合肥美菱股份有限公司
HEFEI MEILING CO., LTD.
二〇一七年年度报告
Annual Report 2017
HEFEI MEILING CO., LTD. Annual Report 2017
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of
Hefei Meiling Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are no
any fictitious statements, misleading statements, or important omissions carried in this report, and
shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the
whole contents.
Mr. Li Wei, Chairman of the Company, Mr. Pang Haitao, person in charge of accounting work
and Mr. Luo Bo, person in charge of accounting organ (accountant in charge) hereby confirm that
the Financial Report of 2017 Annual Report is authentic, accurate and complete.
The Company did not have directors, supervisors and senior executives of the Company could
not guarantee the reality, accuracy and completion of the whole contents or have objections.
All the directors attended the board meeting on deliberating the Report on site and by
communication.
Modified audit opinions notes
□ Applicable √ Not applicable
Shine Wing Certified Public Accountants Co., Ltd. (LLP) issued standard unqualified Auditors’
Report for the Company’s Financial Report of 2017.
Major defects in internal control
□ Applicable √ Not applicable
The Company had no major defects in internal control in the reporting period.
Risk warning of concerning the forward-looking statements with future planning involved in
annual report
√ Applicable □Not applicable
Concerning the forward-looking statements with future planning involved in the Report, they
do not constitute a substantial commitment for investors, investors and the person concerned should
maintain adequate risk awareness, furthermore, differences between the plans, forecast and
commitments should be comprehended. Investors are advised to exercise caution of investment
risks.
Investors are advised to read the full text of annual report, and pay particular attention to the
following risk factors.
More details about the possible risks and countermeasures in the operation of the Company are
described in the report “IX. Prospects for the future development of the company” of “Section IV.
Analysis and discussion of the operation”, investors are advised to read the relevant content.
Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website
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HEFEI MEILING CO., LTD. Annual Report 2017
(www.cninfo.com.cn) are the media for information disclosure for year of 2018 that appointed by
the Company. All public information under the name of the Company disclosed on the above said
media and website shall prevail, and investors are advised to exercise caution.
Does the Company need to comply with disclosure requirements of the special industry: No
Profit distribution pre-plan or capitalizing of common reserves pre-plan deliberated by the
Board in the reporting period
√ Applicable □Not applicable
Whether has capitalizing of common reserves carried out
□Yes √ No
The profit distribution plan for year of 2017, that deliberated and approved by 7th session of
the 9th BOD was: take total shares of 1,044,597,881 shares as base dated 31 December 2017,
distributed 0.6 Yuan (tax included) bonus in cash for every 10-share hold by all shareholders, no
share bonus issued and no capitalizing of common reserves carried out.
Directors and senior executives of the Company respectively signed Written Confirmation
Opinions for 2017 Annual Report.
Supervisory Committee of the Company formed Written Examination Opinions for 2017
Annual Report.
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HEFEI MEILING CO., LTD. Annual Report 2017
Contents
Section I. Important Notice, Contents and Paraphrase ................................................................. 1
Section II. Company Profile and Main Financial Indexes ............................................................. 5
Section III. Summary of Company Business ................................................................................. 12
Section IV. Discussion and Analysis of the Operation .................................................................. 19
Section V. Important Events............................................................................................................ 72
Section VI. Changes in Shares and Particulars about Shareholders ........................................ 175
Section VII. Preferred Stock ......................................................................................................... 196
Section VIII. Particular about Directors, Supervisors, Senior Executives and Employees .... 197
Section IX. Corporate Governance .............................................................................................. 219
Section X. Corporate Bond ........................................................................................................... 238
Section XI. Financial Report ......................................................................................................... 239
Section XII. Documents available for Reference ......................................................................... 392
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HEFEI MEILING CO., LTD. Annual Report 2017
Paraphrase
Items Refers to Contents
Company, the Company or Meiling
Refers to HEFEI MEILING CO., LTD
Electric
Sichuan Changhong or controlling
Refers to Sichuan Changhong Electric Co., Ltd.
shareholder
Changhong Group Refers to Sichuan Changhong Electronics Holding Group Co., Ltd.
Hong Kong Changhong Refers to CHANGHONG (HK) TRADING LIMITED
Meiling Group Refers to Hefei Meiling Group Holdings Limited
Industry Investment Group Refers to Hefei Industry Investment Holding (Group) Co., Ltd.
Shine Wing Refers to Shine Wing Certified Public Accountants (LLP)
Changhong Air-conditioner Refers to Sichuan Changhong Air-conditioner Co., Ltd.
Zhongke Meiling Refers to Zhongke Meiling Cryogenic Technology Co., Ltd.
Jiangxi Meiling Refers to Jiangxi Meiling Electric Appliance Co., Ltd.
Changhong Ridian Refers to Guangdong Changhong Ridian Technology Co., Ltd.
Zhongshan Changhong Refers to Zhongshan Changhong Electric Co., LTD
Changmei Technology Refers to Changmei Technology Co., Ltd.
Huayi Compressor Refers to Huayi Compressor Co., Ltd.
Meiling CANDY Refers to Meiling CANDY Washing Machine Co., Ltd.
Candy Group Refers to Candy Hoover Group S.r.l.
CSRC Refers to China Securities Regulatory Commission
China Securities Regulatory Commission, Anhui Province
Anhui Securities Bureau Refers to
Securities Regulatory Bureau
SSE Refers to Shenzhen Stock Exchange
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HEFEI MEILING CO., LTD. Annual Report 2017
Section II. Company Profile and Main Financial Indexes
I. Company information
MEILINGDIANQI,
Short form of the stock Stock code 000521, 200521
WANMEILING-B
Short form of the Stock after
——
changed (if applicable)
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in
合肥美菱股份有限公司
Chinese)
Short form of the Company (in
美菱电器
Chinese)
Foreign name of the Company
HEFEI MEILING CO.,LTD.
(if applicable)
Abbr. of English name of the
——
Company (if applicable)
Legal representative Li Wei
Registrations add. No. 2163, Lianhua Road, Economic and Technology Development Zone, Hefei
Code for registrations add 230601
Offices add. No. 2163, Lianhua Road, Economic and Technology Development Zone, Hefei
Codes for office add. 230601
Website http://www.meiling.com
E-mail info@meiling.com
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Li Xia Zhu Wenjie
No. 2163, Lianhua Road, Economic and No. 2163, Lianhua Road, Economic and
Contact add.
Technology Development Zone, Hefei Technology Development Zone, Hefei
Tel. 0551-62219021 0551-62219021
Fax. 0551-62219021 0551-62219021
e-mail lixia@meiling.com wenjie.zhu@meiling.com
III. Information disclosure and preparation place
Newspaper appointed for information Securities Times, China Securities Journal, Hong Kong
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HEFEI MEILING CO., LTD. Annual Report 2017
disclosure Commercial Daily
Website for annual report publish appointed by
Juchao website: http://www.cninfo.com.cn
CSRC
Room of secretary of the Board, 2/F , administrative center,
Preparation place for annual report
Office building of the Company
IV. Registration changes of the Company
Organization code Uniform social credit code: 9134000014918555XK
Changes of main business since listing No changes
1. In October 1993, after initial listing, controlling shareholder of the
Company-- Hefei Meiling Industrial Corp. (named Hefei Meiling Group
Co., dated 23 May 1994), executing controlling rights of the Company
and management right of the state-owned assets on behalf of Hefei
State-owned Assets Management Office, named at that time;
2. From November 1997 to May 2003, controlling shareholder of the
Company was Hefei Meiling Group Holding Co., Ltd. (established base
on former Meiling Group Co.,, “Meiling Group” for short), an
enterprise solely owned by the State; mainly operating the state-owned
capital in authorized from State-owned Assets Management
Commission of Hefei City, ensuring the maintenance and appreciation
of state-owned assets;
3. On 29 May 2003, Meiling Group entered into “Equity Transfer
Agreement” with Shunde GreenKel Enterprise Development Co., ltd.
(“GreenKel”), the 82,852,683 state-owned shares held by the Company
was transfer to GreenKel. After transferring, GreenKel comes to the first
Previous changes for controlling
largest shareholder of the Company.
shareholders
4. According to the spirit of “Bulletin of Treatment Opinions on
GreenKel Company purchasing State-owned Assets Shares of Listed
Company” (GZFCQ[2006] No.: 44) jointly issued from SASAC and
Ministry of Finance in April 2006, Meiling Group took back the Meiling
Electric 82,852,683 shares from GreenKel by procedures, which has
been transferred. In September 2006, relevant equity transfer agreement
signed between the Meiling Group and GreenKel is invalid, which was
confirmed by the “Award” ((2006) HZZ No.: 104) issued from
arbitration commission of Hefei; the state-owned legal person’s
82,852,683 shares, held by GreenKel, should return to Meiling Electric,
and relevant equity consideration will pay to GreenKel by Meiling
Group . On 29 December 2006, the 82,852,683 shares of Meiling
Electric were transfer to Meiling Group by GreenKel, and Meiling
Group becomes the controlling shareholder of Meiling Electric again.
5. On 18 May 2006 and 11 January 2007, Meiling Group entered into
“Equity Transfer Agreement of Meiling Electric” and “Supplementary
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HEFEI MEILING CO., LTD. Annual Report 2017
Agreement of Equity Transfer of Meiling Electric” respectively with
Sichuan Changhong and Changhong Group, among the 123,396,375
shares held by Meiling Group, 82,852,683 shares were transferred
respectively to Sichuan Changhong and Changhong Group according to
the transfer way regulated in agreement; of this transferring, 45,000,000
shares (10.88% of total share capital of the Company) were transferred
to Sichuan Changhong, the first largest shareholder of the Company
while 37,852,683 shares (9.15% of total share capital of the Company)
were transferred to Changhong Group, the third largest shareholder of
the Company.
6. On 29 October 2008, Changhong Group and Sichuan Changhong
entered into “Equity Transfer Agreement of Hefei Meiling Co., Ltd.”,
the 32,078,846 restricted circulations A shares of Meiling Electric held
by Changhong Group were transferred by agreement to Sichuan
Changhong. On 23 December 2008, the aforesaid equity transfer was
approved by “Reply on Matters of Equity held by State-owned
Shareholders of Hefei Meiling Co., Ltd.” (GZCQ(2008) No.: 1413)
from SASAC; on 21 January 2009, the aforesaid transfer was registered
for ownership transfer in Shenzhen Branch of China Securities
Depository and Clearing Corporation Limited.
7. Ended as 31 December 2017, Sichuan Changhong and its concerted
action Changhong HK totally holds 265,601,410 shares of the
Company, a 25.43% in total share capital of the Company; Sichuan
Changhong directly holds 234,705,968 A-share of the Company, a
22.47% in total share capital of the Company while Changhong HK
holds circulation B-share of the Company amounting as 30,895,442
shares, a 2.96% in total share capital of the Company.
V. Other relevant information
(I) CPA engaged by the Company
Name of CPA Shine Wing Certified Public Accountants (LLP)
8/F, Block A, Fu Hua Mansion No.8 Chao Yang Men Bei da jie, Dong Cheng
Offices add. for CPA
District, Beijing, P.R.C
Signing Accountants Li Xifu, Xia Cuiqiong
(II) Sponsor engaged by the Company for performing continuous supervision duties in
reporting period
√Applicable □Not applicable
Duration of continuous
Sponsor institution Office address Sponsor representative
supervision
Shenwan HongYuan No. 239 Changshu Rd. 14 October 2016 to 31
Qin Mingzheng, Qiu Feng
Securities Underwriting Shanghai December 2017
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HEFEI MEILING CO., LTD. Annual Report 2017
Sponsor Co., Ltd.
(III) Financial consultant engaged by the Company for performing continuous supervision
duties in reporting period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data
□ Yes √ No
Changes over
2017 2016 2015
last year
Operating income (RMB) 16,797,436,757.36 12,526,710,867.49 34.09% 10,754,200,188.12
Net profit attributable to shareholders of the
32,473,204.92 220,216,680.96 -85.25% 27,104,893.56
listed company (RMB)
Net profit attributable to shareholders of the
listed company after deducting -97,705,959.02 158,461,015.10 -161.66% 93,951,365.12
non-recurring gains and losses (RMB)
Net cash flow arising from operating
-551,501,994.74 985,390,895.63 -155.97% 229,371,185.23
activities (RMB)
Basic earnings per share (RMB/Share) 0.0311 0.2717 -88.55% 0.0355
Diluted earnings per share (RMB/Share) 0.0311 0.2717 -88.55% 0.0355
Weighted average ROE Reduce 5.13 pe
0.64% 5.77% 0.77%
rcentage points
Changes over
End of 2017 End of 2016 End of 2015
end of last year
Total assets (RMB) 15,961,511,966.81 12,507,567,310.84 27.61% 9,237,288,359.74
Net assets attributable to shareholder of
5,051,066,095.31 5,095,160,291.91 -0.87% 3,475,377,055.14
listed company (RMB)
The cause of the accounting policy change and accounting error correction
□ Applicable √ Not applicable
Whether have corporate bonds or not
□Yes √ No
VII. Accounting data difference under domestic and foreign accounting standards
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HEFEI MEILING CO., LTD. Annual Report 2017
(I) Difference of the net profit and net assets disclosed in financial report, under both IAS
(International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting
Principles)
□ Applicable √ Not applicable
The Company has no difference of the net profit and net assets disclosed in financial report,
under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted
Accounting Principles) in reporting period.
(II) Difference of the net profit and net assets disclosed in financial report, under both foreign
accounting rules and Chinese GAAP (Generally Accepted Accounting Principles)
√ Applicable □Not applicable
In RMB
Net profit attributable to shareholders of Net assets attributable to shareholders of
listed company listed company
Amount in last Amount at Amount at
Amount in this period
period period-end period-begin
Chinese GAAP 32,473,204.92 220,216,680.96 5,051,066,095.31 509,516,0291.91
Items and amount adjusted by foreign accounting rules
Foreign accounting rules 32,473,204.92 220,216,680.96 5,051,066,095.31 509,516,0291.91
The Company had no difference of the net profit or net assets disclosed in financial report,
under either foreign accounting rules or Chinese GAAP (Generally Accepted Accounting Principles)
in the period.
(III) Reasons for the differences of accounting data under accounting rules in and out of China
√ Applicable □Not applicable
The “Notice of Relevant Issues of Audit for Company with Domestically Foreign Shares
Offering” was issued from CSRC dated 12 September 2007, since the day issuing, cancel the
previous “dual audit” requirement for companies who offering domestically listed foreign shares
(B-share enterprise) while engaging securities practice qualification CPA for auditing. The
Company did not compile financial report under foreign accounting rules since 2007, the financial
report of the Company is complying on the “Accounting Standard for Business Enterprise” in China,
and therefore, there are no differences of accounting data under accounting rules in and out of
China at period-end.
VIII. Quarterly main financial index
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HEFEI MEILING CO., LTD. Annual Report 2017
In RMB
First quarter Second quarter Third quarter Fourth quarter
Operating income 3,666,603,957.50 4,851,190,235.60 4,661,344,340.71 3,618,298,223.55
Net profit attributable to
shareholders of the listed 61,303,717.56 30,771,322.21 28,147,276.19 -87,749,111.04
company
Net profit attributable to
shareholders of the listed
41,625,189.75 25,280,149.23 15,681,839.2 -180,293,137.20
company after deducting
non-recurring gains and losses
Net cash flow arising from
551,271,013.44 -67,040,315.53 -615,028,782.00 -420,703,910.65
operating activities
Whether there are significant differences between the above-mentioned financial index or its
total number and the relevant financial index disclosed in the company’s quarterly report and
semi-annual report
□Yes √ No
IX. Items and amounts of extraordinary profit (gains)/loss
√ Applicable □Not applicable
In RMB
Item Amount in 2017 Amount in 2016 Amount in 2015 Note
Found more in “income
Gains/losses from the disposal of
from assets disposal” and
non-current asset (including the write-off -8,203,782.90 9,265,320.01 -4,315,502.74
“investment income” in
that accrued for impairment of assets)
Note of financial report
Governmental subsidy reckoned into current
Found more in
gains/losses (not including the subsidy
“non-operating income”
enjoyed in quota or ration according to 68,403,702.36 41,152,549.66 29,285,357.05
and “other income” in
national standards, which are closely
Note of financial report
relevant to enterprise’s business)
Changhong Ridian-merger
Current net gain/losses of the subsidiary
under the same control,
merger under the same control from -- -- 615,594.18
restate the statement of
beginning of the period to combination date
comparative financial data
Held transaction financial asset, gains/losses Found more in
of changes of fair values from transaction 92,846,391.02 11,500,963.72 2,313,967.35 “investment income” and
financial liabilities, and investment gains “gain/loss of income from
10
HEFEI MEILING CO., LTD. Annual Report 2017
from disposal of transaction financial asset, fair value changes” in
transaction financial liabilities and financial Note of financial report
asset available for sales, exclude the
effective hedging business relevant with
normal operations of the Company
Found more in
Other non-operating income and expenditure “non-operating
2,680,908.22 4,948,619.55 -103,646,326.02
except for the aforementioned ones expenditure” in Note of
financial report
Found more in
Gain/losses items qualified definition of the
-- 3,798,660.03 -- “investment income” in
non-recurring gains/losses
Note of financial report
155,727,218.70 70,666,112.97 -75,746,910.18 --
Less: impact on income tax 24,087,520.95 8,534,266.32 -9,078,920.45 --
Impact on minority shareholders’ equity
1,460,533.81 376,180.79 178,481.83 --
(post-tax)
Total 130,179,163.94 61,755,665.86 -66,846,471.56 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information
Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items
defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A
Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public ---
Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
The Company has no items defined as recurring profit (gain)/loss according to the lists of extraordinary profit
(gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
the Public --- Extraordinary Profit/loss, in the period.
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HEFEI MEILING CO., LTD. Annual Report 2017
Section III. Summary of Company Business
I. Main businesses of the company in the reporting period
Does the Company need to comply with disclosure requirements of the special industry?
□Yes √ No
(I) Main businesses of the Company
The company is one of China's major electric appliance manufacturers, possesses four major
domestic manufacturing bases in Hefei, Mianyang, Jingdezhen and Zhongshan, and two overseas
manufacturing bases in Indonesia and Pakistan, currently, we have completed the industry layout of
white electricity basically, covering the full product line including ice, washing, air, kitchen and
bath, small household appliances and others, at the same time, the company enters into the fresh
e-business, bio-medical and other new industrial fields.
Over the past 30 years, the Company has always been adhering to the "independent innovation,
created in China", and always focus on refrigeration industry without stop, elaborately building the
core competitiveness of enterprises by technological innovation and product innovation. The
company has set up the first RoHS public testing center in Anhui Province, the state-level enterprise
technology center and the top-end R & D team, so that Meiling can continue to achieve
breakthrough results in the variable frequency, intelligence, retain freshness, energy-saving, forced
air cooling, deep cooling and other fields. In recent years, the Company has been awarded three
national honorary titles, i.e. “Smart Refrigerator Intelligent Manufacturing Pilot Demonstration
Project”, “National Green Factory” and “National Industrial Design Center”. At the same time, a
variety of Meiling products have entered the national green product list and won a number of
domestic and international innovation awards, which once again demonstrated the capabilities and
strengths of intelligent innovation technologies of Meiling intelligent manufacturing and Meiling
brand.
In recent years, driven by the industry transformation and upgrades and consumption upgrades,
the Company has adhered to the strategy of smart and variable frequency products, promoted the
Company’s products to transform and upgrade to become intelligent and high-end and
comprehensively enhanced the competitiveness of products in the industry by grasping the
opportunities of “fresh-keeping” and energy efficiency upgrades and effectively resolving the pain
points of customers. Under the guidance of the “intelligent” strategy, as early as 2014, the Company
has released the industry-leading CHiQ series of smart refrigerators and air-conditioning products;
in 2016, the Company took the lead in launching the industry’s “Smart Home Eco-system Project”
and launched the world’s first free-to-order internet of things refrigerator in the temperature zone
(CHiQ’s second-generation “Space Smart” refrigerator) and the world's first user-customized
intelligent air housekeeper (CHiQ smart air housekeeper), and realized the continuous
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HEFEI MEILING CO., LTD. Annual Report 2017
implementation of the Company's smart strategy. At the same time, in order to seize the opportunity
of energy efficiency upgrades and consumption upgrades, since the Company launched the “All
People Change for Variable Frequency” campaign in 2015, the share of variable frequency products
has continued to increase due to its advantages in the application of variable frequency technology.
In addition, in order to return to the nature of the “fresh-keeping” of refrigerators and effectively
solve the pain points of users, the Company launched its “M Fresh Life” series of refrigerators
equipped with water molecule activation and preservation technology in 2017 for the first time in
the world. “M Fresh Life” has become not only a new starting point for the Company to transform
to the high-end consumer market, but also a concrete measure for the Company’s continuous
improvement of product quality, taste and brand.
During the reporting period, under the background of stagflation in the industry and sharp
rising costs of raw materials, labor and transportation and exchange rate fluctuations, through the
efforts of all employees, the Company’s sales revenue increased significantly, and the market
position of major product lines was promoted. At the same time, the Company signed the Strategic
Cooperation Framework Agreement with Candy Group, a world-renowned Italian professional
electrical appliance manufacturer, and formally established a strategic partnership between two
parties in the refrigerator (freezer) and washing machine business areas to further enhance the
competitiveness of the Company’s washing machine products. In the future, both parties will
continue to use their respective advantages to carry out in-depth strategic cooperation, jointly
develop the market, promote the brand, and maximize the commercial value and social value. In
addition, during the reporting period, the good development momentum of the Company’s kitchen
and baths, small household appliances, bio-medicine, and ifoodtube e-commerce platform indicated
that the Company has basically completed the industrial layout of integrated white goods.
Facing the future, the Company will further improve the home internet layout, accelerate the
intelligentization of home appliances, form a dual-growth engine of “hardware + services”, drive
the transformation and upgrading of the Company’s profitability model, investigate the new
value-added service models for home appliance enterprises, meet new competition pattern in the
industry, and achieve its own sustainable and stable development under the guidance of the core
values of “professionalism and shared development”.
In reporting period, main income of the Company coming from refrigerator (freezer), air
conditioner, washing machine, kitchen & toilet and small home appliances products, total
amounting to 16,013.3276 million Yuan, a 95.33% of the operating income.
(II) Conditions of the industry the company involved
In 2017, under the influence of supply-side reform of the country and industrial restructuring,
household appliance industry faces with severe challenges and development opportunity. Mainly
show as:
1. The home appliance industry has entered from the rapid growth period into the gradually
stable replacement period and from the broader market growth into the aggressive growth, industry
competition intensified and brand concentration gets further improve.
2. With the upgrading of consumption structure and ideas, the high-end and intelligent
transformation and upgrading of household appliances have become the main theme of the industry.
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HEFEI MEILING CO., LTD. Annual Report 2017
On the one hand, the full implementation of new energy efficiency standards further raised the
threshold for industrial competition and accelerated the upgrading of product structure. On the other
hand, the sharp rise in the raw material prices not only brought business pressure to enterprises, but
also promoted the upgrading of home appliance product structure, got rid of the low-end and
abnormal price competition, and returned to the rational value competition. The competition among
home appliance enterprises in high end and intelligentization would become increasingly fierce, and
higher requirements would be put forward for enterprises in product development, brand status,
terminal promotion, and channel capabilities.
3. With the development of urbanization and the improvement of living standards, the age of
quality consumption has coming, the new consumer groups pay more attention to high-quality,
intelligent and healthy environmental protection products. The product homogenization of
traditional home appliance industry is serious, aiming at the needs of consumers, each home
appliance manufacturer focuses on the technological innovations of smart, variable frequency,
fresh-keeping, and air-cooling and other high-end products for quality promotion so as to improve
the competitive advantage of personalized products. .Furthermore, with the further development of
smart home and continuous improvement of the artificial intelligence technology, the cross-border
cooperation among household appliance enterprise and internet enterprise are promote at an
accelerated rate, so actively exploring business model innovation and enhancing the user
experience have become an important engine for a new round of rapid growth of household
electrical appliance enterprises.
