2017 Annual Report
Stock Code：900956 Stock Abbreviation：Dongbei B
Huangshi Dongbei Electrical Appliance Co., Ltd.
2017 Annual Report
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2017 Annual Report
Important Notes
1.The Board of Directors ，Supervisory Committee，directors , supervisors and Senior Executives of the
Company hereby guarantees that there are no misstatement, misleading representation or important
omissions in this report and shall assume joint and several liability for the authenticity, accuracy and
completeness of the contents hereof.
2.All the directors attended the board meeting.
3. Hubei Daxin Certified Public Accountants Co., Ltd. ( Special General Partnership) issued standard
unqualified auditors' report for the Company.
4. Mr.Zhu Jinming, Person in charge of the Company, Ms. Lu Lihua, Chief financial officer and the Ms.
Ma Li, the person in charge of the accounting department (the person in charge of the
accounting )hereby confirm the authenticity and completeness of the financial report enclosed in this
Annual Report.
5. The profit allocation plan or the capitalization from capital public reserve during the report period
examined by the Board of Directors.
Considering taking into account the company's development and the project's demand for funds, the com
pany's 2017 profit distribution plan is formulated as: The profit allocation and the capitalization from
capital public reserve will not be conducted for the Company in the report period..
6.And forward-looking statement
√ Applicable □ Not applicable
Such as those involving the future operational plans in this report shall not be considered as virtual
prolmises of the Company to investors. And investors are kindly reminded to pay attention to possible
risks.
7. Whether the controlling shareholder and its related parties did not occupy the funds of the Company
for operation.
No.
8. Whether the Company did not provide guarantee in violation of specified decision-making procedure.
No.
9.Reminder of Major Risks：
√ Applicable □ Not applicable
The Company has described the possible risks in this year’s report in order to attract attention from the
investors. For more refer to the ― Report of the future development discussion by Board of Directors‖.
10.Other
□Applicable√ Not applicable
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2017 Annual Report
Table of Contents
I. Definitions
II. Basic Information of the Company and Financial index
III. Outline of Company Business
IV. Management’s Discussion and Analysis
V. Important Events
VI. Change of share capital and shareholding of Principal Shareholders
VII. Situation of the Preferred Shares
VIII. Information about Directors, Supervisors and Senior Executives
IX. Administrative structure
X. Corporate Bond
XI. Financial Report
XII. Documents available for inspection
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I. Definition
1.Definition
In this report, medium, the following words and expressions shall have the following meaning unless
otherwise defined:
Definition of frequently mentioned words and expressions
Company, The Company, We Huangshi Dongbei Electrical Appliance Co.,
Refers to
Ltd.
Dongbei Group, Controlling Huangshi Dongbei Electromechanical Group
Refers to
shareholder Co., Ltd
Refrigerator Industry Refers to Huangshi Dongbei Refrigerator Industry Co.,
Ltd
Xingbei Machinery & electric Refers to Huangshi Xingbei Machinery & electric Co.,
Ltd.
Huizhi Partnership Refers to Huangshi Huizhi Investment Partnership
(Limited partnership)
Daxin, Daxin Certified Public Hubei Daxin Certified Public Accountants
Refers to
Accountants Co., Ltd. ( Special General Partnership)
Report period Refers to 2017
SSE Refers to Shanghai Stock Exchange
CSRC Refers to China Securities Regulatory Commission
The Securities Law of the People’s Republic
The Securities Law Refers to
of China
The Company Law of the People’s Republic
The Company Law Refers to
of China
The Articles of association of Huangshi
Articles, The Articles of association Refers to
Dongbei Electrical Appliance Co., Ltd.
RMB Yuan , RMB million Yuan,RMB
Yuan, Million Yuan, Billion Yuan Refers to
Billion Yuan
II. Basic Information of the Company and Financial index
I.Information of the Company
Chinese name of the Company 黄石东贝电器股份有限公司
Abbr. of the Chinese name of the Company 东贝B股
English name of the Company Huangshi Dongbei Electrical Appliance Co.,Ltd
English Abbreviation DONGBEI
Legal representative of the Company Zhu Jinming
II.Contact person and contact manner
Board secretary Securities affairs Representative
Name Lu Lihua Huang Jie
No.6, Jinshan East Road, Economic & Technology
No.6, Jinshan East Road, Economic & Technology
Contact address Development Zone, Huangshi City, Hubei
Development Zone, Huangshi City, Hubei Province.
Province.
Tel 0714-5415858 0714-5415858
Fax 0714-5415858 0714-5415858
E-mail stock@donper.com stock@donper.com
III.Basic Information about the Company
No.6, Jinshan East Road, Economic & Technology Development
Registered Address:
Zone, Huangshi City, Hubei Province.
Postal code of Registered address 435000
No.6, Jinshan East Road, Economic & Technology Development
Business Address
Zone, Huangshi City, Hubei Province.
Postal code of Business address 435000
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2017 Annual Report
Website： http://www.donper.com
E-mail stock@donper.com
IV.The Place for Placing the Annual Report and the Information Disclosure
Newspapers for Information Disclosure Shanghai Securities Daily and Hong Kong Commercial Daily
Internet Website for Publishing the Annual Report www.sse.com.cn
The Place for Placing the Annual Report Securities Dept. of the Company
V.Stock Profile
Stock Condition of the Compan
Stock Abbreviation
Type Stock exchange for listing Stock Abbreviation Stock Code
(Before change)
B share Shanghai Stock Exchange Dongbei B 900956
VI.Other Relevant Information
Name Hubei Daxin Certified Public Accountants Co.,
Ltd. ( Special General Partnership)
Certified public accountants
engaged by the Company Office address 16/F, Zhiyin Media Square, No.31, Zhongbei
Road, Wuhan
（Domestic）
Names of the Certified Public Suo Boguo, Zhang Ling
Accountants as the signatories
Name
Sponsor engaged by the Company
Office address
for performing continuous
supervision duties in reporting Sponsor representative
period Duration of continuous
supervision
VII.Main accounting data and financial indicators of the Company in the last three years
1.Main accounting data
In RMB
Changed
Main accounting data 2017 2016 over last 2015
year（％)
Operating income 3,789,307,855.30 3,473,518,271.43 9.09 3,420,131,010.98
Net profit attributable to the 83,402,663.88 83,040,363.66 0.44 69,792,841.69
shareholders of the listed company
Net profit after deducting of 56,228,437.99 57,867,834.66 -2.83 58,701,752.38
non-recurring gain/loss attributable to
the shareholders of listed company
Cash flow generated by business 166,782,836.34 -87,308,500.10 Not applica 501,750,054.81
operation, net ble
Changed
End of End of End of
over last
2017 2016 2015
year（％)
Net assets attributable to the 1,147,175,783.39 1,087,134,859.75 5.52 1,003,962,628.52
shareholders of the listed company
Gross assets 4,701,589,019.10 4,351,074,660.89 8.06 4,441,133,850.47
2.Main Financial Index
Main Financial index 2017 2016 Changed over last year（％) 2015
Basic earning per share(RMB/Share) 0.355 0.353 0.57 0.297
Diluted gains per share(RMB/Share) 0.355 0.353 0.57 0.297
Basic earning per share after deducting of non-recurring 0.239 0.246 -2.85 0.250
gains/losses(RMB/Share)
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2017 Annual Report
Weighted average net asset earning ratio（%） 7.39 7.94 Decreased by 0.55% 7.20
Net income on asset, weighted and deducted 4.98 5.54 Decreased by 0.56% 6.06
non-recurring gain/loss(%)
Notes
□ Applicable √Not applicable
VIII.The differences between domestic and international accounting standards
1.Simultaneously pursuant to both Chinese accounting standards and international accounting standards
disclosed in the financial reports of differences in net income and net assets.
□ Applicable √Not applicable
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards.
□ Applicable √Not applicable
3.Notes of the differences between domestic and international accounting standards
□ Applicable √Not applicable
IX.Main Financial Index by Quarters of 2017
In RMB
First quarter Second quarter Third quarter Fourth quarter
（1-3 Month） （4-6 Month） （7-9 Month） （10-12 Month）
Operating income 900,572,653.41 1,057,916,938.91 1,018,869,312.24 811,948,950.74
Net profit attributable to the
6,280,252.54 35,331,530.08 13,799,792.70 27,991,088.56
shareholders of the listed company
Net profit after deducting of
non-recurring gain/loss attributable
4,363,555.70 22,929,873.84 7,275,407.23 21,659,601.22
to the shareholders of listed
company
Net Cash flow generated by
-96,839,417.65 103,241,515.97 26,320,691.58 134,060,046.44
business operation
Quarterly data and Disclosed periodic reports data discrepancies explained
□ Applicable √Not applicable
X.Items and amount of non-operating gains and losses:
√ Applicable □ Not applicable
In RMB
Items of non-operating gains and losses Amount (2017) Notes (If any) Amount (2016) Amount(2015)
Gain/loss form disposal of non-current assets. -11,096,055.52 -7,813,437.33 -462,241.68
Tax rebates, reductions or exemptions due to
approval beyond authority or the lack of official
approval documents
Governmental Subsidy accounted as current 34,318,163.70 38,293,336.06 20,038,689.31
gain/loss, except for those subsidies at with
amount or quantity fixed by the national
government and closely related to the
Company’s business operation.
Capital occupation charges on non-financial
enterprises that are recorded into current gains
and losses
Gains due to that the investment costs for the
Company to obtain subsidiaries, associates and
joint ventures are lower than the enjoyable fair
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value of the identifiable net assets of the
investees when making the investments
Gain/loss on non-monetary asset swap
Gain/loss on entrusting others with investments
or asset management
Asset impairment provisions due acts of God
such as natural disasters
Gains/losses of debt restructure
Reorganization expenses, such as expenditure
for allocation of employees and integration fee
Gains/losses exceeding the fair value arising
from transactions with obviously unfair prices
Net gain and loss of the subsidiary under the
common control and produced from enterprise
consolidation from the beginning of the period to
the consolidation date
Gain and loss anising from contingent matters
irrelevant with the Company’s normal operation
business
Gain and loss from change of the fair value
arising from transactional monetary assets,
transactional financial liabilities as held as well
as the investment income arising from disposal
of the transactional monentary assets,
transactional financial liabilities and financial
assets available for sale excluding the effective
hedging transaction in connection with the
Company’s normal business
Reverse of the provision for impairment of
acounts receivable undergoing impairment test
individually
Gain/loss from external entrusted loan
Gain and loss arising from change in the fair
value of the investment based real estate
measure afterwards by means of fair value
mondel
Influence upon the current gains and losses from
the once-and –for –all adjustment over the
current gains and losses according to the taxation
and accounting laws and regulations
Income from custodian charge obtained from
entrusted operation
Operating income and expenses other than the 10,872,405.78 6,513,157.81 2,644,433.78
aforesaid items
Other gains/losses in compliance with the
definition of non-recurring gain/loss
Influenced amount of minor shareholders’ equity - 1,506,569.15 -7,250,561.72 -7,250,561.72
Influenced amount of income tax - 5,413,718.92 -4,569,965.82 -3,879,230.38
Total 27,174,225.89 25,172,529.00 11,091,089.31
XI. Fair value measurement
□ Applicable √Not applicable
XII.Other
□ Applicable √Not applicable
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III. Outline of Company Business
I.Main businesses , business mode and industry situation of the company in the reporting period
1. The main business
The Company is specialized in R&D and production of high-efficiency, energy-saving and
environmentally-friendly refrigeration compressors, it has more than 200 types products ranging in 7
series, and it is the leading company with the largest number of product models, the most abundant
specifications and the largest power span in the industry. Also in the industry, the company is the sole
enterprise that’s awarded the second prize of national science and technology progress.
Business Mode: through the measures of personalized service, the company has established
long-term cooperative relationship with a great number of domestic and foreign consumers which also
are well-known companies. The company has been always seeking to provide customers with better
quality products and better services of pre-sales, sales and after-sales. Furthermore, the company has set
up the high-efficient communication mechanism with customers, established strategic partnerships with
key customers and constantly pays attention to the customers' satisfaction to the company's product
quality and technical services. When the sales department of the company carries out the product
marketing, it will, according to different needs and requirements of users, set up the policy of "One user,
One Strategy" to provide customers better personalized product and service. Meanwhile, the company
has set up user-records and implemented the regular and random visits to customers, established the
"One stop nanny service" for quaternity service of quality, technology, service and sales and has shaped
a sound service network, thus to improve the customer satisfaction.
2. Industry Description
Please refer to the fourth section-Analysis of business information
Ⅱ.Major Changes in Main Assets
√ Applicable □ Not applicable
Monetary funds increased by 46.54% over the same period last year, Mainly due to the increase in net
cash inflow from operating activities.
Advance payment increased by 42.54% over the same period last year，Mainly due to increased project
input.
Other receivable account decreased by 70.87% over the same period last year ，mainly due to the
expiration of the contract with Far Eastern Finance Leasing Company, and the deposit is due to the rental
charge.
Inventory increased by 42.06% over the same period last year, Mainly due to the increase in raw
material prices and the increase in inventory reserve volume.
The construction in process decreased by 93.94% over the same period last year，Mainly due to the
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transfer of construction projects into fixed assets.
Ⅲ.Analysis On core Competitiveness
√ Applicable □ Not applicable
The company has the core competitiveness formed by five aspects of "constant and sustainable
innovation for R&D of new products, diversified matching production capacity, people-oriented team
cohesion, sustainable and constant innovation ability and all-round marketing ability", thus to enable a
solid foundation for the company's future sustainable development.
1. R & D capabilities and technology
The company has the domestic leading R & D capabilities and the R & D platform, the compressor
technology center is a national recognized enterprise technology center, the company has set up a post
doctoral workstation, Academician workstation and established the research and development center in
Europe and The United States. The company has the compressor product technology to meet high or
medium or low back pressure and high efficiency compressor type under different working fluids
requirements, also, the company has more than 200 items of patents, and the company filed patent
application in the foreign countries. Soon after successfully developed the high-efficient, high-level VFL
series, the company has successfully developed mini VFA series. The VFA frequency conversion
products have been greatly favored by the customers because of the features of "small shape, high
efficiency, low noise and high reliability". Mass sales in March 2017, In October 2017, the VFX series
of low-speed and high-efficiency inverter compressors successfully held a press conference.
2. The world's advanced compressor production line
The company has successively established three manufacturing bases, and it has the world top
compressor production line, which can produce R600a, R134a, R22, R404A, R290 and other types
refrigerant compressor, with the products having 7 series and 200 specs, and the annual production
capacity is 33 million units. Through the tandem-effect of each platform, the products have been sold to
more than 30 countries and regions, like China, Asia, Europe and America, and the company's market
share has been increased year by year.
3.Frank two-way communication
The company’s leaders understand that the effective communication and practice is an effective
way to accelerate the staff and the related party to recognize and accept the culture of the company, and
the company, through the worker’s congress, special forum and so forth communication platforms,
communicated with its employees. Each month, the company holds regular staff recognition conference
of ―People-oriented, glory in hard-working‖ for the purpose of motivating the team.
4. Encourage innovation mechanisms
The company has established a comprehensive mechanism of innovation management, which
mainly includes three parts that are innovation management, technology innovation and daily
improvement, and it's a great innovation mode begins from Innovation concept-innovation
mechanism-innovation system-innovation category-innovation level -innovation tools to final
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achievements. The company's innovation work will focus on the long-term planning, thus to ensure the
orderly conduct of the work. Furthermore, the company has set up the incentive mechanism of
innovation, which will put the innovation work into the daily work system and the appraisal system. It
has revised the Innovation Incentive System and the Reward and Punishment System, which better
clarified the project establishment, implementation, following-up, evaluation, inspection, assessment,
rewards and punishment method and standard for the innovation work, and it adopts a variety of
measures in terms of material rewards, spiritual encouragements and job promotions to carry out the
incentives.
5. Market expansion
According to the customer satisfaction, customer distribution, customer desire and change of
market demand for refrigeration compressor in the world, the company carries out the whole-process
service of pre-sales, sales and after-sales. Combined with the global economic development and changes
in the industry, the company greatly promoted the frequency-conversion matching products and the sales,
thus to better adapt to the direction of the industry development; the overseas sales focus on the progress
of the project of users in blank part of the market, thus to achieve full coverage of the entire area; the
commercial products will par with the top-brand of the industry, with layout of the sales channels and
setting up large customer management unit to centre on customers of Pearl River Delta and Yangtze
River Delta, thus to realize the gradual increase both in sales and profits.
IV. Management’s Discussion and Analysis
I.Management’s Discussion and Analysis
In 2017, under the background of deepening structural reforms in the supply side in China and
facing the severe challenges posed by the unfavorable factors, the Company well managed to meet the
needs of users by virtue of the technical advantages, customer advantages, quality advantages, and scale
advantages. Via continuous R & D investment and technological innovation, the Company continuously
promoted the product technology upgrading, boosted the product structure adjustment and enhanced the
profitability of the Company.
1. Precise market positioning and timely adjustment of product structure
Facing with the fierce market competition, the Company proceeded from various aspects such as
products, markets and marketing, and sought ways to find the breakthrough points to gain the market
initiative. Firstly, the company positively adapted to the market trend, adjusted the product structure in a
timely manner, strived to seize the market share of the frequency-conversion products, implemented the
―One user, one strategy‖ policy, and fully promoted the VFA and VFL frequency conversion products to
enter the market, therefore the annual sales of frequency-conversion compressors soared. Secondly, the
Company innovated the customer management model, enhanced the market development capability,
implemented the market segmentation strategy for the new sector, carried out the zone-type customer
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management, and achieved the unification of market management policies and sales channels. Thirdly,
the Company actively upgraded the marketing tactics, vigorously snatched the market share, re-divided
the commercial and household markets with the orientation of ―Big customers, big channels‖, adjusted
the structure of the marketing team, and strengthened the marketing incentive mechanism.
2. Put emphasis on the continuous improvement and comprehensively promote lean management
In order to promote the lean management in a down-to-earth manner, the Company further
optimized, refined and quantified various management tasks, vigorously carried out lean management
activities, and achieved remarkable results in reducing costs, increasing efficiency, reducing labor
intensity and improving work efficiency. Firstly, the Company put great efforts in management, actively
innovated the management methods, improved the management system, optimized the management
process, and comprehensively enhanced the level of production management. Secondly, the company
sought ways to reduce the costs, fully considered its own reality to find the problems, actively looked for
the deep-seated reasons that restrain the further improvement, focused on the several aspects including
labor cost reduction, design cost reduction, procurement cost reduction, energy cost reduction and
technical process cost reduction, constantly strengthened the tracking management of various cost
indicators and strived to achieve the lean management goals of cost . Thirdly, the Company actively did
the good work in the environment, adhered to the guidance of lean management culture, enhanced the
building-up of better staffs, and soundly promoted the quality and efficiency of the company.
3. Continuous scientific and technological innovation and vigorous promotion on the
transformation of achievements
As a powerful driving force for the rapid development of enterprises, technological innovation
must follow the market and be rooted in users. The company has increased the development efforts for
the R290 commercial refrigeration compressor, and rolled out the VFX series frequency-conversion
compressors in October 2017 after the VFA series compressors hit the market in the end of 2016. In the
second half of last year, the orders for frequency-conversion compressors showed blowout trends, which
fully demonstrated the necessity of leading the market by the technological innovation. Meanwhile, the
company focused on the needs of users, and vigorously promoted various technological improvements,
which played a powerful role in boosting production and promoting sales. Upon the technology of
vibration and noise reduction of frequency conversion compressors, the Company’s products have been
sold in large quantities to Haier, Hisense, and Midea. The foundry company developed a total of 163
new products last year, and achieved innovative breakthroughs in the performance of the knuckle
materials, which greatly stimulated the market demand, thus the production and sales both achieved big
growth.
In 2017, the company had 18 items passed the Product Appraisal of Scientific and technological
achievements at the Ministerial level, thereinto: 6 were rated as international leading and 8 were rated as
internationally advanced. Meanwhile, the Company successfully applied for and received three national
honors namely the "National Demonstration Green Factory", the "Service-oriented Collaborative Lean
Supply Chain Construction Project" and the "National and Local Joint Engineering Research Center". In
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2017 Annual Report
addition, the company newly applied for 12 patents in 2017, including 4 invention patents and 8 utility
models.
4. All staff participate in quality management and focus on improving quality management
In terms of quality management, the company strengthened the whole process of quality control
and management. Through the technical transformation of ―informationiaztion, intelligentization and
lean management‖ on the production line, the company improved the quality online monitoring, on-line
control, and product life cycle quality traceability, and continuously improved the product’s quality and
competitiveness. By firmly focusing on the key point of quality improvement, the Company
continuously improved the staff’s quality awareness, and developed a group of highly capable and
high-quality production specialists through the in-depth activities of ―Creating a team with ingenuity and
striving to be an artisan in Dongbei‖, and the Company fully utilized their role in leading others, thus
ensued the improvement on the production quality. In 2017, the offline rate of major users of
compressors showed a significant downward trend, and the Company passed the annual system audits of
key users such as Haier, Hisense, Mabei, GE and Whirlpool, especially the company won the awards
including Haier Quality Gold Rubik Award and Epplan Core Award and Whirlpool Outstanding Supplier.
A total of 22 achievements entered the QC achievement review throughout the year. Among them, the
QC team of the foundry company obtained the honor of ―the national excellent quality management
team‖ and the Oubao company's technology group of processing workshop obtained the honor of ―the
national quality trustworthy team‖.
II. Production and operation
In the report period, the Company earned operating income of RMB 3,789,307,855.30, which increased
by 9.09% year on year. Net profit attributable to the shareholders of the listed company was RMB
83,402,663.88. which Increased by 0.44% year on year. The compressor output was 28.33 million.
which Increased by 10.03% year on year. The compressor sales was 27.44 million , which Increased
by 7.4% year on year.
（I）Analysis on principal Business
Sheet of change analysis of relevant items of profit statement and cash flow statement
In RMB
Subject Amount in this period Amount in last period Proportion（%）
Business income 3,789,307,855.30 3,473,518,271.43 9.09
Business cost 3,226,141,993.06 2,942,880,386.91 9.63
Sales expenses 125,284,709.02 121,943,017.53 2.74
Administrative expenses 264,325,298.20 271,215,165.05 -2.54
Financial expenses 53,795,275.40 41,029,022.62 31.12
Cash flow generated by operation 166,782,836.34 -87,308,500.10 Not applicable
activities, net
Net cash flow generated by investment -40,629,237.75 -110,535,554.86 Not applicable
activities
Net cash flow generated by financing 115,443,518.01 -56,590,361.16 Not applicable
activities
R& D expenses 151,385,325.46 154,818,413.07 -2.22
(1) Analysis of revenue and cost
√ Applicable □ Not applicable
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2017 Annual Report
The Operating income increased by 9.09% over the previous year, Mainly due to the sales increase
and optimize product structure.
The Operating cost increased by 9.63% over the previous year, Mainly due to the increase in sales
volume and the increase in the price of bulk raw materials led to an increase in costs.
a.The Status of key business in terms of industry of business , production and area
In RMB
The Status of key business in terms of industry of business
Increase/decre Increase/decre Increase/dec
Income from key Cost of key Gross ase of key ase of key rease of
On industry
business business profit（％） business business cost gross profit
turnover（％） （％） （%）
Manufacturing 3,722,331,925.90 3,180,830,541.84 14.55 9.17 10.16 Decreased
by 0.77%
The Status of key business in terms of production of business
Increase/decre Increase/decre Increase/dec
Income from key Cost of key Gross ase of key ase of key rease of
On production
business business profit（％） business business cost gross profit
turnover（％） （％） （%）
3,302,406,214.13 2,839,800,021.23 14.01 11.15 12.34 Decreased
Compressors
by 0.91%
Auto casting 380,251,764.44 313,076,460.76 17.67 -6.74 -5.88 Decreased
and by 0.76%
Compressors
casting
Photovoltaic 39,673,947.33 27,954,059.85 29.54 28.53 3.93 Increased by
power 16.68%
generation
The status of main operation in terms of Area
Increase/decre Increase/decre Increase/dec
Income from key Cost of key Gross ase of key ase of key rease of
On Area
business business profit（％） business business cost gross profit
turnover（％） （％） （%）
Domestic sales 2,789,790,616.42 2,334,176,286.96 16.33 8.90 10.11 Decreased
by 0.93%
Overseas sales 932,541,309.48 846,654,254.88 9.21 9.98 10.29 Decreased
by 0.25%
Notes
√ Applicable □ Not applicable
Explanation of the main business’ branched industry: The current gross profit rate decreases year on year,
Mainly due to the increase in the price of bulk materials in the current period, leading to an increase in
the cost of main operations.
Explanation of the main business’ branched product: The Alashankou project has gradually matured
during this period, with a steady increase in power generation and enhanced profitability.
Explanation of the main business’ branched region:The gross margins at home and abroad declined
during the period, mainly due to the increase in bulk material prices and the increase in material costs of
our company.
b.Analytical Statement of Production and Sales Volume
√ Applicable □ Not applicable
Production Production Production
Main Product Production Marketing Inventory
Gradient Gradient Gradient
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2017 Annual Report
Year on Year on Year on Year
Year （%） Year（%） （%）
28.33 million 27.44 million 1.88 10.28% 7.40% 50.4
Compressors sets sets million
sets
Auto casting and 89482.31 tons 89482.31 tons 0 21.73% 21.73% 0
Compressors casting
Photovoltaic power 54.58 million 54.27 million 0 27.91% 28.48% 0
generation D D
c.Cost analysis sheet
In RMB
The status of key business in terms of industry of business
On industry Items Amount in this Proportion Amount in last Increase/ Change of Notes
period (%) period decrease key
of key business
business profit over
cost(%) the same
period of
last
year(%)
Manufacturi Cost of 3,180,830,541.84 85.78 2,887,447,650.32 84.92 10.16
ng key
business
The status of key business in terms of production of business
On Items Amount in this Proportion Amount in last Increase/ Change
production period (%) period decrease of key
of key business
business profit
cost(%) over the Notes
same
period of
last
year(%)
Compressors Materials 2,839,800,021.23 89.28 2,527,922,880.07 87.55 12.34
, labor
costs, etc.
Auto casting Materials 313,076,460.76 9.84 332,627,776.65 11.52 -5.88
and , labor
Compressors costs, etc.
casting
Photovoltaic Materials 27,954,059.85 0.88 26,896,993.60 0.93 3.93
power , labor
generation costs, etc.
Notes
√ Applicable □ Not applicable
The increase in cost in this period was mainly due to the increase in sales volume and the increase in
the price of bulk raw materials.
d. Information of sales to major customers, and information of key suppliers
√ Applicable □ Not applicable
The sales to the company's top five customers is RMB 971.47 million, which accounts for 26.10% of the
total annual sales; among them, the sales to the related parties of the top five customers is RMB 0,
accounting for o% of total annual sales.
The amount of procurement to the company's top five suppliers was RMB 1271.42 million, which
accounts for 39.97% of the total annual amount of procurement; among them, the amount of
14 / 139
2017 Annual Report
procurement to the related parties of the top five suppliers was RMB 862.3 million, accounting for
27.11% of the total annual amount of procurement.
(2)Cost
√ Applicable □ Not applicable
The selling expense increased by 2.74% year on year, Mainly due to the increase in sales led to the
increase in transportation costs.
The administrative expenses decreased by 2.54% year on year, Mainly due to corporate management
efficiency.
The Financial expenses increased by 31.12% year on year, Mainly due to the increase in exchange gains
and losses.
(3) R& D Expenses
R & D table
√ Applicable □ Not applicable
In RMB
Amount of Capitalization Research and Development Investment 151,385,325.46
Amount of Capitalization Research and Development Investment 0
Total of Capitalization Research and Development Investment 151,385,325.46
Proportion of total R&D expenditure to operating income (%) 4.00
Number of Research and Development persons (persons) 420
Proportion of total R&D expenditure to persons (%) 11.00
Proportion of Capitalization Research and Development 0.00
Investment
Notes
□ Applicable √Not applicable
(4)Cash Flow
√ Applicable □ Not applicable
Items 2017 2016 Increase/Decrease(%)
Cash flow generated by operation 166,782,836.34 -87,308,500.10 Not applicable
activities, net
Net cash flow generated by investment -40,629,237.75 -110,535,554.86 Not applicable
activities
Net cash flow generated by financing 115,443,518.01 -56,590,361.16 Not applicable
activities
The cash flow statement in the 2017-annual consolidated financial statements showed: the explanation
of change of net cash flow from operating activities: the net cash flow from operating activities
increased over the same period last year, Mainly for the decrease of the cash for goods purchase and the
payment for labor service receiving
The explanation of change of net cash flow from investing activities: the net cash flow from investing
activities increased over the same period last year, Mainly due to the decrease in cash paid for the
purchase of fixed assets, intangible assets and other long-term assets and investments.
The explanation for the change of net cash flow from financing activities: the net cash flow from
financing activities increased over the same period last year, Mainly due to the increase in borrowing
during the current period.
(II)Explanation of the Profit’s Significant Changes generated by the Non-core Business
15 / 139
2017 Annual Report
□ Applicable √ Not applicable
(III)Analysis on Assets and liabilities
√ Applicable □ Not applicable
1.Assets and liabilities statement
In RMB
Changed
Proportion Year-end balance Proportion Notes
Name Year-end balance proportion
（%） in last period （%）
（%）
Monetary 628,730,491.66 13.37 429,055,741.89 9.86 46.54 Increase in net
Funds cash inflow
from operating
activities
Advance 90,052,403.74 1.92 63,177,349.54 1.45 42.54 Increased
payment project
investment
Other 2,501,172.05 0.05 8,586,619.35 0.20 -70.87 The contract
receivable with Yuandong
account Finance Leasing
Co., Ltd.
expires, and the
margin is due to
rental expenses.
Inventory 547,305,010.27 11.64 385,268,984.66 8.85 42.06 Rising material
prices and
increase in
inventory
stocking
Construction 949,471.84 0.02 15,656,772.91 0.36 -93.94 Achieve the
in progress intended use of
the state
transferred to
fixed assets
Short-term 815,383,660.00 17.34 587,927,999.83 13.51 38.69 Bank loan
loans amount
increased
Advances 18,526,191.08 0.39 49,836,616.76 1.15 -62.83 Due to the
received customer's early
payment amount
is reduced
Interest 1,650,002.38 0.04 5,101,297.79 0.12 -67.66 The interest
payable payment method
has been
adjusted,
resulting in
reduced interest
payable
Long-term 17,085,779.67 0.39 -100 Due to
payable Yuandong
Finance Leasing
Company has
paid off
2. Information of restrictions of major assets as of the end of the reporting period
√ Applicable □ Not applicable
In RMB
Category Book value at the end of the period Reason for Restriction
Acceptance money deposit 207,398,728.18 Financing guarantee
Pledged Term Deposit Certificate 9,000,000.00 Financing guarantee
3.Other
16 / 139
2017 Annual Report
□ Applicable √ Not applicable
(IV)The analysis of business information of the industry
√ Applicable □ Not applicable
The refrigerator market remained sluggish in 2017. Driven by the export and the freezer market, the
overall production and sales volume of compressors increased in 2017. The Industry Online Statistics
showed that: In the year of 2017, the production of refrigerator compressors was 151.567 million units,
an increase of 9.8% year-on-year; the sales volume was 150.280 million units, an increase of 8.2%
year-on-year; the production growth and the sales growth were both lower than in 2016.
