合肥美菱股份有限公司
HEFEI MEILING CO., LTD.
二〇一六年年度报告
Annual Report 2016
HEFEI MEILING CO., LTD. Annual Report 2016
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of
Hefei Meiling Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are no
any fictitious statements, misleading statements, or important omissions carried in this report, and
shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the
whole contents.
Mr. Liu Tibin, Chairman of the Company, Mr. Zhang Xiaolong, person in change of
accounting work and Mr. Luo Bo, person in charger of accounting organ (accountant in charge)
hereby confirm that the Financial Report of 2015 Annual Report is authentic, accurate and
complete.
The Company did not have directors, supervisors and senior executives of the Company could
not guarantee the reality, accuracy and completion of the whole contents or have objections.
All the directors attended the board meeting on deliberating the Annual Report in both ways of
site and communication.
Modified audit opinions notes
□ Applicable √ Not applicable
Shine Wing Certified Public Accountants Co., Ltd.(LLP) issued standard unqualified Auditors‘
Report for the Company‘s Financial Report of 2016
Major defects in internal control
□ Applicable √ Not applicable
The Company had no major defects in internal control in the reporting period.
Risk warining of concerning the forward-looking statements with future planning involved in
annual report
√ Applicable □Not applicable
Concerning the forward-looking statements with future planning involved in the Report, they
do not constitute a substantial commitment for investors, investors and the person concerned should
maintain adequate risk awareness, furthermore, differences between the plans, forecast and
commitments should be comprehended. Investors are advised to exercise caution of investment
risks.
Investors are advised to read the full text of annual report, and pay particular attention to the
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HEFEI MEILING CO., LTD. Annual Report 2016
following risk factors.
More details about the possible risks and countermeasures in the operation of the Company are
described in the report ―IV. Prospects for the future development of the company‖ of ―Section IV
analysis and discussion of the operation‖, investors are advised to read the relevant content.
Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website
(www.cninfo.com.cn) are the media for information disclosure for year of 2017 that appointed by
the Company. All public information under the name of the Company disclosed on the above said
media and website shall prevail, and investors are advised to exercise caution.
Does the Company need to comply with disclosure requriments of the special industry: No
Profit distribution pre-plan or capitalizing of common reserves pre-plan deliberated by the
Board in the reporting period
√ Applicable □Not applicable
The profit distribution plan for year of 2016, that deliberated and approved by 29th session of
the 8th BOD was: take total shares of 1,044,597,881 shares as base dated 31 December 2016，
distributed 0.6 Yuan (tax included) bonus in cash for every 10-share hold by all shareholders, no
share bonus issued and no capitalizing of common reserves carried out.
Whether has capitalizing of common reserves carried out
□Yes √ No
Directors and senior executives of the Company respectively signed Written Confirmation
Opinions for 2016 Annual Report.
Supervisory Committee of the Company formed Written Examination Opinions for 2016
Annual Report.
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HEFEI MEILING CO., LTD. Annual Report 2016
Contents
Section I Important Notice, Contents and Paraphrase ................................................................. 1
Section II Company Profile and Main Finnaical Indexes ............................................................. 5
Section III Summary of Company Business ................................................................................ 14
Section IV Discussion and Analysis of the operation .................................................................. 20
Section V Important Events .......................................................................................................... 61
Section VI Changes in shares and particular about shareholders............................................. 129
Section VII Preferred Stock……………………………………………………………………145
Section VIII Particulars about Directors, Supervisors,Senior Executives and Employees .... 146
Section IX Corporate Governance ............................................................................................... 160
Section X Corporate bonds ........................................................................................................... 177
Section XI Financial Report .......................................................................................................... 178
Section XII Documents available for reference ........................................................................... 321
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HEFEI MEILING CO., LTD. Annual Report 2016
Paraphrase
Items Refers to Contents
Company, the Company or Meiling
Refers to HEFEI MEILING CO., LTD
Electric
Sichuan Changhong or controlling
Refers to Sichuan Changhong Electric Co., Ltd.
shareholder
Changhong Group Refers to Sichuan Changhong Electronics Holding Group Co., Ltd.
Hong Kong Changhong Refers to CHANGHONG (HK) TRADING LIMITED
Meiling Group Refers to Hefei Meiling Group Holdings Limited
Industry Investmnt Group Refers to Hefei Industry Investment Holding (Group) Co., Ltd.
Xingtai Holding Refers to Hefei Xingtai Financial Holding (Group) Co., Ltd.
Shine Wing Refers to Shine Wing Certified Public Accountants (LLP)
Changhong Air-conditioner Refers to Sichuan Changhong Air-conditioner Co., Ltd.
Zhongke Meiling Refers to Zhongke Meiling Cryogenic Technology Co., Ltd.
Hongyun Venture Capital Fund Refers to Sichuan Hongyun New IT Venture Capital Fund
Zhiyijia Refers to Sichuan Zhiyijia Network Technology Co., Ltd.
Changhong Ridian Refers to Guangdong Changhong Ridian Technology Co., Ltd.
Zhongshan Changhong Refers to Zhongshan Changhong Electric Co., LTD
Changmei Technology Refers to Changmei Technology Co., Ltd.
Meiling Software Refers to Mianyang Meiling Software Technique Co., Ltd.
Mianyang Refrigeration Refers to Mianyang Meiling Refrigeration Co., Ltd.
Huayi Compressor Refers to Huayi Compressor Co., Ltd.
CSRC Refers to China Securities Regulatory Commission
China Securities Regulatory Commission, Anhui Province
Anhui Securities Bureau Refers to
Securities Regulatory Bureau
SSE Refers to Shenzhen Stock Exchange
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HEFEI MEILING CO., LTD. Annual Report 2016
Section II Company Profile and Main Finnaical Indexes
I. Company information
MEILINGDIANQI,
Short form of the stock Stock code 000521, 200521
WANMEILING-B
Short form of the Stock after
——
changed (if applicable)
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in
合肥美菱股份有限公司
Chinese)
Short form of the Company (in
美菱电器
Chinese)
Foreign name of the Company
HEFEI MEILING CO.,LTD.
(if applicable)
Abbr. of English name of the
——
Company (if applicable)
Legal representative Liu Tibin
Registrations add. No. 2163, Lianhua Road, Economic and Technology Development Zone, Hefei
Code for registrations add 230601
Offices add. No. 2163, Lianhua Road, Economic and Technology Development Zone, Hefei
Codes for office add. 230601
website http://www.meiling.com
e-mail info@meiling.com
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Li Xia Zhu Wenjie
No. 2163, Lianhua Road, Economic and No. 2163, Lianhua Road, Economic and
Contact add.
Technology Development Zone, Hefei Technology Development Zone, Hefei
Tel. 0551-62219021 0551-62219021
Fax. 0551-62219021 0551-62219021
e-mail lixia@meiling.com wenjie.zhu@meiling.com
III. Information disclosure and preparation place
Newspaper appointed for information Securities Times, China Securities Journal, Hong Kong
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HEFEI MEILING CO., LTD. Annual Report 2016
disclosure Commercial Daily
Website for annual report publish appointed by
Juchao website: http://www.cninfo.com.cn
CSRC
Room of secretary of the Board, 2/F , administrative center,
Preparation place for annual report
Office building of the Company
IV. Registration changes of the Company
Organization code Uniform social credit code: 9134000014918555XK
Changes of main business since listing No changes
1. In October 1993, after initial listing, controlling shareholder of the
Company-- Hefei Meiling Industrial Corp. (named Hefei Meiling Group
Co., dated 23 May 1994), executing controlling rights of the Company
and management right of the state-owned assets on behalf of Hefei
State-owned Assets Management Office, named at that time;
2. From November 1997 to May 2003, controlling shareholder of the
Company was Hefei Meiling Group Holding Co., Ltd. (established base
on former Meiling Group Co.,, ―Meiling Group‖ for short), an
enterprise solely owned by the State; mainly operating the state-owned
capital in authorized from State-owned Assets Management
Commission of Hefei City, ensuring the maintenance and appreciation
of state-owned assets;
3. On 29 May 2003, Meiling Group entered into ―Equity Transfer
Agreement‖ with Shunde GreenKel Enterprise Development Co., ltd.
(―GreenKel‖), the 82,852,683 state-owned shares held by the Company
was transfer to GreenKel. After transferring, GreenKel comes to the first
Previous changes for controlling
largest shareholder of the Company.
shareholders
4. According to the spirit of ―Bulletin of Treatment Opinions on
GreenKel Company purchasing State-owned Assets Shares of Listed
Company‖ (GZFCQ[2006] No.: 44) jointly issued from SASAC and
Ministry of Finance in April 2006, Meiling Group took back the Meiling
Electric 82,852,683 shares from GreenKel by procedures, which has
been transferred. In September 2006, relevant equity transfer agreement
signed between the Meiling Group and GreenKel is invalid, which was
confirmed by the ―Award‖ ((2006) HZZ No.: 104) issued from
arbitration commission of Hefei; the state-owned legal person‘s
82,852,683 shares, held by GreenKel, should return to Meiling Electric,
and relevant equity consideration will pay to GreenKel by Meiling
Group . On 29 December 2006, the 82,852,683 shares of Meiling
Electric were transfer to Meiling Group by GreenKel, and Meiling
Group becomes the controlling shareholder of Meiling Electric again.
5. On 18 May 2006 and 11 January 2007, Meiling Group entered into
―Equity Transfer Agreement of Meiling Electric‖ and ―Supplementary
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HEFEI MEILING CO., LTD. Annual Report 2016
Agreement of Equity Transfer of Meiling Electric‖ respectively with
Sichuan Changhong and Changhong Group, among the 123,396,375
shares held by Meiling Group, 82,852,683 shares were transferred
respectively to Sichuan Changhong and Changhong Group according to
the transfer way regulated in agreement; of this transferring, 45,000,000
shares (10.88% of total share capital of the Company) were transferred
to Sichuan Changhong, the first largest shareholder of the Company
while 37,852,683 shares (9.15% of total share capital of the Company)
were transferred to Changhong Group, the third largest shareholder of
the Company.
6. On 29 October 2008, Changhong Group and Sichuan Changhong
entered into ―Equity Transfer Agreement of Hefei Meiling Co., Ltd.‖,
the 32078846 restricted circulations A shares of Meiling Electric held by
Changhong Group were transferred by agreement to Sichuan
Changhong. On 23 December 2008, the aforesaid equity transfer was
approved by ―Reply on Matters of Equity held by State-owned
Shareholders of Hefei Meiling Co., Ltd.‖ (GZCQ(2008) No.: 1413)
from SASAC; on 21 January 2009, the aforesaid transfer was registered
for ownership transfer in Shenzhen Branch of China Securities
Depository and Clearing Corporation Limited.
7. Ended as 31 December 2016, Sichuan Changhong and its concerted
action Changhong HK totally holds 259,871,791 shares of the
Company, a 24.88% in total share capital of the Company; Sichuan
Changhong directly holds 234,705,968 A-share of the Company, a
22.47% in total share capital of the Company while Changhong HK
holds circulation B-share of the Company amounting as 25,165,823
shares, a 2.41% in total share capital of the Company.
V. Other relevant information
(I) CPA engaged by the Company
Name of CPA Shine Wing Certified Public Accountants (LLP)
9/F, Block A, Fu Hua Mansion No.8 Chao Yang Men Bei da jie, Dong Cheng
Offices add. for CPA
District, Beijing, P.R.C
Signing Accountants He Yong, Xia Cuiqiong
(II) Sponsor engaged by the Company for performing continuous supervision duties in
reporting period
√Applicable □Not applicable
Duration of continous
Sponsor institution Office address Sponsor representative
supervision
Shenwan Hongyuan No. 19, Taipingqiao 14 October 2016 to 31
Qin Mingzheng, Qiu Feng
Securities Underwriting Steet,Xichang District, December 2017
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HEFEI MEILING CO., LTD. Annual Report 2016
Sponsor Co., Ltd. Beijing
(III) Financial consultant engaged by the Company for performing continuous supervision
duties in reporting period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy
changed and accounting error correction or not
√Yes □No
Changes
2015 over last 2014
2016 year
After
Before adjustment After adjustment Before adjustment After adjustment
adjustment
Operating
income 12,526,710,867.49 10,415,829,226.48 10,754,200,188.12 16.48% 10,764,808,259.00 10,978,535,964.36
(RMB)
Net profit
attributable to
shareholders
220,216,680.96 26,496,345.34 27,104,893.56 712.46% 294,508,518.37 289,842,658.03
of the listed
company(RM
B)
Net profit
attributable to
shareholders
of the listed
company after 158,461,015.10 93,951,365.12 93,951,365.12 68.66% 245,759,705.69 245,759,705.69
deducting
non-recurring
gains and
losses(RMB)
Net cash flow
arising from
operating 985,390,895.63 211,468,056.21 229,371,185.23 329.61% 165,462,930.48 205,636,234.26
activities(RM
B)
Basic earnings
0.2717 0.0347 0.0355 665.35% 0.3856 0.3795
per share
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HEFEI MEILING CO., LTD. Annual Report 2016
(RMB/Share)
Diluted
earnings per
0.2717 0.0347 0.0355 665.35% 0.3856 0.3795
share
(RMB/Share)
5 percent
Weighted
5.77% 0.78% 0.77% point 8.88% 8.50%
average ROE
increase
Changes
End of 2015 over end End of 2014
End of 2016 of last year
After
Before adjustment After adjustment Before adjustment After adjustment
adjustment
Total assets
12,507,567,310.84 9,066,223,601.14 9,237,288,359.74 35.40% 9,009,014,201.70 9,205,651,651.39
(RMB)
Net assets
attributable to
shareholder of
5,095,160,291.91 3,384,574,993.19 3,475,377,055.14 46.61% 3,422,746,664.67 3,512,940,178.40
listed
company
(RMB)
Notes: the Company succeeded to acquire 98.856% equity interests of Guangdong Changhong Ridian
Technology Co., Ltd (―Changhong Ridian‖) through bidding at the end of 2015, and completed registration
procedures at competent industrial and commercial authority in respect of this equity transfer at early February
2016. Upon completion of this equity transfer, the Company was to hold 98.856% equity interests of Changhong
Ridian. Under relevant provisions of Enterprise Accounting Principles No.33-Consolidated Financial Statement,
in respect of the subsidiaries and their businesses acquired arising from business consolidation under the same
control during the reporting period, parent company shall adjust the beginning figures stated in the consolidated
statement and adjust the relevant items in the comparative statement accordingly as if the reporting entity after the
consolidation had been in existence since the time when the ultimate controller commenced to exercise control.
Therefore, the beginning figures and the figures of the corresponding period of last year have been restated.
The cause of the accounting policy change and accounting error correction
□ Applicable √ Not applicable
Total share capital of the Company up to a trading day before disclosure:
Total share capital of the Company up to a trading
1,044,597,881
day before disclosure (Share)
Fully diluted earnings per share calculated with the
0.2717
latest share capital (RMB/Share)
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HEFEI MEILING CO., LTD. Annual Report 2016
Whether have corporate bonds or not
□Yes √ No
VII. Accounting data difference under domestic and foreign accounting standards
(I) Difference of the net profit and net assets disclosed in financial report, under both IAS
(International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting
Principles)
□ Applicable √ Not applicable
The Company has no difference of the net profit and net assets disclosed in financial report,
under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted
Accounting Principles) in reporting period.
(II) Difference of the net profit and net assets disclosed in financial report, under both foreign
accounting rules and Chinese GAAP (Generally Accepted Accounting Principles)
√ Applicable □Not applicable
In RMB
Net profit attributable to shareholders of Net assets attributable to shareholders of
listed company listed company
Amount in last Amount at Amount at
Amount in this period
period period-end period-begin
Chinese GAAP 220,216,680.96 27,104,893.56 5,095,160,291.91 3,475,377,055.14
Items and amount adjusted by foreign accounting rules
Foreign accounting rules 220,216,680.96 27,104,893.56 5,095,160,291.91 3,475,377,055.14
The Company had no difference of the net profit or net assets disclosed in financial report,
under either foreign accounting rules or Chinese GAAP (Generally Accepted Accounting Principles)
in the period.
(III) Reasons for the differences of accounting data under accounting rules in and out of China
√ Applicable □Not applicable
The ―Notice of Relevant Issues of Audit for Company with Domestically Foreign Shares
Offering‖ was issued from CSRC dated 12 September 2007, since the day issuing, cancel the
previous ―dual audit‖ requirement for companies who offering domestically listed foreign shares
(B-share enterprise) while engaging securities practice qualification CPA for auditing. The
Company did not compile financial report under foreign accounting rules since 2007, the financial
report of the Company is complying on the ―Accounting Standard for Business Enterprise‖ in China,
and therefore, there are no differences of accounting data under accounting rules in and out of
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HEFEI MEILING CO., LTD. Annual Report 2016
China at period-end.
VIII. Quarterly main financial index
In RMB
First quarter Second quarter Third quarter Fourth quarter
Operating income 2,926,400,488.89 3,940,230,773.79 3,130,593,704.26 2,529,485,900.55
Net profit attributable to
shareholders of the listed 53,709,680.24 56,283,021.04 55,295,963.61 54,928,016.07
company
Net profit attributable to
shareholders of the listed
41,338,292.32 49,463,362.39 42,159,261.91 25,500,098.48
company after deducting
non-recurring gains and losses
Net cash flow arising from
139,597,747.12 732,091,757.77 691,250,144.50 -577,548,753.76
operating activities
Whether there are significant differences between the above-mentioned financial index or its total number
and the relevant financial index disclosed in the company‘s quarterly report and semi-annual report
□Yes √ No
IX. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB
Item 2016 2015 2014 Note
Found in
―Non-operating
Gains/losses from the disposal of
income and
non-current asset (including the
9,265,320.01 -4,315,502.74 -431,173.22 expenditure‖ of
write-off that accrued for impairment
Notes of
of assets)
Financial
accounting report
Governmental subsidy reckoned into
Found in
current gains/losses (not including the
―Non-operating
subsidy enjoyed in quota or ration
41,152,549.66 29,285,357.05 41,165,417.52 income‖ of Notes
according to national standards, which
of Financial
are closely relevant to enterprise‘s
accounting report
business)
Gain/loss from debt restructure -- -- 955,413.10 Without payment
Current net gain/losses of the Changhong
subsidiary merger under the same -- 615,594.18 -4,719,883.10 Ridian-merger
control from beginning of the period under the same
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HEFEI MEILING CO., LTD. Annual Report 2016
to combination date control in the
Period, restate
the statement of
comparative
financial data
Held transaction financial asset, Found in
gains/losses of changes of fair values ―Investment
from transaction financial liabilities, income‖ and
and investment gains from disposal of ―Changes in fair
transaction financial asset, transaction value
11,500,963.72 2,313,967.35 378,330.00
financial liabilities and financial asset gains/losses‖ of
available for sales, exclude the Notes of
effective hedging business relevant Financial
with normal operations of the accounting
Company report‖
Found in
―Non-operating
Other non-operating income and income and
expenditure except for the 4,948,619.55 -103,646,326.02 10,535,869.24 expenditure‖ of
aforementioned items Notes of
Financial
accounting report
‖ Found in
―Investment
Gain/losses items qualified definition
3,798,660.03 -- -- income‖ of Notes
of the non-recurring gains/losses
of Financial
accounting report
Less: impact on income tax 8,534,266.32 -9,078,920.45 3,576,592.95 --
Impact on minority shareholders‘
376,180.79 178,481.83 224,428.25 --
equity (post-tax)
Total 61,755,665.86 -66,846,471.56 44,082,952.34 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information
Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items
defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A
Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public ---
Extraordinary Profit/loss, explain reasons
√ Applicable □Not applicable
Involved amount
Item Reason
(RMB)
During the reporting period, the wholly owned subsidiary -
Non-operating income 7,122,432.52
Mianyang Meiling Software Technique Co., Ltd. has
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HEFEI MEILING CO., LTD. Annual Report 2016
received VAT refunds of software products according to
"Notice about VAT policy of software products by Ministry
of Finance & State Administration of Taxation" CS No.
[2011] 100 document, and adequately disclosed the
company's business situation, in accordance with relevant
provisions in the third article of the second item of CSRC
"No. 1 explanatory announcement about information
disclosure of the company publicly issues securities -
non-recurring profit and loss (2008)", the public subsidies
which are closely related to the company's business,
conform to the national policies and regulations and
continue to be enjoyed according to a certain standard rating
or quantity should be included in the company's recurring
gains and losses.
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HEFEI MEILING CO., LTD. Annual Report 2016
Section III Summary of Company Business
I. Main businesses of the company in the reporting period
Does the Company need to comply with disclosure requirements of the special industry?
□Yes √ No
(I) Main businesses of the Company
The company is one of China's major electric appliance manufacturers, possesses four major
domestic manufacturing bases in Hefei, Mianyang, Jingdezhen and Zhongshan, and two overseas
manufacturing bases in Indonesia and Pakistan, covering the full product line including ice,
washing, air, kitchen and bath, small household appliances and others, at the same time, the
company enters into the fresh e-business, bio-medical and other new industrial fields.
Over the past 30 years, the company has always been adhering to the "independent innovation,
created in China", elaborately building the core competitiveness of enterprises by technological
innovation and product innovation. The company has set up the first RoHS public testing center in
Anhui Province, the state-level enterprise technology center and the top-end R & D team, so that
Meiling can continue to achieve breakthrough results in the variable frequency, energy saving,
frost-free, cryogenic, intelligence and other fields.
In recent years, with the rapid development of Internet, cloud computing, big data and a new
generation of information technology, the intelligence of home appliance industry has become the
future development direction. Faced with the new changes in the industry development, the
company puts forward the "Double Three One Core" strategy, "One Core" is intelligence. Under the
guidance of "intelligent" strategy, in 2014, the company released CHiQ refrigerator with "cloud
image recognition" as the core and CHiQ air conditioner based on "human state perception"
technology; in 2015, the company began to implement the "Intelligent Life Project" to explore new
path for the enterprise development; in 2016, the company launched the first "Intelligent Home
Eco-circle Plan" in the global white goods industry and brought out the world's first
temperature-zone free custom-made Internet of Things refrigerator (the second generation ―Space
Intelligence" CHiQ refrigerator) and the world's first user free custom-made intelligent air steward
(CHiQ intelligent air steward) to accelerate the implementation of intelligent strategy. At the same
time, the company successfully raised 1.57 billion Yuan of funds in the capital market by the
non-public offering of shares which were mainly used in three key platforms including Meiling
intelligent manufacturing, intelligent research and development and intelligent life, which provided
strong supports for the company's development and intelligent transformation. In addition, since the
company launched "the whole people change for variable frequency" activities and announced to
entirely eliminate fixed frequency refrigerator in 2015, the company‘s variable frequency products
increased the proportion, the technical advantages the company has in variable frequency as well as
14
HEFEI MEILING CO., LTD. Annual Report 2016
the application of frequency conversion technology enabled the company to have greater
advantages in the implementation of new energy efficiency standards.
During the reporting period, in the big environment of continuous downturn in the entire
industry, the company's main products have been full of potential gains, outperforming the broader
market. At the same time, the company has expanded the product lines for household appliances
and kitchen appliances by obtaining the stock rights of Guangdong Changhong Ridian in bidding, in
addition, the expansion of Zhongke Meiling cryogenic B2B product line and the goods development
momentum of ifoodtube fresh e-business platform indicated the layout of the company's white
goods + small appliances has been initially completed.
Nowadays, with the landing of a series of CHiQ intelligent products, continuous rising
proportion of variable frequency products, diversified layout of product lines, and construction of
fresh business platform in Meiling intelligent life O2O community, the company is gradually
improving the home Internet layout, accelerating the intelligent process of household appliances,
forming the "hardware + service" dual growth engine, driving the transformation and upgrading of
the company‘s profit model, exploring new value-added pattern for the home appliance enterprise
services, meeting new pattern of industry competition, and achieving its own sustained and stable
development.
In reporting period, main income of the Company coming from refrigerator(freezer), air
conditioner, washing machine, small home appliances and kitchen & toilet products, total
amounting to 12,025.1034 million Yuan, a 96% of the operating income.
(II) Conditions of the industry the company involved
In 2016, China's economy was in the growth shift period and painful structural adjustment
period, under this background, home appliances industry faced severe challenges and opportunities
for development at the same time, which mainly reflected in following aspects:
The home appliance industry has entered from the rapid growth period into the gradually stable
replacement period and from the broader market growth into the aggressive growth, the whole
industry will enter into the shuffling period.
China is in the third consumption upgrade stage, with the advent of quality consumption and
the upgrading of consumption structure and concept, product structure optimization and
transformation and upgrading have become the industry's main theme. On the one hand, the country
further improves the industry competition threshold and accelerates the upgrading of product
structure after fully implementing the new energy efficiency standards. On the other hand, the
deepening of the supply side reform and rising prices of raw materials not only bring management
pressure to enterprises, but also promote the structural upgrading of home appliances, get rid of
low-end and abnormal price competition, and return to rational value competition at the same time,
and put forward higher requirements to product development, brand status, terminal promotion, and
channel capacity of enterprises.
With the development of urbanization and the improvement of living standards, the new
consumer groups pay more attention to high-quality, intelligent and healthy environmental
protection products. The traditional home appliance industry has serious homogenization, all home
appliance manufacturers actively embrace the Internet, seek for cross-border cooperation, and
15
HEFEI MEILING CO., LTD. Annual Report 2016
develop intelligent home, intelligence has become a new bright spot and inevitable choice for the
industry development. Intelligent wave also promotes the cross-border cooperation between home
appliance enterprises and Internet companies, so actively exploring business model innovation and
enhancing the user experience have become an important engine for a new round of rapid growth of
household electrical appliance enterprises.
In 2016, China's economic operation has been slow but stable, stable and good, the new
normal features have been more obvious. In the "new normal" economic situation, the home
appliance industry has been weak in growth and showing a downward trend. At the same time, with
the arrival of Internet and intelligence era, influenced by the further strengthening of brand
concentration ratio in the industry, rising costs of raw materials and logistics, structure upgrading of
consumer demand, cross-border impact of Internet companies and other factors, the competition in
household appliance industry has intensified, and promoted the transformation and upgrading the
industry. High end and intelligence have become the inevitable choice for the development of home
appliance industry.
II. Major changes in main assets
(I) Major changes in main assets
Major assets Note of major changes
Equity assets No major changes.
Fixed assets No major changes.
Intangible assets No major changes.
The intelligent manufacturing project and relocation expansion of the
Construction in progress
subsidiary Zhongke Meiling and Mianyang Refrigeration
(II) Main overseas assets
√ Applicable □Not applicable
Foreign
assets Whether
Reason for Oper Control measure to accounted exist
Content of assets the Asset size Location ation ensure the security Income (RMB) for net significant
formation mode of assets asssets of impairment
the risk
Company
Details of risks
control measures
60% equity of Investment have been
US$ 7.44
Changhong Ruba establishme Pakistan Sales disclosed by the -2,423,682.54 0.91% N
million
Trading Company nt Company by way
of announcement
on appointed
16
HEFEI MEILING CO., LTD. Annual Report 2016
media (No.
2011-028, No.
2011-032, No.
2014-023, No.
2014-026, No.
2016-027and No.
2016-032) on 28
May 2011, 19
April 2014 and 25
March 2016
Details of risks
control measures
have been
disclosed by the
Company by way
40% equity of
of announcement
Changhong Ruba Investment Manu
US$ 6.524 on appointed
Electric establishme Pakistan factur -2,827,153.12 0.57% N
million media (No.
Company(Private) nt e
2011-028, No.
Ltd.
2011-032, No.
2014-023 and No.
2014-026) on 28
May 2011 and 19
April 2014
Details of risks
control measures
have been
100% equity disclosed by the
KELAPA
ofCHANGHONG Investment Company by way
US$ 6 GADING,
MEILING establishme Sales of announcement -1,059,555.43 0.38% N
million JKT,
ELECTRIC nt on appointed
Indonesia
INDONESIA.PT media (No.
2016-027 and No.
2016-032) on 25
March 2016
Other notes N/A
III. Core Competitiveness Analysis
Does the Company need to comply with disclosure requirements of the special industry?
□Yes √ No
1. Brand capacity
17
HEFEI MEILING CO., LTD. Annual Report 2016
The Company is one of the famous home appliances manufacturers in the PRC, owns several
product lines such as refrigerator, freezing box and air conditioner. Meiling trademark is listed as
one of the most valuable brands in the PRC. The trademark ―Athena‖ in refrigerator, freezer
(services) of the Company was recognized as the famous mark in Anhui Province. The Company
released CHiQ intelligent first and second generation refrigerator, AC and intelligent air steward in
succession. And creating a high-end intelligent brand image around the plan of ―Wisdom Home
Ecosystem‖ for opening a white intelligence era. While in order to enhance the brand image and
further expand the market influence of the brand, the company held a conference for "New LOGO
release and offline of the 10th million set of frequency conversion products" in October 2015,
comprehensively updated LOGO " ", and launched the new brand proposition of
"Meiling, let the good come". Along with the release of new LOGO, Meiling will also implement a
brand strategy of "Good Trilogy", including the direct sensory experience of ―experience the good",
the spirit soul enjoyment of ―enjoy the good‖, and the lifestyle faith of ―believe in the good‖.
By our efforts to rebuild our brand, Meiling will realize a young, international and professional
brand image. Through gradual construction of the ideas of Wonderful Start Point, Wonderful Life
Circle and Wonderful Ecology Circle, Meiling has become a people-oriented artist specializing in
white appliances, a smarter scientific expert and a more reliable house keeper.
2.Product capacity
In more than 30 years, the company has been focusing on the refrigeration industry, has
developed a variety of different types of refrigerator products that lead the industry development
trend, including two-door and multi-door Athena series of high-end refrigerators, top-level
energy-saving refrigerators with daily power consumption of only 0.23 degrees, CHiQ refrigerator
taking "cloud image recognition 'technology as the core, and 2nd generation-CHiQ refrigeration,
which can realized the space change along with the food requirements with human-oriented
charateristics.
The Company owned advanced development and quality assurance systems, and received
certification of ISO9001, ISO14000 and OHSAS18001 from domestic and overseas authorities. The
products of the Company have good quality and reliable capacities. As for technology development,
the Company owned national technology centers, and advanced core technologies in energy-saving,
air cooling, intelligence and copious cooling. As for product development, combine with technology
development trend and characteristics of demand from upgrades in consumers, the Company, put
more efforts on products planning. In 2016, continues to expand the development of medium&high
quality products, including CHiQ intellectual products, inverter products, air patenting, multi zone
and large volume, the product has obvious upgrade in structures.
As for the air conditioning products, the company adheres to the technical strategy by taking
18
HEFEI MEILING CO., LTD. Annual Report 2016
intelligence and variable frequency as the core, intensively studies the human state perception
technology and intelligent interactive technology, focuses on completing the research and
development of intelligent voice recognition technology and productization, successively releases
the first generation of CHiQ air conditioner based on "human state perception" technology and
CHiQ intelligent air steward that can automatically change air.
The company continues to adhere to the intelligent and variable frequency products, and
promote the company's products to continuously transform to high end by boosting the follow-up
research and development, promotion and technology updates of intelligent and variable frequency
products. Meanwhile, the company improves the manufacturing efficiency and product quality,
reduces product costs and enhances product competitiveness by comprehensively implementing
intelligent upgrading and rebuilding to all production lines. In addition, the company improves the
home appliance product line through the layout of kitchen and bath and small household appliances
and has initially completed the layout for integrated white goods. Based on "Intelligent Home
Eco-circle" plan and taking the existing products as the core, the company will enhance the
development, manufacturing, sales and collaboration capabilities of integrated white goods, and
provide users with a set of intelligent white goods system solutions.
3. Operation capacity
The Company conducted benchmark management to improve its basic management level. In
specific, efficiency enhancement has been made in areas of personnel, money and materials, trying
to continuously enhance the internal management. A performance review and sharing system has
been established with clear target and quantity index based on performance and layered incentive
sharing system, thus to inspire the internal production capacity. Under the mainline of value chain
management, the Company continued to carry out value creation and improve its competitiveness.
Its ability to prevent risks has been also strengthened through continuous improvement of internal
control system.
4. Marketing ability
The company has established a relatively complete sales network and service system, the
domestic sales channels emphasizing online and offline collaboration and integration, through the
business operation mode system construction (target management, value chain management, sales
promotion, product mix and channel strategy, etc.) and promotion, the pace of business this year
constantly tends to be benign, has a balanced development in chain, wholesale, e-commerce and
other channels, and the product competitiveness has been improved; the overseas market has been
strengthened by increasing the investments in overseas marketing organizations, research and
development bases and production bases, the company has been actively develop the overseas
market, and the products have been exported to more than 100 countries and regions.
19
HEFEI MEILING CO., LTD. Annual Report 2016
Section IV Discussion and Analysis of the Operation
1. Introduction
In 2016, as the first year of the company's "13th Five-Year Plan", under the guidance of the
strategy "Meiling Dream" and "Double Three One Core", the company adheres to the operating
principles of "progress in opposite trend, innovation and activation, industry benchmarking, benign
operation", the company has overcome the negative factors including weak macroeconomic
growth and continuous decline of industry broad market by the joint efforts of all staff, and
achieved a better start. Thereinto, the domestic refrigerators (freezers) have outperformed the
industry market, e-commerce business has greatly grown, the market position of export
refrigerators (freezers) has been improved; domestic sales of air conditioners have largely
increased, export growth speed is faster; washing machines have a rapid development; kitchen and
bath and small appliances are also increasing rapidly. The company's position in the home
appliance market has been further consolidated and upgraded and become the white goods brand
with rapid growth in domestic and foreign markets in recent years which has a huge user group,
and many years of market accumulation substantially promotes the brand awareness and has a
higher industry status. In 2016, the company has achieved operating income of RMB 12.527
billion, an increase of 16.48% on a year-on-year basis; net profit attributable to the parent company
of RMB 0.220 billion , an increase of 712.46% on a year-on-year basis.
II. Main Business Analysis
(I) Overview
Shows no difference with the summary disclosed in Report of the Board of Director
□Yes √No
1. Introduction
During the reporting period, in the face of the continuous decline in the broader market of
home appliance industry, the company has overcome the pressure, the whole lines of main product
sales have outperformed the board market; product line diversification has achieved a
breakthrough, and the layout for integrated white goods + small household appliance product lines
has been initially completed; cost control and the efficiency promotion have a significant result;
the goals established for 2016 have been achieved, the industry's market position has been further
enhanced, and the export sales business has maintained the momentum of rapid growth, and has
become the white brand with a rapid growth in domestic and foreign markets in recent years.
In 2016, refrigerator and freezer business achieved revenue of approximately RMB 6.679
billion, 10.99% increased on a y-o-y basis; air-conditioning business achieved revenue of
approximately RMB 4.158 billion, 21.74% up y-o-y; washing machine business achieve revenue
20
HEFEI MEILING CO., LTD. Annual Report 2016
around RMB 0.508 billion, with year-on-year growth of 42.73%; other business of small home
appliance and kitchen & toilet products have revenue approximately as RMB 0.68 billion with
28.36% up y-o-y. at the same time, revenue from exportation gains RMB 2.917 billion, a y-o-y
growth of 33.28%
The company's sales in domestic refrigerator (freezer), air conditioner, washing machine has
outperformed the industry market, and the market position have been further consolidated and
improved. From the offline market sales, CMM‘s (China Market Monitor Co., Ltd.) data show that
the retail volume of refrigerator industry declined by 4.59% on a year-on-year basis, but the retail
volume of the company's refrigerator rose by 3.49% on a year-on-year basis; the retail volume of
freezer industry declined by 10.02% on a year-on-year basis, but the retail volume of the
company's freezer rose by 0.23% on a year-on-year basis; the retail volume of air-conditioning
industry rose by 3.49% on a year-on-year basis, and the retail volume of the company's
air-conditioning rose by 15.19% on a year-on-year basis; the retail volume of washing machine
industry declined by 2.74% on a year-on-year basis, but the retail volume of the company's
washing machine rose by 34.79% on a year-on-year basis. At the same time, CMM‘s data also
show that the market share of the company‘s refrigerator retail volume reached 8.70%, rising by
0.84% on a year-on-year basis; the market share of the company‘s freezer retail volume reached
9.72%, an increase of 0.89% on a year-on-year basis; and the market shares of air conditioning,
and washing machine also increased on a year-on-year basis.
(1)From the online sales, AVC (All View Cloud) data show that the company‘s online
refrigerator (freezer) and air conditioning sales have further enlarged the results. The retail sales of
refrigerator industry rose by 57.5% on a year-on-year basis; the retail sales of the company‘s
refrigerator rose by 74.9% on a year-on-year basis; the retail sales of freezer industry rose by
84.9% on a year-on-year basis; the retail sales of the company‘s freezer rose by 88.6% on a
year-on-year basis; the retail sales of air-conditioning industry rose by 73.2% on a year-on-year
basis; the retail sales of the company‘s air-conditioning rose by 166.0% on a year-on-year basis. At
the same time, as for the online markets, AVC data show that the market share of the company‘s
refrigerator retail sales reached 7.01%, an increase of 0.70% on a year-on-year basis; the market
share of the company‘s freezer retail sales reached 10.48%, an increase of 0.21% on a year-on-year
basis; and the market shares of air conditioning, and washing machine retail sales also increased on
a year-on-year basis.
(2) As for the export business, the company's refrigerator, freezer, and air-conditioning
product lines have continued to maintain a rapid growth like a few years ago. According to the
customs data and statistics, the amount of exports of refrigerator industry rose by 3.00% on a
year-on-year basis, the company's amount of exports rose by 17.19% on a year-on-year basis; the
amount of exports of freezer industry rose by 5.43% on a year-on-year basis, the company's
amount of exports rose by 9.92% on a year-on-year basis; the amount of exports of air
conditioning industry rose by 5.71% on a year-on-year basis, the amount of exports of the
company's air conditioning rose by 44.81% on a year-on-year basis, the export growth of the
company‘s refrigerator (freezer) and air conditioning exceeded the industry. In terms of the market
shares, according to the customs data and statistics, the market share of the company‘s refrigerator
exports reached 5.92%, an increase of 0.71% on a year-on-year basis; the market share of freezer
exports reached 2.94%, an increase of 0.12% on a year-on-year basis; the market share of air
21
HEFEI MEILING CO., LTD. Annual Report 2016
conditioning exports reached 1.32%, an increase of 0.36% on a year-on-year basis;
2. Progress of the company's development strategy and business plan during the
reporting period
During the reporting period, in accordance with the development strategy and operating
principles of "progress in opposite trend, innovation and activation, industry benchmarking, benign
operation" in 2016, the company has deployed the annual business plan, arranged the production
and management, and carried out the following activities:
(1) Progress in opposite trend
During the reporting period, the company's operating income scale has increased significantly,
and the main profit has also increased on a year-on-year basis. Among them, the refrigerator
(freezer) products have achieved upgrades in the domestic market share by constantly promoting
the variable frequency and intelligence and adjusting the product structure; air-conditioning
products have achieved a year-on-year growth in domestic revenues and improvements in
profitability by active promotion of energy efficiency upgrades while benefiting from weather and
other factors; meanwhile, the company has actively strengthened the overseas business market
development and product line expansion, achieved the rapid growth of export business this year, as
well as the sustainable growth of operating incomes from washing machines and small household
appliance businesses.
(2) Innovation & Activation
During the reporting period, the company has further changed the sense of business and way
of thinking, and mobilized and stimulated the competitiveness of all business modules by
innovative mechanisms. The company has taken value-oriented principle, not only intensified KPI
assessment, but also expanded the scope of performance sharing; stimulated the potential by
sinking incentive unit, encouraged the pursuit of individual performance and overall performance
enhancing to stimulate the enthusiasm of all business modules; set up the innovation incentive
platform for engineering and technical personnel values, and encouraged innovation in technology
management.
To achieve the targets of the company's "13th Five-Year Plan", the company takes "high
targets, high traction, high pay, high return" as the guide and combines with the actual situation of
subordinate business units and subsidiaries to actively promote the design and demonstration and
implement the interim performance incentive plan (5 years) or equity incentive plan (5 years) to all
subordinate business units and subsidiaries, and strive to fully release the enthusiasm of staff.
(3) Industry benchmarking
In 2016, the company has developed management benchmarking in the market position,
research and development cycle, manufacturing capacity, efficiency promotion and other aspects,
and has achieved certain results. Among them, in terms of market position, in addition to the rise
of domestic and export market position, the domestic average price of benchmarking project has
achieved significant results, the average prices of Meiling refrigerator products have increased by
96 Yuan / set on a year-on-year basis, of which the growing rate has ranked first among the
22
HEFEI MEILING CO., LTD. Annual Report 2016
domestic top five brands, and further narrowed the gap with the top-ranked brands; the company's
air-conditioning products have successfully selected for the energy-saving leader, first-level energy
efficiency variable frequency led industry switching, product structure has improved significantly,
the average prices of online products have rapidly increased; the growing rate of Meiling washing
machine has ranked top in the industry; the structure of small household appliances and kitchen
electrical products has continued to be optimized, channel layout has been deepened, and
e-commerce business has been rapidly growing, so that the company can build kitchen ecosphere
and maintain industry-leading. In the R&D cycle, the capacity baseline has increased by 29%; in
manufacturing capacity, the inspection rate and export on-time delivery rate of refrigerator (freezer)
large customers have continued to improve while the cumulative reject rate of products has been
declining; in efficiency promotion, manpower efficiency promotion focuses on the exploration of
platform functions and the organization optimization way of business support separation, and
material efficiency promotion focuses on persistently digesting the bad stock and inactive stock by
strengthening production and marketing coordination and strictly controlling production reserves,
and funds efficiency promotion focuses on making a good use of stock funds, expanding
incremental capital, and increasing financial incomes.
(4) Benign operation
During the reporting period, in the company's operations, on the one hand, the company has
pulled through the value chain, refined the accounting management of operation unit, improved the
market control and early warning capabilities; on the other hand, the company has emphasized the
benign operation of sales, further strengthened the terminal price management, and strictly
controlled the fixed expenditure to be in the budget target, which made the company's annual
operating efficiency further improved. Among them, the company's material efficiency has
increased by 20% or more on a year-on-year basis, the money efficiency has increased by more
than 5% on a year-on-year basis, and manpower efficiency has continued to improve.
At the same time, during the reporting period, the company's air-conditioning industry has a
benign operation, the sales scale and profitability have greatly improved compared to 2015, the
company has released the world's first user free custom-made intelligent air steward (CHiQ
intelligent air steward), and accelerated the promotion and implementation of intelligent strategy.
Washing machine products have been promoting to constantly transform and upgrade to variable
frequency, intelligent, quiet, energy saving, health washing products by insisting on the product
strategy of large volume + variable frequency, technological innovation, quality leadership,
differentiated operation.
In addition, the company has continued to improve the home appliance industry chain and
product line, purchased Changhong Ridian by bidding the stock rights so as to possess its own
platform for kitchen and bath, small household appliances products; during the reporting period,
Changhong Ridian has further strengthened the kitchen and bath, and small household appliances
businesses, adjusted the organization, established the product centers, realized the integration of
product planning, research and development and cost management, smart small household
appliances highlight the practicality and usability. At the same time, the e-commerce business of
small household appliances is rapidly developing.
At the same time, during the reporting period, the company's improvement project for
23
HEFEI MEILING CO., LTD. Annual Report 2016
intelligent manufacturing capacity has been progressing smoothly, phase I refrigerator intelligent
manufacturing benchmark line project has entered pilot construction; intelligent R & D investment
has promoted a new generation of intelligent and variable frequency products, and the effect is
obvious; smart life project has been advancing as planned, Changmei Science and Technology Co.,
Ltd. has been established and had Mianyang and Hefei business units, the company has its own
fresh e-commerce brand ―ifoodtube‖ which has more than 130,000 members and its daily order
volume peak can reach more than 3,900.
Overall, in 2016, faced with multiple impacts of macroeconomic downturn, industry decline,
intense competition and cross-border of Internet companies, the company has outperformed the
market in product sales, achieved breakthroughs in product line diversification, and obtained
remarkable and good results in cost control and efficiency improvement through the joint efforts of
all Meiling people. On the other hand, the company has actively explored new paths for the
transformation and upgrading of home appliance enterprises under the in-depth development of
Internet technology, introduced the industry's first "Intelligent Home Eco-circle Plan", taken its
own hardware products as the terminal, and explored the new business models around the food, air,
water and other needs.
(II) Revenue and cost
1. Constitute of operation revenue
In RMB
2016 2015
Ratio in Ratio in Increase/dec
Amount operation Amount operation rease y-o-y
revenue revenue
Total of operation
12,526,710,867.49 100% 10,754,200,188.12 100% 16.48%
revenue
According to industries
Manufacture of
12,025,103,352.55 96.00% 10,318,999,424.25 95.95% 16.53%
household appliances
Other 501,607,514.94 4.00% 435,200,763.87 4.05% 15.26%
According to products
Refrigerator, freezer 6,678,568,374.39 53.32% 6,017,333,150.01 55.95% 10.99%
Air-conditioning 4,158,164,312.32 33.19% 3,415,727,210.45 31.76% 21.74%
Washing machine 508,133,090.63 4.06% 356,011,057.00 3.31% 42.73%
Small appliance and 3.38%
423,162,351.81 288,940,970.60 2.69% 46.45%
kitchen
Other products 257,075,223.40 2.05% 240,987,036.19 2.24% 6.68%
Other 501,607,514.94 4.00% 435,200,763.87 4.05% 15.26%
According to region
24
HEFEI MEILING CO., LTD. Annual Report 2016
Domestic 9,603,142,676.83 76.66% 8,562,301,327.00 79.62% 12.16%
Foreign 2,923,568,190.66 23.34% 2,191,898,861.12 20.38% 33.38%
2. About the industries, products, or regions accounting for over 10% of the company’s
operating income or operating profit
√Applicable □ Not applicable
In RMB
Increase/decrea
Increase/decrea Increase/decrea
Operating Gross profit se of gross
Operating cost se of operating se of operating
revenue ratio profit ratio
revenue y-o-y cost y-o-y
y-o-y
According to industries
Manufacture of
household 12,025,103,352.55 9,590,231,985.74 20.25% 16.53% 16.43% 0.07%
appliances
According to products
Refrigerator,
6,678,568,374.39 5,236,031,795.08 21.60% 10.99% 12.94% -1.36%
freezer
Air-conditionin
4,158,164,312.32 3,354,925,254.82 19.32% 21.74% 17.93% 2.61%
g
According to region
Domestic 9,108,442,083.44 6,976,734,143.90 23.40% 12.03% 11.22% 0.55%
Foreign 2,916,661,269.11 2,613,497,841.84 10.39% 33.28% 33.10% 0.11%
Under circumstances of adjustment in reporting period for statistic scope of main business
data, adjusted main business based on latest one year‘s scope of period-end
□ Applicable √ Not applicable
3. Income from physical sales larger than income from labors
√ Yes □ No
Increase/decrease
Industries Item Unit 2016 2015
y-o-y (%)
Manufacture of Sales volume 10 thousand pieces/set 1,237.08 957.27 29.23%
household
Production 10 thousand pieces/set 1,253.24 945.96 32.48%
appliances
industry Inventory 10 thousand pieces/set 130.62 114.46 14.12%
Reasons for y-o-y relevant data with over 30% changes
√Applicable □Not applicable
(1)In reporting period, the Company successful bidding 98.856% equity of Guangdong
Changhong Ridian Technology Co., Ltd. (hereinafter referred as to Changhong Ridian), the data
25
HEFEI MEILING CO., LTD. Annual Report 2016
above mentioned including the data of Changhong Ridian;
(2)In reporting period, products and sales of the products has a greatly growth on a y-o-y
basis due to the rapidly soaring of washing machine and kitchen and small home appliances
products
4. Fulfillment of the company’s signed significant sales contracts up to this reporting
period
□ Applicable √ Not applicable
5. Constitute of operation cost
Industry classification
In RMB
2016 2015 Increase/d
Industries Item Ratio in Ratio in operation ecrease
Amount Amount
operation cost cost y-o-y
Manufacture of
household Raw
8,760,386,320.44 91.58% 7,461,553,895.88 90.59% 0.99%
appliances material
industry
6. Whether the changes in the scope of consolidation in Reporting Period
√ Yes □ No
More details can be seen in the report ―VII. Changes in the scope of the merger‖ and ―VIII.
Interests in other entities‖ of ―Section XI Financial Report‖.
7. Major changes or adjustment in business, product or service of the Company in
Reporting Period
□ Applicable √ Not applicable
8. Major sales and main suppliers
(1) Major sales client of the Company
Total top five clients in sales (RMB) 4,437,473,136.69
Proportion in total annual sales volume for top five clients 35.42%
Proportion of the related parties‘ sales in total annual sales
23.74%
volume for top five clients
Information of top five clients of the Company
Serial Name Sales (RMB) Proportion in total annual sales
1 Client I 1,432,924,635.31 11.44%
26
HEFEI MEILING CO., LTD. Annual Report 2016
2 Client II 1,254,945,781.06 10.02%
3 Client III 1,089,287,870.68 8.69%
4 Client IV 451,034,633.20 3.60%
5 Client V 209,280,216.44 1.67%
Total -- 4,437,473,136.69 35.42%
Other situation of main clients
□ Applicable √ Not applicable
(2) Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 2,000,373,874.42
Proportion in total annual purchase amount for top five
17.98%
suppliers
Proportion of related party‘s purchase in total annual purchase
11.80%
amount for top five suppliers
Information of top five suppliers of the Company
Proportion in total annual
Serial Name Sales (RMB)
purchase
1 Supplier I 445,928,352.23 4.01%
2 Supplier II 438,755,474.68 3.94%
3 Supplier III 427,639,189.69 3.84%
4 Supplier IV 404,822,829.32 3.64%
5 Supplier V 283,228,028.50 2.55%
Total -- 2,000,373,874.42 17.98%
Other notes of main suppliers of the Company
□ Applicable √ Not applicable
(III) Expenses
In RMB
Increase/decre
2016 2015 Note of major changes
ase y-o-y
Sales expense 1,855,396,448.81 1,574,408,045.18 17.85% --
Management expense 472,146,980.73 431,057,033.53 9.53% --
Monetary fund has a great
Financial expense -139,879,189.92 -102,034,012.45 -37.09% operational efficiency
improvement in the Period
Income tax expenses 29,044,015.72 11,226,998.22 158.70% Taxable income tax has a y-o-y
27
HEFEI MEILING CO., LTD. Annual Report 2016
growth in the Period
(IV) R&D expenses
√ Applicable □Not applicable
In 2016 the company has continued to promote the intelligent strategy, increased the
research and development to CHiQ series intelligent refrigerators and intelligent air conditioning.
In the refrigerator, surrounded by the core technology (intelligent, frequency, energy saving and air
cooling), the company has built the core competitiveness, released and published CHiQ second
generation refrigerator that is people-centered and can realize space intelligent change according
to the food needs. The company has vigorously promoted the 0.1 ℃ inverter series refrigerator by
the opportunity of implementing new energy efficiency standards for refrigerators, and the inverter
refrigerator has continued to significantly increase the proportion. The technology development
mainly surrounds the company's technical planning and core technology to carry out the research
on food recognition technology, food preservation technology, odor detection technology,
energy-saving and quite technology, wide speed conversion technology, and air duct design
technology.
As for air conditioning, the company insists on the technical strategy of taking intelligence
and frequency as the core based on the strategic planning of overall intelligent air ecological circle,
takes recognition technology as the core, deeply researches the human state perception technology
and intelligent interactive technology, focuses on intelligent speech recognition technology
research and development and products, and releases intelligent air steward; complete the core
technology research and development for fourth generation of intelligent and comfortable precise
temperature control technology platform, carry out research on the internal air duct, external flow
field, heat exchange simulation and vibration noise CFD & CAE, achieve the full leadership in
user perception, program costs, production efficiency, system reliability; inverter class A series
products enter the national "energy efficiency lead" list; complete the platform construction for L
product, realize the release of "Xiaomanyao" intelligent voice king, "Quezhiling" intelligent eye
and other series of air-conditioning products, take the leading in achieving artificial intelligence
breakthrough in the industry, create man-machine natural interaction mode, and win high praise
from the industry and consumers.
In the cryogenic technology, the company‘s subsidiary listed on new three board - Zhongke
Meiling has developed the second generation of deep-freezing storage box. It has unique narrow
type appearance; multi-layer sealed thermal insulation, adopts two-layer foaming door and three
rubber seal stripes design to maximumly preserve the internal cooling of the box; increases the
LCD display system to timely get the temperature and collection of data; uses ergonomic door
handle that is easy to open, and the double lock design increases security. The blood refrigerator
has technological improvement and adopts unique airduct design so as to have better temperature
28
HEFEI MEILING CO., LTD. Annual Report 2016
uniformity in refrigeration; new multi-function thermostat, the temperature can be switched, while
the thermostat has a USB jack, you can write the temperature curve into a U disk, so that users can
get to know the storage temperature of plasma bag easily. In addition, the "Internet +
cryopreservation equipment" in the biological sample management system pushes the
cryopreservation equipment to the Internet age, thereby transform the cryopreservation equipment
from the sales product to providing the users with cryopreservation services.
R&D investment of the Company
2016 2015 Change ratio
Number of R&D (people) 1204 802 50.12%
Ratio of number of R&D 10.85% 10.68% 0.17 percentage points up
R&D investment (Yuan) 680,286,093.75 626,725,377.52 8.55%
R&D investment accounted
5.43% 5.83% 0.40 percentage points down
for R&D income
R&D investment
62,282,986.30 64,103,620.26 -2.84%
capitalization (Yuan)
Capitalization R&D
investment accounted for 9.16% 10.23% 1.07 percentage points down
R&D investment
The reason of great changes in the proportion of total R&D investment accounted for
operation income than last year
□ Applicable √ Not applicable
Reason for the great change in R&D investment capitalization rate and rational description
□ Applicable √ Not applicable
(V) Cash flow
In RMB
Item 2016 2015 Y-o-y changes
Subtotal of cash in-flow
12,094,822,197.35 10,097,011,753.74 19.79%
from operation activity
Subtotal of cash out-flow
11,109,431,301.72 9,867,640,568.51 12.58%
from operation activity
Net cash flow from
985,390,895.63 229,371,185.23 329.61%
operation activity
Subtotal of cash in-flow
694,384,009.64 538,913,277.50 28.85%
from investment activity
Subtotal of cash out-flow 1,629,560,848.76 1,090,536,212.59 49.43%
29
HEFEI MEILING CO., LTD. Annual Report 2016
from investment activity
Net cash flow from
-935,176,839.12 -551,622,935.09 -69.53%
investment activity
Subtotal of cash in-flow
3,184,640,052.87 1,705,764,746.56 86.70%
from financing activity
Subtotal of cash out-flow
1,418,900,313.83 1,998,885,682.25 -29.02%
from financing activity
Net cash flow from
1,765,739,739.04 -293,120,935.69 --
financing activity
Net increased amount of
1,864,937,181.75 -587,935,955.10 --
cash and cash equivalent
Main reasons for y-o-y major changes in aspect of relevant data
√ Applicable □Not applicable
Net cash flow from operation activity have major changes, mainly because the sales money
received in the Period increased over same period of last year;
Net cash flow from investment activity have major changes, mainly because the principal of
trust investment paid in the period has a y-o-y growth;
Net cash flow from financing activity have major changes, mainly because collecting the
money of non-public offering shares in the Period, and there are no such amount received from a
year earlier;
Reasons of major difference between the cash flow of operation activity in report period and
net profit of the Company
√ Applicable □Not applicable
The operating payable at period-end increased over that of period-begin
III. Analysis of the non-main business
√ Applicable □Not applicable
In RMB
Ratio in Whether be
Amount Note
total profit sustainable
Disposal of company-Meiling Package in
Investment income 14,302,482.67 5.74% N
the Period
Gains from the change of fair value of
Changes in fair value 11,500,963.72 4.61% forward foreign exchange contract in the N
Period
Accrual of the inventory falling price
Asset impairment 1,353,446.69 0.54% N
reserves in the Period
Non-operating Government grants received in the Period
57,917,677.26 23.24% N
income
30
HEFEI MEILING CO., LTD. Annual Report 2016
Non-operating Losses from disposal of non-current assets
5,949,509.51 2.39% N
expense in the Period
IV. Assets and liability
(I) Major changes of assets composition
In RMB
End of 2016 End of 2015
Ratio in Ratio in Ratio
Notes of major changes
Amount total Amount total changes
assets assets
Collecting the money of
Monetary fund 4,058,869,234.63 32.45% 2,135,189,879.15 23.11% 9.34% non-public offering shares and
sales money in the Period
Account No major changes
1,118,960,552.49 8.95% 1,338,396,321.83 14.49% -5.54%
receivable
Inventory 1,974,526,734.86 15.79% 1,554,946,209.51 16.83% -1.04% No major changes
Investment real No major changes
13,275,631.40 0.11% 14,084,213.51 0.15% -0.04%
estate
Long-term No major changes
equity 81,643,631.37 0.65% 74,239,547.01 0.80% -0.15%
investment
Fix assets 1,204,093,169.72 9.63% 1,267,493,931.98 13.72% -4.09% No major changes
The intelligent manufacturing
projects and construction of the
Construction in relocation expansion project
107,037,409.95 0.86% 56,504,880.99 0.61% 0.25%
progress from subsidiary -Zhongke
Meiling and Mianyang
Refrigeration
The short-term loans increased
Short-term
288,343,724.73 2.31% 58,680,093.19 0.64% 1.67% from parent company in the
loans
Period
The long-term loans due within
Long-term
38,908,788.00 0.31% 243,004,866.40 2.63% -2.32% one year has transfer-out for
loans
re-classify
(II) Assets and liability measured by fair value
√ Applicable □Not applicable
In RMB
Items Amount Changes of fair Accumulativ Devaluati Amount of Amount of Amount in the end
31
HEFEI MEILING CO., LTD. Annual Report 2016
at the value e changes of on of purchase sale in the of period
beginnin gains/losses in fair value withdrawi in the period
g period this period reckoned into ng in the period
equity period
Financial assets
1. Financial assets
measured by fair value
and whose change is
recorded in current
0 12,060,213.30 12,060,213.30
gains and
losses(excluding
derivative financial
assets)
Subtotal of financial
0 12,060,213.30 12,060,213.30
assets
Total 0 12,060,213.30 12,060,213.30
Financial liabilities 0 559,249.58 559,249.58
Whether there have major changes on measurement attributes for main assets of the Company
in report period or not
□ Yes √No
(III) Assets right restricted ended as reporting period
Ended as the reporting period, the Company has no major assets been closed down, detain,
freeze or pledge and guarantee
V. Investment
(I) Overall situation
√ Applicable □Not applicable
Investment in the same period of last
Investment in the reporting (RMB) Changes
year ( RMB)
202,350,000 62,000,000 226.37%
(II) The major equity investment obtained in the reporting period
√ Applicable □Not applicable
32
HEFEI MEILING CO., LTD. Annual Report 2016
In RMB
Date of
Meth Capit Term Type Whet Index of
Status as of Expect disclosure
Name of od of Amount of Sharehol al of of Current investment her disclosure (if
Principal business Partners the balance ed (if
investee invest investment ding sourc invest produ profit and loss litigat
sheet date return applicable
ment es ment cts ion applicable
)
)
Hous
ehold
electr
R&D, production and sales of:
ical
household electric appliances,
appli
non-electrical household
ances
appliance, kitchen & bathroom Juchao Website:
of
furniture, audio-visual www.cninfo.com.
small
equipment, radio & television
Guangdong Self- home 2015-12-19 cn ( No.:
equipment, computers, Equit Wu Ownership Not
Changhong owne appli 、 2015-061,
communication and other y-pur Changy 20 Of equity applica
Ridian 95,650,000 98.856% d ances 17,066,865.91 N 2015-12-24 No.: 2015-062,
electronic devices and indoor chase uan, Hu years has
Technology capita , ble 、2016-1-5、No.: 2015-066,
hardware fitting; software and d Zhiheng transferred
Co., Ltd. l kitch 2016-2-4 No.: 2015-067,
IT services; business
en No.: 2016-001,
management advisory service;
and No.: 2016-008)
the 2nd and 3rd types of medical
toiler
equipment business; goods
produ
and technology import and
cts
export
and
water
purifi
33
HEFEI MEILING CO., LTD. Annual Report 2016
er
Development, production and
sales of computer hardware &
software, technology
development, production and
sales of internet of Things
equipment, development and
maintenance of E-commerce Manage
software, information service, ment Fresh Juchao Website:
Changmei Newl Invested Not
technical transfer and services Fund- team of onlin http://www.cninf
Technology y 20 RMB 18 applica 2016-1-8,
of the internet, domestic AD 46,320,000 92.64% raisin Changm e -6,857,143.67 N o.com.cn( No.:
Co., Ltd. establ years million in 2016-11-26
designing, production, g ei retail ble 2016-002, No.:
(note 1) ished the Period
agencies and release, sales of Technol ers 2016-068)
prepackaged food, dairy ogy
products, general merchandise,
alcohol, beverage and
agricultural products, crop
planting, self-support goods
and technology import and
export business.
Produced the follow products
and spareparts: air-conditioner,
Sichuan Hom
refrigeration and freezer, heat
Self- Changh e
Zhongshan pump, water heater, air cooler, Capit Not Juchao Website:
owne ong appli Invested
Changhong electric fan, humidifier, al 20 applica http://www.cninf
184,000,000 100% d Air-con ance RMB 64 12,507,061.40 N 2016-3-25
Electric Co., electric heater, clothes dryer, incre years o.com.cn( No.:
capita ditioner of air million ble
LTD (note 2) dehumidifier, air purifier, air ment 2016-027)
l Co., condi
wate machine, electric
Ltd. tioner
fireplace, kitchen appliance
and tools as well as
34
HEFEI MEILING CO., LTD. Annual Report 2016
refrigerating unit; import and
export business of the
self-produced products and
raw/auxiliary materials,
equitypment and technology;
software development and
consulting
Ever
Source Invested
Grou
Production and sales of the Science RMB 5.1
nd
Hongyuan ground heat & cold machine Self- & million in
Capit heat Not Juchao Website:
Ground Heat and whole machine system as owne Technol the Period,
al Long & applica 261,608.64 http://www.cninf
Pump well as the spare parts, sales of 25,500,000 51% d ogy and N 2015-4-18
incre -term cold o.com.cn( No.:
Technology home appliances, raw capita Develop cumulative ble
ment all-in 2015-016)
Co., Ltd. materials of home appliances l ment contributed
-one
and spare part Group RMB 10.2
PC
Co., million
Ltd.
Technology R&D of ground
Ever
energy heater, ground energy
Source
heating and cooling integrator
Science Invested
and ground energy heating
Hongyuan Self- & RMB19.6
pump environment systems, Capit Not Juchao Website:
Ground Energy owne Technol Not million in
system integration, selling and al Long applica http://www.cninf
Heater 24,500,000 49% d ogy appli the Period, -874,437.22 N 2015-4-18
post-selling service of single incre -term o.com.cn( No.:
Technology capita Develop cable and ble
unit equipment and whole set ment 2015-016)
Company l ment completed
systems; selling, installment,
Group investment
maintenance and after-sale
Co.,
service of home appliances
Ltd.
products
35
HEFEI MEILING CO., LTD. Annual Report 2016
Total -- -- 375,970,000 -- -- -- -- -- -- 22,103,955.06 -- -- --
Note 1: As the implementation subject of "intelligent life" project which is one of the Company‘s non-public offering funds investment
projects in 2016, Changmei Science and Technology Co., Ltd. (hereinafter referred to as "Changmei Technology") has registered capital of 50
million Yuan , of which the Company invests 45 million Yuan in cash in the original plan, accounting for 90% of the registered capital, and
the management team of Changmei Technology invests 5 million in cash, accounting for 10% of the registered capital. The Company and
Changmei Technology management team should respectively pay 40% of the amount of subscribed capital within 30 days from the date of the
establishment of the new company, and the remaining amount shall be paid within 3 years from the date of the establishment of the new
company.
Due to the job transfer of some non-core staff in Changmei Technology resulting in the corresponding subscribed capital unpaid, in order
to ensure the smooth implementation of the company's investment project, the resolution the 27th meeting of the company‘s 8th Board of
Directors passed and agreed the company to transfer the subscribed capital unpaid by some non-core staff in Changmei Technology by its own
funds, i.e. 2.64% stock rights of Changmei Technology (1.32 million Yuan in total). After this transfer of stock rights, the company‘s subscribed
capital becomes 46.32 million Yuan, accounting for 92.64% of the stock rights; the management team totally pays subscribed capital of 3.68
million Yuan, accounting for 7.36% of the stock rights.
Note 2: The resolution of the 19th meeting of the 8th Board of Directors of the company agreed the subsidiary - Zhongshan Changhong
and its partner - UAE RUBA GENERAL TRADING FZE Company (hereinafter referred to as "UAE RUBA Company") to jointly increase
capital in cash according to the existing shareholding ratio in the joint venture sales company - Changhong Ruba Trading Company(Private)
Limited which is invested and established in Pakistan by both sides at an earlier stage, the total capital increase was US$6.4 million, of which
Zhongshan Changhong invested US$3.84 million and UAE RUBA Company invested US$ 2.56 million; agreed the subsidiaries - Zhongshan
Changhong and Changhong Air Conditioning to respectively invest US$5.88 million and US$120,000 to establish " CHANGHONG MEILING
ELECTRIC INDONESIA.PT" in Indonesia. In order to meet the aforesaid investment matters, agreed the company and Changhong Air
Conditioning to increase capital of 64 million Yuan to Zhongshan Changhong according to the existing shareholding ratio, thereinto, the amount
of capital increase of the Company was 57.6 million Yuan and the amount of Changhong Air Conditioning was 6.4 million Yuan.
36
HEFEI MEILING CO., LTD. Annual Report 2016
(III) The major non-equity investment doing in the reporting period
□ Applicable √ Not applicable
(IV) Financial assets investment
1. Securities investment
□ Applicable √ Not applicable
The company had no securities investment in the reporting period.
37
HEFEI MEILING CO., LTD. Annual Report 2016
2. Derivative investment
√ Applicable □Not applicable
In 10 thousand Yuan
Amount of Ratio of
Investme
Relat Wheth Amount reserve for investment
nt Amount
ed er purchased in devaluatio Investment amount at Actual
Initial amount sales in the
Operator relati related Type Start date End date the n of amount at period-end in gains/losses
investment at reporting
onshi trade or reporting withdrawi period-end net assets of the in period
period-b period
p not period ng (if Company at
egin
applicable) period-end
Forward
Financial foreign
N/A No 56,813.32 2016-6-8 2017-12-6 0 105,152.67 67,380.74 0 37,890.69 7.33% -118.76
institution exchange
contract
Total 56,813.32 -- -- 0 105,152.67 67,380.74 0 37,890.69 7.33% -118.76
Capital resource(if applicable) Self-owned capital
Lawsuit involved (if applicable) Not applicable
Disclosure date for approval from the
Board for investment of derivatives (if 2016-3-19
applicable)
Disclosure date for approval from
board of shareholders for investment of 2016-4-7
derivatives (if applicable)
Risk analysis and controlling measures Risk analysis:
for derivatives holdings in the Period 1. Market risk: domestic and international economic situation changes may lead to exchange rate fluctuations, forward foreign exchange
(including but not limited to market transactions are under certain market risk. Forward foreign exchange business is aiming to reducing impact on corporate profits by foreign
risk, liquidity risk, credit risks, exchange settlement and sale prices, exchange rate fluctuations. The Company will follow up the exchange fluctuation, on the basis of target
38
HEFEI MEILING CO., LTD. Annual Report 2016
operation risk and law risks etc.) rate determined from the business, relying on the research of the foreign currency exchange rates, combined with prediction of consignments,
and burdening ability to price variations due to exchange rate fluctuations, then determine the plan of forward foreign exchange contracts, and
make dynamic management to the business, to ensure reasonable profit level.
2. Liquidity risk: all foreign exchange transactions are based on a reasonable estimate of the future import and export business, to meet the
requirements of the trade authenticity. In addition, forward foreign exchange transactions are processed with bank credit, will not affect
liquidity of company funds.
3. Bank default risk: if cooperative banks collapse within the contract time, the Company will not be able to transact the original foreign
exchange contracts with contract price, which leads the risk of income uncertainty. So the Company chose Bank of China, Agricultural Bank
of China, Industrial and Commercial Bank of China, China Construction Bank and other Chinese Banks and part of the larger foreign Banks
(such as Deutsche Bank, UOB, Overseas Chinese Bank, HSBC, etc.) to conduct the trading of foreign exchange capital. These banks share a
solid strength and management whose failure and the risk of loss may bring to the Company is very low.
4. Operational risk: improper operation of the person in charge of forward foreign exchange transactions may cause related risk also. The
Company has formulated related management system which defines the operation process and responsibility to prevent and control risks.
5. The legal risks: unclear terms based in contract signed with banks for related transactions may lead legal risks when forward foreign
exchange transactions are processing. The Company will strengthen legal review, and choose good bank to carry out this kind of business as to
risk control.
Invested derivative products have The Company determines fair value in accordance with the Chapter VII ―Determination of Fair Value‖ carried in the Accounting Standards for
changes in market price or fair value in Business Enterprises No.22 - Recognition and Measurement of Financial Instruments. Fair-value is basically obtained according to prices
the Period, as for analysis of the fair offered by bank and other pricing services. While fair-value of derivatives is mainly obtained according to the balance between prices given by
value of derivatives, disclosed specific outstanding contracts and forward prices given by contracts signed during the reporting period with bank. The differences are identified as
applied methods and correlation trading financial assets and liabilities. During the reporting period, forward foreign exchange contracts and losses of the Company is RMB
assumption and parameter setting -1.1876 Million.
Specific principle of the accounting
policy and calculation for derivatives in
Not applicable
the Period compared with last period in
aspect of major changes
Special opinion on derivative Upon inspection, the independent directors of the Company believes that: during the reporting period, the Company carried out its foreign
investment and risk control by exchange forward deals in strict compliance with the standardized operation guidelines for listed issuer on main board (2015 amended) issued
independent directors by Shenzhen Stock Exchange, the Articles of Association, Authorization Management of the Company, Management System in relating to
39
HEFEI MEILING CO., LTD. Annual Report 2016
Foreign Exchange Forward Deals of Hefei Meiling Co., Ltd., and these deals were conducted within the authorization scope under general
meeting and board meeting. The Company conducts no foreign exchange transactions on the purpose of getting profit only, all of the forward
foreign exchange transactions are operates based on normal operating and production, which is relying on specific business operations with
purpose of avoiding the preventing the risks in exchange rate. The forward foreign exchange transactions of the Company are beneficial to
prevent the exchange risks exposed by import and export business and thus met its requirement for operation development. There was no
speculative operation, no break of relevant rules and regulations and relevant business was conducted under corresponding decision-making
procedures. Interests of the Company and entire shareholders, especially minority shareholders, were not prejudiced.
40
HEFEI MEILING CO., LTD. Annual Report 2016
(V) Application of raised proceeds
√ Applicable □Not applicable
1. Overall application of raised proceeds
√ Applicable □Not applicable
41
HEFEI MEILING CO., LTD. Annual Report 2016
In 10 thousand Yuan
Cumulative
Total raised Ratio of
raised Raised
Total capital has cumulative Usage of the retained
Total raised capitals has Total accumulative capitals idle
Total raised accumulative purpose of raised raised capitals and what
Year Way capital used purpose of raised capitals for more
capitals raised capitals uses capitals has is expected to invested
in Period uses unused than two
used changed in purpose of with those capitals
changed in years
Period uses changed
total
The un-used
fund-raising will
continue on the
investment on schedule.
According to the
fund-raising project,
and been deliberated
Non-publi
and approved by the
c offering
2016 154,073.272276 33,750.503059 33,750.503059 0 0 0% 120,788.994697 Board and shareholders 0
of
general meeting, the
A-shares
idle fund-raised are
purchased guaranteed
financial products with
RMB900 million in
total, rests of the funds
are save in the specific
account of raising funds
Total -- 154,073.272276 33,750.503059 33,750.503059 0 0 0% 120,788.994697 -- 0
Explanation on General usage of raised capital
Being deliberated andapproved by 1st extraordinary shareholders meeting of 2016 and 17th session of 8th BOD, and verified by the Reply on Private Placement of Hefei Meiling
Co., Ltd. (CSRC XK [2016] No.1396) issued from CSRC, the Company successfully offering 280,858,676 shares (A-stock) to 7 qualified investors, including Sichuan
42
HEFEI MEILING CO., LTD. Annual Report 2016
Changhong Electric Co., Ltd. (hereinafter referred as to Sichuan Changhong), with price of 5.59 Yuan/Share and face value of 1.00 Yuan. According to the Verification Report
XYZH/2016CDA40272 issued by Shine Wing Certified Public Accountants (LLP), total raised fund amounting to 1,569,999,998.84 Yuan, less vary issuance changes (tax
included) 29,267,276.08 Yuan, raised fund amounts to 1,540,732,722.76 Yuan.
Totally 337,505,030.59 Yuan raised fund used in the Period, including replace the self-raised fund 63,984,738.91 Yuan, invested till end of 31 October 2016; the raised-fund
project has 2,640,227.91 Yuan (including bank handling charger and card issuing fee 230 Yuan) used from November to December in 2016; extra the ―supply current capital
project‖ used for current capital of the Company 270,880,063.77 Yuan (including 147,341.01 Yuan interest income). The specific raised-fund account has bank interest of
4,662,254.80 Yuan in reporting period.
Ended as 31 December 2016, the specific account for raised-fund of the private placement of 2016 amounting to 1,207,889,946.97 Yuan (including interest 4,514,913.79 Yuan).
Moreover, the Company purchase guaranteed financial products of 900 million Yuan in total with the idle raised-fund.
2. Situation of committed project of raised proceed
√ Applicable □Not applicable
In 10 thousand Yuan
Change the Achieve
Major
project Cumulative Investment Benefit d
Committed investment Date of reach a changes of
(Y/N) Total raised-fund Investment after Invested in the investment progress till end achieve expecte
projects and over-raised predetermined state project
(including commitment adjustment (1) period amount till end of of period-end (3) d in the d
fund investment of use feasibility
partially Period-end (2) ＝(2)/(1) Period benefits
(Y/N)
changed) (Y/N)
Committed investment project
Intelligent
manufacturing
(Hefei) project:
Construction of intelligent end of 2018,
No 39,100.00 39,100.00 2,657.326701 2,657.326701 6.80% -- -- No
manufacturing project construction
project of
freezer
intelligent : end
43
HEFEI MEILING CO., LTD. Annual Report 2016
of June 2018
Construction of intelligent
R&D capability and new
products development of No 55,900.00 55,900.00 2,205.149981 2,205.149981 3.94% End of 2018 -- -- No
the intelligent appliance
technology
Intelligent life project No 32,000.00 32,000.00 1,800.0200 1,800.0200 5.63% April 2010 -- -- No
Supplementary the floating
27,073.272276 27,073.272276 27,088.006377 27,088.006377 100.05% -- -- -- No
capital
Subtotal of committed
-- 154,073.272276 154,073.272276 33,750.503059 33,750.503059 -- -- -- -- --
investment project
Investment of the over-raised fund
No over-raised fund in the Period
Payment of bank loans (if
-- -- -- -- -- -- -- -- -- --
applicable)
Supplementary the floating
-- -- -- -- -- -- -- -- -- --
capital (if applicable)
Subtotal of over-raised fund
-- -- -- -- -- -- -- -- -- --
investment
Total -- 154,073.272276 154,073.272276 33,750.503059 33,750.503059 -- -- -- -- --
1. In the "intelligent manufacturing construction project": the planning construction period of "intelligent manufacturing (Hefei)
project" is 3 years, during the reporting period, the company has basically completed the pilot construction of phase I
refrigerator intelligent manufacturing benchmark line project, including intelligent line construction, manufacturing execution
Conditions and reasons of failure to meet schedule or
system MES import, intelligent logistics system project and other construction contents. The planning construction period of
predicted income (by specific projects)
―production line construction project for newly increased 600,000 sets of environmental protection and energy saving freezers
with large an medium volume‖ (Hereinafter referred to as "freezer intelligent construction project") is 1 year, during the
reporting period, because the No. 9 plant of company‘s freezer factory where the project construction site locates is used by the
44
HEFEI MEILING CO., LTD. Annual Report 2016
subsidiary - Zhongke Meiling Technology Co., Ltd. as its new plant is still under construction, the implementation of this
project is affected, and the project is still in the factory planning stage.
2. The planning construction period of "intelligent R & D capacity building and intelligent home appliances technology
development project" is 3 years, during the reporting period, the project is in the process of promoting in accordance with the
investment plan.
3. As the implementation subject of "intelligent life project", Changmei Science and Technology Co., Ltd. (hereinafter referred
to as "Changmei Technology") was established in April 2016. During the reporting period, the company has completed the
initial capital contribution of RMB 18 million Yuan , which now has Mianyang and Hefei two operating units. The company
has its own fresh e-business brand "ifoodtube" with more than 130,000 registered members, and the daily order volume peak
can reach more than 3,900; arranges offline intelligent terminal cold chain equipment in more than 80 communities, and builds
sorting and processing center, warehouse and other supporting facilities; continues to develop, improve, and upgrade the online
software for intelligent life service platform, strengthens platform promotion, market development, consumer experience, urban
and community operations. The reporting period is the first year of the project construction period, Changmei Technology has
achieved annual sales revenue (April 2016 - December 2016) of 9,476,000 Yuan , and after-tax profits (April 2016 - December
2016) of -7,417,900 Yuan .
4. As of the end of the period, the investment progress of "supplementary liquidity Project" has finished more than 100%,
mainly due to the raised funds in use including to interest on deposit of raised funds.
