2018 Annual Report
Stock Code：900956 Stock Abbreviation：Dongbei B
Huangshi Dongbei Electrical Appliance Co., Ltd.
2018 Annual Report
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2018 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．The situation of the director who failed to attend
Position of the director who Name of the director who
Reason for failure to attend Name of proxy
failed to attend failed to attend
Director Ruan Zhengya Working reason Zhu Jinming
3. Hubei Daxin Certified Public Accountants Co., Ltd. ( Special General Partnership) issued standard
unqualified auditors' report for the Company.
Mr. Mr.Zhu Jinming , The Company leader, Ms. Lu Lihua, Chief financial officer and the
Mr.Mao Qizhi, 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.
Audited by Hubei Daxin Certified Public Accountants Co., Ltd. ( Special General Partnership), th
e company realized a net profit attributable to shareholders of the parent company of RMB 110,098,0
64.74 in 2018, plus an undistributed profit of RMB 666,010,843.42 at the beginning of the year, and a
surplus reserve of RMB 9,774,087.62, which was not allocated at the end of 2018. The profit is RM
B 766,334,820.54.
Considering the interests of shareholders and the company's long-term development, the company's
2018-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
RMB742,834,820.54 will be for future profit allocation; and there are no bonus shares and no increasing
shares by converting capital reserves in the current year. The afore-said profit distribution plan still
needs to be reviewed and approved by the shareholders' general meeting.
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：
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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2018 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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2018 Annual Report
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 Year 2018
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 &
No.6, Jinshan East Road, Economic & Technology
Contact address Technology Development Zone, Huangshi City,
Development Zone, Huangshi City, Hubei Province.
Hubei 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
Website： http://www.donper.com
E-mail stock@donper.com
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2018 Annual Report
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 Company
Stock exchange for Stock Abbreviation
Type Stock Abbreviation Stock Code
listing (Before change)
Shanghai Stock 900956
B share Dongbei B
Exchange
VI.Other Relevant Information
Name Hubei Daxin Certified Public Accountants Co., Ltd.
( Special General Partnership)
Office address 16/F, Zhiyin Media Square, No.31, Zhongbei Road,
Certified public accountants engaged by Wuhan
the Company（Domestic） Names of the Suo Boguo, Zhang Ling
Certified Public
Accountants as the
signatories
Name
Office address
Certified public accountants engaged by Names of the
the Company（Overseas） Certified Public
Accountants as the
signatories
Name
Office address
Sponsor engaged by the Company for Sponsor
performing continuous supervision duties representative
in reporting period Duration of
continuous
supervision
Name
Office address
Financial adviser engaged by the
Company for performing continuous Financial adviser
supervision duties in reporting 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 over last
Main accounting data 2018 2017 2016
year（％)
Operation revenue 4,273,603,379.98 3,789,307,855.30 12.78 3,473,518,271.43
Net profit attributable to the 110,098,064.74 83,402,663.88 32.01 83,040,363.66
shareholders of the listed
company
Net profit after deducting of 87,904,343.22 56,228,437.99 56.33 57,867,834.66
non-recurring gain/loss
attributable to the shareholders of
listed company
Cash flow generated by business 215,815,799.00 207,952,436.34 3.78 -87,308,500.10
operation, net
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2018 Annual Report
End of End of Changed over last End of
2018 2017 year（％) 2016
Net assets attributable to the 1,256,897,581.84 1,147,175,783.39 9.56 1,087,134,859.75
shareholders of the listed
company
Gross assets 4,861,188,873.24 4,701,589,019.10 3.39 4,351,074,660.89
2.Main Financial Index
Changed over last year
Main Financial index 2018 2017 2016
（％)
Basic earning per share(RMB/Share) 0.469 0.355 32.11 0.353
Diluted gains per share(RMB/Share) 0.469 0.355 32.11 0.353
Basic earning per share after deducting of non-recurring 0.374 0.239 56.48 0.246
gains/losses(RMB/Share)
Weighted average net asset earning ratio（%） 9.16 7.39 Increased by 1.77% 7.94
Net income on asset, weighted and deducted non-recurring 7.31 4.98 Increased by 2.33% 5.54
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 2018
In RMB
First quarter Second quarter Third quarter Fourth quarter
（1-3 Month） （4-6 Month） （7-9 Month） （10-12 Month）
Operation revenue 953,227,720.27 1,261,124,104.71 916,550,393.82 1,142,701,161.18
Net profit attributable to the
16,059,148.52 32,136,280.39 20,711,163.46 41,191,472.37
shareholders of the listed company
Net profit after deducting of
non-recurring gain/loss attributable to 9,725,245.02 21,078,430.53 17,077,601.95 40,023,065.72
the shareholders of listed company
Net Cash flow generated by business
-260,970,788.10 28,886,752.01 254,674,737.40 193,225,097.69
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
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2018 Annual Report
In RMB
Notes (If
Items of non-operating gains and losses Amount (2018) Amount (2017) Amount(2016)
any)
Gain/loss form disposal of non-current -5,618,149.48 -11,096,055.52 -7,813,437.33
assets.
Tax rebates, reductions or exemptions due
to approval beyond authority or the lack of
official approval documents
Governmental Subsidy accounted as 29,807,370.80 34,318,163.70 38,293,336.06
current 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 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
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2018 Annual Report
from entrusted operation
Operating income and expenses other than 4,626,004.71 10,872,405.78 6,513,157.81
the aforesaid items
Other gains/losses in compliance with the
definition of non-recurring gain/loss
Influenced amount of minor shareholders’ -2,291,327.90 - 1,506,569.15 -7,250,561.72
equity
Influenced amount of income tax -4,330,176.61 - 5,413,718.92 -4,569,965.82
Total 22,193,721.52 27,174,225.89 25,172,529.00
XI. Fair value measurement
□ Applicable √Not applicable
XII.Other
□ Applicable √Not applicable
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 main business of the Company is professional research and development, production of
high-efficiency energy-saving environmental protection refrigeration compressor, with products
including 7 series and more than 200 varieties, more product models and specific specifications, and the
Company is the only one to win the Second National Prize for Progress in Science and Technology 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.
2. 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.
Within the report period, there was no significant change in the Company's main business and
business model compared with that in the previous year.
3. Industry Description
Please refer to the fourth section-Analysis of business information
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Ⅱ.Major Changes in Main Assets
√ Applicable □ Not applicable
The advance payment decreases by 42.49% compared with the same period of last year, mainly due to a
large number of equipment acceptance invoices recorded in the accounts;
Long-term equity investment increases by 52.47% compared with the same period of last year, mainly
due to the increase in investment income of associates recognized according to the equity method;
The project under construction increases by 7694.90% compared with the same period of last year,
mainly due to the newly-increased technical transformation input of Huangshi Dongbei Foundry Co.,
Ltd.;
Long-term deferred expenses decreases by 31.87% compared with the same period of last year, mainly
due to normal amortization.
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.
In December 2018, the VDU series global new product release meeting was successfully held in
Guilin, which was the fourth consecutive annual launch of the Company's new frequency conversion
products. Experts and leaders attending the launch spoke highly of Donper's continuous pursuit of
technological innovation, leading to technological progress and industrial upgrading in the industry.
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, 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 40
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
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2018 Annual Report
system-innovation category-innovation level -innovation tools to final 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 2018, the refrigerator compressor market continues to slump, and the industry competition is
increasingly fierce. In the face of unfavorable factors of international and domestic economic
environment, the Company took the "Quality Year" as an opportunity to make efforts closely around the
"Quality Improvement, Efficient Development", innovate management ideas, enhance innovation ability
and promote the work to a new level. Over the past year, the Company has significantly improved its
high-end product structure, significantly enhanced its scientific and technological innovation ability,
achieved remarkable results in improving quality indicators, greatly improved its intelligent
manufacturing level, and further advanced its international market, thus realizing counter-trend growth.
1. Take the Quality Year activity as an opportunity for all the staff to participate in it and
comprehensively promote it.
In 2018, according to the requirements of the Quality Year activity, the Company formulated a
series of effective activity plans. Through measures such as quality tackling, system improvement,
process improvement and whole staff participation, the Company conducted technical competitions,
promoted quality standardization training, achieved remarkable results in quality management
promotion, and significantly improved the quality awareness of employees. In addition, based on
literacy activities, companies actively carry out craftsman training programs, implement mentors
appointed to help education, and cultivate a number of craftsman teams with high technology level
and strong practical ability to lay a solid foundation for quality improvement. The Company firmly
grasps the "Explicit Stop, Pain Point Tackling, Quality Literacy" policy objective of the "Quality Year"
to tackle key issues and improve the project on the company's explicit and pain point issues, with the
user downline rate decreased significantly. In 2018, the Company passed the specific audit of BSH
Siemens and was awarded the "Grade A" supplier qualification, which marked the further opening of
BSH Siemens' global platform to us.
2. Adjust the structure and expand the market with the main line of enhancing the competitiveness.
The Company pays attention to leading the scientific research development with the market trend,
expands the market new domain positively, speeds up the product transformation dynamics and seeks
the market breakthrough unceasingly. In terms of market development, the joint-stock companies have
made great efforts both at home and abroad, with a total of 30 new customers expanded in 2018. While
stabilizing old customers and doing a good job in service, the Company will actively promote frequency
conversion matching resources for key customers and further optimize the product structure.
Conventional products focus on high-end efficiency, increase sales of frequency conversion products,
with frequency conversion production and sales increased by 120% year-on-year. The Company will
focus on increasing the proportion of sales of K, L series and R290 products to maximize profits. In the
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2018 Annual Report
layout of the new areas, products have been entering order dishes cabinets, kitchen refrigerators,
dehumidifiers, vehicle-mounted DC refrigerators, water dispensers and other new areas.
3. Pursue excellent products, focus on innovation and achieve remarkable results.
In order to meet the market and consumer demand, to make the product more competitive, the
Company has quickly developed a VDU medium and small inverter compressor, filled the blank in the
current industry with no small capacity frequency conversion refrigerator market, and made the
super-quiet, intelligent and economical breakthrough. On December 14, the VDU series global new
product release meeting was successfully held in Guilin, which was the fourth consecutive annual
launch of the Company's new frequency conversion products, attended by main industry leaders and
nearly 200 engineering and technical experts from more than 30 well-known users at home and abroad.
Experts and leaders atending the meeting spoke highly of Donper's continuous pursuit of technological
innovation, leading to technological progress and industrial upgrading in the industry.
Over the past year, we have paid more attention to the protection of intellectual property rights, and
applied for 114 patents in the whole year, up 115.10% year-on-year. We have obtained 63 patents,
including 13 invention patents, 48 utility model patents and 2 appearance patents. In 2018, the Company
was also rated as "National Intellectual Property Demonstration Enterprise", "Model Academician
Expert Workstation" and "National Technology Innovation Demonstration Enterprise".
4. Strengthen process management and control centered on cost decreasing and benefit increasing.
In 2018, combined with its own situation, the Company will fully tap its potential, reduce cost and
increase efficiency by optimizing product design and production process, and strictly controlling
manufacturing costs. First, the Company shall actively carry out procurement model innovation,
strengthen supply chain improvement and create a 100 km supply circle; second, the Company shall
make timely procurement according to the material market fluctuations to reasonably determine the
procurement volume; third, the management and control of production process shall be strengthened.
Through the transformation of production line "Automation, Informationization and Intelligentization",
the production layout shall be reasonably changed so that the production process can be optimized, the
production efficiency can be effectively improved, the product quality can be improved, the labor
intensity can be lowered, and the per capita efficiency can be increased by 11.1% year-on-year.
II. Production and operation
In the reporting period, the Company earned operating income of RMB 4,273,603,379.98, which
increased by 12.78% year on year. Net profit attributable to the shareholders of the listed company was
RMB 110,098,064.74. which Increased by 32.01% year on year. The compressor output was 30.12
million. which Increased by 6.31% year on year. The compressor sales was 30.53 million , which
Increased by 11.29% year on year.
（I）Analysis on principal Business
1.Sheet of change analysis of relevant items of profit statement and cash flow statement
In RMB
Amount in this Amount in last
Subject Proportion（%）
period period
Operation revenue 4,273,603,379.98 3,789,307,855.30 12.78
Business cost 3,652,738,348.26 3,226,141,993.06 13.22
Sales expenses 140,094,628.36 125,284,709.02 11.82
Administrative expenses 120,672,455.13 112,939,972.74 6.85
R& D expenses 176,947,608.06 151,385,325.46 16.89
Financial expenses 38,978,601.96 53,795,275.40 -27.54
Cash flow generated by operation activities, 215,815,799.00 207,952,436.34 3.78
net
Net cash flow generated by investment -60,311,927.90 -81,798,837.75 Not applicable
activities
Net cash flow generated by financing -81,003,875.42 115,443,518.01 -170.17
activities
(1) Analysis of revenue and cost
√ Applicable □ Not applicable
The Operating income increased by 9.63% over the previous year, Mainly due to the sales increase
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2018 Annual Report
and optimize product structure.
The Operating cost increased by 13.22% over the previous year, Mainly due to the sales increase
and optimize product structure.
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/decreas Increase/decreas
Gross Increase/decreas
Income from Cost of key e of key e of key
On industry profit e of gross profit
key business business business business cost
（％） （%）
turnover（％） （％）
Manufacturin 4,208,262,076.2 3,608,091,590.2 14.26 13.05 13.43 Decreased by
g 2 5 0.29%
The Status of key business in terms of production of business
Increase/decreas Increase/decreas
Gross Increase/decreas
On Income from Cost of key e of key e of key
profit e of gross profit
production key business business business business cost
（％） （%）
turnover（％） （％）
3,766,890,153.23 3,256,947,914.3 13.54 14.07 14.69 Decreased by
Compressors
0 0.47%
Auto casting 394,401,460.69 324,304,313.24 17.77 3.72 3.59 Increased by
and 0.1%
Compressors
casting
Photovoltaic 46,970,462.30 26,839,362.71 42.86 18.39 -3.99 Increased by
power 13.32%
generation
The status of main operation in terms of Area
Increase/decreas Increase/decreas
Gross Increase/decreas
Income from Cost of key e of key e of key
On Area profit e of gross profit
key business business business business cost
（％） （%）
turnover（％） （％）
Domestic 3,049,383,500.9 2,553,140,553.8 16.27 9.31 9.38 Decreased by
sales 7 3 0.06%
Overseas 1,158,878,575.2 1,054,951,036.4 8.97 24.27 24.60 Decreased by
sales 5 2 0.24%
Notes
√ Applicable □ Not applicable
Explanation of the main business’ branched industry: Gross profit rate of the current period is lower
than that of the same period of last year, mainly due to the increase in material costs of the current
period.
Description of main business by product: This phase of the Alashankou Project is becoming more
mature, production and sales further increase, and income increase and cost decrease make the gross
profit rate increase significantly.
Description of main business by region: The decrease of gross profit rate at home and abroad in the
current period is mainly due to the impact of the increase of material cost of compressor business.
b.Analytical Statement of Production and Sales Volume
√ Applicable □ Not applicable
Production Production Production
Main Product Production Marketing Inventory Gradient Year Gradient Year Gradient Year
on Year （%） on Year（%） on Year（%）
30.12 30.539 1.46 6.31 11.29 -22.34
Compressors million sets million sets million
sets
Auto casting and 102084.57 102084.57 0 14.08 14.08 0
Compressors casting tons tons
Photovoltaic power 61.60 61.16 0 12.86 12.70 0
generation million D million D
c.Cost analysis sheet
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2018 Annual Report
In RMB
The status of key business in terms of industry of business
On industry Items Amount in this Proportion(%) Amount in last Increase/decreas Change Notes
period period e of key business of key
cost(%) busines
s profit
over the
same
period
of last
year(%)
Manufacturin Cost of 3,608,091,590.2 86.61 3,180,830,541.8 85.78 0.83
g key 5 4
business
The status of key business in terms of production of business
On production Items Amount in this Proportion(% Amount in last Increase/decreas Change
period ) period e of key business of key
cost(%) busines
s profit
over the Notes
same
period
of last
year(%)
Compressors Materials 3,256,947,914.30 90.27 2,839,800,021.2 89.28 0.99
, labor 3
costs,
etc.
Materials 324,304,313.24 8.99 313,076,460.76 9.84 -0.85
Auto casting
, labor
and
costs,
Compressors
etc.
casting
Photovoltaic Materials 26,839,362.71 0.74 27,954,059.85 0.88 -0.14
power , labor
generation costs,
etc.
Notes
□ Applicable √Not applicable
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 1,044.0819 million, which accounts for 24.81%
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 1286.8159 million, which
accounts for 35.66% of the total annual amount of procurement; among them, the amount of
procurement to the related parties of the top five suppliers was RMB941.596 million, accounting for
26.09% of the total annual amount of procurement.
(2)Cost
√ Applicable □ Not applicable
In RMB
Amount in this Amount in last Proportion(%) Notes
Subject
period period
Selling 140,094,628.36 125,284,709.02 11.82 Mainly due to the increase in
expense transportation costs and "three
guarantees" expenses
Administrative 120,672,455.12 112,939,972.74 6.85 Mainly due to an increase in staff
expenses remuneration expenditures
13 / 143
2018 Annual Report
Financial 38,978,601.96 53,795,275.40 -27.54 Mainly due to the exchange rate gains
expenses from depreciation of RMB against
USD higher than that of the same
period of last year
(3) R& D Expenses
R & D table
√ Applicable □ Not applicable
In RMB
Amount of Capitalization Research and 176,947,608.06
Development Investment
Amount of Capitalization Research and 0
Development Investment
Total of Capitalization Research and 176,947,608.06
Development Investment
Proportion of total R&D expenditure to 4.14
operating income (%)
Number of Research and Development persons 425
(persons)
Proportion of total R&D expenditure to persons 11.01
(%)
Proportion of Capitalization Research and 0
Development Investment
Notes
□ Applicable √Not applicable
(4)Cash Flow
√ Applicable □ Not applicable
Amount in last Increase/Decrease(%)
Subject Amount in this period
period
Cash flow generated by operation activities, net 215,815,799.00 207,952,436.34 3.78
Net cash flow generated by investment -60,311,927.90 -81,798,837.75 Not applicable
activities
Net cash flow generated by financing activities -81,003,875.42 115,443,518.01 -170.17
1. Reasons for the change in net cash flows from operating activities: The net cash flows from operating
activities in the current period increase compared with that in the same period of last year, mainly due to
the increase in cash received from sales of goods and provision of labor services.
2. Reasons for the change in net cash flows from investing activities: The net cash flows from investing
activities in the current period increase compared with that in the same period of last year, mainly due to
the decrease in cash paid for the purchase and construction of fixed assets, intangible assets and other
long-term assets.
3. Reasons for the change in net cash flows from financing activities: The net cash flows from financing
activities in the current period decrease compared with that in the same period of last year, mainly due
to the increase in cash disbursement for debt repayment.
