HEFEI MEILING CO., LTD.
SEMI-ANNUAL FINANCIAL REPORT 2017
(Unaudited)
August 2017
HEFEI MEILING CO., LTD
SEMI-ANNUAL FINANCIAL REPORT 2016 (Unaudited)
I. Audit reports
Whether the semi-annual report was audited or not
□ Yes √ No
The semi-annual report was not audited.
II. Financial statements
Units in Notes of Financial Statements is RMB
1. Consolidated Balance Sheet
Prepared by Hefei Meiling Co., Ltd.
2017-6-30
In RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 4,918,185,647.77 4,058,869,234.63
Settlement provisions
Capital lent
Financial liability measured
by fair value and with variation 10,813,272.50 12,060,213.30
reckoned into current gains/losses
Derivative financial liability
Notes receivable 2,511,715,429.41 1,421,429,723.73
Accounts receivable 2,048,332,541.11 1,118,960,552.49
Accounts paid in advance 289,836,060.91 134,706,488.38
Insurance receivable
Reinsurance receivables
Contract reserve of
reinsurance receivable
Interest receivable 3,229,356.48 2,645,494.32
Dividend receivable
Other receivables 68,537,511.44 39,553,919.44
1
Purchase restituted finance
asset
Inventories 2,582,538,614.47 1,974,526,734.86
Divided into assets held for
sale
Non-current asset due within
46,133,664.00 12,625,340.00
one year
Other current assets 1,867,683,272.03 1,454,346,297.42
Total current assets 14,347,005,370.12 10,229,723,998.57
Non-current assets:
Loans and payments on
behalf
Finance asset available for
31,000,000.00 17,000,000.00
sales
Held-to-maturity investment
Long-term account
receivable
Long-term equity investment 90,247,745.70 81,643,631.37
Investment property 12,871,340.33 13,275,631.40
Fixed assets 1,214,541,611.12 1,204,093,169.72
Construction in progress 148,626,411.17 107,037,409.95
Engineering material
Disposal of fixed asset 75,846,390.89 75,788,138.47
Productive biological asset
Oil and gas asset
Intangible assets 605,320,595.90 613,969,271.63
Expense on Research and
73,961,222.33 45,023,750.60
Development
Goodwill
Long-term expenses to be
2,583,106.23 1,132,075.48
apportioned
Deferred income tax asset 87,505,957.53 84,264,603.65
Other non-current asset - 34,615,630.00
Total non-current asset 2,342,504,381.20 2,277,843,312.27
Total assets 16,689,509,751.32 12,507,567,310.84
Current liabilities:
Short-term loans 1,432,622,701.07 288,343,724.73
Loan from central bank
2
Absorbing deposit and
interbank deposit
Capital borrowed
Financial liability measured
by fair value and with variation 9,671,394.08 559,249.58
reckoned into current gains/losses
Derivative financial liability
Notes payable 4,573,857,981.57 2,635,051,740.30
Accounts payable 3,168,053,679.32 2,331,899,310.82
Accounts received in
472,573,801.58 390,935,440.46
advance
Selling financial asset of
repurchase
Commission charge and
commission payable
Wage payable 103,531,061.56 189,592,039.00
Taxes payable 85,377,009.73 59,849,032.13
Interest payable 708,602.61 1,617,352.01
Dividend payable 16,972,722.88 2,545,801.23
Other accounts payable 812,770,528.06 622,580,323.43
Reinsurance payables
Insurance contract reserve
Security trading of agency
Security sales of agency
Divided into liability held for
sale
Non-current liabilities due
59,718,504.77 272,202,590.10
within 1 year
Other current liabilities
Total current liabilities 10,735,857,987.23 6,795,176,603.79
Non-current liabilities:
Long-term loans 253,460,000.00 38,908,788.00
Bonds payable
Including: preferred stock
Perpetual capital
securities
Long-term account payable
Long-term wages payable 28,061,416.36 29,696,403.85
3
Special accounts payable 980,000.00 1,400,000.00
Projected liabilities 328,801,716.59 331,575,430.79
Deferred income 122,713,001.14 142,919,562.49
Deferred income tax
1,503,490.88 1,809,032.00
liabilities
Other non-current liabilities
Total non-current liabilities 735,519,624.97 546,309,217.13
Total liabilities 11,471,377,612.20 7,341,485,820.92
Owner’s equity:
Share capital 1,044,597,881.00 1,044,597,881.00
Other equity instrument
Including: preferred stock
Perpetual capital
securities
Capital public reserve 2,685,313,862.77 2,687,961,060.65
Less: Inventory shares
Other comprehensive income 938,467.33 3,474,546.95
Reasonable reserve
Surplus public reserve 391,029,420.33 391,029,420.33
Provision of general risk
Retained profit 997,496,549.90 968,097,382.98
Total owner’s equity attributable
5,119,376,181.33 5,095,160,291.91
to parent company
Minority interests 98,755,957.79 70,921,198.01
Total owner’s equity 5,218,132,139.12 5,166,081,489.92
Total liabilities and owner’s
16,689,509,751.32 12,507,567,310.84
equity
Legal Representative: Li Wei
Person in charge of accounting works: Zhang Xiaolong
Person in charge of accounting institute: Luo Bo
2. Balance Sheet of Parent Company
In RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 3,070,514,216.48 3,071,362,771.31
Financial liability measured 10,023,272.50 12,060,213.30
4
by fair value and with variation
reckoned into current gains/losses
Derivative financial liability
Notes receivable 1,597,881,819.77 1,053,598,721.93
Accounts receivable 1,755,138,033.66 1,006,701,894.37
Account paid in advance 399,362,495.77 106,947,474.25
Interest receivable
Dividends receivable
Other receivables 59,549,479.60 26,742,423.95
Inventories 1,108,770,017.32 1,017,090,374.81
Divided into assets held for
sale
Non-current assets maturing
within one year
Other current assets 1,420,969,339.84 1,427,283,451.40
Total current assets 9,422,208,674.94 7,721,787,325.32
Non-current assets:
Available-for-sale financial
31,000,000.00 17,000,000.00
assets
Held-to-maturity investments
Long-term receivables
Long-term equity
1,025,915,752.87 992,282,289.21
investments
Investment property 11,095,070.97 11,332,015.32
Fixed assets 837,773,087.41 861,163,999.99
Construction in progress 38,386,238.77 19,478,121.20
Project materials
Disposal of fixed assets 43,553,207.13 43,494,954.71
Productive biological assets
Oil and natural gas assets
Intangible assets 433,737,939.25 430,435,091.82
Research and development
3,480,624.34 12,797,092.26
costs
Goodwill
Long-term deferred expenses
Deferred income tax assets 69,726,484.23 69,138,686.26
5
Other non-current assets
Total non-current assets 2,494,668,404.97 2,457,122,250.77
Total assets 11,916,877,079.91 10,178,909,576.09
Current liabilities:
Short-term borrowings 1,350,912,701.07 261,843,724.73
Financial liability measured
by fair value and with variation 8,890,194.08 -
reckoned into current gains/losses
Derivative financial liability
Notes payable 2,537,674,948.81 1,734,774,950.13
Accounts payable 1,503,983,245.29 1,521,019,717.86
Accounts received in
95,120,111.63 104,205,506.34
advance
Wage payable 20,368,144.07 57,714,577.87
Taxes payable 19,598,494.87 25,677,906.64
Interest payable 708,602.61 1,617,352.01
Dividend payable 16,972,722.88 2,545,801.23
Other accounts payable 560,457,483.66 634,561,307.52
Divided into liability held for
sale
Non-current liabilities due
8,384,965.56 257,750,238.18
within 1 year
Other current liabilities
Total current liabilities 6,123,071,614.53 4,601,711,082.51
Non-current liabilities:
Long-term loans 253,460,000.00 4,751,000.00
Bonds payable
Including: preferred stock
Perpetual capital
securities
Long-term account payable
Long-term wages payable 28,061,416.36 29,696,403.85
Special accounts payable
Projected liabilities 328,801,716.59 331,575,430.79
Deferred income 60,750,408.61 64,601,290.18
Deferred income tax
1,503,490.88 1,809,032.00
liabilities
6
Other non-current liabilities
Total non-current liabilities 672,577,032.44 432,433,156.82
Total liabilities 6,795,648,646.97 5,034,144,239.33
Owners’ equity:
Share capita 1,044,597,881.00 1,044,597,881.00
Other equity instrument
Including: preferred stock
Perpetual capital
securities
Capital public reserve 2,753,017,007.10 2,753,017,007.10
Less: Inventory shares
Other comprehensive income
Reasonable reserve
Surplus reserve 390,811,254.65 390,811,254.65
Retained profit 932,802,290.19 956,339,194.01
Total owner’s equity 5,121,228,432.94 5,144,765,336.76
Total liabilities and owner’s
11,916,877,079.91 10,178,909,576.09
equity
Legal Representative: Li Wei
Person in charge of accounting works: Zhang Xiaolong
Person in charge of accounting institute: Luo Bo
3. Consolidated Profit Statement
In RMB
Item Current Period Last Period
I. Total operating income 8,517,794,193.10 6,866,631,262.68
Including: Operating income 8,517,794,193.10 6,866,631,262.68
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost 8,436,805,983.05 6,760,418,778.86
Including: Operating cost 6,996,226,048.85 5,432,461,687.10
Interest expense
Commission charge and
commission expense
7
Cash surrender value
Net amount of expense of
compensation
Net amount of withdrawal of
insurance contract reserve
Bonus expense of guarantee
slip
Reinsurance expense
Operating tax and extras 65,836,020.31 79,457,581.26
Sales expenses 1,140,172,032.08 1,075,647,750.60
Administration expenses 222,533,091.74 175,964,420.95
Financial expenses -33,454,482.67 -39,699,342.16
Losses of devaluation of asset 45,493,272.74 36,586,681.11
Add: Changing income of fair
-10,359,085.30 -1,278,570.21
value(Loss is listed with “-”)
Investment income (Loss is
23,593,349.66 4,153,090.95
listed with “-”)
Including: Investment income
on affiliated company and joint -3,226,328.17 -833,210.42
venture
Exchange income (Loss is
listed with “-”)
Other income 1,275,937.62 -
III. Operating profit (Loss is
95,498,412.03 109,087,004.56
listed with “-”)
Add: Non-operating income 23,491,147.85 21,471,702.44
Including: Disposal gains
261,776.49 330,833.76
of non-current asset
Less: Non-operating expense 11,455,300.63 1,818,874.18
Including: Disposal loss
11,359,875.16 1,545,129.64
of non-current asset
IV. Total Profit (Loss is listed
107,534,259.25 128,739,832.82
with “-”)
Less: Income tax expense 9,439,557.86 18,816,185.98
V. Net profit (Net loss is listed with
98,094,701.39 109,923,646.84
“-”)
Net profit attributable to 92,075,039.77 109,992,701.28
8
owner’s of parent company
Minority shareholders’ gains
6,019,661.62 -69,054.44
and losses
VI. Net after-tax of other
-3,352,515.41 2,484,848.72
comprehensive income
Net after-tax of other
comprehensive income attributable -2,536,079.62 1,814,457.07
to owners of parent company
(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
-2,536,079.62 1,814,457.07
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 -2,536,079.62 1,814,457.07
9
differences arising on translation of
foreign currency financial
statements
6. Other
Net after-tax of other -816,435.79 670,391.65
comprehensive income
attributable to minority
shareholders
VII. Total comprehensive income 94,742,185.98 112,408,495.56
Total comprehensive income
attributable to owners of parent 89,538,960.15 111,807,158.35
Company
Total comprehensive income
attributable to minority 5,203,225.83 601,337.21
shareholders
VIII. Earnings per share:
(i) Basic earnings per share 0.0881 0.1440
(ii) Diluted earnings per share 0.0881 0.1440
Legal Representative: Li Wei
Person in charge of accounting works: Zhang Xiaolong
Person in charge of accounting institute: Luo Bo
4. Profit Statement of Parent Company
In RMB
Item Current Period Last Period
I. Operating income 4,129,608,352.50 3,770,773,163.93
Less: Operating cost 3,775,369,456.26 3,160,132,227.01
Operating tax and extras 27,722,529.70 38,748,885.70
Sales expenses 231,438,219.07 421,077,853.44
Administration
109,065,216.23 77,408,287.96
expenses
Financial expenses -37,206,339.33 -31,518,036.32
Losses of devaluation of
4,856,561.37 9,159,976.91
asset
Add: Changing income of
-10,927,134.88 -1,278,570.21
fair value(Loss is listed with “-”)
Investment income (Loss
29,730,083.95 82,892,597.34
is listed with “-”)
10
Including: Investment
income on affiliated company and 3,105,463.66 2,644,982.57
joint venture
Other income
II. Operating profit (Loss is
37,165,658.27 177,377,996.36
listed with “-”)
Add: Non-operating income 7,418,718.98 14,372,303.76
Including: Disposal
- 269,387.27
gains of non-current asset
Less: Non-operating expense 1,447,901.85 1,216,566.48
Including: Disposal loss
1,443,561.25 1,150,366.91
of non-current asset
III. Total Profit (Loss is listed
43,136,475.40 190,533,733.64
with “-”)
Less: Income tax expense 3,997,506.37 14,915,129.58
IV. Net profit (Net loss is listed
39,138,969.03 175,618,604.06
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
11
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 foreign currency financial
statements
6. Other
VI. Total comprehensive income 39,138,969.03 175,618,604.06
VII. Earnings per share:
(i) Basic earnings per share 0.0375 0.2299
(ii) Diluted earnings per
0.0375 0.2299
share
Legal Representative: Li Wei
Person in charge of accounting works: Zhang Xiaolong
Person in charge of accounting institute: Luo Bo
5. Consolidated Cash Flow Statement
In RMB
Item Current Period Last Period
I. Cash flows arising from
operating activities:
Cash received from selling
commodities and providing labor 6,755,539,540.78 6,122,120,567.44
services
Net increase of customer
deposit and interbank deposit
Net increase of loan from
central bank
Net increase of capital
12
borrowed from other financial
institution
Cash received from original
insurance contract fee
Net cash received from
reinsurance business
Net increase of insured
savings and investment
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 205,339,020.51 183,108,861.55
Other cash received
16,569,072.09 19,615,271.12
concerning operating activities
Subtotal of cash inflow arising
6,977,447,633.38 6,324,844,700.11
from operating activities
Cash paid for purchasing
commodities and receiving labor 5,258,471,672.84 4,321,939,929.71
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 704,133,083.60 644,386,641.53
13
workers
Taxes paid 210,338,863.27 168,259,449.49
Other cash paid concerning
320,273,315.76 318,569,174.49
operating activities
Subtotal of cash outflow arising
6,493,216,935.47 5,453,155,195.22
from operating activities
Net cash flows arising from
484,230,697.91 871,689,504.89
operating activities
II. Cash flows arising from
investing activities:
Cash received from
1,457,000,000.00 500,000,000.00
recovering investment
Cash received from
27,800,453.69 4,986,301.37
investment income
Net cash received from
disposal of fixed, intangible and 2,614,755.73 330,776.45
other long-term assets
Net cash received from
disposal of subsidiaries and other
units
Other cash received
41,477,206.87 36,389,716.67
concerning investing activities
Subtotal of cash inflow from
1,528,892,416.29 541,706,794.49
investing activities
Cash paid for purchasing
fixed, intangible and other 239,785,175.33 65,945,234.00
long-term assets
Cash paid for investment 1,853,000,021.00 100,883,860.00
Net increase of mortgaged
loans
Net cash received from
subsidiaries and other units
obtained
Other cash paid concerning
998,270.61 -
investing activities
Subtotal of cash outflow from
2,093,783,466.94 166,829,094.00
investing activities
Net cash flows arising from
-564,891,050.65 374,877,700.49
investing activities
14
III. Cash flows arising from
financing activities:
Cash received from
20,000,000.00 23,145,352.69
absorbing investment
Including: Cash received
from absorbing minority
shareholders’ investment by
subsidiaries
Cash received from loans 1,685,653,798.22 797,486,045.88
Cash received from issuing
bonds
Other cash received
- 3,451.80
concerning financing activities
Subtotal of cash inflow from
1,705,653,798.22 820,634,850.37
financing activities
Cash paid for settling debts 737,057,083.32 88,241,810.84
Cash paid for dividend and
profit distributing or interest 57,193,407.84 49,368,745.83
paying
Including: Dividend and
profit of minority shareholder
paid by subsidiaries
Other cash paid concerning
151,611.24 98,192.48
financing activities
Subtotal of cash outflow from
794,402,102.40 137,708,749.15
financing activities
Net cash flows arising from
911,251,695.82 682,926,101.22
financing activities
IV. Influence on cash and cash
equivalents due to fluctuation in -7,231,244.45 12,229,868.87
exchange rate
V. Net increase of cash and cash
823,360,098.63 1,941,723,175.47
equivalents
Add: Balance of cash and
cash equivalents at the period 3,986,098,419.76 2,121,161,238.01
-begin
VI. Balance of cash and cash
4,809,458,518.39 4,062,884,413.48
equivalents at the period -end
Legal Representative: Li Wei
15
Person in charge of accounting works: Zhang Xiaolong
Person in charge of accounting institute: Luo Bo
6. Cash Flow Statement of Parent Company
In RMB
Item Current Period Last Period
I. Cash flows arising from operating
activities:
Cash received from selling
commodities and providing labor 2,847,697,427.41 3,257,292,398.00
services
Write-back of tax received 97,733,874.40 90,212,886.14
Other cash received concerning
13,343,872.91 11,964,243.27
operating activities
Subtotal of cash inflow arising from
2,958,775,174.72 3,359,469,527.41
operating activities
Cash paid for purchasing
commodities and receiving labor 3,270,599,036.24 2,456,420,547.09
service
Cash paid to/for staff and workers 292,673,473.80 257,679,481.30
Taxes paid 39,983,393.59 58,375,692.51
Other cash paid concerning
111,308,401.29 135,616,094.86
operating activities
Subtotal of cash outflow arising from
3,714,564,304.92 2,908,091,815.76
operating activities
Net cash flows arising from operating
-755,789,130.20 451,377,711.65
activities
II. Cash flows arising from investing
activities:
Cash received from recovering
1,430,000,000.00 500,000,000.00
investment
Cash received from investment
27,605,396.15 80,247,614.77
income
Net cash received from disposal of
fixed, intangible and other long-term 566,647.40 240,112.02
assets
Net cash received from disposal of
subsidiaries and other units
16
Other cash received concerning
41,875,620.90 28,290,477.04
investing activities
Subtotal of cash inflow from investing
1,500,047,664.45 608,778,203.83
activities
Cash paid for purchasing fixed,
190,548,277.28 37,238,789.69
intangible and other long-term assets
Cash paid for investment 1,494,528,000.00 171,250,000.00
Net cash received from
subsidiaries and other units
Other cash paid concerning
998,270.61 63,665,205.65
investing activities
Subtotal of cash outflow from investing
1,686,074,547.89 272,153,995.34
activities
Net cash flows arising from investing
-186,026,883.44 336,624,208.49
activities
III. Cash flows arising from financing
activities:
Cash received from absorbing
investment
Cash received from loans 1,633,110,198.22 794,126,025.52
Cash received from issuing bonds
Other cash received concerning
142,854,592.22 217,115,708.21
financing activities
Subtotal of cash inflow from financing
1,775,964,790.44 1,011,241,733.73
activities
Cash paid for settling debts 737,057,083.32 60,135,614.84
Cash paid for dividend and profit
56,234,951.49 48,236,007.73
distributing or interest paying
Other cash paid concerning
35,096,664.55 56,057,512.35
financing activities
Subtotal of cash outflow from
828,388,699.36 164,429,134.92
financing activities
Net cash flows arising from financing
947,576,091.08 846,812,598.81
activities
IV. Influence on cash and cash
equivalents due to fluctuation in -4,752,741.88 11,423,170.75
exchange rate
V. Net increase of cash and cash 1,007,335.56 1,646,237,689.70
17
equivalents
Add: Balance of cash and cash
3,067,671,385.08 1,654,499,494.28
equivalents at the period -begin
VI. Balance of cash and cash
3,068,678,720.64 3,300,737,183.98
equivalents at the period -end
Legal Representative: Li Wei
Person in charge of accounting works: Zhang Xiaolong
Person in charge of accounting institute: Luo Bo
18
7. Statement of Changes in Owners’ Equity (Consolidated)
This Period
In RMB
This Period
Owners’ equity attributable to parent company
Other
equity instrument Reas
Item Less: Provisio Minority Total owners’
Perpetu Other onabl
Invento Surplus n of Retained interests equity
Share capital Preferr al Capital reserve comprehensive e
ry reserve general profit
ed capital Other income reser
shares risk
stock securiti ve
es
I. Balance at the end
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
of the last year
Add: Changes
of accounting policy
Error
correction of the last
period
Enterpr
ise combine under
the same control
Other
II. Balance at the
beginning of this 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
year
III. Increase/
Decrease in this year -2,647,197.88 -2,536,079.62 29,399,166.92 27,834,759.78 52,050,649.20
(Decrease is listed
19
with “-”)
(i) Total
comprehensive -2,536,079.62 92,075,039.77 5,203,225.83 94,742,185.98
income
(ii) Owners’
devoted and -2,647,197.88 22,631,533.95 19,984,336.07
decreased capital
1.Common shares
invested by 37,361.22 37,361.22
shareholders
2. Capital invested
by holders of other
equity instruments
3. Amount reckoned
into owners equity
with share-based
payment
4. Other -2,647,197.88 22,594,172.73 19,946,974.85
(III) Profit
-62,675,872.85 -62,675,872.85
distribution
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk
provisions
3. Distribution for
owners (or -62,675,872.85 -62,675,872.85
shareholders)
4. Other
20
(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 1,044,597,881.00 2,685,313,862.77 938,467.33 391,029,420.33 997,496,549.90 98,755,957.79 5,218,132,139.12
period
Last Year
In RMB
Last Period
Owners’ equity attributable to the parent Company
Other Less: Reas Provisi
Item Other Minority Total owners’
equity instrument Invento onabl on of
Share capital Capital reserve comprehensiv Surplus reserve Retained profit interests equity
Preferre Perpetu Othe ry e general
e income
d stock al r shares reser risk
21
capital ve
securiti
es
I. Balance at the end
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 the last year
Add: Changes
of accounting policy
Error
correction of the last
period
Enterp
rise combine under
the same control
Other
II. Balance at the
beginning of this 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
year
III. Increase/
Decrease in this
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
year (Decrease 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 by 280,858,676.00 1,259,874,046.76 27,867,909.83 1,568,600,632.59
shareholders
2. Capital invested
22
by holders of other
equity instruments
3. Amount reckoned
into owners equity
with share-based
payment
-101,096,862.24
4. Other 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
1. Withdrawal of
23,962,426.15 -23,962,426.15 -
surplus 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
23
(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 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
period
Legal Representative: Li Wei
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)
This Period
In RMB
This Period
Other
equity instrument Other
Item Less:
comprehen Reasonabl Total owners’
Share capital Perpetual Capital reserve Inventory Surplus reserve Retained profit
Preferred sive e reserve equity
capital Other shares
stock income
securities
I. 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
last year
Add: Changes of
accounting policy
Error
correction of the last period
24
Other
II. Balance at the beginning
1,044,597,881.00 2,753,017,007.10 390,811,254.65 956,339,194.01 5,144,765,336.76
of this year
III. Increase/ Decrease in
this year (Decrease is listed -23,536,903.82 -23,536,903.82
with “-”)
(i) Total comprehensive
39,138,969.03 39,138,969.03
income
(ii) Owners’ devoted and
decreased capital
1.Common shares invested
by shareholders
2. Capital invested by
holders of other equity
instruments
3. Amount reckoned into
owners equity with
share-based payment
4. Other
(III) Profit distribution -62,675,872.85 -62,675,872.85
1. Withdrawal of surplus
reserves
2. Distribution for owners
-62,675,872.85 -62,675,872.85
(or shareholders)
3. Other
(IV) Carrying forward
internal owners’ equity
1. Capital reserves
conversed to capital (share
capital)
25
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
1,044,597,881.00 2,753,017,007.10 390,811,254.65 932,802,290.19 5,121,228,432.94
report period
Last year
In RMB
Last period
Other
equity instrument
Less: Other
Item Perpetu Invento comprehen Reasonabl Total owners’
Share capital Preferr al Capital reserve Surplus reserve Retained profit
ry sive e reserve equity
ed capital Other shares income
stock securiti
es
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
26
II. Balance at the beginning of this
763,739,205.00 1,497,987,446.59 366,848,828.50 786,501,710.90 3,415,077,190.99
year
III. Increase/ Decrease in this year
280,858,676.00 1,255,029,560.51 23,962,426.15 169,837,483.11 1,729,688,145.77
(Decrease is listed with “-”)
(i) Total comprehensive income 239,624,261.53 239,624,261.53
(ii) Owners’ devoted and
280,858,676.00 1,259,877,498.56 1,540,736,174.56
decreased capital
1.Common shares invested by
280,858,676.00 1,259,874,046.76 1,540,732,722.76
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 distribution 23,962,426.15 -69,786,778.42 -45,824,352.27
1. Withdrawal of surplus reserves 23,962,426.15 -23,962,426.15
2. Distribution for owners (or
-45,824,352.27 -45,824,352.27
shareholders)
3. Other
(IV) Carrying forward internal
owners’ equity
1. Capital reserves conversed to
capital (share capital)
2. Surplus reserves conversed to
capital (share capital)
3. Remedying loss with surplus
reserve
4. Other
(V) Reasonable reserve
27
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 report
1,044,597,881.00 2,753,017,007.10 390,811,254.65 956,339,194.01 5,144,765,336.76
period
Legal Representative: Li Wei
Person in charge of accounting works: Zhang Xiaolong
Person in charge of accounting institute: Luo Bo
28
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise 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 [Wanzhengmi (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. 1413] issued by SASAC agrees the above
29
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
said share transferring.