Presentation on the major changes in project feasibility
Not applicable
Use progress of the raised-fund and purpose
Not applicable
Changes of the site for raised-fund investment projects
Not applicable
Adjustment of the raised-fund investment projects
Not applicable
Ended as 31 October 2016, the Company contributed self-raised fund 63,984,738.91 Yuan for the raised-fund investment
Up-front cost and replace of the raised-fund investment project, the money has replaced as 63,984,738.91 Yuan. Shine Wing CPA (LLP) made a special audit for pre-investment and
projects
carried out an Assurance Report on Invested Self-raised fund to the Raised-fund Investment Before Hand
(XYZH/2016CD40285) (hereinafter referred as to Assurance Report). Replacement are as:
45
HEFEI MEILING CO., LTD. Annual Report 2016
In 10 thousand Yuan
Commitment Investment of
Raised-fund Total capital for self-raised fund Amount
investment project investment raised-fund invested till end of 31 replaced
project October 2016
Construction of
intelligent
39,870.65 39,100.00 2,545.41 2,545.41
manufacturing
project
Construction of
intelligent R&D
capability and new
products 55,900.00 55,900.00 2,053.06 2,053.06
development of the
intelligent appliance
technology
Intelligent life
32,076.00 32,000.00 1,800.00 1,800.00
project
Total 127,846.65 127,000.00 6,398.47 6,398.47
th th th th
The replacement has been deliberated and approved by the 27 session of 8 BOD and 14 session of 8 supervisory
committee, independent directors are proposed an agreeable independent opinion, and sponsor institution carried out a
verification opinion without objection.
Supplement working capital temporary with idle
raised-fund Not applicable
Balance and reasons of the implementation of raised-fund
Not applicable
The raised-fund have not been used will continues to invested on the raised-fund projects in above mentioned table. Meanwhile,
according to the raised-fund investment plan, and been approved by the Board and shareholder general meeting, agreeable
independent opinion from independent directors and with the verification opinion without objection issued by sponsor
Use of funds and fund allocation for un-used raised-fund
institution, the idle raised-fund can be use for buying guaranteed financial products, totally amounting to 900 million Yuan, rests
of the raised-fund will save in the specific account.
Use of the raised-fund has no changes till recently.
46
HEFEI MEILING CO., LTD. Annual Report 2016
As for the relevant information of raised-fund disclosed, there is no any disclosure information that released without timely,
Use of raised-fund and problems or other condition in
true-ness, accurate and complete. The savings, usage, management and disclosure of the raised-fund have no violation
disclosure
conditions been found.
47
HEFEI MEILING CO., LTD. Annual Report 2016
(3) The changed project of raised proceeds
□ Applicable √ Not applicable
No changes of raised proceeds in the Period
VI. Sales of major assets and equity
(I) Sales of major assets
□ Applicable √ Not applicable
The Company had no sales of major assets in the reporting period.
(II)Sales of major equity
□ Applicable √ Not applicable
48
HEFEI MEILING CO., LTD. Annual Report 2016
VII. Analysis of main holding company and stock-jointly companies
√ Applicable □Not applicable
(I) Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
Company name Type Main business Register capital Total assets Net Assets Operating revenue Operating profit Net profit
Research and development,
Zhongke Meiling Cryogenic
Subsidiary manufacturing and sales of 68,150,000 174,778,352.22 112,894,152.41 93,528,664.17 8,634,967.57 8,112,300.61
Technology Co., Ltd.
ultra-low temperature freezer
Manufacturing of refrigeration
Jiangxi Meiling Electric Co., Ltd. Subsidiary 50,000,000 186,982,468.76 86,611,646.81 393,776,861.26 -1,054,596.33 1,505,079.01
and freezer
Mianyang Meiling Refrigeration Co., Manufacturing of refrigeration
Subsidiary 100,000,000 162,633,829.27 97,997,656.33 289,026,321.88 864,180.56 1,002,038.81
Ltd. and freezer
Sichuan Changhong Air-conditioner R&D, manufacturing and
Subsidiary 200,000,000 2,068,601,856.95 540,705,432.76 3,181,611,510.60 18,334,469.32 30,757,332.18
Co., Ltd. domestic sales of air-conditioner
Zhongshan Changhong Electric Co., R&D, manufacturing and foreign
Subsidiary 184,000,000 844,520,689.49 249,371,640.31 1,545,246,107.38 8,615,350.80 10,891,273.04
LTD sales of air-conditioner
Hefei Meiling Electronic Appliance
Subsidiary Sales of white goods 55,000,000 391,002,172.29 -308,409,642.03 2,391,219,033.05 -18,447,785.54 -17,763,738.28
Marketing Co., Ltd.
Hefei Meiling Group Holdings Limited Subsidiary Sales of white goods 80,000,000 255,208,480.19 82,896,244.05 1,429,639,273.30 10,151,707.70 10,872,844.13
E-business of agricultural
Changmei Technology Co., Ltd. Subsidiary 50,000,000 17,039,986.45 12,054,094.36 9,475,992.16 -7,418,397.22 -7,417,905.64
products and fresh
R&D, manufacturing and sales of
Guangdong Changhong Ridian kitchen and toilet products, small
Subsidiary 83,000,000 260,498,884.93 109,117,867.30 495,075,275.53 18,093,904.63 17,264,471.30
Technology Co., Ltd. home appliances and water
purifier
49
HEFEI MEILING CO., LTD. Annual Report 2016
(II) Notes of holding and shareholding companies
√ Applicable □Not applicable
The method of
obtaining and
handling
Company Name The influence to the whole production and performance
subsidiaries
during the report
period
Improve the home appliance industry chain and product lines,
Obtained
Guangdong Changhong Ridian constructed the plantform of kitchen and toiler products as well
98.856% equity
Technology Co., Ltd. as small home appliances. Achieved net profit of RMB 17.2645
by public bidding
million in 2016
Meiling Package no longer in the consolidate scope of the
Company, the equity transfer show no changes in main
100% equity business of the Company, and constitute no material assets
Hefei Meiling Package Products Co.,
public transfer in reorganization regulated in Measures for the Administration of
Ltd.
listing Material Asset Reorganization of Listed Companies, the
Company realized pre-tax income of RMB10.52 million
approximately
Bengbu Meiling Appliance A little effect on the overall production and operation and
Clearing off
Marketing Co., Ltd. performance of the company
Luohe Meiling Appliance Marketing A little effect on the overall production and operation and
Clearing off
Co., Ltd. performance of the company
(III) Notes of holding and shareholding companies: Nil
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Future Development Prospects
(I) Competition pattern and development trend
1. Competitive landscape: oligopoly seeks hegemony, reshuffle continues
The current all walks of life have entered a period of mega competition: first is overspeed, the
product development and new business models have very fast update speed; second is breaking
bounds, different industries penetrate and compete among each other; third is ultrahigh, the
demographic dividend and raw material dividends disappear, bulk raw material prices rise, and
costs raise; fourth is super change, subversive changes may occur at any time.
The home appliance industry has shifted from large-scale growth to aggressive growth. Home
appliances oligopoly competition will become the mainstream, the shuffle among the giants is
inevitable. The market competition pattern will be more intense, the shuffle will spread
bidirectionally from the home appliance retail channel and home appliance manufacturing system,
50
HEFEI MEILING CO., LTD. Annual Report 2016
and show the new situation of oligopoly and tycoon competition. At the same time, influenced by
the national supply side reform and industrial restructuring, the raw materials begin to sharply rise
in price, the logistics industry would raise costs because of "governing ultra", and transport costs of
home appliances significantly increase. At the same time, with the introduction of national inclusive
policy, home appliance industry will bid farewell to low price competition and gradually return to
the rational value competition.
2. Technical variables: artificial intelligence, market detonation
Internet of Things, artificial intelligence, and life technology are the several major directions
for the future development of human society. In the home appliance industry, technological
innovation has become the leading, as the drive capability of technological innovation becomes
more and more important in the home appliance industry competition, especially the guide of new
technologies and new concepts in the first-line terminal market will be favored by more and more
enterprises. In addition, as the popularity of intelligence has suffered homogeneous dilemma in the
market and the development of the Internet has stepped into the depth, artificial intelligence has
become a new engine to accelerate the landing of smart home appliances and will give
differentiation advantages to different enterprises in the terminal market, thereby becoming an
important engine to pull the middle and high-end market consumption, it is expected to usher in a
centralized detonation.
3. Product iteration: competitive and new products break through the bottleneck
Influenced by low price competition in the market, the function of many white products is not
substantially improved, but with the rise of middle and high-end consumer groups, especially the
full release of quality, high-end and fashion technology needs, the home appliances industry will
usher in a new round of consumer upgrades, the arrival of quality consumption era will promote the
industry to transform and upgrade to high end and intelligence.
Under the background of industrial restructuring and upgrading and products entering into the
upgrading, the home appliance market that takes competitive and new products as the principle
thing tends to have more distinct and clearer competition, but the competitiveness of many home
appliance products is facing a new round of bottleneck and homogenization challenge. So the
competitiveness of home appliance products in the next stage has to face a major breakthrough, and
carry through the system innovations in quality, function, appearance, technology and other aspects,
not only pursuing the product pragmatism but also giving the product a sense of science and
technology, which will be the direction for whole market product iterations.
4. Channel integration: online and offline, scene services
The Internet has entered the deep water area, the user growth rate has slowed down
significantly. Pure online price war and other strategies have begun to fail, and it is more and more
difficult to obtain incremental users. The integration of online and offline channels has become the
development direction of household appliance enterprises, its core is that the household appliance
enterprises must have the ability to service users. How to make full use of and integrate resources
and advantages from different online and offline channels, complete the integration of enterprise
marketing, product promotion and user needs, reinforce and strengthen its own ability to enhance
customer service capabilities, and thus really jump out of the channel dispute and return to the rapid
51
HEFEI MEILING CO., LTD. Annual Report 2016
landing of products and the strong activation of user demands becomes the must choice for
enterprises.
5. Internationalization: global mergers and acquisitions, capital driving
Internationalization is the need adapt to the times, the internationalization of white goods
industry will be particularly prominent, especially the global capital mergers and acquisitions can
not only quickly enhance the enterprises‘ brand influence and industry status in the global market,
but also promote the growth in overseas markets by the domestic and overseas resources integration
and market development. In addition, the global capital mergers and acquisitions has not only
become a new driving force for the enterprises‘ growth, but also can give attention and influence to
enterprises in the new competitive track.
(II) Development strategy
1. Vision
A leading brand in China, World Class and respectable household appliance enterprise
2. Strategic thought
In 2011, the board of directors of the company proposed the strategic guiding thoughts of
"Meiling Dream" and "Double Three Strategy", and upgraded the original "Double Three Strategy"
to "Double Three One Core Strategy", Double Three refers to three core strategies which are
product strategy, talent strategy, and cost leadership strategy and three significant strategies which
are market strategy, brand strategy, and internationalization strategy, One Core refers to
intelligentization.
In the next few years, the company will stand correctly, accurately and firmly in the draughts
of industry, market and reformation, continue to promote the six innovations so that the company
shall step forward to the direction of "Meiling Dream", and strive to create another Meiling by
2020.
3. Strategic thinking and targets
By "two insists", "two adheres" and "two transformations" (i.e. insist on product doctrine and
technology driven, insist on cultural development and institutional innovation; adhere to domestic
and overseas markets, adhere to talent and brand strategy; transform from single to diversification,
transform from B2C to 020 and C2B), the company has strived to create another Meiling in scale,
production line and organization flow by 2020. Details include: the first is to create another Meiling
in scale, i.e. to achieve the annual sales revenue of 20 billion Yuan, and double the net assets; the
second is to create another Meiling in production line, i.e. to enlarge the market share of main
products of refrigeration, freezer and air conditioner, the washing machine, kitchen and toilet
products and small home appliances comes to new main products of the Company, driven the profit
mode upgrading and transform by laying out new business of fresh E-business and bio-medical;
and thirdly, create another Meiling in organization procedures.
(III) Business plan
1. Business objective
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HEFEI MEILING CO., LTD. Annual Report 2016
Under the circumstance of macroeconomic downturn, home appliance industry decline, fierce
brand competition and rising raw material prices, in 2017, the company will strive to make the
operating income increase by more than 5% over the previous year and net profits attributable to
parent company increase by more than 15% over the previous year under the leadership of the board
of directors.
2. Operating principles
The company‘s operating principles in 2017 are "product leading, marketing force,
manufacturing breakthrough, mechanism protection."
Product leading: Product is the company's core competitiveness. Firstly, take the new level of
energy efficiency standards for the industry as an opportunity, give full play to the advantages of the
company's frequency conversion technology, accelerate the switching speed of new energy
efficiency and improve switching efficiency, and realize the sales volume of the new level energy
efficiency product to be higher than the industry level. Secondly, continue to strengthen the
advantages of intelligent and frequency products, enhance the sales of high-end products and brand
influence through intelligence, greatly expand the frequency products from the offline independent
channels to the online channels and overseas markets, and further strengthen the advantages of
differentiated frequency. Once again, increase the popularity of air-cooling products, enhance the
proportion of large and medium-sized air-cooling products in domestic and overseas markets while
explore the medium and small-sized air-cooling products, reduce the proportion of straight cold
refrigerator, and realize the structural upgrading. At the same time, the product lines of the
company‘s air conditioning, washing machine, kitchen and bath, and small appliances have to speed
up the structure upgrading.
Marketing force: Marketing is the source of the company's performance growth. Further
deepen the value chain management, and promote the construction of marketing information system.
The domestic market continues to focus on the eight words marketing culture concept that is
"integrity, service, profession, passion", change the concept, strengthen the sense of service, and
become "the most active brand in terminal, and the most industrious marketing people in the
market". At the same time, the domestic market needs to fill the short board of regional market: on
the one hand, strengthen the construction of weak links in the online channels, and enhance the
proportion through deep cooperation, on the other hand, the company's dominant markets are
focused on the offline channels, concentrate on breaking through the company‘s weak regional
markets.
Further enhance the product mix and the proportion of large customers in overseas markets,
strengthen the construction of qualified personnel, and strengthen the company's own brand
promotion and overseas plant capacity building.
Manufacturing breakthrough: Manufacturing is the guarantee of the company's product
quality and technology. Wholly pull the breakthrough for manufacturing production line efficiency
by promoting intelligent manufacturing, large refrigerator efficiency enhancement project, Jiangxi
Meiling high-speed production line project, high-end refrigerator fine engineering, and labor lifting
project. Intelligent manufacturing is one of the direction of transformation and upgrading in
manufacturing industry. Take the non-public offering investment project ―intelligent manufacturing‖
53
HEFEI MEILING CO., LTD. Annual Report 2016
as the core, promote the transformation of "Meiling manufacturing" to "Meiling intelligent
manufacturing", realize the further breakthrough of high-end technology level, improve the
manufacturing flexibility, so as to meet the individual needs of different users. Finally realize the
double improvement for domestic and export fulfillment rate, and significantly reduce the
comprehensive manufacturing costs.
Mechanism protection: Mechanism is the basis for the company's positive operation. An
enterprise‘s fundamental is the talents, and the talents‘ fundamental is the mechanism. In order to
realize the company‘s "Meiling Dream", the competitive guarantee mechanism is the key. In 2017,
the company will establish and improve the incentive mechanism, talent mechanism, innovation
mechanism, responsibility mechanism, and benchmarking mechanism so as to provide powerful
guarantee mechanism for the company's development in 2017.
3. Market strategy
(1) Refrigerator (freezer)
Continue to adhere to the intelligence and frequency two core product strategy, speed up the
development and upgrading of a new generation of intelligent product , implement the company's
intelligent strategy, and enhance the proportion of inverter products. Vigorously invest in basic
technology research and product upgrading, continue to carry out intelligence, frequency, cryogenic,
frost-free and other technical researches, maintain technology-leading in the industry, increase the
development efforts to air-cooling, multiple temperature zone, large volume, frequency, and
intelligent products, promote the company's product structure to upgrade to high end and
intelligence, and drive the company's industrial transformation and upgrading; at the same time,
improve manufacturing efficiency and product quality, reduce product costs and enhance product
competitiveness by fully implementing intelligent upgrading and rebuilding to the production lines.
The domestic market takes frequency leading, intelligent pilot, multi-door becoming stronger,
back to back getting bigger, air-cooling jump start as the thinking, makes reasonable planning,
promote the products‘ combination ability, and enhance the domestic sales capacity by adjusting the
product structure. Regarding the channel, enhance the offline terminal sales ability through the price
management, promotion management, user experience management and other means, at the same
time, enhance the online sales ability by creating e-commerce hot products, enhancing after-sales
service experience, and collaborative operations among all product lines and other means.
Overseas markets should adhere to the brand structure of "own brands + OEM / ODM", the
mainstream homogeneous product costs take the lead in strategy, and differentiate the products with
insufficient competitiveness. At the same time, focus on enhancing the service capabilities to big
customers, improving the overseas delivery rate, shortening the lead time, and improving the
product quality, especially improving the ability to respond quickly to solve problems in the face of
customer needs.
(2)Air conditioning
Based on the company's intelligent development strategy, the company‘s air-conditioning
business will seize class A frequency, energy saving, intelligence, health and other industrial bright
spots, focus on the company‘s "Intelligent Home Eco-circle" plan, develop intelligent terminals,
54
HEFEI MEILING CO., LTD. Annual Report 2016
provide healthy and intelligent air solutions, gradually build the triune business development model
of intelligent equipment + application scenarios + social sharing, lay out from the sensor, control
and equipment, achieve monomer becoming stronger, system integration, and benign development,
and become China's first-class air-conditioning enterprise. At the same time, vigorously expand
overseas markets, carry out quality, market, product research and development, cost control and
other capacity building, and ensure to enter into and stabilize the second group status in air
conditioning industry in the next three to five years through regional and customer structure
adjustment. In addition, the air conditioning industry will seize the opportunities of coal to
electricity and home appliances energy-saving leader policy, improve product layout, and promote
enterprise transformation.
(3) Washing machine
On the one hand, speed up the channel layout, rely on Meiling refrigerator (freezer) channels,
assault wholesale channels, enter and upgrade G60 branches, and comprehensively cover the chain
channels. Enhance research and development capabilities, grasp the technical direction of the
industry, develop Meiling washing machine core technology, upgrade product lineup, and improve
product competitiveness. Integrate supply chain resources, strengthen product quality, and improve
consumer satisfaction and brand reputation of Meiling washing machine. Create a professional team,
improve services, achieve rapid sales promotion, and improve sales structure. Enter into the second
camp of the industry during ―the 13th Five Year‖ and become one of the company‘s pillar industry
by mergers and acquisitions or self-built production bases.
On the other hand, the company has signed the Strategic Cooperation Framework Agreement
(hereinafter referred to as the "Cooperation Agreement") with an internationally known professional
manufacturer of electrical appliances - Candy Hoover Group S.r.l. (hereinafter referred to as "Candy
Group") in March 2017. Both sides will carry out comprehensive and in-depth strategic cooperation
in the refrigerator (freezer), washing machines and other business areas. Regrading the washing
machine, the company and Candy Group will jointly set up a joint venture company working on the
research and development, and sales business of washing machine products, sothat the company can
further strengthen the independent research and development capabilities, enhance the competitive
advantages of product lines, expand the company's product marketing share, enhance the company's
core competitiveness and brand influence, and enhance the company's profitability and
comprehensive competitiveness in virtue of the respective R & D and business advantages of both
sides.
(4) Small appliances
Based on kitchen and bath, strengthen electric heating, develop water purification business,
and build core business. Increase investments in kitchen and bath and water purification business,
enhance manufacturing, research and development and market capabilities; rely on intelligent
strategy to strengthen the development of intelligent products, and strive to achieve the industry
leader in intelligent products; continue to promote research and development, manufacturing,
Marketing,quality, and operation capacity building to enhance the industry status.
(5) Bio-medical care
The company takes Zhongke Meiling, its subsidiary listed on new three board, as the platform
55
HEFEI MEILING CO., LTD. Annual Report 2016
for the comprehensive development of bio-medical industry. Based on the related diversification in
the bio-medical field, takes the single-compression mixed refrigerant as the core refrigeration
technology, and takes the stock business like deep-freezing storage facilities as the basis so as to
rapidly promote the product upgrading and iteration and realize the diversification of product
category and transaction mode; focuses on life science and cold chain storage core businesses,
combines with its own technological advantages, takes products as the carrier and market-oriented
principle and user-centered management idea to steadily and rapidly expand the deep-freezing
storage facilities, medical freezing products, internet cold chain terminals, liquid nitrogen storage
equipment and other related industrial chains, and quickly makes bigger and stronger in biomedical
field; comprehensively starts using "Meiling biomedical" brand, increases marketing efforts, builds
a sound marketing channel system, and continue to promote the perfect combination of marketing
channels and end products.
(6) Intelligent life new business model
Actively promote the investment project "intelligent life project", and build Meiling intelligent
life O2O community fresh business platform. Focus on the layout of the community cold storage
self pick-up cabinet, give play to the company‘s advantages in the intelligent and refrigeration fields,
and strive to develop the the fresh e-business O2O business platform with a certain influence in the
industry in three to five years. Focus on regionalization and localization, gradually integrate the
regional and national brand enterprises entering business, and ultimately create Meiling intelligent
life project to be a national intelligent life O2O service platform. Transform to the "equipment +
service" model by means of food management, provide exploration for the intelligent
transformation of refrigerator, help the company to move towards high-frequency service sales from
low-frequency hardware sales, form the "hardware + service" double growth engine, and drive the
transformation and upgrading of the company‘s profit model.
The above business plan and business objectives do not represent the listed company‘s profit
forecast of 2017, whether it can be achieved depends on the changes in market condition, the efforts
of management team and other factors, there are a lot of uncertainties, investors should pay special
attention to it.
(IV) Possible risks and countermeasures
In 2017, the domestic and foreign macroeconomic situation is still not optimistic, the
competition in home appliance market will be more intense, enterprises‘ living environment will be
even worse. In the future, the company will face weak macroeconomic growth, grim industry
situation, intensified competition, labor tension, sharp rise in raw material prices, transportation
costs and human resources costs, impact of the new business model and Internet age and other risks.
1. Risk of macroeconomic fluctuations
The products the company produces and sells belong to consumer electrical products, of which
the market demands are greatly impacted by macroeconomic and consumer consumption level.
Macroeconomic fluctuations may have a certain impact on consumers‘ income expectations,
purchasing power and purchasing intention. In addition, the uncertainty of the development of real
estate impacts the consumers‘ demands for purchasing electrical appliances to a certain extent. If
the future economic growth continues to slow down or decline, the demands and gross margin of
56
HEFEI MEILING CO., LTD. Annual Report 2016
household appliances industry may reduce, and thus make negative effects on the company's
profitability.
2. Impact of intensifying industry competition and declining broader market
China's home appliance industry is a complete competing industry, there are many domestic
and foreign-funded household appliances manufacturers providing products with a higher degree of
homogenization and fierce competition. With the withdrawal of national preferential policy, the
industry broader market continues to decline, the industry enters into aggressive growth from
large-scale growth, the industry brand concentration further strengthens, the competition among the
brands shows a new situation of oligarchy and giant competition. In recent years, the industry
transformation and upgrading significantly speeds up, if a company cannot accurately judge and
keep up with the industry's market dynamics, it will be eliminated. Increasing competition in the
industry may cause irrational competition in the market and bring operational risks to the
enterprises.
3. Impact of cross-border Internet industry and challenges of new business model
With the arrival of Internet era and artificial intelligence era, the Internet enterprises continue
to cross boarder and swarm into intelligent home fields, which intensifies competition in the
industry, subversive changes may occur at any time, and traditional household appliance enterprises
are facing serious challenges. At the same time, under the impact of Internet economy and new
business model, the home appliance manufacturers are actively promoting the transformation, new
business model and new products emerge one after another in the home appliance industry, the
development of intelligent home appliances changes quickly, if unable to make rapid response or
catch up with the development trend, it may be easily replaced or even completely subverted. New
rules of the game bring strong sense of crisis and sense of urgency to the enterprises.
4. Pressure of raw material price rising and transportation costs rising
In 2016, affected by the growing real estate, the reform of supply side, the pressure of
environmental protection, some poor management and withdrawal of capacity, the price of bulk
materials has a unilateral rise; at the same time, the transportation costs greatly rise due to logistics
industry‘s governance to ―three excesses‖. It is expected that the raw material price and logistics
transportation costs will continue to rise sharply or run at high prices in 2017, but the end product
selling price will be unchanged or will be difficult to digest the impact of rising raw materials prices,
logistics costs and other key resource costs, which will bring greater operating pressure to the
company and further affect the company's profitability.
5. Human resources risk
Household appliance industry is an industry with relatively intensive capital, technology, and
labor. With the gradual expansion of the company's business scope and scale, and the arrival of
intelligent home appliances and the impact of Internet, the company will greatly increase the
demands for high-level management personnel, technical personnel, and innovative talents, talent
introduction becomes one of the key points for human resources management, if it cannot
effectively enhance the company's attraction to high-quality talents from various aspects, the
company's future development will be subject to constraints. At the same time, in its intelligent
57
HEFEI MEILING CO., LTD. Annual Report 2016
manufacturing transformation period, the company needs higher requirements to the technical
capacity and professional quality of workers at the production line, the improvement for the
company's product quality will be influenced if the comprehensive quality of workers at the
production line can not be enhanced. In addition, with the increase in orders, the demand for
workers at the production line is increasing, but affected by the supply and demand in labor market
and the continuous rising labor costs, the company's cost pressure will be further enlarged.
Faced with the above risks, the company on the one hand will raise awareness of risk
prevention, and make overall arrangements in the product, technology, and market in advance.
Focus on the smooth implementation of the company's intelligent manufacturing, intelligent
research and development, and intelligent life projects, strengthen the innovation and drive of the
company's intelligent technology, accelerate the implementation of the company's intelligent
strategy, promote the company's transformation and upgrading from front-end manufacturing,
back-end products to intelligence, promote the company‘s transformation and upgrading, meet the
new pattern of competition in the industry, and enhance the company's core competitiveness. At the
same time, through the active exploration of new business model, ultimately realize the crossings
from "Meiling manufacturing" to "Meiling intelligent manufacturing", from hardware provider to
service provider, from one-time transaction to continuous transaction, from a single product
provider to the system provider, drive the transformation and upgrading of the company's profit
model. The company will always put the basic technology research in the most important and most
central position, enhance the core competitiveness of products by increasing the research on basic
technology; aiming at the unique needs of different users, seize the consumer demands, accurately
grasp the product development direction, and strengthen the application technology research on the
products‘ functional aspects; meanwhile, combine with its own products, and actively explore the
research on cutting-edge technology. At present, the company is transforming to diversification by
enriching the product lines, further strengthens the synergy among various product lines, and
creates a comprehensive household appliance enterprise with strong competitiveness; at the same
time, focuses on the "intelligent home eco-circle" plan, actively explores the new paths for the
transformation and upgrading of home appliance enterprises under the in-depth development of
Internet technology, takes its own hardware products as the terminal, focuses on food, air, water and
other needs to explore the new business model, seizes the consumers‘ needs, and provides users
with a set of intelligent white goods system solutions.
On the other hand, the company will implement the business policy of "product leading,
marketing force, manufacturing breakthrough, mechanism protection" under the leadership of the
board of directors and under the guidance of "Meiling Dream": take globalization as a platform, and
intelligent and frequency transformation as a breakthrough, adhere to the intelligent and variable
frequency product strategy unswervingly, promote technological innovation, strengthen the research
and development to intelligence, frequency, air-cooling, and cryogenic technologies, create
intelligent, high-end products and personalized products, and enhance the company's product
competitiveness from quality, high end and fashion technology by improving the manufacturing
efficiency and technological level. Enhance the domestic offline terminal sales capacity, break the
weak regional market, pay attention to the development of online channels, speed up the integration
between online and offline channels; build a marketing management system centering on retail
through digitization, a value management system centering on retail price, and an operation and
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HEFEI MEILING CO., LTD. Annual Report 2016
distribution system taking customer inventory as the core, and promote the marketing
transformation of digitization. Attach importance to the development of overseas markets, take the
initiative to explore the construction of own brands in overseas markets, and accelerate the pace of
overseas mergers and acquisitions. Give full play to the motivation of intra-organization
institutional changes and management mechanism innovation, activate the team independent
innovation, and provide security mechanism for the company's sustained and healthy development.
X. Reception of research, communication and interview
(I) In the report period, reception of research, communication and interview
√ Applicable □Not applicable
Time Way Type Basic situation index of investigation
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HEFEI MEILING CO., LTD. Annual Report 2016
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Reception (times) 25
Number of hospitality 121
Number of individual reception 2
Number of other reception N/A
Disclosed, released or let out major
No
undisclosed information
60
HEFEI MEILING CO., LTD. Annual Report 2016
Section V. Iimportant Events
I. Profit distribution plan of common stock and capitalizing of common reserves plan
Formulation, Implementation and Adjustment of common stock Profit Distribution Policy
Especially Cash Dividend policy during the Reporting Period
√Applicable □ Not applicable
During the reporting period, the company has strictly executed the profit distribution policy in
accordance with the revised " Articles of Association", the formulation and implementation of the
company's cash dividend policy are in line with the provisions of "Articles of Association" and the
requirements of the resolutions of shareholders' meeting, the dividends standards and proportion
have been definite and clear, relevant decision-making procedures and mechanisms have been
complete, the responsibilities of independent directors have been clear and have played its due role,
minority shareholders have had the opportunities to fully express their views and aspirations, and
the legitimate interests of minority shareholders have been maintained.
In the reporting period, the Company implemented Profit distribution plan for year of 2015,
that is, distribute 0.6 Yuan (tax included) in cash for every 10 shares held by all shareholders of the
Company based on total share capital 763,739,205 shares dated 31 December 2015 (including
600,875,205 shares of A-share and 162,864,000 shares of B-share), cash dividend of 45,824,352.27
Yuan was distributed in total.
Special explanation on cash dividend policy
Satisfy regulations of General Meeting or requirement of Article of
Y
Association (Y/N):
Well-defined and clearly dividend standards and proportion (Y/N): Y
Completed relevant decision-making process and mechanism (Y/N): Y
Independent directors perform duties completely and play a proper
Y
role (Y/N):
Minority shareholders have opportunity to express opinions and
Y
demands totally and their legal rights are fully protected (Y/N):
Condition and procedures are compliance and transparent while the
Y
cash bonus policy adjusted or changed (Y/N):
(II) Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves
plan (pre-plan) in latest three years (including the reporting period)
1. Profit distribution plan for year of 2014
Distribute 0.6 Yuan (tax included) in cash for every 10 shares held by all shareholders of the
Company based on total share capital 763,739,205 shares dated 31 December 2014, cash dividend
of 45,824,352.30 Yuan was distributed in total.
61
HEFEI MEILING CO., LTD. Annual Report 2016
2. Profit distribution plan for year of 2015
Distribute 0.6 Yuan (tax included) in cash for every 10 shares held by all shareholders of the
Company based on total share capital 763,739,205 shares dated 31 December 2015, cash dividend
of 45,824,352.27Yuan was distributed in total.
3. Profit distribution plan for year of 2016
Distribute 0.6 Yuan (tax included) in cash for every 10 shares held by all shareholders of the
Company based on total share capital 1,044,597,881 shares dated 31 December 2016, cash dividend
of RMB 62,675,872.86 Yuan was distributed in total.
The pre-plan had been deliberated and approved by the board of directors, and it need to be
submitted the annual shareholders’ general meeting of 2016 for its consideration.
(III) Cash dividend of common stock in latest three years (including the reporting period)
In RMB
Net profit Ratio in net profit
attributable to attributable to
common stock common stock
Amount for cash Amount for cash Proportion for
Year for bonus shareholders of shareholders of
bonus (tax bonus by other cash bonus by
shares listed company in listed company
included) ways other ways
consolidation contained in
statement for consolidation
bonus year statement
2016 62,675,872.86 220,216,680.96 28.46% — —
2015 45,824,352.27 27,104,893.56 169.06% — —
2014 45,824,352.30 289,842,658.03 15.81% — —
(IV)The Company gains profits in reporting period and the retained profit of common stock
shareholders provided by parent company is positive but no plan of cash dividend proposed of
common stock
□ Applicable √ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
√Applicable □ Not applicable
Bonus shares for every 10-share (Share) 0
Dividends for every 10-share (RMB) (Tax
0.6
included)
Shares added for every 10-share base
0
(Share)
Equity base of distribution plan (Share) 1,044,597,881
Total cash dividend(RMB) (Tax included) 62,675,872.86
Distributable profits (RMB) 956,339,194.01
62
HEFEI MEILING CO., LTD. Annual Report 2016
Ratio of cash dividend in total profit
100%
distribution
Cash dividend:
Distribute 0.6 Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on
total share capital 1,044,597,881 shares dated 31 December 2016, cash dividend of RMB 62,675,872.86 Yuan
was distributed in total.
Detail explanation on profit distribution or capitalization from capital public reserve
Being audited by Shine Wing Certified Public Accountants (LLP), the net profit achieved in individual statement
of the parent company amounting to RMB 239,624,261.53 Yuan, in line with relevant regulations, after extract
for statutory surplus reserve RMB 23,962,426.15 Yuan, the distributable profit in individual statement of the
parent company for year of 2016 amounting to RMB 215,661,835.38 Yuan; deducted the 2015 profit
distribution RMB 45,824,352.27 Yuan, plus the retained profit at beginning of the year RMB 786,501,710.90
Yuan, the accumulated retained profit in individual statement of the parent company at end of 2016 amounting to
RMB 956,339,194.01 Yuan. In addition, the accumulated retained profit in consolidate statement at end of the
2016 amounting to RMB 968,097,382.98 Yuan;the distributable profit in consolidate statement for year of
2016 amounting to RMB 196,254,254.81 Yuan.
According to the relevant laws and regulations and the provisions of "Articles of Association" and considering
the interests of the shareholders and the company's long-term development needs, the board of directors
approved the company to distribute the cash bonus of 0.6 Yuan per 10 stocks (including tax) to all shareholders
on the basis of the general capital of 1,044,597,881 stocks of December 31, 2016, totally the cash bonus RMB
62,675,872.86 Yuan has been distributed (Including tax, the cash bonus accounts for 29.06% of the profit
available for distribution in the individual statements of the parent company in the current year). After the
distribution, the total share capital of the company keeps the same, accumulates the remaining undistributed
profits of RMB 893,663,321.15 Yuan which is to be distributed annually after carry-over
This plan has been considered and passed by the board of directors, and needs to be submitted to 2016 annual
general meeting of the company for deliberation.
III. Implementation of commitment
(I) Commitments that the company, shareholders, actual controller, offeror, directors,
supervisors, senior management or other related parties have fulfilled during the reporting
period and have not yet fulfilled by the end of reporting period
√Applicable □ Not applicable
63
HEFEI MEILING CO., LTD. Annual Report 2016
Implemen
Commitment Acceptor Content Date Term
tation
1. The acquirer shall not engage in refrigerator business
or activity which competes or will compete with
Strictly
business of Meiling Electrical Appliances Co., Ltd. Valid for long
implemen
(hereinafter referred to as the ―Meiling Electrical term
ted
Appliances‖),or that which has interest conflict with
Meiling Electrical Appliances.
2. The acquirer promises to apply shareholders‘ right on
Sichuan About committed and Strictly
a legal and reasonable manner and shall not take any Valid for long
Commitments Changhong promised in order to implemen
action to limit or affect the normal operation of Meiling term
made in Electric Co., prevent horizontal ted
Electrical Appliances.
acquisition Ltd. competition in the
2007-6-12
report or (hereinafter Acquisition Report of 3. For any opportunity to engage in competing business,
equity change referred to as Hefei Meiling Co., the acquirer will advise Meiling Electrical Appliances in
report the ―Sichuan Ltd. written for engaging such business or not. If Meiling
Changhong‖) Electrical Appliances gives no clear written reply as to
whether engaging the competing business or not within Strictly
Valid for long
20 days after receipt of the aforesaid letter, it shall be implemen
term
deemed that it will not engage in such business. The ted
acquirer will only engage in non-competing business
provided that Meiling Electrical Appliances confirms
not to or is deemed to not engage in such
non-competing business.
Commitment Commitment 1. It will not engage in such business or activity that
Strictly
made during Sichuan regarding to reducing competes with or has interest conflict with that of Valid for long
2010-6-24 implemen
the Changhong and preventing Meiling Electrical Appliances except for the action term
ted
non-public competition with taken for sake of Meiling Electrical Appliances as
64
HEFEI MEILING CO., LTD. Annual Report 2016
offer of 2010 Meiling Electrical required by Meiling Electrical Appliances.
Appliances 2. The Company promises to apply shareholders‘ right
on a legal and reasonable manner and shall not take any
action to limit or affect the normal operation of Meiling
Electrical Appliances.
3. In case that Meiling Electrical Appliances expects, on
the basis of its existing business, to expand its operation
scope into the business which the Company has already
operated, the Company agrees to grant pre emptive right
to Meiling Electrical Appliances regarding such
business if the same conditions are met, provided that
the Company is still the controlling shareholder or
actual controller of Meiling Electrical Appliances.
1. Measures will be adopted to prevent continued related
transaction with Meiling Electrical Appliances: as to the
related transaction that can not be prevented, it will sign
related transaction agreement with Meiling Electrical
Appliances under the market principles of ―equally paid
Commitment and mutual benefit‖, and fairly determined the
regarding to reducing transaction price according to the market prevailing
Strictly
and standardizing standards. Valid for long
2010-6-24 implemen
related transaction term
2. Perform the necessary obligations to make related ted
with Meiling
directors and related shareholder abstain from voting
Electrical Appliances
according to relevant regulation, and observe legal
procedure for approving related transaction and
information disclosure obligations.
3. Promise not to hurt legal interests of Meiling
Electrical Appliances and other shareholders through
65
HEFEI MEILING CO., LTD. Annual Report 2016
related transaction.
Commit to authorized Changhong Air Conditioning and Zhongshan Air Strictly
Valid for long
Conditioning Co., Ltd. (hereinafter referred to as the ―Zhongshan Air 2010-11-6 implemen
term
Conditioning‖) to use ―Changhong‖ trademark and relevant patents for free. ted
1. Commit to disclose periodic reports on a truthful, accurate, complete, fair and
prompt manner, to disclose all the information that have important influences
over investors, to accept supervision under the CSRC and Shenzhen Stock
Exchange.
2. Commit to make public clarification in respect of such information that is
released from any public media and may result in misleading influences on
Strictly
stock price once the Company is aware of such information. Valid for long
The Company 2011-1-7 implemen
3. The directors, supervisors, senior management and core technicians of the term
ted
Company will accept opinions and criticism from the social publics, and they
will not trade the Company‘s securities, directly or indirectly, with any inside
information and other illegal methods. The Company promises that the
documents submitted to Shenzhen Stock Exchange exist no false statement or
material omission, and no relevant information will be disclosed during the
application for listing without prior content from Shenzhen Stock Exchange.
Commitment 1. Since the property transfer didn‘t involve the buildings and land currently
Strictly
made in used by Changhong Air Conditioning, Sichuan Changhong commits, upon the Valid for long
implemen
transfer of completion of equity transfer, to continue to lease such assets to Changhong Air term
Sichuan ted
air Conditioning at market price. 2009-12-10
Changhong
conditioning 2. After completion of this property transfer, Sichuan Changhong commits to
Valid for long Strictly
assets manage to prevent new related transaction with Meiling Electrical Appliances.
term implemen
property For those which can not be prevented, Sichuan Changhong commits to
66
HEFEI MEILING CO., LTD. Annual Report 2016
determine the transaction price based on market accepted methods, so as to ted
ensure fairness of related transaction and protection of the interest of Meiling
Electrical Appliances.
3. Sichuan Changhong commits that it will not engage in air conditioning and
refrigerator business or activity which competes or will compete with business
of Meiling Electrical Appliances, or that which has interest conflict with
Meiling Electrical Appliances.
1. Make promise not to reduce the shares of Meiling bought in every year
Commitments
during implementation of the performance incentive fund via any market ways 2013-8-15; Three years after
by Annual Implemen
in the later first year, which was allowed to be reduced by 50% according to the 2014-7-3; current shares
performance ting
laws and regulations in the second year, and the remaining 50% was allowed to 2015-7-21 purchased
incentive Some of the
be reduced in the third year in accordance with the laws and regulations.
fund, Directors,
From the date
incentive supervisors and 2. The directors, supervisors and senior management promised to manage in
when annual
objects while senior accordance with the relevant management approaches in accordance with the
incentive fund
purchasing executives of "Company Law", "Securities Law" and "The Company‘s shares held by the
plan deliberated
stock of the the Company as directors, supervisors and senior management of the listed company and its 2013-8-15;
and approved by
Company well as other change management rules", as objects of annual performance incentive fund of 2014-7-3; Implemen
general meeting
with incentive Meiling, including but not limited to: during his tenure, the shares transferred 2015-7-21 ting
to 6 moths after
performance objects each year shall not exceed 25% of the total number of shares held of the
director,
incentive Company; shall not sell the shares of the Company within six months after
supervisor and
funds and bought it or purchase again six months after sold it; shall not transfer the shares
senior executives
owned fund held within six months after Dismission.
resigned
Sichuan 1. Based on market conditions and as allowed by laws and rules, multiple
Commitments
Changhong measures were adopted adequately to increase shareholding of Meiling Strictly
of not to Valid for long
Electric Co., Appliances, so as to demonstrate its firm confidence on the PRC economy and 2015-7-9 implemen
reducing the term
LTD and Meiling Appliances with its actual actions, maintain sound development of ted
shares
persons acting capital market and promote recovery of healthy market;
67
HEFEI MEILING CO., LTD. Annual Report 2016
in concert 2. The Company continued to support operation and development of listed
Changhong company. It is committed to bringing steady and real return to investors.
(Hong Kong)
3. Sichuan Changhong has committed that Sichuan Changhong and its persons
Trading
acting in concert - Changhong (Hong Kong) Trading Co., Ltd. shall not reduce
Company
holdings of "Meiling" and "Anhui Meiling B" within six months since January
Limited Implemen
18, 2016, if the holdings of "Meiling" and "Anhui Meiling B" increase due to 2016-1-18 2016-7-18
ted
Meiling bonus issue or share capital increased by transferring, the company will
still abide by the above commitment. To violate the above commitment, all
gains by reducing holdings will belong to Meiling.
14 October 2016
Sichuan Shares are not transfer within thirty-six (36) months since end of the private Implemen
2016-3-6 to 14 October
Changhong placement ting
2019
1. I hereby undertake not to deliver interests to other
entities or individuals without consideration or at unfair
Commitment conditions, nor to prejudice the Company‘s interests by
made during other means. Till the
the Commitment on completion of
2. I hereby undertake to restrain my role related
non-public Directors and compensation of projects invested
consumption behaviors.
offer in 2016 senior immediate dilution of with the proceeds Implemen
3. I hereby undertake not to conduct any investment and 2016-2-23
executives of return arising from from this ting
consumption which is not related to performance of
the Company non-public issuance of non-public
duties with utilization of any company assets.
shares issuance of
4. I hereby undertake that the remuneration system shares
determined by the board of directors or the remuneration
and examination committee be linked to implementation
of the compensation of return measures.
68
HEFEI MEILING CO., LTD. Annual Report 2016
5. In case that the Company adopts share based
incentive plan in future, I hereby undertake that the
exercise conditions of the incentive plan to be
announced by the Company be linked to implementation
of the compensation of return measures.
6. For the period from the date of this commitment to
the date of completion of this non-public issuance of
shares, if the CSRC makes other new regulatory
requirements on compensation of return measures and
the commitment thereof, and in case that the above
commitments cannot satisfy these new requirements
from the CSRC, I hereby undertake to issue
supplementary commitment in compliance with the
latest CSRC requirements.
As one of the principals responsible for compensation of
return measures, I, in case of break of the above
commitments or refuse to perform the above
commitments, agree to receive relevant punishment or
to adopt relevant administration measures according to
the systems, rules and regulations of the CSRC and
Shenzhen Stock Exchange.
1. Promise to truly, accurately, completely, fairly and timely publish
periodic reports, disclose all information that has significant impacts
on the investors, and accept the supervision and management of Strictly
Valid for long
The Company China Securities Regulatory Commission and the Shenzhen Stock 2016-10-12 implemen
term
Exchange. ted
2. Make commitments that the Company will publicly clarify in time
after knowing any information on any public communications media
69
HEFEI MEILING CO., LTD. Annual Report 2016
that may cause misleading influence on the stock price
3. The Company‘s directors, supervisors and senior executives will
listen carefully to the opinions and criticisms of the public and never
use any acquired inside information and other improper means to
directly or indirectly engage in the trading activities of the Company's
stock.
Six issuing
Promise that the restricted period of 2016 non-public offering of A
object except 2016-10-14 to Implemen
shares of Meiling subscribed this time is 12 months. 2016-9-9
Sichuan 2017-10-14 ting
Changhong
Perform the commitment promptly or
√ Yes □ No
not
If the commitments is not fulfilled on
time, shall explain the specify reason Non-applicable
and the next work plan
Note: for the commitments completed and exemption for implementing in above mentioned table, the Company will not disclose in next ordinary report
70
HEFEI MEILING CO., LTD. Annual Report 2016
(II) Concerning assts or project of the Company, which has profit forecast, and reporting
period still in forecasting period, explain reasons of reaching the original profit forecast
□ Applicable √ Not applicable
IV. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in
period.
Disclosure date for specific
approval opinion on fund 2017-3-30
occupation from CPA
Disclosure index for specific Juchao website: www.cninfo.com.cn--Special explanation of non-operating
approval opinion on fund capital occupation and other related capital transactions in Hefei Meiling Co.,
occupation from CPA Ltd. in 2016.
V. Explanation from Board of Directors, Supervisory Committee and Independent
Directors (if applicable) for “Qualified Opinion” that issued by CPA
□ Applicable √ Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and
calculation method compared with the financial report of last year
□ Applicable √ Not applicable
No particulars about the changes in aspect of accounting policy, estimates or calculation
method in Period.
VII. Major accounting errors within reporting period that needs retrospective
restatement
□ Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the
Company in the period.
VIII. Compare with last year’s financial report; explain changes in consolidation
statement’s scope
√Applicable □ Not applicable
The consolidated financial statements of the Company cover 50 subsidiaries, including
Sichuan Changhong Air Conditioning Co., Ltd., Zhongshan Changhong Electric Co., Ltd., Zhongke
Meiling Cryogenic Technology Co., Ltd. and Guangdong Changhong Ridian Technology Co., Ltd.
(hereinafter referred to as "Ridian Company"). Compared with the previous year, during the
reporting period, three subsidiaries are newly included in the consolidated financial statements,
thereinto, include Ridian Company in the Company‘s consolidated financial statements due to the
71
HEFEI MEILING CO., LTD. Annual Report 2016
completion of industrial and commercial registration of changes for stock right assigning after
bidding 98.856% stock rights of Ridian Company. At the same time, according to the relevant
provisions of Accounting Standards for Business Enterprises No. 33 - Consolidated Financial
Statements, the company made a restatement to the beginning balance of the consolidated financial
statements and the number at the same period of last year, the resolution of the 15th meeting of the
company‘s 8th Board of Directors passed and agreed the company to invest and build Changmei
Science and Technology Co., Ltd., the registered capital is RMB 50 million Yuan , which has
completed the industrial and commercial registration in April 2016, and has been included in the
Company‘s consolidated statements; the resolution of the 19th meeting of the company‘s 8th Board
of Directors passed and agreed the subsidiaries Zhongshan Changhong and Sichuan Changhong Air
Conditioning Co., Ltd. to jointly set up a subsidiary named "CHANGHONG MEILING ELECTRIC
INDONESIA.PT " in Indonesia, with registered capital of US 6 million dollars, which has
completed the industrial and commercial registration in August 2016, and has been included in the
Company‘s consolidated statements.
In addition, during the reporting period, two subsidiaries Luohe Meiling Electric Marketing
Co., Ltd. and Bengbu Meiling Electric Marketing Co., Ltd. were no longer included in the
consolidated financial statements due to the liquidation and write-off. The subsidiary Hefei Meiling
Packaging Product Co., Ltd. was no longer included in the consolidated financial statements due to
the public listing for transfer.
More details can be seen in the report ―VII. Changes in the scope of the merger‖ and ―VIII.
Interests in other entities‖ of ―Section XI Financial Report‖
IX. Appointment and non-reappointment (dismissal) of CPA
(I) Accounting firm appointed
Name of domestic accounting firm Shine Wing Certified Public Accountants (LLP)
Remuneration for domestic accounting firm
110
(in 10 thousand Yuan)
Continuous life of auditing service for
8-year
domestic accounting firm
Name of domestic CPA He Yong, Xia Cuiqiong
Name of foreign accounting firm (if
N/A
applicable)
Remuneration for foreign accounting firm
N/A
(10 thousand Yuan) (if applicable)
Continuous life of auditing service for
N/A
foreign accounting firm (if applicable)
Name of foreign CPA (if applicable) N/A
(II) Re-appointed accounting firms in this period
□Yes √No
(III) Appointment of internal control auditing accounting firm, financial consultant or sponsor
72
HEFEI MEILING CO., LTD. Annual Report 2016
√ Applicable □Not applicable
In reporting period, Shine wing Certified Public Accountants (LLP) was appointed as audit
institute of internal control for the Company, auditing charge for internal control amounting as
RMB 250,000.
In reporting period, the Company carrying private placement of shares, and appointed
Shenwan Hongyuan Securities Underwriting Sponsor Co., Ltd. as the sponsor institution and lead
underwriter of the placement. During the offering period, totally expenses 28 million Yuan
including underwriting fee and sponsor fee.
X. Particular about suspended and delisting after annual report disclosed
□ Applicable √ Not applicable
XI. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period
XII. Significant lawsuits and arbitrations of the Company
□ Applicable √Not applicable
(I) No significant lawsuits or arbitrations occurred in the reporting period
(II) Some other significant lawsuits and arbitrations in the reporting period
To maintain the independence and integrity of "Meiling" trademark and trade name, the
company has launched a series of litigation and arbitration related to "Meiling" trademark, please
see 2014 first quarter report, 2014 semi-annual report, the 2014 annual report disclosed respectively
on April 19, 2014, August 12, 2014, and March 26, 2014 for the relevant progress. Up to now, Hefei
Meiling Household Appliances Co., Ltd., Hefei Meiling Environmental Protection Equipment
Technology Co., Ltd., Hefei Meiling Purifying Equipment Technology Co., Ltd., Hefei Meiling
Electrical Appliances Co., Ltd., Hefei Meiling Cabinet Electrical Appliance Co., Ltd., Hefei Meiling
Vehicle Industry Co., Ltd., Hefei Meiling Intelligent Technology Co., Ltd. (former Hefei Meiling
Telecommunication Technology Co., Ltd., the company changed its corporate name to Hefei
Meiling Intelligent Technology Co., Ltd. on their owned, we are pursue its legal responsibility
through legal proceedings) have had no right to use "Meiling" trademark.
At present, only the kitchen ventilator, cooker, water heater, water purifiers and household
electrical appliances manufactured and sold by the Company and its wholly-owned subsidiary -
Guangdong Changhong Ridian Technology Co., Ltd. are the company's regular products, any other
small household appliances using same or similar trademark as our company or using the trade
name similar to the Company’s name are the Company’s products. In view of the infringement
to the Company’s trademark and trade name, false propaganda and unfair competition in the
market, the Company has carried out many ways including administrative reports, criminal
investigation and civil litigation to fight against infringement and counterfeiting behavior in the
whole country.
73
HEFEI MEILING CO., LTD. Annual Report 2016
XIII. Penalty and rectification
□ Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.
XIV. Integrity of the company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
During the reporting period, the Company and the controlling shareholders and the actual
controllers have had good reputation, and there is no large amount due unliquidated debt sentenced
by the court.
XV. Implementation of the company’s stock incentive plan, employee stock ownership
plan or other employee incentives
√ Applicable □ Not applicable
Implementation for annual performance incentive fund
On August 9, 2012 and August 28, 2012, the Company considers the adoption of "Hefei
Meiling annual performance incentive fund implementation plan" (hereinafter referred to as ""
stimulus "") on the 16th meeting of the 7th board of directors and the 2012-second provisional
shareholders meeting. Details were disclosed on information disclosure media appointed by the
Company as "Securities Times", "Chinese Securities Daily", "Hong Kong Commercial Daily" and
the Juchao network (www.cninfo.com.cn) on August 10, 2012 and August 29th in the form of
announcement (No.: 2012-028, No.:2012-035).
1. Implementation about 2012, 2013 and 2014 performance incentive fund provision and
distribution plan
See details in "Implementation of the company's annual incentive fund" in "XV
Implementation of the company's stock incentive plan, employee stock ownership plan, or other
employee incentive measures" in "Section V Significant Events" of the company's "2015 Annual
Report" disclosed on March 25, 2016.
Up to the end of this reporting period, the company's stock purchased by some 2012 annual
performance incentive objects (non-directors, supervisors and senior management) with their
granted 2012 annual performance incentive funds and own funds has been fully desterilized, the
company's stock purchased by some 2013 annual performance incentive objects (non-directors,
supervisors and senior management) with their granted 2013 annual performance incentive funds
and own funds has been desterilized by 50% for term of holding for two years, see below for the
overall reducing holding-shares of some above-mentioned incentive objects; if the stock holding
period of the company's stock purchased by 2014 annual performance incentive objects with their
granted 2014 annual performance incentive funds and own funds is less than two years, the
purchased stock of all incentive objects should be locked according to the commitments. Among the
incentive objects, the current directors, supervisors and senior management have not reduced the
Company’s shares purchased by implementing 2012, 2013, and 2014 annual performance
incentive plans.
74
HEFEI MEILING CO., LTD. Annual Report 2016
2. Shareholding and reducing of performance incentive objects of the Company
Ended as 31 December 2016, shares hold by all incentive objects amounting to 10,161,379
shares, a 0.973 % in total share capital of the Company, including 8,828,247 A-share, a 0.845% in
total share capital and 1,333,132 B-share, a 0.128% in total share capital of the Company. Ended as
31 December 2016, other grantees of the 2012 and 2013 incentive plan (not being directors,
supervisors and senior management) have reduced holding of 3,244,577 in aggregate, accounting
for about 0.31% of the total share capital, since September 2014 to the end of the reporting period,
including reduced holding of 151,123 in the reporting period, accounting for about 0.01% of the
total share capital.
XVI. Major related transaction
(I) Related transaction with routine operation concerned
√ Applicable □Not applicabl
(1) Related transaction with routine operation concerned
75
HEFEI MEILING CO., LTD. Annual Report 2016
Whet
her
Trading over
Related Propor limit the Available
Related Clearing
Type of transaction tion in Date of
Seri Content of Pricing transaction approve appro form for similar
Related related amount similar
Relationship related principl price (in 10 related disclosur Index of disclosure
al party transact (in 10 transac d (in 10 ved market
transaction e thousand transactio
ion thousand tions e
Yuan) thousan limite n price
Yuan) (%)
d Yuan) d or
not
(Y/N)
Electric
melting,
Spot
Sichuan Commo resistors, Juchao
Controlling exchange,
Changhon dity integrated Marketi 2016-3-25 Website(www.cninfo.com.cn)
1 shareholder and 14,456.41 14,456.41 1.48% 100,000 No Bank --
g Electric purchas circuit ng price , 2016-5-5 No.:2016-027,2016-028,2016
ultimate controller acceptanc
Co., Ltd. ed accessory, -030,2016-046
e
color
masterbatch
Sichuan
Changhon
Commo Juchao
g Controlling
dity Sunstroke Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
2 Electronic shareholder and 0.37 0.37 0.00% 15,000 No --
purchas supplies ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
s Holding ultimate controller
ed -030,2016-046
Group
Co., Ltd.
Huayi Other enterprise Commo Compressor Marketi Spot 2016-3-25 Juchao
3 44,592.84 44,592.84 4.57% 70,000 No --
Compress control under the dity etc. ng price exchange, , 2016-5-5 Website(www.cninfo.com.cn)
76
HEFEI MEILING CO., LTD. Annual Report 2016
or Co., same controlling purchas Bank No.:2016-027,2016-028,2016
Ltd. shareholder and ed acceptanc -030,2016-046
ultimate controller e
Sichuan
Other enterprise
Changhon Commo Juchao
control under the Plastic Bank
g Mold dity Marketi 2016-3-25 Website(www.cninfo.com.cn)
4 same controlling products 42,763.92 42,763.92 4.38% 100,000 No acceptanc --
Plastic purchas ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and etc. e
Tech. Co., ed -030,2016-046
ultimate controller
Ltd.
Sichuan Other enterprise
Commo Juchao
Changhon control under the Bank
dity Door shell, Marketi 2016-3-25 Website(www.cninfo.com.cn)
5 g Jijia same controlling baseboard 21,372.67 21,372.67 2.19% 100,000 No acceptanc --
purchas etc. ng price , 2016-5-5 No.:2016-027,2016-028,2016
Fine Co., shareholder and e
ed -030,2016-046
Ltd. ultimate controller
Sichuan Other enterprise
Commo Juchao
Changhon control under the Bank
dity Packing Marketi 2016-3-25 Website(www.cninfo.com.cn)
6 g Package same controlling case, printed 5,862.38 5,862.38 0.60% 100,000 No acceptanc --
purchas matter etc. ng price , 2016-5-5 No.:2016-027,2016-028,2016
Printing shareholder and e
ed -030,2016-046
Co., Ltd. ultimate controller
CHANG Other enterprise
Commo Juchao
HONG(H control under the Balck and
dity Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
7 K)TRADI same controlling white 179.34 179.34 0.02% 100,000 No --
purchas ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
NGLIMIT shareholder and material
ed -030,2016-046
ED ultimate controller
Sichuan Other enterprise
Commo Printed Juchao
Changhon control under the Bank
dity board Marketi 2016-3-25 Website(www.cninfo.com.cn)
8 g same controlling 770.77 770.77 0.08% 100,000 No acceptanc --
purchas components ng price , 2016-5-5 No.:2016-027,2016-028,2016
Precision shareholder and e
ed etc. -030,2016-046
Electronic ultimate controller
77
HEFEI MEILING CO., LTD. Annual Report 2016
s Tech.
Co., Ltd.
Sichuan
Changhon Other enterprise
Commo Juchao
g New control under the Power
dity Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
9 Energy same controlling supply, 6.69 6.69 0.00% 100,000 No --
purchas ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
Technolo shareholder and battery
ed -030,2016-046
gy Co., ultimate controller
Ltd.
Other enterprise
Commo Juchao
081 control under the
dity Transformer Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
10 Electronic same controlling 278.61 278.61 0.03% 15,000 No --
purchas etc. ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
Group shareholder and
ed -030,2016-046
ultimate controller
Guangdon
Other enterprise
g Commo Juchao
control under the
Changhon dity Foam pieces Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
11 same controlling 865.98 865.98 0.09% 100,000 No --
g purchas etc. ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and
Electronic ed -030,2016-046
ultimate controller
s Co., Ltd.
Sichuan
Other enterprise
Hongyu Commo Juchao
control under the Bank
Metal dity Marketi 2016-3-25 Website(www.cninfo.com.cn)
12 same controlling Radiator 55.98 55.98 0.01% 100,000 No acceptanc --
Manufact purchas ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and e
ure Co., ed -030,2016-046
ultimate controller
Ltd.
Sichuan Other enterprise Commo Spot Juchao
Marketi 2016-3-25
13 Changhon control under the dity Hand piece 468.62 468.62 0.05% 100,000 No exchange, -- Website(www.cninfo.com.cn)
ng price , 2016-5-5
g same controlling purchas Bank No.:2016-027,2016-028,2016
78
HEFEI MEILING CO., LTD. Annual Report 2016
Intelligent shareholder and ed acceptanc -030,2016-046
Manufact ultimate controller e
uring
Technolo
gy Co.,
Ltd.
Sichuan
Other enterprise Printed
Changhon Commo Juchao
control under the board, Bank
g Devices dity Marketi 2016-3-25 Website(www.cninfo.com.cn)
14 same controlling remote 684.44 684.44 0.07% 100,000 No acceptanc --
Technolo purchas ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and control and e
gy Co., ed -030,2016-046
ultimate controller transformer
Ltd.
Sichuan
Other enterprise Spot
Changhon Commo Juchao
control under the Sheet metal exchange,
g Xinrui dity Marketi 2016-3-25 Website(www.cninfo.com.cn)
15 same controlling parts, plastic 5,019.64 5,019.64 0.51% 15,000 No Bank --
Technolo purchas ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and parts etc. acceptanc
gy Co., ed -030,2016-046
ultimate controller e
Ltd
Sichuan Other enterprise
Commo Juchao
Hongwei control under the
dity DC power Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
16 Technolo same controlling 342.66 342.66 0.04% 100,000 No --
purchas supply etc. ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
gy Co., shareholder and
ed -030,2016-046
Ltd. ultimate controller
Sichuan
Other enterprise
Changhon Commo Juchao
control under the Light lamp,
g Lighting dity Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
17 same controlling lamp tube 0.57 0.57 0.00% 100,000 No --
Technolo purchas ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and etc.
gy ed -030,2016-046
ultimate controller
Co.,Ltd.
79
HEFEI MEILING CO., LTD. Annual Report 2016
Other enterprise
Sichuan Commo Juchao
control under the Advertising
Jiahong dity Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
18 same controlling materials, 13.77 13.77 0.00% 15,000 No --
Industrial purchas ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and plant etc.
Co., Ltd. ed -030,2016-046
ultimate controller
Sichuan
Other enterprise
Zhiyijia Commo Juchao
control under the
Network dity Electronic Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
19 same controlling 2.56 2.56 0.00% 100,000 No --
Technolo purchas products ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and
gy Co., ed -030,2016-046
ultimate controller
Ltd.
Sichuan Other enterprise
Commo Juchao
Changhon control under the
dity Auxiliary Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
20 g Power same controlling 3.68 3.68 0.00% 100,000 No --
purchas parts ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
Source shareholder and
ed -030,2016-046
Co., Ltd. ultimate controller
Other enterprise
Sichuan Commo Juchao
control under the
Huafeng dity Air Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
21 same controlling 23.04 23.04 0.00% 15,000 No --
Corp. purchas conditioner ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and
Group ed -030,2016-046
ultimate controller
Sichuan
Service Other enterprise Spot
Commo Juchao
Exp. control under the exchange,
dity Three pack Marketi 2016-3-25 Website(www.cninfo.com.cn)
22 Appliance same controlling 1.67 1.67 0.00% 100,000 No Bank --
purchas accessories ng price , 2016-5-5 No.:2016-027,2016-028,2016
Service shareholder and acceptanc
ed -030,2016-046
Chain ultimate controller e
Co., Ltd.
80
HEFEI MEILING CO., LTD. Annual Report 2016
Sichuan
Other enterprise Spot
Changhon Commo Printed Juchao
control under the exchange,
g dity boards, Marketi 2016-3-25 Website(www.cninfo.com.cn)
23 same controlling 3,485.14 3,485.14 0.36% 100,000 No Bank --
Electronic purchas transformers ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and acceptanc
Products ed , etc. -030,2016-046
ultimate controller e
Co., Ltd.
Other enterprise
Sichuan Commo Juchao
control under the
Hongxin dity Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
24 same controlling Software 5.09 5.09 0.00% 100,000 No --
Software purchas ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and
Co., Ltd. ed -030,2016-046
ultimate controller
Sichuan Other enterprise
Commo Juchao
Changhon control under the
dity Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
25 g Property same controlling Bonsai 0.04 0.04 0.00% 15,000 No --
purchas ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
Service shareholder and
ed -030,2016-046
Co., Ltd. ultimate controller
Information
system Spot
Sichuan Juchao
Controlling Accept services, exchange,
Changhon Marketi 2016-3-25 Website(www.cninfo.com.cn)
26 shareholder and the marketing 2,063.55 2,063.55 1.51% 5,000 No Bank --
g Electric ng price , 2016-5-5 No.:2016-027,2016-028,2016
ultimate controller services fees, repair acceptanc
Co., Ltd. -030,2016-046
fees, shared e
service fees
Sichuan
Other enterprise Spot
Changhon Transportati Juchao
control under the Accept exchange,
g on, storage, Marketi 2016-3-25 Website(www.cninfo.com.cn)
27 same controlling the 43,875.55 43,875.55 32.11% 65,000 No Bank --
Minsheng loading and ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and services acceptanc
Logistics unloading -030,2016-046
ultimate controller e
Co., LTD
81
HEFEI MEILING CO., LTD. Annual Report 2016
Sichuan
Other enterprise
Changhon Juchao
control under the Accept Bank
g Mold maintenance Marketi 2016-3-25 Website(www.cninfo.com.cn)
28 same controlling the 5.56 5.56 0.00% 5,000 No acceptanc --
Plastic fee etc. ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and services e
Tech. Co., -030,2016-046
ultimate controller
Ltd.
Sichuan
Service Other enterprise Spot
Juchao
Exp. control under the Accept After-sales exchange,
Marketi 2016-3-25 Website(www.cninfo.com.cn)
29 Appliance same controlling the maintenance 11,989.08 11,989.08 8.77% 20,000 No Bank --
ng price , 2016-5-5 No.:2016-027,2016-028,2016
Service shareholder and services fee etc. acceptanc
-030,2016-046
Chain ultimate controller e
Co., Ltd.
Other enterprise
Sichuan Juchao
control under the Accept
Hongxin Software Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
30 same controlling the 30.38 30.38 0.02% 5,000 No --
Software usage fee ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and services
Co., Ltd. -030,2016-046
ultimate controller
Guangdon
Other enterprise
g Juchao
control under the Accept Security
Changhon Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
31 same controlling the service 77.48 77.48 0.06% 5,000 No --
g ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and services charge
Electronic -030,2016-046
ultimate controller
s Co., Ltd.
Other enterprise
Sichuan Maintenanc Juchao
control under the Accept
Jiahong e fee, Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
32 same controlling the 18.82 18.82 0.01% 15,000 No --
Industrial business ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and services
Co., Ltd. activity fee -030,2016-046
ultimate controller
82
HEFEI MEILING CO., LTD. Annual Report 2016
Sichuan
Other enterprise
Changhon Juchao
control under the Accept
g Business Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
33 same controlling the 18.12 18.12 0.01% 15,000 No --
Internatio activity fee ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and services
nal Hotel -030,2016-046
ultimate controller
Co., Ltd.
CHANG Other enterprise
Juchao
HONG(H control under the Accept
Sales Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
34 K)TRADI same controlling the 9.75 9.75 0.01% 5,000 No --
expense ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
NGLIMIT shareholder and services
-030,2016-046
ED ultimate controller
Sichuan
Changhon
Juchao
g Controlling Accept Employee
Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
35 Electronic shareholder and the physical 11.34 11.34 0.01% 15,000 No --
ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
s Holding ultimate controller services examination
-030,2016-046
Group
Co., Ltd.
Sichuan
Changhon Other enterprise
Juchao
g control under the Accept
Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
36 Internatio same controlling the Plane ticket 11.99 11.99 0.01% 15,000 No --
ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
nal Travel shareholder and services
-030,2016-046
Service ultimate controller
Co., Ltd.
Sichuan Other enterprise Juchao
Accept Engineering
Changhon control under the Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
37 the maintenance 0.67 0.67 0.00% 15,000 No --
g Property same controlling ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
services cost
Service shareholder and -030,2016-046
83
HEFEI MEILING CO., LTD. Annual Report 2016
Co., Ltd. ultimate controller
Sichuan
Changhon Other enterprise
Juchao
g control under the Accept Bank
Maintenanc Marketi 2016-3-25 Website(www.cninfo.com.cn)
38 Precision same controlling the 2.84 2.84 0.00% 5,000 No acceptanc --
e cost ng price , 2016-5-5 No.:2016-027,2016-028,2016
Electronic shareholder and services e
-030,2016-046
s Tech. ultimate controller
Co., Ltd.
Sichuan Other enterprise
Juchao
Hongwei control under the Accept Laboratory
Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
39 Technolo same controlling the technical 23.58 23.58 0.02% 5,000 No --
ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
gy Co., shareholder and services service fee
-030,2016-046
Ltd. ultimate controller
Sichuan
Other enterprise
Zhiyijia Juchao
control under the Accept
Network After-sale Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
40 same controlling the 0.25 0.25 0.00% 5,000 No --
Technolo service ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and services
gy Co., -030,2016-046
ultimate controller
Ltd.
Spot
Sichuan Juchao
Controlling Accept Water, exchange,
Changhon Marketi 2016-3-25 Website(www.cninfo.com.cn)
41 shareholder and fuel and electricity 1,658.98 1,658.98 0.17% 100,000 No Bank --
g Electric ng price , 2016-5-5 No.:2016-027,2016-028,2016
ultimate controller power and gas fee acceptanc
Co., Ltd. -030,2016-046
e
Huayi Other enterprise Spot Juchao
Accept
Compress control under the Compressed Marketi exchange, 2016-3-25 Website(www.cninfo.com.cn)
42 fuel and 48.05 48.05 0.00% 100 No --
or Co., same controlling air fee ng price Bank , 2016-5-5 No.:2016-027,2016-028,2016
power
Ltd. shareholder and acceptanc -030,2016-046
84
HEFEI MEILING CO., LTD. Annual Report 2016
ultimate controller e
Guangdon
Other enterprise Water,
g Juchao
control under the Accept electricity
Changhon Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
43 same controlling fuel and and 153.20 153.20 0.02% 100,000 No --
g ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and power compressed
Electronic -030,2016-046
ultimate controller air fee
s Co., Ltd.
Other enterprise
Sichuan Juchao
control under the Accept Water and
Jiahong Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
44 same controlling fuel and electricity 1.15 1.15 0.00% 15,000 No --
Industrial ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and power fee
Co., Ltd. -030,2016-046
ultimate controller
Hefei
Changhon Other enterprise
Juchao
g New control under the Accept
Electricity Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
45 Energy same controlling fuel and 24.26 24.26 0.00% 100,000 No --
fee ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
Technolo shareholder and power
-030,2016-046
gy Co., ultimate controller
Ltd.
Sichuan
Changhon
Juchao
g Controlling Accept Water and
Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
46 Electronic shareholder and fuel and electricity 1.02 1.02 0.00% 15,000 No --
ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
s Holding ultimate controller power fee
-030,2016-046
Group
Co., Ltd.
Sichuan Other enterprise Accept Water and Marketi Spot 2016-3-25 Juchao
47 4.51 4.51 0.00% 15,000 No --
Changhon control under the fuel and electricity ng price exchange , 2016-5-5 Website(www.cninfo.com.cn)
85
HEFEI MEILING CO., LTD. Annual Report 2016
g Property same controlling power fee No.:2016-027,2016-028,2016
Service shareholder and -030,2016-046
Co., Ltd. ultimate controller
Spot
Sichuan Juchao
Controlling exchange,
Changhon Sales of Air-conditio Marketi 2016-3-25 Website(www.cninfo.com.cn)
48 shareholder and 108,928.79 108,928.79 8.70% 350,000 No Bank --
g Electric goods ner ng price , 2016-5-5 No.:2016-027,2016-028,2016
ultimate controller acceptanc
Co., Ltd. -030,2016-046
e
Sichuan
Changhon
Juchao
g Controlling
Sales of Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
49 Electronic shareholder and Food 338.20 338.20 0.03% 10,000 No --
goods ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
s Holding ultimate controller
-030,2016-046
Group
Co., Ltd.
Sichuan Other enterprise
Juchao
Changhon control under the Door shell, Bank
Sales of Marketi 2016-3-25 Website(www.cninfo.com.cn)
50 g Jijia same controlling bottom 4,693.13 4,693.13 0.37% 350,000 No acceptanc --
goods ng price , 2016-5-5 No.:2016-027,2016-028,2016
Fine Co., shareholder and plate, etc. e
-030,2016-046
Ltd. ultimate controller
Sichuan
Other enterprise
Changhon Color Juchao
control under the Bank
g Mold Sales of Masterbatch Marketi 2016-3-25 Website(www.cninfo.com.cn)
51 same controlling 13,701.81 13,701.81 1.09% 350,000 No acceptanc --
Plastic goods , plastic ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and e
Tech. Co., particle -030,2016-046
ultimate controller
Ltd.
Lejiayi Other enterprise Refrigerator Spot Juchao
Sales of Marketi 2016-3-25
52 Chain control under the , washing 365.25 365.25 0.03% 350,000 No exchange, -- Website(www.cninfo.com.cn)
goods ng price , 2016-5-5
Managem same controlling machine Bank No.:2016-027,2016-028,2016
86
HEFEI MEILING CO., LTD. Annual Report 2016
ent Co., shareholder and acceptanc -030,2016-046
Ltd. ultimate controller e
PT.CHA Other enterprise
Air Juchao
NGHON control under the
Sales of conditioning Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
53 GELECT same controlling 2.60 2.60 0.00% 350,000 No --
goods maintenance ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
RICINDO shareholder and
spare parts -030,2016-046
NESIA ultimate controller
CHANG Other enterprise
Juchao
HONG(H control under the Refrigerator
Sales of Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
54 K)TRADI same controlling , air 45,103.46 45,103.46 3.60% 350,000 No --
goods ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
NGLIMIT shareholder and conditioner
-030,2016-046
ED ultimate controller
CHANG Other enterprise
Juchao
HONGEL control under the
Sales of Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
55 ECTRIC( same controlling Refrigerator 13.92 13.92 0.00% 350,000 No --
goods ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
AUSTRA shareholder and
-030,2016-046
LIA) ultimate controller
Sichuan Other enterprise
Juchao
Hongwei control under the
Sales of DC power Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
56 Technolo same controlling 9.76 9.76 0.00% 350,000 No --
goods supply etc. ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
gy Co., shareholder and
-030,2016-046
Ltd. ultimate controller
Sichuan
Other enterprise Spot
Changhon Juchao
control under the Refrigerator exchange,
g Sales of Marketi 2016-3-25 Website(www.cninfo.com.cn)
57 same controlling , air 87.20 87.20 0.01% 350,000 No Bank --
Minsheng goods ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and conditioner acceptanc
Logistics -030,2016-046
ultimate controller e
Co., LTD
87
HEFEI MEILING CO., LTD. Annual Report 2016
Sichuan
Service Other enterprise Spot
Juchao
Exp. control under the exchange,
Sales of Maintenanc Marketi 2016-3-25 Website(www.cninfo.com.cn)
58 Appliance same controlling 724.69 724.69 0.06% 350,000 No Bank --
goods e parts ng price , 2016-5-5 No.:2016-027,2016-028,2016
Service shareholder and acceptanc
-030,2016-046
Chain ultimate controller e
Co., Ltd.
Sichuan
Changhon Other enterprise
Juchao
g Gerun control under the
Sales of Waste Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
59 Renewabl same controlling 949.01 949.01 0.08% 350,000 No --
goods materials ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
e shareholder and
-030,2016-046
Resources ultimate controller
Co., Ltd.
Hefei Other enterprise
Juchao
Changhon control under the Bank
Sales of Marketi 2016-3-25 Website(www.cninfo.com.cn)
60 g same controlling Packing box 255.71 255.71 0.02% 350,000 No acceptanc --
goods ng price , 2016-5-5 No.:2016-027,2016-028,2016
Industrial shareholder and e
-030,2016-046
Co., Ltd. ultimate controller
Other enterprise
Sichuan Juchao
control under the
Huafeng Sales of Air-conditio Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
61 same controlling 17.25 17.25 0.00% 10,000 No --
Corp. goods ner ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and
Group -030,2016-046
ultimate controller
Sichuan Other enterprise Refrigerator
Juchao
Zhiyijia control under the , air
Sales of Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
62 Network same controlling conditioner, 143,292.46 143,292.46 11.44% 350,000 No --
goods ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
Technolo shareholder and washing
-030,2016-046
gy Co., ultimate controller machine
88
HEFEI MEILING CO., LTD. Annual Report 2016
Ltd.
Other enterprise
Sichuan Juchao
control under the
Changhon Sales of Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
63 same controlling Food 3.95 3.95 0.00% 350,000 No --
g Property goods ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and
Co., Ltd. -030,2016-046
ultimate controller
Anhui
Other enterprise Spot
Xinhao Juchao
control under the exchange,
Plasma Sales of Small home Marketi 2016-3-25 Website(www.cninfo.com.cn)
64 same controlling 5.13 5.13 0.00% 10,000 No Bank --
Display goods appliances ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and acceptanc
Panel Co., -030,2016-046
ultimate controller e
Ltd.
Sichuan
Other enterprise
Changhon Juchao
control under the
g Network Sales of Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
65 same controlling Food 1.57 1.57 0.00% 350,000 No --
Technolo goods ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and
gy Co., -030,2016-046
ultimate controller
Ltd.
Chengdu
Changhon Other enterprise
Juchao
g control under the
Sales of Air-conditio Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
66 Electronic same controlling 1.55 1.55 0.00% 350,000 No --
goods ner ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
Technolo shareholder and
-030,2016-046
gy Co., ultimate controller
Ltd.
Sichuan Other enterprise Juchao
Sales of Marketi Spot 2016-3-25
67 Changhon control under the Food 0.31 0.31 0.00% 350,000 No -- Website(www.cninfo.com.cn)
goods ng price exchange , 2016-5-5
g same controlling No.:2016-027,2016-028,2016
89
HEFEI MEILING CO., LTD. Annual Report 2016
Intelligent shareholder and -030,2016-046
Health ultimate controller
Technolo
gy Co.,
Ltd.
Sichuan Other enterprise
Juchao
Changhon control under the
Sales of Air-conditio Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
68 g Property same controlling 4.89 4.89 0.00% 10,000 No --
goods ner ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
Service shareholder and
-030,2016-046
Co., Ltd. ultimate controller
Guangdon
Other enterprise
g Juchao
control under the
Changhon Sales of Small home Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
69 same controlling 0.14 0.14 0.00% 350,000 No --
g goods appliances ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and
Electronic -030,2016-046
ultimate controller
s Co., Ltd.
Other enterprise
Sichuan Juchao
control under the
Huanyu Sales of Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
70 same controlling Food 1.42 1.42 0.00% 10,000 No --
Industrial goods ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and
Co. Ltd. -030,2016-046
ultimate controller
Sichuan
Other enterprise Spot
Changhon Juchao
control under the Sheet metal exchange,
g Xinrui Sales of Marketi 2016-3-25 Website(www.cninfo.com.cn)
71 same controlling parts, plastic 75.91 75.91 0.01% 10,000 No Bank --
Technolo goods ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and parts, etc. acceptanc
gy Co., -030,2016-046
ultimate controller e
Ltd
Sichuan Other enterprise Sales of Marketi Spot 2016-3-25 Juchao
72 Food 4.32 4.32 0.00% 350,000 No --
Changhon control under the goods ng price exchange , 2016-5-5 Website(www.cninfo.com.cn)
90
HEFEI MEILING CO., LTD. Annual Report 2016
g same controlling No.:2016-027,2016-028,2016
Intelligent shareholder and -030,2016-046
Manufact ultimate controller
uring
Technolo
gy Co.,
Ltd.