(II)Explanation of the Profit’s Significant Changes generated by the Non-core Business
□ Applicable √ Not applicable
(III)Analysis on Assets and liabilities
√ Applicable □ Not applicable
1.Assets and liabilities statement
In RMB
Year-end Changed
Year-end Proportion Proportion Notes
Name balance in last proportion
balance （%） （%）
period （%）
Prepayments 51,788,096.09 1.07 90,052,403.74 1.92 -42.49 Mainly due to a large
number of equipment
acceptance invoices
14 / 143
2018 Annual Report
accounted
Long-term 12,047,863.51 0.25 7,901,853.76 52.47 Mainly due to the
equity increase in investment
investment income of associates
recognized by the
equity method
Construction in 74,010,397.82 1.52 949,471.84 0.02 7,694.90 Mainly due to Dongbei
process Foundry Co., Ltd.
added new technical
transformation
investment
Long-term 5,316,339.50 0.11 7,802,851.16 0.17 -31.87 Mainly due to normal
amortization amortization
expenses
Non-current 70,445,000 1.45 37,445,000 0.80 88.13 Mainly due to the
liabilities due transfer of long-term
within one year payables
Long-term 0 0.00 33,000,000 0.70 -100.00 Mainly due to
payable transferred to
non-current liabilities
due within one year
Other 419,880.71 0.01 796,147 0.02 -47.26 Mainly due to foreign
Comprehensive exchange statement
Income translation differences
caused by exchange
rate fluctuations
2. Information of restrictions of major assets as of the end of the reporting period
√ Applicable □ Not applicable
In RMB
Book value at the end of the
Category Reason for Restriction
period
Monetary Funds 169,904,996.34 Issued bank acceptance bills, letters of credit, time deposit
certificates
Account 85,193,105.01 Used for the pledge of short-term loan loans
receivable
Fixed assets 410,611,386.16 Used to handle loan mortgage
3.Other
□ Applicable √ Not applicable
(IV)The analysis of business information of the industry
√ Applicable □ Not applicable
In 2018, the global economy as a whole maintained its recovery momentum, but the recovery
momentum has obviously weakened, the overlapping resonance probability of "grey rhino" and "black
swan" has increased, and the differentiation of economies has become more obvious. Sales of
refrigerators rose 0.2% year-on-year in 2018 according to industry online statistics. With the domestic
market tending to saturation, the global overseas sales market of refrigerators and freezers has grown
significantly in South Asia, North America and Eastern Europe. From January to December 2018, China
exported 56.154 million refrigerator compressors, up 12% year-on-year (Source: China Customs).
Domestic light commercial refrigeration equipment is in the development stage, and it is in great
increased demand. With sustained and steady economic growth and the rapid development of food and
beverage industry in China in recent years, light commercial refrigeration equipment such as ice cream
machine, wine cabinet and so on are widely used in various dining places, large supermarkets,
convenience stores and display cabinets, with wide applied range. The light commercial market
maintained a stable growth trend in 2018, and the growth rate of all-sealed piston compressors used in
light commercial refrigeration increased.
With the upgrading of refrigerator performance standards in China and the rapid growth of inverter
refrigerators, 16.66 million inverter refrigerators were sold in 2018, up 31% year-on-year, according to
industry online data. Frequency conversion products have a lot of room for development, the
compressor manufacturers adapt to the trend of the times and develop towards frequency conversion
and energy-saving direction.
15 / 143
2018 Annual Report
(V)The investment of the Company
1.Investments in external parties
□ Applicable √ Not applicable
(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 Total
Sharehold Net assets Net Profit
Capital assets
Name Business Scope ing Ratio （RMB10,0 （RMB10,0
（RMB10 (RMB10,0
（%） 00) 00)
,000) 00)
Wuhu Abaur Production and sales of refrigeration 3,000 75 165811.75 68335.56 3935.91
Mechanical & compressors, compressor motor;
Related to small and medium sized
Electrical Co., castings, machinery manufacturing and
Ltd related technology development,
consulting. Movable property and real
estate leasing; general warehousing
services (except dangerous chemicals).
Huangshi Casting of small and medium-sized cast 3,281.40 38.46 57731.33 16270.01 2809.64
Dongbei products, house renting and parking
Foundry Co., service. Import and export of goods and
Ltd. technology (excluding national
restrictions)
Import and Refrigeration compressors, refrigeration 800 100 740.47 735.17 -15.84
export of goods equipment, motors, solar energy products,
and technology
(excluding machinery and electrical technology
national products, electronic components,
restrictions) high-tech products, software products,
refrigeration products and parts, auto
parts, new energy products and
components, optoelectronic products and
parts, solar power generation systems and
solar off-grid power system technology
development, research, consulting and
production.
Dongbei Production and sales of refrigeration 20,000 100 71606.01 16662.13 -3047.50
Mechanical & compressors, compressor motor;
Electrical high-tech product development,
(Jiangsu) Co., production and consulting.
Ltd.
Huangshi Sales of Refrigeration Compressor, USD 1 100 3288.69 -924.42 -406.95
Dongbei Refrigeration Equipment and Parts , million
International Photoelectric products and solar water
Trade Co., heater ,etc.
Ltd.
Alashankou Solar power generation systems and 16,500 60 60465.40 14965.06 381.36
Dongbei off-grid solar power system design,
Clean Energy development, production, sales,
Co., Ltd. installation and service.
16 / 143
2018 Annual Report
Dongbei Refrigeration compressors, various castings, 3,000 100 3093.49 -158.15 121.48
(Wuhu) compressor motors, refrigeration equipment and
parts, production, procurement and sales of
Electromecha production raw materials; wholesale, import &
nical Co., Ltd. export of machine tools and other related
supporting business; economic information
consultation.
Huangshi Solar power station, ecological 15,000 75 0 0 0
Donglian New agriculture investment and development;
Energy Co., energy contract management, new energy
Ltd. technology development, photovoltaic
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 New agriculture investment and development;
Energy energy contract management, new energy
Technology technology development, photovoltaic
Co., Ltd power generation system integration,
import and export trade of goods.
Note: The Company indirectly holds 38.46% shares of Huangshi Donper-Foundry Co., Ltd.; indirectly
holds 60% shares of Alashankou Dongbei Jieneng Co., Ltd.; Huangshi Donglian New Energy Co., Ltd.
and Fengtai Donglian New Energy Technology Co., Ltd. have not started normal operation.
(VIII)The structure of the subject of corporate control
□ Applicable √ Not applicable
I.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 is still fierce, the domestic market is becoming
saturated, and the foreign market has great expansion potential, which has become the expansion
direction for compressor manufacturers; under the trend of consumption upgrading, refrigerators are
developing towards the direction of environmental protection, energy saving, intelligence, and
compressors are developing towards the lightweight and energy-saving inverter compressors with
national policy support and energy efficiency standard promotion; benefiting from the rapid
development of cold chain logistics and micro-retail supermarkets, commercial compressors are
gradually becoming a new growth point in the industry.
2.Development Strategy
√ Applicable □ Not applicable
According to China's new economic normal, new situation, new requirements, the Company will follow
the development concept of "innovation, coordination, green, opening up and sharing" to promote
product transformation and upgrading. In the future, the Company will concentrate its resources on the
medium-and high-end products, focus on the new development direction of compressor market and the
international and domestic markets, adhere to the guiding ideology of "innovation driving, simultaneous
development of quality and efficiency", change the development mode, transform the growth
momentum and enhance the development space.
(I) Focus on identifying the right market position and seizing new opportunities.
The Company shall rely on innovation and creation and use new technology, products and
functions to win the new market. The Company shall continue to optimize the product mix, accelerate
the expansion of frequency conversion and commercial products, achieve increase in volume and profits.
The Company shall promote the matching and promotion of R290 working medium products in
customers, improve the success rate of new product development and frequency conversion products
matching, seize matching resources, expand market share and maximize profits. The Company shall
vigorously expand the blank market, blank projects and blank areas of existing customers. The
Company shall actively promote product self-switching and enhance the competitiveness and potential
of the market.
(II) Strive to make up for the technical shortcomings and develop new products.
17 / 143
2018 Annual Report
In terms of technological innovation, the Company shall focus on user experience to promote new
product development and old product improvement and enhance core competitiveness. The Company
shall not only focus on frequency conversion and commercial fields, but also give consideration to the
constant frequency market, prolong the product life cycle and improve product competitiveness and
profit margin. The Company shall ensure that a generation of products is developed and put into
production, with efficiency created. The Company shall give full play to the pioneering role of
technological innovation platforms such as technology research and development centers, academician
workstations, and foreign research and development centers, absorb advanced technologies and
continuously maintain t
(III) Strive to solidify the achievements in Quality Year and form a long-term mechanism.
Quality work is the eternal theme of enterprise development. Promoting quality level and carrying
forward quality culture not only reflects the development requirements of advanced productivity, but
also reflects the development direction of advanced culture of enterprise. The "Quality Year" activity
organized by the Company last year effectively creates the "emulate, learn from, catch up with, help and
in turn surpass each other" learning and working atmosphere. The Company shall solidify the highlight
achievements of the "Quality Year", carry out quality improvement activities in a sustained and in-depth
manner, form a long-term mechanism, lay a solid foundation for management, comprehensively
promote fine quality management, strengthen supervision and management in production and clarify the
scope of quality responsibility. The Company shall continue to put quality work in an important position
to be firmly grasped, and create a working atmosphere that attaches importance to quality from the top
down. Employees' subjective initiative shall be stimulated to give play to the collective intelligence,
work together to solve the painful and difficult problems in the work and jointly promote the quality of
enterprise products to a new level.
(IV) Strive to tap the inherent potential and continuously reduce the cost and increase the efficiency.
The cost decreasing and benefit increasing work of the Company shall be centered around the
annual stated objective. The Company shall reasonably select the cost decreasing approach, formulate
reasonable cost decreasing measures, implement scientific cost control and reduction measures from
three aspects of activating asset stock, reducing controllable expenses and improving asset use
efficiency, and actively carry out the management efficiency improvement. The way of cost control
shall be gradually changed from the simple total amount control to the emphasis on "benefit, effect and
efficiency". Incentive mechanisms shall be established to encourage employees to bring their talents
into full play and to submit golden ideas and small suggestions. The Company shall encourage
renovation and waste recycling to reduce equipment and tooling costs. It is necessary to enhance the
consciousness of cost reduction and efficiency increase of the management personnel, broaden their
thinking, and constantly enrich the means and methods of cost decreasing and benefit increasing so as to
further broaden the channels of cost decreasing and strengthen the effect of cost decreasing and benefit
increasing.
(V) Strive to train elite teams and build development support.
The Company shall adhere to the successful practice of "introducing and sending out" talents,
continue to speed up the introduction of internationalized high-end talents, increase the strength of
technical training and exchange of R&D Center personnel, and rapidly improve the overall R&D ability
and quality of the Company's team. The Company shall adhere to the talent team building as an
important support for the Company's development strategy, and carry out continuous exploration and
innovation in the introduction and training of talents, talent selection and appointment, talent innovation
and development platform building, improvement and consummation of talent incentive system, talent
logistics support services, and other aspects. The Company shall open its minds, create a good
atmosphere of respecting talents and innovation, and provide talents with opportunities and platforms to
display their talents. Through talent introduction according to demand, flexible use of talents and career
retention, efforts shall be made to build the talent chain to support the high-quality development of the
Company.
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
18 / 143
2018 Annual Report
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
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 March 29, 2018, the Company convened the Fourth Session of the Seventh Board of Directors to
review the Plan on Profit Distribution of the Company in 2017.
Considering taking into account the company's development and the project's demand for funds, the co
mpany'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..
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
Year Number of Net profit
Ratio of net profit
shares for attributable to
Number of Amount of Amount of attributable to
every 10 shareholders of
bonus shares dividends for cash bonus shareholders of
shares after listed company in
for every 10 every 10 (Included listed company in
capital consolidated
shares shares tax) consolidated
surplus statement of
statement
capitalization bonus year
2018 0 1 0 23,500,000 110,098,064.74 21.34
2017 0 0 0 0 83,402,663.88 0
2016 0 1 0 23,500,000 83,040,363.66 28.30
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2018 Annual Report
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
20 / 143
2018 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
In the
In the event
event of
of failure
Whether
Whether failure to
strictly
Background Party who Commitment there is a to perform
Commitment Commitment performed
of the made the time and time limit perform in a
Type Content in a
Commitment commitment duration for in due timely
timely
performance time, manner,
manner
specify specify
the the next
reasons step of
plan
Other Related Xing Bei From July 1, No Yes
party Electromechanical 2016 to the
committed: "in committed
order to further party opt out
ensure the
independent
operation of
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,
The asset, business
commitments and organization
made in the with in
report of accordance with
acquisition relevant laws and
or in the the regulations of
statement of regulatory
changes in documents.
equity
Solving the Related Refrigerator From July No Yes
related party Industrial, Huizhi 1, 2016 to
transaction International, the
Huizhi committed
Partnership and party opt out
Xing Bei
Electromechanical
respectively
committed as
follows: " our
company will
strictly abide by
the relevant laws,
regulations,
regulatory
documents,
Articles of
Association of the
21 / 143
2018 Annual Report
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
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,
22 / 143
2018 Annual Report
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 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
23 / 143
2018 Annual Report
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 Related Refrigerator From July No Yes
horizontal party Industrial, Huizhi 1, 2016 to
competition International, the
Huizhi committed
Partnership and party opt out
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
24 / 143
2018 Annual Report
same or familiar
with the products
or services of the
listed company
and its controlled
enterprises, our
company shall
take 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
25 / 143
2018 Annual Report
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
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
26 / 143
2018 Annual Report
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
business to the
level losing
control right (if
applicable) or to
27 / 143
2018 Annual Report
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."
28 / 143
2018 Annual Report
Other Acquirer Regarding the From June Yes Yes
repayment plan, 9, 2017 to
the acquirer has the
made the completion
following of
arrangements: repayment
1.based on the
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 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.
29 / 143
2018 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
3. Completion of performance commitments and their impact on goodwill impairment testing
□ Applicable √ 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
On June 15, 2018, the Ministry of Finance issued the Notice of the Ministry of Finance on
Revising the Format of 2018 Financial Statements of General Enterprises (CK (2018) No. 15).
Enterprises implementing the Accounting Standards for Business Enterprises shall prepare financial
statements in 2018 and subsequent periods in accordance with the Accounting Standards for Business
Enterprises and the Notice.
The main impact of the Company implementing CK (2018) No. 15 is as follows:
Amount of
Changes in Restated amount Items and amounts of the
Statement items report item
accounting policies in the previous statement presented in the
affected affected in this
and causes period previous period
period
1. Consolidated Notes receivable：
presentation of notes Notes receivable & 1,948,293,867.0 760,479,711.09
1,756,498,821.79
and accounts Account receivable 1 Account receivable：
receivable 996,019,110.70
2.Presentation of
interests and
Other receivable：
dividends receivable Other receivable 3,250,165.16 2,501,172.05
incorporated into 2,501,172.05
other receivables
3. Presentation of
fixed assets
1,327,237,063.5 Fixed assets：
liquidation Fixed assets 1,438,011,522.04
4 1,438,011,522.04
incorporated into
fixed assets
4. Presentation of
project materials
Construction in Construction in process：
incorporated into 74,010,397.82 949,471.84
process 949,471.84
project under
construction
Notes payable：
5.Presentationof Note
Notes payable & 1,765,969,850.2 1,005,984,488.10
payable and Account 1,744,336,527.23
account payable 8 account payable：
payable
738,352,039.13
6. Presentation of Other payable 159,179,874.09 154,871,296.71 Interest payable：
30 / 143
2018 Annual Report
interests and 1,650,002.38
dividends payable Dividend payable：
incorporated into 10,009,121.12
other payables Other payable：
143,212,173.21
7. Presentation of
special payables Special payable：
Long-term payable 33,000,000.00
incorporated into 33,000,000.00
long-term payables
8. Adjustments to the
Management Management expenses：
presentation of 120,672,455.12 112,939,972.74
expenses 264,325,298.20
management costs
9. Separate
presentation of
R & D expenses 176,947,608.06 151,385,325.46 -
research and
development costs
Presentation of
10. Presentation of Received other cash
asset-related government
asset-related related to business 77,058,960.08 86,896,050.69
subsidies: RMB
government subsidies activities
41,169,600.0
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 10,000
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 18 years
by the company
Outside accounting firm name Hubei Daxin Certified Public Accountants Co.,
Ltd.(Special General Partnership)
Outside accounting firm rewards
Outside accounting firm audit years
Name Remuneration
CPAs firm for the internal control Hubei Daxin Certified Public 10
Accountants Co., 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
31 / 143
2018 Annual Report
□ 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
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 devel
op 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
32 / 143
2018 Annual Report
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
Summary of matters Index
The Resolution On the Sale of Partial Idle Land Use Rights and Announcement No.:2018-009
Related Transactions deliberated and approved at the Fourth Session
of the Seventh Board of Directors convened by the Company on
March 27, 2018
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
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 devel
op 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
(IV).Related Liabilities
1.Matters that have been disclosed in provisional announcements and there has been no change or devel
op 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
33 / 143
2018 Annual Report
□ Applicable √ Not applicable
2.Guarantees
√Applicable□Not applicable
In RMB 10,000
Particulars about the external guarantee of the Company(Barring the guarantee for the controlling subsidiaries)
Whethe Whet
Occurr
r her
Name ence
Guara guarant whether provi
of Amou date Guaran Wheth Guara
ntee Type of ee anti-guar ded
guaran Relati nt of (date of tee the er ntee Relation
warrantee the guarante exceed antee to
tee on guara agreem expirati termin demurr ship
startin e the exist or relate
target ntee ent on date ated age
g date delinqu not d
signing
ency partie
)
date s
Huang Huangshi 5,398. 2018/ 2019/1 Guarante No No No Yes
shi Dongbei 20 5/24 1/13 e with
Dongb Electromec joint
ei hanical responsi
The
Electri Group Co., bility
Comp
cal Ltd.
any
Applia
nce
Co.,
Ltd
Huang Huangshi 2,601. 2018/ 2019/6 Guarante No No No Yes
shi Aibo 55 7/23 /24 e with
Dongb Technology joint
ei Developme responsi
The
Electri nt Co., Ltd. bility
Comp
cal
any
Applia
nce
Co.,
Ltd
Huang Huangshi 5,765. 2018/ 2019/8 Guarante No No No Yes
shi Dongbei 14 2/6 /1 e with
Dongb Refrigeratin joint
ei g Co., Ltd. responsi
The
Electri bility
Comp
cal
any
Applia
nce
Co.,
Ltd
Total amount of guarantee in the report (Barring 13,764.89
the guarantee for the controlling subsidiaries)
Total balance of guarantee in the report(A)(Barring 13,764.89
the guarantee for the controlling subsidiaries)
Guarantees provided by the Company to its controlled subsidiaries
Total amount of guarantees provided to 191,713.86
subsidiaries in the report period
Total balance of guarantees provided to 98,013.00
subsidiaries at the end of the report period(B)
Total amount of guarantees provided by the company (including the guarantees provided to controlled subsidiaries)
111,777.89
Total amount of guarantee（A+B）
Proportion of the total guarantee in the net assets of 88.93
the Company(%)
Including：
34 / 143
2018 Annual Report
Guarantees provided to the shareholders, 13,764.89
substantial controllers and the related parties（C）
Guarantees provided to objects with over70%in 67,875.59
liability/capital rate, directly or indirectly（D）
Amount of guarantee over 50％ of the net asset 54,419.10
（E）
Total of the above （C+D+E） 111,777.89
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
（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
35 / 143
2018 Annual Report
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,Improve living standards,
2. Summary of Annual Precision Poverty Alleviation
√Applicable □ Not applicable
The Company implements the precise poverty alleviation work, organizes "one-to-one" paired
assistance by cadres to 51 employees in need in total and distributes RMB 34,700 of relief funds;
applies to the Municipal Federation of Trade Unions for assistance in difficulty and precise assistance,
with the total amount up to RMB 18,000; implements the "Student Assistance in Golden Autumn"
program, with RMB 87,000 distributing to assist 53 children of staff admitted to university; conducts
home visits and sympathy for 23 objects more than 200 times, with a total of RMB 63,180 financial aid
distributed.