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 30 June 2017, 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
30
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
(I) Restricted shares 290,457,371 27.81%
1. State-owned shares
2. State-owned legal person’s shares 70,793,625 6.78%
3. Other domestic shares 218,663,897 20.94%
Including: Domestic legal person’s shares 215,697,115 20.65%
Domestic natural person’s shares 2,966,782 0.29%
4. Foreign shares 999,849 0.09%
(II) Unrestricted shares 754,140,510 72.19%
1. RMB Ordinary shares 592,276,359 56.69%
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: Li Wei; register capital(paid-in capital): RMB 1,044,597,881; type of company: limited
liability company(joint venture and listed of Taiwan, Hong Kong and 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&auxiliary 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 Company Limited, Zhongshan Changhong Electric Company Limited and Zhongke Meiling
Cryognic Technology Company Limited, etc. As compared to previous year, Subsidiary Meiling Candy
Washing Machine Company Limited, Zhongshan Hongling Trade Company Limited and Guangzhou
Changhong Trade Company Limited were newly included due to direct investment in this period; Subsidiary
Xi’an Meizhilai Appliances Marketing Company Limited was excluded due to liquidation.
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
31
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
“IV-Significant Accounting Policy and Accounting Estimation”.
2. Continuous operation
The Company recently has a history of profitability operation and has financial resources supporting,
and prepared the financial statement on basis of going concern is reasonable.
IV. Significant Accounting Policy and Accounting Estimation
1. Statement on observation of accounting standards for enterprise
The financial statement prepared by the Company applies with the requirements of Accounting Standard
for Enterprise, and reflects the financial condition, operational achievements and cash flow of the Company
effectively and completely.
2. Accounting period
The accounting period of the Company is the calendar date from 1 January to 31 December.
3. 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.
32
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise 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
subsidiary’s financial statement based on the fair value of the various identifiable assets, liabilities or
33
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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
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
34
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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 cannot 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’ 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.
35
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the 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 included 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 part 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 gains/losses while
36
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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
37
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise 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
38
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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 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, export tax refund
Combination 2
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 1 year (1 year
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
39
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise 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
40
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise 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 then transfers 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
41
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
cost, and cost of the investment is adjusted when making additional investment or writing off investment;
When calculated by equity method, current investment gains and losses represent the proportion of the net
gains and losses realized by the invested unit in current year attributable to or undertaken by the investor.
When the Company is believed to enjoy proportion of net gains and losses of invested unit, gains and
losses attributable to the Company according to its shareholding ratio is to computer out according to the
accounting policy and accounting period of the Company, on the basis of the fair value of various
recognizable assets of the invested unit as at the date of obtaining of the investment, after offset of gains
and losses arising from internal transactions with associates and joint-ventures, and finally to make
confirmation after adjustment of net profit of the invested unit. Confirmation on gains and losses from the
long-term equity investment in associates and joint-ventures held by the Company prior to the first
execution day, could only stand up with the precedent condition that debit balance of equity investment
straightly amortized according to its original remaining term has already been deducted, if the
aforementioned balance relating to the investment do exist.
In case that investor loses joint control or significant influence over investee due to disposal of part
equity interest investment, the remaining equity interest shall be calculated according to 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
42
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
real estate is formed with all necessary expenditures occurred before construction completion of the assets
arriving at the estimated utilization state.
Consequent measurement of investment estate shall be measured by cost method. Depreciation is
provided with average service life method pursuant to the predicted service life and net rate of salvage
value. The predicted service life and net rate of salvage value and annual depreciation are listed as follows:
Predicted rate of salvage Depreciation rate per
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 reorganization of fixed assets, they would be accounted as fixed asset
cost; and for the part which is replaced, reorganization of its carrying value shall cease; for those not
meeting requirements for reorganization of fixed assets, they shall be accounted in current gains and losses
43
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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 reorganization of such fixed asset.
The amount of income from disposal, transfer, discarding as scrap or damage of fixed asset after deducting
the asset’ s carrying value and relevant taxation shall be written into current gains and losses.
The Company withdraws depreciation for all fixed assets except for those which have been fully
depreciated while continuing to use. It adopts average service life method for withdrawing depreciation
which is treated respectively as cost or current expense of relevant assets according to purpose of use. The
depreciation term, predicted rate of salvage value and depreciation rate applied to fixed assets of the
Company are as follows:
Predicted rate of salvage Depreciation rate per
No. 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
reorganization of capitalized amount of common borrowing, it equals to the weighted average of the
44
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
assets whose accumulated expense or capital disburse is more than common borrowing times
capitalization rate of occupied common borrowing. Capitalization rate is determined according to
weighted average interest rate of common borrowing.
Assets satisfying capitalization principle generally refer to fixed assets, investment real estate and
inventories which can only arrive at predicted available-for-use and available-for-sale state after quite a
long time (generally over one year) in purchase or production activities.
If abnormal interruption happens during purchase or production of assets satisfying capitalization
principle and the interruption lasts over 3 months, the capitalization for the borrowing expense shall pause
until the purchase or production restarts.
17. Intangible assets
The Company holds intangible assets including land use right, trademark, patent technology and
non-patent technology. Intangible assets are measured according to the effective costs paid for obtaining
the assets. For those intangible assets purchased in by the Company, their effective cost consist of actual
payment and relevant other expenditure; for the intangible assets input by investors, effective cost is
determined according to the value agreed in investment contracts and agreements, while if the agreed
value is not fair, then effective value is confirmed according to fair value.
Land use right is averagely amortized according to its transfer term commencing from the sate of
transfer; trademark use-rights averagely amortized by 10 years; patent technology, non-patent technology
and other intangible assets is averagely amortized according to the shortest of their predicted service life,
beneficial term concluded by contract and effective term regulated by laws. Amortization amount is
recorded in assets cost and current gains and losses relevant to beneficial objectives.
Re-examination on predicted service life and amortization method of the intangible assets which
have limited service life shall be conducted at the end of each year. If changed, it would be treated as
change of accounting estimation. Re-examination on predicted service life of intangible assets which have
uncertain service life shall be conducted. For any evidence proving that service life of intangible assets is
limited, then the service life shall be estimated and the Company shall make amortization within the
predicted service life period.
18. Research and development
As for expenditure for research and development, the Company classifies it into expenditure on
research phase and development phase, based on nature of the expenditure and that whether the final
intangible assets formed by research & development is of great uncertainty. Expenditure arising during
research should be recorded in current gains and losses upon occurrence; expenditure arising during
development is confirmed as intangible assets when satisfying the following conditions:
(1) Completions of the intangible assets make it available for application or sell in technology;
(2) Equipped with plan to complete the intangible asset and apply or sell it;
45
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
(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;
(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
46
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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, and non-monetary benefits as well as other short-term remuneration. During the accounting
period when staff provides services, the short-term remuneration actually occurred is recognized as
liabilities and shall be included in current gains and losses or related asset costs according to the beneficial
items.
Retirement benefits mainly consist of basic pension insurance, unemployment insurance and
early-retirement benefits, etc. retirement benefit scheme represents the agreement reached by the
Company and its employees in respect of retirement benefits, or the rules or regulations established by the
Company for providing retirement benefits to employees. In particular, defined contribution plan means a
retirement benefit plan, pursuant to which, the Company makes fixed contribution to independent fund,
upon which, and it is not obliged to make further payment. Defined benefit plan refers to retirement
benefit scheme other than defined contribution plan.
The early retirement policy for staff and workers of the Company is the compensation for
encouraging staff and workers to accept the reduction voluntarily. The employees make applications
47
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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 recognized when the packing list is received;
and the associated costs incurred or to be incurred can be measured reliably. Air-conditioner OEM/ODM
will recognize revenue while notes issued after commodity transferring to the shipping space that
appointed by the client.
(2) The Company confirms the realization of service income when the gross income and total cost of
labor service cab be unfailingly calculated, the economic benefits related to labor service are likely to flow
into the Group, and the progress of labor service can be confirmed reliably. On balance sheet date, with
regard to those with results provided for labor service transactions can be estimated reliably, confirm the
relevant service income according to percentage of completion method and determine the
percentage-of-completion method by the proportion of the occurred cost in the estimated total cost; as for
those with results provided for labor service transactions can’t be estimated reliably and with occurred
labor cost predicted to be able to get compensation, confirm to provide service income according to labor
cost amount occurred and capable of getting compensation, and carry over the occurred labor costs; for
those with results provided for labor service transactions can’t be estimated reliably and with occurred
labor cost predicted to be not able to get compensation, reckon the occurred labor cost in the current profits
and losses, but not confirm to provide service income.
48
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
(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.
Government subsidies related to the daily activities of the enterprise shall be included in other income
or offset the relevant costs in accordance with the essence of the economic business. Government
subsidies not related to the daily activities of the enterprise shall be included in the non-operating income
and expenditure.
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.
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
49
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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 5 parts:
air-conditioner, refrigerator and freezer, marketing , Small household appliances 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
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
50
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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 cannot 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
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.
51
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Taking into account the various uncertainties during the ten years, the Company considers no
discount factor of such projected liabilities. Instead, the Company reviews the parameters (probability,
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 cannot 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 cannot 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 period.
(2) Change of significant accounting estimates
The Company had no change of significant accounting estimates in the period.
V. Taxation
(I) Major taxes (expenses) and tax (expense) rates
Tax(expenses) Tax base Tax rate
VAT Income from sales of goods and from processing 17%、13%、6%、5%
Urban maintenance and
Turnover tax 5% or 7%
construction tax
Education surcharge Turnover tax 3%
Local education surcharge Turnover tax 2%
52
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Tax(expenses) Tax base Tax rate
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 3rd year to 5th year, and
enjoy the preferential till expired.
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.
Subsidiary Guangdong Changhong Ridian Technology Co., Ltd. obtained a High-Tech Enterprise
certificates on 9 December 2016 with three-year valid, and the enterprise enjoys 15% favorable income
53
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
tax for the national high-tech enterprise
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, 2017, “period-end” refers to June 30, 2017, “the period” refers to Jan. 1
to June 30, 2017, “the last period” refers to Jan. 1 to June 30, 2016, the currency is RMB.
1. Monetary fund
Item Balance at period-end Balance at year-begin
Cash 83,233.09 94,415.53
Bank deposit 4,349,072,332.23 3,827,367,022.13
Other Monetary fund 569,030,082.45 231,407,796.97
Total 4,918,185,647.77 4,058,869,234.63
Including: total amount deposited in overseas 11,786,986.88 19,067,202.50
Other monetary fund:
Item Amount at period-end
Deposits 528,902,400.86
Account of foreign currency for verification 34,005,529.84
Union Pay online 4,456,393.66
Taobao account 1,665,758.09
Total 569,030,082.45
Among the other monetary fund, the cash deposit (with over three months restiction) and account of
third payment platform are not considered as the cash and cash equivalent, which amounting to
108,727,129.38 Yuan in total.
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 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 period-end Balance at year-begin
Derivative financial assets 10,813,272.50 12,060,213.30
Derivative financial assets refer to the RMB forward exchange fund in the period.
3. Notes receivable
(1) Category of notes receivable
54
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Item Balance at period-end Balance at year-begin
Bank acceptance bill 2,314,320,720.47 1,096,452,069.60
Commercial acceptance bill 197,394,708.94 324,977,654.13
Total 2,511,715,429.41 1,421,429,723.73
(2) Notes receivable mortgaged by end of the year
Item Amount mortgaged by end of the period
Bankacceptance 586,118,629.32
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 period-end
period-end
Bank acceptance bill 2,235,142,755.76
Commercial acceptance bill 242,420,369.40
Total 2,477,563,125.16
(4) Notes transfer to account receivable due to the failure implementation from drawer at year-end:
Nil
4 Accounts receivable
(1) Account receivable by category
Amount at period-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
Combination 1 1,425,699,322.29 66.91% 73,041,490.89 5.12% 1,352,657,831.40
Combination 2 690,888,200.94 32.42% - - 690,888,200.94
Subtotal of combination 2,116,587,523.23 99.33% 73,041,490.89 3.45% 2,043,546,032.34
Account receivable with single minor amount
14,236,410.51 0.67% 9,449,901.74 66.38% 4,786,508.77
but withdrawal bad debt provision singly
Total 2,130,823,933.74 100.00% 82,491,392.63 3.87% 2,048,332,541.11
(Continued)
Amount at year-begin
Category
Book balance Bad debt provision Book value
55
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Percent Percent
Amount Amount
age age
Significant account receivable and withdrawal
bad debt provision single
Account receivable withdrawal bad debt
provision by combination
Combination 1 834,543,507.58 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
1) No account receivable with single major amount but withdrawal bad debt provision singly at
period-end.
2) Account receivable with withdrawal bad debt provision for combination 1 by aging account
Balance at period-end
Age
Account receivable Bad debt provision Provision proportion
Within 1 year 1,415,374,510.68 70,768,725.53 5.00%
1-2 years 7,781,228.46 1,167,184.27 15.00%
2-3 years 2,003,415.01 701,195.25 35.00%
3-4 years 250,015.02 137,508.26 55.00%
4-5 years 155,170.28 131,894.74 85.00%
Over 5 years 134,982.84 134,982.84 100.00%
Total 1,425,699,322.29 73,041,490.89
3) Account receivable with no withdrawal bad debt provision for combination 2
Combination Book balance
Account connect with related parties 574,882,713.94
Letter of Credit 116,005,487.00
Total 690,888,200.94
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, 11 clients involved.
(2) Bad debt reserve provided for, reversed (or recovered) during this period
New accrual bad debts in the period amounting to RMB 29,688,536.58, no trade receivables
written-off in previous year were recovered.
(3) No account receivable actually written-off in the period.
56
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
(4) In the period, top five receivables collected by arrears party amounting to RMB 857,662,386.81
in total, accounted for 40.25% of the receivables at balance of the period-end, the bad debt provision
accrual correspondingly amounting to RMB 16,602,557.02 at period-end balance.
5. Accounts paid in advance
(1) Age of account paid in advance
Amount at period-end Amount at year-begin
Item
Amount Percentage Amount Percentage
Within 1 year 286,492,615.39 98.85% 131,113,656.82 97.33%
1－2 years 2,764,333.17 0.95% 2,983,725.64 2.22%
2－3 years 186,787.65 0.06% 487,258.38 0.36%
Over 3 years 392,324.70 0.14% 121,847.54 0.09%
Total 289,836,060.91 100.00% 134,706,488.38 100.00%
(2) Top 5 of account paid in advance in balance at period-end amounting to RMB 201,885,181.30,
accounted for 69.65% of the account.
6. Interest receivable
Item Balance at period-end Balance at year-begin
Deposit interest receivable 3,229,356.48 2,645,494.32
7. Other accounts receivable
(1) Category of other account receivable
Amount at period-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 11,062,149.18 15.54% 2,360,977.37 21.34% 8,701,171.81
Combination 2 59,836,339.63 84.08% - - 59,836,339.63
Subtotal of combination 70,898,488.81 99.62% 2,360,977.37 3.33% 68,537,511.44
Other account receivable with single minor 100.00
267,932.63 0.38% 267,932.63 -
amount but withdrawal bad debt provision singly %
Total 71,166,421.44 100.00% 2,628,910.00 3.69% 68,537,511.44
(Continued)
Amount at year-begin
Category Book balance Bad debt provision
Bookvalue
Percent Percent
Amount Amount
age age
Significant other account receivable and
57
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Amount at year-begin
Category Book balance Bad debt provision
Bookvalue
Percent Percent
Amount Amount
age age
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
100.00
Total 41,913,449.02 2,359,529.58 5.63% 39,553,919.44
%
1) No significant other account receivable and no withdrawal bad debt provision single at period-end.
2) Other account receivable with withdrawal bad debt provision for combination 1 by aging account
Balance at period-end
Age
Account receivable Bad debt provision Provision proportion
Within 1 year 7,661,808.58 383,090.43 5.00%
1-2 years 706,540.60 105,981.09 15.00%
2-3 years 969,067.92 339,173.77 35.00%
3-4 years 180,000.00 99,000.00 55.00%
4-5 years 740,000.00 629,000.00 85.00%
Over 5 years 804,732.08 804,732.08 100.00%
Total 11,062,149.18 2,360,977.37
3) Other account receivable with no withdrawal bad debt provision for combination 2
Combination Book balance
Contact with related party 200,000.00
Employee’s reserve loans 29,892,444.67
Export rebate 29,743,894.96
Total 59,836,339.63
4) The other account receivable with major amount at period-end and accrual for bad debt provision
single refers to the receivable amount of 267,932.63 Yuan from Guangdong Xiongfeng Electric Co., Ltd.
(2) Reversal (or withdraw) of reserve for bad debts in the period
New accrual bad debts in the year amounting to RMB 269,380.42, no trade receivables written-off in
previous year were recovered.
58
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
(3) No actual verification of other receivables in the period.
(4) Classification of other accounts receivable according to the nature of account
Nature Book balance at period-end Book balance at year-begin
Employee’s reserve loans 29,892,444.67 18,784,317.17
Non-consolidated related party 200,000.00 12,870,014.08
Deposit 7,990,509.82 8,062,507.62
Advance money temporary 267,932.63 1,413,879.45
Export rebate 29,743,894.96 159,982.87
Other 3,071,639.36 622,747.83
Total 71,166,421.44 41,913,449.02
(5) Top 5 other receivables collected by arrears party at balance of period-end:
Bad Balance
Proportion in total
Balanceat atperiod-end
Name Natureofaccount Bookage other receivables at
period-end of debt
period-end
provision
State Administration of
Taxation of Hefei Economic Within 1
Export rebate 29,358,965.71 41.25%
& Technological year
Development Zone
Employees Within 1
Fei Ming 4,293,600.00 6.03%
deposit year
Within 1
Nanjing Customs of PRC Cash deposit 1,775,972.11 2.50% 88,798.61
year
Employees Within 1
Li Miao 1,090,329.05 1.53%
deposit year
Beijing Tongzhou New Rural Guarantee Within 1
1,000,000.00 1.41% 50,000.00
Construction Service Center money year
Total 37,518,866.87 52.72% 138,798.61
(6) No other account receivable involved government subsidies at period-end.