Market aspect: from the growth perspective, the export growth was higher than the domestic sales
growth, and the export of fully-sealed piston compressor was 45.868 million units, a YOY increase of
13% and exported to 176 countries, of which 15 countries reaching the export volume of more than 1
million units and 15 countries reaching the export volume of more than 0.1 million units. The export
situation of all continents was roughly the same as that of the previous year. Asia was still the main
export region of China's fully-sealed piston compressors, accounting for as high as 57 percent according
to the data as of November, followed by Europe and America. The overseas markets are more attractive
to compressor companies.
Product aspect: the frequency conversion and commercial use have become the new growth points.
The implementation of new energy efficiency and the popularity of large-capacity refrigerators have led
to an explosive growth in frequency conversion products. The Industry Online Data showed that the
frequency conversion products have increased by 56% year-on-year. With the fervent trend of unmanned
convenience stores and vending machines, it’s shaping a new emerging market. All major fully-sealed
piston compressor companies have also focused on the unmanned vending business market. The
unmanned vending market has increased by 18.5% from the same period of last year. At present,
although the demand of the unmanned vending market cannot be compared with the household market,
the unmanned vending business market is definitely another development direction for fully-sealed
piston compressors.
Profitability: the year of 2017 was a stressful year for the fully-sealed piston compressor industry.
The raw material prices rose madly. The cost of labor and logistics continued to increase, and the
product cost went up, but the increase in product prices did not keep up with the increase in costs.
Therefore, fewer companies gained the growth in operating profit in 2017.
The company will pay close attention to the industry trends, continue to optimize the product
structure in accordance with changes in the demand of end market, continue to strengthen the scientific
and technological innovation and improve the management capabilities, comprehensively manage the R
& D, production and quality links, improve the company's operating efficiency, speed up the
development of overseas market with the help of the Belt and Road Strategy and expand the Company’s
market share.
(V)The investment of the Company
1.Investments in external parties
□ Applicable √ Not applicable
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2017 Annual Report
(1) Significant equity investment
□ Applicable √ Not applicable
(2) Significant non-equity investment
□ Applicable √ Not applicable
(3)Financial Asset and Liabilities Measured by Fair Value
□ Applicable √ Not applicable
(VI)The sale of Significant assets and equity
□ Applicable √ Not applicable
(VII)Analysis on principal controlling companyand Mutual shareholding companies
√ Applicable □ Not applicable
Registered
Sharehold Total assets Net assets Net Profit
Capital
Name Business Scope ing Ratio (RMB’000 （RMB’00 （RMB’000
（RMB’0
（%） 0) 00） 0）
000）
Wuhu Aba Production and sales of refrigeration 5,000 75 162,446.11 643,99.65 4,378.85
ur Mechan compressors, compressor motor; Related
ical & to small and medium sized castings,
Electrical machinery manufacturing and related
Co.,Ltd technology development, consulting.
Huangshi 3,281.40 51.28 47,556.32 13,460.37 2,033.00
Casting of small and medium-sized cast
Dongbei
products, house renting and parking
Foundry
service.
Co., Ltd.
Refrigeration compressors, refrigeration 800 100 756.31 751.01 -17.77
equipment, motors, solar energy products,
machinery and electrical technology
products, electronic components,
Dongbei
high-tech products, software products,
(Wuhan )T
refrigeration products and parts, auto
echnology
parts, new energy products and
Innovatio
components, optoelectronic products and
n Co., Ltd.
parts, solar power generation systems and
solar off-grid power system technology
development, research, consulting and
production.
Dongbei 20,000 100 55,766.60 13,709.63 31.63
Mechanic Production and sales of refrigeration
al & compressors, compressor motor;
Electrical high-tech product development,
(Jiangsu) production and consulting.
Co., Ltd.
Huangshi USD 1 100 4,532.60 -479.84 -478.98
Dongbei Sales of Refrigeration Compressor, million
Internatio Refrigeration Equipment and Parts ,
nal Trade Photoelectric products and solar water
Co., Ltd. heater ,etc.
Alashanko 16,500 80 60,075.60 14,583.70 -1,505.0
u Solar power generation systems and 9
Dongbei off-grid solar power system design,
Clean development, production, sales,
Energy installation and service.
Co., Ltd.
Dongbei Sales of refrigeration compressors, 3,000 100 10,367.81 -279.63 -159.72
(Wuhu) refrigeration equipment and components,
Electrome photovoltaic products, solar water
chanical heaters, etc.
Co., Ltd.
Huangshi Solar power station, ecological 15,000 75 0 0 0
18 / 139
2017 Annual Report
Donglian agriculture investment and development;
New energy contract management, new energy
Energy technology development, photovoltaic
Co., Ltd. power generation system integration,
import and export trade of goods（Non
state restriction）.
Fengtai Solar power station, ecological 5,000 75 0 0 0
Donglian agriculture investment and development;
New energy contract management, new energy
Energy technology development, photovoltaic
Technolog power generation system integration,
y Co., Ltd. import and export trade of goods.
Wutai Solar power station, ecological 20,000 75 0 0 0
Jinhe agriculture investment and development;
New energy contract management, new energy
Energy technology development, photovoltaic
Co., Ltd. power generation system integration,
import and export trade of goods.
Notes：The holding subsidiary Wuhu Abaur Mechnical & Electrical Co., Ltd. holds a 51.28% stake of
Huangshi Dongbei Foundry Co., Ltd; and holds 80% stake of Alashankou Dongbei Energy-saving Co.,
Ltd.; in the current period there were newly added subsidiaries Huangshi Donglian New Energy Co., Ltd,
Fengtai Donglian New Energy Technology Co., Ltd and Wutai Jinhe New Energy Co., Ltd due to the
transfer of equity by the related party Hubei Dongbei New Energy Co., Ltd-with that the transfer price
was a nominal price of 1 yuan, and all of them did not start normal operations; as of the reporting date,
Huangshi Donglian New Energy Co., Ltd and Fengtai Donglian New Energy Technology Co., Ltd are
handling the simple cancellation procedure, and Wutai Jinhe New Energy Co., Ltd was cancelled on
May 22, 2017.
(VIII)The structure of the subject of corporate control
□ Applicable √ Not applicable
III.Competition and development trends in the industry
1.Competition pattern of pesticide industry
√ Applicable □ Not applicable
In the future, the competition in the compressor industry will remain fierce. First of all, from the
perspective of domestic and foreign markets, with the increasingly saturated domestic market, the
development potential in overseas market will increase, and that will gradually become the expanding
direction for compressor manufacturers; secondly, as people are more likely to require a higher
refrigerator efficiency, the development will head to the lightweight, energy-saving
frequency-conversion compressors; furthermore, the commercial compressors have a broader market
prospect than the household compressors, so that will become a new development direction for the
compressor manufacturers.
2.Development Strategy
√ Applicable □ Not applicable
In 2018, the world economy will continue to recover, and it’s expected that China's economic
growth rate will remain stable. The Company’s business goal of 2018 is: ensure the production and sales
in the whole year reaching 28 million units compressors. We will focus on the development concept of
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2017 Annual Report
―innovation, coordination, green, openness and sharing‖, adhere to centering on the economic efficiency,
deepen the quality reform and efficiency reform, transform business ideas, adjust the product structure,
and enhance the development space.
3.Operation Plan
√ Applicable □ Not applicable
A. Pay close attention to high-quality development and achieve the goal of efficiency
In 2018, the company will focus on the efficiency, realize the growth both in profits and sales,
strive to achieve the mass production of VFA frequency conversion products, and increase the market
share of frequency conversion compressors despite the overall market oversupply situation. The
commercial-use products will be repositioned in the market, highlighting the key customers and
perfecting the user demand maps.
The foreign trade needs to be better refined and the better lay-out, focusing on the market share
increments in Europe and Southeast Asia. And we must seize the R600a-switching for enforcing
implementation, thus to realize the goal of exporting over 10 million units.
B. Stay focus on technological innovation and enhance the core competitiveness
First of all, it needs to have an in-depth understanding of users’ needs and pain points, make a
profound analysis of all existing and future technologies that may be adopted and establish a
technological innovation mechanism of ―The combination of industry, academia and research‖
consisting of technical innovation consulting layer and decision-making layer, research and development
layer and production and application layer, thus to provide the institutional guarantee for the sustainable
development.
Secondly, the company will give a full play to the staff of the company and enhance the ability of
independent innovation. By organizing the employees to widely carry out the ―small innovations, gizmos,
minor renovations, small designs, and small recommendations‖ activities, the Company will pay
attention to the development of knowledge-based, technology-based, and compound-type employees and
create a learning organization, so as to greatly improve the skill level of employees and effectively
enhance the innovation abilities of employees.
Thirdly, the company will continue to utilize the leading role of the technological innovation
platforms such as technical R&D centers, academician workstations and university cooperation, spare no
efforts to absorb advanced technologies and continue to maintain the leading technological position.
With adopting new design and new technology to improve frequency conversion products, the company
will actively meet the market demands while reducing the costs.
C. Continuously enhance the quality improvement and promote the artisan lead
The company will continuously improve the quality awareness, strengthen the guidance and
implement the quality standards training. Through the activities of ―Creating a team with ingenuity and
strive to be Dongbei Artisan‖, the Company will cultivate a group of competent and high-quality
production specialists, give full play to their leading role and ensure the enhancement of production
quality. Meantime, we will strengthen the cultivation for senior personnel with rich quality experience
and knowledge, so as to undertake and promote the quality management work.
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2017 Annual Report
Upon strict process control, the company will soundly improve the quality. From suppliers,
production process, customer site and end feedbacks, the company will, with the goal of transcending
customers’ requirements and zero defects, soundly improve the product qualification ratio and reduce the
product off-line rate at the customer site. Meanwhile, the company will implement the costs control of
single unit, thus to push the improvement on the whole process of production quality.
Adhering to the practical and pragmatic management. The Company will carry out the
comprehensive optimization of quality management, sorting-out, integration and unity of the
management system, establish the Internet information management mode of quality management, thus
to ensure an effective, efficient and practical quality management system. Through the 6S management
and QC group activities, it will guide and encourage employees to enhance the awareness of
responsibility. With the application of PDCA cycle, the company will improve the product quality and
perfect the management methods, so as to shape a virtuous cycle of improvement and result.
D. Put emphasis on lean management and stimulate the business motivation
In terms of lean production management, the Company will focus on reducing costs and increasing
efficiency, using digital, information, and technology means to optimize and integrate logistics flow,
capital flow and information flow, and implement the whole-process and whole-system dynamic control
of production and business activities. Furthermore, the company will reengineer the management
processes, continuously improve the production, eliminate the waste products and reduce the costs. It is
very necessary to do a good job in each process, and to meticulously and exquisitely do all things. The
Company will strengthen the transformation of management processes centered on financial
management, further deepen the overall budget management, truly realize the beforehand preparation for
the key business indicators, with in-process control and the whole-process control including the ex post
analysis.
4. Potential Risks
√ Applicable □ Not applicable
1. Market risk: the company's products are mainly used in the industries which are largely affected by
the macroeconomic situation, so if there is a drastic fluctuation in macroeconomic resulting in decline in
the demand of the company's products by downstream industries, there will be an impact on the
operating performance of the company.
2. Risk of fluctuations in the prices of raw materials: for the company's product of refrigerator
compressor, the raw material accounts for a big percentage, so in the future, the fluctuation in the prices
of raw materials will directly impact the company's production costs, thus to have an impact on the
operating performance of the company.
3. Risk of labor costs: the company is a traditional manufacturing enterprise, so with the continuous rise
of every production elements such as labor costs, the company's operating performance will be affected.
5.Other
□ Applicable √ Not applicable
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2017 Annual Report
IV. The explanation and the information about the disclosure not conformed to the Code as the
provision of the Code does not applied to the company or because of special reasons
□ Applicable √ Not applicable
V. Important Events
ⅠSpecification of profit distribution of common shares and capitalizing of common reserves
1.Formulation, implementation and adjustment of profit distribution policy of common shares
especially cash dividend policy during the reporting period
√ Applicable □ Not applicable
According to the Notice of Further Implementing the Matters Concerning Distribution of Cash
Dividends by Listed Companies (Zheng Jia Fa (2012) No. 37 Document) issued by CSRC on May 4,
2012 and the requirements of Hubei Securities Regulatory Bureau and Shanghai Stock Exchange, the
sixth meeting of the fifth board of directors of the Company held examined and adopted the proposal for
implementing the dividend distribution document of CSRC and revising the clauses of the Articles of
Association of the Company in respect of profit distribution. The adoption of this proposal perfected the
Company's profit distribution policy, improved the transparency of profit distribution, protected public
investors' lawful rights and interests and enhanced the level of the Company's overall standardized
operation.
On April 20, 2017, the company held the sixteenth meeting of the sixth Board of Directors to deliberate
the "Advance plan for the distribution of profits of the company in 2017", which was submitted to the
company's 2017 Annual General Meeting of Shareholders for review on May 24, 2017 with an approval
result. On July 13, 2017, the company disclosed the ―Notice about Dividend Distribution for Year 2016‖,
the company's 2016-profit distribution plan is: based on the total share capital of 235,000,000 shares, it’s
proposed that the company will distribute cash dividend of RMB 1.00 per 10 shares (tax inclusive) to all
the shareholders, and the estimated profit distribution will be RMB 23,500,000, while the rest profit of
RMB588,190,176.32 will be for future profit allocation; and there are no bonus shares and no increasing
shares by converting capital reserves in the current year., and such dividend distribution was
implemented on July 28, 2017
2.The Company's plan for preplan for profit distribution or capitalization of capital surplus for
the recent three years (including the report period)
In RMB
22 / 139
2017 Annual Report
Year Number of Net profit
Ratio of net profit
shares for attributable to
Number of Amount of attributable to
every 10 Amount of shareholders of
bonus shares dividends for shareholders of
shares after cash bonus listed company in
for every 10 every 10 listed company in
capital (Included tax) consolidated
shares shares consolidated
surplus statement of
statement
capitalization bonus year
2017 0 0 0 0 83,402,663.88 0
2016 0 1 0 23,500,000 83,040,363.66 28.30
2015 0 0 0 0 69,792,841.69 0
3. Information about the repurchase of shares by cash offer that is included into the cash
dividends
□ Applicable √ Not applicable
4.In the reporting period, both the Company’s profit and the parent company’s retained earnings
were positive however not cash dividend distribution proposal has been put forward.
√Applicable □ Not applicable
The reasons for not proposing cash dividend distribution plan for
common stock for the reporting period having the positive profit
The use purpose and use plan of undistributed profits
and having the positive profit attributable to the common stock
shareholders of the parent company
As audited by Daxin Certified Public Accountants Co., Ltd. The competition in the compressor industry has
( Special General Partnership), the net profit attributable to become increasingly fierce. In order to enhance the
shareholders of the parent company in 2017 was RMB core competitiveness of the company and increase the
83,402,663.88, plus the undistributed profit of RMB investment in the research and development of
611,690,176.32 at the beginning of the year, with drawing the frequency-conversion compressors, the company
surplus reserve amount of RMB 5,581,996.78 and with the needs continuous investment.
dividend distributed for common stock was RMB 23,500,000.00,
thus the undistributed profit at the end of 2017 was RMB
666,010,843.42.
Considering taking into account the company's development
and the project's demand for funds, the company's 2017 profit di
stribution plan is formulated as: The profit allocation and the
capitalization from capital public reserve will not be conducted
for the Company in the report period..
23 / 139
2017 Annual Report
II. Performance of commitments
1.The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the reporting period made by the company, shareholder, actual
controller, acquirer, director, supervisor, senior management personnel and other related parities.
√ Applicable □ Not applicable
Party
Whether In the event of
who
Background Whether there is a strictly In the event of failure failure to perform
Commitmen made Commitment time and
of the Commitment Content time limit for performed to perform in due time, in a timely manner,
t Type the duration
Commitment performance in a timely specify the reasons specify the next
commi
manner step of plan
tment
Other Relate Xing Bei Electromechanical From July 1, 2016 to No Yes
d party committed: "in order to further the committed party
ensure the independent operation of opt out
Dongbei B Share, the company and
its controlled enterprises shall stay
independent to Dongbei B Share in
terms of aspects such as
procurement, production, sales, staff,
finance, asset, business and
organization with in accordance with
relevant laws and the regulations of
The
regulatory documents.
commitments
made in the
Solving the Relate Refrigerator Industrial, Huizhi From July 1, 2016 to No Yes
report of
related d party International, Huizhi Partnership and the committed party
acquisition
transaction Xing Bei Electromechanical opt out
or in the
respectively committed as follows: "
statement of
our company will strictly abide by
changes in
the relevant laws, regulations,
equity
regulatory documents, Articles of
Association of the listed company
and the provisions of
decision-making system of the
related transaction to exercise the
rights of shareholders; when the
shareholders' general meeting votes
for a related transaction that involves
our company or our company's
controlled enterprises, our company
will perform the fair decision-making
24 / 139
2017 Annual Report
procedures such as performing the
decision of the related transaction
and avoiding the voting. 2.our
company and our company's
controlled enterprises will avoid or
reduce the related transaction with
the listed company as far as possible;
for the related transaction that cannot
be avoided or having the reasonable
cause, it shall abide by the market
principle of impartiality, fairness and
openness to carry out the transaction
in a fair and reasonable market price
and shall sign an agreement in
accordance with laws, and shall
perform the lawful procedures and
the obligation of information
disclosure and the applying for
approval in accordance with Articles
of Association of the listed Company,
the relevant laws and regulations and
the Listing Rules of Shanghai stock
Exchange, thus to ensure that the
legitimate rights and interests of the
listed company and the other
shareholders will not be damaged in
the related transactions. 3. Not take
advantage of the status and influence
of our company in the listed
company to give a preference better
than the condition offered by a third
party or to seek a priority right to
reach transaction in business
transaction related to the listed
company. 4. Our company shall not
commit any illegal occupation of the
funds or assets of the listed company.
If the listed company provides
guarantee to our company and our
company's controlled enterprises, it
shall be in strict accordance with the
25 / 139
2017 Annual Report
provisions of laws and regulations to
implement the relevant
decision-making and information
disclosure procedures; 5. If the actual
loss caused to the listed company or
its controlled enterprise arising from
the breach of the above
commitments, our company shall
bear the liability for compensation.6.
The above commitments are effective
in the duration that our company
directly or indirectly controls the
listed company and the company
maintains the status of being a listed
company."
Solving the Relate Refrigerator Industrial, Huizhi
horizontal d party International, Huizhi Partnership and
competition Xing Bei Electromechanical
respectively committed as follows:"1.
After the completion of the tender
offer, our company will impel our
company or our company's controlled
enterprises (if any, not contain the
listed company or its controlled
enterprises, the same below) not to
engage in the production or business
activities that directly or indirectly
compete with the listed company and
its controlled enterprises. 2. After the
completion of the tender offer, our
company will supervise and restrain
the production and business activities
of our company or our company's
controlled enterprises, and in the case
that the products or services of our
company or our company's controlled
enterprises is same or familiar with
the products or services of the listed
company and its controlled
enterprises, our company shall take
26 / 139
2017 Annual Report
the following measures to solve it:
(1) if our company and our
company's controlled enterprises
found any new business opportunities
that will constitute direct competition
with the main business of the listed
company or its controlled enterprises,
it shall immediately notify the listed
company and its controlled
subsidiaries in written and spare no
effort to promote the business
opportunities first provided for the
listed company or its controlled
enterprises in reasonable and fair
terms and conditions. The listed
company and its controlled
enterprises shall, within 30 days after
receiving the notice, have the right to
notify our company or our company's
controlled enterprises its intention to
participate in the above-said
opportunities in written, then our
company or our company's controlled
enterprises shall provide the new
business opportunities to the listed
company or its controlled enterprise
for free. If the listed company and its
controlled enterprises decided not to
engage in such new business for
some reasons, it shall promptly notify
our company in writing, and our
company or our company's controlled
enterprises may operate the related
new business on our own. (2) If the
listed company and its controlled
enterprises give up the afore-said
competitive new business
opportunities and our company or
our company's controlled enterprises
engage in such business opportunity
that may constitute a new business
27 / 139
2017 Annual Report
which directly competes with the
main business of the listed company
or its controlled enterprises, our
company shall give the rights of
option to the listed company, that is,
under the applicable laws and
regulations of the listing rules of the
stock exchange, the listed company
and its controlled enterprises shall
have the right to acquire, at any time,
by one time or more times, any
equity, assets and other interests of
our company or our company's
controlled enterprises related to the
above-said competitive business, or
the listed company or its controlled
enterprises may choose operation
methods such as entrusted operation
or lease or contract management to
possess the assets or business in the
competitive business belonging to
enterprises controlled by our
company or our company's controlled
enterprises in accordance with the
provisions of relevant laws and
regulations. If, under the same
conditions, a third party, under the
relevant laws and the relevant articles
of association or the organizational
documents, possesses and is about to
excises the preemptive rights, then
the above commitment is not
applicable, but under such situation,
our company or our company's
controlled enterprises will spare no
effort to persuade that third party to
give up the preemptive rights. (3) if
the Listed Company deems
necessary, our company or our
company's controlled enterprises will
reduce our holding equity, assets and
28 / 139
2017 Annual Report
business to the level losing control
right (if applicable) or to the level of
zero, and the listed company may, in
an appropriate manner, have the
priority to acquire the equity, assets
and business controlled by our
company or our company's controlled
enterprises. 4) Our company
unconditionally accepts other
measures that can eliminate the
horizontal competition offered by the
listed company. (5) Our company
committed that it shall not use the
status in the listed company or the
actual controlling ability (if
applicable) to damage the interests of
the listed company and other
shareholders of the listed company.
(6) Since the date of the commitment
letter issued, our company committed
to make compensation for any actual
losses, damages and expenses caused
to the listed company incurred by any
of the company's breach of the
foregoing commitments. (7)The
above commitments are effective in
the duration that our company
directly or indirectly controls the
listed company and the company
maintains the status of being a listed
company."
Other Acquir Regarding the repayment plan, the From June 9, 2017 to Yes Yes
er acquirer has made the following the completion of
arrangements: 1.based on the repayment
earnings forecast for the next few
years, the Refrigerator Industrial can
give the stable profit dividends to
investment companies which invest
Refrigerator Industrial. 2. Through
MBO, the executives of Dongbei B
29 / 139
2017 Annual Report
can indirectly hold Dongbei B shares
via Dongbei Group, which will
enable their interests to be consistent
with the listed company, thus to
improve the working enthusiasm of
executives, reduce management costs
and increase the performance of the
listed company, so as to make a
contribution to the profit of
Refrigerator Industrial. 3. If
necessary, the shareholders will
provide funds to Refrigerator
Industrial according to their
respective proportion of capital
contribution.
30 / 139
2017 Annual Report
2.The existence of the company's assets or projects earnings forecasts and earnings reporting period is
still in the forecast period, the company has assets or projects meet the original profit forecast made and
the reasons explained
Not applicable
III.Particulars of fund occupation and progress of debt repayment in the report period
□Applicable√Not applicable
IV.Explanation by the Board of Directors about the “ non-standard audit report ”.
□Applicable√Not applicable
V.Explain change of the accounting policies, accounting estimates and measurement methods
1.Explain retrospective restatement due to correction of significant accounting errors
√Applicable□Not applicable
In 2017, the Ministry of Finance issued the "No. 42 Accounting Standard for Business
Enterprises-Non-current Assets for Sale, Disposal Group, and Termination of Operation"-which is
effective from May 28th 2017, and that the prospective approach is required for the non-current assets
held for sale, disposal group and termination of operation existed on the effective date.
In 2017, the Ministry of Finance revised the "No. 16 Accounting Standards for Business
Enterprises-Government Grants‖, and the revised standards are effective from June 12, 2017; the
prospective approach is required for the treatment of the government grants existed on January 1, 2017;
and for the newly added government grants from January 1, 2017 to the effective date, it’s also required
to make adjustments according to the revised standards.
In 2017, the Ministry of Finance issued the ―Notice on the Issuance of the Revised Format of
Financial Statements for General Enterprises‖ (Cai Hui (2017) No. 30). Enterprises that implement the
Accounting Standards for Business Enterprises shall prepare the 2017 financial statement and the future
financial statement in accordance with the Accounting Standards for Business Enterprises and the
requirements of such notice.
The main impact of the Company's implementation of the above two criteria and the No. 30 (2017)
accounting document is as follows:
Prior-
The amount
Amount of period The amount of
Name of reported in the
Changes in Accounting report item restate non-operating
report item prior period as
Policies and Causes affected for the d income reported
affected non-operating
current period amoun in the prior period
expenses
t
1.Government grants related
to the company's daily Other
13,851,422.70 — 12,612,298.51 —
activities are included in income
other income
31 / 139
2017 Annual Report
2.The company's analysis and explanation to the causes and influences of the correction of major
accounting errors
□ Applicable √ Not applicable
3. Information about communication with the former accounting firm
□ Applicable √ Not applicable
4.Other notes
□ Applicable √ Not applicable
VI. Engagement or dismissal of certified public accountants' firm
In RMB
Now appointing
Domestic certified public accountants engaged by the Hubei Daxin Certified Public Accountants Co.,
Company Ltd.(Special General Partnership)
Remuneration for the domestic certified public accountants 45
Recompense by the Company
Time for the domestic cetified public accountants serveas 17
by the company
Outside accounting firm name
Outside accounting firm rewards
Outside accounting firm audit years
Name Remuneration
CPAs firm for the internal control Hubei Daxin Certified Public Accountants Co., 10
Ltd.(Special General Partnership)
Financial Adviser
Sponsor
Dismissal of accounting firms note
□ Applicable √ Not applicable
Circumstances change during the accounting firm's audit explanation
□ Applicable √ Not applicable
VII.Risk of suspending or terminating stock listing
1.Reasons for suspending or terminating listing
□ Applicable √ Not applicable
2. Measures planned to be adopted by the company
□ Applicable √ Not applicable
VIII. Situation and reasons for the termination of listing it is facing
□ Applicable √ Not applicable
IX.Risk of suspending or terminating stock listing
□ Applicable √ Not applicable
X.Significant lawsuits and arbitrations of the Company
□ Applicable √ Not applicable
1. Litigation, arbitration matters that have been disclosed in the temporary announcement but with no
subsequent progress
□ Applicable √ Not applicable
2. Litigation, arbitration matters that have not been disclosed in the temporary announcement or having
subsequent progress
□ Applicable √ Not applicable
3.Other
□ Applicable √ Not applicable
32 / 139
2017 Annual Report
XI. Penalty to the Company and its directors, supervisors and senior executives, controlling
shareholder, actual controller or buyer and particulars about rectification
□Applicable √ Not applicable
XII.Integrity of the company and its controlling shareholders and actual controllers
□Applicable √ Not applicable
XIII.Implementation of the company’s stock incentive plan, employee stock ownership plan or
other employee incentives
1.Related incentives matters that have been disclosed in the temporary announcement but with no
subsequent implementation progress or change
□Applicable √ Not applicable
2. Information about incentives matters that have not been disclosed in the temporary announcement or
having subsequent progress
Stock incentive situation
□Applicable √ Not applicable
Other notes
□Applicable √ Not applicable
Employee stock ownership plan
□Applicable √ Not applicable
Other incentive
□Applicable √ Not applicable
XIV. Significant related-party transactions
(I) Related transactions in connection with daily operation
1.Matters that have been disclosed in provisional announcements and there has been no change or develo
p of subsequent implementation.
□Applicable √ Not applicable
2..Matters that have been disclosed in provisional announcements and there has been no change or
develop of subsequent implementation.
□Applicable √ Not applicable
3.Information not disclosed in temporary announcement
□Applicable √ Not applicable
(II) The acquisition of assets or equity, the sale of the occurrence of the associated transactions
1.Matters that have been disclosed in provisional announcements and there has been no change or
develop of subsequent implementation.
□Applicable √ Not applicable
2.Matters that has been in temporary announcement disclosed, but there is progress in the
implementation of the follow-up or change
□Applicable √ Not applicable
3.Information not disclosed in temporary announcement
□Applicable √ Not applicable
4. If related to a commitment of business performance, it shall disclose the business performance
realized in the reporting period
□Applicable √ Not applicable
(III).Significant related party transactions of common foreign investment
1.Matters that have been disclosed in provisional announcements and there has been no change or develo
p of subsequent implementation.
□Applicable √ Not applicable
33 / 139
2017 Annual Report
2..Matters that have been disclosed in provisional announcements and there has been no change or
develop of subsequent implementation.
□Applicable √ Not applicable
3.Information not disclosed in temporary announcement
□Applicable √ Not applicable
(IV).Related Liabilities
1.Matters that have been disclosed in provisional announcements and there has been no change or develo
p of subsequent implementation.
□Applicable √ Not applicable
2..Matters that have been disclosed in provisional announcements and there has been no change or
develop of subsequent implementation.
□Applicable √ Not applicable
3.Information not disclosed in temporary announcement
□Applicable √ Not applicable
(V)Other
□Applicable √ Not applicable
XV.Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
□Applicable √ Not applicable
(2) Contract
□ Applicable √ Not applicable
(3) Lease
□ Applicable √ Not applicable
2.Guarantees
√Applicable□Not applicable
In RMB
Particulars about the external guarantee of the Company(Barring the guarantee for the controlling subsidiaries)
Occurr
ence wheth
Whether Wheth
date er
Name of Guarantee Type Wheth guarante Guara er
Amount (date Guarantee anti-g
guarantee Relati warra the of er e exceed ntee provid Relati
of of the starting uarant
target on ntee expiration guara termin the demur ed to onship
guarantee agreem date ee
date ntee ated delinque rage related
ent exist
ncy date parties
signing or not
)
Huangshi Huang 3,000.00 2017/11/20 2018/11/20 Guara No No No Yes
Dongbei shi ntee
Electrical Aibo with
The
Appliance Techn joint
Comp
Co., Ltd ology respon
any
Devel sibilit
opme y
nt
34 / 139
2017 Annual Report
Co.,
Ltd.
Huangshi Huang 5,797.90 2017/6/12 2018/11/6 Guara No No No Yes
Dongbei shi ntee
Electrical Dong with
Appliance bei joint
The
Co., Ltd Electr respon
Comp
omech sibilit
any
anical y
Group
Co.,
Ltd.
Huangshi Huang 9,315.51 2017/1/24 2018/10/31 Guara No No No Yes
Dongbei shi ntee
Electrical Dong with
The
Appliance bei joint
Comp
Co., Ltd Refrig respon
any
eratin sibilit
g Co., y
Ltd.