3.Precision poverty alleviation effect
□ Applicable √ Not applicable
4. Follow-up Precision Poverty Alleviation Plan
√Applicable □ Not applicable
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
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
4. Environmental protection statement of companies other than key pollutant discharging units
√Applicable □ Not applicable
As of the end of the reporting period, the Company has not been included in the list of serious
polluting enterprises published by the State Environmental Protection Department, nor has there been
any major environmental event or pollution accident.
5.Explanation of the subsequent progress or changes in the disclosure of environmental information
content during the reporting period
□ Applicable √ Not applicable
6.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
36 / 143
2018 Annual Report
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
(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
37 / 143
2018 Annual Report
4.Situation
Ⅲ.Shareholders and actual controlling shareholder
1.Total shareholders
Total number of common 17,611
shareholders at the end of the
reporting period
Total shareholders at the end of the month from the date of disclosing the annual report 17,540
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
Number of Propor Amount of Pledged or frozen
Increase/d Sharehold
Shareholder name shares held at tion(% restricted
ecrease Status Quantity er nature
period -end ) shares held
Huangshi Dongbei 0 117,600,000 50.04 117,600,000 94,094,000 Domestic
Electromechanical Non-State-
Group Co., Ltd. Pledge owned
legal
person
ISHARES CORE 595,000 2,176,803 0.93 Foreign
Unkno
MSCI EMERGING Legal
wn
MARKETS ETF person
Sun Menglin -164,851 1,000,000 0.43 Domestic
Unkno
natural
wn
person
Zhou Xiaohai 0 896,200 0.38 Domestic
Unkno
natural
wn
person
Jiangsu Luoke 0 800,000 0.34 Domestic
ElectricGroup Co., Ltd. Non-State-
Unkno
owned
wn
legal
person
Lin Yongtian 0 658,600 0.28 Domestic
Unkno
natural
wn
person
Hua Xili 495,590 0.21 Domestic
Unkno
natural
wn
person
Yao Weifang 0 441,700 0.19 Domestic
Unkno
natural
wn
person
China -80,000 431,864 0.18 Foreign
Unkno
MerchantsSecutities Legal
wn
(HK) Co., Ltd. person
Shao Liping 900 400,900 0.17 Domestic
Unkno
natural
wn
person
Shareholding of top 10 shareholders of unrestricted shares
Quantity of Share type
unrestricted shares
Name of the shareholder
held at the end of the Share type Quantity
reporting period
ISHARES CORE MSCI EMERGING 2,176,803 Foreign shares placed in domestic
MARKETS ETF exchange
Sun Menglin 1,000,000 Foreign shares placed in domestic
exchange
38 / 143
2018 Annual Report
Zhou Xiaohai 896,200 Foreign shares placed in domestic
exchange
Lin Yongtian 658,600 Foreign shares placed in domestic
exchange
Hua Xili 495,590 Foreign shares placed in domestic
exchange
Yao Weifang 441,700 Foreign shares placed in domestic
exchange
China MerchantsSecutities (HK) Co., Ltd. 431,864 Foreign shares placed in domestic
exchange
Shao Liping 400,900 Foreign shares placed in domestic
exchange
Zhou Quan 367,800 Foreign shares placed in domestic
exchange
Xu Xiudi 353,000 Foreign shares placed in domestic
exchange
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 be conditions
held of shares can
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 Shaoxing Xingbei Pressing Co., Ltd 400,000
6 Zhuji LimingDecoration Engineering Co., 400,000
Ltd.
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
39 / 143
2018 Annual Report
compressors, development and consultation of high-tech products. Housing
rental, car rental, real estate development. Sales of metal materials,
building materials, flowers and seedlings.
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
□ Applicable √ Not applicable
4. Index and date of change information of the controlling shareholder during the reporting period
□ 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
40 / 143
2018 Annual Report
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
□ 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
41 / 143
2018 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
42 / 143
2018 Annual Report
The total
The total amount remuneration
of remuneration from
Beginning Shares
Expiration Shares held at Increase or decrease Reason received from the shareholder
date of held at
Name Position Sex Age date of office the in the amount of of the Company in the or other
office the report period
term year-beginning shares for the year change related
term year-end (RMB10,000 -parties in the
（Before tax） report period
(RMB10,000)
Zhu Jinming Board Chairman Male 55 2017.5.24 2020.5.24 0 0 0
Fang Zeyun Director , Male 54 2018.5.8 2020.5.24 49,300 49,300 0 9.24
General Manager
Ruan Zhengya Director Male 48 2017.5.24 2020.5.24 0 0 0
Yu Yumiao Independent Male 53 2017.5.24 2020.5.24 0 0 0 5
director
Xie Jincheng Independent Male 57 2017.5.24 2020.5.24 0 0 0 5
director
Lu Yanying Independent Female 60 2018.5.8 2020.5.24 0 0 0
director
Wang Shiwu Chairman of the Male 46 2017.5.24 2020.5.24 0 0 0
board of
supervisors
Jiang Min Supervisor Male 50 2017.5.24 2020.5.24 0 0 0
Cai Jiangxia Supervisor Female 48 2018.3.29 2020.5.24 0 0 0 9.52
Lu Lihua Deputy Female 48 2017.5.24 2020.5.24 0 0 0 39.40
General Manager
and Secretary to
the Board
Dou Zuowei Deputy General Male 37 2017.5.24 2020.5.24 0 0 0 34.83
Manager
Zhao Dayou Independent Male 64 2017.5.24 2018.5.8 0 0 0 5
（ Have left director
office）
Zhu Yushan Deputy General Male 37 2017.5.24 2018.4.27 0 0 0
（Have left Manager
office）
Hu Rongzhi Supervisor Female 42 2017.5.24 2018.3.29 0 0 0
（ Have left
office）
Gao Jianjun Deputy General Male 41 2017.5.24 2018.3.29 0 0 0
43 / 143
2018 Annual Report
Manager
（ Have left
office）
Lin Yinkun Director, Male 47 2017.5.24 2018.1.4 0 0 0
GeneralManage
r
（ Have left
office）
Total / / / / / 49,300 49,300 / 107.99 /
44 / 143
2018 Annual Report
Name Work Experience
Zhu He has served as director and Vice president Manager of Huangshi Dongbei Electromechanical Co.,
Jinming 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.
Fang From May 2002 to May 2008, he served as Deputy General Manager of Huangshi Co., Ltd.; from May 2008
Zeyun to May 2014, he served as Director and General Manager of Huangshi Dongbei Electrical Appliances Co.,
Ltd.; from May 2014 to December 2016, he served as Vice President and Assistant President of Huangshi
dongbei Group Co., Ltd.; from March 29, 2018 to present, he served as General Manager of the Company;
and from May 8, 2018 so far, he served as Director and General Manager of the Company.
Ruan He served as general manager of Changzhou Luoke Electric Co., Ltd.since 2004, He was served as director
Zhengya of the company since May 2008.
Yu Had been served as the teaching assistant, lecturer, associate professor in the accounting and auditing
Yumiao 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,he served as
Independent director of company.
Xie He once served as Dean and Secretary of the Party Committee of the School of Continuing Education of
Jincheng 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 She served as Teacher of School of Management, Huazhong University Of Science & Technology and
Yanying School of Managerment, Wuhan University of Hydraulic and Electrical Engineering,and now acts as
professor of Economics and Management School of Wuhan University .
Wang From November 2010 to January 2017, he took the posts of Deputy Director and Director of the Office of
Shiwu 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 He served as Director of Financial Deptement of Huangshi Dongbei Electromechanical Group Co., Ltd., and
Min now acts as assistant president of Huangshi Dongbei Electromechanical Group Co., Ltd，He served as
Supervisor of the Company since May 2011.
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.
Dou He used to be the project manager of LG Electronics Co., Ltd., the head of the new model of the LG
Zuowei Compressor Division, and the head of the development department of the LG Compressor Division. He now
served as deputy general manager of the company.
Cai Currently, she is the Director of the Management Office of the Company and has been serving as employees
Jiangxia Supervisor of the Companysince March 29, 2018.
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 of corporate Starting date of Expiry date of
Name Position
shareholder term of office term of office
Zhu Jinming Dongbei Group President
Wang Shiwu Secretary of the
discipline Inspection
Dongbei Group
Commission,
Chairman of the Union
Jiang Min Dongbei Group Vice president
Posts held at corporate
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2018 Annual Report
shareholders
2.Posts held at other units
√Applicable □Not applicable
Starting date Expiry date
Name Name of other units Position of term of of term of
office office
Yu Yumiao Wuhan University Profersor
Oceanwide holdings Independent Director
Semir Independent Director
Jinyu medicine Independent Director
Xie Jincheng Zhongnan University of professor at the School of
Economics and Law Finance, Deputy Director of
China Investment Research
Center
Lu Yanying Accounting professor of
Wuhan University
economics and management
Shanli Shares Independent Director
Posts held at other
units
III. Remuneration of directors, supervisors and senior executives
√Applicable □Not applicable
The decision-making procedure for remuneration of The shareholders' general meeting decided the remuneration .
directors, supervisors and senior executives:
The determine of remuneration of the basis of directors, According to the early development of various economic
supervisors and senior executives indicators to determine the end of the completion 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 Refer to the chapter (1) The change of hold share and
senior management in the end of the report period. remuneration
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2018 Annual Report
IV.Change in directors, supervisors and senior executives
√Applicable □Not applicable
Name Titles Change situation Reason
Lu Yanying Independent director Appoint
Fang Zeyun Directro , General Manager Appoint
Zhao Dayou Independent director Leave his post
ZHU Yushan Deputy General Manager Leave his post
Gao Jianjun Deputy General Manager Leave his post
Lin Yinkun Directro , General Manager Leave his post
V. Information about the received punishments from the securities regulatory agencies in the most
recent three years
□Applicable √Not applicable
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2018 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 2,890
The number of employees in the principal subsidiaries 939
Total 3,829
Parent Company and subsidiaries are required to bear the costs of
retired employees.
Divided by function
Type Person
Production personnel 3,130
Sales personnel 82
Technical personnel 425
Financial personnel 35
Administrative personnel 157
Total 3,829
Education status
Type Person
Junior college and above 1,531
Technical secondary shool and Senior High School 2,298
Total 3,829
(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 wor
k as soon as possible. 2.job training: to carry out a variety of training in accordance with the annual train
ing 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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2018 Annual Report
IX. Administrative structure
I.Basic state of corporate governance
√ Applicable □Not applicable
Within the report period, the Company constantly shall improve and perfect the corporate
governance structure, standardize the operation of the Company in practice, continuously strengthen the
quality of information disclosure, actively carry out investor relations management and earnestly
safeguard the rights and interests of all shareholders in strict accordance with the requirements of laws
and regulations including Company Law, Securities Law, Listing Rules of Shanghai Stock Exchange,
as well as the provisions of the Articles of Association.
(1) Shareholders and the General Meeting of Shareholders
The Company shall, in strict accordance with the requirements of the regulations including
Company Law, Rules of the General Meeting of Shareholders of Listed Companies, Articles of
Association and Rules of Procedure of the General Meeting of Shareholders, organize the general
meeting of shareholders in a conscientious manner and on time, and facilitate the participation of
shareholders in the meeting so as to enable them to fully exercise their shareholders' rights. The
Company treats all shareholders equally, makes explanations on their inquiries in a timely manner,
and listens to their suggestions and opinions, thus ensuring the speaking right of small and
medium-sized shareholders. When deliberating related party transactions, the shareholders' general
meeting shall strictly follow the procedure of withdrawal of related party shareholders from voting.
(2) About the Company and Controlling Shareholders
The Company has independent and complete main business and independent management
ability, thus it is independent from the controlling shareholders and actual controllers in personnel,
assets, business, institutions and financial affairs and can operate and manage itself independently
and bear responsibility and risk independently. The controlling shareholders and actual controllers of
the Company shall be able to exercise their rights and undertake corresponding obligations
according to law. Within the report period, the controlling shareholders shall not exceed the
authorizations and privileges of the shareholders' general meeting and the board of directors to
directly or indirectly interfere in the decision-making and business activities of the Company and
use their controlling position to infringe on the interests of other shareholders, which does not have
adverse effects on the corporate governance structure and independence.
(3) Directors and Board of Directors
The board of directors of the Company is composed of six directors, including three independent
directors, with four special committees established, namely, Strategy Committee, Audit Committee,
Remuneration and Examination Committee and Nomination Committee. All directors shall be
rigorous, diligent and responsible in their work during their term of office. They shall be able to pay
continuous attention to the operation of the Company, actively participate in relevant training, and
improve the standard operation level; actively participate in board meeting, give full play to their
49 / 143
2018 Annual Report
professional expertise, make prudent decision and safeguard the interests of the Company and the
majority of shareholders.
(4) About supervisors and Board of Supervisors
The board of supervisors of the Company shall be composed of three supervisors. The
procedures for convening, holding and voting of the meeting shall conform to the Articles of
Association and Rules of Procedure of the Board of Supervisors. The supervisors of the Company
shall fully exercise the supervisory authority of the board of supervisors to safeguard the interests of
the Company and the majority of shareholders.
(5) Information Disclosure and Transparency
Within the report period, the Company shall strengthen the management of information
disclosure affairs in strict accordance with the requirements of the Listing Rules of Shanghai Stock
Exchange and other provisions to disclose information truthfully, accurately, completely, promptly
and fairly.
(6)About Insider Registration Management of Inside Information
The Company shall conscientiously do a good job in the registration and filing of inside
information insiders in strict accordance with the Inside Information Insider Management System
and other relevant systems, establish inside information insider archives for the Company's regular
reports and major events, and timely submit and file it in accordance with the provisions; at the
same time, it shall strictly regulate the behavior of submitting company information to external
information users. Within the report period, the Company did not buy or sell company stocks by
using the insider information.
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 8, 2018 www.sse.com.cn May 9,2018
2017
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 2017
The work Report of the Supervisory Committee for 2017
Annual report for 2017 and its summary
Proposal for the Final Accounting Report for 2017
Proposal for the plan for Profit Distribution for 2017
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2018 Annual Report
Proposal for Renewing the Engagement of Certified Public Accountants and the Proposal for Internal
Audit Institution
Proposal of the company and its subsidiaries' 2018-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
2018
Proposal on Providing the Guarantee to Huangshi Aibo Technology Development Co., Ltd;
Proposal for The information of Daily Related Transactions of 2017 and Announcement of Expected
Proposal to amend the ariticles of association
Proposal for Election of Directors;
Proposal for Election of Independent Directors;
III. Routine work of the board of directors
(1)Board meetings and resolutions
Attenda
nce of
the
Attendance of board meetings shareho
olders’
general
meeting
Whether
Whether on
the The
Name the reasons
independen Number of attendan
The why not
t directors The meetings ce
attendance Attendanc personally
supposed attendance record
record of e through Absence attend the
times of by means of
sharehoolders agent (times) meeting of the
attendanc of shareho
’ general (times) board of
e this year communica olders’
meeting director for
tion general
twice
meeting
successively.
Zhu No 5 5 3 0 0 No 1
Jinmi
ng
Fang No 4 4 3 0 0 No 1
Zeyu
n
Ruan No 5 4 3 1 0 No 1
Zhen
gya
Yu Yes 5 4 3 1 0 No 1
Yumi
ao
Xie Yes 5 5 3 0 0 No 1
Jinch
eng
Lu Yes 4 4 3 0 0 No 1
Yanyi
ng
Zhao Yes 1 1 0 0 0 No 1
Dayo
u
Explanation personally did not attend two consecutive meetings of the Board
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2018 Annual Report
□Applicable √Not applicable
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
Where there is competition within the same industry, the company shall take corresponding measures,
work schedule and follow-up work plan
□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
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2018 Annual Report
The company will disclose the Company’s 2018 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
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 2018.
Hubei Daxin Certified Public Accountants Co., Ltd. audited the internal control of the Company and
issued 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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2018 Annual Report
XI. Financial Report
I.Auditor’s Reoprt
√ Applicable □ Not applicable
Auditor’s Reoprt
Da Xin Shen Zi (2019)No.:2-00345
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, 2018,
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, 2018 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-(29) 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
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2018 Annual Report
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
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;
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2018 Annual Report
(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
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.
(4) Obtain the transaction price of the same type of raw materials purchased from the related
party and the non-related party, and make a comparative analysis to determine whether the
transaction price is fair;
(5) Determine whether the related party transactions have reasonable commercial reasons by
examining the contract, inquiring the management of the Company and other audit procedures.
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 2018, 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
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2018 Annual Report
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
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
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2018 Annual Report
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
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 21, 2019
II.Financial statements
Consolidated Balance Sheet
December 31,2018
Prepared by: Huangshi Dongbei Electrical Appliance Co., Ltd.
In RMB
Year-beginning
Items Notes Year-end balance
balance
Current asset：
Monetary fund 704,521,838.46 628,730,491.66
Settlement provision
Outgoing call loan
Financial assets measured at fair value with variations
accounted into current income account
Derivative financial assets
Notes receivable & Account receivable 1,948,293,867.01 1,756,498,821.79
Including:Notes receivable 799,264,334.89 760,479,711.09
Account receivable 1,149,029,532.12 996,019,110.70
Prepayments 51,788,096.09 90,052,403.74
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance contracts receivable
Other account receivable 3,250,165.16 2,501,172.05
Including: Interest receivable
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2018 Annual Report
Dividend receivable
Repurchasing of financial assets
Inventories 528,995,368.83 547,305,010.27
Assets held for sales
Non-current asset due within 1 year
Other current asset 65,088,549.90 82,726,575.63
Total of current assets 3,301,937,885.45 3,107,814,475.14
Non-current assets：
Loans and payment on other’s behalf disbursed
Available for sale financial assets
Expired investment in possess
Long-term receivable
Long term share equity investment 12,047,863.51 7,901,853.76
Property investment 3,051,659.12 3,216,703.28
Fixed assets 1,327,237,063.55 1,438,011,522.04
Construction in progress 74,010,397.82 949,471.84
Productive biological assets
Oil and natural gas assets
Intangible assets 126,866,649.79 125,139,532.21
R & D costs
Goodwill
Long-germ expenses to be amortized 5,316,339.50 7,802,851.16
Deferred tax assets 1,117,914.50 1,149,509.67
Other non-current asset 9,603,100.00 9,603,100.00
Total of non-current assets 1,559,250,987.79 1,593,774,543.96
Total of assets 4,861,188,873.24 4,701,589,019.10
Current liabilities
Short-term loans 838,409,676.75 815,383,660.00
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
Notes payable and account payable 1,765,969,850.28 1,744,336,527.23
Advance payment 13,725,272.30 18,526,191.08
Selling of repurchased financial assets
Fees and commissions receivable
Employees’ wage payable 31,709,120.00 24,663,399.95
Tax payable 26,951,152.65 29,107,244.83
Other account payable 159,179,874.09 154,871,296.71
Including:Interest payable 747,455.55 1,650,002.38
Dividend payable 10,009,121.12 10,009,121.12
Reinsurance fee payable
Insurance contract provision
Entrusted trading of securities
Entrusted selling of securities
Liabilities held for sales
Non-current liability due within 1 year 70,445,000.00 37,445,000.00
Other current liability
Total of current liability 2,906,389,946.07 2,824,333,319.80
Non-current liabilities：
Long-term loan 250,695,000.00 288,140,000.00
Bond payable
Including：preferred stock
Sustainable debt
Long-term payable 33,000,000.00
Employees’ wage payable
Expected liabilities
Deferred income 153,882,613.46 144,271,900.16
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2018 Annual Report
Deferred income tax liability
Other non-current liabilities
Total of Non-current liabilities 404,577,613.46 465,411,900.16
Total of liability 3,310,967,559.53 3,289,745,219.96
Owners’ equity
Share capital 235,000,000.00 235,000,000.00
Other equity instrument
Including：preferred stock
Sustainable debt
Capital reserves 190,111,836.26 190,111,836.26
Less：Shares in stock
Other comprehensive income 419,880.71 796,147.00
Special reserves
Surplus reserves 65,031,044.33 55,256,956.71
Common risk provision
Retained profit 766,334,820.54 666,010,843.42
Total of owner’s equity belong to the parent company 1,256,897,581.84 1,147,175,783.39
Minority shareholders’ equity 293,323,731.87 264,668,015.75
Total of owners’ equity 1,550,221,313.71 1,411,843,799.14
Total of liabilities and owners’ equity 4,861,188,873.24 4,701,589,019.10
Legal Representative: Zhu Jinming Person in charge of accounting：Lu Lihua
Accounting Dept Leader: Mao Qizhi
Balance sheet of Parent Company
December 31, 2018
Prepared by: Huangshi Dongbei Electrical Appliance Co., Ltd.