Mianyang
Technolo Other enterprise
Juchao
gy Town control under the
Sales of Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
73 Big Data same controlling Food 0.06 0.06 0.00% 350,000 No --
goods ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
Technolo shareholder and
-030,2016-046
gy Co., ultimate controller
Ltd.
Other enterprise
BVCH Juchao
control under the
Optronics Sales of Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
74 same controlling Food 1.91 1.91 0.00% 350,000 No --
(Sichuan) goods ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and
Co., Ltd. -030,2016-046
ultimate controller
Sichuan
Other enterprise
Changhon Juchao
control under the
g Sales of Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
75 same controlling Food 8.74 8.74 0.00% 350,000 No --
Electronic goods ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and
Products -030,2016-046
ultimate controller
Co., Ltd.
Sichuan Other enterprise Juchao
Changhon control under the Sales of Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
76 Food 0.25 0.25 0.00% 10,000 No --
g Group same controlling goods ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
Finance shareholder and -030,2016-046
91
HEFEI MEILING CO., LTD. Annual Report 2016
Co., Ltd. ultimate controller
Other enterprise Spot
Huayi Juchao
control under the exchange,
Compress Sales of Air-conditio Marketi 2016-3-25 Website(www.cninfo.com.cn)
77 same controlling 16.92 16.92 0.00% 350,000 No Bank --
or Co., goods ner ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and acceptanc
Ltd. -030,2016-046
ultimate controller e
Sichuan Other enterprise
Juchao
Changhon control under the Bank
Sales of Air-conditio Marketi 2016-3-25 Website(www.cninfo.com.cn)
78 g Package same controlling 33.31 33.31 0.00% 350,000 No acceptanc --
goods ner ng price , 2016-5-5 No.:2016-027,2016-028,2016
Printing shareholder and e
-030,2016-046
Co., Ltd. ultimate controller
Sichuan Other enterprise
Juchao
Changhon control under the Air-conditio
Sales of Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
79 g Power same controlling ner 5.34 5.34 0.00% 350,000 No --
goods ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
Source shareholder and components
-030,2016-046
Co., Ltd. ultimate controller
Sichuan
Changhon Other enterprise
Juchao
g control under the
Sales of Air-conditio Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
80 Education same controlling 0.31 0.31 0.00% 350,000 No --
goods ner ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
Technolo shareholder and
-030,2016-046
gy Co., ultimate controller
Ltd.
Guangdon Other enterprise
Providin Juchao
g control under the Water and
g fuel Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
81 Changhon same controlling electricity 95.61 95.61 0.01% 350,000 No --
and ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
g shareholder and fee
power -030,2016-046
Electronic ultimate controller
92
HEFEI MEILING CO., LTD. Annual Report 2016
s Co., Ltd.
Sichuan
Other enterprise Spot
Changhon Providin Juchao
control under the Water and exchange,
g g fuel Marketi 2016-3-25 Website(www.cninfo.com.cn)
82 same controlling electricity 6.87 6.87 0.00% 350,000 No Bank --
Minsheng and ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and fee acceptanc
Logistics power -030,2016-046
ultimate controller e
Co., LTD
Sichuan
Other enterprise
Changhon Providin Juchao
control under the Water and Bank
g Devices g fuel Marketi 2016-3-25 Website(www.cninfo.com.cn)
83 same controlling electricity 46.33 46.33 0.00% 350,000 No acceptanc --
Technolo and ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and fee e
gy Co., power -030,2016-046
ultimate controller
Ltd.
Sichuan Other enterprise
Providin Juchao
Changhon control under the Water and Bank
g fuel Marketi 2016-3-25 Website(www.cninfo.com.cn)
84 g Jijia same controlling electricity 9.64 9.64 0.00% 350,000 No acceptanc --
and ng price , 2016-5-5 No.:2016-027,2016-028,2016
Fine Co., shareholder and fee e
power -030,2016-046
Ltd. ultimate controller
Sichuan
Other enterprise
Changhon Providin Juchao
control under the Water and Bank
g Mold g fuel Marketi 2016-3-25 Website(www.cninfo.com.cn)
85 same controlling electricity 485.62 485.62 0.04% 350,000 No acceptanc --
Plastic and ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and fee e
Tech. Co., power -030,2016-046
ultimate controller
Ltd.
Sichuan Other enterprise Providin Juchao
Water and
Hongwei control under the g fuel Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
86 electricity 0.79 0.79 0.00% 350,000 No --
Technolo same controlling and ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
fee
gy Co., shareholder and power -030,2016-046
93
HEFEI MEILING CO., LTD. Annual Report 2016
Ltd. ultimate controller
Sichuan Other enterprise Rental of
Rent to Juchao
Changhon control under the warehouse Bank
the Marketi 2016-3-25 Website(www.cninfo.com.cn)
87 g Jijia same controlling rental, 58.31 58.31 0.35% 3,000 No acceptanc --
related ng price , 2016-5-5 No.:2016-027,2016-028,2016
Fine Co., shareholder and forklift, two e
party -030,2016-046
Ltd. ultimate controller living area
Sichuan
Other enterprise
Changhon Rent to Juchao
control under the Storage Bank
g Mold the Marketi 2016-3-25 Website(www.cninfo.com.cn)
88 same controlling lease, 132.08 132.08 0.79% 3,000 No acceptanc --
Plastic related ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and workshop e
Tech. Co., party -030,2016-046
ultimate controller
Ltd.
Sichuan
Other enterprise Spot
Changhon Rent to Juchao
control under the Warehouse exchange,
g Xinrui the Marketi 2016-3-25 Website(www.cninfo.com.cn)
89 same controlling rental, 1.37 1.37 0.01% 10,000 No Bank --
Technolo related ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and forklift acceptanc
gy Co., party -030,2016-046
ultimate controller e
Ltd
Sichuan
Other enterprise Part of the Spot
Changhon Rent to Juchao
control under the office exchange,
g the Marketi 2016-3-25 Website(www.cninfo.com.cn)
90 same controlling rental, 118.24 118.24 0.71% 3,000 No Bank --
Minsheng related ng price , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and warehousin acceptanc
Logistics party -030,2016-046
ultimate controller g lease e
Co., LTD
Sichuan Other enterprise Rent to Juchao
Service control under the the Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
91 Apartment 21.90 21.90 0.13% 3,000 No --
Exp. same controlling related ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
Appliance shareholder and party -030,2016-046
94
HEFEI MEILING CO., LTD. Annual Report 2016
Service ultimate controller
Chain
Co., Ltd.
Hefei Other enterprise
Rent to Juchao
Changhon control under the
the Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
92 g same controlling Apartment 44.87 44.87 0.27% 3,000 No --
related ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
Industrial shareholder and
party -030,2016-046
Co., Ltd. ultimate controller
Spot
Sichuan Rent to Juchao
Controlling exchange,
Changhon the Marketi 2016-3-25 Website(www.cninfo.com.cn)
93 shareholder and Apartment 6.86 6.86 0.04% 3,000 No Bank --
g Electric related ng price , 2016-5-5 No.:2016-027,2016-028,2016
ultimate controller acceptanc
Co., Ltd. party -030,2016-046
e
Sichuan
Changhon Other enterprise
Rent to Juchao
g control under the Bank
the Marketi 2016-3-25 Website(www.cninfo.com.cn)
94 Precision same controlling Apartment 6.40 6.40 0.04% 3,000 No acceptanc --
related ng price , 2016-5-5 No.:2016-027,2016-028,2016
Electronic shareholder and e
party -030,2016-046
s Tech. ultimate controller
Co., Ltd.
Other enterprise
BVCH Rent to Juchao
control under the
Optronics the Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
95 same controlling Cargo lift 6.37 6.37 0.04% 3,000 No --
(Sichuan) related ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and
Co., Ltd. party -030,2016-046
ultimate controller
Guangdon Other enterprise Rent to Juchao
g control under the the Part of the Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
96 147.44 147.44 0.88% 3,000 No --
Changhon same controlling related office rental ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
g shareholder and party -030,2016-046
95
HEFEI MEILING CO., LTD. Annual Report 2016
Electronic ultimate controller
s Co., Ltd.
Shenzhen Other enterprise
Rent to Juchao
Yijia‘en control under the
the Two living Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
97 Technolo same controlling 1.81 1.81 0.01% 3,000 No --
related area ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
gy Co. shareholder and
party -030,2016-046
Ltd. ultimate controller
Sichuan Other enterprise
Rent to Juchao
Hongwei control under the
the Two living Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
98 Technolo same controlling 0.50 0.50 0.00% 3,000 No --
related area ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
gy Co., shareholder and
party -030,2016-046
Ltd. ultimate controller
Sichuan Other enterprise
Rent to Juchao
Changhon control under the
the Warehousi Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
99 g Package same controlling 0.42 0.42 0.00% 3,000 No --
related ng fee ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
Printing shareholder and
party -030,2016-046
Co., Ltd. ultimate controller
Sichuan
Changho Other enterprise
Rent to Juchao
ng control under the
the Workshop Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
100 Devices same controlling 82.37 82.37 0.49% 3,000 No --
related lease ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
Technolo shareholder and
party -030,2016-046
gy Co., ultimate controller
Ltd.
Spot
Sichuan Rent Juchao
Controlling exchange,
Changhon from the Plant and Marketi 2016-3-25 Website(www.cninfo.com.cn)
101 shareholder and 907.78 907.78 5.43% 3,000 No Bank --
g Electric related office ng price , 2016-5-5 No.:2016-027,2016-028,2016
ultimate controller acceptanc
Co., Ltd. party -030,2016-046
e
96
HEFEI MEILING CO., LTD. Annual Report 2016
Sichuan
Changhon
Rent Juchao
g Controlling
from the Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
102 Electronic shareholder and Shops 8.98 8.98 0.05% 15,000 No --
related ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
s Holding ultimate controller
party -030,2016-046
Group
Co., Ltd.
Beijing
Changhon Other enterprise
Rent Juchao
g Science control under the
from the Office Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
103 and same controlling 8.91 8.91 0.05% 3,000 No --
related leasing ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
Technolo shareholder and
party -030,2016-046
gy Co., ultimate controller
Ltd.
Guangdon
Other enterprise
g Rent Juchao
control under the
Changhon from the The staff Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
104 same controlling 52.53 52.53 0.31% 3,000 No --
g related dormitory ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and
Electronic party -030,2016-046
ultimate controller
s Co., Ltd.
Sichuan
Hongchen
Other enterprise
g Purchas Juchao
control under the
Constructi e of Plant Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
105 same controlling 590.96 590.96 3.42% 15,000 No --
on fixed construction ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and
Engineeri assets -030,2016-046
ultimate controller
ng Co.,
Ltd.
97
HEFEI MEILING CO., LTD. Annual Report 2016
Video Spot
Sichuan Purchas Juchao
Controlling conference exchange,
Changhon e of Marketi 2016-3-25 Website(www.cninfo.com.cn)
106 shareholder and equipment 22.14 22.14 0.13% 5,000 No Bank --
g Electric fixed ng price , 2016-5-5 No.:2016-027,2016-028,2016
ultimate controller and acceptanc
Co., Ltd. assets -030,2016-046
computer e
Purchas
Other enterprise e of
Sichuan Juchao
control under the fixed
Hongxin Information Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
107 same controlling assets 40.21 40.21 0.23% 5,000 No --
Software system, etc. ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
shareholder and and
Co., Ltd. -030,2016-046
ultimate controller intangib
le assets
Sichuan Other enterprise Laboratory
Purchas Juchao
Hongwei control under the apparatus
e of Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
108 Technolo same controlling and 137.49 137.49 0.80% 5,000 No --
fixed ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
gy Co., shareholder and computer
assets -030,2016-046
Ltd. ultimate controller equipment
Sichuan
Changhon
g Other enterprise Spot
Purchas Production Juchao
Intelligent control under the exchange,
e of line Marketi 2016-3-25 Website(www.cninfo.com.cn)
109 Manufact same controlling 205.38 205.38 1.19% 5,000 No Bank --
fixed transformati ng price , 2016-5-5 No.:2016-027,2016-028,2016
uring shareholder and acceptanc
assets on -030,2016-046
Technolo ultimate controller e
gy Co.,
Ltd.
Sichuan Other enterprise Purchas Central Bank Juchao
Marketi 2016-3-25
110 Changhon control under the e of control 1.79 1.79 0.01% 5,000 No acceptanc -- Website(www.cninfo.com.cn)
ng price , 2016-5-5
g Jijia same controlling fixed cabinet e No.:2016-027,2016-028,2016
98
HEFEI MEILING CO., LTD. Annual Report 2016
Fine Co., shareholder and assets -030,2016-046
Ltd. ultimate controller
Sichuan
Changhon Other enterprise
Juchao
g Gerun control under the Sales of
Waste Marketi Spot 2016-3-25 Website(www.cninfo.com.cn)
111 Renewabl same controlling fixed 3.11 3.11 0.12% 5,000 No --
material ng price exchange , 2016-5-5 No.:2016-027,2016-028,2016
e shareholder and assets
-030,2016-046
Resources ultimate controller
Co., Ltd.
Total -- - 523,189.36 - - - -- -- -- --
Detail of sales return with major amount involved Not applicable
1. It is estimated that the related transaction amount resulted by purchasing goods (including door shell and plastic products etc.) and accepting fuel and power
from Sichuan Changhong and its subsidiary by the Company for year of 2016 was RMB 1000 million at most (tax-excluded), actually RMB 931,650,100 yuan
occurred in reporting period (tax-excluded).
2. It is estimated that the related transaction amount resulted by purchasing goods (including compressor purchased etc.) from Huayi Compressor and its subsidiary
by the Company for year of 2016 was RMB 700 million at most (tax-excluded), actually RMB 445,928,400 yuan occurred in reporting period (tax-excluded).
3. It is estimated that the related transaction amount resulted by purchasing or selling equipment, software, maintenance and spare parts and molds etc. from
Sichuan Changhong and its subsidiary by the Company for year of 2016 was RMB 50 million at most (tax-excluded), actually RMB 10,010,800 yuan occurred in
Report the actual implementation of the daily reporting period (tax-excluded).
related transactions which were projected about 4. It is estimated that the related transaction amount resulted by purchasing goods from and providing fuel and power to Sichuan Changhong and its subsidiary by
their total amount by types during the reporting the Company for year of 2016 was RMB 3500 million at most (tax-excluded), actually RMB 3,188,510,800 yuan occurred in reporting period (tax-excluded).
period (if applicable) 5. It is estimated that the related transaction amount resulted by purchasing compressed air, accepting energy, power and service from Huayi Compressor and its
subsidiary by the Company for year of 2016 was RMB 1 million at most (tax-excluded), actually RMB 480,500 yuan occurred in reporting period (tax-excluded).
6. It is estimated that the related transaction amount resulted by leasing business from Sichuan Changhong and its subsidiary by the Company for year of 2016 was
RMB 30 million at most (tax-excluded), actually RMB 15,967,900 yuan occurred in reporting period (tax-excluded).
7. It is estimated that the related transaction amount from domestic finished goods logistic business outsourcing and purchased compressor to Sichuan Changhong
Minsheng Logistic Co., Ltd. by the Company for year of 2016 was RMB 650 million at most (tax-excluded), actually RMB 438,755,500 yuan occurred in
reporting period (tax-excluded).
8. It is estimated that the related transaction amount from after sales service of domestic goods outsourcing to Sichuan Service Exp. Appliance Service Chain Co.,
99
HEFEI MEILING CO., LTD. Annual Report 2016
Ltd. by the Company for year of 2016 was RMB 200 million at most (tax-excluded), actually RMB 119,890,800 yuan occurred in reporting period.
9. It is estimated that the related transaction amount resulted by accepting other service and labor service etc. or providing other service and labor service etc. to
Sichuan Changhong and its subsidiary by the Company for year of 2016 was RMB 50 million at most (tax-excluded), actually RMB 22,133,900 yuan occurred in
reporting period (tax-excluded).
10. It is estimated that the related transaction amount resulted by selling goods from Sichuan Changhong Electronics Group and its subsidiary by the Company for
year of 2016 was RMB 100 million at most (tax-excluded), actually RMB 4,444,200 yuan occurred in reporting period.
11. It is estimated that the related transaction amount resulted by purchasing goods and receiving labor services, fuel power, leasing and purchasing equipment etc.
from Sichuan Changhong Electronics Group and its subsidiary by the Company for year of 2016 was RMB 150 million at most (tax-excluded), actually RMB
60,030,300 yuan occurred in reporting period.
Reasons for major differences between trading price and market
Not applicable
reference price
100
HEFEI MEILING CO., LTD. Annual Report 2016
(II)Related transactions with Finance Company
1. Related transactions about the “Financial Service Agreement” signed between the
Company and Sichuan Changhong Group Finance Co., Ltd.
In order to expand the financing channels and reduce financing costs and financial costs,
combining the good cooperation over the past three years, the company held the eighteenth meeting
of the eighth board of directors on March 18, 2016 and the first extraordinary general meeting of
2016 on April 6, 2016 which deliberated and agreed the company and Sichuan Changhong Group
Finance Co., Ltd. (hereinafter referred to as "Changhong Finance Company") to carry on financial
services cooperation and sign a triennial "financial service agreement". Under the agreement,
Changhong Finance Company would provide a series of financial services within the business
scope in accordance with the requirements of the Company and its subsidiaries, including but not
limited to deposit services, settlement services, loan services, bills discounting services, guarantees
and other services approved by China Banking Regulatory Commission that a finance company can
engage in.
In March 2017, the Company received the 2016 Annual Audit Report which was provided by
Changhong Finance Company after being audited by ShineWing Certified Public Accountants
(special general partnership) who possesses related business qualifications in securities and futures.
The basic indicators of Changhong Finance Company in 2016 conform to the Enterprise Group
Finance Company Management Measures issued by China Banking Regulatory Commission and
the relevant provisions of the Shenzhen Stock Exchange, it has been specified in the company’s
“Risk disposal plan for loans and deposits financial services of Sichuan Changhong Group
Finance Co., Ltd.” that in some situations the risk disposal procedures need to be launched, and no
such situation has occurred.
According to the provisions of "Information Disclosure Memorandum No. 2 – transactions
and related transactions" of Shenzhen Stock Exchange, the company carries out the loans and
deposits and other related services according to the "Financial Services Agreement" signed with
Changhong Finance Company, and continues to complete the risk management of loans and
deposits services with Changhong Finance Company, regularly makes special risk assessments and
issues risk assessment reports, and implements the obligation of information disclosure in
accordance with relevant regulations. On March 19, April 7, July 29,& October 18 2016, the
company has disclosed the detailed information on the appointed information disclosure media,
including "Securities Times", "China Securities Journal", "Hong Kong Commercial Daily" and
www.cninfo.com.cn in the form of announcement (No. 2016-020, No. 2016-021, No. 2016-022, No.
2016-037), "Risk continuous assessment report about Sichuan Changhong Group Finance Co., Ltd.",
and on the company’s 2015 annual report, the first quarter report of 2016, the semi-annual report
of 2016 and the third quarter report of 2016.
2. Related transactions between the Company and Changhong Finance Company
Up to 31 December 2016, the Company and its subsidiaries has opened financial business as
savings, note drawing and notes discounted with Changhong Finance Company. The Company and
its subordinate company owns 1,908,842,163.20 Yuan savings in Changhong Finance Company,
takes 25.69% of the deposit taking balance in Changhong Finance Company without 30% occupied,
101
HEFEI MEILING CO., LTD. Annual Report 2016
balance of notes drawing was 544,374,441.19 Yuan and balance of notes discounted as RMB
565,252,574.29 Yuan. More details are:
In RMB
Interest and
Balance at Increase in the Decrease in the Balance at commission
Name
year-begin year year year-end charge received
or paid
I. Savings in
Changhong Group 1,260,081,706.55 20,157,897,324.19 19,509,136,867.54 1,908,842,163.20 58,234,199.95
Finance Company
II. Borrowings from
Changhong Group
Finance Company
1.Short-term loans - - - - -
2.Long-term loans - - - - -
III. Other financial
business
1.notes drawing 733,001,248.18 1,701,833,720.48 1,890,460,527.47 544,374,441.19 -
2.notes discounted 236,410,328.55 1,226,847,207.83 898,004,962.09 565,252,574.29 12,054,811.69
Note: The Company purchases Guangdong Changhong Ridian Technology Co., Ltd.
(“Changhong RIdian”) in early of 2016, the above table including the financial business of
savings and notes arising from related transactions between Changhong Ridian and Changhong
Finance Company.
According to the regulations of "Information Disclosure Memorandum No. 2 - Transactions
and Connected Transactions" of Shenzhen Stock Exchange, Shine Wing Certified Public
Accountants (special general partnership) provided "Special instructions on deposits, loans and
other financial business that Hefei Meiling Co., Ltd. involved in related transactions of financial
company of in 2016" to state the deposits, loans, and other financial business that the company
developed with Changhong Finance Company during the reporting period, and disclosed at
www.cninfo.com.cn on March 30, 2017.
(III) Related transactions by assets acquisition and sold
√ Applicable □Not applicable
Book Assessed Market Trans Clearin Transacti
Type of value of valuation fair fer g form on gains
Related Relatio related Content of related Pricing for Date of
party nship transac transaction principle transferr value of value price related and
disclosure
tion ed assets transferr (in 10 (in 10 transact losses (in
(in 10 ed assets thousa thous ion 10
102
HEFEI MEILING CO., LTD. Annual Report 2016
thousand (in 10 nd and thousand
Yuan) thousand Yuan) Yuan) Yuan)
Yuan) (if (if
applicabl applica
e) ble)
Bidding the
98.856% equity of
Guangdong
Changhong Ridian Juchao
Technology Co., Website
Ltd. (including (www.cninfo.
The 2015
Sichuan 88.916% equity of com.cn)
control -12-
Changhong Changhong Ridian No.:
ling 19,
Electric Co., directly held by 2015-061,
shareh
LTD, Sichuan 2015
older Equity Public No.:
Sichuan Changhong and 8,984.68 9,563.93 9,565 Cash -- -12-
and its bidding bidding 2015-062,
Changhong 9.940% equity of 24,
subordi No.:
Innovation Changhong Ridian 2016
nate 2015-066,
Investment geld by subsidiary -1-5,
subsidi No.:
Co., Ltd. of Sichuan 2016-2-4
ary 2015-067,
Changhong
–Sichuan No.:
Changhong 2016-008
Innovation
Investment Co.,
Ltd. )
Reasons for major differences between transfer
price and book value or assessed valuation value
Not applicable
(if applicable)
Improved the home appliance industry chain and production line, constructed
The impact on the Company's operating results self-owned kitchen and toilet products platform as well as small appliances.
and financial situation Achieved operation revenue of 495.0753 million Yuan and net profit of 17.2645
million Yuan in 2016
As for the relevant trading with performance
agreement involved, actual performance of the
Not applicable
Period
(IV) Material related transaction of jointly foreign investment
□ Applicable √ Not applicable
The Company has no material related transaction of jointly foreign investment occurred in
reporting period-end.
(IV) Connect of related liability and debt
√ Applicable □Not applicable
103
HEFEI MEILING CO., LTD. Annual Report 2016
Whether has non-operational contact of related liability and debts or not
□ Yes √No
No non-operational contact of related liability or debts in Period
104
HEFEI MEILING CO., LTD. Annual Report 2016
1. Claim receivable from related party:
Current
Whether has Balance at Current newly Current Balance at
interest
non-business period-begin added recovery Intere period-end
Serial Related party Relationship Causes (10
capital (10 thousand (10 thousand (10 thousand st rate (10 thousand
thousand
occupying or not Yuan) Yuan) Yuan) Yuan)
Yuan)
Operational
Sichuan Changhong Controlling shareholder and
1 contact of No 258.76 108,935.65 109,032.83 - - 161.58
Electric Co., Ltd. ultimate controller
related credit
Sichuan Changhong Operational
Controlling shareholder and
2 Electronics Holding contact of No 220.92 338.2 521.5 - - 37.62
ultimate controller
Group Co., Ltd. related credit
Other enterprise control under
Sichuan Changhong Operational
the same controlling
3 International Hotel Co., contact of No 285.98 - 152.5 - - 133.47
shareholder and ultimate
Ltd. related credit
controller
Other enterprise control under
Operational
Anhui Xinhao Plasma the same controlling
4 contact of No 64.5 5.13 63.33 - - 6.3
Display Panel Co., Ltd. shareholder and ultimate
related credit
controller
Other enterprise control under
Operational
Yibing Hongxing the same controlling
5 contact of No 105.8 - 91.09 - - 14.72
Electronics Co., Ltd. shareholder and ultimate
related credit
controller
Other enterprise control under
Sichuan Changhong Operational
the same controlling
6 Xinrui Technology Co., contact of No - 77.29 77.29 - - -
shareholder and ultimate
Ltd related credit
controller
105
HEFEI MEILING CO., LTD. Annual Report 2016
Other enterprise control under
Operational
Sichuan Huafeng Corp. the same controlling
7 contact of No - 17.25 17.25 - - -
Group shareholder and ultimate
related credit
controller
Other enterprise control under
Operational
Sichuan Huanyu the same controlling
8 contact of No - 1.42 1.42 - - -
Industrial Co. Ltd. shareholder and ultimate
related credit
controller
Other enterprise control under
Sichuan Changhong Operational
the same controlling
9 Group Finance Co., contact of No - 0.25 0.25 - - -
shareholder and ultimate
Ltd. related credit
controller
Other enterprise control under
Sichuan Changhong Operational
the same controlling
10 Mold Plastic Tech. Co., contact of No 20.75 14,319.50 14,243.73 - - 96.52
shareholder and ultimate
Ltd. related credit
controller
Other enterprise control under
Operational
Lejiayi Chain the same controlling
11 contact of No 32.58 365.25 397.83 - - -
Management Co., Ltd. shareholder and ultimate
related credit
controller
Other enterprise control under
Operational
Hefei Changhong the same controlling
12 contact of No 149.21 300.58 449.79 - - -
Industrial Co., Ltd. shareholder and ultimate
related credit
controller
Other enterprise control under
Operational
Huayi Compressor Co., the same controlling
13 contact of No 26.38 16.92 9.82 - - 33.48
Ltd. shareholder and ultimate
related credit
controller
14 Sichuan Changhong Other enterprise control under Operational No 0.08 33.73 33.37 - - 0.44
106
HEFEI MEILING CO., LTD. Annual Report 2016
Package Printing Co., the same controlling contact of
Ltd. shareholder and ultimate related credit
controller
Other enterprise control under
Operational
Sichuan Changhong the same controlling
15 contact of No 0.55 4,761.08 4,761.63 - - -
Jijia Fine Co., Ltd. shareholder and ultimate
related credit
controller
Other enterprise control under
Sichuan Changhong Operational
the same controlling
16 Network Technology contact of No 5.12 1.57 6.69 - - -
shareholder and ultimate
Co., Ltd. related credit
controller
Other enterprise control under
Operational
Sichuan Hongwei the same controlling
17 contact of No 0.9 26.25 0 - - 27.15
Technology Co., Ltd. shareholder and ultimate
related credit
controller
Other enterprise control under
Operational
PT.CHANGHONGEL the same controlling
18 contact of No 21.24 2.6 21.14 - - 2.7
ECTRICINDONESIA shareholder and ultimate
related credit
controller
Other enterprise control under
Operational
CHANGHONG(HK)T the same controlling
19 contact of No 13,321.47 45,103.46 52,370.77 - - 6,054.16
RADINGLIMITED shareholder and ultimate
related credit
controller
Other enterprise control under
Operational
CHANGHONGELECT the same controlling
20 contact of No - 14.48 0 - - 14.48
RIC(AUSTRALIA) shareholder and ultimate
related credit
controller
Sichuan Changhong Other enterprise control under Operational
21 No - 3.95 3.95 - - -
Property Co., Ltd. the same controlling contact of
107
HEFEI MEILING CO., LTD. Annual Report 2016
shareholder and ultimate related credit
controller
Other enterprise control under
Sichuan Changhong Operational
the same controlling
22 Gerun Renewable contact of No 0.36 952.12 952.48 - - 0
shareholder and ultimate
Resources Co., Ltd. related credit
controller
Other enterprise control under
Sichuan Service Exp. Operational
the same controlling
23 Appliance Service contact of No 20 746.58 746.58 - - 20
shareholder and ultimate
Chain Co., Ltd. related credit
controller
Other enterprise control under
Chengdu Changhong Operational
the same controlling
24 Electronic Technology contact of No 183.52 1.55 141.62 - - 43.45
shareholder and ultimate
Co., Ltd. related credit
controller
Other enterprise control under
Sichuan Zhiyijia Operational
the same controlling
25 Network Technology contact of No 26,096.46 143,292.46 151,984.21 - - 17,404.72
shareholder and ultimate
Co., Ltd. related credit
controller
Other enterprise control under
Operational
Guangdong Changhong the same controlling
26 contact of No - 243.19 243.19 - - -
Electronics Co., Ltd. shareholder and ultimate
related credit
controller
Other enterprise control under
Operational
Sichuan Changhong the same controlling
27 contact of No - 5.34 5.34 - - -
Power Source Co., Ltd. shareholder and ultimate
related credit
controller
Sichuan Changhong Other enterprise control under Operational
28 Minsheng Logistics the same controlling contact of No 8.03 212.31 220.34 - - -
Co., LTD shareholder and ultimate related credit
108
HEFEI MEILING CO., LTD. Annual Report 2016
controller
Other enterprise control under
Sichuan Changhong Operational
the same controlling
29 Devices Technology contact of No 0.14 128.7 128.84 - - -
shareholder and ultimate
Co., Ltd. related credit
controller
Other enterprise control under
Operational
BVCH Optronics the same controlling
30 contact of No - 6.37 6.37 - - -
(Sichuan) Co., Ltd. shareholder and ultimate
related credit
controller
Other enterprise control under
Sichuan Changhong Operational
the same controlling
31 Intelligent Health contact of No - 0.31 0.31 - - -
shareholder and ultimate
Technology Co., Ltd. related credit
controller
Sichuan Changhong Other enterprise control under
Operational
Intelligent the same controlling
32 contact of No - 25.47 0 - - 25.47
Manufacturing shareholder and ultimate
related credit
Technology Co., Ltd. controller
Other enterprise control under
Sichuan Changhong Operational
the same controlling
33 Electronic Products contact of No - 8.74 8.74 - - -
shareholder and ultimate
Co., Ltd. related credit
controller
Other enterprise control under
Mianyang Technology Operational
the same controlling
34 Town Big Data contact of No - 0.06 0.06 - - -
shareholder and ultimate
Technology Co., Ltd. related credit
controller
Other enterprise control under
Operational
BVCH Optronics the same controlling
35 contact of No - 1.91 1.91 - - -
(Sichuan) Co., Ltd. shareholder and ultimate
related credit
controller
109
HEFEI MEILING CO., LTD. Annual Report 2016
Other enterprise control under
Operational
Shenzhen Yijia‘en the same controlling
36 contact of No - 1.81 1.81 - - -
Technology Co. Ltd. shareholder and ultimate
related credit
controller
Other enterprise control under
Sichuan Changhong Operational
the same controlling
37 Precision Electronics contact of No - 6.4 6.4 - - -
shareholder and ultimate
Tech. Co., Ltd. related credit
controller
Other enterprise control under
Sichuan Changhong Operational
the same controlling
38 Education Technology contact of No - 0.31 0.31 - - -
shareholder and ultimate
Co., Ltd. related credit
controller
Other enterprise control under
Sichuan Changhong Operational
the same controlling
39 Property Service Co., contact of No - 4.89 3.64 - - 1.25
shareholder and ultimate
Ltd. related credit
controller
Other enterprise control under
Operational
Sichuan Changhe the same controlling
40 contact of No - 0.2 0.2 - - -
Technology Co., Ltd. shareholder and ultimate
related credit
controller
Total -- 40,822.75 319,963.28 336,708.53 - - 24,077.51
Influence on business performance and financial status of the Company from
--
related liabilities
2. Debts payable to related party
Balance at Current Current Current Balance at
period-begin newly recovery Intere interest period-end
Serial Related party Relationship Causes
(10 thousand added (10 thousand st rate (10 (10
Yuan) (10 Yuan) thousand thousand
110
HEFEI MEILING CO., LTD. Annual Report 2016
thousand Yuan) Yuan)
Yuan)
Operational
Sichuan Changhong Controlling shareholder and
1 contact of 3,639.39 19,108.86 17,238.04 - - 5,510.20
Electric Co., Ltd. ultimate controller
related debt
Sichuan Changhong Operational
Controlling shareholder and
2 Electronics Holding contact of 0.41 21.71 22.13 - - -
ultimate controller
Group Co., Ltd. related debt
Other enterprise control under Operational
CHANGHONG(HK)
3 the same controlling shareholder contact of 87.66 189.09 88.55 - - 188.2
TRADINGLIMITED
and ultimate controller related debt
CHANGHONGELEC Other enterprise control under Operational
4 TRICMIDDLEEAST the same controlling shareholder contact of 0.16 3.57 0 - - 3.73
FZE and ultimate controller related debt
Guangdong Other enterprise control under Operational
5 Changhong the same controlling shareholder contact of 272.53 1,149.19 1,060.97 - - 360.75
Electronics Co., Ltd. and ultimate controller related debt
Guangdong Other enterprise control under Operational
6 Changhong Ridian the same controlling shareholder contact of 151.6 - 151.6 - - -
Technology Co., Ltd. and ultimate controller related debt
Other enterprise control under Operational
Huayi Compressor
7 the same controlling shareholder contact of 14,024.94 44,640.89 53,085.21 - - 5,580.63
Co., Ltd.
and ultimate controller related debt
Other enterprise control under Operational
Lejiayi Chain
8 the same controlling shareholder contact of 0.09 55.89 0 - - 55.98
Management Co., Ltd.
and ultimate controller related debt
Other enterprise control under Operational
081 Electronic Group
9 the same controlling shareholder contact of 14.85 278.61 -36.95 - - 330.41
Co., Ltd.
and ultimate controller related debt
111
HEFEI MEILING CO., LTD. Annual Report 2016
Sichuan Zhiyijia Other enterprise control under Operational
10 Network Technology the same controlling shareholder contact of 4.87 2.81 7.68 - - -
Co., Ltd. and ultimate controller related debt
Sichuan Changhong
Other enterprise control under Operational
Intelligent
11 the same controlling shareholder contact of 3.8 674 539.93 - - 137.87
Manufacturing
and ultimate controller related debt
Technology Co., Ltd.
Other enterprise control under Operational
Mianyang Hongrun
12 the same controlling shareholder contact of 43.88 986.57 865.79 - - 164.66
Electronic Co., Ltd.
and ultimate controller related debt
Other enterprise control under Operational
Sichuan CCO Display
13 the same controlling shareholder contact of 7.46 - 7.46 - - -
Device Co., Ltd.
and ultimate controller related debt
Other enterprise control under Operational
Sichuan Hongwei
14 the same controlling shareholder contact of - 503.74 338.99 - - 164.75
Technology Co., Ltd.
and ultimate controller related debt
Sichuan Hongyu Other enterprise control under Operational
15 Metal Manufacture the same controlling shareholder contact of 7.66 55.98 16.1 - - 47.54
Co., Ltd. and ultimate controller related debt
Sichuan Service Exp. Other enterprise control under Operational
16 Appliance Service the same controlling shareholder contact of 1,235.06 11,990.75 12,561.13 - - 664.69
Chain Co., Ltd. and ultimate controller related debt
Sichuan Changhong Other enterprise control under Operational
17 Package Printing Co., the same controlling shareholder contact of 386.57 5,862.38 5,085.70 - - 1,163.25
Ltd. and ultimate controller related debt
Sichuan Changhong Other enterprise control under Operational
18 Power Source Co., the same controlling shareholder contact of 1.77 15.15 0 - - 16.92
Ltd. and ultimate controller related debt
112
HEFEI MEILING CO., LTD. Annual Report 2016
Sichuan Changhong Other enterprise control under Operational
19 Devices Technology the same controlling shareholder contact of 285.7 684.44 145.69 - - 824.45
Co., Ltd. and ultimate controller related debt
Sichuan Changhong Other enterprise control under Operational
20 Gerun Renewable the same controlling shareholder contact of 36.01 6.65 - - 29.36
Resources Co., Ltd. and ultimate controller related debt
Sichuan Changhong Other enterprise control under Operational
21 International Hotel the same controlling shareholder contact of - 18.12 15.67 - - 2.45
Co., Ltd. and ultimate controller related debt
Other enterprise control under Operational
Sichuan Changhong
22 the same controlling shareholder contact of 1,854.53 21,374.46 18,096.14 - - 5,132.86
Jijia Fine Co., Ltd.
and ultimate controller related debt
Sichuan Changhong Other enterprise control under Operational
23 Precision Electronics the same controlling shareholder contact of 47.44 773.61 597.85 - - 223.2
Tech. Co., Ltd. and ultimate controller related debt
Sichuan Changhong Other enterprise control under Operational
24 Minsheng Logistics the same controlling shareholder contact of 1,437.86 43,875.55 41,241.93 - - 4,071.48
Co., LTD and ultimate controller related debt
Sichuan Changhong Other enterprise control under Operational
25 Mold Plastic Tech. the same controlling shareholder contact of 4,798.18 42,769.48 35,779.50 - - 11,788.16
Co., Ltd. and ultimate controller related debt
Sichuan Changhong Other enterprise control under Operational
26 Xinrui Technology the same controlling shareholder contact of 1,809.92 5,019.64 3,696.10 - - 3,133.45
Co., Ltd and ultimate controller related debt
Sichuan Changhong Other enterprise control under Operational
27 New Energy the same controlling shareholder contact of 3.51 6.69 10.17 - - 0.02
Technology Co., Ltd. and ultimate controller related debt
Sichuan Changhong Other enterprise control under Operational
28 2.85 0.57 3.42 - - -
Lighting Technology the same controlling shareholder contact of
113
HEFEI MEILING CO., LTD. Annual Report 2016
Co.,Ltd. and ultimate controller related debt
Beijing Changhong Other enterprise control under Operational
29 Science and the same controlling shareholder contact of - 8.91 8.91 - - -
Technology Co., Ltd. and ultimate controller related debt
Sichuan Changhong Other enterprise control under Operational
30 Electronic System the same controlling shareholder contact of 7.7 - - - - 7.7
Co., Ltd. and ultimate controller related debt
Other enterprise control under Operational
Sichuan Jiahong
31 the same controlling shareholder contact of 8.05 33.74 41.17 - - 0.61
Industrial Co., Ltd.
and ultimate controller related debt
Other enterprise control under Operational
Sichuan Hongxin
32 the same controlling shareholder contact of - 75.68 75.68 - - -
Software Co., Ltd.
and ultimate controller related debt
Other enterprise control under Operational
Sichuan Huafeng
33 the same controlling shareholder contact of - 28.35 0 - - 28.35
Corp. Group
and ultimate controller related debt
Sichuan Hongcheng Other enterprise control under Operational
34 Construction the same controlling shareholder contact of - 590.96 590.96 - - -
Engineering Co., Ltd. and ultimate controller related debt
Sichuan Changhong Other enterprise control under Operational
35 Electronic Products the same controlling shareholder contact of - 3,485.14 3,480.14 - - 5
Co., Ltd. and ultimate controller related debt
Sichuan Changhong Other enterprise control under Operational
36 International Travel the same controlling shareholder contact of - 11.99 10.49 - - 1.5
Service Co., Ltd. and ultimate controller related debt
Sichuan Changhong Other enterprise control under Operational
37 Property Service Co., the same controlling shareholder contact of - 0.71 0.71 - - 0
Ltd. and ultimate controller related debt
114
HEFEI MEILING CO., LTD. Annual Report 2016
Hefei Changhong Other enterprise control under Operational
38 New Energy the same controlling shareholder contact of - 24.26 24.26 - - -
Technology Co., Ltd. and ultimate controller related debt
Sichuan Changhong Other enterprise control under Operational
39 Property Service Co., the same controlling shareholder contact of - 0.71 0.71 - - -
Ltd. and ultimate controller related debt
Sichuan Changhong Other enterprise control under Operational
40 Diandianbang the same controlling shareholder contact of - 0.03 0 - - 0.03
Technology Co., Ltd. and ultimate controller related debt
Other enterprise control under Operational
PT.CHANGHONGEL
41 the same controlling shareholder contact of 0.02 0.02 - - -
ECTRICINDONESIA
and ultimate controller related debt
Total 30,174.47 204,322.23 194,858.50 - - 39,638.20
Influence on business performance and financial status of the Company from
--
related debts
Note: the Company purchased Changhong Ridian at beginning of 2016, and it’s a merger under the same control, the abovementioned has
re-state the data at period-begin, including Changhong Ridian. For the above-mentioned statement, up to the Period-end, debts payable to
related party from the Company and subordinate are amounting as 396,382,000 Yuan in total, the claim receivable from related party for the
Company and subordinate amounting as 240,775,100 Yuan.
115
HEFEI MEILING CO., LTD. Annual Report 2016
(V) Other related transactions
√ Applicable □Not applicable
The private placement of the Company (including issuring price and pricing principal,
numbers issued and effective term of the resolution) was being deliberated and approved by the
17th session of the 8th BOD and 1st extraordinary shareholders general meeting of 2016 dated 6
March 2016 and 6 April 2016.
In view of the adjustment in aspect of the issuing price and pricing princile and numbers, the
Resigning of Conditional Entry Subscription Agreement between the Company and Sichuan
Changhong Electric Co., Ltd. was deliberaed and aprpoved by the 17th session of the 8th BOD and
1st extraordinary shareholders general meeting of 2016. The Company entered into a Conditional
Entry Subscription Agreement with Sichuan Changhong on 6 March 2016, the Agreement has the
same content with former agreement, except the clause of Princing Principle and Subscription price
and Incorporation by Agreement.
Disclosure information for related transaction temporary disclosed
Temporary notice Dated disclosed Website for disclosure
2016-014: Resolution notice of 17th
meeting of 8th session of the Board
2016-017: Notice of re-signing the
―subscription agreement of privately
placement with entry-into-force 7 March 2016 Juchao Website:
conditions‖ in relation to related 7 April 2016 http://www.cninfo.com.cn
transactions
2016-037: Resolution of the 1st
extraordinary shareholders general
meeting of 2016
XVII. Significant contract and implementations
(I)Entrust, contract and leasing
1. Entrust
□ Applicable √ Not applicable
No entrust in Period.
2. Contract
□ Applicable √ Not applicable
No contract in Period.
3. Leasing
√ Applicable □Not applicable
116
HEFEI MEILING CO., LTD. Annual Report 2016
(1) leasing
Operational leasing of the Company please found more details in ―investment real estate‖,
―fixed assets‖, ―Lease of related party‖ and ―Rent of related party‖ in Note of Financial Statement.
(2) Gains/losses to the Company from projects that reached over 10% in total profit of the
Company in reporting period
□Applicable √ Not applicable
No gains or losses to the Company from projects that reached over 10% in total profit of the
Company in reporting period.
(ii) Major guarantee
√ Applicable □Not applicable
1. Guarantee
During the reporting period, the guarantees that the company provides for its wholly-owned
and holding subsidiaries are for the loans generated by supporting their production and operation,
the guaranty type is assurance; the guarantees that the company and subsidiaries provide for the
distributors are to provide joint liability guarantees for the high quality distributors conforming to
certain conditions within the line of credit of designated banks, the E-bank acceptance bills opened
under this line of credit are all used for the distributors to pay the purchase payment for goods to the
Company and subsidiaries, aiming to promote the company‘s channel business development,
strengthen the good cooperative relationship between the company and the downstream distributors,
and effectively stimulate the company and its subsidiaries‘ sales growth.
Up to 31 December 2016, the company has granted credit to the guarantees of some
wholly-owned and holding subsidiaries, in addition to the wholly-owned subsidiary Zhongshan
Changhong, other subsidiaries have no actual guarantee; meanwhile, the company and its
subsidiaries have granted credit to the guarantees of some high quality distributors, the balance of
guarantees is within the line of credit. The external guarantees of the Company and subsidiaries are
as follows:
In 10 thousand Yuan
Particulars about the external guarantee of the Company and subsidiaries (Barring the guarantee for subsidiaries)
Complete
Name of the Actual date of Actual Guarantee
Related Announcement Guarantee Guarantee Guarant impleme
Company happening (Date of guarantee for related
disclosure date limit type ee term ntation or
guaranteed signing agreement) limit party
not
Dealer of Notice No.:
Hefei 2016-068,No.: 2016-072 Joint
Meiling Co., and No.: 2016-077 on 20,000 2016-3-11 1,459.09 liability 1 year No No
Ltd. 26 November 2016 and guaranty
14 December 2016
117
HEFEI MEILING CO., LTD. Annual Report 2016
Dealer of Notice No.:
Sichuan 2016-068,No.: 2016-072 Joint
Changhong and No.: 2016-077 on 20,000 2016-1-15 433.9981 liability 1 year No No
Air-condition 26 November 2016 and guaranty
er Co., Ltd. 14 December 2016
Total actual occurred
Total approving external guarantee in
40,000 external guarantee in report 1,893.0881
report period (A1)
period (A2)
Total actual balance of
Total approved external guarantee at the
40,000 external guarantee at the end 1,279.6881
end of report period ( A3)
of report period (A4)
Guarantee between the Company and the subsidiaries
Complete
Name of the Actual date of Actual Guarantee
Related Announcement Guarantee Guarantee Guarant impleme
Company happening (Date of guarantee for related
disclosure date limit type ee term ntation or
guaranteed signing agreement) limit party
not
Joint
5,000（note
2015-5-27 liability 1 year Yes No
1）
guaranty
Joint
Notice No.:
2015-3-30 8,000 liability 1 year Yes No
2015-003,No.: 2015-007
guaranty
and No.: 2015-015 on 55,000
26 March 2015 and 18
Joint
Zhongshan April 2015 2015-12-29 15,000 liability 1 year Yes No
Changhong guaranty
Electric Co., Joint
17,000
LTD 2015-12-30 liability 1 year No No
（note 2）
guaranty
Joint
Notice No.:
2016-8-5 5,000 liability 1 year No No
2016-027,No.: 2016-031
guaranty
and No.: 2016-046 on 56,500
25 March 2016 and 5
Joint
May 2016
2016-10-28 5,000 liability 1 year No No
guaranty
Joint
Guangdong Notice No.:
2016-9-1 2,000 liability 1 year No No
Changhong 2016-027,No.: 2016-031
guaranty
Ridian and No.: 2016-046 on 8,500
Joint
Technology 25 March 2016 and 5
2016-5-5 4,500 liability 1 year No No
Co., Ltd. May 2016
guaranty
118
HEFEI MEILING CO., LTD. Annual Report 2016
Zhongke Notice No.:
Meiling 2016-027,No.: 2016-031 Joint
Cryogenic and No.: 2016-046 on 2,000 - 0 liability - - -
Technology 25 March 2016 and 5 guaranty
Co., Ltd. May 2016
Total amount of actual
Total amount of approving guarantee for occurred guarantee for
67,000 61,500
subsidiaries in report period (B1) subsidiaries in report period
(B2)
Total balance of actual
Total amount of approved guarantee for
guarantee for subsidiaries at
subsidiaries at the end of reporting 67,000 33,500
the end of reporting period
period (B3)
(B4)
Guarantee of the subsidiaries for the subsidiaries
Complet
Name of the Actual date of Actual e Guarantee
Related Announcement Guarantee Guarantee Guarant
Company happening (Date of guarantee impleme for related
disclosure date limit type ee term
guaranteed signing agreement) limit ntation party
or not
-- -- -- -- -- -- -- -- --
Total amount of actual
Total amount of approving guarantee for occurred guarantee for
-- --
subsidiaries in report period (C1) subsidiaries in report period
(C2)
Total balance of actual
Total amount of approved guarantee for
guarantee for subsidiaries at
subsidiaries at the end of reporting -- --
the end of reporting period
period (C3)
(C4)
Total amount of guarantee of the Company( total of three abovementioned guarantee)
Total amount of actual
Total amount of approving guarantee in
report period (A1+B1+C1) 107,000 occurred guarantee in report 63,393.0881
period (A2+B2+C2)
Total balance of actual
Total amount of approved guarantee at
the end of report period (A3+B3+C3) 107,000 guarantee at the end of 34,779.6881
report period (A4+B4+C4)
Ratio of actrual guarantee (A4+B4+C4) in net assets of the Company 6.83%
Including:
Amount of guarantee for shareholders, actual controller and its related parties(D) 0
The debts guarantee amount provided for the guaranteed parties whose
assets-liability ratio exceed 70% directly or indirectly(E) 27,000
Proportion of total amount of guarantee in net assets of the Company exceed
50%(F) 0
Total amount of the aforesaid three guarantees(D+E+F) 27,000
Explanations on possibly bearing joint and several liquidating responsibilities for --
119
HEFEI MEILING CO., LTD. Annual Report 2016
undue guarantees (if applicable)
Explanations on external guarantee against regulated procedures (if applicable)
Note 1: The guarantee business of Zhongshan Changhong signed the agreement on 27 May
2015, the implementation time is : 29 September 2015 to 29 September 2016.
Note 2: The guarantee business of Zhongshan Changhong signed the agreement on 30
December 2015, the implementation time is : 1 January 2016 to 31 December 2016.
The above guarantees are all wholly-owned and holding subsidiaries of the Company.
Production and operation of these wholly-owned and holding subsidiaries was normal with no
overdue unpaid loans and guarantee risk is controllable. During the reporting period, the highest
level of security the Company provided amounted to 670 million Yuan by the approval, the actual
amount of guarantee is 615 million Yuan. The highest level of security the Company and
subsidiaries provided outside amounted to 400 million Yuan by the approval, the actual amount of
guarantee is 18.930881 million Yuan. At the end of the reporting period, the practical guarantee
balance amounted to 347.796881 million Yuan, accounting for the Company’s latest net assets
ratio of 6.83%.
Explanation on guarantee with composite way
□Applicable √Not applicable
2. Guarantee outside against the regulation
□Applicable √Not applicable
No guarantee outside against the regulation in Period.
(III) Entrust others to cash asset management
1. Trust financing
√Applicable □Not applicable
120
HEFEI MEILING CO., LTD. Annual Report 2016
In 10 thousand Yuan
Amount of
reserve for
Whether Principal Actual Actual
devaluation
related Trust financing Criteria for fixing actually Anticipated gains/los collected
Name Type Start date End date of
trade or amount reward collected in income ses in gains/losses
withdrawing
not the Period period in period
(if
applicable)
Anhui Branch of Bank Floating
of Communication Co., N proceeds 50,000.00 2015-10-20 2016-1-19 3.9% annual yield 50,000.00 486.16 498.63 498.63
Ltd. products
Floating
Heifei Changjiang East
N proceeds 10,000.00 2016-12-15 2017-4-6 4.3% annual yield - 131.95 - -
Road Branch of ICBC
products
Income of
entrust
Sichuan Trust Co., Ltd. N 35,520.00 2016-12-28 2017-12-5 6.6% annual yield - 2,196.60 - -
products
transfer
Floating
3.65% annual
Hefei Barnch of BEA N proceeds 3,000.00 2016-12-30 2017-3-30 - 27.00 - -
yield
products
Floating
4.00% annual
Anhui Branch of CBC N proceeds 20,000.00 2016-12-20 2017-3-20 - 197.26
yield
products
Floating
Hefei Branch of Huaxia 4.15% annual
N proceeds 30,000.00 2016-12-21 2017-6-22 - 624.21 - -
Bank Co., Ltd. yield
products
121
HEFEI MEILING CO., LTD. Annual Report 2016
Anhui Branch of Bank
Guaranteed
of Communication Co., N 20,000.00 2016-12-23 2017-3-24 3.5% annual yield - 174.52
income
Ltd.
Floating
Hefei Branch of Huaxia 4.15% annual
N proceeds 20,000.00 2016-12-28 2017-6-29 - 416.14
Bank Co., Ltd. yield
products
Total 188,520.00 -- -- -- 50,000.00 4,253.84 498.63 --
Capital resource Own funds 985.2 million Yuan; raised fund 900 million Yuan
Principal uncollected for overdue and
0
accumulated earnings
Lawsuit involved (if applicable) Not applicable
Disclosure date for approval from the Board for
18 October 2016 and 26 November 2016
trust financing (if applicable)
Disclosure date for approval from board of
2016-12-14
shareholders for trust financing (if applicable)
Whether has trust financing plan in future Y
122
HEFEI MEILING CO., LTD. Annual Report 2016
2. Entrust loans
□Applicable√Not applicable
No entrust loans in the period
(iv) Other material contracts
□Applicable√Not applicable
No other material contracts in the period
XVIII. Explanation on other significant events
1. Fulfill the precise social responsibility for poverty alleviation
□Applicable √ Not applicable
2. Performance of precise poverty alleviation social responsibility
The listed Company and its subsidiary whether belongs to the key sewage units released from
enviornmetnal protection department
□Yes √No □Not applicable
Issued social responsibility report
□Yes √No
XIX. Explanation on other significant events
√ Applicable □Not applicable
(i) being deliberated and approved on the 18th session of 8th BOD and First Extraordinary
shareholders meeting of 2016, the Company and subsidiary are agreed to carry forward foreign
exchange fund trading business during 1 July 2016 to 30 July 2017, with balance up to US$ 500
million, delibery period for single business will not last for 2-year. Found more in the Notice (No.:
2016-020, No.: 2016-022 and No.: 2016-037) released on appointed media Securities Times, China
Securities Journal, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn) dated
19 March 2016 and 7 April 2016.
(ii) The resolution of the 19th meeting of the 8th Board of Directors of the company passed
and agreed the company to apply for a special credit line of bank notes pool with a maximum of
300 million Yuan to China Merchants Bank Co., Ltd. Hefei Branch, and the credit term was one
year, the credit variety was mainly used in bank notes pool special business, and adopted bill pledge.
The company has disclosed the details on the designated information disclosure media "Securities
Times", "China Securities Journal", "Hong Kong Commercial Daily" and www.cninfo.com.cn in
forms of announcement (No. 2016-027, No. 2016-034) on March 25, 2016.
(iii) On June 2, 2016, the company held the news conference on "intelligent space control the
future - Meiling intelligent home eco-circle plan and CHiQ second generation new product". At this
press conference, the company launched the "intelligent home eco-circle" plan, and released the
human-centered CHiQ second-generation refrigerator that can realize space intelligent changes
according to food needs, and CHiQ intelligent air steward that can automatically change air. The
company has disclosed the details on the designated information disclosure media "Securities
Times", "China Securities Journal", "Hong Kong Commercial Daily" and www.cninfo.com.cn in
forms of announcement (No. 2016-050) on June 3, 2016.
(iv) With the approval of ―Reply to approve the non-public offering shares of Hefei Meiling
123
HEFEI MEILING CO., LTD. Annual Report 2016
Co., Ltd.‖ ("CSRC License No.[2016]1396") of China Securities Regulatory, as the company has
successfully issued non-public offering of 280,858,676 shares of RMB ordinary shares (A shares) to
7 specific investors that conform to the related provisions and conditions, including Sichuan
Changhong Electric Co., Ltd. After the completion of this offering, the company‘s registered capital
increases from 736,739,205 Yuan to 1,044,597,881 Yuan.
According to the authorization of the company‘s second extraordinary general meeting in 2015
to the Board of Directors, the resolution of the 26th meeting of the 8th Board of Directors of the
company passed and agreed the company to increase the company‘s registered capital and
correspondingly revise some terms of the "Articles of Association" on the basis of the actual results
of this non-public offering of shares according to the relevant laws, regulations and regulatory
documents. Details have been disclosed on the designated information disclosure media "Securities
Times", "China Securities Journal", "Hong Kong Commercial Daily" and www.cninfo.com.cn in
forms of announcement (No. 2016-062, No. 2016-066) on October 18, 2016. The company has
disclosed the full text of revised "Articles of Association of Hefei Meiling Co., Ltd." at
www.cninfo.com.cn on the same day.
(v) The resolutions of the 26th meeting of the 8th Board of Directors of the company and the
second extraordinary general meeting in 2016 passed and agreed the company to use its own
temporarily idle funds of less than 2 billion Yuan (the amount can be scrolled to use) to invest and
purchase steady finance products with time limit within one year from the financial institutions
(banks, securities companies, trust companies, etc.) with high security, good liquidity, and low risk
in the premise of ensuring the fund demands for day-to-day management and operations and
effectively controlling the investment risks, and the investment period is one year (from the date the
deliberation of the company‘s stockholders' meeting passed). The company has disclosed the details
on the designated information disclosure media "Securities Times", "China Securities Journal",
"Hong Kong Commercial Daily" and www.cninfo.com.cn in forms of announcement (No. 2016-062,
No. 2016-067, and No. 2016- 077) on October 18, 2016 and December 14, 2016.
(vi) The resolutions of the 27th meeting of the 8th Board of Directors of the company and the
second extraordinary general meeting in 2016 passed and agreed the company and the subsidiary
Changhong Air Conditioning to continue to provide joint liability guarantee within the credit line of
designated banks for qualified suppliers satisfying certain conditions on condition that the risks are
controllable. The e-bank acceptance opened in this credit line should all be used by dealers to pay
the purchase payment to the Company and the subsidiaries; the total amount of guarantee should
not exceed 400 million Yuan , of which the guarantee amount of the company to dealers shall not
exceed 200 million Yuan , the guarantee amount of Changhong Air Conditioning to its dealers
should be no more than 200 million Yuan , it is subject to the guarantee contract signed by the bank,
and the guarantee period is one year. The company has disclosed the details on the designated
information disclosure media "Securities Times", "China Securities Journal", "Hong Kong
Commercial Daily" and www.cninfo.com.cn in forms of announcement (No. 2016-068, No.
2016-072, and No. 2016- 077) on November 26, 2016 and December 14, 2016.
(vii) The resolutions of the 27th meeting of the 8th Board of Directors of the company and the
second extraordinary general meeting in 2016 passed and agreed the company to apply for
registration of issuing ultra-short- term financing bonds of no more than 2 billion Yuan (including
2 billion Yuan ) to National Association of Financial Market Institutional Investors through financial
institutions so as to further expand the financing channels and reduce the financing costs, and adjust
124
HEFEI MEILING CO., LTD. Annual Report 2016
the financing structure to meet the company's production and operation and investment needs. The
company has disclosed the details on the designated information disclosure media "Securities
Times", "China Securities Journal", "Hong Kong Commercial Daily" and www.cninfo.com.cn in
forms of announcement (No. 2016-068, No. 2016-073, No. 2016-077) on November 26, 2016 and
December 14, 2016.
XX. Major event of the subsidiary
√ Applicable □Not applicable
According to the resolution of the tenth meeting of the eighth board of directors held on
August 28, 2015, the company's board of directors agreed the subsidiary - Zhongke Meiling
Cryogenics Co., Ltd. to start the restructuring and set up the limited liability company, and apply for
the listing in the National Equities Exchange and Quotations after the overall restructuring. After
being audited and approved by National Equities Exchange and Quotations Co., Ltd., Zhongke
Meiling has been listed in National Equities Exchange and Quotations on February 24, 2016, the
security is referred to as "Zhongke Meiling", and the stock code is "835892."
In order to support the development of Zhongke Meiling, establish and improve its long-term
incentive mechanism, supplement the working capital needed for its development, enhance its stock
trading activity and promote the sustainable development of its business operation, the resolution of
the 24th meeting of the 8th Board of Directors of the company passed and the company‘s Board of
Directors agreed Zhongke Meiling to issue no more than 3,150,000 shares (including 3,150,000
shares) to its senior management and core staff, the issuing objects should subscribe in cash, at the
same time, the Company would give up the pre-emption right of this share issuance on equal
conditions. The issue price was intended to be 1.63 Yuan / share on the basis of the net assets
assessed value of Zhongke Meiling up to June 30, 2016, and should issue no more than 3,150,000
shares (including 3,150,000 shares) to its senior management and core staff, the amount of
financing should not exceed 5,134,500 Yuan (including 5,134,500 Yuan ).
Up to now, Zhongke Meiling has successfully completed this private placement work to the
management and core staff, and completed the industrial and commercial change registration work.
Zhongke Meiling finally issued 315 million shares to its senior management and core employees,
with the financing amount of 5,134,500 Yuan. After the completion of this introduction of Zhongke
Meiling, the Company's shareholding ratio in Zhongke Meiling shall reduce from 70% to 66.7645%.
Zhongke Meiling will still be the holding subsidiary of the Company and still included in the
consolidated financial statements of the Company.
Found more in the Notice (No.: 2015-038, No.: 2015-039, No.: 2015-041, No.:2015-050,
No.:2016-006, No.:2016-013, No.: 2016-055 and No.: 2016-056) released on appointed media
Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website
dated 29 August 2015, 16 September 2016, 3 November 2015 and 30 January 2016, 24 February
2016 and 21 September. Meanwhile, more of the share issuance of Zhongke Meiling can be found
in the (www.neeq.com.cn) NEEQ(National Equities Exchange and Quotatitions) for reference.
(ii) The resolutions of the 19th meeting of the 8th Board of Directors of the company passed
and agreed the subsidiary Zhongshan Changhong Electric Co., Ltd. (hereinafter referred to as
125
HEFEI MEILING CO., LTD. Annual Report 2016
"Zhongshan Changhong") and its partner UAE RUBAGENERALTRADINGFZE company to
jointly increase capital in cash according to the existing shareholding ratio to the joint venture sales
company - Changhong Ruba Trading Company (Private) Limited which was invested and
established by both sides in Pakistan at an earlier stage, the total amount of capital increase is
US$ 6.4 million dollars. The company has disclosed the details on the designated information
disclosure media "Securities Times", "China Securities Journal", "Hong Kong Commercial Daily"
and www.cninfo.com.cn in forms of announcement (No. 2016-027, No. 2016-032) on March 25,
2016.
(iii) The resolutions of the 19th meeting of the 8th Board of Directors of the company passed
and agreed the subsidiary Zhongshan Changhong and Sichuan Changhong Air Conditioning Co.,
Ltd. to jointly invest and establish the subsidiaryCHANGHONG MEILING ELECTRIC
INDONESIA.PT in Indonesia, with the registered capital of US$ 6 million dollars. The company
has disclosed the details on the designated information disclosure media "Securities Times", "China
Securities Journal", "Hong Kong Commercial Daily" and www.cninfo.com.cn in forms of
announcement (No. 2016-027, No. 2016-032) on March 25, 2016.
(iv) The resolutions of the 23rd meeting of the 8th Board of Directors of the company passed
and agreed the company to transfer its 99% stock rights in Mianyang Meiling Software Technology
Co., Ltd. (hereinafter referred to as "Meiling Software") to its wholly-owned subsidiary Sichuan
Changhong Air Conditioning Co., Ltd. (hereinafter referred to as "Changhong Air Conditioning"),
the equity transferring price is based on the net assets value of Meiling Software up to June 30,
2016, and the equity transferring price is 5,798,619.62 Yuan after confirmed by both sides. After
this transferring, the Company‘s wholly-owned subsidiary Changhong Air Conditioning and
Mianyang Meiling Refrigeration shall totally hold 100% stock rights in Meiling Software. The
company has disclosed the details on the designated information disclosure media "Securities
Times", "China Securities Journal", "Hong Kong Commercial Daily" and www.cninfo.com.cn in
forms of announcement (No. 2016-052) on July 29, 2016.
(v) In order to optimize the company's resource allocation and divest the assets uncorrelated to
the company‘s main business and having low operating efficiency and losses, the resolutions of the
26th meeting of the 8th Board of Directors of the company passed and agreed the company to
publicly transfer its 100% stock rights (thereinto, the company directly holds 48.26% stock rights of
Meiling Packaging, and indirectly holds 51.74% stock rights of Meiling Packaging via the
wholly-owned subsidiary Heifei Meiling Group Holdings Co., Ltd. ) in the subsidiary Heifei
Meiling Packaging Products Co., Ltd. (Hereinafter referred to as "Meiling Packaging") at
Southwest United Equity Exchange, the listed price of stock right should be no less than estimated
value of 23,218,900 Yuan of all rights and interests of shareholders in Meiling
Packaging(assessment date is July 31, 2016). On December 28, 2016, according to the listing
results, Hefei Qige Packaging Materials Co., Ltd. (hereinafter referred to as "Qige Packaging") has
the intention transferee qualification and is eventually transferred the aforementioned stock rights
with 23,880,000 Yuan .
On 19 January 2017, the equity transfer completed its changes in industry and commerce
bureau, after ownership transfer, no shares of Hefei Meiling Package Products Co., Ltd. are held by
the Company.
126
HEFEI MEILING CO., LTD. Annual Report 2016
Found more in the Notice (No.: 2016-062, No.: 2016-065, No.: 2016-075 and No.: 2016-081)
released on appointed media Securities Times, China Securities Journal, Hong Kong Commercial
Daily and Juchao Website dated 18 October 201
(vi) The resolutions of the 27th meeting of the 8th Board of Directors of the company passed
and agreed the company‘s subsidiary HongYuan Earth Energy Heat Pump Technology Co., Ltd.
(Hereinafter referred to as the "Heat Pump Company") to set up HongYuan Earth Energy Heat
Pump Technology Co., Ltd. Guangdong Branch (tentative name, ultimately subject to the industrial
and commercial registration) in Nantou Town, Zhongshan City, Guangdong Province, and take this
subsidiary as the project implementation subject, invest 14,972,000 Yuan to build product base for
earth energy heat pump products to promote the production capacity of Heat Pump Company and
effectively meet the market demands. The company has disclosed the details on the designated
information disclosure media "Securities Times", "China Securities Journal", "Hong Kong
Commercial Daily" and www.cninfo.com.cn in forms of announcement (No. 2016-068) on
November 26, 2016.
(vii) The resolutions of the 27th meeting of the 8th Board of Directors of the company passed
and agreed the company‘s subsidiary Zhongshan Changhong Electric Co., Ltd. (Hereinafter referred
to as "Zhongshan Changhong") to invest one million Yuan to set up a wholly-owned trading-type
subsidiary Zhongshan Changhong Trading Co., Ltd. (tentative name, ultimately subject to the
industrial and commercial registration) to engage in product import and export trading business.
The company has disclosed the details on the designated information disclosure media "Securities
Times", "China Securities Journal", "Hong Kong Commercial Daily" and www.cninfo.com.cn in
forms of announcement (No. 2016-068) on November 26, 2016.
(viii) The resolutions of the 27th meeting of the 8th Board of Directors of the company passed
and agreed the company‘s subsidiary Guangdong Changhong Ridian Technology Co., Ltd.
(Hereinafter referred to as "Ridian Company") to invest RMB 1 million Yuan in Zhongshan,
Guangdong to set up a wholly-owned trading-type subsidiary Zhongshan Hongling Trading Co.,
Ltd. (tentative name, ultimately subject to the industrial and commercial registration) to engage in
product import and export trading business. The company has disclosed the details on the
designated information disclosure media "Securities Times", "China Securities Journal", "Hong
Kong Commercial Daily" and www.cninfo.com.cn in forms of announcement (No. 2016-068) on
November 26, 2016.
(ix) The resolutions of the 27th meeting of the 8th Board of Directors of the company passed
and agreed the company‘s subsidiary Sichuan Changhong Air Conditioning Co., Ltd. (Hereinafter
referred to as "Changhong Air Conditioning ") to invest about 22,886,000 Yuan to make technical
transformation of capacity expansion. The company has disclosed the details on the designated
information disclosure media "Securities Times", "China Securities Journal", "Hong Kong
Commercial Daily" and www.cninfo.com.cn in forms of announcement (No. 2016-068) on
November 26, 2016.
(x) As the original leasing plant of the company‘s subsidiary Mianyang Meiling Refrigeration
Co., Ltd. (hereinafter referred to as "Mianyang Meiling") has been collected and stored by the
government, the resolutions of the 27th meeting of the 8th Board of Directors of the company
passed and agreed Mianyang Meiling to rent plant for removal and invest 52,920,000 Yuan
127
HEFEI MEILING CO., LTD. Annual Report 2016
(excluding rental costs) to build a new environmentally friendly energy-saving refrigerator
production line expansion project. After going into operation, the project will form the production
capacity of 800,000 new environmentally friendly energy-saving refrigerators. The company has
disclosed the details on the designated information disclosure media "Securities Times", "China
Securities Journal", "Hong Kong Commercial Daily" and www.cninfo.com.cn in forms of
announcement (No. 2016-068) on November 26, 2016.
(xi) In order to ensure the orderly promotion of "Intelligent Life" project which is one of the
company's non-public offering funds investment projects in 2016, the resolution of the 15th meeting
of the 8th Board of Directors of the company passed and agreed the company to invest and build
Changmei Science and Technology Co., Ltd. (hereinafter referred to as "Changmei Technology"),
its registered capital is 50 million Yuan , of which the Company plans to invest 45 million Yuan in
cash, accounting for 90% of the registered capital, the management team of Changmei Technology
invests 5 million Yuan in cash, accounting for 10% of the registered capital. The Company and
Changmei Technology management team shall respectively pay 40% of the amount of the
subscribed capital within 30 days from the date of the establishment of the new company, and the
remaining amount shall be paid within 3 years from the date of establishment of the new company.
Due to the job transfer of some non-core staff in Changmei Technology resulting in the
corresponding subscribed capital unpaid, in order to ensure the smooth implementation of the
company's investment project, the resolution of the 27th meeting of the company‘s 8th board of
directors passed and agreed the company to transfer the subscribed capital unpaid by some non-core
staff in Changmei Technology by its own funds, i.e. 2.64% stock rights of Changmei Technology
(1.32 million Yuan in total). After this transfer of stock rights, the company‘s subscribed capital
becomes 46.32 million Yuan, accounting for 92.64% of the stock rights, the management team
totally pays subscribed capital of 3.68 million Yuan , accounting for 7.36% of the stock rights.
Found more in the Notice (No.: 2016-002 and No.: 2016-068) released on appointed media
Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website
dated 8 January 2016 and 26 November .
128
HEFEI MEILING CO., LTD. Annual Report 2016
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
(I) Changes in Share Capital
In Share
Before the Change Increase/Decrease in the Change (+, -) After the Change
Capitali
New shares Bonus zation of Proporti
Amount Proportion Others Subtotal Amount
issued shares public on
reserve
I. Restricted shares 9,965,170 1.30% 280,858,676 0 0 -522,100 280,336,576 290,301,746 27.79%
1. State-owned
0 0.00% 0 0 0 0 0 0 0.00%
shares
2. State-owned legal
915,987 0.12% 69,877,638 0 0 0 69,877,638 70,793,625 6.78%
person‘s shares
3. Other domestic
8,049,334 1.05% 210,981,038 0 0 -522,100 210,458,938 218,508,272 20.92%
shares
Including: Domestic
4,839,035 0.63% 210,981,038 0 0 0 210,981,038 215,820,073 20.66%
legal person‘s shares
Domestic natural
3,210,299 0.42% 0 0 0 -522,100 -522,100 2,688,199 0.26%
person‘s shares
4. Foreign shares 999,849 0.13% 0 0 0 0 0 999,849 0.09%
Including: Foreign
0 0.00% 0 0 0 0 0 0 0.00%
legal person‘s shares
Foreign natural
999,849 0.13% 0 0 0 0 0 999,849 0.09%
person‘s shares
II. Unrestricted
753,774,035 98.70% 0 0 0 522,100 522,100 754,296,135 72.21%
shares
1. RMB Ordinary
591,909,884 77.50% 0 0 0 522,100 522,100 592,431,984 56.71%
shares
2. Domestically
161,864,151 21.20% 0 0 0 0 0 161,864,151 15.50%
listed foreign shares
3. Overseas listed
0 0.00% 0 0 0 0 0 0 0.00%
foreign shares
4. Others 0 0.00% 0 0 0 0 0 0 0.00%
III. Total shares 763,739,205 100.00% 280,858,676 0 0 0 280,858,676 1,044,597,881 100.00%
(II) Reasons for share changed
√ Applicable □ Not applicable
129
HEFEI MEILING CO., LTD. Annual Report 2016
1. In reporting period, after six months since former senior executive Mr. Deng Xiaohui leaved,
the shares of Mr. Deng 522,100 shares are release for trading.
2. Being approved by the Reply on Private Placement of Hefei Meiling Co., Ltd. (CSRC XK
[2016] No.1396) issued from CSRC, the Company completed the private placement of 2016 in the
Period. According to the placement results, 280,858,676 shares (A-stock) issued privately to 7
investors with price of 5.59 Yuan/Share, which have restricted for trading.
(III) Approval of share changed
√Applicable □Not applicable
Being approved by the Reply on Private Placement of Hefei Meiling Co., Ltd. (CSRC XK
[2016] No.1396) issued from CSRC, the Company successfully offering 280,858,676 shares
(A-stock) to 7 qualified investors, including Sichuan Changhong Electric Co., Ltd., with price of
5.59 Yuan/Share.
(IV) Ownership transfer of share changed
□Applicable √Not applicable
(V) Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets
per share attributable to common shareholders of Company in latest year and period
□ Applicable √ Not applicable
(VI) Other information necessary to disclose for the Company or need to disclosed under
requirement from security regulators
□ Applicable √ Not applicable
(VII) Changes of restricted shares
√ Applicable □ Not applicable
130
HEFEI MEILING CO., LTD. Annual Report 2016
In Share
Restricted
Shares
Opening Shares Ending
Increased
Shareholders shares released in shares Restricted reasons Date for released
In
restricted Period restricted
the
Period
On 6 August 2015, he is no
longer the deputy president
of the Company because of
occupation mobility
meanwhile; lift the
Share lockup in senior
Deng Xiaohui 522,100 522,100 0 0 restricted 6 months after
executives
demission. other restricted
conditions found more in
―III. Implementation of
commitments‖ in ―Section
V. Important Event‖
Sichuan Changhong Electric Co., Ltd. 0 0 69,877,638 69,877,638 Lock up for private placement 2019-10-15
Ping An Bank – Ping An UOB Dingtai Fexible Mix Stock Investment Fund Ping An
0 0 12,522,361 12,522,361 Lock up for private placement 2017-10-15
Bank Co., Ltd.-
Ping An UOB-Ping An Bank-Guohai Securities Co., Ltd. 0 0 12,522,361 12,522,361 Lock up for private placement 2017-10-15
Collective fund trust scheme
0 0 23,613,595 23,613,595 Lock up for private placement 2017-10-15
Golden Ergle- SPD-U Trust-U Trust JinYue No.4 Collected Asset Trust Plan
National Social Security Funds-504 0 0 9,838,998 9,838,998 Lock up for private placement 2017-10-15
Harvest Fund- Ping An Bank- Huaxia Asset Management Co., Ltd. 0 0 9,838,998 9,838,998 Lock up for private placement 2017-10-15
Harvest Fund－ABC－ABC-CA Fund Management (Shanghai) Co., Ltd. 0 0 8,050,089 8,050,089 Lock up for private placement 2017-10-15
131
HEFEI MEILING CO., LTD. Annual Report 2016
Harvest Fund－Industrial Bank－Shanghai Xinghan Asset Management Co., Ltd. 0 0 8,050,090 8,050,090 Lock up for private placement 2017-10-15
Ping An Annuity Insurance Company of China, Ltd. – Ping An Pension Ruifu private
0 0 23,613,595 23,613,595 Lock up for private placement 2017-10-15
placement No.1 Assest Management Products
Rongtong Fund－Guangzhou Rural Commercial bank －Wanlian Securiteis Co., Ltd. 0 0 5,879,549 5,879,549 Lock up for private placement 2017-10-15
Rongtong Fund－Ningbo Bank －Universal Trust Co., Ltd. 0 0 293,977 293,977 Lock up for private placement 2017-10-15
Rongtong Fund－CBC－Rongtong Rongyi No. 1 private placementserial special
0 0 940,729 940,729 Lock up for private placement 2017-10-15
(multiple) clients Asset Management Plan
Rongtong Fund－CBC－Rongtong Rongyi No. 2 private placement serial special
0 0 235,181 235,181 Lock up for private placement 2017-10-15
(multiple) clients Asset Management Plan
Rongtong Fund－CBC－Rongtong Rongyi No. 3 private placementserial special
0 0 411,569 411,569 Lock up for private placement 2017-10-15
(multiple) clients Asset Management Plan
Caitong Fund－ICBC－China Foreign Economic Relations and Trade Trust －Foreign
0 0 3,577,817 3,577,817 Lock up for private placement 2017-10-15
Trade TrustHengsheng Private Placement Investment Collective fund trust scheme
Caitong Fund－ICBC－Fuchunprivate placementZengliNo.13 Asset Management
0 0 536,673 536,673 Lock up for private placement 2017-10-15
Plan
Caitong Fund－ICBC－China Construction Investment Trust－Yongquan No.25
0 0 536,673 536,673 Lock up for private placement 2017-10-15
（Caitongprivate placement No.1）Collective fund trust scheme
Caitong Fund－ICBC－Yueda Jiquan private placement No.3 Asset Management Plan 0 0 322,003 322,003 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－FuchunYuantong private placement No.6 Asset Management
0 0 536,673 536,673 Lock up for private placement 2017-10-15
Plan
Caitong Fund－ICBC－Fuchunprivate placementBoli No.8 Asset Management Plan 0 0 536,673 536,673 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Fuchunprivate placementBoli No.12 Asset Management Plan 0 0 357,782 357,782 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Caitongprivate placement No.16 Asset Management Plan 0 0 357,782 357,782 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Fuchunprivate placementBoli No.13 Asset Management Plan 0 0 5,366,726 5,366,726 Lock up for private placement 2017-10-15
132
HEFEI MEILING CO., LTD. Annual Report 2016
Caitong Fund－ICBC－Fuchunprivate placement No.1033 Asset Management Plan 0 0 536,673 536,673 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Fuchunprivate placementBoli No.17 Asset Management Plan 0 0 2,862,254 2,862,254 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Fuchunprivate placementBoli No.18 Asset Management Plan 0 0 894,454 894,454 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Fuchunprivate placementBoli No.21 Asset Management Plan 0 0 4,472,272 4,472,272 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－private placementEverbright ZengyiNo.1 Asset Management
0 0 1,431,127 1,431,127 Lock up for private placement 2017-10-15
Plan
Caitong Fund－ICBC－Fuchunprivate placement No.1028 Asset Management Plan 0 0 178,891 178,891 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Fuchunprivate placement No.1101 Asset Management Plan 0 0 1,788,909 1,788,909 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Hengzeng Xinxiang No.8 Asset Management Plan 0 0 393,560 393,560 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Fuchunprivate placement No.729 Asset Management Plan 0 0 447,227 447,227 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Shanghai Chamrich Equity Investment Fund Management Co.,
0 0 894,454 894,454 Lock up for private placement 2017-10-15
Ltd.