(7) No other receivables terminated reorganization due to the transfer of financial assets at
period-end.
(8) No assets and liability transfer other receivables and continues to involve at period-end.
8. Inventories
(1) Classification of inventories
Amount at period-end
Item
Bookbalance Impairment provision Book value
Raw materials 322,314,685.16 2,144,408.97 320,170,276.19
Stockcommodities 1,825,782,218.57 79,589,804.12 1,746,192,414.45
Low value consumable articles 12,545,529.30 - 12,545,529.30
Goodsintransit 426,481,411.06 8,326,761.05 418,154,650.01
59
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Amount at period-end
Item
Bookbalance Impairment provision Book value
Goods-in-process 41,023,888.17 - 41,023,888.17
Deferred expense for moulds 44,451,856.35 - 44,451,856.35
Total 2,672,599,588.61 90,060,974.14 2,582,538,614.47
(Continues)
Amount at year-begin
Item
Bookbalance Impairment provision Book value
Raw materials 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
Goodsintransit 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
(2) Inventory falling price reserves
Amount at
Amount at Increased in the Decreased in the period
Item period-end
year-begin period
Switch-back Other switch-out
Raw materials 2,133,956.27 10,447.01 2,144,403.28
Stock
71,224,130.62 9,586,178.63 1,220,499.44 79,589,809.81
commodities
Goods in
2,700,789.83 5,795,290.81 169,319.59 8,326,761.05
transit
Total 76,058,876.72 15,391,916.45 1,389,819.03 90,060,974.14
(3) Provision for inventories
Reasons for the
Item Specific basis for determining of net realizable value Switch-back or conversion
in the period
Cost is higher than net realizable value (The processed products are
Raw materials decline)
Stock Cost is higher than net realizable value (The market price at period-end
fell)
commodities
Cost is higher than net realizable value (The market price at period-end
Goods in transit fell)
Cost is higher than net realizable value (The processed products are
Goods in process
decline)
60
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
9. Non-current assets due within one year
Balance at Nature
Item Balanceat period-end
year-begin
Time deposits due within one
46,133,664.00 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, will expire in 2017 and reclassify to this project.
10. Other current assets
Item Balanceat period-end Balance at year-begin Nature
Financial products 1,767,200,000.00 1,385,200,000.00 Bank financial products
Value-added tax to be Reclassify of value-added
86,050,824.57 56,525,274.99
deducted tax to be deducted
Advance payment of income Reclassify of advance
11,124,666.91 12,357,316.25
tax payment of income tax
Re-classify the prepaid
Advance payment of taxes
3,307,780.55 263,706.18 construction tax and
and surcharges
education surcharge
Total 1,867,683,272.03 1,454,346,297.42
11. Finance asset available for sales
(1) Finance asset available for sales
Balanceat period-end Balance at year-begin
Item Impairm Impairme
Bookbalance ent Book value Bookbalance nt Book value
provision provision
Equity instrument available for
31,000,000.00 31,000,000.00 17,000,000.00 17,000,000.00
sales
Including: measured by cost 31,000,000.00 31,000,000.00 17,000,000.00 17,000,000.00
Total 31,000,000.00 31,000,000.00 17,000,000.00 17,000,000.00
(2) Finance asset available for sales measured by cost at period-end
Holding Cash
Decrease
Increase in proportion dividend
Invested Unit Year-begin in the Period-end
the period in invested for the
period
unit period
Huishang Bank Co., Ltd. 5,000,000.00 5,000,000.00 0.0972% -
Sichuan Hongyun New it 14,000,000.0
12,000,000.00 26,000,000.00 16.00%
Investment Fund 0
14,000,000.0
Total 17,000,000.00 31,000,000.00 -
0
(3) No impairment reserve of finance asset available for sales at period-end.
61
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
12. Long-term equity investment
Change in the period
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 period-end balance at
vestm cash dividends Other
investment confirmed by sive income of impair period-end
ent or profits
equity method adjustment equity ment
Associated companies
1. ChanghongRuba
29,314,674.36 720,850.57 -921,916.41 29,113,608.52
Electric Company(Private)Ltd.
2. Hefei Xingmei Assets Management
12,394,800.39 -512,602.26 11,882,198.13
Co., Ltd.
3. Sichuan Zhiyijia Network Technology
9,380,373.67 -2,236,489.97 7,143,883.70
Co., Ltd.
4. Hengyuan Dineng Rebao Technology
22,771,065.45 -41,337.05 22,729,728.40
Company Limited
5. Sichuan Tianyou Guigu Technology
7,782,717.50 971,714.68 8,754,432.18
Co., Ltd.
6. Chengdu Guigu Environment
12,500,000.00 -1,876,105.23 10,623,894.77
Technology Co., Ltd.
Total 81,643,631.37 12,500,000.00 -2,973,969.26 -921,916.41 90,247,745.70
Note: Chengdu Guigu Environment Technology Co., Ltd. established on 22 May 2013, and according to the equity transfer agreement and supplementary agreement
signed between the Sichuan Changhong Air-conditioner Co., Ltd. and Sichuan Tianyou Guigu Technology Co., Ltd. dated 31 December 2016, the 25% equity of
Chengdu Guigu Environment Technology Co., Ltd. are acquired by the Company with 12.5 million Yuan contributed on 31 March 2017
62
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise 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 period
3.Decreased in the period
4.Balance at period-end 23,142,172.83 916,691.38 24,058,864.21
II. Accumulated depreciation and
accumulated amortization
1.Balance at year-begin 10,328,434.76 454,798.05 10,783,232.81
2.Increased in the period 385,106.79 19,184.28 404,291.07
(1) provision or amortization 385,106.79 19,184.28 404,291.07
3.Decreased in the period
4.Balance at period-end 10,713,541.55 473,982.33 11,187,523.88
III. Provision for impairment
IV. Book value
1.Book value at period-end 12,428,631.28 442,709.05 12,871,340.33
2.Book value at year-begin 12,813,738.07 461,893.33 13,275,631.40
(2) No investment real estate measured by fair value at period-end.
(3) No particular about mortgage of investment property at period-end.
(4) No investment real estate having not completed the property right certificate at period-end.
14. Fixed assets
(1) Details of fixed assets
Houses and Mechanical Transport Others
Item Total
buildings equipment equipment equipment
I. Originalbookvalue
2,087,508,116.1
1.Balanceatyear-begin 904,218,907.77 985,418,849.90 24,269,870.93 173,600,487.55
5
2.Increasedintheperiod 11,505,120.83 65,881,249.60 2,414,923.37 14,454,768.32 94,256,062.12
(1)Purchase 1,017,777.70 23,488,521.06 1,752,055.74 4,005,376.97 30,263,731.47
(2) Construction in progress
10,487,343.13 42,392,728.54 662,867.63 10,449,391.35 63,992,330.65
transfer-in
(3)Inventory transfer-in -
(4) Increase in exchange rate
-
fluctuation
3.Decreasedintheperiod 2,311,532.81 53,784,188.91 1,035,550.14 22,819,027.46 79,950,299.32
(1)disposeor retirement 2,311,532.81 46,099,647.91 1,035,550.14 22,819,027.46 72,265,758.32
(2) Construction in progress - 7,684,541.00 - - 7,684,541.00
63
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Houses and Mechanical Transport Others
Item Total
buildings equipment equipment equipment
transfer-in
(3)otherdecrease - - - - -
2,101,813,878.9
4.Balanceat period-end 913,412,495.79 997,515,910.59 25,649,244.16 165,236,228.41
5
II. Accumulated
-
depreciation
1.Balanceatyear-begin 181,544,269.20 605,064,394.99 15,989,039.94 79,008,738.98 881,606,443.11
2.Increasedintheperiod 14,967,319.56 40,878,868.73 893,212.38 7,814,416.44 64,553,817.11
(1)provision 14,967,319.56 40,878,868.73 893,212.38 7,814,416.44 64,553,817.11
3.Decreasedintheperiod 417,225.55 40,937,661.52 990,798.74 18,350,809.90 60,696,495.71
(1)disposeor retirement 417,225.55 39,381,369.90 990,798.74 18,350,809.90 59,140,204.09
(2) Construction in progress
- 1,556,291.62 - - 1,556,291.62
transfer-in
(3)otherdecrease - - - - -
4. Balanceat period-end 196,094,363.21 605,005,602.20 15,891,453.58 68,472,345.52 885,463,764.51
III. Provision for
-
impairment
1.Balanceatyear-begin - 1,601,411.95 7,403.67 199,687.70 1,808,503.32
2.Increasedintheperiod -
3.Decreasedintheperiod -
(1)disposeor retirement -
4.Balanceat period-end - 1,601,411.95 7,403.67 199,687.70 1,808,503.32
IV Book value -
1,214,541,611.1
1.Bookvalueatperiod-end 717,318,132.58 390,908,896.44 9,750,386.91 96,564,195.19
2
1,204,093,169.7
2.Bookvalueatyear-begin 722,674,638.57 378,753,042.96 8,273,427.32 94,392,060.87
2
The new fixed assets in the period mainly due to the transfer-in of construction in progress, and
disposal of fixed assets in the period makes the decrease of fixed assets
(2) No fixed assets temporary idle at period-end.
(3) No fixed assets for collateral at period-end.
(4) No fixed assets leased through operating lease at period-end.
(5) No fixed assets leased through operating lease at period-end.
Accumulated Depreciation
Items Original book value Net book value
depreciation provision
Mechanical
1,750,124.70 212,108.29 - 1,538,016.41
equipment
Transport equipment 197,640.00 187,758.00 - 9,882.00
Building construction 32,626,483.29 7,399,519.29 - 25,226,964.00
Others equipment 15,214,412.00 2,097,531.77 - 13,116,880.23
64
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Total 49,788,659.99 9,896,917.35 - 39,891,742.64
(6) Fixed assets without property certificate
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 period-end.
15. Construction in progress
(1) Details of construction in progress
Amount at period-end Amount at year-begin
Imp I
air m
men pa
t ir
Item pro m
Book balance visio Book value Book balance en Book value
n t
pr
ov
isi
on
Relocation and capacity expansion
83,304,597.68 83,304,597.68 60,889,270.95 60,889,270.95
project of Zhongke Meiling
Construction of intelligent manufacturing 23,126,522.82 23,126,522.82 12,785,053.55 12,785,053.55
Leasing project in college 7,072,430.40 7,072,430.40 5,631,371.46 5,631,371.46
Reform of the box shell molding in
4,654,700.80 4,654,700.80
Jiangxi
Equipments pending for installation 4,278,102.62 4,278,102.62 3,490,730.72 3,490,730.72
Production reform of J line big
3,190,119.66 3,190,119.66
refrigeration
28 station box foam line 3,072,649.63 3,072,649.63
Jiangmei door foam line 2,256,410.28 2,256,410.28
Door shell molding extruder of Jiangxi
1,897,435.90 1,897,435.90
Meiling
Reform of line R290 1,769,230.77 1,769,230.77 4,031,885.46 4,031,885.46
Upgrading and reform of the production
line of intelligent refrigerator of 1,496,635.61 1,496,635.61 11,190,008.45 11,190,008.45
Mianyang Meiling
65
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Amount at period-end Amount at year-begin
Imp I
air m
men pa
t ir
Item pro m
Book balance visio Book value Book balance en Book value
n t
pr
ov
isi
on
Construction of the lab test center
1,051,340.78 1,051,340.78
building and experiment ability
Squeeze board line of Jiangxi Meiling 979,843.89 979,843.89 593,777.99 593,777.99
Cold perfusion system of Jiangxi Meiling 773,504.23 773,504.23
Liner punch line of Jiangxi Meiling 721,794.87 721,794.87
Domestic web depart. Of Jiangxi Meiling 589,743.59 589,743.59
Central air conditioning relocation and
- 1,124,429.99 1,124,429.99
Capacity Upgrading Project
KA line - 792,136.75 792,136.75
2nd phase construction of the fitting life
- 165,000.00 165,000.00
zone in new industrial park of Meiling
Comprehensive promotion of non shrink
- 87,220.00 87,220.00
tube expander
Other miscellaneousitems 8,391,347.64 8,391,347.64 6,256,524.63 6,256,524.63
Total 148,626,411.17 - 148,626,411.17 107,037,409.95 - 107,037,409.95
(2) Changes in significant construction in progress
Transfer to
Book Increase fixed assets Other
Book balance
Projects balance at during the Sourceoffunds
in the decrease at period-end
year-begin period
period
Relocation and capacity
expansion project of 60,889,270.95 22,453,788.27 38,461.54 - 83,304,597.68 Self-raised
Zhongke Meiling
Intelligent manufacturingproject 12,785,053.55 17,751,938.34 7,410,469.07 - 23,126,522.82 Raisefunds
Upgrading and reform of
the production line of
11,190,008.45 22,846,920.68 32,540,293.52 - 1,496,635.61 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 period period
Relocation and capacity
expansion project of 16,512.00 96.00% 96.00%
Zhongke Meiling
Intelligent manufacturingproject 26,128.00 13.81% 23.00%
66
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Upgrading and reform of the
production line of intelligent 4,792.00 71.03% 90.00%
refrigeratorof MianyangMeiling
(3) No depreciation reserves for construction in process at year-end.
16. Disposal of fixed assets
Amount at Amount at Reasons for disposal
Item
period-end year-begin transferred
Relocation for land
Relevant assets disposal for reserved lands 75,846,390.89 75,788,138.47
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 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 period-end.
17. Intangible assets
(1) According to intangible assets item
Trademark Non-patent
Item Land use right Other Total
special right technology
67
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Trademark Non-patent
Item Land use right Other Total
special right technology
I. Original book
value
1.Balance at
613,696,837.62 283,292,439.34 195,407,299.78 161,699.32 1,092,558,276.06
year-begin
2.Increased in the
- - 17,766,418.25 179,245.29 17,945,663.54
period
(1) purchase - 179,245.29 179,245.29
(2) Internal
17,766,418.25 17,766,418.25
research
3.Decreased in the
- - - - -
period
(1)Disposal -
(2)otherdecrease -
4.Balance at
613,696,837.62 283,292,439.34 213,173,718.03 340,944.61 1,110,503,939.60
period-end
II. Accumulated
-
depreciation
1.Balance at
116,684,176.11 270,959,304.29 90,912,770.61 32,753.42 478,589,004.43
year-begin
2.Increased in the
6,549,112.52 1,941,443.40 18,084,625.99 19,157.36 26,594,339.27
period
(1) provision 6,549,112.52 1,941,443.40 18,084,625.99 19,157.36 26,594,339.27
3.Decreased in the
-
period
(1)otherdecrease
4.Balance at
123,233,288.63 272,900,747.69 108,997,396.60 51,910.78 505,183,343.70
period-end
III. Provision for
-
impairment
IV. Book value -
1.Book value at
490,463,548.99 10,391,691.65 104,176,321.43 289,033.83 605,320,595.90
period-end
2.Book value at
497,012,661.51 12,333,135.05 104,494,529.17 128,945.90 613,969,271.63
year-begin
(2) As of the end of the period, 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
19,827,456.74
18. Development expense
Increase during the
Decrease during the period
period
Balance at Included in Balance at
Item Internal
year-begin current Confirmed as period-end
development Other Other
profits and intangible assets
expenditure
losses
Technology
development for 30,878,434.47 41,688,995.69 - - 4,534,710.78 68,032,719.38
Air-conditioner
68
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Technology
development for 12,797,092.26 3,915,239.55 - - 13,231,707.47 3,480,624.34
refrigerator
Other technology
1,348,223.87 1,099,654.74 - - - 2,447,878.61
development
Total 45,023,750.60 46,703,889.98 - - 17,766,418.25 73,961,222.33
19. Goodwill
(1) Original value of goodwill
Increase during the Decrease during the
period period
Name of invested Balance at Formation Formation Balance at
unit year-begin from from period-end
Other Other
enterprise enterprise
merger merger
Hefei Meiling Group
3,553,367.77 3,553,367.77
Holding Co., Ltd.
Guangxi Huidian
Household Electrics 5,313,913.50 5,313,913.50
Co., Ltd
Total 8,867,281.27 8,867,281.27
(2) Impairment provision of goodwill
Increase during the Decrease during the
Name of invested Balance at period period Balance at
unit year-begin period-end
Provision Other Provision Other
Hefei Meiling Group
3,553,367.77 3,553,367.77
Holding Co., Ltd.
Guangxi Huidian
Household Electrics 5,313,913.50 5,313,913.50
Co., Ltd
Total 8,867,281.27 8,867,281.27
Note: at the period 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.
20. Long-term deferred expenses
Increase Amortization Other increase
Balance at Balance at
Item during the during the during the
year-begin period-end
period period period
Relocation expenses of the
1,132,075.48 1,546,289.16 95,258.41 - 2,583,106.23
intelligent manufacturing plant
21. Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets without the offset
Balance at period-end Balance at year-begin
Item Deductible Deferred Deductible Deferred
temporary income tax temporary income tax
difference assets difference assets
69
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Balance at period-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
140,671,711.72 21,466,063.56 107,230,307.69 16,454,229.77
property depreciation preparation
Deferred income tax assets recognized from
328,801,716.59 49,320,257.49 331,575,430.79 49,736,314.62
accrual liability
Deferred income tax assets recognized from
32,119,825.09 4,817,973.76 35,517,365.78 5,327,604.87
dismission welfare
Deferred income tax assets recognized from
68,179,831.33 10,252,327.40 82,260,654.75 12,339,098.21
deferred income
Deferred income tax assets recognized from
1,268,504.84 317,126.21 1,293,875.10 323,468.74
ir-reparable losses
Deferred income tax assets recognized from
8,881,394.08 1,332,209.11 559,249.58 83,887.44
changes in the fair value
Total 579,922,983.65 87,505,957.53 558,436,883.69 84,264,603.65
(2) Deferred income tax liabilities without the offset
Balance at period-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
10,023,272.50 1,503,490.88 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
period-end set-off year-begin set-off
Deferred income
87,505,957.53 84,264,603.65
tax assets
Deferred income
1,503,490.88 1,809,032.00
tax liabilities
(4) Details of unrecognized deferred income tax assets
Item Balance at period-end Balance at year-begin
Deductible temporary difference 36,196,248.37 26,140,372.22
Deductible loss 241,612,758.47 373,985,517.42
Total 277,809,006.84 400,125,889.64
22. Other non-current assets
Item Balance at period-end Balance at year-begin
Term deposit for pledge - 34,615,630.00
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 $ 4,990,000 dollars, part will expire in 2017 and reclassify to this project.
70
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
23. Short-term loans
(1) Types of short-term loans
2. Type of loans Balance at period-end Balance at year-begin
Loan in pledge 26,500,000.00 26,500,000.00
Loan in credit 1,406,122,701.07 261,843,724.73
Total 1,432,622,701.07 288,343,724.73
New loans in the period:
The Company signed the Agreement on Comprehensive Credit Line of Trade Financing with China
Everbright Bank Hefei Branch. Up to June 30, 2017, the financing amount under this service agreement
was USD 39,800,000.00, equivalent to RMB 269,621,120.00.
The Company signed the Agreement on Trade Financing Business Service with Agricultural Bank of
China Co., Ltd., Hefei Jinzhai Road Sub-branch, up to June 30, 2017, the financing amount under this
service agreement was EUR 10,005,959.80, equivalent to RMB 77,542,186.07, and the financing period
was from April 1, 2017 to August 22, 2017.
The Company signed the Agreement on Financing Business Cooperation of Export Commercial
Invoice with China Construction Bank Co., Ltd., Hefei Luyang Sub-branch, up to June 30, 2017, the
financing amount under this service agreement was EUR 10,000,000.00, equivalent to RMB
77,496,000.00.
The Company signed the Agreement on Financing of Export Commercial Invoice with Bank of
China Co., Ltd. Hefei Economic Development Zone Branch, up to June 30, 2017, the financing amount
under this service agreement was RMB 5,770,000.00, and the financing period was from June 30, 2017 to
December 11, 2017.
The Company signed the Agreement on Financing of Export Order with Industrial and Commercial
Bank of China Co., Ltd., Hefei Changjiang East Road Sub-branch, up to June 30, 2017, the financing
amount under this service agreement was RMB 107,000,000.00.
The Company signed the Contract of Working Capital Loan with Agricultural Bank of China Co.,
Ltd., Hefei Jinzhai Road Sub-branch, up to June 30, 2017, the financing amount under this service
agreement was RMB 50,000,000.00, and the financing period was from June 12, 2017 to June 11, 2018.
The Company signed the Contract of Ren Min Bi Working Capital Loans with China Construction
Bank Co., Ltd., Hefei Luyang Sub-branch, up to June 30, 2017, the financing amount under this service
agreement was RMB 200,000,000.00, and the financing period was from March 1, 2017 to February 28,
2018.
The Company signed the Contract of Working Capital Loan with Bank of Communications Co., Ltd.
Anhui Branch, up to June 30, 2017, the financing amount under this service agreement was RMB
71
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
268,483,395.00.
The Company signed the Trade Credit Financing Letter with United Overseas Bank, Chengdu
Branch, up to June 30, 2017, the financing amount under this service agreement was RMB
100,000,000.00, and the financing period was from June 20, 2017 to December 20, 2017.
The Company signed the Agreement on Trade Financing with China Minsheng Bank, Hefei Branch,
up to June 30, 2017, the financing amount under this service agreement was RMB 195,000,000.00.