Total amount of guarantee in the report (Barring the 18,113.41
guarantee for the controlling subsidiaries)
Total balance of guarantee in the report(A)(Barring the 18,113.41
guarantee for the controlling subsidiaries)
Guarantees provided by the Company to its controlled subsidiaries
Total amount of guarantees provided to subsidiaries in the report period 171,426.00
Total balance of guarantees provided to subsidiaries at the end of the report 104,775.49
period(B)
Total amount of guarantees provided by the company (including the guarantees provided to controlled subsidiaries)
122,888.90
Total amount of guarantee（A+B）
Proportion of the total guarantee in the net assets of the Company(%) 107.12
Including：
Guarantees provided to the shareholders, substantial controllers and the related 18,113.41
parties（C）
Guarantees provided to objects with over70%in liability/capital rate, directly or 76,210.80
indirectly（D）
Amount of guarantee over 50％ of the net asset（E） 65,530.11
Total of the above （C+D+E） 122,888.90
Explanation of unexpired may commitment joint liability guarantee
Guarantee explanation
3.Situation of Entrusting Others for Managing Spot Asset
(1)Situation of Entrusted Finance
a. Overall information of entrusted wealth-management
□ Applicable √ Not applicable
Other
□ Applicable √ Not applicable
b. Information of single-item entrusted wealth-management
□ Applicable √ Not applicable
Other
□ Applicable √ Not applicable
c.Provision for impairment of entrusted loans
□ Applicable √ Not applicable
35 / 139
2017 Annual Report
（2）Situation of Entrusted Loans
a.Overall information of entrusted loans
□ Applicable √ Not applicable
Other
□ Applicable √ Not applicable
b.Information of single-ttem entrusted loans
□ Applicable √ Not applicable
Other
□ Applicable √ Not applicable
c.Provision for impairment of entrusted loans
□ Applicable √ Not applicable
(3)Other
□ Applicable √ Not applicable
4. Other significant contract
□ Applicable √ Not applicable
XVI.Explanation about other significant matters
□ Applicable √ Not applicable
XVII. The information of actively fulfilling the social responsibility
1.Overview of the annual targeted poverty alleviation
√Applicable □ Not applicable
1. Precision poverty alleviation planning
While creating values for shareholders and improving employees’ benefits, the company has been
earnestly implementing the spirit of poverty alleviation, actively doing a good job of helping and
supporting work, constantly paying attention to the company’s hard-life masses, adhering to the
―people-oriented‖ philosophy, expressing concern and sympathy to the company’s internally distressed
employees, and helping to solve real life difficulties.
2. Summary of Annual Precision Poverty Alleviation
On the one hand, through the establishment of the Love Fund, the company has been assisting the
company's particularly impoverished employees; on the other hand, the company preferentially recruits
people from poor areas to join the company; in 2017, the company invested approximately RMB 1.5
million in poverty alleviation funds.
3. Follow-up Precision Poverty Alleviation Plan
In 2018, the company will further conscientiously study and actively implement the important spirit of
the state on poverty alleviation work, summarize the experience of poverty alleviation work, deeply
understand the actual situation of the poor, provide them with necessary living conditions guarantee, and
continue to create a good atmosphere for helping them.
2..Information about the work on social responsibility
□ Applicable √ Not applicable
36 / 139
2017 Annual Report
3.Environment information
1.If the listed company or its subsidiaries belong to the heavy polluting industry specified by the
National Environmental Protection Department, please specify the information of environmental
protection.
□ Applicable √ Not applicable
2.Companies other than key polluters
□ Applicable √ Not applicable
3.Other notes
□ Applicable √ Not applicable
4.Other notes
□ Applicable √ Not applicable
XVIII. Convertible bonds
1. Information about issuance of convertible bonds
□ Applicable √ Not applicable
2. Information about the holder and guarantor of convertible bonds in the reporting period
□ Applicable √ Not applicable
3. Information about the changes of convertible bonds in the reporting period
□ Applicable √ Not applicable
Information about cumulative bonds conversion into shares in the reporting period
□ Applicable √ Not applicable
4. Information about all the past adjustments of conversion-into-share price
□ Applicable √ Not applicable
5.The company's liabilities, changes in credit and cash arrangements for repaying the debt in future years
□ Applicable √ Not applicable
6. Explanation of other information of convertible bonds
□ Applicable √ Not applicable
VI. Change of share capital and shareholding of Principal Shareholders
Ⅰ.Changes in share capital
1. Changes in share capital
（1）Change in ordinary shares
The Company has not changed ordinary shares of the Report period .
(2)Description of changes in ordinary shares
□ Applicable √ Not applicable
37 / 139
2017 Annual Report
(3)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(If any)
□ Applicable √ Not applicable
(4)Other information necessary to disclose for the company or need to disclosed under requirement from
security regulators
□ Applicable √ Not applicable
2. Change of shares with limited sales condition
□ Applicable √ Not applicable
Ⅱ.Issuing and listing
1. Information about the issuance of securities during the reporting period
□ Applicable √ Not applicable
Description of the situation of issuance of securities during the reporting period (for bonds having
different interest within the duration, please respectively specify)
□ Applicable √ Not applicable
2. Information about changes in the total number of ordinary shares of the company and shareholder
structure and the company's assets and liabilities structure
□ Applicable √ Not applicable
3. Information about the existing internal staff shares
□ Applicable √ Not applicable
4.Situation
Ⅲ.Shareholders and actual controlling shareholder
1.Total shareholders
Total number of common 17,913
shareholders at the end of the
reporting period
Total shareholders at the end of the month from the date of disclosing the annual 17,800
report
The total number of preferred shareholders voting rights restored at period-end
Total preferred shareholders at the end of the month from the date of disclosing the
annual report
2.Number of shareholders and shareholding
In shares
Particulars about the shareholding of the top ten shareholders
Increase Number of Propor Amount of Pledged or frozen
Shareholder
Shareholder name /decreas shares held at tion(% restricted shares
Status Quantity nature
e period -end ) held
Huangshi Dongbei 0 117,600,000 50.04 117,600,000 94,094,000 Domestic
Electromechanical Non-State-o
Pledge
Group Co., Ltd. wned legal
person
38 / 139
2017 Annual Report
ISHARES CORE 769,103 1,581,803 0.67 Foreign
Unkno
MSCI EMERGING Legal
wn
MARKETS ETF person
Sun Menglin 298,301 1,164,851 0.50 omestic
Unkno
natural
wn
person
Jiangsu Luoke 0 800,000 0.34 800,000 Domestic
ElectricGroup Co., Non-State-o
No
Ltd. wned legal
person
Lin Yongtian 158,600 658,600 0.28 Domestic
Unkno
natural
wn
person
Lin Yuyong 406,846 512,746 0.22 Domestic
Unkno
natural
wn
person
China 30,000 511,864 0.22 Foreign
Unkno
MerchantsSecutities Legal
wn
(HK) Co., Ltd. person
Yao Weifang 6,200 441,700 0.19 Domestic
Unkno
natural
wn
person
Oriental Securities 421,035 421,035 0.18 Foreign
Unkno
(HK) Co., Ltd. Legal
wn
person
Ji Mingyu 61,922 409,900 0.17 Domestic
Unkno
natural
wn
person
Shareholding of top 10 shareholders of unrestricted shares
Quantity of Share type
unrestricted
Name of the shareholder shares held at the
Share type Quantity
end of the
reporting period
ISHARES CORE MSCI EMERGING MARKETS ETF 1,581,803 Foreign shares
placed in domestic
exchange
Sun Menglin 1,164,851 Foreign shares
placed in domestic
exchange
Zhou Xiaohai 896,200 Foreign shares
placed in domestic
exchange
Lin Yongtian 658,600 Foreign shares
placed in domestic
exchange
Lin Yuyong 512,746 Foreign shares
placed in domestic
exchange
China MerchantsSecutities (HK) Co., Ltd. 511,864 Foreign shares
placed in domestic
exchange
Yao Weifang 441,700 Foreign shares
placed in domestic
exchange
Oriental Securities (HK) Co., Ltd. 421,035 Foreign shares
placed in domestic
exchange
Ji Mingyu 409,900 Foreign shares
placed in domestic
exchange
Shao Liping 400,900 Foreign shares
placed in domestic
exchange
39 / 139
2017 Annual Report
Explanation on associated relationship among
the aforesaid shareholders
Description of the preferred shareholders
whose voting rights were restored and their
numbers of holding shares
Shareholding of top 10 shareholders of Conditional shares
√Applicable□Not applicable
In Shares
Restricted shares can be
Quantity of traded on
Restricted
No Name of the shareholder conditional shares New number
Time can conditions
held of shares can
be traded
be traded
1 Huangshi Dongbei Electromechanical 117,600,000
Group Co., Ltd.
2 Jiangsu Luoke ElectricGroup Co., Ltd. 800,000
3 Wuhan Xinhua Hardware Factory 400,000
4 Changshu Tianyin Electromechanical Co., 400,000
Ltd.
5 Zhuji LimingDecoration Engineering Co., 400,000
Ltd.
6 Shaoxing Xingbei Pressing Co., Ltd 400,000
7
8
9
10
Explanation on associated relationship among the
aforesaid shareholders
3. Strategic investors or general legal persons due to the placing of new shares to become the top 10
shareholders
□ Applicable √ Not applicable
IV.Brief introduction of the controlling shareholder and actual controller
(1) The controlling shareholder
1. Legal
√Applicable□Not applicable
Name Huangshi Dongbei Electromechanical Group Co., Ltd
Legal representative Yang Baichang
Date of incorporation January 18,2002
Principal business activities Production and sales of refrigerating compressors and electrical motors of
compressors, development and consultation of high-tech products. Housing
rental, car rental, real estate development.
Equity of other
domestic/foreign listed
company with share
controlling and share
participation by
controlling shareholder in reporting period
Other explanation
2.Natural person
□ Applicable √ Not applicable
3. It does not exist a special explanation of the controlling shareholder by the company
40 / 139
2017 Annual Report
□ Applicable √ Not applicable
4. Index and date of change information of the controlling shareholder during the reporting period
□ Applicable √ Not applicable
5.The block diagram of the property right and control relationship between the Company and controlling
shareholders
□ Applicable □ Not applicable
(2) Actual controller
1.Legal
□ Applicable √ Not applicable
2.Natural person
□ Applicable √ Not applicable
3. It does not exist a special explanation of the actual controller by the company
√Applicable□Not applicable
The company's controlling shareholder is Huangshi Dongbei Electromechanical Group Co.,Ltd, whose
controlling shareholder is Huangshi Dongbei Refrigerator Industrial Co., Ltd. In light of that the single
shareholder of Huangshi Dongbei Refrigerator Industrial Co., Ltd is Huangshi Huizhi Investment
Partnership (limited partnership) which is a limited partnership company and its executive
partner-Huangshi Xingbei Electromechanical Co., Ltd has no controlling shareholder and actual
controller, thus the company has no actual controller. For details, please see "Huangshi Electric
Equipment Co.,Ltd's Suggestive Announcement about Changes in the equity structure of the controlling
shareholder and the change of the actual controller".(Announcement No.2016-032)
4. Index and date of change information of the actual controller during the reporting period
□ Applicable √ Not applicable
5.The block diagram of the property right and control relationship between the Company and the actual
controller
□ Applicable √ Not applicable
6.The actual controller controlled the company through trust or other asset management means
41 / 139
2017 Annual Report
□ Applicable √ Not applicable
(3)Other information about the controlling shareholder and the actual controller
□ Applicable √ Not applicable
V.Other legal person shareholders holding more than ten percent shares
□ Applicable √ Not applicable
VI. Description of the situation of limit on reducing shares
□ Applicable √Not applicable
VII. Situation of the Preferred Shares
□ Applicable √Not applicable
42 / 139
2017 Annual Report
VIII.Particulars about Directors, Supervisors, Senior Executives and Employees
I.Change of shareholding and particulars about remuneration
1. The change of shareholding of directors, supervisors and senior executives who currently hold their posts or left their posts in the report period and particulars
about their remuneration
√Applicable Not applicable
In shares
The total
amount of The total
remuneration remuneration
Shares Increase or
from
Beginning Expiration held at Shares decrease in received from
Reason of shareholder or
Name Position Sex Age date of office date of the held at the the amount of the Company in
the change the report other related
term office term year-beg year-end shares for the
period -parties in the
inning year
report period
(RMB’0000)
(RMB’0000)
（Before tax）
Zhu Jinming Board Chairman Male 54 2017.5.24 2020.5.24 0 0 0
Ruan Director Male 47 2017.5.24 2020.5.24 0 0 0
Zhengya
Zhao Dayou Independent director Male 63 2017.5.24 2018.5.24 0 0 0 5
Yu Yumiao Independent director Male 52 2017.5.24 2020.5.24 0 0 0 5
Xie Jincheng Independent director Male 56 2017.5.24 2020.5.24 0 0 0 5
Lu Lihua Deputy Female 47 2017.5.24 2020.5.24 0 0 0 37.59
General Manager and
Secretary to the Board
Zhu Yushan Deputy General Male 36 2017.5.24 2020.5.24 0 0 0 32.12
Manager
Gao Jianjun Deputy General Male 40 2017.5.24 2018.3.29 0 0 0 52.90
Manager
（Have left office）
Dou Zuowei Deputy General Male 36 2017.5.24 2020.5.24 0 0 0 45.16
Manager
Wang Shiwu Chairman of the board Male 45 2017.5.24 2020.5.24 0 0 0
of supervisors
Jiang Min Supervisor Male 49 2017.5.24 2020.5.24 0 0 0
Hu Rongzhi Supervisor Female 42 2017.5.24 2018.3.29 0 0 0 14.93
（Have left office）
Lu Yanying Independent director Female 59 2014.5.20 2017.5.24 0 0 0
（Have left office）
Lin Yinkun Director, Male 46 2017.5.24 2018.1.4 0 0 0 121.50
43 / 139
2017 Annual Report
GeneralManager
（Have left office）
Total / / / / / / 319.20 /
Name Work Experience
Zhu Jinming He has served as director and Vice president Manager of Huangshi Dongbei Electromechanical Co., Ltd.From 2002 to May 2010, and he served as Director and President of
Huangshi Dongbei Electromechanical Group Co., Ltd.and Director of the Company since May 2010. he served as board chairman of the Company since November 27, 2015.
Ruan He served as general manager of Changzhou Luoke Electric Co., Ltd.since 2004, He was served as director of the company since May 2008.
Zhengya
Zhao Dayou He now serves as director of Tourism Planning, Research and Development Center of Three Gorges University, deputy director of Three Gorges Culture, Economy and Social
Development Research Center of Hubei University Culture and Social Science Key Research Base, member of Yichang City Planning Commission and Yichang CPPCC,
and academic pacesetter of Three Gorges University for regional economy.
Yu Yumiao Had been served as the teaching assistant, lecturer, associate professor in the accounting and auditing department of school of Economics of Wuhan University, professor of
accounting department of business school of Wuhan University; currently, serves as professor and doctoral tutor in accounting department of school of economics and
management of Wuhan University; since December 15, 2015, has been served as the company’s independent director.
Xie Jincheng He once served as Dean and Secretary of the Party Committee of the School of Continuing Education of Zhongnan University of Economics and Law. He is currently a
professor at the School of Finance of Zhongnan University of Economics and Law and deputy director of China Investment Research Center of Zhongnan University of
Economics and Law.
Lu Lihua She served as Director of Fanincial Deptement and assistant of General Manager of Huangshi Dongbei Electrical Appliance Co., Ltd since 2005, She now served as Deputy
General Manager ,and Secretary to the Board and Dorector of the Company.
Zhu Yushan He once served as deputy director of the company's information center, production department director, assistant general manager, and director, and now serves as deputy
general manager of the company.
Dou Zuowei He used to be the project manager of LG Electronics Co., Ltd., the head of the new model of the LG Compressor Division, and the head of the development department of the
LG Compressor Division. He is now the deputy general manager of the company.
Gao Jianjun He used to be the production supervisor of Wuxi Guangyang Bearing Co., Ltd. (Japan company), the senior production supervisor/quality manager of Seagate International
Technology Co., Ltd. (US company), and the quality manager of Wuxi Yingdexi Appliance Technology Co., Ltd. (Italian company). He used to be Deputy General Manager of
the company. General manager.
Wang Shiwu From November 2010 to January 2017, he took the posts of Deputy Director and Director of the Office of the Leading Group in Correcting Unhealthy Winds of the Huangshi
City Government, Director of the Office of Optimization of the Economic Development Environment, Director of the Enforcement and Efficiency Supervision Office of the
Huangshi City Commission for Discipline Inspection, and the Fourth Disciplinary Inspection of the Huangshi Commission for Discipline Inspection Director of the room,
since January 2017 has served as Secretary of the Disciplinary Committee and Chairman of the Labor Union of Huangshi Dongbei Electromechanical Group Co., Ltd.
Jiang Min He served as Director of Financial Deptement of Huangshi Dongbei Electromechanical Group Co., Ltd., and now acts as assistant president of Huangshi Dongbei
Electromechanical Group Co., Ltd，He served as Supervisor of the Company since May 2011.
Hu Rongzhi Worked in Huangshi Dongbei Electrical Appliance Co., Ltd . in 1994, engaged in parts sorting, product design, technical standards, technical management, project declarations
and other work, once worked as director of the manager office of Huangshi Dongbei Electric Co., Ltd., currently serving as Huangshi Dongbei Electromechanical Group Co.,
Ltd. Responsible company management department minister.
Lu Yanying She served as Teacher of School of Management, Huazhong University Of Science & Technology and School of Managerment, Wuhan University of Hydraulic and Electrical
Engineering,and now acts as professor of Economics and Management School of Wuhan University .
Lin Yinkun He served as deputy director of process workshop , director of Manager office , Minister of quality Dept of the Company,General Manager of Wuhu Abaur Mechnical &
Electrical Co., Ltd. He now served as director and General Manager of the Company.
44 / 139
2017 Annual Report
Other notes
□Applicable √Not applicable
2.Directors, supervisors and senior management of equity during the reporting period was granted incentive
□Applicable √Not applicable
II.Particulars about duty performance of directors, supervisors and senior executives who currently hold their posts or left their posts in the report period
1. Posts held at corporate shareholders
√Applicable □Not applicable
Name Name of corporate shareholder Position Starting date of term of office Expiry date of term of office
Zhu Jinming Dongbei Group President
Wang Shiwu Secretary of the discipline
Dongbei Group Inspection Commission, Chairman
of the Union
Jiang Min Dongbei Group Vice president
Posts held at corporate
shareholders
2.Posts held at other units
√Applicable □Not applicable
Starting date of term of Expiry date of term of
Name Name of other units Position
office office
Zhao Dayou Three Gorges University Professor
Lu Yanying Wuhan University Ph.D.Supervisor ,Accounting professor of economics
and management
Oceanwide holdings Independent Director
Semir Independent Director
Jinyu medicine Independent Director
Xie Jincheng Zhongnan University of Economics and professor at the School of Finance, Deputy Director
Law of China Investment Research Center
Lu Yanying Wuhan University Accounting professor of economics and management
Shanli Shares Independent Director
Posts held at other units
III. Remuneration of directors, supervisors and senior executives
√Applicable □Not applicable
45 / 139
2017 Annual Report
The decision-making procedure for remuneration of directors, supervisors and
The shareholders' general meeting decided the remuneration .
senior executives:
The determine of remuneration of the basis of directors, supervisors and senior According to the early development of various economic indicators to determine the end of the completion
executives of the total remuneration
Remuneration of directors, supervisors and senior executives As of the date of this report, the remuneration of directors, supervisors and senior management personnel
have been paid.
Total actual remuneration of all directors, supervisors and senior management in Refer to the chapter (1) The change of hold share and remuneration
the end of the report period.
IV.Change in directors, supervisors and senior executives
√Applicable □Not applicable
Name Titles Change situation Reason
Lu Yanying Independent director Leave his post Re-election of the Board
Wang Shiwu Supervisor Election Re-election of the Board
Ma Yanping Supervisor Leave his post Re-election of the Board
V. Information about the received punishments from the securities regulatory agencies in the most recent three years
□Applicable √Not applicable
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2017 Annual Report
VI. The structure of employees in the parent Company and the principal subsidiaries
(1)Particulars of Employees
The number of employees in the parent Company 2,894
The number of employees in the principal subsidiaries 923
Total 3,817
Parent Company and subsidiaries are required to bear the costs of 286
retired employees.
Divided by function
Type Person
Production personnel 3,122
Sales personnel 80
Technical personnel 420
Financial personnel 36
Administrative personnel 159
Total 3,817
Education status
Type Total（Person）
Junior college and above 1,522
Technical secondary shool and Senior High School 2,295
Total 3,817
(2) Remuneration policy
√ Applicable □Not applicable
According to business development of company status, developed a level of remuneration and benefits p
olicies that adapted to the development stage, is committed to create a happy life for the employees.(3)
(3) Training plan
√ Applicable □Not applicable
Staff training is divided into two blocks: 1. pre-job training: training new employees to achieve three lev
el training.So that new employees are familiar with and agree with the corporate culture to adapt to work
as soon as possible. 2.job training: to carry out a variety of training in accordance with the annual traini
ng plan .Enhance staff skills and qualities to ensure that employees complete tasks.
(4)Outsourcing situation
□ Applicable √ No Applicable
(5)Other
□ Applicable √ No Applicable
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2017 Annual Report
IX. Administrative structure
I.Basic state of corporate governance
√ Applicable □Not applicable
During the report period, the company has strictly fulfilled the requirements of ―Corporate Law‖,
―Securities Law‖, ―Articles of Association‖, China Securities Regulatory Commission, Shanghai Stock
Exchange, the relevant laws and regulations and the regular documents, continuously improved the
corporate governance structure, strengthened the information disclosure, standardized the company’s
operation, and enhanced the governance level of the company. The shareholders meeting, the Board of
Directors, the Supervisor Committee and the management of the company shall have clear rights and
duties, and the corporate governance structure of the company has basically met the modern enterprise
system and the requirements of ―Governance Rules of Listed Companies‖. To continually strengthen the
relevant standard governance, the company has issued ―Annual Evaluation Report of Internal Control for
Dongbei B Shares ‖, ―Audit Report of Internal Control for Dongbei B Shares‖, ―Management Method of
Foreign Investment for Dongbei B Shares‖ and other series of standard governance system of the
company according to the relevant laws and regulations of China Securities Regulatory Commission and
Shanghai Stock Exchange. The company has abided by ―Registration and Filing System on Learners of
Inside Information for Dongbei B Shares‖, ―Confidential System of Inside Information for Dongbei B
Shares‖ and ―Registration and Management System on Learners of Inside Information for Dongbei B
Shares‖ to conscientiously do the registration and record on learners of inside information well, and
timely fill in the registration form of inside information learners.During the reporting period, the
company strictly in accordance with the requirements of the above system, strict implementation of the
relevant provisions, earnestly inside information insider's registration, filing work to strengthen the
confidentiality of inside information, to ensure fair information disclosure.
Does there exist any difference in compliance with the corporate governance , the PRC Company Law
and the relevant provisions of CSRC,Any discrepancies should explain why
□Applicable √Not applicable
II. Brief Introduction of Shareholders' General Meeting
Sessions Meeting Date Disclosure index Disclosure date
Annual Genral Meeting of May 24,2017 www.sse.com.cn May 25,2017
2016
The statement of Shareholders' General Meeting:
√ Applicable □Not applicable
Proposal on Amending the Articles of Association of the Company;
The 2016 Annual General Meeting of Shareholders examined and approved the following proposals:
The Work Report of the Board of Directors For 2016;
The work Report of the Supervisory Committee for 2016;
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2017 Annual Report
Annual report for 2016 and its summary;
Proposal for the Final Accounting Report for 2016;
Proposal for the Preplan for Profit Distribution for 2016;
Proposal for Renewing the Engagement of Certified Public Accountants and the Proposal for Internal
Audit Institution;
Proposal of the company and its subsidiaries' 2017-year applying for a comprehensive credit line and the
authorization for providing guarantee to the financing within the comprehensive credit line
Proposal on Providing the Guarantee to the Company’s Controlling Shareholder and its Subsidiaries in
2017;
Proposal on Providing the Guarantee to Huangshi Aibo Technology Development Co., Ltd;
Proposal for The information of Daily Related Transactions of 2016 and Announcement of Expected
Daily related transactions in 2017;
Proposal for Election of Directors;
Proposal for Election of Independent Directors;
Proposal for Election Supervisors.
III. Routine work of the board of directors
(1)Board meetings and resolutions
Attendance of
the
Attendance of board meetings
sharehoolders’
general meeting
The
Whethe attend Whether on
r the ance Number the reasons
indepen record of why not
Name The Attenda
dent of meetings personally The attendance
supposed nce
director shareh attendance Absence attend the record of
times of through
s oolder by means (times) meeting of the sharehoolders’
attendance agent
s’ of board of general meeting
this year (times)
genera communic director for
l ation twice
meetin successively.
g
Zhu No 5 5 3 0 0 No 1
Jinming
Lin No 5 5 3 0 0 No 1
Yinkun
Ruan No 5 5 3 0 0 No 1
Zhengya
Zhao Yes 5 5 3 0 0 No 1
Dayou
Yu Yes 5 5 3 0 0 No 1
Yumiao
Xie Yes 3 2 3 1 0 No 1
Jincheng
Lu Yes 2 2 1 0 0 No 1
Yanying
Explanation personally did not attend two consecutive meetings of the Board
□Applicable √Not applicable
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2017 Annual Report
The number of the meetings of the board of directors 5
within the year
Of which: Number of field meetings 2
Number of meetings held by means of communication 3
Site and the number of meetings was held of 0
communication
(2)Objection of independent directors on some relevant issues
□Applicable √Not applicable
(3)Other
□Applicable √Not applicable
IV.Important observations and recommendations in their duties during the reporting period
raised under the Special Committee of the Board
√ Applicable □Not applicable
During the reporting period, the Board of Directors under the special committee are in favor of the bill
under consideration in the performance of their duties, have not made other comments and suggestions.
V.The Supervisory Committee found that the company's explanation risk
√ Applicable □Not applicable
During the reporting period, the Supervisory Committee of the company regularly reports, according to
the operation, financial condition, as well as related party transactions and other internal control
self-assessment report and other work to perform supervisory duties. Supervisory Committee on
oversight matters during the reporting period without objection.
VI. The company and its controlling shareholder in business, personnel, assets, organization,
finance and other aspects of existence does not guarantee the independence, can not maintain the
ability to operate independently of note
□Applicable √Not applicable
The company's countermeasures, work schedule and follow-up work plan to the existed horizontal
competition
□Applicable √Not applicable
VII.Particulars about mechanism of appraisal of senior executives and establishment and
implementation of stimulation mechanism in the report period
√ Applicable □Not applicable
During the reporting period, Dongbei B shares senior management compensation management approach
"firm basis for consideration by the Board of Directors and the annual management objectives for senior
managers to check and assessment.
VIII. Whether disclose the self-assessment report on internal control
√ Applicable □ Not applicable
The company will disclose the Company’s 2017 Annual Self-assessment Report on Internal Control at
the date of disclosing the annual report, for the full text, please see the company’s announcements
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2017 Annual Report
disclosed on Shanghai Stock Exchange website (www.sse.com.cn).
Description of material deficiencies in the internal control during the reporting period
□ Applicable √ Not applicable
IX. Statement on auditor's report on internal control
The Company prepared and disclosed Report on Self-evaluation of Internal Control for 2017. Hubei
Daxin Certified Public Accountants Co., Ltd. audited the internal control of the Company and issued
Auditor's Report on Internal Control. The full text of the said report was published at the website of
Shanghai Stock Exchange (http: / / www.sse.com.cn). Refer to the appendix for details of the auditor's
report on internal control.
Whether the disclosure of internal control audit report: Yes
X.Other
□ Applicable √ Not applicable
X. Corporation bonds
□ Applicable √ Not applicable
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2017 Annual Report
XI. Financial Report
I.Auditor’s Reoprt
√ Applicable □ Not applicable
Auditor’s Reoprt
Da Xin Shen Zi (2018)No.:2-00315
To all shareholders of Huangshi Dongbei Electrical Appliance Co., Ltd.
I. Opinion
We have audited the financial statements of Huangshi Dongbei Electrical Appliance Co., Ltd.
(hereinafter referred to as "the Company"), which comprise the balance sheet as at December 31, 2017,
and the income statement, the statement of cash flows and the statement of changes in owners' equity for
the year then ended and notes to the financial statements.
In our opinion, the attached financial statements are prepared, in all material respects, in accordance
with Accounting Standards for Business Enterprises and present fairly the financial position of the
Company as at December 31, 2017 and its operating results and cash flows for the year then ended.
II. Basis for Our Opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants in
China. Our responsibilities under those standards are further described in the Auditor's Responsibilities
for the Audit of the Financial Statements section of our report. According to the Code of Ethics for
Chinese CPA, we are independent of the Company in accordance with the Code of Ethics for Chinese
CPA and we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
III. KeyAudit Matters
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.
(A) Recognition of domestic operating income
1. Description of the matter
Please refer to the related disclosures of Note 3-(21) and Note 5-(34) of the financial report. The
Company's operating income mainly comes from the sales of refrigeration compressor products to
refrigeration equipment manufacturers in domestic and overseas markets.
According to the company's accounting policy, there are two ways to recognize the income of the
domestic business: the first one is recognizing the income upon the purchaser's confirmation of receipt
after its use; the second way is recognizing the income when sending out the goods. We focus on the
cut-off of the recognition of operating income in the first approach, as there may be a time difference
between the timing of the receipt of the product by the domestic refrigeration equipment manufacturer
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2017 Annual Report
and the time of sales confirmation, leading to that there may be a risk that the sales income is not
recognized within the appropriate period. Therefore, we deem the recognition of domestic operating
income as a key audit matter.
2. Countermeasures in Audit
Our main audit procedures carried out for income recognition are as follows:
(1) Understand the internal control loop of sales and payments collection, test and evaluate the
effectiveness of the design and implementation of internal controls related to income recognition;
(2) Through the interview with the management of the company (hereinafter referred to as ―the
management‖) to understand the income recognition policy, check the relevant clauses of the major
customers’ contracts, analyze whether the actual implementation of the income recognition policy is
appropriate, and review whether the relevant accounting policies are consistently applied;
(3) Examine the original documents such as contracts or orders, delivery orders, receipts, shipping
documents and so forth of major customers, and verify whether the income recognition is consistent with
the disclosed accounting policy;
(4) Implement the analysis procedure for the operating income, compare it with the historical gross
profit margin, analyze the changes in the gross profit margin, and review the rationality of the income;
(5) For the domestic sales business, the documents related to income recognition, such as contracts
or orders, signed delivery receipts and billing statements, are checked through sampling;
(6) Perform the cut-off test on operating income to confirm whether the income recognition is
recorded in the correct accounting period. A comparative analysis of the changes in income shall be
carried out to mainly compare the annual income and the income of the short-period near the end of the
year with those in the same period in previous years, and the confirmation procedure shall be carried out
for the major customers to understand the reasons for the differences, with selecting the customer
confirmation receipts before and after the date of the balance sheet for checking the accounting records.
(B) The relationship between related parties and the completeness of the transaction
1. Description of the matter
Please refer to the relevant disclosures in note7 of the financial report. As of December 31, 2017, the
Company had related party transactions involving different types of transactions with related parties, and
we make our attention deeming the relationship between related parties and the completeness of the
transaction as the key audit matter.
2. Countermeasures in Audit
Our main audit procedures for the related parties’ relationship and their related transactions are as
follows:
(1) Get to know the controls related to the related transaction of related parties, test and evaluate
the effectiveness of the design and implementation of internal controls related to related parties’
transaction;
(2) Examine the relevant records or documents to determine whether there are related party
relationships or related party transactions that the management has not previously identified or disclosed
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2017 Annual Report
to certified public accountants;
(3) During the audit process, be vigilant about the following transactions and consider whether
there are related parties that are not identified at the time of the planned audit;
1. Transactions with unusual conditions in price interest rates, guarantees, payments, etc.;
2. Transactions with clear illogic on business grounds;
3. Transactions with that the substance is inconsistent with the form;
4. Transactions handled in an abnormal manner;
5. Large or significant transactions with certain customers or suppliers.
IV. Other information
The management of the Company is responsible for the other information. The other information
comprises information of the Company's annual report in 2017, but excludes the financial statements and
our auditor's report.