Caitong Fund－ICBC－Fuchun Huarong Safety Pad No.1 Asset Management Plan 0 0 322,004 322,004 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Caizhi private placement No.11 Asset Management Plan 0 0 805,009 805,009 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Hengzeng Xinxiang No. 9 Asset Management Plan 0 0 822,898 822,898 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Fuchunprivate placement No. 1089 Asset Management Plan 0 0 894,454 894,454 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Selected Fortune VIP Zunxiang private placement No. 3 Asset
0 0 357,782 357,782 Lock up for private placement 2017-10-15
Management Plan
Caitong Fund－ICBC－Fuchunprivate placement No. 1016 Asset Management Plan 0 0 447,227 447,227 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Hengzeng Xinxiang No. 10 Asset Management Plan 0 0 536,673 536,673 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Fuchunprivate placement Xixiang No.2 Asset Management
0 0 411,449 411,449 Lock up for private placement 2017-10-15
Plan
Caitong Fund－ICBC－Beta private placement No.6 Asset Management Plan 0 0 268,336 268,336 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Fuchunprivate placement No.1017 Asset Management Plan 0 0 983,900 983,900 Lock up for private placement 2017-10-15
133
HEFEI MEILING CO., LTD. Annual Report 2016
Caitong Fund－ICBC－Fuchunprivate placement No.1008 Asset Management Plan 0 0 447,227 447,227 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Xinruiprivate placement No.3 Asset Management Plan 0 0 357,782 357,782 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Fuchunprivate placement No.1009 Asset Management Plan 0 0 536,673 536,673 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Shenzhen Fangwu Innovation Asset Management Co., Ltd. 0 0 715,563 715,563 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Fuchunprivate placement No.1018 Asset Management Plan 0 0 608,229 608,229 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Fuchun Shanxi private placement No.1 Asset Management
0 0 411,449 411,449 Lock up for private placement 2017-10-15
Plan
Caitong Fund－ICBC－Shenzhen Pusu Capital Management Co., Ltd. 0 0 2,146,690 2,146,690 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Hai Tan private placement No.1 Asset Management Plan 0 0 536,673 536,673 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Yongan Futures Co., Ltd. 0 0 357,782 357,782 Lock up for private placement 2017-10-15
Caitong Fund－ICBC－Fuchunprivate placement No. 1015 Asset Management Plan 0 0 876,565 876,565 Lock up for private placement 2017-10-15
Caitong Fund－Everbright Bank－Soochow Securities Co., Ltd. 0 0 8,944,544 8,944,544 Lock up for private placement 2017-10-15
Caitong Fund－Everbright Bank－Zhang ZHongyi 0 0 1,788,909 1,788,909 Lock up for private placement 2017-10-15
Caitong Fund－Everbright Bank－Shanghai Tongsheng Asset Management Co., Ltd. 0 0 715,563 715,563 Lock up for private placement 2017-10-15
Caitong Fund－Everbright Bank－Caitong Fund－Fuchunprivate placement No.693
0 0 715,563 715,563 Lock up for private placement 2017-10-15
Asset Management Plan
Caitong Fund－Everbright Bank－Shenzhen UBS Jingao Investment Management Co.,
0 0 357,782 357,782 Lock up for private placement 2017-10-15
Ltd.
Caitong Fund－Everbright Bank－Caitong Fund－Everbright Fuzunhui Zunping No. 1
0 0 1,788,909 1,788,909 Lock up for private placement 2017-10-15
Asset Management Plan
Caitong Fund－Everbright Bank－QiJuprivate placement No.2 Asset Management
0 0 536,673 536,673 Lock up for private placement 2017-10-15
Plan
Caitong Fund－Everbright Bank－QiJu private placement No.3 Asset Management
0 0 536,673 536,673 Lock up for private placement 2017-10-15
Plan
134
HEFEI MEILING CO., LTD. Annual Report 2016
Caitong Fund－Everbright Bank－QiJu private placement No. 4 Asset Management
0 0 536,673 536,673 Lock up for private placement 2017-10-15
Plan
Caitong Fund－Everbright Bank－Bohai Securities Co., Ltd. 0 0 1,788,909 1,788,909 Lock up for private placement 2017-10-15
Caitong Fund－Everbright Bank－Caitong Fund－JinXIu private placement No.1
0 0 894,454 894,454 Lock up for private placement 2017-10-15
Asset Management Plan
Caitong Fund－Everbright Bank－Beijing ZRTDX Investment Management Co., Ltd. 0 0 3,577,817 3,577,817 Lock up for private placement 2017-10-15
Caitong Fund－Ping An Bank－Shanghai Tongan Investment Management Co., Ltd. 0 0 536,673 536,673 Lock up for private placement 2017-10-15
Caitong Fund－Ping An Bank－China Securities Co., Ltd. 0 0 5,366,726 5,366,726 Lock up for private placement 2017-10-15
Caitong Fund－Ping An Bank－Shanghai Tongan Investment Management Co., Ltd. 0 0 894,454 894,454 Lock up for private placement 2017-10-15
Caitong Fund－Ping An Bank－Shanghai Tongan Investment Management Co., Ltd. 0 0 357,782 357,782 Lock up for private placement 2017-10-15
Caitong Fund－Ping An Bank－Shanghai Tongan Investment Management Co., Ltd. 0 0 357,782 357,782 Lock up for private placement 2017-10-15
Caitong Fund－Ping An Bank－Fortune Securities Co., Ltd. 0 0 1,788,909 1,788,909 Lock up for private placement 2017-10-15
Caitong Fund－Ping An Bank－Shanghai Tongan Investment Management Co., Ltd. 0 0 626,118 626,118 Lock up for private placement 2017-10-15
Caitong Fund－Ping An Bank－Shanghai Goldstate Brilliance Asset Management Co.,
0 0 894,454 894,454 Lock up for private placement 2017-10-15
Ltd.
Caitong Fund－Industrial Bank－Caitong Fund－Fuchun Jinhui Ruihe No. 5 Asset
0 0 357,782 357,782 Lock up for private placement 2017-10-15
Management Plan
Caitong Fund－CBC－Youzeng No. 5 Asset Management Plan 0 0 805,009 805,009 Lock up for private placement 2017-10-15
Caitong Fund－Shanghai Bank－Shanghai Kuake Youfu Enterprise Management
0 0 268,336 268,336 Lock up for private placement 2017-10-15
Consulting Co., Ltd.
Caitong Fund－Shanghai Bank－Fuchunprivate placement Zengli No. 12 Asset
0 0 3,577,817 3,577,817 Lock up for private placement 2017-10-15
Management Plan
Caitong Fund－Shanghai Bank－Zhejiang Hanglian Iron and Steel Co., Ltd. 0 0 894,454 894,454 Lock up for private placement 2017-10-15
Caitong Fund－Shanghai Bank－Fuchunprivate placement Huifu No. 1314 Asset 0 0 1,252,236 1,252,236 Lock up for private placement 2017-10-15
135
HEFEI MEILING CO., LTD. Annual Report 2016
Management Plan
Caitong Fund－SPD－Caitong Fund－Puhui No. 2 Asset Management Plan 0 0 1,788,909 1,788,909 Lock up for private placement 2017-10-15
Caitong Fund－Ningbo Bank －Tibet Yuanlesheng Asset Management Co., Ltd. 0 0 357,782 357,782 Lock up for private placement 2017-10-15
Caitong Fund－Ningbo Bank －Fuchunprivate placement No. 916 Asset Management
0 0 393,560 393,560 Lock up for private placement 2017-10-15
Plan
Caitong Fund－Ningbo Bank －Jiaxiuyi Shunxing No.1 Asset Management Plan 0 0 1,073,345 1,073,345 Lock up for private placement 2017-10-15
Caitong Fund- Ningbo Bank-Haitong Xingtai (Anhui) Emerging Industry Investment
0 0 10,733,452 10,733,452 Lock up for private placement 2017-10-15
Fund (Limited Partnership)
Caitong Fund－Huatai Securities －Caitong Fund－Fuchun Selected private
0 0 1,788,909 1,788,909 Lock up for private placement 2017-10-15
placement No.1 Asset Management Plan
Total 522,100 522,100 280,858,676 280,858,676 -- --
Note 1: In the above table, 6 months after Mr. Deng Xiaohui, a former senior executive of the company, left his post, the lockup to the
company’s stock held by him should get expired. The company’s shares held by the remaining shareholders are the restricted shares
subscribed from the company’s non-public offering of A shares in 2016, this non-public offering of shares includes seven issuing objects, a
total of 85 subscribers, of which except that the controlling shareholder - Sichuan Changhong has directly involved in subscription of the
company’s non-public offering of shares in 2016, the other six issuing objects (Ping An Dahua Fund Management Co., Ltd., Golden Eagle
Fund Management Co., Ltd., Harvest Fund Management Co., Ltd., Ping An Annuity Insurance Company of China, Ltd, Rongtong Fund
Management Co., Ltd., Caitong Fund Management Co., Ltd.) has the total allocated products of 84 subscribers. See details on the (iii) Allocated
products of issuing objects” in “XII Share subscription of issuing objects” in “Section II The issuing of new shares” of the” Issuing
report and listing announcement summary on the non-public offering of shares of Hefei Meiling Co., Ltd.” (Announcement No. 2016-057)
which the company has disclosed on the designated information disclosure media "Securities Times", "China Securities Journal", "Hong Kong
Commercial Daily" and www.cninfo.com.cn on October 13, 2016.
Note 2: Except for the restricted shareholders listed in the above table, there was no change in shares of other restricted shareholders during
the reporting period, the reason for the restriction was because of the legal commitment of the company's share reform or the lockup share of
senior executives.
136
HEFEI MEILING CO., LTD. Annual Report 2016
II. Security offering and listing
(I) Security offering in reporting period (Not including preferred stock)
√Applicable □Not applicable
Stock and Approved
Issue price Circulation Date of
derivative Issuing date Listing date trading
(interest rate) figures termination
securities volume
Stock
A-Share 2016-10-13 5.59 280,858,676 2016-10-14 280,858,676 -
Convertible bond, warrant bond and corporate bond
N/A
Other derivative securities
N/A
Security offering in reporting period (Not including preferred stock)
Approved by China Securities Regulatory Commission ―Reply to the non-public offering of
shares of Hefei Meiling Co., Ltd‖ (CSRC License No. 2096) No. 1396), the company has issued
280,858,676 shares of RMB common stock (A shares) to 7 specified objects including the
controlling shareholder Sichuan Changhong through the non-public offering of shares on October
13, 2016, the issue price is 5.59 Yuan / share, the raised funds amount to 1,569,999,998.84 Yuan ,
after deducting the issue costs (including tax) of 29,267,276.08 Yuan , the net amount of raised
funds is 1,540,732,722.76 Yuan . The new shares of the company‘s non-public offering have been
listed on October 14, 2016.
(II) Explanation on changes of total shares, shareholders structure and assets & liability
structures
√Applicable □Not applicable
The Company completed the private placement of 2016 in the Period, shares of the Company
up to 1,044,597,881 shares from 763,739,205 shares. Meanwhile, Sichuan Changhong-the
controlling shareholder subscribed 24.88% of the issued shares. After this private placement,
Sichuan Changhong still is the controlling shareholder of the Company without any controlling
rights changed.
The private placement of the Company has 1,540,732,722.76 Yuan raised funds, based on the
static benchmark of the financial data on 30 June 2016, after placement, total assets of the Company
raised to RMB 13,296,708,172.69 Yuan with 13.11% up; owner‘ equity attributable to shareholder
of parent company raised to RMB 4,982,134,513.34 Yuan with 44.77% up; the asset-liability ratio
(merge aperture) downs to 62.05% with 8.13% declined.
137
HEFEI MEILING CO., LTD. Annual Report 2016
(III) Current shares held by internal staffs
□ Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company
(I) Amount of shareholders of the Company and particulars about shares holding
In Share
Total
preference
Total preference shareholders
Total common
shareholders with voting
shareholders at
with voting rights
Total shareholders at end of the end of last
59,595 56,706 rights recovered 0 recovered at 0
Period month before
at end of end of last
annual report
reporting period month before
disclosed
(if applicable) annual report
disclosed (if
applicable)
Particulars about shares held above 5% by shareholders or top 10 shares holding
Total Number of share
Proport Amount of Amount of
Nature of ion of shareholders Changes in pledged/frozen
Full name of Shareholders restricted un-restricted
shareholder shares at the end of report period State of
held shares held shares held Amount
report period share
Sichuan Changhong State-owned
22.47% 234,705,968 69,877,638 69,877,638 164,828,330 -- --
Electric Co., Ltd. legal person
Hefei Industry Investment State-owned
4.58% 47,823,401 0 0 47,823,401 -- --
Holding (Group) Co., Ltd. legal person
Changhong Electric (Hong Foreign
2.41% 25,165,823 0 0 25,165,823 -- --
Kong) Trading Co., Ltd. legal person
Ping An Annuity Insurance
Company of China, Ltd. – Domestic
Ping An Pension Ruifu non-State-o
2.26% 23,613,595 23,613,595 23,613,595 0 -- --
private placement No.1 wned legal
Assest Management person
Products
Domestic
Golden Ergle- SPD-U
non-State-o
Trust-U Trust JinYue No.4 2.26% 23,613,595 23,613,595 23,613,595 0 -- --
wned legal
Collected Asset Trust Plan
person
Foreign
CAO SHENGCHUN 1.30% 13,542,207 0 0 13,542,207 -- --
nature
138
HEFEI MEILING CO., LTD. Annual Report 2016
person
Domestic
Ping An UOB-Ping An
non-State-o
Bank-Guohai Securities 1.20% 12,522,361 12,522,361 12,522,361 0 -- --
wned legal
Co., Ltd.
person
Domestic
Ping An Bank – Ping An
non-State-o
UOB Dingtai Fexible Mix 1.20% 12,522,361 12,522,361 12,522,361 0 -- --
wned legal
Stock Investment Fund
person
Caitong Fund- Ningbo
Domestic
Bank-Haitong Xingtai
non-State-o
(Anhui) Emerging Industry 1.03% 10,733,452 10,733,452 10,733,452 0 -- --
wned legal
Investment Fund (Limited
person
Partnership)
Domestic
National Social Security non-State-o
0.94% 9,838,998 9,838,998 9,838,998 0 -- --
Funds-504 wned legal
person
Domestic
Harvest Fund- Ping An
non-State-o
Bank- Huaxia Asset 0.94% 9,838,998 9,838,998 9,838,998 0 -- --
wned legal
Management Co., Ltd.
person
Among the above shareholders, "Ping An Annuity Insurance Company of China, Ltd -
Ping An Endowment Ruifu Dingzeng No.1 Asset Management Products" has subscribed
the products managed by Ping An Annuity Insurance Company of China, Ltd in the
Company's non-public offering of shares in 2016, and Ping An Annuity Insurance
Company of China, Ltd holds 23,613,595 shares of the company‘ stock through this
product; Golden Ergle- SPD-U Trust-U Trust JinYue No.4 Collected Asset Trust Plan ‖
has subscribed the products managed by Golden Eagle Asset Management Co., Ltd. in
the Company's non-public offering of shares in 2016, and Golden Eagle Asset
Management Co., Ltd. holds 23,613,595 shares of the company‘ stock through this
Strategy investors or general legal
product; ―Ping An UOB-Ping An Bank-Guohai Securities Co., Ltd. ‖ and ―Ping An Bank
person becomes top 10 shareholders due
– Ping An UOB Dingtai Fexible Mix Stock Investment Fund ‖ have has subscribed the
to rights issued (if applicable)
products managed by Ping An Dahua Fund Management Co., Ltd. in the Company's
non-public offering of shares in 2016, and Ping An Dahua Fund Management Co., Ltd.
totally holds 25,044,722 shares of the company‘ stock through the above-mentioned two
products; ―Caitong Fund- Ningbo Bank-Haitong Xingtai (Anhui) Emerging Industry
Investment Fund (Limited Partnership) ‖ has subscribed one of the products managed by
Caitong Fund Management Co., Ltd. in the Company's non-public offering of shares in
2016, and Caitong Fund Management Co., Ltd. totally holds 95,169,946 shares of the
company‘ stock through this product and other products, 71 products in total; The
―National Social Security Funds-504‖ and ―Harvest Fund- Ping An Bank- Huaxia Asset
139
HEFEI MEILING CO., LTD. Annual Report 2016
Management Co., Ltd.‖ have subscribed the products managed by Harvest Fund
Management Co., Ltd. in the Company's non-public offering of shares in 2016, and
Harvest Fund Management Co., Ltd. totally holds 35,778,175 shares of the company‘
stock through above-mentioned two product and other products, 4 products in total; See
details on the (iii) Allocated products of issuing objects‖ in ―XII Share subscription of
issuing objects‖ in ―Section II The issuing of new shares‖ of the ―Issuing report and
listing announcement summary on the non-public offering of shares of Hefei Meiling
Co., Ltd.‖ (Announcement No. 2016-057) which the company has disclosed on the
designated information disclosure media "Securities Times", "China Securities Journal",
"Hong Kong Commercial Daily" and www.cninfo.com.cn on October 13, 2016.
The aforesaid shareholders make a commitment that the restricted stock trade period of
the non-public offering of A shares they hold by subscribing from Meiling Electric in
2016 is twelve months. That is from October 14, 2016 to October 14, 2017.
Among the above shareholders, Changhong (Hong Kong) Trade Co., Ltd. is the
wholly-owned subsidiary of Sichuan Changhong Electronic Co., Ltd.; there existed no
associated relationship or belong to the concerted actors as specified in the Measures for
the Administration of Information Disclosure of Shareholder Equity Changes of Listed
Companies among Sichuan Changhong Electronic Co., Ltd., Changhong (Hong Kong)
Trade Co., Ltd. and other top 8 shareholders; and top ten shareholders with unrestricted
subscription;
" Ping An UOB-Ping An Bank-Guohai Securities Co., Ltd. " and " Ping An Bank – Ping
Explanation on associated relationship
An UOB Dingtai Fexible Mix Stock Investment Fund " have subscribed the products
among the aforesaid shareholders
managed by Ping An Dahua Fund Management Co., Ltd. in the Company's non-public
offering of shares in 2016; "―National Social Security Funds-504 ‖和―Harvest Fund-
Ping An Bank- Huaxia Asset Management Co., Ltd. ‖ have subscribed the products
managed by Harvest Fund Management Co., Ltd. in the Company's non-public offering
of shares in 2016. The company neither knows whether there is any association among
other shareholders, nor knows whether other shareholders belong to the persons acting in
concert that is stipulated in the ―Administrative Measures on Information Disclosure of
Changes in Shareholding of Listed Companies‖.
Particular about top ten shareholders with un-restrict shares held
Amount of Type of shares
Shareholders‘ name unrestricted shares
Type Amount
held at end of Period
Sichuan Changhong Electric Co., Ltd. 164,828,330 RMB ordinary shares 164,828,330
Hefei Industry Investment Holding (Group) Co., Ltd. 47,823,401 RMB ordinary shares 47,823,401
Domestically listed
Changhong Electric (Hong Kong) Trading Co., Ltd. 25,165,823 25,165,823
foreign shares
Domestically listed
CAO SHENGCHUN 13,542,207 13,542,207
foreign shares
China Securities Finance Corporation Limited 4,399,500 RMB ordinary shares 4,399,500
140
HEFEI MEILING CO., LTD. Annual Report 2016
Domestically listed
NORGES BANK 4,216,432 4,216,432
foreign shares
China Construction Bank CO., Ltd. –Yinhua China
4,125,878 RMB ordinary shares 4,125,878
Dream 30 Stock Securities Investment Fund
ICBC- Jianxin Selected Mix Stock Investment Fund 3,526,985 RMB ordinary shares 3,526,985
Domestically listed
Long Qifang 3,294,937 3,294,937
foreign shares
Bank of China Limited – Taida Hongli Reform
Motivation Quantization Strategy Flexible Mix Stock 3,195,600 RMB ordinary shares 3,195,600
Investment Fund
Among the above shareholders, Changhong (Hong Kong) Trade Co., Ltd. is the
wholly-owned subsidiary of Sichuan Changhong Electronic Co., Ltd.; there existed no
associated relationship or belong to the concerted actors as specified in the Measures
Expiation on associated relationship or
for the Administration of Information Disclosure of Shareholder Equity Changes of
consistent actors within the top 10
Listed Companies among Sichuan Changhong Electronic Co., Ltd., Changhong (Hong
un-restrict shareholders and between top
Kong) and other top 8 shareholders; and top ten shareholders with unrestricted
10 un-restrict shareholders and top 10
subscription; as the Company has not known whether there exists any business
shareholders
relationship among the other shareholders with unrestricted subscription or they
belong to the concerted actors as specified in the Measures for the Administration of
Information Disclosure of Shareholder Equity Changes of Listed Companies.
Explanation on top ten common
shareholders involving margin business (if Not applicable
applicable)
Note: In the above table, "the shareholding situation of the shareholders hold more than 5% of
shares or the top ten shareholders" is subject to the data on stock transfer books provided by China
Securities Depository and Clearing Corporation Limited Shenzhen Branch, during the reporting
period, 7 issuing objects including Sichuan Changhong Electric Co., Ltd. , Ping An Dahua Fund
Management Co., Ltd., Golden Eagle Fund Management Co., Ltd., Harvest Fund Management Co.,
Ltd., Ping An Endowment Insurance Co., Ltd., Rongtong Fund Management Co., Ltd., and Caitong
Fund Management Co., Ltd. have subscribed the company‘s non-public offering of shares in 2016,
and these shares are all restricted shares. For the number of subscribed shares of the
above-mentioned 7 issuing objects and the allocated products of other 6 issuing objects except for
Sichuan Changhong, see details on the ―Issuing report and listing announcement summary on the
non-public offering of shares of Hefei Meiling Co., Ltd.‖ (Announcement No. 2016-057) which the
company has disclosed on the designated information disclosure media "Securities Times", "China
Securities Journal", "Hong Kong Commercial Daily" and www.cninfo.com.cn on October 13, 2016.
The top ten ordinary shareholders of the company and the top 10 ordinary shareholders of
unrestricted conditions have not made the repurchase transactions as agreed during the reporting
period.
141
HEFEI MEILING CO., LTD. Annual Report 2016
(II) Controlling shareholder of the Company
1. Nature of controlling shareholders: local state-owned holding
2. Type of controlling shareholders: legal person
Controlling Legal
Dated Organization
shareholders‘ rep./person in Main business
founded code
name charge of unit
Manufactures, sales and maintenance of household appliance,
automotive electrical appliance, Electronic products and spare parts,
communications equipments, lighting equipment, household products,
computer and other Electronic equipments, specialized equipments of
Electronic and Electronic, Electronic machinery and equipment, series
products of batteries, Electronic medicine products, Electronic
equipments, mechanical equipment , Refrigeration equipment and
accessories digital monitoring products, metal products, apparatus and
instruments, culture and office machines, culture and education and
sports products, kitchen cabinet and gas appliance; house and
Sichuan
equipment rental; packing products and technical services; road
Changhong 915107002054
Zhao Yong 1933-4-8 transportation; storage and discharging convey; R&D, sales and
Electric Co., 12308D
services of integrated circuit and software; consultancy and services of
Ltd.
enterprise management; hi-tech project investment and other
state-permitted business; development and operation of property;
engineering construction for house and buildings; callback and disposal
of obsolete appliance and Electronic products; services of Information
Technology; consultancy and services of finance; sales, relevant import
and export business of Chemical raw materials and products(Not
contain dangerous chemicals), building materials, non-ferrous metal,
Steel, plastics, packing material, mechanical and electrical
equipment, Precious metals, Automotive components, Electronic
components, agent service of telecommunication.
Equity
controlling and
1. Ended as 31 December 2016, 28.81 percent equity of Huayi Compressor Co., Ltd. (stock code: 000404), the
jointly of other
listed company in main board of SSE, were directly hold by Sichuan Changhong.
foreign/domesti
2. Up to 31 December 2016, 1,008,368,000 common shares of the Changhong Jiahua Holdings Limited (Stock
c listed
code: 08016), the listed company in GEM of Hong Kong Stock Exchange, were held by Sichuan Changhong and
company by
its persons acting in concert, representing 69.3202 percent in total issued common shares of Changhua Jiahua
controlling
Holding.
shareholder in
reporting period
3. Controlling shareholder changes in reporting period
□ Applicable √ Not applicable
Controlling shareholder stays the same in Period
142
HEFEI MEILING CO., LTD. Annual Report 2016
(III) Actual controller of the Company
1. Nature of actual controller: local state-owned assets management
2. Type of actual controller: legal person
Legal
Dated Organization
Actual controller rep./person in Main business
founded code
charge of unit
State-owned Assets Supervision &
Administration Commission of Mianyang
Municipality is entrusted by the same level
State-owned Assets
government, together performs
Supervision &
-- -- -- decision-making and management of
Administration Commission
state-owned asset owners, and is one
of Mianyang Municipality
organization which executes comprehensive
management and supervision on its belonged
state-owned assets.。
Equity controlling of other
foreign/domestic listed
Not applicable
company by actual controller
in reporting period
3. Changes of actual controller in Period
□ Applicable √Not applicable
Actual controller stays the same in Period
4. Property rights and the block diagram of the control relationship between the Company and
the actual control
State-owned Assets Supervision & Administration Commission of
Mianyang Municipality
100%
Sichuan Changhong Electronics%Holding Group Co.,
Ltd.
23.20%
%
Sichuan Changhong Electric Co., Ltd.
100%
四川 22.47%
Changhong (Hong Kong)省绵Trading
四川省绵
Limited 阳市
2.41% 阳市虹欢
虹欢
科技有限
%
科技
Hefei Meiling Co., Ltd. 责任公司
有限
5. Actual controller controlling the Company by means of entrust or other assets management
%
公司
143
%
HEFEI MEILING CO., LTD. Annual Report 2016
□ Applicable √ Not applicable
(IV) Other legal person‘s shareholders with over ten percent shares held
□ Applicable √ Not applicable
(V)Limitation and reducing the holdings of shares of controlling shareholders, actual
controllers, restructuring side and other commitment subjects
√Applicable □Not applicable
During the reporting period, approved by China Securities Regulatory Commission‘s Reply to
the approval of non-public offering of shares of Hefei Meiling Co., Ltd. (CSRC License No. [2016]
1396), the company has totally issued 280,858,676 shares of RMB ordinary shares (A shares) to 7
specified objects including the controlling shareholder Sichuan Changhong by non-public offering.
Among the 7 objects of this non-public offering, the company's controlling shareholder
Sichuan Changhong Electric Co., Ltd. has promised the restricted stock trade period of this
subscription is thirty-six months; and other 6 subscribing objects including Caitong Fund
Management Co., Ltd., Harvest Fund Management Co., Ltd., Ping An Dahua Fund Management
Co., Ltd., Golden Eagle Fund Management Co., Ltd., Ping An Endowment Insurance Co., Ltd., and
Rongtong Fund Management Co., Ltd. have promised the restricted stock trade period of this
subscription is twelve months
144
HEFEI MEILING CO., LTD. Annual Report 2016
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the reporting.
145
HEFEI MEILING CO., LTD. Annual Report 2016
Section VIII. Particular about Directors, Supervisors, Senior
Executives and Employees
I. Changes of shares held by directors, supervisors and senior executive
Amount of
Amount of
Shares held shares Shares
Post shares Other
Office dated Office dated at decreased held at
Name Title Sex Age increase in changes(
status from ended period-begin in this period-end
this Share)
(Share) period (Share)
period(Share)
(Share)
Currentl
Liu Tibin Chairman y in M 54 2011-11-15 2017-7-3 0 0 0 0 0
office
Currentl
Xu Deputy
y in M 52 2016-5-4 2017-7-3 0 0 0 0 0
Bangjun Chairman
office
Deputy Currentl
Li Wei Chairman, y in M 44 2011-6-20 2017-7-3 1,140,400 0 0 0 1,140,400
President office
Currentl
Kou
Director y in M 47 2014-7-3 2017-7-3 0 0 0 0 0
Huameng
office
Director, Currentl
Wu
Deputy y in M 44 2014-7-3 2017-7-3 414,300 0 0 0 414,300
Dinggang
Chairman office
Currentl
Gao Jian Director y in M 41 2014-7-3 2017-7-3 0 0 0 0 0
office
Currentl
Fan Independe
y in M 50 2014-7-3 2017-7-3 0 0 0 0 0
Shengdao nt Director
office
Currentl
Independe
Ren Jia y in M 53 2014-7-3 2017-7-3 0 0 0 0 0
nt Director
office
Currentl
Lu Independe
y in M 52 2014-7-3 2017-7-3 0 0 0 0 0
Yingjin nt Director
office
146
HEFEI MEILING CO., LTD. Annual Report 2016
Chairman
Currentl
Yu of
y in M 46 2014-7-3 2017-7-3 263,300 0 0 0 263,300
Wanchun Supervisor
office
y
Currentl
Yu Xiao Supervisor y in M 48 2014-11-5 2017-7-3 0 0 0 0 0
office
Currentl
Hu Jia Supervisor y in F 42 2013-6-6 2017-7-3 0 0 0 0 0
office
Currentl
Staff
Deng Li y in M 34 2017-2-28 2017-7-3 0 0 0 0 0
Supervisor
office
Currentl
Zhu Staff
y in M 29 2015-4-8 2017-7-3 0 0 0 0 0
Wenjie Supervisor
office
Executive Currentl
Liu
deputy y in M 53 2011-6-20 2017-7-3 1,333,132 0 0 0 1,333,132
Hongwei
president office
Currentl
Deputy
Liao Tao y in M 46 2013-1-28 2017-7-3 548,866 0 0 0 548,866
Chairman
office
Currentl
Zhong Deputy
y in M 44 2013-12-30 2017-7-3 158,900 0 0 0 158,900
Ming Chairman
office
Deputy Currentl
Zhang
Chairman y in M 41 2013-4-18 2017-7-3 329,700 0 0 0 329,700
Xiaolong
and CFO office
Secretary Currentl
Li Xia of the y in F 36 2009-5-22 2017-7-3 459,100 0 0 0 459,100
Board office
Deputy Office
Li Jin M 49 2011-6-20 2016-1-20 0 0 0 0 0
chairman leaving
Shang Staff Office
M 49 2011-6-20 2017-2-28 269,700 0 0 0 269,700
Wen supervisor leaving
Total -- -- -- -- -- -- 4,917,398 0 0 0 4,917,398
II. Changes of directors, supervisors and senior executives
Name Title Type Date Reasons
Xu Bangjun Director Being elected 2016-5-4 Mr. Xu Bangjun elected as director of the
147
HEFEI MEILING CO., LTD. Annual Report 2016
Company after being deliberated and approved
by the AGM of 2015
Mr. Xu Bangjun elected as deputy chairman of
Deputy
Being elected 2016-5-4 the Company after being deliberated and
chairman
approved by the 22nd session of 8th BOD
Mr. Li Wei elected as deputy chairman of the
Deputy
Li Wei Being elected 2016-5-4 Company after being deliberated and approved
chairman
by the 22nd session of 8th BOD
Mr. Deng Li elected as staff supervisor of the
Deng Li Staff Supervisor Being elected 2017-2-28 Company after democratic election of the
Workers‘ Conference
He applying for quit the director of the 8th BOD
of the Company, deputy chairman, member of
Director,Deputy Office
Li Jin 2016-1-20 strategy committee and remuneration and
chairman leaving
evaluation committee of the Company due to
personnel work changes
Office Serves no staff supervisor of the Company due to
Shang Wen Staff Supervisor 2017-2-28
leaving personnal reasons
III. Post-holding
(I) Professional background, major working experience and present main responsibilities in
Company of directors, supervisors and senior executive at the present in latest five years
1. Liu Tibin, member of the Communist Party, born in January 1963, senior accountant,
government subsidies specialist of the State Council, and he is the winner of National Labor Medal.
He-a doctoral candidate, graduated from electronic industry and financial accounting major,
department of industrial economy of Hangzhou Institute of Electronic and Technology. (Bachelor of
Economics), was doctor student in the enterprise management major, department of business
management, University of Electronic Science and Technology of China. He participated in the
work in July 1984. He has served successively as the deputy GM, CFO, executive deputy GM and
secretary of Party committee in Sichuan Changhong Electronic Co., Ltd.; General Accountant,
deputy GM, secretary of Party committee and other post in Sichuan Changhong Electronic Group
Co., Ltd.; recently he serve as the deputy chairman and member of the Party Committee of Sichuan
Changhong Electronic Group Co., Ltd.; and the deputy chairman, GM and member of the Party
Committee of Sichuan Changhong Electronic Co., Ltd. together as the Chairman of Huayi
Compressor Co., Ltd., chairman of Sichuan Changhong Minsheng Logistic Co., Ltd. and Chairman
of the Company.
2. Xu Bangjun, born in December 1964,member of Communisty Party of China, an engineer
with a bachelor degree, graduated from economic management of the Sichuan Party School. He
have successively held the posts of vice director of the machinery factory of Sichuan Changhong
Electric Co., Ltd., GM of Sichuan Changhong Mould & Plastic Technology Co., Ltd., member of
PC of Sichuan Changhong Electric Co., Ltd., employee director and chairman of the union in
Sichuan Changhong Electronics Holding Group Co., Ltd., chairman of the union of Sichuan
Changhong Electric Co., Ltd. Now he serves as GM Assistant of Sichuan Changhong Electric Co.,
148
HEFEI MEILING CO., LTD. Annual Report 2016
Ltd., Chairman of the Househould Appliances Industry Group of Sichuan Changhong Electric Co.,
Ltd., deputy chairman of Huayi Compressor Co., Ltd. and Hefei Meiling Co., Ltd.
3. Li Wei, was born in February 1973, Member of CPC, Assistant Economist with bachelor
degree, he is reading EMBA in USTC. He ever took the post of General Manager of Xi‘an Sales
Filiale of Sichuan Changhong Electronic Co., Ltd, General Manger of Southeast Operation
Management Center of Changhong Electronic (China) Marketing Co., Ltd. and GM of Sichuan
Changhong Air-conditioner Co., Ltd ; now he is the deputy chairman and president of the Company
and chairman of Zhongke Meiling Cryogenic Technology Co., Ltd
4. Kou Huameng, was born in February 1970, Member of CPC, master degree candidate, and
postgraduated from Sichuan Institute of Business Administration, EMBA graduate from UESTC.
He served successively as deputy director of production office of Sichuan Changhong Electric Co.,
LTD, director of Guangxi Marketing management Committee, director of Fujian-Jiangxi Marketing
Management and director and GM of Guangdong Changhong Digital Technology Co., Ltd. Now he
serves as director of the Development Management Dept. of Sichuan Changhong Electric Co., LTD,
director of Huayi Compressor Co., Ltd. and director of the Company.
5. Wu Dinggang, was born in March 1973, Member of CPC, owns bachelor degree, graduate
from Tianjin University of Commerce China (Tianjin University of Commerce now), major in
refrigeration equipment and cryogenic technique, a master‘s candidate. He served successively as
GM of Suining Sale Branch and Chengdu Sales Branch of Sichuan Changhong Electric Co., LTD,
director of Chongqing Marketing Management Department of Sichuan Changhong Electric Co.,
LTD, deputy GM of Changhong Electronics (China) Marketing Co., GM of market planning center
of Changhong Multimedia Industry, director and GM of Le-Jia-Yi Chain Management Co., Ltd.
Now he serves as director and Deputy President of the Company.
6. Gao Jian, was born in September 1975, member of China Democratic National Construction
Association, owns bachelor degree and graduate from economic management educated in Anhui
Provincial Party Institute. He served successively as deputy chief of Commercial Bureau of Luyang
District, Hefei City, and deputy chief of Finance Bureau of Luyang District, Hefei City, and deputy
director of Luyang Assets Management Office, deputy director of investment and financing
management center, GM of Hefei Luyang State-owned Assets Investment Holding Group Co.,Ltd.,
the director of Auditing Bureau of Luyang, deputy chairman of Luyang CPPCC and chairman of
Luyang Shiyu Micro Loan Co., Ltd. Now he serves as deputy president of Hefei Xingtai Financial
Holding (Group) Co., Ltd., the director of Hefei Science & Technology Rural Commercial bank and
the Company.
7. Gan Shengdao, was born in March 1967, member of China Democratic National
Construction Association, a doctoral candidate and Doctor of Economic. He served successively as
teaching assistant, lecturer and associate professor in Department of National Economic
Management of Sichuan University, the associate professor and professor in Department of
Business Administration of Sichuan University. Now he serves as professor and doctoral supervisor
in Busines School of Sichuan University, deputy director of Financial Institute of Sichuan
University, Chengdu Rainbow Electric (Group) Co., Ltd., Sichuan Sunny Seal Co., Ltd., Liangshan
Rural Commercial Bank Co., Ltd. and Sichuan Yahua Industrial Group Co., Ltd, independent
director of Yibing Wuliangye Co., Ltd. and outside director of Sichuan Huashi Group Co., Ltd. and
independent director of the Company.
149
HEFEI MEILING CO., LTD. Annual Report 2016
8. Ren Jia, was born in July 1963, postgraduate student, graduated from THU, major in
Materials Science and Engineering. He served successively as office deputy manager of Jiangsu
Overseas Group Corp., vice GM of ANYKA (Guangzhou) Co., Ltd. and vice GM of SMV. He
serves as deputy president of Shanghai Xinwei Electronic Co., Ltd., GM of SIMIC Development
Co., Ltd. and Independent Director of the Company.
9. Lu Yingjin, was born in October 1964, Member of CPC, a doctoral candidate, Doctor of
Management Science and Engineering of the UESTC. He served successively as Assistant Engineer
of Shenli Field Drilling Technical Company and lecturer of Staff Education and Training Center of
South-West Petroleum Bureau, and he teaches in UESTC since 2002.And he has been a visiting
scholar in the department of computer science at the University of Kentucky in the United States.
Now he serves as associate professor in Economics and Management School of UESTC and
Independent Director of the Company.
10. Yu Wanchun, was born in September 1970, Member of CPC, undergraduate degree, a
senior accountant, graduated with a bachelor degree in accounting major of Chongqing Institute of
Commerce. He took the job in July 1994. He served successively as deputy director of Financial
Department of the Sichuan Changhong Electric Co., LTD, and deputy president of the Company,
director of discipline inspection office of Sichuan Changhong Electronics Holding Group Co., Ltd.
and director of discipline inspection supervision. Now he serves as chairman of
supervisory, member of CPC of Sichuan Changhong Electric Co., LTD, director of auditing
department, member of CPC of the Sichuan Changhong Electronic Holding Group Co., Ltd., and
chairman of supervisory of Huayi Compressor Co., Ltd. and chairman of supervisory of the Sichuan
Electronic War Industry Group Co., Ltd, supervisor of Anhui Xinhao Plasma Display Panel Co.,
Ltd. , Sichuan Changhong Property Co., Ltd., Sichuan Changhong Jiahua Information Products Co.,
Ltd. and Sichuan Hongyang Investment Co., Ltd., and the chairman of supervisory committee of the
Company
11. Yu Xiao, was born in August 1968, Member of CPC, a master degree candidate, graduated
with a Master‘s degree in Business Management of College of Business Administration of Sichuan
University, a senior accountant. He served successively as deputy chief in Sichuan Changhong
Electric Co., Ltd., deputy chief in Financial Accounting Office of Sales, deputy director of the Sales
Department, director of the Financial Department and director of Huayi Compressor Co., Ltd. Now
he serves as CFO and deputy GM of the Sichuan Changhong Electronics Holding Group Co., Ltd.
and supervisor of the Company.
12. Hu Jia, was born in January 1975, Member of CPC, bachelor degree, graduated from
Sichuan University major in Accountancy in July 1997, a senior accountant, Chinese Certified
Public Accountant, CPA Australia, selected to national Accounting Talents of Engineering of the
Ministry of Finance and the delegation of the 10th Party Congress in Sichuan Province. She served
successively as division chief of Pricing Division of Cost Control Center of Sichuan Changhong
Electric Co., LTD, the division chief of Payable Division, General Ledger Office, deputy director
and director of the finance department. Now she serves as CFO of Sichuan Changhong Electric Co.,
Ltd., chairman of Sichuan Changhong Group Finance Co., Ltd., chairman of Changhong (Hong
Kong) Trading Limited and supervisor of the Company.
13. Deng Li, born in August 1982, a undergraduate, study MBA in University of Science and
Technology of China. He worked in Hefei Meiling Co., Ltd. since July 2006 after graduated. And
successively served in training office of Hefei Meiling Co.,, Ltd. and purchasing office of freezer
150
HEFEI MEILING CO., LTD. Annual Report 2016
business department. Now he serves as administrative chief of logistics department and staff
supervisor of the Company.
14. Zhu Wenjie, member of Communist Party of China, born in January 1988, bachelor's
degree, study MBA in University of Science and Technology of China. He started to work in Hefei
Meiling Co., Ltd. in July 2010 after graduation, served as an accountant for big customer
accounting in financial management department of Hefei Meiling Co., Ltd., securities affairs
assistant at the office of secretary of the board, and director of securities affairs, and currently
serves as the representative of the Company's securities affairs, director of securities affairs at the
office of secretary of the board, and employee supervisor of the Company.
15. Liu Hongwei, Male, Chinese American, bored in May 1963, a doctoral candidate, Doctor
of Applied Mechanics from Lehigh University; he served successively in Kulicke and Soffa
Industries, Pennsylvania; Tessera Technology Corporation, Califonia; Intel Corporation in Silicon
Velleg. Now he serves as executive deputy president of the Company.
16. Liao Tao, Member of CPC, was born in September 1970, owes a university degree. He
successively served as chief technology office of plastic plant and project manager of operation &
management of Sichuan Changhong Electric Co., Ltd.; director of engineering dept. of Guangdong
Changhong Electronic Co., Ltd. and vice GM of Sichuan Changhong Air-conditioner Co., ltd. Now
he serves as vice president of the Company.
17. Zhong Ming, was born in November 1972, member of CPC, a doctoral candidate, a senior
engineer and a PhD major in engineering. He successively served as deputy director of research
institution of Sichuan Changhong Air-conditioner Co., Ltd., deputy GM of Sichuan Changhong
Air-conditioner Co., Ltd. and technical director of household appliance group of Sichuan
Changhong Electric Co., LTD. He serves as deputy president of the Company currently and director
of Zhongke Meiling Cryogenic Technology Co., Ltd..
18. Zhong Xiaolong, was born in February 1976, accountant, a bachelor degreed. He
successively served as chief of management analysis of general management dept. of Sichuan
Changhong Electric Co., LTD, GM of marketing auditing of audit dept. of Sichuan Changhong
Electric Co., LTD, director of financial dept. of Guangdong Changhong Electric Co., Ltd., deputy
GM of financial sharing center of Sichuan Changhong Electric Co., LTD and CFO of Sichuan COC
Display Device Co., Ltd and CFO of the Company. He serves as deputy president and finance
manager of the Company currently.
19. Li Xia, was born in October 1980, Member of CPC and Intermediate Accountant with
Master Degree. She graduated from Accounting Department of Sichuan University Business and
Management School. In July 2006, she worked in Sichuan Changhong Electronic Co., Ltd. She ever
was Project Manager in Financing & Acquisition Office of Asset Management Department and
Business Executive in Board Office of Sichuan Changhong Electronic Co., Ltd. she took the posts
of Deputy GM and Financial Supervisor of Sichuan Changhong Innovation Investment Co., Ltd.
She is the Secretary of the Board of the Company recently and chairman of supervisory committee
of Zhongke Meiling Cryogenic Technology Co., Ltd..
20. Li Jin, born in April 1967, a senior engineer with a doctoral candidate, he graduated from
Department of Thermal Engineering, Tsinghua University, speciality of engineering thermal physics,
a doctor of engineering. He obtained the MBA master‘s degree of the University of Glasgow in
September 2008. He worked since July 1998, and successively served as system designer of
151
HEFEI MEILING CO., LTD. Annual Report 2016
air-conditioning department in Sichuan Changhong Electric Co., Ltd., director of air-conditioning
technology research institute and deputy director and chief engineer, the GM of Sichuan Changhong
Air-conditioner Co., Ltd., director and deputy GM of Sichuan Changhong Electric Co., Ltd. and
deputy chairman of Huayi Compressor Co., Ltd. now he serves as directgor and GM of Sichuan
Changhong Electronics Holding Group Co., Ltd. and director of Sichuan Changhong Electric Co.,
Ltd.. he is no longer serves as deputy chairman of the Company since 20 Janaury 2016
21. Shang Wen, was born in August 1967, Member of CPC, bachelor degree, worked in Hefei
Meiling Refrigerator Plant since graduate from Anhui University since July 1991. He served
successively as propagandist and policy researcher of Hefei Meiling Refrigerator Plant, GM‘s
secretary in Hefei Meiling Co., Ltd., deputy director, director, GM assistant of the GM Office and
director of CEO Office. He is no longer serves as the staff supervisor of the Company since 28
Feburary 2017
(II) Post-holding in shareholder‘s unit
√ Applicable □ Not applicable
Drawing
remuneration and
shareholder‘s unit Start date of End date of
Name Title allowance from
office term office term
shareholder‘s
unit (Y/N)
Sichuan Changhong
Party Secretary 2015.12 - N
Electric Co., Ltd.
Sichuan Changhong
Electronics Holding Party Secretary 2015.12 - N
Liu Tibin Group Co., Ltd.
Sichuan Changhong
Deputy president, GM 2005.9 - Y
Electric Co., Ltd.
Sichuan Changhong
Electronics Holding Deputy president 2005.9 - N
Group Co., Ltd.
Sichuan Changhong
GM Assistant 2016.9.13 - Y
Electric Co., Ltd.
Xu Bangjun
Sichuan Changhong Chairman of Household
2016.2.1 - N
Electric Co., Ltd. Appliances Industry Group
Kou Sichuan Changhong Director of development and
2010.11.29 - Y
Huameng Electric Co., Ltd. management department
Hefei Xingtai
Financial Holding Deputy president 2013.11 - Y
(Group) Co., Ltd.
Gao Jian
Hefei Xingtai
Financial Holding Director 2014.9 - N
(Group) Co., Ltd.
152
HEFEI MEILING CO., LTD. Annual Report 2016
Sichuan Changhong
Chief of auditing department 2013.03.25 - N
Electric Co., Ltd.
Sichuan Changhong Chairman of supervisory
2014.05.28 2017.05.28 Y
Electric Co., Ltd. committee
Yu Wanchun
Sichuan Changhong
Director of supervisory office 2014.11 - N
Electric Co., Ltd.
Sichuan Changhong
Electronics Holding Chief of auditing department 2016.07.01 - N
Group Co., Ltd.
Sichuan Changhong
Deputy GM and chief
Yu Xiao Electronics Holding 2016.01.29 - Y
accountant
Group Co., Ltd.
Sichuan Changhong
Financial administrator 2014.05.28 2017.05.28 Y
Electric Co., Ltd.
Hu Jia Changhong (Hong
Kong) Trading Chairman 2014.08.29 - N
Limited
Sichuan Changhong
Director 2014.05.28 2017.05.28 N
Electric Co., Ltd.
Li Jin Sichuan Changhong
Electronics Holding Director, GM 2015.11.13 - Y
Group Co., Ltd.
Post-holding in shareholders unit Not applicable
(III) Post-holding in other unit
√ Applicable □ Not applicable
Drawing
remuneration
Other unit Start date of End date of
Name Title and allowance
office term office term
from other
unit (Y/N)
Huayi Compressor Co., Ltd. Chairman 2008.2.18 - N
Liu Tibin Sichuan Changhong Minsheng
Chairman 2006.10 - N
Logistric Co., Ltd.
Xu Bangjun Huayi Compressor Co., Ltd. Deputy chairman 2016.5.6 2018.4.15 N
Zhongke Meiling Cryogenic
Li Wei Chairman 2015.8.28 2018.8.27 N
Technology Co., Ltd.
Kou Huameng Huayi Compressor Co., Ltd. Director 2015.4.16 - N
153
HEFEI MEILING CO., LTD. Annual Report 2016
Hefei Science & Technology Rural
Gao Jian Director 2015.4 - N
Commercial bank
Chairman of
Huayi Compressor Co., Ltd. 2014.8.25 2018.04.16 N
Supervisory Committee
Sichuan Electronic War Industry Chairman of
2015.1.14 - N
Group Co., Ltd Supervisory Committee
Anhui Xinhao Plasma Display Panel
Supervisor 2014.4.15 - N
Co., Ltd.
Yu Wanchun
Sichuan Changhong Property Co.,
Supervisor 2015.3.6 - N
Ltd.
Sichuan Changhong Jiahua
Supervisor 2015.06．10 - N
Information Products Co., Ltd.
Sichuan Hongyang Investment Co.,
Supervisor 2014.7.14 - N
Ltd.
Sichuan Changhong Group Finance
Hu Jia Chairman 2015.10.29 - N
Co., Ltd.
Professor, doctoral
supervisor, deputy
Business School of Sichun University director of Financial 1990.7 - Y
Institute of Sichuan
University
Chengdu Rainbow Electric (Group) Y
Independent Director 2012.3.23 -
Co., Ltd.
Gan Shengdao Sichuan Sunny Seal Co., Ltd. Independent Director 2011.6.21 - Y
Liangshan Rural Commercial Bank Y
Independent Director 2011.11.18 -
Co., Ltd.
Sichuan Yahua Industrial Group Co.,
Independent Director 2015.6.9 - Y
Ltd
Sichuan Huashi Group Co., Ltd. Outside director 2015.8.10 - Y
Yibing Wuliangye Co., Ltd. Independent Director 2016.11.18 Y
SIMIC Holdings Co., Ltd. Deputy president 2013.1 - Y
Ren Jia
SIMIC Development Co., Ltd. GM 2014.7 - N
School of Management and
Lu Yingjin Associate professor 2001.12.30 - Y
Economics of UESTC
Zhongke Meiling Cryogenic
Zhong Ming Director 2015.8.28 2018.8.27 N
Technology Co., Ltd.
Zhongke Meiling Cryogenic Chairman of
Li Xia 2015.8.28 2018.8.27 N
Technology Co., Ltd. Supervisory Committee
Post-holding
Not applicable
in other unit
(IV) Punishment of securities regulatory authority in recent three years to the company‘s
154
HEFEI MEILING CO., LTD. Annual Report 2016
current and outgoing directors, supervisors and senior management during the reporting period
□ Applicable √ Not applicable
IV. Remuneration of directors, supervisors and senior executives
(I) Decision-making, determine basis and actually payment of remuneration for directors,
supervisors and senior executives
1. Procedure for deciding remunerations of directors, supervisors and senior management
Implemented in line with laws, regulations and relevant rules of ―Company Law‖, ―Article of
Association‖ and ―Enforcement Regulation of Remuneration and Evaluation Committee of the
Board‖, including:
(1) Allowance plan of independent directors are implemented after deliberated in the Board
and approved in Shareholders‘ General Meeting. Other directors and non-staff supervisors except
independent directors are received no remuneration from the Company.
(2) Remuneration of senior executives are deliberated and approved by the Board according to
remuneration evaluation plan together with opinions of Remuneration and Evaluation Committee.
2. Bases on which remunerations of directors, supervisors and senior management are decided
The Company conducted the performance examination on the task of directors, supervisors
and senior executives according to the HR management policy, wages of directors, supervisors and
senior executives are decided by their performance and evaluations check by the Company. All
wages are performing by the evaluation results according to the only evaluation standard that
carried by the Company.
3. Actual payment of remunerations of directors, supervisors and senior management
Allowance of the independent directors are paid by the standards approved in Annual
Shareholders‘ General Meeting, other director, who serves as senior executive at the same time, and
non-staff supervisors except independent directors did not received remuneration from the
Company; remunerations for senior executives of the Company are paid strictly by the unify
remuneration valuation mechanism of the Company.
Directors, supervisors and senior executives of the Company has 19 in total up to 31 December
2016, actually 12 person receiving remuneration from the Company, 2 staff supervisors are received
their remuneration by actual positions (non-supervisor post); furthermore, 3 independent directors
are received the allowance monthly from the Company; the Company will pay remuneration to
senior executives monthly/quarterly/annually.
During the reporting period, the Company has established the executive compensation and
performance management program for the senior management of 2016 in accordance with the main
scope, the responsibilities, the importance of the management positions of the senior management,
155
HEFEI MEILING CO., LTD. Annual Report 2016
and the compensation level of other relevant company and position, the program includes but not
limited to the company's key performance indicator (KPI) and performance evaluation criteria,
procedures and major evaluation system; the major programs and systems of the reward and
punishment; review the performance of duties of the company's senior management and conduct the
annual performance appraisal.
At the end of the year, the Remuneration and Appraisal Committee combined the work report
and self-evaluation of the senior management in 2016, followed the performance evaluation criteria
and procedures, and evaluated the Key Performance Indicator (KPI) of the senior management in
2016; and other relevant indicators of performance evaluation; proposed the remuneration amount
and performance appraisal approach of the senior management based on the job performance
evaluation results and the remuneration policy, and reported to the Board for approval.
(II) Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
Total Whether
remuneration remuneration
Name Title Sex Age Post status obtained from obtained from
the Company related party of
(before taxes) the Company
Currently in
Liu Tibin Chairman M 54 -- Y
office
Currently in
Xu Bangjun Deputy chairman M 52 -- Y
office
Deputy chairman, Currently in
Li Wei M 44 47.36 N
President office
Currently in
Kou Huameng Director M 47 -- Y
office
Director, deputy Currently in
Wu Dinggang M 44 45.08 N
President office
Currently in
Gao Jian Director M 41 -- Y
office
Currently in
Gan Shengdao Independent Director M 50 11.90 N
office
Currently in
Ren Jia Independent Director M 53 11.90 N
office
Currently in
Lu Yingjin Independent Director M 52 11.90 N
office
Yu Wanchun Chairman of M 46 Currently in -- Y
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HEFEI MEILING CO., LTD. Annual Report 2016
supervisory committee office
Currently in
Yu Xiao Supervisor M 48 -- Y
office
Currently in
Hu Jia Supervisor F 42 -- Y
office
Currently in
Deng Li Staff supervisor M 34 17.05 N
office
Currently in
Zhu Wenjie Staff supervisor M 29 13.12 N
office
Executive vice Currently in
Liu Hongwei M 53 46.59 N
president office
Currently in
Liao Tao deputy President M 46 30.07 N
office
Currently in
Zhong Ming deputy President M 44 32.58 N
office
deputy President and Currently in
Zhang Xiaolong M 41 30.85 N
finance chief office
Currently in
Li Xia Secretary of the Board F 36 21.29 N
office
Li Jin Deputy chairman M 49 Office leaving -- Y
Shang Wen Staff supervisor M 49 Office leaving 17.75 N
Total -- -- -- -- 337.44 --
(III) Equity incentive authorized for director, supervisor and senior executive in reporting
period
The Company's audited operating results and actual operating conditions in 2015 did not
reached the granted conditions of annual performance incentive funds, there are no equity incentive
authorized in the Period
(IV) Equity incentive authorized for director, supervisor and senior executive in reporting
period
□ Applicable √ Not applicable
V. Staff of the Company
Hefei Meiling Co., Ltd. and its controlling subsidiaries owned on-job employees of 18,967
people in total. There are 146 people in retired are enjoying expenses paid by the Company.
(I) Numbers, professional structure and education background
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HEFEI MEILING CO., LTD. Annual Report 2016
On-job employee in parent company (people) 6,772
On-job employee in main subsidiary (people) 12,195
Total on-job employees (people) 18,967
Current total payroll(people) 18,967
Number of retired employees with expenses paid by the
146
parent company and main subsidiary (people)
professional structure
Types of professional category Numbers of professional category (people)
Production staff 9,894
Salesman 6,196
Technician 2,229
Financial staff 239
Administration staff 409
-
Total 18,967
Education background
Type of education background Numbers (people)
High school and below 10,776
Junior college 3,269
Undergraduate 4,788
Master and above 134
Total 18,967
(II) Remuneration policy
Remuneration policy of the employees: the Company formulated human resources and
compensation policy conducive to sustainable development of enterprise according to the
provisions of relevant laws and policies promulgated by the state and to the Company's actual
situation; through the performance appraisal, we guided managers and staff to make contribution for
the development of the Company. At the same time, the Company attaches great importance to staff
development, build the position system and promotion channels, and enhance staff capacity through
a variety of training. We combine the incentive and guarantee compensation, encourages mutual
develop between employees and the Company. The Companies concerned about employee benefits,
shaping corporate culture by providing various holiday, allowance, sympathy, traffic and organizing
colorful activities, thus improve employee satisfaction.
(III) Training plans
Training plan: The company has formulated the Staff Training Management System, Credit
Management Regulations, Reserve Team Selection and Training Regulations and other systems and
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HEFEI MEILING CO., LTD. Annual Report 2016
standard work flows, set up the training courses system based on the staff capacity model and
combined with staff development, combined the training and staff professional qualifications with
the career development. In 2016, the company has focused on promoting the 100-people echelon
talent construction project, established the reserve leader, reserve cadres, outstanding college
students and other talent development echelon, established the special reserves talent pool for
overseas factory management team, overseas business management team in order to strengthen the
reserves of overseas talent, and organized targeted and special training for the storage staff so as to
provide talent reserves and supports for the company's future long-term development. At the same
time, the company has improved the satisfaction and loyalty of new employees by career planning
and management, propaganda and guidance of corporate culture to new college students and other
new forces.
(IV) Labor outsourcing
□Applicable √Not applicable
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HEFEI MEILING CO., LTD. Annual Report 2016
Section IX. Corporate Governance
I. Corporate governance of the Company
(I) Overview of the corporate governance
In strict compliance with the Company Law, Securities Law, Governance Principles of Listed
Company issued by the CSRC, and the Rules Governing the Listing of Securities on Shenzhen
Stock Exchange (amended in 2014), the Company continued to construct and perfect its
governance structure, thereby forming its decision-making, supervision and operation management
organization with general meeting, the board of directors, the board of supervisors and operation
management as the major structure. The general meeting, board of directors, board of supervisors
and operation management of the Company has definite terms of reference, which can ensure an
effective balance, scientific decision-making process and coordinative operation, laying firm
foundation for making decisions relating to the Company‘s continuous, steady and healthy
development.
During the reporting period, in accordance with the Guidelines for the Standard Operation of
Listed Companies on the Main Board of Shenzhen Stock Exchange and other relevant provisions,
combining with the issuance results of the company‘s non-public offering of shares in 2016 and
the company‘s actual business development needs, the company has revised the Articles of
Association and Financial Products Investment Management System of Hefei Meiling Co., Ltd.,
effectively fulfilled the company's internal management and control system, and further
standardized the operation of the company, improved the corporate governance level, and
enhanced the company's overall operational efficiency. Overall, during the reporting period, the
actual situation of corporate governance has been in line with the requirements of relevant state
laws and regulations, and regulatory documents relevant to governance of listed companies issued
by China Securities Regulatory Commission and Shenzhen Stock Exchange.
1. Shareholders and general meeting
The Company standardized the procedures concerning convening, holding and voting of
general meeting in strict compliance with the Articles of Association and Rules of Procedure of
General Meeting. All shareholders, especially the minority shareholders, were equally treated to
ensure all shareholders shall rank pari passu and can fully exercise their right. During the reporting
period, the Company convened general meetings according to Rules of Procedure of Listed
Issuer‘s General Meeting (amended in 2016) issued by the CSRC and the Implementation Rules
Relating to Network Voting at General Meeting of Listed Issuer issued by Shenzhen Stock
Exchange (amended in September 2016). In addition to convening general meeting in forms of site
conference, the Company offered convenience for shareholders to present general meeting via
network voting which was safe, economic and convenient. Meanwhile, separate counting was
conducted in respect of the voting by minority shareholders (other shareholders other than those
which, serve as directors, supervisors and senior managers; individually or jointly, hold more than
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HEFEI MEILING CO., LTD. Annual Report 2016
5% of the shares of listed issuer), and the voting results will be disclosed promptly, so as to
practically protect the minority interests and ensure all shareholder, especially the minority
shareholders, can fully exercise their rights as shareholders.
2. The Company and controlling shareholders:
The Company has independent business and independent management capability. The
Company and its controlling shareholders owe independent business, personnel, assets, organs and
finance. During the period, controlling shareholder abide by requirement of Article of Association
and Management System of Related Transactions, strictly regulate their behaviors, and no
controlling shareholder has directly or indirectly intervened in the Company‘s policy-making and
business activities beyond the general meeting of stockholders, no capital or assets of the Company
occupied by controlling shareholder and its affiliates either.
3. The directors and board of directors
Board Meeting are revoke and open in line with the regulation of Company Law and Article
of Association strictly, voting and information disclosure procedures appliance with relevant rules.
All directors of the Company carry out work according to ―Rules of Procedure of the Board‖ and
―Independent Director System‖, seriously attend the board of directors and shareholders‘ meeting,
exercise obligations by the law and faithfully perform their duties vigorously, positively participate
in trainings of related knowledge open by Shenzhen Stock Exchange and Securities Bureau, and
get familiar with related laws and regulations. Independent directors follow close to the line of
Instruction of Setting Up Independent Directors System in Listed Companies and Independent
Director System, take an active part in decision-making of the Company and present a prior
approval and independent opinions for related transactions and major events, bring out the
functions of independent directors.
In the Period, Board of the Company setting up four special committees including strategy,
remuneration and appraisal, audit and nomination, each special committee respectively undertakes
the functions of discussion, policy making, supervision and assessment according to the relevant
working instruction, and plays important role in improving the scientific decision-making,
decision-making efficiency and quality for the Board.
4. Supervisors and board of supervisors
The Company convened and held meeting of supervisors in strict compliance with the
Company Law and Articles of Association, and the voting and information disclosure procedures
of supervisors‘ meeting complied with relevant requirements. The 8th session of board of
supervisors consisted or five supervisors, two of whom are staff supervisor, the number and
constitution of which met applicable laws and regulations. Our supervisors can carefully
performed their duties including presenting at general meeting and meeting of the board of
directors in accordance to the Rules of Procedures of Board of Supervisors, to exercise supervision
over the board of directors‘ decision-making procedures, subjects to be proposed and our operation
in law, to review the periodic reports prepared by the Board and form written audit opinion in
respect thereof and to make effective supervision over our material transactions, connected
transaction, financial position as well as the legality and compliance of the performance by
directors and senior management and issue independent opinions in respect thereof.
5. The performance appraisal and incentive and constraint mechanism
The Company owes and continues to improve fair-ness and transparency performance
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HEFEI MEILING CO., LTD. Annual Report 2016
appraisal standards and incentive and constraint mechanism for directors, supervisors and senior
management, the engagement of managers of the Company is open and transparent and meets the
provisions of laws and regulations.
6. The stakeholders
The Company fully respects and maintains the legitimate rights and interests of stakeholders;
strengthen communication and negotiation with each other, realizes the coordination and balance
of interests for all parties including society, shareholders, company and staff, pushes forward the
sustainable, steady and harmonious development of the Company together.
7. The information disclosure and transparency
During the Period, the Company strengthens management of information disclosure, performs
the duty of information disclosure in strict accordance with the rules of related laws and
regulations, Rules Governing the stock listed on Shenzhen Stock Exchange (2014 Reversion) and
―Management System of Information Disclosure‖, and appoints Securities Times, China Securities
Journal, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn) for information
disclosure medial; as for the major un-disclosed inside information, exercise strictly confidential
procedures and controlling persons with inside information kowned. The Company perform duty
in aspect of truthfully, accurately, timely and completely discloses information, ensures all
investors obtain the Company‘s information equally and other legal interest.
8. Investor relations management
The Company has seriously done the job of the investor relations management in accordance
with the requirements of the "Investor Relations Management System" and "Reception and
Promotion system" during the Period. Received the consultation and research of the professional
institutional investors to the company, checking records for visitors and signing letter of
commitment, disclosed the "investor relations activities record" timely. At the same time,
communicated with the investors through the "interact easily" platform of Shenzhen Stock
Exchange Investor Relations; seriously received the suggestion and opinions from investors,
protect interest of the minority investors, earnestly accepted and replied the calls, faxes, and emails
from the investors; cautiously dealt with the media coverage.
(II) Is there any difference between the actual condition of corporate governance and
relevant regulations about corporate governance for listed company from CSRC?
□Yes √ No
There are no differences between the actual condition of corporate governance and relevant
regulations about corporate governance for listed company from CSRC.
II. Independency of the Company relative to controlling shareholders’ in aspect of
businesses, personnel, assets, organization and finance
The Company totally separated in business, personnel, assets, institutions and financial
aspects from Sichuan Changhong (controlling shareholder), with independent business accounting,
responsibility and risk and independent business operation capability.
1. The business: the Company has an independent and complete business as well as operation
ability, with specialized procurement, production, technology, marketing, management, human
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HEFEI MEILING CO., LTD. Annual Report 2016
resources and other departments. We autonomously manage and operate business on our own.
While the management staff are independent from controlling shareholders and their subordinate
enterprises. The Company is free from interference by controlling shareholders and other affiliates,
and there is no dependence on controlling shareholders and other affiliates.
2. The personnel: personnel, labor, personnel and salary of the Company are completely
independent. President, vice president, Secretary of the board of directors and other senior
management personnel are working in the Company and receive salary, not receiving any
remuneration and holding position of any except directors, supervisors in the controlling
shareholder and its subordinate enterprises.
3. Assets: the Company owns places of production and management independent from its
controlling shareholder, owns complete assets structure, independent production system, auxiliary
production systems and supporting facilities, land use rights, ownership of houses and other assets,
and independent purchase and sales system. No assets occupied by controlling shareholders and
other affiliates.
4. Institutions: the Company established organization completely independent from
controlling shareholders; the general meeting, board of directors, board of supervisors and the
internal organization are capable of taking independent action, with no controlling shareholder
intervention of corporation's decision-making behavior. The Company strengthen the power
restriction system via general meeting, the Board, supervisory committee, independent directors
and vary committees, formulated an effective structure for corporate governance.
5. Financial aspects: the Company set up independent financial management, and independent
accounting system and financial management system, independently setting up banking account
and tax declaration.
III. Horizontal competition
□Applicable √Not applicable
IV. In the report period, the Company held annual shareholders’ general meeting and
extraordinary shareholders’ general meeting
1. Annual Shareholders’ General Meeting in the report period
Ratio of
Session of investor
Type Date Date of disclosure Index of disclosure
meeting participati
on
Juchao
First
Website—(http://www.cninfo
Extraordinary Extraordinary
.com.cn) ―Resolution
General General 34.48% 2016-4-6 2016-4-7
Notice of First extraordinary
Meeting of Meeting
general meeting of 2016‖
2016
No.: 2016-037
Juchao
AGM of 2015 AGM 34.03% 2016-5-4 2016-5-5
Website—(http://www.cninfo
163
HEFEI MEILING CO., LTD. Annual Report 2016
.com.cn) ―Resolution
Notice of Annual General
Meeting of 2015‖ No.:
2016-046
Juchao
Second Website—(http://www.cninfo
Extraordinary Extraordinary .com.cn) ―Resolution
General General 31.74% 2016-12-13 2016-12-14 Notice of Second
Meeting of Meeting extraordinary general
2016 meeting of 2016‖ No.:
2015-077
2. Request for extraordinary general meeting by preferred stockholders whose voting
rights restore
□ Applicable √ Not applicable
V. Responsibility performance of independent directors
(i)The attending of independent directors to Board meetings and general meeting
The attending of independent directors
Times of Absent the
Times of
Board meeting Times of Times of Meeting for
Independent attending by Times of
supposed to present in entrusted the second
Director communicatio Absence
attend in the person presence time in a row
n
report period (Y/N)
Gan Shengdao 13 1 12 0 0 否
Ren Jia 13 0 13 0 0 否
Lu Yingjin 13 1 12 0 0 否
Times presented in shareholders‘
general meeting by independent Gan Shengdao: 1 times Ren Jia: 2 times Lu Yingjin: one time
directors
Explanation of absent the Board Meeting for the second time in a row:
No independent directors absent the Board Meeting for the second time in a row
(ii) Objection for relevant events from independent directors
Whether independent directors come up with objection about company‘s relevant matters or
not
□ Yes √ No
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HEFEI MEILING CO., LTD. Annual Report 2016
Independent directors has no objections for relevant events in reporting period
(iii) Other explanation about responsibility performance of independent directors
Whether the opinions from independent directors have been adopted or not
√Yes □ No
Explanation on recommendations adopted or un-adopted:
During the report period, the independent directors of the 8th session of the Board, Mr. Gao
Shengdao, Mr. Ren Jia and Mr. Lu Yingjin, faithfully performed their duties, and prudently,
earnestly and diligently exercised their rights as independent directors in strict accordance with
―Corporation Law‖, ―Securities Law‖, ―Guidance on the Establishment of Independent Director
System in Listed Companies‖ of China Securities Regulatory Commission, ―Stock listing
Rules‖(Revised in 2014) of Shenzhen Stock Exchange, ―Articles of Association‖, ―Independent
Director System‖, ―Annual Report Working System of Independent Director‖, and rules of related
laws and regulations, not influenced by the major shareholders, actual controllers, or other units
and individuals having a stake in the Company, actively attended the general meeting of
shareholders and board meeting, made independent opinions on related matters, gave reasonable
suggestions to the production and management and the business development of the Company,
gave full play to the role as independent directors, and maintained the legitimate rights and
interests of shareholders of the Company, especially the medium and small shareholders.
1. Deepen understanding operation of the Company. Independent directors take advantage of
attending the shareholders meeting and Board meetings, fully understand the situation of operation
of the Company, listen to the reports of business status and operation from the management. While
in deliberated the related transactions, independent directors are accredited and issued opinions on
the Board Meeting; as for the other propsoals that need to decided by the Board, such as business
development, financial operations and risk controlling, relevant materials are well-deliberated by
independent directors, after report, they issued independent opinions and effectively promoted the
scientific and objectivity of decisions of the board of directors.
(2) Positive reinforce capacitate professional. Independent directors actively joined in the
training activities for directors, supervisors and senior management held by the supervision
organization, studied relevant laws and regulations, deepened their understanding to relevant
regulations, especially the regulations involving corporate governance structure and rights
protection for shareholders with public shares, so as to strengthen and improve their protective
capabilities for the Company and shareholders‘ rights and interests, and form the ideology of
consciously protecting the shareholders with public shares.
(3) Diligently perform their duties. In the process of establishment and disclosure for 2016
annual report, the independent directors, Mr. Gan Shengdao, Mr. Ren Jia and Mr. Lu Yingjin,
positively performed their duties, gave full play to their independent roles in the annual reports,
carefully listened the management‘s report about the annual business condition and development
of major events and did necessary field visits, directly met and communicated with the Certified
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HEFEI MEILING CO., LTD. Annual Report 2016
Public Accountants for annual report and internal control auditing in the audit process, and
diligently performed their duties as the independent directors
In reporting period, independent directors propose opinions on the Board, and details of
suggestions as:
Dated Items Agree/against Disclosure index
Independent opinion on relevant proposal of Juchao Website
2016-03-07 Agreed
the 17th session of 8th BOD (www.cninfo.com.cn)
Independent opinion on relevant proposal of Juchao Website
2016-03-19 Agreed
the 18th session of 8th BOD (www.cninfo.com.cn)
Independent opinion on relevant proposal of Juchao Website
2016-03-25 Agreed
the 19th session of 8th BOD (www.cninfo.com.cn)
Independent opinion on relevant proposal of Juchao Website
2016-07-29 Agreed
the 23rd session of 8th BOD (www.cninfo.com.cn)
Independent opinion on private placement to
management from controlling subsidiary
Juchao Website
2016-09-21 Zhongke Meiling Cryogenic Technology Co., Agreed
(www.cninfo.com.cn)
Ltd. and The Company waiving the priority of
purchasing
Independent opinion on relevant proposal of Juchao Website
2016-10-18 Agreed
the 26th session of 8th BOD (www.cninfo.com.cn)
Independent opinion on relevant proposal of Juchao Website
2016-11-26 Agreed
the 27th session of 8th BOD (www.cninfo.com.cn)
VI. Responsibility performance of subordinate special committee of the Board in report
period
(I) Responsibility performance for strategy committee of the Board
In accordance with the requirements of the relevant laws and regulations of the Company
Law and the Listing Rules of the Shenzhen Stock Exchange and the relevant requirements of the
CSRC and the Shenzhen Stock Exchange, the Strategic Committee under the Board of Directors of
the company has strictly followed the provisions of the Articles of Association and the Working
Rules of the Strategic Committee of the Board of Directors, strictly performed their duties, and
offered proposals and carried out positive guides for the company's strategic development and
foreign investments, the specific situation is as follows:
On January 6, 2016, the Strategic Committee convened the 4th meeting of the Strategy
Committee of the 8th Board of Directors which considered and approved the Proposal on Investing
and Building Changmei Science and Technology Co., Ltd. See details on ―(i) Performance of duty
of the Strategic Committee of the Board of Directors‖ in ―VI Performance of duty of the special
committees of the Board of Directors during the reporting period‖ in ―Section IX Corporate
Governance‖ of the company‘s 2015 Annual Report which the company has disclosed at
www.cninfo.com.cn on March 26, 2016.
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HEFEI MEILING CO., LTD. Annual Report 2016
On March 22, 2016, the Strategic Committee convened the 5th meeting of the Strategy
Committee of the 8th Board of Directors which has considered and approved the Proposal on the
Development Plan of the Company in 2016, the Proposal on the Capital Increase of the Subsidiary
- Zhongshan Changhong Electric Co., Ltd. to Changhong Ruba Trading Company(Private)
Limited and the Proposal on joint investments of the Subsidiaries - Zhongshan Changhong and
Changhong Air Conditioning in the Establishment of Indonesian Subsidiary. See details on ―(i)
Performance of duty of the Strategic Committee of the Board of Directors‖ in ―VI Performance of
duty of the special committees of the Board of Directors during the reporting period‖ in ―Section
IX Corporate Governance‖ of the company‘s 2015 Annual Report which the company has
disclosed at www.cninfo.com.cn on March 26, 2016.
On November 23, 2016, the Strategic Committee convened the 6th meeting of the Strategy
Committee of the 8th Board of Directors which has considered and approved the Proposal on the
Subsidiary - HongYuan Earth Energy Heat Pump Technology Co., Ltd. to Set up Branch Offices
and Invest in the Construction of Production Base for Earth Energy and Heat Pump Products, the
Proposal on the Subsidiary - Zhongshan Changhong Electric Co., Ltd. to Invest and Establish a
Wholly-owned Subsidiary, and the Proposal on the Subsidiary - Guangdong Changhong Ridian
Technology Co., Ltd. to Invest and Establish a Wholly-owned Subsidiary.
According to the business development needs and market demands of the company's
subsidiary - HongYuan Earth Energy Heat Pump Technology Co., Ltd. (hereinafter referred to as
"Heat Pump Company"), it has been agreed that Heat Pump Company sets up HongYuan Earth
Energy Heat Pump Technology Co., Ltd. Guangdong Branch in Nantou Town, Zhongshan City,
Guangdong Province (tentative name, and ultimately subject to industrial and commercial
registration), and this branch acts as the implementation subject of the project, invests 14,972,000
Yuan to build the production base for earth energy heat pump products so as to expand the
production capacity of Heat Pump Company and effectively satisfy the market's needs. It has been
agreed to submit the investment to the Board of Directors for consideration.
According to the operation and development needs of the company's subsidiary - Zhongshan
Changhong, and in order to integrate various types of supply chain resources, reduce operating
costs, and further expand the overseas sales scale of the company's air-conditioning products and
others, it has been agreed that Zhongshan Changhong invests 1 million Yuan in Zhongshan,
Guangdong to set up trade-based wholly-owned subsidiary - Zhongshan Changhong Trading Co.,
Ltd. (tentative name, and ultimately subject to industrial and commercial registration) to engage in
product import and export trading business. It has been agreed to submit the investment to the
Board of Directors for consideration.
According to the operation and development needs of the company's subsidiary - Guangdong
Changhong Ridian Technology Co., Ltd. (hereinafter referred to as "Ridian Company"), and in
order to integrate various types of supply chain resources, reduce operating costs, and further
expand the overseas sales scale of the company's small household appliance products, it has been
agreed that Ridian Company invests 1 million Yuan in Zhongshan, Guangdong to set up
trade-based wholly-owned subsidiary - Zhongshan Hongling Trading Co., Ltd. (tentative name,
and ultimately subject to industrial and commercial registration) to engage in product import and
export trading business. It has been agreed to submit the investment to the Board of Directors for
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HEFEI MEILING CO., LTD. Annual Report 2016
consideration.
On March 18, 2017, the Strategic Committee convened the 7th meeting of the Strategy
Committee of the 8th Board of Directors which has considered and approved the Proposal on the
Development Plan of the Company in 2017, the Proposal on the Company to Invest and Build a
Production Base for Producing 2,000,000 Sets of Washing Machines, and the Proposal on the
Company to jointly invest with Candy Hoover Group S.r.l. to Establish a Joint Venture Company
for Washing Machines.
According to the company's medium and long term development strategy, the committee
members combined with the macroeconomic situation and industry status and summarized the
annual work situation in 2016, discussed and established the company‘s business ideas and
business plans in 2017, and further ensured the realization of the company‘s medium and long
term development strategic targets.