The subsidiary Zhongke Meiling signed the Contract of Working Capital Loan with Bank of China,
Anhui Branch on June 26, 2017, the loan amount on the contract was RMB 9,200,000.00 and the loan
term was from June 27, 2017 to June 26, 2018, the loan adopted floating interest rate, every 12 months
was a floating cycle; the interest rate was the average interest rate floating by 92 base points based on the
loan prime rate of one working day before the actual withdrawal date published by National Interbank
Funding Center.
On March 29, 2021, Zhongshan Changhong Company applied for the financing of EUR
5,500,000.00 to China Construction Bank Co., Ltd. Zhongshan Branch by export commodity financing,
equivalent to RMB 42,622,800.00, the financing interest rate was 1.4%, and the financing period was
from March 29, 2017 to September 22, 2017.
On June 30, 2017, the subsidiary Zhongshan Changhong Company applied for the financing of USD
500,000.00 to Huaxia Bank Co., Ltd. Zhongshan Branch by export commodity financing, equivalent to
RMB 3,387,200.00, the financing interest rate was 2.9%, and the financing period was from June 30, 2017
to July 28, 2017.
On September 13, 2016, the subsidiary Zhongshan Changhong Company applied for financing of
RMB26,500,000.00 from Agricultural Bank of China Co., Ltd., Zhongshan Nantou Sub-branch by export
commodity financing, the financing interest rate was 3.15%, and the financing period was from
September 13, 2016 to September 8, 2017.
(2) No overdue short term borrowings unredeemed at period-end.
24. Financial liabilities at fair value through gains and losses
Balance at Balance at
Item
period-end year-begin
Derivative financial liabilities 9,671,394.08 559,249.58
25. Notes payable
Type Balance at period-end Balance at year-begin
Bank acceptance bill 4,151,427,967.62 2,315,706,781.72
Commercial acceptance bill 422,430,013.95 319,344,958.58
Total 4,573,857,981.57 2,635,051,740.30
Notes expired at period-end without paid.
72
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
26. Account payable
(1) Age of account payable
Item Balance at period-end Balance at year-begin
Total 3,168,053,679.32 2,331,899,310.82
Including: over 1 year 68,509,996.79 47,332,805.86
(2) No account payable with over one year book age at period-end.
27. Advance payment
(1) Age of advance payment
Item Amount at period-end Amount at year-begin
Total 472,573,801.58 390,935,440.46
Including: over 1 year 18,267,405.69 13,605,202.15
(2) No major account received in advance with over one year age at period-end
28. Wages payable
(1) Types of wages payable
Balance at Increase in this Decrease in this Balance at
Item
year-begin period period period-end
Short-term compensation 178,822,854.81 583,841,841.44 677,554,930.79 85,109,765.46
After-service welfare- defined
4,948,222.26 47,830,929.91 38,416,264.80 14,362,887.37
contribution plans
Dismiss welfare 5,820,961.93 1,652,300.02 3,414,853.22 4,058,408.73
Total 189,592,039.00 633,325,071.37 719,386,048.81 103,531,061.56
(2) Short-term compensation
Balance at Increase in this Decrease in this Balance at
Item
year-begin period period period-end
Wages, bonuses,allowancesandsubsidies 146,971,903.13 519,315,260.52 589,643,902.20 76,643,261.45
Welfare for workers and staff 100,340.00 19,747,658.74 19,740,043.13 107,955.61
Social insurance 2,498,982.71 20,788,123.40 20,539,250.66 2,747,855.45
Including: Medical insurance 2,345,425.78 17,580,484.43 17,548,178.68 2,377,731.53
Work injury insurance 47,092.65 1,618,690.35 1,577,678.15 88,104.85
Maternity insurance 106,464.28 1,588,948.62 1,413,393.83 282,019.07
Housing accumulation fund 3,326,804.54 22,868,732.94 22,374,622.48 3,820,915.00
Labor union expenditure and
1,742,673.51 1,122,065.84 1,074,961.40 1,789,777.95
personnel education expense
Short-termprofit sharingplan 24,182,150.92 - 24,182,150.92 -
Total 178,822,854.81 604,629,964.84 698,094,181.45 87,857,620.91
(3) Defined contribution plans
Balance at Increase in this Decrease in this Balance at
Item
year-begin period period period-end
73
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Balance at Increase in this Decrease in this Balance at
Item
year-begin period period period-end
Basic endowment insurance 3,867,272.79 45,384,484.37 36,077,525.26 13,174,231.90
Unemployment insurance 1,080,949.47 2,446,445.54 2,338,739.54 1,188,655.47
Total 4,948,222.26 47,830,929.91 38,416,264.80 14,362,887.37
29. Tax payable
Item Balance at period-end Balance at year-begin
Value-added tax 39,161,576.95 19,079,499.27
Enterprise income tax 2,902,240.90 3,423,898.42
Individual income tax 7,340,175.56 3,205,739.98
Urban maintenance and construction tax 2,726,475.63 3,302,546.79
House property tax 5,010,184.86 5,593,587.71
Land-use right tax 4,603,515.26 4,802,263.59
Educational surtax 1,964,898.41 2,428,555.60
Stamp tax 904,624.34 2,944,485.06
Construction fund of Water Conservancy Projects 621,024.81 745,069.75
Treatment fund for abandon electric & electronics products 18,173,836.00 12,328,067.00
Other 1,968,457.01 1,995,318.96
Total 85,377,009.73 59,849,032.13
30. Interest payable
(1) Classification of interest payable
Item Balance at period-end Balance at year-begin
Interest on long-term loans for repayment of principal
708,602.61 1,617,352.01
of installment maturity
(2) No significant overdue and unpaid interest at period-end.
31. Dividends payable
Item Balance at period-end Balance at year-begin
Sichuan Changhong Electric Co., Ltd. 14,082,358.08 -
City insurance company 450,504.45 376,729.65
Hefei Branch of BOC 225,252.20 188,364.80
Hefei collective industry association 225,251.86 188,364.52
Entrust Investment Wuhu of Provincial ABC 180,201.78 150,691.86
BOC-Fullgoal Tianyi Securities Investment Fund 153,697.50 153,697.50
Other piecemeal units 1,655,457.01 1,487,952.90
Total 16,972,722.88 2,545,801.23
Note: Balance at period-end refers to the common dividends that not receiving by shareholders.
32. Other payable
74
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
(1) Classification of other payable according to nature of account
Nature of account Balance at period-end Balance at year-begin
1.Accrued expenses(expenses occurred without reimbursed) 635,158,520.52 479,907,162.28
2. receivables received temporary and deducted temporary 13,736,245.44 7,725,476.68
3.deposit, margin 94,875,963.37 88,308,204.63
4.not the come-and-go with related parties in statement scope 28,054,566.50 12,959,890.54
5.other 40,945,232.23 33,679,589.30
Total 812,770,528.06 622,580,323.43
(2) Other significant payables aging over one year as at the period-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 period-end Balance at year-begin
Long term loans due within one year 46,202,065.60 262,486,600.00
Deferred income transfer to gains and losses within one year 13,516,439.17 9,715,990.10
Total 59,718,504.77 272,202,590.10
(2) Deferred income transfer into profit and loss within 1 year
Amount
Subsidy reckoned into
Amountat Amount at
Itemofgovernment subsidies increase during non-operation Other changes
year-begin period-end
this period revenue in the
period
Demolition compensation of
2,425,513.16 1,204,791.70 1,188,519.14 2,409,240.60 Assets-related
Hefei Meiling
Technical reform for Athena
4,286,250.00 2,143,125.00 2,143,125.00 4,286,250.00 Assets-related
Project
Freezer project of Hefei Meiling 734,062.52 367,031.25 367,031.21 734,062.48 Assets-related
Promotion of new industrialization (annual
output of 0.6 million large and volume
304,412.50 152,206.24 152,206.22 304,412.48 Assets-related
environmental protection energy-saving
freezer project,)
Demolition compensation of
1,797,880.32 898,940.16 898,940.16 1,797,880.32 Assets-related
Jiangxi Meiling
Production adaption project of
167,871.60 1,182,490.85 3,379,600.93 2,364,981.68 Assets-related
FTXS
Industrialization project of the intelligent
105,154.63 315,463.91 210,309.28 Assets-related
energy-savingAC
VISA research and application
704,651.16 2,113,953.49 1,409,302.33 Assets-related
project
Total 9,715,990.10 6,758,390.99 10,558,840.06 13,516,439.17
34. Long-term loans
(1) Classification of long-term loans
Type Amount at period-end Amount at year-begin
75
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Type Amount at period-end Amount at year-begin
Loan in pledge - 34,157,788.00
Loan in mortgage 2,560,000.00 3,200,000.00
Loan in credit 250,900,000.00 1,551,000.00
Total 253,460,000.00 38,908,788.00
(2) Details of long-term loans at year-end
Amount at Amountat
Borrowing Returning Foreign Interest
Loan unit period-end year-begin
day day currency rate
(RMB) （RMB）
Zhongshan Branch of China Guangfa
2015-01-06 2018-01-06 USD 3.20% - 34,157,788.00
BankNote1
Ministry of Finance of HefeiNote2 2002-11-21 2017-11-20 RMB 1.80% - 651,000.00
Ministry of Finance of HefeiNote3 2004-12-10 2019-12-10 RMB 1.80% 900,000.00 900,000.00
Note4
Ministry of Finance of Hefei 2006-11-9 2021-11-8 RMB 1.80% 2,560,000.00 3,200,000.00
Anhui branch Import and Export Bank
Note5 2017-05-16 2019-05-12 RMB 3.35% 250,000,000.00 -
Total 253,460,000.00 38,908,788.00
Note 1: 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. And re-classified to non-current liability due within one
year in the period
Note 2: 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 value date of the prevailing year as
published by the PBOC, plus 0.3 percentage points). And re-classified to non-current liability due within
one year in the period
Note 3: It was the special Treasury bond capital appropriated by Ministry of Finance of Hefei for
76
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
enterprises’ information reform, received on Dec. 10th, 2004.
Note 4: 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 5: On May 12, 2017, the Company signed the Loan Contract (seller's credit on exports) with the
Export-Import Bank Anhui Branch, the contract appointed Export-Import Bank Anhui Branch to offer
loans of total amount of RMB 250 million to the Company, this loan should be exclusively used in the
export of general mechanical and electrical products, the loan period is 2 years, and the interest rate is
subject to the interest rate of the seller's credit on exports.
35. Long-term wage payable
Balance at
Item Balance at period-end
year-begin
Dismissal welfare 28,061,416.36 29,696,403.85
According to the internal early retirement policy, the long-term payable dismissal welfare bears by
the Company up to end of the period.
36. Account payable special funds
Decrease
Balance at Increase in Balance at
Item in the Reason
year-begin the period period-end
period
Special fund of technical
Zhongshan Science &
transformation of 1,400,000.00 420,000.00 980,000.00
Technology Plan
Zhongshan
37. Projected liability
Item Balance at period-end Balance at year-begin Reason
Product quality guarantee 11,795,030.15 11,795,030.15 Guarantee of product
Guarantee fund for quality service 317,006,686.44 319,780,400.64 Guarantee of product
Total 328,801,716.59 331,575,430.79
77
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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 period-end
year-begin
Government subsidies---subsidies of development project 58,560,896.86 67,032,277.62
Government subsidies---subsidies of relocation 64,152,104.28 75,887,284.87
Total 122,713,001.14 142,919,562.49
(2) Government subsidy
Amount
New Concerned
reckoned into
Amountat subsidy Other Amountat with
Item non-operating
year-begin in the changes period-end assets/earn
income in the
period ings
period
Demolition compensation of Hefei Assets
44,974,521.48 1,188,519.14 43,786,002.34
Meiling concerned
Assets
Demolition compensation 23,356,008.77 9,647,721.29 13,708,287.48
concerned
Adaptability improvement of the
Assets
FTXS production (Propane 18,751,981.92 3,379,600.93 15,372,380.99
concerned
instead of the HCFC-22)
Special fund of the Athena technical Assets
13,450,312.50 2,143,125.00 11,307,187.50
transformation concerned
VISA research and application Assets
10,100,000.00 2,113,953.49 7,986,046.51
project concerned
Demolition compensation of Assets
7,556,754.62 898,940.16 6,657,814.46
Jiangxi Meiling concerned
Subsidy fund for the new factory of Assets
5,000,000.00 5,000,000.00
Zhongke Meiling concerned
Intelligent white-goods software platform and
Assets
research and industrialization of typical 4,000,000.00 4,000,000.00
concerned
applications
Capitalappropriatedfromthenationaltreasury Assets
2,950,000.00 2,950,000.00
concerned
Development and productization of the CHIQ Assets
2,350,000.00 2,350,000.00
AC concerned
Research and application of frequency
Assets
2,300,000.00 2,300,000.00
conversioncontrolMCUchip concerned
Assets
Freezer project of Hefei Meiling 2,202,187.45 367,031.21 1,835,156.24
concerned
Special fund of strategy emerging industry Assets
2,000,000.00 2,000,000.00
and high-end growth industry concerned
Industrialization project of the intelligent Assets
1,700,000.00 315,463.91 1,384,536.09
energy-savingAC concerned
Promotion of new industrialization (annual
output of 0.6 million large and volume Assets
1,674,268.75 152,206.22 1,522,062.53
environmental protection energy-saving concerned
freezer project,)
78
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Amount
New Concerned
reckoned into
Amountat subsidy Other Amountat with
Item non-operating
year-begin in the changes period-end assets/earn
income in the
period ings
period
Design and application of energy saving air Assets
300,000.00 300,000.00
conditioningduct concerned
Assets
Subsidy of project development 253,527.00 253,527.00
concerned
Total 142,919,562.49 9,647,721.29 10,558,840.06 122,713,001.14
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
Changeduringtheperiod（+、-）
Shares
Balance at New transferred Balance at
Item Bonus
year-begin shares from Other Subtotal period-end
share
issued capital
reserve
Total shares 1,044,597,881.00 1,044,597,881.00
40. Capital reserve
Amount at Increase during the Decrease during Amount at
Item
year-begin period the period period-end
Share premium 2,639,787,797.95 - 2,647,197.88 2,637,140,600.07
Other capital reserve 48,173,262.70 - - 48,173,262.70
Total 2,687,961,060.65 - 2,647,197.88 2,685,313,862.77
Note: decrease of the share premium mainly because purchasing minority equity from part of the
marketing subsidiaries in the period, which is off-setting the capital reserves as 2,647,197.88 Yuan.
41. Other comprehensive income
Account in the period
Less: written in
other
comprehensive
Balance at Account income in Belong to Belong to Balance at
Item Less :
year-begin before previous period parent minority period-end
income tax
income tax in and carried company shareholders
expense
the period forward to after tax after tax
gains and losses
in current
period
Other comprehensive income re-divided into gains/losses
Including: conversion
difference arising
3,474,546.95 -3,352,515.41 -2,536,079.62 -816,435.79 938,467.33
from foreign currency
financial statement
42. Surplus reserves
79
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Amount at Increase during the Decrease during Amount at
Item
year-begin period the period period-end
Statutory surplus reserve 275,421,718.17 275,421,718.17
Discretionary surplus reserve 115,607,702.16 115,607,702.16
Total 391,029,420.33 391,029,420.33
43. Retained profit
Item This period Last year
Amount at the end of last year 968,097,382.98 817,667,480.44
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 968,097,382.98 817,667,480.44
Add: net profit attributable to shareholders of parent company for this
92,075,039.77 220,216,680.96
year
Less: withdraw of statutory surplus reserve 23,962,426.15
withdraw of discretional surplus reserve
Withdraw of general risk provision
Dividend payable for ordinary shares 62,675,872.85 45,824,352.27
Dividend of ordinary shares transferred to share capital
Amount at the end of this period 997,496,549.90 968,097,382.98
44. Operating income and operating cost
(1) Operating income and operating cost
Amount for this Amount for the same
Item
period period of last year
Main business income 8,133,419,814.85 6,635,243,672.98
Other business income 384,374,378.25 231,387,589.70
Total 8,517,794,193.10 6,866,631,262.68
Main business cost 6,646,020,504.49 5,226,428,116.77
Other business cost 350,205,544.36 206,033,570.33
Total 6,996,226,048.85 5,432,461,687.10
(2) Main business classified according to product
Amount for this period Amount for the same period of last year
Product
Operation income Operation cost Operation income Operation cost
Refrigerator,
3,712,357,454.31 3,021,413,721.30 3,511,755,682.66 2,641,347,914.01
freezer
Air-condition 3,830,599,287.94 3,157,180,107.27 2,578,582,275.76 2,117,657,552.65
Washing
227,162,009.50 177,357,302.38 214,447,675.62 174,849,330.14
machine
80
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Amount for this period Amount for the same period of last year
Product
Operation income Operation cost Operation income Operation cost
Small
appliances and
264,195,096.38 229,232,770.78 192,655,423.38 174,011,438.27
kitchen and
toilet
Other 99,105,966.72 60,836,602.76 137,802,615.56 118,561,881.70
Total 8,133,419,814.85 6,646,020,504.49 6,635,243,672.98 5,226,428,116.77
(3) Main business classified according to sales region
Amount for this period Amount for the same period of last year
Region
Operation income Operation cost Operation income Operation cost
Domestic 6,013,436,261.57 4,647,630,149.87 4,999,875,111.36 3,763,161,367.63
Overseas 2,119,983,553.28 1,998,390,354.62 1,635,368,561.62 1,463,266,749.14
Total 8,133,419,814.85 6,646,020,504.49 6,635,243,672.98 5,226,428,116.77
Top five clients have income in sales of RMB 3,048,439,744.17 yuan in total, a 35.79% in total
operation income.
45. Business tax and extra charges
Amount for this Amount for the same
Item
period period of last year
Business tax - 354,041.11
City construction tax 8,915,596.60 19,899,317.46
Extra charge for education and local education surcharge 6,645,828.18 14,421,660.64
Real estate tax 5,629,056.96 5,722,192.63
Treatment fund for abandon electrics & electronics 31,420,436.00 27,244,167.00
Land tax 4,976,086.01 5,143,139.80
Stamp duty 4,878,793.95 3,644,166.46
Water fund 3,205,205.83 2,763,018.05
Other 165,016.78 265,878.11
Total 65,836,020.31 79,457,581.26
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 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, relevant items are re-state in administrative expenses of last period
46. Sales expense
81
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Amount for this Amount for the same
Item
period period of last year
Market support 147,028,679.89 267,473,422.40
Wages and surcharges, social security 236,131,802.33 236,101,636.65
Transport expenses 294,108,877.21 207,605,016.03
Air conditioner installation fee 178,757,254.42 120,680,390.00
National three guarantees expense 119,131,144.08 82,896,108.22
Storage lease expenses 54,395,016.56 51,149,832.06
Advertisement expenses 30,738,929.11 29,181,669.39
Travelling expenses 19,520,650.45 14,924,457.13
Operation activities expenses 10,205,202.11 8,087,086.19
Communication expenses 6,278,918.66 6,235,033.36
House-lease expenses 8,851,097.31 5,521,119.25
Vehicle consumption 3,093,351.13 3,604,088.38
Depreciation 3,128,078.94 2,999,300.47
Communication fee 2,912,337.19 2,432,210.13
Exhibition expenses 2,926,713.09 2,267,160.86
Others 22,963,979.60 34,489,220.08
Total 1,140,172,032.08 1,075,647,750.60
47. Administration expense
Amount for this Amount for the same
Item
period period of last year
Salary and social insurance etc. 96,746,046.21 78,371,373.79
Trial fee of R&D 20,069,927.78 19,368,311.75
Amortized intangible assets 26,351,436.68 19,260,530.22
Depreciation 12,215,178.83 10,181,555.80
Inspection and authentication fee 3,236,512.69 4,684,054.78
Domestic travelling fee 3,657,865.58 4,132,225.03
Utilities 5,236,432.59 4,029,484.90
Business activities 2,348,636.48 3,906,395.17
Office charge 3,101,227.29 3,027,548.26
Property insurance 1,947,504.69 1,797,851.23
Others 47,622,322.92 27,205,090.02
Total 222,533,091.74 175,964,420.95
48. Financial expense
Amount for this Amount for the same
Item
period period of last year
Interest expenditure 16,357,573.34 4,108,756.46
Less: Interest income 74,918,215.41 32,356,650.27
Add: exchange loss 12,143,246.92 -18,503,350.12
82
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
procedure charge expenditure 6,631,231.15 10,153,124.33
discount expenditure 6,331,681.33 -3,102,122.56
other expenditure 900.00
Total -33,454,482.67 -39,699,342.16
49. Loss from Assets depreciation
Amount for this Amount for the same
Item
period period of last year
Bad debt losses 30,101,356.29 33,194,478.64
Provision for falling price of inventory 15,391,916.45 3,392,202.47
Total 45,493,272.74 36,586,681.11
50. Changes in fair value gains/loses
Amount for this Amount for the same
Item
period period of last year
Financial assets measured at fair value and whose movements are
-1,246,940.80 2,340,308.20
included in the profit and loss of the current period
Including :Income of fair value changes from derivative financial
-1,246,940.80 2,340,308.20
instruments
Financial liabilities measured at fair value and whose movements are
-9,112,144.50 -3,618,878.41
included in the profit and loss of the current period
Including :Income of fair value changes from derivative financial
-9,112,144.50 -3,618,878.41
instruments
Total -10,359,085.30 -1,278,570.21
51. Investment income
(1) Sources of investment income
Amount for this Amount for the same
Item
period period of last year
Long-term equity investment income by equity method -3,226,328.17 -833,210.42
Investment income obtained from disposal of long-term equity
2,506.98 -
investment
Investment income obtained from held of finance asset available for
19,584,987.35 4,986,301.37
sales
Investment income obtained from disposal of financial assets
measured at fair value and whose movements are included in the 7,232,183.50 -
profit and loss of the current period
Total 23,593,349.66 4,153,090.95
(2) Long-term equity investment income by equity method
Amount for
Amount for the same Reason of change of this period
Item
this period period of last than last year
year
Changes of net profit of the
Hefei Xingmei Assets Management Co., Ltd. -512,602.26 -56,019.64
invested unit
ChanghongRuba Electric Changes of net profit of the
468,491.66 -220,932.04
Company(Private)Limited invested unit and counter
83
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Amount for
Amount for the same Reason of change of this period
Item
this period period of last than last year
year
Sichuan Zhiyijia Network Technology Co., Ltd. -2,236,489.97 2,322,881.18 current transaction offset
Hongyuan Dineng Rebao Technology Co. Ltd. -41,337.05 -2,196,252.31
Sichuan Tianyou Guigu Technology Co., Ltd. 971,714.68 -682,887.61
Chengdu Guigu Environment Technology Co., Ltd. -1,876,105.23 -
Total -3,226,328.17 -833,210.42
(3) Investment income obtained from disposal of long-term equity investment
Amount for this Amount for the same
Item
period period of last year
Equity income obtained from disposal of Hefei MeiLing Packing
2,506.98 -
Products Co., Ltd.