In RMB
Year-beginning
Items Notes Year-end balance
balance
Current asset：
Monetary fund 349,489,503.68 321,873,553.97
Financial assets measured at fair value with variations
accounted into current income account
Derivative financial assets
Notes receivable & Account receivable 1,328,972,276.61 1,098,015,028.14
Including : Notes receivable 480,715,352.78 369,888,786.14
Account receivable 848,256,923.83 728,126,242.00
Prepayments 36,995,448.41 98,583,037.30
Other account receivable 796,481.06 327,894.18
Including: Interest receivable
Dividend receivable
Inventories 321,040,465.16 329,329,383.10
Assets held for sales
Non-current asset due within 1 year
Other current asset 4,419,528.36 15,427,138.91
Total of current assets 2,041,713,703.28 1,863,556,035.60
Non-current assets：
Available-for-sale financial assets
Expired investment in possess
Long-term receivable
Long term share equity investment 248,161,074.70 188,161,074.70
60 / 143
2018 Annual Report
Property investment
Fixed assets 439,343,177.30 482,573,300.37
Construction in progress 40,310.34 133,333.34
Productive biological assets
Oil and natural gas assets
Intangible assets 39,417,106.05 41,111,546.00
Development expenses
Goodwill
Long-germ expenses to be amortized 2,212,301.79 4,258,993.22
Deferred income tax asset
Other non-current asset 9,603,100.00 9,603,100.00
Total of non-current assets 738,777,070.18 725,841,347.63
Total of assets 2,780,490,773.46 2,589,397,383.23
Current liabilities
Short-term loans 388,632,000.00 458,383,660.00
Financial liabilities measured at fair value with variations
accounted into current income account
Derivative financial liabilities
Notes payable & Account payable 1,413,527,947.13 1,266,864,885.57
Advance payment 11,284,712.16 5,837,906.70
Employees’ wage payable 14,096,761.29 8,379,039.88
Tax payable 14,424,453.83 20,571,977.73
Other account payable 63,746,314.95 67,366,468.90
Including: Interest payable 99,083.33 606,970.83
Dividend payable
Liabilities held for sales
Non-current liability due within 1 year 33,000,000.00
Other current liability
Total of current liability 1,938,712,189.36 1,827,403,938.78
Non-current liabilities：
Long-term loan
Bond payable
Including：preferred stock
Sustainable debt
Long-term payable 33,000,000.00
Employees’ wage payable
Expected liabilities
Deferred income 45,249,666.32 30,205,402.83
Deferred income tax liability
Other non-current liabilities
Total of Non-current liabilities 45,249,666.32 63,205,402.83
Total of liability 1,983,961,855.68 1,890,609,341.61
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 65,031,044.33 55,256,956.71
Retained profit 405,695,935.94 317,729,147.40
Total of owners’ equity 796,528,917.78 698,788,041.62
Total of liabilities and owners’ equity 2,780,490,773.46 2,589,397,383.23
Legal Representative: Zhu Jinming Person in charge of accounting：Lu Lihua
Accounting Dept Leader: Mao Qizhi
61 / 143
2018 Annual Report
Consolidated Income Statement
January –December 2018
In RMB
Year-begin
Not Year-end
Items ning
es balance
balance
4,273,603,379.98 3,789,307,855
I. Income from the key business .30
4,273,603,379.98 3,789,307,855
Incl：Business income .30
Interest income
Insurance fee earned
Fee and commission received
4,163,911,59 3,708,101,842
II. Total business cost .52
0.47
3,652,738,348.26 3,226,141,993
Incl：Business cost .06
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 24,990,775.28 31,209,925.82
140,094,628.36 125,284,709.0
Sales expense 2
120,672,455.13 112,939,972.7
Administrative expense 4
176,947,608.0 151,385,32
D & D expenses
6 5.46
38,978,601.96 53,795,275.
Financial expenses
40
83,917,482.00 75,835,362.
Including: Interest expenses
27
40,453,612.89 31,637,104.
Interest income
31
9,489,173.42 7,344,641.0
Asset impairment loss
2
29,807,370.80 13,851,422.
Add: Other income
70
4,146,009.75 -905,588.2
Investment gain（“-”for loss）
1
4,146,009.75 -905,588.2
Incl: investment gains from affiliates
1
Gains from change of fir value （“-”for loss）
Assets disposal income -1,352,213.50
Gains from currency exchange（“-”for loss）
142,292,956.5 94,151,847.
III. Operational profit（“-”for loss）
6 27
6,511,340.43 32,075,422.
Add ：Non-operational income
19
6,151,271.70 11,832,330.
Less：Non business expenses
93
142,653,025.2 114,394,93
IV.Total profit(“-”for loss)
9 8.53
3,899,244.43 13,554,403.
Less：Income tax expenses
48
V. Net profit 138,753,780.8 100,840,53
62 / 143
2018 Annual Report
6 5.05
（I）Classification by business continuity
138,753,780.8 100,840,53
1.Net continuing operating profit 6 5.05
2.Termination of operating net profit
（II）Classification by ownership
110,098,064.7 83,402,663.
1.Net profit attributable to the owners of parent company
4 88
28,655,716.12 17,437,871.
2.Minority shareholders’ equity
17
VI. Net after-tax of other comprehensive income -376,266.29 138,259.76
Net of profit of other comprehensive income attributable to owners of the parent -376,266.29 138,259.76
company.
（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 method investee can not be recla
ssified into profit or loss.
（II） -376,266.29 138,259.76
Other comprehensive income that will be reclassified into profit or loss.
1.Other comprehensive income under the equity method investee can be reclassif
ied 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 and losses of available for sa
le financial assets
4.The effective portion of cash flow hedges and losses
5.Translation differences in currency financial statements -376,266.29 138,259.76
6.Other
Net of profit of other comprehensive income attributable to Minority
shareholders’ equity
138,377,514.5 100,978,79
VII. Total comprehensive income
7 4.81
109,721,798.4 83,540,923.
Total comprehensive income attributable to the owner of the parent company
5 64
28,655,716.12 17,437,871.
Total comprehensive income attributable minority shareholders
17
VI. Earnings per share
（I）Basic earnings per share 0.469 0.355
(II)Diluted earnings per share 0.469 0.355
Legal Representative: Zhu Jinming Person in charge of accounting：Lu Lihua
Accounting Dept Leader: Mao Qizhi
Income statement of the Parent Company
January -December 2018
In RMB
Not Amount of the Amount of
Items
es Report period previous year
3,393,801,7 2,966,805,1
I. Income from the key business
49.74 99.80
3,049,621,1 2,688,367,0
Incl：Business cost
95.17 49.23
Business tax and surcharge 10,744,875. 13,138,689.
63 / 143
2018 Annual Report
75 12
76,793,643. 67,492,384.
Sales expense
09 83
60,174,148.1 58,510,354.
Administrative expense
8 91
84,284,478. 64,908,836.
R & D expenses
84 96
4,027,411.73 20,048,487.
Financial expenses
07
27,958,471. 26,380,849.
Including: Interest expenses
19 65
17,646,798.2 14,700,165.
Interest income
8 69
16,388,196.6 -273,898.02
Asset impairment loss
1
7,865,224.1 1,832,178.0
Add :Other income
1 0
Investment gain（“-”for loss）
Incl: investment gains from affiliates
Gains from change of fir value （“-”for loss）
-1,416,458.6
Assets disposal income
3
98,216,565.8 56,445,473.
II. Operational profit（“-”for loss）
5 70
3,591,084.72 7,207,249.4
Add ：Non-operational income
3
4,066,774.4 7,832,755.3
Less：Non business expenses
1 3
97,740,876.1 55,819,967.
III.Total profit(“-”for loss)
6 80
Less：Income tax expenses
97,740,876.1 55,819,967.
IV. Net profit（“-”for net loss）
6 80
97,740,876.1 55,819,967.8
1.Net continuing operating profit 6 0
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 method investee can not be re
classified 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 be recla
ssified into profit or loss.
2.Gains and losses from changes in fair value available for sale financial asset
s
3.Held-to-maturity investments reclassified to gains and losses of available for
sale financial assets
4.The effective portion of cash flow hedges and losses
5.Translation differences in currency financial statements
6.Other
97,740,876.1 55,819,967.
VI. Total comprehensive income
6 80
VII. Earnings per share：
64 / 143
2018 Annual Report
（I）Basic earnings per share
(II)Diluted earnings per share
Legal Representative: Zhu Jinming Person in charge of accounting：Lu Lihua
Accounting Dept Leader: Mao Qizhi
Consolidated Cash flow statement
January-December 2018
In RMB
Amount of the Amount of previous
Items Notes
Report period year
I.Net cash flow form business operation
Cash received from sales of products and providing of 3,046,251,973.21 2,800,254,300.57
services
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 131,866,360.94 113,612,159.78
77,058,960.08 86,896,050.69
Other cash received from business operation
Subtotal of cash inflow from business activities 3,255,177,294.23 3,000,762,511.04
Cash paid for purchasing of merchandise and services 2,313,518,213.58 2,097,750,457.72
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 386,264,295.85 351,279,133.25
Taxes paid 76,299,143.75 93,297,343.62
Other cash paid for business activities 263,279,842.05 250,483,140.11
Subtotal of cash outflow from business activities 3,039,361,495.23 2,792,810,074.70
Cash flow generated by business operation, net 215,815,799.00 207,952,436.34
II. Cash flow generated by investing
Cash received from investment retrieving
Cash received as investment gains
Net cash retrieved from disposal of fixed assets, intangible 137,502.90 418,106.00
assets, and other long-term assets
Net cash received from disposal of subsidiaries or other
operational units
Other investment related cash received
Subtotal of cash inflow due to investment activities 137,502.90 418,106.00
Cash paid for construction of fixed assets, intangible assets 60,449,430.80 82,216,943.75
and other long-term assets
Cash paid at investment
Net increase of loan against pledge
Net cash received from subsidiaries and other operational
65 / 143
2018 Annual Report
units
Other cash paid for investment activities
Subtotal of cash outflow due to investment activities 60,449,430.80 82,216,943.75
Net cash flow generated by investment -60,311,927.90 -81,798,837.75
III.Cash flow generated by financing
Cash received as investment
Incl: Cash received as investment from minor shareholders
Cash received as loans 1,167,464,697.37 1,126,687,380.00
Cash received from bond placing
Other financing –related cash received
Subtotal of cash inflow from financing activities 1,167,464,697.37 1,126,687,380.00
Cash to repay debts 1,181,883,680.62 909,194,200.00
Cash paid as dividend, profit, or interests 66,584,892.17 102,031,328.93
Incl: Dividend and profit paid by subsidiaries to minor
shareholders
Other financing –related cash received 18,333.06
Subtotal of cash outflow due to financing activities 1,248,468,572.79 1,011,243,861.99
Net cash flow generated by financing -81,003,875.42 115,443,518.01
IV. Influence of exchange rate alternation on cash and cash 3,067,854.71 -1,955,462.28
equivalents
V.Net increase of cash and cash equivalents 77,567,850.39 239,641,654.32
Add ： Balance of cash and cash equivalents at the 541,382,061.70 301,740,407.38
beginning of term
VI. Balance of cash and cash equivalents at the end of term 618,949,912.09 541,382,061.70
Legal Representative: Zhu Jinming Person in charge of accounting：Lu Lihua
Accounting Dept Leader: Mao Qizhi
Parent Company Cash flow statement
January –December 2018
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 2,479,730,646.03 2,249,873,364.05
services
Refunded taxes and levies 125,791,760.94 107,537,659.78
Other cash receipts related to operating activities 41,394,430.83 18,798,715.15
Subtotal of cash inflow 2,646,916,837.80 2,376,209,738.98
Cash paid for purchasing commodities and 2,142,746,723.75 2,060,571,813.53
accepting labor
Cash paid to staffs or paid for staffs 155,305,369.50 151,779,119.22
Taxes paid 17,135,283.03 12,703,551.92
Other cash paid for business activities 155,524,201.59 138,302,989.37
Sub-total of cash outflow 2,470,711,577.87 2,363,357,474.04
Cash flow generated by business operation, net 176,205,259.93 12,852,264.94
II.Cash flow generated by investing
Cash received from investment retrieving
Cash received as investment gains
Net cash retrieved from disposal of fixed assets, 135,632.90 265,106.00
intangible assets, and other long-term assets
Net cash received from disposal of subsidiaries
or other operational units
Other investment-related cash received
Sub-total of cash inflow 135,632.90 265,106.00
Cash paid for construction of fixed assets, 598,140.62 37,133,146.25
intangible assets and other long-term assets
Cash paid as investment 60,000,000.00
Net cash received from subsidiaries and other
66 / 143
2018 Annual Report
operational units
Other cash paid for investment activities
Sub-total of cash outflow 60,598,140.62 37,133,146.25
Net cash flow generated by investment -60,462,507.72 -36,868,040.25
III.Cash flow generated by financing
Cash received as investment
Cash received as loans 624,618,600.00 715,687,380.00
Cash received from bond placing
Other financing –related cash received
Subtotal of cash inflow from financing activities 624,618,600.00 715,687,380.00
Cash to repay debts 694,370,260.00 506,770,200.00
Cash paid as dividend, profit, or interests 26,201,263.50 51,487,427.78
Other financing –related cash received
Subtotal of cash outflow due to financing activities 720,571,523.50 558,257,627.78
Net cash flow generated by financing -95,952,923.50 157,429,752.22
IV. Influence of exchange rate alternation on cash 3,444,121.00 -2,093,722.04
and cash equivalents
V.Net increase of cash and cash equivalents 23,233,949.71 131,320,254.87
Add: balance of cash and cash equivalents at the 311,297,553.97 179,977,299.10
beginning of term
VI ..Balance of cash and cash equivalents at the 334,531,503.68 311,297,553.97
end of term
Legal Representative: Zhu Jinming Person in charge of accounting：Lu Lihua
Accounting Dept Leader: Mao Qizhi
67 / 143
2018 Annual Report
Consolidated Statement on Change in Owners’ Equity
January-December 2018
In RMB
Amount in this period
Owner’s equity Attributable to the Parent Company
Other Equity Capit L Mino
instrusment al es Co Total
r
reser s: m of
ves S
Other
Spe mo
share
Items Sust Comp Surpl owne
Share Retai holde
pre aina ha
rehen
ciali
us
n rs’
Capit ferr ble O re zed ris ned rs’
sive reserv equit
al ed debt th s
Inco
rese
es
k profit equit
sto er in rve pro y
me y
ck st visi
oc on
k
235,0 190,1 796,1 55,25 666,01 264,66 1,411,
I.Balance at the end
00,00 11,83 47.00 6,956. 0,843. 8,015. 843,79
of last year 0.00 6.26 71 42 75 9.14
Add: Change of
accounting
policy
Correcting of
previous errors
Merger of entities
under common
control
Other
II.Balance at the 235,0 190,1 796,1 55,25 666,01 264,66 1,411,
beginning of current 00,00 11,83 47.00 6,956. 0,843. 8,015. 843,79
year 0.00 6.26 71 42 75 9.14
-376, 9,774, 100,32 28,655 138,37
III.Changed in the 266.2 087.6 3,977. ,716.1 7,514.
current year 9 2 12 2 57
（ 1 ） Total -376, 110,09 28,655 138,37
comprehensive 266.2 8,064. ,716.1 7,514.
income 9 74 2 57
（II）Investment or
decreasing of capital
by owners
1 ． Ordinary Shares i
nvested by hareholde
rs
2．Holders of other e
quity instruments inv
ested capital
3．Allotment to the
owners (or
shareholders)
4．Other
（ III ） Profit 9,774, -9,774,
allotment 087.6 087.62
2
9,774, -9,774,
1.Providing of
087.6 087.62
surplus reserves
2
2.Providing of
68 / 143
2018 Annual Report
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.Change amount of
defined benefit plans
that carry forward
Retained earnings
5.Other
(V). Special reserves
1. Provided this year
2．Used this term
（VI）Other
235,0 190,1 419,8 65, 766, 293, 1,550,
00,00 11,83 80.71 031 334, 323, 221,31
IV. Balance at the
0.00 6.26 ,04 820. 731. 3.71
end of this term
4.3 54 87
3
Amount in last year
Owner’s equity Attributable to the Parent Company
Other Equity Capit L Min
instrusment al es Co Total
reser s: m
or
Other of
Sus ves S Spe mo shar
Items Com Surpl Reta owne
Share pre ha ciali n ehol
tain prehe us ined rs’
Capit fer able O re
nsive
zed
reserv
ris ders’
al red th s rese k profi equit
debt Inco es equit
sto er in rve pro t y
me y
ck st vis
oc ion
k
235,0 190,1 65 49, 611,6 247,2 1,334,
00,00 11,83 7, 67 90,17 30,14 365,0
I.Balance at the end
0.00 6.26 88 4,9 6.32 4.58 04.33
of last year 7. 59.
24 93
Add: Change of
accounting
policy
Correcting of
previous errors
Merger of entities
under common
control
Other
II.Balance at the 235,0 190,1 657,8 49, 611,6 247,2 1,334,
69 / 143
2018 Annual Report
beginning of current 00,00 11,83 87.24 67 90,17 30,14 365,0
year 0.00 6.26 4,9 6.32 4.58 04.33
59.
93
138,2 5,581, 54,32 17,43 77,47
III.Changed in the
59.76 996.7 0,667 7,871 8,794.
current year 8 .10 .17 81
（ 1 ） Total 138,2 83,40 17,43 100,9
comprehensive 59.76 2,663 7,871 78,79
income .88 .17 4.81
（II）Investment or
decreasing of capital
by owners
1．Ordinary Shares
invested by harehol
ders
2．Holders of other
equity instruments i
nvested capital
3．Allotment to the
owners (or
shareholders)
4．Other
（ III ） Profit 5,581, -29,0 -23,50
allotment 996.7 81,99 0,000.