According to the company's strategic development plan and combined with the company's
business development needs, in order to make up for weakness in research and development,
manufacturing capacity of the washing machine industry, it has been agreed that the company
invests not more than 371,210,000 Yuan to build a production base that can produce 2,000,000 sets
of automatic washing machines. The completion of this project will promote the development of
the company's washing machine industry, enhance the competitiveness, profitability and future
sustainable development momentum of washing machine products, it fits with the company's
long-term strategic development needs. It has been agreed to submit the investment to the Board of
Directors for consideration.
(3) According to the company's development strategy, and in order to expand the market size
of Meiling washing machine products an enhance the brand influence of Meiling washing machine
products, it has been agreed that the company and Candy Hoover Group Srl. that has the
international superior resources in research and development, technology, channels and overseas
customers jointly invest 150 million Yuan to set up Meiling Kadi (China) Washing Machine Co.,
Ltd. (pre-approved name, and ultimately subject to the name approved by the industrial and
commercial bureau) to sell washing machine products, of which the company invests 90 million
Yuan with its own funds, accounting for 60% of the registered capital, Candy Group invests 60
million Yuan with its own funds, accounting for 40% of the registered capital. It has been agreed to
submit the investment to the Board of Directors for consideration.
(II) Responsibility performance for audit committee of the Board
Audit committee of the Board performed its functions of supervision and examination to
maintain the independence of audition in auditing for year of 2016 according to the requirements
of related laws and regulations such as Company Law and Rules Governing the Listing of Stocks
on Shenzhen Stock Exchange and related requirements of Securities Regulatory Commission and
Shenzhen Stock Exchange by abiding of Articles of Incorporation, Implementing Regulations of
Audit Committee of Board of the Directors, and Annual Work Rules of Audit Committee, the
details are as follows:
1. On 29 January 2016, the ―Financial Statement Report for year of 2015 and Arrangement of
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HEFEI MEILING CO., LTD. Annual Report 2016
Internal Control Auditing‖ and ―Un-audited Financial Accounting Statement for year of 2015‖
were deliberated and approved in 9th session of 8th audit committee of the Board. Found more
details in ―(II) Responsibility performance for audit committee of the Board‖ of ―VI.
Responsibility performance of subordinate special committee of the Board in report period‖
carried in ―Section IX. Corporate Governance‖ disclosed in Annual Report 2015, released on
Juchao Website (www.cninfo.com.cn) dated 25 March 2016.
2. On 3 March 2016, the 10th session of 8th audit committee of the Board deliberated the first
draft of Annual Report 2015, after a preliminary audit opinion issued from Shine Wing CPA (LLP).
Found more details in ―(II) Responsibility performance for audit committee of the Board‖ of ―VI.
Responsibility performance of subordinate special committee of the Board in report period‖
carried in ―Section IX. Corporate Governance‖ disclosed in Annual Report 2015, released on
Juchao Website (www.cninfo.com.cn) dated 25 March 2016.
3. On March 13, 2016, the audit committee held the 11th session of the 8th audit committee of
the board o which reviewed and approved "The Company's 2015 Annual Audited Financial
Reports", "2015 Internal Control Audit Report", "Summary report about the company's 2015
annual audit work taken up by ShineWing Certified Public Accountants", "Motion on
reappointment of the audit institution for 2016 annual financial report and internal controls and its
payment" and "Motion on the company to carry out forward foreign exchange transaction
business", and agreed to submit the above motions to the board of directors for consideration.
4. On 22 April 2016, the ―Financial Statement of 1Q of 2016‖ was deliberated and approved
in 12th session of 8th audit committee of the Board, the un-audited financial statement present a
real, accurate and completed financial status and operation results of the Company for 1Q of 2016.
The financial statements of 1Q of 2016 agree to submit for approval in the Board.
5. On 17 July 2016, the ―Financial Statement of Semi-annual 2016‖ was deliberated and
approved in 13th session of 8th audit committee of the Board, the un-audited financial statement
present a real, accurate and completed financial status and operation results of the Company for
semi-annual of 2016. The financial statements of semi-annual 2016 agree to submit for approval in
the Board.
6. On 14 October 2016, the ―Financial Statement of 3Q 2016‖ was deliberated and approved
in 14th session of 8th audit committee of the Board, the un-audited financial statement present a
real, accurate and completed financial status and operation results of the Company for 3Q of 2016.
The financial statement of 3Q 2016 agree to submit for approval in the Board.
7. On 24 January 2017, the ―Financial Statement Report for year of 2016 and Arrangement of
Internal Control Auditing‖ and ―Un-audited Financial Accounting Statement for year of 2016‖
were deliberated and approved in 15th session of 8th audit committee of the Board, the un-audited
financial statement presented an objectified financial status and operation results for year of 2016
basically.
8. On 3 March 2017, the audit committee held the 16th session of the 8th audit committee
after the Shine Wing Certified Public Account (LLP) issued preliminary audit opinion. Reviewed
the auditing draft of financial report for year of 2016, proposed specific opinions; members of
audit committee communicated with certified public accountant who was responsible for audition
169
HEFEI MEILING CO., LTD. Annual Report 2016
of the company, the certified public accountant who was be responsible for annual audition of the
company reported related matters and adjusted matters during the audition to the audit committee,
and matters of the company needs to be adjusted have been adjusted according to adjustment
opinions of the certified public accountant who was responsible for annual audition. The audit
committee read the first draft of audited financial accounting statements for 2016 of the company
according to audition condition known from certified public accountant who was responsible for
annual audition and production operation condition and financial performances reported by
management level of the company, considered that the annual financing accounting statements for
2016 audited preliminarily by the Shine Wing Certified Public Account can truly, correctly and
completely reflect the operation condition of the company, and confirmed the preliminary audit
opinions of financing accounting statements of the company issued by the Shine Wing Certified
Public Account.
9. On 18 March 2016, the 17th session of the 8th audit committee of the Board deliberated
and approved the followed 5 proposals as‖ Audited Financial Statement Report of 2016‖,
―Auditing Report of Internal Control for year of 2016‖, Summary Report on Auditing Works for
year of 2016 from Shine Wing Certified Public Account‖, ―Auditing Institution for Financial
Report of 2017 and Internal Control Auditing Re-engagement and Remuneration Paid‖, and
―Opening Business of Forward Exchange‖, and agreed to submit these auditing institutions to
board of the directors of the Company for deliberation.
(III) Responsibility performance for nominations committee of the Board
The nominations committee under the board of directors practically performed their duties on
the basis of requirements of laws and regulations of ―Company Law‖ and ―Rules Governing the
Listing of Stocks on Shenzhen Stock Exchange‖ and related requirements of China Securities
Regulatory Commission and Shenzhen Stock Exchange, and in strict accordance with ―Articles of
Association‖, ―Implementation Rules of Nominations Committee of the Board‖, in the reporting
period, the nominations committee reviewed and made recommendations to the engaged senior
management that needed to be submitted to the board for consideration and nomination.
On March 22, 2016, the nomination committee held its third meeting of the nomination
committee of the eighth board of directors, the meeting reviewed and approved "Motion on the
qualification examination of non-independent director candidates planned to be by-elected by the
company's eighth board of directors" that the non-independent director candidates for the eighth
board of directors recommended by the company's controlling shareholders are qualified in
accordance with relevant provisions of the "Company Law", "Articles of Association" and the
China Securities Regulatory Commission who are not determined to have limited access to the
market by China Securities Regulatory Commission, and the educational background, work
experience, professional competence and professional quality of the non-independent director
candidates meet the job qualifications. We agreed to nominate Mr. Xu Bangjun to be the
non-independent director candidate of the Company's the eighth board of directors and submit to
the board of directors for consideration.
(IV) Responsibility performance for remuneration and appraisal committee of the
board
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HEFEI MEILING CO., LTD. Annual Report 2016
In line with relevant laws and regulation of Company Law and ―Rules Governing the
Listing of Stocks on Shenzhen Stock Exchange‖ as well as requirement from CSRC and Shenzhen
Stock Exchange, remuneration and appraisal committee of the Board, strictly follow rules of
―Article of Association‖ and ―Implementation Rules of remuneration and appraisal committee of
the Board‖, in the reporting period, the committee proposed suggestions on the performance
evaluation standards and incentive & restraint mechanism for directors, supervisors and senior
executives, and review the appraisal and remuneration of directors, supervisors and senior
executives, accrual and distribution for performance incentive fund included. More details are as:
On March 16, 2016, the 3rd meeting of the Remuneration and Appraisal Committee of the 8th
Board of Directors was convened. The meeting reviewed and approved the "Appraisal and
Payment of Remuneration of Directors and Senior Executives in the Year 2015". See details on "
（iiii）Performance of duty of the Remuneration and Appraisal Committee of the Board of
Directors‖ in ―VI Performance of duty of the special committees of the Board of Directors during
the reporting period‖ in ―Section IX Corporate Governance‖ of the company‘s ―2015 Annual
Report‖ which the company has disclosed at www.cninfo.com.cn on March 25, 2016.
2. On March 18, 2017, the fourth meeting of the Remuneration and Appraisal Committee of
the 8th Board of Directors was convened, the meeting has considered and approved the
Remuneration Assessment and Payment of Directors and Senior Executives of the Company in
2016, and Proposal on Withdrawing 2016 Annual Performance Incentive Fund, and issued the
following comments:
(1) The committee has assessed and reviewed the remuneration and payment of the directors
and senior management of the company in 2016, and considered that the allowances received by
the independent directors of the company should be paid according to the allowances approved by
the shareholders' general meeting; the remuneration received by the senior executives of the
company should be paid in strict accordance with the company's remuneration assessment system,
the remuneration information disclosed by the Company is true, accurate and complete which
conforms to the requirements of China Securities Regulatory Commission‘s ―Information
Disclosure Content and Format of the Company Publicly Issues Securities No. 2 - contents and
format of annual report (2016 Revision)‖.
According to the remuneration assessment to senior executives of the company and combined
with the comments of the Remuneration and Appraisal Committee, the Board of Directors of the
company has reviewed and approved the remuneration assessment and payment of directors and
senior executives in the 2016 annual report of the company.
According to the latest Accounting Standards for Business Enterprises No. 9 - Employee
Compensation of the Ministry of Finance revised in 2014, the company's accounting policies and
the provisions of Incentive Plan, after calculation, and in accordance with the financial statements
and operating conditions of the company audited in 2016, the company has fulfilled the terms of
the annual performance incentive fund in 2016, it has been agreed that the company withdraws the
performance incentive fund of 24,182,150.92 Yuan in accordance with 10% of the audited net
profits in 2016 (the net profit in above terms and withdrawing indicators refers to the net profit
attributable to the shareholders of listed company). At the same time, according to the Accounting
Standards for Business Enterprises No. 9 - Employee Compensation of Ministry of Finance and the
171
HEFEI MEILING CO., LTD. Annual Report 2016
relevant accounting policies of the company, the Company's performance incentive fund
withdrawn in 2016 shall be included in the current profits and losses and it has been agreed to
submit the ―Proposal on Withdrawing the Company‘s 2016 Annual Performance Incentive Fund‖
to the Board of Directors for consideration.
VII. Works from Supervisory Committee
Whether the Company has risks or not in reporting period that found in supervisory activity
from supervisory committee
□ Yes √ No
Supervisory committee has no objection about supervision events in reporting period
VIII. Appraisal and incentive to senior management
(I) Evaluation mechanism for senior executives of the Company
The Company formulated ―Implementation Rules of Remuneration and Appraisal Committee
of the Board‖, the remuneration and appraisal committee established 2016 annual compensation
and performance management plan for the senior management of the Company in accordance with
the main scope, responsibilities, importance of their management positions and the remuneration
level of other relevant enterprises and positions; the plan included but not limited to key
performance indicator (KPI), performance appraisal standards, procedures and major programs and
systems of main appraisal system, reward and punishment; investigated the execution of duty of
the senior management and implemented annual performance appraisal to them. After reviewed by
the committee, submit to the Board for approval.
At the end of the year, combined with the senior management‘s working reports and
self-evaluation of 2016, and according to the performance evaluation criteria and procedures, the
Compensation and Appraisal Committee has carried out performance appraisal to the senior
management‘s key performance indication (KPI) in 2016 and other related indicators; proposed the
remuneration amount and performance assessment methods for senior management according to
the job performance evaluation results and remuneration distribution policy, and reported to the
Board of Directors for approval.
(II) Establishment and implementation of performance incentive mechanism
1. The Company formulated a mid-long term incentive and restraint mechanism, that is
―Implementation Plan of Annual Performance Incentive Fund‖ in 2012, on 9 August 2012 and 28
August 2012, the Plan was deliberated and approved in 16th meeting of 7th session of the Board
and 2nd extraordinary general meeting 2012. Details of the aforesaid event can be found in the
announcement (No.: 2012-028 and No.: 2012-035) released on appointed media Securities Times,
China Securities Journal, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn)
dated 10 August 2012 and 29 August 2012. Implementation of the annual performance incentive
fund found more in ― Implementation of Annual Performance Incentive Fund‖ of ―XV
Implementation of the company‘s stock incentive plan, employee stock ownership plan or other
172
HEFEI MEILING CO., LTD. Annual Report 2016
employee incentives‖ in ―Section V. Important Event‖ carried in the Report.
IX. Internal Control
1. Details of major defects in IC appraisal report that found in reporting period
□Yes √ No
There are no details of major defects in IC appraisal report in reporting period
(ii) Appraisal Report of Internal Control
Date of evaluation report of internal control
2017-3-30
disclosed (Full-text)
Index of evaluation report of internal control
Juchao website (www.cninfo.com.cn)
disclosed (Full-text)
The ratio of the total assets of units included in
the scope of evaluation accounting for the total
97.31%
assets on the company's consolidated financial
statements
The ratio of the operating income of units
included in the scope of evaluation accounting
97.24%
for the operating income on the company's
consolidated financial statements
Defects Evaluation Standards
Category Financial Reports Non-financial Reports
1. Material defect: defect: severally or jointly with other defects, Occurrence of the followings shall
will lead to material wrong reporting in financial reports being not be deemed as material defect,
able to prevented or found or rectified in a timely manner. otherwise as major defect or
Occurrence of the followings will be deemed as material defect: general defect subject to the level
1. inefficiency of environment control; of influence.
2. fraud of directors, supervisors and senior management; 1. breach of national laws,
3. The external auditor finds material wrong reporting in current regulations or regulatory
financial statement, while the Company has not found such documents;
Qualitative reporting during its operation; 2. procedure for making significant
criteria 4. The material defect identified and reported to the management decisions is not scientific;
fails to be rectified in a reasonable time period; 3. absence of system may lead to
5. The audit committee and audit department of the Company invalid system;
exercise invalid supervision upon internal control; 4. Material or major defects are not
6. Other defects which may affect financial statement users to make likely to rectify;
correct judgment. 5. Large negative effects on the
2. Major defect: severally or jointly with other defects, will lead to company and disclosed in the form
wrong reporting in financial reports being not able to prevented or of announcement;
found or rectified in a timely manner which still needs attention 6. Other issues that materially
173
HEFEI MEILING CO., LTD. Annual Report 2016
from the management though it doesn‘t reach or exceed material affect the Company.
defect as described above. Occurrence of the followings will be
deemed as major defect:
(1) Financial losses caused by guaranteeing and investing in
securities and financial derivatives transactions and disposing
property right and stock right without authorization;
(2) The company's financial staff or other relevant business
personnel have unclear powers and responsibilities or job chaos, or
are suspected of being involved in economic or job-related crimes
and have been transferred to the judiciary;
(3) Punishment or severely negative impacts on the company's
image due to the bias implementation of the policy or accounting
errors, etc.;
(4) Financial losses caused by destroying, concealing, or altering
the important original evidences at will, such as invoices and
checks, etc.
(5) Cash income is not entered into the account book, or public
funds are deposited in private account or "private coffer" is
established by breaking the rules.
3. General defect: other internal control related defects that do not
constitute material defects or major defect.
1. Proportion of direct property
loss in total operating income:
Material defect: wrong reporting
≧ 0.1%; Major defect: 0.05% ≤
1. Proportion of potential wrong reporting in total operating wrong reporting ＜ 0.1%; General
income: Material defect: wrong reporting ≧0.5%; Major defect: defect: wrong reporting＜0.05%.
0.1% ≤ wrong reporting＜0.5%; General defect: wrong reporting＜ 2. Proportion of direct property
0.1%. loss in total profit: Material
2. Proportion of potential wrong reporting in total profit: defect: wrong reporting ≧ 10%;
Material defect: wrong reporting ≧10%; Major defect: 5% ≤ Major defect: 5% ≤ wrong
Quantitative wrong reporting＜10%; General defect: wrong reporting＜5%. reporting ＜ 10%; General defect:
standard 3. Proportion of potential wrong reporting in total assets: wrong reporting＜5%.
Material defect: wrong reporting ≧0.5%; Major defect: 0.1% ≤ 3. Proportion of direct property
wrong reporting＜0.5%; General defect: wrong reporting＜0.1%. loss in total assets: Material
4. Proportion of potential wrong reporting in total owners’ defect: wrong reporting ≧ 0.2%;
equity: Material defect: wrong reporting ≧0.5%; Major defect: Major defect: 0.1% ≤ wrong
0.1% ≤ wrong reporting＜0.5%; General defect: wrong reporting＜ reporting＜0.2%; General defect:
0.1%. wrong reporting＜0.1%.
4. Proportion of direct property
loss in total owners’ equity:
Material defect: wrong reporting
≧0.2%; Major defect: 0.1% ≤
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HEFEI MEILING CO., LTD. Annual Report 2016
wrong reporting＜0.2%; General
defect: wrong reporting＜0.1%.
Amount of
significant
0
defects in
financial reports
Amount of
significant
defects in 0
non-financial
reports
Amount of
important defects
0
in financial
reports
Amount of
important defects
0
in non-financial
reports
X. Auditing report of internal control
√Applicable □ Not applicable
Deliberation section of auditing report of IC
We consider that: in all major aspects, Hefei Meiling Co., Ltd. has efficiency in financial report of internal
control dated 31 December 2016 according to Basic Standards of Internal Control for Enterprise and relevant
regulations.
Disclosure details of audit
Disclosed
report of internal control
Disclosure date of audit report
2017-3-30
of internal control (full-text)
Index of audit report of
Juchao Website: (ww.cninfo.com.cn)
internal control (full-text)
Opinion type of auditing
Standard unqualified
report of IC
whether the non-financial
No
report had major defects
Whether CPA carries out qualified opinion for audit report of internal control or not
□Yes √No
Whether the opinions are consistent in audit report of internal control carrying out by CPA
175
HEFEI MEILING CO., LTD. Annual Report 2016
and the self-evaluation report of the Board or not
√Yes □ No
176
HEFEI MEILING CO., LTD. Annual Report 2016
Section X Corporate Bonds
Whether the Company has a corporation bonds that issuance publicly and listed on stock
exchange and without due on the date when annual report approved for released or fail to cash in
full on due
□Yes √No
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HEFEI MEILING CO., LTD. Annual Report 2016
Section XI Financial Report
I. Audit Report
Type of audit opinion Standard unqualified auditor‘s report
Date of audit report signing 2017-3-28
Audit authority Shine Wing Certified Public Accountants (LLP)
Auditing file No. XYZH/2017CDA40093
CPA‘s name He Yong, Xia Cuiqiong
Auditors’ Report
XYZH/2017CDA40093
To the Shareholders of Hefei Meiling Co., Ltd.:
We have audited the Companying consolidated and parent Company‘s financial statements of
Hefei Meiling Co., Ltd. (―the Company‖), including balance sheet of 31 December 2016 and profit
statement, and cash flow statement, and statement on changes of shareholders‘ equity for the year
ended, and notes to the financial statements for the year ended.
I. Management’s responsibility for the financial statements
Management of the Company is responsible for prepare and present financial statement of the
Company, which including: (1) Prepare financial statements with fair presentation in line with
Accounting Standards for Business Enterprises; (2) Designing, executed and maintaining
necessary internal control in order to prevent fundamental miscarrying in financial statement from
fraudulent or errors.
II. Auditor's responsibility
Our responsibility is to express an audit opinion on these financial statements based on our
audit. We performed our audit in accordance with Chinese Certified Public Accountants' Auditing
Standards. Those standards require us to comply with professional ethics, and to plan and perform
our audit so as to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures of the financial statements. The selective audit procedures depend on auditor's
judgment, including the evaluation of the risk of material misstatement of the consolidated
financial statements due to frauds or errors. When evaluating risk, we consider internal control
related to financial statements, in order to design auditing procedures, but not for the purpose of
expressing an opinion on the internal control's effectiveness. An audit also includes assessing the
appropriateness of the accounting policies adopted and the reasonableness of the accounting
178
HEFEI MEILING CO., LTD. Annual Report 2016
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that we have obtained sufficient and appropriate audit evidences to provide a basis
for our audit opinion.
III. Auditing opinion
In our opinion, the Company‘s financial statements have been prepared in accordance with
the Enterprises Accounting Standards and Enterprises Accounting System, and they fairly present
the financial status of the Company and of its parent company as of 31 December 2016 and its
operation results and cash flows for the year ended.
Shine Wing Certified Public Accountants (LLP) Chinese CPA: He Yong
Chinese CPA: Xia Cuiqiong
Beijing, P.R.C 28 March 2017
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HEFEI MEILING CO., LTD. Annual Report 2016
II. Financial Statement
Statement in Financial Notes are carried in RMB/CNY
1. Consolidated balance sheet
Prepared by Hefei Meiling Co., Ltd.
2016-12-31
In RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 4,058,869,234.63 2,135,189,879.15
Settlement provisions
Capital lent
Financial liability measured
by fair value and with variation 12,060,213.30
reckoned into current gains/losses
Derivative financial liability
Notes receivable 1,421,429,723.73 1,286,332,682.74
Accounts receivable 1,118,960,552.49 1,338,396,321.83
Accounts paid in advance 134,706,488.38 68,041,820.73
Insurance receivable
Reinsurance receivables
Contract reserve of
reinsurance receivable
Interest receivable 2,645,494.32 1,238,199.65
Dividend receivable
Other receivables 39,553,919.44 39,494,835.30
Purchase restituted finance
asset
Inventories 1,974,526,734.86 1,554,946,209.51
Divided into assets held for
sale
Non-current asset due within
12,625,340.00
one year
Other current assets 1,454,346,297.42 539,101,578.44
Total current assets 10,229,723,998.57 6,962,741,527.35
Non-current assets:
Loans and payments on
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HEFEI MEILING CO., LTD. Annual Report 2016
behalf
Finance asset available for
17,000,000.00 17,000,000.00
sales
Held-to-maturity investment
Long-term account
receivable
Long-term equity investment 81,643,631.37 74,239,547.01
Investment property 13,275,631.40 14,084,213.51
Fixed assets 1,204,093,169.72 1,267,493,931.98
Construction in progress 107,037,409.95 56,504,880.99
Engineering material
Disposal of fixed asset 75,788,138.47 75,773,138.47
Productive biological asset
Oil and gas asset
Intangible assets 613,969,271.63 593,449,698.85
Expense on Research and
45,023,750.60 53,344,827.72
Development
Goodwill
Long-term expenses to be
1,132,075.48
apportioned
Deferred income tax asset 84,264,603.65 78,435,177.86
Other non-current asset 34,615,630.00 44,221,416.00
Total non-current asset 2,277,843,312.27 2,274,546,832.39
Total assets 12,507,567,310.84 9,237,288,359.74
Current liabilities:
Short-term loans 288,343,724.73 58,680,093.19
Loan from central bank
Absorbing deposit and
interbank deposit
Capital borrowed
Financial liability measured
by fair value and with variation 559,249.58
reckoned into current gains/losses
Derivative financial liability
Notes payable 2,635,051,740.30 2,172,064,923.79
Accounts payable 2,331,899,310.82 1,604,075,191.50
Accounts received in
390,935,440.46 295,604,800.16
advance
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HEFEI MEILING CO., LTD. Annual Report 2016
Selling financial asset of
repurchase
Commission charge and
commission payable
Wage payable 189,592,039.00 115,297,429.40
Taxes payable 59,849,032.13 70,530,483.54
Interest payable 1,617,352.01 214,328.89
Dividend payable 2,545,801.23 2,200,499.91
Other accounts payable 622,580,323.43 643,567,087.33
Reinsurance payables
Insurance contract reserve
Security trading of agency
Security sales of agency
Divided into liability held for
sale
Non-current liabilities due
272,202,590.10 11,153,067.68
within 1 year
Other current liabilities
Total current liabilities 6,795,176,603.79 4,973,387,905.39
Non-current liabilities:
Long-term loans 38,908,788.00 243,004,866.40
Bonds payable
Including: preferred stock
Perpetual capital
securities
Long-term account payable
Long-term wages payable 29,696,403.85 38,211,463.86
Special accounts payable 1,400,000.00
Projected liabilities 331,575,430.79 338,125,014.55
Deferred income 142,919,562.49 132,890,618.54
Deferred income tax
1,809,032.00
liabilities
Other non-current liabilities
Total non-current liabilities 546,309,217.13 752,231,963.35
Total liabilities 7,341,485,820.92 5,725,619,868.74
Owner‘s equity:
Share capital 1,044,597,881.00 763,739,205.00
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HEFEI MEILING CO., LTD. Annual Report 2016
Other equity instrument
Including: preferred stock
Perpetual capital
securities
Capital public reserve 2,687,961,060.65 1,529,183,876.13
Less: Inventory shares
Other comprehensive income 3,474,546.95 -2,280,500.61
Reasonable reserve
Surplus public reserve 391,029,420.33 367,066,994.18
Provision of general risk
Retained profit 968,097,382.98 817,667,480.44
Total owner‘s equity attributable
5,095,160,291.91 3,475,377,055.14
to parent company
Minority interests 70,921,198.01 36,291,435.86
Total owner‘s equity 5,166,081,489.92 3,511,668,491.00
Total liabilities and owner‘s
12,507,567,310.84 9,237,288,359.74
equity
Legal Representative: Liu Tibin Person in charge of accounting works: Zhang Xiaolong
Person in charge of accounting institute: Luo Bo
2. Balance Sheet of Parent Company
Prepared by Hefei Meiling Co., Ltd.
In RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 3,071,362,771.31 1,654,499,494.28
Financial liability measured
by fair value and with variation 12,060,213.30
reckoned into current gains/losses
Derivative financial liability
Notes receivable 1,053,598,721.93 828,061,004.44
Accounts receivable 1,006,701,894.37 943,328,995.97
Account paid in advance 106,947,474.25 302,567,578.88
Interest receivable
Dividends receivable
Other receivables 26,742,423.95 53,255,891.89
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HEFEI MEILING CO., LTD. Annual Report 2016
Inventories 1,017,090,374.81 869,593,027.59
Divided into assets held for
sale
Non-current assets maturing
within one year
Other current assets 1,427,283,451.40 522,617,641.34
Total current assets 7,721,787,325.32 5,173,923,634.39
Non-current assets:
Available-for-sale financial
17,000,000.00 17,000,000.00
assets
Held-to-maturity investments
Long-term receivables
Long-term equity
992,282,289.21 840,634,581.05
investments
Investment property 11,332,015.32 11,805,903.99
Fixed assets 861,163,999.99 890,217,780.00
Construction in progress 19,478,121.20 20,365,686.01
Project materials
Disposal of fixed assets 43,494,954.71 43,479,954.71
Productive biological assets
Oil and natural gas assets
Intangible assets 430,435,091.82 438,227,183.15
Research and development
12,797,092.26 2,162,829.06
costs
Goodwill
Long-term deferred expenses
Deferred income tax assets 69,138,686.26 70,170,515.47
Other non-current assets
Total non-current assets 2,457,122,250.77 2,334,064,433.44
Total assets 10,178,909,576.09 7,507,988,067.83
Current liabilities:
Short-term borrowings 261,843,724.73 34,411,720.00
Financial liability measured
by fair value and with variation
reckoned into current gains/losses
Derivative financial liability
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HEFEI MEILING CO., LTD. Annual Report 2016
Notes payable 1,734,774,950.13 1,395,443,530.25
Accounts payable 1,521,019,717.86 1,114,807,199.47
Accounts received in
104,205,506.34 145,333,375.62
advance
Wage payable 57,714,577.87 42,847,802.62
Taxes payable 25,677,906.64 20,425,867.86
Interest payable 1,617,352.01 214,328.89
Dividend payable 2,545,801.23 2,200,499.91
Other accounts payable 634,561,307.52 686,009,980.82
Divided into liability held for
sale
Non-current liabilities due
257,750,238.18 7,487,315.76
within 1 year
Other current liabilities
Total current liabilities 4,601,711,082.51 3,449,181,621.20
Non-current liabilities:
Long-term loans 4,751,000.00 199,341,900.00
Bonds payable
Including: preferred stock
Perpetual capital
securities
Long-term account payable
Long-term wages payable 29,696,403.85 38,211,463.86
Special accounts payable
Projected liabilities 331,575,430.79 338,125,014.55
Deferred income 64,601,290.18 68,050,877.23
Deferred income tax
1,809,032.00
liabilities
Other non-current liabilities
Total non-current liabilities 432,433,156.82 643,729,255.64
Total liabilities 5,034,144,239.33 4,092,910,876.84
Owners‘ equity:
Share capita 1,044,597,881.00 763,739,205.00
Other equity instrument
Including: preferred stock
Perpetual capital
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HEFEI MEILING CO., LTD. Annual Report 2016
securities
Capital public reserve 2,753,017,007.10 1,497,987,446.59
Less: Inventory shares
Other comprehensive income
Reasonable reserve
Surplus reserve 390,811,254.65 366,848,828.50
Retained profit 956,339,194.01 786,501,710.90
Total owner‘s equity 5,144,765,336.76 3,415,077,190.99
Total liabilities and owner‘s
10,178,909,576.09 7,507,988,067.83
equity
Legal Representative: Liu Tibin Person in charge of accounting works: Zhang Xiaolong
Person in charge of accounting institute: Luo Bo
3. Consolidated Profit Statement
Prepared by Hefei Meiling Co., Ltd.
In RMB
Item Current Period Last Period
I. Total operating income 12,526,710,867.49 10,754,200,188.12
Including: Operating income 12,526,710,867.49 10,754,200,188.12
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost 12,355,268,931.56 10,639,235,185.22
Including: Operating cost 10,028,393,422.32 8,626,957,829.63
Interest expense
Commission charge and
commission expense
Cash surrender value
Net amount of expense of
compensation
Net amount of withdrawal of
insurance contract reserve
Bonus expense of guarantee
slip
186
HEFEI MEILING CO., LTD. Annual Report 2016
Reinsurance expense
Tax and extras 137,857,822.93 87,849,554.99
Sales expenses 1,855,396,448.81 1,574,408,045.18
Administration expenses 472,146,980.73 431,057,033.53
Financial expenses -139,879,189.92 -102,034,012.45
Losses of devaluation of asset 1,353,446.69 20,996,734.34
Add: Changing income of fair
11,500,963.72 81,170.00
value(Loss is listed with ―-‖)
Investment income (Loss is
14,302,482.67 -12,043,591.71
listed with ―-‖)
Including: Investment income
on affiliated company and joint -1,724,205.46 -15,983,663.17
venture
Exchange income (Loss is
listed with ―-‖)
III. Operating profit (Loss is
197,245,382.32 103,002,581.19
listed with ―-‖)
Add: Non-operating income 57,917,677.26 45,525,813.85
Including: Disposal gains
4,155,568.27 1,772,955.83
of non-current asset
Less: Non-operating expense 5,949,509.51 115,465,594.34
Including: Disposal loss
5,411,002.25 6,221,387.00
of non-current asset
IV. Total Profit (Loss is listed
249,213,550.07 33,062,800.70
with ―-‖)
Less: Income tax expense 29,044,015.72 11,226,998.22
V. Net profit (Net loss is listed with
220,169,534.35 21,835,802.48
―-‖)
Net profit attributable to
220,216,680.96 27,104,893.56
owner‘s of parent company
Minority shareholders‘ gains and
-47,146.61 -5,269,091.08
losses
VI. Net after-tax of other
7,798,783.78 1,288,320.82
comprehensive income
Net after-tax of other
comprehensive income attributable 5,755,047.56 982,398.38
to owners of parent company
187
HEFEI MEILING CO., LTD. Annual Report 2016
(I) Other comprehensive
income items which will not be
reclassified subsequently to profit
of loss
1. Changes as a result
of re-measurement of net defined
benefit plan liability or asset
2. Share of the other
comprehensive income of the
investee accounted for using equity
method which will not be
reclassified subsequently to profit
and loss
(II) Other comprehensive
income items which will be
5,755,047.56 982,398.38
reclassified subsequently to profit
or loss
1. Share of the other
comprehensive income of the
investee accounted for using equity
method which will be reclassified
subsequently to profit or loss
2. Gains or losses
arising from changes in fair value
of available-for-sale financial assets
3. Gains or losses
arising from reclassification of
held-to-maturity investment as
available-for-sale financial assets
4. The effect hedging
portion of gains or losses arising
from cash flow hedging
instruments
5. Translation
differences arising on translation of
5,755,047.56 982,398.38
foreign currency financial
statements
6. Other
Net after-tax of other
comprehensive income attributable 2,043,736.22 305,922.44
to minority shareholders
VII. Total comprehensive income 227,968,318.13 23,124,123.30
188
HEFEI MEILING CO., LTD. Annual Report 2016
Total comprehensive income
attributable to owners of parent 225,971,728.52 28,087,291.94
Company
Total comprehensive income
attributable to minority 1,996,589.61 -4,963,168.64
shareholders
VIII. Earnings per share:
(i) Basic earnings per share 0.2717 0.0355
(ii) Diluted earnings per share 0.2717 0.0355
As for the merger under the same control, the combined party has profit of 0.00 Yuan achieved before
combination in the year while gains 615,594.18 Yuan in last year.
Legal Representative: Liu Tibin Person in charge of accounting works: Zhang Xiaolong
Person in charge of accounting institute: Luo Bo
4. Profit Statement of Parent Company
Prepared by Hefei Meiling Co., Ltd.
In RMB
Item Current Period Last Period
I. Operating income 7,446,086,755.52 6,454,683,327.03
Less: Operating cost 6,433,627,521.78 5,501,158,020.89
Tax and extras 73,861,322.33 46,198,522.96
Sales expenses 688,401,472.30 628,028,964.03
Administration
208,401,227.95 200,756,534.30
expenses
Financial expenses -98,934,716.78 -76,986,515.39
Losses of devaluation of
2,102,466.99 1,884,756.30
asset
Add: Changing income of
12,060,213.30 81,170.00
fair value(Loss is listed with ―-‖)
Investment income (Loss
83,282,277.41 -4,275,552.10
is listed with ―-‖)
Including: Investment
income on affiliated company and 3,156,876.73 -7,735,291.56
joint venture
II. Operating profit (Loss is
233,969,951.66 149,448,661.84
listed with ―-‖)
Add: Non-operating income 29,275,529.00 19,562,063.49
189
HEFEI MEILING CO., LTD. Annual Report 2016
Including: Disposal
269,387.27 14,913.06
gains of non-current asset
Less: Non-operating expense 2,534,291.62 86,901,951.21
Including: Disposal loss
2,440,092.05 5,910,524.05
of non-current asset
III. Total Profit (Loss is listed
260,711,189.04 82,108,774.12
with ―-‖)
Less: Income tax expense 21,086,927.51 10,009,893.74
IV. Net profit (Net loss is listed
239,624,261.53 72,098,880.38
with ―-‖)
V. Net after-tax of other
comprehensive income
(I) Other comprehensive
income items which will not be
reclassified subsequently to profit
of loss
1. Changes as a result
of re-measurement of net defined
benefit plan liability or asset
2. Share of the other
comprehensive income of the
investee accounted for using
equity method which will not be
reclassified subsequently to profit
and loss
(II) Other comprehensive
income items which will be
reclassified subsequently to profit
or loss
1. Share of the other
comprehensive income of the
investee accounted for using
equity method which will be
reclassified subsequently to profit
or loss
2. Gains or losses
arising from changes in fair value
of available-for-sale financial
assets
3. Gains or losses
arising from reclassification of
190
HEFEI MEILING CO., LTD. Annual Report 2016
held-to-maturity investment as
available-for-sale financial assets
4. The effect hedging
portion of gains or losses arising
from cash flow hedging
instruments
5. Translation
differences arising on translation
of foreign currency financial
statements
6. Other
VI. Total comprehensive income 239,624,261.53 72,098,880.38
VII. Earnings per share:
(i) Basic earnings per share 0.2956 0.0944
(ii) Diluted earnings per
0.2956 0.0944
share
Legal Representative: Liu Tibin Person in charge of accounting works: Zhang Xiaolong
Person in charge of accounting institute: Luo Bo
5. Consolidated Cash Flow Statement
Prepared by Hefei Meiling Co., Ltd.
In RMB
Item Current Period Last Period
I. Cash flows arising from
operating activities:
Cash received from selling
commodities and providing labor 11,699,243,669.11 9,821,704,004.35
services
Net increase of customer
deposit and interbank deposit
Net increase of loan from
central bank
Net increase of capital
borrowed from other financial
institution
Cash received from original
insurance contract fee
Net cash received from
reinsurance business
191
HEFEI MEILING CO., LTD. Annual Report 2016
Net increase of insured
savings and investment
Net increase of amount from
disposal financial assets that
measured by fair value and with
variation reckoned into current
gains/losses
Cash received from interest,
commission charge and
commission
Net increase of capital
borrowed
Net increase of returned
business capital
Write-back of tax received 335,919,734.52 233,659,161.10
Other cash received
59,658,793.72 41,648,588.29
concerning operating activities
Subtotal of cash inflow arising
12,094,822,197.35 10,097,011,753.74
from operating activities
Cash paid for purchasing
commodities and receiving labor 8,789,463,121.16 7,699,848,052.80
service
Net increase of customer
loans and advances
Net increase of deposits in
central bank and interbank
Cash paid for original
insurance contract compensation
Cash paid for interest,
commission charge and
commission
Cash paid for bonus of
guarantee slip
Cash paid to/for staff and
1,223,290,043.44 1,169,853,434.73
workers
Taxes paid 449,049,753.97 406,349,536.96
Other cash paid concerning
647,628,383.15 591,589,544.02
operating activities
Subtotal of cash outflow arising
11,109,431,301.72 9,867,640,568.51
from operating activities
192
HEFEI MEILING CO., LTD. Annual Report 2016
Net cash flows arising from
985,390,895.63 229,371,185.23
operating activities
II. Cash flows arising from
investing activities:
Cash received from
500,000,000.00 400,980,332.00
recovering investment
Cash received from
9,533,550.19 3,459,739.46
investment income
Net cash received from
disposal of fixed, intangible and 28,393,920.60 2,749,368.50
other long-term assets
Net cash received from
disposal of subsidiaries and other 23,314,758.79
units
Other cash received
133,141,780.06 131,723,837.54
concerning investing activities
Subtotal of cash inflow from
694,384,009.64 538,913,277.50
investing activities
Cash paid for purchasing
fixed, intangible and other 134,749,360.71 93,486,096.59
long-term assets
Cash paid for investment 1,490,783,872.00 987,050,116.00
Net increase of mortgaged
loans
Net cash received from
subsidiaries and other units
obtained
Other cash paid concerning
4,027,616.05 10,000,000.00
investing activities
Subtotal of cash outflow from
1,629,560,848.76 1,090,536,212.59
investing activities
Net cash flows arising from
-935,176,839.12 -551,622,935.09
investing activities
III. Cash flows arising from
financing activities
Cash received from
1,570,791,736.49 4,900,000.00
absorbing investment
Including: Cash received
28,791,737.65 4,900,000.00
from absorbing minority
193
HEFEI MEILING CO., LTD. Annual Report 2016
shareholders‘ investment by
subsidiaries
Cash received from loans 1,613,844,864.58 1,700,864,359.43
Cash received from issuing
bonds
Other cash received
3,451.80 387.13
concerning financing activities
Subtotal of cash inflow from
3,184,640,052.87 1,705,764,746.56
financing activities
Cash paid for settling debts 1,351,232,591.45 1,899,924,701.39
Cash paid for dividend and
profit distributing or interest 67,342,850.57 54,515,544.51
paying
Including: Dividend and
profit of minority shareholder
paid by subsidiaries
Other cash paid concerning
324,871.81 44,445,436.35
financing activities
Subtotal of cash outflow from
1,418,900,313.83 1,998,885,682.25
financing activities
Net cash flows arising from
1,765,739,739.04 -293,120,935.69
financing activities
IV. Influence on cash and cash
equivalents due to fluctuation in 48,983,386.20 27,436,730.45
exchange rate
V. Net increase of cash and cash
1,864,937,181.75 -587,935,955.10
equivalents
Add: Balance of cash and
cash equivalents at the period 2,121,161,238.01 2,709,097,193.11
-begin
VI. Balance of cash and cash
3,986,098,419.76 2,121,161,238.01
equivalents at the period -end
Legal Representative: Liu Tibin Person in charge of accounting works: Zhang Xiaolong
Person in charge of accounting institute: Luo Bo
6. Cash Flow Statement of Parent Company
Prepared by Hefei Meiling Co., Ltd.
In RMB
194
HEFEI MEILING CO., LTD. Annual Report 2016
Item Current Period Last Period
I. Cash flows arising from
operating activities:
Cash received from selling
commodities and providing labor 6,286,987,522.89 5,593,115,621.61
services
Write-back of tax received 194,271,770.99 137,031,380.36
Other cash received
28,856,943.31 19,541,500.17
concerning operating activities
Subtotal of cash inflow arising
6,510,116,237.19 5,749,688,502.14
from operating activities
Cash paid for purchasing
commodities and receiving labor 5,059,846,568.26 4,949,806,686.98
service
Cash paid to/for staff and
499,890,356.04 462,425,101.84
workers
Taxes paid 131,211,995.78 146,873,149.10
Other cash paid concerning
308,996,738.10 280,746,768.10
operating activities
Subtotal of cash outflow arising
5,999,945,658.18 5,839,851,706.02
from operating activities
Net cash flows arising from
510,170,579.01 -90,163,203.88
operating activities
II. Cash flows arising from
investing activities:
Cash received from
511,480,198.00 400,000,000.00
recovering investment
Cash received from
84,794,863.59 3,459,739.46
investment income
Net cash received from
disposal of fixed, intangible and 1,919,834.50 2,456,048.50
other long-term assets
Net cash received from
disposal of subsidiaries and other 5,798,619.62
units
Other cash received
117,071,741.57 101,399,102.52
concerning investing activities
Subtotal of cash inflow from
721,065,257.28 507,314,890.48
investing activities
195
HEFEI MEILING CO., LTD. Annual Report 2016
Cash paid for purchasing
fixed, intangible and other 65,695,722.77 48,147,261.30
long-term assets
Cash paid for investment 1,546,450,000.00 927,000,000.00
Net cash received from
subsidiaries and other units
Other cash paid concerning
70,692,821.70 16,917,669.77
investing activities
Subtotal of cash outflow from
1,682,838,544.47 992,064,931.07
investing activities
Net cash flows arising from
-961,773,287.19 -484,750,040.59
investing activities
III. Cash flows arising from
financing activities
Cash received from
1,541,999,998.84
absorbing investment
Cash received from loans 1,583,917,936.22 1,588,236,225.91
Cash received from issuing
bonds
Other cash received
162,688,163.19 179,702,763.86
concerning financing activities
Subtotal of cash inflow from
3,288,606,098.25 1,767,938,989.77
financing activities
Cash paid for settling debts 1,323,059,487.45 1,796,140,016.74
Cash paid for dividend and
profit distributing or interest 65,467,602.28 52,330,306.51
paying
Other cash paid concerning
78,461,124.88 101,955,781.82
financing activities
Subtotal of cash outflow from
1,466,988,214.61 1,950,426,105.07
financing activities
Net cash flows arising from
1,821,617,883.64 -182,487,115.30
financing activities
IV. Influence on cash and cash
equivalents due to fluctuation in 43,156,715.34 21,453,537.47
exchange rate
V. Net increase of cash and cash
1,413,171,890.80 -735,946,822.30
equivalents
196
HEFEI MEILING CO., LTD. Annual Report 2016
Add: Balance of cash and
cash equivalents at the period 1,654,499,494.28 2,390,446,316.58
-begin
VI. Balance of cash and cash
3,067,671,385.08 1,654,499,494.28
equivalents at the period -end
Legal Representative: Liu Tibin Person in charge of accounting works: Zhang Xiaolong
Person in charge of accounting institute: Luo Bo
197
HEFEI MEILING CO., LTD. Annual Report 2016
7. Statement of Changes in Owners’ Equity (Consolidated)
Prepared by Hefei Meiling Co., Ltd.
This Period
In RMB
This Period
Owners‘ equity attributable to parent company
Other
equity instrument Less:
Item Minority Total owners‘
Perpetu Inven Other Reasona
Surplus Provision of Retained interests equity
Share capital Preferr al Capital reserve tory comprehensiv ble
reserve general risk profit
ed capital Other share e income reserve
stock securiti s
es
I. Balance at
the end of the 763,739,205.00 1,529,183,876.13 -2,280,500.61 367,066,994.18 817,667,480.44 36,291,435.86 3,511,668,491.00
last year
Add:
Changes of
accounting
policy
Error
correction of
the last period
Enterprise
combine under
the same
control
198
HEFEI MEILING CO., LTD. Annual Report 2016
Other
II. Balance at
the beginning 763,739,205.00 1,529,183,876.13 -2,280,500.61 367,066,994.18 817,667,480.44 36,291,435.86 3,511,668,491.00
of this year
III. Increase/
Decrease in this
year (Decrease 280,858,676.00 1,158,777,184.52 5,755,047.56 23,962,426.15 150,429,902.54 34,629,762.15 1,654,412,998.92
is listed with
―-‖)
(i) Total
comprehensive 5,755,047.56 220,216,680.96 1,996,589.61 227,968,318.13
income
(ii) Owners‘
devoted and
280,858,676.00 1,158,777,184.52 32,984,351.87 1,472,620,212.39
decreased
capital
1.Common
shares invested 280,858,676.00 1,259,874,046.76 27,867,909.83 1,568,600,632.59
by shareholders
2. Capital
invested by
holders of other
equity
instruments
3. Amount
reckoned into
owners equity
with
share-based
payment
4. Other -101,096,862.24 5,116,442.04 -95,980,420.20
(III) Profit
23,962,426.15 -69,786,778.42 -351,179.33 -46,175,531.60
distribution
199
HEFEI MEILING CO., LTD. Annual Report 2016
1. Withdrawal
of surplus 23,962,426.15 -23,962,426.15
reserves
2. Withdrawal
of general risk
provisions
3. Distribution
for owners (or -45,824,352.27 -351,179.33 -46,175,531.60
shareholders)
4. Other
(IV) Carrying
forward internal
owners‘ equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus reserve
4. Other
(V) Reasonable
reserve
1. Withdrawal
in the report
period
200
HEFEI MEILING CO., LTD. Annual Report 2016
2. Usage in the
report period
(VI)Others
IV. Balance at
the end of the 1,044,597,881.00 2,687,961,060.65 3,474,546.95 391,029,420.33 968,097,382.98 70,921,198.01 5,166,081,489.92
report period
Last Period
In RMB
Last Period
Owners‘ equity attributable to the parent Company
Other
equity instrument Less:
Item Minority Total owners‘
Perpetu Inven Other Reasona
Surplus Provision of Retained interests equity
Share capital Preferr al Capital reserve tory comprehensiv ble
reserve general risk profit
ed capital Other share e income reserve
stock securiti s
es
I. Balance at the
end of the last 763,739,205.00 1,549,009,939.03 -3,262,898.99 359,857,106.14 843,596,827.22 16,678,477.92 3,529,618,656.32
year
Add:
Changes of
accounting policy
Error
correction of the
last period
Enterprise
combine under
the same control
Other
201
HEFEI MEILING CO., LTD. Annual Report 2016
II. Balance at the
beginning of this 763,739,205.00 1,549,009,939.03 -3,262,898.99 359,857,106.14 843,596,827.22 16,678,477.92 3,529,618,656.32
year
III. Increase/
Decrease in this
-19,826,062.90 982,398.38 7,209,888.04 -25,929,346.78 19,612,957.94 -17,950,165.32
year (Decrease is
listed with ―-‖)
(i) Total
comprehensive 982,398.38 27,104,893.56 -4,963,168.64 23,124,123.30
income
(ii) Owners‘
devoted and -19,826,062.90 24,576,126.58 4,750,063.68
decreased capital
1.Common
shares invested 4,900,000.00 4,900,000.00
by shareholders
2. Capital
invested by
holders of other
equity
instruments
3. Amount
reckoned into
owners equity
with share-based
payment
4 Other -19,826,062.90 19,676,126.58 -149,936.32
(III) Profit
7,209,888.04 -53,034,240.34 -45,824,352.30
distribution
1. Withdrawal of
7,209,888.04 -7,209,888.04
surplus reserves
2. Withdrawal of
general risk
provisions
202
HEFEI MEILING CO., LTD. Annual Report 2016
3. Distribution
for owners (or -45,824,352.30 -45,824,352.30
shareholders)
4. Other
(IV) Carrying
forward internal
owners‘ equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with surplus
reserve
4. Other
(V) Reasonable
reserve
1. Withdrawal in
the report period
2. Usage in the
report period
(VI)Others
IV. Balance at the
end of the report 763,739,205.00 1,529,183,876.13 -2,280,500.61 367,066,994.18 817,667,480.44 36,291,435.86 3,511,668,491.00
period
203
HEFEI MEILING CO., LTD. Annual Report 2016
Legal Representative: Liu Tibin Person in charge of accounting works: Zhang Xiaolong
Person in charge of accounting institute: Luo Bo
8. Statement of Changes in Owners’ Equity (Parent Company)
Prepared by Hefei Meiling Co., Ltd.
This Period
In RMB
2016
Other
Other
Item equity instrument Less:
comprehen Reasonable Total owners‘
Share capital Perpetual Capital reserve Inventor Surplus reserve Retained profit
Preferred sive reserve equity
capital Other y shares
stock income
securities
I. Balance at the
end of the last 763,739,205.00 1,497,987,446.59 366,848,828.50 786,501,710.90 3,415,077,190.99
year
Add:
Changes of
accounting
policy
Error
correction of
the last period
Other
II. Balance at
the beginning of 763,739,205.00 1,497,987,446.59 366,848,828.50 786,501,710.90 3,415,077,190.99
this year
III. Increase/
Decrease in this 280,858,676.00 1,255,029,560.51 23,962,426.15 169,837,483.11 1,729,688,145.77
year (Decrease
204
HEFEI MEILING CO., LTD. Annual Report 2016
is listed with
―-‖)
(i) Total
comprehensive 239,624,261.53 239,624,261.53
income
(ii) Owners‘
devoted and
280,858,676.00 1,259,877,498.56 1,540,736,174.56
decreased
capital
1.Common
shares invested 280,858,676.00 1,259,874,046.76 1,540,732,722.76
by shareholders
2. Capital
invested by
holders of other
equity
instruments
3. Amount
reckoned into
owners equity
with
share-based
payment
4. Other 3,451.80 3,451.80
(III) Profit
23,962,426.15 -69,786,778.42 -45,824,352.27
distribution
1. Withdrawal
of surplus 23,962,426.15 -23,962,426.15
reserves
2. Distribution
for owners (or -45,824,352.27 -45,824,352.27
shareholders)
3. Other
205
HEFEI MEILING CO., LTD. Annual Report 2016
(IV) Carrying
forward internal
owners‘ equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus reserve
4. Other
(V) Reasonable
reserve
1. Withdrawal
in the report
period
2. Usage in the
report period
(VI)Others -4,847,938.05 -4,847,938.05
IV. Balance at
the end of the 1,044,597,881.00 2,753,017,007.10 390,811,254.65 956,339,194.01 5,144,765,336.76
report period
Last period
In RMB
Item 2015
206
HEFEI MEILING CO., LTD. Annual Report 2016
Other
Other
equity instrument Less:
comprehen Reasonable Total owners‘
Share capital Perpetual Capital reserve Inventor Surplus reserve Retained profit
Preferred sive reserve equity
capital Other y shares
stock income
securities
I. Balance at the
end of the last 763,739,205.00 1,497,987,059.46 359,638,940.46 767,437,070.86 3,388,802,275.78
year
Add:
Changes of
accounting
policy
Error
correction of
the last period
Other
II. Balance at
the beginning of 763,739,205.00 1,497,987,059.46 359,638,940.46 767,437,070.86 3,388,802,275.78
this year
III. Increase/
Decrease in this
year (Decrease 387.13 7,209,888.04 19,064,640.04 26,274,915.21
is listed with
―-‖)
(i) Total
comprehensive 72,098,880.38 72,098,880.38
income
(ii) Owners‘
devoted and
387.13 387.13
decreased
capital
1.Common
shares invested
207
HEFEI MEILING CO., LTD. Annual Report 2016
by shareholders
2. Capital
invested by
holders of other
equity
instruments
3. Amount
reckoned into
owners equity
with
share-based
payment
4. Other 387.13 387.13
(III) Profit
7,209,888.04 -53,034,240.34 -45,824,352.30
distribution
1. Withdrawal
of surplus 7,209,888.04 -7,209,888.04
reserves
2. Distribution
for owners (or -45,824,352.30 -45,824,352.30
shareholders)
3. Other
(IV) Carrying
forward internal
owners‘ equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
208
HEFEI MEILING CO., LTD. Annual Report 2016
capital (share
capital)
3. Remedying
loss with
surplus reserve
4. Other
(V) Reasonable
reserve
1. Withdrawal
in the report
period
2. Usage in the
report period
(VI)Others
IV. Balance at
the end of the 763,739,205.00 1,497,987,446.59 366,848,828.50 786,501,710.90 3,415,077,190.99
report period
Legal Representative: Liu Tibin Person in charge of accounting works: Zhang Xiaolong
Person in charge of accounting institute: Luo Bo
209
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
I. Company profile
Hefei Meiling Co., Ltd (hereinafter referred to as ―the Company‖) is an incorporated Company
established and reorganized by Hefei Meiling Refrigerator General Factory and approved on June 12 th
1992 through [WanTiGaiHanZi (1992) No.039] issued by original Mechanism Reform Committee of
Anhui Province. On August 30th 1993, through Anhui Provincial Government [Wanzhenmin (1993)
No.166] and re-examination of China Securities Regulatory Commission, the Company made first
public issue for 30 million A shares and the Company was listed on Oct. 18th, 1993 in Shenzhen Stock
Exchange. On August 13th, 1996, the Company was approved to issue 100 million B shares to investors
abroad through [ZhengWeiFa(1996) No.26] issued by China Securities Regulatory Commission. The
Company went public in Shenzhen Stock Exchange on August 28th, 1996.
State-owned Assets Supervision & Administration Commission of the State Council approved such
transfers with Document Guozi Chanquan No.253 in 2007 Reply on Matters of Hefei Meiling Group
Holdings Company Limited Transferring Partial State-owned Ownership, Hefei Meiling Group
Holdings Company Limited (hereinafter abbreviated as Meiling Group) transferred its holding
37,852,683 shares in 82,852,683 state-owned shares of the Company to Sichuan Changhong Electronic
Group Co., Ltd (hereinafter abbreviated as Changhong Group), other 45,000,000 shares to Sichuan
Changhong Electric Co. Ltd (hereinafter abbreviated as Sichuan Changhong). On Aug 15, 2007, the
above ownerships were transferred and Cleaning Corporation Limited.
On 27 August 2007, State-owned Assets Supervision & Administration Commission of Anhui Provincial
Government replied with Document [WGZCQH(2007) No.309] Reply on ―Related Matters of Share
Merger Reform of Meiling Co., Ltd.‖, agreed the Company‘s ownership split reform plan. The
Company made consideration that non-tradable share holders deliver 1.5 shares to A share holders per
10 shares, and original Meiling Group made prepayment 3,360,329 shares for some non-tradable share
holders as consideration for split reform plan.
On 29 May 2008, concerning 34,359,384 state-owned shares (including 3,360,329 shares paid for other
non-tradable shareholders by original Meiling Group in share reform) held by original Meiling Group,
the ―Notice of Freely Transfer of Meiling Electrics Equity held by Meiling Group‖[HGZCQ(2008) No.
59] issued from State-owned Assets Supervision & Administration Commission of Hefei Municipal,
agrees to transfer the above said shares to Hefei Xingtai Holding Group Co., Ltd.(―Xingtai Holding
Co.,‖) for free. On 7 August 2008, the ―Reply of Transfer Freely of Part of the Shares of Hefei Meiling
Co., Ltd. held by State-owned shareholders‖[GZCQ(2007) No. 750] issued by SASAC, agrees the
above said transferring.
On October 29, 2008, Changhong Group Company signed Agreement on Equity Transfer of Hefei
Meiling Co., Ltd with Sichuan Changhong, in which 32,078,846 tradable A-shares with conditional
subscription of the Company (accounting for 7.76% in total shares) held by Changhong Group
Company. On 23 December 2008, ―Reply of Transfer Freely of Part of the Shares of Hefei Meiling Co.,
Ltd. held by State-owned shareholders‖[GZCQ(2008) No. 1412] issued by SASAC agrees the above
said share transferring.
210
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
On 24 December 2010, being deliberated and approved in 32nd Meeting of 6th Session of the Board and 2nd
Extraordinary Shareholders‘ General Meeting of 2010 as well as approval of document [ZJXP(2010) No.
1715] from CSRC, totally 116,731,500 RMB ordinary shares (A stock) were offering privately to target
investors with issue price of RMB 10.28/share. Capital collecting amounting to RMB 1,199,999,820 after
issuing expenses RMB 22,045,500 deducted, net capital collected amounting to RMB 1,177,954,320, and
paid-in capital(share capital) increased RMB 116,731,500 with capital reserve(share premium) RMB
1,061,106,088.5 increased. The increasing capital has been verified by Capital Verification Report No.:
［XYZH2010CDA6021］issued from Shinwing CPA Co., Ltd.
On 20 June 2011, the general meeting of the Company considered and approved the 2010 profit distribution
plan, namely to distribute cash dividends of RMB0.5 (tax included) plus two shares for every ten shares held
by shareholders to all shareholders, based on the total share capital of 530,374,449 shares as of 31 December
2010. The total share capital of the Company upon profit distribution increased to 636,449,338 shares. The
capital increase was verified by Anhui Huashen Zhengda Accounting Firm with the verification report
WHSZDKYZ(2011)No.141.
On 26 June 2012, the general meeting of the Company considered and approved the 2011 profit distribution
and capitalization of capital reserve plan, namely to distribute cash dividends of RMB0.5 (tax included) plus
two shares for every ten shares to all shareholders capitalized from capital reserve, based on the total share
capital of 636,449,338 shares as of 31 December 2011. The total share capital of the Company upon
implementation of capitalization of capital reserve increased to 763,739,205 shares from 636,449,338 shares,
and was verified by Anhui Anlian Xinda Accounting Firm with the verification report
WALXDYZ(2012)No.093.
On November 18, 2015, considered and approved by the 12th meeting of the 8th Board of Directors of the
company and the first extraordinary general meeting in 2016, and approved by the document of China
Securities Regulatory Commission [CSRC License No. (2016) 1396] ―Reply to the approval of non-public
offering of shares of Hefei Meiling Co., Ltd.‖, the company has actually raised funds of 1,569,999,998.84
Yuan by non-public offering of no more than 334,042,553 new shares at face value of RMB 1 Yuan per
share and with issue price no less than RMB4.70 per share, after
deducting the issue costs of 29,267,276.08 Yuan , the net amount of raised funds is 1,540,732,722.76 Yuan ,
the increased paid-in capital (share capital) of RMB 280,858,676.00 Yuan , increased capital reserve (share
premium) of 1,259,874,046.76 Yuan . This capital increase has been verified by No.
［XYZH2016CDA40272］capital verification report of ShineWing Certified Public Accountants special
general partnership.
Ended as 31 December 2016, total share capital of the Company amounting to 1,044,597,881shares with
ordinary shares in full. Among which, 881,733,881 shares of A-share accounting 84.41% in total shares
while B-share with 162,864,000 shares accounting 15.59% in total shares. Detail share capital as:
Type of stock Quantity Proportion
(I)Restricted shares 290,301,746 27.79%
1. State-owned shares
2. State-owned legal person‘s shares 70,793,625 6.78%
211
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
3. Other domestic shares 218,508,272 20.92%
Including: Domestic legal person‘s shares 215,820,073 20.66%
Domestic natural person‘s shares 2,688,199 0.26%
4. Foreign shares 999,849 0.09%
(II)Unrestricted shares 754,296,135 72.21%
1. RMB Ordinary shares 592,431,984 56.71%
2. Domestically listed foreign shares 161,864,151 15.50%
3. Overseas listed foreign shares
4. Others
Total shares 1,044,597,881 100.00%
The Company belongs to the manufacture of light industry, and engaged in the production and sale of
refrigerator, freezer and air-conditioner. Unified social credit code of the Company:
9134000014918555XK; Address: No.2163, Lianhua Road, Economy and Technology Development
Zone, Hefei City; Legal Representative: Liu Tibin; register capital(paid-in capital): RMB
10,445,978,810,000; type of company: limited liability company(joint venture and listed of Taiwan,
Hong Kong and Macau) Business Scope: Manufacture of cooling apparatus, air-conditioner, washing
machine, injection plastic machine of computer controlling, computer heater, plastic products,
packaging products and decorations. Business of self-produced products, technology export and
import-export of the raw&auxilary materials, machinery equipment, instrument and technology;
department sales and transportation
II. Scope of consolidated financial statement
The Company‘s consolidated financial statement included 50 subsidiaries including Sichuan Changhong
Air Conditioner CO., Ltd, Zhongshan Changhong Home Appliances Company Limited and Zhongke
Meiling Low Temperature Technology Co., Ltd, etc. As compared to previous year, Subsidiary
Changmei Technology Co. Ltd. and CHONGHONG MEILING ELECTRIC INDONESIA,PT was
newly included due to direct investment in this year; Subsidiary Changhong Ridian Technology Co. Ltd.
was newly included due to enterprise merger under the same control; Subsidiary Bengbu Meiling
Appliances Marketing Company Limited and Luohe Meiling Appliances Marketing Company Limited
were excluded due to liquidation; Subsidiary Hefei MeiLing Packing Co., Ltd. were excluded due to
sale of equity.
More detail can be seen in ―VII. Changes of consolidated scope‖ and ―VIII. Rights and interest in other
subjects‖ in the Note.
III. Basis for preparation of financial statement
1. Basis for preparation
The financial statements of the Company were prepared in accordance with the actual transactions and
proceedings, and relevant regulation of Accounting Standards for Enterprise released by the Ministry of
Finance, and was on the basis of sustainable operation, and the accounting policy and estimation stated
in the ―IV. Significant Accounting Policy and Accounting Estimation‖.
212
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
2. Continuous operation
The Company recently has a history of profitability operation and has financial resources supporting,
and prepared the financial statement on basis of going concern is reasonable.
IV. Significant Accounting Policy, Accounting Estimation
1. Statement on observation of accounting standards for enterprise
The financial statement prepared by the Company applies with the requirements of Accounting Standard
for Enterprise, and reflects the financial condition, operational achievements and cash flow of the
Company effectively and completely.
2. Accounting period
The accounting period of the Company is the calendar date from 1 January to 31 December.
3. Standard currency for accounting
The Company takes RMB as the standard currency for accounting.
4. Accountant arrangement method of business combination under common control and not under
common control
As acquirer, the Company measures the assets and liabilities acquired through business combination
under common control at their carrying values as reflected in the consolidated financial statement of the
ultimate controller as of the combination date. Capital reserve shall be adjusted in respect of any
difference between carrying value of the net assets acquired and carrying value of the combination
consideration paid. In case that capital reserve is insufficient to offset, the Company would adjust
retained earnings.
The acquiree‘s net identifiable assets, liabilities or contingent liabilities acquired through business
combination not under common control shall be measured at fair value as of the acquisition date. The
cost of combination represents the fair value of the cash or non-cash assets paid, liabilities issued or
committed and equity securities issued by the Company as at the date of combination in consideration
for acquiring the controlling power in the acquiree, together with the sum of any directly related
expenses occurred during business combination(in case of such business combination as gradually
realized through various transactions, the combination cost refers to the sum of each cost of respective
separate transaction). Where the cost of the combination exceeds the acquirer‘s interest in the fair value
of the acquirer‘s identifiable net assets acquired, the difference is recognized as goodwill; where the cost
of combination is lower than the acquirer‘s interest in the fair value of the acquiree‘s identifiable net
assets, the Company shall firstly make further review on the fair values of the net identifiable assets,
liabilities or contingent liabilities acquired as well as the fair value of the non-cash assets portion of
combination consideration or the equity securities issued by the Company. In case that the Company
finds the cost of combination is still lower than the acquirer‘s interest in the fair value of the acquiree‘s
identifiable net assets after such further review, the difference is recognized in non-operating income for
the current period when combination occurs.
213
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
5. Measures on Preparation of Consolidated Financial Statements
The Company shall put all the subsidiaries controlled and main body structured into consolidated
financial statements.
Any difference arising from the inconformity of accounting year or accounting policies between the
subsidiaries and the Company shall be adjusted in the consolidated financial statements.
All the material inter-company transactions, non-extraordinary items and unrealized profit within the
combination scope are written-off when preparing consolidated financial statement. Owners‘ equity of
subsidiary not attributable to parent company and current net gains and losses, other comprehensive
income and total comprehensive income attributable to minority shareholders are recognized as
non-controlling interests, minority interests, other comprehensive income attributable to minority
shareholders and total comprehensive income attributable to minority shareholders in consolidated
financial statement respectively.
As for subsidiary acquired through business combination under common control, its operating results
and cash flow will be included in consolidated financial statement since the beginning of the period
when combination occurs. When preparing comparative consolidated financial statement, the relevant
items in previous year‘s financial statement shall be adjusted as if the reporting entity formed upon
combination has been existing since the ultimate controller commenced relevant control.
As for equity interests of the investee under common control acquired through various transactions
which eventually formed business combination, the Company shall supplement disclosure of the
accounting treatment in consolidated financial statement in the reporting period when controlling power
is obtained. For example, as for equity interests of the investee under common control acquired through
various transactions which eventually formed business combination, adjustments shall be made as if the
current status had been existing when the ultimate controller commenced control in connection of
preparing consolidated financial statement; in connection with preparing comparative statement, the
Company shall consolidate the relevant assets and liabilities of the acquiree into the Company‘s
comparative consolidated financial statement to the extent not earlier than the timing when the
Company and the acquiree are all under control of the ultimate controller, and the net assets increased
due to combination shall be used to adjust relevant items under owners‘ equity in comparative statement.
In order to prevent double computation of the value of the acquiree‘s net assets, the relevant profits and
losses, other comprehensive income and change of other net assets recognized during the period from
the date when the Company acquires original equity interests and the date when the Company and the
acquiree are all under ultimate control of the same party (whichever is later) to the date of combination
in respect of the long-term equity investment held by the Company before satisfaction of combination
shall be utilized to offset the beginning retained earnings and current gains and losses in the period as
the comparative financial statement involves, respectively.
As for subsidiary acquired through business combination not under common control, its operating
results and cash flow will be included in consolidated financial statement since the Company obtains
controlling power. When preparing consolidated financial statement, the Company shall adjust the
214
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
subsidiary‘s financial statement based on the fair value of the various identifiable assets, liabilities or
contingent liabilities recognized as of the acquisition date.
As for equity interests of the investee not under common control acquired through various transactions
which eventually formed business combination, the Company shall supplement disclosure of the
accounting treatment in consolidated financial statement in the reporting period when controlling power
is obtained. For example, as for equity interests of the investee not under common control acquired
through various transactions which eventually formed business combination, when preparing
consolidated financial statement, the Company would re-measure the equity interests held in the
acquiree before acquisition date at their fair value as of the acquisition date, and any difference between
the fair value and carrying value is included in current investment income. in case that the equity
interests in acquiree held by the Company before the relevant acquisition date involves other
comprehensive income at equity method and change of other owners‘ equity (other than net gains and
losses, other comprehensive income and profit distribution), then the equity interests would transfer to
investment gains and losses for the period which the acquisition date falls upon. The other
comprehensive income arising from change of the net liabilities or net assets under established benefit
scheme as acquiree‘s re-measured such scheme is excluded.
The transaction with non-controlling interest to dispose long-term equity investment in a subsidiary
without losing control rights over the subsidiary, the difference between the proceeds from disposal of
interests and the decrease of the shared net assets of the subsidiary is adjusted to capital premium (share
premium). In case capital reserve is not sufficient to offset the difference, retained earnings will be
adjusted.
As for disposal of part equity investment which leads to losing control over the investee, the Company
would re-measure the remaining equity interests at their fair value as of the date when the Company
loses control over the investee when preparing consolidated financial statement. The sum of
consideration received from disposal of equity interest and fair value of the remaining equity interest,
less the net assets of the original subsidiary attributable to the Company calculated based on the original
shareholding proportion since the acquisition date or the date then consolidation commences, is
included in investment gains and losses for the period when control is lost, meanwhile to offset goodwill.
Other comprehensive income related to equity interest investment in original subsidiaries is transferred
into current investment gains and losses upon lost of control.
If the disposal of the equity investment of a subsidiary is realized through multiple transactions until
loss of control and is a package deal, the accounting treatment of these transactions should be dealt with
as one transaction of disposal of the subsidiary until loss of control. However, before the Company
loses total control of the subsidiary, the differences between the actual disposal price and the share of
the net assets of the subsidiary disposed of in every transaction should be recognized as other
comprehensive income in the consolidated financial statements, and transferred to profit or loss when
losing control.
6. Accounting treatment for joint venture arrangement and joint controlled entity
215
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
The joint venture arrangement of the Company consists of joint controlled entity and joint venture. As
for jointly controlled entity, the Company determines the assets held and liabilities assumed separately
as a party to the jointly controlled entity, recognizes such assets and liabilities according to its
proportion, and recognizes relevant income and expense separately under relevant agreement or
according to its proportion. As for asset transaction relating to purchase and sales with the jointly
controlled entity which does not constitute business activity, part of the gains and losses arising from
such transaction attributable to other participators of the jointly controlled entity is only recognized.
7. Cash and cash equivalents
Cash in the cash flow statement comprises the Group‘s cash on hand and deposits that can be readily
withdrawn on demand. Cash equivalents are short-term, highly liquid investments held by the Group,
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value, including but not limited to the followings which meet the aforesaid conditions: debt
investment matured within three months upon the acquisition date, bank time deposit which can be early
withdrew by serving a notice and transferrable deposit receipt, etc. for time deposit which can not be
used for payment at any time, it would be note recognized as cash; while if can be used for such purpose,
it would be recognized as cash. Guarantee deposit over three months in other monetary capital shall not
be recognized as cash equivalents, and those less than three months are recognized as cash equivalents.
8. Foreign currency business and foreign currency financial statement conversion
(1) Foreign currency business
As for the foreign currency business, the Company converts the foreign currency amount into RMB
amount pursuant to the spot exchange rate as of the business day. As at the balance sheet date, monetary
items expressed by foreign currency are converted into RMB pursuant to the spot exchange rate as of
the balance sheet date. The conversion difference occurred is recorded into prevailing gains and losses,
other than the disclosure which is made according to capitalization rules for the exchange difference
occurred from the special foreign currency borrowings borrowed for constructing and producing the
assets satisfying condition of capitalization. As for the foreign currency non-monetary items measured
by fair value, the amount is then converted into RMB according to the spot exchange rate as of the
confirmation day for fair value. And the conversion difference occurred during the procedure is
recorded into prevailing gains and losses directly as change of fair value. As for the foreign currency
non-monetary items measured by historical cost, conversion is made with the spot exchange rate as of
the business day, with no change in RMB amount.
(2) Conversion of foreign currency financial statement
Spot exchange rate as of the balance sheet date is adopted for conversion of assets and liabilities in
foreign currency balance sheet; as for the items in statement of owners‘ equity except for ―Undistributed
profit‖, conversion is made pursuant to the spot exchange rate of business day; income and expense
items in income statement then are also converted pursuant to the spot exchange rate of transaction day.
Difference arising from the aforementioned conversions shall be listed separately in items of owners‘
216
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
equity. Spot exchange rate as of the occurrence date of cash flow is adopted for conversion of foreign
currency cash flow. The amount of cash affected by exchange rate movement shall be listed separately
in cash flow statement.
9. Financial assets and financial liabilities
(1) Financial assets
1) Classification of financial assets
In consideration of investment targets and economic essence, the Company groups the financial assets
owned by it as four categories, namely financial assets measured by fair value and whose movement is
recorded into prevailing gains and losses, held-to-maturity investment, loans and accounts receivables,
as well as financial assets available-for-sale.
Financial assets measured by fair value and whose movement is recorded into prevailing gains and
losses represent the financial assets which are held mainly for disposal in a short time and listed as
tradable financial assets in the balance sheet.
Held-to-maturity investment represents the non-derivative financial assets which has fixed maturity day,
fixed or available-for-confirmation recovered amount and for which the management has definite
intention and ability to hold till maturity.
Loans and accounts receivables represent the non-derivative financial assets which have no quotation in
an active market and fixed or available-for-confirmation recovered amount.
Financial assets available-for-sale including the non-derivative financial assets available-for-sale and the
financial assets which have not been grouped as others at the initial confirmation
2) Recognition and measurement for financial assts
Financial assets, while become party of the contract of financial instrument in the Company, recognized
in balance sheet by fair value. For the financial assets which are measured by fair value and whose fair
value change is recorded into prevailing gains and losses, the relevant transaction expense arising from
acquisition is recorded into prevailing gains and losses directly, while the relevant transaction expense
of other financial assets is recorded into initial recognition amount.
Financial assets which are measured by fair value and whose fair value change is recorded into
prevailing gains and losses, together with financial assets available-for-sale, would have follow-up
measurement according to fair value; effective interest method is adopted for loans and accounts
receivables and held-to-maturity investment which are shown in amortized cost.
Fair value change of financial assets which are measured by fair value and whose fair value change is
recorded into prevailing gains and losses is recorded into gains and losses of fair value change; interests
or cash dividend acquired from holding assets are recognized as investment income; when disposing
such assets, the difference between their fair value and initial accounting amount is recognized as
investment gains and losses. Meanwhile, gains and losses of fair value shall be adjusted.
Except impairment losses and exchange gains/loss from financial assets with foreign currency, variation
of the fair value for financial assets available for sale should reckon into shareholders‘ equity. The
variation of fair value accumulative reckon into equity previously should transfer into current
217
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
gains/losses while recognition of this financial asset terminated. For the interest during period of
holding for instrument investment of liability available for sale based on real interest rate, and cash
dividend related with instrument investment of equity available for sale that announced by invested
enterprises should reckon into current gains/losses as investment incomes.
3) Impairment of financial assets
Except for the financial assets which are measured by fair value and whose fair value change is recorded
into prevailing gains and losses, the Company will make check in the carrying value of other financial
assets as at the balance sheet date. If there is objective evidence proving impairment of certain financial
assets, the Company then makes provision for impairment.
When the financial assets calculated by amortized cost decrease in value, count and draw the provision
for impairment according to the balance between present value and book value of predicted future cash
flows (Excluding future credit losses that haven‘t occurred yet.). If there is any objective evidence to
indicate that the financial assets has recovered and is objectively connected with matters occurred after
confirming the losses, the formerly confirmed impairment losses will be reversed and reckoned in
current profits and losses.
When the fair value of financial assets available for sale goes down substantially or non- transiently, the
accumulating losses previously and directly reckoned in shareholder's equity and formed due to
shrinkage of fair value will be transferred and reckoned in impairment losses. As for the debt instrument
investment available for sale with confirmed impairment losses, if its fair value rises after and it is
objectively connected with matters occurred after confirming the primary impairment losses, the
formerly confirmed impairment losses will be reversed and reckoned in current profits and losses. And
the debt instrument investment available for sale with confirmed impairment losses shall be directly
reckoned in stockholder's equity if its fair value rises after.
4) Transfer of financial assets
The financial assets meet one of following requirements will be terminated recognition: ① The contract
rights of collecting cash flow of the financial assets is terminated; ②The financial assets has already
been transferred, and the Company has transferred almost all risks and remunerations of financial assets
ownership to the transferee; ③The financial assets has been transferred, even though the Company has
neither transferred nor kept almost all risks and remunerations of financial assets ownership, the
Company has given up controlling the financial assets.
If the enterprise has neither transferred or kept almost all risks and remunerations of financial assets
ownership, nor given up controlling the financial assets, then confirm the relevant financial assets
according to how it continues to involve into the transferred financial assets and confirm the relevant
liabilities accordingly. The degree of keeping involving into the transferred financial assets refers to the
risk level with which the fluctuation of this financial asset value makes the enterprise face.
If the entire transfer of financial assets satisfies the demand for derecognition, reckon the balance
between the book value of the transferred financial assets and the sum of consideration received from
218
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
transfer and fluctuation accumulated amount of fair value formerly reckoned in other consolidated
income in the current profits and losses.
If part transfer of financial assets satisfies the demand for derecognition, apportion the integral book
value of the transferred financial assets between the derecognized parts and the parts not yet
derecognized according to each relative fair value, and reckon the balance between the sum of
consideration received from transfer and fluctuation accumulated amount of fair value formerly
reckoned in other consolidated income that should be apportioned to the derecognized parts and the
apportioned aforementioned carrying amounts in the current profits and losses.
(2) Financial liabilities
When making the initial recognition for financial liabilities, the Company classifies the financial
liabilities into ones which are measured by fair value and whose change is recorded into prevailing gains
and losses, and other financial liabilities.
Financial liabilities which are measured by fair value and whose change is recorded into prevailing
gains and losses include tradable financial liabilities and financial liabilities which are measured by fair
value and whose change is recorded into prevailing gains and losses at the initial recognition day.
Follow-up measurements are made by fair value. Recorded into prevailing gains and losses are the gains
or losses formed through fair value change and dividend and interest expenditure regarding to the
financial liabilities.
As for other financial liabilities, effective interest rate method is adopted and follow-up measurement is
made according to amortized cost.