On the whole, in the context of the weak recovery of the world economy and the fact that
China’s economic development has entered a new normal, China’s economic situation in 2017 was
generally smooth and steady. While the household appliance industry was in a state of stagflation,
under the influence of the further strengthening of brand concentration of the industry, the rise in
cost of raw materials and logistics, the upgrading of consumer demand structure, and the
cross-border impact of internet enterprises, the industry faced the accelerated reshuffle, oligopolistic
competition, transformation and upgrading of product and business model and other challenges.
Therefore, quality consumption era, high end and intelligence have become the inevitable choices
for the development of the home appliance industry.
II. Major changes in main assets
(I) Major changes in main assets
Major assets Note of major changes
Equity assets No major changes
Fixed assets No major changes
Intangible assets No major changes
Construction in progress Project of construction in progress increased in the period
2. Main overseas assets
14
HEFEI MEILING CO., LTD. Annual Report 2017
√ Applicable □Not applicable
Whether
Foreign assets
Operati exist
Reason for Control measure to ensure the security accounted for
Content of assets Asset size Location on Income (RMB) significant
the formation of assets net assets of
mode impairment
the Company
risk
Details of risks control measures have
been disclosed by the Company by way
of announcement on appointed media
60% equity of (No. 2011-028, No. 2011-032, No.
Investment US$ 7.803
Changhong Ruba Pakistan Sales 2014-023, No. 2014-026, No. 2016-027, -1,173,136.24 0.81% No
establishment million
Trading Company No. 2016-032, No. 2017-053 and No.
2017-059) on 28 May 2011, 19 April
2014, 25 March 2016 and 10 August
2017
Details of risks control measures have
40% equity of been disclosed by the Company by way
Changhong Ruba of announcement on appointed media
Investment US$ 6.976 Manufa
Electric Pakistan (No. 2011-028, No. 2011-032, No. -400,790.01 0.55% No
establishment 1 million cture
Company(Private)L 2014-023, No. 2014-026, No. 2017-053
td. and No. 2017-059) on 28 May 2011, 19
April 2014 and 10 August 2017
100% equity of Details of risks control measures have
KELAPA
CHANGHONG been disclosed by the Company by way
Investment US$ 6 GADING,
MEILING Sales of announcement on appointed media -6,242,827.39 0.62% No
establishment million JKT,
ELECTRIC (No. 2016-027 and No. 2016-033) on 25
Indonesia
INDONESIA. PT March 2016
Other notes N/A
III. Core Competitiveness Analysis
Does the Company need to comply with disclosure requirements of the special industry?
□Yes √ No
(I) Brand capacity
The Company is one of the famous home appliances manufacturers in the PRC, owns several
product lines such as refrigerator, freezing box and air conditioner. Meiling trademark is listed as
one of the most valuable brands in the PRC, well-known trademark in China; the trademark
“Athena” in refrigerator, freezer (services) of the Company was recognized as the famous mark in
15
HEFEI MEILING CO., LTD. Annual Report 2017
Anhui Province. The Company released CHiQ intelligent first and second generation refrigerator,
AC and intelligent air steward in succession. And creating a high-end intelligent brand image
around the plan of “Wisdom Home Ecosystem” for opening a white intelligence era. While in order
to enhance the brand image and further expand the market influence of the brand, the company held
a conference for "New LOGO release and offline of the 10th million set of frequency conversion
products" in October 2015, comprehensively updated LOGO " ", and launched the
new brand proposition of "Meiling, let the good come". Along with the release of new LOGO,
Meiling will also implement a brand strategy of "Good Trilogy", including the direct sensory
experience of “experience the good", the spirit soul enjoyment of “enjoy the good”, and the lifestyle
faith of “believe in the good”. Moreover, under the boost of consumption upgrades, in November
2017, the Company launches a “M -Fresh” refrigeration with the “water molecules activating
technology”, return to essence of the refrigerator and set off the revolution of fresh-keeping in
industry.
Reshaping brand ability through continuous upgrading of products, Meiling will realize a
young, international and professional brand image. Through gradual construction of the ideas of
Wonderful Start Point, Wonderful Life Circle and Wonderful Ecology Circle, Meiling has become a
people-oriented artist specializing in white appliances, a smarter scientific expert and a more
reliable house keeper.
(II) Product capacity
In more than 30 years, the Company has been focusing on the refrigeration industry, has
developed a variety of different types of refrigerator products, including three serial produces as
“MELNG 美菱, CHiQ and Athena”. Mainly include the “M Fresh Life” series fresh-keeping
refrigerators equipped with water molecule activation and fresh-keeping technology, Jingdong
smart large-screen 570 series refrigerators, CHiQ series high-end intelligent refrigerators and air
conditioners, 0.1-degree double-precision variable frequency refrigerators, European 540-wide
series air-cooled products, 106DTB series freezer with new appearance and thin door, YC-365L
low-temperature & medical refrigerator and so on; in particular, the “M-Fresh Life” series
fresh-keeping refrigerators that the Company has latest released return to the essence of the
refrigerator, by virtue of the Company’s water molecule activation fresh-keeping technology,
change passive fresh-keeping to active fresh-controlling, change from variable frequency
temperature control and intelligent interaction to intelligent fresh-controlling, activate water
molecules, generate resonance force, fission force, and penetrating power so as to thoroughly solve
the problems of traditional refrigerators such as short preservation time, much thawed water, and
poor preservation in bags.
The Company owned advanced development and quality assurance systems, and received
certification of ISO9001, ISO140001 and OHSAS18001 from domestic and overseas authorities.
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HEFEI MEILING CO., LTD. Annual Report 2017
The products of the Company have good quality and reliable capacities. As for technology
development, the Company owned national technology centers, and advanced core technologies in
energy-saving, intelligence, air cooling, fresh-keeping, frequency conversion and copious cooling.
As for product development, combine the R&D results and consumption upgrading demand, the
Company renewal its outline of product planning and development for the year, products structure
is escalating. Putting more efforts on the middle & high-end products in field of air patenting,
large-size, frequency conversion, intelligence and fresh-keeping, developing core products with
competitive, the product has obvious upgrade in structures.
As for the air conditioning products, the company adheres to the technical strategy by taking
intelligence and variable frequency as the core, intensively studies the human state perception
technology and intelligent interactive technology, focuses on completing the research and
development of intelligent voice recognition technology and productization, successively releases
the first generation of CHiQ air conditioner based on "human state perception" technology and
CHiQ intelligent air steward that can automatically change air.
In terms of washing machine, the Company has actively developed the core technology of
Meiling washing machines, upgraded its product lineup, continuously laid out the large-scale
washing and drying integration, and innovated the era of drum-type healthy washing. The Company
has developed and launched a series of drum-type washing machines, including Meiling520
Zhenrui washing and drying series front loading washing machines and Meiling vortex
full-automatic drum-type washing machine series with light luxury gold appearance, large capacity
and high efficient washing and drying technology, a number of patented technologies, and high
efficient and environmental protection and energy saving configuration, especially the
XQB80-19BPLQ1 and MB80-19PZLGX series variable frequency washing machines use DD
(direct drive) variable frequency motor which provides more precise control, less energy loss, less
noise, and longer life.
In terms of kitchen appliance products, the Company has taken the concept of “smart kitchen”
as the mainline, focused on the core business to create competitive industries, and achieved a full
coverage of kitchen and bath and household appliances. Under the guidance of the Company’s
intelligence and variable frequency product strategy, the Company has developed and released
EQ21 series intelligent kitchen ventilator with integration of intelligent control, smoke and stove
linkage, and large air volume, tankless integrated water purifier, cloud intelligent remote control
series intelligent electric water heaters and intelligent gas water heaters, as well as the kitchen
ventilator with DC inverter technology. In addition, with the advent of the Company's
independently developed plasma-disinfected dishwasher, the dishwasher category has enjoyed core
technologies in the segmented industries.
In terms of cryogenic products, the Company has continued to increase R&D investment and
promote the upgrading of technologies and products. The Company’s existing ultra low freezer,
17
HEFEI MEILING CO., LTD. Annual Report 2017
plasma blaster freezer, blood bank refrigerator, medical refrigerator, combined refrigerator &
freezer and medical freezer and other biomedical products have been widely used in medical and
health, disease control and epidemic prevention, blood systems, research institutes,
bio-pharmaceutical, genetic engineering and life sciences and other fields. Especially in ultra low
products, the Company has the -40 °C ~ -164 °C ultra-low freezer storage tank with the largest
volume, the widest temperature zone, and mute design in the world.
The Company insisting on the two products strategy as intelligence and frequency conversion,
with follow-up R&D of the intelligence and frequency conversion, promoting products of the
Company leading in high-end and technology innovation; meanwhile, the company improves the
manufacturing efficiency and product quality and enhances product competitiveness by
comprehensively implementing intelligent upgrading and rebuilding to all production lines. In
addition, the company has initially completed the layout for integrated white goods. Meanwhile,
based on "Intelligent Home Eco-circle" plan and taking the existing products as the core, the
company will enhance the development, manufacturing, sales and collaboration capabilities of
integrated white goods, and provide users with a set of intelligent white goods system solutions.
(III) Operation capacity
The Company conducted benchmark management to improve its basic management level. In
specific, efficiency enhancement has been made in areas of personnel, money and materials, trying
to continuously enhance the internal management. A performance review and sharing system has
been established with clear target and quantity index based on performance and layered incentive
sharing system, thus to inspire the internal production capacity. Under the mainline of value chain
management, the Company continued to carry out value creation and improve its competitiveness.
Its ability to prevent risks has been also strengthened through continuous improvement of internal
control system.
(IV) Marketing ability
The company has established a relatively complete sales network and service system, of which,
the domestic sales channels emphasizing online and offline collaboration and integration, through
the business operation mode system construction (target management, value chain management,
sales promotion, product mix and channel strategy, etc.) and promotion, the pace of business this
year constantly tends to be benign, has a balanced development in chain, wholesale, e-commerce
and other channels, and the product competitiveness has been improved; the overseas market has
been strengthened by increasing the investments in overseas marketing organizations, research and
development bases and production bases, cooperate with internationally-known home appliance
brand business and dealer, optimized the client structure and improve product structure, the
company has been actively develop the overseas market, and the products have been exported to
more than 130 countries and regions.
18
HEFEI MEILING CO., LTD. Annual Report 2017
Section IV. Discussion and Analysis of the Operation
I. Introduction
2017 was the second year of the Company’s “13th Five-Year” plan and was also a year in
which all Meiling people were making strides. Under the guidance of the “Meiling Dream” and
“Double Three One Core” strategy, the Company adhered to the operating principles of
“Product Leading, Manufacturing Breakthrough, Marketing Force, and Mechanism Guarantee”,
overcame the unfavorable factors including stagflation of industry, the rise of raw material costs,
labor costs, and transportation costs, and achieved significant growth in sales revenue through the
innovation of mechanism management, activation of internal teams, benchmarking learning from
industry-leading competitors, and the re-establishment of key capabilities. Among them, in terms of
product leading, the Company’s refrigerator (freezer) products significantly increased the ratio in
air-cooling, variable-frequency, intelligent, fresh-keeping, and large-volume, accelerated the
upgrading of products, firstly launched the “M Fresh Life” series refrigerator with water
molecule activation and preservation technology in the worldwide, and further enhanced the
product differentiation competitiveness. In terms of manufacturing breakthroughs, the high-speed
production line of its subsidiary Jiangxi Meiling was successfully put into operation, the efficiency
of the large-scale refrigerators’ smart manufacturing production was outstanding, and
breakthroughs were made in the “less labor project”. In terms of marketing force, the sales
revenue of the Company’s refrigerators (freezers) and air conditioners at home and abroad, and
the washing machines and small household electrical appliances had a growth trend shoulder to
shoulder, and the steady development of biomedical and fresh e-commerce further consolidated the
Company’s industry position. In the aspect of mechanism guarantee, the team has been greatly
activated and the supporting responsibility mechanism has been gradually improved by signing
medium and long term incentive plans with major business units. In addition, the Company has
firmly grasped the mainstream of consumption upgrading, adhered to technological innovation, and
significantly improved the Company’s product structure transformation and upgrading.
II. Main Business Analysis
(I) Overview
Shows no difference with the summary disclosed in Report of the Board of Director
□Yes √No
1. Introduction
During the reporting period, the Company achieved a year-on-year growth in both online and
offline sales. In the case of stagflation in the refrigerator industry, the domestic sale of the
19
HEFEI MEILING CO., LTD. Annual Report 2017
Company’s refrigerators outperformed the market and achieved a steady increase in market share
and average price, the air conditioner achieved a rapid and substantial growth, the export sales of
refrigerators (freezers), air conditioners maintained a momentum of rapid growth, the sales of main
products all outperformed the broader market; the washing machines maintained a growth in
business, and also reached an agreement with Candy Group in Italy to set up a washing machine
joint venture, which enhanced the competitiveness of the Company’s washing machine products;
the small home appliances, biomedical and fresh e-commerce businesses rose abruptly based on
their accumulated strengths with a rapid growth in business synchronization.
In 2017, refrigerator and freezer business achieved revenue of approximately RMB 7.465
billion, 11.77% increased on a y-o-y basis; air-conditioning business achieved revenue of
approximately RMB 7.005 billion, 68.47% up y-o-y; washing machine business achieve revenue
around RMB 0.706 billion, with year-on-year growth of 38.92%; other business of kitchen & toilet
products and small home appliance have revenue approximately as RMB 0.838 billion with 23.16%
up y-o-y. At the same time, revenue from exportation gains RMB 3.841 billion, a y-o-y growth of
31.69%.
(1)The domestic sale of the Company’s refrigerators and washing machines outperformed the
market, the product structure of freezers and air conditioners was optimized and upgraded, and the
market position was further consolidated and improved. From the offline market sales, CMM’s
data showed that the retail sales of refrigerator industry slightly rose by 0.62% on a year-on-year
basis, but the retail sales of the Company’s refrigerator rose by 2.63% on a year-on-year basis; the
retail sales of freezer industry declined by 11.20% on a year-on-year basis, and the retail sales of the
Company’s freezer declined by 15.24% on a year-on-year basis; the retail sales of air-conditioner
industry rose by 12.55% on a year-on-year basis, but the retail sales of the Company’s air
conditioner rose by 7.01% on a year-on-year basis; the retail sales of washing machine industry
slightly rose by 0.57% on a year-on-year basis, but the retail sales of the Company’s washing
machine rose by 2.71% on a year-on-year basis. At the same time, CMM’s data also showed that
the market share of the Company’s refrigerator retail sales reached 8.82%, rising by 0.12% on a
year-on-year basis; the market share of the Company’s freezer retail sales reached 9.29%, an
increase of 0.43% on a year-on-year basis; and the market shares of air conditioner and washing
machine basically held the line compared with the same period of last year.
From the online sales, the company’s online refrigerator and air conditioning sales have
further enlarged the results. AVC (All View Cloud) data show that the retail sales of refrigerator
industry rose by 57.85% on a year-on-year basis; the retail sales of the company’s refrigerator rose
by 85.84% on a year-on-year basis; the retail sales of air-conditioning industry rose by 114.77% on
a year-on-year basis; the retail sales of the company’s air-conditioning rose by 95.94% on a
year-on-year basis. At the same time, as for the online markets, AVC data show that the market
share of the company’s refrigerator retail sales reached 8.25%, an increase of 1.24% on a
year-on-year basis; the market share of the company’s freezer retail sales reached 6.63%, an
decrease of 3.85% on a year-on-year basis; and the market shares of air conditioning, and washing
machine retail sales also increased on a year-on-year basis.
(2) As for the export business, the company's refrigerator and air-conditioning product lines
have continued to maintain a rapid growth like a few years ago. According to the customs data and
20
HEFEI MEILING CO., LTD. Annual Report 2017
statistics, the amount of exports of refrigerator industry rose by 17.59% on a year-on-year basis, the
company's amount of exports rose by 16.11% on a year-on-year basis; the amount of exports of air
conditioning industry rose by 5.06% on a year-on-year basis, the amount of exports of the
company's air conditioning rose by 56.14% on a year-on-year basis, the export growth of the
company’s refrigerator and air conditioning exceeded the industry. In terms of the market shares,
according to the customs data and statistics, the market share of the company’s refrigerator
exports reached 5.81%, basically the same as last year; the market share of freezer exports reached
2.74%, an decrease of 0.23% on a year-on-year basis; the market share of air conditioning exports
reached 1.96%, an increase of 0.64% on a year-on-year basis;
2. Progress of the company's development strategy and business plan during the
reporting period
During the reporting period, in accordance with the development strategy and operating
principles of “product leading, marketing force, manufacturing breakthrough, and mechanism
protection” in 2017, the company has deployed the annual business plan, arranged the production
and management, and carried out the following activities:
(1) Product leading
The Company carried out the product upgrades based on the intelligent and variable frequency
product strategy, took energy efficiency upgrades and preservation as breakthroughs so as to
comprehensively increase the competitiveness of products and further strengthen the advantages of
variable frequency differentiation. During the reporting period, the proportions of the Company’s
intelligent & variable frequency refrigerators, and variable frequency air conditioners all achieved
significant growth, and the product upgrades achieved the expected goals. At the same time, the
competition for new energy efficiency in the industry became normalized, and the Company firmly
grasped the market opportunities for energy efficiency upgrades and improved the product
competitiveness.
In terms of technology research, the Company insisted on the upgrades of basic research on
core technology, maintained the existing technological advantages, expanded the innovation and
upgrades in technology field, achieved differentiated breakthroughs, and launched high-end
products to lead the industry. In November 2017, the Company released the “M Fresh Life”
series refrigerators equipped with the “water molecule activation and preservation technology”,
which adopted the original water molecule activation and preservation technology to activate the
water molecules by vibrating the moisture in the food, and then the activated water molecules
generated resonance force, fission force and penetration force to have a long-acting and deep-level
control to the freshness and completely solve the existing problems of traditional refrigerators in
single space, short fresh-keeping time, nutrition loss and much bloody water in frozen and thawed
process, slow cooling speed, and poor fresh-keeping in bags, and so on, fully satisfied the high-end
needs of maximumly guaranteeing the food material quality and no loss of nutrition, increasingly
favored by high-end user groups, and once again raised the preservation revolution in the
refrigerator industry. At present, the Company’s original water molecule activation and
preservation technology has passed the national-level technology certification and is at the
international advanced level. In addition, the “M Fresh Life” refrigerator has won two world
21
HEFEI MEILING CO., LTD. Annual Report 2017
record awards, “the domestic refrigerator with the longest preservation time in the world” and
“the domestic refrigerator with the minimum nutrition loss rate in the world”.
(2) Marketing force
In terms of domestic sales, the Company focused on the marketing culture concept of
“integrity, service, profession, and passion”, changed concepts and strengthened service
awareness; motivated by the slogan of “the most active brand at terminal, and the most diligent
marketer in the market”, the Company’s marketing ability was significantly improved, all
product lines achieved a healthy and continuous growth. Among them, the increase in refrigerators
was higher than that of the industry, the air-conditioning products had an outbreak of increase, the
freezers achieved an upgrade and reversed the downward trend, the washing machines achieved
cooperation with Candy Group, small home appliances had a significant growth, and the biomedical
and fresh e-commerce business developed steadily.
In overseas markets, the sales volume and average price of products also made new
breakthroughs, and the export business continued to maintain a growth trend.
(3) Manufacturing breakthrough
In December 2017, the intelligent production line for annually producing 1 million sets of
environmental protection and energy-saving refrigerators of the subsidiary company Jiangxi
Meiling was put into production. The project is a major move and layout for Meiling to achieve
transformation and upgrade and realize strategic goals. The production line is also a representative
of the high level, high efficiency, and high production quality in the domestic industry, and is a solid
move for Meiling to transform from traditional manufacturing to intelligent manufacturing. .
During the reporting period, the five major projects of Jiangxi Meiling, including Intelligent
Production Line Construction Project, Large Refrigerator Efficiency Improvement Project,
Recruitment Workers Improvement Project, 300L+ Large Refrigerator Replacement Key Project,
and Smart Production Project were implemented in an orderly manner. At the same time, the
Company’s intelligent manufacturing capacity enhancement project was progressing smoothly, the
completion of the benchmarking line project pilot construction of phase I and the benchmarking
automation project duplication and generic benchmarking project of phase II pulled the entire
promotion of the Company’s manufacturing efficiency, the order delivery rate of refrigerators and
freezers in domestic sales and the delivery satisfaction rate of overseas customers in 2017 have
increased on a year-on-year basis.
(4) Mechanism guarantee
With respect to mechanism guarantee, the Company further implemented the incentive
mechanism, activated the team, designed multi-level and multi-form incentive mechanisms for
different industries and units, continued to explore team potential, and improved the Company’s
competitiveness; in the talent mechanism, the Company continued to promote the 100 people
echelon project to select and train all kinds of key employees; in the innovation mechanism, the
Company brought the innovative spirit and fault-tolerant mechanism into the relevant management
system; in the accountability mechanism, the Company combined with the accountability system
and further defined the boundary of departmental functional responsibilities, and embedded ARCI
22
HEFEI MEILING CO., LTD. Annual Report 2017
rule into the system documents; in the benchmarking mechanism, the Company confirmed the
benchmarking projects and actively promoted by the establishment of working mechanism.
In addition, with the advent of intelligent internet, sharing economy and personalized
consumption, the traditional retail model was unable to meet new consumer demands. Under the
background of the transformation and upgrading of intelligent manufacturing, the Company actively
explored the future development road, in January 2018, the Company signed a strategic cooperation
agreement with the artificial intelligence leading enterprise Deep Blue Technology (Shanghai) Co.,
Ltd. to jointly build a new intelligent ecology. Two parties cooperated and released the smart retail
unmanned refrigerators, through the artificial intelligence, machine vision, biometric identification,
bio-payment, settlement systems, and other solutions for shared devices, the consumer can purchase
and fetch the goods and close the door only by palm print identification after the registration for the
first time, which greatly improved the user experience and shopping efficiency.
This strategic cooperation was based on the strong support of the Company’s intelligent
manufacturing. Through the rapid blocking out of smart retail, Meiling shall achieve the further
implementation and layout of fresh e-commerce, establish a new nationwide smart terminal
platform, and build a new intelligent ecosystem for the rapid energy storage of the industry chain. In
the future, the Company will promote the rapid application and popularization of artificial
intelligence new retail technologies, allow the Company’s “Smart Home Ecosystem Project” to
quickly take root, and provide consumers with more personalized services by relying on smart big
data analysis technology.
On the whole, in 2017, the industry launched a vigorous wave of product upgrades in the face
of intensified competition, consumption upgrades, and quality consumption brought by update
demand. Through the joint efforts of all Meiling people, on the one hand, the Company
outperformed the market in product sales, the product structure upgraded significantly, the
proportion of variable frequency and intelligent products had a continuous increase, especially the
release of “M Fresh Life” series refrigerators raised a wave of preservation technology in the
industry and led a preservation revolution in the industry, and it is also an important product for the
Company to transform to the high-end consumer market. On the other hand, the Company
continued to focus on the “Smart Home Ecosystem Project”, and actively explored a new path
for the transformation and upgrading of home appliance enterprises under the further development
of internet technology, taking its own hardware products as the terminal, and focusing on food, air,
water and other requirements for the exploration of new business models.