8 6.78 00
5,581, -5,58
1.Providing of
996.7 1,996
surplus reserves
8 .78
2.Providing of
common risk
provisions
-23,5 -23,50
3．Allotment to the
00,00 0,000.
owners (or 0.00 00
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.Change amount of
defined benefit
plans that carry
forward
Retained earnings
5.Other
(V). Special
reserves
1. Provided this year
2．Used this term
（VI）Other
235,0 190,1 796,1 55,25 666,0 264,6 1,411,
IV. Balance at the
00,00 11,83 47.00 6,956. 10,84 68,01 843,7
end of this term
0.00 6.26 71 3.42 5.75 99.14
70 / 143
2018 Annual Report
Legal Representative: Zhu Jinming Person in charge of accounting：Lu Lihua
Accounting Dept Leader: Mao Qizhi
Statement of change in owner’s Equity of the Parent Company
January-December 2018
In RMB
Amount in this period
Other Equity instrusment Other
Less:
Items Share Other Capital Comprehe Sp
preferred Shares in
capital Sustainable reserves nsive d
stock stock
debt Income
235,000,00 90,801,937
I.Balance at the end of last
0.00 .51
year
Add: Change of accounting
policy
Correcting of previous errors
Other
235,000,00 90,801,937
II.Balance at the beginning of
0.00 .51
current year
III.Changed in the current year
（I）Total comprehensive
income
(II) Investment or decreasing
of capital by owners
1．Ordinary Shares invested b
y shareholders
2．Holders of other equity ins
truments invested capital
3.Amount of shares paid and
accounted as owners’ equity
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.Change amount of defined
benefit plans that carry
forward
Retained earnings
71 / 143
2018 Annual Report
5．Other
(V) Special reserves
1. Provided this year
2．Used this term
（VI）Other
IV. Balance at the end of this 235,000,00 90,801,937
term 0.00 .51
Amount in last year
Other Equity instrument Other
Items Less:
Share Capital Comprehe Sp
preferred Shares in
capital Sustainable Other reserves nsive d
stock stock
debt Income
I.Balance at the end of last 235,000,00 90,801,937
0.00 .51
year
Add: Change of accounting
policy
Correcting of previous errors
Other
II.Balance at the beginning of 235,000,00 90,801,937
0.00 .51
current year
III.Changed in the current
year
（I）Total comprehensive
income
(II) Investment or decreasing
of capital by owners
1 ． Ordinary Shares invested
by shareholders
2 ． Holders of other equity in
struments invested capital
3.Amount of shares paid and
accounted as owners’ equity
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.Change amount of defined
benefit plans that carry
forward
Retained earnings
5．Other
72 / 143
2018 Annual Report
(V) Special reserves
1. Provided this year
2．Used this term
（VI）Other
IV. Balance at the end of this 235,000,00 90,801,937
term 0.00 .51
Legal Representative: Zhu Jinming Person in charge of accounting：Lu Lihua
Accounting Dept Leader: Mao Qizhi
73 / 143
2018 Annual Report
III.Basic Information of the Company
1.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. As of December 31, 2018,Companies
registered capital of RMB 235 million, equity amounted to 235 million shares, par value of 1 yuan. by
Huangshi Dongbei Electromechanical Gruop Co., Ltd.,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. six promoters hold.
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
II.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)
2. 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.,Thereinto, Huangshi Donglian New Energy Co., Ltd, Fengtai Donglian New Energy
Technology Co., Ltd in the year and have not started normal operations.
IV. Basis for the preparation of financial statements
1.Basis for the preparation
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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
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
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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
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
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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 short, strong liquidity and low risk of value fluctuation .
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
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
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√ 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
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
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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
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
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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
4－5 years
Over 5 years
Over 4 years 100 100
Appropriate provisions for doubtful accounts according to Percentage 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
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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.
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
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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
(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）
（%） (%)
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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
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
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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
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
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（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.
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
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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
√ 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
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2018 Annual Report
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
√ 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:
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2018 Annual Report
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
√ Applicable □ Not applicable
1. Types of government subsidies and accounting treatment
Government subsidies refer to the monetary assets or non-monetary assets acquired by the
Company free of charge from the government (but excluding the capital invested by the government as
the owner). Where government subsidies are monetary assets, they are measured at the amount
receivable or received. If a government subsidy is a non-monetary asset, it shall be measured at its fair
value. If its fair value cannot be obtained in a reliable way, it shall be measured at its nominal amount.
Government subsidies related to routine activities are included in other income by nature of
economic business. Government subsidies irrelevant to routine activities shall be included into the
non-operating receipt and disbursement.
Government subsidies for the procurement and construction or formation of long-term assets in
other manners specified in government documents are recognized as asset-related government subsidies.
Where the government documents do not specify the object of the subsidy, and the subsidy can form
long-term assets, the part of the government subsidy corresponding to the value of the assets shall be
regarded as the government subsidy related to the assets, and the rest shall be regarded as the
government subsidy related to the income; where it is difficult to be distinguished, government
subsidies as a whole are treated as income-related government subsidies. Asset-related government
subsidies are recognized as deferred income. The amount recognized as deferred income shall be
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2018 Annual Report
recorded in the current profits or losses in a reasonable and systematic way within the service life of the
relevant assets.
Except the government subsidies pertinent to assets, other government subsidies shall be
determined as government subsidies pertinent to gains. Where government subsidies related to income
are used to compensate for relevant expenses or losses of the enterprise in subsequent periods, such
subsidies shall be recognized as deferred income and shall be included in the profits and losses of the
current period during the period in which relevant expenses are recognized; where it is used to
compensate the relevant expenses or losses incurred by the enterprise, it shall be directly included in the
current profits and losses.
Where the Company obtains policy-oriented preferential loan with discounted interest, and the
finance allocates interest subsidy funds to a lending banks that serves a loan to the Company at a
policy-based preferential rate, the actual debit amount received shall be seen as the entry value of loan
and relevant loan costs shall be worked out pursuant to the loan principal and the policy-based
preferential rate; where the finance directly allocates interest subsidy funds to the Company,
corresponding interest subsidies shall offset relevant loan costs.
2. Recognition time of government subsidies
Governmental subsidy is recognized when the attached conditions for governmental subsidy are
met and it can be received. The government subsidies measured at amounts receivable will be
recognized at the end of a period when there is conclusive evidence indicating that the government
subsidies can meet the relevant conditions stipulated by the financial support policy and be expected to
receive the financial support funds. Other government subsidies except the government subsidies
measured at amounts receivable will be recognized when subsidies are actually received.
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
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
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2018 Annual Report
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 amount of
Approval
Changes in Accounting Policies and Causes significantly affected report
procedure
item)
See other instructions for details
On June 15, 2018, the Ministry of Finance issued the Notice
of the Ministry of Finance on Revising the Format of 2018
Financial Statements of General Enterprises (CK (2018) No. 15).
Enterprises implementing the Accounting Standards for Business
Enterprises shall prepare financial statements in 2018 and
subsequent periods in accordance with the Accounting Standards
for Business Enterprises and the Notice.
Other note
The main impact of the Company implementing CK (2018) No. 15 is as follows:
Amount of
Changes in Restated amount Items and amounts of the
Statement items report item
accounting policies in the previous statement presented in the
affected affected in this
and causes period previous period
period
1. Consolidated
Notes receivable & 1,948,293,867.0 Notes receivable：
presentation of notes 1,756,498,821.79
Account receivable 1 760,479,711.09
and accounts
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2018 Annual Report
receivable Account receivable：
996,019,110.70
2.Presentation of
interests and
Other receivable：
dividends receivable Other receivable 3,250,165.16 2,501,172.05
2,501,172.05
incorporated into
other receivables
3. Presentation of
fixed assets
1,327,237,063.5 Fixed assets：
liquidation Fixed assets 1,438,011,522.04
4 1,438,011,522.04
incorporated into
fixed assets
4. Presentation of
project materials
Construction in Construction in process：
incorporated into 74,010,397.82 949,471.84
process 949,471.84
project under
construction
Notes payable：
5.Presentationof Note
Notes payable & 1,765,969,850.2 1,005,984,488.10
payable and Account 1,744,336,527.23
account payable 8 account payable：
payable
738,352,039.13
Interest payable：
6. Presentation of 1,650,002.38
interests and
Dividend payable：
dividends payable Other payable 159,179,874.09 154,871,296.71
10,009,121.12
incorporated into
other payables Other payable：
143,212,173.21
7. Presentation of
special payables Special payable：
Long-term payable 33,000,000.00
incorporated into 33,000,000.00
long-term payables
8. Adjustments to the
Management Management expenses：
presentation of 120,672,455.12 112,939,972.74
expenses 264,325,298.20
management costs
9. Separate
presentation of
R & D expenses 176,947,608.06 151,385,325.46 -
research and
development costs
Presentation of
10. Presentation of Received other cash
asset-related government
asset-related related to business 77,058,960.08 86,896,050.69
subsidies: RMB
government subsidies activities
41,169,600.0
(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 6%、10%、11%、16%、17%
deductible VAT input provision and pay
Consumption tax
Business tax
7%
Tax for city maintenance and Should be accounted and paid according to
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2018 Annual Report
construction: 7% of the payable current taxes.
15%、25%
Should be accounted and paid according of
Enterprise income tax
payable income tax.
3%
Should be accounted and paid according to
Fees for education:
3% of payable current 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
2. Tax preference
√ Applicable □ Not applicable
The company exports products to implement value-added tax "exemption, credit, refund" policy, our
products export tax rebate rate of 16%, 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 2,338.00 1,311.83
Bank deposit 534,614,504.12 412,330,451.65
Other monetary funds 169,904,996.34 216,398,728.18
Total 704,521,838.46 628,730,491.66
Indluding：The total amount of deposit abroad 20,893,487.60 25,865,330.12
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.Notes receivable & Account receivable
Summary situation
(1) Daieal
Notes receivable & Account receivable listed by category
√Applicable□Not applicable
In RMB
Items Closing balance Opening balance
Notes receivable 799,264,334.89 760,479,711.09
Account receivable 1,149,029,532.12 996,019,110.70
Total 1,948,293,867.01 1,756,498,821.79
Other note
□ Applicable √ Not applicable
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2018 Annual Report
Notes receivable
(1) Notes receivable listed by category
√Applicable□Not applicable
In RMB
Items Closing balance Opening balance
Bank acceptance bill 611,828,138.47 570,493,946.74
Trade acceptance bill 187,436,196.42 189,985,764.35
Total 799,264,334.89 760,479,711.09
(2) Notes receivable pledged by the Company at the period-end
√Applicable□Not applicable
In RMB 10,000
Itesm Amount
Bank acceptance bill 8,336.88
Trade acceptance bill
Total 8,336.88
(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 10,000
Items Amount of recognition termination at Amount of not terminated recognition
the period-end at the period-end
Bank acceptance bill 88,707.67
Trade acceptance bill
Total 88,707.67
(4) Notes transferred to accounts receivable because drawer of the notes fails to executed the contract or
agreement
□ Applicable √ Not applicable
Other notes
□ Applicable √ Not applicable
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 Proportio Amoun Proportio value Amount Proportio Amount Proportio value
n(%) t n(%) n(%) n(%)
Accounts 24,645,478. 2.05 12,744,40 51.71 11,901,077
receivable of 06 0.27 .79
individual
significance
and subject to
individual
impairment
assessment
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2018 Annual Report
Accounts 1,176,216,4 97.95 39,087,97 3.32 1,137,128,4 1,038,347,9 100.00 42,328,86 4.08 996,019,11
receivable 33.38 9.05 54.33 80.08 9.38 0.70
subjecttoim
pairment
assessment
by credit
risk
characteristi
cs of a
portfolio
Accounts
receivable of
individual
insignificance
but subject ot
individual
impairment
assessment
1,200,861,9 / 51,832,37 / 1,149,029,5 1,038,347,9 / 42,328,869 / 996,019,11
Total 11.44 9.32 32.12 80.08 .38 0.70
Accounts receivable with significant single amount for which bad debt provision separately accrued at
the period-end
√ Applicable □ Not applicable
In RMB
Closing balance
Account receivable
Account Withdrawal
（Unit) Bad debt provision Reason
receivable proportion
1. Henan Xinfei Refrigeration 17,139,353.65 9,527,486.17 55.59 Expected low
equipment Co., Ltd. recyclability
2. Henan Xinfei Appliance Co., 7,506,124.41 3,216,914.10 42.86 Expected low
Ltd. recyclability
Total 24,645,478.06 12,744,400.27 / /
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 1,131,155,884.43 22,623,117.69 2
Subtotal within 1 year 1,131,155,884.43 22,623,117.69
1-2 years 25,417,833.24 1,270,891.66 5
2-3 years 5,697,667.52 1,709,300.27 30
Over 3 years
3-4 years 1,150,946.89 690,568.13 60
Over 4 years 12,794,101.30 12,794,101.30 100
4-5 years
Over 5 years
Total 1,176,216,433.38 39,087,979.05
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
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2018 Annual Report
The withdrawal amount of the bad debt provision during the reporting period is RMB9,503,509.94;
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 1 170,695,057.12 14.21 3,413,901.14
2.Client 2 71,871,426.95 5.98 1,955,998.69
3.Client 3 58,243,083.64 4.85 1,164,861.67
4.Client 4 56,835,971.20 4.73 1,136,719.42
5.Client 5 46,902,205.35 3.91 938,044.11
Total 404,547,744.26 33.68 8,609,525.03
(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
5. Prepayment
(1) List by aging analysis:
√ Applicable □ Not applicable
In RMB
Closing balance Opening balance
Aging
Amount Proportion(%) Amount Proportion(%)
46,338,467.77 89.48 81,182,854.12 90.15
Within 1 year
4,687,503.32 9.05 3,658,766.54 4.06
1-2 years
423,600.00 0.82 4,882,383.08 5.42
2-3 years
338,525.00 0.65 328,400.00 0.37
Over 3 years
51,788,096.09 100.00 90,052,403.74 100.00
Total
Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in
time:
Closing Reason for
Creditor unit Debt unit Aging
balance not settle
Qingdao Beinuo Under
Huangshi Dongbei Fourdry Within 1 year,
Magnetoelectric technology 1,650,000.00 Fulfillment
Co., Ltd. 1-2 years
Co., Ltd.
Huangshi Dongbei Electrical Machinery Technology 1,376,000.00 Withn 1 year, Under
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2018 Annual Report
Appliance Co., Ltd. Development Co., Ltd. 1-2 years Fulfillment
Total 3,026,000.00
(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. 13,444,205.36 25.96
2.Huangshi Dongbei Electromechanical Group Co., ltd. 6,686,395.08 12.91
3. Changzhou Faderke Clay sand foundry machinery co.,
3,860,110.00 7.45
Ltd
4.Henan Juren Crane Group Co., Ltd. 2,003,540.00 3.87
5. Qingdao Beinuo Magnetoelectric technology Co., Ltd. 1,650,000.00 3.19
Total 27,644,250.44 53.38
Other notes：
□Applicable√Not applicable
6. Other accounts receivable
Summary situation
(1) Other accounts receivable disclosed by category
√ Applicable □ Not applicable
In RMB
Items Closing balance Opening balance
Interest receivable
Dividend receivable
Other receivable 3,250,165.16 2,501,172.05
Total 3,250,165.16 2,501,172.05
Other notes：
□Applicable√Not applicable
Interest receivable
(1)Classification of interest receivable
□ Applicable √ Not applicable
（2）Important overdue interest
□ Applicable √ Not applicable
Other notes：
□Applicable√Not applicable
Dividend receivable
(1) Dividend receivable
□ Applicable √ Not applicable
(2) Significant dividend receivable aged over 1 year
□Applicable√Not applicable
Other notes：
□Applicable√Not applicable
Other accounts receivable
(1) Other accounts receivable disclosed by category
√ Applicable □ Not applicable
In RMB
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2018 Annual Report
Closing balance Opening balance
Classification Book Balance Bad debt provision Book Balance Bad debt provision
Book Book
Amount Proportio Amount Proportio Amount Proportio Amount Proportio
value value
n(%) n(%) n(%) n(%)
Other accounts
receivable of
individual
significance
and subject to
individual
impairment
assessment
Other accounts 3,774,97 95.45 524,813 13.90 3,250,16 2,745,46 85.25 244,295 8.90 2,501,17
receivable 8.75 .59 5.16 7.58 .53 2.05
subjecttoim
pairment
assessment
by credit
risk
characteristi
cs of a
portfolio
Other accounts 180,000. 4.55 180,000 100.00 0 474,854. 14.75 474,854 100.00 0
receivable of 00 .00 58 .58
individual
insignificance
but subject ot
individual
impairment
assessment
3,954,97 / 704,813 / 3,250,16 3,220,32 / 719,150 / 2,501,17
Total
8.75 .59 5.16 2.16 .11 2.05
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 1,899,938.75 37,998.77 2
Subtotal within 1 year 1,899,938.75 37,998.77 2
1-2 years 1,028,368.72 51,418.44 5
2-3 years 242,021.28 72,606.38 30
Over 3 years
3-4 years 604,650.00 362,790.00 60
Over 4 years
4-5 years
Over 5 years 3,774,978.75 524,813.59
Total
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt
provision
□ Applicable √ Not applicable
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2018 Annual Report
In the groups, other accounts receivable adopting other methods to accrue bad debt provision:
□ 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 333,483.64 361,166.52
Deposit 2,172,098.83 2,193,668.29
Current account 1,449,396.28 665,487.35
Total 3,954,978.75 3,220,322.16
(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 14,336.52.
Of which the significant amount of the reversed or collected part during the reporting period:
□ Applicable √ Not applicable
(3) The actual write-off other accounts receivable
□ Applicable √ Not applicable
(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 1-2 years 25.28 20,000.00
2. Huangshi petrochina kunlun city Current 532,345.92 Within 1 13.46 10,646.92
investment gas Co., Ltd. account year
3.Wuhu Zhongran City Development Deposit 488,650.00 3-4 years 12.36 293,190.00
Co., Ltd.
4. Nanjing SKYWORTH home Deposit 200,000.00 2-3 years 5.06 60,000.00
appliance Co., Ltd.