1) Method for recognition of fair value of financial assets and liabilities
For those financial instruments existing in active markets, market quotation in the active market is used
to confirm their fair values. In active market, the Company takes the present bid price of already-held
financial assets or plan-to-undertake financial liabilities as the fair values of relevant assets and
liabilities; the Company takes the present offer price of plan-to-buy financial assets and
–already-undertaken liabilities as the fair values of relevant assets and liabilities. In the situation that
there are no present bid and offer price for financial assets and liabilities, while there is no material
change in economic environment after the latest business day, then fair value of the financial assets and
liabilities is to confirm pursuant to the latest business market quotation.
Fair value of the financial instruments which have no active market is confirmed by adoption of
estimation technology. Estimation technology includes reference to the price applied by parties which
know well situation and are willing to make deals in the latest market business, reference to the current
fair value of other financial assets which are the same in principle, reference to discounted cash flow
method and option pricing model.
10. Bad debt provision for accounts receivable
Allowance method is adopted for the bad debt losses which are likely to happen. And conducting
impairment test independently or by combination at period-end, withdrawn bad debt provision and then
recorded into current gains and losses. As for the accounts receivable which are not able to call back
219
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
through definite evidence, they shall be treated as bad debt losses after approval of the Group according
to regulated procedures to offset withdrawn bad debt provision.
The following situation as standards for confirmation of bad debt losses of accounts receivable: revoke,
bankruptcy, insolvency, serious insufficiency of cash flow of its debit units, or the debit units have to
stop production due to serious natural disaster and are not able to settle the debts or in predicted time, or
other definite evidence showing that the debt is not available to call back or the possibility of calling
back is tiny.
Account receivables were divided as follow categories at period-end, which was performed impairment
test in way of individual or group, and withdrawal bad debt provision:
(1) Account receivable with single significant amount:
If totally amount takes over 80% of the total for over 5% occupied, than 5% of single amount
Determine basis or amount
in total amounts recognized as single significant amount; if totally amount takes less than
standards for single
80% of the total for over 5% occupied, than lower recognition standards till qualified 80% in
significant amount
total
Method of bad debt
provision accrual for account Withdrawal bad debt provision according to difference between the current value of future
receivable with single major cash flow and book values; if there has no impairment been found in individual test,
amount withdrawal bad debt provision while testing by group
(2) Account receivable withdrawal bad debt provision based on combination:
Basis for combination recognized
Combination 1 Account receivable except combination 2
Employee reserve fund, foreign investment amount, contact with related party in consolidated statement
Combination 2 of Changhong Group, export tax refund receivable, account receivable with L/C or insurance,
government subsidy etc.
Methods on withdrawal of bad debt provision based on combination
Combination 1 Withdrawal bad debt provision by proportion in different age group
Combination 2 Risks are under control without bad debt provision accrual
In combination 1, withdrawal proportion of bad debt provision for account receivable based on age
analysis:
Withdrawal proportion of account receivable Withdrawal proportion of other account
Age
(%) receivable (%)
Within 1year(1year
5 5
included )
1－2years 15 15
2－3 years 35 35
3－4 years 55 55
4－5 years 85 85
Over 5 years 100 100
(3) Account receivable with single minor amount but withdrawal single item bad debt provision:
Reasons for withdrawal single
Account with minor amount but have significant inflow risk on predicted future cash flow
item bad debt provision
220
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Withdrawal method for bad Impairment test on the current value of predicted future cash flow, bad debt provision
debt provision withdrawal.
11. Inventories
Inventories of the Company principally include raw materials, stock goods; work in process, self-made
semi-finished product, materials consigned to precede, low-value consumption goods, goods in transit,
goods in process and mould etc.
Perpetual inventory system is applicable to inventories. For daily calculation, standard price is adopted
for raw materials, low-value consumption goods and stock goods. Switch-back cost of the current
month is adjusted by distribution price difference at the end of the month, the dispatched goods will
share the cost differences of inventory while in settlement the business income; and low-value
consumption goods is carried forward at once when being applied for use; the mould expenses will
evenly deferred share based on balance at period-begin plus increase amount in this period divided by
12 months.
Inventory at period-end is valued by the Lower-of-value between the cost and net realizable value. For
those individual stock, suffering damage, totally or partly out of fashion or has lower sales price than
cost, predicted recoverable parts in cost, and withdrawal provision of inventory depreciation single. For
those raw materials, stock commodities and goods in transit, withdrawal provision of inventory
depreciation by follow methods:
(1) Determined the net realizable value of raw materials on the higher amount between the final prices
of estimated sale-price deducted cost (about to happen till products finished), estimated sales expense
and relevant taxes, and the fair value of external disposal.
(2) Withdrawal obsolete provision for commodity stocks and goods in transit by the follow proportion:
1) Refrigerator, freezer and washing machine
Withdrawal proportion for obsolete
Grade Stock duration
provision
Within 3 months 0%
4-6 months 5%
7-12 months 15%
Grade-A
1-2 years 25%
2-3 years 40%
Over 3 years 100%
Qualified 40%
Grade-B 50%
Grade-C 60%
Unqualified 60%
Disposal 65%
Sample machine 30%
Special user type that exceed the order quantity 50%
2) Air-conditioner
221
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Withdrawal proportion for obsolete
Location level
provision
Repair 50%
Awaiting repair 70%
Store return 70%
De-stocking 70%
Overstock 100%
With respect to the inventories and delivered goods which are not vested to the above classification,
their realizable net value will be calculated by the Company based on the estimated selling price of the
inventories less estimated selling expense and related taxes. The Company re-checks the above
mentioned proportion at every end of the year. Calculated the net realizable value by difference between
the estimated sale price less the estimated sales expense and relevant taxation; after comparison with the
book value of commodity stocks and goods in transit, determined whether adjusted the proportion or not.
Mould expense will amortize in installment in usual times. Once the use-life of mould is terminated, and
than transfer its remaining cost into gains/losses, no withdrawal of obsolete provision at period-end.
12. Long-term equity investment
Long-term equity investment of the Company is mainly about investment in subsidiary, investment in
associates and investment in joint-ventures.
For long-term equity investments acquired through business combination under common control, the
initial investment cost shall be the acquirer‘s share of the carrying amount of net assets of the acquiree
as of the combination date as reflected in the consolidated financial statement of the ultimate controller.
If the carrying amount of net assets of the acquiree as of the combination date is negative, the
investment cost of long-term equity investment shall be zero. For long-term equity investment acquired
through business combination not under common control, the initial investment cost shall be the
combination cost.
Excluding the long-term equity investment acquired through business combination, there is also a king
of long-term equity investment acquired through cash payment, for which the actual payment for the
purchase shall be investment cost; If Long-term equity investments are acquired by issuing equity
securities, fair value of issuing equity investment shall be investment cost; for Long-term equity
investments which are invested by investors, the agreed price in investment contract or agreement shall
be investment cost; and for long-term equity investment which is acquired through debt reorganization
and non-monetary assets exchange, regulations of relevant accounting standards shall be referred to for
confirming investment cost.
The Company adopts cost method for investment in subsidiaries, makes calculation for investments in
joint-ventures and associates by equity method.
When calculated by cost method, long-term equity investment is priced according to its investment cost,
and cost of the investment is adjusted when making additional investment or writing off investment;
When calculated by equity method, current investment gains and losses represent the proportion of the
net gains and losses realized by the invested unit in current year attributable to or undertaken by the
222
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
investor. When the Company is believed to enjoy proportion of net gains and losses of invested unit,
gains and losses attributable to the Company according to its shareholding ratio is to computer out
according to the accounting policy and accounting period of the Company, on the basis of the fair value
of various recognizable assets of the invested unit as at the date of obtaining of the investment, after
offset of gains and losses arising from internal transactions with associates and joint-ventures, and
finally to make confirmation after adjustment of net profit of the invested unit. Confirmation on gains
and losses from the long-term equity investment in associates and joint-ventures held by the Company
prior to the first execution day, could only stand up with the precedent condition that debit balance of
equity investment straightly amortized according to its original remaining term has already been
deducted, if the aforementioned balance relating to the investment do exist.
In case that investor loses joint control or significant influence over investee due to disposal of part
equity interest investment, the remaining equity interest shall be calculated according to Enterprise
Accounting Principles No.22-Recognition and Measurement of Financial Instrument. Difference
between the fair value of the remaining equity interest as of the date when lose of joint control or
significant influence and the carrying value is included in current gains and losses. Other comprehensive
income recognized in respect of the original equity interest investment under equity method should be
treated according to the same basis which the investee adopts to directly dispose the relevant assets or
liabilities when ceasing adoption of equity method calculation; and also switches to cost method for
calculating the long-term equity investments which entitles the Company to have conduct control over
the invested units due to its additional investments; and switches to equity method for calculating the
long-term equity investments which entitles the Company to conduct common control or significant
influence, while no control over the invested units due to its additional investments, or the long-term
equity investments which entitles the Company with no control over the invested units any longer while
with common control or significant influence.
When disposing long-term equity investment, the balance between its carrying value and effective price
for obtaining shall be recorded into current investment income. When disposing long-term equity
investment which is calculated by equity method, the proportion originally recorded in owners‘ equity
shall be transferred to current investment income according to relevant ratio, except for that other
movements of owners‘ equity excluding net gains and losses of the invested units shall be recorded into
owners‘ equity.
13. Investment real estate
The investment real estate of the Company includes leased houses and buildings, and is accounted value
by its cost. Cost of purchased-in investment real estate consists of payment for purchase, relevant taxes
and other expenditure which is attributable to the assets directly; while cost of self-built investment real
estate is formed with all necessary expenditures occurred before construction completion of the assets
arriving at the estimated utilization state.
Consequent measurement of investment estate shall be measured by cost method. Depreciation is
provided with average service life method pursuant to the predicted service life and net rate of salvage
223
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
value. The predicted service life and net rate of salvage value and annual depreciation are listed as
follows:
Predicted rate of salvage Depreciation rate per
Type Depreciation term
value annum
Houses and buildings 30-40 years 4%-5% 2.375%-3.20%
When investment real estate turns to be used by holders, it shall switch to fixed assets or intangible assets
commencing from the date of such turning. And when self-used real estate turns to be leased out for rental or
additional capital, the fixed assets or intangible assets shall switch to investment real estate commencing
from the date of such turning. In situation of switch, the carrying value before the switch shall be deemed as
the credit value after the switch.
When investment is disposed, or out of utilization forever and no economic benefit would be predicted to
obtain through the disposal, the Company shall terminate recognition of such investment real estate. The
amount of income from disposal, transfer, discarding as scrap or damage of investment real estate after
deducting the asset‘ s carrying value and relevant taxation shall be written into current gains and losses.
14. Fixed assets
Fixed assets of the Company represent the tangible assets and assets package: held by the Company for
purpose of producing commodities, providing labor service, leasing or operational management, service
life exceeds one year, and unit price exceeds RMB 2,000. Including four categories of houses and
buildings, machinery equipments, transportation equipments and other equipments
Their credit value is determined on the basis of the cost taken for obtaining them. Of which, cost of
purchased-in fixed assets include bidding price and import duty and relevant taxes, and other
expenditure which occurs before the fixed assets arrive at the state of predicted utilization and which
could be directly attributable to the assets; while cost of self-built fixed asset is formed with all
necessary expenditures occurred before construction completion of the assets arriving at the estimated
utilization state; credit value of the fixed assets injected by investors is determined based on the agreed
value of investment contracts or agreements, while as for the agreed value of investment contracts or
agreements which is not fair, it shall take its fair value as credit value; and for fixed assets which are
leased in through finance leasing, credit value is the lower of fair value of leased assets and present
value of minimized leasing payment as at the commencing date of leasing.
Consequent expenditure related to fixed assets consists of expenditures for repair and update reform.
For those meeting requirements for recognization of fixed assets, they would be accounted as fixed asset
cost; and for the part which is replaced, recognization of its carrying value shall cease; for those not
meeting requirements for recognization of fixed assets, they shall be accounted in current gains and
losses as long as they occur. When fixed asset is disposed, or no economic benefit would be predicted to
obtain through utilization or disposal of the asset, the Company shall terminate recognization of such
fixed asset. The amount of income from disposal, transfer, discarding as scrap or damage of fixed asset
224
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
after deducting the asset‘ s carrying value and relevant taxation shall be written into current gains and
losses.
The Company withdraws depreciation for all fixed assets except for those which have been fully
depreciated while continuing to use. It adopts average service life method for withdrawing depreciation
which is treated respectively as cost or current expense of relevant assets according to purpose of use.
The depreciation term, predicted rate of salvage value and depreciation rate applied to fixed assets of the
Company are as follows:
Predicted rate of salvage Depreciation rate per
No. Type Depreciation term
value annum
1 Houses and buildings 30-40 years 4%-5% 2.375%-3.20%
2 Machinery equipments 10-14 years 4%-5% 6.786%-9.60%
3 Transport equipment 5-12 years 4%-5% 7.92%-19.20%
4 Other equipments 8-12 years 4%-5% 7.92%-12.00%
The Company makes re-examination on predicted service life, predicted rate of salvage value and
depreciation method at each year-end. Any change will be treated as accounting estimation change.
15. Construction in process
Construction in process is measured with effective cost. Self-operated constructions projects are
measured with direct materials, direct salaries and direct construction expense; construction projects
undertaken by external are measured with the engineering payment payable; and engineering cost
(income abatement) of equipment-installation projects is confirmed with consideration of value of the
equipments, installation fee, and expenditure arising from trial operation of the projects. Borrowing
expense and exchange gains and losses which should be capitalized are also included in cost of
construction in process.
16. Borrowing expense
Borrowing expenses include interest expense, amortization of discount or premium, auxiliary expenses
and exchange difference due to borrowing in foreign currency. The borrowing expense which could be
directly attributable to purchase or production of assets satisfying capitalization condition, starts
capitalization when capital expenditure and borrowing expense occur and when necessary purchase or
production conducted for promoting assets to reach the predicted available-for-use or available-for-sale
state; and capitalization shall cease when purchased or produced assets satisfying capitalization
condition have reached the predicted available-for-use or available-for-sale state. Other borrowing
expense is recognized as expense during the occurrence period.
Capitalization shall be exercised for interest expense actually occurred from special borrowings in
current period after deduction of the interest income arising from unutilized borrowing capital which is
saved in banks or deduction of investment income obtained from temporary investment; For
recognization of capitalized amount of common borrowing, it equals to the weighted average of the
assets whose accumulated expense or capital disburse is more than common borrowing times
225
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
capitalization rate of occupied common borrowing. Capitalization rate is determined according to
weighted average interest rate of common borrowing.
Assets satisfying capitalization principle generally refer to fixed assets, investment real estate and
inventories which can only arrive at predicted available-for-use and available-for-sale state after quite a
long time (generally over one year) in purchase or production activities.
If abnormal interruption happens during purchase or production of assets satisfying capitalization
principle and the interruption lasts over 3 months, the capitalization for the borrowing expense shall
pause until the purchase or production restarts.
17. Intangible assets
The Company holds intangible assets including land use right, trademark, patent technology and
non-patent technology. Intangible assets are measured according to the effective costs paid for obtaining
the assets. For those intangible assets purchased in by the Company, their effective cost consist of actual
payment and relevant other expenditure; for the intangible assets input by investors, effective cost is
determined according to the value agreed in investment contracts and agreements, while if the agreed
value is not fair, then effective value is confirmed according to fair value.
Land use right is averagely amortized according to its transfer term commencing from the sate of
transfer; trademark use-rights averagely amortized by 10 years; patent technology, non-patent
technology and other intangible assets is averagely amortized according to the shortest of their predicted
service life, beneficial term concluded by contract and effective term regulated by laws. Amortization
amount is recorded in assets cost and current gains and losses relevant to beneficial objectives.
Re-examination on predicted service life and amortization method of the intangible assets which have
limited service life shall be conducted at the end of each year. If changed, it would be treated as change
of accounting estimation. Re-examination on predicted service life of intangible assets which have
uncertain service life shall be conducted. For any evidence proving that service life of intangible assets
is limited, then the service life shall be estimated and the Company shall make amortization within the
predicted service life period.
18. Research and development
As for expenditure for research and development, the Company classifies it into expenditure on research
phase and development phase, based on nature of the expenditure and that whether the final intangible
assets formed by research & development is of great uncertainty. Expenditure arising during research
should be recorded in current gains and losses upon occurrence; expenditure arising during development
is confirmed as intangible assets when satisfying the following conditions:
226
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
(1) Completions of the intangible assets make it available for application or sell in technology;
(2) Equipped with plan to complete the intangible asset and apply or sell it;
(3) There is market for products produced with this intangible assets or the intangible asset itself;
(4) Have sufficient technology, financial resource and other resources to support development of the
intangible assets, and have ability to apply or sell the assets;
(5) Expenditure attributable to development of the intangible assets could be reliable measured.
Expenditure arising during development not satisfying the above conditions shall be recorded in current
gains and losses upon occurrence. Development expenditure which had been recorded in gains and
losses in previous period would not be recognized as assets in later period. Expenditure arising during
development phase which has been starting capitalization is listed in balance sheet as development
expenditure, and transferred to intangible assets since the project reaches at predicted utilization state.
19. Impairment of non-financial long-term assets
As at each balance sheet date, the Company has inspection on long-term equity investment, fixed assets,
construction in process and intangible assets with limited service life. When the following indications
appear, assets may be impaired, and the Company would have impairment test. As for goodwill and
intangible assets which have uncertain service life, no matter there is impairment or not, impairment test
shall be conducted at the end of every year. If it is hard to make test on recoverable amount of single
asset, test is expected to make on the basis of the assets group or assets group portfolio where such asset
belongs to.
After impairment test, if the carrying value exceeds the recoverable amount of the asset, the balance is
recognized as impairment loss. As long as impairment loss of the aforementioned assets is recognized, it
couldn‘t be switched back in later accounting periods. Recoverable amount of assets refers to the higher
of fair value of assets net disposal expense and present value of predicted cash flow of the asset.
Indications for impairment are as follows:
(1) Market value of asset drops a lot in current period, the drop scope is obviously greater than the
predicted drop due to move-on of times or normal utilization;
(2) Economy, technology or law environment where enterprise operates or market where asset is located
will have significant change in current or recent periods, which brings negative influence to enterprise;
(3) Market interest rate or returning rate of other market investments have risen in current period, which
brings influence in calculating discount rate of present value of predicted future cash flow of assets,
which leads to a great drop in recoverable amount of such assets;
(4) Evidence proving that asset is obsolete and out of time or its entity has been damaged;
(5) Asset has been or will be keep aside, terminating utilization or disposed advance;
227
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
(6) Internal report of enterprise shows that economic performance of asset has been or will be lower
than prediction, such as that net cash flow created by asset or operation profit (or loss) realized by asset
is greatly lower (or higher) than the predicted amount;
(7) Other indications showing possible impairment of assets
20. Goodwill
Goodwill represents balance between equity investment cost or business combination cost under no
common control exceeding the attributable part or fair value of recognizable net assets of party invested
or purchased (obtained through business combination) as of acquisition day or purchase day.
Goodwill relating to subsidiaries is separately listed in consolidated financial statement. And goodwill
relating to associates and joint-ventures is included in carrying value of long-term equity investment.
21. Long-term deferred expenses
Long-term deferred expenses of the Company refer to the expense which has been paid out while should
be amortized from the current period and periods thereafter, with amortization term over 1 year
(excluding 1 year). Such expense is averagely amortized during the beneficial period. If such long-term
deferred expense could not bring benefit to following accounting periods, the unamortized value of the
item shall be fully transferred to current gains and losses.
22. Staff remuneration
Employee benefits mainly include all kinds of remuneration incurred in exchange for services rendered
by employees or compensation to the termination of employment relationship such as short-term wages,
post-employment benefits, compensation for the termination of employment relationship and other
long-term employee welfare.
Short-term remuneration includes: staff salary, bonus, allowances and subsidies, staff benefits, social
insurances like medical insurance, work-related injury insurance and maternity insurance, housing fund,
labor union funds and staff education funds, short-term paid absence of duty, short-term profit sharing
scheme, non-monetary benefits as well as other short-term remuneration. During the accounting period
when staff provides services, the short-term remuneration actually occurred is recognized as liabilities
and shall be included in current gains and losses or related asset costs according to the beneficial items.
Retirement benefits mainly consist of basic pension insurance, unemployment insurance and
early-retirement benefits, etc. retirement benefit scheme represents the agreement reached by the
Company and its employees in respect of retirement benefits, or the rules or regulations established by
the Company for providing retirement benefits to employees. In particular, defined contribution plan
means a retirement benefit plan, pursuant to which, the Company makes fixed contribution to
228
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
independent fund, upon which, it is not obliged to make further payment. Defined benefit plan refers to
retirement benefit scheme other than defined contribution plan.
The early retirement policy for staff and workers of the Company is the compensation for encouraging
staff and workers to accept the reduction voluntarily. The employees make applications voluntarily, the
two parties sign the compensation agreement after approved by the Company and calculate the
compensation amount according to the compensation standard passed by the staff representative
conference, and the Company confirms it as dismiss welfare and reckons it in current profits and losses.
As the Company promises to adjust the treatment for early retiring staff and workers with the increase
of social basic cost of living allowances, the discount elements will not be considered for calculating the
dismiss welfare.
23. Estimated liabilities
If the business in connection with such contingencies as a security involving a foreign party, commercial
acceptance bill discount, pending litigation or arbitration, product quality assurance, etc. meets all of the
following conditions, the Company will confirm the aforesaid as liabilities: the obligation is an existing
obligation of the Company; performance of the obligation is likely to cause economic benefits to flow
out of the enterprise; the amount of the obligation is reliably measurable.
24. Principle of recognition of revenue and measurement method
The Company‘s sales revenue is mainly comprised of revenue from sale of goods, labor providing
income and revenue from assignment of asset use rights. The principle of recognition of such revenue is
as follows:
(1) Revenue from the sale of goods shall be recognized when the Company has transferred to the buyer
the significant risks and rewards of ownership of the goods; the Company retains neither continuing
managerial involvement to the degree usually associated with ownership nor effective control over the
goods sold; the amount of revenue can be measured reliably; it is probable that the associated economic
benefits will flow into the Company; The export business is recognised when the packing list is received;
and the associated costs incurred or to be incurred can be measured reliably. Air-conditioner OEM/ODM
will recognize revenue while notes issued after commodity transferring to the shipping space that
appointed by the client.
(2) The Company confirms the realization of service income when the gross income and total cost of
labor service cab be unfailingly calculated, the economic benefits related to labor service are likely to
flow into the Group, and the progress of labor service can be confirmed reliably. On balance sheet date,
with regard to those with results provided for labor service transactions can be estimated reliably,
confirm the relevant service income according to percentage of completion method and determine the
percentage-of-completion method by the proportion of the occurred cost in the estimated total cost; as
229
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
for those with results provided for labor service transactions can‘t be estimated reliably and with
occurred labor cost predicted to be able to get compensation, confirm to provide service income
according to labor cost amount occurred and capable of getting compensation, and carry over the
occurred labor costs; for those with results provided for labor service transactions can‘t be estimated
reliably and with occurred labor cost predicted to be not able to get compensation, reckon the occurred
labor cost in the current profits and losses, but not confirm to provide service income.
(3) The economy benefit of use-right of transfer assets probably wills inflow to the Company, if the
income can be measure accountability, than use-right income of transfer assets recognized.
25. Government subsidies
Government subsidy at the Company be able to meet its attached conditions, and can be confirmed
when received. Government grants for monetary assets, in accordance with the measurement of the
amount actually received, according to a fixed quota for the allocation of the grant criteria, in
accordance with the amount of accounts receivable measurement; government subsidies for
non-monetary assets, in accordance with the fair value, fair value should not reliably achieved, in
accordance with the notional amount (RMB 1.00) measurement.
Asset-related government grants recognized as deferred income, and average life of related assets
included in the current profit and loss distribution. With the proceeds of the relevant government
subsidies to compensate for the period after the relevant costs or losses recognized as deferred income
and, while recognizing the associated costs included in current period profit and loss; for compensation
related costs that have occurred or loss, directly gains and losses included in the current period.
26. Deferred Income Tax Assets and Deferred Income Tax Liabilities
A deferred tax asset and deferred tax liability shall be determined by a difference (temporary difference)
between the carrying amount of an asset or liability and its tax base. The deferred tax asset shall be
recognized for the carry forward of unused deductible losses that it is probable that future taxable profits
will be available against which the deductible losses can be utilized. For temporary difference arising
from initial recognition of goodwill, no corresponding deferred income tax liabilities will be recognized.
For temporary difference arising from initial recognition of assets and liabilities occurred in the
transaction related to non business combination which neither affect accounting profit nor assessable
income (or deductable losses), no corresponding deferred income tax assets and deferred income tax
liabilities will be recognized. As of the balance sheet date, deferred income tax assets and deferred
income tax liabilities are measured at the effective tax rate applicable to the period when recovery of
assets or settlement of liabilities occur.
The Company recognizes deferred income tax assets to the extent of future assessable income tax which
is likely to be obtained to offset deductable temporary difference, deductable losses and tax credits.
230
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
27. Lease
The Company categorizes the lease into the financial lease and the operating lease.
The financial lease is the lease in which all risks and returns related to the ownership of assets are
transferred in substance. The Company as a lease holder, on the date of lease, the financial lease is
recognized as the fixed asset at lower cost of fair value of the rental asset and the NPV of minimum
payment of leasing. The minimum payment of leasing is recognized as long-term payable and the
difference is accounted into unrecognized financing expense.
The operating lease is the lease apart from the financial lease. The Company, as a lease holder, accounts
the rents into current period by straight line method during the term of the lease. The Company, as a
leaser, accounts the rental income into current period by straight line method during the term of the
lease.
28. Income tax accounting
The Company accounted the income tax in a method of debit in balance sheet. The income tax expenses
include income tax in the current year and deferred income tax. The income tax associated with the
events and transactions directly included in the owners‘ equity shall be included in the owners‘ equity;
and the deferred income tax derived from business combination shall be included in the carrying amount
of goodwill, except for that above, the income tax expense shall be included in the profit or loss in the
current period.
The income tax expense in the current year refers to the tax payable, which is calculated according to
the tax laws on the events and transactions incurred in the current period. The deferred income tax refers
to the difference between the carrying amount and the deferred tax assets and deferred tax liabilities at
the year-end recognized in the method of debit in the balance sheet.
29. Segment information
Business segment was the major reporting form of the Company, which divided into 4 parts:
air-conditioner, refrigerator and freezer, marketing and others. The transfer price among the segments
will recognize based on the market price, common costs will allocated by income proportion between
segments except for the parts that without reasonable allocation.
30. Explanation on significant accounting estimation
The management of the Company needs to apply estimation and assumption when preparing financial
statement which will affect the application of accounting policy and amounts of assets, liabilities,
income and expense. The actual condition may differ from the estimation. Constant evaluation is
231
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
conducted by the management in respect of the key assumption involved in the estimation and judgment
of uncertainties. Effect resulting from change of accounting estimation is recognized in the period the
change occurs and future periods.
The following accounting estimation and key assumption may result in material adjustment to the book
value of assets and liabilities in future period.
(1) Inventory impairment provision
The Company provides impairment provision according to the type of finished products and goods
delivered under fixed proportion, and estimates the realizable net value of inventories by reference to
the projected selling price of similar inventories less sales expenses and related taxes on a regular basis,
so as to evaluate the rationality of the provision proportion. If the actual selling price or expense differs
from the previous estimation, the management will make corresponding adjustment to the proportion.
The estimation results based on existing experiences may differ from the latter actual results, which may
result in adjustment to the book value of inventories in the balance sheet and affect over the gains and
losses of the period when the estimation changes.
(2) Accounting estimation on long-term assets impairment provision
The Company makes impairment test on fixed assets such as buildings, machine and equipments which
have impairment indication and long-term assets such as goodwill as at the balance sheet date. The
recoverable amount of relevant assets and assets group shall be the present value of the projected future
cash flow which shall be calculated with accounting estimation.
If the management amends the gross profit margin and discount rate adopted in calculation of future
cash flow of assets and assets group and the amended gross profit margin is lower than the currently
adopted one or the amended discount rate is higher than the currently adopted one, the Company needs
to increase provision of impairment provision. If the actual gross profit margin is higher (or the discount
rate is lower) than the estimation of management, the Company can not transfer back the long term
assets impairment provision provided already.
(3) Accounting estimation on realization of deferred income tax assets
Estimation on deferred income tax assets needs estimation on the taxable income and applicable tax rate
for each future year. Realization of deferred income tax assets depends on whether a company is able to
obtain sufficient taxable income in future. Change of future tax rate and switch back of temporary
difference could affect the balance of income tax expense (gains) and deferred income tax. Change of
the aforesaid estimation may result in material adjustment to deferred income tax.
(4) Usable term and residual value rate of fixed assets and intangible assets
The Company, at least at the end of each accounting year, reviews the projected usable life and residual
value rate of fixed assets and intangible assets. The projected usable life and residual value rate are
determined by the management based on the historical experiences of similar assets by reference to the
estimation generally used by the same industry with consideration on projected technical upgrade. If
material change occurs to previous estimation, the Company shall accordingly adjust the depreciation
232
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
expenses and amortization expenses for future period.
(5) Projected liabilities arising from product quality guarantee
The Company commits to repair the major spare parts of refrigerators sold through go-to-countryside
promotion activity for free for ten years. As to the maintenance expenses that may be increased arising
from such commitment, the Company has provided projected liabilities.
Taking into account the various uncertainties during the ten years, the Company considers no discount
factor of such projected liabilities. In stead, the Company reviews the parameters (probility, proportion,
maintenance expense per single set) based on the actual occurrence of maintenance expenses as of each
balance sheet date. If obvious change is found, the Company will adjust the projected liabilities
according to the latest parameters so as to reflect the best estimation.
31. Other comprehensive income
Other comprehensive income represents various gains and losses not recognized in current gains and
losses according to other accounting rules.
Other comprehensive income items shall be reported in the following two classes under other relevant
accounting rules:
(1) Other comprehensive income items that can not be reclassified into gains and losses in future
accounting periods, mainly including changes arising from re-measurement of net liabilities or net assets
under defined benefit plan and interest in investee‘s other comprehensive income which are measured
under equity method and which can not be reclassified into gains and losses in future accounting
periods;
(2) Other comprehensive income items that will be reclassified into gains and losses in future
accounting periods upon satisfaction of required conditions, mainly including interest in investee‘s other
comprehensive income which are measured under equity method and which will be reclassified into
gains and losses in future accounting periods upon satisfaction of required conditions, gains or losses
arising from change of fair value of available-for-sale financial assets, gains or losses arising from
reclassification of held-to-maturity investment into available-for-sale financial assets, gains or losses
occurred by cash flow hedging instruments attributable to effective hedge, foreign currency financial
statement translation difference, etc.
32. Change of significant accounting policies and accounting estimates
(1) Change of significant accounting policies
The Company had no change of significant accounting policies in the year.
(2) Change of significant accounting estimates
The Company had no change of significant accounting estimates in the year.
V. Taxation
233
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
1. Major taxes (expenses) and tax rates
Tax(expenses) Tax base Tax rate
VAT Income from sales of goods and from processing 17%、13%、11%、6%、5%
Business tax Rental income and off-price expense 5%
Urban maintenance and
Turnover tax 5% or 7%
construction tax
Education surcharge Turnover tax 3%
Local education surcharge Turnover tax 2%
Corporate income tax Taxable income 15% or 25%
Original Book value of house property×(1-30%)or
House Property Tax 1.2% or 12%
annual rent income
Land use tax Actual land area used RMB 2.5/M2 to RMB 15/M2
2. Preferential tax and approval documents
The Company and its subsidiary Zhongke Meiling Cryogenics Technology Limited Company were
recognized as second Hi-Tech Enterprise for year of 2014 in Anhui Province with term of three years.
Therefore, the Company and its subsidiary Zhongke Meiling Cryogenics Technology Limited Company
enjoys 15% rate for the income tax for State Hi-Tech Enterprise. On 22 January 2015, being recognized
by ―Name Lists of First Hi-Tech Enterprise for year of 2014 in Anhui Province‖[WGQR(2014) No. 37]
from Anhui Science & Technology Department, the Company and Zhongke Meiling Cryogenics
Technology Limited Company continuous to enjoy 15% rate for the income tax for State Hi-Tech
Enterprise for three years term.
Subsidiary Zhongshan Changhong Electric Co., LTD. was recognized as First Hi-Tech Enterprise for
year of 2008 in Guangdong Province with 15% rate for the income tax for State Hi-Tech Enterprise
enjoys for term of three years. On 10 October 2014, being recognized by ―Name Lists of Second
Hi-Tech Enterprise for year of 2014 in Guangdong Province‖[YKGS(2014) No.15] from
Guangdong Science & Technology Department, Zhongshan Changhong Appliance Co., Ltd.
continuous to enjoy 15% rate for the income tax for State Hi-Tech Enterprise for three years
term.
The subsidiary Sichuan Changhong Air Conditioning Co., Ltd. has passed the review for
high-tech enterprise certification on December 8, 2016, which is valid for three years. After
passing the filing and auditing of tax bureau, the company will only pay the corporate income
tax by 15% of the tax rate.
Subsidiary Mianyang Meiling Software Technology Co., Ltd. pass the software enterprise certificate on
27 June 2014, and obtained the Software Enterprise Certification [Chuan No.:R-2014-0072].
Calculating the promotion period since the year of profit-making, the 1st year to 2nd year, the income tax
shall be exempted, levy income tax based on half of the statutory rates from the 3 rd year to 5th year, and
enjoy the preferential till expired
234
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Subsidiary Mianyang Meiling Software Technology Co., Ltd. pass the software enterprise certificate on
27 June 2014, and obtained the Software Enterprise Certification [Chuan No.:R-2014-0072].
Calculating the promotion period since the year of profit-making, the 1st year to 2nd year, the income tax
shall be exempted, levy income tax based on half of the statutory rates from the 3rd year to 5th year, and
enjoy the preferential till expired
The subsidiary Guangdong Changhong Ridian Technology Co., Ltd. has applied for the affirmation of
high-tech enterprises, on December 9, 2016, the company has been listed in the ―List of 3rd batch enterprises
drafted to be affirmed as high-tech enterprises of Guangdong province in 2016‖ released by the national
high-tech enterprises affirmation management leading group office of Ministry of Science and Technology,
and would pay the income tax by 15% of the income tax which is a privilege to the national high-tech
enterprises.
VI. Notes to the major items in the consolidated financial statements
With respect to the financial statements figures disclosed below, unless otherwise specified,
―year-beginning‖ refers to Jan. 1, 2016; ―year-end‖ refers to Dec. 31, 2016; ―the year‖ refers to Jan. 1 to
Dec. 31, 2016; ―the last year‖ refers to Jan. 1 to Dec. 31, 2015; the currency is RMB.
1. Monetary fund
Item Balance at year-end Balance at year-begin
Cash 94,415.53 46,496.63
Bank deposit 3,827,367,022.13 2,043,331,029.26
Other Monetary fund 231,407,796.97 91,812,353.26
Total 4,058,869,234.63 2,135,189,879.15
Including: total amount deposited in overseas 19,067,202.50 3,650,516.73
Other monetary fund:
Item Amount at year-end
Deposits 184,335,513.55
Account of foreign currency for verification 43,772,022.45
Union Pay online 2,208,249.18
Taobao account 1,092,011.79
Total 231,407,796.97
Deposit which serves as non cash and cash equivalents refers to the banking acceptance draft deposit with a
term of over three months, amounting to RMB 44,690,554.87, guarantee margin amounting to RMB 220,000,
the loan margin amounting to RMB 27,609,260. China Union Pay, Taobao account and Ten Pay are all third
party payment platforms. Except for the deposit of RMB 251,000.00, utilization of other balance is not
subject to any restriction.
According to the national policies relating to foreign exchange management, all goods payment denominated
in foreign currency should be transferred to reviewing accounts which may not be used temporarily. Upon
approval of such review, those payments may be transferred to general accounts. Due to the relatively short
235
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
time for reviewing foreign exchange, balance of the reviewing accounts is not limited on utilization.
2. Financial assets measured at fair value and whose changes are recorded in the profits and losses of the
current period
Item Balance at year-end Balance at year-begin
Derivative financial assets 12,060,213.30
Derivative financial assets refers to the RMB forward exchange fund in the year
3. Notes receivable
(1) Category of notes receivable
Item Amount at year-end Amount at year-begin
Bank acceptance bill 1,096,452,069.60 1,286,319,058.59
Commercial acceptance bill 324,977,654.13 13,624.15
Total 1,421,429,723.73 1,286,332,682.74
(2) Notes receivable mortgaged by end of the year
Item Amount mortgaged by end of the year
Bankacceptance 174,237,778.45
Note: in order to improve the utilization rate of notes, the Company pledged to banks those notes that
haven‘t expired yet in exchange for issuance of banking acceptance drafts.
(3) Note receivables endorsement or discount at year-end and are not expired on balance sheet date
No termination
Termination confirmation
Item confirmation amount at
amount at year-end
year-end
Bank acceptance bill 2,453,613,738.31
Commercial acceptance bill 34,951,039.44
Total 2,488,564,777.75
(4)Notes transfer to account receivable due to the failure implementation from drawer at year-end: Nil
3. Accounts receivable
(1) Account receivable by category
Amount at year-end
Category Book balance Bad debt provision
Book value
Percent Percent
Amount Amount
age age
Significant account receivable and withdrawal
bad debt provision single
Account receivable withdrawal bad debt
provision by combination
236
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Combination 1 834,543,507.58 71.22% 43,843,529.45 5.25% 790,699,978.13
Combination 2 323,321,432.79 27.59% 0.00% 323,321,432.79
Subtotal of combination 1,157,864,940.37 98.81% 43,843,529.45 3.79% 1,114,021,410.92
Account receivable with single minor amount
13,898,468.17 1.19% 8,959,326.60 64.46% 4,939,141.57
but withdrawal bad debt provision singly
Total 1,171,763,408.54 100.00% 52,802,856.05 4.51% 1,118,960,552.49
(Continued)
Amount at year-begin
Category Book balance Bad debt provision
Book value
Percent Percent
Amount Amount
age age
Significant account receivable and withdrawal
bad debt provision single
Account receivable withdrawal bad debt
provision by combination
Combination 1 899,278,954.60 64.20% 50,987,076.18 5.67% 848,291,878.42
Combination 2 488,135,576.26 34.85% 0.00% 488,135,576.26
Subtotal of combination 1,387,414,530.86 99.05% 50,987,076.18 3.67% 1,336,427,454.68
Account receivable with single minor amount
13,315,915.98 0.95% 11,347,048.83 85.21% 1,968,867.15
but withdrawal bad debt provision singly
Total 1,400,730,446.84 100.00% 62,334,125.01 4.45% 1,338,396,321.83
1) No account receivable with single major amount but withdrawal bad debt provision singly at
year-end.
2) Account receivable with withdrawal bad debt provision for combination 1 by aging account
Balance at year-end
Item
Account receivable Bad debt provision Provision proportion
Within 1 year 817,156,334.38 40,857,816.72 5.00%
1-2 years 16,240,289.85 2,436,043.48 15.00%
2-3 years 709,294.36 248,253.03 35.00%
3-4 years 302,606.15 166,433.38 55.00%
4-5 years 85.00%
Over 5 years 134,982.84 134,982.84 100.00%
Total 834,543,507.58 43,843,529.45
3) Account receivable with no withdrawal bad debt provision for combination 2
Combination Book balance
Account connect with related parties 291,315,034.61
Letter of Credit 32,006,398.18
Total 323,321,432.79
237
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
4) Account receivable with single minor amount but withdrawal bad debt provision singly, refers to the
minor single receivables, and withdrawal bad debt provision by combination shows no risk
characteristic of the receivables, 8 clients involved.
(2) Bad debt reserve provided for, reversed (or recovered) during this year
Bad debt reserve written off this year was RMB 3,023,539.08, and the bad debt reserve reversed this
year was RMB 6,507,729.88. No trade receivables written-off in previous year was recovered this year.
(3) No account receivable actually written-off in the Year.
(4) In the Year, top five receivables collected by arrears party amounting to RMB 431,686,312.59 in
total, accounted for 36.84% of the receivables at balance of the year-end, the bad debt provision accrual
correspondingly amounting to RMB 8,052,057.89 at year-end balance.
5. Accounts paid in advance
(1) Age of account paid in advance
Amount at year-end Amount at year-begin
Item
Amount Percentage Amount Percentage
Within 1 year 131,113,656.82 97.33% 66,062,097.51 97.09%
1－2 years 2,983,725.64 2.22% 1,427,195.93 2.10%
2－3 years 487,258.38 0.36% 84,878.71 0.12%
Over 3 years 121,847.54 0.09% 467,648.58 0.69%
Total 134,706,488.38 100.00% 68,041,820.73 100.00%
(2) Top 5 of account paid in advance in balance at year-end amounting to RMB 63,059,987.89,
accounted for 46.81% of the account.
6. Interest receivable
Item Amount at year-end Amount at year-begin
Deposit interest receivable 2,645,494.32 1,238,199.65
7. Other accounts receivable
(1) Category of other account receivable
Amount at year-end
Category Book balance Bad debt provision
Bookvalue
Percent
Amount Percentage Amount
age
Significant other account receivable and
withdrawal bad debt provision single
Other account receivable withdrawal bad
debt provision by combination
Combination 1 8,798,418.31 20.99% 2,091,596.95 23.77% 6,706,821.36
Combination 2 32,347,098.08 77.18% 32,347,098.08
Subtotal of combination 41,145,516.39 98.17% 2,091,596.95 5.08% 39,053,919.44
Other account receivable with single minor
767,932.63 1.83% 267,932.63 34.89% 500,000.00
amount but withdrawal bad debt provision singly
238
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Amount at year-end
Category Book balance Bad debt provision
Bookvalue
Percent
Amount Percentage Amount
age
Total 41,913,449.02 100.00% 2,359,529.58 5.63% 39,553,919.44
(Continued)
Amount at year-begin
Category Book balance Bad debt provision
Bookvalue
Percent Percent
Amount Amount
age age
Significant other account receivable and
withdrawal bad debt provision single
Other account receivable withdrawal bad
debt provision by combination
Combination 1 9,229,628.47 21.24% 3,691,780.99 40.00% 5,537,847.48
Combination 2 33,956,987.82 78.14% 0.00% 33,956,987.82
Subtotal of combination 43,186,616.29 99.38% 3,691,780.99 8.55% 39,494,835.30
Other account receivable with single minor
267,932.63 0.62% 267,932.63 100.00%
amount but withdrawal bad debt provision singly
Total 43,454,548.92 100.00% 3,959,713.62 9.11% 39,494,835.30
1) No significant other account receivable and no withdrawal bad debt provision single at year-end.
2) Other account receivable with withdrawal bad debt provision for combination 1 by aging account
Balance at year-end
Book Age
Account receivable Bad debt provision Provision proportion
Within 1 year 5,300,340.70 265,017.04 5.00%
1-2 years 1,394,115.53 209,117.33 15.00%
2-3 years 229,230.00 80,230.50 35.00%
3-4 years 610,000.00 335,500.00 55.00%
4-5 years 420,000.00 357,000.00 85.00%
Over 5 years 844,732.08 844,732.08 100.00%
Total 8,798,418.31 2,091,596.95
3) Other account receivable with no withdrawal bad debt provision for combination 2
Combination Book balance
Contact with related party 12,870,014.08
Employee‘s reserve loans 18,784,317.17
Export rebate 159,982.87
Pre-paid charge of the employee 532,783.96
Total 32,347,098.08
239
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
4) The other account receivable with major amount at year-end and accrual for bad debt provision single
refers to the receivable amount of 267,932.63 Yuan from Guangdong Xiongfeng Electric Co., Ltd.,
pre-paid insurance indemnity 500,000.00 Yuan.
(2) Reversal (or withdraw) of reserve for bad debts in the Year
Releasing bad-debt provision in the Year amounting to RMB 1,600,184.04; bad debt recovered the
original verification was RMB 6,000.00 in the year.
(3) No actual verification of other receivables in the year
(4) Classification of other accounts receivable according to the nature of account
Nature Book balance at year-end Book balance at year-begin
Employee‘s reserve loans 18,784,317.17 12,957,099.30
Non-consolidated related party 12,870,014.08 730,771.79
Deposit 8,062,507.62 3,918,959.87
Advance money temporary 1,413,879.45 140,406.00
Other 622,747.83 5,438,195.23
Export rebate 159,982.87 20,269,116.73
Total 41,913,449.02 43,454,548.92
(5) Top 5 other receivables collected by arrears party at balance of year-end:
Bad Balance
Proportion in total
atyear-end
Name Nature ofaccount Balance atyear-end Bookage other receivables at
of debt
year-end
provision
Capital-reduct
Sichuan Tianyou Guigu Within 1
ion money 12,500,000.00 29.82%
Technology Co. Ltd. year
receivable
Employees Within 1
Han Shaofeng 1,545,000.00 3.69%
deposit year
Within 1
Nanjing Customes of PRC Cash deposit 1,344,924.85 3.21% 67,246.24
year
Beijing Tongzhou New Rural Guarantee Within 1
1,000,000.00 2.39% 50,000.00
Construction Service Center money year
Employees Within 1
Pu Lingqiao 901,743.63 2.15%
deposit year
Total 17,291,668.48 41.26% 117,246.24
(6) No other account receivable involved government subsidies at year-end.
(7) No other receivables terminated recognization due to the transfer of financial assets at year-end.
(8) No assets and liability transfer other receivables and continues to involve at year-end.
8. Inventories
(1) Classification of inventories
Amount at year- end
Item
Bookbalance Impairment provision Book value
240
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Amount at year- end
Item
Bookbalance Impairment provision Book value
Rawmaterials 239,470,144.24 2,133,956.27 237,336,187.97
Stockcommodities 1,477,211,122.85 71,224,130.62 1,405,986,992.23
Low value consumable articles 11,908,736.75 11,908,736.75
Goodsin transit 245,587,568.44 2,700,789.83 242,886,778.61
Goods-in-process 31,950,329.21 31,950,329.21
Deferred expense for moulds 44,457,710.09 44,457,710.09
Total 2,050,585,611.58 76,058,876.72 1,974,526,734.86
(Continues)
Amount at year- begin
Item
Bookbalance Impairment provision Book value
Rawmaterials 142,734,356.80 1,427,876.25 141,306,480.55
Stockcommodities 1,292,031,075.82 79,430,353.78 1,212,600,722.04
Low value consumable articles 11,776,746.58 11,776,746.58
Goodsin transit 112,214,773.27 177,014.68 112,037,758.59
Goods-in-process 19,621,573.80 19,621,573.80
Deferred expense for moulds 57,602,927.95 57,602,927.95
Total 1,635,981,454.22 81,035,244.71 1,554,946,209.51
(2) Inventory falling price reserves
Amount at
Amount at Increased in the Decreased in the year
Item year-end
year-begin year
Switch-back Other switch-out
Raw materials 1,427,876.25 706,080.02 2,133,956.27
Stock
79,430,353.78 6,417,796.55 14,624,019.71 71,224,130.62
commodities
Goods in
177,014.68 3,217,863.71 694,088.56 2,700,789.83
transit
Total 81,035,244.71 10,341,740.28 15,318,108.27 76,058,876.72
(3) Provision for inventories
Reasons for the
Item Specific basis for determining of net realizable value Switch-back or conversion
in the year
Cost is higher than net realizable value (The processed products are
Raw materials decline)
241
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Stock Cost is higher than net realizable value (The market price at year-end
fell)
commodities
Cost is higher than net realizable value (The market price at year-end
Goods in transit fell)
Cost is higher than net realizable value (The processed products are
Goods in process
decline)
9. Non current assets due within one year
Balance at Nature
Item Balance at year-end
year-begin
Time deposits due within one
12,625,340.00 Reclassification of time deposit
year
Note: This project is the three-year term fixed deposit that the subsidiary Zhongshan Changhong has deposited at Guangdong
Development Bank Zhongshan Branch for getting the bank‘s long-term loan. The deposit amount is US $ 6,810,000.00 dollars,
equivalent to RMB 47,240,970.00 Yuan, of which US$ 1,820,000.00 dollars, equivalent to RMB 12,625,340.00 Yuan, will
expire in 2017 and reclassify to this project.
10. Other current assets
Item Balance at year-end Balance at year-begin Nature
Financial products 1,385,200,000.00 500,000,000.00 Bank financial products
Value-added tax to be Reclassify of value-added
56,525,274.99 12,862,817.57
deducted tax to be deducted
Advance payment of income Reclassify of advance
12,357,316.25 24,200,227.82
tax payment of income tax
Re-classify the prepaid
Advance payment of taxes
263,706.18 2,038,533.05 construction tax and
and surcharges
education surcharge
Total 1,454,346,297.42 539,101,578.44
11. Finance asset available for sales
(1) Finance asset available for sales
Balance at year-end Balance at year-begin
Item Impairm Impairme
Bookbalance ent Book value Bookbalance nt Book value
provision provision
Equity instrument available for
17,000,000.00 17,000,000.00 17,000,000.00 17,000,000.00
sales
Including: measured by cost 17,000,000.00 17,000,000.00 17,000,000.00 17,000,000.00
Total 17,000,000.00 17,000,000.00 17,000,000.00 17,000,000.00
(2) Finance asset available for sales measured by cost at year-end
Holding
Decrease Cash
Increase in proportion
Invested Unit Year-begin in the Year-end dividend
the year in invested
year for the year
unit
Huishang Bank Co., Ltd. 5,000,000.00 5,000,000.00 0.0972% 1,707,274.11
242
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Holding
Decrease Cash
Increase in proportion
Invested Unit Year-begin in the Year-end dividend
the year in invested
year for the year
unit
Sichuan Hongyun New it
12,000,000.00 12,000,000.00 16.00%
Investment Fund
Total 17,000,000.00 17,000,000.00 1,707,274.11
(3) No impairment reserve of finance asset available for sales at year-end.
243
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
12. Long-term equity investment
Change in the year
Impairmen
Balance at Investment Other Other Provisio Balance at t reserve
Invested Unit Disin Declaration of
year-begin Additional profit and loss comprehen changes n for year-end balance at
vestm cash dividends Other
investment confirmed by sive income of impair year-end
ent or profits
equity method adjustment equity ment
Associated companies
1. ChanghongRuba
29,713,680.32 -2,810,304.61 2,411,298.65 29,314,674.36
Electric Company(Private)Ltd. Note 1
2. Hefei Xingmei Assets Management
12,846,069.09 -451,268.70 12,394,800.39
Co., Ltd.
3. Sichuan Zhiyijia Network Technology
4,813,098.30 4,567,275.37 9,380,373.67
Co., Ltd.Note 2
4. Hengyuan Dineng Rebao Technology
4,045,502.68 19, 600,000.00 -874,437.23 22,771,065.45
Company Limited Note 3
5. Sichuan Tianyou Guigu Technology 12,500,
22,821,196.62 -2,538,479.12 7,782,717.50
Co., Ltd. Note 4 000.00
12,500,
Total 74,239,547.01 19,600,000.00 -2,107,214.29 2,411,298.65 81,643,631.37
000.00
Note 1: on 30 April 2014, our subsidiary Zhongshan Changhong and RUBA Comprehensive Trading Corporation entered into a registered capital increase agreement, pursuant to which, both parties
agreed to increase registered capital of USD12,310,000, among which, Zhongshan Changhong agreed to contribute capital of USD4,924,000 based on the original shareholding proportion of 40%, and
RUBA Comprehensive Trading Corporation agreed to contribute capital of USD7,386,000 based on the original shareholding proportion of 60%.
Note 2: on 16 December 2014, the Company executed a joint venture agreement with its controlling shareholder Sichuan Changhong Appliances Company Limited, targeting to jointly establish Sichuan
Zhiyijia Network Technology Co., Ltd. On 5 January 2015, Sichuan Zhiyijia Network Technology Co., Ltd was officially incorporated with registered capital of RMB50 million, among which, the
Company made contribution of RMB15 million with shareholding proportion of 30% and Sichuan Changhong Appliances Company Limited made contribution of RMB35 million with shareholding
proportion of 70%.
Note 3: our subsidiary Sichuan Changhong Air Conditioner Co., Ltd (―Changhong Air Conditioner‖) and Hengyouyuan Science & Technology Development Group (―Hengyouyuan‖) cooperated to
establish Hengyuan Dineng Rebao Technology Company Limited on 28 October 2015. The registered capital of the company is RMB50 million, among which, Changhong Air Conditioner contributed
RMB24.5 million, accounting for 49% of the registered capital, and Hengyouyuan contributed RMB25.5 million, accounting for 51% of the registered capital.
Note 4: Sichuan Tianyou Guigu Science & Technology Company was incorporated on 31 March 2015 with registered capital of RMB100 million. Our subsidiary Changhong Air Conditioner made capital
contribution of RMB 25 million in cash, accounting for 25% of the registered capital. Chengdu Jiaodao Property Development Company made capital contribution of RMB 20 million, accounting for 20%
244
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
of the registered capital. Chengdu Southwest Jiaotong University Industry (Group) Co., Ltd made capital contribution of RMB 20 million, accounting for 20% of the registered capital. Mianyang
Investment Holding (Group) Co., Ltd made capital contribution of RMB 5 million, accounting for 5% of the registered capital. Shanghai Zhongcheng Xindaya Financial Information Service Co., Ltd made
capital contribution of RMB 5 million, accounting for 5% of the registered capital. Jiangsu Runye Investment Co., Ltd made capital contribution of RMB 10 million, accounting for 10% of the registered
capital. Chengdu Dongyu Shangmao Co., Ltd made capital contribution of RMB 15 million, accounting for 15% of the registered capital. In 2016, shareholders meeting of Sichuan Tianyou Guigu
Technology Co., Ltd. agreed to reduce the 50 million Yuan capital, the shareholders are reducing the capital by ratio of share-holding. After capital reduction, subsidiary Changhong Air conditioner
contributed 12.5 million Yuan, representing 25% of the registered capital.
245
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
13. Investment properties
(1) Investment properties measured at costs
Houses and
Item Land use rights Total
buildings
I. Original book value
1.Balance at year-begin 23,142,172.83 916,691.38 24,058,864.21
2.Increased in the year
3.Decreased in the year
4.Balance at year-end 23,142,172.83 916,691.38 24,058,864.21
II.Accumulated depreciation and
accumulated amortization
1.Balance at year-begin 9,558,221.21 416,429.49 9,974,650.70
2.Increased in the year 770,213.55 38,368.56 808,582.11
(1) provision or amortization 770,213.55 38,368.56 808,582.11
3.Decreased in the year
4.Balance at year-end 10,328,434.76 454,798.05 10,783,232.81
III. Provision for impairment
IV. Book value
1.Book value at year-end 12,813,738.07 461,893.33 13,275,631.40
2.Book value at year-begin 13,583,951.62 500,261.89 14,084,213.51
(2) No investment real estate measured by fair value at year-end.
(3) No particular about mortgage of investment property at year-end.
(4) No investment real estate having not completed the property right certificate at year-end
14. Fixed assets
(1) Details of fixed assets
Houses and Mechanical Transport Others
Item Total
buildings equipment equipment equipment
I. Originalbookvalue
1.Balance atyear-begin 921,581,186.91 973,472,601.74 25,328,176.24 157,072,665.55 2,077,454,630.44
2.Increased intheyear 5,172,711.93 97,327,067.62 1,048,117.67 18,635,668.29 122,183,565.51
(1)Purchase 2,649,436.80 3,177,875.00 824,044.84 4,203,313.85 10,854,670.49
(2) Construction in progress
2,523,275.13 94,149,192.62 39,829.05 8,233,563.01 104,945,859.81
transfer-in
(3) Inventorytransfer-in 6,143,863.48 6,143,863.48
(4) Increase in exchange rate
184,243.78 54,927.95 239,171.73
fluctuation
3.Decreasedin theyear 22,534,991.07 85,380,819.46 2,106,422.98 2,107,846.29 112,130,079.80
(1)disposeorretirement 2,120,034.24 67,563,188.83 1,409,251.58 1,111,584.77 72,204,059.42
(2) Construction in progress
1,608,240.00 1,608,240.00
transfer-in
246
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Houses and Mechanical Transport Others
Item Total
buildings equipment equipment equipment
(3)otherdecrease 20,414,956.83 16,209,390.63 697,171.40 996,261.52 38,317,780.38
4.Balance atyear-end 904,218,907.77 985,418,849.90 24,269,870.93 173,600,487.55 2,087,508,116.15
II.Accumulated
depreciation
1.Balance atyear-begin 155,193,162.74 568,413,901.49 16,171,932.43 66,783,601.48 806,562,598.14
2.Increased intheyear 30,668,440.85 90,305,238.31 1,776,529.45 13,581,814.09 136,332,022.70
(1)provision 30,668,440.85 90,305,238.31 1,776,529.45 13,581,814.09 136,332,022.70
3.Decreasedin theyear 4,317,334.39 53,654,744.81 1,959,421.94 1,356,676.59 61,288,177.73
(1)disposeorretirement 419,682.96 40,047,900.94 1,297,109.11 705,324.61 42,470,017.62
(2) Construction in progress
1,660,254.05 1,660,254.05
transfer-in
(3)otherdecrease 3,897,651.43 11,946,589.82 662,312.83 651,351.98 17,157,906.06
4.Balance atyear-end 181,544,269.20 605,064,394.99 15,989,039.94 79,008,738.98 881,606,443.11
III.Provision for
impairment
1.Balance atyear-begin 1,240,639.77 1,950,369.18 7,403.67 199,687.70 3,398,100.32
2.Increased intheyear
3.Decreasedin theyear 1,240,639.77 348,957.23 1,589,597.00
(1)disposeorretirement 1,240,639.77 348,957.23 1,589,597.00
4.Balance atyear-end 1,601,411.95 7,403.67 199,687.70 1,808,503.32
IV Book value
1.Bookvalue atyear-end 722,674,638.57 378,753,042.96 8,273,427.32 94,392,060.87 1,204,093,169.72
2.Bookvalue atyear-begin 765,147,384.40 403,108,331.07 9,148,840.14 90,089,376.37 1,267,493,931.98
The new fixed assets in this year mainly due to the RMB 104,945,859.81 transfer from construction in
process; decrease of the fixed assets in the Year mainly because the assets renewal transfer to
construction in process and assets dispose for retirement; Other reduce refers to the sales of subsidiary
Hefei Meiling Package Products Co., Ltd.
(2) No fixed assts temporary idle at year-end.
(3) No fixed assets for collateral at year-end.
(4) No fixed assets leased through operating lease at year-end.
(5) No fixed assets leased through operating lease at year-end.
Accumulated Depreciation
Items Original book value Net book value
depreciation provision
Mechanical
40,920.00 34,554.69 6,365.31
equipment
Building construction 47,869,316.55 7,436,435.07 40,432,881.48
Total 47,910,236.55 7,470,989.76 40,439,246.79
(6) Fixed assts without property certificate
247
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Reason of not complete the
Item Book value
property certificate
II canteen of living area 25,910,795.15 In procedure
6# building for cadremen 8,930,447.86 In procedure
7# building for cadremen 8,215,215.45 In procedure
4# makeshift shelter (dormitory building transfer to capital) 6,651,069.97 In procedure
3# makeshift shelter 5,689,907.18 In procedure
8# makeshift shelter 5,178,824.74 In procedure
5# makeshift shelter 5,140,247.60 In procedure
Canteen 2,716,313.94 In procedure
Total 68,432,821.89
(7) No fixed assets ready for sale at year-end
15. Construction in progress
(1) Details of construction in progress
Amount at year-end Amount at year-begin
Imp Book value Imp Book value
air air
Item men men
Book Book
t t
balance balance
pro pro
visio visio
n n
Relocation and capacity expansion project of
60,889,270.95 60,889,270.95 4,420,650.01 4,420,650.01
Zhongke Meiling
Upgrading and reform of the production line
of intelligent refrigerator of Mianyang 11,190,008.45 11,190,008.45
Meiling
Leasing project in college 5,631,371.46 5,631,371.46
Reform of line R290 4,031,885.46 4,031,885.46 9,920,126.79 9,920,126.79
Construction of intelligent manufacturing 12,785,053.55 12,785,053.55 2,944,802.39 2,944,802.39
Equipments pending for installation 3,490,730.72 3,490,730.72 4,033,590.36 4,033,590.36
Central air conditioning relocation and
1,124,429.99 1,124,429.99 1,092,360.60 1,092,360.60
Capacity Upgrading Project
KA line 792,136.75 792,136.75 1,279,229.95 1,279,229.95
Relocation of the squeeze board line in
593,777.99 593,777.99
Jiangxi Meiling
2nd phase construction of the fitting life zone
165,000.00 165,000.00 1,325,050.00 1,325,050.00
in new industrial park of Meiling
Comprehensive promotion of non shrink tube
87,220.00 87,220.00 7,725,638.80 7,725,638.80
expander
Phase 1 VISA laboratory 4,692,307.69 4,692,307.69
C line small refrigerator production and
2,319,042.81 2,319,042.81
transformation projects
The new purchase of evaporator with 6.35 C
2,764,217.07 2,764,217.07
production line
The freezer front-end equipment capacity
2,332,760.65 2,332,760.65
expansion project
248
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Amount at year-end Amount at year-begin
Imp Book value Imp Book value
air air
Item men men
Book Book
t t
balance balance
pro pro
visio visio
n n
Laboratory reconstruction of water cooled
1,597,191.46 1,597,191.46
chiller and water source heat pump unit
Final assembly expanding project of the
1,996,064.77 1,996,064.77
freezer
Project of mid-large volume environment icebox production
540,601.71 540,601.71
annualoutputfor0.6 million
Other miscellaneousitems 6,256,524.63 6,256,524.63 7,521,245.93 7,521,245.93
Total 107,037,409.95 107,037,409.95 56,504,880.99 56,504,880.99
(2) Changes in significant construction in progress
Transfer to
Book Increase Other
fixed assets Book balance
Projects balance at during the Source offunds
decrease at year-end
year-begin year in the year
Relocation and capacity
expansion project of 4,420,650.01 56,468,620.94 60,889,270.95 Self-raised
Zhongke Meiling
Intelligentmanufacturingproject 2,944,802.39 28,007,852.54 18,022,473.18 145,128.20 12,785,053.55 Raisefunds
Upgrading and reform of
the production line of
11,190,008.45 11,190,008.45 Self-raised
intelligent refrigerator of
Mianyang Meiling
(Continued)
Accumulated including: Interest
Proportion of
amount of interest capitaliza
Budget (in 10 project Progres
Projects interest capitalized tion rate
thousand Yuan) investment in s
capitalizatio amount of the of the
budget
n year year
Relocation and capacity
expansion project of 14,589.74 53.63% 80.00%
Zhongke Meiling
Intelligentmanufacturingproject 26,128.00 11.85% 16.00%
Upgrading and reform of the
production line of intelligent 4,792.00 23.32% 30.00%
refrigeratorofMianyangMeiling
(3) No depreciation reserves for construction in process at year-end.
16. Disposal of fixed assets
Reasons for disposal
Item Closing amount Opening amount
transferred
Relocation for land
Relevant assets disposal for reserved lands 75,788,138.47 75,773,138.47
reserve
Pursuant to the urban planning requirements of the People‘s Government of Hefei city, Hefei Land
Reserve Center plans to purchase and store the land use right of an integrated economic development
249
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
zone of the Company located at Longgang of Hefei with an area of 103,978.9 sq.m. (Approximately
155.9684 mu, Land Use Right Certificate No.: Dong Guo Yong (2004) Zi No. 0200, the stated use of the
land is for industrial purpose). The estimated consideration for purchasing and storage is RMB74.48
million. The land is mainly used for the Company‘s warehouse, product finishing workshop and the
factory of Zhongke Meiling. Pursuant to the purchasing and storage requirements of land use right, the
land will be purchased and stored with vacant possession. In April 2013, the Company completed the
relocation of occupants of the premises, and the net fixed assets in relation to the land will transfer as
disposal, accounting treatment will be conduct in line with relevant rules upon receiving of the
relocation compensation.
Pursuant to the urban planning requirements of Hefei Municipal Government and the Government of
Feidong county, the land reserve center of Feidong county will purchase and store the land use right of
an economic development zone located at Feidong county, Hefei city, which is owned by the
Company‘s subordinate companies, Equator Electric and Equator Home Appliance, respectively, with an
area of 19,245.09 sq.m. (Approximately 28.87 mu, Land Use Right Certificate No.: Dong Guo Yong
(2008) No. 0366, the stated use of the land is for industrial purpose) and an area of 46,161.9 sq.m.
(Approximately 69.24 mu, Land Use Right Certificate No.: Dong Guo Yong (2008) No. 0367, the
stated use of the land is for industrial purpose). The total consideration for purchasing and storage is
approximately RMB36 million, of which the consideration for the land use right owned by Equator
Electric and Equator Home Appliance is approximately RMB10.59 million and RMB25.41 million,
respectively. The Company has completed the relocation of occupants of the premises, and the net fixed
assets in relation to the land will transfer as disposal, accounting treatment will be conduct in line with
relevant rules upon receiving of the relocation compensation.
No impairment of relevant assets disposal for reserved lands at year-end.
17. Intangible assets
(1) According to intangible assets item
Trademark Non-patent
Item Land use right Other Total
special right technology
I. Original book
value
1.Balance at
621,593,887.18 283,292,439.34 125,275,031.23 12,406.87 1,030,173,764.62
year-begin
2.Increased in the
70,604,063.42 149,292.45 70,753,355.87
year
(1) purchase 149,292.45 149,292.45
(2)Internal research 70,604,063.42 70,604,063.42
3.Decreased in the
7,897,049.56 471,794.87 8,368,844.43
year
(1) Disposal 471,794.87 471,794.87
(2)otherdecrease 7,897,049.56 7,897,049.56
250
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Trademark Non-patent
Item Land use right Other Total
special right technology
4.Balance at
613,696,837.62 283,292,439.34 195,407,299.78 161,699.32 1,092,558,276.06
year-end
II.Accumulated
depreciation
1.Balance at
104,809,120.83 267,076,417.49 64,838,113.89 413.56 436,724,065.77
year-begin
2.Increased in the
13,001,696.85 3,882,886.80 26,074,656.72 32,339.86 42,991,580.23
year
(1) provision 13,001,696.85 3,882,886.80 26,074,656.72 32,339.86 42,991,580.23
3.Decreased in the
1,126,641.57 1,126,641.57
year
(1)otherdecrease 1,126,641.57 1,126,641.57
4.Balance at
116,684,176.11 270,959,304.29 90,912,770.61 32,753.42 478,589,004.43
year-end
III. Provision for
impairment
IV. Book value
1.Book value at
497,012,661.51 12,333,135.05 104,494,529.17 128,945.90 613,969,271.63
year-end
2.Book value at
516,784,766.35 16,216,021.85 60,436,917.34 11,993.31 593,449,698.85
year-begin
(2) As of the end of 2016, mortgage of intangible assets is as follows:
Name Property certificate serials Area(M2) Net book value Note
Land use right HGYJCZi No.: 0121 27,120.22 20,133,702.23
18. Development expense
Increase during the year Decrease during the year
Balance at Included in Balance at
Item Internal
year-begin current Confirmed as year-end
development Other Other
profits and intangible assets
expenditure
losses
Technology
development for 50,919,386.00 44,090,189.50 3,660,130.40 60,471,010.63 30,878,434.47
Air-conditioner
Technology
development for 2,397,040.54 19,989,721.44 236,104.86 9,353,564.86 12,797,092.26
refrigerator
Other technology
28,401.18 2,168,640.18 69,329.56 779,487.93 1,348,223.87
development
Total 53,344,827.72 66,248,551.12 3,965,564.82 70,604,063.42 45,023,750.60
19. Goodwill
(1) Original value of goodwill
Increase during the Decrease during the
year year
Name of invested Balance at Formation Formation Balance at
unit year-begin from from year-end
Other Other
enterprise enterprise
merger merger
251
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Increase during the Decrease during the
year year
Name of invested Balance at Formation Formation Balance at
unit year-begin from from year-end
Other Other
enterprise enterprise
merger merger
Hefei Meiling Group 7,369,435.
10,922,803.73 3,553,367.77
Holding Co., Ltd. 96
Guangxi Huidian
Household Electrics 5,313,913.50 5,313,913.50
Co., Ltd
7,369,435.
Total 16,236,717.23 8,867,281.27
96
(2) Impairment provision of goodwill
Increase during the Decrease during the
Name of invested Balance at year year Balance at
unit year-begin year-end
Provision Other Provision Other
Hefei Meiling Group 7,369,435.
10,922,803.73 3,553,367.77
Holding Co., Ltd. 96
Guangxi Huidian
Household Electrics 5,313,913.50 5,313,913.50
Co., Ltd
7,369,435.
Total 16,236,717.23 8,867,281.27
96
Note: at the year end, the Company conducted impairment test on goodwill, and provided for
impairment reserve in connection with the difference between the predicted future cash flow of the
investee and the group of assets including the goodwill. The recoverable amount is based on the
predicted future cash flow of the investee.
Subsidiary Hefei Meiling Package Product Co., Ltd. was sold in the period, the goodwill and accrual
impairment provision for former assets are reduced correspondingly
20. Long-term deferred expenses
Amortization
Balance at Increase Other increase Balance at
Item during the
year-begin during the year during the year year-end
year
Relocation expenses of the
1,132,075.48 1,132,075.48
intelligent manufacturing plant
21. Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets without the offset
Balance at year-end Balance at year-begin
Item Deductible Deferred Deductible Deferred
temporary income tax temporary income tax
difference assets difference assets
Deferred income tax assets recognized from
107,230,307.69 16,454,229.77 110,979,461.54 16,646,919.23
property depreciation preparation
Deferred income tax assets recognized from
331,575,430.79 49,736,314.62 338,125,014.55 50,718,752.18
accrual liability
Deferred income tax assets recognized from
35,517,365.78 5,327,604.87 45,269,999.29 6,790,499.89
Dismission welfare
252
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Balance at year-end Balance at year-begin
Item Deductible Deferred Deductible Deferred
temporary income tax temporary income tax
difference assets difference assets
Deferred income tax assets recognized from
82,260,654.75 12,339,098.21 28,526,710.37 4,279,006.56
deferred income
Deferred income tax assets recognized from
1,293,875.10 323,468.74
ir-reparable losses
Deferred income tax assets recognized from
559,249.58 83,887.44
changes in the fair value
Total 558,436,883.69 84,264,603.65 522,901,185.75 78,435,177.86
(2) Deferred income tax liabilities without the offset
Balance at year-end Balance at year-begin
Item Deductible Deferred Deductible Deferred
temporary income tax temporary income tax
difference assets difference assets
Deferred income tax liabilities recognized
12,060,213.30 1,809,032.00
from changes in the fair value
(3) Deferred income tax assets or liabilities listed after set-off
Inter-neutralization at Ending balance after Inter-neutralization at Opening balance after
Item
year-end set-off year-begin set-off
Deferred income
84,264,603.65 78,435,177.86
tax assets
Deferred income
1,809,032.00
tax liabilities
(4) Details of unrecognized deferred income tax assets
Item Balance at year-end Balance at year-begin
Deductible temporary difference 26,140,372.22 40,973,787.35
Deductible loss 373,985,517.42 385,199,882.64
Total 400,125,889.64 426,173,669.99
22. Other non-current assets
Item Balance at year-end Balance at year-begin
Term deposit for pledge 34,615,630.00 44,221,416.00
Note: This project is the three-year term fixed deposit that the subsidiary Zhongshan Changhong has deposited at Guangdong
Development Bank Zhongshan Branch for getting the bank‘s long-term loan. The deposit amount is US $ 6,810,000.00 dollars,
equivalent to 47,240,970.00 Yuan, of which US$ 1,820,000.00, equivalent to 12,625,340.00 Yuan, will expire in 2017 and
reclassify to this project.
23. Short-term loans
(1) Types of short-term loans
Type of loans Balance at year-end Balance at year-begin
253
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Type of loans Balance at year-end Balance at year-begin
Loan in pledge 26,500,000.00 24,268,373.19
Loan in credit 261,843,724.73 34,411,720.00
Total 288,343,724.73 58,680,093.19
New loans in the Year:
1) The Company and Agricultural Bank of China Co., Ltd. Hefei Jinzhai Road Branch have signed a "Trade Financing Business
Service Agreement", the agreement appoints the service period is from January 1, 2016 to December 31, 2016, up to December
31, 2016; the amount of financing under this service agreement is US $ 37,745,960.03 dollars, equivalent to RMB261,
843,724.73.
2) According to the appointment on ―Export Trade Financing Contract‖ signed by the subsidiary Zhongshan Changhong
Company and Agricultural Bank of China Co., Ltd. Zhongshan Nantou Branch, on September 13, 2016, Zhongshan Changhong
Company has applied for financing RMB 26,500,000.00 Yuan to Agricultural Bank of China Co., Ltd. Zhongshan Nantou
Branch by export trade financing, the financing rate is 3.15%, and the time limit is from September 13, 2016 to September 8,
2017.
(2) No overdue short term borrowings unredeemed at year-end.
24. Financial liabilities at fair value through gains and losses
Balance at Balance at
Item
year-end year-begin
Derivative financial liabilities 559,249.58
25. Notes payable
Type Balance at year-end Balance at year-begin
Bank acceptance bill 2,315,706,781.72 2,154,377,903.42
Commercial acceptance bill 319,344,958.58 17,687,020.37
Total 2,635,051,740.30 2,172,064,923.79
Notes expired at year-end without paid
26. Account payable
(1) Age of account payable
Item Balance at year-end Balance at year-begin
Total 2,331,899,310.82 1,604,075,191.50
Including: over 1 year 47,332,805.86 35,963,023.64
(2) No account payable with over one year book age at year-end.
27. Advance payment
(1) Age of advance payment
254
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Item Balance at year-end Balance at year-begin
Total 390,935,440.46 295,604,800.16
Including: over 1 year 13,605,202.15 17,816,277.00
(2) No major account received in advance with over one year age at year-end
28. Wages payable
(1) Types of wages payable
Balance at Increase in this Decrease in this Balance at
Item
year-begin year year year-end
Short-term compensation 104,153,335.66 1,254,948,719.62 1,180,279,200.47 178,822,854.81
After-service welfare- defined
4,085,558.31 89,997,424.04 89,134,760.09 4,948,222.26
contribution plans
Dismiss welfare 7,058,535.43 6,274,897.41 7,512,470.91 5,820,961.93
Total 115,297,429.40 1,351,221,041.07 1,276,926,431.47 189,592,039.00
(2) Short-term compensation
Balance at Increase in this Decrease in this Balance at
Item
year-begin year year year-end
Wages ,bonuses, allowancesand subsidies 94,173,695.60 1,103,672,234.13 1,050,874,026.60 146,971,903.13
Welfare for workers and staff 101,706.00 42,958,549.99 42,959,915.99 100,340.00
Social insurance 2,357,897.57 41,373,821.06 41,232,735.92 2,498,982.71
Including: Medical insurance 2,183,451.95 34,645,902.20 34,483,928.37 2,345,425.78
Work injury insurance 79,354.04 3,444,765.98 3,477,027.37 47,092.65
Maternity insurance 95,091.58 3,283,152.88 3,271,780.18 106,464.28
Housing accumulation fund 6,079,965.72 38,776,870.36 41,530,031.54 3,326,804.54
Labor union expenditure and
1,440,070.77 3,985,093.16 3,682,490.42 1,742,673.51
personnel education expense
Short-termprofitsharingplan 24,182,150.92 24,182,150.92
Total 104,153,335.66 1,254,948,719.62 1,180,279,200.47 178,822,854.81
(3) Defined contribution plans
Balance at Increase in this Decrease in this Balance at
Item
year-begin year year year-end
Basic endowment insurance 3,186,528.80 84,818,196.93 84,137,452.94 3,867,272.79
Unemployment insurance 899,029.51 5,179,227.11 4,997,307.15 1,080,949.47
Total 4,085,558.31 89,997,424.04 89,134,760.09 4,948,222.26
29. Tax payable
Item Balance at year-end Balance at year-begin
Value-added tax 19,079,499.27 36,732,243.37
Business tax 345,276.14
Enterprise income tax 3,423,898.42 506,399.61
Individual income tax 3,205,739.98 1,807,299.13
255
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Item Balance at year-end Balance at year-begin
Urban maintenance and construction tax 3,302,546.79 4,102,776.80
House property tax 5,593,587.71 5,722,887.03
Land-use right tax 4,802,263.59 4,688,835.65
Educational surtax 2,428,555.60 2,917,920.88
Stamp tax 2,944,485.06 2,012,329.38
Construction fund of Water Conservancy Projects 745,069.75 496,683.41
Treatment fund for abandon electric & electronics products 12,328,067.00 9,140,895.00
Other 1,995,318.96 2,056,937.14
Total 59,849,032.13 70,530,483.54
30. Interest payable
(1) Classification of interest payable
Item Balance at year-end Balance at year-begin
Interest on long-term loans for repayment of principal
1,617,352.01 214,328.89
of installment maturity
(2) No significant overdue and unpaid interest at year-end.
31. Dividends payable
Item Balance at year-end Balance at year-begin
City Insurance company 376,729.65 302,954.85
BOC-Fullgoal Tianyi Securities Investment Fund 153,697.50 153,697.50
Hefei Branch of BOC 188,364.80 151,477.40
Hefei collective industry association 188,364.52 151,477.18
Entrust Investment Wuhu of Provincial ABC 150,691.86 121,181.94
Other piecemeal units 1,487,952.90 1,319,711.04
Total 2,545,801.23 2,200,499.91
Note: Balance at year-end refers to the common dividends that not receiving by shareholders.
32. Other payable
(1) Classification of other payable according to nature of account
Nature of account Balance at year-end Balance at year-begin
1.Accrued expenses(expenses occurred without reimbursed) 479,907,162.28 510,133,656.28
2. receivables received temporary and deducted temporary 7,725,476.68 10,538,181.53
3.deposit, margin 88,308,204.63 76,195,308.46
4.not the come-and-go with related parties in statement scope 12,959,890.54 7,470,061.10
5.other 33,679,589.30 39,229,879.96
Total 622,580,323.43 643,567,087.33
256
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
(2) Other significant payables aging over one year as at the year-end mainly refers to the procurement
deposit.