Our opinion on the financial statements does not cover the other information and we do not and will not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to
be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date
of this auditor's report, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard
V. Responsibilities of Management and Those Charged with Governance for the Financial
Statements
The Company's management is responsible for preparing the financial statements in accordance with the
requirements of Accounting Standards for Business Enterprises to achieve a fair presentation, and for
designing, implementing and maintaining internal control that is necessary to ensure that the financial
statements are free from material misstatements, whether due to frauds or errors.
In preparing the financial statements, management of the Company 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 basis of accounting unless management either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting
process.
VI. Auditor's Responsibilities for the Audit of 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 auditor's report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the audit standards will always detect a material misstatement when
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2017 Annual Report
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 these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism 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 our 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, 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 management of the Company.
(4) Conclude on the appropriateness of using the going concern assumption by the management of the
Company, and conclude, 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 to draw attention in our
auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor's 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, including the
disclosures, 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 activities within the Company to express an opinion on the financial statements and bear all
liability for the opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit matters, 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 to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
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 our auditor's report unless law or regulation
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2017 Annual Report
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that
a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Hubei Daxin Certified Public Accountants Co., Ltd. ( Special General Partnership)
Chinese C.P.A.: Suo Baoguo(Project Partner)
Beijing China Chinese C.P.A.:Zhang Ling
March 29, 2018
II.Financial statements
Consolidated Balance Sheet
December 31,2017
Prepared by: Huangshi Dongbei Electrical Appliance Co., Ltd.
In RMB
Year-beginning
Items Notes Year-end balance
balance
Current asset：
Monetary fund 628,730,491.66 429,055,741.89
Settlement provision
Outgoing call loan
Financial assets measured at fair value with variations accounted
into current income account
Derivative financial assets
Note receivable 760,479,711.09 670,495,870.59
Account receivable 996,019,110.70 1,036,597,776.58
Prepayments 90,052,403.74 63,177,349.54
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance contracts receivable
Interest receivable
Dividend receivable
Other account receivable 2,501,172.05 8,586,619.35
Repurchasing of financial assets
Inventories 547,305,010.27 385,268,984.66
Assets held for sales
Non-current asset due in 1 year
Other current asset 82,726,575.63 78,299,066.78
Total of current assets 3,107,814,475.14 2,671,481,409.39
Non-current assets：
Loans and payment on other’s behalf disbursed
Disposable financial asset
Expired investment in possess
Long-term receivable
Long term share equity investment 7,901,853.76 8,807,441.97
Property investment 3,216,703.28 3,381,747.44
Fixed assets 1,438,011,522.04 1,518,584,062.55
Construction in progress 949,471.84 15,656,772.91
Engineering material
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2017 Annual Report
Fixed asset disposal
Production physical assets
Gas & petrol
Intangible assets 125,139,532.21 123,019,135.36
R & D petrol
Goodwill
Long-germ expenses to be amortized 7,802,851.16 9,108,739.38
Differed income tax asset 1,149,509.67 1,035,351.89
Other non-current asset 9,603,100.00
Total of non-current assets 1,593,774,543.96 1,679,593,251.50
Total of assets 4,701,589,019.10 4,351,074,660.89
Current liabilities
Short-term loans 815,383,660.00 587,927,999.83
Loan from Central Bank
Deposit received and hold for others
Call loan received
Financial liabilities measured at fair value with variations
accounted into current income account
Derivative financial liabilities
Note payable 1,005,984,488.10 973,506,867.88
Account payable 738,352,039.13 664,618,835.28
Advance payment 18,526,191.08 49,836,616.76
Selling of repurchased financial assets
Fees and commissions receivable
Employees’ wage payable 24,663,399.95 25,199,143.09
Tax payable 29,107,244.83 28,370,056.54
Interest payable 1,650,002.38 5,101,297.79
Dividend payable 10,009,121.12 10,009,121.12
Other account payable 143,212,173.21 143,440,241.74
Reinsurance fee payable
Insurance contract provision
Entrusted trading of securities
Entrusted selling of securities
Liabilities held for sales
Non-current liability due in 1 year 37,445,000.00 31,820,000.00
Other current liability
Total of current liability 2,824,333,319.80 2,519,830,180.03
Non-current liabilities：
Long-term loan 288,140,000.00 331,210,000.00
Bond payable
Including：preferred stock
Sustainable debt
Long-term payable 17,085,779.67
Long-term payable employees’s remuneration
Special payable 33,000,000.00 33,000,000.00
Expected liabilities
Deferred income 144,271,900.16 115,583,696.86
Deferred income tax liability
Other non-current liabilities
Total non-current liabilities 465,411,900.16 496,879,476.53
Total of liability 3,289,745,219.96 3,016,709,656.56
Owners’ equity
Share capital 235,000,000.00 235,000,000.00
Other equity instruments
Including：preferred stock
Sustainable debt
Capital reserves 190,111,836.26 190,111,836.26
Less：Shares in stock
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2017 Annual Report
Other comprehensive income 796,147.00 657,887.24
Special reserves
Surplus reserves 55,256,956.71 49,674,959.93
Common risk provision
Undistributed profit 666,010,843.42 611,690,176.32
Total of owner’s equity belong to the parent company 1,147,175,783.39 1,087,134,859.75
Minority shareholders’ equity 264,668,015.75 247,230,144.58
Total of owners’ equity 1,411,843,799.14 1,334,365,004.33
Total of liabilities and owners’ equity 4,701,589,019.10 4,351,074,660.89
Legal Representative: Zhu Jinming Person in charge of accounting：Lu Lihua
Accounting Dept Leader: Ma Li
Balance sheet of Parent Company
December 31, 2017
Prepared by: Huangshi Dongbei Electrical Appliance Co., Ltd.
In RMB
Year-beginning
Items Notes Year-end balance
balance
Current asset：
Monetary fund 321,873,553.97 225,396,406.02
Financial assets measured at fair value with variations accounted
into current income account
Derivative financial assets
Note receivable 369,888,786.14 348,398,992.67
Account receivable 728,126,242.00 689,089,915.64
Prepayments 98,583,037.30 110,216,234.42
Interest receivable
Dividend receivable
Other account receivable 327,894.18 134,441.17
Inventories 329,329,383.10 217,842,285.95
Assets held for sales
Non-current asset due in 1 year
Other current asset 15,427,138.91 2,042,644.38
Total of current assets 1,863,556,035.60 1,593,120,920.25
Non-current assets：
Disposable financial asset
Expired investment in possess
Long-term receivable
Long term share equity investment 188,161,074.70 188,161,074.70
Property investment
Fixed assets 482,573,300.37 519,881,126.79
Construction in progress 133,333.34 480,079.05
Engineering material
Fixed asset disposal
Production physical assets
Gas & petrol
Intangible assets 41,111,546.00 41,673,353.92
R & D petrol
Goodwill
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2017 Annual Report
Long-germ expenses to be amortized 4,258,993.22 5,957,730.82
Deferred income tax asset
Other non-current asset 9,603,100.00
Total of non-current assets 725,841,347.63 756,153,365.28
Total of assets 2,589,397,383.23 2,349,274,285.53
Current liabilities
Short-term loans 458,383,660.00 247,948,999.83
Financial liabilities measured at fair value with variations
accounted into current income account
Derivative financial liabilities
Note payable 460,809,023.95 462,515,322.64
Account payable 806,055,861.62 301,225,802.55
Advance payment 5,837,906.70 511,643,233.56
Employees’ wage payable 8,379,039.88 9,747,409.36
Tax payable 20,571,977.73 19,567,926.14
Interest payable 606,970.83 2,213,548.96
Dividend payable
Other account payable 66,759,498.07 63,810,787.84
Liabilities held for sales
Non-current liability due in 1 year
Other current liability
Total of current liability 1,827,403,938.78 1,618,673,030.88
Non-current liabilities：
Long-term loan
Bond payable
Including：preferred stock
Sustainable debt
Long-term payable
Employees’ wage payable
Special payable 33,000,000.00 33,000,000.00
Expected liabilities
Deferred income 30,205,402.83 31,133,180.83
Deferred income tax liability
Other non-current liabilities
Total of Non-current liabilities 63,205,402.83 64,133,180.83
Total of liability 1,890,609,341.61 1,682,806,211.71
Owners’ equity
Share capital 235,000,000.00 235,000,000.00
Other equity instrument
Including：preferred stock
Sustainable debt
Capital reserves 90,801,937.51 90,801,937.51
Less：Shares in stock
Other comprehensive income
Special reserves
Surplus reserves 55,256,956.71 49,674,959.93
Undistributed profit 317,729,147.40 290,991,176.38
Total of owners’ equity 698,788,041.62 666,468,073.82
Total of liabilities and owners’ equity 2,589,397,383.23 2,349,274,285.53
Legal Representative: Zhu Jinming Person in charge of accounting：Lu Lihua
Accounting Dept Leader: Ma Li
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2017 Annual Report
Consolidated Income Statement
January –December 2017
In RMB
Year-end Year-beginning
Items Notes
balance balance
I. Income from the key business 3,789,307,855.30 3,473,518,271.43
Incl：Business income 3,789,307,855.30 3,473,518,271.43
Interest income
Insurance fee earned
Fee and commission received
II. Total business cost 3,708,101,842.52 3,400,348,060.76
Incl：Business cost 3,226,141,993.06 2,942,880,386.91
Interest expense
Fee and commission paid
Insurance discharge payment
Net claim amount paid
Insurance policy dividend paid
Insurance policy dividend paid
Reinsurance expenses
Business tax and surcharge 31,209,925.82 18,724,758.10
Sales expense 125,284,709.02 121,943,017.53
Administrative expense 264,325,298.20 271,215,165.05
Financial expenses 53,795,275.40 41,029,022.62
Asset impairment loss 7,344,641.02 4,555,710.55
Add：Gains from change of fir value （―-‖for loss）
Investment gain（―-‖for loss） -905,588.21 1,778,523.43
Incl: investment gains from affiliates -905,588.21 1,778,523.43
Assets disposal income
Gains from currency exchange（―-‖for loss）
Other income 13,851,422.70
III. Operational profit（―-‖for loss） 94,151,847.27 74,948,734.10
Add ：Non-operational income 32,075,422.19 45,611,069.89
Less：Non business expenses 11,832,330.93 8,618,013.35
IV.Total profit(―-‖for loss) 114,394,938.53 111,941,790.64
Less：Income tax expenses 13,554,403.48 10,771,360.72
V. Net profit 100,840,535.05 101,170,429.92
V. Net profit
1.Net continuing operating profit 100,840,535.05 101,170,429.92
2.Termination of operating net profit
Net profit attributable to the owners of parent company
Minority shareholders’ equity 17,437,871.17 18,130,066.26
VI. Other comprehensive income 83,402,663.88 83,040,363.66
Net of profit of other comprehensive income attributable to owners of t 138,259.76 131,867.57
he parent company.
（I）Other comprehensive income items that will not be reclassified 138,259.76 131,867.57
into gains/losses in the subsequent accounting period
1.Re-measurement of defined benefit plans of changes in net debt or n
et assets
2.Other comprehensive income under the equity method investee can n
ot be reclassified into profit or loss.
（II）
Other comprehensive income that will be reclassified into profit or loss
.
1.Other comprehensive income under the equity method investee can b 138,259.76 131,867.57
e reclassified into profit or loss.
2.Gains and losses from changes in fair value available for sale financi
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2017 Annual Report
al assets
3.Held-to-maturity investments reclassified to gains and losses of avail
able for sale financial assets
4.The effective portion of cash flow hedges and losses
5.Translation differences in currency financial statements
6.Other 138,259.76 131,867.57
Net of profit of other comprehensive income attributable to Minority
shareholders’ equity
VII. Total comprehensive income
VII. Total comprehensive income 100,978,794.81 101,302,297.49
Total comprehensive income attributable to the owner of the parent 83,540,923.64 83,172,231.23
company
Total comprehensive income attributable minority shareholders 17,437,871.17 18,130,066.26
VIII. Earnings per share
（I）Basic earnings per share 0.36 0.35
(II)Diluted earnings per share
Legal Representative: Zhu Jinming Person in charge of accounting：Lu Lihua
Accounting Dept Leader: Ma Li
Income statement of the Parent Company
January -December 2017
In RMB
Amount of the Report Amount of previous
Items Notes
period year
I. Income from the key business 2,966,805,199.80 3,042,481,779.09
Incl：Business cost 2,688,367,049.23 2,787,965,412.28
Business tax and surcharge 13,138,689.12 7,177,381.01
Sales expense 67,492,384.83 70,759,721.81
Administrative expense 123,419,191.87 134,314,332.62
Financial expenses 20,048,487.07 688,406.12
Asset impairment loss -273,898.02 636,084.09
Add：Gains from change of fir value （―-‖for loss）
Investment gain（―-‖for loss）
Incl: investment gains from affiliates
Assets disposal income
Other income 1,832,178.00
II. Operational profit（―-‖for loss） 56,445,473.70 40,940,441.16
Add ：Non-operational income 7,207,249.43 8,047,943.76
Less：Non business expenses 7,832,755.33 7,377,623.94
III.Total profit(―-‖for loss) 55,819,967.80 41,610,760.98
Less：Income tax expenses 3,716,807.47
IV. Net profit（―-‖for net loss） 55,819,967.80 37,893,953.51
1.Net continuing operating profit 55,819,967.80 37,893,953.51
2.Termination of operating net profit
V.Net of profit of other comprehensive income
（I）Other comprehensive income items that will not
be reclassified into gains/losses in the subsequent
accounting period
1.Re-measurement of defined benefit plans of changes
in net debt or net assets
2.Other comprehensive income under the equity metho
d investee can not be reclassified into profit or loss.
（ II ）
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2017 Annual Report
Other comprehensive income that will be reclassified i
nto profit or loss.
1.Other comprehensive income under the equity metho
d investee can be reclassified into profit or loss.
2.Gains and losses from changes in fair value available
for sale financial assets
3.Held-to-maturity investments reclassified to gains an
d losses of available for sale financial assets
4.The effective portion of cash flow hedges and losses
5.Translation differences in currency financial stateme
nts
6.Other
VI. Total comprehensive income 55,819,967.80 37,893,953.51
VII. Earnings per share：
（I）Basic earnings per share
(II)Diluted earnings per share
Legal Representative: Zhu Jinming Person in charge of accounting：Lu Lihua
Accounting Dept Leader: Ma Li
Consolidated Cash flow statement
January-December 2017
In RMB
Amount of the Amount of
Items Notes
Report period previous year
I.Net cash flow form business operation
Cash received from sales of products and providing of services 2,800,254,300.57 2,744,385,266.38
Net increase of customer deposits and capital kept for brother
company
Net increase of loans from central bank
Net increase of inter bank loans from other financial bodies
Cash received against original insurance contract
Net cash received from reinsurance business
Net increase of client deposit and investment
Net increase of trade financial asset disposal
Cash received as interest, processing fee, and commission
Net increase of inter bank fund received
Net increase of repurchasing business
Tax returned 113,612,159.78 112,928,926.23
Other cash received from business operation 45,726,450.69 37,538,744.06
Subtotal of cash inflow from business activities 2,959,592,911.04 2,894,852,936.67
Cash paid for purchasing of merchandise and services 2,097,750,457.72 2,356,090,130.42
Net increase of client trade and advance
Net increase of savings in central bank and brother company
Cash paid for original contract claim
Cash paid for interest, processing fee and commission
Cash paid for policy dividend
Cash paid to staffs or paid for staffs 351,279,133.25 339,660,734.12
Taxes paid 93,297,343.62 61,943,010.32
Other cash paid for business activities 250,483,140.11 224,467,561.91
Subtotal of cash outflow from business activities 2,792,810,074.70 2,982,161,436.77
Cash flow generated by business operation, net 166,782,836.34 -87,308,500.10
II. Cash flow generated by investing
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2017 Annual Report
Cash received from investment retrieving
Cash received as investment gains 27,395,464.63
Net cash retrieved from disposal of fixed assets, intangible assets, and 418,106.00 54,459.00
other long-term assets
Net cash received from disposal of subsidiaries or other operational
units
Other investment related cash received 41,169,600.00 17,380,000.00
Subtotal of cash inflow due to investment activities 41,587,706.00 44,829,923.63
Cash paid for construction of fixed assets, intangible assets and other 82,216,943.75 155,365,478.49
long-term assets
Cash paid at investment
Net increase of loan against pledge
Net cash received from subsidiaries and other operational units
Other cash paid for investment activities
Subtotal of cash outflow due to investment activities 82,216,943.75 155,365,478.49
Net cash flow generated by investment -40,629,237.75 -110,535,554.86
III.Cash flow generated by financing
Cash received as investment
Incl: Cash received as investment from minor shareholders
Cash received as loans 1,126,687,380.00 944,221,000.00
Cash received from bond placing
Other financing –related cash received 146,000,000.00
Subtotal of cash inflow from financing activities 1,126,687,380.00 1,090,221,000.00
Cash to repay debts 909,194,200.00 946,395,080.17
Cash paid as dividend, profit, or interests 102,031,328.93 54,414,049.82
Incl: Dividend and profit paid by subsidiaries to minor shareholders
Other financing –related cash received 18,333.06 146,002,231.17
Subtotal of cash outflow due to financing activities 1,011,243,861.99 1,146,811,361.16
Net cash flow generated by financing 115,443,518.01 -56,590,361.16
IV. Influence of exchange rate alternation on cash and cash equivalents -1,955,462.28 2,333,306.96
V.Net increase of cash and cash equivalents 239,641,654.32 -252,101,109.16
Add：Balance of cash and cash equivalents at the beginning of term 301,740,407.38 553,841,516.54
VI. Balance of cash and cash equivalents at the end of term 541,382,061.70 301,740,407.38
Legal Representative: Zhu Jinming Person in charge of accounting：Lu Lihua
Accounting Dept Leader: Ma Li
Parent Company Cash flow statement
January –December 2017
In RMB
Amount of the Report Amount of previous
Items Notes
period year
I.Cash flow from operating activities
Cash received from sales of goods or rending of services 2,249,873,364.05 1,915,256,810.24
Refunded taxes and levies 107,537,659.78 93,765,940.68
Other cash receipts related to operating activities 18,198,715.15 12,062,922.97
Subtotal of cash inflow 2,375,609,738.98 2,021,085,673.89
Cash paid for purchasing commodities and accepting labor 2,060,571,813.53 1,686,034,617.03
Cash paid to staffs or paid for staffs 151,779,119.22 147,245,419.10
Taxes paid 12,703,551.92 13,193,155.76
Other cash paid for business activities 138,302,989.37 144,330,888.59
Sub-total of cash outflow 2,363,357,474.04 1,990,804,080.48
Cash flow generated by business operation, net 12,252,264.94 30,281,593.41
II.Cash flow generated by investing
Cash received from investment retrieving
Cash received as investment gains 27,395,464.63
Net cash retrieved from disposal of fixed assets, intangible 265,106.00 54,459.00
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2017 Annual Report
assets, and other long-term assets
Net cash received from disposal of subsidiaries or other
operational units
Other investment-related cash received 600,000.00
Sub-total of cash inflow 865,106.00 27,449,923.63
Cash paid for construction of fixed assets, intangible assets and 37,133,146.25 36,146,499.91
other long-term assets
Cash paid as investment
Net cash received from subsidiaries and other operational units
Other cash paid for investment activities
Sub-total of cash outflow 37,133,146.25 36,146,499.91
Net cash flow generated by investment -36,268,040.25 -8,696,576.28
III.Cash flow generated by financing
Cash received as investment
Cash received as loans 715,687,380.00 569,742,000.00
Cash received from bond placing
Other financing –related cash received
Subtotal of cash inflow from financing activities 715,687,380.00 569,742,000.00
Cash to repay debts 506,770,200.00 669,575,400.17
Cash paid as dividend, profit, or interests 51,487,427.78 15,683,233.27
Other financing –related cash received
Subtotal of cash outflow due to financing activities 558,257,627.78 685,258,633.44
Net cash flow generated by financing 157,429,752.22 -115,516,633.44
IV. Influence of exchange rate alternation on cash and cash -2,093,722.04 2,208,124.01
equivalents
V.Net increase of cash and cash equivalents 131,320,254.87 -91,723,492.30
Add: balance of cash and cash equivalents at the beginning of 179,977,299.10 271,700,791.40
term
VI ..Balance of cash and cash equivalents at the end of term 311,297,553.97 179,977,299.10
Legal Representative: Zhu Jinming Person in charge of accounting：Lu Lihua
Accounting Dept Leader: Ma Li
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2017 Annual Report
Consolidated Statement on Change in Owners’ Equity
January-December 2017
In RMB
Amount in this period
Owner’s equity Attributable to the Parent Company
Other Equity Capital Less Minor
Items instrusment reserves Spec Com Total of
: Other shareholders’
Shar Comprehe
ializ
Surplus
mon
Attributable owners’ equity
Share Capital preferr ed risk equity
Sustai Othe es in nsive reserves profit
ed reser prov
nable r stoc Income
stock ve ision
debt k
235,000,000.0 190,111,836.2 657,887.2 49,674,959. 611,690,176.3 247,230,144.5 1,334,365,004.
I.Balance at the end of last year 0 6 4 93 2 8 33
Add: Change of accounting
policy
Correcting of previous errors
Merger of entities under
common control
Other
II.Balance at the beginning of 235,000,000.0 190,111,836.2 657,887.2 49,674,959. 611,690,176.3 247,230,144.5 1,334,365,004.
current year 0 6 4 93 2 8 33
138,259.7 5,581,996.7 54,320,667.10 17,437,871.17 77,478,794.81
III.Changed in the current year 6 8
（ 1 ） Total comprehensive 138,259.7 83,402,663.88 17,437,871.17 100,978,794.8
income 6 1
（II）Investment or decreasing
of capital by owners
1．Ordinary Shares invested by
hareholders
2．Holders of other equity instr
uments invested capital
3．Allotment to the owners (or
shareholders)
4．Other
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2017 Annual Report
（III）Profit allotment 5,581,996.7 -29,081,996.7 -23,500,000.0
8 8 0
5,581,996.7 -5,581,996.78
1.Providing of surplus reserves
8
2.Providing of common risk -23,500,000.0 -23,500,000.0
provisions 0 0
3．Allotment to the owners (or
shareholders)
4．Other
(IV) Internal transferring of
owners’ equity
1. Capitalizing of capital
reserves (or to capital shares)
2. Capitalizing of surplus
reserves (or to capital shares)
3．Making up losses by surplus
reserves.
4．Other
(V). Special reserves
1. Provided this year
2．Used this term
（VI）Other
235,000,000.0 190,111,836.2 796,147.0 55,256,956. 666,010,843.4 264,668,015.7 1,411,843,799.
IV. Balance at the end of this
0 6 0 71 2 5 14
term
Amount in last year
Owner’s equity Attributable to the Parent Company
Other Equity Minor
Items instrusment Spec Comm Total of owners’
Less: Other shareholders’
ializ on equity
Capital Shares Comprehe Surplus Attributable equity
Share Capital preferr Ot ed risk
Sustai reserves in nsive reserves profit
ed he reser provis
nable stock Income
stock r ve ion
debt
235,000,000.0 190,111,836.2 526,019.6 45,885,564. 532,439,208.0 229,100,078.3 1,233,062,706.8
I.Balance at the end of last year 0 6 7 58 1 2 4
Add: Change of accounting
policy
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2017 Annual Report
Correcting of previous errors
Merger of entities under
common control
Other
235,000,000.0 190,111,836.2 526,019.6 45,885,564. 532,439,208. 229,100,078.3 1,233,062,706.8
II.Balance at the beginning of
0 6 7 58 01 2 4
current year
131,867.5 3,789,395.3 79,250,968.31 18,130,066.26 101,302,297.49
III.Changed in the current year 7 5
（ 1 ） Total comprehensive 131,867.5 83,040,363.66 18,130,066.26 101,302,297.49
income 7
（II）Investment or decreasing
of capital by owners
1．Ordinary Shares invested by
hareholders
2．Holders of other equity instr
uments invested capital
3．Allotment to the owners (or
shareholders)
4．Other
（III）Profit allotment 3,789,395.3 -3,789,395.35
5
3,789,395.3 -3,789,395.35
1.Providing of surplus reserves
5
2.Providing of common risk
provisions
3．Allotment to the owners (or
shareholders)
4．Other
(IV) Internal transferring of
owners’ equity
1. Capitalizing of capital
reserves (or to capital shares)
2. Capitalizing of surplus
reserves (or to capital shares)
3．Making up losses by surplus
reserves.
4．Other
(V). Special reserves
1. Provided this year
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2017 Annual Report
2．Used this term
（VI）Other
235,000,000.0 190,111,836.2 657,887.2 49,674,959. 611,690,176.3 247,230,144.5 1,334,365,004.3
IV. Balance at the end of this
0 6 4 93 2 8 3
term
Legal Representative: Zhu Jinming Person in charge of accounting：Lu Lihua Accounting Dept Leader: Ma Li
Statement of change in owner’s Equity of the Parent Company
January-December 2017
In RMB
Amount in this period
Other Equity
instrusment
Less: Other
Items Capital Specialized Surplus Attributable Total of owners’
Share capital preferr Shares in Comprehensiv
Sustai Othe reserves reserve reserves profit equity
ed stock e Income
nable r
stock
debt
235,000,000.0 90,801,937.51 49,674,959.93 290,991,176.38 666,468,073.82
I.Balance at the end of last year
0
Add: Change of accounting
policy
Correcting of previous errors
Other
235,000,000.0 90,801,937.51 49,674,959.93 290,991,176.38 666,468,073.82
II.Balance at the beginning of
0
current year
5,581,996.78 26,737,971.02 32,319,967.80
III.Changed in the current year
（ 1 ） Total comprehensive 55,819,967.80 55,819,967.80
income
（II）Investment or decreasing
of capital by owners
1．Ordinary Shares invested by
68 / 139
2017 Annual Report
hareholders
2．Holders of other equity instr
uments invested capital
3．Allotment to the owners (or
shareholders)
4．Other
（III）Profit allotment 5,581,996.78 -29,081,996.78 -23,500,000.00
1.Providing of surplus reserves 5,581,996.78 -5,581,996.78
2．Allotment to the owners (or -23,500,000.00 -23,500,000.00
shareholders)
3．Other
(IV)Internal transferring of
owners’ equity
1. Capitalizing of capital
reserves (or to capital shares)
2. Capitalizing of surplus
reserves (or to capital shares)
3．Making up losses by surplus
reserves.
4. Other
(V) Special reserves
1. Provided this year
2．Used this term
（VI）Other
235,000,000.0 90,801,937.51 55,256,956.71 317,729,147.40 698,788,041.62
IV. Balance at the end of this
0
term
Amount in last year
Other Equity instrusment Less: Other Specia
Items Capital Shares Compre lized Total of owners’
Share Capital preferre Surplus reserves Attributable profit
Sustaina Other reserves in hensive reserv equity
d stock stock Income e
ble debt
235,000,000.0 90,801,937.51 49,674,959.93 290,991,176.38 666,468,073.82
I.Balance at the end of last year
0
Add: Change of accounting
policy
69 / 139
2017 Annual Report
Correcting of previous errors
Other
235,000,000.0 90,801,937.51 49,674,959.93 290,991,176.38 666,468,073.82
II.Balance at the beginning of
0
current year
III.Changed in the current year
（ 1 ） Total comprehensive
income
（II）Investment or decreasing
of capital by owners
1．Ordinary Shares invested by
hareholders
2．Holders of other equity instr
uments invested capital
3．Allotment to the owners (or
shareholders)
4．Other
（III）Profit allotment
1.Providing of surplus reserves
2．Allotment to the owners (or
shareholders)
3．Other
(IV)Internal transferring of
owners’ equity
1. Capitalizing of capital
reserves (or to capital shares)
2. Capitalizing of surplus
reserves (or to capital shares)
3．Making up losses by surplus
reserves.
4．Other
(V) Special reserves
1. Provided this year
2．Used this term
（VI）Other
IV. Balance at the end of this 235,000,000.0 90,801,937.51 49,674,959.93 290,991,176.38 666,468,073.82
term 0
70 / 139
2017 Annual Report
Legal Representative: Zhu Jinming Person in charge of accounting：Lu Lihua Accounting Dept Leader: Ma Li
71 / 139
2017 Annual Report
III.Basic Information of the Company
I.Company profile
√ Applicable □ Not applicable
1. Enterprise registration address, organization mode and headquarter address.
Huangshi Dongbei Electrical Appliance Co., Ltd. (hereinafter referred to as the "Company" or the
"Company") March 10, 1999 registered in Hubei Province Administration for Industry and Commerce,
on July 15, 1999 are traded on the Shanghai Stock Exchange. Companies registered capital of RMB 235
million, equity amounted to 235 million shares, par value of 1 yuan. Of which 117.60 million shares of
state-owned legal person shares, held by Huangshi Dongbei Electromechanical Group Co., Ltd ; 2.4
million for corporate shares, by Changzhou Zhongke Electrical Manufacturing Co., Ltd., Changshu
Tianyin Electromechanical Co., Ltd., Zhejiang Lisheng Electromechanical Manufacturing Co., Ltd.,
Shaoxing Xingbei Pressing Co., Ltd., Wuhan Xinhua Pressing Co., Ltd. five promoters hold; 115 million
shares of B shares outstanding.
Registered Address: No.6, Jinshan East Road, Economic & Technology Development Zone, Huangshi
City, Hubei Province.
Unified social credit code : 91420000710920880L
Registered Capital : RMB 235 million
Legal Representative：Zhu Jinming
2.The nature of the company's business and main business activities.
The company's main business for refrigeration compressors, compressor motor production and sales.
Major customers for refrigerators, freezers and other refrigeration products manufacturer.
Business scope: Production and sales of refrigeration compressors and compressor motors;
development, production and consultation of high-tech products; sales of compressor parts and
components; leasing of personal property and real estate; providing of high-tech product inspection and
test & inspection services; warehousing services. (Projects that are subject to approval according to the
law can only be carried out after approval by the relevant department)
II. Consolidated financial statements
√ Applicable □ Not applicable
The company will be fully owned subsidiary included in the consolidated financial statements,
including Wuhu Abaur Mechnical & Electrical Co., Ltd., Huangshi Dongbei Foundry Co., Ltd,. Dongbei
Electromechanical (Jiangsu) Co., Ltd., Dongbei(Wuhan) Technology Innovation Co., Ltd., Alashankou
Dongbei Clean Energy Co., Ltd. ,Dongbei International Trade Co., Ltd..,Dongbei (Wuhu)
Electromechanical Co., Ltd.,Huangshi Donglian New Energy Co., Ltd., Fengtai Donglian New Energy
Co., Ltd.,Wutai Jinhe New Energy Co., Ltd.Thereinto, Huangshi Donglian New Energy Co., Ltd,
Fengtai Donglian New Energy Technology Co., Ltd and Wutai County Jinhe New Energy Co., Ltd are
72 / 139
2017 Annual Report
the newly added second-tier subsidiaries in the year and have not started normal operations; as of the
date of the report, Huangshi Donglian New Energy Co., Ltd and Fengtai Donglian New Energy
Technology Co., Ltd are handling the simple cancellation procedure, and Wutai County Jinhe New
Energy Co., Ltd was cancelled on May 22, 2017.