(II) Revenue and cost
1. Constitute of operation revenue
In RMB
2017 2016
Increase/decrea
Ratio in operation Ratio in operation
Amount Amount se y-o-y
revenue revenue
Total of operation
16,797,436,757.36 100% 12,526,710,867.49 100% 34.09%
revenue
23
HEFEI MEILING CO., LTD. Annual Report 2017
According to industries
Manufacture of 33.17%
household 16,013,327,582.28 95.33% 12,025,103,352.55 96.00%
appliances
Other business 784,109,175.08 4.67% 501,607,514.94 4.00% 56.32%
According to products
Refrigerator, freezer 7,464,503,149.31 44.44% 6,678,568,374.39 53.32% 11.77%
Air-conditioning 7,005,144,650.67 41.70% 4,158,164,312.32 33.19% 68.47%
Washing machine 705,875,802.77 4.20% 508,133,090.63 4.06% 38.92%
Small appliance and 26.73%
536,291,620.64 3.19% 423,162,351.81 3.38%
kitchen
Other products 301,512,358.89 1.80% 257,075,223.40 2.05% 17.29%
Other business 784,109,175.08 4.67% 501,607,514.94 4.00% 56.32%
According to region
Domestic 12,941,622,221.55 77.05% 9,603,142,676.83 76.66% 34.76%
Foreign 3,855,814,535.81 22.95% 2,923,568,190.66 23.34% 31.89%
2. About the industries, products, or regions accounting for over 10% of the company’s
operating income or operating profit
√ Applicable □Not applicable
Whether the company needs to comply with the disclosure requirements of the particular industry
□ Yes √ No
In RMB
Increase/decrea
Increase/decrea Increase/decrea
Operating Gross profit se of gross
Operating cost se of operating se of operating
revenue ratio profit ratio
revenue y-o-y cost y-o-y
y-o-y
According to industries
Manufacture of
household 16,013,327,582.28 13,092,373,731.24 18.24% 33.17% 36.52% -2.01%
appliances
According to products
Refrigerator,
7,464,503,149.31 6,042,215,238.91 19.05% 11.77% 15.40% -2.55%
freezer
Air-conditioning 7,005,144,650.67 5,766,992,639.83 17.67% 68.47% 71.90% -1.65%
Small appliance 536,291,620.64 456,677,143.84 14.85% 26.73% 20.24% 4.61%
24
HEFEI MEILING CO., LTD. Annual Report 2017
and kitchen
According to region
Domestic 12,172,421,690.59 9,465,251,585.24 22.24% 33.64% 35.67% -1.16%
Foreign 3,840,905,891.69 3,627,122,146.00 5.57% 31.69% 38.78% -4.82%
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main
business based on latest one year’s scope of period-end
□ Applicable √ Not applicable
3. Income from physical sales larger than income from labors
√ Yes □ No
Increase/decrease
Industries Item Unit 2017 2016
y-o-y (%)
10 thousand
Sales volume 1,508.66 1,237.08 21.95%
pieces/set
Manufacture of
household 10 thousand
Production 1,547.89 1,253.24 23.51%
appliances pieces/set
industry
10 thousand
Inventory 169.85 130.62 30.03%
pieces/set
Reasons for y-o-y relevant data with over 30% changes
√ Applicable □ Not applicable
Subordinate wholly-owned subsidiary – Sichuan Changhong Air Conditioner Co., Ltd. (hereinafter referred to as
Changhong AC) have a certain reserve for the upcoming relocation, thus the inventory goes up from a year earlier.
4. Fulfillment of the company’s signed significant sales contracts up to this reporting period
□ Applicable √ Not applicable
5. Constitute of operation cost
Industry classification
In RMB
2017 2016
Increase/de
Ratio in
Industries Item Ratio in crease
Amount operation Amount
operation cost y-o-y
cost
Manufacture of
Raw material 12,170,622,123.33 92.96% 8,760,386,320.44 91.58% 1.38%
household appliances
25
HEFEI MEILING CO., LTD. Annual Report 2017
6. Whether the changes in the scope of consolidation in Reporting Period
√ Yes □ No
More details can be seen in the report “VII. Changes in the scope of the merger” and “VIII. Interests in other
entities” of “Section XI Financial Report”
7. Major changes or adjustment in business, product or service of the Company in Reporting Period
□ Applicable √ Not applicable
8. Major sales and main suppliers
(1) Major sales client of the Company
Total top five clients in sales (RMB) 5,993,839,490.34
Proportion in total annual sales volume for top five
35.68%
clients
Proportion of the related parties’ sales in total annual
23.18%
sales volume for top five clients
Information of top five clients of the Company
Serial Name Sales (RMB) Proportion in total annual sales
1 Client I 2,256,203,510.44 13.43%
2 Client II 1,407,238,139.85 8.38%
3 Client III 1,272,889,729.08 7.58%
4 Client IV 692,253,111.98 4.12%
5 Client V 365,254,998.99 2.17%
Total -- 5,993,839,490.34 35.68%
Other situation of main clients
□ Applicable √ Not applicable
(2) Main suppliers of the Company
Total purchase amount from top five suppliers
2,849,858,364.95
(RMB)
Proportion in total annual purchase amount for top
18.09%
five suppliers
Proportion of related party’s purchase in total annual
10.29%
purchase amount for top five suppliers
Information of top five suppliers of the Company
26
HEFEI MEILING CO., LTD. Annual Report 2017
Serial Name Sales (RMB) Proportion in total annual purchase
1 Supplier I 783,669,187.79 4.97%
2 Supplier II 690,886,554.31 4.39%
3 Supplier III 557,786,009.24 3.54%
4 Supplier IV 445,228,789.57 2.83%
5 Supplier V 372,287,824.04 2.36%
Total -- 2,849,858,364.95 18.09%
Other notes of main suppliers of the Company
□ Applicable √ Not applicable
(III) Expenses
In RMB
Increase/decr
2017 2016 Note of major changes
ease y-o-y
Sales expenses increased due to the
Sales expense 2,434,337,059.85 1,855,396,448.81 31.20%
increase of sales scale in the period
Management expense 496,931,743.04 472,146,980.73 5.25% --
Interest cost increased from a year
Financial expense -33,648,833.18 -139,879,189.92 75.94% earlier and change of the gains/losses
from exchange
Income tax expenses 20,520,373.53 29,044,015.72 -29.35% --
(IV) Investment in R&D
√ Applicable □Not applicable
In 2017, the Company insisted on the upgrade of fundamental research on core technology in
technical research, maintained its existing technological advantages, expanded the innovation and
upgrade in the technological field, made breakthroughs in differentiation, continued to promote
product upgrades, and led the development orientation in the industry.
In terms of the refrigerator, the Company focused on its technology planning and core
technology for technology development, and carried out the research on intelligent interaction
technology, food fresh keeping technology, energy saving and mute technology, wide rotation speed
variable frequency technology, air duct design technology, and vacuum insulation technology, etc.
The advent of “M Fresh Life” series refrigerator with the Company’s original “water
molecules activation and preservation technology” once again lifted a preservation revolution in
refrigerator industry, greatly promoted the Company’s brand influence and reputation, and became
a new start to Meiling’s transformation to high-end consumer market; in addition, in order to
realize the high-end transformation, technological innovation and industry leading by advancing the
follow-up research, popularization, and technology updates of intelligent and variable frequency
27
HEFEI MEILING CO., LTD. Annual Report 2017
products, the Company intensified the advance of research and development of a new generation of
CHiQ products, continued to vigorously promote 0.1 ℃ variable frequency series refrigerator and
realize the continuous increase in proportion of intelligent and variable frequency refrigerators and
variable frequency freezer, accelerated the popularization of medium and small air cooling
refrigerator, and realized the fast rise in proportion of air cooling refrigerator.
In air conditioning, according to the strategic planning of holistic intelligent air ecosphere, the
Company core with the technical strategic as intelligence and frequency conversion, carrying out
variable frequency control in depth, CFD&CAE simulation, intelligent voice, and basic core ability
construction as recognition and interaction etc. Focused on breakthroughs in user perception and
user experience, the Company completed the research on the fourth-generation intelligent and
comfortable precise temperature control technology platform and single-board and single-chip and
dual-drive technology platform, and the transformation applications on the product, mastered the
industry-leading control technology represented by PMV comfort control and natural wind control,
created super-energy-saving, super-comfortable, ultra-quiet and healthy air conditioner; the
Company carried out reliability and performance simulation for simulation technology by focusing
on compressor and system piping vibration, outdoor unit shutters and other harsh working
conditions to optimize the system and air duct of outdoor unit, reached the advanced level of
benchmarking industry, realized the product upgrades, and promoted the brand competitiveness.
The intelligent voice technology was successfully applied in the “slim waist” series air
conditioners represented by Q2F, resulting in the hot selling Changhong smart high-end products in
2017 and the great promotion of product image.
In terms of biopharmaceutical, the Company’s subsidiary Zhongke Meiling, a three board
listed company, greatly expanded the mobile and cryogenic application area with its own
advantages, and pioneered the compressor-free DW-HL1.8TL cryogenic storage tank. As the
world’s smallest portable ultra-low temperature product, it has achieved the rapid cooling and
adapted to a variety of power supplies, which refreshed the world’s perception and protected the
precious sample in the whole process of low-temperature storage. At the same time, through the use
of new technologies, Zhongke Meiling further developed energy-saving and noise-reducing variable
frequency ultra-low temperature series products and thoroughly implemented the green design
green corporate philosophy. In addition, the Company’s new refrigerator series products achieved
all-round uniform cooling which protected the long-term storage safety of the last link of the cold
chain storage system, and the products were sold all over the country. At present, all the products of
Zhongke Meiling are matched with remote monitoring systems, real-timely display the status of the
items in the box, achieved full-time and real-time monitoring to ensure the safety of the items in the
box.
R&D investment of the Company
2017 2016 Change ratio
Number of R&D (people) 1570 1204 30.40%
Ratio of number of R&D 14.29% 10.85% 3.44 percentage points up
R&D investment (Yuan) 761,572,843.03 680,286,093.75 11.95%
28
HEFEI MEILING CO., LTD. Annual Report 2017
R&D investment accounted
4.53% 5.43% 0.90 percent points down
for R&D income
R&D investment
116,704,686.42 62,282,986.30 87.38%
capitalization (Yuan)
Capitalization R&D
investment accounted for 15.32% 9.16% 6.16 percentage points up
R&D investment
The reason of great changes in the proportion of total R&D investment accounted for operation income than last
year
□ Applicable √ Not applicable
Reason for the great change in R&D investment capitalization rate and rational description
√ Applicable □ Not applicable
The Company carried out the product upgrades based on the strategy of intelligent and variable frequency
products, and accelerated the distribution of new products, which further consolidated and improved its market
position. During the reporting period, the Company increased its investment in the technology research and the
development of refrigerator (freezer) and air conditioner and high value-added new products, especially the
development of intelligent product technology, variable frequency technology, and long-term preservation
technology (water molecule activation and preservation technology, etc.), resulting in a large increase in
capitalization amount of R&D input during the reporting period over the previous year.
(V) Cash flow
In RMB
Item 2017 2016 Y-o-y changes
Subtotal of cash in-flow
14,940,892,460.66 12,094,822,197.35 23.53%
from operation activity
Subtotal of cash out-flow
15,492,394,455.40 11,109,431,301.72 39.45%
from operation activity
Net cash flow from
-551,501,994.74 985,390,895.63 -155.97%
operation activity
Subtotal of cash in-flow
5,451,591,320.85 694,384,009.64 685.10%
from investment activity
Subtotal of cash out-flow
4,960,940,585.00 1,629,560,848.76 204.43%
from investment activity
Net cash flow from
490,650,735.85 -935,176,839.12 -152.47%
investment activity
Subtotal of cash in-flow
2,880,194,862.03 3,184,640,052.87 -9.56%
from financing activity
Subtotal of cash out-flow 1,673,559,914.76 1,418,900,313.83 17.95%
29
HEFEI MEILING CO., LTD. Annual Report 2017
from financing activity
Net cash flow from
1,206,634,947.27 1,765,739,739.04 -31.66%
financing activity
Net increased amount of
1,103,667,350.63 1,864,937,181.75 -40.82%
cash and cash equivalent
Main reasons for y-o-y major changes in aspect of relevant data
√ Applicable □Not applicable
Net cash flow from operation activity has major changes mainly because: the cash paid for
purchasing goods and receiving labor service I the period are over than that of cash received from
good sales and providing labor services.
Net cash flow from investment activity has major changes mainly because: cash from entrusted
financing collected in the period increased over that of last period.
Net cash flow from financing activity has major changes mainly because: cash received from
privately placement last period, while no such money occurred in the period.
Reasons of major difference between the cash flow of operation activity in report period and
net profit of the Company
√ Applicable □Not applicable
Operational receivable at period-end increased and Stock over that of period-beginning.
III. Analysis of the non-main business
√ Applicable □Not applicable
In RMB
Ratio in Whether be
Amount Note
total profit sustainable
The financing income and disposal of Hefei
Investment income 102,766,412.15 181.52% No
Wanmei Property in the period
Gains/losses from Loss of fair value changes in forward foreign
-11,888,232.24 -21.00% No
fair value changes exchange contract in the period
Accrual of the inventory falling price reserves
Asset impairment 50,913,972.56 89.93% No
in the period increased
Non-operating
5,671,791.04 10.02% Government subsidy received in the period No
income
Non-operating
222,977.82 0.39% The fines and arrears paid in the period No
expense
IV. Assets and liability
(I) Major changes of assets composition
30
HEFEI MEILING CO., LTD. Annual Report 2017
In RMB
End of 2017 End of 2016
Ratio
Ratio in Ratio in Notes of major changes
Amount Amount changes
total assets total assets
The entrusted financing collected
at expiration in the period and
Monetary fund 5,283,081,788.04 33.10% 4,058,869,234.63 32.45% 0.65%
collection of sales return for
goods increased
Sale scale increased in the period
Account receivable 1,780,416,509.02 11.15% 1,118,960,552.49 8.95% 2.20% and more ratio of credit customer
in sales
Inventory increased from a year
Inventory 2,918,100,650.27 18.28% 1,974,526,734.86 15.79% 2.49% earlier for the growth of sales in
the period
Part of the investment real estate
Investment real
9,569,711.72 0.06% 13,275,631.40 0.11% -0.05% are disposed by parent company
estate
in the period
Long-term equity No major changes
90,534,671.92 0.57% 81,643,631.37 0.65% -0.08%
investment
Fix assets 1,439,427,226.50 9.02% 1,204,093,169.72 9.63% -0.61% No major changes
Construction in Project of construction in
174,857,717.15 1.10% 107,037,409.95 0.86% 0.24%
progress progress increased in the period
Short-term loans from parent
Short-term loans 1,631,206,000.00 10.22% 288,343,724.73 2.31% 7.91%
company increased in the period
Long-term loans from parent
Long-term loans 253,160,000.00 1.59% 38,908,788.00 0.31% 1.28%
company increased in the period
(II) Assets and liability measured by fair value
√ Applicable □Not applicable
In RMB
Changes of fair Accumulative Devaluation
Amount at the Amount of Amount
value changes of fair of Amount in the
Items beginning purchase in of sale in
gains/losses in value reckoned withdrawing end of period
period the period the period
this period into equity in the period
Financial assets
1. Financial assets
measured by fair value
and whose change is 12,060,213.30 3,586,518.18 15,646,731.48
recorded in current gains
and losses (excluding
31
HEFEI MEILING CO., LTD. Annual Report 2017
derivative financial assets)
Subtotal of financial assets 12,060,213.30 3,586,518.18
15,646,731.48
Total 12,060,213.30 3,586,518.18 15,646,731.48
Financial liabilities 559,249.58 15,474,750.42 16,034,000.00
Whether there have major changes on measurement attributes for main assets of the Company in report period or
not
□Yes √ No
(III) Assets right restricted ended as reporting period
Ended as the reporting period, the Company has no major assets been closed down, detain, freeze or pledge and
guarantee
V. Investment
(I) Overall situation
√ Applicable □Not applicable
Investment in the same period of last
Investment in the reporting (RMB) Changes
year ( RMB)
992,441,301.50 202,350,000 390.46%
(II) The major equity investment obtained in the reporting period
√ Applicable □Not applicable
32
HEFEI MEILING CO., LTD. Annual Report 2017
In RMB
Date of
Name Metho Term Current Index of
Status as of Expect disclosure
of d of Amount of Sharehol Capital of Type of investment Whether disclosure (if
Principal business Partners the balance ed (if
invest invest investment ding sources invest products profit and litigation
sheet date return applicable
ee ment ment loss applicable
)
)
Meili
ng
CAN
Juchao
DY R&D, sales and after-sale services of Invested
Newly Self-o Candy Washing Not Website:
Washi washing machines; own and operate all 20 RMB 45 -1,252,23
establis 90,000,000 60% wned Hoover machine, applica No 2017-3-30 http://www.cni
ng types of goods and technology import years million in 0.18
hed capital Group S.r.l etc. ble nfo.com.cn(No
Machi & export business the Period
.: 2017-010)
ne
Co.,
Ltd.
Development, production and sales of In reporting
Juchao
computer hardware & software, period,
Chan Capital Website:
technology development, production Manageme invested 2nd
gmei invest http://www.cni
and sales of internet of Things Self-o nt team of Fresh phase Not 2016-1-8、
Techn ment, 20 -12,625,8 nfo.com.cn(No
equipment, development and 48,128,000 96.256% wned Changmei online capital and applica No 2016-11-26、
ology acquisi years 74.56 .: 2016-002,
maintenance of E-commerce software, capital Technolog retailers purchased ble 2017-11-10
Co., tion No.: 2016-068
information service, technical transfer y 14.424
Ltd. and No.:
and services of the internet, domestic million
2017-088)
AD designing, production, agencies Yuan equity
33
HEFEI MEILING CO., LTD. Annual Report 2017
and release, sales of prepackaged food, from natural
dairy products, general merchandise, persons,
alcohol, beverage and agricultural totally
products, crop planting, self-support 32.424
goods and technology import and million
export business(Except for items Yuan
prohibited or restricted by laws and contributed
regulations) accumulate.
Researching, development, 1. In
manufacturing sales and service of Zhongke reporting
cryogenic refrigeration equipment and Xianxing period,
products; development, production, (Beijing) transferee of
sales and service of medical device Assets the equity
class-II as 6858 medical treatment, Manageme (Zhongke
Zhon
low-temperature & cold-storage nt Co., Meiling) in
gke
equipment and instrument; computer Ltd.; Qu part of the Juchao
Meili Cryogeni
network system integration; intelligent Yaohui, staffs are Website:
ng c
product system integration; software Self-o Fang priced at Not http://www.cni
Cryog Acquis 66.8703 Long-t refrigerat 8,342,581. 2017-8-10、
development and technology 45,900,000 wned Rongxin, 1.63 applica No nfo.com.cn(No
enic ition % erm ion 41 8-22
information services; development, capital Xu Yuan/Share ble .: 2017-053
Techn equipme
production, sales and service of Shengchao (652,000 and No.:
ology nt
electronic products and automation , Hu Yuan in 2017-067)
Co.,
equipment; installation of refrigeration Xiaozong, total), 0.4
Ltd.
engineering equipment and their Yang million
debugging, maintenance and sales; Guangzha shares
sales service of cold chain transport o, Tao Yu transferred.
vehicle and refrigerated car; and Wang After
development, production, sales and Dongyong transferred,
service of cold chain incubator; shareholdin
34
HEFEI MEILING CO., LTD. Annual Report 2017
development, production, sales and g ratio of
service of cold storage and commercial Zhongke
cold chain products; development, Meiling by
production, sales and service of liquid the
nitrogen biological containers and Company
accessories; development, production, goes to
sales and service of household health 67.3514%
products, medical consumables, lab from
consumable and CCTV products; 66.7645%.
self-management and agency for 2. In
variety commerce and technology reporting
import and export business period,
Zhongke
Meiling has
additional
stock issue
tailed for
management
s, and the
Company
gives up the
right of
preemption,
shareholdin
g ratio of
Zhongke
Meiling by
the
Company
35
HEFEI MEILING CO., LTD. Annual Report 2017
downs to
66.8703%
from
67.3514%.
Construction of mechanical &
Sichu electrical installation of building,
an research, production, sales, installation Juchao
Chan and service of household appliance, Website:
Air Invested
ghong refrigeration & AC equipment, air Capital Self-o Not http://www.cni
20 condition RMB 650 140,358,9
Air source heat pump (cold water) unit, increm 850,000,000 100% wned N/A applica No 2017-8-10 nfo.com.cn(No
years ing million in 46.98
Condi water (ground) source heat pump unit ent capital ble .: 2017-053
products the Period
tionin & related accessories; equipment and No.:
g Co., leasing, spare parts processing and 2017-061)
Ltd. sales of metal materials (excluding
gold and silver)
Sichuan
Sichu Hongyun
an Venture
Venture business: act on behalf of Invested
Hong Equity
institution or individuals as other RMB 14
yun Investment
venture firms in a venture business; million in Juchao
New Manageme
investment advisory business; Capital Self-o Not the Period, Not Website:
–G nt Co.,
providing venture management increm 40,000,000 16% wned 8 years applicabl and applica -- No 2015-08-12 http://www.cni
IT Ltd., State
services for venture; participate in ent capital e cumulative ble nfo.com.cn(No
Ventu Developm
establishing a venture business and contributed .: 2017-035)
re ent &
management consulting organ for the RMB 26
Capit Investment
venture million
al Corp.,
Fund Sichuan
Technolog
36
HEFEI MEILING CO., LTD. Annual Report 2017
y Transfer
Center,
Sichuan
Changhon
g Electric
Co., Ltd.,
Chengdu
Tianfu
Innovation
Equity
Investment
Fund
Center
(Limited
Partner),
Sichuan
Changhon
g Jiahua
Digital
Technolog
y Co., Ltd.
Chen R&D, manufacture, sales, installation Chengdu
gdu and after-sale service of indoor air Dongyu Indoor
Guigu environment control system, air Yihao air Invested
Newly Self-o Not
Envir handling equipment, air-condition, Enterprise Long-t environ RMB 12.5 -882,354.
contrib 12,500,000 25% wned applica No - -
onme negative ion products, new air purifier Manageme erm ment million in 64
ution capital ble
ntal and accessories; sales of household nt control the Period
Tech. appliance, air source water heater, solar Consultant system
Co., photovoltaic power generation Partnershi
37
HEFEI MEILING CO., LTD. Annual Report 2017
Ltd. equipment, electro-mechanical p (LP),
equipment, electronic products and Chengdu
refrigeration plant; sales service of Jiaoda
system integration and installment; Real
equipment leasing, spare parts external Estate
processing service and sales of metal Developm
materials (less-common metals ent Co.,
excluded); development and sales of Ltd.,
software and technical service; Chengdu
consulting and service of enterprise Southwest
management. Jiaotong
University
Industry
(Group)
Co., Ltd.,
Sichuan
Shuye
Jiachen
Real
Estate
Developm
ent Co.,
Ltd.,
Shanghai
Zhongche
ng
Xindaya
Financial
Informatio
38
HEFEI MEILING CO., LTD. Annual Report 2017
n Service
Co., Ltd.
and
Mianyang
Ke
Chuang
Yuan
Investment
Holding
Co., Ltd
During the
reporting
period, the
Manufacturing and sales of the Company
following: air-conditioner, air cooler, invested
air purifier, heat pump, new wind RMB 2
Zhon
system equipment, electric heater, million in
gshan Zhuhai Home
electric fan, refrigerators and freezers, the first Juchao
Hong Samyou applianc
water heating, water filter, humidifier, Newly Self-o period, as Not Website:
you Environme Long-t es as
clothes dryer, dehumidifier, air water establis 24,000,000 60% wned the applica 1,798.64 No 2017-3-14 http://www.cni
Electr ntal erm air-condi
machine, electric fireplace, kitchen hed capital significant ble nfo.com.cn(No
ic Technolog tioner
appliance and tools as well as changes in .: 2017-006)
Co., y Co., Ltd. etc.
refrigerating unit and home appliances; the expected
Ltd.
sales of electric raw/auxiliary customers of
materials, electrical parts; goods and the joint
technology import & export business venture
company,
the future
business
39
HEFEI MEILING CO., LTD. Annual Report 2017
volume of
the joint
venture
company
may be
substantially
lower than
the
expectation.
In order to
avoid the
follow-up
investment
risk, the two
parties
agreed to
cancel the
joint venture
company
through
friendly
negotiations
, And start
the
cancellation
procedures
at beginning
of 2018.At
present, the
40
HEFEI MEILING CO., LTD. Annual Report 2017
industrial
and
commercial
cancellation
procedures
are being
performed.
Guan
gzhou Commodity wholesale trading (except Juchao
Invested
Chan for the licensed commodities); goods Newly Self-o Not Not Website:
Long-t RMB 1 -215,101.
ghong import & export business (exclusive establis 1,000,000 100% wned N/A applicabl applica No 2016-11-26 http://www.cni
erm million in 23
Trade monopoly commodities); technology hed capital e ble nfo.com.cn(No
the Period
Co., import & export .: 2016-068)
Ltd.