33. Non-current liability due within one year
(1) Classification of non-current liability due within one year
Item Balance at year-end Balance at year-begin
Long term loans due within one year 262,486,600.00
Deferred income transfer to gains and losses within one year 9,715,990.10 11,153,067.68
Total 272,202,590.10 11,153,067.68
(2) Deferred income transfer into profit and loss within 1 year
Amount reckoned
Amount at into non-operation Other Amount at Assets-related/
Itemofgovernment subsidies revenue in the changes year-end Income-related
year-begin
Period
Demolition compensation of
1,797,880.32 1,797,880.32 1,797,880.32 1,797,880.32 Assets-related
Jiangxi Meiling
Demolition compensation of Hefei
2,467,003.32 2,445,033.38 2,403,543.22 2,425,513.16 Assets-related
Meiling
technical reform for Athena
4,286,250.00 4,286,250.00 4,286,250.00 4,286,250.00 Assets-related
Project
Freezer project of Hefei Meiling 734,062.44 734,062.50 734,062.58 734,062.52 Assets-related
New generation of intelligent energy-saving
1,700,000.00 -1,700,000.00 Assets-related
AC and industrialization for keyopponents
Adaptability improvement
R290/D52/13-R290 project for 167,871.60 167,871.60 167,871.60 167,871.60 Assets-related
production of FTXS
Promotion of new industrialization
(annual output of 0.6 million large
and volume environmental 304,412.50 304,412.50 Assets-related
protection energy-saving freezer
project,)
Total 11,153,067.68 9,431,097.8 7,994,020.22 9,715,990.10
Note 1: The project refers to the deferred income transfer to the non-current liability due within one year,
which will expected to amortized next year
Note 2: the industrialization project of the new energy-saving intelligent AC and key parts are not acceptance
in 2016
34. Long-term loans
(1) Classification of long-term loans
Type Amount at year-end Amount at year-begin
Loan in pledge 34,157,788.00 43,662,966.40
Loan in mortgage 3,200,000.00 3,840,000.00
Loan in credit 1,551,000.00 195,501,900.00
257
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Type Amount at year-end Amount at year-begin
Total 38,908,788.00 243,004,866.40
(2) Details of long-term loans at year-end
Amount at
Borrowing Returning Foreign Interest Amount atyear-end
Loan unit year-begin
day day currency rate （RMB）
（RMB）
Zhongshan Branch of China Guangfa
2014.12.24 2017.12.24 USD 3.20% 11,688,480.00
BankNote1
Zhongshan Branch of China Guangfa
2015.01.06 2018.01.06 USD 3.20% 34,157,788.00 31,974,486.40
BankNote2
Ministry of Finance of HefeiNote3 2002-11-21 2017-11-20 RMB 1.80% 651,000.00 1,301,900.00
Note4
Ministry of Finance of Hefei 2004-12-10 2019-12-10 RMB 1.80% 900,000.00 1,200,000.00
Ministry of Finance of HefeiNote5 2006-11-9 2021-11-8 RMB 2.25% 3,200,000.00 3,840,000.00
Anhui branch Import and Export Bank
Note6 2015-12-18 2017-4-18 RMB 2.65% 193,000,000.00
Total 38,908,788.00 243,004,866.40
Note1: On 24 December 2014, subsidiary Zhongshan Changhong entered into Foreign Currency
Mid-Long term Loan Contract with Zhongshan Branch of China Guangfa Bank, agreed that issuing
foreign currency USD1, 800,000.00 to the Company. The loans are contributed for the joint venture
project in Pakistan, which are Zhongshan Changhong Electrics and RUBA GENERAL TRADING FZE.
This borrowing was secured by the fixed deposit of USD 1,820,000.00 saved by Zhongshan Changhong
in China Guangfa Bank Zhongshan Branch. The loans amounting to 12,486,600.00 Yuan after
convertion and the amount has re-classified to non-current liability due within one year
Note 2: on 6 January 2015, subsidiary Zhongshan Changhong entered into Middle and Long Term
Foreign Currency Borrowing Contract with China Guangfa Bank Zhongshan Branch, which agreed that
China Guangfa Bank Zhongshan Branch would provide loans of USD 4,924,000.00 to the Company to
finance the joint venture project conducted by Zhongshan Changhong Appliances Co., Ltd and RUBA
GENERAL TRADING FZE Company in Pakistan. This borrowing was secured by Zhongshan
Changhong with the fixed deposits of USD 86, 000.00 and USD 4, 904,000.00 saved by it in China
Guangfa Bank Zhongshan Branch, respectively.
Note 3: on 1 November 2002, the Company entered into the Agreement Relating to Implementing
Construction Projects through Lending Treasury Bond Funds with the finance office of Hefei, pursuant
to which, the finance office of Hefei lent the treasure bonds or RMB7.16 million related to our
―Technology Reform Project in relation to Nanometer Materials for Retaining Freshness‖ to our
Company, with a terms of 15 years. The lent funds have begun to carry interest commencing from the
date of appropriation of funds by the finance office of Hefei (namely 21 November 2002), and the
Company shall pay the interests to the finance office of Hefei annually on an average basis during the
lending period. The first four years of the loan is grace period. The interest rate per annum applicable to
the lent funds is floating interest rate since 1999 (for interest rate per annum in respect of each batch of
Treasury bond lending capital, it is determined by reference to one-year time deposit rate per annum on
258
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
value date of the prevailing year as published by the PBOC, plus 0.3 percentage points).
Note 4: It was the special Treasury bond capital appropriated by Ministry of Finance of Hefei for
enterprises‘ information reform, received on Dec. 10th, 2004.
Note 5: In August of 2006, the Company signed Asset Mortgage Agreement with Ministry of Finance of
Hefei. It takes five industry crusher chambers which cover an area of 2,322.98 square meters as
mortgage for the Company to get the lending of treasury bond fund which has 15-year term and worthy
of RMB 7,040,000 from the Ministry of Finance of Hefei. The capital on-lending began to bear interest
from the appropriate date (November 9, 2006), which would be paid by stages in the loan period to
Ministry of Finance of Hefei by the Company. The first four years were grace period, during which the
annual interest rate was subject to floating interest rate (the annual interest rate was the annual interest
rate of one year fixed deposit plus 0.3%). On 1 March 2013, according to the Letter Relating to Ceasing
Process of Other Securities in respect of the Properties in Feidong Longgang Industrial Park of Hefei
Meiling Co., Ltd. (HCJ(2006)No.85) issued by the finance office of Hefei, Meiling commenced the
national purchase of its land parcels in Longgang in compliance with the land planning of Hefei
municipal government, which required its properties in Longgang land parcel to be unrestricted. The
real estate for mortgage lifted in 2006 of the Company with registration No. HGYJCZ No.0121 which
was used as the security for treasury bonds lending capital (details were set out in Note VI.15).
Note 6: on 18 December 2015, the Company and the Export-Import Bank Anhui Branch executed a
Borrowing Contract (High-tech Products Export Seller Credit) which agreed that the Export-Import
Bank Anhui Branch would grant to the Company loans with total facilities of RMB250 million.
Utilization of this loan is subject to export of high-tech products only. The term of the loan is 16 months,
and the interest rate is based on export seller credit rate. The loan balance under the contract amounting
to 250 million Yuan at end of the year, and the amount has re-classified to non-current liability due
within one year
35. Long-term wage payable
Balance at
Item Balance at year-end
year-begin
Dismissal welfare 29,696,403.85 38,211,463.86
According to the internal early retirement policy, the long-term payable dismissal welfare bears by the
Company up to end of the year amounting to RMB 29,696,403.85.
36. Account payable special funds
Balance at Increase in Decrease Balance at
Item Reason
year-begin the year in the year year-end
Special fund of technical
Zhongshan Science &
transformation of 1,400,000.00 1,400,000.00
Technology Plan
Zhongshan
37. Projected liability
259
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Item Balance at year-end Balance at year-begin Reason
Product quality guarantee 11,795,030.15 11,146,216.49 Guarantee of product
Guarantee fund for quality service 319,780,400.64 326,978,798.06 Guarantee of product
Total 331,575,430.79 338,125,014.55
Product quality deposit is the maintenance expense provided by the Company under the national policy,
while quality service special guarantee capital is the warranty costs provided for product quality in
addition to such policy.
38. Deferred income
(1) Classification of deferred income
Amount at
Item Amount at year-end
year-begin
Government subsidies---subsidies of development project 67,032,277.62 52,631,208.54
Government subsidies---subsidies of Relocation 75,887,284.87 80,259,410.00
Total 142,919,562.49 132,890,618.54
(2) Government subsidy
Amount Concerned
New
Amount at reckoned into Other Amount at with
Item subsidy in
year-begin non-operatin changes year-end assets/earni
the Year
g income ngs
Demolition compensation of Assets
47,378,064.70 2,403,543.22 44,974,521.48
Hefei Meiling concerned
Assets
Demolition compensation 23,526,710.37 170,701.60 23,356,008.77
concerned
Special fund of the Athena technical Assets
17,736,562.50 4,286,250.00 13,450,312.50
transformation concerned
Technical transformation of propane Assets
11,661,457.52 11,661,457.52
and R410a replace the FCFC-22 concerned
VISA research and application Assets
10,100,000.00 10,100,000.00
project concerned
Demolition compensation of Assets
9,354,634.94 1,797,880.32 7,556,754.62
Jiangxi Meiling concerned
Adaptability improvement
Assets
R290/D52/13-R290 project for 7,258,396.00 167,871.60 7,090,524.40
concerned
production of FTXS
Subsidy fund for the new factory of Assets
5,000,000.00 5,000,000.00
Zhongke Meiling concerned
Intelligent white-goods software platform
Assets
and research and industrialization of typical 4,000,000.00 4,000,000.00
concerned
applications
Capital appropriated from the national
Assets
2,950,000.00 2,950,000.00
treasury concerned
Development and productization of the Assets
2,350,000.00 2,350,000.00
CHIQ AC concerned
Promotion of new industrialization
(annual output of 0.6 million large and Assets
2,435,300.00 456,618.75 304,412.50 1,674,268.75
volume environmental protection concerned
energy-saving freezer project,)
Research and application of frequency
Assets
2,300,000.00 2,300,000.00
conversion controlMCUchip concerned
260
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Amount Concerned
New
Amount at reckoned into Other Amount at with
Item subsidy in
year-begin non-operatin changes year-end assets/earni
the Year
g income ngs
Special fund of strategy emerging Assets
2,000,000.00 2,000,000.00
industry and high-end growth industry concerned
Freezer project of Hefei Assets
2,936,250.03 734,062.58 2,202,187.45
Meiling concerned
Industrialization project of the Assets
-1,700,000.00 1,700,000.00
intelligent energy-savingAC concerned
Assets
Subsidy ofproject development 531,900.00 278,373.00 253,527.00
concerned
Design and application of energy saving Assets
300,000.00 300,000.00
airconditioningduct concerned
Total 132,890,618.54 18,928,657.52 905,693.35 7,994,020.22 142,919,562.49
Note: other movements of this item are attributable to reclassification of the amount to be amortized
over one year to non-current liabilities due within one year.
39. Share capital
Change during theyear（+、-）
Shares
Balance at New transferred Balance at
Item Bonus
year-begin shares from Other Subtotal year-end
share
issued capital
reserve
280,8
Total shares 763,739,205.00 58,67 280,858,676.00 1,044,597,881.00
6.00
40. Capital reserve
Amount at Increase during the Decrease during Amount at
Item
year-begin year the year year-end
Share premium 1,481,014,065.23 1,259,874,046.76 101,100,314.04 2,639,787,797.95
Other capital reserve 48,169,810.90 3,451.80 48,173,262.70
Total 1,529,183,876.13 1,259,877,498.56 101,100,314.04 2,687,961,060.65
Note: The increase in share premiums for the current year is due to the increase in the private placement of new shares in the
current period so as to offset capital reserve of RMB5,141,904.16 Yuan by reducing the acquisition of minority shareholding
from some marketing subsidiaries, offset capital reserve of RMB 95,650,000.00 Yuan by combining Guangdong Changhong
Ridian Technology Co., Ltd. under the same control, and offset capital reserve of RMB 308,409.88 Yuan by the subsidiary
Zhongke Meiling Low Temperature Technology Co., Ltd. to dilute the parent company‘s rights and interests through private
placement of shares to specific natural person; other increase in capital reserve is due to the reckon in of rationed shares
difference.
41. Other comprehensive income
Item Balance at Account in the year Balance at
261
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
year-begin Less: written in year-end
other
comprehensive
Account income in Belong to Belong to
Less :
before previous period parent minority
income tax
income tax in and carried company shareholders
expense
the year forward to after tax after tax
gains and losses
in current
period
Other comprehensive income re-divided into gains/losses
Including: conversion
difference arising
-2,280,500.61 7,798,783.78 5,755,047.56 2,043,736.22 3,474,546.95
from foreign currency
financial statement
42. Surplus reserves
Amount at Increase during the Decrease during Amount at
Item
year-begin year the year year-end
Statutory surplus reserve 251,459,292.02 23,962,426.15 275,421,718.17
Discretionary surplus reserve 115,607,702.16 115,607,702.16
Total 367,066,994.18 23,962,426.15 391,029,420.33
43. Retained profit
Item This year Last year
Amount at the end of last year 817,667,480.44 843,596,827.22
Add: adjustment from undistributed profit at year-begin
Including: retroactive adjustment by Accounting Standards for
Business Enterprise
change of accounting policy
Correction of former material error
Change of combination scope under common control
Amount at the beginning of this year 817,667,480.44 843,596,827.22
Add: net profit attributable to shareholders of parent company for this
220,216,680.96 27,104,893.56
year
Less: withdraw of statutory surplus reserve 23,962,426.15 7,209,888.04
withdraw of discretional surplus reserve
Withdraw of general risk provision
Dividend payable for ordinary shares 45,824,352.27 45,824,352.30
Dividend of ordinary shares transferred to share capital
Amount at the end of this year 968,097,382.98 817,667,480.44
44 Operating income and operating cost
(1) Operating income and operating cost
Item Amount for this year Amount for last year
Main business income 12,025,103,352.55 10,318,999,424.25
Other business income 501,607,514.94 435,200,763.87
Total 12,526,710,867.49 10,754,200,188.12
262
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Item Amount for this year Amount for last year
Main business cost 9,590,231,985.74 8,236,606,146.33
Other business cost 438,161,436.58 390,351,683.30
Total 10,028,393,422.32 8,626,957,829.63
(2) Main business classified according to product
Amount for this year Amount for last year
Product
Operation income Operation cost Operation income Operation cost
Refrigerator,
6,678,568,374.39 5,236,031,795.08 6,017,333,150.01 4,635,965,558.65
freezer
Air-condition 4,158,164,312.32 3,354,925,254.82 3,415,727,210.45 2,844,833,539.24
Washing
508,133,090.63 404,747,868.32 356,011,057.00 293,117,500.61
machine
Small
appliances and
423,162,351.81 379,811,894.02 288,940,970.60 261,832,731.45
kitchen and
toilet
Other 257,075,223.40 214,715,173.50 240,987,036.19 200,856,816.38
Total 12,025,103,352.55 9,590,231,985.74 10,318,999,424.25 8,236,606,146.33
(3) Main business classified according to sales region
Amount for this year Amount for last year
Region
Operation income Operation cost Operation income Operation cost
Domestic 9,108,442,083.44 6,976,734,143.90 8,130,650,603.41 6,273,110,957.69
Overseas 2,916,661,269.11 2,613,497,841.84 2,188,348,820.84 1,963,495,188.64
Total 12,025,103,352.55 9,590,231,985.74 10,318,999,424.25 8,236,606,146.33
Top five clients have income in sales of RMB 4,437,473,136. 69 yuan in total, a 35.42% in total
operation income.
45. Business tax and extra charges
Item Amount for this year Amount for last year
Business tax 895,146.45 1,008,789.43
City construction tax 25,764,035.98 23,575,164.51
Extra charge for education and local education surcharge 18,742,400.86 17,160,932.84
Real estate tax 11,925,656.28 404,921.48
Treatment fund for abandon electrics & electronics 53,619,622.00 45,449,658.00
Land tax 11,078,203.69
Stamp duty 9,221,240.77
Water fund 5,293,129.18
Other 1,318,387.72 250,088.73
Total 137,857,822.93 87,849,554.99
According to the finance and accounting of the Ministry of Finance No. [2016] 22 ―About Printing the Notice of Accounting
Treatment Provisions for Value Added Tax‖, after the overall trial implementation of business tax changing to value-added tax,
the title of "business tax and surcharges" changes to ―taxes and surcharges‖, this account is used to calculate the consumption
tax, city maintenance and construction tax, resource tax, education surcharge and property tax, land use tax, travel tax, stamp
263
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
tax and other related taxes occurred in business operations. The company adjusts property tax, land tax, stamp tax, water
conservancy funds and other taxes and fees to the taxes and additional subject accounting accordingly.
46. Sales expense
Item Amount for this year Amount for last year
Salary , extra charges and laboring charge 516,616,181.17 447,556,061.71
Transport expenses 453,357,684.29 428,165,323.89
Market support 232,609,376.03 138,065,923.05
Air conditioner installation fee 212,014,995.68 132,863,018.76
National three guarantees expense 153,157,117.74 142,589,930.91
Storage lease expenses 110,446,203.15 116,703,905.77
Other expenses 48,585,265.28 34,306,907.77
Travelling expenses 38,814,724.25 38,948,402.40
Advertisement expenses 38,230,903.17 46,857,777.01
Operation activities expenses 17,125,348.72 16,501,466.28
Meeting organization 11,440,400.40 10,618,708.25
House-lease expenses 9,484,909.62 9,083,216.04
Depreciation expenses 6,041,295.37 5,116,523.38
Communication expenses 7,472,043.94 7,030,879.96
Total 1,855,396,448.81 1,574,408,045.18
47. Administration expense
Item Amount for this year Amount for last year
Salary and social insurance etc. 250,588,937.09 186,321,428.76
Trial fee of R&D 50,029,204.84 45,792,844.72
Tax 35,909,877.24
Amortized intangible assets 42,656,480.50 34,093,373.12
Depreciation 20,636,117.00 19,069,317.84
Utilities 10,655,035.88 10,614,175.78
Domestic travelling fee 9,102,131.63 10,340,291.19
Inspection and authentication fee 7,598,269.93 7,849,745.81
Business activities 7,391,394.85 6,129,878.41
Office charge 6,076,143.02 5,786,777.68
Property insurance 4,198,820.70 2,785,476.37
Funds of Board 2,743,185.06 2,029,495.42
Others 60,471,260.23 64,334,351.19
Total 472,146,980.73 431,057,033.53
48. Financial expense
Item Amount for this year Amount for last year
Interest expenditure 25,317,436.95 22,074,815.67
Less: Interest income 115,658,075.99 120,080,403.20
264
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Add: exchange loss -51,103,635.28 -11,082,892.47
procedure charge expenditure 10,595,347.69 5,064,460.35
discount expenditure -9,030,263.29 1,860,545.49
other expenditure 129,461.71
Total -139,879,189.92 -102,034,012.45
49. Loss from Assets depreciation
Item Amount for this year Amount for last year
Bad debt losses -8,988,293.59 796,959.27
Provision for falling price of inventory 10,341,740.28 14,885,861.57
Provision for devaluation of goodwill 5,313,913.50
Total 1,353,446.69 20,996,734.34
50. Changes in fair value gains/loses
Item Amount for this year Amount for last year
Financial assets measured at fair value and whose movements are
12,060,213.30
included in the profit and loss of the current period
Including :Income of fair value changes from derivative financial
12,060,213.30
instruments
Financial liabilities measured at fair value and whose movements are
-559,249.58 81,170.00
included in the profit and loss of the current period
Including :Income of fair value changes from derivative financial
-559,249.58 81,170.00
instruments
Total 11,500,963.72 81,170.00
51. Investment income
(1) Sources of investment income
Item Amount for this year Amount for last year
Long-term equity investment income by equity method -1,724,205.46 -15,983,663.17
Investment income obtained from disposal of long-term equity
10,520,753.99
investment
Investment income obtained from held of finance asset available for
6,693,575.48 5,756,139.46
sales
Investment income obtained from disposal of financial assets
measured at fair value and whose movements are included in the -1,187,641.34 -2,296,400.00
profit and loss of the current period
Investment income obtained from disposal of finance asset available
480,332.00
for sales
Total 14,302,482.67 -12,043,591.71
(2) Long-term equity investment income by equity method
Amount for Amount for Reason of change of this year
Item
this year last year than last year
Changes of net profit of the
Hefei Xingmei Assets Management Co., Ltd. -451,268.70 -225,715.84
invested unit
265
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Amount for Amount for Reason of change of this year
Item
this year last year than last year
ChanghongRuba Electric
-2,427,295.78 -2,537,744.93
Company(Private)Limited
-10,186,901.7 Changes of net profit of the
Sichuan Zhiyijia Network Technology Co., Ltd. 4,567,275.37
0 invested unit and counter
current transaction offset
Hongyuan Dineng Rebao Technology Co. Ltd. -874,437.22 -854,497.32
Sichuan Tianyou Guigu Technology Co., Ltd. -2,538,479.13 -2,178,803.38
-15,983,663.1
Total -1,724,205.46
7
(3) Investment income obtained from disposal of long-term equity investment
Item Amount for this year Amount for last year
Equity income obtained from disposal of Hefei MeiLing
10,520,753.99
Packaging Products Co., Ltd.
(4) Investment income obtained from financial assets available for sales
Item Amount for this year Amount for last year
Dividends of Huishang Bank Co., Ltd. (shareholding 0.0972%) 1,707,274.11 1,707,274.11
Purchase of bank financial products 4,986,301.37 4,048,865.35
Total 6,693,575.48 5,756,139.46
(5) The investment income from disposal of financial assets at fair value through profit or loss refers to
the profit or loss occurred from non-deliverable forward (NDF) transaction.
(6) Investment income obtained from disposal of finance asset available for sales:
Item Amount for this year Amount for last year
Disposal of equity of FuyangWeiao Appliance Marketing Co., Ltd. 480,332.00
Total 480,332.00
52. Non-operation revenue
(1)Non-operation revenue
Amount reckoned
into non-recurring
Item Current Year Last Year
gains/losses in the
Year
Gains from disposal of non-current
4,155,568.27 1,772,955.83 4,155,568.27
assets
Including:Gains from disposal of
4,155,568.27 1,772,955.83 4,155,568.27
fixed assets
Government subsidy 48,274,982.18 37,650,927.30 41,152,549.66
Income of penalty 688,220.18 714,106.32 688,220.18
Other 4,798,906.63 5,387,824.40 4,798,906.63
Total 57,917,677.26 45,525,813.85 50,795,244.74
266
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
(2) Government subsidy
Assets/Income
Item 2016 2015 Resources and basis
related
VAT drawback for the software 7,122,432.52 7,558,226.97 CS [2011]NO. 100 Income-related
products
Project of Athena Luxury 4,286,250.00 4,286,250.00
Deferred income
Asset-related
Refrigerators transfer-in
Other sporadic items 4,096,393.64 4,843,891.28 Income-related
Step-out subsidy for 2016 4,000,000.00 630,000.00 YSWH [2016] Income-related
2,445,033.38 2,467,300.72 Deferred income
Staff dormitory building project Asset-related
transfer-in
Special fund of the internal & external
2,100,000.00 YSWH [2016]No.30 Income-related
economic & trade development in
2016 and port construction
Relocation project of the Jiangxi 1,797,880.32 1,797,880.32 Relocation compensation Asset-related
Meiling Refrigeration
Special fund of foreign trade
1,733,000.00 1,362,000.00
Hefei Treasury Payment
promotion from City Commercial Income-related
Center
Bureau
Policy subsidy of the promotion of 1,538,700.00 HZ〔2015〕 No. 36 Income-related
new industrialization development
Municipal Finance Bureau enterprise HZ〔2014〕 No. 81.
1,521,680.00 1,717,800.00 Income-related
post subsidy HZ〔2013〕 No. 52 etc.
Subsidy for technical transformation 1,217,800.00 HZ〔2015〕 No. 36 Income-related
of fixed assets
Treasury Payment Center
Policy subsidy of service industry 1,120,000.00 of Hefei Economic &
Income-related
development Technology
Development Zone
Tianjin Xintai Industrial
Tianjin Xingtai Industrial Economic 1,014,456.72 Economic Development Income-related
Development Management Center
Management Center
267
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Policy subsidy of promote the Treasury Payment Center
development of new industrialization 1,000,000.00
of Hefei Economic &
Income-related
from Economic & Technology Technology
Development Zone Development Zone
Industrial policy smart home 1,000,000.00 HZ（2016）No. 35 etc. Income-related
appliance technology awards
Power demand side management in 992,000.00 CQ〔2015〕No. 1846 etc. Income-related
2016
NJP production trade enterprise 933,835.00 Nanjing Port (Group) Co.,
Income-related
award Ltd.
Zhongshan 3rd batch of scientific and
808,200.00 Zhongshan Technology
technological innovation projects and Income-related
[2016] No. 252
funds
Management Committee
Technical Transformation fund (H-N 801,721.90 2,127,801.98
of Jingdezhen High &
Income-related
refunds) New-Tech Development
Zone
734,062.50 734,062.50
Transfer-in deferred
Refrigerator project Asset-related
income
Supporting fund of Anhui Branch of 714,733.00
Hefei Government HZ
Income-related
SINOSURE (2014) No.62 etc.
Standard award of Quality & 700,000.00 HZ (2016) No.35 etc. Income-related
Technical Supervision from the City
Step Out government subsidy 695,439.00 1,379,033.00 Finance Bureau of
Income-related
/CZ038001 Zhongshan City
500,000.00 Zhong SW [2016] No.:
Government subsidy for Step Out Income-related
20
Award for the growing enterprise of
Treasury Payment Center
promotion of new-type
500,000.00
of Hefei Economic &
industrialization development from Income-related
Technology
Hefei Economic & Technology
Development Zone
Development Zone
268
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Industry policy-Afterwards subsidy 500,000.00 HZ (2016) No. 35 etc. Income-related
and industrial design award
Policy fund for the 2nd promotion of
service industry development and 500,000.00 Hefei Finance Office Income-related
financing industry for year of 2016
Subsidy for overseas sales from Treasury Payment Center
economic and trade development 490,800.00 of Hefei Economic &
Income-related
bureau of Hefei Economic & Technology
Technology Development Zone Development Zone
Subsidy for equipment and
Treasury Payment Center
instrument from R&D organization
476,189.00 639,000.00 of Hefei Economic &
of Science Technology Bureau of Income-related
Technology
Hefei Economic & Technology
Development Zone etc.
Development Zone
Government subsidy of promoting 456,618.75 Deferred income
Asset-related
new industries transfer-in
Special funds for technical 455,600.00 541,300.00 ZF [2014] No. 108 Income-related
transformation in Zhongshan
450,600.00
HZ （2016 ）No. 35
Industrial Development Income-related
\HZBM（2016）No. 65
Development subsidy for exportation 412,010.25 ZSWZH [2016] No. 36 Income-related
enterprise
Anhui Selected Enterprise Reward
Treasury Payment Center
for the promotion of new-type
300,000.00 of Hefei Economic &
industrialization from Hefei Income-related
Technology
Economic & Technology
Development Zone
Development Zone
Technical reform of the production
278,373.00 HZ （2016 ）No. 35
line for eco-friendly high-quality Asset-related
\HZBM（2016）No. 65
metal pipe
Subsidy from Hefei Economic & 242,600.00 640,650.00 HJQG〔2015〕No. 111
Income-related
Technology Development Zone etc.
269
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Relocation of production base of 170,701.60 251,688.93
Deferred income
Asset-related
Mianyang Meiling transfer-in
R410A adaptive reuse of 167,871.60 167,871.60
Deferred income
Asset-related
C/III/S/13/037/ coolants production transfer-in
Subsidy for brand propagate
2,000,000.00 YWJMCZ [2013] No.8 Income-related
extension aboard
Special funds for enterprise
1,100,000.00 WJXJGH(2015) No. 502 Income-related
development in 2015
Export certification fees in 2014 895,500.00 HSWM[2015] No. 98 Income-related
Nanjing Port Container Development
810,670.00 NGC[2012] No. 12 Income-related
Award in 2014
Second batch of enterprises to
enhance the training of skills training 600,000.00 HRSM[2015] No. 73 Income-related
subsidies in2015
Clause 10- to promote the
Reward for the new products from development of new
500,000.00 Income-related
province industrialization policy
award in 2014
New intelligent terminal
CHIQkitech and toilet whole-set
600,000.00 layout and business Income-related
development and industrialization
model based on internet
Total 48,274,982.18 37,650,927.30
53. Non-operating expenditure
Amount reckoned
into non-recurring
Item Current Year Last Year
gains/losses in the
Year
Loss from disposal of non-current
5,411,002.25 6,221,387.00 5,411,002.25
assets
Including: loss from disposal of fixed
5,411,002.25 6,221,387.00 5,411,002.25
assets
Penalty and late fee 292,483.57 2,099,844.49 292,483.57
Energy saving waste settlement loss 103,156,160.00
Other 246,023.69 3,988,202.85 246,023.69
Total 5,949,509.51 115,465,594.34 5,949,509.51
54. Income tax expenses
270
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Item Amount for this year Amount for last year
Current income tax 33,057,179.03 5,835,302.27
Deferred Income Tax -4,013,163.31 5,391,695.95
Total 29,044,015.72 11,226,998.22
55. Other comprehensive income
Found more in ―VI. 41. Other comprehensive income‖ in the Note
56. Items to cash flow statement
(1) Cash received (paid) from (for) other activities relating to operation/investment/financing
1) Cash received from other activities relating to operation
Item Amount for this year Amount for last year
Government subsidy and rewards 32,627,249.81 19,795,783.78
Margin, deposit 8,003,986.51 6,985,538.71
Royalty for trademark right 1,427,748.49 1,800,000.00
Rent income 8,011,411.57 3,657,466.43
Collection of social security fund 395,438.83 369,556.28
Other 8,006,198.03 8,947,003.09
Compensations 1,186,760.48 93,240.00
Total 59,658,793.72 41,648,588.29
2) Cash paid for other activities relating to operation
Item Amount for this year Amount for last year
Market expenses 219,216,676.44 174,739,404.03
AD charge 29,701,141.25 57,339,812.53
Business travel, meeting and exhibition expenses 58,751,632.09 49,453,564.12
Rental expense 31,857,198.71 33,566,628.17
Labor service charge 2,903,955.79 10,608,044.21
Transport and vehicle charges 21,940,946.74 13,746,033.62
Business activities expenses 23,567,274.72 23,060,460.98
Promotion expenses 2,465,301.13 3,640,833.44
Technology cooperation fee and consultancy charge 675,200.63 1,699,621.68
Charge of inspection, testing, certification and evaluation 15,351,654.42 16,095,613.45
labor insurance premium 3,373,849.39 861,682.18
handling Charges 44,361,568.27 15,713,817.60
Communication fee 9,219,840.88 3,761,928.36
Deposit loans 11,429,695.34 14,485,493.43
Office expenses 7,971,054.43 3,779,052.25
Transfer to limited capital 58,742,173.73
Back saving energy subsidies 65,380,000.00
Others 106,099,219.19 103,657,553.97
271
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Item Amount for this year Amount for last year
Total 647,628,383.15 591,589,544.02
3) Cash received from other activities relating to investment
Item Amount for this year Amount for last year
Interest income arising from bank savings 114,301,729.54 118,842,201.15
Government investment granted 18,447,427.52 10,600,000.00
Margin 392,623.00 2,281,636.39
Total 133,141,780.06 131,723,837.54
4) Cash paid for other activities relating to investment
Item Amount for this year Amount for last year
Equity purchase margin 10,000,000.00
Loses of forward exchange settlement 4,027,616.05
Total 4,027,616.05 10,000,000.00
5) Cash received from other activities relating to financing
Item Amount for this year Amount for last year
Odd shares returned by stock exchange 3,451.80 387.13
6) Cash paid for other activities relating to financing
Item Amount for this year Amount for last year
Pledged time deposit 44,221,416.00
Amount refund to minority shareholders due to the
58,679.33 130,164.45
cancellation of subsidiary
Handling charge of dividend 98,192.48 93,855.90
Handling charge of private placement 168,000.00
Total 324,871.81 44,445,436.35
(2) Supplementary information about consolidated cash flow statement
Item 2016 2015
1. Net profit is adjusted to cash flow of operation
activities:
Net profit 220,169,534.35 21,835,802.48
Add: provision for depreciation of assets 1,353,446.69 20,996,734.34
Depreciation of fixed assets, consumption of oil gas
136,332,022.70 143,974,672.76
assets and depreciation of productive biological assets
Amortization of intangible assets 42,991,580.23 33,243,645.07
Amortization of long-term retained expense
Loss from disposal of fixed assets, intangible assets
1,255,433.98 4,448,699.92
and other long term assets(gain is listed with ―-‖)
Loss from discarding fixed assets as useless (gain is
listed with ―-‖)
Loss from change of fair value(gain is listed with
-11,500,963.72 -81,170.00
―-‖)
Financial expense (gain is listed with ―-‖) -141,444,274.32 -108,181,713.11
Investment loss (gain is listed with ―-‖) -14,302,482.67 12,043,591.71
272
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Item 2016 2015
Decrease of deferred income tax assets (increase is
-5,822,195.31 5,391,695.95
listed with ―-‖)
Increase of deferred income tax liabilities (decrease
1,809,032.00
is listed with ―-‖)
Decrease of inventories (increase is listed with ―-‖) -414,604,157.36 226,802,180.34
Decrease of operational accounts receivable
-41,454,447.96 -193,688,355.76
(increase is listed with ―-‖)
Increase of operational accounts payable (decrease
1,283,989,960.74 72,290,455.60
is listed with ―-‖)
Other -73,381,593.72 -9,705,054.07
Net cash flow arising from operation activities 985,390,895.63 229,371,185.23
2. Major investment and financing activities that do
not involve cash receipts:
Conversion of debt into capital
Switching Company bonds due within one year
financing lease of fixed assets
3. Net change in cash and cash equivalents:
Balance at year-end of cash 3,986,098,419.76 2,121,161,238.01
Less: Balance at year-begin of cash 2,121,161,238.01 2,709,097,193.11
Add: Balance at year-end of cash equivalents
Less: Balance at year-begin of cash equivalents
Net increase in cash and cash equivalents 1,864,937,181.75 -587,935,955.10
(3) No net cash paid for subsidiary obtained in the Year
(4) Cash received by disposal of subsidiary in the Year
Item Amount for this year
Cash or cash equivalent received in the year from disposal of subsidiaries 23,835,710.00
Including: Hefei MeiLing Packing Products Co., Ltd. 23,835,710.00
Less: Cash and cash equivalent held by subsidy on date when controlling rights lose 520,951.21
Including: Hefei MeiLing Packing Products Co., Ltd. 520,951.21
Add: Cash and cash equivalent received in the year for dispose subsidiary in previous
Net cash received from disposal of subsidiaries 23,314,758.79
(5) Cash and cash equivalent
Item Amount for this year Amount for last year
Cash 3,986,098,419.76 2,121,161,238.01
Including: cash in stock 94,415.53 46,496.63
Bank deposits available for payment at any time. 3,810,367,022.13 2,043,331,029.26
Bank deposits available for payment at any time 175,636,982.10 77,783,712.12
Cash equivalents
including: bond investment due within 3 months
273
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Balance of cash and cash equivalents at year end 3,986,098,419.76 2,121,161,238.01
Including: using the restricted cash and cash equivalents of the
parent company or subsidiary of the group
57. Assets with ownership or the right to use restricted
Item Ending Book value Reasons
Monetary fund 72,770,814.87 Margin
Notes receivable 174,237,778.45 Pledged
note1
Intangible assets 20,133,702.23 Pledged
note2
Other non-current assets 34,615,630.00 Pledged
Non-current assets due within 1
12,625,340.00 Pledged
yearnote2
Total 314,383,265.55
Note 1: security for intangible assets was security of land use right. For details, please refer to ―34. Long
term borrowings‖ under this note VI.
Note 2: Other non-current assets and non-current assts due within one year are pledged as time deposit,
found more in 22. Other non-current assets in Note VI
58. Foreign currency
(1) Foreign currency
Ending foreign currency Ending RMB converted
Item Exchange rate
balance balance
Monetary fund
Including: USD 77,034,163.75 6.93700 534,385,993.93
Euro 12,820,549.42 7.30680 93,677,190.50
AUD 976,158.74 5.01570 4,896,119.39
Pakistan Rupi 8,198,667.73 0.06621 542,833.79
IDR 460,321,136.00 0.00051 234,763.78
Account receivable
Including:USD 69,069,088.81 6.93700 479,132,269.07
Euro 8,745,825.04 7.30680 63,903,994.40
AUD 3,925,343.14 5.01570 19,688,343.59
Pakistan Rupi 728,341,621.50 0.06621 48,223,498.76
Other receivables
Including:USD 135,079.07 6.93700 937,043.51
Pakistan Rupi 32,734,809.97 0.06621 2,167,371.77
IDR 245,783,291.72 0.00051 125,349.48
Advance payment
Including: USD 263,168.48 6.93700 1,825,599.75
Euro 208,024.91 7.30680 1,519,996.41
Pakistan Rupi 227,505,716.36 0.06621 15,063,153.48
274
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Ending foreign currency Ending RMB converted
Item Exchange rate
balance balance
IDR 491,041,667.00 0.00051 250,431.25
Accounts payable
Including:USD 1,678,942.56 6.93700 11,646,824.54
Pakistan Rupi 6,375,951.97 0.06621 422,151.78
Other accounts payable
Including:USD 580,465.24 6.93700 4,026,687.37
Pakistan Rupi 126,010,228.89 0.06621 8,343,137.25
IDR 199,246,613.00 0.00051 101,615.77
Advance receivable
Including: USD 34,766,233.55 6.93700 241,173,362.14
Euro 4,330,449.92 7.30680 31,641,731.48
AUD 500,731.03 5.01570 2,511,516.63
Short-term loans
Including:USD 37,745,960.03 6.93700 261,843,724.73
Long-term loans
Including:USD 4,924,000.00 6.93700 34,157,788.00
Non-current assets due within
1y ear
Including:USD 1,800,000.00 6.93700 12,486,600.00
(2) Foreign operational entity
The foreign operational entity of the Company was Changhong Ruba Trading Company (Private)
Limited, mainly operates in Lahore, Pakistan; Recording currency is Pakistan Rupi.
CHANGHONG MEILING ELECTRIC INDONESIA,PT, mainly operates in Jakarta; Recording
currency is IDR.
VII. Changes of consolidation rage
1. Enterprise combined under the different control: Nil
2. Enterprise combined under the same control
(1) Enterprise combined under the same control in the year
275
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Revenue Net profit
Basis of of the of the
Interest consider combined combined Combined
Combined
percentag as the Determin party party party’s net
party’s
Combined e obtained business Combine e basis of from from profit
revenue
party in merger d date combined combined combined during a
during a
business under date year-begi year-begi compariso
comparison
merger the same n to the n to the n
control date date
combined combined
Guangdon Has the
g same
Equity
Changhong controlle 349,645,724.0
98.8554% 2016-1-1 money 615,594.18
Ridian r of the 3
paid in full
Technolog Compan
y Co., Ltd. y
(2) Combined cost
Guangdong Changhong Ridian Technology Co.,
Item
Ltd.
Cash 95,650,000.00
Total 95,650,000.00
(3) Book value of the assets and liabilities from the combined party on combination date
Guangdong Changhong Ridian Technology Co., Ltd.
Item
Combined date At end of last year
Assets:
Monetary Fund 67,851,083.54 67,851,083.54
Note receivable 33,803,990.75 33,803,990.75
Stock 9,553,171.57 9,553,171.57
Fixed assets 46,666,626.48 46,666,626.48
Intangible assets 15,414,228.78 15,414,228.78
Liabilities:
Accounts payable 81,435,705.12 81,435,705.12
Net assets 91,853,396.00 91,853,396.00
Less: minority shareholders' equity 1,051,334.05 1,051,334.05
Net assets acquired 90,802,061.95 90,802,061.95
3. Reversed takeover: Nil
4. Disposal of subsidiary
276
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Other
comprehensive
Difference betweenthe
income
disposal priceand
transferredinto
Ratio of Determination proportion of the
Way ofthe investment
Priceofthe equity the equity Time point of basis forthetime subsidiary’snet assetsenjoy
Subsidiary equity income ,which
disposed disposed control rightlose point of control in aspect of theconsolidated
disposed relatedwiththe
(%) rightlose financialstatement,which
equity
isrespond to the disposal
investment of
investment
original
subsidiary
Hefei MeiLing
Equity Transfer of
Packing Products 23,880,000.00 100% 2016-12-31 10,520,753.99
transfer control rights
Co., Ltd.
5. Subsidiary liquidated
Other
Difference betweenthe comprehensive
disposal priceand income
proportion of the transferredinto
Priceofthe Ratio ofthe Way ofthe Determination basis
Time point of subsidiary’snet assetsenjoy investment
Subsidiary equity equity equity forthe time point of
control rightlose in aspect of theconsolidated income ,which
disposed disposed disposed control rightlose
financialstatement,whichis relatedwiththe
respond to the disposal equity investment
investment of original
subsidiary
Bengbu Meiling
Liquidation Liquidation
Appliance Marketing 93.50% 2016.9
cancelled completed
Co.,Ltd.
Luohe Meiling
Liquidation Liquidation
Appliance Marketing 100.00% 2016.12
cancelled completed
Co.,Ltd.
Total
6. Subsidiary established
Other
balance
Capital that Rati
actually consider o of
Registe RC (10 paid at as the Share-hol voti Minorit
Business ng Consolida
Subsidiary Type red thousan year-en net ding Ratio y’s
nature righ ted (Y/N) interest
place d Yuan) d (10 investm (%)
thousan ent for t
d Yuan) subsidia (%)
ry in
nature
Limite
Changmei Manufact
d Mianya RMB:5, RMB:1, 92.4 911,238
Technology ure and 92.44 Yes
compa ng 000 800 4 .03
Co., Ltd. sale
ny
CHONGHO
NG Limite
MEILING d USD ： USD:30 100.
Jakarta Sale 100.00 Yes
ELECTRIC compa 300 0 00
INDONESI ny
A,PT
277
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
VIII. Equity in other entity
1. Equity in subsidiary
(1) Composition of the enterprise group
Share-holding ratio
Registration Business (%)
Subsidiary Business area Acquire way
place nature Indirectl
Directly
y
Manufactures,
ZhongkeMeilingCryogenicTechnologyCo., Ltd.1) Hefei Hefei 66.76 Investment
sales
Software
MianyangMeilingSoftwareTechnologyCo., Ltd. 2) Mianyang Mianyang 100.00 Investment
development
Manufactures,
MianyangMeilingRefrigeration Co., Ltd.3) Mianyang Mianyang 95.00 5.00 Investment
sales
Manufactures,
JiangxiMeilingAppliance Co., Ld.4) Jingdezhen Jingdezhen 98.75 1.25 Investment
sales
Hefei MeilingApplianceMarketingCo., Ltd.5) Hefei Hefei Sales 99.82 0.18 Investment
Enterprise combined under the
GuangxiHuidian HomeApplianceCo., Ltd.6) Nanning Nanning Sales 100.00
differentcontrol
Xi‘an MeilingApplianceMarketingCo., Ltd.7) Xi‘an Xi‘an Sales 98.50 Investment
Wuhu MeilingApplianceMarketingCo., Ltd.8) Wuhu Wuhu Sales 98.00 Investment
ChangchunMeilingApplianceMarketing Co., Ltd.9) Changchun Changchun Sales 97.00 Investment
Lanzhou MeilingApplianceMarketingCo., Ltd.10) Lanzhou Lanzhou Sales 100.00 Investment
JinanMeilingApplianceMarketing Co., Ltd.11) Jinan Jinan Sales 91.40 Investment
NanchangMeilingApplianceMarketingCo., Ltd.12) Nanchang Nanchang Sales 85.00 Investment
Jingzhou MeilingApplianceMarketingCo., Ltd.13) Jingzhou Jingzhou Sales 96.00 Investment
ShengyangMeilingApplianceMarketingCo., Ltd.14) Shengyang Shengyang Sales 100.00 Investment
Wuhan MeilingApplianceMarketingCo., Ltd.15) Wuhan Wuhan Sales 91.00 Investment
Zhengzhou MeilingApplianceMarketingCo., Ltd.16) Zhengzhou Zhengzhou Sales 95.00 Investment
ShijiazhuangMeilingApplianceMarketing Co., Ltd.17) Shijiazhuang Shijiazhuang Sales 95.33 Investment
MianyangMeilingApplianceMarketing Co., Ltd.18) Mianyang Mianyang Sales 93.80 Investment
Chengdu MeilingApplianceMarketing Co.,Ltd.19) Chengdu Chengdu Sales 94.80 Investment
Guiyang MeilingApplianceMarketingCo.,Ltd.20) Guiyang Guiyang Sales 100.00 Investment
Fuzhou MeilingApplianceMarketingCo., Ltd.21) Fuzhou Fuzhou Sales 99.00 Investment
NanjingMeilingApplianceMarketingCo., Ltd.22) Nanjing Nanjing Sales 99.00 Investment
Hefei MeilingWhiteApplianceMarketing Co., Ltd.23) Hefei Hefei Sales 95.00 Investment
Taiyuan MeilingApplianceMarketingCo., Ltd.24) Taiyuan Taiyuan Sales 100.00 Investment
ChangshaMeilingApplianceMarketingCo., Ltd.25) Changsha Changsha Sales 97.00 Investment
HohhotMeilingApplianceMarketingCo., Ltd.26) Hohhot Hohhot Sales 95.00 Investment
HangzhouMeilingApplianceMarketing Co., Ltd.27) Hangzhou Hangzhou Sales 95.00 Investment
ChongqingMeilingApplianceMarketingCo., Ltd.28) Chongqing Chongqing Sales 98.00 Investment
KunmingMeilingApplianceMarketingCo.,Ltd.29) Kunming Kunming Sales 95.50 Investment
ShanghaiMeilingApplianceMarketing Co.,Ltd.30) Shanghai Shanghai Sales 99.00 Investment
NantongMeilingApplianceMarketingCo.,Ltd.31) Nantong Nantong Sales 92.00 Investment
Guangzhou MeilingApplianceMarketingCo., Ltd.32) Guangzhou Guangzhou Sales 98.00 Investment
TianjinMeilingApplianceMarketing Co., Ltd.33) Tianjin Tianjin Sales 100.00 Investment
278
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Share-holding ratio
Registration Business (%)
Subsidiary Business area Acquire way
place nature Indirectl
Directly
y
UrumchiMeilingApplianceMarketingCo., Ltd.34) Urumchi Urumchi Sales 90.00 Investment
Harbin MeilingApplianceMarketingCo., Ltd.35) Harbin Harbin Sales 95.00 Investment
BeijingMeilingApplianceMarketing Co., Ltd.36) Beijing Beijing Sales 99.00 Investment
Manufactures, Enterprise combined under the
Hefei MeiLing NonferrousMetalProductsCo., Ltd.37) Hefei Hefei 100.00
sales differentcontrol
Manufactures, Enterprise combined under the
GuangdongChanghongRidianTechnologyCo., Ltd.38) Zhongshan Zhongshan 99.855
sales same control
ChangmeiTechnologyCo., Ltd. 39) Mianyang Mianyang Sales 92.44 Investment
CHONGHONG MEILING ELECTRIC
Jakarta Jakarta Sales 100.00 Investment
INDONESIA,PT40）
ChanghongRubaTradingCompany41) Pakistan Pakistan Sales 60.00 Investment
Manufactures, Enterprise combined under the
Sichuan ChanghongAirConditionerCo., Ltd.42) Mianyang Mianyang 100.00
sales same control
Manufactures, Enterprise combined under the
Zhongshan ChanghongApplianceCo., Ltd43) Zhongshan Zhongshan 90.00 10.00
sales same control
Manufactures, Enterprise combined under the
Hefei Meiling Group HoldingCo., Ltd.44) Hefei Hefei 100.00
sales differentcontrol
Manufactures, Enterprise combined under the
MeilingEquatorElectric(Hefei)Co., Ltd. 45) Hefei Hefei 100.00
sales differentcontrol
Manufactures, Enterprise combined under the
Hefei Equator Electric Co., Ltd. 46) Hefei Hefei 100.00
sales differentcontrol
Hongyuan Earth Energy Heat Pump Technology Co. Manufactures,
Mianyang Mianyang 51.00 Investment
Ltd.47) sales
Note:
1)Zhongke Meiling Low Temperature Technology Company Limited (―Zhongke Meiling‖), the predecessor of which was
Zhongke Meiling Low Temperature Technology Limited Liability Company, was established on 29 October 2002 by joint
contribution from the Company and Technical Institute of Physics and Chemistry, CAS (―TIPC‖), with registered capital of
RMB60 million upon the establishment, among which, the Company made capital contribution of RMB42 million (including
the assets in specie at the consideration of RMB35,573,719.70 as evaluated by Beijing Zhongzheng Appraisal Co., Ltd. with
issuance of the Appraisal Report (ZZPBZ(2002)No.029) and cash contribution of RMB6,426,280.30) accounting for 70% of
the aforesaid registered capital, and TIPC made capital contribution of RMB18 million with intangible assets of such value
(namely the single compressor mixture industrial low temperature refrigeration technology) as evaluated by Jingzhongzi Assets
Appraisal Co., Ltd. with issuance of the Appraisal Report (ZZPBZ(2002)No.225) accounting for 30% of the aforesaid
registered capital. The paid-in of the above registered capital has been verified by Huazheng Accounting Firm by issuance of
the Assets Verification Report(HZYZ(2002)No.B157) dated 16 October 2002.
In October 2014, according to the relevant provision under the Management Rules on Application of State Owned Assets by
Central Business Organs, TIPC transferred the 30% equity interests held by it in Zhongke Meiling Low Temperature
Technology Company Limited to its wholly-owned subsidiary Zhongke Xianxing (Beijing) Assets Management Co., Ltd
(―Zhongke Xianxing‖) which would perform management over the operating assets of TIPC. Upon consideration and approval
at the 37th meeting of the 7th Board of Directors of Hefei Meiling Co., Ltd, it is agreed to waive the pre-emptive right.
On 10 August 2015, all the founders signed the Founder Agreement of Zhongke Meiling Low Temperature Technology
Company Limited, pursuant to which, they decided to change the firm type of Zhongke Meiling Low Temperature Technology
Company Limited to a joint stock company. Based on the net assets of RMB96,431,978.25 as audited by Xinyong Zhonghe
CPA as of 30 June 2015, an aggregate of 65,000,000 shares have been converted at the proportion of 1:0.67, which are to be
279
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
held by the original shareholders according to their respective entitlement. In case that the net assets exceed registered capital,
the balance shall be recorded in capital reserve. On 28 August 2015, Xinyong Zhonghe CPA reviewed the registered capital and
paid-in thereof in respect of the stock reform, and issued Assets Verification Report (XYZH/2015CDA40161). The Company
registered industrial and commercial information on 11 September 2015.
On November 25, 2016, the first Extraordinary Shareholders' General Meeting of Zhongke Meiling Low Temperature
Technology Co., Ltd. in 2016 considered and approved the Proposal on the Issuance Plan of the Company, Zhongke Meiling
Company issued 3,150,000 shares to specific investors by the non-public offering of shares at 1.63 Yuan per share. The
current capital increase was verified by the No.［XYZH/2016CDA40294］capital verification report issued by ShineWing CPA
(special general partnership). After the completion of the issuance, the share capital of Zhongke Meiling Company increased to
68,150,000 shares and the Company's shareholding ratio was 66.76%.
2) Mianyang Meiling Software Technology Co., Ltd. (hereinafter referred to as Meiling Software Company) was established on
Jan. 24, 2014. It is a limited company jointly invested by the Company and Mianyang Meiling Refrigeration Co., Ltd., being
approved by the Industrial and Commerce Bureau of Peicheng District, Mianyang City. The company owes registered capital of
RMB 5 million, including RMB 4.95 million contributed by Meiling Company in cash, accounted for 99% of the registered
capital; Mianyang Meiling Refrigeration Co., Ltd. contributed RMB 50000 in cash with 1% of the register capital occupied.
The above mentioned register capital have been verified by verification report of Chuanjinlai Yanzi No.[2014] B039 issued by
Sichuan Jinlai Accounting Firm Co., Ltd. In July 2016, the shares of Mianyang Meiling Software Technology Co., Ltd., held by
the Company has transferred to Sichuan Changhong AC Co., Ltd., after transferred, Changhong AC has 99% equity of
Mianyang Software, the Company has no shares of Mianyang Software directly
3) Mianyang Meiling Refrigeration Co., Ltd. (hereinafter referred to as Mianyang Meiling Company), a limited liability
company jointly set up by the Company and China-tech Meiling Company, was founded on Mar. 6, 2009. Its registered capital
and paid-in capital was RMB 50 million upon establishment, of which, the Company invested RMB 45 million, accounting for
90% of the registered capital; Zhongke Meiling Company invested RMB 5 million, accounting for 10% of the registered capital.
The capital receipt was verified by the verification report [CXKY (2009) No. 008] of Sichuan Xingrui Certified Public
Accountants. On 19 January 2011, the Company increase RMB 50 million in capital of Mianyang Meiling, of which RMB 95
million invested by the Company, a 95% of total register capital while RMB 5 million invested by Zhongke Meiling, a 5% of
total capital occupied. The paid-in capital has been verified by Capital Verification Report ［XYZH/2010CDA6040］from
Chengdu Branch of Shinewing CPA CO., Ltd. In 2011, Zhongke Meiling entered into ―Equity Transfer Agreement‖ with
Jiangxi Meiling Refrigeration Co., Ltd. 5 percent equity of Mianyang Meiling held by Zhongke Meiling was transferred to
Jiangxi Meiling Refrigerator. In September 2013, Jiangxi Meiling Refrigeration was combined by Jiangxi Meiling Appliance
Co., Ld, than 5 percent equity was transfer to Jiangxi Meiling Appliance.
4) Jiangxi Meiling Appliance Co., Ld.(Jiangxi Meiling Appliance Co.,) was a limited liability company jointly established by
the Company and Mianyang Meiling on 23 May 2011. Register capital of the company totally as RMB 50 million, RMB
49.375 million invested by the Company, 98.75% in total register capital while RMB 0.625 million invested by Mianyang
Meiling , a 1.25% in total register capital occupied. The initial investment RMB 10.50 million was received dated 13 May 2011
with RMB 10 million from the Company and RMB 0.5 million from Mianyang Meiling. Rest of the capital shall be invested
fully within 2 years after the joint ventures established according to capital requirement. The initial investment capital were
verified by the Capital Verification Report [JXKYZi(2011) No. 090] issued from Jingdezhen Xingci CPA Co., Ltd. Second
capital RMB 39.5 million was fully funded on 28 July 2011, the Company contributed RMB 39.375 million while Mianyang
Meiling Company invested RMB 125,000, the contributions have been verified by the capital verification report [Jing Xing
Kuai Yan Zi (2011) No.: 134] issued from JDZ Xingci CPA Co., Ltd.
5) Hefei Meiling Appliance Marketing Co., Ltd. (Meiling Marketing Company for short) is the limited company jointly
invested by the Company and Mianyang Meiling Company on 21 Oct. 2009. Registered capital and paid-up capital was RMB
10 million, including RMB 9.9 million invested by the Company, a 99% of the registered capital; Mianyang Meiling Company
contributed RMB 0.1 million, a 1% of the registered capital. The above mentioned paid-up register capital have been verified
280
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
by verification report of [Wan An Lian Xin Da Yan Zi (2009) No. 074] issued by Anhui An Lian Xin Da Accounting Firm Co.,
Ltd. On 25 Nov. 2010, the Company increased capital RMB 45 million, registered capital amounting to RMB 55 million,
including RMB 54.9 million contributed by the Company, a 99.82% of the registered capital, while Mianyang Meiling invested
RMB 0.1 million, a 0.18% of the registered capital. The increased capital have been verified by verification report of [Wan Hua
Shen Zheng Da Kuai Yan Zi (2010) No. 1514] issued by Anhui Hua Shen Zhengda CPA Co., Ltd.
6) Guangxi Huidian Home Appliance Co., Ltd. (Guangxi Huidian for short) established in March 2010 with registered capital
of RMB 5 million. The Company invested RMB 1 million, accounted for 20% of the registered capital; Meiling Marketing
acquired 44% equity interests from the minority shareholders in 2014. In 2015, Meiling Marketing and Jiangxi Meiling
Appliances entered into equity transfer agreements with minority shareholders respectively, to acquire as the transferees the
35.6% and 0.4% equity interests of Guangxi Weidian held by minority shareholders. Upon completion of equity transfer in
April 2015, Meiling Marketing and Jiangxi Meiling Appliances held the entire equity interests of Guangxi Weidian as a whole.
7) Xi‘an Meiling Appliance Marketing Co., Ltd. (Xi‘an Meiling for short) was established dated 13 April 2011 with registered
capital of RMB 3 million; Meiling Marketing invested RMB 1.83 million, accounted for 61% of the registered capital. After
Meiling Marketing acquired 24% equity interests from the minority shareholders in 2014, Meiling Marketing acquired 13.5%
equity interests from the minority shareholders in 2015, Meiling Marketing the Company totally holds 98.5% equity of the
Xi‘an Meiling.
8) Wuhu Meiling Appliance Marketing Co., Ltd. (Wuhu Meiling for short) was established dated 24 December 2010 with
registered capital of RMB 6 million; the Company invested RMB 2.16 million, accounted for 36% of the registered capital.
After Meiling Marketing acquired 65% equity interests from the minority shareholders in 2014, Meiling Marketing the
Company totally holds 98% equity of the Wuhu Meiling;
9) Changchun Meiling Appliance Marketing Co., Ltd. (Changchun Meiling for short) was established dated 22 December 2010
with registered capital of RMB 3million; Meiling Marketing invested RMB 2.91 million, accounted for 97% of the registered
capital.
10) Lanzhou Meizhilai Meiling Appliance Marketing Co., Ltd., originally named Lanzhou Meiling Appliance Marketing Co.,
Ltd. (Meiling for short) was established dated 25 March 2011 with registered capital of RMB 3 million; Meiling Marketing
invested RMB 1.215 million, accounted for 40.50% of the registered capital. After Meiling Marketing acquired 11% equity
interests from the minority shareholders in 2013, Meiling Marketing acquired 48.5% equity interests from the minority
shareholders in 2016, Meiling Marketing the Company totally holds 100% equity of Lanzhou Meiling.
11) Jinan Meiling Appliance Marketing Co., Ltd. (Jinan Meiling for short) was established dated 3 June 2011 with registered
capital of RMB 3 million; Meiling Marketing invested RMB 1.08 million, accounted for 36% of the registered capital; after
Meiling Marketing acquired 55.4% equity interests from the minority shareholders in 2015, Meiling Marketing totally holds
91.4% equity of the Jinan Meiling.
12) Nanchang Meiling Appliance Marketing Co., Ltd. (Nanchang Meiling for short) was established dated 5 January 2011 with
registered capital of RMB 3 million; Meiling Marketing invested RMB 1.08 million, accounted for 36% of the registered
capital. After the Company acquired 49% equity interests from the minority shareholders in 2014, Meiling Marketing totally
holds 85% equity of Nanchang Meiling.
13) Jingzhou Meiling Appliance Marketing Co., Ltd. (Jingzhou Meiling for short) was established dated 10 January 2011 with
registered capital of RMB 4 million; Meiling Marketing invested RMB 2.4 million, accounted for 60% of the registered capital.
In 2013, the Company purchased 20% equity from minority; After Meiling Marketing acquired 1% equity interests from the
minority shareholders in 2014, Meiling Marketing acquired 15% equity interests from the minority shareholders in 2016,
Meiling Marketing totally holds 96% equity of Jingzhou Meiling.
281
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
14) Shengyang Meiling Appliance Marketing Co., Ltd. (Shengyang Meiling for short) was established dated 26 January 2011 with
registered capital of RMB 3 million; Meiling Marketing invested RMB 2.844 million, accounted for 94.8% of the registered
capital. After Meiling Marketing acquired 5.2% equity interests from the minority shareholders in 2016, Meiling Marketing
totally holds 100% equity of Shenyang Meiling.
15) Wuhan Meiling Appliance Marketing Co., Ltd. (Wuhan Meiling for short) was established dated 10 January 2011 with
registered capital of RMB 5 million; Meiling Marketing invested RMB 4.55 million, accounted for 91% of the registered
capital.
16) Zhengzhou Meiling Appliance Marketing Co., Ltd. (Zhengzhou Meiling for short) was established dated 17 January 2011 with
registered capital of RMB 3 million; Meiling Marketing invested RMB 1.08 million, accounted for 36% of the registered
capital. In 2013, Meiling Marketing purchased 10% equity from minority; Meiling Marketing signed equity transfer agreement
with the minority shareholders in April 2015, to acquire as the transferee the 39% equity interests of Zhengzhou Meiling held
by minority shareholders, Meiling Marketing acquired 10% equity interests from the minority shareholders in February 2016;
Upon completion of such equity transfer, Meiling Marketing held in aggregate the 95% equity interests of Zhengzhou Meiling.
17) Shijiazhuang Meiling Appliance Marketing Co., Ltd. (Shijiazhuang Meiling for short) was established dated 14 January 2011
with registered capital of RMB 3 million; Meiling Marketing invested RMB 1.08 million, accounted for 36% of the registered
capital; After Meiling Marketing acquired 27.33% equity held by the minority in 2014, holding 63.33% equity of the
Shijiazhuang Meiling; After Meiling Marketing acquired 32% equity held by the minority in 2015, totally holding 95.33%
equity of Shijiazhuang Meiling;
18) Mianyang Meiling Appliance Marketing Co., Ltd. (Mianyang Meiling for short) was established dated 27 January 2011 with
registered capital of RMB 5 million; Meiling Marketing invested RMB 2.6 million, accounted for 52% of the registered capital.
After Meiling Marketing purchased 33% equity from minority in 2013, and purchased 8.8% equity from minority in 2015,
Meiling Marketing totally holds 93.8% equity of Mianyang Meiling.
19) Chengdu Meiling Appliance Marketing Co., Ltd. (Chengdu Meiling for short) was established dated 26 January 2011 with
registered capital of RMB 5 million; Meiling Marketing invested RMB 4.17 million, accounted for 83.4% of the registered
capital; After Meiling Marketing purchased 9% equity from minority in 2015, and purchased 0.8% equity from minority in
2016, Meiling Marketing totally holds 94.8% equity of Chengdu Meiling.
20) Guiyang Meiling Appliance Marketing Co., Ltd. (Guiyang Meiling for short) was established dated 24 January 2011 with
registered capital of RMB 3 million; Meiling Marketing invested RMB 0.78 million, accounted for 26% of the registered
capital; after Meiling Marketing purchased 18% equity from minority in 2013, Meiling Marketing purchased 42% equity from
minority in 2015, Meiling Marketing purchased 14% equity from minority in 2016, Meiling Marketing held in aggregate the
100% equity interests of Guiyang Meiling.
21) Fuzhou Meiling Appliance Marketing Co., Ltd. (Fuzhou Meiling for short) was established dated 25 January 2011 with
registered capital of RMB 3 million; Meiling Marketing invested RMB 2.97 million, accounted for 99% of the registered
capital.
22) Nanjing Meiling Appliance Marketing Co., Ltd. (Nanjing Meiling for short) was established dated 14 Feb. 2011 with
registered capital of RMB 3 million; Meiling Marketing invested RMB 2.97 million, accounted for 99% of the registered
capital.
23) Hefei Meiling White Appliance Marketing Co., Ltd. (White Appliance for short) was established dated 21 January 2011 with
registered capital of RMB 6 million; Meiling Marketing invested RMB 5.1 million, accounted for 85% of the registered capital;
Meiling Marketing signed equity transfer agreement with the minority shareholders in 2015, to acquire as the transferee the
10% equity interests of White Appliance held by minority shareholders. Upon completion of such equity transfer in February
2015, Meiling Marketing held in aggregate the 95% equity interests of White Appliance.
282
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
24) Taiyuan Meiling Appliance Marketing Co., Ltd. (Taiyuan Meiling for short) was established dated 18 January 2011 with
registered capital of RMB 4 million; Meiling Marketing invested RMB 1.59 million, accounted for 39.75% of the registered
capital; after Meiling Marketing purchased 45.5% equity from minority in 2013, Meiling Marketing purchased 14.75% equity
from minority in 2016, Meiling Marketing totally holds 100% equity of the Taiyuan Meiling.
25) Changsha Meiling Appliance Marketing Co., Ltd. (Changsha Meiling for short) was established dated 26 January 2011 with
registered capital of RMB 5 million; Meiling Marketing invested RMB 1.8 million, accounted for 36% of the registered capital;
the Company entered into equity transferred agreement with minority shareholders in 2014, transferred 50% equity of
Changsha Meiling held by the minority, after Meiling Marketing purchased 11% equity from minority in 2016, Meiling
Marketing totally holds 97% equity of Changsha Meiling.
26) Hohhot Meiling Appliance Marketing Co., Ltd., originally called Hohhot Xiangyou Appliance Marketing Co., Ltd.(Hohhot
Meiling for short) was established dated 21 Feb. 2011 with registered capital of RMB 3 million; Meiling Marketing invested
RMB 1.65 million, accounted for 55% of the registered capital; after Meiling Marketing purchased 28% equity from minority
in 2013, Meiling Marketing purchased 12% equity from minority in 2016, Meiling Marketing totally holds 95% equity of the
Hohhot Meiling.
27) Hangzhou Meiling Appliance Marketing Co., Ltd. was established dated 17 Feb. 2011 with registered capital of RMB 3
million; Meiling Marketing invested RMB 2.655 million, accounted for 88.5% of the registered capital; Meiling Marketing
signed equity transfer agreement with the minority shareholders in 2015, to acquire as the transferee the 6.5% equity interests
of Hangzhou Meiling held by minority shareholders. Upon completion of such equity transfer in February 2015, Meiling
Marketing held in aggregate the 95% equity interests of Hangzhou Meiling.
28) Chongqing Meiling Appliance Marketing Co., Ltd. (Chongqing Meiling for short) was established dated 1 March 2011 with
registered capital of RMB 3 million; Meiling Marketing invested RMB 2.55 million, accounted for 85% of the registered
capital; After Meiling Marketing purchased 13% equity from minority in 2015, Meiling Marketing totally holds 98% equity of
Chongqing Meiling.
29) Kunming Meiling Appliance Marketing Co., Ltd. (Kunming Meiling for short) was established dated 28 Feb. 2011 with
registered capital of RMB 3 million; Meiling Marketing invested RMB 1.395 million, accounted for 46.5% of the registered
capital; after Meiling Marketing purchased 40% equity from minority in 2013, Meiling Marketing purchased 9% equity from
minority in 2016, Meiling Marketing totally holds 95.5% equity of the Kunming Meiling.
30) Shanghai Meiling Appliance Marketing Co., Ltd. (Shanghai Meiling for short) was established dated 9 March 2011 with
registered capital of RMB 3 million; Meiling Marketing invested RMB 2.97 million, accounted for 99% of the registered
capital.
31) Nantong Meiling Appliance Marketing Co., Ltd. (Nantong Meiling for short) was established dated 8 March 2011 with
registered capital of RMB 3 million; Meiling Marketing invested RMB 1.74 million, accounted for 58% of the registered
capital; In 2013, after Meiling Marketing purchased 34% equity from minority, Meiling Marketing totally holds 92% equity of
the Nantong Meiling.
32) Guangzhou Meiling Appliance Marketing Co., Ltd. (Guangzhou Meiling for short) was established dated 13 May 2011 with
registered capital of RMB 5 million; Meiling Marketing invested RMB 4.3 million, accounted for 86% of the registered capital;
after Meiling Marketing acquired 12% equity interests from the minority shareholders in 2014, Meiling Marketing totally held
the 98% equity interests of Guangzhou Meiling.
33) Tianjin Meiling Appliance Marketing Co., Ltd. (Tianjin Meiling for short) was established dated 2 March 2011 with
registered capital of RMB 3 million; Meiling Marketing invested RMB 2.565 million, accounted for 85.5% of the registered
capital; In 2015, Meiling Marketing and Jiangxi Meiling Appliances entered into equity transfer agreements with minority
shareholders respectively, to acquire as the transferees the 14.1% and 0.4% equity interests of Guangxi Weidian held by
283
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
minority shareholders. Upon completion of equity transfer in December 2015, Meiling Marketing totally held the entire equity
interests of Tinjian Meiling.
34) Urumchi Meiling Appliance Marketing Co., Ltd. (Urumchi Meiling for short) was established dated 4 March 2011 with
registered capital of RMB 3 million; Meiling Marketing invested RMB 2.7 million, accounted for 90% of the registered capital.
35) Harbin Meiling Appliance Marketing Co., Ltd. (Harbin Meiling for short) was established dated 6 April 2011 with registered
capital of RMB 3 million; Meiling Marketing invested RMB 1.08 million, accounted for 36% of the registered capital; Meiling
Marketing acquired 41.5% equity interests from the minority shareholders in 2014, Meiling Marketing acquired 17.5% equity
interests from the minority shareholders in 2015, Meiling Marketing totally held the 95% equity interests of Harbin Meiling.
36) Beijing Meiling Appliance Marketing Co., Ltd. (Beijing Meiling for short) was established dated 28 March 2011 with
registered capital of RMB 3 million; Meiling Marketing invested RMB 2.97 million, accounted for 99% of the registered
capital.
37) Hefei Meiling Nonferrous Metal Products Co., Ltd. (Nonferrous Metal) was the Sino-foreign joint venture jointly set up by
original Meiling Group, Hefei Meiling Copper Co., Ltd. And Singapore Kim Shin Development Co., Ltd., which have been originally
approved by the [WJMWFZZ(1996) No.349] of Foreign Trade and Economic Committee of Anhui Province. Its registered
capital was US$ 2.92 million upon establishment, of which, original Meiling Group invested US$ 1.46 million (monetary
capital), accounting 50% of the registered capital, Hefei Meiling Copper Co., Ltd invested US$ 0.584 million (monetary capital of RMB
0.18 million and real assets of US$ 0.404 million), accounting 20% of registered capital while Singapore Kim Shin Development Co., Ltd
invested US$ 0.876 million (monetary capital), accounting 30% of the registered capital. The above mentioned investment
verified by the verification report of [HSWZ(1995) No. 0737], [HSWZ(1996) No. 328] and [HSWZ(1998) No. 088] from
Anhui CPAs Co., Ltd. In July 2008, approved by [HWS(2008) No.53] from Foreign Trade Economic Cooperation Bureau of
Hefei City, 30% equity and 20% equity held by Singapore Kim Shin Development Co., Ltd and Hefei Meiling Copper Co., Ltd
respectively transferred to original Meiling Group Totally. The Company‘s register capital came into RMB 24,286,808.00 after
transference, and was not the joint-venture any more.
38) Guangdong Changhong Ridian Technology Co., Ltd. (hereinafter referred to as the Company, the company) is a limited
liability company invested and established by Sichuan Changhong Electric Co., Ltd. (hereinafter referred to as Sichuan
Changhong) and Sichuan Changhong Motor Transport Co., Ltd. (hereinafter referred to as Changhong Motor Transport
Company) on May 25, 2016. The registered capital and paid-in capital are RMB 40 million Yuan , of which Sichuan
Changhong has invested 32 million Yuan by monetary capital, accounting for 80% of the registered capital; Changhong
Motor Transport Company has invested 8 million Yuan , accounting for 20% of the registered capital. The official receipts of
registered capital have been verified by original Sichuan Junhe Accounting Firm [No. JHYZ (2006) 3027]. The company
increased registered capital of 43 million Yuan on January 4, 2007, changing from 40 million Yuan to 83 million Yuan , for
the newly increased 43 million Yuan , Sichuan Changhong invested 1.8 million Yuan , Guangdong Xiongfeng Electric Co., Ltd.
invested 40 million Yuan , and Kou Huameng and other 9 natural person shareholders invested 1.2 million Yuan , at the same
time, the shareholders' meeting considered and agreed to transfer the investment of 8 million Yuan of Changhong Motor
Transport Company to Sichuan Changhong Innovation Investment Co., Ltd., the structure of the registered capital after changes
was that Sichuan Changhong invested 33.8 million Yuan , accounting for 40.72%；Guangdong Xiongfeng Electric Co., Ltd.
invested 40 million Yuan , accounting for 48.19%; Sichuan Changhong Innovation Investment Co., Ltd. Invested 8 million
Yuan , accounting for 9.64%; Kou Huameng and other 9 natural person shareholders invested 1.2 million Yuan , accounting for
1.45%. The change of registered capital was verified by Zhongshan Promise Accounting Firm [No. ZCHZ (2007)501010].
On February 18, 2009, 7 natural person shareholders transferred total 0.76% stock rights to Hu Zhiheng, after the transfer, the
registered capital of the company was still 83 million Yuan , the structure of registered capital after changes was that Sichuan
Changhong invested 33.8 million Yuan , accounting for 40.72%; Guangdong Xiongfeng Electric Co., Ltd. invested 40 million
Yuan , accounting for 48.19%; Sichuan Changhong Innovation Investment Co., Ltd. invested 8 million Yuan , accounting for
284
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
9.64%; Hu Zhiheng and other two natural person shareholders invested 1.2 million Yuan , accounting for 1.45%.
On October 9, 2014, the company held the shareholders meeting which considered and agreed Kou Huameng to transfer its
stock rights of total 250,000 Yuan which accounts for 0.301% of the company's registered capital to Sichuan Changhong
Innovation Investment Co., Ltd. at the cost of 317,802 Yuan . The other shareholders of the Company waived the right of
pre-emption. On December 11, 2014, the company held the shareholders meeting which considered and agreed Guangdong
Xiongfeng Electric Co., Ltd. to transfer its stock rights of total 40 million Yuan which accounts for 48.19 % of the company's
registered capital to Sichuan Changhong Electric Co., Ltd. at the cost of 43,977,300 Yuan . The other shareholders of the
Company waived the right of pre-emption. The structure of registered capital after changes was that Sichuan Changhong
invested 73.8 million Yuan , accounting for 88.92%; Sichuan Changhong Innovation Investment Co., Ltd. Invested 8.25 million
Yuan , accounting for 9.94%; Hu Zhiheng and another natural person shareholder invested 950,000 Yuan , accounting for
1.14%.
On January 4, 2016, Sichuan Changhong and Sichuan Changhong Innovation Investment Co., Ltd. transferred total 98.855% of
the Company‘s stock rights they held to the Company. After the transfer, the Company directly holds 98.855% stock rights of
Changhong Ridian.
39) Changmei Technology Co., Ltd. (Changmei Technology for short) was invested and set up on May 12, 2016 in order to
promote intelligent transformation and implement the company‘s intelligent life project according to the company's strategic
planning and business development needs. Changmei Technology has registered capital of 50 million Yuan , of which the
Company subscribed and paid 45 million Yuan in cash, accounting for 90% of the registered capital, and Changmei
Management Group team subscribed and paid 5 million Yuan in cash, accounting for 10% of the registered capital.
40) CHANGHONG MEILING ELECTRIC INDONESIA, PT.(Indonesia Changhong for short) is a subsidiary established in
Indonesia and jointly invested by Zhongshan Changhong and Sichuan Changhong in 2016, the company‘s registered capital is
6 million US dollars, of which Zhongshan Changhong subscribed and paid 5.88 million US dollars in cash, accounting for 98%
of the registered capital, Changhong Air Conditioning subscribed and paid 120,000 US dollars in cash, accounting for 2% of
the registered capital.
41) Changhong Ruba Trading Company (Private) Limited (―Changhong Ruba‖) was a joint venture established by Zhongshan
Changhong Appliances Company Limited and RUBA GENERAL TRADING FZE Company (―RUBA‖) on 5 August 2011
with the approval from Guangdong Development and Reform Commission by issuance of the Approval Relating to Joint
Construction of a Manufacturing and Selling Platform Project in Pakistan by Zhongshan Changhong Appliances Company
Limited (YFGWZ(2011)958). The resolution of the second extraordinary shareholders' meeting of Zhongshan Changhong in
2016 passed the "Proposal on the Company's Capital Increase to Changhong Ruba Trading Company (Private) Limited", and
agreed that the company and UAE RUBA Company jointly increase capital to Changhong Ruba Trading Company(Private)
Limited which was invested by both sides in Pakistan at an earlier stage, Zhongshan Changhong invested 3.84 million US
dollars in this capital increase, and UAE RUBA Company invested 2.56 million US dollars, the shares held by both sides
remained unchanged. After the capital increase, the company‘s registered capital became 12.4 million US dollars, of which
Zhongshan Changhong Electric Co., Ltd. Invested 7.44 million US dollars in cash, shareholding ratio was 60%, UAE RUBA
Company invested 4.96 million US dollars in cash, and shareholding ratio was 40%.
42) Sichuan Changhong Air-conditioners Co., Ltd.(Changhong Air-conditioner for short), a limited liability company jointly set
up by Sichuan Changhong and Changhong Chuangtou, was founded on November 28, 2008. Its registered capital was RMB
200 million upon establishment, of which, Sichuan Changhong invested RMB 298 million (RMB 210,088,900 invested by
monetary capital while RMB 87,911,100 invested by real material), equivalent to RMB 198 million shares, accounting for 99%
285
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
of the registered capital; and Changhong Chuangtou invested RMB 3 million, accounting for 1% of the registered capital with
equivalent of RMB 2 million shares. The registered capital receipt was verified by the verification report [CGYYZ (2008) No.
177] of Sichuan Guangyuan Certified Public Accountants Co., Ltd. and [HLTHYZ(2008) No. 12-006] of Sichuan Henglitai
Certified Public Accountants Co., Ltd. In December 2009, the Company obtained 100% equity of Changhong Air-conditioner
by consolidated under the same control.