(4) Investment income obtained from financial assets available for sales
Amount for this Amount for the same
Item
period period of last year
Purchase of bank financial products 19,584,987.35 4,986,301.37
Total 19,584,987.35 4,986,301.37
(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.
52. Other income
Source of other revenue Amount for this period Amount for the same period of last year
Drawback policy of VAT for software
1,275,937.62 -
products
Total 1,275,937.62 -
According to the regulations of Accounting Standards for Business Enterprises No. 16 - Government
Subsidy (CK No.[2017] 15) issued and revised by the Ministry of Finance in May 2017, since January 1,
2017, the government subsidy related to the daily activities of the enterprise should be included in other
income or offset the relevant costs in accordance with the essence of economic business. During the
reporting period, the wholly-owned subsidiary Mianyang Meiling Software Technology Co., Ltd. received
the refunds of added-value tax of software products in accordance with the Notice on VAT Policy of
Software Products of State Administration of Taxation (CS No. [2011] 100), which is closely related to the
company’s normal business, and this business should be included in the subject list in the current period.
53. Non-operation revenue
(1)Non-operation revenue
Amount reckoned
Amount for the same into non-recurring
Item Current period
period of last year gains/losses in the
period
84
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Amount reckoned
Amount for the same into non-recurring
Item Current period
period of last year gains/losses in the
period
Gains from disposal of non-current
261,776.49 330,833.76 261,776.49
assets
Including:Gains from disposal of
261,776.49 330,833.76 261,776.49
fixed assets
Government subsidy 22,490,062.54 16,456,206.17 22,490,062.54
Income of penalty 483,051.41 301,433.90 483,051.41
Other 256,257.41 4,383,228.61 256,257.41
Total 23,491,147.85 21,471,702.44 23,491,147.85
(2) Government subsidy
Amount for the
Item Current period same period of Resourceand basis Assets/benefitrelated
last year
Drawback policy of VAT for
VAT refunds - 1,705,532.50 Incomerelated
software product
Other government subsidy etc. 1,960,999.85 2,641,549.48 - Incomerelated
Other Deferred incometransfer-in 16,406,112.28 4,803,445.57 Deferredincometransfer-in Incomerelated
NJP production trade enterprise award 1,238,685.00 - Nanjing Port (Group) Co., Ltd. Incomerelated
Finance Bureau of Zhongshan
Government subsidy for Step Out 526,900.00 - Incomerelated
City
Supporting fund of Anhui Branch of Hefei Government, He Zheng
508,404.98 - Incomerelated
SINOSURE (2014) No.62 etc.
National informatization standard He Zheng [2016] No. 35
500,000.00 - Incomerelated
recognition award
Social security subsidies 304,629.43 - Wan RSF (2016) No. 33 Incomerelated
Skills development cash grant from
He Cai Zhen 2011
Hefei Human Resources and Social 211,500.00 - Incomerelated
[No.1035]
Security Bureau
Training base grants from Hefei
200,000.00 - He Jiao Mi [2017] No. 234 Incomerelated
Board of Education
Zhongshan Ke Fa (2017)
Subsidy for high-tech enterprise 200,000.00 - Incomerelated
No. 85
Contract foreign projects of special
Zhong Shangwu He Zi
funds for foreign trade and economic 177,831.00 - Incomerelated
(2016) No. 24
development of 2016
Supporting fund for multi hierarchy He Jing Qu Guan [2016]
104,000.00 - Incomerelated
man power (2nd batch) No.90
Self-service innovation award 100,000.00 - He Zheng [2016] No. 35 Incomerelated
Offering rewards for NEEQ 51,000.00 - Cai Jin (2015) No. 2035 Incomerelated
- City Commercial Bureau-
A special fund of trade promotion for
1,733,000.00 special fund of trade Incomerelated
year of 2016
promotion for year of 2016
Reward of the new-type -
1,538,700.00 He Zheng [2015] No. 36 Incomerelated
industrialization development policy
85
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Amount for the
Item Current period same period of Resourceand basis Assets/benefitrelated
last year
promotion
Subsidy for technically improve of -
1,217,800.00 He Zheng [2015] No. 36 Incomerelated
the fixed assets
- Hefei 2015 Economic &
Technological Development
Subsidy of industry carry-over fund 1,000,000.00 Area (HETA) - promotion of Incomerelated
the new-type industrialization
development policy
- Agreement of the Tianjin
Policy rewards Xintai Industrial Economic
1,014,456.72 Incomerelated
Development Management
Center
- Contract of the investment of
Enterprise development fund
801,721.90 2 million refrigerators for one Incomerelated
distributed by High-Tech Zone
year
Total 22,490,062.54 16,456,206.17
54. Non-operating expenditure
Amount reckoned
Amount for the same into non-recurring
Item Current period
period of last year gains/losses in the
period
Loss from disposal of non-current
11,359,875.16 1,545,129.64 11,359,875.16
assets
Including: loss from disposal of fixed
11,359,875.16 1,545,129.64 11,359,875.16
assets
Penalty and late fee 16,170.32 259,138.22 16,170.32
Other 79,255.15 14,606.32 79,255.15
Total 11,455,300.63 1,818,874.18 11,455,300.63
55. Income tax expenses
Amount for the same
Item Current period
period of last year
Current income tax 12,992,795.39 23,825,374.34
Deferred Income Tax -3,553,237.53 -5,009,188.36
Total 9,439,557.86 18,816,185.98
56. Other comprehensive income
Found more in “VI. 41. Other comprehensive income” in the Note
57. 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
86
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Amount for the same
Item Current period
period of last year
Government subsidy and rewards 6,083,950.26 9,947,228.10
Margin, deposit 2,932,691.26 3,672,988.85
Rental and trademark income 2,326,107.91 3,930,732.75
Compensations 492,082.89 103,131.84
Other 4,734,239.77 1,961,189.58
Total 16,569,072.09 19,615,271.12
2) Cash paid for other activities relating to operation
Amount for the same
Item Current period
period of last year
Market support fee 107,158,880.74 100,020,332.36
Advertising fee 16,086,131.50 14,594,018.03
Travel expense 25,366,506.33 21,472,512.46
Rental fee 17,832,545.16 9,218,885.60
Business activity fee 16,561,532.31 11,903,159.89
Pretty cash for employees 9,558,081.08 11,554,152.86
Meeting organization fee 6,041,902.70 7,113,406.24
Regular bus expenses 5,069,668.94 4,598,247.00
Inspection and certification fee 6,369,408.44 5,446,512.42
Vehicle cost 5,736,637.76 3,973,278.42
Handling Charges 4,719,226.91 25,077,479.49
Office expenses 5,656,327.46 3,575,528.11
Exhibition expenses 3,018,403.85 3,215,177.35
Penalty and overdue fine 16,170.32 259,138.22
Changes of the limited monetary fund 37,101,414.00 60,085,067.00
Other 53,980,478.26 36,462,279.04
Total 320,273,315.76 318,569,174.49
3) Cash received from other activities relating to investment
Amount for the same
Item Current period
period of last year
Interest income arising from bank savings 40,936,820.59 31,720,923.67
Government investment granted - 4,331,970.00
Margin 540,386.28 336,823.00
Total 41,477,206.87 36,389,716.67
4) Cash paid for other activities relating to investment
Amount for the same
Item Current period
period of last year
Loses of forward exchange settlement 647,270.61
87
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Bid bond refund 351,000.00
Total 998,270.61
5) Cash received from other activities relating to financing
Amount for the same
Item Current period
period of last year
Odd shares returned by stock exchange - 3,451.80
6) Cash paid for other activities relating to financing
Amount for the same
Item Current period
period of last year
Amount refund to minority shareholders due to the
15,642.93 -
cancellation of subsidiary
Handling charge of dividend 135,968.31 98,192.48
Total 151,611.24 98,192.48
(2) Supplementary information about consolidated cash flow statement
Amount for the same period
Item Current period
of last year
1. Net profit is adjusted to cash flow of operation
activities:
Net profit 98,094,701.39 109,923,646.84
Add: provision for depreciation of assets 45,493,272.74 36,586,681.11
Depreciation of fixed assets, consumption of oil gas
64,958,108.18 69,875,277.54
assets and depreciation of productive biological assets
Amortization of intangible assets 26,594,339.27 19,417,253.87
Amortization of long-term retained expense 95,258.41
Loss from disposal of fixed assets, intangible assets
11,098,098.67 1,214,295.88
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
10,359,085.30 1,278,570.21
“-”)
Financial expense (gain is listed with “-”) -46,417,395.15 -28,247,893.81
Investment loss (gain is listed with “-”) -23,593,349.66 -4,153,090.95
Decrease of deferred income tax assets (increase is
-3,241,353.88 -5,009,188.36
listed with “-”)
Increase of deferred income tax liabilities (decrease
-305,541.12
is listed with “-”)
Decrease of inventories (increase is listed with “-”) -622,013,977.03 -27,646,224.86
Decrease of operational accounts receivable
-2,129,300,425.57 -995,881,410.16
(increase is listed with “-”)
Increase of operational accounts payable (decrease
3,052,409,876.36 1,694,331,587.58
is listed with “-”)
Other
Net cash flow arising from operation activities 484,230,697.91 871,689,504.89
2. Major investment and financing activities that do
not involve cash receipts:
88
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Amount for the same period
Item Current period
of last year
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 period-end of cash 4,809,458,518.39 4,062,884,413.48
Less: Balance at year-begin of cash 3,986,098,419.76 2,121,161,238.01
Add: Balance at year-end of cash equivalents
Less: Balance at year-begin of cash equivalents
Net increase in cash and cash equivalents 823,360,098.63 1,941,723,175.47
(3) No net cash paid for subsidiary obtained in the period.
(4) No cash received from subsidiary and other operation units disposal in the period
(5) Cash and cash equivalent
Item Amount at period-end Amount at year-begin
Cash 4,809,458,518.39 3,986,098,419.76
Including: cash in stock 83,233.09 94,415.53
Bank deposits available for payment at any time. 4,349,072,332.23 3,810,367,022.13
Bank deposits available for payment at any time 460,302,953.07 175,636,982.10
Cash equivalents
including: bond investment due within 3 months
Balance of cash and cash equivalents at year end 4,809,458,518.39 3,986,098,419.76
Including: using the restricted cash and cash equivalents of the
parent company or subsidiary of the group
58. Assets with ownership or the right to use restricted
Item Ending book value Reasons
Monetary fund 108,727,129.38 Margin
Notes receivable 586,118,629.32 Pledged
Intangible assetsnote1 19,827,456.74 Pledged
Non-current assets due within 1
46,133,664.00 Pledged
yearnote2
Total 760,806,879.44
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: non-current assts due within one year are pledged as time deposit, found more in 9.
non-current assets due within one year in Note VI.
59. Foreign currency
89
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
(1) Foreign currency
Ending foreign currency Ending RMB converted
Item Exchange rate
balance balance
Monetary fund
Including: USD 58,017,135.02 6.7744 393,031,279.50
Euro 6,580,132.00 7.7496 50,993,390.95
AUD 1,384,006.85 5.2099 7,210,537.29
IDR 2,337,016,816.00 0.0005 1,168,508.41
Rupi 17,834,337.79 0.0645 1,150,314.79
Account receivable
Including: USD 126,320,333.81 6.7744 855,744,469.38
Euro 8,571,952.19 7.7496 66,429,200.69
AUD 2,031,639.94 5.2099 10,584,640.92
IDR 17,415,143,335.00 0.0005 8,707,571.67
Rupi 1,593,760,001.86 0.0645 102,797,520.12
Other receivables
Including: USD 67,569.47 6.7744 457,742.62
Euro 8,268.56 7.7496 64,078.03
IDR 1,856,629,640.00 0.0005 928,314.82
Rupi 18,676,421.30 0.0645 1,204,629.17
Advance payment
Including: USD 1,920,308.16 6.7744 13,008,935.60
IDR 1,052,966.00 0.0005 526.48
Rupi 740,762,639.24 0.0645 47,779,190.23
Other accounts payable
Including: USD 225,933.49 6.7744 1,530,563.83
IDR 1,094,956,343.00 0.0005 547,478.17
Rupi 264,014,236.91 0.0645 17,028,918.28
Short-term loans
Including: USD 40,300,000.00 6.7744 273,008,320.00
Euro 25,505,959.80 7.7496 197,660,986.07
Payment in advance
Including: USD 35,319,258.98 6.7744 239,266,788.04
Euro 2,380,231.99 7.7496 18,445,845.83
AUD 2,273.84 5.2099 11,846.48
IDR 2,500,000.00 0.0005 1,250.00
Advance payment
Including: USD 581,515.25 6.7744 3,939,416.91
Euro 2,579,917.72 7.7496 19,993,330.36
IDR 781,556,641.00 0.0005 390,778.32
90
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Ending foreign currency Ending RMB converted
Item Exchange rate
balance balance
Current assets due within one
year
Including: USD 6,810,000.00 6.7744 46,133,664.00
Non-current liabilities due
within 1y ear
Including: USD 6,724,000.00 6.7744 45,551,065.60
(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.
91
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
VII. Changes of consolidation rage
1. Enterprise combined under the different control: Nil
2. Enterprise combined under the same control: Nil
3. Reversed takeover: Nil
4. Disposal of subsidiary: Nil
5. Subsidiary liquidated
Differencebetweenthedisposal priceand Othercomprehensiveincome
Priceofthe proportionofthesubsidiary’s netassetsenjoy transferredintoinvestment
Ratiooftheequity Way oftheequity Determination basis forthetime
Subsidiary equity Timepointofcontrol rightlose inaspect oftheconsolidatedfinancial income,whichrelatedwiththe
disposed disposed pointofcontrolrightlose
disposed statement,whichisrespondtothedisposal equity investmentoforiginal
investment subsidiary
Xi’an MeizhilaiApplianceMarketingCo.,Ltd. 98.50% Liquidationcancelled 2017.6 Liquidationcompleted
6. Subsidiary established
Capital
Other balance that Ratio of
Registe RC (10 actually paid at Share-hol
Business consider as the net voting right Consolidate Minority’s
Subsidiary Type red thousand period-end (10 ding Ratio
nature investment for subsidiary d (Y/N) interest
place Yuan) thousand (%) (%)
in nature
Yuan)
Limited
MeiLing Candy Washing 19,962,638.78
Liability Hefei Sale RMB:15,000 RMB:5,000 60.00 60.00 Y
Machine Co., Ltd.
Company
Guangzhou Changhong Trade Limited Zhongsh
Sale RMB:100 RMB:100 100.00 100.00 Y -
Co., Ltd. Company an
Zhongshan Hongling Trade Co., Limited Zhongs
Sale RMB:100 RMB:60 100.00 100.00 Y -
Ltd. Company han
92
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
VIII. Equity in other entity
1. Equity in subsidiary
(1) Composition of the enterprise group
Share-holdingratio
Registration Business (%)
Subsidiary Businessarea Acquire way
place nature Indirectl
Directly
y
Manufactures,
ZhongkeMeilingCryogenicTechnology Co.,Ltd. 1) Hefei Hefei 66.76 Investment
sales
Software
MianyangMeiling SoftwareTechnology Co.,Ltd.2) Mianyang Mianyang 100.00 Investment
development
Manufactures,
MianyangMeilingRefrigerationCo.,Ltd.3) Mianyang Mianyang 95.00 5.00 Investment
sales
Manufactures,
JiangxiMeilingApplianceCo.,Ld.4) Jingdezhen Jingdezhen 98.75 1.25 Investment
sales
HefeiMeilingApplianceMarketing Co.,Ltd.5) Hefei Hefei Sales 99.82 0.18 Investment
Enterprise combined under the
GuangxiHuidian HomeApplianceCo.,Ltd.6) Nanning Nanning Sales 100.00
differentcontrol
WuhuMeilingApplianceMarketingCo.,Ltd.7) Wuhu Wuhu Sales 98.00 Investment
Changchun MeilingApplianceMarketing Co.,Ltd.8) Changchun Changchun Sales 100.00 Investment
Lanzhou MizhilaiApplianceMarketingCo.,Ltd.9) Lanzhou Lanzhou Sales 100.00 Investment
Jinan MeilingApplianceMarketing Co.,Ltd.10) Jinan Jinan Sales 91.40 Investment
NanchangXiangyouApplianceMarketing Co.,Ltd.11) Nanchang Nanchang Sales 85.00 Investment
Jingzhou MeilingApplianceMarketingCo., Ltd.12) Jingzhou Jingzhou Sales 96.00 Investment
ShengyangMeilingApplianceMarketing Co.,Ltd.13) Shengyang Shengyang Sales 100.00 Investment
WuhanMeizhirongApplianceMarketing Co.,Ltd.14) Wuhan Wuhan Sales 91.00 Investment
ZhengzhouMeilingApplianceMarketing Co.,Ltd.15) Zhengzhou Zhengzhou Sales 100.00 Investment
Shijiazhuang MeilingApplianceMarketing Co.,Ltd.16) Shijiazhuang Shijiazhuang Sales 100.00 Investment
MianyangMeilingApplianceMarketingCo.,Ltd.17) Mianyang Mianyang Sales 100.00 Investment
ChengduMeilingApplianceMarketingCo.,Ltd.18) Chengdu Chengdu Sales 94.80 Investment
GuiyangMeilingApplianceMarketingCo., Ltd.19) Guiyang Guiyang Sales 100.00 Investment
Fuzhou MeilingApplianceMarketingCo.,Ltd.20) Fuzhou Fuzhou Sales 100.00 Investment
NanjingMeilingApplianceMarketingCo.,Ltd.21) Nanjing Nanjing Sales 100.00 Investment
HefeiMeilingWhiteApplianceMarketing Co.,Ltd.22) Hefei Hefei Sales 95.00 Investment
TaiyuanMeilingApplianceMarketingCo.,Ltd.23) Taiyuan Taiyuan Sales 100.00 Investment
Changsha MeilingApplianceMarketingCo.,Ltd.24) Changsha Changsha Sales 97.00 Investment
HohhotXiangyouApplianceMarketingCo.,Ltd.25) Hohhot Hohhot Sales 95.00 Investment
Hangzhou MeilingApplianceMarketing Co.,Ltd.26) Hangzhou Hangzhou Sales 100.00 Investment
ChongqingMeilingApplianceMarketing Co.,Ltd.27) Chongqing Chongqing Sales 100.00 Investment
Kunming MeilingApplianceMarketingCo.,Ltd.28) Kunming Kunming Sales 97.5 Investment
ShanghaiMeilingApplianceMarketingCo.,Ltd.29) Shanghai Shanghai Sales 99.00 Investment
NantongMeilingApplianceMarketingCo., Ltd.30) Nantong Nantong Sales 100.00 Investment
93
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Share-holdingratio
Registration Business (%)
Subsidiary Businessarea Acquire way
place nature Indirectl
Directly
y
Guangzhou MeilingApplianceMarketing Co.,Ltd.31) Guangzhou Guangzhou Sales 98.00 Investment
TianjinMeilingApplianceMarketingCo.,Ltd.32) Tianjin Tianjin Sales 100.00 Investment
UrumchiMeilingApplianceMarketingCo., Ltd.33) Urumchi Urumchi Sales 90.00 Investment
HarbinMeilingApplianceMarketingCo.,Ltd.34) Harbin Harbin Sales 100.00 Investment
Beijing MeilingApplianceMarketingCo.,Ltd.35) Beijing Beijing Sales 100.00 Investment
Manufactures, Enterprise combined under the
HefeiMeiLingNonferrousMetal Products Co.,Ltd.36) Hefei Hefei 100.00
sales differentcontrol
Manufactures, Enterprise combined under the
GuangdongChanghongRidianTechnology Co.,Ltd.37) Zhongshan Zhongshan 98.855
sales samecontrol
ChangmeiTechnology Co.,Ltd.38) Mianyang Mianyang Sales 92.64 Investment
CHONGHONG MEILING ELECTRIC
Jakarta Jakarta Sales 100.00 Investment
INDONESIA,PT39）
ChanghongRubaTradingCompany40) Pakistan Pakistan Sales 60.00 Investment
Manufactures, Enterprise combined under the
SichuanChanghongAirConditionerCo.,Ltd.41) Mianyang Mianyang 100.00
sales samecontrol
Manufactures, Enterprise combined under the
ZhongshanChanghongElectricCo.,LTD42) Zhongshan Zhongshan 90.00 10.00
sales samecontrol
Manufactures, Enterprise combined under the
HefeiMeilingGroupHoldingCo.,Ltd.43) Hefei Hefei 100.00
sales differentcontrol
Manufactures, Enterprise combined under the
MeilingEquatorElectric(Hefei)Co.,Ltd.44) Hefei Hefei 100.00
sales differentcontrol
Manufactures, Enterprise combined under the
HefeiEquator Electric Co., Ltd. 45) Hefei Hefei 100.00
sales differentcontrol
Hongyuan Earth Energy Heat Pump Technology Co. Manufactures,
Mianyang Mianyang 51.00 Investment
Ltd.46) sales
MeiLing Candy Washing Machine Co., Manufactures,
Hefei Hefei 60.00 Investment
Ltd.47) sales
Guangzhou Changhong Trade Co., 100.0
Zhongshan Zhongshan Sales Investment
Ltd.48) 0
100.0
Zhongshan Hongling Trade Co., Ltd.49) Zhongshan Zhongshan Sales Investment
0
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
94
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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 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
95
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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 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.