Chan
ghong Increasing Juchao
Refrigera
Ruba the capital Website:
Ruba tors, air
Electr Capital Self-o of 3,001,600 Not http://www.cni
Household appliances processing & $ 6.9761 mil General Long-t condition -400,790
ic increm 40% wned Yuan applica No 2017-8-10 nfo.com.cn(No
assembling lion Trading erm ers and .01
Comp ent capital ($0.4521mil ble .: 2017-053
FZE other
any(P lion ) in the and No.:
products
rivate period 2017-059)
)Ltd.
Chan Increasing Juchao
ghong Capital Self-o Not the capital Not Website:
Import trading, sales and service etc. of Long-t -6,242,82
Meili increm $ 6 million 100% wned N/A applicabl of19.9167 applica No 2016-3-25 http://www.cni
the household appliance erm 7.39
ng ent capital e million ble nfo.com.cn(No
Electr Yuan in the .: 2016-027
41
HEFEI MEILING CO., LTD. Annual Report 2017
ic period, and No.:
Indon completed 2016-033)
esia,P all capital
T investment
Zhon
gshan Juchao
Invested
Hongl Newly Self-o Not Not Website:
Domestic trading; goods and Long-t RMB 1 378,304.6
ing establis 1,000,000 100% wned N/A applicabl applica No 2016-11-26 http://www.cni
technology import & export erm million in 8
Trade hed capital e ble nfo.com.cn(No
the Period
Co.,Lt .: 2016-068)
d.
R&D, manufacture and sales of
Hebei household electrical apparatus,
Hong non-electric household appliances
mao (including gas heating water heater),
House furniture for kitchens and toilets, audio Househo Juchao
Invested
hold visual, radio and television equipment, Newly Self-o ld Not Website:
20 RMB 5 -2,277,38
Appli computer, communications and other establis 5,000,000 100% wned N/A Electric applica No 2017-7-22 http://www.cni
years million in 3.23
ance electronic devices, indoor hardware hed capital Applianc ble nfo.com.cn(No
the Period
Techn fitting (paint excluded), air and water es .: 2017-050)
ology purification equipment and weighing
Co., apparatus products; software and IT
Ltd. services; enterprise management
consulting services etc.
125,185,0
Total -- -- -- -- -- -- -- -- -- -- -- -- --
70.47
42
HEFEI MEILING CO., LTD. Annual Report 2017
(III) The major non-equity investment doing in the reporting period
√ Applicable □Not applicable
43
HEFEI MEILING CO., LTD. Annual Report 2017
In RMB
Industr Reasons for
y Accrued not
Accrued Actual
Inves Fixed involve Capit Realized Reaching
Investment Investment
tment Invest d in al Anticipated Income up to the Planned Disclosed Disclosed
Project Name Amount in this Amount up to the Project Schedule
Meth ments Invest Sourc Income the End of Schedule Date (if any) Index (if any)
Reporting Period End of Reporting
od or not ment e Reporting and
Period
Project Period Anticipated
s Income
The
intelligent
production
line for one
1 million sets of
Home million sets of Project is Juchao
environmental and
applian environmental under Website：
energy saving Self-
ce and planning www.cninfo.
refrigerator Self- owne Complete 40.27% of Not
Yes manufa 84,411,016.48 84,411,016.48 energy-saving during the 2017-3-14 com.cn
intelligent built d total investment Applicable
cturing refrigerators reporting ( Announcem
production line Fund
industr shall be period, no ent No.
construction project s
y formed after income yet. 2017-006)
(Note 1)
this project
being put into
operation
2 million sets of Home The company The Project is Juchao
Not
automatic washing Self- applian Self- successfully bade for production under 2017-3-30、 Website：
Yes 139,535,900 139,535,900 applicable
machines built ce owne the plant, office capacity of 2 planning 2017-4-14 www.cninfo.
production base manufa d building and land use million sets of during the com.cn
44
HEFEI MEILING CO., LTD. Annual Report 2017
project (Note 2) cturing Fund rights under the name automatic reporting (Announcem
industr s of Anhui Dongwei washing period, no ent No.
y Solar Technology Co., machine shall income yet. 2017-010,
Ltd. from the judicial be formed No.
sale with its own after this 2017-024)
funds of RMB134, project being
585,900; it will be the put into
implementation place operation
for washing machine
production base,
construction of the
project are in
processing recently
Total -- -- -- 223,946,916.48 223,946,916.48 -- -- -- -- -- -- --
Note 1: In order to meet the increasing market demands, make up for the insufficient capacity, enhance the operating efficiency of the company's production line, and
further promote the company's intelligent manufacturing process, the 28th meeting of the company's 8th Board of Directors approved and agreed the company’s
subsidiary Jiangxi Meiling Electric Appliance Co., Ltd. (Hereinafter referred to as “Jiangxi Meiling”) to invest RMB 209,600,000 to build 1 million sets of
environmental and energy saving refrigerator intelligent production line construction project, meanwhile, in order to ensure the smooth implementation of this
investment and construction project, agreed the company to increase capital of RMB 200 million to Jiangxi Meiling for investing in this project. See details on
“Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the company disclosed in the form of announcement
(Announcement No. 2017-006) on March 14, 2017. Currently, the project has been completed on 20 December 2017 and put into production at end of 2017
Note 2: According to the company's strategic development plan, combined with the company's business needs, and in order to make up for the insufficient research
and manufacturing capacity of washing machine industry so as to meet the market demands, the 29th meeting of the company's 8th Board of Directors approved and
agreed the company’s to invest no more than RMB 371,210,000 in the construction of the 2 million sets of automatic washing machines production base project. In
addition, the 29th meeting of the company's 8th Board of Directors approved and agreed the company to successfully bid for the plant and office building (covering an
area of 86,087.65 square meters) and land use rights (covering an area of 116,233.61 square meters) under the name of Anhui Dongwei by public auction organized
by the court with its own funds of RMB134, 585,900, and use the plant and land as the washing machine production base for construction. See details on “Securities
45
HEFEI MEILING CO., LTD. Annual Report 2017
Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the company disclosed in the form of announcement
(Announcement No. 2017-010, No. 2017-024) on March 30, 2017 and April 14, 2017. The project construction is still under planning at present. Meanwhile,
according to the “Adjudication” issued by People’s Court of Shushan District, Hefei City the Company will proactively handling relevant procedures of ownership
transfer in aspect of lands and house assets
46
HEFEI MEILING CO., LTD. Annual Report 2017
(IV) Financial assets investment
1. Securities investment
□ Applicable √ Not applicable
The Company had no securities investment in the reporting period.
47
HEFEI MEILING CO., LTD. Annual Report 2017
2. Derivative investment
√ Applicable □Not applicable
In 10 thousand Yuan
Ratio of
Relat Whethe Amount Amount of investment
Investment Amount
ed r purchased in reserve for Investment amount at Actual
Initial amount at sales in the
Operator relati related Type Start date End date the devaluation of amount at period-end in gains/losses
investment period-begi reporting
onshi trade or reporting withdrawing period-end net assets of the in period
n period
p not period (if applicable) Company at
period-end
Forward
Financial foreign
N/A No 63,230.44 8 June 2016 26 June 2018 37,890.69 348,059.87 176,729.68 - 210,705.91 40.86% -2,222.26
institution exchange
contract
Total 63,230.44 -- -- 37,890.69 348,059.87 176,729.68 - 210,705.91 40.86% -2,222.26
Capital resource(if applicable) Self-owned capital
Lawsuit involved (if applicable) Not applicable
Disclosure date for approval from the
Board for investment of derivatives (if 30 March 2017
applicable)
Disclosure date for approval from
board of shareholders for investment 4 May 2017
of derivatives (if applicable)
Risk analysis and controlling measures 1. Market risk: domestic and international economic situation changes may lead to exchange rate fluctuations, forward foreign exchange
for derivatives holdings in the Period transactions are under certain market risk. Forward foreign exchange business is aiming to reducing impact on corporate profits by foreign
(including but not limited to market exchange settlement and sale prices, exchange rate fluctuations. The Company will follow up the exchange fluctuation, on the basis of target
48
HEFEI MEILING CO., LTD. Annual Report 2017
risk, liquidity risk, credit risks, rate determined from the business, relying on the research of the foreign currency exchange rates, combined with prediction of consignments,
operation risk and law risks etc.) and burdening ability to price variations due to exchange rate fluctuations, then determine the plan of forward foreign exchange contracts, and
make dynamic management to the business, to ensure reasonable profit level.
2. Liquidity risk: all foreign exchange transactions are based on a reasonable estimate of the future import and export business, to meet the
requirements of the trade authenticity. In addition, forward foreign exchange transactions are processed with bank credit, will not affect
liquidity of company funds.
3. Bank default risk: if cooperative banks collapse within the contract time, the Company will not be able to transact the original foreign
exchange contracts with contract price, which leads the risk of income uncertainty. So the Company chose Bank of China, Agricultural Bank
of China, Industrial and Commercial Bank of China, China Construction Bank and other Chinese Banks and part of the larger foreign Banks
(such as Deutsche Bank, UOB, Overseas Chinese Bank, HSBC, etc.) to conduct the trading of foreign exchange capital. These banks share a
solid strength and management whose failure and the risk of loss may bring to the Company is very low.
4. Operational risk: improper operation of the person in charge of forward foreign exchange transactions may cause related risk also. The
Company has formulated related management system which defines the operation process and responsibility to prevent and control risks.
5. The legal risks: unclear terms based in contract signed with banks for related transactions may lead legal risks when forward foreign
exchange transactions are processing. The Company will strengthen legal review, and choose good bank to carry out this kind of business as
to risk control.
Invested derivative products have The Company determines fair value in accordance with the Chapter VII “Determination of Fair Value” carried in the Accounting Standards
changes in market price or fair value in for Business Enterprises No.22 - Recognition and Measurement of Financial Instruments. Fair-value is basically obtained according to prices
the Period, as for analysis of the fair offered by bank and other pricing services. While fair-value of derivatives is mainly obtained according to the balance between prices given
value of derivatives, disclosed specific by outstanding contracts and forward prices given by contracts signed during the reporting period with bank. The differences are identified as
applied methods and correlation trading financial assets and liabilities. During the reporting period, forward foreign exchange contracts and losses of the Company is RMB
assumption and parameter setting -22,222,600 yuan.
Specific principle of the accounting
policy and calculation for derivatives
Not applicable
in the Period compared with last period
in aspect of major changes
Special opinion on derivative Upon inspection, the independent directors of the Company believes that: during the reporting period, the Company carried out its foreign
investment and risk control by exchange forward deals in strict compliance with the standardized operation guidelines for listed issuer on main board (2015 amended) issued
49
HEFEI MEILING CO., LTD. Annual Report 2017
independent directors by Shenzhen Stock Exchange, the Articles of Association, Authorization Management of the Company, Management System in relating to
Foreign Exchange Forward Deals of Hefei Meiling Co., Ltd., and these deals were conducted within the authorization scope under general
meeting and board meeting. The Company conducts no foreign exchange transactions on the purpose of getting profit only, all of the forward
foreign exchange transactions are operates based on normal operating and production, which is relying on specific business operations with
purpose of avoiding the preventing the risks in exchange rate. The forward foreign exchange fund transaction has close concerned with daily
operation needs of the Company, and it benefit a lot in avoiding the exchange rate risks in import and exports business, and thus met its
requirement for operation development. There was no speculative operation, no break of relevant rules and regulations and relevant business
was conducted under corresponding decision-making procedures. Interests of the Company and entire shareholders, especially minority
shareholders, were not prejudiced.
50
HEFEI MEILING CO., LTD. Annual Report 2017
(V) Application of raised proceeds
√ Applicable □Not applicable
1. Overall application of raised proceeds
√ Applicable □Not applicable
51
HEFEI MEILING CO., LTD. Annual Report 2017
In 10 thousand Yuan
Cumulative
Ratio of
Total raised raised
Total cumulative Total Usage of the retained
Total raised capital has capitals has Raised capitals
Total raised accumulative raised capitals accumulative raised capitals and what is
Year Way capital used purpose of purpose of idle for more
capitals raised capitals has purpose raised capitals expected to invested with
in Period uses changed uses than two years
used of uses unused those capitals
in Period changed in
changed
total
The raised funds that the
Company has not run out
will continue to complete
the corresponding
investment as planned. At
the same time, according
to the planning for equity
investment projects, it’s
agreed the Company to use
Non-public
the idle raised funds of no
2016 offering of 154,073.272276 17,051.635693 50,802.138752 0 0 0% 108,002.557762 0
more than RMB 1.06
A-shares
billion (The amount can be
rolled over) to invest in the
principal-protected
financial products after
being approved by the
Company’s board of
directors, board of
supervisors, and the
resolutions of
52
HEFEI MEILING CO., LTD. Annual Report 2017
shareholders’ meeting, and
after the independent
directors issuing
consentient independent
opinions and sponsor
agencies issuing
unanimous verification
opinions. The remaining
funds are deposited in the
designated raised capital
account.
Total -- 154,073.272276 17,051.635693 50,802.138752 0 0 0% 108,002.557762 -- 0
Explanation on General usage of raised capital
Being deliberated and approved by 1st extraordinary shareholders meeting of 2016 and 17th session of 8th BOD, and verified by the Reply on Private Placement of Hefei Meiling Co.,
Ltd. (CSRC XK [2016] No.1396) issued from CSRC, the Company successfully offering 280,858,676 shares (A-stock) to 7 qualified investors, including Sichuan Changhong Electric
Co., Ltd. (hereinafter referred as to Sichuan Changhong), with price of 5.59 Yuan/Share and face value of 1.00 Yuan. According to the Verification Report XYZH/2016CDA40272
issued by Shine Wing Certified Public Accountants (LLP), total raised fund amounting to 1,569,999,998.84 Yuan, less vary issuance changes (tax included) 29,267,276.08 Yuan, raised
fund amounts to 1,540,732,722.76 Yuan.
Ended as 31 December 2017, actually fund of raised used accumulative amounted as 508,021,387.52 Yuan in total, balance of the account for fund raised counted as 1,080,025,577.62
Yuan (including interest income accumulative amounted as 9,115,551.55 Yuan and income from financial product at expiration 38,051,349.82 Yuan)
The Company accumulative used the fund raised amounted as 508,021,387.52 Yuan, the use of purpose including: intelligent construction has 82,689,804.44 Yuan in used; R&D
ability for intelligence and new products for intelligent household appliance has 122,950,679.31 Yuan in used; smart life project totally used 31,500,840.00 Yuan; used in current fund
supplementary counted as 270,880,063.77 Yuan (including saving interest of 147,341.01 Yuan)
2. Situation of committed project of raised proceed
√ Applicable □Not applicable
In 10 thousand Yuan
53
HEFEI MEILING CO., LTD. Annual Report 2017
Change the Cumulative Major
Investment Benefit Achieved
Committed investment project (Y/N) investment Date of reach a changes of
Total raised-fund Investment after Invested in the progress till end achieved expected
projects and over-raised fund (including amount till end predetermined state of project
commitment adjustment (1) period of period-end in the benefits
investment partially of Period-end use feasibility
(3)＝(2)/(1) Period (Y/N)
changed) (2) (Y/N)
Committed investment project
Intelligent
manufacturing
(Hefei) project:
Construction of intelligent end of 2018, Not
No 39,100.00 39,100.00 5,611.653743 8,268.980444 21.15% -- No
manufacturing project construction applicable
project of freezer
intelligent : end
of June 2018
Construction of intelligent
R&D capability and new
Not
products development of the No 55,900.00 55,900.00 10,089.917950 12,295.067931 21.99% End of 2018 -- No
applicable
intelligent appliance
technology
Not
Intelligent life project No 32,000.00 32,000.00 1,350.064000 3,150.084000 9.84% April 2021 -- No
applicable
Supplementary the floating Not
No 27,073.272276 27,073.272276 0 27,088.006377 100.05% -- -- No
capital applicable
Subtotal of committed
-- 154,073.272276 154,073.272276 17,051.635693 50,802.138752 32.97% -- -- -- --
investment project
Investment of the over-raised fund
54
HEFEI MEILING CO., LTD. Annual Report 2017
No over-raised fund in the Period
Payment of bank loans (if
-- -- -- -- -- -- -- -- -- --
applicable)
Supplementary the floating
-- -- -- -- -- -- -- -- -- --
capital (if applicable)
Subtotal of over-raised fund
-- -- -- -- -- -- -- -- -- --
investment
Total -- 154,073.272276 154,073.272276 17,051.635693 50,802.138752 32.97% -- -- -- --
1. In the "intelligent manufacturing construction project": the planning construction period of "intelligent manufacturing (Hefei)
project" is 3 years, during the reporting period, phase I and phase II has completed in construction, phase III till in process. The
planning and construction period of the “intelligent production line construction project for an annual increase of 600,000 sets
of medium and large volume environmental protection energy-saving freezers” is one year. During the reporting period,
because the Company’s No. 9 plant in freezer plant area where the project construction site locates has been used by the
subsidiary Zhongke Meiling Cryogenics Company Limited, the implementation of the project was influenced, and the project is
still in the stage of factory planning.
2. “Intelligent R&D ability building projects and new product development projects for intelligent home appliances”: the
planning and construction period of the “intelligent R&D ability building projects and new product development projects for
Conditions and reasons of failure to meet schedule or predicted
intelligent home appliances” is three years. During the reporting period, the construction of Inspection & Testing Center
income (by specific projects)
Building was underway, the project had a smooth progress as planned, it’s expected to be put into use in June 2018; completed
the development and marketing of intelligent second-generation products, and the research and development of intelligent
third-generation products has also completed the trial production in small batches and is planned to come into the market in the
second half of 2018; other projects are being implemented smoothly.
3. As the implementation subject of the Company’s “Intelligent Life Project”, Changmei Technology was established in April
2016. At present, Changmei Technology has three subordinate operating units in Mianyang, Hefei, and Chengdu, has arranged
more than 120 groups of offline intelligent terminal cold chain devices in more than 100 communities through the investment in
hardware facilities in Mianyang, Hefei, and Chengdu, and has established sorting and processing center and warehouses and
other supporting facilities. At the moment, Changmei Technology is investing in the grading hardware facilities of Chengdu and
55
HEFEI MEILING CO., LTD. Annual Report 2017
Hefei markets, and is actively exploring and cultivating market. The Company has the self-owned fresh e-commerce brand
“ifoodtube”, and the platform has more than 160,000 registered members; continue to develop, improve, and upgrade the online
software for intelligent life service platform. The Company will further strengthen the platform promotion, market
development, consumer experience, and city and community operations, and enhance the consumer stickiness and collective
orders from community consumers. It is the second year for the project construction in the period, Changmei Technology
achieved a revenue of 17.8102 million Yuan for the year, profit after tax amounted as -13.495 million Yuan.
4. Up to end of the period, investment in “Supplementary the floating capital” has over 100%, mainly due to the saving interest
in fund raised used in the project
Presentation on the major changes in project feasibility
Not applicable
Use progress of the raised-fund and purpose
Not applicable
Changes of the site for raised-fund investment projects
Not applicable
Adjustment of the raised-fund investment projects
Not applicable
Ended as 31 October 2016, the Company contributed self-raised fund 63,984,738.91 Yuan for the raised-fund investment
project, the money has replaced as 63,984,738.91 Yuan. Shine Wing CPA (LLP) made a special audit for pre-investment and
carried out an Assurance Report on Invested Self-raised fund to the Raised-fund Investment Before Hand
(XYZH/2016CD40285) (hereinafter referred as to Assurance Report). Replacement are as:
Up-front cost and replace of the raised-fund investment In 10 thousand Yuan
projects Commitment Investment of
Raised-fund Total capital for self-raised fund Amount
investment project investment raised-fund invested till end of 31 replaced
project October 2016
Construction of
intelligent
39,870.65 39,100.00 2,545.41 2,545.41
manufacturing
project
56
HEFEI MEILING CO., LTD. Annual Report 2017
Construction of
intelligent R&D
capability and new
products 55,900.00 55,900.00 2,053.06 2,053.06
development of the
intelligent appliance
technology
Intelligent life
32,076.00 32,000.00 1,800.00 1,800.00
project
Total 127,846.65 127,000.00 6,398.47 6,398.47
th th th
The replacement has been deliberated and approved by the 27 session of 8 BOD and 14 session of 8th supervisory
committee, independent directors are proposed an agreeable independent opinion, and sponsor institution carried out a
verification opinion without objection.
Supplement working capital temporary with idle raised-fund
Not applicable
Balance and reasons of the implementation of raised-fund
Not applicable
The raised-fund have not been used will continues to invested on the raised-fund projects in above mentioned table. Meanwhile,
according to the raised-fund investment plan, and been approved by the Board, the Board of supervisors and shareholder
general meeting, agreeable independent opinion from independent directors and with the verification opinion without objection
Use of funds and fund allocation for un-used raised-fund issued by sponsor institution, it’s agreed the Company to use the idle raised fund of no more than 1060 million Yuan (the
amount can be rolled over) to invest in principal-protected financial products, the remaining funds are deposit in the designated
raised capital account.
Use of the raised-fund has no changes till recently.
As for the relevant information of raised-fund disclosed, there is no any disclosure information that released without timely,
Use of raised-fund and problems or other condition in
true-ness, accurate and complete. The savings, usage, management and disclosure of the raised-fund have no violation
disclosure
conditions been found.
57
HEFEI MEILING CO., LTD. Annual Report 2017
3. The changed project of raised proceeds
□ Applicable √ Not applicable
No changes of raised proceeds in the Period.
VI. Sales of major assets and equity
(I) Sales of major assets
□ Applicable √ Not applicable
The Company had no sales of major assets in the reporting period.
(II) Sales of major equity
□ Applicable √ Not applicable
58
HEFEI MEILING CO., LTD. Annual Report 2017
VII. Analysis of main holding company and stock-jointly companies
√ Applicable □Not applicable
(I) Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
Company name Type Main business Register capital Total assets Net Assets Operating revenue Operating profit Net profit
Research and development,
Zhongke Meiling Cryogenic manufacturing and sales of
Subsidiary 68,640,300 267,581,540.42 125,981,368.86 143,090,796.12 14,006,755.07 12,482,579.70
Technology Co., Ltd. ultra-low temperature
freezer
Jiangxi Meiling Electric Co., Manufacturing of
Subsidiary 50,000,000 302,652,075.40 91,097,257.64 650,405,956.72 4,483,610.83 4,485,610.83
Ltd. refrigeration and freezer
Mianyang Meiling Manufacturing of
Subsidiary 100,000,000 133,153,091.24 112,524,474.84 258,278,364.39 18,006,960.01 14,526,818.51
Refrigeration Co., Ltd. refrigeration and freezer
R&D, manufacturing and
Sichuan Changhong
Subsidiary domestic sales of 850,000,000 3,826,160,227.60 1,324,776,535.97 5,231,954,432.68 139,754,271.84 134,372,688.08
Air-conditioner Co., Ltd.
air-conditioner
R&D, manufacturing and
Zhongshan Changhong Electric
Subsidiary foreign sales of 184,000,000 1,553,869,205.95 164,256,327.28 2,438,254,177.62 -69,559,325.89 -73,032,392.20
Co., LTD
air-conditioner
Hefei Meiling Electronic
Subsidiary Sales of white goods 55,000,000 177,607,306.59 -213,787,648.75 1,292,408,149.65 95,065,629.48 95,050,334.75
Appliance Marketing Co., Ltd.