5. Shanghai Suntri Automation Current 180,000.00 Over 4 4.55 180,000.00
Engineering Co., Ltd. account years
Total / 2,400,995.92 / 60.71 563,836.92
(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
7.Inventories
（1）Inventories types
√ Applicable □ Not applicable
In RMB
Closing balance Opening balance
Book balance Provision Book value Book balance Provision for Book value
Items
for bad bad debts
debts
Raw materials 55,139,912.42 55,139,912.42 45,157,464.03 45,157,464.03
Processing 212,803,047.85 212,803,047.85 194,021,643.99 194,021,643.99
products
98 / 143
2018 Annual Report
Stock goods 261,052,408.56 261,052,408.56 308,125,902.25 308,125,902.25
Turnover
materials
Consumptive
biological
assets
Construction
cont ract has
been com pleted
unsettled a ssets
Total 528,995,368.83 528,995,368.83 547,305,010.27 547,305,010.27
(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
8. Holding assets for sale
□ Applicable √ Not applicable
9. Non-current assets due within 1 year
□ Applicable √ Not applicable
10. Other current assets
√ Applicable □ Not applicable
In RMB
Items Closing balance Opening balance
VAT input tax 65,088,549.90 82,726,575.63
Total 65,088,549.90 82,726,575.63
11. Available-for-sale financial assets
(1) Available-for-sale financial assets
□ Applicable √ Not applicable
(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
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2018 Annual Report
(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
12. 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
13. 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
14. Long-term equity investment
√ Applicable □ Not applicable
In RMB
Increase /decrease
Adjust Closin
Invest
Negat ment Cash g
Additi Withdr
Openin ment of bonus balanc
Chang awal of Closin
g onal ive other or e of
Investee es of impair g
balanc profit compr profits Other impair
other ment balance
e invest invest ehensi announ ment
equity provisi
and ve ced to provisi
ment on
ment incom issue on
loss e
100 / 143
2018 Annual Report
recogni
zed
under
the
equity
method
I. Joint ventures
Subtotal
II. Associated enterprises
Huangs 5,183,50 4,154,36 9,337,87
hi Aibo 7.21 6.41 3.62
Propert
y
Co.,Ltd.
Hubei 2,718,34 -8,356.6 2,709,98
Jinling 6.55 6 9.89
Precisio
n
Agricult
ure Co.,
Ltd.
Subtotal 7,901,85 4,146,00 12,047,8
3.76 9.75 63.51
7,901,85 4,146,00 12,047,8
Total 3.76 9.75 63.51
15. 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 3,717,926.72 3,717,926.72
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
(2)Other Out
4. Year-end balance 3,882,970.88 3,882,970.88
101 / 143
2018 Annual Report
III. Provision for impairment
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 3,051,659.12 3,051,659.12
2. Book value at year beginning 3,216,703.28 3,216,703.28
(2) Details of investment property failed to accomplish certification of property
□ Applicable √ Not applicable
Other notes
□ Applicable √ Not applicable
16. Fixed assets
(1) List of fixed assets
√ Applicable □ Not applicable
In RMB
Items Closing balance Opening balance
Fixed assets 1,327,237,063.55 1,438,011,522.04
liquidation of fixed assets
Total 1,327,237,063.55 1,438,011,522.04
Other notes
□ Applicable √ Not applicable
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 698,524,948.00 1,577,226,902.23 26,241,258.19 41,228,446.43 2,343,221,554.85
2. Increased at this period 7,130,919.75 38,837,892.03 1,252,029.53 857,687.15 48,078,528.46
（1）Purchase 6,976,130.79 36,214,354.02 1,080,908.84 857,687.15 45,129,080.80
（ 2 ） Transferred from
construction in -progress 154,788.96 2,623,538.01 171,120.69 2,949,447.66
The merger of enterprises
increase
3. Decreased at this period 53,040.00 34,083,084.02 283,544.15 4,305,503.24 38,725,171.41
（1）Disposal or scrap 53,040.00 34,083,084.02 283,544.15 4,305,503.24 38,725,171.41
4 Year-end balance 705,602,827.75 1,581,981,710.24 27,209,743.57 37,780,630.34 2,352,574,911.90
II. Accumulated
depreciation
1. Year-beginning balance 212,870,224.27 636,885,500.50 20,050,062.85 35,404,245.19 905,210,032.81
2. Increased at this period 34,328,174.83 113,621,116.40 608,584.28 3,623,649.35 152,181,524.86
1) Withdrawal 34,328,174.83 113,621,116.40 608,584.28 3,623,649.35 152,181,524.86
3.Decreased at tthis period 39,498.87 27,707,270.63 269,366.93 4,037,572.88 32,053,709.31
102 / 143
2018 Annual Report
（1）Disposal or scrap 39,498.87 27,707,270.63 269,366.93 4,037,572.88 32,053,709.31
4. Year-end balance 247,158,900.23 722,799,346.27 20,389,280.20 34,990,321.66 1,025,337,848.36
III. Provision for
impairment
1. Year-beginning balance
2. Increased at this period
(1) Withdrawal
3. Decreased at this period
（1）Disposal or scrap
4. Year-end balance
IV.Book value
1. Closing book value 458,443,927.52 859,182,363.98 6,820,463.37 2,790,308.68 1,327,237,063.55
2. Book value at year
beginning 485,654,723.73 940,341,401.73 6,191,195.34 5,824,201.24 1,438,011,522.04
(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
Liquidation of fixed assets
□ Applicable √ Not applicable
17. Construction in progress
(1) List of construction in progress
√Applicable□Not applicable
In RMB
Items Closing balance Opening balance
Construction in progress 74,010,397.82 949,471.84
Engineering Material
Total 74,010,397.82 949,471.84
Other notes：
□ Applicable √ Not applicable
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 13,612,486.41 13,612,486.41 653,874.35 653,874.35
Software installation 133,333.34 133,333.34
engineering
Foundry Luoqiao Phase 54,921,517.80 54,921,517.80 162,264.15 162,264.15
IV Construction Project
Shell workshop stamping 5,476,393.61 5,476,393.61
engineering
103 / 143
2018 Annual Report
Total 74,010,397.82 74,010,397.82 949,471.84 949,471.84
(2) Changes of significant construction in progress
√Applicable□Not applicable
In RMB
Including
Amoun Capitalisat
Transfer ：Current Capitalizat
t at Increase Other Balance Progre ion of Sourc
Budg red to Proportion amount of ion rate of
Name year at this decrea in ss of interest es of
et fixed (%) interest(%
beginni period se year-end work accumulat capitalizat funds
assets )
ng ed balance ion of
interest
Shell 5,476,39 5,476,393.
worksho 3.61 61
p
stamping
engineeri
ng
Foundry 162,264. 54,759,253. 54,921,51
Luoqiao 15 65 7.80
Phase IV
Construct
ion
Project
162,264. 60,235,647. 60,397,911 / / / /
Total
15 26 .41
(3) List of the withdrawal of the impairment provision of the construction in progress
□ Applicable √ Not applicable
Other notes
□ Applicable √ Not applicable
Engineering material
□ Applicable √ Not applicable
18. Productive biological assets
(1) Measured by cost
□ Applicable √ Not applicable
(2) Measured by fair value
□ Applicable √ Not applicable
Other notes
□ Applicable √ Not applicable
19. Oil-and-gas assets
□ Applicable √ Not applicable
20.Intangible assets
（1）List of intangible assets
√ Applicable □ Not applicable
104 / 143
2018 Annual Report
In RMB
Non-patent
Items Land use right Patent Software Total
Technology
I. Original price
1.Opening balance 143,390,520.83 6,880,532.87 150,271,053.70
2.Increased amount 6,934,062.92 205,633.05 7,139,695.97
ofthe period
6,934,062.92 72,299.71 7,006,362.63
(1) Purchase
(2)Internal
Development
(3)Increased of
Enterprise Combination
(4) Transfer to 133,333.34 133,333.34
construction project
3.Decreased amount of
the period
(1)Disposition
4. Closing balance 150,324,583.75 7,086,165.92 157,410,749.67
II.Accumulated
amortization
1. Balance in 20,819,765.47 4,311,756.02 25,131,521.49
year-begin
2.Increased amount of 4,220,991.60 1,191,586.79 5,412,578.39
the period
(1)Withdrawal 4,220,991.60 1,191,586.79 5,412,578.39
3. Decreased amount of
the period
(1) Disposition
4. Closing balance 25,040,757.07 5,503,342.81 30,544,099.88
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 125,283,826.68 1,582,823.11 126,866,649.79
period-end
2. Book value of the 122,570,755.36 2,568,776.85 125,139,532.21
period-begin
(2) Details of fixed assets failed to accomplish certification of land use right
□Applicable√Not applicable
Other notes
□ Applicable √ Not applicable
21. R&D expenses
105 / 143
2018 Annual Report
□Applicable√Not applicable
22. Goodwill
(1) Original book value of goodwill
□Applicable√Not applicable
(2) Goodwill impairment preparation
□Applicable√Not applicable
(3)Information about the asset group or portfolio of assets where goodwill resides
□Applicable√Not applicable
(4) Describe the goodwill impairment test process, key parameters (e.g. forecast period growth rate,
stable period growth rate, profit margin, discount rate and forecast period when forecasting the present
value future cash flow, if applicable) and the recognition method of goodwill impairment loss
□Applicable√Not applicable
(5) The impact of goodwill impairment test
□ Applicable √ Not applicable
Other notes
□ Applicable √ Not applicable
23.Long-term amortization expenses
√ Applicable □ Not applicable
In RMB
Items Opening balance Increase Amortization Decrease Closing balance
amount
Afforestation 3,806,677.06 2,240,859.56 1,565,817.50
fees
Decoration fees 2,863,006.16 609,352.01 2,253,654.15
Mold usage fee 1,133,167.94 230,474.85 902,693.09
Fire engineering 699,029.13 104,854.37 594,174.76
Total 7,802,851.16 699,029.13 3,185,540.79 5,316,339.50
24. 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
temporary tax assets temporary tax assets
difference difference
Assets impairment 7,453,908.87 1,117,914.50 7,663,397.83 1,149,509.67
provision
Insider trading unrealized
profit
Deductible loss
Total 7,453,908.87 1,117,914.50 7,663,397.83 1,149,509.67
(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
106 / 143
2018 Annual Report
□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 45,083,284.04 35,384,621.66
Deductible losses 55,612,952.78 25,938,536.46
Total 100,696,236.82 61,323,158.12
(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
2020 2,471,044.81 7,499,449.92
2021 326,211.07 326,211.07
2022 18,112,875.47 18,112,875.47
2023 34,702,821.43
Total 55,612,952.78 25,938,536.46 /
Other notes
□ Applicable √ Not applicable
25. Other non-current assets
√Applicable □ Not applicable
In RMB
Items Closing balance Opening balance
Purchase of house 9,603,100.00 9,603,100.00
Total 9,603,100.00 9,603,100.00
26. Short-term loans
(1) Category of short-term loans
√Applicable□Not applicable
In RMB
Items Closing balance Opening balance
15,277,676.75
Impawn loan
Mortgage loan
823,132,000.00 815,383,660.00
Guaranteed loan
Credit loan
Total 838,409,676.75 815,383,660.00
Note：
Note 1: The pledged loan is a subsidiary of Dongbei Mechanical & Electrical (Jiangsu) Co., Ltd., which
pledges accounts receivable to Bank of Communications for factoring financing business;
Note 2: To ensure that the loan is obtained by Huangshi Dongbei Electromechanical Group Co., ltd.,
Huangshi Dongbei Electrical Appliances Co., Ltd., Wuhu Abaur Mechanical & Electrical Co., Ltd.,
Dongbei Electrical and Mechanical (Jiangsu) Co., Ltd. and Huangshi Dongbei Foundry Co., Ltd.
providing mutual guarantee to the bank.
107 / 143
2018 Annual Report
(2)Overdue short-term loans
□Applicable√Not applicable
(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
27. Financial liabilities measured at fair value through current profit and loss
□ Applicable √ Not applicable
28. Derivative financial liabilities
□ Applicable√ Not applicable
34. Notes payable & Account payable
√ Applicable □ Not applicable
In RMB
Items Closing balance Opening balance
Notes receivable 1,014,351,712.43 1,005,984,488.10
Account receivable 751,618,137.85 738,352,039.13
Total 1,765,969,850.28 1,744,336,527.23
Other notes
□ Applicable √ Not applicable
Notes payable
(1) List of notes payable
√Applicable□Not applicable
In RMB
Items Closing balance Opening balance
Trade acceptance 203,068,065.25 225,299,336.97
Bank acceptance 811,283,647.18 741,685,151.13
L/C 39,000,000.00
Total 1,014,351,712.43 1,005,984,488.10
Account payable
(1) List of accounts payable
√Applicable□Not applicable
In RMB
Items Closing balance Opening balance
Within 1 year（Including 1 year） 713,824,340.12 694,016,181.10
Over 1 year 37,793,797.73 44,335,858.03
Total 751,618,137.85 738,352,039.13
(2) Notes of the accounts payable aging over one year
√Applicable□Not applicable
108 / 143
2018 Annual Report
In RMB
Items Closing balance Reasons for outstanding or
carry-over
1.Supplier 1 3,360,798.82 Contract is in-process of execution
2.Supplier 2 2,561,421.70 Contract is in-process of execution
3.Supplier 3 1,359,262.09 Contract is in-process of execution
4.Supplier 4 1,075,906.54 Contract is in-process of execution
Total 8,357,389.15 /
Other notes
□ Applicable √ Not applicable
30. 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） 13,680,477.51 18,361,176.03
Over 1 year 44,794.79 165,015.05
Total 13,725,272.30 18,526,191.08
(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
31. Payroll payable
(1) List of Payroll payable
√Applicable□Not applicable
In RMB
Items
Year-beginning Increase in the Decrease in the Year-end
balance current period current period balance
I. Short-term salary 24,663,399.95 364,178,641.02 357,132,920.97 31,709,120.00
II. Post-employment benefits 27,908,304.11 27,908,304.11
III. Termination benefits 1,223,070.76 1,223,070.76
IV.Other welfare within 1 year
Total 24,663,399.95 393,310,015.89 386,264,295.84 31,709,120.00
(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 and 22,661,734.46 313,904,512.27 306,229,008.64 30,337,238.09
subsidies
2.Employee welfare 25,371,771.05 25,371,771.05
3. Social insurance premiums 14,204,904.77 14,204,904.77
Including：Medical insurance 11,792,603.28 11,792,603.28
Work injury insurance 1,635,744.56 1,635,744.56
Maternity insurance 776,556.93 776,556.93
4. Public reserves for housing 9,443,387.40 9,443,387.40
5.Union funds and staff education fee 2,001,665.49 1,254,065.53 1,883,849.11 1,371,881.91
6. Short-term paid absences
7.Short-term profit-sharing plan
Total 24,663,399.95 364,178,641.02 357,132,920.97 31,709,120.00
(3) List of drawing scheme
√Applicable□Not
109 / 143
2018 Annual Report
In RMB
Items
Year-beginning Increase in the Decrease in the Year-end balance
balance current period current period
1. Basic old-age insurance 26,980,486.72 26,980,486.72
premiums
2.Unemployment insurance 927,817.39 927,817.39
3. Annuity payment
Total 27,908,304.11 27,908,304.11
Other notes
□ Applicable √ Not applicable
32. Taxes payable
√ Applicable □ Not applicable
In RMB
Items Year-end balance
Year-beginning balance
VAT 2,209,418.67
Consumption tax
Business tax
Enterprises income tax 20,155,507.87 24,490,472.88
Personal income tax 205,070.49 360,479.02
Urban maintenance and construction 1,217,386.33 985,391.66
tax
Property tax 1,160,112.60 881,293.65
Land use tax 593,006.73 894,318.88
Education surcharge 385,235.27 285,808.94
Other 1,025,414.69 1,209,479.80
Total 26,951,152.65 29,107,244.83
33.Other payable
(3) List of other payable
√Applicable□Not applicable
In RMB
Items Closing balance Opening balance
Interest payable 747,455.55 1,650,002.38
Dividend payable 10,009,121.12 10,009,121.12
Other payable 148,423,297.42 143,212,173.21
Total 159,179,874.09 154,871,296.71
Other notes
□ Applicable √ Not applicable
Interest payable
√Applicable□Not applicable
In RMB
Items Year-end balance
Year-beginning balance
Installments of long-term interest-bearing loan interest 404,923.74 1,059,536.19
Corporate bond interest
Interest on short-term loans payable 342,531.81 590,466.19
The preference shares are classified as financial
liabilities \ perpetual debt interest
Total 747,455.55 1,650,002.38
Particulars of significant overdue unpaid interest:
□Applicable√Not applicable
110 / 143
2018 Annual Report
Other notes：
□Applicable√Not applicable
Dividends payable
√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
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 97,533,158.39 92,105,791.25
Petty cash 89,562.50 23,215.72
Deposit 2,179,003.67 2,026,638.35
Provisional account payable 48,621,572.86 49,056,527.89
Total 148,423,297.42 143,212,173.21
(2) Other significant accounts payable with aging over one year
□Applicable√Not applicable
Other notes
□Applicable√Not applicable
34. Holding unsold liabilities
□Applicable√Not applicable
35. Non-current liabilities due within 1 year
√ Applicable □ Not applicable
In RMB
Items Closing balance Opening balance
Long-term loans due within 1 year 37,445,000.00 37,445,000.00
Long-term bond payable due within
1 year
Long-term payable due within 1 year 33,000,000.00
Total 70,445,000.00 37,445,000.00
36.Other current liabilities
Other current liabilities
□Applicable√Not applicable
Changes on short term bonds payable:
□Applicable√Not applicable
Other notes
□Applicable√Not applicable
37. Long-term loan
(1) Category of long-term loan
111 / 143
2018 Annual Report
√Applicable□Not applicable
In RMB
Items Closing balance Opening balance
Pledge loan
Mortgage loan 238,630,000.00 270,450,000.00
Guarantee loan 10,625,000.00 16,250,000.00
Credit loan 1,440,000.00 1,440,000.00
Total 250,695,000.00 288,140,000.00
Note:
Note 1: The mortgage loan is obtained from the Export-Import Bank of China by Alashankou Dongbei
Jieneng Co., Ltd., the subsidiary, with the mortgage of power generation equipment and the pledge of
electricity receivable (mortgage contract:2130099922015110984ZY01, pledge contract:
2130099922015110984ZY02).
Note 2: To ensure that the loan is obtained by Huangshi Dongbei Electromechanical Group Co., ltd., and
Huangshi Dongbei Electrical Appliances Co., Ltd. providing guarantee for Dongbei Electrical and
Mechanical (Jiangsu) Co., Ltd., the subsidiary company.