96
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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) 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.
8) 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. After Meiling Marketing
acquired 3% equity interests from the minority shareholders in 2017, Meiling Marketing the Company
totally holds 100% equity of the Changchun Meiling.
9) 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.
10) 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.
11) Nanchang Youxiang Appliance Marketing Co., Ltd. (Nanchang Xiangyou 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.
12) 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
97
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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.
13) 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.
14) Wuhan Meizhirong Appliance Marketing Co., Ltd. (Wuhan Meizhirong 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.
15) 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. After Meiling Marketing acquired 5% equity
interests from the minority shareholders in 2017, Meiling Marketing held in aggregate the 100% equity
interests of Zhengzhou Meiling.
16) 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. After Meiling Marketing acquired 4.67% equity interests from the minority
shareholders in 2017, Meiling Marketing held in aggregate the 100% equity interests of Shijiazhuang
Meiling.
17) 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. After Meiling Marketing acquired 6.2% equity interests from the
minority shareholders in 2017, Meiling Marketing held in aggregate the 100% equity interests of
Mianyang Meiling.
18) 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
98
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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.
19) 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.
20) 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. After Meiling Marketing acquired 1% equity interests from
the minority shareholders in 2017, Meiling Marketing held in aggregate the 100% equity interests of
Fuzhou Meiling.
21) 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. After Meiling Marketing acquired 1% equity interests
from the minority shareholders in 2017, Meiling Marketing held in aggregate the 100% equity interests of
Nanjing Meiling.
22) 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.
23) 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.
24) 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.
99
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
25) 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.
26) 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. After Meiling Marketing acquired 5% equity
interests from the minority shareholders in 2017, Meiling Marketing held in aggregate the 100% equity
interests of Hangzhou Meiling.
27) 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. After
Meiling Marketing acquired 2% equity interests from the minority shareholders in 2017, Meiling
Marketing held in aggregate the 100% equity interests of Chongqing Meiling.
28) 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. After Meiling Marketing acquired 2%
equity interests from the minority shareholders in 2017, Meiling Marketing held in aggregate the 97.5%
equity interests of Kuming Meiling.
29) 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.
30) 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. After Meiling
Marketing acquired 8% equity interests from the minority shareholders in 2017, Meiling Marketing held
in aggregate the 100% equity interests of Nantong Meiling.
100
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
31) 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.
32) 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 minority shareholders. Upon
completion of equity transfer in December 2015, Meiling Marketing totally held the entire equity interests
of Tinjian Meiling.
33) 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.
34) 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. After
Meiling Marketing acquired 5% equity interests from the minority shareholders in 2017, Meiling
Marketing held in aggregate the 100% equity interests of Harbin Meiling.
35) 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. After Meiling Marketing acquired 1% equity interests from
the minority shareholders in 2017, Meiling Marketing held in aggregate the 100% equity interests of
Beijing Meiling.
36) 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
101
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
[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.
37) 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 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
102
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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.
38) 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.
On 19 December 2016, being deliberated on shareholders meeting, 2.64% equity held by part of the
natural persons, are agreed to transferred to Hefei Meiling Co., Ltd. After transferred, the equity structures
are as: Hefei Meiling Co., Ltd. contributes 46.32 million Yuan, a 92.64% in registered capital; natural
person of Changmei management team totally contributed 3.68 million Yuan, a 7.36% in registered
capital.
39) 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.
40) 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
103
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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%.
41) 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% 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.
42) 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.
43) 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
104
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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.
44) 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.
45) 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 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.
46) 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%.
47) Meiling Candy Washing Machine Co., Ltd. (“Meiling Candy”) was established on 27 April 2017
105
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
with joint capital contribution from Hefei Meiling Co., Ltd. and Candy Hoover Group S.r.l.. Registered
capital amounting to 150 million Yuan, including 90 million Yuan contributed by Hefei Meiling Co., Ltd.,
a 60% in total registered capital while 60 million Yuan or equivalent USD contributed by Candy Hoover
Group S.r.l., a 40％in total registered capital. Ended as 30 June, the first phase contribution 30 million
Yuan and 20 million Yuan are paid respectively by Hefei Meiling and Candy Hoover Group S.r.l.
48) Guangzhou Changhong Trade Co., Ltd. (“Guangzhou Changhong”) was established in line with
the strategy plans and operation development requirement by Zhongshan Changhong Electric Co., LTD
on 6 January 2017 with registered capital of one million Yuan. Zhongshan Changhong contributed in cash,
a 100% in registered capital.
49) Zhongshan Hongling Trade Co., Ltd. (“Hongling Trade”) was established as a limited liability
company by Guangdong Changhong Ridian Technology Co., Ltd. dated 5 December 2016. Registered
capital amounting to one million Yuan, Guangdong Changhong Ridian Technology takes 100% equity.
(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
period period-end
period
Zhongke Meiling 33.24% 986,542.54 38,507,489.75
Hongyuan Ground Energy 49.00% 2,372,403.10 12,095,380.59
Changhong Ridian 1.14% 46,439.28 1,295,378.72
Meiling Kadi 40.00% -37,361.22 19,962,638.78
(3) Financial information for major non-wholly-owned subsidiary
Ending balance
Subsidiary Non-current
Current assets Non-currentassets Totalassets Currentliabilities Totalliabilities
liability
Zhongke
125,050,695.49 101,526,920.98 226,577,616.47 105,715,124.36 5,000,000.00 110,715,124.36
Meiling
Hongyuan
Ground 195,690,658.99 1,877,476.61 197,568,135.60 172,883,685.42 - 172,883,685.42
Energy
Changhong
190,122,411.51 58,864,880.48 248,987,291.99 135,812,098.27 - 135,812,098.27
Ridian
Meiling Kadi 111,284,441.35 158,066.04 111,442,507.39 61,535,910.44 - 61,535,910.44
(Continued)
Openingbalance
Subsidiary Non-current
Current assets Non-currentassets Totalassets Currentliabilities 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
106
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Subsidiary Openingbalance
Changhong
201,344,325.02 59,154,559.91 260,498,884.93 151,381,017.63 151,381,017.63
Ridian
Meiling Kadi - - - - - -
(Continued)
Current period
Subsidiary Total comprehensive Cash flow from
Operation income Net profit
income operation activity
Zhongke
60,567,937.18 2,968,339.70 2,968,339.70 36,565,279.44
Meiling
Hongyuan
Ground 266,905,097.64 4,841,638.97 4,841,638.97 -9,120,688.64
Energy
Changhong
208,290,529.53 4,057,326.42 4,057,326.42 -5,939,023.08
Ridian
Meiling Kadi 24,592,916.36 -93,403.05 -93,403.05 309,458.60
(Continued)
Amount for the same period of last year
Subsidiary Total comprehensive Cash flow from
Operation income Net profit
income operation activity
Zhongke
38,908,381.02 2,151,566.44 2,151,566.44 6,169,648.52
Meiling
Hongyuan
Ground 34,314,113.36 -798,632.06 -798,632.06 -926,619.14
Energy
Changhong
222,027,059.04 3,034,542.05 3,034,542.05 27,949,640.51
Ridian
Meiling Kadi - - - -
(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
107
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
2. Changes of owner’ equity shares in subsidiary and its impacts
Changchun zhengzhou Shijiazhuang Mianyang Fuzhou Nanjing Hangzhou Chongqing Kunming Nantong Harbin Beijing
Item Total
Meiling Meiling Meiling Meiling Meiling Meiling Meiling Meiling Huidian Meiling Meiling Meiling
Originalratioof shares held 97.00% 95.00% 95.33% 93.80% 99.00% 99.00% 95.00% 98.00% 95.50% 92.00% 95.00% 99.00%
Equity purchasedfromminority 3.00% 5.00% 4.67% 6.20% 1.00% 1.00% 5.00% 2.00% 2.00% 8.00% 5.00% 1.00%
Ratio of shares held at
100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 97.50% 100.00% 100.00% 100.00%
period-end
Cash 1 3 1 5 1 1 1 1 4 1 1 1 21.00
Acquisition cost/total disposal
1 3 1 5 1 1 1 1 4 1 1 1 21.00
consideration
Less: net assets of subsidiary
measured by equity shares -170,960.56 -769,777.59 -97,449.94 412,939.38 -119,653.94 -117,860.92 -735,435.01 -48,991.17 -20,037.95 -441,685.90 -156,586.55 -381,676.73 -2,647,176.88
obtainedby disposed
Balance 170,961.56 769,780.59 97,450.94 -412,934.38 119,654.94 117,861.92 735,436.01 48,992.17 20,041.95 441,686.90 156,587.55 381,677.73 2,647,197.88
Including:
-170,961.56 -769,780.59 -97,450.94 412,934.38 -119,654.94 -117,861.92 -735,436.01 -48,992.17 -20,041.95 -441,686.90 -156,587.55 -381,677.73 -2,647,197.88
Capitalpublicreserveadjusted
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 -2,647,197.88 Yuan, and
should be included in the capital reserve.
108
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise 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
6.Chengdu Guigu Environment Technology Manufactures,
Chengdu Chengdu 25.00 Equity
Co., Ltd. sales
(2) Financial information for major Joint venture: Nil
(3) Financial information for affiliated enterprise
Ending balance /Currentperiod
Chengdu
HefeiXingmei Sichuan Zhiyijia Hongyuan Sichuan
Item ChanghongRub Guigu
Assets Network Dineng Rebao TianyouGuigu
aElectricCompa Environmen
Management Technology Co., Technology Co. Technology Co.,
ny(Private)Ltd. t Technology
Co.,Ltd. Ltd. Ltd. Ltd.
Co., Ltd.
Currentassets: 106,622,727.23 3,794,894.67 1,767,413,320.51 108,375,007.35 11,803,904.00 37,397,817.27
Including: cash and cash
862,247.27 3,737,574.67 525,244,514.18 536,417.51 6,302,339.05 25,814,460.87
equivalent
Non-currentassets 81,040,087.59 22,419,345.68 13,977,775.32 4,042,220.08 25,380,204.84 14,467,194.33
Totalassets 187,662,814.82 26,214,240.35 1,781,391,095.83 112,417,227.43 37,184,108.84 51,865,011.60
Currentliability 101,018,008.57 1,603,225.17 1,730,935,643.69 59,301,986.01 606,786.89 9,124,966.94
Mom-currentliability - - 1,400,000.00 - 1,511,363.63 243,750.00
Totalliabilities 101,018,008.57 1,603,225.17 1,732,335,643.69 59,301,986.01 2,118,150.52 9,368,716.94
Minority’sinterest - - - 104,684.88 - -
Equity attributable to shareholder
86,644,806.25 24,611,015.18 49,055,452.14 53,010,556.54 35,065,958.32 42,496,294.66
ofparentcompany
Share of net assets measured by
34,657,922.50 11,882,198.13 14,716,635.63 25,975,172.70 8,766,489.58 10,624,073.66
shareholding
Adjustmenttime - - - - - -
--Goodwill - - - - - -
109
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Unrealized profit of the internal
5,544,313.98 - 7,572,751.93 3,245,444.30 12,057.40 178.89
downstreamtransactions
Unrealized profit of the internal
517,388.80 - - - - -
upstreamtransactions
Other - - - - - -
Book value of the equity
29,113,608.52 11,882,198.13 7,143,883.70 22,729,728.40 8,754,432.18 10,623,894.77
investmentforaffiliate
Fair value of equity investment
for the affiliates with consideration - - - - - -
publicly
Operationincome 130,908,878.06 74,174.75 1,824,770,956.91 24,702,679.10 513,414.56 2,635,882.58
Financialexpenses 191,224.13 -5,430.52 -11,144,192.28 69,906.80 -310,264.28 -76,340.87
Incometaxexpenses - - 7,230,229.39 - - -
Netprofit -632,619.48 -1,061,727.97 12,060,219.73 -71,775.81 -304,136.00 -3,422,217.75
Net profit of discontinuing
- - - - - -
operation
Othercomprehensiveincome - - - - - -
Totalcomprehensiveincome - - - - - -
Dividend received from affiliates
- - - - - -
intheYear
(Continued)
Openingbalance /Amountforthesameperiod oflastYear
ChanghongRuba HefeiXingmei Sichuan Zhiyijia Hongyuan
Item SichuanTianyou
ElectricCompany Assets Network Dineng Rebao
GuiguTechnology
Management Technology Co., Technology Co.
(Private)Ltd Co.,Ltd.
Co.,Ltd. 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
3,218,558.81 4,230,072.28 432,181,490.05 3,089,747.24 36,370,617.75
equivalent
Non-currentassets 87,139,096.04 22,951,140.57 14,581,224.90 4,316,949.46 42,568,210.38
Totalassets 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
89,582,216.78 25,672,743.15 36,995,232.41 53,082,332.35 31,192,462.90
ofparentcompany
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
Other
110
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Book value of the equity
29,314,674.36 12,394,800.39 9,380,373.67 22,771,065.45 7,782,717.50
investmentforaffiliate
Fair value of equity investment
for the affiliates with consideration
publicly
Operationincome 70,462,882.13 844,579.58 1,558,745,387.54 90,683,257.48 4,030,586.19
Financialexpenses 100,521.40 -3,138.37 -4,722,600.31 -24,436.43 -310,111.90
Incometaxexpenses - - 1,997,985.96 - -
Netprofit -2,017,456.15 -116,030.74 9,003,340.70 -4,238,296.19 -2,700,889.12
Net profit of discontinuing
operation
Othercomprehensiveincome
Totalcomprehensiveincome
Dividend received from affiliates
intheYear
(4) Financial summary for non-important Joint venture and affiliate enterprise
Ending balance / Current Openingbalance /Amountforthesameperiod
Item
period oflastYear
Affiliate:
Total book value of investment
Total amount measured by shareholding
ratio
--net profit -4,967,426.56 -1,831,541.72
--Other comprehensiveincome
-- Totalcomprehensiveincome -4,967,426.56 -1,831,541.72
(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
111
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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 respective
proportion of contracts at fixed and floating rates based on the prevailing market conditions. As of 30 June
2017, the interest-bearing debts mainly referred to borrowing contracts at floating rate denominated in
RMB with total amount of 1,215,413,395.00, borrowing contracts at fixed rate denominated in USD with
total amount of 273,008,320.00, borrowing contracts at fixed rate denominated in EURO with total
amount of 197,660,986.07. 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 period and fair value measurement level
Fair value at period-end
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 10,813,272.50 10,813,272.50
Financial liabilities measured by fair value and with variation reckoned into current gains/losses
1. Transactional financial liabilities
(1) Derivative financial liabilities 9,671,394.08 9,671,394.08
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
112
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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 25.10% 25.10%
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
period period
Sichuan Changhong Electric Co.,
4,616,244,222 4,616,244,222
LTD
(3) Shares held by the controlling shareholder and its changes on equity
Amount of shares held Shareholding ratio (%)
Controlling shareholder Ratio at Ratio at
Ending balance Opening balance
period-end year-begin
Sichuan Changhong Electric Co.,
262,171,365 259,871,791 25.10% 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
Affiliated enterprise of Subsidiary Changhong
Chengdu Guigu Environment Technology Co., Ltd.
Air-conditioning
4. Other related parties
113
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Other related parties Relationship
Control by same controlling shareholder and ultimate
CHANGHONG(HK)TRADINGLIMITED
controller
Control by same controlling shareholder and ultimate
CHANGHONGELECTRIC(AUSTRALIA)
controller
Control by same controlling shareholder and ultimate
CHANGHONGELECTRICMIDDLEEASTFZE
controller
Control by same controlling shareholder and ultimate
PT.CHANGHONGELECTRICINDONESIA
controller
Control by same controlling shareholder and ultimate
Chengdu Changhong Electronic Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Guangdong Changhong Electronics Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Guangdong Changhong Device Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Guangyuan Changhong Electronics Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Hefei Changhong Industrial Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Huayi Compressor Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Lejiayi Chain Management 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 Hongwei Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Hongxin Software 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 Package Printing Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Innovation Investments Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Diandianbang Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Power Source Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Electronic Products Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Electronic System Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Energy Sunshine Technology 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 Precision Electronics Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Minsheng Logistics Co., LTD
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Mold Plastic Tech. Co., Ltd.
controller
Sichuan Changhong Devices Technology Co., Ltd. Control by same controlling shareholder and ultimate
114
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Other related parties Relationship
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Network Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong New Energy Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Wisdom Health Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Property Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Changhong International Holdings (Hong Kong) Co., Ltd.
controller
Control by same controlling shareholder and ultimate
BVCH Optronics (Sichuan) Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Orion PDP Co.,ltd
controller
Control by same controlling shareholder and ultimate
Anhui Xinhao PDP Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Guangyuan Hongcheng Industrial Co., Ltd.
controller
Control by same controlling shareholder and ultimate
081 Electronic Group
controller
Control by same controlling shareholder and ultimate
Sichuan Ailian Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Hongcheng Real Estate Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Hongcheng Construction Engineering Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Huafeng Enterprise Group Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Huanyu Industrial Co. Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Jiahong Industry Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Electronic Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Gerun Renewable Resources Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong International Hotel 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
Sichuan Changhong Group Finance Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Educational Technology 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 Changhong Xinrui Technology 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
Yibing Hongxing Electronics Co., Ltd.