Hefei Meiling Group Holdings
Subsidiary Sales of white goods 80,000,000 846,963,391.93 -53,316,027.64 3,272,250,841.88 -125,482,336.11 -136,212,271.69
Limited
E-business of agricultural
Changmei Technology Co., Ltd. Subsidiary 50,000,000 21,504,575.03 13,218,093.00 17,810,174.84 -13,505,502.51 -13,495,001.36
products and fresh
Guangdong Changhong Ridian Subsidiary R&D, manufacturing and 83,000,000 317,391,106.28 120,644,345.85 475,756,667.69 15,039,984.08 11,526,478.55
59
HEFEI MEILING CO., LTD. Annual Report 2017
Technology Co., Ltd. sales of kitchen and toilet
products, small home
appliances and water
purifier
Research and development,
Meiling Candy Washing
Subsidiary and sales of Washing 150,000,000 186,922,762.75 72,912,949.70 277,854,553.21 -1,626,780.33 -2,087,050.30
machine Co., Ltd.
machine
60
HEFEI MEILING CO., LTD. Annual Report 2017
(II) Notes of holding and shareholding companies
√ Applicable □Not applicable
The method of
obtaining and
handling
Company Name The influence to the whole production and performance
subsidiaries
during the report
period
Controlling subsidiary of the Company, and established
jointly by the Company and Candy Group with registered
capital of 150 million Yuan. By making full use of the
production capacity, product development capabilities,
sales channels, manufacturing scale and quality control
Meiling CANDY Washing Machine
Investment and other advantages that the company and Candy Group
Co., Ltd.
have in washing machine so as to rapidly lay out the
washing machine market, expand the product market
shares of Meiling brand and Candy brand, and enhance the
company's profitability and comprehensive
competitiveness.
The Company’s holding subsidiary was jointly invested
and established by the subsidiary Zhongshan Changhong
Zhongshan Hongyou Electric Co.,
Investment and Zhuhai Samyou Environmental Technology Co., Ltd.
Ltd.
(hereinafter referred to as “Samyou Environmental”), with
registered capital of 40 million Yuan.
Wholly-owned subsidiary of the Company, established by
Zhongshan Changhong –subsidiary of the Company, with
Guangzhou Changhong Trade Co.,
Investment one million Yuan contribution. The enterprise will enlarge
Ltd.
the foreign sales for the Company in aspect of air
conditioner products
Wholly-owned subsidiary of the Company, established by
Zhongshan Hongling Trade Co., Changhong Ridian Company –subsidiary of the Company,
Investment
Ltd. with one million Yuan contribution. The enterprise will
enlarge the sales of small household appliance aboard
The Company’s subsidiary was invested and established
by the subsidiary Changhong Ridian Company, with
registered capital of 5 million Yuan. The establishment of
Hebei Hongmao Household this company is conducive to the Company seizing the
Investment
Appliance Technology Co., Ltd. national “coal to gas” policy dividend and gas heating
water heater market opportunities to build a gas heating
water heater product line and further expand the
Company’s kitchen and bath industry.
Xi’an Meizhilai Electric Appliance A little effect on the overall production and operation and
Clearing off
Marketing Co., Ltd. performance of the company
61
HEFEI MEILING CO., LTD. Annual Report 2017
Hefei Meiling White Appliance Marketing Co., A little effect on the overall production and operation and
Clearing off
Ltd. performance of the company
Hohhot Xiangyou Electric A little effect on the overall production and operation and
Clearing off
Appliance Marketing Co., Ltd. performance of the company
Urumchi Meiling Electric A little effect on the overall production and operation and
Clearing off
Appliance Marketing Co., Ltd. performance of the company
Lanzhou Meizhilai Electric A little effect on the overall production and operation and
Clearing off
Appliance Marketing Co., Ltd. performance of the company
Mianyang Meiling Electric A little effect on the overall production and operation and
Clearing off
Appliance Marketing Co., Ltd. performance of the company
(III) Notes of holding and shareholding companies: Nil
The Company has no major holding and stock-jointly enterprise should be disclosed in the period
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Future Development Prospects
(I) Competition pattern and development trend
1. Competitive landscape: oligopoly seeks hegemony, reshuffle continues
The current all walks of life have entered a period of mega competition: first is overspeed, the product
development and new business models have very fast update speed; second is breaking bounds, different
industries penetrate and compete among each other; third is ultrahigh, the demographic dividend and raw material
dividends disappear, bulk raw material prices rise, and costs raise; fourth is super change, subversive changes may
occur at any time.
The home appliance industry has shifted from large-scale growth to aggressive growth. The competition trend of
household appliance oligopoly is more and more obvious; the shuffle among the giants is inevitable. The market
competition pattern will be more intense; the shuffle will spread bi-directionally from the home appliance retail
channel and home appliance manufacturing system, and show the new situation of oligopoly and tycoon
competition. At the same time, influenced by the national supply side reform and industrial restructuring, the raw
materials begin to sharply rise in price, the logistics industry would raise costs because of "governing ultra", and
transport costs of home appliances significantly increase. At the same time, with the introduction of national
inclusive policy, home appliance industry will bid farewell to low price competition and gradually return to the
rational value competition.
2. Technical variables: artificial intelligence, market detonation
Internet of Things, artificial intelligence, and life technology are the several major directions for the future
development of human society. In the home appliance industry, technological innovation has become the leading,
62
HEFEI MEILING CO., LTD. Annual Report 2017
as the drive capability of technological innovation becomes more and more important in the home appliance
industry competition, especially the guide of new technologies and new concepts in the first-line terminal market
will be favored by more and more enterprises. In addition, as the popularity of intelligence has suffered
homogeneous dilemma in the market and the development of the Internet has stepped into the depth, artificial
intelligence has become a new engine to accelerate the landing of smart home appliances and will give
differentiation advantages to different enterprises in the terminal market, thereby becoming an important engine to
pull the middle and high-end market consumption, it is expected to usher in a centralized detonation.
3. Product iteration: competitive and new products break through the bottleneck
Influenced by low price competition in the market, the function of many white products is not substantially
improved, but with the rise of middle and high-end consumer groups, especially the full release of quality,
high-end and fashion technology needs, the home appliances industry will usher in a new round of consumer
upgrades, the arrival of quality consumption era will promote the industry to transform and upgrade to high end
and intelligence.
Under the background of industrial restructuring and upgrading and products entering into the upgrading, the
home appliance market that takes competitive and new products as the principle thing tends to have more distinct
and clearer competition, but the competitiveness of many home appliance products is facing a new round of
bottleneck and homogenization challenge. So the competitiveness of home appliance products in the next stage
has to face a major breakthrough, and carry through the system innovations in quality, function, appearance,
technology and other aspects, not only pursuing the product pragmatism but also giving the product a sense of
science and technology, which will be the direction for whole market product iterations.
4. Channel integration: online and offline, scene services
The Internet has entered the deep water area; the user growth rate has slowed down significantly. Pure online price
war and other strategies have begun to fail, and it is more and more difficult to obtain incremental users. The
integration of online and offline channels has become the development direction of household appliance
enterprises, its core is that the household appliance enterprises must have the ability to service users. How to make
full use of and integrate resources and advantages from different online and offline channels, complete the
integration of enterprise marketing, product promotion and user needs, reinforce and strengthen its own ability to
enhance customer service capabilities, and thus really jump out of the channel dispute and return to the rapid
landing of products and the strong activation of user demands becomes the must choice for enterprises.
5. Internationalization: global mergers and acquisitions, capital driving
Internationalization is the need adapt to the times, the internationalization of white goods industry will be
particularly prominent, especially the global capital mergers and acquisitions can not only quickly enhance the
enterprises’ brand influence and industry status in the global market, but also promote the growth in overseas
markets by the domestic and overseas resources integration and market development. In addition, the global
capital mergers and acquisitions has not only become a new driving force for the enterprises’ growth, but also can
63
HEFEI MEILING CO., LTD. Annual Report 2017
give attention and influence to enterprises in the new competitive track.
(II) Development strategy
1. Vision
Be a leading brand in China, World Class and respectable household appliance enterprise.
2. Strategic thought
In 2011, the board of directors of the company proposed the strategic guiding thoughts of "Meiling Dream" and
"Double Three Strategy", and upgraded the original "Double Three Strategy" to "Double Three One Core
Strategy", Double Three refers to three core strategies which are product strategy, talent strategy, and cost
leadership strategy and three significant strategies which are market strategy, brand strategy, and
internationalization strategy, One Core refers to intelligentization.
In the next few years, the company will stand correctly, accurately and firmly in the draughts of industry, market
and reformation, continue to promote the six innovations so that the company shall step forward to the direction of
"Meiling Dream", and strive to create another Meiling by 2020.
3. Strategic thinking and targets
By "two insists", "two adheres" and "two transformations" (i.e. insist on product doctrine and technology driven,
insist on cultural development and institutional innovation; adhere to domestic and overseas markets, adhere to
talent and brand strategy; transform from single to diversification, transform from B2C to 020 and C2B), the
company has strived to create another Meiling in scale, production line and organization flow by 2020. Details
include: the first is to create another Meiling in scale, i.e. to achieve the annual sales revenue of 20 billion Yuan,
and double the net assets; the second is to create another Meiling in production line, i.e. to enlarge the market
share of main products of refrigeration, freezer and air conditioner, the washing machine, kitchen and toilet
products and small home appliances comes to new main products of the Company, driven the profit mode
upgrading and transform by laying out new business of fresh E-business and bio-medical; and thirdly, create
another Meiling in organization procedures.
(III) Business plan
1. Business objective
With macro economy entering the new normal, fierce competition from various brands in the household
appliances industry and rising raw material prices, in 2018, under the leadership of the board of directors,
the Company will strive to achieve an annual growth of more than 10% in operating income over the
previous year, and an increase of more than 800% in net profit attributable to the parent company over the
previous year. In 2017, the Company’s operating income has reached 167.97 hundred million Yuan. In 2018,
the Company will focus on improving profitability while ensuring a proper increase in revenue scale.
64
HEFEI MEILING CO., LTD. Annual Report 2017
2. Operating principles
The Company’s operating principles in 2018 are ”product leading, marketing transformation, efficiency promotion
and team activation"
Product leading: The Company satisfied the needs of product upgrades, consumption upgrades, and high-end
breakthroughs through the promotion of quality, taste, and brand. Meanwhile, the Company achieved the
products’ easy manufacturing and easy maintenance through the product platformization, serialization; parts
standardization, generalization, and modularization, that is “five -ization and two easy”. The Company continued
to adhere to intelligent and variable frequency strategies, and firmly grasp the “fresh-keeping” leading technology.
In 2018, the Company will continue to promote the development of smart products and variable frequency, M
fresh life refrigerator and freezer, and large-capacity refrigerators, increase cost control, enhanced product
appearance competitiveness, and achieve product serialization, make breakthroughs in the market and business
models, and continue to increase the proportion of variable frequency, intelligence, and preservation, and the
differentiated competition.
Marketing transformation: Digitalization is the core of the traditional marketing business transformation,
reconstruct the three major systems by digitalization, namely, establishing a marketing management system with
terminal retail as the core, establishing a value management system with retail price as the core, and establishing
an operation management system with customer’s business inventory as the core. At the same time, in the
domestic market, on the one hand, achieve value transformation by adjusting the structure, raising the average
price, and increasing the share, on the other hand, promote channel transformation by boosting and implementing
O2O business and implementing O2O collaboration from product and value chain access, benefit sharing, and
organizational guarantee.
In addition, in the overseas market, further increase the product development and planning of mid- and high-end
refrigerators, promote the sales structure, improve the average sales price, and increase the profitability; transform
from the single pursuit of scale to the pursuit of both scale and profit, and from the order driving to market driving;
gradually increase the team and product investments in brand, and promote the construction of overseas own
brands.
Efficiency promotion: Fully promote the intelligent manufacturing project, take the promotion of inventory
turnover as the core goal, optimize the process, implement the process reengineering, form the solutions, and
implement by means of technology, informatization, tools, etc., constantly optimize the operating system, and
promote the overall operational efficiency. Meanwhile, the Company will further enhance the organizational
efficiency through organization model innovation (product management body + business synergy), accountability
culture development and process improvement, and enhance the operational efficiency through continuous
management benchmarking promotion. In addition, the Company will also further streamline the existing business
processes through the marketing business information platform construction, and get through to the marketing
transactions, retail and customer inventory and internal inventory management so as to lay the foundation for the
establishment of new business models and the promotion of follow-up supply chain management level of the
65
HEFEI MEILING CO., LTD. Annual Report 2017
Company.
Team activation: Inspire the team’s vitality through the innovative incentive mechanism design; promote the
organizational atmosphere through the continuous corporate culture publicizing, training, propagation and
guidance.
3. Market strategy
(1) Refrigerator (freezer)
Continue to adhere to the intelligence and frequency two core product strategy, speed up the development and
upgrading of a new generation of intelligent product, implement the company's intelligent strategy, and enhance
the proportion of inverter products. Vigorously invest in basic technology research and product upgrading,
continue to carry out intelligence, frequency, forced air cooling, fresh-keeping and other technical researches,
maintain technology-leading in the industry, promote the company's product structure to upgrade to high end and
intelligence, and drive the company's industrial transformation and upgrading; At the same time, implement the
“five -ization and two easy”, “quality, taste and brand”, “intelligent production”, comprehensively improve the
efficiency and quality, reduce the product costs and enhance the product competitiveness. In domestic and
overseas market, realize the transformation of marketing around value, strengthen the domestic sales channel
capacity building, strengthen the online and offline synergy, and increase the competitiveness.
The domestic market takes frequency leading, intelligent pilot, multi-door becoming stronger, back to back getting
bigger, air-cooling jump start as the thinking, makes reasonable planning, promote the products’ combination
ability, and enhance the domestic sales capacity by adjusting the product structure. Regarding the channel,
enhance the offline terminal sales ability through the price management, promotion management, user experience
management and other means, at the same time, enhance the online sales ability by creating e-commerce hot
products, enhancing after-sales service experience, and collaborative operations among all product lines and other
means.
In overseas markets, on the one hand, strengthen the market research, market planning and market promotion
capabilities; continuously adjust the product mix, transform from low end, low cost, low value to middle end,
middle price, and middle value; while also pull through the overseas factories, R&D, sales and the
full-value-chain, reduce the manufacturing costs, reduce the logistics costs, improve the human performance and
material efficiency and enhance the overall competitiveness of overseas products; export the semi-knocked down
business through technology and process, and achieve the local production in overseas. On the other hand,
gradually increase the team and product investments in brand, and promote the construction of overseas own
brands, realize the local marketing of self-owned brands in overseas, and increase the brand added value.
66
HEFEI MEILING CO., LTD. Annual Report 2017
(2) Air conditioning
Based on the company's intelligent development strategy, the company’s air-conditioning business will seize class
A frequency, energy saving, intelligence, health and other industrial bright spots, focus on the company’s
"Intelligent Home Eco-circle" plan, develop intelligent terminals, provide healthy and intelligent air solutions,
gradually build the triune business development model of intelligent equipment + application scenarios + social
sharing, based on the product, strengthen the transformation of basic research and application, take user
experience as the core, promote the “quality, taste and brand”, grasp the industry trends, create the quality
products, and form the comprehensive competitiveness of the industry by quickly creating the central
air-conditioning capacity. In addition, the air conditioning industry will seize the opportunities of coal to
electricity and home appliances energy-saving leader policy, improve product layout, and promote enterprise
transformation.
(3) Washing machine
On the one hand, focus on the industrial trend-oriented products and take the differentiated products as
breakthroughs to comprehensively improve the product quality and increase the product competitiveness; steadily
open up channels, take the cross-product line target assessment as a means and link, promote the synergy among
various product line business teams, and achieve the channel synergy, terminal synergy, team synergy, promotion
synergy, and promotion synergy.
On the other hand, the Company and Candy Group has co-founded a joint venture company to engage in the R&D
and sales of washing machines and complete the product differentiation by making use of the respective R&D and
business advantages of both parties; expand channels, serve customers, give full play to synergistic advantages,
achieve rapid promotion of product image and sales volume, expand the Company’s product market share,
enhance the Company’s core competitiveness and brand influence, and promote the Company’s profitability and
overall competitiveness. The Company is striving to be ranked in the top 8 of the washing machine’s market
rankings in the next three to five years, be ranked 5th in domestic brands, and become a mid- and high-end
washing machine brand with the first-class quality.
(4) Kitchen and bath, small household appliances
Based on kitchen and bath, develop purified water business and build core business. Take the concept of “smart
kitchen” as the main line, respectively focus on the core business to create competitive industries, achieve the
linkage development of multi-product lines, and highlight the leading advantages of intelligent products. Adhere
to the road of brand, products, and terminal image, build the smart kitchen, take the intelligent and wall-hung
stove as the entry point, and achieve the rapid growth of kitchen and bath and small household appliances
business.
(5) Bio-medical care
Under the guidance of the development strategy of “relevant diversification based on biomedical field”, the
Company continues to focus on life sciences, smart cold chain, and family health businesses. On the one hand, the
67
HEFEI MEILING CO., LTD. Annual Report 2017
Company will base on the technology and brand advantages of the existing ultra-low equipment, take the market
demand as the leader, and further strengthen the research on core technologies and the upgrading of core products.
On the other hand, combined with the development trend of cold chain logistics industry and the current situation
of the aging of the domestic population and the market demand for the integration of family prevention, treatment
and recovery, the Company will give full play to its brand, technology, and channel advantages in the biomedical
field, steadily and rapidly expand the business to cold chain warehousing and home health services, and actively
promote the construction of intelligent terminal equipment so as to provide the society with more efficient and
convenient public services.
(6) Intelligent life new business model
Fresh E-commerce: relying on cold-chain smart devices to carry out the fresh direct sales demonstration, and
guide the city operators to join; cold chain intelligentization: relying on fresh direct sales demonstration to
develop cold-chain smart devices and create business solutions, and achieve the multi-city expansion;
E-commerce platform: relying on the intelligent expansion of cold chain to build a national urban life service
platform.
The above business plan and business objectives do not represent the listed company’s profit forecast of 2018,
whether it can be achieved depends on the changes in market condition, the efforts of management team and other
factors, there are a lot of uncertainties, investors should pay special attention to it.
(IV) Possible risks and countermeasures
In 2018, the competition in the home appliance market will become more intense, and the survival environment
for enterprises will be even worse. In the future, the Company will face serious risks such as the severe industrial
situation, the intensified competition, the labor shortage, and the rise of raw material prices, transportation costs
and human resource costs, the new business models and the impact of internet age.
1. Impact of intensifying industry competition and declining broader market
China's home appliance industry is a complete competing industry, there are many domestic and foreign-funded
household appliances manufacturers providing products with a higher degree of homogenization and fierce
competition. With the withdrawal of national preferential policy, the industry broader market continues to decline,
the industry enters into aggressive growth from large-scale growth, the industry brand concentration further
strengthens, and the competition among the brands shows a new situation of oligarchy and giant competition. In
recent years, the transformation and upgrading of the industry have been speeding up, and the competition for new
energy efficiency in the industry has been normalized. Whoever can faster and more accurately grasp the
opportunity of new energy efficiency switching will be able to enhance the competitiveness of products to a
greater extent. If you can't accurately judge and follow the market dynamics of the industry, you may be
eliminated.
68
HEFEI MEILING CO., LTD. Annual Report 2017
2. Impact of cross-border Internet industry and challenges of new business model
With the arrival of Internet era and artificial intelligence era, the Internet enterprises continue to cross boarder and
swarm into intelligent home fields, which intensifies competition in the industry, subversive changes may occur at
any time, and traditional household appliance enterprises are facing serious challenges. At the same time, under
the impact of Internet economy and new business model, the home appliance manufacturers are actively
promoting the transformation, new business model and new products emerge one after another in the home
appliance industry, the development of intelligent home appliances changes quickly, if unable to make rapid
response or catch up with the development trend, it may be easily replaced or even completely subverted. New
rules of the game bring strong sense of crisis and sense of urgency to the enterprises.
3. Pressure of raw material price rising and transportation costs rising
In 2017, influence by the supply-side reform and product structure adjustment, price of raw materials goes up
dramatically; at the same time, the transportation costs greatly rise due to logistics industry’s governance to “three
excesses”. It is expected that the raw material price and logistics transportation costs will continue to run at high
prices in 2018, but the end product selling price will be unchanged or will be difficult to digest the impact of
rising raw materials prices, logistics costs and other key resource costs, which will bring greater operating
pressure to the company and further affect the company's profitability.
4. Human resources risk
Household appliance industry is an industry with relatively intensive capital, technology, and labor. With the
gradual expansion of the company's business scope and scale, and the arrival of intelligent home appliances and
the impact of Internet, the company will greatly increase the demands for high-level management personnel,
technical personnel, and innovative talents, talent introduction becomes one of the key points for human resources
management, if it cannot effectively enhance the company's attraction to high-quality talents from various aspects,
the company's future development will be subject to constraints. At the same time, in its intelligent manufacturing
transformation period, the company needs higher requirements to the technical capacity and professional quality
of workers at the production line, the improvement for the company's product quality will be influenced if the
comprehensive quality of workers at the production line can not be enhanced. In addition, with the increase in
orders, the demand for workers at the production line is increasing, but affected by the supply and demand in labor
market and the continuous rising labor costs, the company's cost pressure will be further enlarged.
Faced with the above risks, the Company will raise awareness of risk prevention, and make overall arrangements
in the product, technology, and market in advance, focus on the smooth implementation of the Company's
intelligent manufacturing, intelligent research and development, and smart life projects, capture the consumers’
demands, accurately grasp the product development, strengthen the innovation and drive of the Company’s
intelligent, variable frequency, fresh-keeping and deep cooling technologies, accelerated the implementation of the
Company’s intelligent strategy, promote the Company’s transformation and upgrading from front-end
manufacturing and back-end products to intelligence, advance the Company’s transformation and upgrading, meet
69
HEFEI MEILING CO., LTD. Annual Report 2017
the new pattern of competition in the industry, and enhance the Company’s core competitiveness. At present, the
Company has completed the industrial layout for integrated white goods, and will further strengthen the synergy
among each production line, and create a comprehensive household appliance enterprise with strong
competitiveness. At the same time, the Company has focused on the “Smart Home Ecosystem” plan, actively
explored the new paths for the transformation and upgrading of home appliance enterprises under the in-depth
development of internet technology, taken its own hardware products as the terminal, focused on food, air, water
and other needs to explore the new business model, seized the consumers’ needs, and provided users with a
complete set of solutions for smart white goods system, and ultimately achieved the leap from “Meiling
manufacturing” to “Meiling intelligent manufacturing” and driven the transformation and upgrade of the
Company’s profit model.
On the other hand, the company will implement the business policy of "product leading, marketing transformation,
efficiency upgrading and team activation " under the leadership of the board of directors and under the guidance
of "Meiling Dream": take globalization as a platform, and intelligent and frequency transformation as a
breakthrough, adhere to the intelligent and variable frequency product strategy unswervingly, promote
technological innovation, strengthen the research and development to intelligence, frequency, fresh-keeping,
forced air cooling, create intelligent, high-end products and personalized products, and enhance the company's
product competitiveness from quality, high end and fashion technology. Speed up the integration between online
and offline channels; under the help of digital marketing transformation, and intelligence manufacturing, improve
the turnover of inventory rapidly; pay attention to the development of overseas market, actively exploit
construction of the self-owned brand aboard, and speed up the pace of overseas mergers and acquisition; through
the comprehensive boosting of intelligent manufacturing projects, the promotion of “five -ization and two easy”,
and the continuous industry benchmarking activities, the overall operational efficiency of the Company will be
fully enhanced; the internal organizational changes and management mechanism innovation will be fully utilized
to activate the team’s independent innovation capabilities, provide institutional guarantees for the Company’s
sustainable and healthy development, and realize a sound and sustainable development of the Company.