Other note, Including interest rate range：
□Applicable√Not applicable
38. 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
39. Long-term payable
(1) Long-term payable listed by nature of the account
√ Applicable □ Not applicable
In RMB
Items Opening balance Closing balance
Long-term payable 0 0.00
Special payable 0 33,000,000.00
Total 33,000,000.00
Other notes
□Applicable√Not applicable
Long-term payable
(1) Long-term payable listed by nature of the account
√ Applicable □ Not applicable
Special payable
√ Applicable □ Not applicable
112 / 143
2018 Annual Report
In RMB
Opening balance Opening Decrease at this Opening Reason
Items
balance period balance
Huangshi 33,000,000 33,000,000 0 Transfer to
Municipal non-current liabilities
Finance Bureau due within one year
entrusted loan
Total 33,000,000 33,000,000 0 /
40. Long-term payroll payable
□Applicable√Not applicable
41.Estimated liabilities
□Applicable√Not applicable
42. Deferred income
Deferred income
√ Applicable □ Not applicable
In RMB
Items Opening balance Increase Decrease Closing balance Formation reasons
Government 144,271,900.16 26,110,293.50 16,499,580.20 153,882,613.46
subsidy
Total 144,271,900.16 26,110,293.50 16,499,580.20 153,882,613.46 /
(2) Details of government subsidies
√ Applicable □ Not applicable
In RMB
New Amount Amount Oth Asset-relate
Beginning subsidy in transferred transferred er d or
Items to to other End of term
of term current cha income-relat
period non-operati income nges ed
onal income
Compressor 16,017,320. 1,255,544.9 14,761,775. Asset-relate
industrial projects 29 2 37 d
13,258,084. 10,704,193. 654,468.81 23,307,808. Asset-relate
Land compensation
00 50 69 d
fee
Subsidy fund for 97,032,488. 3,400,000.0 12,430,123. 88,002,365. Asset-relate
capital construction 87 0 59 28 d
project
Funds for technical 17,964,007. 1,866,100.0 1,736,942.8 18,093,164. Asset-relate
transformation 00 0 8 12 d
projects
Energy 7,140,000.0 297,500.00 6,842,500.0 Asset-relate
conservation and 0 0 d
environmental
protection
innovation capacity
construction project
Provincial science 3,000,000.0 125,000.00 2,875,000.0 Asset-relate
and technology 0 0 d
research and
development
special, application
technology
research and
development
Other notes
□Applicable√Not applicable
113 / 143
2018 Annual Report
43. Other non-current liabilities
□Applicable√Not applicable
44. Share capital
√ Applicable □ Not applicable
In RMB
Changed（+，-）
Balance in year- Issuance Balance in
beginning Bonus Capitalization year-end
of new Other Subtotal
shares of public
share
reserve
Total of 235,000,000.00 235,000,000.00
capital
shares
45. 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
instrumentsoutstanding 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
46. Capital reserves
√ Applicable □ Not applicable
In RMB
Items Opening Increase Decrease Closing balance
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
47. Treasury stock
□Applicable√Not applicable
48. Other comprehensive income
√Applicable□Not applicable
In RMB
Occurred current term
Less：
Amount
Accounted Attributable Attributabl
occurred Less：
Beginning as other to the e to End of
Items before Income
gains parent minority term
of term
income tax tax
previously Company shareholder
of the expenses
but after tax s after tax
period
transferred
114 / 143
2018 Annual Report
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
remeasureme
nt 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 796,147.00 -376,266.29 -376,266.29 419,880.71
Comprehensive
income that will
be reclassified
subsequently to
profit or loss
Indluding ： Share
of other
comprehensive
income of the
investee under the
equity method that
w8ill be
reclassified to
profit or loss
Gains or losses on
115 / 143
2018 Annual Report
changes in fair
value of
available-for-sale
financial assets
Gains or losses on
reclassification of
held-to-maturityin
vestments to
available-for –sale
financial assets
Effective portion
of gains or losses
on cash flow
hedges
796,147.00 -376,266.29 -376,266.29 419,880.71
Translation
differences of
financial
statements
denominated in
foreign currencies
Total of other 796,147.00 -376,266.29 -376,266.29 419,880.71
comprehensive
income
49. Special reserves
□Applicable√Not applicable
50. Surplus reserves
√ Applicable □ Not applicable
In RMB
Items Opening balance Increase Decrease Closing balance
Statutory surplus 55,256,956.71 9,774,087.62 65,031,044.33
reserves
Discretional surplus
reserves
Reserve funds
Enterprise
development funds
Other
Total 55,256,956.71 9,774,087.62 65,031,044.33
51.Retained profits
√ Applicable □ Not applicable
In RMB
116 / 143
2018 Annual Report
Amount of last
Items Amount of this period
period
666,010,843.42 611,690,176.32
Before adjustment: Retained profits at the end of priodyear
Adjustment: Total retained profits at the beginning of year
666,010,843.42 611,690,176.32
After adjustment: Retained profits at the beginning of year
110,098,064.74 83,402,663.88
Add ： Net profit attributable to shareholders of the parent
Company for the period
9,774,087.62 5,581,996.78
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 766,334,820.54 666,010,843.42
52. Business income, Business cost
√ Applicable □ Not applicable
In RMB
Amount of current period Amount of previous period
Items
Income Cost Income Cost
Income from 4,208,262,076.22 3,608,091,590.25 3,722,331,925.90 3,180,830,541.84
Main Business
Other Business 65,341,303.76 44,646,758.01 66,975,929.40 45,311,451.22
income
Total 4,273,603,379.98 3,652,738,348.26 3,789,307,855.30 3,226,141,993.06
53.Business tax and subjoin
√ Applicable □ Not applicable
In RMB
Items Amount of current period Amount of previous period
Consumption tax
Business tax
6,607,156.66 7,723,779.39
City maintenance and construction
tax
Education surtax 2,831,638.62 3,310,184.94
Resource tax
House tax 5,933,845.52 6,222,185.95
Land use tax 4,623,700.60 8,215,238.86
Vehicle and vessel usage tax 62,117.72 58,386.02
Stamp tax 2,330,644.95 2,716,823.93
Local education surcharges 1,560,940.75 1,786,780.67
Water Construction Fund 1,024,791.02 1,096,607.28
Other 15,939.44 79,938.78
Total 24,990,775.28 31,209,925.82
54.Sales expenses
√ Applicable □ Not applicable
117 / 143
2018 Annual Report
In RMB
Items Amount of current period Amount of previous period
Transport costs 66,837,786.44 62,218,590.50
Travel expenses 4,216,349.49 4,491,371.57
Wege 26,836,408.97 24,137,669.84
Warranty expenses 29,408,175.30 24,089,140.10
Other 12,795,908.16 10,347,937.01
Total 140,094,628.36 125,284,709.02
55.Administrative expenses
√ Applicable □ Not applicable
In RMB
Items Amount of current period Amount of previous period
Wage 80,548,277.49 73,433,333.46
Travel expenses 12,005,576.10 14,160,547.17
Depreciation 9,025,973.67 9,759,390.72
Repair fees 1,399,461.83 1,385,312.31
Other 17,693,166.04 14,201,389.08
Total 120,672,455.13 112,939,972.74
56. R & Development expenses
√ Applicable □ Not applicable
In RMB
Items Amount of current period Amount of previous period
Wage 39,437,519.75 34,772,365.63
Depreciation 10,682,633.74 13,852,938.99
Material costW 100,391,845.10 82,423,785.75
Water and electricity 8,551,584.18 7,386,494.05
Tool 4,527,046.43 3,865,939.19
Other 13,356,978.86 9,083,801.85
Total 176,947,608.06 151,385,325.46
57. Financial expenses
√ Applicable □ Not applicable
In RMB
Items Amount of current period Amount of previous period
Interest expense 83,917,482.00 75,835,362.27
Less: Incoming interests -40,453,612.89 -31,637,104.31
Exchange gains/losses 6,523,695.44
Less ：exchange gains -7,870,888.24
3,385,621.09 3,073,322.00
Handling charges
Total 38,978,601.96 53,795,275.40
58. Asset impairment loss
√Applicable□Not applicable
In RMB
Items Amount of current period Amount of previous period
9,489,173.42 7,344,641.02
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
118 / 143
2018 Annual Report
V.Impairment on long-term equity
investment
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
9,489,173.42 7,344,641.02
Total
59.Other income
√Applicable□Not applicable
In RMB
Items Amount of current period Amount of previous period
Deferred income transfer 16,499,580.20 12,481,396.70
Government subsidies related to daily 13,307,790.60 1,370,026.00
business activities
Total 29,807,370.80 13,851,422.70
60.Investment income
√Applicable□Not applicable
In RMB
Amount of current period Amount of previous
Items
period
Long-term equity investment income under equity method 4,146,009.75 -905,588.21
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
Disposal of investment proceeds from hold-to-maturity
investments
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 4,146,009.75 -905,588.21
61. Gains on the changes in the fair value
□Applicable√Not applicable
62. Income from asset disposal
119 / 143
2018 Annual Report
√Applicable□Not applicable
In RMB
Amount of current period Amount of previous
Items
period
Gains or losses from disposal are generated by disposing those not -1,352,213.50
classified as holding fixed assets for sale, construction in progress,
productive biological assets and intangible assets.
Total -1,352,213.50
63.Non-operating income
Non-operating Income
√ Applicable □ Not applicable
In RMB
Items Amount of current Amount of previous period Recorded in the amount of
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
80,000.00 1,487,009.27 80,000.00
Gains from debt restructuting
Non-monetary assets
exchangegains
Accepting donations
Government grants 20,466,741.00
Quality claims and other 6,116,438.51 8,710,344.80 6,116,438.51
fine income 100,000.00 211,010.73 100,000.00
Electricity allowance 82,230.79
Other 214,901.92 1,118,085.60 214,901.92
Total 6,511,340.43 32,075,422.19 6,511,340.43
Government subsidy reckoned into current gains/losses
□Applicable√Not applicable
Other notes
□Applicable√Not applicable
64.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 700,774.92 127,275.59 700,774.92
Non-monetary asset exchange
losses
Foreign donations 520,000.00 165,000.00 520,000.00
Electricity allowance 4,265,935.98 11,178,286.31 4,265,935.98
Fine 363,786.92 363,786.92
Other 300,773.88 361,769.03 300,773.88
120 / 143
2018 Annual Report
Total 6,151,271.70 11,832,330.93 6,151,271.70
65. Income tax expense
(1) Lists of income tax expense
√ Applicable □ Not applicable
In RMB
Items Report period Same period of the previous year
Current income tax expense 3,867,649.26 13,668,561.26
Deferred income tax expense 31,595.17 -114,157.78
Total 3,899,244.43 13,554,403.48
(2) Adjustment process of accounting profit and income tax expense
√ Applicable □ Not applicable
In RMB
Items Report period
Total profits 142,653,025.29
Current income tax expense accounted by tax and relevant regulations 26,598,249.60
Effect of different tax rates applicable to subsidiaries
Income tax adjustments on prior periods
Impact of non-taxable income -621,901.46
Impact of non-deductible costs, expenses and losses -1,022,189.22
Affect the use of deferred tax assets early unconfirmed deductible losses
This issue does not affect the deferred tax assets recognized deductible temporary -4,308,701.95
differences or deductible loss
Additional impact of research and development expenses deduction -16,746,212.54
Income tax expenses 3,899,244.43
Other note
□Applicable√Not applicable
66. Other comprehensive income
√ Applicable □ Not applicable
Refer to the notes
67. 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 9,975,115.57 3,513,821.62
Fine and Quality compensation 6,216,438.51 6,082,313.43
Interest income 3,924,580.43 3,296,920.13
Rent and utilities 23,599,341.47 17,071,128.51
Govemment Subsidy 33,343,484.10 56,931,867.00
Total 77,058,960.08 86,896,050.69
(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 114,068,160.61 107,964,592.46
Water and electricity 1,511,397.82 944,355.80
121 / 143
2018 Annual Report
Technology Development costs 80,604,613.82 77,214,340.83
Other Current account 67,095,669.80 64,359,851.02
Total 263,279,842.05 250,483,140.11
(3) Other cash received relevant to investment activity
□Applicable√Not applicable
(4) Other cash paid relevant to Investment financing activity
□Applicable√Not applicable
(5) Other cash paid relevant to financing activity
□Applicable√Not applicable
（6）Other Cash payable related to Financing activities
□Applicable√Not applicable
68. Supplement Information for cash flow statement
（1）Supplement Information for cash flow statement
√ Applicable □ Not applicable
In RMB
Amount of current Amount of
Supplement Information
period previous period
I. Adjusting net profit to cash flow from operating activities
Net profit 138,753,780.86 100,840,535.05
Add: Impairment loss provision of assets 9,489,173.42 7,344,641.02
Depreciation of fixed assets, oil and gas assets and consumable biological 152,346,569.01 161,396,324.64
assets
Amortization of intangible assets 5,412,578.39 5,056,297.74
Amortization of Long-term deferred expenses 3,185,540.79 2,698,068.22
Loss on disposal of fixed assets, intangible assets and other long-term 1,352,213.50
deferred assets
Loss from scrapping of fixed assets 4,265,935.98 11,096,055.52
Loss from fair change
Financial cost 83,917,482.00 75,835,362.27
Loss on investment -4,146,009.75 905,588.21
Decrease in deferred income tax assets 31,595.17 -114,157.78
Increased of deferred income tax liabilities
Decrease of inventories 18,309,641.44 -162,036,025.61
Decease of operating receivables -163,768,904.10 56,566,899.10
Increased of operating Payable -33,333,797.71 -51,637,152.04
Other
Net cash flows arising from operating activities 215,815,799.00 207,952,436.34
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 618,949,912.09 541,382,061.70
Less: Balance of cash at the beginning of the period 541,382,061.70 301,740,407.38
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 77,567,850.39 239,641,654.32
Note: The amount of notes receivable for goods and providing labor service provision which is not
related to cash is RMB 1757.2876 million in the current period.
122 / 143
2018 Annual Report
(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 618,949,912.09 541,382,061.70
Including：cash at hand 2,338.00 1,311.83
Demand bank deposit 534,614,504.12 412,330,451.65
Demand other monetary funds 84,333,069.97 129,050,298.22
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 618,949,912.09 541,382,061.70
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
RMB85.5719 million.
69. 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.:
□Applicable√Not applicable
70. The assets with the ownership or use right restricted
√Applicable□Not applicable
In RMB
Items Closing book value Restricted reason
169,904,996.34 Issued bank acceptance bills, letters of credit, time
Monetary capital
deposit certificates
Note receivable
Inventory
Fixed assets 410,611,386.16 Used for the pledge of short-term loan loans
Intangible assets
Account receivalbe 85,193,105.01 Used to handle loan mortgage
Total 665,709,487.51 /
71. 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
123 / 143
2018 Annual Report
Indluding：USD 16,844,851.70 6.8632 115,609,586.96
Euro 7,528,064.59 7.8473 59,074,981.26
HKD
RMB
RMB
Account receivable
Including：USD 31,895,595.27 6.8632 218,905,849.42
Euro 5,082,314.15 7.8473 39,882,443.87
HKD
RMB
RMB
Long-term loans
Including：USD
Euro
HKD
RMB
RMB
Foreign currency accounting-XXX
RMB
RMB
Short-term loans
Including：USD 10,000,000.00 6.8632 68,632,000.00
Other payable
USD 34,351.88 6.8632 235,763.82
(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
72.Arbitrage
□Applicable√Not applicable
73.Government subsidy
1. Basis situation
√Applicable□Not applicable
In RMB
Amount of profits and
Type Amount Items
losses for the current period
Industrial investment funds 7,609,600.00 Deferred income 237,800.00
Provincial-level science and 3,000,000.00 Deferred income 125,000.00
technology research and
development, application
technology research and
development
Energy conservation and 7,140,000.00 Deferred income 297,500.00
environmental protection
innovation capacity building
project
16 years of technical reform 1,866,100.00 Deferred income 174,946.88
project subsidy funds
Land transfer gold return 3,094,593.50 Deferred income 60,508.81
Financial infrastructure supporting 1,770,000.00 Deferred income 118,000.00
subsidy 4
Financial infrastructure supporting 1,630,000.00 Deferred income 108,664.00
subsidy 5
Tax return 6,074,600.00 Other income 6,074,600.00
Technological Center Capacity 1,494,740.00 Other income 1,494,740.00
Building Project
Industrial development subsidy 1,223,712.60 Other income 1,223,712.60
Science and technology awards 1,227,400.00 Other income 1,227,400.00
categories of government grants
Special funds for foreign economic 1,091,000.00 Other income 1,091,000.00
& trade Development
124 / 143
2018 Annual Report
subsidies for high - tech enterprises 600,000.00 Other income 600,000.00
Provincial science and technology 285,900.00 Other income 285,900.00
innovation and development of
special funds
Patent subsidy fund 119,500.00 Other income 119,500.00
Talent subsidy fund 1,079,000.00 Other income 1,079,000.00
Stabilization subsidy 111,938.00 Other income 111,938.00
2. Information about refunding government grants
□Applicable√Not applicable
81.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
3.Reverse 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
125 / 143
2018 Annual Report
IX. Equity in other entities
1. Equity in subsidiary
(1) The structure of the enterprise group\
√Applicable□Not applicable
Main Proportion of
Name of the Registration Nature of shareholding(%)
operating Way of gaining
subsidiary place business
place Directly Indirectly
Wuhu Abaur 75.00 Investment
Manufacturing
Mechanical & Wuhu Wuhu
Electrical Co., Ltd..
38.46 Under the
same
Huangshi Dongbei Manufacturing
Huangshi Huangshi control
Founry Co., Ltd.
business
combination
100.00 Under the
Huangshi Dongbei same
International Trade Huangshi BVI Trading control
Co., Ltd. business
combination
Dongbei 100.00 Investment
Manufacturing
Electromechanical Suqian Suqian
(Jiangsu) Co., Ltd.
Dongbei(Wuhan) 100.00 Investment
Technology Wuhan Wuhan R&D Centre
Innovation Co., Ltd.
Alashankou 60.00 Investment
Power
Dongbei Greenergy Alashankou Alashankou
Generation
Co., Ltd.
Dongbei (Wuhu) Wuhu Wuhu Trading 100.00 Investment
Electromechanical
Co., Ltd.
Fengtai Donglian Huainan Unoperated 75.00 Under the
New Energy same
Technology Co., control
Ltd. business
combination
Wutai Jinhe New Wutai Unoperated 75.00 Under the
Energy Co., Ltd. same
control
business
combination
Other note
Note: The Company indirectly holds 38.46% shares of Huangshi Dongbei Foundry Co., Ltd.; indirectly
holds 60% shares of Alashankou Dongbei Jieneng Co., Ltd.; Huangshi Donglian New Energy Co., Ltd.
and Fengtai Donglian New Energy Technology Co., Ltd. have not started normal operation.
(2) Significant not wholly owned subsidiary
√ Applicable □ Not applicable
In RMB
Shareholding The profits and losses Declaring dividends Balance of minority
Subsidiary proportion of arbitrate to the distribute to minority shareholder at
minority shareholder minority shareholders shareholder closing period
Wuhu Abaur 25.00 14,451,266.77 109,197,607.57
Mechanical &
Electrical Co.,
Ltd..
Holding proportion of minority shareholder in subsidiary different from voting proportion:
□ Applicable √ Not applicable
Other notes：
□ Applicable √ Not applicable
126 / 143
2018 Annual Report
(3) The main financial information of significant not wholly owned subsidiary
√ Applicable □ Not applicable
In RMB10,000
Year-end balance Year-beginning balance
Non Tota
Curre Non Curren Non
Name Non curren Total l
Current Total nt Current curren Total t current
current t liabilit liabi
assets assets Liabili assets t assets Liabili liabilitie
assets liabilit ies litie
ties assets ties s
ies s
Wuhu 168,495. 81,752.2 250,2 140,3 25,3 165,6 161,201. 81,1 242,3 136,70 28,20 164,
Abaur 73 4 47.97 04.72 73.0 77.76 18 55.2 56.38 7.43 5.64 913.
Mecha 4 0 07
nical
&
Electri
cal
Co.,
Ltd..
Amount of current period Amount of previous period
Cash Cash
flows flows
Total Total
Name Business Net from Business Net from
Comprehensiv Comprehensiv
income profit operatin income profit operatin
e income e income
g g
activities activities
Wuhu 218,462.1 7,126.9 7,126.91 7,685.62 206,949.1 4,906.7 4,906.76 15,850.10
Abaur 9 1 0 6
Mechanica
l &
Electrical
Co., Ltd.
(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
3. Equity in joint venture arrangement or associated enterprise
√ Applicable □ Not applicable
(1) Main joint venture and associated enterprise
√ Applicable □ Not applicable
In RMB
Accounting
Main Proportion(%) treatment of the
Registration
Name operating Business nature investment of joint
place
place Directly Indirectly venture or associated
enterprise
Huangshi Aibo Huangshi Huangshi Real estate 24.00 Equity method
Property Co., Ltd.