controller
115
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Other related parties Relationship
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
Sichuan Jiashibang Electric Service 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
Amount for the
Current period same period of
Related parties Content (10 thousand last Year
Yuan) (10 thousand
Yuan)
Purchasing
Sichuan Changhong Electric Co., Ltd. 20,358.26 7,972.57
commodity
Purchasing
Huayi Compressor Co., Ltd. 22,954.46 23,598.51
commodity
Purchasing
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 32,589.07 24,724.78
commodity
Purchasing
Sichuan Changhong Jijia Fine Co., Ltd. 15,533.97 11,425.50
commodity
Purchasing
Sichuan Changhong Package Printing Co., Ltd. 5,360.60 2,819.62
commodity
Purchasing
Sichuan Changhong Precision Electronics Tech. Co., Ltd. 748.78 471.03
commodity
Purchasing
Sichuan Jiahong Industry Co., Ltd. 2.91
commodity
Purchasing
Sichuan Changhong New Energy Tech. Co., Ltd. 0.71 16.18
commodity
Purchasing
081 Electronic Group 235.55 165.29
commodity
Purchasing
Sichuan Changhong Devices Technology Co., Ltd. 2,578.26
commodity
Purchasing
Guangdong Changhong Electronics Co., Ltd. 663.79 561.62
commodity
Purchasing
CHANGHONG(HK)TRADINGLIMITED 179.34
commodity
Purchasing
Sichuan Changhong Energy Sunshine Technology Co., Ltd. 0.57
commodity
Sichuan Changhong Intelligent Manufacturing Technology Purchasing
86.44 46.93
Co., Ltd. commodity
Purchasing
Sichuan Changhong Xinrui Technology Co., Ltd 4,901.96 2,874.03
commodity
Purchasing
Sichuan Changhong Power Source Co., Ltd. 3.68
commodity
Purchasing
Sichuan Hongwei Technology Co., Ltd. 4.92
commodity
Purchasing
Sichuan Zhiyijia Network Technology Co., Ltd. 0.92 1.32
commodity
116
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Amount for the
Current period same period of
Related parties Content (10 thousand last Year
Yuan) (10 thousand
Yuan)
Purchasing
Sichuan Huafeng Enterprise Group Co., Ltd. 1.40
commodity
Purchasing
Sichuan Changhong Electronic Products Co., Ltd. 2,403.23
commodity
Purchasing
Sichuan Ailian Technology Co., Ltd. 434.57
commodity
Purchasing
Sichuan Changhong Educational Technology Co., Ltd. 5.03
commodity
Purchasing
Sichuan Hongyu Metal Manufacture Co., Ltd. 63.52 6.97
commodity
Purchasing
Sichuan Changhe Technology Co., Ltd. 431.07 308.60
commodity
Purchasing
Sichuan Changxin Refrigeration Parts Co., Ltd. 21,212.11 11,569.40
commodity
Purchasing
Mianyang Highly Electric Co., Ltd. 18,335.82 11,853.60
commodity
Purchasing
Mianyang Hongrun Electronics Co., Ltd. 583.74
commodity
Purchasing
Hongyuan Dineng Rebao Technology Co. Ltd. 7,981.68
commodity
Purchasing
Sichuan Tianyou Guigu Technology Co., Ltd. 175.02
commodity
Purchasing
Chengdu Guigu Environment Technology Co., Ltd. 3.28
commodity
Total 146,324.54 109,926.07
2. Labor service receive
Amount for the
Related parties Content Current period same period of
last Year
Labor service
Sichuan Changhong Electric Co., Ltd. 8,164,963.58 12,247,946.22
receive
Labor service
Sichuan Changhong Electronics Holding Group Co., Ltd. 23,035.00 9,235.00
receive
Labor service
Sichuan Changhong Minsheng Logistics Co., LTD 251,485,024.96 179,284,102.84
receive
Labor service
Sichuan Service Exp. Appliance Service Chain Co., Ltd. 73,918,850.99 54,735,610.51
receive
Labor service
Sichuan Hongxin Software Co., Ltd. 632,000.00 37,735.85
receive
Labor service
Guangdong Changhong Electronics Co., Ltd. 308,552.78 298,128.51
receive
Labor service
Sichuan Jiahong Industry Co., Ltd. 236,642.41 148,240.81
receive
Labor service
Sichuan Changhong International Hotel Co., Ltd. 83,082.01 81,913.94
receive
Labor service
CHANGHONG(HK)TRADINGLIMITED 237,531.09 97,468.90
receive
Labor service
Sichuan Changhong International Travel Agency Co., Ltd. 31,250.00
receive
117
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Labor service
Sichuan Changhong Property Service Co., Ltd. 386,219.15
receive
Labor service
Sichuan Hongwei Technology Co., Ltd. 206,683.02
receive
Labor service
Sichuan Zhiyijia Network Technology Co., Ltd. 155,943.39
receive
Labor service
Lejiayi Chain Management Co., Ltd. 22,641.51
receive
Labor service
Sichuan Changhong Network Tech. Co., Ltd. 5,743.71
receive
Sichuan Changhong Intelligent Manufacturing Technology Labor service
196,581.20
Co., Ltd. receive
Labor service
Sichuan Changhong Jijia Fine Co., Ltd. 1,794.87
receive
Total 336,096,539.67 246,940,382.58
3. Purchase of fuels and energy
Amount for the
Related parties Content Current period same period of
last Year
Receive fuels and
Sichuan Changhong Electric Co., Ltd. 6,950,453.59 6,045,488.65
energy
Receive fuels and
Sichuan Changhong Electronics Holding Group Co., Ltd. 10,243.00
energy
Receive fuels and
Huayi Compressor Co., Ltd. 262,087.18
energy
Receive fuels and
Guangdong Changhong Electronics Co., Ltd. 498,792.14 570,996.81
energy
Receive fuels and
Sichuan Jiahong Industry Co., Ltd. 4,781.60 7,135.70
energy
Receive fuels and
Sichuan Changhong Property Service Co., Ltd. 10,928.55
energy
Total 7,464,955.88 6,895,951.34
4. Sales of goods/ labor service providing
Amount for the
Current period same period of
Related parties Content (10 thousand last Year
Yuan) (10 thousand
Yuan)
Sichuan Changhong Electric Co., Ltd. Sales of goods 84,180.47 53,934.25
Sichuan Changhong Electronics Holding Group Co., Ltd. Sales of goods 99.47 148.47
Sichuan Changhong Jijia Fine Co., Ltd. Sales of goods 3,774.84 2,269.56
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Sales of goods 5,503.42 8,989.13
Lejiayi Chain Management Co., Ltd. Sales of goods 173.06 176.06
118
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Amount for the
Current period same period of
Related parties Content (10 thousand last Year
Yuan) (10 thousand
Yuan)
PT.CHANGHONGELECTRICINDONESIA Sales of goods 0.49
CHANGHONG(HK)TRADINGLIMITED Sales of goods 24,741.31 36,112.72
CHANGHONGELECTRIC(AUSTRALIA) Sales of goods 847.30 10.66
Sichuan Hongwei Technology Co., Ltd. Sales of goods 8.95 0.61
Sichuan Changhong Devices Technology Co., Ltd. Sales of goods 0.17
Sichuan Changhong Minsheng Logistics Co., LTD Sales of goods 108.76 58.92
Sichuan Service Exp. Appliance Service Chain Co., Ltd. Sales of goods 559.66 285.23
Sichuan Changhong Gerun Renewable Resources Co., Ltd. Sales of goods 759.82 364.88
Hefei Changhong Industrial Co., Ltd. Sales of goods 2.11 104.71
Sichuan Huafeng Enterprise Group Co., Ltd. Sales of goods 0.26 15.58
Sichuan Zhiyijia Network Technology Co., Ltd. Sales of goods 98,589.85 66,360.65
Sichuan Changhong Property Co., Ltd. Sales of goods 5.97 3.70
Anhui Xinhao PDP Co., Ltd. Sales of goods 5.13
Sichuan Changhong Network Tech. Co., Ltd. Sales of goods 8.71 0.61
Chengdu Changhong Electronic Technology Co., Ltd. Sales of goods 1.55
Sichuan Changhong Wisdom Health Technology Co., Ltd. Sales of goods 0.36 0.30
Sichuan Changhong Property Service Co., Ltd. Sales of goods 2.05
Guangdong Changhong Electronics Co., Ltd. Sales of goods 0.14
Sichuan Huanyu Industrial Co. Ltd. Sales of goods 12.10 0.42
Sichuan Changhong Xinrui Technology Co., Ltd Sales of goods 1.89 75.89
Orion PDP Co.,ltd Sales of goods 961.52
Sichuan Changhong Intelligent Manufacturing Technology
Sales of goods 1.12 0.23
Co., Ltd.
Mianyang Technology Town Big Data Technology Co., Ltd. Sales of goods 0.29
BVCH Optronics (Sichuan) Co., Ltd. Sales of goods 1.28
Sichuan Changhong Electronic Products Co., Ltd. Sales of goods 9.04
Sichuan Changhong Group Finance Co., Ltd. Sales of goods 1.59
Sichuan Changhong Package Printing Co., Ltd. Sales of goods 1.76
Sichuan Changhong Power Source Co., Ltd. Sales of goods 35.17
Sichuan Changhong Educational Technology Co., Ltd. Sales of goods 1.63
081 Electronic Group Sales of goods 4.46
Guangyuan Changhong Electronics Technology Co., Ltd. Sales of goods 39.05
Sichuan Ailian Technology Co., Ltd. Sales of goods 19.22
Sichuan Changhong Innovation Investments Co., Ltd. Sales of goods 0.02
Guangyuan Hongcheng Industrial Co., Ltd. Sales of goods 0.10
Sichuan Changhong Energy Sunshine Technology Co., Ltd. Sales of goods 0.12
119
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Amount for the
Current period same period of
Related parties Content (10 thousand last Year
Yuan) (10 thousand
Yuan)
Sichuan Changhong Electronic Technology Co., Ltd. Sales of goods 0.42
Sichuan Hongxin Software Co., Ltd. Sales of goods 0.62
Sichuan Hongcheng Real Estate Co., Ltd. Sales of goods 0.75
Sichuan Changhong New Energy Tech. Co., Ltd. Sales of goods 64.70
Sichuan Changhong Electronic System Co., Ltd. Sales of goods 3.23
Sichuan Changhong Precision Electronics Tech. Co., Ltd. Sales of goods 8.86
Changhong International Holdings (Hong Kong) Co., Ltd. Sales of goods 0.05
Sichuan Changxin Refrigeration Parts Co., Ltd. Sales of goods 5,863.82 3,962.85
Hongyuan Dineng Rebao Technology Co. Ltd. Sales of goods 1,040.01 12,126.08
Sichuan Tianyou Guigu Technology Co., Ltd. Sales of goods 36.18 210.02
ChanghongRubaElectricCompany(Private)Ltd. Sales of goods 1,122.42 3,524.40
Total 228,598.28 188,742.92
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
Amount for the
Related parties Content Current period same period of
last Year
Fuel and energy
Guangdong Changhong Electronics Co., Ltd. 51,666.51 292,821.41
providing
Fuel and energy
Sichuan Changhong Minsheng Logistics Co., LTD 10,848.03 20,229.17
providing
Fuel and energy
Sichuan Hongwei Technology Co., Ltd. 71.89
providing
Fuel and energy
Sichuan Changhong Devices Technology Co., Ltd. 333,399.12 136,553.66
providing
Fuel and energy
Sichuan Changhong Jijia Fine Co., Ltd. 13,781.32 65,288.54
providing
Fuel and energy
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 2,030,399.35 3,010,107.37
providing
Fuel and energy
Hefei Changhong Industrial Co., Ltd. 9,677.31
providing
Fuel and energy
Sichuan Changhong Precision Electronics Tech. Co., Ltd. 1,964.92
providing
Fuel and energy
Sichuan Service Exp. Appliance Service Chain Co., Ltd. 2,269.46
providing
120
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Amount for the
Related parties Content Current period same period of
last Year
Total 2,454,077.91 3,525,000.15
6. Related rental
(1) Renting
Leasing income
Type of Leasing income in the same
Lessor Lessee
assets in this period period of last
year
HefeiMeiling
Sichuan Changhong Jijia Fine Co., Ltd. Plant 253,680.00
Co., Ltd.
HefeiMeiling
Sichuan Changhong Jijia Fine Co., Ltd. Warehouse 14,060.38
Co., Ltd.
HefeiMeiling
Sichuan Changhong Jijia Fine Co., Ltd. Forklifttruck 442.45
Co., Ltd.
HefeiMeiling
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Plant 702,270.00
Co., Ltd.
HefeiMeiling
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Apartment 152,224.76
Co., Ltd.
HefeiMeiling
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Warehouse 34,301.89
Co., Ltd.
HefeiMeiling
Sichuan Changhong Minsheng Logistics Co., LTD Office 10,608.00
Co., Ltd.
HefeiMeiling Sichuan Service Exp. Appliance Service Chain Co.,
Apartment 106,491.41
Co., Ltd. Ltd.
HefeiMeiling
Sichuan Changhong Xinrui Technology Co., Ltd Forklifttruck 2,016.51 390.57
Co., Ltd.
HefeiMeiling
Sichuan Changhong Xinrui Technology Co., Ltd Warehouse 14,867.93 12,226.42
Co., Ltd.
HefeiMeiling
Sichuan Changhe Technology Co., Ltd. Warehouse 5,458.49 1,833.96
Co., Ltd.
HefeiMeiling
Hefei Changhong Industrial Co., Ltd. Apartment 87,680.00
Co., Ltd.
HefeiMeiling Sichuan Changhong Precision Electronics Tech. Co.,
Apartment 15,657.14
Co., Ltd. Ltd.
Changhong
Freight
Air-conditio BVCH Optronics (Sichuan) Co., Ltd. 52,480.00 63,720.00
elevator
ner
Changhong
Machinery
Air-conditio Sichuan Changhong Mold Plastic Tech. Co., Ltd. 25,433.40
equipment
ner
Changhong
Air-conditio Sichuan Changhong Jijia Fine Co., Ltd. Driving 7,000.00
ner
Zhongshan
Guangdong Changhong Electronics Co., Ltd. 2#livingarea 59,606.04 3,889.43
Changhong
Zhongshan
Sichuan Changhong Minsheng Logistics Co., LTD Warehouse 100,000.00
Changhong
Zhongshan Trade
Guangdong Changhong Electronics Co., Ltd. 402,298.16
Changhong Center
Zhongshan Trade
Sichuan Changhong Minsheng Logistics Co., LTD 20,006.99
Changhong Center
121
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Leasing income
Type of Leasing income in the same
Lessor Lessee
assets in this period period of last
year
Jiangxi
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Plant 237,432.38 241,197.71
Meiling
Changhong
Sichuan Changhong Minsheng Logistics Co., LTD Plant 514,072.40 515,462.10
Ridian
Changhong
Sichuan Changhong Devices Technology Co., Ltd. Plant 463,469.00 418,624.00
Ridian
Changhong
Sichuan Hongwei Technology Co., Ltd. Plant 35,218.29
Ridian
Mianyang
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Warehouse 32,943.40
Refrigeration
Mianyang
Sichuan Changhe Technology Co., Ltd. Warehouse 113.21
Refrigeration
Mianyang
Sichuan Changxin Refrigeration Parts Co., Ltd. Warehouse 113.21
Refrigeration
Total 2,745,665.75 1,861,623.88
(2) Lessee of related parties
Leasing
Leasing expense expense in the
Lessor Lessee Type of assets
in this period same period of
last year
Changhong
Sichuan Changhong Electric Co., Ltd. Workshop 2,204,901.44
Air-conditioner
Changhong
Sichuan Changhong Electric Co., Ltd. Office 46,951.52
Air-conditioner
Sichuan Changhong Electronics Holding Changhong
Building 33,310.74 51,912.42
Group Co., Ltd. Air-conditioner
Sichuan Changhong Property Service Changhong
Workshop 908,313.35
Co., Ltd. Air-conditioner
Guangdong Changhong Electronics Co., Changhong
Staffdormitory 4,763.20
Ltd. Air-conditioner
Chengdu Changhong Electronic Changhong
Office 84,765.80
Technology Co., Ltd. Air-conditioner
Workshop
Sichuan Changhong Electric Co., Ltd. MianyangRefrigeration 583,939.82
leasing
Sichuan Changhong Electronics Holding
MianyangRefrigeration Staffdormitory 3,280.00 2,080.00
Group Co., Ltd.
Sichuan Changhong Electric Co., Ltd. Appliancemarketing Office 354,901.77
Sichuan Changhong Electric Co., Ltd. Beijing Meiling Office 89,128.50
Sichuan Changhong Electric Co., Ltd. NanjingMeiling Office 10,584.72
Sichuan Changhong Property Service Changmei
Office 13,207.55
Co., Ltd. Technology
Chengdu Changhong Electronic Changmei
Office 80,048.73
Technology Co., Ltd. Technology
Guangdong Changhong Electronics Co., Changhong
Staffdormitory 30,975.80 279,543.46
Ltd. Ridian
Total 1,753,189.71 3,029,419.11
7. Related guarantee
122
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Maximum guarantee
Completed
Secured party Sponsored party amount (in 10 Start End
(Y/N)
thousand Yuan)
Zhongshan
HefeiMeilingCo.,Ltd. 5,000.00 2016.08.05 2017.08.04 N
Changhong
Zhongshan
HefeiMeilingCo.,Ltd. 5,000.00 2016.10.28 2017.10.28 N
Changhong
Zhongshan
HefeiMeilingCo.,Ltd. 6,000.00 2017.01.03 2018.01.03 N
Changhong
Zhongshan
HefeiMeilingCo.,Ltd. 5,500.00 2017.01.22 2018.01.22 N
Changhong
Zhongshan
HefeiMeilingCo.,Ltd. 20,000.00 2017.03.01 2018.03.31 N
Changhong
Zhongshan
HefeiMeilingCo.,Ltd. 10,000.00 2017.03.29 2018.03.29 N
Changhong
HefeiMeilingCo.,Ltd. Changhong Ridian 4,500.00 2016.05.05 2017.05.05 N
HefeiMeilingCo.,Ltd. Changhong Ridian 2,000.00 2016.09.01 2017.09.01 N
HefeiMeilingCo.,Ltd. Changhong Ridian 2,000.00 2017.06.13 2017.09.01 N
HefeiMeilingCo.,Ltd. Zhongke Meiling 2,000.00 2017.02.16 2018.01.05 N
HefeiMeilingCo.,Ltd. Zhongke Meiling 1,000.00 2017.06.23 2018.06.22 N
Counter
guarantee:
Zhongshan
HefeiMeilingCo.,Ltd. 5,000.00 2016.08.05 2017.08.04 N
Changhong
Zhongshan
HefeiMeilingCo.,Ltd. 5,000.00 2016.10.28 2017.10.28 N
Changhong
Zhongshan
HefeiMeilingCo.,Ltd. 6,000.00 2017.01.03 2018.01.03 N
Changhong
Zhongshan
HefeiMeilingCo.,Ltd. 5,500.00 2017.01.22 2018.01.22 N
Changhong
Zhongshan
HefeiMeilingCo.,Ltd. 20,000.00 2017.03.01 2018.03.31 N
Changhong
Zhongshan
HefeiMeilingCo.,Ltd. 10,000.00 2017.03.29 2018.03.29 N
Changhong
Changhong Ridian HefeiMeilingCo.,Ltd. 4,500.00 2016.05.05 2017.05.05 N
Changhong Ridian HefeiMeilingCo.,Ltd. 2,000.00 2016.09.01 2017.09.01 N
Changhong Ridian HefeiMeilingCo.,Ltd. 2,000.00 2017.06.13 2017.09.01 N
Zhongke Meiling HefeiMeilingCo.,Ltd. 2,000.00 2017.02.16 2018.01.05 N
Zhongke Meiling HefeiMeilingCo.,Ltd. 1,000.00 2017.06.23 2018.06.22 N
8. Assets transfer, debt restructuring of related parties
Amount for the
Related parties Type Current period same period of
last year
Purchase and
Sichuan Changhong Electric Co., Ltd. construction of fixed 25,000.00 216,211.27
assets
Purchase and
Sichuan Changhong Intelligent Manufacturing
construction of fixed 13,629,166.26
Technology Co., Ltd.
assets
Sichuan Hongxin Software Co., Ltd. Purchase and 1,895,509.44 188,679.25
construction of fixed
123
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Amount for the
Related parties Type Current period same period of
last year
assets
Sichuan Hongcheng Construction Engineering Co.,
Purchasing fixed assets 3,688,920.36
Ltd.
Sichuan Hongcheng Real Estate Co., Ltd. Purchasing fixed assets 509,433.94
Sichuan Hongwei Technology Co., Ltd. Purchasing fixed assets 1,110,261.19
Purchase of intangible
Sichuan Hongxin Software Co., Ltd. 149,292.45
assets
Sichuan Changhong Gerun Renewable Resources
Fixed assets sold 31,091.89
Co., Ltd.
9. Related transaction with Changhong Finance Company
(1) Saving balance
Income from bank
Company Opening balance Ending balance
saving
Hefei Meiling Co., Ltd. 1,269,669,769.16 770,376,202.99 7,605,780.39
Sichuan Changhong Air-conditioner Co.,
419,338,790.38 502,791,520.88 7,453,833.28
Ltd.
Zhongshan Changhong Electric Co., LTD 67,318,559.05 102,644,880.25 296,153.11
Hefei Meiling Group Holdings Limited 1,185,381.05 101,771,524.73 12,143.68
Mianyang Meiling Refrigeration Co., Ltd. 60,008.27 3,987,404.56 5,807.24
Zhongke Meiling Cryogenic Technology
25,450,411.46 17,294,389.52 83,978.06
Co., Ltd.
Jiangxi MeiLing Electric Appliance Co.,
405,000,000.00 7,198.58
Ltd.
Guangdong Changhong Ridian Technology
125,819,243.83 1,370,298.23 511,270.45
Co., Ltd.
Total 1,908,842,163.20 1,905,236,221.16 15,976,164.79
(2) Notes discounted
Bank acceptance book Bank acceptance Expenses of
Company
discounted amount discounted amount discounted
Hefei Meiling Co., Ltd. 508,958,028.25 502,739,694.94 6,218,333.31
Sichuan Changhong Air-conditioner Co.,
513,290,861.30 507,593,215.01 5,697,646.29
Ltd.
Mianyang Meiling Refrigeration Co., Ltd. 4,000,000.00 3,971,666.67 28,333.33
Jiangxi MeiLing Electric Appliance Co.,
205,000,000.00 205,000,000.00
Ltd.
Total 1,231,248,889.55 1,219,304,576.62 11,944,312.93
(3) Notes issued
Company Issuing unit Noteamount Type
Sichuan Changhong Group
Hefei Meiling Co., Ltd. 99,403,000.00 Bankacceptance
Finance Co., Ltd.
Sichuan Changhong Air-conditioner Sichuan Changhong Group
626,539,394.79 Bankacceptance
Co., Ltd. Finance Co., Ltd.
124
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Zhongshan Changhong Electric Co., Sichuan Changhong Group
282,638,177.49 Bankacceptance
LTD Finance Co., Ltd.
Mianyang Meiling Refrigeration Co., Sichuan Changhong Group
5,233,311.20 Bankacceptance
Ltd. Finance Co., Ltd.
Zhongke Meiling Cryogenic Sichuan Changhong Group
17,277,060.00 Bankacceptance
Technology Co., Ltd. Finance Co., Ltd.
Guangdong Changhong Ridian Sichuan Changhong Group
7,490,730.08 Bankacceptance
Technology Co., Ltd. Finance Co., Ltd.
Jiangxi MeiLing Electric Appliance Sichuan Changhong Group
200,000,000.00 Bankacceptance
Co., Ltd. Finance Co., Ltd.
Total 1,238,581,673.56
(4) Borrowing: Nil
(5) Accounts receivable factoring: Nil
(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 provi
ision sion
Account
Sichuan Changhong Electric Co., Ltd. 678,572.23 521,671.35
receivable
Account Sichuan Changhong Electronics Holding
17,850.00 376,186.92
receivable Group Co., Ltd.
Account Sichuan Changhong Mold Plastic Tech.
608,155.97 965,201.45
receivable Co., Ltd.
Account CHANGHONGELECTRIC(AUSTRALI
8,568,997.49 144,829.93
receivable A)
Account Sichuan Changhong Property Service
12,516.00
receivable Co., Ltd.
Account
Huayi Compressor Co., Ltd. 275,400.00 334,800.00
receivable
Account
Sichuan Changhong Jijia Fine Co., Ltd. 164,379.15
receivable
Account Sichuan Changhong Minsheng Logistics
196,189.88
receivable Co., LTD
Account PT.CHANGHONGELECTRICINDONE
4,809.82 26,971.06
receivable SIA
Account CHANGHONG(HK)TRADINGLIMITE
233,409,742.89 60,541,639.57
receivable D
Account Sichuan Changhong Package Printing
19,943.20 4,400.00
receivable Co., Ltd.
Account Sichuan Changhong International Hotel
825,626.90 1,334,736.90
receivable Co., Ltd.
Account Chengdu Changhong Electronic
434,509.01 434,509.01
receivable Technology Co., Ltd.
Account Sichuan Changhong Gerun Renewable
0.60 0.60
receivable Resources Co., Ltd.
Account
394,817.20
receivable Lejiayi Chain Management Co., Ltd.
125
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Ending balance Opening balance
Bad Bad
Item Related parties debt debt
Book balance Book balance
prov provi
ision sion
Account Sichuan Zhiyijia Network Technology
232,654,318.73 174,033,095.60
receivable Co., Ltd.
Account
Sichuan Hongwei Technology Co., Ltd. 70,553.20 7,600.00
receivable
Account
Anhui Xinhao PDP Co., Ltd. 63,000.00 63,000.00
receivable
Account Sichuan Changhong Power Source Co.,
26,289.18
receivable Ltd.
Account
147,174.10
receivable Yibing Hongxing Electronics Co., Ltd.
Account Sichuan Changhong Educational
18,765.20
receivable Technology Co., Ltd.