43) Zhongshan Changhong Electric Co., Ltd.( Zhongshan Changhong), was the original Guangdong Changhong Electric Co.,
Ltd., and is a limited liability company jointly set up by Sichuan Changhong and China Minmetals on May 22, 2001. Its
registered capital was RMB 80 million upon establishment, of which, Sichuan Changhong invested RMB 72 million, including
RMB 69.3 million biding for the estate/ non-estate from original Zhongshan Sanrong Air-conditioner Co., Ltd. And its patent
use-right of RMB2.7 million, accounting for 90% of the registered capital; Chine Minmetals invested RMB 8 million in
monetary capital accounting 10% of the registered capital. The Company changed its name originally from Guangdong
Changhong Electric Co., Ltd in July 2003. In December 2009, the Company obtained 90% equity of Zhongshan Changhong by
consolidated under same control. 10% equity held by China Minmetals has been transferred by Changhong Air-conditioner on
April 11, 2010. On 25 May 2014, the Company increased RMB 36 million to Zhongshan Changhong, and Changhong AC
increased RMB 4 million. In 2016, according to the overseas development strategy of the Company and the development and
operation needs of the subsidiaries, the Company and the wholly-owned subsidiary Changhong Air Conditioning have
increased capital of RMB 64 million Yuan to Zhongshan Changhong according to the existing shareholding ratio, among
which the capital increase of the Company was RMB 57.6 million Yuan , and the capital increase of Changhong Air
Conditioning was RMB 6.4 million Yuan . After the completion of this capital increase, the registered capital Zhongshan
Changhong shall increase to RMB 184 million Yuan , the shareholding ratio of the company and Changhong Air Conditioning
remained unchanged and was still 90% and 10%, of which the Company invested 165.6 million Yuan , accounting for 90% of
the registered capital, Changhong Air Conditioning invested 18.4 million Yuan , accounting for 10% of the registered capital.
44) Hefei Meiling Group Holding Co., Ltd (Meiling Group), was the state-owned company originally approved by People‘s Government of
Hefei Province and established authorized by SASAC of Hefei City. On July 14, 2008, 100% state-owned equity of Meiling Group has
freely transferred to Xingtai Holding by Hefei SASAC. Agreement by the approval of < State-owned property agreement
transfer from Meiling Group> [ HGZCQ(2010) No.34] of Hefei SASAC on April 9, 2010, 100% state-owned property of
Meiling Group after partial assets and liabilities separated transferred to the Company from Xingtai Holding as amount of
RMB 113.2 million. The re-registration of industrial and commercial procedure for Meiling Group after separated partial assets
liability has finished on July 28, 2010. The new Meiling Group has register capital of RMB 80 million, and has been verified
by the [AD(2010)YZD No. 016] from Anhui Anding CPAs Co., Ltd.
45) Meiling Equator Appliance (Hefei) Co., Ltd.( Equator Appliance for short) was the Sino-foreign joint venture jointly set up by original
Meiling Group and EQUATOR INVESTMENTS (USA) INC.( EQUATOR for short), which have been approved by the
[SWZWFZZ(2004) No.0103] of Approval Certificate of Foreign Enterprise from People‘s Government of Anhui Province. Its
registered capital was US$ 3 million upon establishment, of which, Sino company invested US$ 2.25 million in machinery
equipment, accounting 75% of the registered capital while foreign company invested US$ 0.5 million in monetary capital and
US$ 0.25 million in intangible assets, amounting to US$0.75 million, accounting 25% of the registered capital. The above
mentioned investment verified by the verification report of [WYAYZ (2004) No. 135] from Anhui Yongan CPAs Co., Ltd. In
July 2007, approved by [HWJ(2007) No.136] from Foreign Trade Economic Cooperation Bureau of Hefei City, 25% equity
held by EQUATOR transferred to Anhui Meiling Electric Co., Ltd. Totally. The Company‘s register capital came into RMB
24,793,200 after transference, and was not the joint-venture any more. 25% equity owned by Anhui Meiling Electric Co., Ltd
has been transferred totally to original Meiling Group in July 2009.
46) Hefei Equator Appliance Co., Ltd.( Equator Appliance) was jointly set up by original Meiling Group and Yingkaite Appliance on
September 26, 2007. Its register capital was RMB 12 million, among which, original Meiling Group invested RMB 8,670,600 in
monetary capital, accounting 72.255% in registered capital; Equator Appliance invested RMB 3,329,400 in the assessment
286
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
value of intangible assets (land-use right), accounting 27.745% of total registered capital. The investment being verified by
[WYAZ(2004) No. 135] from Anhui Yongan CPAs Co., Ltd.
47) Hongyuan Ground Energy Heating Pump Technology Company (―Hongyuan Ground Energy‖) was established as a limited
liability company with joint capital contribution from Sichuan Changhong Air Conditioner Company (―Changhong Air
Conditioner‖) and Hengyouyuan Science & Technology Development Group on 28 August 2015, with the approval from the
Industrial and Commercial Administration Office of Fucheng district, Mianyang, Sichuan province. The registered capital of
the company is RMB50 million, among which, RMB25.5 million is contributed by Changhong Air Conditioner in cash with
shareholding proportion of 51%, and the remaining RMB24.5 million is contributed by Hengyouyuan Science & Technology
Development Group in cash with shareholding proportion of 49%.
(2) Major non-wholly-owned subsidiary
Dividend
Gains/losses Balance of
Shareholdi distributed to
attributable to minority’s
Subsidiary ng of minority
minority in the interest at
minority announced in the
Year year-end
Year
Zhongke Meiling 33.23% 2,426,850.66 292,500.00 37,520,947.21
Hongyuan Ground Energy 49.00% 251,349.47 9,722,977.49
Changhong Ridian 1.14% 197,605.39 1,248,939.44
(3) Financial information for major non-wholly-owned subsidiary
Ending balance
Subsidiary Non-current
Current assets Non-current assets Total assets Current liabilities Totalliabilities
liability
Zhongke
95,736,799.26 79,041,552.96 174,778,352.22 56,884,199.81 5,000,000.00 61,884,199.81
Meiling
Hongyuan
Ground 94,131,015.35 214,113.11 94,345,128.46 74,502,317.25 74,502,317.25
Energy
Changhong
201,344,325.02 59,154,559.91 260,498,884.93 151,381,017.63 151,381,017.63
Ridian
(Continued)
Opening balance
Subsidiary Non-current
Current assets Non-current assets Total assets Current liabilities Totalliabilities
liability
Zhongke
110,871,612.72 23,171,786.54 134,043,399.26 28,073,877.64 5,000,000.00 33,073,877.64
Meiling
Hongyuan
Ground 25,708,356.81 45,480.97 25,753,837.78 16,423,984.68 16,423,984.68
Energy
Changhong
111,208,245.86 62,080,855.26 173,289,101.12 81,435,705.12 81,435,705.12
Ridian
(Continued)
Current Year
Subsidiary Total comprehensive Cash flow from
Operation income Net profit
income operation activity
Zhongke
93,528,664.17 8,112,300.61 8,112,300.61 17,598,849.36
Meiling
287
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Subsidiary Current Year
Hongyuan
Ground 43,213,417.74 512,958.11 512,958.11 18,468,908.62
Energy
Changhong
495,075,275.53 17,264,471.30 17,264,471.30 81,480,606.59
Ridian
(Continued)
Last Year
Subsidiary Total comprehensive Cash flow from
Operation income Net profit
income operation activity
Zhongke
92,111,076.79 6,858,233.25 6,858,233.25 -8,138,362.46
Meiling
Hongyuan
Ground 18,346,958.57 -670,146.90 -670,146.90 -79,832.60
Energy
Changhong
349,645,724.03 615,594.18 615,594.18 17,903,129.02
Ridian
(4) Major limitation on using enterprise group‘s assets and liquidate debts of enterprise group: Nil
(5) Offering financial supporting or other supports for structured entity that included in consolidation
statement scope: Nil
288
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
2. Changes of owner‘ equity shares in subsidiary and its impacts
Chengdu Guiyang Kuming Taiyuan Jiangzhou Shenyang Zhengzhou Changsha Hohhot Lanzhou
Item Zhongke Meiling Total
Meiling Meiling Meiling Meiling Meiling Meiling Meiling Huidian Meiling Meiling
Originalratio ofsharesheld 70.00% 94.00% 86.00% 86.50% 85.25% 81.00% 94.80% 85.00% 86.00% 83.00% 51.50%
Equity purchased from
-3.24% 0.80% 14.00% 9.00% 14.75% 15.00% 5.20% 10.00% 11.00% 12.00% 48.50%
minority
Ratio of shares held at
66.76% 94.80% 100.00% 95.50% 100.00% 96.00% 100.00% 95.00% 97.00% 95.00% 100.00%
period-end
Cash 2.00 4.00 14.00 15.00 11.00 11.00 9.00 15.00 12.00 333,779.00 333,872.00
Acquisition cost/total disposal
2.00 4.00 14.00 15.00 11.00 11.00 9.00 15.00 12.00 333,779.00 333,872.00
consideration
Less: net assets of subsidiary
measured by equity shares -308,409.88 -207,617.71 98,584.79 -251,298.63 -1,705,062.28 -903,669.21 -495,032.36 -1,080,438.58 167,599.27 -194,991.57 -236,105.88 -5,116,442.04
obtainedbydisposed
Balance 308,409.88 207,619.71 -98,580.79 251,312.63 1,705,077.28 903,680.21 495,043.36 1,080,447.58 -167,584.27 195,003.57 569,884.88 5,450,314.04
Including:
-308,409.88 -207,619.71 98,580.79 -251,312.63 -1,705,077.28 -903,680.21 -495,043.36 -1,080,447.58 167,584.27 -195,003.57 -569,884.88 -5,450,314.04
Capitalpublicreserveadjusted
On November 25, 2016, the first extraordinary general meeting of the subsidiary Zhongke Meiling considered and approved the Proposal on the Company‘s Stock Issuance Plan, the Company gave up the
right of preemption, Zhongke Meiling issued stock of 3,150,000 shares this time, after the issuance of shares, the stock rights held by the Company in Zhongke Meiling were diluted to 66.76%, the balance
between the net asset shares calculated by the new shareholding ratio after the stock issuance of subsidiary and the net asset shares before the stock issuance of subsidiary calculated by the proportion of
original shareholding ratio before the stock issuance of subsidiary was -308,409.88 Yuan, and should be included in the capital reserve.
The balance between the newly achieved long-term equity investment by purchasing stock rights of minority shareholders of some marketing subsidiaries and the net asset shares held by the subsidiary
continuously calculated from the purchase date and calculated by the newly increased shareholding ratio was -5,141,904.16 Yuan, and should be included in the capital reserve.
289
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
3. Equity in joint venture or affiliated enterprise
(1) Major joint venture or affiliated enterprise
Share holding
(%) Accounting
treatment for
Main office Registe Business investment of
Joint venture or affiliated enterprise place r place nature Direct Indire
ly ctly joint venture or
affiliated
enterprise
Affiliated enterprise:
1.ChanghongRubaElectricCompany Lahore, Manufactures,
Lahore 40.00 Equity
(Private)Ltd. Pakistan sales
2.Hefei Xingmei Assets Management Co., Rental,
Hefei Hefei 48.28 Equity
Ltd. agency
3.Sichuan Zhiyijia Network Technology
Mianyang Mianyang Sales 30.00 Equity
Co., Ltd.
4.Hongyuan Dineng Rebao Technology Co. R & D, sales,
Mianyang Mianyang 49.00 Equity
Ltd. after-sales
5.Sichuan Tianyou Guigu Technology Co., Manufactures,
Mianyang Mianyang 25.00 Equity
Ltd. sales
(2) Financial information for major Joint venture: Nil
(3) Financial information for affiliated enterprise
Ending balance /CurrentYear
HefeiXingmei
Item ChanghongRubaEl Sichuan Zhiyijia Hongyuan Dineng SichuanTianyou
Assets
ectricCompany(Pri NetworkTechnology RebaoTechnology GuiguTechnology
Management Co.,
vate)Ltd. Co.,Ltd. Co. Ltd. Co.,Ltd.
Ltd.
Currentassets: 53,816,804.37 4,306,112.28 1,082,166,887.90 110,218,752.45 46,813,516.00
Including:cash and cash equivalent 3,218,558.81 4,230,072.28 432,181,490.05 3,089,747.24 36,370,617.75
Non-currentassets 87,139,096.04 22,951,140.57 14,581,224.90 4,316,949.46 42,568,210.38
Total assets 140,955,900.41 27,257,252.85 1,096,748,112.80 114,535,701.91 89,381,726.38
Currentliability 51,373,683.63 1,584,509.70 1,058,052,880.39 61,339,639.80 54,110,854.39
Mom-currentliability 1,700,000.00 4,078,409.09
Totalliabilities 51,373,683.63 1,584,509.70 1,059,752,880.39 61,339,639.80 58,189,263.48
Minority‘sinterest 113,729.76
Equity attributable to shareholder of
89,582,216.78 25,672,743.15 36,995,232.41 53,082,332.35 31,192,462.90
parent company
Share of net assets measured by
35,832,886.70 12,394,800.39 11,098,569.71 26,010,342.85 7,798,115.73
shareholding
Adjustmenttime
--Goodwill
Unrealized profit of the internal
6,783,242.24 1,718,196.04 3,239,277.40 15,398.22
downstreamtransactions
Unrealized profit of the internal
265,029.89
upstreamtransactions
290
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Other
Book value of the equity investment
29,314,674.36 12,394,800.39 9,380,373.67 22,771,065.45 7,782,717.50
for affiliate
Fair value of equity investment for the
affiliateswith consideration publicly
Operation income 123,489,213.94 1,140,362.57 3,453,729,444.24 186,783,858.84 6,509,473.40
Financialexpenses 171,233.87 -4,426.04 -10,069,596.05 -48,439.86 -1,241,884.84
Income taxexpenses 1,001,622.63
Netprofit -7,067,882.80 -934,690.76 12,027,151.46 2,990,569.80 -10,086,049.29
Netprofitofdiscontinuingoperation
Othercomprehensiveincome 6,028,246.66
Total comprehensiveincome -1,039,636.14 -934,690.76 12,027,151.46 2,990,569.80 -10,086,049.29
Dividend received from affiliates in the
Year
(Continued)
Opening balance /LastYear
ChanghongRubaEle HefeiXingmei
Item Sichuan Zhiyijia Hongyuan Dineng SichuanTianyou
ctricCompany Assets
Network Technology RebaoTechnology GuiguTechnology
Management Co.,
(Private)Ltd Co.,Ltd. Co. Ltd. Co.,Ltd.
Ltd.
Currentassets: 80,097,168.57 4,422,052.11 1,049,476,856.75 23,764,511.93 72,222,287.99
Including:cash and cash equivalent 7,375,329.25 4,422,051.68 91,309,812.52 8,883,320.31 55,646,748.59
Non-currentassets 89,542,558.20 24,020,971.98 1,601,922.21 735,873.42 33,684,137.62
Total assets 169,639,726.77 28,443,024.09 1,051,078,778.96 24,500,385.35 105,906,425.61
Currentliability 79,017,873.85 1,835,590.18 1,026,110,698.01 14,504,686.26 7,727,913.42
Mom-currentliability 6,900,000.00
Totalliabilities 79,017,873.85 1,835,590.18 1,026,110,698.01 14,504,686.26 14,627,913.42
Minority‘sinterest
Equity attributable to shareholder of
90,621,852.92 26,607,433.91 24,968,080.95 9,995,699.09 91,278,512.19
parent company
Share of net assets measured by
36,248,741.17 12,846,069.09 7,490,424.28 4,897,892.55 22,819,628.05
shareholding
Adjustmenttime
--Goodwill
Unrealized profit of the internal
-365,542.81 2,677,325.98 852,389.87 -1,568.58
downstreamtransactions
Unrealized profit of the internal
392,444.88
upstreamtransactions
Other
Book value of the equity investment
29,713,680.32 12,846,069.09 4,813,098.30 4,045,502.68 22,821,196.62
for affiliate
Fair value of equity investment for the
affiliateswith consideration publicly
Operation income 106,976,700.85 1,770,062.00 2,211,431,774.61 6,373,887.46 2,809,349.48
Financialexpenses 94,584.75 -4,571.75 -4,333,752.73 -1,250.90 -543,578.15
Income taxexpenses 4,755.05
291
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Netprofit -5,264,779.35 -467,514.17 -25,031,919.05 -4,300.91 -8,721,487.81
Netprofitofdiscontinuingoperation
Othercomprehensiveincome 1,227,315.18
Total comprehensiveincome -4,037,464.17 -467,514.17 -25,031,919.05 -4,300.91 -8,721,487.81
Dividend received from affiliates in the
Year
(4) Financial summary for non-important Joint venture and affiliate enterprise
Ending balance / Current
Item Opening balance / Last Year
Year
Affiliate:
Total book value of investment
Total amount measured by shareholding
ratio
--net profit -10,437,028.50 -8,152,786.56
--Other comprehensiveincome
-- Total comprehensiveincome -10,437,028.50 -8,152,786.56
(5) Major limitation on capital transfer ability to the Company from joint venture or affiliates: Nil
(6) Excess loss occurred in joint venture or affiliates: Nil
(7) Unconfirmed commitment with joint venture investment concerned: Nil
(8) Intangible liability with joint venture or affiliates investment concerned: Nil
4. Major conduct joint operation: Nil
5. Structured body excluding in consolidate financial statement: Nil
IX. Relevant risks related with financial instrument
The major financial instruments of the Company include borrowings, account receivables, account
payables, transactional financial assets, transactional financial liabilities, the details of which are set out
in Note 6. Risks related to these financial instruments include exchange risks and interest rate risks. The
management of the Company controls and monitors the risk exposures to ensure the above risks are
under control.
In connection with exchange risks, in order to prevent from exchange risks arising from foreign
currency transaction amount, foreign currency dominated loans and interest expenditure, the Company
entered into several forward exchange contracts with banks. Fair value of the forward exchange contract
which has been recognized as derivative financial instrument as of 31 December 2016 has been included
in profits and losses. As export business is increasing, if risks that are out of control of the Company
occur such as appreciation of RMB, the Company will mitigate the relevant risks by adjusting its sales
policy.
The Company‘s interest rate risk arises from bank borrowings and interest-bearing debt. Financial
liabilities at floating rate expose the Company to cash flow interest rate risk, and financial liabilities at
fixed rate expose the Company to fair value interest rate risk. The Company will determine the
292
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
respective proportion of contracts at fixed and floating rates based on the prevailing market conditions.
As of 31 December 2016, the interest-bearing debts mainly referred to borrowing contracts at floating
rate denominated in RMB with total amount of 281,251,000.00, borrowing contracts at fixed rate
denominated in USD with total amount of 308,488,112.73. Risks relating to change of fair value of
financial instruments arising from movement of interest rate mainly related to bank borrowings at fixed
rate. As for borrowings at fixed rate, the Company aims to keep its floating rate. Risks relating to
change of cash flow of financial instruments arising from movement of interest rate mainly related to
bank borrowings at floating rate. The Company establishes its policy to keep floating rate for these
borrowings so as to eliminate fair value risk arising from movement of interest rate.
X. Fair value
1. Asset and liability measured by fair value at end of the year and fair value measurement level
F ai r v al u e at y e ar- e n d
Item
1st level 2nd level 3rd level Total
Financial assets measured by fair value and with variation reckoned into current gains/losses
1. Transactional financial assets
(1) Derivative financial assets 12,060,213.30 12,060,213.30
Financial liabilities measured by fair value and with variation reckoned into current gains/losses
1. Transactional financial liabilities
(1) Derivative financial liabilities 559,249.58 559,249.58
The derivative contract is measured by fair value on 2nd level, which is the real-time quote on foreign
exchange market on balance sheet date
XI. Related parties and related transaction
(I) Relationship of related parties
1. Controlling shareholder and ultimate controller
(1) Controlling shareholder and ultimate controller
Controlling shareholder and Place of Legal
Type of Nature of Organization
registratio representativ
entity business code
ultimate controller n e
Sichuan Changhong Electric Co., Mianya Manufactur
4,616,244,222 24.88% 24.88%
LTD ng e and sales
Sichuan Changhong Electronic Holding Group is the controlling shareholder of Sichuan Changhong
Appliances, and the SASAC Mianyang office holds 100.00% equity interests of Sichuan Changhong
Electronic Holding Group, which means that SASAC Mianyang office is the ultimate controller of the
Company.
(2) Register capital and change thereof of controlling shareholder
Increase Decrease
Controlling shareholder Opening balance during the during the Ending balance
year year
Sichuan Changhong Electric Co.,
4,616,244,222 4,616,244,222
LTD
293
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
(3)Shares held by the controlling shareholder and its changes on equity
Amount of shares held Shareholding ratio (%)
Controlling shareholder Ratio at
Ending balance Opening balance Ratio at year-end
year-begin
Sichuan Changhong Electric Co.,
259,871,791 189,994,153 24.88% 24.88%
LTD
2. Subsidiary
Found more in Note ―VIII. 1 (1) Enterprise group composition‖
3. Joint venture and affiliated enterprise
Major Joint venture and affiliated enterprise of the Company found more in Note ―VIII. 3 (1) major
joint venture and affiliated enterprise‖. Other Joint venture and affiliated enterprise that have related
transactions occurred with the Company in the Year or occurred in last period, and with balance results:
Joint venture and affiliated enterprise Relationship
Hefei Meiling Sole Energy Technology Co., Ltd. Affiliated enterprise of Subsidiary Meiling Group
ChanghongRubaElectricCompany(Private)Ltd. Affiliated enterprise of Subsidiary Zhongshan Changhong
Hefei Xingmei Assets Management Co., Ltd. Affiliated enterprise of the Company
Affiliated enterprise of the Company, sharing the same
Sichuan Zhiyijia Network Technology Co., Ltd. controlling shareholder with the Company and actual
controller
Affiliated enterprise of Subsidiary Changhong
Hongyuan Dineng Rebao Technology Co. Ltd.
Air-conditioning
Affiliated enterprise of Subsidiary Changhong
Sichuan Tianyou Guigu Technology Co., Ltd.
Air-conditioning
4. Other related parties
Other related parties Relationship
Control by same controlling shareholder and ultimate
Huayi Compressor Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Mold Plastic Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Jijia Fine Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Package Printing Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Precision Electronics Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Jiahong Industrial Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong New Energy Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
081 Electronic Group
controller
Control by same controlling shareholder and ultimate
Guangdong Changhong Electronics Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Electronic Products Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Xinrui Technology Co., Ltd
controller
294
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Other related parties Relationship
Control by same controlling shareholder and ultimate
Sichuan Changhong Power Source Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Lighting Technology Co.,Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Hongwei Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
CHANGHONG(HK)TRADINGLIMITED
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong International Hotel Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Communication Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Service Exp. Appliance Service Chain Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong International Travel Agency Co., Ltd.
controller
Control by same controlling shareholder and ultimate
PT.CHANGHONGELECTRICINDONESIA
controller
Control by same controlling shareholder and ultimate
Sichuan CCO Display Device Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Hongxin Software Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Devices Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
CHANGHONGELECTRICMIDDLEEASTFZE
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Gerun Renewable Resources Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Hefei Changhong Industrial Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Lejiayi Chain Management Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Minsheng Logistics Co., LTD
controller
Control by same controlling shareholder and ultimate
ChanghongEuropeElectrics.r.o
controller
Control by same controlling shareholder and ultimate
Chengdu Changhong Property Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Anhui Xinhao PDP Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Huafeng Corp. Group
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Network Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Chengdu Changhong Electronic Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Guangyuan Hongcheng Industrial Co., Ltd.
controller
Control by same controlling shareholder and ultimate
BVCH Optronics (Sichuan) Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Beijing Changhong Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Electronic System Co., Ltd.
controller
295
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Other related parties Relationship
Control by same controlling shareholder and ultimate
081 Electronic Group Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Group Finance Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Yibing Hongxing Electronics Co., Ltd.
controller
Sichuan Changhong Intelligent Manufacturing Technology Control by same controlling shareholder and ultimate
Co., Ltd. controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Property Service Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Hongcheng Construction Engineering Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Hefei Changhong New Energy Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Property Co., Ltd.
controller
Sichuan Changhong Intelligent Health Technology Co., Control by same controlling shareholder and ultimate
Ltd. controller
Control by same controlling shareholder and ultimate
Sichuan Huanyu Industrial Co. Ltd.
controller
Mianyang Technology Town Big Data Technology Co., Control by same controlling shareholder and ultimate
Ltd. controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Education Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Shenzhen Yijia‘en Technology Co. Ltd.
controller
Control by same controlling shareholder and ultimate
CHANGHONGELECTRIC(AUSTRALIA)
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Diandianbang Technology Co., Ltd.
controller
Sichuan Hongyu Metal Manufacture Co., Ltd. Affiliate enterprise of controlling shareholder
Sichuan Changxin Refrigeration Parts Co., Ltd. Affiliate enterprise of controlling shareholder
Mianyang Highly Electric Co., Ltd. Affiliate enterprise of controlling shareholder
Sichuan Changhe Technology Co., Ltd. Affiliate enterprise of controlling shareholder
Hengyouyuan Technology Development Group Co., Ltd. The investor has major influence on the subsidiary
(II) Related transactions
1. Purchasing commodity
Current Year Last Year
Related parties Content (10 thousand (10 thousand
Yuan) Yuan)
Purchasing
Sichuan Changhong Electric Co., LTD 14,456.41 9,519.51
commodity
Purchasing
Sichuan Changhong Electronics Group Co., Ltd. 0.37
commodity
Purchasing
Huayi Compressor Co., Ltd. 44,592.84 51,119.55
commodity
Purchasing
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 42,763.92 34,993.69
commodity
Purchasing
Sichuan Changhong Jijia Fine Co., Ltd. 21,372.67 15,319.03
commodity
296
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Current Year Last Year
Related parties Content (10 thousand (10 thousand
Yuan) Yuan)
Purchasing
Sichuan Changhong Package Printing Co., Ltd. 5,862.38 3,891.38
commodity
Purchasing
CHANGHONG(HK)TRADINGLIMITED 179.34 871.32
commodity
Purchasing
Sichuan Changhong Precision Electronics Tech. Co., Ltd. 770.77 450.53
commodity
Purchasing
Sichuan Changhong New Energy Technology Co., Ltd. 6.69 43.42
commodity
Purchasing
081 Electronic Group Co., Ltd. 278.61 188.68
commodity
Purchasing
Guangdong Changhong Electronics Co., Ltd. 865.98 476.21
commodity
Purchasing
Sichuan Hongyu Metal Manufacture Co., Ltd. 55.98 37.51
commodity
Sichuan Changhong Intelligent Manufacturing Technology Purchasing
468.62 187.64
Co., Ltd. commodity
Purchasing
Sichuan Changhong Devices Technology Co., Ltd. 684.44 2,929.15
commodity
Purchasing
Sichuan Changhong Xinrui Technology Co., Ltd 5,019.64 8,393.49
commodity
Purchasing
Sichuan Hongwei Technology Co., Ltd. 342.66 17.74
commodity
Purchasing
Sichuan Changhong Lighting Technology Co.,Ltd. 0.57 4.79
commodity
Purchasing
Sichuan Jiahong Industrial Co., Ltd. 13.77 3.09
commodity
Purchasing
Sichuan Changhong International Hotel Co., Ltd. 5.74
commodity
Purchasing
Sichuan Zhiyijia Network Technology Co., Ltd. 2.56 1.62
commodity
Purchasing
Sichuan Changhong Power Source Co., Ltd. 3.68
commodity
Purchasing
Sichuan Huafeng Group Co., Ltd. 23.04
commodity
Purchasing
Sichuan Service Exp. Appliance Service Chain Co., Ltd. 1.67
commodity
Purchasing
Sichuan Changhong Electronic Products Co., Ltd. 3,485.14
commodity
Purchasing
Sichuan Hongxin Software Co., Ltd. 5.09
commodity
Purchasing
Sichuan Changhong Property Service Co., Ltd. 0.04
commodity
Purchasing
Sichuan Changhong Communication Technology Co., Ltd. 0.16
commodity
Purchasing
Sichuan Changhe Technology Co., Ltd. 687.31 341.13
commodity
Purchasing
Sichuan Changxin Refrigeration Parts Co., Ltd. 20,715.41 11,944.29
commodity
Purchasing
Mianyang Highly Electric Co., Ltd. 18,280.41 14,137.35
commodity
Purchasing
Hongyuan Dineng Rebao Technology Co. Ltd. 13,655.96
commodity
Sichuan Tianyou Guigu Technology Co., Ltd. Purchasing 189.61 23.62
297
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Current Year Last Year
Related parties Content (10 thousand (10 thousand
Yuan) Yuan)
commodity
Total 194,785.58 154,900.64
2. Labor service receive
Related parties Content Current Year Last Year
Labor service
Sichuan Changhong Electric Co., LTD 20,635,470.36 13,536,578.79
receive
Labor service
Sichuan Changhong Minsheng Logistics Co., LTD 438,755,474.68 420,580,234.83
receive
Labor service
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 55,643.55 12,279.45
receive
Labor service
Sichuan Service Exp. Appliance Service Chain Co., Ltd. 119,890,832.60 125,062,530.99
receive
Labor service
Sichuan Hongxin Software Co., Ltd. 303,773.60
receive
Labor service
Guangdong Changhong Electronics Co., Ltd. 774,830.62 113,519.53
receive
Labor service
Sichuan Jiahong Industrial Co., Ltd. 188,221.66 29,852.60
receive
Labor service
Sichuan Changhong International Hotel Co., Ltd. 181,222.85 17,473.00
receive
Labor service
CHANGHONG(HK)TRADINGLIMITED 97,468.90 2,007,833.37
receive
Labor service
Sichuan Changhong Electronics Group Co., Ltd. 113,420.18 12,922.00
receive
Labor service
Sichuan Changhong International Travel Agency Co., Ltd. 119,887.70
receive
Labor service
Sichuan Changhong Property Service Co., Ltd. 6,733.33
receive
Labor service
Sichuan Changhong Precision Electronics Tech. Co., Ltd. 28,408.32
receive
Labor service
Sichuan Hongwei Technology Co., Ltd. 235,849.05 968,584.90
receive
Labor service
Sichuan Zhiyijia Network Technology Co., Ltd. 2,529.91
receive
Labor service
Sichuan Changhong Jijia Fine Co., Ltd. 4,304.00
receive
Total 581,389,767.31 562,346,113.46
3. Purchase of fuels and energy
Related parties Content Current Year Last Year
Receive fuels and
Sichuan Changhong Electric Co., LTD 16,589,751.56 14,864,527.96
energy
Receive fuels and
Huayi Compressor Co., Ltd. 480,530.98 247,361.46
energy
Guangdong Changhong Electronics Co., Ltd. Receive fuels and 1,531,985.67
298
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
energy
Receive fuels and
Sichuan Jiahong Industrial Co., Ltd. 11,450.26
energy
Receive fuels and
Hefei Changhong New Energy Technology Co., Ltd. 242,591.95
energy
Receive fuels and
Sichuan Changhong Electronics Group Co., Ltd. 10,243.00 5,396.54
energy
Receive fuels and
Sichuan Changhong Property Service Co., Ltd. 45,132.76
energy
Total 18,911,686.18 15,117,285.96
4. Sales of goods/ labor service providing
Current Year Last Year
Related parties Content
(10 thousand Yuan) (10 thousand Yuan)
Sichuan Changhong Electric Co., LTD Sales of goods 108,928.79 82,925.29
Sichuan Changhong Electronics Group Co., Ltd. Sales of goods 338.20 0.69
Sichuan Changhong Jijia Fine Co., Ltd. Sales of goods 4,693.13 2,906.14
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Sales of goods 13,701.81 12,094.53
Lejiayi Chain Administration Co., Ltd. Sales of goods 365.25 570.66
PT.CHANGHONGELECTRICINDONESIA Sales of goods 2.60 20.92
CHANGHONG(HK)TRADINGLIMITED Sales of goods 45,103.46 38,162.85
CHANGHONGELECTRIC(AUSTRALIA) Sales of goods 13.92
Sichuan Hongwei Technology Co., Ltd. Sales of goods 9.76 6.00
Sichuan Changhong Devices Technology Co., Ltd. Sales of goods 0.00 48.60
Sichuan Changhong Minsheng Logistics Co., LTD Sales of goods 87.2 123.69
Sichuan Service Exp. Appliance Service Chain Co., Ltd. Sales of goods 724.69 733.07
Sichuan Changhong Gerun Renewable Resources Co., Ltd. Sales of goods 949.01 615.73
Hefei Changhong Industrial Co., Ltd. Sales of goods 255.71 439.68
Sichuan Huafeng Group Co., Ltd. Sales of goods 17.25 4.24
Sichuan Zhiyijia Network Technology Co., Ltd. Sales of goods 143,292.46 42,443.59
Sichuan Changhong Property Co., Ltd. Sales of goods 3.95
Anhui Xinhao PDP Co., Ltd. Sales of goods 5.13 62.91
Sichuan Changhong Network Technology Co., Ltd. Sales of goods 1.57 4.37
Chengdu Changhong Electronic Technology Co., Ltd. Sales of goods 1.55
Sichuan Changhong Intelligent Health Technology Co., Ltd. Sales of goods 0.31
Guangdong Changhong Electronics Co., Ltd. Sales of goods 0.14 4.92
Sichuan Huanyu Industrial Co. Ltd. Sales of goods 1.42
Sichuan Changhong Xinrui Technology Co., Ltd Sales of goods 75.91 3,764.42
Sichuan Changhong Intelligent Manufacturing Technology
Sales of goods 4.32
Co., Ltd.
299
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Current Year Last Year
Related parties Content
(10 thousand Yuan) (10 thousand Yuan)
Mianyang Technology Town Big Data Technology Co., Ltd. Sales of goods 0.06
BVCH Optronics (Sichuan) Co., Ltd. Sales of goods 1.91
Sichuan Changhong Electronic Products Co., Ltd. Sales of goods 8.74
Sichuan Changhong Group Finance Co., Ltd. Sales of goods 0.25
Huayi Compressor Co., Ltd. Sales of goods 16.92
Sichuan Changhong Package Printing Co., Ltd. Sales of goods 33.31 21.16
Sichuan Changhong Power Source Co., Ltd. Sales of goods 5.34 17.86
Sichuan Changhong Education Technology Co., Ltd. Sales of goods 0.31
Sichuan Changhong International Hotel Co., Ltd. Sales of goods 1.35
Sichuan Changhong Precision Electronics Tech. Co., Ltd. Sales of goods 14.92
081 Electronic Group Co., Ltd. Sales of goods -6.04
CHANGHONGELECTRICMIDDLEEASTFZE Sales of goods 15.44
ChanghongEuropeElectrics.r.o Sales of goods 92.42
Chengdu Changhong Property Co., Ltd. Sales of goods 1.37
Hefei MeiLing Solar Energy Technology Co., Ltd. Sales of goods 75.23
Guangyuan Hongcheng Industrial Co., Ltd. Sales of goods 0.03
Fuyang Meiling Appliance Marketing Co., Ltd. Sales of goods 333.75
Sichuan Changhong Property Service Co., Ltd. Sales of goods 4.89
Sichuan Changxin Refrigeration Parts Co., Ltd. Sales of goods 7,035.25 3,333.09
Hongyuan Dineng Rebao Technology Co. Ltd. Sales of goods 21,275.51 1,033.72
Sichuan Tianyou Guigu Technology Co., Ltd. Sales of goods 229.86 36.01
ChanghongRubaElectricCompany(Private)Ltd. Sales of goods 3,846.63 3,039.47
Mianyang Highly Electric Co., Ltd. Sales of goods 0.46
Total 351,036.52 192,942.54
Businesses between the Company and its connected persons are generally conducted under market
operation rules as if they were the same as other business counterparties. For price of sale or purchase
and provision of other labor service between the Company and its related parties, the state pricing is
applicable if the pricing do exists; in case of absence of such state pricing, price is determined under
market price; in case of absence of such market price, price is determined by both parties at actual cost
plus reasonable expenses; for some special services, the price of which cannot be determined under the
rule of cost plus expense, the price shall be determined by both parties by negotiation.
5. Fuel and energy providing
Related parties Content Current Year Last Year
Fuel and energy
Guangdong Changhong Electronics Co., Ltd. 956,099.28 866,165.68
providing
Fuel and energy
Sichuan Changhong Minsheng Logistics Co., LTD 68,684.40 80,271.36
providing
Fuel and energy
Sichuan Changhong Devices Technology Co., Ltd. 463,262.93
providing
300
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Related parties Content Current Year Last Year
Fuel and energy
Sichuan Changhong Jijia Fine Co., Ltd. 96,364.38 386,615.33
providing
Fuel and energy
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 4,856,207.90 5,769,242.83
providing
Fuel and energy
Sichuan Hongwei Technology Co., Ltd. 7,893.94
providing
Fuel and energy
Sichuan Service Exp. Appliance Service Chain Co., Ltd. 170.93
providing
Total 6,448,512.83 7,102,466.13
6. Related rental
(1) Renting
Type of Leasing income Leasing income
Lessor Lessee
assets in this year in last year
Hefei Meiling
Sichuan Changhong Jijia Fine Co., Ltd. Forklifttruck 2,792.14 62.74
Co.,Ltd.
Hefei Meiling
Sichuan Changhong Jijia Fine Co., Ltd. Warehouse 14,060.38
Co.,Ltd.
Hefei Meiling
Sichuan Changhong Jijia Fine Co., Ltd. Apartment 75,635.43
Co.,Ltd.
Hefei Meiling
Sichuan Changhong Jijia Fine Co., Ltd. Plant 486,720.81 466,560.00
Co.,Ltd.
Hefei Meiling
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Warehouse 34,301.89
Co.,Ltd.
Hefei Meiling
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Plant 661,680.00 1,294,380.00
Co.,Ltd.
Hefei Meiling
Sichuan Changhe Technology Co., Ltd. Warehouse 1,833.96
Co.,Ltd.
Hefei Meiling
Sichuan Changhong Xinrui Technology Co., Ltd Forklifttruck 1,485.85 1,191.51
Co.,Ltd.
Hefei Meiling
Sichuan Changhong Xinrui Technology Co., Ltd Warehouse 12,226.42
Co.,Ltd.
Hefei Meiling
Sichuan Changhong Minsheng Logistics Co., LTD Office 10,608.00
Co.,Ltd.
Hefei Meiling Sichuan Service Exp. Appliance Service Chain Co.,
Office 24,547.72
Co.,Ltd. Ltd.
Hefei Meiling Sichuan Service Exp. Appliance Service Chain Co.,
Apartment 194,413.33
Co.,Ltd. Ltd.
Hefei Meiling
Hefei Changhong Industrial Co., Ltd. Apartment 448,681.52
Co.,Ltd.
Hefei Meiling
Sichuan Changhong Electric Co., LTD Apartment 68,624.76
Co.,Ltd.
Hefei Meiling Sichuan Changhong Precision Electronics Tech. Co.,
Apartment 63,959.42
Co.,Ltd. Ltd.
Changhong Freight
BVCH Optronics (Sichuan) Co., Ltd. 63,720.00 63,720.00
Air-Conditioner elevator
Changhong Machinerayequi
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 8,177.80
Air-Conditioner pment
Changhong
Sichuan Changhong Jijia Fine Co., Ltd. Driving 7,000.00
Air-Conditioner
Zhongshan
Sichuan Changhong Jijia Fine Co., Ltd. 2# livingarea 3,889.43 10,320.21
Changhong
301
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Type of Leasing income Leasing income
Lessor Lessee
assets in this year in last year
Zhongshan
Sichuan Changhong Minsheng Logistics Co., LTD Warehouse 100,000.00
Changhong
Zhongshan Office
Guangdong Changhong Electronics Co., Ltd. 1,474,415.84 814,103.36
Changhong building
Zhongshan Office
Sichuan Changhong Minsheng Logistics Co., LTD 57,509.74 40,659.36
Changhong building
Zhongshan
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 2# livingarea 89,802.16
Changhong
Zhongshan
Shenzhen Yijia‘en Technology Co. Ltd. 2# livingarea 18,141.15
Changhong
Zhongshan
Sichuan Hongwei Technology Co., Ltd. 2# livingarea 5,047.62
Changhong
Mianyang Warehousin
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 60,396.23 65,886.80
Refrigeration g fee
Mianyang Warehousin
Sichuan Changhong Package Printing Co., Ltd. 4,150.94 3,773.59
Refrigeration g fee
Mianyang Warehousin
Sichuan Changhe Technology Co., Ltd. 207.55 271.69
Refrigeration g fee
Mianyang Warehousin
Sichuan Changxin Refrigeration Parts Co., Ltd. 207.55 566.03
Refrigeration g fee
Jiangxi
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Rentalof Plant 474,614.85 451,920.00
Electric
Jiangxi
Sichuan Changhong Jijia Fine Co., Ltd. Rentalof Plant 134,064.00
Electric
Jiangxi Machinerayequi
Sichuan Changhong Jijia Fine Co., Ltd. 99,487.17
Electric pment
Changhong Workshop
Sichuan Changhong Devices Technology Co., Ltd. 823,744.00 842,128.00
Ridian lease
Changhong Workshop
Sichuan Changhong Minsheng Logistics Co., LTD 1,014,296.40 339,838.08
Ridian lease
Changhong Workshop
Sichuan Hongwei Technology Co., Ltd. 71,539.20
Ridian lease
Total 6,291,715.09 4,715,649.54
(2) Lessee of related parties
Leasing
Leasing expense
Lessor Lessee Type of assets expense in last
in this year
year
Sichuan Workshop and
Sichuan Changhong Electric Co., LTD 8,374,314.61 7,884,364.10
Changhong office
Sichuan Changhong Electronics Group Sichuan
Shopfront 84,263.16 9,767.00
Co., Ltd. Changhong
Sichuan Changhong Electronics Group
Mianyang Refrigeration Staffdormitory 5,520.00 7,840.00
Co., Ltd.
Beijing Changhong Technology Co., Ltd. BeijingMeiling Office 89,128.50 356,514.00
Sichuan Changhong Electric Co., LTD Appliance marketing Office 493,088.97 535,471.91
Guangdong Changhong Electronics Co., Changhong Dormitory
525,298.65
Ltd. Ridian rental
Changhong Dormitory
Sichuan Changhong Electric Co., LTD 210,433.96
Ridian rental
Total 9,782,047.85 8,793,957.01
7. Related guarantee
302
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Maximum guarantee
Completed
Secured party Sponsored party amount (in 10 Start End
(Y/N)
thousand Yuan)
Zhongshan
Hefei Meiling Changhong 15,000.00 2015.12.29 2016.12.29 Y
Electric Appliance
Zhongshan
Hefei Meiling Changhong 8,000.00 2015.03.30 2016.03.29 Y
Electric Appliance
Zhongshan
Hefei Meiling Changhong 17,000.00 2016.01.01 2016.12.31 N
Electric Appliance
Zhongshan
Hefei Meiling Changhong 5,000.00 2015.05.27 2016.05.27 Y
Electric Appliance
Zhongshan
Hefei Meiling Changhong 5,000.00 2016.08.05 2017.08.04 N
Electric Appliance
Zhongshan
Hefei Meiling Changhong 5,000.00 2016.10.28 2017.10.28 N
Electric Appliance
Hefei Meiling Changhong Ridian 2,000.00 2016.09.01 2017.09.01 N
Hefei Meiling Changhong Ridian 4,500.00 2016.05.05 2017.05.05 N
Counter
guarantee:
Zhongshan
Changhong Hefei Meiling 15,000.00 2015.12.29 2016.12.29 Y
Electric Appliance
Zhongshan
Changhong Hefei Meiling 8,000.00 2015.03.30 2016.03.29 Y
Electric Appliance
Zhongshan
Changhong Hefei Meiling 17,000.00 2016.01.01 2016.12.31 N
Electric Appliance
Zhongshan
Changhong Hefei Meiling 5,000.00 2015.05.27 2016.05.27 Y
Electric Appliance
Zhongshan
Changhong Hefei Meiling 5,000.00 2016.08.05 2017.08.04 N
Electric Appliance
Zhongshan
Changhong Hefei Meiling 5,000.00 2016.10.28 2017.10.28 N
Electric Appliance
Changhong Ridian Hefei Meiling 2,000.00 2016.09.01 2017.09.01 N
Changhong Ridian Hefei Meiling 4,500.00 2016.05.05 2017.05.05 N
8. Assets transfer, debt restructuring of related parties
Related parties Type Current Year Last Year
Sichuan Changhong Electric Co., LTD Purchasing fixed assets 221,411.27 3,271,518.77
Sichuan Hongxin Software Co., Ltd. Purchasing fixed assets 252,830.20 990,566.04
Sichuan Hongwei Technology Co., Ltd. Purchasing fixed assets 1,374,917.70
Sichuan Hongxin Software Co., Ltd. Purchasing fixed assets 149,292.45
Sichuan Changhong Intelligent Manufacturing
Purchasing fixed assets 2,053,812.82
Technology Co., Ltd.
303
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Related parties Type Current Year Last Year
Sichuan Changhong Jijia Fine Co., Ltd. Purchasing fixed assets 17,948.72
Purchase and
Sichuan Hongcheng Construction Engineering Co.,
construction of fixed 5,909,615.13
Ltd.
assets
Sichuan Changhong Electronic System Co., Ltd. Purchasing fixed assets 714,059.83
081 Electronic Group Co., Ltd. Purchasing fixed assets 59,829.06
Sichuan Changhong New Energy Technology Co.,
Fixed assets sold 15,035.60
Ltd.
Sichuan Changhong Gerun Renewable Resources
Fixed assets sold 31,091.89
Co., Ltd.
Sichuan Tianyou Guigu Technology Co., Ltd. Fixed assets sold 854.70
Total 10,011,774.88 5,051,009.30
9. Related transaction with Changhong Finance Company
(1) Saving balance
Income from bank
Company Opening balance Ending balance
saving
Hefei Meiling Co., Ltd. 929,016,660.03 1,269,669,769.16 46,911,461.33
Sichuan Changhong Air Conditioner Co.,
51,254,783.01 403,311,310.63 5,814,745.44
Ltd.
Zhongshan Changhong Appliance Co., Ltd 64,705,781.78 67,318,559.05 95,732.71
Hefei Meiling Group Holding Co., Ltd. 3,832.74 1,185,381.05 1,889,048.34
Mianyang MeiLing Refrigeration Co., Ltd. 218,333.30 60,008.27 623,644.26
Zhongke MeiLing Low-temperature
50,772,917.93 25,450,411.46 450,411.46
Technology Co., Ltd.
Jiangxi MeiLing Electric Appliance Co.,
102,164,170.55 2,175,638.22
Ltd.
Guangdong Changhong Ridian Technology
61,945,227.21 125,819,243.83 235,401.39
Co., Ltd.
Hongyuan Heat Pump Technology Co., Ltd. 16,027,479.75 38,116.80
Total 1,260,081,706.55 1,908,842,163.20 58,234,199.95
(2) Notes discounted
Bank acceptance book Bank acceptance Expenses of
Company
discounted amount discounted amount discounted
Hefei Meiling Co., Ltd. 242,871,970.10 240,970,903.54 1,901,066.56
Sichuan Changhong Air Conditioner Co.,
733,975,237.73 726,008,159.25 7,967,078.48
Ltd.
Hefei Meiling Group Holding Co., Ltd. 100,000,000.00 98,373,333.30 1,626,666.70
Mianyang MeiLing Refrigeration Co., Ltd. 150,000,000.00 149,440,000.05 559,999.95
Total 1,226,847,207.83 1,214,792,396.14 12,054,811.69
(3) Notes issued
Company Issuing unit Note amount Type
304
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Sichuan Changhong Group Finance
Hefei Meiling Co., Ltd. 627,233,900.00 Bankacceptance
Co., Ltd.
Sichuan Changhong Air Conditioner Sichuan Changhong Group Finance
748,307,945.36 Bankacceptance
Co., Ltd. Co., Ltd.
Zhongshan Changhong Appliance Sichuan Changhong Group Finance
270,000,947.24 Bankacceptance
Co., Ltd Co., Ltd.
Mianyang MeiLing Refrigeration Sichuan Changhong Group Finance
141,021.36 Bankacceptance
Co., Ltd. Co., Ltd.
Guangdong Changhong Ridian Sichuan Changhong Group Finance
56,053,906.52 Bankacceptance
Technology Co., Ltd. Co., Ltd.
Hefei Meiling Group Holding Co., Sichuan Changhong Group Finance
96,000.00 Bankacceptance
Ltd. Co., Ltd.
Total 1,701,833,720.48
(4) Borrowing: Nil
(5) Accounts receivable factoring : Nil
10. Key management‘s remuneration
Current Year(10 thousand Last Year (10 thousand
Item
Yuan) Yuan)
Total remuneration 337.44 340.36
Including: performance incentive fund
(III) Come and go balance with related parties
1. Receivables
Ending balance Opening balance
Bad Bad
Item Related parties debt debt
Book balance Book balance
prov prov
ision ision
Account
Sichuan Changhong Electric Co., LTD 521,671.35 2,138,556.68
receivable
Account
Sichuan Changhong Electronics Group Co., Ltd. 376,186.92 2,209,161.87
receivable
Account
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 965,201.45 207,505.03
receivable
Account
CHANGHONGELECTRIC(AUSTRALIA) 144,829.93
receivable
Account
Hefei Changhong Industrial Co., Ltd. 1,492,108.99
receivable
Account
Sichuan Changhong Property Service Co., Ltd. 12,516.00
receivable
Account
Huayi Compressor Co., Ltd. 334,800.00 263,800.00
receivable
Account
Sichuan Changhong Jijia Fine Co., Ltd. 5,536.56
receivable
Account
PT.CHANGHONGELECTRICINDONESIA 26,971.06 212,356.95
receivable
Account
CHANGHONG(HK)TRADINGLIMITED 60,541,639.57 133,214,694.78
receivable
Account
Sichuan Changhong Package Printing Co., Ltd. 4,400.00 800.00
receivable
305
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Ending balance Opening balance
Bad Bad
Item Related parties debt debt
Book balance Book balance
prov prov
ision ision
Account
Sichuan Changhong International Hotel Co., Ltd. 1,334,736.90 2,859,768.75
receivable
Account Chengdu Changhong Electronic Technology Co.,
434,509.01 1,835,245.20
receivable Ltd.
Account Sichuan Changhong Gerun Renewable Resources
0.60 3,559.52
receivable Co., Ltd.
Account
Lejiayi Chain Administration Co., Ltd. 325,769.21
receivable
Account
Sichuan Zhiyijia Network Technology Co., Ltd. 174,033,095.60 260,964,612.33
receivable
Account
Sichuan Hongwei Technology Co., Ltd. 7,600.00 8,998.00
receivable
Account
Anhui Xinhao PDP Co., Ltd. 63,000.00 645,000.00
receivable
Account
Yibing Hongxing Electronics Co., Ltd. 147,174.10 1,058,049.10
receivable
Account
Sichuan Changhong Network Technology Co., Ltd. 51,150.00
receivable
Account
ChanghongRubaElectricCompany(Private)Ltd 16,296,282.53 34,269,278.41
receivable
Account
Hongyuan Dineng Rebao Technology Co. Ltd. 36,070,419.59 12,094,465.83
receivable
Account paid
Sichuan Changhong Electric Co., LTD 1,054,531.13
in advance
Account paid
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 5.38
in advance
Account paid
Sichuan Zhiyijia Network Technology Co., Ltd. 14,074.00
in advance
Account paid
Sichuan Hongwei Technology Co., Ltd. 263,948.00
in advance
Account paid Sichuan Changhong Intelligent Manufacturing
254,682.00
in advance Technology Co., Ltd.
Other
Sichuan Changhong Electric Co., LTD 39,617.46 449,090.56
receivables
Other Sichuan Service Exp. Appliance Service Chain Co.,
200,000.00 200,000.00
receivables Ltd.
Other
Sichuan Changhong Minsheng Logistics Co., LTD 80,265.12
receivables
Other
Sichuan Changhong Devices Technology Co., Ltd. 1,416.11
receivables
Other
Hongyuan Dineng Rebao Technology Co. Ltd. 130,396.62
receivables
Other
Sichuan Tianyou Guigu Technology Co., Ltd. 12,500,000.00
receivables
Total 305,772,283.82 454,591,194.38
2. Payables
Item Related parties Ending balance Opening balance
Account
received in Sichuan Changhong Electric Co., LTD 36,470,918.03 4,549,701.77
advance
306
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Item Related parties Ending balance Opening balance
Account
Sichuan Changhong Diandianbang Technology Co.,
received in 259.00
Ltd.
advance
Account
received in CHANGHONG(HK)TRADINGLIMITED 317.48
advance
Account
received in Lejiayi Chain Administration Co., Ltd. 559,819.59 900.02
advance
Account
received in 081 Electronic Group 2,906,393.55
advance
Account
Sichuan Changhong Gerun Renewable Resources
received in 273,106.03 339,625.21
Co., Ltd.
advance
Account
received in CHANGHONGELECTRICMIDDLEEASTFZE 37,303.37 1,626.32
advance
Account
received in PT.CHANGHONGELECTRICINDONESIA 245.39
advance
Account
received in Sichuan Hongshi Display Devices Co., Ltd. 74,587.00
advance
Account
Sichuan Service Exp. Appliance Service Chain Co.,
received in 52,999.49 25,349.12
Ltd.
advance
Account
received in Sichuan Changhong Power Source Co., Ltd. 164,400.00
advance
Account
Sichuan Changhong Precision Electronics Tech. Co.,
received in 0.01
Ltd.
advance
Account
received in Sichuan Changhong Mold Plastic Tech. Co., Ltd. 27,308.76
advance
Account
received in Hefei MeiLing Solar Energy Technology Co., Ltd. 315,389.49
advance
Account
received in Sichuan Tianyou Guigu Technology Co., Ltd. 269,700.06 148,501.26
advance
Accounts
Sichuan Changhong Electric Co., LTD 18,441,774.94 29,851,894.60
payable
Accounts
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 111,859,645.07 46,397,079.60
payable
Accounts
Huayi Compressor Co., Ltd. 54,756,261.49 139,199,433.03
payable
Accounts
Sichuan Changhong Jijia Fine Co., Ltd. 49,428,116.49 18,183,863.16
payable
Accounts
Sichuan Changhong Minsheng Logistics Co., LTD 40,128,307.43 13,792,125.99
payable
Accounts
Sichuan Changhong Package Printing Co., Ltd. 11,582,508.82 3,815,726.06
payable
Accounts
Sichuan Changhong Devices Technology Co., Ltd. 8,244,251.90 2,856,979.62
payable
Accounts Sichuan Changhong Lighting Technology Co.,Ltd. 28,458.00
307
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Item Related parties Ending balance Opening balance
payable
Accounts Sichuan Changhong Precision Electronics Tech. Co.,
2,231,885.31 474,412.43
payable Ltd.
Accounts
081 Electronic Group Co., Ltd. 397,568.22 145,004.41
payable
Accounts Sichuan Changhong New Energy Technology Co.,
235.76 35,055.83
payable Ltd.
Accounts
Guangdong Changhong Electronics Co., Ltd. 3,602,882.13 2,698,808.96
payable
Accounts
Sichuan Changhong Power Source Co., Ltd. 4,806.70 17,694.78
payable
Accounts
Sichuan Hongyu Metal Manufacturing Co., Ltd. 475,411.87 76,605.95
payable
Accounts Sichuan Service Exp. Appliance Service Chain Co.,
6,593,913.18 12,325,292.30
payable Ltd.
Accounts
Sichuan Hongwei Technology Co., Ltd. 1,647,512.58
payable
Accounts Sichuan Changhong Gerun Renewable Resources
10,503.63 10,503.63
payable Co., Ltd.
Accounts
Sichuan Changhong International Hotel Co., Ltd. 24,483.00
payable
Accounts
Sichuan Changhong Xinrui Technology Co., Ltd 31,134,508.32 17,899,155.35
payable
Accounts Sichuan Changhong Intelligent Manufacturing
1,159,293.19 37,968.00
payable Technology Co., Ltd.
Accounts Sichuan Changhong International Travel Agency Co.,
14,981.00
payable Ltd.
Accounts
Sichuan Changhong Electronic System Co., Ltd. 77,000.00 77,000.00
payable
Accounts
Sichuan Jiahong Industrial Co., Ltd. 1500.00 78,317.93
payable
Accounts
Sichuan Changhong Property Service Co., Ltd. 28.00
payable
Accounts
Sichuan Huafeng Group Co., Ltd. 283,500.63
payable
Accounts
Hongyuan Dineng Rebao Technology Co. Ltd. 2,846,000.00
payable
Accounts
Sichuan Tianyou Guigu Technology Co., Ltd. 397,435.50 333,333.01
payable
Accounts
Sichuan Changxin Refrigeration Parts Co., Ltd. 16,767,170.82 5,266,539.58
payable
Accounts
Mianyang Highly Electric Co., Ltd. 33,257,152.05 20,557,246.51
payable
Accounts
Sichuan Changhe Technology Co., Ltd. 2,769,516.97 1,288,398.54
payable
Other
accounts Sichuan Changhong Electric Co., LTD 189,285.06 1,992,259.81
payable
Other
accounts Sichuan Changhong Electronics Group Co., Ltd. 4,124.00
payable
Other
accounts Sichuan Changhong Mold Plastic Tech. Co., Ltd. 6,021,988.84 1,557,408.63
payable
308
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Item Related parties Ending balance Opening balance
Other
accounts Sichuan Changhong Jijia Fine Co., Ltd. 1,900,500.00 361,466.64
payable
Other
Sichuan Changhong Gerun Renewable Resources
accounts 10,000.00 10,000.00
Co., Ltd.
payable
Other
accounts Huayi Compressor Co., Ltd. 1,050,000.00 1,050,000.00
payable
Other
accounts Sichuan Changhong Package Printing Co., Ltd. 50,000.00 50,000.00
payable
Other
Sichuan Changhong Precision Electronics Tech. Co.,
accounts 145.16
Ltd.
payable
Other
accounts Sichuan Changhong Minsheng Logistics Co., LTD 586,504.95 594,004.95
payable
Other
accounts CHANGHONG(HK)TRADINGLIMITED 1,881,972.53 876,260.05
payable
Other
accounts Sichuan Changhong Devices Technology Co., Ltd. 260.07
payable
Other
accounts Sichuan Changhong Xinrui Technology Co., Ltd 200,000.00 200,000.00
payable
Other
accounts Sichuan Changhong Electronic Products Co., Ltd. 50,000.00
payable
Other
accounts 081 Electronic Group Co., Ltd. 169.00 3,549.14
payable
Other
accounts Sichuan Zhiyijia Network Technology Co., Ltd. 48,707.00
payable
Other
accounts Sichuan Jiahong Industrial Co., Ltd. 4,643.32 2,182.34
payable
Other
accounts Guangdong Changhong Electronics Co., Ltd. 4,602.00 26,485.76
payable
Other
Sichuan Changhong Intelligent Manufacturing
accounts 219,375.00
Technology Co., Ltd.
payable
Other
accounts Mianyang Highly Electric Co., Ltd. 637,644.61 603,295.12
payable
Other
accounts Sichuan Changhe Technology Co., Ltd. 100,000.00 50,000.00
payable
Other
accounts Sichuan Changxin Refrigeration Parts Co., Ltd. 50,000.00 50,000.00
payable
Other
Hengyouyuan Technology Development Group Co.,
accounts 2,800.00
Ltd.
payable
Total 449,302,334.16 330,940,803.04
309
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
(IV) Commitments from related parties: Nil
XII. Share-based payment: Nil
XIII. Contingency
1. Pending action or possible liabilities formed from arbitration: Nil
2. Contingency from external guarantee: Nil
3. Other contingency: nil
XIV. Commitments: Nil
XV. Events occurring after the balance sheet date
1. Important non-adjustment items: nil
2. Profit distribution
Being audited by Shine Wing Certified Public Accountants (LLP), the net profit achieved in individual
statement of the parent company amounting to RMB 239,624,261.53 Yuan, in line with relevant
regulations, after extract for statutory surplus reserve RMB 23,962,426.15 Yuan, the distributable profit
in individual statement of the parent company for year of 2016 amounting to RMB 215,661,835.38
Yuan; deducted the 2015 profit distribution RMB 45,824,352.27 Yuan, plus the retained profit at
beginning of the year RMB 786,501,710.90 Yuan, the accumulated retained profit in individual
statement of the parent company at end of 2016 amounting to RMB 956,339,194.01 Yuan. In addition,
the accumulated retained profit in consolidate statement at end of the 2016 amounting to RMB
968,097,382.98 Yuan;the distributable profit in consolidate statement for year of 2016 amounting to
RMB 196,254,254.81 Yuan.
According to the relevant laws and regulations and the provisions of "Articles of Association" and
considering the interests of the shareholders and the company's long-term development needs, the board
of directors approved the company to distribute the cash bonus of 0.6 Yuan per 10 stocks (including tax)
to all shareholders on the basis of the general capital of 1,044,597,881 stocks of December 31, 2016,
totally the cash bonus RMB 62,675,872.86 Yuan has been distributed (Including tax, the cash bonus
accounts for 29.06% of the profit available for distribution in the individual statements of the parent
company in the current year). After the distribution, the total share capital of the company keeps the
same, accumulates the remaining undistributed profits of RMB 893,663,321.15 Yuan which is to be
distributed annually after carry-over
This plan has been considered and passed by the board of directors, and needs to be submitted to 2016
annual general meeting of the company for deliberation.
3. Maj or sales return: nil
4. Other than the above mentioned events, the Company have no other events occurred after balance
sheet date.
XVI. Other significant matters
1. Correction of previ ous periods and influence: nil
2. Debt restructuring: nil
3. Assets replacement: nil
4. Pension plan: nil
310
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
5. Discontinuing operation: nil
6. Branch infor mation
Small
Item Ice cumber AC Marketing Other Salesin branch Total
appliances
Operation income 707,211.02 447,310.64 239,121.90 49,507.53 29,851.54 220,331.54 1,252,671.09
Including:: Income fromtradingoutside 506,166.07 447,259.55 239,121.90 49,157.11 10,966.45 1,252,671.09
Income fromtradinginbranch 201,044.95 51.09 350.42 18,885.08 220,331.54
Operation expenses 689,663.78 447,145.01 240,898.47 47,908.28 28,489.62 214,866.56 1,239,238.60
Operationprofit 17,547.25 165.62 -1,776.57 1,599.25 1,361.92 13,432.49
Total assets 965,651.61 286,639.75 39,100.22 26,049.89 13,265.58 79,950.31 1,250,756.73
Totalliability 505,141.29 209,092.68 69,941.18 15,138.10 7,998.84 73,163.50 734,148.58
Supplementaryinformation
Depreciation and amortization expenses 12,576.04 4,124.59 19.40 372.26 511.38 1.05 17,602.62
Capital expenditure 15,522.32 8,544.42 25.98 80.45 827.88 62.51 24,938.54
Non-cash expenses except for depreciation
60,215.02 57,850.44 35,916.76 1,307.20 757.98 2,107.29 153,940.11
and amortization
7. Other major transactions and events shows impact on investor‘s decision-making: nil
XVII. Notes to main items of financial statement of parent company
1. Account receivable
(1) Risk structure of account receivable
Ending amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Account receivable with single significant
amount and withdrawal single item bad
debt provision
Account receivable withdrawal bad debt
provision by combination
Combination 1 234,535,499.95 23.02% 12,281,916.10 5.24% 222,253,583.85
Combination 2 784,448,310.52 76.98% 784,448,310.52
Combination Subtotal 1,018,983,810.47 100.00% 12,281,916.10 1.21% 1,006,701,894.37
Account receivable with single minor
amount but withdrawal single item bad
debt provision
Total 1,018,983,810.47 100.00% 12,281,916.10 1.21% 1,006,701,894.37
(Continued)
Opening amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Account receivable with single
significant amount and withdrawal single
item bad debt provision
Account receivable withdrawal bad debt
— — — — —
provision by combination
311
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Opening amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Combination 1 153,138,749.45 16.03% 11,767,503.69 7.68% 141,371,245.76
Combination 2 801,957,750.21 83.97% 801,957,750.21
Combination Subtotal 955,096,499.66 100.00% 11,767,503.69 1.23% 943,328,995.97
Account receivable with single minor
amount but withdrawal single item bad
debt provision
Total 955,096,499.66 100.00% 11,767,503.69 1.23% 943,328,995.97
1) No account receivable with single significant amount and withdrawal bad debt provision single at
year-end.
2) Account receivable with Withdrawal of bad debt provision by aging account in combination 1
Ending balance
Book Age
Account receivable Bad debt provision Provision ratio (%)
Within 1 year 230,187,998.34 11,509,399.92 5%
1-2 years 4,064,533.95 609,680.09 15%
2-3 years 184,817.80 64,686.23 35%
3-4 years 55%
4-5 years 85%
Over 5 years 98,149.86 98,149.86 100%
Total 234,535,499.95 12,281,916.10 —
3) Account receivable without bad debt provision withdrawal in combination 2
Combination Book balance
Connected amount between related parties 752,441,912.34
Account receivable with L/C 32,006,398.18
Total 784,448,310.52
4) No account receivable with single minor amount but withdrawal single item bad debt provision at
year-end
(2) Provision, reversal (or recovery) of bad debt provision
The bad debt accrual in the year was RMB 514,412.41; no recovery or reversal bad debt provision in the
year.
(3) No account receivable actually written-off at year-end.
(4) No arrears of the shareholders holding more than 5% (including 5%) shares with voting rights of the
Company at year-end.
(5) The top five account receivable at year-end has RMB 361,770,254.95 in total, a 35.50% in total
account receivable.
(6) Account receivable de-recognized: Nil
312
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
2. Other account receivable
(1) Category of other account receivable
Ending amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Other account receivable with single
significant amount and withdrawal single
item bad debt provision
Other account receivable withdrawal bad
debt provision by combination
Combination 1 2,286,196.46 8.50% 164,504.75 7.20% 2,121,691.71
Combination 2 24,620,732.24 91.50% 24,620,732.24
Combination Subtotal 26,906,928.70 100.00% 164,504.75 0.61% 26,742,423.95
Other account receivable with single minor
amount but withdrawal single item bad
debt provision
Total 26,906,928.70 100.00% 164,504.75 0.61% 26,742,423.95
(Continued)
Opening amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Other account receivable with single
significant amount and withdrawal single
item bad debt provision
Other account receivable withdrawal bad
debt provision by combination
Combination 1 4,840,833.66 8.76% 1,976,106.94 40.82% 2,864,726.72
Combination 2 50,391,165.17 91.24% 50,391,165.17
Combination Subtotal 55,231,998.83 100.00% 1,976,106.94 3.58% 53,255,891.89
Other account receivable with single minor
amount but withdrawal single item bad debt
provision
Total 55,231,998.83 100.00% 1,976,106.94 3.58% 53,255,891.89
1) No other account receivable with single significant amount and no withdrawal bad debt provision single at
year-end
2) Other account receivable with withdrawal bad debt provision by aging account for combination 1
Ending balance
Item
Account receivable Bad debt provision Provision ratio (%)
Within 1 year 1,824,247.20 91,212.36 5%
1-2 years 451,949.26 67,792.39 15%
2-3 years 35%
3-4 years 10,000.00 5,500.00 55%
4-5 years 85%
Over 5 years 100%
Total 2,286,196.46 164,504.75
313
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
3) Other receivable without bad debt provision withdrawal in combination 2
Combination Book balance
Connected amount between related parties 21,867,562.15
Loans of employee‘s pretty cash 2,753,170.09
Total 24,620,732.24
4) No other account receivable with single minor amount but withdrawal bad debt provision singly,
refers to the minor single receivables at year-end.
(2) Reversal (or withdraw) of reserve for bad debts in the Year
Releasing bad debt provision in the year amounting to RMB 1,811,602.19; bad debt recovered the original
verification was RMB 6,000.00 in the year.
(3) Other account receivable charge off in this year: Nil
(4) No areas from shareholders‘ unit with over 5 percent (5 percent included) voting rights held at
year-end
(5) Top 5 other account receivable has RMB 24,339,624.01 in total, a 90.46% in total account receivable
at year-end
(6) Other receivables classify by nature
Nature Ending book balance Opening book balance
Related parties 21,867,562.15 32,309,376.56
Loans of employee‘s pretty cash 2,753,170.09 3,317,078.21
Margin 1,344,924.85 398,295.60
Advance money paid temporary 619,956.01
Other 321,315.60 4,442,538.06
Export rebate 14,764,710.40
Total 26,906,928.70 55,231,998.83
(7) Other receivable de-recognized: Nil
314
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
3. Long-term equity investments
(1) Classification of long-term equity investments
Ending balance Opening balance
Item
Book balance Impairment loss Book value Book balance Impairment loss Book value
Investment in subsidiaries
Hefei Meiling Packing Products Co., Ltd. 12,961,230.52 12,961,230.52
Zhongke MeiLing Low-temperature Technology Co.,
42,000,000.00 42,000,000.00 42,000,000.00 42,000,000.00
Ltd.
Mianyang MeiLing Refrigeration Co.,
95,000,000.00 95,000,000.00 95,000,000.00 95,000,000.00
Ltd.
Hefei Meiling Appliance Marketing Co.,
54,900,000.00 54,900,000.00 54,900,000.00 54,900,000.00
Ltd.
Zhongshan Changhong Appliance Co.,
169,856,419.37 169,856,419.37 112,256,419.37 112,256,419.37
Ltd
Sichuan Changhong Air Conditioner Co.,
305,600,437.79 305,600,437.79 305,600,437.79 305,600,437.79
Ltd.
Hefei Meiling Group Holding Co., Ltd. 113,630,000.00 113,630,000.00 113,630,000.00 113,630,000.00
Jiangxi MeiLing Electric Appliance Co.,
79,000,000.00 79,000,000.00 79,000,000.00 79,000,000.00
Ltd.
Mianyang Meiling Software Technology
4,950,000.00 4,950,000.00
Co., Ltd.
Guangdong Changhong Ridian
90,802,061.95 90,802,061.95
Technology Co., Ltd.
Changmei Technology Co., Ltd. 18,000,000.00 18,000,000.00
Investment in associates
Hefei Xingmei Assets Management Co.,
12,394,800.39 12,394,800.39 12,846,069.09 12,846,069.09
Ltd.
Sichuan Zhiyijia Network Technology
11,098,569.71 11,098,569.71 7,490,424.28 7,490,424.28
Co., Ltd.
Total 992,282,289.21 992,282,289.21 840,634,581.05 840,634,581.05
(2) Investment in subsidiaries
315
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Increase during the Decrease during the Provision forimpairment Ending balance of
Invested unit Opening balance Ending balance
year year losses impairment loss
Hefei Meiling Packing Products Co., Ltd. 12,961,230.52 12,961,230.52
Zhongke Meiling Cryogenic Technology
42,000,000.00 42,000,000.00
Co., Ltd.
Mianyang MeiLing Refrigeration Co.,
95,000,000.00 95,000,000.00
Ltd.
Hefei Meiling Appliance Marketing Co.,
54,900,000.00 54,900,000.00
Ltd.
Zhongshan Changhong Appliance Co.,
112,256,419.37 57,600,000.00 169,856,419.37
Ltd
Sichuan Changhong Air Conditioner Co.,
305,600,437.79 305,600,437.79
Ltd.
Hefei Meiling Group Holding Co., Ltd. 113,630,000.00 113,630,000.00
Jiangxi MeiLing Electric Appliance Co.,
79,000,000.00 79,000,000.00
Ltd.
Mianyang Meiling Software Technology
4,950,000.00 4,950,000.00
Co., Ltd.
Guangdong Changhong Ridian
90,802,061.95 90,802,061.95
Technology Co., Ltd.
Changmei Technology Co., Ltd. 18,000,000.00 18,000,000.00
Total 820,298,087.68 166,402,061.95 17,911,230.52 968,788,919.11
(3) Investment in associates
Changes intheYear
Adjustment Ending
Invested unit Opening balance Investment income Other Cash dividend or Ending balance balance of
Additional Negative for other Provision for
recognizedunder equity profitannounced to Other impairment
Investment Investment comprehensi impairment loss
equity change issued
ve income
Hefei Xingmei Assets
12,846,069.09 -451,268.70 12,394,800.39
ManagementCo., Ltd.
Sichuan Zhiyijia Network
7,490,424.28 3,608,145.43 11,098,569.71
TechnologyCo.,Ltd.
Total 20,336,493.37 3,156,876.73 23,493,370.10
316
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
4. Operation income and operation cost
Current Year Last Year
Item
Income Cost Income Cost
Main business 6,507,129,875.91 5,529,452,332.04 5,758,154,658.16 4,822,671,744.03
Other business 938,956,879.61 904,175,189.74 696,528,668.87 678,486,276.86
Total 7,446,086,755.52 6,433,627,521.78 6,454,683,327.03 5,501,158,020.89
(1) Classified according to product
Current Year Last Year
Product
Operation income Operation cost Operation income Operation cost
Main business 6,507,129,875.91 5,529,452,332.04 5,758,154,658.16 4,822,671,744.03
Refrigerator and
6,090,629,825.93 5,184,542,280.26 5,459,207,451.22 4,572,815,730.29
freezer
Washing
416,498,098.94 344,908,193.24 295,337,371.41 249,850,015.80
machine
Air conditioner 5,117.95 4,910.25
Other 1,951.04 1,858.54 3,604,717.58 1,087.69
Other business 938,956,879.61 904,175,189.74 696,528,668.87 678,486,276.86
Sales of raw
922,463,944.65 902,013,070.81 683,226,603.42 674,964,128.19
materials
Other income 16,492,934.96 2,162,118.93 13,302,065.45 3,522,148.67
Total 7,446,086,755.52 6,433,627,521.78 6,454,683,327.03 5,501,158,020.89
(2) Classified according to region
Current Year Last Year
Regions
Operation income Operation cost Operation income Operation cost
Domestic income 5,599,460,298.75 4,804,187,600.08 4,964,248,778.53 4,192,090,273.97
Export income 1,846,626,456.77 1,629,439,921.70 1,490,434,548.50 1,309,067,746.92
Total 7,446,086,755.52 6,433,627,521.78 6,454,683,327.03 5,501,158,020.89
Top five clients of the Company owe income in sales of RMB 2,703,980,742.68 yuan, a 36.31% in total
operation income.
5. Investment income
Item Current Year Last Year
Long-term equity investment income by equity method 3,156,876.73 -7,735,291.56
Investment income arising from disposal of the long-term equity
-641,846.86
investment
Investment income arising from period of holding the long-term
75,261,313.40
equity investment
Investment income from disposal of financial assets, which is
measured by fair value and with its variation reckoned into current -1,187,641.34 -2,296,400.00
gains/losses
Investment income during holding the financial assets available for
6,693,575.48 5,756,139.46
sale
Total 83,282,277.41 -4,275,552.10
317
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
XVIII. Approval of financial statement
The financial statement has already been approved from the board of directors of the Company for
reporting dated 28 March 2017.
318
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
Supplementary information for financial statement
1. Non-operational gains and losses for this year
(1) Non-recurring gains and losses regulated by Explanation Announcement of Information Disclosure on
Stock Issuance Enterprise No.1—Non-recurring gains/losses (2008) from CSRC:
Item Current Year Note
Gains and losses from disposal of non-current assets 9,265,320.01
Tax refund or mitigate due to examination-and-approval beyond power or without
official approval document or accident
Government subsidy recorded in current gains and losses 41,152,549.66
Capital occupancy expense, collected from non-financial enterprises and recorded
in current gains and losses
Income from the exceeding part between investment cost of the Company paid for
obtaining subsidiaries, associates and joint-ventures and recognizable net assets fair
value attributable to the Company when acquiring the investment
Gains and losses from exchange of non-monetary assets
Gains and losses from assets under trusted investment or management
Various provision for impairment of assets withdrew due to act of God, such as
natural disaster
Gains and losses from debt restructuring
Enterprise reorganization expense
Gains and losses of the part arising from transaction in which price is not fair and
exceeding fair value
Current net gains and losses occurred from period-begin to combination day by
subsidiaries resulting from business combination under common control
Gains and losses arising from contingent proceedings irrelevant to normal operation
of the Company
Except for effective hedge business relevant to normal operation of the Company,
gains and losses arising from fair value change of tradable financial assets and
11,500,963.72
tradable financial liabilities, and investment income from disposal of tradable
financial assets, tradable financial liabilities and financial assets available for sale
Switch-back of provision of impairment of account receivable which are treated
with separate depreciation test
Gains and losses obtained from external trusted loans
Gains and losses arising from change of fair value of investment real estate whose
follow-up measurement are conducted according to fair value pattern
Affect on current gains and losses after an one-time adjustment according to
requirements of laws and regulations regarding to taxation and accounting
Trust fee obtained from trust operation
Other non-operating income and expenditure except for the aforementioned ones 4,948,619.55
Other gains and losses items complying with definition for non-current gains and
3,798,660.03
losses
Subtotal 70,666,112.97
Affect on income tax 8,534,266.32
Affect on minority equity(after taxation) 376,180.79
Total 61,755,665.86
2. Return on equity and earnings per share
319
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2016 to 31 December 2016
(Unless otherwise specified. RMB for record in the statement)
In accordance with requirement of the No. 9 Rule of Information Disclosure Compiling of Public Listed
Companies: Calculation and Disclosure of Return on Equity and Earnings per Share (revised in 2010), the
weighted average return on equity, basic earnings per share and diluted earnings per share of the Company
in 2016 are as follow:
Weighted average Earnings per share/EPS
Profit during the report period
return on equity Basic EPS Diluted EPS
Net profit attributable to shareholders of
5.77% 0.2717 0.2717
parent company
Net profit attributable to shareholders of
parent company after deduction of 4.15% 0.1955 0.1955
non-recurring gains and losses
3. Accounting difference under the accounting rules in and out of China: Nil
4. Supplementary information for accounting policy changed: Nil
320
HEFEI MEILING CO., LTD. Annual Report 2016
Section XII Documents available for Reference
I. Financial statement carrying the signatures and seals of the Chairman, principal of the accounting
works and person in charge of accounting organ;
II. Original auditing report carrying the seal of CPA and autography and seal of the accountants;
III. Original documents of the Company and manuscripts of public notices that disclosed in the
website designated by CSRC in the report period;
The aforesaid documents are all available at headquarter of the Company. The Company would
provide them timely when CSRC and Shenzhen Stock Exchange require or the shareholders need
consultation according to the regulations and Articles of Association.
Chairman: Liu Tibin
Hefei Meiling Co., Ltd.
30 March 2017
321