IV. Basis for the preparation of financial statements
1.Basis for the preparation
The preparation of financial statements of the company based on continuous operation.Base on actual
transactions and events occurring, according to the ministry of finance issued ―Accounting Standards for
Enterprises - Basic Standards‖ specific accounting standards, application guidelines of accounting
standards which was promulgated after, accounting standards interpretation and other requirements
(hereafter named ―Enterprise Accounting Standard‖), based on the significant accounting policies
described below, and will have the preparation to the accounting estimation.
2.Continuous operation.
√ Applicable □ Not applicable
The Company since 12 months after the reporting period does not exist on the company's continued viab
ility of significant concern events or circumstances.
V.Significant accounting policies and accounting estimates
Specific accounting policies and accounting estimates tips:
□Applicable√Not applicable
1.Statement for complying with the accourting standard
The financial statements prepared by the Company comply with the requirements of corporate
accounting standards. They truly and completely reflect the financial situations, operating results and
other relevant information of the company.
2.Fiscal Year
The Company adopts the Gregorian calendar year commencing on January 1 and ending on December
31 as the fiscal year.
3.Operating cycle
√ Applicable □ Not applicable
The company has a 12 -month operating cycle, and its assets and liabilities as liquidity criteria for the
classification.
4.Standard currency for bookkeeping
The Company takes RMB as the standard currency for bookkeeping.
5.Accounting treatment for corporate merger under the same control or different control
√ Applicable □ Not applicable
1. corporate merger under the same control
For the merger of enterprises under the same control, if the consideration of the merging is that it
73 / 139
2017 Annual Report
makes payment in cash, transfers non-cash assets or bears its liabilitys, we will, on the date of merger,
regard the share of the book value of the merged party’s net assets in its owner’s consolidated financial
statement as the initial cost of the long-term equity investment. If the consideration of the merging party
is that it issues equity instruments, he total face value of stocks issued will be regarded as the capital
stock. The difference between the initial cost of the long-term equity investment and book value of
consideration (or the face value of stocks issued) shall offset against the capital reserve. If the capital
reserve is insufficient to dilute, the retained earnings shall be adjusted.
2. corporate merger under different control
For the merger under different control, the merger cost is the total fair value of the assets paid,
liability incurred or bored, and equity securities issued by the merging party to acquire the control right
of the merged party on the date of merger. Acquired identifiable asset, liability or contingent assets that
conform to conditions will be calculated by fair value on the date of merger. The balance of the merger
cost over the merged party’s fair value of identifiable net asset usually accounts for the value of goodwill.
If the merger cost is lower than the merged party’s fair value of identifiable net asset, and remains so
after review, the balance accounts for the non-operating revenue.
6.Preparation of consolidated financial statement
√ Applicable □ Not applicable
1. Scope of consolidated financial statement
We include all subsidiaries (including independent entity under our control) into the scope of
consolidated statement, including enterprises under our control, separable parts of investment recipients
and structure entity.
2.Unify the accounting policies, balance sheet and accounting period of parent company and
subsidiaries.
Subsidiaries and the company adopted accounting policies or be inconsistent in the accounting
period, in preparing Consolidation financial statements, in accordance with the company accounting
policies or has the necessary adjustments to financial statements of the subsidiary during the accounting
period.
3. Offset items in consolidated financial statement
Based on the balance sheet of parent company and subsidiaries, the consolidated financial statement
already offsets internal transaction between the parent company and subsidiaries or between subsidiaries.
The owners’ equity of subsidiaries that does not belong to the share of the parent company, as the equity
of minority shareholders, will be listed as the ―Minority Shareholder Equity‖ under the item ―owners’
equity‖ in the consolidated balance sheet. Long-term equity investment of the parent company held by
the subsidiary will be regarded as the treasury stock of the business group, and as the deduction item of
owners’ equity, will be listed as ―deduction: treasury stock‖ under the item ―owners’ equity‖ in the
consolidated balance sheet.
4. Accounting treatment of merged subsidiaries
For subsidiary obtained by merger under the same control, it is regarded that the merger already
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happens when the final controller begin the real-time control, its asset, liability, record of performance
and cash flow will be included in the consolidated financial statement since the beginning of merger
period; for the subsidiary obtained by merger under different control, when preparing the consolidated
financial statement, individual financial sheets need to be adjusted on the basis of the fair value of
identifiable net asset on the day of merger.
7.Classification of joint arrangements and accounting treatment for joint operation
□Applicable√Not applicable
8. The determination standard in cash and cash equivalents
The cash has been confirmed when the company drew up the cash flow sheet, it referred to the cash can
be used to pay the deposit at any time the cash listed in the cash flow statement refers to the cash in store
and the cash can be obtained at any time. Cash equivalent means the holding period of the company is
9.The foreign currency business and the translation of foreign currency financial statement
√ Applicable □ Not applicable
（1）The foreign currency translation services
The company with the foreign occurring currency transactions, which used the standard money by
the spot exchange rate on the transaction date to enter an item in an account. The balance sheet date, For
monetary items of foreign currency, the spot exchange rate at the date of balance sheet shall be used in
conversion. The exchange balance due to the difference between the spot exchange rate at the date of
balance sheet and the spot exchange rate at initial confirmation or at the date of previous balance sheet
shall be attributed to the profit and loss of current period, except the exchange balance due to the special
loans of foreign currency meeting the conditions of capitalization shall be attributed to the cost of related
assets based on capitalization during the capitalization.For the non-monetary items of foreign currency
measured with historical cost, still the spot exchange rate at the date of transaction shall be used, and the
amount of recording currency shall not be changed. For the non-monetary items of foreign currency
measured with fair value, the spot exchange rate at the date of the fair value confirmation shall be used
in conversion, the difference between the amount of recording currency after conversion and that of
initial recording currency is made as the change of fair value, which shall be attributed to the profit and
loss of current period or confirmed as other composite income and attributed.
（2）The foreign currency financial statements
The company with the subsidiaries, joint ventures and integrated enterprises and so on, will use the
different functional currency account after the conversion by the foreign currency financial statements,
and will have an accounting practice and an editing to the combined financial statements.
The assets in the balance sheet and liabilities items, by using the spot exchange rate on the balance sheet
date, all equity projects except the item of ―Undistributed Profits‖, other items were calculated by the
spot exchange rate. With the income and expense items, it was determined by a systematic and rational
approach, and calculated by the approximate exchange rate of the spot exchange rate to convert on the
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transaction date. The converting differences generated by the foreign currency financial statements, and
all equity items in the balance sheet are listed separately.The foreign currency cash flows are determined
in accordance with systematical and reasonable way, and calculated by the spot exchange rate on the
approximate exchange rate. The impact of the changing exchange rate to the cash amount, is shown
separately in the cash flow statement .In disposal of overseas operation, the conversion difference of the
foreign currency statements related the overseas operation shall be transferred into the profit and loss of
current period in whole or as per the ratio in disposal of the overseas operation.
10.Financial instruments
√ Applicable □ Not applicable
（1）The classification of financial instruments and recognition
The financial instruments classified as financial assets or financial liabilities. The company became a
party in the financial instrument contract; it was recognized as the financial asset or the financial
liability.
The financial assets at the initial recognition are classified as: by measuring at the fair value and its
alternation are reckoned into the financial assets of the profit or loss (included trading financial assets
and the fair value and its alternation are designated into the financial assets of the profit or loss), the
held-to-maturity investment, receivables, and available-for-sale financial assets. Except the receivables
beyond the financial assets classification, which depend on the company and their subsidiaries have the
intention and ability to hold on. Financial asset calculated by fair value and whose change is included in
profit/loss of current period includes the financial asset for short-term sale. Receivable is non-derivative
financial asset that has no quotation in the active market and has recognized or recognizable recovering
amount. Salable financial asset includes non-derivative financial asset defined as salable type when
confirmed initially and financial assets not classified as other types. Held-to-maturity investment refers
to non-derivative financial asset with recognized due date, recognized or recognizable recovering
amount, and of which the management level has clear purpose and capability to hold to the call date.
The financial liabilities at the initial recognition are classified as: by measuring at the fair value and
its alternation are reckoned into the financial liabilities of the profit or loss.
(2)Measurement of financial instruments
The financial assets or financial liabilities are initially recognized as the fair value of the company.
The subsequent measurement shall be disposed by classification: the financial assets measured with fair
value and having its change attributed to the profit and loss of current period, the salable financial assets
and the financial liabilities measured with fair value and having its change attributed to the profit and
loss of current period, Held-to-maturity investment, loan, receivable and other financial liability will be
calculated by amortized cost; equity instrument investment with no quotation in the active market and
whose fair value cannot be reliably measured, and derivative financial assets or liabilities that are
connected with the said equity investment and need to be settled by delivering it, will be calculated by
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cost. The profits and losses arising from the change in the fair value of a financial asset or financial
liability shall be dealt with according to the following provisions, unless it is related to hedging: ①The
profits and losses, arising from the change in the fair value of the financial asset or financial liability
which is measured at its fair value and of which the change is recorded into the profits and losses of the
current period, shall be recorded into the profits and losses of the current period; ②The profits and
losses arising from the change in the fair value of a sellable financial asset shall be included into other
consolidated income .
(3)Recognition of the fair value of financial assets and liabilities
For financial instrument with active market, its fair value is recognized by the quotation in the
active market. For financial instrument without active market, its fair value is recognized by the value
appraisal techniques, which mainly includes the market approach, income approach and cost approach.
（4）The confirmation of the transferring in financial assets and measurement
When the ownership of financial assets is transferring almost all of the risks and rewards, neither
transferring nor retaining them, but give up the control of financial assets, and should terminate and
recognize it as financial capital . the financial assets satisfied the termination conditions, it should be
transferred by measuring; it meant the transferring of the book value in financial assets and
consideration received from the transferring, and the balance in the changing amount of fair value which
directly included in capital surplus, then reckoned in the profit and loss.
If the transfer of partial financial asset satisfies the conditions to stop the recognition, the entire
book value of the transferred financial asset shall, between the portion whose recognition has been
stopped and the portion whose recognition has not been stopped, be apportioned according to their
respective relative fair value.
When the existing obligations of the financial liabilities have been fully or partly lifted, it should be
terminated and confirmed the financial liabilities or a part of it.
（5）The impairment of financial assets
Where a financial asset measured on the basis of post-amortization costs is impaired, an impairment
provision shall be made according to the difference of the book value over current value of the predicted
future cash flow. If there is any objective evidence proving that the value of the said financial asset has
been restored, and it is objectively related to the events that occur after such loss is recognized, the
impairment-related losses as originally recognized shall be reversed and be recorded into the profits and
losses of the current period.
If there is any objective evidence proving that a sellable financial asset is impaired, the
accumulative losses arising from the decrease of the fair value of the shareholder’s equity which was
directly included shall be transferred out and recorded into the impairment losses. For the sellable debt
instruments whose impairment losses have been recognized, if the fair value has risen subsequently and
are related to the subsequent events that occur after the originally impairment losses were recognized,
the originally recognized impairment losses shall be reversed and be recorded into the profits and losses
of the current period. For a sellable equity instrument investment whose impairment losses have been
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recognized, if the fair value has risen subsequently, it shall be included directly into the shareholder’s
equity.
For the equity instrument investment, we define the ―significant‖ or ―prolonged‖ decline of fair
value, calculate cost, recognize the final fair value and define steady decline period according to
following standards:
Significant decline of fair value The decline of final fair value against cost reaches or exceeds 50%
Prolonged decline of fair value decline for 12 consecutive months
Total of valuable consideration (deduct announced but not issued
Cost calculation cash dividends or due bond interest that hasn’t been drawn) and
related transaction fee
For financial instrument with active market, its fair value is
recognized by the quotation in the active market. For financial
Recognition of final fair value
instrument without active market, its fair value is recognized by the
value appraisal techniques
Decline continuously or bound range during the decline tendency
Steady decline period sustaining period being lower than 20%, and the bound sustaining
period not exceeding 6 months
11.Account receivables
(1)Account receivable belong t individual significance and individually assessed for impairment
√ Applicable □ Not applicable
Judgment criteria or amount standard of material specific The receivable with single amount exceeding RMB 5
amount or amount criterial million (including RMB 5 million) shall be confirmed as
the receivable with significant single amount.
Provision method with material specific amount and The depreciation loss test is conducted separately, and if
provision of specific bad debt preparation an objective evidence indicates depreciation of the
receivable, the company shall confirm the depreciation
losses and appropriate the depreciation provisions
according to the difference by which the current value of
future cash flow is lower than its book value.
(2)Provision for credit risk characteristics portfolio of bad debts:
√ Applicable □ Not applicable
Credit risk characteristics of the provision for bad debts method (aging analysis, balance percentage method, other
methods)
Group basis Items with significant single amount but no need single
bad debt provision and items without significant single
amount and big risk
A method of provision for bad debts provision in Group
Group 1 Aging analysis method
Appropriate provisions for doubtful accounts according to aging analysis method in group
√Applicable □Not applicable
Appropriation Ratio of Appropriation Ration of Other
Account Age
Receivables (%) Receivables (%)
Within 1 year（Including 1 year） 2 2
Including：Subitem within 1 year
1－2 years 5 5
2－3 years 30 30
Over 3 years
3－4 years 60 60
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4－5 years
Over 5 years
Over 4 years 100 100
Appropriate provisions for doubtful accounts according to aging analysis method in group
□Applicable√Not applicable
Appropriate provisions for doubtful accounts according to Other analysis method ingroup
□ Applicable √ Not applicable
(3)Account receivable with non-material specific amount but specific bad debt preparation
√ Applicable □ Not applicable
Reason for bad debt provision Difficultly recoverable receivables estimated
The depreciation loss test is conducted separately, and if
an objective evidence indicates depreciation of the
receivable, the company shall confirm the depreciation
Method of appropriation of bad debt provision losses and appropriate the depreciation provisions
according to the difference by which the current value of
future cash flow is lower than its book value.
12.Inventories
√ Applicable □ Not applicable
（1）Category of inventories
Inventories refers to finished goods or merchandise the company holds for sale during its daily operation,
work in process, materials consumed during the process of production or services etc. It mainly include
raw materials, materials for cyclic use, materials for consigned processing, packaging materials,
low-value consumables, work in process, self-made unfinished goods, finished goods (merchandise
inventories) etc.
（2）Accounting for outgoing inventories
When the inventory is delivered, the weighted average method is adopted to determine the actual cost.
（3）Inventory and method of appropriating provisions for inventories write-down
In the date of balance sheet of assets and liabilities, the provision for depreciation of inventories
shall be valuated and appropriated as per the lower between the cost and net realizable value of
individual inventory; but for the inventories big quantity and varieties and lower unit price, appropriated
as per the type of the inventory.
（4）Inventories system
The company implements the perpetual inventories system.
(5) Amortization of low cost and short lived articles and packing
Packaging materials, low-value consumables and other materials for cyclic use are amortized by use of
the one-off amortization method.
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13.Asset held for sale
□Applicable√Not applicable
14.Long-term equity investments
√ Applicable □ Not applicable
1.Determining initial investment cost
The initial investment cost of a long-term equity investment acquired through business combination
under common control is determined at the book value of the acquired equity while in the case of
business combination not under common control the combination costs is taken as the initial investment
cost; The initial investment cost of a long-term equity investment acquired by cash is the paid
purchasing price;For long-term equity investments acquired by issuing equity securities, the initial
investment cost is the fair value of the issued equity securities;Long-term equity investment obtained
through debt restructuring, the initial investment cost shall be in accordance with "Accounting Standards
for Enterprises No. 12 - Debt restructuring" of the relevant provisions;
For investments acquired through exchange of non-monetary assets or debt restructuring, the initial
investment cost is determined in accordance with relevant rules and regulations.
2.Subsequent measurement and recognition of profit and loss
A long-term equity investment of an investing enterprise that is able to control the invested enterprise
should be calculated by the cost approach. The long-term equity investment of associated enterprise and
joint venture enterprises should be calculated by the equity approach. For investing enterprise’s equity
investment to the associated enterprise, if part of it is held indirectly by venture capital institution,
mutual foundation, trust company, investment linked insurance foundation or similar entities, no matter
those entities have significant influence on this part of investment or not, the investing enterprise should
calculate this part of investment by fair value and include its change in the profits and losses according
to Accounting Standards for Enterprises No. 22 Recognition and Measurement of Financial Instruments,
and calculate the rest part of investment by equity approach.
3.Basis for determining common control or significant influence over invested business
Having joint control over invested enterprise indicates that any activity that has significant
influence on the return of a certain arrangement shall not be decided until agreed by parties sharing the
control right, including the selling and buying of goods or labor service, management of financial assets,
purchase and disposal of assets, R&D and financing activities. Significant influence on invested
enterprise refers to holding a voting equity of 20% to 50% of invested enterprise. Or, though the voting
equity accounts less than 20% but one of following conditions is met: have representative in the board of
directors of similar authority of the invested enterprise; participate in the policy formulation of invested
enterprise; assign management personnel for invested enterprise; invested enterprise relies on the
technology or technical material of the investing enterprise; important transaction has been made with
the invested enterprise.
15.Investing real estate
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(1)Section I: If using the cost of metering mode:
Depreciation or amortization method
There are several types of the company’s investing real estate: land use rights for lease, buildings for
lease and land use rights held for transfer after value being added.The investing real estate of the
company is measured at cost initially and then by use of the cost model subsequently.
The lease-out buildings among the investing real estate of the company is depreciated by use of the life
averaging method. The detailed accounting policy is the same as that for fixed assets.Depreciation perod
follows：
Residual value rate Annual depreciation rate
Classification Lifetime（years）
（%） (%)
House and Building 40 5 2.375
The investing real estate of the company is measured at cost initially and then by use of the cost model
subsequently.
16.Fixed assets
（1）Recognition conditions
√ Applicable □ Not applicable
Fixed assets refer to as the tangible assets possessed for producing goods, providing labor, lease or
management with more than one fisical year of service life. Fixed assets are recognized when satisfying
the following conditions.The economic benefits related to such fixed assets can flow into the
enterprise.The cost of such fixed assets can be measured reliably.
(2)Depreciation method
√ Applicable □ Not applicable
Annual depreciation
Residual value rate
Classification Depreciation method Lifetime（years） rate
（%）
(%)
Houses and straight-line method 10-20 5 9.5-4.75
buildings
Machinery straight-line method 5-10 5 19-9.5
equipments
Transportation straight-line method 4-8 5 23.75-11.88
equipments
Other equipments straight-line method 3-5 5 31.67－19.00
(3)The financing leased fixed assets recognized basis, pricing and depreciation method
√ Applicable □ Not applicable
The basis for determining a fixed asset under a financing lease is that all the risks and rewards related to
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the ownership of the fixed asset have been transferred substantively in the lease. A fixed asset under a
financing lease is valued initially at the asset’s fair value or the present value of the minimum lease
payment as of the lease commencement date, whichever is lower. It is also the book entry value of the
asset.For subsequent valuation of a fixed asset under a financing lease, depreciation and impairment
provisions are appropriated in accordance with the depreciation policy the same as that for self-owned
fixed assets.
17.Construction in progress
√ Applicable □ Not applicable
There are two categories of construction in progress in the company: self-operated construction and
subcontracted-out construction. The company converts its construction in progress into fixed assets
when the construction is competed for the intended use. To be eligible for the intended use, the
construction in progress must satisfy one of the following conditions:The physical construction
(including installation) of the fixed asset has been completed or completed substantially;Trial production
or operation has been run and proved that the asset can normally operate or steadily produce qualified
products, or the trial operation results show that the asset can normally work or be open for
business;Expenses on the constructed fixed asset seldom or almost no longer arise;The purchased or
constructed fixed asset has met or substantially matched the design or contract requirements.
18.Borrowing costs
√ Applicable □ Not applicable
（1）Recognition criteria for borrowing costs capitalization
The borrowing costs of the company, which can be directly attributed to acquisition, construction or
production of capitalization eligible assets, are capitalized and counted in the cost of the relevant asset
while other borrowing costs are recognized as expenses when incurred and counted in the profit and loss
of a current accounting period. Capitalization eligible assets refer to fixed assets, investing real estate,
inventory etc., which need to attain the intended use or sale through acquisition, construction or
production activities over a long period.
（2）Calculation of capitalized amount
A capitalization period refers to the period from the commencement to the termination of the
capitalization of borrowing costs, which excludes the suspension period of the borrowing costs
capitalization.A capitalization suspension period means that the acquisition, construction or production
is abnormally interrupted for consecutive three months so the capitalization of the borrowing costs
should be suspended.
Calculation of a capitalized amount: for a special borrowing, it is determined at the interest expenses of
the special borrowing arising in a current period less the interest income from the credit line balance
being deposited in a bank or the income from temporary investment of the balance; for the assets using
general borrowings, the capitalized amount is determined by the weighted average excess of the assets’
accumulated expenses over their special borrowings multiplying the capitalization rate of the used
general borrowings while the capitalization rate is determined by calculating the weighted average
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interest rate of general borrowings; for a borrowing at a discount or premium, the actual interest rate
method is used to determine amortization for each accounting period and adjust interest amount of each
period.
The actual interest rate method is a method of calculating unextinguished discounts or premiums or
interest expenses at the actual interest rate. The actual interest rate is the rate used to derive the present
book value of the borrowing from discounting of the prospective cash flows arising throughout the
expected duration of the borrowing.
19.Biological assets
□Applicable√Not applicable
20.Oil-gas assets
□Applicable√Not applicable
21. .Intangible assets
1. Valuation method, service life, impairment test
√ Applicable □ Not applicable
（1）Measurement of intangible assets
The company measures its intangible assets initially at cost. A purchased intangible asset has the actual
paid price and relevant expenses as its actual cost. For the intangible assets contributed by the investors,
the actual cost is the value set by the investment contract or agreement but if the contract or agreement
value is not fair, the actual cost is determined at fair value. The cost of the intangible assets developed in
house is the total expenses incurred to attain the intended use.
Subsequent measurements are performed on intangible assets in the following ways: for an intangible
asset with a finite useful life, the company adopts the straight-line method for its amortization, and the
useful life and the amortization method are reviewed at the end of each fiscal year and will be adjusted
accordingly if they are different from the original estimates. Intangible assets with an indefinite useful
life are not amortized but a review will be conducted so if there are concrete evidences indicating that
the useful life is finite, such assets will have an estimated useful life and be amortized by use of the
straight-line method.
（2）Recognition of an indefinite useful life
The company is unable to foresee the period that an intangible asset can bring the company economic
benefits, or the useful life of the asset is uncertain. Such an asset can be recognized as an intangible asset
with an indefinite useful life.Recognition of an indefinite useful life is based on: contractual rights or
other legal rights but there are no contractual or legal provisions limiting the service life; the fact that it
is impossible to determine the economic life of the intangible asset even when the conditions of the same
industry or relevant experts’ opinions are taken into account.
At the end of each year, the indefinite useful life of an intangible asset is reviewed upward from the level
of the department that uses the asset, which conducts a basic review, to assess whether there are changes
in the basis for recognizing an indefinite useful life.
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2.Internal research and development
√ Applicable □ Not applicable
The expenses of an in-house R & D project during the research phase are counted in the profit and loss
of a current accounting period when incurred，Those being confirmed in meeting the conditions of the
intangible assets shall be transferred to the accounting of intangible assets.
Specific standards for dividing the research stage and the development stage of internal
research&development projects: Any ongoing planned survey stages for acquiring new technology and
knowledge should be identified as the research stage, whose characteristic is planned and exploratory.
Any stages where research achievement or other knowledge are applied to certain plans or designs to
produce new or materially improved materials, devices and products when the commercial production is
ongoing or before utilizing should be identified as the development stage, whose characteristic is
pertinent and more possible to form an achievement.
22. Impairment of long-term assets
√ Applicable □ Not applicable
Long-term assets like long-term equity investment, investment real estate calculated by cost
approach, fixed assets, project under construction and intangible assets who have impairment on the day
of balance sheet should go through impairment test. If the impairment test result shows that the
recoverable amount of the asset is lower than its book value, impairment provision shall be made
according to the difference and recorded into the impairment losses.
Recoverable amount is the higher one of the net amount of fair value after deducting disposal fee
and the prospective cash flow of asset. Asset impairment provision is calculated and recognized on the
basis of a single asset. If it is difficult to estimate the recoverable amount of a single asset, the
recoverable amount of the asset group which this asset belongs can be calculated. Asset group is the
smallest asset mix that can produce cash inflow independently.
Goodwill separately listed in the financial statement shall be tested for impairment at least annually,
regardless of whether there is any indication of impairment. During the impairment test, the book value
of the goodwill is apportioned to the asset group or combination of asset groups that are expected to
benefit from the synergies of the business combination. If the test result shows that the recoverable
amount of the asset group or combination of asset groups that includes the allocated goodwill is lower
than its book value, it shall recognize the corresponding impairment loss. The amount of impairment
loss is first set off against the book value of the goodwill allocated to the asset group or group of asset
groups, and then is proportionately set off against the book value of other assets other than the goodwill
in the asset group or group of asset groups.
Once the above asset impairment loss is confirmed, the value restored part will not be reversed
thereafter.
23. Amortization method of long-term deferred expenses
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√ Applicable □ Not applicable
The long-term expenses to be amortized of the company refer to all the expenses paid but the benefiting
period of which is over one year (not including one year). They are mainly parking fee, housing
decoration expenses etc. The long-term expenses to be amortized are amortized over the benefiting
period of expense items. For the long-term expenses to be amortized that cannot be benefiting in future
accounting periods, the amortized value of the expense items are all counted in the profit and loss of a
current accounting period.
24. Payroll
(1) Accounting treatment of short-term compensation
√ Applicable □ Not applicable
During the accounting period of an employee providing services to the company, the short-term
compensation is recognized as liabilities, and included in the profits and losses of the current period,
except that it is required or allowed by the accounting standards to be included in the asset cost. Welfare
expenses for the employees will be included in the profits and losses or related asset cost according to
the actual amount. If the welfare expense is nonmonetary, it will be calculated according to the fair value.
For social insurances like medical insurance, work injury insurance, maternity insurance and housing
accumulation fund paid by the company for employees, as well as labor union expenditure and employee
education expenses drawn according to stipulation, during the accounting period of an employee
providing services to the company, the corresponding employee compensation will be recognized
according to stipulated base and proportion, and corresponding liabilities will be recognized and
included into the profits and losses of current period or related asset cost.
(2)Accounting treatment of the welfare after demission
√ Applicable □ Not applicable
During the accounting period of an employee providing services to the company, the payable
amount calculated according to Defined Contribution Plan is recognized as the liabilities, and will be
included in the profits and losses of the current period or related asset cost. The formula defined through
prospective accumulated unit-of-welfare approach will regard the welfare obligation produced by
Defined Benefit Plan as the period of employee providing services, and include it into the profits and
losses of the current period or related asset cost.
(1) Accounting treatment of the demission welfare
√ Applicable □ Not applicable
When the Company provides dismiss welfare for the employee, it should recognize the employee
compensation liabilities produced by dismiss welfare on the earlier of the following two dates: when the
enterprise cannot withdraw the dismiss welfare provided by labor relationship plan or redundancy
proposal; when the enterprise recognizes the cost or fee related to reorganization involving paying
dismiss welfare.
(2) Accounting treatment of the welfare of other long-term staffs
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√ Applicable □ Not applicable
Other long-term employee welfare provided by the Company to employees, if meeting Defined
Contribution Plan conditions, should be treated according to related stipulations of Defined Contribution
Plan. Besides, the net liability or net asset of the other long-term employee welfare should be recognized
and calculated according to related stipulations of Defined Benefit Plan.
25. Estimated liabilities
□Applicable√Not applicable
26. Share-based payment
□Applicable√Not applicable
27. Other financial instruments such as preferred shares and perpetual capital securities
□Applicable√Not applicable
28.Revenue
√ Applicable □ Not applicable
(1)Sales of Goods
Goods sales revenues are recognized according to the contractual or agreement price received or
receivable from the purchasing party when the Goods the company sells satisfy the following conditions:
① the main risks and rewards of the ownership of Goods have been transferred to the purchasing party;
② the company neither reserves the continuing control right related to the ownership nor exert effective
control over the sold merchandise; ③ the received amount can be measured reliably; ④ the relevant
economic benefits are probable to flow into the company; ⑤ and the relevant costs incurred or to be
incurred can be measured reliably.
The detailed principles for the recognition of revenue from selling goods are: ① the goods have
been delivered by the Company, installed and verified by the purchaser, the amount of revenue is already
confirmed, the payment for goods has been received or is anticipated to be recoverable, and the cost can
be measured reliably; ② the goods have been delivered by the Company, verified, signed and received
by the purchaser, the amount of revenue is already confirmed, the payment for goods has been or is
anticipated to be recoverable, and the cost can be measured reliably; ③ for revenue from exporting
goods, the Company have gone through declaration procedures according to requirements in the contract
signed with client and the order, the amount of revenue is already confirmed, the payment for goods has
been received or is anticipated to be recoverable, and the cost can be measured reliably.
(2)Alienation of asset use rights
The company recognizes the revenues from alienation of asset use rights when the economic benefits
related to the alienation can flow in and the received amount can be measured reliably.
29. Government subsidies
Government grants measured in accordance with the amount receivable shall be confirmed when
there is conclusive evidence at the end of the period that they can meet the relevant conditions stipulated
in the financial support policy and it’s expected to receive financial support funds. Except for
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government grants measured according to the amount of receivables, the government grants are
recognized when the grants are actually received.
(1) Judgment basis and accounting treatment of government subsidies related to assets
√ Applicable □ Not applicable
Government grants related to assets are recognized as deferred income. The amount recognized as
deferred income shall be recorded into the gains and losses of the current period in accordance with the
reasonable and systematic method within the use life of the relevant assets. Among them, those related to
the company's daily activities shall be included in other income, and those unrelated to the company's
daily activities shall be included in the non-operating income.
The government subsidies that are obtained by the company used for purchase or construction, or
forming long-term assets by other ways are defined as government subsidies pertinent to assets.
Government grants measured at nominal amounts shall be directly included into the current gains
and losses.
(2) Judgment basis and accounting treatment of government subsidies related to profits
√ Applicable □ Not applicable
Government grants related to income shall be treated as follows: for those are used to compensate
related expenses or losses of the enterprise in the future, they shall be recognized as deferred income and
shall be recorded into the current gains and losses during the period when the related expenses are
recognized; for those are used to compensate the related expenses or losses that have been incurred by
the enterprise, they shall be directly included into the current gains and losses, with that when included
into the current gains and losses, the government grants related to the company's daily activities are
included into other income and the government grants that are not related to the company's daily
activities are included into non-operating income.
The government subsidies other than those pertinent to assets are recognized as the subsidies pertinent to
income.
If the object of the grants is not explicitly specified in the government document, the government grants
shall be divided into asset-related or income-related upon the following judgment basis:
Where the government document explicitly specifies the particular project for which the subsidy is
directed, it shall be divided according to the relative proportion of the expenditure amount of the formed
assets expected in the budget and the expenditure amount included in the expenses of such particular
project, and such dividing proportion needs to be reviewed on each balance sheet date, and if necessary,
it shall make changes accordingly; 2. Where the government document only make a general statement
on the use and does not direct for a particular project, then it shall be deemed as the government grants
related to income.