Account
Sichuan Huanyu Industrial Co. Ltd. 141,550.00
receivable
Account
Sichuan Changhong Property Co., Ltd. 69,900.00
receivable
Account Sichuan Changhong New Energy Tech.
313,864.41
receivable Co., Ltd.
Account Sichuan Changhong Innovation
232.80
receivable Investments Co., Ltd.
Account Mianyang Technology Town Big Data
3,313.20
receivable Technology Co., Ltd.
Account Sichuan Changhong Electronic System
3,000.00
receivable Co., Ltd.
Account Sichuan Changhong Electronic Products
4,100.00
receivable Co., Ltd.
Account Sichuan Changhong Network Tech. Co.,
34,064.00
receivable Ltd.
Account
9,469,893.05
receivable Orion PDP Co.,ltd
Account
Hefei Changhong Industrial Co., Ltd. 8,744.00
receivable
Account Changhong International Holdings (Hong
620.80
receivable Kong) Co., Ltd.
Account Hongyuan Dineng Rebao Technology Co.
59,547,184.81 36,070,419.59
receivable Ltd.
Account ChanghongRubaElectricCompany(Privat
26,854,326.22 16,296,282.53
receivable e)Ltd.
Account paid
Sichuan Changhong Electric Co., Ltd. 7,816,525.64 1,054,531.13
in advance
Account paid Sichuan Changhong Electronics Holding
93,901.98
in advance Group Co., Ltd.
Account paid
Sichuan Hongwei Technology Co., Ltd. 363,948.00 263,948.00
in advance
Account paid Sichuan Zhiyijia Network Technology
5,258.97 14,074.00
in advance Co., Ltd.
Account paid Sichuan Changhong Intelligent
616,680.00 254,682.00
in advance Manufacturing Technology Co., Ltd.
Account paid
21,000.00
in advance Sichuan Changhong Jijia Fine Co., Ltd.
126
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Ending balance Opening balance
Bad Bad
Item Related parties debt debt
Book balance Book balance
prov provi
ision sion
Other
39,617.46
receivables Sichuan Changhong Electric Co., Ltd.
Other Sichuan Service Exp. Appliance Service
200,000.00 200,000.00
receivables Chain Co., Ltd.
Other Hongyuan Dineng Rebao Technology Co.
130,396.62
receivables Ltd.
Other Sichuan Tianyou Guigu Technology Co.,
12,500,000.00
receivables Ltd.
Total 584,000,028.53 305,772,283.82
2. Payables
Item Related parties Ending balance Opening balance
Accounts
Sichuan Changhong Electric Co., Ltd. 65,507,692.60 18,441,774.94
payable
Accounts
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 234,352,253.68 111,859,645.07
payable
Accounts
Huayi Compressor Co., Ltd. 96,415,634.09 54,756,261.49
payable
Accounts
Sichuan Changhong Jijia Fine Co., Ltd. 173,559,467.19 49,428,116.49
payable
Accounts
Sichuan Changhong Minsheng Logistics Co., LTD 18,962,093.41 40,128,307.43
payable
Accounts
Sichuan Changhong Package Printing Co., Ltd. 47,699,791.37 11,582,508.82
payable
Accounts
Sichuan Changhong Devices Technology Co., Ltd. 8,244,251.90
payable
Accounts Sichuan Changhong Precision Electronics Tech. Co.,
15,312,633.09 2,231,885.31
payable Ltd.
Accounts
081 Electronic Group 864,603.30 397,568.22
payable
Accounts
Sichuan Changhong New Energy Tech. Co., Ltd. 235.76
payable
Accounts
Guangdong Changhong Electronics Co., Ltd. 6,432,120.19 3,602,882.13
payable
Accounts
Sichuan Changhong Power Source Co., Ltd. 4,806.70
payable
Accounts Sichuan Service Exp. Appliance Service Chain Co.,
14,622,269.15 6,593,913.18
payable Ltd.
Accounts
Sichuan Hongwei Technology Co., Ltd. 1,647,512.58 1,647,512.58
payable
Accounts
Sichuan Hongxin Software Co., Ltd. 1,377,000.00
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 23,817,184.85 31,134,508.32
payable
127
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Item Related parties Ending balance Opening balance
Accounts Sichuan Changhong Intelligent Manufacturing
13,381,744.45 1,159,293.19
payable Technology Co., Ltd.
Accounts Sichuan Changhong International Travel Agency Co.,
104,170.00 14,981.00
payable Ltd.
Accounts
Sichuan Changhong Electronic System Co., Ltd. 77,000.00 77,000.00
payable
Accounts
Sichuan Jiahong Industry Co., Ltd. 1,500.00
payable
Accounts
Sichuan Changhong Property Service Co., Ltd. 546.00 28.00
payable
Accounts
Sichuan Huafeng Enterprise Group Co., Ltd. 16,335.76 283,500.63
payable
Accounts
Sichuan Changhong Electronic Products Co., Ltd. 20,441,553.82
payable
Accounts
Sichuan Ailian Technology Co., Ltd. 4,487,817.51
payable
Accounts
Sichuan Jiashibang Electric Service Co., Ltd. 2,325.00
payable
Accounts
Sichuan Hongyu Metal Manufacture Co., Ltd. 962,208.48 475,411.87
payable
Accounts
Sichuan Changxin Refrigeration Parts Co., Ltd. 44,248,452.99 16,767,170.82
payable
Accounts
Mianyang Highly Electric Co., Ltd. 47,125,794.58 33,257,152.05
payable
Accounts
Sichuan Changhe Technology Co., Ltd. 3,063,524.32 2,769,516.97
payable
Accounts
Hongyuan Dineng Rebao Technology Co. Ltd. 1,783.60
payable
Accounts
Sichuan Tianyou Guigu Technology Co., Ltd. 397,435.50
payable
Accounts
Chengdu Guigu Environment Technology Co., Ltd. 441,220.12
payable
Account
received in Sichuan Changhong Electric Co., Ltd. 36,470,918.03
advance
Account
received in Lejiayi Chain Management Co., Ltd. 0.02 559,819.59
advance
Account
received in 081 Electronic Group 2,906,393.55
advance
Account
received in CHANGHONGELECTRICMIDDLEEASTFZE 1,696.65 37,303.37
advance
Account
Sichuan Changhong Gerun Renewable Resources
received in 47,011.00 273,106.03
Co., Ltd.
advance
Account
Sichuan Service Exp. Appliance Service Chain Co.,
received in 85,406.59 52,999.49
Ltd.
advance
Account
received in Sichuan Changhong Power Source Co., Ltd. 164,400.00
advance
Account Sichuan Changhong Precision Electronics Tech. Co.,
0.01
received in Ltd.
128
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Item Related parties Ending balance Opening balance
advance
Account
received in Sichuan Changhong Diandianbang Tech. Co., Ltd. 259.00 259.00
advance
Account
received in Hefei MeiLing Solar Energy Technology Co., Ltd. 315,389.49
advance
Account
received in Hongyuan Dineng Rebao Technology Co. Ltd. 633,687.85
advance
Account
received in Sichuan Tianyou Guigu Technology Co., Ltd. 269,700.06
advance
Other
accounts Sichuan Changhong Electric Co., Ltd. 15,310,127.66 189,285.06
payable
Other
accounts Sichuan Changhong Mold Plastic Tech. Co., Ltd. 7,275,110.79 6,021,988.84
payable
Other
accounts Sichuan Changhong Jijia Fine Co., Ltd. 1,900,500.00 1,900,500.00
payable
Other
Sichuan Changhong Gerun Renewable Resources
accounts 10,000.00 10,000.00
Co., Ltd.
payable
Other
accounts Huayi Compressor Co., Ltd. 1,598,900.00 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 322.46 145.16
Ltd.
payable
Other
accounts Sichuan Changhong Minsheng Logistics Co., LTD 586,504.95 586,504.95
payable
Other
accounts CHANGHONG(HK)TRADINGLIMITED 45,136.48 1,881,972.53
payable
Other
accounts Sichuan Changhong Devices Technology Co., Ltd. 260.07
payable
Other
accounts Sichuan Changhong Electronic Products Co., Ltd. 50,013.43 50,000.00
payable
Other
accounts Sichuan Changhong Xinrui Technology Co., Ltd 200,000.00 200,000.00
payable
Other
accounts 081 Electronic Group 169.00 169.00
payable
Other
accounts Sichuan Jiahong Industry Co., Ltd. 7,193.12 4,643.32
payable
Other Guangdong Changhong Electronics Co., Ltd. 4,602.00 4,602.00
129
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Item Related parties Ending balance Opening balance
accounts
payable
Other
Sichuan Changhong Intelligent Manufacturing
accounts 219,375.00 219,375.00
Technology Co., Ltd.
payable
Other
accounts Mianyang Highly Electric Co., Ltd. 637,644.61 637,644.61
payable
Other
accounts Sichuan Changhe Technology Co., Ltd. 100,000.00 100,000.00
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
Other
accounts Hongyuan Dineng Rebao Technology Co. Ltd. 8,967.00
payable
Dividends
Sichuan Changhong Electric Co., Ltd. 14,082,358.08
payable
Total 877,840,221.45 449,302,334.16
(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: Nil
3. Major 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 previous periods and influence: Nil
2. Debt restructuring: Nil
130
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
3. Assets replacement: Nil
4. Pension plan: Nil
5. Discontinuing operation: Nil
6. Branch information
Small
Item Icecumber AC Marketing household Other Salesin branch Total
appliances
Operationincome 406,929.55 407,704.24 80,240.23 20,829.05 14,608.07 78,531.72 851,779.42
Including::Income fromtrading outside 338,516.23 407,605.54 80,240.23 20,452.80 4,964.62 - 851,779.42
Income fromtrading inbranch 68,413.32 98.70 - 376.26 9,643.45 78,531.72 -
Operationexpenses 407,400.30 408,202.14 76,076.39 20,583.76 13,251.49 78,290.82 847,223.26
Operationprofit -470.75 -497.90 4,163.84 245.29 1,356.58 4,797.06
Totalassets 1,251,216.60 508,806.84 27,832.11 24,898.73 15,082.90 158,886.21 1,668,950.97
Totalliability 720,335.31 427,527.47 54,495.73 13,581.21 8,381.39 77,183.35 1,147,137.76
Supplementary information - - - - - - -
Depreciationandamortizationexpenses 6,110.27 2,328.24 9.48 198.48 390.51 -118.26 9,155.24
Capitalexpenditure 10,680.29 7,194.96 26.39 169.51 264.47 62.79 18,272.83
Non-cash expenses except for depreciation and
39,292.71 52,444.60 7,399.60 1,512.96 1,748.39 -310.60 102,708.86
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 1 317,354,799.99 17.92% 16,042,896.99 5.06% 301,311,903.00
Combination 2 1,453,826,130.66 82.08% - 1,453,826,130.66
Combination Subtotal 1,771,180,930.65 100.00% 16,042,896.99 0.91% 1,755,138,033.66
Account receivable with single minor
amount but withdrawal single item bad
debt provision
Total 1,771,180,930.65 100.00% 16,042,896.99 0.91% 1,755,138,033.66
(Continued)
Category Opening amount
131
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
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
1) No account receivable with single significant amount and withdrawal bad debt provision single
at period-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 316,931,501.71 15,846,575.09 5%
1-2 years 78,258.40 11,738.76 15%
2-3 years 246,846.47 86,396.26 35%
3-4 years - - 55%
4-5 years 43.55 37.02 85%
Over 5 years 98,149.86 98,149.86 100%
Total 317,354,799.99 16,042,896.99
3) Account receivable without bad debt provision withdrawal in combination 2
Combination Book balance
Connected amount between related parties 1,408,187,606.66
Account receivable with L/C 45,638,524.00
Total 1,453,826,130.66
4) No account receivable with single minor amount but withdrawal single item bad debt provision
at period-end
(2) Provision, reversal (or recovery) of bad debt provision
The bad debt accrual in the period was RMB 3,760,980.89; no recovery or reversal bad debt
provision in the year.
(3) No account receivable actually written-off in the period.
(4) No arrears of the shareholders holding more than 5% (including 5%) shares with voting rights
132
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
of the Company at period-end.
(5) The top five account receivable at period-end has RMB 1,047,684,539.21 in total, a 59.15% in
total account receivable.
(6) Account receivable de-recognized: Nil
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 3,031,000.28 5.06% 296,487.57 9.78% 2,734,512.71
Combination 2 56,814,966.89 94.94% - - 56,814,966.89
Combination Subtotal 59,845,967.17 100.00% 296,487.57 0.50% 59,549,479.60
Other account receivable with single minor
amount but withdrawal single item bad
debt provision
Total 59,845,967.17 100.00% 296,487.57 0.50% 59,549,479.60
(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 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
1) No other account receivable with single significant amount and no withdrawal bad debt
provision single at period-end.
2) Other account receivable with withdrawal bad debt provision by aging account for combination
1
133
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Ending balance
Item
Account receivable Bad debt provision Provision ratio (%)
Within 1 year 2,546,998.03 127,349.90 5%
1-2 years 11,315.60 1,697.34 15%
2-3 years 462,686.65 161,940.33 35%
3-4 years 10,000.00 5,500.00 55%
4-5 years - - 85%
Over 5 years - - 100%
Total 3,031,000.28 296,487.57
3) Other receivable without bad debt provision withdrawal in combination 2
Combination Book balance
Connected amount between related parties 20,240,856.48
Loans of employee’s pretty cash 7,380,361.69
Export rebate 29,193,748.72
Total 56,814,966.89
4) No other account receivable with single minor amount but withdrawal bad debt provision singly,
refers to the minor single receivables at period-end.
(2) Reversal (or withdraw) of reserve for bad debts in the period
The bad debt accrual in the period was RMB 131,982.82; no recovery or reversal bad debt
provision in the year.
(3) Other account receivable charge off in this period: Nil
(4) No areas from shareholders’ unit with over 5 percent (5 percent included) voting rights held at
period-end.
(5) Top 5 other account receivable has RMB 52,706,330.90 in total, an 88.07% in total account
receivable at period-end.
(6) Other receivables classify by nature
Nature Ending book balance Opening book balance
Related parties 20,240,856.48 21,867,562.15
Loans of employee’s pretty cash 7,380,361.69 2,753,170.09
Margin 1,344,924.85
Advance money paid temporary 619,956.01
Other 3,031,000.28 321,315.60
Export rebate 29,193,748.72
Total 59,845,967.17 26,906,928.70
(7) Other receivable de-recognized: Nil
134
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise 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:
ZhongkeMeilingCryogenicTechnology Co.,Ltd. 42,000,000.00 42,000,000.00 42,000,000.00 42,000,000.00
Mianyang Meiling Refrigeration Co., Ltd. 95,000,000.00 95,000,000.00 95,000,000.00 95,000,000.00
Hefei Meiling Appliance Marketing Co.,
54,900,000.00 54,900,000.00 54,900,000.00 54,900,000.00
Ltd.
Zhongshan Changhong Electric Co., LTD 169,856,419.37 169,856,419.37 169,856,419.37 169,856,419.37
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 Holdings Limited 113,630,000.00 113,630,000.00 113,630,000.00 113,630,000.00
Jiangxi MeiLing Electric Appliance Co.,
79,000,000.00 79,000,000.00 79,000,000.00 79,000,000.00
Ltd.
Guangdong Changhong Ridian
90,802,061.95 90,802,061.95 90,802,061.95 90,802,061.95
Technology Co., Ltd.
Changmei Technology Co., Ltd. 18,528,000.00 18,528,000.00 18,000,000.00 18,000,000.00
Meiling Candy Washing Machine Co.,
30,000,000.00 30,000,000.00 - -
Ltd.
Investment in associates:
Hefei Xingmei Assets Management Co.,
11,882,198.13 11,882,198.13 12,394,800.39 12,394,800.39
Ltd.
Sichuan Zhiyijia Network Technology
14,716,635.63 14,716,635.63 11,098,569.71 11,098,569.71
Co., Ltd.
Total 1,025,915,752.87 1,025,915,752.87 992,282,289.21 992,282,289.21
(2) Investment in subsidiaries
135
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Increase during the Decrease during the Provisionforimpairment Ending balance of
Invested unit Opening balance Ending balance
period period losses impairmentloss
Zhongke Meiling Cryogenic Technology
42,000,000.00 42,000,000.00
Co., Ltd.
Mianyang Meiling Refrigeration Co., Ltd. 95,000,000.00 95,000,000.00
Hefei Meiling Appliance Marketing Co.,
54,900,000.00 54,900,000.00
Ltd.
Zhongshan Changhong Electric Co., LTD 169,856,419.37 169,856,419.37
Sichuan Changhong Air-conditioner Co.,
305,600,437.79 305,600,437.79
Ltd.
Hefei Meiling Group Holdings Limited 113,630,000.00 113,630,000.00
Jiangxi MeiLing Electric Appliance Co.,
79,000,000.00 79,000,000.00
Ltd.
Guangdong Changhong Ridian
90,802,061.95 90,802,061.95
Technology Co., Ltd.
Changmei Technology Co., Ltd. 18,000,000.00 528,000.00 18,528,000.00
Meiling Candy Washing Machine Co.,
30,000,000.00 30,000,000.00
Ltd.
Total 968,788,919.11 30,528,000.00 999,316,919.11
(3) Investment in associates
Changesintheperiod
Opening Adjustment Ending balance
Invested unit Investmentincome Other Cash dividendor Ending balance
balance Additional Negative for other Provisionfor ofimpairment
recognized under equity profitannouncedto Other
Investment Investment comprehensi impairmentloss
equity change issued
ve income
Hefei Xingmei Assets
12,394,800.39 -512,602.26 11,882,198.13
Management Co., Ltd.
Sichuan Zhiyijia Network
11,098,569.71 3,618,065.92 14,716,635.63
Technology Co., Ltd.
Total 23,493,370.10 3,105,463.66 26,598,833.76
136
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
3. Operation income and operation cost
Amount in the period Amount in the same period of last year
Item
Income Cost Income Cost
Main business 3,544,613,227.13 3,199,404,365.71 3,359,972,441.96 2,762,714,566.29
Other business 584,995,125.37 575,965,090.55 410,800,721.97 397,417,660.72
Total 4,129,608,352.50 3,775,369,456.26 3,770,773,163.93 3,160,132,227.01
(1) Classified according to product
Amount in the period Amount in the same period of last year
Product
Operation income Operation cost Operation income Operation cost
Refrigerator and
3,279,271,848.62 2,971,360,809.10 3,178,958,581.60 2,612,206,850.23
freezer
Washing machine 176,232,144.12 151,753,972.11 179,396,785.22 150,507,716.06
Small household
appliances and 89,105,560.29 76,286,085.40 - -
kitchen and toilet
Other 3,674.10 3,499.10 1,617,075.14 -
Total 3,544,613,227.13 3,199,404,365.71 3,359,972,441.96 2,762,714,566.29
(2) Classified according to region
Amount in the period Amount in the same period of last year
Regions
Operation income Operation cost Operation income Operation cost
Domestic income 2,457,823,202.55 2,162,505,987.73 2,481,708,373.76 2,002,163,732.22
Export income 1,086,790,024.58 1,036,898,377.98 878,264,068.20 760,550,834.07
Total 3,544,613,227.13 3,199,404,365.71 3,359,972,441.96 2,762,714,566.29
Top five clients of the Company owe income in sales of RMB 2,076,958,447.26 yuan, a 50.29%
in total operation income.
4. Investment income
Amount in the same
Item Amount in the period
period of last year
Long-term equity investment income by equity method 3,105,463.66 2,644,982.57
Investment income arising from disposal of the long-term equity
2,506.98
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 7,232,183.50
gains/losses
Investment income during holding the financial assets available for
19,389,929.81 4,986,301.37
sale
Total 29,730,083.95 82,892,597.34
XI. Approval of financial statement
137
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
The financial statement has already been approved from the board of directors of the Company
for reporting dated 9 August 2017.
138
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Supplementary information for financial statement
1. Non-operational gains and losses for this period
(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 Period Note
Gains and losses from disposal of non-current assets -11,095,591.69
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 22,490,062.54
Capital occupancy expense, collected from non-financial enterprises and recorded in current
gains and losses
Income from the exceeding part between investment cost of the Company paid for obtaining
subsidiaries, associates and joint-ventures and recognizable net assets fair value attributable
to the Company when acquiring the investment
Gains and losses from exchange of non-monetary assets
Gains and losses from assets under trusted investment or management
Various provision for impairment of assets withdrew due to act of God, such as natural
disaster
Gains and losses from debt restructuring
Enterprise reorganization expense
Gains and losses of the part arising from transaction in which price is not fair and
exceeding fair value
Current net gains and losses occurred from period-begin to combination day by
subsidiaries resulting from business combination under common control
Gains and losses arising from contingent proceedings irrelevant to normal operation of the
Company
Except for effective hedge business relevant to normal operation of the Company, gains and
losses arising from fair value change of tradable financial assets and tradable financial
-10,359,085.30
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 643,883.35
Other gains and losses items complying with definition for non-current gains and losses 26,817,170.85
Subtotal 28,496,439.75
Affect on income tax 3,129,349.31
Affect on minority equity(after taxation) 197,389.65
139
Annotations of Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 30 June 2017
(Unless other wise specified, RMB for record in the Statement)
Item Current Period Note
Total 25,169,700.79
2. Return on equity and earnings per share
In accordance with requirement of the No. 9 Rule of Information Disclosure Compiling of Public Listed
Companies: Calculation and Disclosure of Return on Equity and Earnings per Share (revised in 2010), the
weighted average return on equity, basic earnings per share and diluted earnings per share of the Company
semi-annual report in 2017 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
1.79% 0.0881 0.0881
parent company
Net profit attributable to shareholders of
parent company after deduction of 1.30% 0.0640 0.0640
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
Hefei Meiling Co., Ltd.
10 August 2017
140