X. Reception of research, communication and interview
(I) In the report period, reception of research, communication and interview
√ Applicable □Not applicable
Time Way Type Basic situation index of investigation
Field http://irm.cninfo.com.cn/ircs/ssgs/companyIrmForSzse.do?stockcod
2017-1-12 Institute
research e=000521
Field http://irm.cninfo.com.cn/ircs/ssgs/companyIrmForSzse.do?stockcod
2017-1-18 Institute
research e=000521
Field http://irm.cninfo.com.cn/ircs/ssgs/companyIrmForSzse.do?stockcod
2017-2-15 Institute
research e=000521
70
HEFEI MEILING CO., LTD. Annual Report 2017
Field http://irm.cninfo.com.cn/ircs/ssgs/companyIrmForSzse.do?stockcod
2017-2-24 Institute
research e=000521
Field http://irm.cninfo.com.cn/ircs/ssgs/companyIrmForSzse.do?stockcod
2017-4-20 Institute
research e=000521
Field http://irm.cninfo.com.cn/ircs/ssgs/companyIrmForSzse.do?stockcod
2017-5-11 Institute
research e=000521
Field http://irm.cninfo.com.cn/ircs/ssgs/companyIrmForSzse.do?stockcod
2017-5-25 Institute
research e=000521
Field http://irm.cninfo.com.cn/ircs/ssgs/companyIrmForSzse.do?stockcod
2017-6-14 Institute
research e=000521
Field http://irm.cninfo.com.cn/ircs/ssgs/companyIrmForSzse.do?stockcod
2017-7-6 Institute
research e=000521
Field http://irm.cninfo.com.cn/ircs/ssgs/companyIrmForSzse.do?stockcod
2017-11-28 Institute
research e=000521
Field http://irm.cninfo.com.cn/ircs/ssgs/companyIrmForSzse.do?stockcod
2017-11-29 Institute
research e=000521
Field http://irm.cninfo.com.cn/ircs/ssgs/companyIrmForSzse.do?stockcod
2017-12-14 Institute
research e=000521
Reception (times) 12
Number of hospitality 23
Number of individual reception 0
Number of other reception N/A
Disclosed, released or let out major undisclosed
No
information
71
HEFEI MEILING CO., LTD. Annual Report 2017
Section V. Important Events
I. Profit distribution plan of common stock and capitalizing of common reserves plan
(I) Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash
Dividend policy during the Reporting Period
√ Applicable □Not applicable
During the reporting period, the company has strictly executed the profit distribution policy in accordance with
the " Articles of Association", the formulation and implementation of the company's cash dividend policy are in
line with the provisions of "Articles of Association" and the requirements of the resolutions of shareholders'
meeting, the dividends standards and proportion have been definite and clear, relevant decision-making
procedures and mechanisms have been complete, the responsibilities of independent directors have been clear and
have played its due role, minority shareholders have had the opportunities to fully express their views and
aspirations, and the legitimate interests of minority shareholders have been maintained.
In the reporting period, the Company implemented Profit distribution plan for year of 2016, that is, distribute 0.6
Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on total share
capital 1,044,597,881 shares dated 31 December 2016 (including 881,733,881 shares of A-share and 162,864,000
shares of B-share), cash dividend of 62,675,872.86 Yuan was distributed in total.
Special explanation on cash dividend policy
Satisfy regulations of General Meeting or requirement
Y
of Article of Association (Y/N):
Well-defined and clearly dividend standards and
Y
proportion (Y/N):
Completed relevant decision-making process and
Y
mechanism (Y/N):
Independent directors perform duties completely and
Y
play a proper role (Y/N):
Minority shareholders have opportunity to express
opinions and demands totally and their legal rights are Y
fully protected (Y/N):
Condition and procedures are compliance and
transparent while the cash bonus policy adjusted or Y
changed (Y/N):
(II) Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan
(pre-plan) in latest three years (including the reporting period)
72
HEFEI MEILING CO., LTD. Annual Report 2017
1. Profit distribution plan for year of 2015
Distribute 0.6 Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on
total share capital 763,739,205 shares dated 31 December 2015, cash dividend of 45,824,352.27 Yuan was
distributed in total.
2. Profit distribution plan for year of 2016
Distribute 0.6 Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on
total share capital 1,044,597,881 shares dated 31 December 2016, cash dividend of 62,675,872.86 Yuan was
distributed in total.
3. Profit distribution plan for year of 2017
Distribute 0.6 Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on
total share capital 1,044,597,881 shares dated 31 December 2017, cash dividend of 62,675,872.86 Yuan was
distributed in total.
The pre-plan had been deliberated and approved by the board of directors, and it need to be submitted the annual
shareholders’ general meeting of 2017 for its consideration.
(III) Cash dividend of common stock in latest three years (including the reporting period)
In RMB
Net profit Ratio in net profit
attributable to attributable to
common stock common stock
Amount for cash Amount for cash Proportion for
Year for bonus shareholders of shareholders of
bonus (tax bonus by other cash bonus by
shares listed company in listed company
included) ways other ways
consolidation contained in
statement for consolidation
bonus year statement
2017 62,675,872.86 32,473,204.92 193.01% - -
2016 62,675,872.86 220,216,680.96 28.46% - -
2015 45,824,352.27 27,104,893.56 169.06% - -
(IV) The Company gains profits in reporting period and the retained profit of common stock shareholders
provided by parent company is positive but no plan of cash dividend proposed of common stock
□ Applicable √ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
√ Applicable □Not applicable
Bonus shares for every 10-share (Share) 0
Dividends for every 10-share (RMB) (Tax
0.6
included)
Shares added for every 10-share base 0
73
HEFEI MEILING CO., LTD. Annual Report 2017
(Share)
Equity base of distribution plan (Share) 1,044,597,881
Total cash dividend (RMB) (Tax included) 62,675,872.86
Distributable profits (RMB) 893,442,648.28
Ratio of cash dividend in total profit
100%
distribution
Cash dividend:
Distribute 0.6 Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on
total share capital 1,044,597,881 shares dated 31 December 2017, cash dividend of 62,675,872.86 Yuan was
distributed in total.
Detail explanation on profit distribution or capitalization from capital public reserve
After auditing by Shinewing Certified Public Accountants (LLP), in the year of 2017, net profit of the parent
company in individual statement amounted as RMB -220,729.76 Yuan. According to relevant regulations,
retained profit for the year ended counted as RMB 956,339,194.01 Yuan, after deducted the RMB
62,675,815.97 Yuan distributed for year of 2016, and minor change of the net profit for the year RMB
220,729.76 Yuan, the retained profit in individual statement of the parent company counted as RMB
893,442,648.28 Yuan accumulatively. In 2017, the net profit attributable to owners of parent company in
consolidate statement amounted as RMB 32,473,204.92 Yuan. In line with relevant regulations, the profit
achieved for the year of 2017 which is available for distribution amounted as RMB 32,473,204.92 Yuan,
deducted the RMB 62,675,815.97 Yuan distributed for year of 2016 and plus retained profit RMB
968,097,382.98 Yuan at beginning of the year, the retained profit ended as 2017 in consolidate statement
amounted as RMB 937,894,771.93 Yuan accumulatively.
According to the relevant laws and regulations and the provisions of "Articles of Association" and considering
the interests of the shareholders and the company's long-term development needs, the board of directors
approved the company to distribute the cash bonus of 0.6 Yuan per 10 stocks (including tax) to all shareholders
on the basis of the general capital of 1,044,597,881 stocks of December 31, 2017, totally the cash bonus
62,675,872.86 Yuan has been distributed (Including tax). After the distribution, the total share capital of the
company keeps the same, accumulates the remaining undistributed profits of 830,766,775.42 Yuan which is to
be distributed annually after carry-over.
This plan has been considered and passed by the board of directors, and needs to be submitted to 2017 annual
general meeting of the company for deliberation.
III. Implementation of commitment
(I) Commitments that the company, shareholders, actual controller, offeror, directors,
supervisors, senior management or other related parties have fulfilled during the reporting
period and have not yet fulfilled by the end of reporting period
√ Applicable □Not applicable
74
HEFEI MEILING CO., LTD. Annual Report 2017
Implemen
Commitment Acceptor Content Date Term
tation
1. The acquirer shall not engage in refrigerator business or
activity which competes or will compete with business of Strictly
Valid for long
Meiling Electrical Appliances Co., Ltd. (hereinafter referred implemen
term
to as the “Meiling Electrical Appliances”),or that which has ted
interest conflict with Meiling Electrical Appliances.
2. The acquirer promises to apply shareholders’ right on a
Sichuan About committed and Strictly
legal and reasonable manner and shall not take any action to Valid for long
Commitments Changhong promised in order to implemen
limit or affect the normal operation of Meiling Electrical term
made in Electric Co., prevent horizontal ted
Appliances.
acquisition Ltd. competition in the
2007-6-12
report or (hereinafter Acquisition Report of 3. For any opportunity to engage in competing business, the
equity change referred to as Hefei Meiling Co., acquirer will advise Meiling Electrical Appliances in written
report the “Sichuan Ltd. for engaging such business or not. If Meiling Electrical
Changhong”) Appliances gives no clear written reply as to whether
Strictly
engaging the competing business or not within 20 days after Valid for long
implemen
receipt of the aforesaid letter, it shall be deemed that it will term
ted
not engage in such business. The acquirer will only engage in
non-competing business provided that Meiling Electrical
Appliances confirms not to or is deemed to not engage in
such non-competing business.
1. It will not engage in such business or activity that
Commitment
Commitment competes with or has interest conflict with that of Meiling
regarding to reducing
made during Electrical Appliances except for the action taken for sake of Strictly
Sichuan and preventing Valid for long
the Meiling Electrical Appliances as required by Meiling 2010-6-24 implemen
Changhong competition with term
non-public Electrical Appliances. ted
Meiling Electrical
offer of 2010 2. The Company promises to apply shareholders’ right on a
Appliances
legal and reasonable manner and shall not take any action to
75
HEFEI MEILING CO., LTD. Annual Report 2017
limit or affect the normal operation of Meiling Electrical
Appliances.
3. In case that Meiling Electrical Appliances expects, on the
basis of its existing business, to expand its operation scope
into the business which the Company has already operated,
the Company agrees to grant pre emptive right to Meiling
Electrical Appliances regarding such business if the same
conditions are met, provided that the Company is still the
controlling shareholder or actual controller of Meiling
Electrical Appliances.
1. Measures will be adopted to prevent continued related
transaction with Meiling Electrical Appliances: as to the
related transaction that can not be prevented, it will sign
related transaction agreement with Meiling Electrical
Appliances under the market principles of “equally paid and
Commitment mutual benefit”, and fairly determined the transaction price
regarding to reducing according to the market prevailing standards.
Strictly
and standardizing Valid for long
2. Perform the necessary obligations to make related 2010-6-24 implemen
related transaction term
directors and related shareholder abstain from voting ted
with Meiling
according to relevant regulation, and observe legal procedure
Electrical Appliances
for approving related transaction and information disclosure
obligations.
3. Promise not to hurt legal interests of Meiling Electrical
Appliances and other shareholders through related
transaction.
76
HEFEI MEILING CO., LTD. Annual Report 2017
Commit to authorized Changhong Air Conditioning and Zhongshan Air Conditioning Strictly
Valid for long
Co., Ltd. (hereinafter referred to as the “Zhongshan Air Conditioning”) to use 2010-11-6 implemen
term
“Changhong” trademark and relevant patents for free. ted
1. Commit to disclose periodic reports on a truthful, accurate, complete, fair and
prompt manner, to disclose all the information that have important influences over
investors, to accept supervision under the CSRC and Shenzhen Stock Exchange.
2. Commit to make public clarification in respect of such information that is released
from any public media and may result in misleading influences on stock price once
the Company is aware of such information. Strictly
Valid for long
The Company 3. The directors, supervisors, senior management and core technicians of the 2011-1-7 implemen
term
Company will accept opinions and criticism from the social publics, and they will ted
not trade the Company’s securities, directly or indirectly, with any inside information
and other illegal methods. The Company promises that the documents submitted to
Shenzhen Stock Exchange exist no false statement or material omission, and no
relevant information will be disclosed during the application for listing without prior
content from Shenzhen Stock Exchange.
1. Since the property transfer didn’t involve the buildings and land currently used by
Strictly
Changhong Air Conditioning, Sichuan Changhong commits, upon the completion of Valid for long
implemen
equity transfer, to continue to lease such assets to Changhong Air Conditioning at term
Commitment ted
market price.
made in
2. After completion of this property transfer, Sichuan Changhong commits to manage
transfer of air Sichuan
to prevent new related transaction with Meiling Electrical Appliances. For those 2009-12-10
conditioning Changhong
which can not be prevented, Sichuan Changhong commits to determine the Strictly
assets Valid for long
transaction price based on market accepted methods, so as to ensure fairness of implemen
property term
related transaction and protection of the interest of Meiling Electrical Appliances. ted
3. Sichuan Changhong commits that it will not engage in air conditioning and
refrigerator business or activity which competes or will compete with business of
77
HEFEI MEILING CO., LTD. Annual Report 2017
Meiling Electrical Appliances, or that which has interest conflict with Meiling
Electrical Appliances.
1. Make promise not to reduce the shares of Meiling bought in every year during 2013-8-15;
Commitments
implementation of the performance incentive fund via any market ways in the later Three years after
by Annual 2014-7-3; Implemen
first year, which was allowed to be reduced by 50% according to the laws and current shares
performance 2015-7-21; ting
regulations in the second year, and the remaining 50% was allowed to be reduced in purchased
incentive Some of the 2017-6-20
the third year in accordance with the laws and regulations.
fund, Directors,
From the date
incentive supervisors and 2. The directors, supervisors and senior management promised to manage in
when annual
objects while senior accordance with the relevant management approaches in accordance with the
incentive fund
purchasing executives of "Company Law", "Securities Law" and "The Company’s shares held by the
plan deliberated
stock of the the Company as directors, supervisors and senior management of the listed company and its change 2013-8-15;
and approved by
Company well as other management rules", as objects of annual performance incentive fund of Meiling, 2014-7-3; Implemen
general meeting
with incentive including but not limited to: during his tenure, the shares transferred each year shall 2015-7-21; ting
to 6 moths after
performance objects not exceed 25% of the total number of shares held of the Company; shall not sell the 2017-6-20
director,
incentive shares of the Company within six months after bought it or purchase again six
supervisor and
funds and months after sold it; shall not transfer the shares held within six months after
senior executives
owned fund Dismission.
resigned
Sichuan 1. Based on market conditions and as allowed by laws and rules, multiple measures
Changhong were adopted adequately to increase shareholding of Meiling Appliances, so as to
Electric Co., demonstrate its firm confidence on the PRC economy and Meiling Appliances with
Commitments LTD and its actual actions, maintain sound development of capital market and promote
Strictly
of not to persons acting recovery of healthy market; Valid for long
2015-7-9 implemen
reducing the in concert term
ted
shares Changhong
2. The Company continued to support operation and development of listed company.
(Hong Kong)
It is committed to bringing steady and real return to investors.
Trading
Company
78
HEFEI MEILING CO., LTD. Annual Report 2017
Limited
14 October 2016
Sichuan Shares are not transfer within thirty-six (36) months since end of the private Implemen
2016-3-6 to 14 October
Changhong placement ting
2019
1. I hereby undertake not to deliver interests to other entities
or individuals without consideration or at unfair conditions,
nor to prejudice the Company’s interests by other means.
2. I hereby undertake to restrain my role related consumption
behaviors.
3. I hereby undertake not to conduct any investment and
consumption which is not related to performance of duties
Commitment
with utilization of any company assets. Till the
made during
the Commitment on 4. I hereby undertake that the remuneration system completion of
Directors and compensation of determined by the board of directors or the remuneration and projects invested
non-public
senior immediate dilution of examination committee be linked to implementation of the with the proceeds Implemen
offer in 2016 2016-2-23
executives of return arising from compensation of return measures. from this ting
the Company non-public issuance of non-public
5. In case that the Company adopts share based incentive
shares issuance of
plan in future, I hereby undertake that the exercise conditions
shares
of the incentive plan to be announced by the Company be
linked to implementation of the compensation of return
measures.
6. For the period from the date of this commitment to the
date of completion of this non-public issuance of shares, if
the CSRC makes other new regulatory requirements on
compensation of return measures and the commitment
thereof, and in case that the above commitments cannot
79
HEFEI MEILING CO., LTD. Annual Report 2017
satisfy these new requirements from the CSRC, I hereby
undertake to issue supplementary commitment in compliance
with the latest CSRC requirements.
As one of the principals responsible for compensation of
return measures, I, in case of break of the above
commitments or refuse to perform the above commitments,
agree to receive relevant punishment or to adopt relevant
administration measures according to the systems, rules and
regulations of the CSRC and Shenzhen Stock Exchange.
1. Promise to truly, accurately, completely, fairly and timely publish periodic reports,
disclose all information that has significant impacts on the investors, and accept the
supervision and management of China Securities Regulatory Commission and the
Shenzhen Stock Exchange.
2. Make commitments that the Company will publicly clarify in time after knowing
Strictly
any information on any public communications media that may cause misleading Valid for long
The Company 2016-10-12 implemen
influence on the stock price term
ted
3. The Company’s directors, supervisors and senior executives will listen carefully to
the opinions and criticisms of the public and never use any acquired inside
information and other improper means to directly or indirectly engage in the trading
activities of the Company's stock.
Six issuing
Promise that the restricted period of 2016 non-public offering of A shares of Meiling
object except 2016-10-14 to Implemen
subscribed this time is 12 months. 2016-9-9
Sichuan 2017-10-14 ting
Changhong
Perform the commitment promptly or
√ Yes □ No
not
80
HEFEI MEILING CO., LTD. Annual Report 2017
If the commitments is not fulfilled on
time, shall explain the specify reason Non-applicable
and the next work plan
Note: for the commitments completed and exemption for implementing in above mentioned table, the Company will not disclose in next ordinary report
81
HEFEI MEILING CO., LTD. Annual Report 2017
(II) Concerning assts or project of the Company, which has profit forecast, and reporting
period still in forecasting period, explain reasons of reaching the original profit forecast
□ Applicable √ Not applicable
IV. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in
period.
Disclosure date for specific
approval opinion on fund 2018-3-30
occupation from CPA
Disclosure index for specific Juchao website: www.cninfo.com.cn-- Specific Explanation on
approval opinion on fund Non-operational fund occupation from controlling shareholders and its related
occupation from CPA party for year of 2017 of Hefei Meiling Co., Ltd.
V. Explanation from Board of Directors, Supervisory Committee and Independent
Directors (if applicable) for “Qualified Opinion” that issued by CPA
□ Applicable √ Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and
calculation method compared with the financial report of last year
√ Applicable □ Not applicable
Found more in 35. Change of significant account policies and accounting estimates in IV.
Significant Accounting Policy and Accounting Estimation carried out in Section XI. Financial
Report.
VII. Major accounting errors within reporting period that needs retrospective
restatement
□ Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the
Company in the period.
VIII. Compare with last year’s financial report; explain changes in consolidation
statement’s scope
√ Applicable □Not applicable
In the reporting period, the consolidated financial statements of the Company cover 53
subsidiaries, including Sichuan Changhong Air Conditioning Co., Ltd., Zhongshan Changhong
Electric Co., Ltd. and Zhongke Meiling Cryogenic Technology Co., Ltd. Compared with the
previous year, during the reporting period, five subsidiaries are newly included in the consolidated
financial statements, thereinto, including the wholly-owned subsidiary “Zhongshan Hongling
82
HEFEI MEILING CO., LTD. Annual Report 2017
Trading Co., Ltd.” and “Hebei Hongmao Household Appliance Technology Co., Ltd. ” invested by
subsidiary Ridian Company; the “Guangzhou Changhong Trading Co., Ltd.” invested by subsidiary
Zhongshan Changhong; the “Zhongshan Hongyou Appliance Co., Ltd.” jointly invested by
subsidiary Zhongsan Changhong and Zhuhai Samyou Environment Tech. Co., Ltd.; the Meiling
CANDY Washing Machine Co., Ltd. invested jointly by the Company Candy Group; ”the
wholly-owned subsidiary “HongYuan Ground Energy Heat Pump Technology (Zhongshan) Co.,
Ltd.” invested by subsidiary HongYuan Ground Energy Heat Pump Technology Co., Ltd.
In addition, during the reporting period, six subsidiaries Xi'an Meizhilai Appliance Marketing
Co., Ltd., Hefei Meiling White Appliance Marketing Co., Ltd.., Hohhot Xiangyou Appliance
Marketing Co., Ltd., Urumchi Meiling Appliance Marketing Co., Ltd.., Lanzhou Meizhilai
Appliance Marketing Co., Ltd. and Mian Yang Appliance Marketing Co., Ltd. were no longer
included in the consolidated financial statements due to the liquidation.
More details can be seen in the report “VII. Changes in the scope of the merger” and “VIII.
Interests in other entities” of “Section XI Financial Report”
IX. Appointment and non-reappointment (dismissal) of CPA
(I) Accounting firm appointed
Name of domestic accounting firm Shine Wing Certified Public Accountants (LLP)
Remuneration for domestic accounting firm
120
(in 10 thousand Yuan)
Continuous life of auditing service for
9-year
domestic accounting firm
Name of domestic CPA Li Xifu, Xia Cuiqiong
Name of foreign accounting firm (if
N/A
applicable)
Remuneration for foreign accounting firm
N/A
(10 thousand Yuan) (if applicable)
Continuous life of auditing service for
N/A
foreign accounting firm (if applicable)
Name of foreign CPA (if applicable) N/A
(II) Re-appointed accounting firms in this period
□Yes √ No
(III) Appointment of internal control auditing accounting firm, financial consultant or sponsor
√ Applicable □Not applicable
In reporting period, Shine wing Certified Public Accountants (LLP) was appointed as audit
institute of internal control for the Company, auditing charge for internal control amounting as
RMB 250,000.
83
HEFEI MEILING CO., LTD. Annual Report 2017
As the sponsor and principal underwriter, Shen Wan HongYuan Securities Underwriting
Sponsor Co., Ltd. plays a continues supervision role in the period
X. Particular about suspended and delisting after annual report disclosed
□ Applicable √ Not applicable
XI. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period
XII. Significant lawsuits and arbitrations of the Company
□ Applicable √ Not applicable
(I) No significant lawsuits or arbitrations occurred in the reporting period.
(II) Some other significant lawsuits and arbitrations in the reporting period.
To maintain the independence and integrity of "Meiling" trademark and trade name, the
Company carried out serials of lawsuits, attribution and administration suits with “Meiling”
trademark and corporate name concerned, please found more in 2014 first quarter report, 2014
semi-annual report, the 2014 annual report disclosed respectively on April 19, 2014, August 12,
2014, and March 26, 2014 for the relevant progress. Up till now, enterprises that have no
relationship with our Company are inapplicable to “Meiling” trade name, for example, the
company name of Hefei Meiling Small Home Appliance Co., Ltd. and Anhui Meiling Home
Appliances Import & Export Co., Ltd. have been covered by the unified social credit code, and the
company name of Hefei Meiling Environmental Protection Equipment Technology Co., Ltd., Hefei
Meiling Purifying Equipment Technology Co., Ltd., Hefei Meiling Cabinet Electronics Co., Ltd.,
Hefei Meiling Vehicle Industry Co., Ltd., and Hefei Meiling Intelligent Technology Co., Ltd.
(formerly Hefei Meiling Communication Technology Co., Ltd., this enterprise changed the trade
name to “Hefei Meiling Intelligent Technology Co., Ltd.” without authorization) have been
changed and “Meiling” has been removed. However, Hefei Meiling Daily Electric Appliances
Co., Ltd. illegally used the trade name of “Meiling”, the Company is solving the issue by lawsuit
according to law, and the above enterprises no longer have right to use the “Meiling” trademark.
At present, only the kitchen ventilator, cooker, water heater, water purifiers and household
electrical appliances manufactured and sold by the Company and its wholly-owned subsidiary -
Hefei Meiling Group Holding Co., Ltd. and Guangdong Changhong Ridian Technology Co., Ltd.
are the company's regular products, any other small household appliances using same or similar
trademark as our company or using the trade name similar to the Company’s name are the
Company’s products. In view of the infringement to the Company’s trademark and trade name,
false propaganda and unfair competition in the market, the Company has carried out many ways
including administrative reports, criminal investigation and civil litigation to fight against
infringement and counterfeiting behavior in the whole country.
XIII. Penalty and rectification
84
HEFEI MEILING CO., LTD. Annual Report 2017
□ Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.
XIV. Integrity of the company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
During the reporting period, the Company and the controlling shareholders and the actual
controllers have had good reputation, and there is no large amount due unliquidated debt sentenced
by the court.