30. Deferred income tax assets/deferred income tax liabilities
√ Applicable □ Not applicable
（1）Based on the difference between the book value of assets and liabilities and the taxable base (for
items not recognized as assets or liabilities while their taxable base can be determined in accordance
with the provisions of the tax law, the taxable base is the difference), the company calculates and
recognizes deferred income tax assets or liabilities at the tax rate applicable when it is time to recover
87 / 139
2017 Annual Report
the assets or liquidate the liabilities.
（2）Deferred income tax assets are recognized to the limit of taxable income, which can be achieved
probably and be utilized to offset deductible temporary differences. If there are concrete evidences
indicating that sufficient taxable income can be achieved probably in a future period to offset deductible
temporary differences as of the balance sheet date, then the company will recognize the deferred income
tax asset that were not recognized in a previous period. If not, the company will write down the book
value of deferred income tax assets.
（3）For the deductible temporary differences related to the investments on the subsidiaries and associate
enterprises, deferred income tax liabilities are recognized unless the company can control the reversal
time of the temporary differences and such differences probably will not be reversed in the foreseeable
future. Deferred income tax assets will be recognized for the deductible temporary differences related to
the investments on the subsidiaries and associate enterprises when such differences can be reversed
probably in the foreseeable future and it is probable to achieve taxable income in the future, which can
be utilized to offset the deductible temporary differences.
31. Lease
1.Accounting treatment of operating lease
√ Applicable □ Not applicable
Payments made under operating leases straight-line basis over the lease term costs related assets or profit
or loss.
2.Accounting treatments of financial lease
√ Applicable □ Not applicable
The lower of the fair value of leased asset and the current value of lowest lease payment will be
regarded as the entry value of leased assets. The difference between the entry value of the leased assets
and the lowest lease payment will be regarded as the unsettled financing expense and be amortized by
real interest method. The balance of the lowest lease payment deducing unsettled financing expense will
be listed as long-term payables.
32. Other significant accounting policies and estimates
□Applicable√Not applicable
33. Significant change of accounting policies and estimates
(1) Change of accounting policies
√Applicable □ Not applicable
Remarks (name and
Approval
Changes in Accounting Policies and Causes amount of significantly
procedure
affected report item)
In 2017, the Ministry of Finance issued the "No. 42 Accounting Standard for See other instructions
Business Enterprises-Non-current Assets for Sale, Disposal Group, and for details
Termination of Operation"-which is effective from May 28th 2017, and that the
prospective approach is required for the non-current assets held for sale, disposal
group and termination of operation existed on the effective date.
In 2017, the Ministry of Finance revised the "No. 16 Accounting Standards for See other instructions
88 / 139
2017 Annual Report
Business Enterprises-Government Grants‖, and the revised standards are for details
effective from June 12, 2017; the prospective approach is required for the
treatment of the government grants existed on January 1, 2017; and for the
newly added government grants from January 1, 2017 to the effective date, it’s
also required to make adjustments according to the revised standards.
In 2017, the Ministry of Finance issued the ―Notice on the Issuance of the See other instructions
Revised Format of Financial Statements for General Enterprises‖ (Cai Hui for details
(2017) No. 30). Enterprises that implement the Accounting Standards for
Business Enterprises shall prepare the 2017 financial statement and the future
financial statement in accordance with the Accounting Standards for Business
Enterprises and the requirements of such notice.
Other
The main impact of the Company's implementation of the above two criteria and the No. 30 (2017)
accounting document is as follows:
The amount
Prior-pe The amount of reported in
Name of Amount of report
Changes in Accounting riod non-operating the prior
report item item affected for
Policies and Causes restated income reported period as
affected the current period
amount in the prior period non-operati
ng expenses
1.Government grants related
to the company's daily
Other income 13,851,422.70 — 12,612,298.51 —
activities are included in
other income
(2) Change of main accounting estimates
□ Applicable √ Not applicable
34.Other
□ Applicable √ Not applicable
VI. Taxation
1. Main taxes and tax rate
√ Applicable □ Not applicable
Cagegory of taxes Tax basis Tax rate
VAT By the difference between the output tax less deductible VAT 6%、11%、13%、17%
input provision and pay
Consumption tax
Business tax
7%
Tax for city
Should be accounted and paid according to 7% of the payable
maintenance and
current taxes.
construction:
15%、25%
Enterprise income tax Should be accounted and paid according of payable income tax.
3%
Should be accounted and paid according to 3% of payable current
Fees for education:
taxes.
Notes ：Wholly owned subsidiary of Dongbei International Trade Co., Ltd. registered in the British
Virgin Islands, no tax liability.
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
□ Applicable √ Not applicable
89 / 139
2017 Annual Report
2. Tax preference
√ Applicable □ Not applicable
(1)VAT
The company exports products to implement value-added tax "exemption, credit, refund" policy, our
products export tax rebate rate of 17%.
(2) Enterprise income tax
The company and its subsidiaries Wuhu Abaur Mechanical & Electrical Co.,Ltd.and Huangshi Dongbei
Foundry Co., Ltd.,m Dongbei Mechanical & Electrical(Jiangsu) Co., Ltd. reviewed by the relevant
departments, have been identified as high-tech enterprises, the current corporate income tax rate is 15%.
3.Other
□Applicable√Not applicable
VII. Notes on major items in consolidated financial statements
1. Monetary funds
√ Applicable □ Not applicable
In RMB
Items Closing balance Opening balance
Cash on hand 1,311.83 1,310.84
Bank deposit 412,330,451.65 215,594,966.82
Other monetary funds 216,398,728.18 213,459,464.23
Total 628,730,491.66 429,055,741.89
Indluding：The total amount of deposit abroad 25,865,330.12 10,485,841.07
2. Financial assets measured by fair value and the changes be included in the current gains and losses
□ Applicable √ Not applicable
3. Derivative financial assets
□ Applicable √ Not applicable
4.Note receivable
(1) Note receivable listed by category
√Applicable□Not applicable
In RMB
Items Closing balance Opening balance
Bank acceptance bill 570,493,946.74 560,737,893.44
Trade acceptance bill 189,985,764.35 109,757,977.15
Total 760,479,711.09 670,495,870.59
(2) Notes receivable pledged by the Company at the period-end
□ Applicable √ Not applicable
(3) Notes receivable which had endorsed by the Company or had discounted and had not due on the
balance sheet date at the period-end
√Applicable□Not applicable
In RMB’0000
Items Amount of recognition termination at Amount of not terminated recognition
the period-end at the period-end
Bank acceptance bill 33,785.95
Trade acceptance bill
Total 33,785.95
90 / 139
2017 Annual Report
(4) Notes transferred to accounts receivable because drawer of the notes fails to executed the contract or
agreement
□ Applicable √ Not applicable
Other notes
The amount of the bill receivable which has been discounted but undue for the balance sheet date is
RMB 339.4741 million.
5. Accounts receivable
(1) Accounts receivable disclosed by category
√ Applicable □ Not applicable
In RMB
Closing balance Opening balance
Classification Book Balance Bad debt provision Book Balance Bad debt provision
Book Book
Amount Proportion(% Amount Proport value Amount Proportion Amount Proport value
) ion(%) (%) ion(%)
Accounts
receivable of
individual
significance and
subject to
individual
impairment
assessment
Accounts 1,038,347,9 100.00 42,328,86 4.08 1,072,235,126. 100.00 35,637,35 3.32
receivable 80.08 9.38 74 0.16
subjecttoimpair
ment
assessment by
credit risk
characteristics
of a portfolio
Accounts
receivable of
individual
insignificance but
subject ot
individual
impairment
assessment
1,038,347,9 / 42,328,86 / 1,072,235,126. / 35,637,35 /
Total 80.08 9.38 74 0.16
Accounts receivable with significant single amount for which bad debt provision separately accrued at
the period-end
□ Applicable √ Not applicable
In the groups, accounts receivable adopting aging analysis method to accrue bad debt provision:
√Applicable□Not applicable
In RMB
Closing balance
Aging
Account receivable Bad debt provision Withdrawal proportion
Within 1 year
Including ：Subitem within
1 year
Within 1 year 958,956,726.79 19,114,305.26 2
Subtotal within 1 year 958,956,726.79 19,114,305.26 2
1-2 years 37,391,979.10 1,869,598.96 5
2-3 years 29,110,512.31 8,733,153.69 30
Over 3 years
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2017 Annual Report
3-4 years 692,376.03 415,425.62 60
Over 4 years 12,196,385.85 12,196,385.85 100
4-5 years
Over 5 years
Total 1,038,347,980.08 42,328,869.38
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision
□Applicable √ Not applicable
In the groups, accounts receivable adopting other methods to accrue bad debt provision:
□ Applicable √ Not applicable
(2)Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision during the reporting period was of
RMB42,328,869.38;
Of which the significant amount of the reversed or collected part during the reporting period was:
√Applicable□Not applicable
(3) The actual write-off accounts receivable
□ Applicable √ Not applicable
(4) Top 5 of the closing balance of the accounts receivable colleted according to the arrears party
√Applicable□Not applicable
Name Closing balance Proportion (%) Bad debt prosion
1.Client 1 126,073,742.27 12.14 2,521,474.85
2.Client 2 90,273,965.94 8.69 8,944,488.11
3.Client 3 88,445,827.29 8.52 1,768,916.55
4.Client 4 51,974,494.94 5.01 1,039,489.90
5.Client 5 42,530,459.45 4.10 850,609.19
Total 399,298,489.89 38.46 15,124,978.60
(5) Account receivable which terminate the recognition owning to the transfer of the financial assets：
□Applicable√Not applicable
(6) The amount of the assets and liabilities formed by the transfer and the continues involvement of
accounts receivable
□Applicable√Not applicable
Other notes：
□Applicable√Not applicable
6. Prepayment
(1) List by aging analysis:
√ Applicable □ Not applicable
In RMB
Closing balance Opening balance
Aging
Amount Proportion(%) Amount Proportion(%)
92 / 139
2017 Annual Report
81,182,854.12 90.15 42,842,092.47 67.81
Within 1 year
3,658,766.54 4.06 6,239,827.10 9.88
1-2 years
4,882,383.08 5.42 14,095,429.97 22.31
2-3 years
328,400.00 0.37
Over 3 years
90,052,403.74 100.00 63,177,349.54 100.00
Total
Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in
time:
Closing Reason for not
Creditor unit Debt unit Aging
balance settle
Huangshi Dongbei Electrical Beijing Lizhun Machinery 2,574,000.00 1-2 years Under
Appliance Co., Ltd. manufacturing Co., Ltd. Fulfillment
Huangshi Dongbei Electrical Maer Trade (Shanghai) Co., Ltd. 1,920,000.00 1-2 years Under
Appliance Co., Ltd. Fulfillment
(2) Top 5 of the closing balance of the prepayment colleted according to the prepayment target
√ Applicable □ Not applicable
Name Closing balance Proportion(%)
1. Baosteel Huangshi Coated plate Co., Ltd. 30,944,178.93 34.36
2. Wuhan iron & steel co., Ltd. 5,704,120.98 6.33
3. China Shipbuilding heavy Industry Pengli
4,138,400.00 4.60
(Nanjing) Intelligent equipment system Co., Ltd.
4.Changzhou Faderke Clay sand foundry
2,910,000.00 3.23
machinery co., Ltd
5.Hubei Provincial Complete Tendering Co., Ltd. 2,673,185.70 2.97
Total 46,369,885.61 51.49
Other notes：
□Applicable√Not applicable
7. Interest receivable
(1)Classification of interest receivable
□ Applicable √ Not applicable
（2）Important overdue interest
□ Applicable √ Not applicable
Other notes：
□Applicable√Not applicable
8.Dividend receivable
（1）Dividend receivable
□Applicable√Not applicable
(2) Significant dividend receivable aged over 1 year
□Applicable√Not applicable
Other notes：
□Applicable√Not applicable
9. Other accounts receivable
(1) Other accounts receivable disclosed by category
√ Applicable □ Not applicable
93 / 139
2017 Annual Report
In RMB
Closing balance Opening balance
Classification Book Balance Bad debt provision Book Balance Bad debt provision
Book Book
Amount Proporti Amount Proporti Amount Proport Amount Proport
value value
on(%) on(%) ion(%) ion(%)
Other
accounts
receivable of
individual
significance
and subject
to individual
impairment
assessment
Other 2,745,467.58 85.25 244,295.53 8.90 8,652,647.66 100.00 66,028.31 0.76
accounts
receivable
subjecttoi
mpairment
assessment
by credit
risk
characteris
tics of a
portfolio
Other 474,854.58 14.75 474,854.58 100.00
accounts
receivable of
individual
insignificanc
e but subject
ot individual
impairment
assessment
Total 3,220,322.16 / 719,150.11 / 8,652,647.66 / 66,028.31 /
Other accounts receivable with significant single amount for which bad debt provision separately
accrued at the period-end
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting aging analysis method to accrue bad debt provision:
√Applicable□Not applicable
In RMB
Closing balance
Aging Other account receivable Bad debt provision Withdrawal proportion(%)
Withn 1 year
Incluidng：Subitem withn 1 year
Withn 1 year 1,812,803.90 36,256.10 2
Subtotal within 1 year 1,812,803.90 36,256.10 2
1-2 years 287,038.68 14,351.93 5
2-3 years 645,625.00 193,687.50 30
Over 3 years
3-4 years
Over 4 years
4-5 years
Over 5 years 2,745,467.58 244,295.53
Total
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt
94 / 139
2017 Annual Report
provision
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting other methods to accrue bad debt provision:
□ Applicable √ Not applicable
(2)Accounts receivable withdraw, reversed or collected during the reporting period
The amount of the reversed or collected part during the reporting period was of RMB 719,150.11.
Of which the significant amount of the reversed or collected part during the reporting period was of
RMB 000:
□ Applicable √ Not applicable
(3) The actual write-off other accounts receivable
□ Applicable √ Not applicable
The important other receivables verification
□ Applicable √ Not applicable
Other account receivables actually cancel after wtite-off：
□ Applicable √ Not applicable
(4) Other accounts receivable classified by the nature of accounts
√Applicable□Not applicable
In RMB
Nature Closing book balance opening book balance
Petty cash 361,166.52 597,840.30
Deposit 2,193,668.29 7,213,112.30
Current account 665,487.35 841,695.06
Total 3,220,322.16 8,652,647.66
(5) Top 5 of the closing balance of the other accounts receivable colleted according to the arrears party
√Applicable□Not applicable
In RMB
Proportion of the total Closing
Closing year end balance of balance of
Name Nature Aging
balance the accounts bad debts
receivable(%) provision
1.Ningbo Korea Electric Co., Ltd. Deposit 1,000,000.00 Within 1 31.05 20,000.00
year
2. Wuhu Zhongran City Development Deposit 488,650.00 2-3 years 15.17 146,595.00
Co., Ltd.
3.Anhui Xinyang Electronics Co., Ltd. Current 474,854.58 3-4 years 14.75 474,854.58
account
4. Nanjing SKYWORTH home Current 200,000.00 1-2 years 6.21 10,000.00
appliance Co., Ltd. account
5.State GRAD Hubei Electric Power Deposit 100,000.00 Within 1 3.11 2,000.00
Co.,Ltd.Huangshi Power Supply year
Company
Total / 2,263,504.58 / 70.29 653,449.58
(6) Accounts receivable involved with government subsidies
□ Applicable √ Not applicable
(7) Other account receivable which terminate the recognition owning to the transfer of the financial
assets
□ Applicable √ Not applicable
(8) The amount of the assets and liabilities formed by the transfer and the continues involvement of
other accounts receivable
Other notes
□ Applicable √ Not applicable
95 / 139
2017 Annual Report
10.Inventories
（1）Inventories types
√ Applicable □ Not applicable
In RMB
Closing balance Opening balance
Book balance Provis Book value Book balance Provisi Book value
Items ion for on for
bad bad
debts debts
Raw materials 45,157,464.03 45,157,464.03 32,002,197.56 32,002,197.56
Processing products 194,021,643.99 194,021,643.99 154,754,456.04 154,754,456.04
Stock goods 308,125,902.25 308,125,902.25 198,512,331.06 198,512,331.06
Turnover materials
Consumptive
biological
assets
Construction cont ract
has been com pleted
unsettled a ssets
Total 547,305,010.27 547,305,010.27 385,268,984.66 385,268,984.66
(2) Inventory depreciation reserve
□ Applicable √ Not applicable
(3) Explanation on inventories with capitalization of borrowing costs included at ending balance
□ Applicable √ Not applicable
(4) Assets unsettled formed by construction contract which has completed at period-end
□ Applicable √ Not applicable
Other notes
□ Applicable √ Not applicable
11. Holding assets for sale
□ Applicable √ Not applicable
12. Non-current assets due within 1 year
□ Applicable √ Not applicable
13. Other current assets
√ Applicable □ Not applicable
In RMB
Items Closing balance Opening balance
VAT input tax 82,726,575.63 78,299,066.78
Total 82,726,575.63 78,299,066.78
14. Available-for-sale financial assets
(1) Available-for-sale financial assets
□ Applicable √ Not applicable
96 / 139
2017 Annual Report
(2) Available-for-sale financial assets measured at fair value at period-end
□ Applicable √ Not applicable
(3) Changes of the impairment of the available-for-sale financial assets during the reporting period
□ Applicable √ Not applicable
(4)Relevant description of the end of the fair value of the equity instruments at the end of a serious
decline in fair value or non temporary decline but not related to impairment provision
□ Applicable √ Not applicable
Other notes
□ Applicable √ Not applicable
15. Held-to-maturity investment
(1) Held-to-maturity investment
□ Applicable √ Not applicable
(2) Important held-to-maturity investment at period-end
□ Applicable √ Not applicable
(3) Reclassify of held-to-maturity investment in the period
□ Applicable √ Not applicable
Other notes
□ Applicable √ Not applicable
16. Long-term account receivables
（1）Long-term account receivables
□ Applicable √ Not applicable
(2) Long-term account receivables recognition terminated due to transfer of financial assets
□ Applicable √ Not applicable
(3) Long-term account receivables transferred and assets & liability formed by its continuous
involvement
□ Applicable √ Not applicable
Other notes
□ Applicable √ Not applicable
17. Long-term equity investment
√ Applicable □ Not applicable
In RMB
97 / 139
2017 Annual Report
Increase /decrease
Invest
ment Adjust Closin
gains ment Cash g
Additi Withdr
Openin and of bonus balanc
Decre Chang awal of Closin
g onal losses other or e of
Investee ase es of impair g
balanc recogni compr profits Other impair
invest other ment balance
e invest zed ehensi announ ment
ment equity provisi
under ve ced to provisi
ment on
the incom issue on
equity e
method
I. Joint ventures
Subtotal
II. Associated enterprises
Huangs 6,098, -914,9 5,183,
hi Aibo 462.24 55.03 507.21
Propert
y
Co.,Ltd.
Hubei 2,708, 9,366. 2,718,
Jinling 979.73 82 346.55
Precisio
n
Agricult
ure Co.,
Ltd.
Subtotal 8,807, -905,5 7,901,
441.97 88.21 853.76
8,807, -905,5 7,90
441.97 88.21 1,853.
Total
76
18. Investment property
Measurement model of investment real estate
(1) Investment property adopted the cost measurement mode
In RMB
Items Houses and Land use right Construction in
Total
building progress
I.Originalbookvalue
1. Year-beginning balance 6,934,630.00 6,934,630.00
2. Increased at this period
(1)Outsourcing
(2)Inventory /Fixed assets/ project
under construction
(3)The merger of enterprises increase
3. Decrease at this period
(1)Disposition
(2)Other Out
4.Closing balance 6,934,630.00 6,934,630.00
II.Total accumulated depreciation
accumulated amortization
1. Year-beginning balance 3,552,882.56 3,552,882.56
2. Increased at this period 165,044.16 165,044.16
(1) Withdrawal 165,044.16 165,044.16
3. Decrease at this period
(1)Disposition
98 / 139
2017 Annual Report
(2)Other Out
4. Year-end balance 3,717,926.72 3,717,926.72
III. Impairment allowance
1. Year-beginning balance
2. Increased at this period
(1) Withdrawal
3. Decrease at this period
(1)Disposition
(2)Outsourcing
4. Year-end balance
IV.Book value
1. Closing book value 3,216,703.28 3,216,703.28
2. Book value at year beginning 3,381,747.44 3,381,747.44
(2) Details of investment property failed to accomplish certification of property
□ Applicable √ Not applicable
Other notes
□ Applicable √ Not applicable
19. Fixed assets
(1) List of fixed assets
√ Applicable □ Not applicable
In RMB
Items House and Machinery Transporation Other Total
building equipment eqiupment equipment
I.Originalbookvalue
1. Year-beginning balance 674,777,390.23 1,589,632,148.64 24,380,543.01 41,573,476.23 2,330,363,558.11
2. Increased at this period 23,747,557.77 65,782,622.82 4,003,536.75 435,457.73 93,969,175.07
（1）Purchase 17,756,535.35 53,524,369.96 4,003,536.75 435,457.73 75,719,899.79
（ 2 ） Transferred from
construction in -progress 5,991,022.42 12,258,252.86 18,249,275.28
The merger of enterprises
increase
3. Decreased at this period 78,187,869.23 2,142,821.57 780,487.53 81,111,178.33
（1）Disposal or scrap 78,187,869.23 2,142,821.57 780,487.53 81,111,178.33
4 Year-end balance 698,524,948.00 1,577,226,902.23 26,241,258.19 41,228,446.43 2,343,221,554.85
II. Accumulated depreciation
1. Year-beginning balance 178,366,300.38 581,549,460.33 20,455,759.07 31,407,975.78 811,779,495.56
2. Increased at this period 34,503,923.89 120,755,493.56 1,279,492.08 4,692,370.95 161,231,280.48
(1) Withdrawal 34,503,923.89 120,755,493.56 1,279,492.08 4,692,370.95 161,231,280.48
3.Decreased at tthis period 65,419,453.39 1,685,188.30 696,101.54 67,800,743.23
（1）Disposal or scrap 65,419,453.39 1,685,188.30 696,101.54 67,800,743.23
4. Year-end balance 212,870,224.27 636,885,500.50 20,050,062.85 35,404,245.19 905,210,032.81
III. Impairment allowance
1. Year-beginning balance
2. Increased at this period
99 / 139
2017 Annual Report
(1) Withdrawal
3. Decreased at this period
（1）Disposal or scrap
4. Year-end balance
IV.Book value
1. Closing book value 485,654,723.73 940,341,401.73 6,191,195.34 5,824,201.24 1,438,011,522.04
2. Book value at year
beginning 496,411,089.85 1,008,082,688.31 3,924,783.94 10,165,500.45 1,518,584,062.55
(2) List of temporarily idle fixed assets
□ Applicable √ Not applicable
(3) Fixed assets leased in from financing lease
□ Applicable √ Not applicable
(4) Fixed assets leased out from operation lease
□ Applicable √ Not applicable
(5) Details of fixed assets failed to accomplish certification of property
□ Applicable √ Not applicable
Other notes：
□ Applicable √ Not applicable
20. Construction in progress
(1) List of construction in progress
√Applicable□Not applicable
In RMB
Balance in year-end Balance in year-begin
Items Bad debt Book Value Bad debt Book Value
Book balance Book balance
povision povision
Equipment installation 653,874.35 653,874.35 10,305,737.37 10,305,737.37
Alashankou plant and 4,917,170.04 4,917,170.04
supporting facilities
projects
Software installation 133,333.34 133,333.34 433,865.50 433,865.50
engineering
Foundry Luoqiao Phase 162,264.15 162,264.15
IV Construction Project
Total 949,471.84 949,471.84 15,656,772.91 15,656,772.91
100 / 139
2017 Annual Report
(2) Changes of significant construction in progress
√Applicable□Not applicable
In RMB
Capitalisation of Including：Current
Amount at Other Balance Capitalization
Increase at Transferred to Proportion Progress interest amount of
Name Budget year decreas in rate of Sources of funds
this period fixed assets (%) of work accumulated capitalization of
beginning e year-end interest(%)
balance interest
Equipment 10,305,737.37 2,647,066.2 11,798,309.62 500,619. 653,874.35
installation 6 66
Alashankou plant 4,917,170.04 1,533,795.6 6,450,965.66 - -
and supporting 2
facilities projects
Software installation 433,865.50 374,920.19 675,452. 133,333.34
engineering 35
Foundry Luoqiao - 162,264.15 - 162,264.15
Phase IV
Construction Project
15,656,772.91 4,718,046.2 18,249,275.28 1,176,07 949,471.84 / / / /
Total 2 2.01
101 / 139
2017 Annual Report
(3) List of the withdrawal of the impairment provision of the construction in progress
□ Applicable √ Not applicable
Other notes
□ Applicable √ Not applicable
21. Engineering material
□ Applicable √ Not applicable
22. Liquidation of fixed assets
□ Applicable √ Not applicable
23. Productive biological assets
(1) Measured by cost
□ Applicable √ Not applicable
(2) Measured by fair value
□ Applicable √ Not applicable
Other notes
□ Applicable √ Not applicable
24. Oil-and-gas assets
□ Applicable √ Not applicable
25.Intangible assets
（1）List of intangible assets
√ Applicable □ Not applicable
In RMB
Non-patent
Items Land use right Patent Software Total
Technology
I. Original price
1.Opening balance 137,611,542.75 5,482,816.36 143,094,359.11
2.Increased amount 5,778,978.08 1,397,716.51 7,176,694.59
ofthe period
5,778,978.08 1,261,867.45 7,040,845.53
(1) Purchase
(2)Internal
Development
(3)Increased of
Enterprise Combination
(4) Transfer to 135,849.06 135,849.06
construction project
3.Decreased amount of
the period
102 / 139
2017 Annual Report
(1)Disposition
4. Closing balance 143,390,520.83 6,880,532.87 150,271,053.70
II.Accumulated
amortization
1. Balance in year-begin 17,122,037.20 2,953,186.55 20,075,223.75
2.Increased amount of 3,697,728.27 1,358,569.47 5,056,297.74
the period
(1)Withdrawal 3,697,728.27 1,358,569.47 5,056,297.74
3. Decreased amount of
the period
(1) Disposition
20,819,765.47 4,311,756.02 25,131,521.49
4. Closing balance
III. Provision for
impairment
1. Balance in year-begin
2.Increased amount of
the period
(1)Withdrawal
3. Decreased amount of
the period
(1) Disposition
4. Closing balance
IV. Book value
1. Book value of the 122,570,755.36 2,568,776.85 125,139,532.21
period-end
2. Book value of the 120,489,505.55 2,529,629.81 123,019,135.36
period-begin
The intangible assets by the end of the formation of the company's internal R & D accounted for 0.00%
of the proportion of the balance of intangible assets
(2) Details of fixed assets failed to accomplish certification of land use right
□Applicable√Not applicable
Other notes
□ Applicable √ Not applicable
26. R&D expenses
□Applicable√Not applicable
27. Goodwill
(1) Original book value of goodwill
□Applicable√Not applicable
Notes of the testing process of goodwill impairment, parameters and the recognition method of goodwill
impairment losses:
□Applicable√Not applicable
Other notes
□Applicable√Not applicable
103 / 139
2017 Annual Report
28.Long-term amortization expenses
√ Applicable □ Not applicable
In RMB
Items Opening balance Increase Amortization Decrease Closing balance
amount
Afforestation 5,636,381.18 239,805.83 2,069,509.95 3,806,677.06
fees
Decoration fees 3,472,358.20 609,352.04 2,863,006.16
Mold usage fee 1,152,374.18 19,206.24 1,133,167.94
Total 9,108,739.38 1,392,180.01 2,698,068.23 7,802,851.16
29. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets had not been off-set
√Applicable□Not applicable
In RMB
Closing balance Opening balance
Items Deductible Deferred income Deductible Deferred income tax
temporary tax assets temporary assets
difference difference
Assets impairment 7,663,397.83 1,149,509.67 6,902,345.93 1,035,351.89
provision
Insider trading
unrealized profit
Deductible loss
Total 7,663,397.83 1,149,509.67 6,902,345.93 1,035,351.89
(2) Deferred income tax liabilities had not been off-set
□Applicable√Not applicable
(3) Deferred income tax assets or liabilities listed by net amount after off-set
□Applicable√Not applicable
(4) List of unrecognized deferred income tax assets
√Applicable□Not applicable
In RMB
Items Year-end balance
Year-beginning balance
Deductible temporary difference 35,384,621.66 28,801,032.54
Deductible losses 28,039,641.82 9,926,766.35
Total 63,424,263.48 38,727,798.89
(5) Deductible losses of unrecognized deferred income tax assets will due the following years
√Applicable□Not applicable
In RMB
Notes
Year Year-end balance
Year-beginning balance
2019 2,101,105.36 2,101,105.36
2020 7,499,449.92 7,499,449.92
2021 326,211.07 326,211.07
2022 18,112,875.47
Total 28,039,641.82 9,926,766.35 /
Other notes
□ Applicable √ Not applicable
30. Other non-current assets
√Applicable □ Not applicable
In RMB
104 / 139
2017 Annual Report
Items Closing balance Opening balance
Purchase of house 9,603,100.00
Total 9,603,100.00
31. Short-term loans
(1) Category of short-term loans
√Applicable□Not applicable
In RMB
Items Closing balance Opening balance
Impawn loan
Mortgage loan
815,383,660.00 587,927,999.83
Guaranteed loan
Credit loan
Total 815,383,660.00 587,927,999.83
(2) List of the short-term loans overdue but not return
□Applicable√Not applicable
Situation of Overdue Outstanding Short-Term Borrowing
□Applicable√Not applicable
Other notes
□ Applicable √ Not applicable
32. Financial liabilities measured at fair value through current profit and loss
□ Applicable √ Not applicable
33. Derivative financial liabilities
□ Applicable√ Not applicable
34. Note payable
√ Applicable □ Not applicable
In RMB
Items Closing balance Opening balance
Trade acceptance 225,299,336.97 77,161,138.00
Bank acceptance 741,685,151.13 886,345,729.88
L/C 39,000,000.00 10,000,000.00
Total 1,005,984,488.10 973,506,867.88
35. Accounts payable
(1) List of accounts payable
√Applicable□Not applicable
In RMB
Items Closing balance Opening balance
Within 1 year（Including 1 year） 694,016,181.10 634,753,293.91
Over 1 year 44,335,858.03 29,865,541.37
Total 738,352,039.13 664,618,835.28
(2) Notes of the accounts payable aging over one year
√Applicable□Not applicable
105 / 139
2017 Annual Report
In RMB
Items Closing balance Reasons for outstanding or
carry-over
1. Wuhan Jinding heavy Industry Co., Ltd. 3,785,007.00 Contract is in-process of execution
2.Jinan Gengchen Iron & Steel Co., Ltd. 3,730,695.00 Contract is in-process of execution
3.Hubei Jianbang Foundry Material Co., Ltd. 3,573,921.70 Contract is in-process of execution
4.Linzhou Hexin Casting Co., Ltd. 2,554,812.75 Contract is in-process of execution
5.Yicheng Tianli Ferroalloy Co., Ltd. 2,424,200.00 Contract is in-process of execution
6.Qingyuan Yijie(Xiamen) New Energy Engineering 2,311,213.65 Contract is in-process of execution
Co., Ltd.
7.Zhejiang Free Frade Zone Rongheng 1,871,310.00 Contract is in-process of execution
RegenerationResources Technology Co., Ltd.