127 / 143
2018 Annual Report
Hubei Jinling Fine Huangshi Huangshi Development of 24.00 Equity method
Agriculture Co., Ltd the agricultural
products
(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
5.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
128 / 143
2018 Annual Report
□ Applicable √ Not applicable
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 RMB10,000
The parent
The parent company
company of the
Registered Regisrated of the Company’s
Name Natrue
address capital Company's
vote ratio
shareholding ratio
Huangshi Manufacturing 24,184.00 50.04 50.04
Dongbei
Huangshi
Electromechanical
Group Co., Ltd.
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
129 / 143
2018 Annual Report
Name Relationship with the Company
Controlled by the parent company Huangshi Dongbei
Huangshi Dongbei Refrigerating Co., Ltd.
Electromechanical Group Co., Ltd.
One of the shareholders of the parent Company Huangshi Dongbei
Huangshi Aibo Technology Development Co., Ltd. Electromechanical Group Co., Ltd., Trust holdings shares of
Huangshi Dongbei Group Employees.
Wuhu Farici Investment Co., Ltd. Other
Hubei Xingdong Investment Co., Ltd. Other
One of the shareholders of the parent Company Huangshi Dongbei
Jiangsu Luoke Electrical Group Co., Ltd.
Electromechanical Group Co., Ltd.
Huangshi Chenxin Photoelectric Co., Ltd. Wuhu Farici Investment Co., Ltd. holding subsidiaries
Huangshi Aibo Technology Development Co., Ltd. holding
Hubei Dongbei New Energy Co., Ltd.
subsidiaries
Huangshi Aibo Technology Development Co., Ltd. holding
Dongbei New Energy（Wuhu）Co., Ltd.
subsidiaries
Huangshi Aibo Technology Development Co., Ltd. holding
Hubei Jinling Fine agricultural Linyang Co., Ltd.
subsidiaries
Huangshi Aibo Technology Development Co., Ltd. holding
Hubei Jinling Fine agricultural Co., Ltd.
subsidiaries
Huangshi Aibo Technology Development Co., Ltd. holding
Huangshi Jinbei Dairy Co., Ltd.
subsidiaries
Huangshi Huangshi Director Dongxing Petty Loan Wuhu Farici Investment Co., Ltd. holding subsidiaries
Co., Ltd.
Huangshi Dongbei Electromechanical Group Co., Ltd.’s parent
Huangshi Dongbei Refrigerator industry Co., Ltd.
company
Controlled by the parent company Huangshi Dongbei
Huangshi Dongbei Electronic Commerce Co., Ltd.
Electromechanical Group Co., Ltd.
Controlled by the parent company Huangshi Dongbei
Jiangsu Dongbei Machinery Co., Ltd.
Electromechanical Group Co., Ltd.
Wuhu Abaur Real estate Co., Ltd. Other
Huangshi Aibo Technology Development Co., Ltd. holding
Huangshi Jinbei food chain co., Ltd subsidiaries
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 RMB10,000
Amount of last
Related-party Content Amount of this period
period
Jiangsu Luoke Electric Group Co., Ltd. Compressor parts 38,363.69 35,684.31
Huangshi Aibo Technology Development Co.,
Compressor parts 70,968.60 65,204.84
Ltd.
Huangshi Dongbei Electromechanical Group
Compressor parts 8,237.87 4,567.96
Co., Ltd.
Huangshi Jinbei Dairy Co., Ltd. Agricultural products 460.49 335.05
Hubei Jinling Fine Agriculture Co., Ltd. Agricultural products 35.62 96.32
Huangshi Chenxin Optoelectronic Co., Ltd. ow value consumable 11.86 294.06
Hubei Dongbei New Energy Co., Ltd. Compressor parts 1,240.09 1,673.37
Hubei Dongbei New Energy Co., Ltd. Photovotaic 155.20
Huangshi Dongbei Electromechanical Group Guarantee 454.74 200.00
Co., Ltd.
Information of sales of goods and provision of labor service
√ Applicable □ Not applicable
In RMB10,000
Amount of this Amount of last
Related-party Content
period period
Huangshi Dongbei Refrigerating Co., Ltd. Compressor 2,876.75 2,265.29
Hubei Dongbei New Energy Co., Ltd. Compressor parts 5.87 9.21
Huangshi Aibo Technology Development Co., Ltd. Charge for electricity, 1,136.71 1,109.59
materials for sale
130 / 143
2018 Annual Report
Huangshi Chenxin Optoelectronic Co., Ltd. Charge for electricity 121.70 296.79
Huangshi Dongbei Electromechanical Group Co., Chare for electricity and 21.67
Ltd. water
Jiangsu Luoke Electric Group Co., Ltd. Material sales, storage 94.34 23.08
charges
Huangshi Dongbei Electronic Commerce Co., Ltd. Compressor 123.10 71.64
Huangshi Jinbei Dairy Co., Ltd. Chare for electricity and 84.73 70.12
water
Huangshi Aibo Technology Development Co., Ltd. Guarantee 28.13 18.07
Jiangsu Dongbei Machinery Co., Ltd. Chare for electricity and 77.24
water
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 The lease incme confirmed The lease income
Name of lessee
leased assets in this year confirmed in last year
Huangshi Dongbei Electromechanical 300,132.00
House
Group Solar energy Co., Ltd.
Hubei Dongbei New Energy Co., Ltd. House 738,464.82 861,973.92
Huangshi Dongbei Refrigerating Co., Ltd. House 6,331,839.84 6,331,839.84
Huangshi Jinbei Dairy Co., Ltd. House 220,680.00 148,680.00
Wuh Jiangsu Luoke Electrical Group Co., 57,278.34
House
Ltd.u Abaur Real estate Co., Ltd.
Jiangsu Luoke Electrical Group Co., Ltd. House 354,806.02 308,940.00
Wuhu Abaur Real Estate Co., Ltd. House 3,000.00
Jiangsu Luoke Electrical Group Co., Ltd. House 93,240.00 208,770.00
Jiangsu Dongbei Electrical 237,600.00
House
Machinery Co., Ltd.
The company was lessee：
√Applicable□ Not applicable
In RMB
The lease income The lease incoe confirmed
Lessor Category of leased assets
confirmed in this year in last year
Huangshi Dongbei Electromechanical Land 36,000.00 36,000.00
Group Co., Ltd.
Huangshi Aibo Technology House 525,830.40 525,830.40
Development Co., Ltd.
Notes
□ Applicable √ Not applicable
131 / 143
2018 Annual Report
(4) Related-party guarantee
The company was guarantor:
√Applicable□ Not applicable
In RMB10,000
Execution
Guarantor Guarantee amount Start date End date accomplished or
not
Alashankou Dongbei Clean Co., Ltd. 35,000.00 2015/5/28 2027/11/17 No
Dongbei Electromechanical (Jiangsu) Co., 10,727.60 2015/12/17 2020/12/31 No
Ltd.
Wuhu Abaur Mechanical & Electrical Co., 40,299.58 2018/1/15 2019/11/27 No
Ltd.
Huangshi Dongbei Electromechanical 5,398.20 2018/5/24 2019/11/13 No
Group Co., Ltd.
Huangshi Dongbei Founry Co., Ltd. 11,985.82 2018/7/26 2019/6/29 No
Huangshi Aibo Technology Development 2,601.55 2018/7/23 2019/6/24 No
Co., Ltd.
Huangshi Dongbei Refrigerating Co., 5,765.14 2018/2/6 2019/8/1 No
Ltd.
The Company was secured party
√Applicable□ Not applicable
In RMB
Execution
Guarantor Guarantee amount Start date End date accomplished
or not
Huangshi Dongbei Electromechanical Group Co., 64,556.17 2018/1/4 2019/12/14 No
Ltd.
Wuhu Abaur Mechanical & Electrical Co., Ltd. 4,075.77 2018/4/20 2019/4/19 No
Notes
□ Applicable √ Not applicable
(5)Inter-bank lending of capital of related parties
□ Applicable √ Not applicable
(6) Related party asset transfer and debt restructuring
□ Applicable √ Not applicable
(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 1,079,832.15 3,192,042.69
personnel
(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 Bad debt
Items Related parties
Book balance reserve Book balance reserve
132 / 143
2018 Annual Report
Account Huangshi Dongbei Refrigerating Co., 5,501,153.87 110,023.08 3,082,257.23
receivable Ltd.
Account Huangshi Dongbei Electronic Commerce 181,187.04 3,623.74 159,206.70 3,184.13
receivable Co., Ltd
Account Huangshi Haole Electronic Commerce 15,483.10 309.66
receivable Co., Ltd
Other Huangshi Jinbei food chain co., Ltd 113,927.41 2,278.55
receivable
Huangshi Dongbei Electromechanical 6,686,395.08 6,700,254.35
Prepayment
Group Co., Ltd.
Other Huangshi Jinbei Dairy Co . , Ltd . 28,595.40 571.91
receivable
(2) Payables
√Applicable □ Not applicable
In RMB
Items Related party Book Balance at Book Balance at period
period end beginning
Huangshi Aibo Technology Development Co., 63,134,389.29 110,891,997.92
Account payable
Ltd.
Huangshi Aibo Technology Development Co., 952,721.66 3,010,000.00
Other account payable
Ltd.
Account payable Jiangsu Luoke Electrical Group Co., Ltd. 63,054,693.26 45,336,865.54
Other account payable Jiangsu Luoke Electrical Group Co., Ltd. 1,019,268.21 2,154,470.00
Advance Payments Jiangsu Luoke Electrical Group Co., Ltd. 33,663.76
Jiangsu Dongbei Electrical Machinery 10,849,798.30
Account payable
Co., Ltd.
Jiangsu Dongbei Electrical Machinery 10,000.00
Other account payable
Co., Ltd.
Account payable Hubei Dongbei New Energy Co., Ltd. 7,254,827.73 12,754,019.17
Other account payable Hubei Dongbei New Energy Co., Ltd. 500,000.00 440,000.00
Other account payable Hubei Chenxin Optoelectronic Co., Ltd. 431,668.13
Other account payable Huangshi Jinbei Dairy Co . , Ltd . 193,586.15
Huangshi Dongbei Electromechanical Group 38,905.00 301,005.00
Account payable
Solar energy Co., Ltd.
Other account payable Hubei Jinling Fine agricultural Co., Ltd. 26,500.00
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
XIV. Commitments
1. Significant commitments
√Applicable □ Not applicable
Nature and amount of significant commitments to externals existed on the balance sheet date and such
133 / 143
2018 Annual Report
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
（2）Other assets replacement
□ Applicable √ Not applicable
4. Pension plan
134 / 143
2018 Annual Report
□ 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）Notes receivable & Account receivable
1.Classification
√ Applicable □ Not applicable
In RMB
Items Year-end balance Year-beginning
Notes receivable 480,715,352.78 369,888,786.14
Account receivable 848,256,923.83 728,126,242.00
Total 1,328,972,276.61 1,098,015,028.14
Other notes
□ Applicable √ Not applicable
Notes receivable
(1) Notes receivable listed by category
√ Applicable □ Not applicable
In RMB
Items Year-end balance Year-beginning
Bank acceptance bill 308,723,825.49 218,753,646.13
Trade acceptance bill 171,991,527.29 151,135,140.01
Total 480,715,352.78 369,888,786.14
(2) Notes receivable pledged by the Company at the period-end
135 / 143
2018 Annual Report
□ 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 10,000
Items Amount of recognition termination at Amount of not terminated recognition
the period-end at the period-end
Bank acceptance bill 352,580,158.97
Trade acceptance bill
Total 352,580,158.97
(4) Notes transferred to accounts receivable because drawer of the notes fails to executed the contract or
agreement
□ Applicable √ Not applicable
Other notes
□ Applicable √ Not applicable
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 Proportio Amount Proportio value Amount Proportio Amount Proportio value
n(%) n(%) n(%) n(%)
Accounts 66,506,623 7.48 12,744,400 19.16 53,762,223 102,289,18 13.58 102,289,18
receivable of .59 .27 .32 8.94 8.94
individual
significance
and subject to
individual
impairment
assessment
Accounts 823,078,85 92.52 28,584,15 3.47 794,494,70 650,970,345 86.42 25,133,29 3.86 625,837,05
receivable 8.94 8.43 0.51 .49 2.43 3.06
subjecttoim
pairment
assessment
by credit
risk
characteristi
cs of a
portfolio
Accounts
receivable of
individual
insignificance
but subject ot
individual
impairment
assessment
889,585,482 / 41,328,558 / 848,256,92 753,259,534 / 25,133,292 / 728,126,242
Total .53 .70 3.83 .43 .43 .00
Accounts receivable with significant single amount for which bad debt provision separately accrued at
the period-end
√ Applicable □ Not applicable
In RMB
Account receivable Closing balance
136 / 143
2018 Annual Report
（Unit) Account
Bad debt provision
Withdrawal
Reason
receivable proportion
1. Henan Xinfei Refrigeration 17,139,353.65 9,527,486.17 55.59 Pending
equipment Co., Ltd. litigation
2. Henan Xinfei Appliance Co., 7,506,124.41 3,216,914.10 42.86 Pending
Ltd. litigation
3.Dongbei International 41,861,145.53 Subsidiary
Trade Co., Ltd.
Total 66,506,623.59 12,744,400.27 / /
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
Subtotal within 1 year 806,161,371.65 16,142,812.26 2
1-2 years 3,955,661.22 197,783.06 5
2-3 years 848,948.25 254,684.48 30
Over 3 years
3-4 years 261,035.90 156,621.54 60
4-5 years
Over 5 years
Over 4 years 11,851,841.92 11,851,841.92 100
Total 823,078,858.94 28,584,158.43
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 is RMB16,195,266.27;
Of which the significant amount of the reversed or collected part during the reporting period :
√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 1 170,695,057.12 19.19 3,413,901.14
2.Client 2 58,243,083.64 6.55 1,164,861.67
3.Client 3 56,835,971.20 6.39 1,136,719.42
4.Client 4 46,902,205.35 5.27 938,044.11
5.Client 5 46,466,584.83 5.22 929,331.70
Total 379,142,902.14 42.62 7,582,858.04
137 / 143
2018 Annual Report
(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
Summary situation
(1) Other accounts receivable disclosed by category
√ Applicable □ Not applicable
In RMB
Items Closing balance Opening balance
Interest receivable
Dividend receivable
Other receivable 796,481.06 327,894.18
Total 796,481.06 327,894.18
Other notes：
□Applicable√Not applicable
Interest receivable
(1)Classification of interest receivable
□ Applicable √ Not applicable
（2）Important overdue interest
□ Applicable √ Not applicable
Other notes：
□Applicable√Not applicable
Dividend receivable
(1) Dividend receivable
□ Applicable √ Not applicable
(2) Significant dividend receivable aged over 1 year
□Applicable√Not applicable
Other notes：
□Applicable√Not applicable
Other accounts receivable
(1) Other 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
Amoun Proportion( Amoun Proportion( Amount Proportion( Amou Proportion(
value value
t %) t %) %) nt %)
138 / 143
2018 Annual Report
Other accounts
receivable of
individual
significance and
subject to
individual
impairment
assessment
Other accounts 817,021. 81.95 20,540.4 2.51 796,481. 335,504.27 100.00 7,610.0 2.27 327,894.
receivable 49 3 06 9 18
subjecttoimpa
irment
assessment by
credit risk
characteristics
of a portfolio
Other accounts 180,000.0 18.05 180,000. 100.00 0
receivable of 0 00
individual
insignificance
but subject ot
individual
impairment
assessment
997,021.4 / 200,540.4 / 796,481.0
335,504. / 7,610.0 / 327,894.
Total 9 3 6 9 18
27
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 802,021.49 16,040.43 2
1-2 years
2-3 years 15,000.00 4,500.00 30
Over 3 years
3-4 years
Over 4 years
4-5 years
Over 5 years 817,021.49 20,540.43
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) Other accounts receivable classified by the nature of accounts
√Applicable□Not applicable
In RMB
Nature Closing book balance Opening book balance
Current account 784,735.99 80,270.67
Petty cash 212,285.50 255,233.60
139 / 143
2018 Annual Report
Total 997,021.49 335,504.27
(3)Accounts receivable withdraw, reversed or collected during the reporting period
the amount of the reversed or collected part during the reporting period is RMB192,930.34
Of which the significant amount of the reversed or collected part during the reporting period:
□ Applicable √ Not applicable
(4) The actual write-off other accounts receivable
□ Applicable √ Not applicable
(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 year Closing balance
Closing
Name Nature Aging end balance of the accounts of bad debts
balance
receivable(%) provision
1. Huangshi petrochina Current 532,345.92 Within 1 53.39 10,646.92
kunlun city investment account year
gas Co.,Ltd.
2.Shanghai Suntri Current 180,000.00 Over 4 18.05 180,000.00
Automation Engineering account years
Co., Ltd.
3. Huangshi Aibo Current 57,278.34 Within 1 5.74 1,145.57
Technology account year
Development Co., Ltd.
4.Zhan Zhiyong Petty cash 50,000.00 Within 1 5.01 1,000.00
year
5.Liu Jiuqing Petty cash 31,400.00 Within 1 3.15 628.00
year
Total / 851,024.26 / 85.34 193,420.49
(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
□ 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 248,161,074.70 248,161,074.70 188,161,074.70 188,161,074.70
Investment to joint ventures
and associated enterprises
Total 248,161,074.70 248,161,074.70 188,161,074.70 188,161,074.70
（1）Investment to the subsidiary
√Applicable □ Not applicable
In RMB
140 / 143
2018 Annual Report
Withdrawn
impairment Closing
provision balance of
Name Opening balance Increase Decrease Closing balance
in the impairment
reporting provision
period
Wuhu Abaur 33,339,800.00 33,339,800.00
Mechnical &
Electrical Co.,
Ltd.
Dongbei 6,821,274.70 6,821,274.70
International
Trade Co., Ltd.
Dongbei(Wuhan) 8,000,000.00 8,000,000.00
Technology
Innovation Co.,
Ltd.
Dongbei 140,000,000.00 60,000,000.00 200,000,000.00
Electromechanica
l (Jiangsu) Co.,
Ltd.
Total 188,161,074.70 60,000,000.00 248,161,074.70
（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 3,304,493,877.30 3,005,073,800.20 2,883,187,268.48 2,644,138,044.01
Other Business 89,307,872.44 44,547,394.97 83,617,931.32 44,229,005.22
Total 3,393,801,749.74 3,049,621,195.17 2,966,805,199.80 2,688,367,049.23
5.Investment income
□ Applicable √ Not applicable
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 -5,618,149.48
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 those 29,807,370.80
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
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2018 Annual Report
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 aforesaid items 4,626,004.71
Other non-recurring Gains/loss items
.Amount of influence of income tax -4,330,176.61
Amount of influence of minority interests -2,291,327.90
Total 22,193,721.52
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.
□Applicable√Not applicable
2.Return on equity(ROE)and earnings per share(EPS)
√ Applicable □ Not applicable
Weighted average Earnings per share
Profit of the reporting period return on equity Basic earnings per Diluted earnings per
（%） share share
Net profit attributable to common 9.16 0.469
shareholders of the Company
Net profit attributable to common 7.31 0.374
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
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2018 Annual Report
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 21, 2019
Revised information
□Applicable√Not applicable
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