XV. Implementation of the company’s stock incentive plan, employee stock ownership
plan or other employee incentives
√ Applicable □Not applicable
Implementation for annual performance incentive fund
On August 9, 2012 and August 28, 2012, the Company considers the adoption of "Hefei
Meiling annual performance incentive fund implementation plan" (hereinafter referred to as ""
stimulus "") on the 16th meeting of the 7th board of directors and the 2012-second provisional
shareholders meeting. Details were disclosed on information disclosure media appointed by the
Company as "Securities Times", "Chinese Securities Daily", "Hong Kong Commercial Daily" and
the Juchao network (www.cninfo.com.cn) on August 10, 2012 and August 29th in the form of
announcement (No.: 2012-028, No.:2012-035).
1. Implementation about 2012, 2013 and 2014 performance incentive fund provision and
distribution plan
See details in "Implementation of the company's annual incentive fund" in "XV
Implementation of the company's stock incentive plan, employee stock ownership plan, or other
employee incentive measures" in "Section V Significant Events" of the company's "2016 Annual
Report" disclosed on March 30, 2017.
Up to the end of this reporting period, the company's stock purchased by some 2012 annual
performance incentive objects (non-directors, supervisors and senior management) and 2013 annual
performance incentive objects (non-directors, supervisors and senior management) with their
granted 2012 annual performance incentive funds and own funds and 2013 annual performance
incentive funds and own funds have been fully desterilized, the company's stock purchased by some
2014 annual performance incentive objects (non-directors, supervisors and senior management)
with their granted 2014 annual performance incentive funds and own funds has been desterilized by
50% for term of holding for two years, see below for the overall reducing holding-shares of some
above-mentioned incentive objects; Among the incentive objects, the current directors, supervisors
and senior management have not reduced the Company’s shares purchased by implementing 2012,
2013, and 2014 annual performance incentive plans.
2. The implementation of provision and allocation program of 2016 annual performance
incentive funds
85
HEFEI MEILING CO., LTD. Annual Report 2017
According to the “Incentive Plan” approved by the company, the audited operating results
and actual operation of the company in 2016 have met the requirements for awarding the annual
performance incentive funds. The company held the 29th meeting of the 8the Board of Directors
and the 15th meeting of the 8th Board of Supervisors and the Annual General Meeting of
Shareholders of 2016 on March 28, 2017 and May 4, 2017, the independent directors made
independent opinions, and the benefited directors abstained from voting, the meetings considered
and approved the “Proposal on the Provision for the Company's 2016 Annual Performance
Incentive Funds”. In addition, the company held the 32nd meeting of the 8th Board of Directors,
the 17th meeting of the 8th Board of Supervisors, and the first extraordinary general meeting of
shareholders in 2017 on June 2, 2017 and June 20, 2017, the independent directors made
independent opinions, and the benefited directors abstained from voting, the meetings considered
and approved the “Allocation Plan for the Company's 2016 Annual Performance Incentive
Funds”, the details are as follows:
(1) Incentive range and number of people: 39 eligible objects (senior management, middle
management, core technical staff and the core backbone staff).
(2) Source of funds: withdraw performance incentive funds of RMB 24,182,200 by 10% of the
audited net profits attributable to shareholders of listed companies in 2016, and allocate RMB 23.63
million of the withdrawn incentive funds to 39 incentive objects (senior management, middle
management, core technical staff and the core backbone staff) whom conform to national laws and
regulations and the requirements of “Incentive Plan”. The incentive objects purchase the
Company’s stock by their received performance incentive funds (after paying the relevant tax)
plus no less than 30% of their annual total remuneration (annual total remuneration except for the
performance incentive funds and after paying the corresponding income tax and five social
insurances and housing fund) through the open market.
(3) Shareholding situation: According to the provisions of “Incentive Plan” approved by the
company, in the premise of conforming to the listing rules of the Shenzhen Stock Exchange and
other applicable Chinese laws and regulation, the incentive objects promise to purchase the
Company’s stock through the open market within 60 working days (The time shall be postponed
in case of a period that the regulator requires the Company’s stock cannot be trade) after receiving
the performance incentive funds. As of the disclosure date of this report, this incentive plan is still
in progress.
(4) Changes in equity interests arising from disposal shares due to incentive objects: aim at
shares purchased by incentive objects without disposal during the reporting period.
(5) Commitment on restricted holding shares: according to the regulations of “Incentive
Plan” and the commitment of all incentive objects, the Company’ shares purchased by them shall
not be reduced by any market approach in the next year from the date of purchase, but the holding
shares can be reduced by 50% after the second year according to the laws and regulations, and the
remaining 50% can be reduced after the third year according to the laws and regulations. In addition,
some directors, supervisors and senior executives among the incentive objects promise to handle the
shares in accordance with the relevant management methods of the Company Law, the Securities
Law, and the Company’s Shares Held by the Directors, Supervisors and Senior Management of
List Company and the Shares’ Change Management Rules, including but not limited to: during the
86
HEFEI MEILING CO., LTD. Annual Report 2017
term of office, the annual transfer of shares shall not exceed 25% of the Company’s shares held by
oneself; cannot sell the Company’s share within 6 months after the purchase or repurchase within
six months after the sale; cannot transfer the company’s shares within six months after dimission.
See details on “Securities Times”, “China Securities Journal”, “Hong Kong Commercial
Daily” and www.cninfo.com.cn that the company disclosed in the form of announcement
(Announcement No. 2017-010, No. 2017-011, No. 2017-015, No. 2017-031, No. 2017-035, No.
2017-036, No. 2017-037, No. 2017-041, No. 2017-062, No. 2017-064, No. 2017-070, No.
2017-087, No. 2017-090, No. 2017-091, No. 2017-092, 2017 Semi Annual Report, Full text of the
third quarter 2017 Report) on 30 March 2017, 5 May 2017, 3 June 2017, 21 June 21 2017, 10
August 2017, 18 August 2017, 19 August 2017, 26 August 2017, 18 October 2017, 8 November
2017, 10 November 2017, 14 November 2017 and 17 November 2017
3. Shareholding and reducing of performance incentive objects of the Company
Ended as 31 December 2017, shares hold by all incentive objects amounting to 12,379,807
shares, a 1.1851 % in total share capital of the Company, including 10,689,914 A-share, a 1.0233%
in total share capital and 1,689,893 B-share, a 0.1618% in total share capital of the Company. Other
grantees of the 2012, 2013 and 2014 incentive plan (not being directors, supervisors and senior
management) have reduced holding of 4,134,008 in aggregate, accounting for about 0.3956% of the
total share capital, since September 2014 to the end of the reporting period, including reduced
holding of 571,431 in the reporting period.
XVI. Major related transaction
(I) Related transaction with routine operation concerned
√ Applicable □Not applicable
(1) Related transaction with routine operation concerned
87
HEFEI MEILING CO., LTD. Annual Report 2017
Trading
Whether
Related Proport limit Available
Related
Type of transaction ion in over the Clearing
Content of Pricing transaction approve similar Date of
Related Relationshi related amount similar form for
Serial related principl price (in 10 approved Index of disclosure
party p transact (in 10 transact d (in 10 related market disclosure
transaction e thousand
ion thousand ions limited or transaction
Yuan) thousan price
Yuan) (%)
not (Y/N)
d Yuan)
Electric
melting,
Controlling 2017-3-30; Juchao
Sichuan Commo resistors, Spot
shareholder 2017-5-5; Website(www.cninfo.com.c
Changhon dity integrated Marketi exchange,
1 and 35,306.58 35,306.58 2.53% 39,800 No -- 2017-8-22; n)No.:2017-013,2017-031,2
g Electric purchas circuit ng price Bank
ultimate 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd. ed accessory, acceptance
controller 2017-12-23 2017-096,2017-100
color
masterbatch
Sichuan
Changhon Controlling 2017-3-30; Juchao
Commo
g shareholder 2017-5-5; Website(www.cninfo.com.c
dity Sunstroke Marketi Spot
2 Electronic and 0.49 0.49 0.00% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
purchas supplies ng price exchange
s Holding ultimate 2017-9-13; 017-065,2017-066,2017-73,
ed
Group controller 2017-12-23 2017-096,2017-100
Co., Ltd.
Other
2017-3-30; Juchao
Huayi enterprise Commo Spot
2017-5-5; Website(www.cninfo.com.c
Compress control dity Compressor Marketi exchange,
3 37,169.68 37,169.68 2.67% 60,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
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2017-9-13; 017-065,2017-066,2017-73,
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2017-12-23 2017-096,2017-100
controlling
88
HEFEI MEILING CO., LTD. Annual Report 2017
shareholder
and ultimate
controller
Other
enterprise
Sichuan
control Spot 2017-3-30; Juchao
Changhon Commo
under the Plastic exchange, 2017-5-5; Website(www.cninfo.com.c
g Mold dity Marketi
4 same products 69,088.66 69,088.66 4.96% 71,500 No Bank and -- 2017-8-22; n)No.:2017-013,2017-031,2
Plastic purchas ng price
controlling etc. commercial 2017-9-13; 017-065,2017-066,2017-73,
Tech. Co., ed
shareholder acceptance 2017-12-23 2017-096,2017-100
Ltd.
and ultimate
controller
Other
enterprise
Sichuan control Spot 2017-3-30; Juchao
Commo Door shell,
Changhon under the exchange, 2017-5-5; Website(www.cninfo.com.c
dity baseboard, Marketi
5 g Jijia same 36,871.44 36,871.44 2.65% 39,600 No Bank and -- 2017-8-22; n)No.:2017-013,2017-031,2
purchas Sheet metal ng price
Fine Co., controlling commercial 2017-9-13; 017-065,2017-066,2017-73,
ed parts
Ltd. shareholder acceptance 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
Sichuan enterprise Spot 2017-3-30; Juchao
Commo
Changhon control exchange, 2017-5-5; Website(www.cninfo.com.c
dity Packing Marketi
6 g Package under the case, printed 11,148.32 11,148.32 0.80% 11,900 No Bank and -- 2017-8-22; n)No.:2017-013,2017-031,2
purchas matter etc. ng price
Printing same commercial 2017-9-13; 017-065,2017-066,2017-73,
ed
Co., Ltd. controlling acceptance 2017-12-23 2017-096,2017-100
shareholder
89
HEFEI MEILING CO., LTD. Annual Report 2017
and ultimate
controller
Other
Sichuan enterprise
Changhon control 2017-3-30; Juchao
Commo Printed
g under the 2017-5-5; Website(www.cninfo.com.c
dity board Marketi Bank
7 Precision same 5,904.39 5,904.39 0.42% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
purchas components ng price acceptance
Electronic controlling 2017-9-13; 017-065,2017-066,2017-73,
ed etc.
s Tech. shareholder 2017-12-23 2017-096,2017-100
Co., Ltd. and ultimate
controller
Other
enterprise
Sichuan
control 2017-3-30; Juchao
Changhon Commo
under the Power 2017-5-5; Website(www.cninfo.com.c
g New dity Marketi Spot
8 same supply, 3.09 3.09 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Energy purchas ng price exchange
controlling battery 2017-9-13; 017-065,2017-066,2017-73,
Technolog ed
shareholder 2017-12-23 2017-096,2017-100
y Co., Ltd.
and ultimate
controller
Other
enterprise
2017-3-30; Juchao
control Commo Spot
081 2017-5-5; Website(www.cninfo.com.c
under the dity Transformer Marketi exchange,
9 Electronic 334.84 334.84 0.02% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
same purchas etc. ng price Bank
Group 2017-9-13; 017-065,2017-066,2017-73,
controlling ed acceptance
2017-12-23 2017-096,2017-100
shareholder
and ultimate
90
HEFEI MEILING CO., LTD. Annual Report 2017
controller
Other
enterprise
Guangdon
control 2017-3-30; Juchao
g Commo Spot
under the 2017-5-5; Website(www.cninfo.com.c
Changhon dity Foam pieces Marketi exchange,
10 same 1,460.11 1,460.11 0.10% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
g purchas etc. ng price Bank
controlling 2017-9-13; 017-065,2017-066,2017-73,
Electronic ed acceptance
shareholder 2017-12-23 2017-096,2017-100
s Co., Ltd.
and ultimate
controller
Other
Sichuan
enterprise
Changhon
control 2017-3-30; Juchao
g Commo Spot
under the 2017-5-5; Website(www.cninfo.com.c
Intelligent dity Marketi exchange,
11 same Hand piece 253.85 253.85 0.02% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Manufact purchas ng price Bank
controlling 2017-9-13; 017-065,2017-066,2017-73,
uring ed acceptance
shareholder 2017-12-23 2017-096,2017-100
Technolog
and ultimate
y Co., Ltd.
controller
Other
enterprise
Sichuan 2017-3-30; Juchao
control Commo Spot
Changhon Sheet metal 2017-5-5; Website(www.cninfo.com.c
under the dity Marketi exchange,
12 g Xinrui parts, plastic 4,902.37 4,902.37 0.35% 12,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
same purchas ng price Bank
Technolog parts etc. 2017-9-13; 017-065,2017-066,2017-73,
controlling ed acceptance
y Co., Ltd 2017-12-23 2017-096,2017-100
shareholder
and ultimate
91
HEFEI MEILING CO., LTD. Annual Report 2017
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Commo
Zhiyijia under the 2017-5-5; Website(www.cninfo.com.c
dity Electronic Marketi Spot
13 Network same 0.92 0.92 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
purchas products ng price exchange
Technolog controlling 2017-9-13; 017-065,2017-066,2017-73,
ed
y Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
control 2017-3-30; Juchao
Sichuan Commo
under the 2017-5-5; Website(www.cninfo.com.c
Huafeng dity electric Marketi Spot
14 same 1.40 1.4 0.00% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Corp. purchas device ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
Group ed
shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
Sichuan enterprise
PCB, 2017-3-30; Juchao
Changhon control Commo Spot
remote 2017-5-5; Website(www.cninfo.com.c
g under the dity Marketi exchange,
15 control, 4,112.64 4,112.64 0.30% 4,100 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Electronic same purchas ng price Bank
transformer, 2017-9-13; 017-065,2017-066,2017-73,
Products controlling ed acceptance
etc 2017-12-23 2017-096,2017-100
Co., Ltd. shareholder
and ultimate
92
HEFEI MEILING CO., LTD. Annual Report 2017
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Commo
Changhon under the 2017-5-5; Website(www.cninfo.com.c
dity Marketi Spot
16 g Property same bonsai 0.04 0.04 0.00% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
purchas ng price exchange
Service controlling 2017-9-13; 017-065,2017-066,2017-73,
ed
Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
Sichuan control Spot 2017-3-30; Juchao
Commo
Ailian under the exchange, 2017-5-5; Website(www.cninfo.com.c
dity Internet Marketi
17 Science & same 677.33 677.33 0.05% 6,000 No Bank and -- 2017-8-22; n)No.:2017-013,2017-031,2
purchas module ng price
Technolog controlling commercial 2017-9-13; 017-065,2017-066,2017-73,
ed
y Co., Ltd. shareholder acceptance 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
Sichuan enterprise
2017-3-30; Juchao
Changhon control Commo Digital
2017-5-5; Website(www.cninfo.com.c
g under the dity module Marketi Spot
18 5.03 5.03 0.00% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Education same purchas components, ng price exchange
2017-9-13; 017-065,2017-066,2017-73,
Technolog controlling ed etc.
2017-12-23 2017-096,2017-100
y Co., Ltd. shareholder
and ultimate
93
HEFEI MEILING CO., LTD. Annual Report 2017
controller
Sichuan
Changhon Controlling 2017-3-30; Juchao
g shareholder Accept 2017-5-5; Website(www.cninfo.com.c
Regular bus Marketi Spot
19 Electronic and the 19.72 19.72 0.01% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
fee ng price exchange
s Holding ultimate services 2017-9-13; 017-065,2017-066,2017-73,
Group controller 2017-12-23 2017-096,2017-100
Co., Ltd.
Information
Controlling 2017-3-30; Juchao
Sichuan system Spot
shareholder Accept 2017-5-5; Website(www.cninfo.com.c
Changhon services, Marketi exchange,
20 and the 1,983.75 1,983.75 1.11% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
g Electric repair fees, ng price Bank
ultimate services 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd. shared acceptance
controller 2017-12-23 2017-096,2017-100
service fees
Other
enterprise
Sichuan
control 2017-3-30; Juchao
Changhon Transportati Spot
under the Accept 2017-5-5; Website(www.cninfo.com.c
g on, storage, Marketi exchange,
21 same the 55,778.60 55,778.60 31.13% 58,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Minsheng loading and ng price Bank
controlling services 2017-9-13; 017-065,2017-066,2017-73,
Logistics unloading acceptance
shareholder 2017-12-23 2017-096,2017-100
Co., LTD
and ultimate
controller
Sichuan Other 2017-3-30; Juchao
Accept after-sale Spot
Service enterprise Marketi 2017-5-5; Website(www.cninfo.com.c
22 the maintenance 13,596.57 13,596.57 7.59% 20,000 No exchange, --
Exp. control ng price 2017-8-22; n)No.:2017-013,2017-031,2
services ,Installation Bank
Appliance under the 2017-9-13; 017-065,2017-066,2017-73,
94
HEFEI MEILING CO., LTD. Annual Report 2017
Service same , etc. acceptance 2017-12-23 2017-096,2017-100
Chain Co., controlling
Ltd. shareholder
and ultimate
controller
Other
enterprise
control 2017-3-30; Juchao
Sichuan
under the Accept 2017-5-5; Website(www.cninfo.com.c
Hongxin Software Marketi Spot
23 same the 133.53 133.53 0.07% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Software usage fee ng price exchange
controlling services 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd.
shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
Guangdon
control 2017-3-30; Juchao
g
under the Accept Security 2017-5-5; Website(www.cninfo.com.c
Changhon Marketi Spot
24 same the service 85.48 85.48 0.05% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
g ng price exchange
controlling services charge 2017-9-13; 017-065,2017-066,2017-73,
Electronic
shareholder 2017-12-23 2017-096,2017-100
s Co., Ltd.
and ultimate
controller
Other 2017-3-30; Juchao
Sichuan maintenance
enterprise Accept 2017-5-5; Website(www.cninfo.com.c
Jiahong fee ,Busines Marketi Spot
25 control the 51.76 51.76 0.03% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Industrial s activity ng price exchange
under the services 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd. fee
same 2017-12-23 2017-096,2017-100
95
HEFEI MEILING CO., LTD. Annual Report 2017
controlling
shareholder
and ultimate
controller
Other
enterprise
Sichuan
control 2017-3-30; Juchao
Changhon
under the Accept 2017-5-5; Website(www.cninfo.com.c
g Business Marketi Spot
26 same the 34.94 34.94 0.02% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Internatio activity fee ng price exchange
controlling services 2017-9-13; 017-065,2017-066,2017-73,
nal Hotel
shareholder 2017-12-23 2017-096,2017-100
Co., Ltd.
and ultimate
controller
Other
enterprise
CHANGH control 2017-3-30; Juchao
ONG(HK) under the Accept 2017-5-5; Website(www.cninfo.com.c
Sales Marketi Spot
27 TRADIN same the 23.75 23.75 0.01% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
expense ng price exchange
GLIMITE controlling services 2017-9-13; 017-065,2017-066,2017-73,
D shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Sichuan Other
2017-3-30; Juchao
Changhon enterprise
Accept 2017-5-5; Website(www.cninfo.com.c
g control Marketi Spot
28 the Ticket fees 22.60 22.6 0.01% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Internatio under the ng price exchange
services 2017-9-13; 017-065,2017-066,2017-73,
nal Travel same
2017-12-23 2017-096,2017-100
Service controlling
96
HEFEI MEILING CO., LTD. Annual Report 2017
Co., Ltd. shareholder
and ultimate
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Managemen
Changhon under the Accept 2017-5-5; Website(www.cninfo.com.c
t fee and Marketi Spot
29 g Property same the 94.50 94.5 0.05% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
maintenance ng price exchange
Service controlling services 2017-9-13; 017-065,2017-066,2017-73,
fee
Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
control 2017-3-30; Juchao
Sichuan
under the Accept Laboratory 2017-5-5; Website(www.cninfo.com.c
Hongwei Marketi Spot
30 same the technical 49.72 49.72 0.03% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Technolog ng price exchange
controlling services service fee 2017-9-13; 017-065,2017-066,2017-73,
y Co., Ltd.
shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
Sichuan enterprise 2017-3-30; Juchao
Zhiyijia control Accept 2017-5-5; Website(www.cninfo.com.c
Platform Marketi Spot
31 Network under the the 397.37 397.37 0.22% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
cost ng price exchange
Technolog same services 2017-9-13; 017-065,2017-066,2017-73,
y Co., Ltd. controlling 2017-12-23 2017-096,2017-100
shareholder
97
HEFEI MEILING CO., LTD. Annual Report 2017
and ultimate
controller
Other
enterprise
Lejiayi control 2017-3-30; Juchao
Chain under the Accept 2017-5-5; Website(www.cninfo.com.c
Advertising Marketi Spot
32 Managem same the 2.26 2.26 0.00% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
fee ng price exchange
ent Co., controlling services 2017-9-13; 017-065,2017-066,2017-73,
Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Changhon under the Accept 2017-5-5; Website(www.cninfo.com.c
Communica Marketi Spot
33 g Network same the 5.08 5.08 0.00% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
tion fee ng price exchange
Technolog controlling services 2017-9-13; 017-065,2017-066,2017-73,
y Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Sichuan Other
Changhon enterprise
2017-3-30; Juchao
g control
Accept Engineering 2017-5-5; Website(www.cninfo.com.c
Intelligent under the Marketi Spot
34 the maintenance 19.66 19.66 0.01% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Manufact same ng price exchange
services fee 2017-9-13; 017-065,2017-066,2017-73,
uring controlling
2017-12-23 2017-096,2017-100
Technolog shareholder
y Co., Ltd. and ultimate
98
HEFEI MEILING CO., LTD. Annual Report 2017
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Plastic
Changhon under the Accept 2017-5-5; Website(www.cninfo.com.c
removal Marketi Spot
35 g Jijia same the 0.18 0.18 0.00% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
processing ng price exchange
Fine Co., controlling services 2017-9-13; 017-065,2017-066,2017-73,
fee
Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
Sichuan enterprise
Changhon control 2017-3-30; Juchao
g Gerun under the Accept 2017-5-5; Website(www.cninfo.com.c
Waste Marketi Spot
36 Renewabl same the 7.32 7.32 0.00% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
disposal fee ng price exchange
e controlling services 2017-9-13; 017-065,2017-066,2017-73,
Resources shareholder 2017-12-23 2017-096,2017-100
Co., Ltd. and ultimate
controller
Other
enterprise
2017-3-30; Juchao
Shenzhen control
Accept 2017-5-5; Website(www.cninfo.com.c
Yijia’en under the software Marketi Spot
37 the 21.02 21.02 0.01% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Technolog same R & D cost ng price exchange
services 2017-9-13; 017-065,2017-066,2017-73,
y Co. Ltd. controlling
2017-12-23 2017-096,2017-100
shareholder
and ultimate
99
HEFEI MEILING CO., LTD. Annual Report 2017
controller
Controlling 2017-3-30; Juchao
Sichuan Purchas Spot
shareholder Water, 2017-5-5; Website(www.cninfo.com.c
Changhon e fuel Marketi exchange,
38 and electricity 1,987.99 1,987.99 0.14% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
g Electric and ng price Bank
ultimate and gas 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd. power acceptance
controller 2017-12-23 2017-096,2017-100
Other
enterprise
control 2017-3-30; Juchao
Huayi Purchas Spot
under the 2017-5-5; Website(www.cninfo.com.c
Compress e fuel Compressed Marketi exchange,
39 same 59.10 59.10 0.00% 65 No -- 2017-8-22; n)No.:2017-013,2017-031,2
or Co., and air ng price Bank
controlling 2017-9-13; 017-065,2017-066,2017-73,
Ltd. power acceptance
shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
Guangdon
control Water, 2017-3-30; Juchao
g Purchas
under the electricity 2017-5-5; Website(www.cninfo.com.c
Changhon e fuel Marketi Spot
40 same and 130.57 130.57 0.01% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
g and ng price exchange
controlling compressed 2017-9-13; 017-065,2017-066,2017-73,
Electronic power
shareholder air 2017-12-23 2017-096,2017-100
s Co., Ltd.
and ultimate
controller
Sichuan Other Purchas Water and Marketi Spot 2017-3-30; Juchao
41 0.48 0.48 0.00% 6,000 No --
Jiahong enterprise e fuel electricity ng price exchange 2017-5-5; Website(www.cninfo.com.c
100
HEFEI MEILING CO., LTD. Annual Report 2017
Industrial control and fee 2017-8-22; n)No.:2017-013,2017-031,2
Co., Ltd. under the power 2017-9-13; 017-065,2017-066,2017-73,
same 2017-12-23 2017-096,2017-100
controlling
shareholder
and ultimate
controller
Other
Hefei enterprise
Changhon control 2017-3-30; Juchao
Purchas
g New under the 2017-5-5; Website(www.cninfo.com.c
e fuel Electricity Marketi Spot
42 Energy same 39.55 39.55 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
and fee ng price exchange
Science & controlling 2017-9-13; 017-065,2017-066,2017-73,
power
Technolog shareholder 2017-12-23 2017-096,2017-100
y Co., Ltd. and ultimate
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Purchas
Changhon under the Water and 2017-5-5; Website(www.cninfo.com.c
e fuel Marketi Spot
43 g Property same electricity 3.76 3.76 0.00% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
and ng price exchange
Service controlling fee 2017-9-13; 017-065,2017-066,2017-73,
power
Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Sichuan Controlling Air Spot 2017-3-30; Juchao
Sales of Marketi
44 Changhon shareholder conditioner, 127,288.97 127,288.97 7.58% 141,000 No exchange, -- 2017-5-5; Website(www.cninfo.com.c
goods ng price
g Electric and air purifier, Bank 2017-8-22; n)No.:2017-013,2017-031,2
101
HEFEI MEILING CO., LTD. Annual Report 2017
Co., Ltd. ultimate etc. acceptance 2017-9-13; 017-065,2017-066,2017-73,
controller 2017-12-23 2017-096,2017-100
Sichuan
Changhon Controlling 2017-3-30; Juchao
g shareholder 2017-5-5; Website(www.cninfo.com.c
Sales of Food and air Marketi Spot
45 Electronic and 102.53 102.53 0.01% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods conditioning ng price exchange
s Holding ultimate 2017-9-13; 017-065,2017-066,2017-73,
Group controller 2017-12-23 2017-096,2017-100
Co., Ltd.