8.Nanchang Sanfeng Automation Co., Ltd. 1,586,714.53 Contract is in-process of execution
9.Hubei Sanfeng Intelligent Transportation 1,299,145.29 Contract is in-process of execution
Equipment Co., Ltd.
Total 23,137,019.92 /
Other notes
□ Applicable √ Not applicable
36. Advance from customers
(1) List of advance from customers
√Applicable□Not applicable
In RMB
Items Closing balance Opening balance
Within 1 year（Including 1 year） 18,361,176.03 49,147,880.67
Over 1 year 165,015.05 688,736.09
Total 18,526,191.08 49,836,616.76
(2) Significant advance from customers aging over one year
□Applicable√Not applicable
(3) Particulars of settled but unfinished projects formed by construction contract at period-end.
□Applicable√Not applicable
Other notes
□ Applicable √ Not applicable
37. Payroll payable
(1) List of Payroll payable
√Applicable□Not applicable
In RMB
Items
Year-beginning Increase in the Decrease in the Year-end balance
balance current period current period
I. Short-term salary 25,199,143.09 322,823,465.45 323,359,208.59 24,663,399.95
II. Post-employment benefits 25,941,089.62 25,941,089.62
III. Termination benefits 1,978,835.04 1,978,835.04
IV.Other welfare within 1 year
Total 25,199,143.09 350,743,390.11 351,279,133.25 24,663,399.95
(2) List of Short-term salary
√Applicable□Not applicable
In RMB
Balance in Increase at this Decrease at this Balance in
Items
year-begin period period year-end
1.Wages, bonuses, allowances 22,480,711.67 269,094,269.63 268,913,246.84 22,661,734.46
and subsidies
2.Employee welfare 22,499,523.13 22,499,523.13
3. Social insurance premiums 18,617,588.83 18,617,588.83
Including：Medical insurance 17,039,137.93 17,039,137.93
Work injury insurance 969,086.05 969,086.05
Maternity insurance 609,364.85 609,364.85
4. Public reserves for housing 10,619,487.05 10,619,487.05
106 / 139
2017 Annual Report
5.Union funds and staff 2,718,431.42 1,992,596.81 2,709,362.74 2,001,665.49
education fee
6. Short-term paid absences
7.Short-term profit-sharing plan
Total 25,199,143.09 322,823,465.45 323,359,208.59 24,663,399.95
(3) List of drawing scheme
√Applicable□Not applicable
In RMB
Items
Year-beginning Increase in the Decrease in the Year-end balance
balance current period current period
1. Basic old-age insurance 25,077,409.51 25,077,409.51
premiums
2.Unemployment insurance 863,680.11 863,680.11
3. Annuity payment
Total 25,941,089.62 25,941,089.62
Other notes
□ Applicable √ Not applicable
38. Taxes payable
√ Applicable □ Not applicable
In RMB
Items Year-end balance
Year-beginning balance
VAT 628,209.05
Consumption tax
Business tax 49,982.56
Enterprises income tax 24,490,472.88 24,101,136.03
Personal income tax 360,479.02 466,033.66
Urban maintenance and construction 985,391.66 624,993.83
tax
Property tax 881,293.65 757,954.45
Land use tax 894,318.88 881,177.58
Education surcharge 285,808.94 131,352.70
Other 1,209,479.80 729,216.68
Total 29,107,244.83 28,370,056.54
39. Interest payable
√Applicable□Not applicable
In RMB
Items Year-end balance
Year-beginning balance
Installments of long-term interest-bearing loan 1,059,536.19 2,672,932.58
interest and Interest on short-term loans payable
principal at maturity
Corporate bond interest
Interest on short-term loans payable 590,466.19 1,673,036.46
The preference shares are classified as financial
liabilities \ perpetual debt interest
Interest on loans to non-financial institutions 755,328.75
Total a 1,650,002.38 5,101,297.79
Particulars of significant overdue unpaid interest:
□Applicable√Not applicable
Other notes：
□Applicable√Not applicable
40. Dividends payable
107 / 139
2017 Annual Report
√Applicable□Not applicable
In RMB
Items Closing balance Opening balance
Common stock dividends 10,009,121.12 10,009,121.12
Preference shares classified as equity
instruments \ perpetual debt dividend
Preference shares\Perpetual debt
dividend-XXX
Preference shares\Perpetual debt
dividend-XXX
Dividends payable-XXX
Dividends payable-XXX
Total 10,009,121.12 10,009,121.12
41. Other accounts payable
(1) Other accounts payable listed by nature of the account
√Applicable□Not applicable
In RMB
Items Closing balance Opening balance
Unit account 92,105,791.25 82,385,907.50
Petty cash 23,215.72 261.38
Deposit 2,026,638.35 1,754,599.34
Provisional account payable 49,056,527.89 59,299,473.52
Total 143,212,173.21 143,440,241.74
(2) Other significant accounts payable with aging over one year
□Applicable√Not applicable
Other notes
□Applicable√Not applicable
42. Holding unsold liabilities
□Applicable√Not applicable
43. Non-current liabilities due within 1 year
√ Applicable □ Not applicable
In RMB
Items Closing balance Opening balance
Long-term loans due 1 year 37,445,000.00 31,820,000.00
Long-term bond payable due 1 year
Long-term payable due 1 year
Total 37,445,000.00 31,820,000.00
44.Other current liabilities
Other current liabilities
□Applicable√Not applicable
Changes on short term bonds payable:
□Applicable√Not applicable
Other notes
□Applicable√Not applicable
45. Long-term loan
(1) Category of long-term loan
√Applicable□Not applicable
In RMB
Items Closing balance Opening balance
Pledge loan
Mortgage loan 270,450,000.00 302,270,000.00
Guarantee loan 16,250,000.00 27,500,000.00
Credit loan 1,440,000.00 1,440,000.00
108 / 139
2017 Annual Report
Total 288,140,000.00 331,210,000.00
Other notes
□Applicable√Not applicable
46. Bonds payable
(1) Bonds payable
□Applicable√Not applicable
(2) Changes on bonds payable (not including other financial instrument classified as preferred stock and
perpetual capital securities of financial liabilities)
□Applicable√Not applicable
(3) Note to conditions and time of share transfer of convertible bonds
□Applicable√Not applicable
（4）Other financial instruments that are classified as financial liabilities
The issuance of preferred stock and other financial instruments such as perpetual debt
□Applicable√Not applicable
Table of changes in financial instruments such as preferred stock and perpetual debt
□Applicable√Not applicable
Other financial instruments are classified as financial liabilities
□Applicable√Not applicable
Other notes
□Applicable√Not applicable
47. Long-term payable
(1) Long-term payable listed by nature of the account
√ Applicable □ Not applicable
In RMB
Items Opening balance Closing balance
Money should be paid to Yuandong 17,085,779.67 0
International Leasing Limited
Other notes
□Applicable√Not applicable
48. Long term payroll payable
□Applicable√Not applicable
49. Special payable
√ Applicable □ Not applicable
In RMB
Opening balance Opening Decrease at this Opening balance Reason
Items
balance period
Huangshi Municipal Finance 33,000,000.00 33,000,000.00
Bureau entrusted loan
Total 33,000,000.00 33,000,000.00 /
50. Accrued liabilities
□Applicable√Not applicable
51. Deferred income
Deferred income
√ Applicable □ Not applicable
In RMB
Items Opening balance Increase Decrease Closing balance Formation reasons
109 / 139
2017 Annual Report
Government 115,583,696.86 41,169,600.00 12,481,396.70 144,271,900.16
subsidy
Total 115,583,696.86 41,169,600.00 12,481,396.70 144,271,900.16 /
(2) Details of government subsidies
√ Applicable □ Not applicable
In RMB
Amount
Beginning of New subsidy in transferred to Other Asset-related or
Items End of term
term current period non-operational changes income-related
income
Refrigeration c 3,767,291.67 267,492.00 3,499,799.67 Asset-related
ompressor ind
ustrial
transformation
of special fun
ds
Major special f 3,168,750.00 225,000.00 2,943,750.00 Asset-related
unds
Compressor 12,912,232.62 916,848.00 11,995,384.62 Asset-related
industrial
projects
Huangshi City, 544,906.54 38,688.00 506,218.54 Asset-related
construction o
f
affordable hou
sing subsidies
Daye Luo 802,393.33 104,664.00 697,729.33 Asset-related
bridge new
plant
construction
subsidies
Technology 4,900,000.00 700,000.00 4,200,000.00 Asset-related
projects
subsidies
land 2,995,248.00 126,564.00 2,868,684.00 Asset-related
compensation
fee
The special 2,700,000.00 300,000.00 2,400,000.00 Asset-related
funds of
Special Power
Supply Line
Construction
Period III
The subsidy of 20,542,208.03 1,700,794.03 18,841,414.00 Asset-related
financial
infrastructure
The Subsidy 41,666,666.67 40,000,000.00 7,644,539.67 74,022,127.00 Asset-related
funds for
machinery and
equipment
Finance 10,619,000.00 229,600.00 10,389,400.00 Asset-related
Bureau
subsidy
PDM data 225,000.00 99,993.00 125,007.00 Asset-related
center
management
system to the
public
Industrial 10,740,000.00 44,750.00 10,695,250.00 Asset-related
transformation
and upgrading
of the project
subsidy funds
110 / 139
2017 Annual Report
Fixed asset 600,000.00 35,000.00 565,000.00 Asset-related
investment
plan for 2017
Compressor 569,600.00 47,464.00 522,136.00 Asset-related
parts
revamping
project
Total 115,583,696.86 41,169,600.00 12,481,396.70 144,271,900.16 /
Other notes
□Applicable√Not applicable
52. Other non-current liabilities
□Applicable√Not applicable
53. Share capital
√ Applicable □ Not applicable
In RMB
Changed（+，-）
Balance in year- Issuance Capitalizat Balance in
beginning Bonus year-end
of new ion of Other Subtotal
shares
share public
reserve
Total of 235,000,000.00 235,000,000.00
capital
shares
54. Other equity instruments
(1) Basic information of preferred stock, perpetual capital securities and other financial instruments
outstanding issued at period-end
□Applicable√Not applicable
(2) Change list of preferred stock, perpetual capital securities and other financial instruments outstanding
issued at period-end
□Applicable√Not applicable
Changes, reason of change and basis of relevant accounting treatment of other equity instruments in
reporting period:
□Applicable√Not applicable
Other notes
□Applicable√Not applicable
55. Capital reserves
√ Applicable □ Not applicable
In RMB
Items Opening balance Increase Decrease Closing balance
Capital premium 180,001,555.45 180,001,555.45
Other capital reserves 10,110,280.81 10,110,280.81
Total 190,111,836.26 190,111,836.26
56. Treasury stock
□Applicable√Not applicable
57. Other comprehensive income
√Applicable□Not applicable
In RMB
Items Occurred current term End of term
Beginning
111 / 139
2017 Annual Report
of term Less：
Accounted
Amount
as other Attributabl
occurred Less： Attributable
gains e to
before Income to the parent
previously minority
income tax tax Company
but shareholde
of the expenses after tax
transferred rs after tax
period
to gain/loss
this period
1.Other
comprehensive
income that will
not be reclassified
subsequently to
profit or loss
Indluding：Change
as a result of
remeasuremen
t of the net
defined
benefit plan
liability or
asset
Share of other
comprehensive
income of the
investee underthe
equity method that
will not be
reclassified to
profit or loss
II. Other 657,887.24 138,259.76 138,259.76 796,147.00
Comprehensive
income that will be
reclassified
subsequently to
profit or loss
Indluding：Share of
other
comprehensive
income of the
investee under the
112 / 139
2017 Annual Report
equity method that
w8ill be
reclassified to
profit or loss
Gains or losses on
changes in fair
value of
available-for-sale
financial assets
Gains or losses on
reclassification of
held-to-maturityinv
estments to
available-for –sale
financial assets
Effective portion of
gains or losses on
cash flow hedges
657,887.24 138,259.76 138,259.76 796,147.00
Translation
differences of
financial statements
denominated in
foreign currencies
Total of other 657,887.24 138,259.76 138,259.76 796,147.00
comprehensive
income
58. Special reserves
□Applicable√Not applicable
59. Surplus reserves
√ Applicable □ Not applicable
In RMB
Items Opening balance Increase Decrease Closing balance
Statutory surplus 49,674,959.93 5,581,996.78 55,256,956.71
reserves
Discretional surplus
reserves
Reserve funds
Enterprise
development funds
Other
Total 49,674,959.93 5,581,996.78 55,256,956.71
113 / 139
2017 Annual Report
60.Retained profits
√ Applicable □ Not applicable
In RMB
Items Amount of this period Amount of last period
611,690,176.32 532,439,208.01
Before adjustment: Retained profits at the end of
priodyear
Adjustment: Total retained profits at the beginning of year
611,690,176.32 532,439,208.01
After adjustment: Retained profits at the beginning of year
83,402,663.88 83,040,363.66
Add：Net profit attributable to shareholders of the parent
Company for the period
5,581,996.78 3,789,395.35
Less：Appropriation to statutory surplus reserve
Appropriation to discretionary surplus reserve
Appropriation to general risk reserve
23,500,000.00
Ordinary shares’ dividends payable
Ordinary shares’ dividends converted into share capital
Retained profits at the end of the period 666,010,843.42 611,690,176.32
61. Business income, Business cost
√ Applicable □ Not applicable
In RMB
Amount of current period Amount of previous period
Items
Income Cost Income Cost
Income from 3,722,331,925.90 3,180,830,541.84 3,409,757,876.03 2,887,447,650.31
Main Business
Other Business 66,975,929.40 45,311,451.22 63,760,395.40 55,432,736.60
income
Total 3,789,307,855.30 3,226,141,993.06 3,473,518,271.43 2,942,880,386.91
62.Business tax and subjoin
√ Applicable □ Not applicable
In RMB
Items Amount of current period Amount of previous period
Consumption tax
316,966.15
Business tax
7,723,779.39 4,498,400.93
City maintenance and construction tax
Education surtax 3,310,184.94 1,927,886.05
Resource tax
House tax 6,222,185.95 2,390,542.87
Land use tax 8,215,238.86 5,422,040.60
Vehicle and vessel usage tax 58,386.02 49,240.32
Stamp tax 2,716,823.93 2,091,703.67
Other 79,938.78
Water Construction Fund 1,096,607.28 882,759.07
Local education surcharges 1,786,780.67 1,145,218.44
114 / 139
2017 Annual Report
Total 31,209,925.82 18,724,758.10
63.Sales expenses
√ Applicable □ Not applicable
In RMB
Items Amount of current period Amount of previous period
Transport costs 62,218,590.50 48,428,267.95
Travel expenses 4,491,371.57 3,991,352.05
Wege 24,137,669.84 19,692,382.12
Warranty expenses 24,089,140.10 28,247,203.38
Other 10,347,937.01 21,583,812.03
Total 125,284,709.02 121,943,017.53
64.Administrative expenses
√ Applicable □ Not applicable
Items Amount of current period Amount of previous period
Wage 73,433,333.46 72,591,459.42
Travel expenses 14,160,547.17 12,818,185.95
Depreciation 9,759,390.72 10,345,756.27
Repair fees 1,385,312.31 1,518,814.43
Taxes 5,261,995.44
R& D expenses 151,385,325.46 154,818,413.07
Other 14,201,389.08 13,860,540.47
Total 264,325,298.20 271,215,165.05
65. Financial expenses
√ Applicable □ Not applicable
In RMB
Items Amount of current period Amount of previous period
Interest expense 75,835,362.27 67,720,748.91
Less: Incoming interests -31,637,104.31 -18,366,785.37
Exchange gains/losses 6,523,695.44
Less ：exchange gains -10,960,460.65
3,073,322.00 2,635,519.73
Handling charges
Total 53,795,275.40 41,029,022.62
66. Asset impairment loss
√Applicable□Not applicable
In RMB
Items Amount of current period Amount of previous period
7,344,641.02 4,555,710.55
I .Losses for bad debts
II. Losses for falling price of inventory
III. Losses of available for sale financial
assets impairment
IV.Impairment on held-to-mathurity
investments
V.Impairment on long-term equity
investment
115 / 139
2017 Annual Report
VI.Impairment on investment properties
VII.Impairment on fixed assets
VIII. Impairment on construction materials
IX. Impairment on construction in progress
X. Impairment on bearer biological assets
XI. Impairment on oil and gas assets
XII. Impairment on intangible assets
XIII. Impairment on goodwill
XIV.Other
7,344,641.02 4,555,710.55
Total
67. Gains on the changes in the fair value
□Applicable√Not applicable
68.Investment income
√Applicable□Not applicable
In RMB
Items Amount of current period Amount of previous period
Long-term equity investment income under equity method -905,588.21 1,778,523.43
Investment loss through disposal of long-term equity
investment
Income from financial assets measured by fair value with
changes in fair value recognised in profit or loss
Investment income from disposal of financial assets measured
by fair value with changes in fair value recognised in profit or
loss
Investment income received from holding of held-to-maturity
investments during holding period
Investment income received from available for sale financial
assets during holding period
Investment income from disposal of available for sale financial
assets
Investment income from the remaining equity recalculated by
fair value after losing control
Total -905,588.21 1,778,523.43
69.Non-operating gains
Non-operating gains
√ Applicable □ Not applicable
In RMB
Items Amount of current Amount of previous Recorded in the amount of
period period the non-recurring gains and
losses
Total gains from disposal of
non-current assets
Including：Gains from disposal of
fixed assets
Gains from disposal of intangible
assets
1,487,009.27 1,487,009.27
Gains from debt restructuting
Non-monetary assets
exchangegains
116 / 139
2017 Annual Report
Accepting donations
Government grants 20,466,741.00 38,293,336.06 20,466,741.00
Quality claims and other 8,710,344.80 5,064,646.84 8,710,344.80
fine income 211,010.73 1,775,863.91 211,010.73
Waste income 82,230.79 135,382.51 82,230.79
Electricity allowance 987,007.05 987,007.05
Other 131,078.55 341,840.57 131,078.55
Total 32,075,422.19 45,611,069.89 32,075,422.19
Government subsidy reckoned into current gains/losses
√ Applicable □ Not applicable
In RMB
Amount of this
Items Amount of last period Assets-related/income -related
period
Tax return 6,074,500.00 19,162,985.55 Related to income
Support Fund for the Development of 4,645,100.00 Related to income
Intelligent Home Appliances Industry
Strong provincial subsidy 2,660,000.00 Related to income
Technological Center Capacity Building 1,747,700.00 1,252,500.00 Related to income
Project
Industrial development subsidy 1,434,000.00 Related to income
Science and technology awards categories of 1,247,441.00 Related to income
government grants
Special funds for foreign economic & trade 1,058,000.00 500,000.00 Related to income
Development
subsidies for high - tech enterprises 810,000.00 Related to income
Provincial science and technology innovation 790,000.00 4,641,000.00 Related to income
and development of special funds
Auto special project award 124,552.00 Related to income
Patent subsidy fund 669,776.00 Related to income
Talent subsidy fund 355,000.00 Related to income
Stabilization subsidy 345,250.00 2,717,638.00 Related to income
Staging included in deferred income 12,481,396.70 9,894,660.51 Related to income
Total 34,318,163.70 38,293,336.06 /
Other notes
□Applicable√Not applicable
70.Non-Operation expense
√ Applicable □ Not applicable
In RMB
The amount of
Amount of current period Amount of previous
Items non-operating gains &
lossed
period
Total of non-current asset
Disposition loss
Incl: loss of fixed assets disposition
loss of intangible assets disposition
Loss on debt reconstruction 127,275.59 127,275.59
Non-monetary asset exchange
losses
Foreign donations 165,000.00 230,000.00 165,000.00
Waste loss 11,178,286.31 7,948,819.84 11,178,286.31
Other 361,769.03 439,193.51 361,769.03
Total 11,832,330.93 8,618,013.35 11,832,330.93
71. Income tax expense
117 / 139
2017 Annual Report
(1) Lists of income tax expense
√ Applicable □ Not applicable
In RMB
Items Report period Same period of the previous year
Current income tax expense 13,668,561.26 7,310,935.93
Deferred income tax expense -114,157.78 3,460,424.79
Total 13,554,403.48 10,771,360.72
(2) Adjustment process of accounting profit and income tax expense
√ Applicable □ Not applicable
In RMB
Items Report period
Total profits 114,394,938.53
Current income tax expense accounted by tax and relevant 14,699,129.15
regulations
Effect of different tax rates applicable to subsidiaries
Income tax adjustments on prior periods
Impact of non-taxable income 135,838.23
Impact of non-deductible costs, expenses and losses 9,464,087.95
Affect the use of deferred tax assets early unconfirmed
deductible losses
This issue does not affect the deferred tax assets 2,119,751.09
recognized deductible temporary differences or deductible
loss
Additional impact of research and development expenses -12,864,402.93
deduction
Income tax expenses 13,554,403.49
Other notes
□Applicable√Not applicable
72. Other comprehensive income
√ Applicable □ Not applicable
Refer to the notes
73. Supplementary information to cash flow statement
(1) Other cash received relevant to operating activities
√ Applicable □ Not applicable
In RMB
Items Amount of current period Amount of previous period
Other Unit 3,513,821.62 2,460,754.58
Fine and Quality compensation 6,082,313.43 7,182,351.31
Interest income 3,296,920.13 4,454,413.35
Rent and utilities 17,071,128.51 14,205,534.82
Govemment Subsidy 15,762,267.00 9,235,690.00
Total 45,726,450.69 37,538,744.06
(2)Other cash paid relevant to operating activities
√ Applicable □ Not applicable
In RMB
Items Amount of current period Amount of previous period
Office ,transportation andother 107,964,592.46 97,626,917.46
Water and electricity 944,355.80 1,028,567.46
Technology Development costs 77,214,340.83 72,864,227.79
118 / 139
2017 Annual Report
Other Current account 64,359,851.02 52,947,849.20
Total 250,483,140.11 224,467,561.91
(3) Other cash received relevant to investment activity
√ Applicable □ Not applicable
In RMB
Items Amount of current period Amount of previous period
Government grants related to assets received 41,169,600.00 17,380,000.00
Total 41,169,600.00 17,380,000.00
(4) Other cash paid relevant to Investment financing activity
□Applicable√Not applicable
(5) Other cash paid relevant to financing activity
√ Applicable □ Not applicable
In RMB
Items Amount of current period Amount of previous period
Including：
Loans to non-financial institutions 146,000,000.00
Total 146,000,000.00
（6）Other Cash payable related to Financing activities
√ Applicable □ Not applicable
In RMB
Items Amount of current period Amount of previous period
Including：
Customer service leasing assets cash 2,231.17
payments 18,333.06
Repayment of loans to non-financial 146,000,000.00
institutions
Total 18,333.06 146,002,231.17
74. Supplement Information for cash flow statement
（1）Supplement Information for cash flow statement
√ Applicable □ Not applicable
In RMB
Amount of current period Amount of previous
Supplement Information
period
I. Adjusting net profit to cash flow from operating
activities
Net profit 100,840,535.05 101,170,429.92
Add: Impairment loss provision of assets 7,344,641.02 4,555,710.55
Depreciation of fixed assets, oil and gas assets and 161,396,324.64 151,926,802.14
consumable biological assets
Amortization of intangible assets 5,056,297.74 4,868,321.59
Amortization of Long-term deferred expenses 2,698,068.22 2,620,526.93
Loss on disposal of fixed assets, intangible assets and
other long-term deferred assets
Loss from scrapping of fixed assets 11,096,055.52 7,813,437.33
Loss from fair change
Financial cost 75,835,362.27 53,808,376.89
Loss on investment 905,588.21 -1,778,523.43
Decrease in deferred income tax assets -114,157.78 3,460,424.79
Increased of deferred income tax liabilities
Decrease of inventories -162,036,025.61 21,978,972.51
Decease of operating receivables 56,566,899.10 -168,794,334.07
119 / 139
2017 Annual Report
Increased of operating Payable -92,806,752.04 -268,938,645.25
Other
Net cash flows arising from operating activities 166,782,836.34 -87,308,500.10
II. Significant investment and financing activities that
without cash flows:
Transferring debts to capital
Convertible corporate bond to mature within one year
Leasing fixed assets through financing
III．The information of net increase of cash and cash
equivalent
Balance of cash at the End of the period 541,382,061.70 301,740,407.38
Less: Balance of cash at the beginning of the period 301,740,407.38 553,841,516.54
Add: Balance of cash equivalent at the end of the period
Less: Balance of cash equivalent at the beginning of the
period
Net increase in cash and cash equivalents 239,641,654.32 -252,101,109.16
(2) Net Cash paid of obtaining the subsidiary
□Applicable√Not applicable
(3) Net Cash receive of disposal of the subsidiary
□Applicable√Not applicable
(4) Cash and cash equivalents
√ Applicable □ Not applicable
In RMB
Items Closing balance Opening balance
1.Cash 541,382,061.70 301,740,407.38
Including：cash at hand 1,311.83 1,310.84
Demand bank deposit 412,330,451.65 215,594,966.82
Demand other monetary funds 129,050,298.22 86,144,129.72
Usable money in Central Bank
Money saved in associated financial bodies
Money from associated financial bodies
II. Cash equivalents
Of which: bond investment which will due
in three months
III. Closing balance of cash and cash 541,382,061.70 301,740,407.38
equivalents
Including: Cash and cash equivalents of
parent company or subsidiaries with use
restrictions
Other notes
√ Applicable □ Not applicable
Notes : The balance of cash in the balance of more than three months due to the deposit margin of
RMB78.3484 million. The deposit certificate pledged of RMB 9 million .
75. Note of statement of changes in the owner's equity
Explain "other" project name and adjustment amount of the adjustment of closing balance in previous
year, etc.:
120 / 139
2017 Annual Report
□Applicable√Not applicable
76. The assets with the ownership or use right restricted
√Applicable□Not applicable
In RMB
Items Closing book value Restricted reason
216,398,728.18 To issue bank acceptance draft, L /C, time deposit
Monetary capital
certificate pledge
Note receivable
Inventory
Fixed assets 432,069,811.15 For loan mortgage
Intangible assets
Total 648,468,539.33 /
77. Foreign currency monetary items
(1) Foreign currency monetary items
√Applicable□Not applicable
In RMB
Closing foreign currency Closing convert to RMB
Items Exchange rate
balance balance
Monetary capital
Indluding：USD 8,544,912.34 6.5342 55,834,166.21
Euro 5,100,981.52 7.8023 39,799,388.11
HKD
RMB
RMB
Account receivable
Including：USD 25,118,430.26 6.5342 164,128,847.00
Euro 3,396,855.82 7.8023 26,503,288.19
HKD
RMB
RMB
Long-term loans
Including：USD
Euro
HKD
RMB
RMB
Foreign currency
accounting-XXX
RMB
RMB
Short-term loans
Including：USD 27,300,000.00 6.5342 178,383,660.00
(2) Note to oversea entities including: for significant oversea entities, shall disclose main operating place,
recording currency and selection basis, if there are changes into recording currency, shall also disclose
the reason.
□Applicable√Not applicable
78.Arbitrage
□Applicable√Not applicable
79.Government subsidy
1. Basis situation
√Applicable□Not applicable
In RMB
Amount of profits and
Type Amount Items losses for the current
period
121 / 139
2017 Annual Report
The Subsidy funds for machinery and 40,000,000.00 Deferred income
equipment
Fixed asset investment plan for 2017 600,000.00 Deferred income
Compressor parts revamping project 569,600.00 Deferred income
Tax return 6,074,500.00 Non-operating 6,074,500.00
income
Support Fund for the Development of 4,645,100.00 Non-operating 4,645,100.00
Intelligent Home Appliances Industry income
2,660,000.00 Non-operating 2,660,000.00
Strong provincial subsidy
income
Technological Center Capacity Building 1,747,700.00 Non-operating 1,747,700.00
Project income
1,434,000.00 Non-operating 1,434,000.00
Industrial development subsidy
income
Science and technology awards categories of 1,247,441.00 Non-operating 1,247,441.00
government grants income
Special funds for foreign economic & trade 1,058,000.00 Non-operating 1,058,000.00
Development income
subsidies for high - tech enterprises 810,000.00 Non-operating 810,000.00
income
Provincial science and technology innovation 790,000.00 Non-operating 799,000.00
and development of special funds income
Refrigeration compressor industrial 267,492.00 Other income 267,492.00
transformation of special funds
Major special funds 225,000.00 Other income 225,000.00
Compressor industrial projects 916,848.00 Other income 916,848.00
Huangshi City, construction of 38,688.00 Other income 38,688.00
affordable housing subsidies
Daye Luo bridge new plant construction 104,664.00 Other income 104,664.00
subsidies
Technology projects subsidies 700,000.00 Other income 700,000.00
land compensation fee 126,564.00 Other income 126,564.00
The special funds of Special Power Supply 300,000.00 Other income 300,000.00
Line Construction Period III
The subsidy of financial infrastructure 1,700,794.03 Other income 1,700,794.03
The Subsidy funds for machinery and 7,644,539.67 Other income 7,644,539.67
equipment
Finance Bureau subsidy 229,600.00 Other income 229,600.00
PDM data center management system to the 99,993.00 Other income 99,993.00
public
Subsidy fund for industrial transformation 44,750.00 Other income 44,750.00
and upgrading project
Fixed asset investment plan for 2017 35,000.00 Other income 35,000.00
Compressor parts revamping project 47,464.00 Other income 47,464.00
Patent subsidy fund 669,776.00 Other income 669,776.00
Talent subsidy fund 355,000.00 Other income 355,000.00
Stabilization subsidy 345,250.00 Other income 345,250.00
2. Information about refunding government grants
□Applicable√Not applicable
80.Other
□Applicable√Not applicable
VIII. Changes of merge scope
1. Business merger not under same control
□Applicable√Not applicable
2. Business combination under the same control
□Applicable√Not applicable
(1) The Merger of enterprises under the same control that occurred in the current period
□Applicable√Not applicable
122 / 139
2017 Annual Report
(2) Combined cost
□Applicable√Not applicable
(3) Book value of assets and liabilities of the merged party on the merger date
□Applicable√Not applicable
Other notes
□Applicable√Not applicable
3.Counter purchase
□Applicable√Not applicable
4.The disposal of subsidiary
Whether there a single disposition loses control of a subsidiary's investment
□ Applicable √ Not applicable
Other notes
□Applicable√Not applicable
Whether there are multiple transactions step by step dispose the investment to subsidiary and lost control
in reporting period
□ Applicable √ Not applicable
5. Other reasons for the changes in combination scope
Notes to reasons for the changes in combination scope (Newly established subsidiary and subsidiary of
liquidation) and relevant information
□Applicable√Not applicable
6.Other
□ Applicable √ Not applicable
IX. Equity in other entities
1. Equity in subsidiary
(1) The structure of the enterprise group\
√Applicable□Not applicable
Main Proportion of shareholding(%)
Name of the Registration Nature of
operating Way of gaining
subsidiary place business Directly Indirectly
place
Wuhu Abaur 75.00 Investment
Mechanical Manufacturing
Wuhu Wuhu
& Electrical
Co., Ltd..
Huangshi 38.46 Under the same
Dongbei Manufacturing control business
Huangshi Huangshi
Founry Co., combination
Ltd.
Huangshi 100.00 Under the same
Dongbei control business
International Huangshi BVI Trading combination
Trade Co.,
Ltd.
Dongbei 100.00 Investment
Electromech
Manufacturing
anical Suqian Suqian
(Jiangsu)
Co., Ltd.
Dongbei(Wu 100.00 Investment
han) Wuhan Wuhan R&D Centre
Technology
123 / 139
2017 Annual Report
Innovation
Co., Ltd.
Alashankou 80.00 Investment
Dongbei Power
Alashankou Alashankou
Greenergy Generation
Co., Ltd.
Dongbei Wuhu Wuhu Trading 100.00 Investment
(Wuhu)
Electromec
hanical Co.,
Ltd.
Huangshi Huangshi Huangshi Unoperated 75.00 Under the same
Donglian control business
New Energy combination
Co., Ltd.
Fengtai Huainan Unoperated 75.00 Under the same
Donglian control business
New Energy combination
Technology
Co., Ltd.
Wutai Jinhe Wutai Unoperated 75.00 Under the same
New control business
Energy Co., combination
Ltd.
Notes:The holding subsidiary Wuhu Abaur Mechanical & Electrical Co., Ltd.. holds a 51.28% stake of
Huangshi Dongbei Foundry Co., Ltd; and holds 80% stake of Alashankou Dongbei Energy-saving Co.,
Ltd.; in the current period there were newly added subsidiaries Huangshi Donglian New Energy Co., Ltd,
Fengtai Donglian New Energy Technology Co., Ltd and Wutai County Jinhe New Energy Co., Ltd due
to the transfer of equity by the related party Hubei Dongbei New Energy Co., Ltd-with that the transfer
price was a nominal price of 1 yuan, and all of them did not start normal operations; as of the reporting
date, Huangshi Donglian New Energy Co., Ltd and Fengtai Donglian New Energy Technology Co., Ltd
are handling the simple cancellation procedure, and Wutai County Jinhe New Energy Co., Ltd was
cancelled on May 22, 2017.
(2) Significant not wholly owned subsidiary
√ Applicable □ Not applicable
In RMB
Shareholding Declaring
The profits and losses Balance of minority
proportion of dividends distribute
Subsidiary arbitrate to the shareholder at
minority to minority
minority shareholders closing period
shareholder shareholder
Wuhu Abaur Mechanical & 25.00 10,543,254.60 169,921,674.96
Electrical Co., Ltd..
Huangshi Dongbei Founry 48.72 9,904,788.73 65,578,932.62
Co., Ltd.
Holding proportion of minority shareholder in subsidiary different from voting proportion:
□ Applicable √ Not applicable
Other notes：
□ Applicable √ Not applicable
(3) The main financial information of significant not wholly owned subsidiary
√ Applicable □ Not applicable
124 / 139
2017 Annual Report
In RMB’0000
Year-end balance Year-beginning balance
Non
Non
Name Non Current curren Total Non Current Total
Current Total Current Total current
current Liabilit t liabiliti current Liabiliti liabilitie
assets assets assets assets liabilitie
assets ies liabilit es assets es s
s
ies
Wuhu 128,872 33,573. 162,446 97,626. 420. 98,046. 126,104 36,291. 162,395 101,884 490.0 102,374
Abaur .23 88 .11 47 00 47 .20 23 .43 .63 0 .63
Mech
anical
&
Electr
ical
Co.,
Ltd..
Huan 30,722. 16,834. 47,556. 33,642. 453. 34,095. 28,180. 18,082. 46,262. 32,632. 2,202. 34,835.
gshi 19 13 32 18 77 95 12 48 60 41 82 23
Dong
bei
Founr
y Co.,
Ltd.
Amount of current period Amount of previous period
Total Cash flows Total Cash flows
Busines
Name Net Compreh from Business Net Compreh from
s
profit ensive operating income profit ensive operating
income
income activities income activities
Wuhu Abaur 151,008 4,378.85 4,378.85 15,898.44 127,836. 5,777.48 5,777.48 -10,284.13
Mechanical & .24 89
Electrical Co., Ltd..
Huangshi Dongbei 52,481. 2,033.00 2,033.00 -536.66 42,520.8 1,014.21 1,014.21 -3,066.59
Founry Co., Ltd. 27 2
(4) Significant restrictions of using enterprise group assets and pay off enterprise group debt
□ Applicable √ Not applicable
(5) Provide financial support or other support for structure entities incorporate into the scope of
consolidated financial statements
□ Applicable √ Not applicable
Other notes：
□ Applicable √ Not applicable
2. The transaction of the Company with its owner’s equity share changed but still controlling the
subsidiary
□ Applicable √ Not applicable
(1) Note to owner’s equity share changed in subsidiary
√ Applicable □ Not applicable
3. Equity in joint venture arrangement or associated enterprise
√ Applicable □ Not applicable
In RMB
Accounting treatment
Main Registra Proportion(%)
of the investment of
Name operating tion Business nature
Direct Indirec joint venture or
place place
ly tly associated enterprise
Huangshi Aibo Property Co., Huangshi Huangs Real estate 24.00 Equity method
Ltd. hi
Hubei Jinling Fine Huangshi Huangs Development of 24.00 Equity method
Agriculture Co., Ltd hi the agricultural
products
125 / 139
2017 Annual Report
(2) Main financial information of significant joint venture
□ Applicable √ Not applicable
(3) Summary financial information of insignificant joint venture or associated enterprise
□ Applicable √ Not applicable
(4) Note to the significant restrictions of the ability of joint venture or associated enterprise transfer
funds to the Company
□ Applicable √ Not applicable
(5) The excess loss of joint venture or associated enterprise
□ Applicable √ Not applicable
(6) The unrecognized commitment related to joint venture investment
□ Applicable √ Not applicable
(7) Contingent liabilities related to joint venture or associated enterprise investment
□ Applicable √ Not applicable
(8) Significant common operation
□ Applicable √ Not applicable
4. Equity of structure entity not including in the scope of consolidated financial statements
Related notes to structure entity not including in the scope of consolidated financial statements
6.Other
□ Applicable √ Not applicable
X. The risk related financial instruments
□ Applicable √ Not applicable
XI. The disclosure of the fair value
1. Closing fair value of assets and liabilities calculated by fair value
□ Applicable √ Not applicable
2. Market price recognition basis for consistent and inconsistent fair value measurement items at level 1
□ Applicable √ Not applicable
3. Valuation technique adopted and nature and amount determination of important parameters for
consistent and inconsistent fair value measurement items at level 2
□ Applicable √ Not applicable
4. Valuation technique adopted and nature and amount determination of important parameters for
consistent and inconsistent fair value measurement items at level 3
□ Applicable √ Not applicable
5. Sensitiveness analysis on unobservable parameters and adjustment information between opening and
closing book value of consistent fair value measurement items at level 3
□ Applicable √ Not applicable
6. Explain the reason for conversion and the policy governing when the conversion happens if
conversion happens among consistent fair value measurement items at different levels
□ Applicable √ Not applicable
126 / 139
2017 Annual Report
7. Changes in the valuation technique in the current period and the reason for change
□ Applicable √ Not applicable
8. Fair value of financial assets and liabilities not measured at fair value
□ Applicable √ Not applicable
9.Other
□ Applicable √ Not applicable
XII. Related party and related party transactions
1. Parent company information of the enterprise
√ Applicable □ Not applicable
In RMB’0000
The parent The parent
Register company of the company of the
Regisrated
Name ed Natrue
capital Company's Company’s vote
address
shareholding ratio ratio
Huangshi Dongbei Huangs Manufactur 24,184.00 50.04 50.04
Electromechanical Group Co., Ltd. hi ing
Notes
Huangshi Dongbei Electromechanical Group Co.,Ltd was incorporated on January 18, 2002;
registered address: No. 5, Wu Huang Road, Tieshan district Huangshi City, Hubei Province; legal
representative: Yang Baichang; registered capital: RMB 241.8429 million; company type: other limited
liability company; business scope: production and sales of refrigeration compressors, refrigeration
equipment and spare parts, maintenance of refrigeration equipment, high-tech development, consulting;
rental housing, car rental, real estate development.( if involves licensed operating items, it shall obtain
permissions from relevant department before operation).Its holding stake of the company: 50.04%.
Final controlling party: Nil
Other notes：
Nil
2. Subsidiaries of the Company
See details to Notes IX..
√ Applicable □ Not applicable
3. Information on the joint ventures and associated enterprises of the Company
The details to Notes of significant joint venture and associated enterprise of the Company
□ Applicable √ Not applicable
Other notes
□ Applicable √ Not applicable
4.Information on other related parties
√Applicable□ Not applicable
Name Relationship with the Company
127 / 139
2017 Annual Report
Huangshi Dongbei Refrigerating Controlled by the parent company Huangshi Dongbei Electromechanical Group
Co., Ltd. Co., Ltd.
One of the shareholders of the parent Company Huangshi Dongbei
Huangshi Aibo Technology
Electromechanical Group Co., Ltd., Trust holdings shares of Huangshi Dongbei
Development Co., Ltd.
Group Employees.
Wuhu Farici Investment Co., Ltd. Other
Hubei Xingdong Investment Co., Other
Ltd.
Jiangsu Luoke Electrical Group One of the shareholders of the parent Company Huangshi Dongbei
Co., Ltd. Electromechanical Group Co., Ltd.
Huangshi Chenxin Photoelectric Wuhu Farici Investment Co., Ltd. holding subsidiaries
Co., Ltd.
Hubei Dongbei New Energy Co., Huangshi Aibo Technology Development Co., Ltd. holding subsidiaries
Ltd.
Dongbei New Energy（Wuhu）Co., Huangshi Aibo Technology Development Co., Ltd. holding subsidiaries
Ltd.
Hubei Jinling Fine agricultural Huangshi Aibo Technology Development Co., Ltd. holding subsidiaries
Linyang Co., Ltd.
Hubei Jinling Fine agricultural Co., Huangshi Aibo Technology Development Co., Ltd. holding subsidiaries
Ltd.
Huangshi Jinbei Dairy Co., Ltd. Huangshi Aibo Technology Development Co., Ltd. holding subsidiaries
Huangshi Huangshi Director Wuhu Farici Investment Co., Ltd. holding subsidiaries
Dongxing Petty Loan Co., Ltd.
Huangshi Dongbei Refrigerator Huangshi Dongbei Electromechanical Group Co., Ltd.’s parent company
industry Co., Ltd.
Lin Yinkun Director, General Manager
Lu Lihua Deputy General Manager and Secretary of the board
Zhu Yushan Deputy General Manager
Gao Jianjun Deputy General Manager
Dou Zuowei Deputy General Manager
Ma Yanping Supervisor
Hu Rongzhi Supervisor
Huangshi Dongbei Electronic Controlled by the parent company Huangshi Dongbei Electromechanical Group
Commerce Co., Ltd. Co., Ltd.
Jiangsu Dongbei Machinery Co., Controlled by the parent company Huangshi Dongbei Electromechanical Group
Ltd. Co., Ltd.
Wuhu Abaur Real estate Co., Ltd. Other
5.Related-party transactions
(1) Information on acquisition of goods and reception of labor service
Acquisition of goods and reception of labor service
√Applicable□ Not applicable
In RMB’0000
Related-party Content Amount of this period Amount of last period
Huangshi Dongbei Refrigerating Co., 3.21
Compressor parts
Ltd.
Jiangsu Luoke Electric Group Co., Ltd. Compressor parts 35,684.31 31,026.44
Huangshi Aibo Technology 65,204.84 54,705.85
Compressor parts
Development Co., Ltd.
Huangshi Dongbei Electromechanical 4,567.96 2,704.53
Compressor parts
Group Co., Ltd.
Huangshi Jinbei Dairy Co., Ltd. Agricultural products 335.05 316.73
Hubei Jinling Fine Agriculture Co., Ltd. Agricultural products 96.32 84.57
Huangshi Chenxin Optoelectronic Co., Inspection equipment 294.06
Ltd.
Hubei Dongbei New Energy Co., Ltd. Compressor parts 1,673.37
Hubei Dongbei New Energy Co., Ltd. Photovotaic 40,455.39
Huangshi Dongbei Electromechanical Guarantee 200.00
Group Co., Ltd.
128 / 139
2017 Annual Report
Information of sales of goods and provision of labor service
√ Applicable □ Not applicable
In RMB’0000
Amount of last
Related-party Content Amount of this period
period
Huangshi Dongbei Refrigerating Co., Ltd. Compressor 2,265.29 1,153.53
Hubei Dongbei New Energy Co., Ltd. Compressor parts 9.21 10.92
Huangshi Aibo Technology Development Charge for electricity, 1,109.59 3.55
Co., Ltd. materials for sale
Huangshi Chenxin Optoelectronic Co., Ltd. Charge for electricity 296.79
Huangshi Dongbei Electromechanical Compressor parts 16.51
Group Co., Ltd.
Jiangsu Luoke Electric Group Co., Ltd. Storage fee 23.08 9.51
Huangshi Dongbei Electronic Commerce Compressor 71.64
Co., Ltd.
Huangshi Jinbei Dairy Co., Ltd. Charge for electricity 70.12
Huangshi Aibo Technology Development Guarantee 18.07
Co., Ltd.
Notes
□ Applicable √ Not applicable
（2）Related trusteeship or contracting
Lists of entrust/contractee
□ Applicable √ Not applicable
Notes
□ Applicable √ Not applicable
The company commissioned the management / package list
□ Applicable √ Not applicable
Notes
□ Applicable √ Not applicable
(3)Information of related lease
The Company was lessor
√Applicable□ Not applicable
In RMB
Cagegory of leased The lease incme The lease income
Name of lessee
assets confirmed in this year confirmed in last year
Huangshi Dongbei Electromechanical 300,132.00 300,132.00
House
Group Solar energy Co., Ltd.
Hubei Dongbei New Energy Co., Ltd. House 861,973.92 861,973.92
Huangshi Dongbei Refrigerating Co., Ltd. House 6,331,839.84 6,331,839.84
Huangshi Jinbei Dairy Co., Ltd. House 148,680.00 148,680.00
Jiangsu Luoke Electrical Group Co., Ltd. House 308,940.00 308,940.00
Wuhu Abaur Real estate Co., Ltd. House 3,000.00 6,000.00
Jiangsu Luoke Electrical Group Co., Ltd. House 208,770.00 182,580.00
The company was lessee：
√Applicable□ Not applicable
In RMB
Category of leased The lease income The lease incoe confirmed in
Lessor
assets confirmed in this year last year
Huangshi Dongbei Electromechanical Land 36,000.00 36,000.00
Group Co., Ltd.
Huangshi Aibo Technology Development House 525,830.40
Co., Ltd.
Notes
□ Applicable √ Not applicable
(4) Related-party guarantee
129 / 139
2017 Annual Report
The company was guarantor:
√Applicable□ Not applicable
In RMB’0000
Execution
Guarantee
Guarantor Start date End date accomplished or
amount
not
Alashankou Dongbei Clean Co., Ltd. 35,000.00 2015/5/28 2027/11/17 No
Wuhu Abaur Mechanical & Electrical Co., 43,678.10 2017/1/13 2018/12/13 No
Ltd.
Dongbei Electromechanical (Jiangsu) Co., 13,092.34 2015/12/17 2020/12/31 No
Ltd.
Huangshi Aibo Technology Development 3,000.00 2017/11/20 2018/11/20 No
Co., Ltd.
Huangshi Dongbei Electromechanical 5,797.90 2017/6/12 2018/11/6 No
Group Co., Ltd.
Huangshi Dongbei Refrigerating Co., 9,315.51 2017/1/24 2018/10/31 No
Ltd.
Huangshi Dongbei Founry Co., Ltd. 13,005.05 2017/1/17 2018/10/23 No
The Company was secured party
√Applicable□ Not applicable
In RMB’0000
Execution
Guarantee
Guarantor Start date End date accomplished
amount
or not
Huangshi Dongbei Electromechanical 68,168.17 2016/7/14 2019/7/14 No
Group Co., Ltd.
Wuhu Abaur Mechanical & Electrical Co., 19,051.37 2017/1/13 2018/5/14 No
Ltd.
Wuhu Abaur Mechanical & Electrical Co., 3,000.00 2017/5/12 2018/5/11 No
Ltd. And Equipment mortgage
Notes
□ Applicable √ Not applicable
(5)Inter-bank lending of capital of related parties
√Applicable□ Not applicable
□ Applicable √ Not applicable
(6) Related party asset transfer and debt restructuring
√Applicable□ Not applicable
In RMB
Amount of current
Related party Content Amount of previous period
period
Hubei Dongbei New Energy Co., Ltd. Stock equity transfer 1.00
Huangshi Aibo Technology Fixed assets transfer 330,341.88
Development Co., Ltd
Huangshi Chenxin Optoelectronic Fixed assets transfer 2,513,333.33
Co.,Ltd.
(7)Rewards for the key management personnel
√Applicable □ Not applicable
In RMB
Items
Amount of current period Amount of previous period
Rewards for the key management 3,192,042.69 2,440,650.56
personnel
130 / 139
2017 Annual Report
(8)Other related-party transactions
□ Applicable √ Not applicable
6. Receivables and payables of related parties
(1)Receivable
√Applicable □ Not applicable
In RMB
Items Related parties
Bad debt
Items Related parties Bad debt reserve
Book balance reserve Book balance
Other Huangshi Jinbei Dairy Co . , Ltd . 28,595.40 571.91
receivable
Account Huangshi Dongbei Refrigerating 3,082,257.23 4,391,107.06
receivable Co., Ltd.
Account Huangshi Dongbei Electronic 159,206.70 3,184.13
receivable Commerce Co., Ltd
Huangshi Dongbei 6,700,254.35 9,161,889.64
Prepayment
Electromechanical Group Co., Ltd.
Total 9,970,313.68 3,756.04 13,552,996.70
(2) Payables
√Applicable □ Not applicable
In RMB
Items Related party Book Balance at period
Book Balance at period beginning
end
Huangshi Dongbei New Energy Co., 12,754,019.17 14,548,473.46
Account payable
Ltd
Other account Hubei Dongbei New Energy Co., Ltd. 440,000.00 130,000.00
payable
Huangshi Aibo Technology 110,891,997.92 62,401,194.23
Account payable
Development Co., Ltd.
Other account Huangshi Aibo Technology 3,010,000.00 6,000,000.00
payable Development Co., Ltd.
Huangshi Dongbei Electromechanical 301,005.00 302,005.00
Account payable
Group Solar Energy Co., Ltd.
Other account Jiangsu Luoke Electrical Group Co., 2,154,470.00 2,000,000.00
payable Ltd.
Jiangsu Luoke Electrical Group Co., 45,336,865.54 23,281,869.78
Account payable
Ltd.
Jiangsu Luoke Electrical Group Co., 33,663.76
Advance Payments
Ltd.
7. Related party commitment
□ Applicable √ Not applicable
8.Other
□ Applicable √ Not applicable
XIII. Stock payment
1. The stock payment overall situation
□ Applicable √ Not applicable
2.The stock payment settled by equity
□ Applicable √ Not applicable
3. The stock payment settled by cash
□ Applicable √ Not applicable
4. Modification and termination of the stock payment.
□ Applicable √ Not applicable
5.Other
□ Applicable √ Not applicable
131 / 139
2017 Annual Report
XIV. Commitments
1. Significant commitments
√Applicable □ Not applicable
Nature and amount of significant commitments to externals existed on the balance sheet date and such
commitments
As of the reporting date, the company did not have material events after the balance sheet date, and/or
material commitments and/or contingencies needing to be disclosed.
2. Contingency
(1) Significant contingency at balance sheet date
□ Applicable √ Not applicable
(2) The Company have no significant contingency to disclose, also should be stated
□ Applicable √ Not applicable
(3)Other
□ Applicable √ Not applicable
XV. Enents after balance sheet date
1. Significant events had not adjusted
□ Applicable √ Not applicable
2. Profit distribution
□ Applicable √ Not applicable
3. Sales return
□ Applicable √ Not applicable
4. Notes of other significant events
□ Applicable √ Not applicable
XVI.Other significant events
1. The accounting errors correction in previous period
（1）Retrospective restatement
□ Applicable √ Not applicable
（2）Prospective application
□ Applicable √ Not applicable
2. Debt restructuring
□ Applicable √ Not applicable
3. Replacement of assets
（1）Non-monetary assets exchange
□ Applicable √ Not applicable
132 / 139
2017 Annual Report
（2）Other assets replacement
□ Applicable √ Not applicable
4. Pension plan
□ Applicable √ Not applicable
5. Discontinuing operation
□ Applicable √ Not applicable
6.Segment information
(1) Recognition basis and accounting policies of reportable segment
□ Applicable √ Not applicable
(2) The financial information of reportable segment
□ Applicable √ Not applicable
(3) There was no reportable segment, or the total amount of assets and liabilities of each part of
reportable segment, shall disclose the reason.
□ Applicable √ Not applicable
（4）Other notes
□ Applicable √ Not applicable
7. Other important transactions and events have an impact on investors’ decision-making
□ Applicable √ Not applicable
8.Other
□ Applicable √ Not applicable
XVII. Notes s of main items in financial reports of parent company
（1）Account receivable
1.Classification accojunt receivables.
√ Applicable □ Not applicable
In RMB
Year-end balance Year-beginning
Provision for bad Provision for bad
Book balance Book balance
Classificat debts debts
ion Pro Pro Balance
Prop Balance value Prop
port port value
Amount ortio Amount Amount ortio Amount
ion( ion(
n(%) n(%)
%) %)
133 / 139
2017 Annual Report
Receivabl 102,289,188.9 13.5 102,289,188.9 38,563,613.96 5.40 38,563,613.9
es with 4 8 4 6
major
individual
amount
and bad
debt
provision
provided
individuall
y
2. Other 650,970,345.4 86.4 25,133,292.4 3.8 625,837,053.0 675,938,358.5 94.6 25,412,056.8 3.7 650,526,301.
Receivabl 9 2 3 6 62 0 4 6 68
es
provided
bad debt
provision
in groups
Other
Account
receivable
with
minor
individual
amount
but bad
debtprovis
ion is
provided
753,259,534.4 / 25,133,292.4 / 728,126,242.0 714,501,972.4 / 25,412,056.8 / 689,089,915.
Total
3 3 08 4 64
Receivable accounts with large amount individually and bad debt provisions were provided
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □Not applicable
In RMB
Balance at year-end
Aging
Account receivable Provision for bad debts Proportion%
Within 1 year
Including：Subitem within 1 year
Subtotal within 1 year 636,617,251.98 12,732,345.04 2
1-2 years 868,572.81 43,428.64 5
2-3 years 1,610,002.78 483,000.83 30
Over 3 years
3-4 years
Over 4 years 11,874,517.92 11,874,517.92 100
4-5 years
Over 5 years
Total 650,970,345.49 25,133,292.43
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt
provision:
□ Applicable √ Not applicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(2) Account receivables actually written-off during the reporting period
The withdrawal amount of the bad debt provision during the reporting period was of RMB25,133,292.43;
Of which the significant amount of the reversed or collected part during the reporting period was:
□ Applicable √ Not applicable
134 / 139
2017 Annual Report
(3) The actual write-off accounts receivable
□ Applicable √ Not applicable
Of which: significant actual verification of accounts receivable
□ Applicable √ Not applicable
(4) Top five of account receivable of closing balance collected by arrears party
√ Applicable □ Not applicable
Name Closing balance Proportion (%) Bad debt prosion
1.Client 1 126,073,742.27 16.74 2,521,474.85
2.Client 2 88,445,827.29 11.74 1,768,916.55
3.Client 3 51,974,494.94 6.90 1,039,489.90
4.Client 4 50,923,986.48 6.76
5.Client 5 46,953,694.14 6.23
Total 364,371,745.12 —— 5,329,881.29
(5) Account receivable which terminate the recognition owning to the transfer of the financial assets：
□ Applicable √ Not applicable
(6) The amount of the assets and liabilities formed by the transfer and the continues involvement of
accounts receivable
□ Applicable √ Not applicable
Other notes：
□ Applicable √ Not applicable
2. Other accounts receivable
(1) Other accounts receivable disclosed by category
√ Applicable □ Not applicable
In RMB
Closing balance Opening balance
Bad debt Bad debt
Book Balance Book Balance
Classification provision provision
Amount Proporti Amount Propo Book value Amount Proport Amount Propor Book value
on(%) rtion( ion(%) tion(%
%) )
Other
accounts
receivable of
individual
significance
and subject to
individual
impairment
assessment
Other 335,504.27 100.00 7,610.09 2.27 327,894.18 137,184.87 100.00 2,743.70 2.00 134,441.17
accounts
receivable
subjecttoi
mpairment
assessment
by credit
risk
characteris
tics of a
portfolio
135 / 139
2017 Annual Report
Other
accounts
receivable of
individual
insignificanc
e but subject
ot individual
impairment
assessment
Total 335,504.27 / 7,610.09 / 327,894.18 137,184.87 / 2,743.70 / 134,441.17
Other accounts receivable with significant single amount for which bad debt provision separately
accrued at the period-end
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting aging analysis method to accrue bad debt provision:
√Applicable□Not applicable
In RMB
Closing balance
Aging Other account Withdrawal
Bad debt provision
receivable proportion(%)
Withn 1 year
Incluidng：Subitem withn 1 year
Subtotal within 1 year 305,504.27 6,110.09 2
1-2 years 30,000.00 1,500.00 5
2-3 years
Over 3 years
3-4 years
Over 4 years
4-5 years
Over 5 years 335,504.27 7,610.09
Total
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt
provision
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting other methods to accrue bad debt provision:
□ Applicable √ Not applicable
(2)Accounts receivable withdraw, reversed or collected during the reporting period
the amount of the reversed or collected part during the reporting period was of RMB7,610.09.
Of which the significant amount of the reversed or collected part during the reporting period was of
RMB 000:
□ Applicable √ Not applicable
(3) The actual write-off other accounts receivable
□ Applicable √ Not applicable
(4) Other accounts receivable classified by the nature of accounts
√Applicable□Not applicable
In RMB
Nature Closing book balance Pening book balance
Current account 80,270.67 30,318.66
Petty cash 255,233.60 106,866.21
Total 335,504.27 137,184.87
(5) Top 5 of the closing balance of the other accounts receivable colleted according to the arrears party
□ Applicable √ Not applicable
(6) Accounts receivable involved with government subsidies
□ Applicable √ Not applicable
136 / 139
2017 Annual Report
(7) Other account receivable which terminate the recognition owning to the transfer of the financial
assets
□ Applicable √ Not applicable
(8) The amount of the assets and liabilities formed by the transfer and the continues involvement of other
accounts receivable
□ Applicable √ Not applicable
Other notes：
□ Applicable √ Not applicable
3.Long-term equity investment
√Applicable □ Not applicable
In RMB
Closing balance Opening balance
Items Bad debt Bad debt
Book balance Book value Book balance Book value
provision provision
Investment to the subsidiary 188,161,074.70 188,161,074.70 188,161,074.70 188,161,074.70
Investment to joint ventures
and associated enterprises
Total 188,161,074.70 188,161,074.70 188,161,074.70 188,161,074.70
（1）Investment to the subsidiary
√Applicable □ Not applicable
In RMB
Withdraw
n
impairme Closing
Increa Decre nt balance of
Name Opening balance Closing balance
se ase provision impairmen
in the t provision
reporting
period
Wuhu Abaur Mechnical & 33,339,800.00 33,339,800.00
Electrical Co., Ltd.
Dongbei International Trade Co., 6,821,274.70 6,821,274.70
Ltd.
Dongbei(Wuhan) Technology 8,000,000.00 8,000,000.00
Innovation Co., Ltd.
Dongbei Electromechanical 140,000,000.00 140,000,000.00
(Jiangsu) Co., Ltd.
Total 188,161,074.70 188,161,074.70
（2）Investment to joint ventures and associated enterprises
□ Applicable √ Not applicable
4.Business income and Business cost
√ Applicable □ Not applicable
In RMB
Report period Same period of the previous year
Items
Income Cost Income Cost
Main Business 2,883,187,268.48 2,644,138,044.01 2,763,681,193.75 2,544,379,077.57
Other Business 83,617,931.32 44,229,005.22 278,800,585.34 243,586,334.71
Total 2,966,805,199.80 2,688,367,049.23 3,042,481,779.09 2,787,965,412.28
5.Investment income
□ Applicable √ Not applicable
137 / 139
2017 Annual Report
6.Other
□ Applicable √ Not applicable
XVIII. Supplement Information
1.Non-recurring gains and losses of current year
√ Applicable □ Not applicable
In RMB
Items Amount Notes
Non-current asset disposal gain/loss -11,096,055.52
Tax refund, deduction and exemption that is examined and approved
by authority exceeding or has no official approval document.
Governmental Subsidy accounted as current gain/loss, except for 34,318,163.70
those subsidies at with amount or quantity fixed by the national
government and closely related to the Company’s business operation.
Capital occupation fee collected from non-financial organizations
and accounted as current gain/loss.
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-non-monetary assets
Gains and losses from assets under trusted investment or
Management
Asset impairment provisions for force major such as natural disasters
Gain/loss from debt reorganization
Enterprise reorganization expenses, such as payment to stuff
placement and consolidation expenses
Gain/loss from trades obviously departed from fair value
Net gain/loss of current term from consolidation of subsidiaries
under common control from beginning of term to the consolidation
date
Gain/loss from debt forcasting without connection to the main
business operation
In addition to normal business with the company effective hedging
related business, holders of tradable financial assets, transactions and
financial liabilities arising from changes in fair value gains and
losses, as well as the disposal of trading of financial assets, trading
financial liabilities and available-for-sale financial assets gains return
on investment;
Single impairment test for impairment of receivables transferred
back to preparation
Gains and losses obtained from external trusted loans
The use of fair value measurement model of follow-up to the fair
value of real estate investment gains and losses arising from changes
According to tax, accounting and other laws, regulations, the
requirements of the current Gain/loss for a one-time adjustment of
the impact of the current Gain/loss;
Entrusted with the operating of the trust to obtain fee income
Net amount of non-operating income and expense except the 10,872,405.78
aforesaid items
Other non-recurring Gains/loss items
.Amount of influence of income tax - 5,413,718.92
Amount of influence of minority interests - 1,506,569.15
Total 27,174,225.89
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on
information disclosure for Compaines Offering their Securities to the Public-Non-recurring Gains and
Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on
information Disclosure for Companies offering their securities to the public-non-recurring Gains and
losses which have been defined as recurring gains and losses, it is necessary to explain the reason.
138 / 139
2017 Annual Report
□Applicable√Not applicable
2.Return on equity(ROE)and earnings per share(EPS)
√ Applicable □ Not applicable
Earnings per share
Weighted average
Profit of the reporting period Basic earnings per
return on equity（%） Diluted earnings per share
share
Net profit attributable to common 7.39 0.355
shareholders of the Company
Net profit attributable to common 4.98 0.239
shareholders of the Company after
deduction of non-recurring profit
and loss
3.Differences between accounting data under domestic and overseas accounting standards
□ Applicable √ Not applicable
4.Other
□ Applicable √ Not applicable
XII. Documents Available for Inspection
Documents Available for Accounting statements carried with personal signatures and seals of legal representative,
Inspection Chief Financial officer and Financial Principal.
Documents Available for Original of Auditors’ Report carried with the seal of Certified Public Accountants as well
Inspection as personal signatures of certified Public accountants.
Documents Available for The texts of all the Company's documents publicly disclosed on the newspapers and
Inspection periodicals designated by China Securities Regulatory Commission in the report period.
Chairman of the board of directors: Zhu Jinming
Issue day approved by the Board of Directors：March 29, 2018
Revised information
□Applicable√Not applicable
139 / 139