Other
enterprise
Sichuan control 2017-3-30; Juchao
Color board,
Changhon under the Bank and 2017-5-5; Website(www.cninfo.com.c
Sales of door shell Marketi
46 g Jijia same 6,714.31 6,714.31 0.40% 7,000 No commercial -- 2017-8-22; n)No.:2017-013,2017-031,2
goods and other ng price
Fine Co., controlling acceptance 2017-9-13; 017-065,2017-066,2017-73,
components
Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
Sichuan
control 2017-3-30; Juchao
Changhon Color
under the 2017-5-5; Website(www.cninfo.com.c
g Mold Sales of Masterbatch Marketi Bank
47 same 11,200.34 11,200.34 0.67% 17,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Plastic goods , plastic ng price acceptance
controlling 2017-9-13; 017-065,2017-066,2017-73,
Tech. Co., particle
shareholder 2017-12-23 2017-096,2017-100
Ltd.
and ultimate
controller
102
HEFEI MEILING CO., LTD. Annual Report 2017
Other
enterprise
Lejiayi control Refrigerator 2017-3-30; Juchao
Spot
Chain under the , washing 2017-5-5; Website(www.cninfo.com.c
Sales of Marketi exchange,
48 Managem same machine ,air 744.44 744.44 0.04% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods ng price Bank
ent Co., controlling conditioners 2017-9-13; 017-065,2017-066,2017-73,
acceptance
Ltd. shareholder , etc. 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
PT.CHAN control 2017-3-30; Juchao
refrigerators
GHONGE under the 2017-5-5; Website(www.cninfo.com.c
Sales of ,and air Marketi Spot
49 LECTRIC same 2.62 2.62 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods conditioning ng price exchange
INDONE controlling 2017-9-13; 017-065,2017-066,2017-73,
spare parts
SIA shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
CHANGH control 2017-3-30; Juchao
Refrigerator
ONG(HK) under the 2017-5-5; Website(www.cninfo.com.c
Sales of , freezers, Marketi Spot
50 TRADIN same 36,525.50 36,525.50 2.17% 45,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods air ng price exchange
GLIMITE controlling 2017-9-13; 017-065,2017-066,2017-73,
conditioner
D shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
103
HEFEI MEILING CO., LTD. Annual Report 2017
Other
enterprise
CHANGH control 2017-3-30; Juchao
ONGELE under the 2017-5-5; Website(www.cninfo.com.c
Sales of Refrigerator Marketi Spot
51 CTRIC(A same 1,946.83 1,946.83 0.12% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods , freezer ng price exchange
USTRALI controlling 2017-9-13; 017-065,2017-066,2017-73,
A) shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
control 2017-3-30; Juchao
Sichuan
under the 2017-5-5; Website(www.cninfo.com.c
Hongwei Sales of Food and air Marketi Spot
52 same 13.50 13.5 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Technolog goods conditioning ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
y Co., Ltd.
shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Changhon under the 2017-5-5; Website(www.cninfo.com.c
Sales of Marketi Spot
53 g Devices same Food 1.81 1.81 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods ng price exchange
Technolog controlling 2017-9-13; 017-065,2017-066,2017-73,
y Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
104
HEFEI MEILING CO., LTD. Annual Report 2017
Other
enterprise
Sichuan
control 2017-3-30; Juchao
Changhon Spot
under the Refrigerator 2017-5-5; Website(www.cninfo.com.c
g Sales of Marketi exchange,
54 same , air 285.09 285.09 0.02% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Minsheng goods ng price Bank
controlling conditioner 2017-9-13; 017-065,2017-066,2017-73,
Logistics acceptance
shareholder 2017-12-23 2017-096,2017-100
Co., LTD
and ultimate
controller
Other
Sichuan enterprise
Service control 2017-3-30; Juchao
Spot
Exp. under the 2017-5-5; Website(www.cninfo.com.c
Sales of Maintenanc Marketi exchange,
55 Appliance same 1,780.47 1,780.47 0.11% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods e parts ng price Bank
Service controlling 2017-9-13; 017-065,2017-066,2017-73,
acceptance
Chain Co., shareholder 2017-12-23 2017-096,2017-100
Ltd. and ultimate
controller
Other
Sichuan enterprise
Changhon control 2017-3-30; Juchao
g Gerun under the 2017-5-5; Website(www.cninfo.com.c
Sales of Waste Marketi Bank
56 Renewabl same 1,579.82 1,579.82 0.09% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods materials ng price acceptance
e controlling 2017-9-13; 017-065,2017-066,2017-73,
Resources shareholder 2017-12-23 2017-096,2017-100
Co., Ltd. and ultimate
controller
105
HEFEI MEILING CO., LTD. Annual Report 2017
Other
enterprise
Hefei control Air 2017-3-30; Juchao
Changhon under the conditioners 2017-5-5; Website(www.cninfo.com.c
Sales of Marketi Bank
57 g same , 70.56 70.56 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods ng price acceptance
Industrial controlling refrigerators 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd. shareholder , etc 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
control 2017-3-30; Juchao
Sichuan
under the 2017-5-5; Website(www.cninfo.com.c
Huafeng Sales of Food and air Marketi Spot
58 same 18.34 18.34 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Corp. goods conditioning ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
Group
shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
Refrigerator
Sichuan control Spot 2017-3-30; Juchao
, freezers,
Zhiyijia under the exchange, 2017-5-5; Website(www.cninfo.com.c
Sales of air Marketi
59 Network same 225,620.35 225,620.35 13.43% 250,000 No Bank and -- 2017-8-22; n)No.:2017-013,2017-031,2
goods conditioner, ng price
Technolog controlling commercial 2017-9-13; 017-065,2017-066,2017-73,
washing
y Co., Ltd. shareholder acceptance 2017-12-23 2017-096,2017-100
machine
and ultimate
controller
106
HEFEI MEILING CO., LTD. Annual Report 2017
Other
enterprise
control 2017-3-30; Juchao
Sichuan
under the 2017-5-5; Website(www.cninfo.com.c
Changhon Sales of Air-conditio Marketi Spot
60 same 322.07 322.07 0.02% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
g Property goods ner ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd.
shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Changhon under the 2017-5-5; Website(www.cninfo.com.c
Sales of Food and air Marketi Spot
61 g Network same 20.30 20.3 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods conditioning ng price exchange
Technolog controlling 2017-9-13; 017-065,2017-066,2017-73,
y Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
Sichuan enterprise
Changhon control 2017-3-30; Juchao
g under the 2017-5-5; Website(www.cninfo.com.c
Sales of Marketi Spot
62 Intelligent same Food 0.75 0.75 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods ng price exchange
Health controlling 2017-9-13; 017-065,2017-066,2017-73,
Technolog shareholder 2017-12-23 2017-096,2017-100
y Co., Ltd. and ultimate
controller
107
HEFEI MEILING CO., LTD. Annual Report 2017
Other
enterprise
Sichuan control 2017-3-30; Juchao
Changhon under the 2017-5-5; Website(www.cninfo.com.c
Sales of Food and air Marketi Spot
63 g Property same 5.17 5.17 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods conditioning ng price exchange
Service controlling 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
control 2017-3-30; Juchao
Sichuan
under the 2017-5-5; Website(www.cninfo.com.c
Huanyu Sales of Air-conditio Marketi Spot
64 same 12.10 12.1 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Industrial goods ner ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
Co. Ltd.
shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Spot
Changhon under the 2017-5-5; Website(www.cninfo.com.c
Sales of Marketi exchange,
65 g Xinrui same Food 2.97 2.97 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods ng price Bank
Technolog controlling 2017-9-13; 017-065,2017-066,2017-73,
acceptance
y Co., Ltd shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
108
HEFEI MEILING CO., LTD. Annual Report 2017
Other
Sichuan
enterprise
Changhon
control 2017-3-30; Juchao
g
under the 2017-5-5; Website(www.cninfo.com.c
Intelligent Sales of Marketi Spot
66 same Food 2.76 2.76 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Manufact goods ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
uring
shareholder 2017-12-23 2017-096,2017-100
Technolog
and ultimate
y Co., Ltd.
controller
Other
enterprise
Mianyang
control 2017-3-30; Juchao
Technolog
under the 2017-5-5; Website(www.cninfo.com.c
y Town Sales of Marketi Spot
67 same Food 0.37 0.37 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Big Data goods ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
Technolog
shareholder 2017-12-23 2017-096,2017-100
y Co., Ltd.
and ultimate
controller
Other
enterprise
control 2017-3-30; Juchao
BVCH
under the 2017-5-5; Website(www.cninfo.com.c
Optronics Sales of Marketi Spot
68 same Food 3.13 3.13 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
(Sichuan) goods ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd.
shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
109
HEFEI MEILING CO., LTD. Annual Report 2017
Other
enterprise
Sichuan
control 2017-3-30; Juchao
Changhon
under the 2017-5-5; Website(www.cninfo.com.c
g Sales of Food and air Marketi Spot
69 same 26.32 26.32 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Electronic goods conditioning ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
Products
shareholder 2017-12-23 2017-096,2017-100
Co., Ltd.
and ultimate
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Changhon under the 2017-5-5; Website(www.cninfo.com.c
Sales of Marketi Spot
70 g Group same Food 4.05 4.05 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods ng price exchange
Finance controlling 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Changhon under the 2017-5-5; Website(www.cninfo.com.c
Sales of Marketi Bank
71 g Package same Food 5.80 5.8 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods ng price acceptance
Printing controlling 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
110
HEFEI MEILING CO., LTD. Annual Report 2017
Other
enterprise
Sichuan control 2017-3-30; Juchao
Changhon under the 2017-5-5; Website(www.cninfo.com.c
Sales of Food and air Marketi Spot
72 g Power same 36.02 36.02 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods conditioning ng price exchange
Source controlling 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
Sichuan
control 2017-3-30; Juchao
Changhon
under the 2017-5-5; Website(www.cninfo.com.c
g Sales of Food and air Marketi Spot
73 same 330.36 330.36 0.02% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Education goods conditioning ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
Technolog
shareholder 2017-12-23 2017-096,2017-100
y Co., Ltd.
and ultimate
controller
Other
enterprise
control 2017-3-30; Juchao
081 under the 2017-5-5; Website(www.cninfo.com.c
Sales of Air-conditio Marketi Spot
74 Electronic same 12.78 12.78 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods ner ng price exchange
Group controlling 2017-9-13; 017-065,2017-066,2017-73,
shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
111
HEFEI MEILING CO., LTD. Annual Report 2017
Other
GuangYu enterprise
an control Air 2017-3-30; Juchao
Changhon under the conditioners 2017-5-5; Website(www.cninfo.com.c
Sales of Marketi Spot
75 g same , 122.00 122 0.01% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods ng price exchange
Electronic controlling refrigerators 2017-9-13; 017-065,2017-066,2017-73,
Technolog shareholder , etc 2017-12-23 2017-096,2017-100
y Co., Ltd. and ultimate
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Ailian under the 2017-5-5; Website(www.cninfo.com.c
Sales of Food and air Marketi Spot
76 Science & same 33.97 33.97 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods conditioning ng price exchange
Technolog controlling 2017-9-13; 017-065,2017-066,2017-73,
y Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
Sichuan enterprise
Changhon control 2017-3-30; Juchao
g under the 2017-5-5; Website(www.cninfo.com.c
Sales of Marketi Spot
77 Innovatio same Food 0.06 0.06 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods ng price exchange
n controlling 2017-9-13; 017-065,2017-066,2017-73,
Investmen shareholder 2017-12-23 2017-096,2017-100
t Co., Ltd. and ultimate
controller
112
HEFEI MEILING CO., LTD. Annual Report 2017
Other
enterprise
GuangYu
control 2017-3-30; Juchao
an
under the 2017-5-5; Website(www.cninfo.com.c
Hongchen Sales of Marketi Spot
78 same Food 0.10 0.1 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
g goods ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
Industrial
shareholder 2017-12-23 2017-096,2017-100
Co., Ltd.
and ultimate
controller
Other
enterprise
Sichuan
control 2017-3-30; Juchao
Changhon
under the 2017-5-5; Website(www.cninfo.com.c
g Energy Sales of Food and air Marketi Spot
79 same 1.45 1.45 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Sunshine goods conditioning ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
Technolog
shareholder 2017-12-23 2017-096,2017-100
y Co., Ltd.
and ultimate
controller
Other
enterprise
Sichuan
control 2017-3-30; Juchao
Changhon
under the 2017-5-5; Website(www.cninfo.com.c
g Sales of Marketi Spot
80 same Food 1.18 1.18 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Electronic goods ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
Technolog
shareholder 2017-12-23 2017-096,2017-100
y Co., Ltd.
and ultimate
controller
113
HEFEI MEILING CO., LTD. Annual Report 2017
Other
enterprise
control 2017-3-30; Juchao
Sichuan
under the 2017-5-5; Website(www.cninfo.com.c
Hongxin Sales of Marketi Spot
81 same Food 2.35 2.35 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Software goods ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd.
shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Hongchen under the 2017-5-5; Website(www.cninfo.com.c
Sales of Food and air Marketi Spot
82 g Real same 13.34 13.34 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods conditioning ng price exchange
Estate controlling 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
control 2017-3-30; Juchao
Sichuan
under the 2017-5-5; Website(www.cninfo.com.c
Jiahong Sales of Food and air Marketi Spot
83 same 11.50 11.5 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Industrial goods conditioning ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd.
shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
114
HEFEI MEILING CO., LTD. Annual Report 2017
Other
enterprise
Sichuan
control 2017-3-30; Juchao
Changhon
under the 2017-5-5; Website(www.cninfo.com.c
g New Sales of Food and air Marketi Spot
84 same 147.86 147.86 0.01% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Energy goods conditioning ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
Technolog
shareholder 2017-12-23 2017-096,2017-100
y Co., Ltd.
and ultimate
controller
Other
enterprise
Sichuan
control 2017-3-30; Juchao
Changhon
under the 2017-5-5; Website(www.cninfo.com.c
g Sales of Air Marketi Spot
85 same 24.24 24.24 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Internatio goods conditioning ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
nal Hotel
shareholder 2017-12-23 2017-096,2017-100
Co., Ltd.
and ultimate
controller
Other
enterprise
Sichuan
control 2017-3-30; Juchao
Changhon
under the 2017-5-5; Website(www.cninfo.com.c
g Sales of Marketi Spot
86 same Food 3.23 3.23 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Electronic goods ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
System
shareholder 2017-12-23 2017-096,2017-100
Co., Ltd.
and ultimate
controller
115
HEFEI MEILING CO., LTD. Annual Report 2017
Other
Sichuan enterprise
Changhon control 2017-3-30; Juchao
g under the 2017-5-5; Website(www.cninfo.com.c
Sales of Marketi Spot
87 Precision same Food 12.09 12.09 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
goods ng price exchange
Electronic controlling 2017-9-13; 017-065,2017-066,2017-73,
s Tech. shareholder 2017-12-23 2017-096,2017-100
Co., Ltd. and ultimate
controller
Other
enterprise
control 2017-3-30; Juchao
under the 2017-5-5; Website(www.cninfo.com.c
Orion.PD Sales of Marketi Spot
88 same Refrigerator 1,785.99 1,785.99 0.11% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
P.Co.,ltd goods ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
Changhon
enterprise
g
control 2017-3-30; Juchao
Internatio
under the 2017-5-5; Website(www.cninfo.com.c
nal Sales of Marketi Spot
89 same Food 0.24 0.24 0.00% 15,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Holdings goods ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
(Hong
shareholder 2017-12-23 2017-096,2017-100
Kong)
and ultimate
Co., Ltd.
controller
116
HEFEI MEILING CO., LTD. Annual Report 2017
Other
enterprise
Guangdon
control 2017-3-30; Juchao
g Providin
under the Water and 2017-5-5; Website(www.cninfo.com.c
Changhon g fuel Marketi Spot
90 same electricity 102.61 102.61 0.01% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
g and ng price exchange
controlling fee 2017-9-13; 017-065,2017-066,2017-73,
Electronic power
shareholder 2017-12-23 2017-096,2017-100
s Co., Ltd.
and ultimate
controller
Other
enterprise
Sichuan
control 2017-3-30; Juchao
Changhon Providin Spot
under the Water and 2017-5-5; Website(www.cninfo.com.c
g g fuel Marketi exchange,
91 same electricity 10.37 10.37 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Minsheng and ng price Bank
controlling fee 2017-9-13; 017-065,2017-066,2017-73,
Logistics power acceptance
shareholder 2017-12-23 2017-096,2017-100
Co., LTD
and ultimate
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Providin
Changhon under the Water and 2017-5-5; Website(www.cninfo.com.c
g fuel Marketi Bank
92 g Jijia same electricity 11.24 11.24 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
and ng price acceptance
Fine Co., controlling fee 2017-9-13; 017-065,2017-066,2017-73,
power
Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
117
HEFEI MEILING CO., LTD. Annual Report 2017
Other
enterprise
Sichuan
control 2017-3-30; Juchao
Changhon Providin
under the Water and 2017-5-5; Website(www.cninfo.com.c
g Mold g fuel Marketi Bank
93 same electricity 694.10 694.1 0.04% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Plastic and ng price acceptance
controlling fee 2017-9-13; 017-065,2017-066,2017-73,
Tech. Co., power
shareholder 2017-12-23 2017-096,2017-100
Ltd.
and ultimate
controller
Other
enterprise
control 2017-3-30; Juchao
Sichuan Providin
under the Water and 2017-5-5; Website(www.cninfo.com.c
Hongwei g fuel Marketi Spot
94 same electricity 0.85 0.85 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Technolog and ng price exchange
controlling fee 2017-9-13; 017-065,2017-066,2017-73,
y Co., Ltd. power
shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Providin
Changhon under the Water and 2017-5-5; Website(www.cninfo.com.c
g fuel Marketi Bank
95 g Devices same electricity 83.27 83.27 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
and ng price acceptance
Technolog controlling fee 2017-9-13; 017-065,2017-066,2017-73,
power
y Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
118
HEFEI MEILING CO., LTD. Annual Report 2017
Other
enterprise
Sichuan control 2017-3-30; Juchao
Rent to
Changhon under the Workshop, 2017-5-5; Website(www.cninfo.com.c
the Marketi Bank
96 g Jijia same warehouse, 64.15 64.15 0.27% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
related ng price acceptance
Fine Co., controlling forklift, etc 2017-9-13; 017-065,2017-066,2017-73,
party
Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
Sichuan
control 2017-3-30; Juchao
Changhon Rent to
under the 2017-5-5; Website(www.cninfo.com.c
g Mold the warehouse, Marketi Bank
97 same 272.74 272.74 1.17% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Plastic related workshop ng price acceptance
controlling 2017-9-13; 017-065,2017-066,2017-73,
Tech. Co., party
shareholder 2017-12-23 2017-096,2017-100
Ltd.
and ultimate
controller
Other
enterprise
Sichuan Part of
control 2017-3-30; Juchao
Changhon Rent to office Spot
under the 2017-5-5; Website(www.cninfo.com.c
g the building Marketi exchange,
98 same 108.54 108.54 0.47% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Minsheng related rent, ng price Bank
controlling 2017-9-13; 017-065,2017-066,2017-73,
Logistics party workshop, acceptance
shareholder 2017-12-23 2017-096,2017-100
Co., LTD etc.
and ultimate
controller
119
HEFEI MEILING CO., LTD. Annual Report 2017
Other
Sichuan enterprise
Service control 2017-3-30; Juchao
Rent to
Exp. under the 2017-5-5; Website(www.cninfo.com.c
the Apartment, Marketi Spot
99 Appliance same 24.25 24.25 0.10% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
related office ng price exchange
Service controlling 2017-9-13; 017-065,2017-066,2017-73,
party
Chain Co., shareholder 2017-12-23 2017-096,2017-100
Ltd. and ultimate
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Rent to Spot
Changhon under the 2017-5-5; Website(www.cninfo.com.c
the warehouse, Marketi exchange,
100 g Xinrui same 1.69 1.69 0.01% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
related forklift ng price Bank
Technolog controlling 2017-9-13; 017-065,2017-066,2017-73,
party acceptance
y Co., Ltd shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
Hefei control 2017-3-30; Juchao
Rent to
Changhon under the 2017-5-5; Website(www.cninfo.com.c
the Marketi Spot
101 g same Apartment 32.15 32.15 0.14% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
related ng price exchange
Industrial controlling 2017-9-13; 017-065,2017-066,2017-73,
party
Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
120
HEFEI MEILING CO., LTD. Annual Report 2017
Controlling 2017-3-30; Juchao
Sichuan Rent to Spot
shareholder 2017-5-5; Website(www.cninfo.com.c
Changhon the Marketi exchange,
102 and Apartment 6.97 6.97 0.03% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
g Electric related ng price Bank
ultimate 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd. party acceptance
controller 2017-12-23 2017-096,2017-100
Other
Sichuan enterprise
Changhon control 2017-3-30; Juchao
Rent to
g under the Forklift, 2017-5-5; Website(www.cninfo.com.c
the Marketi Bank
103 Precision same warehouse, 11.54 11.54 0.05% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
related ng price acceptance
Electronic controlling apartment 2017-9-13; 017-065,2017-066,2017-73,
party
s Tech. shareholder 2017-12-23 2017-096,2017-100
Co., Ltd. and ultimate
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Rent to
Ailian under the 2017-5-5; Website(www.cninfo.com.c
the Marketi Spot
104 Science & same Warehouse 0.01 0.01 0.00% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
related ng price exchange
Technolog controlling 2017-9-13; 017-065,2017-066,2017-73,
party
y Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other 2017-3-30; Juchao
BVCH Rent to
enterprise 2017-5-5; Website(www.cninfo.com.c
Optronics the Cargo Marketi Spot
105 control 5.25 5.25 0.02% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
(Sichuan) related elevator ng price exchange
under the 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd. party
same 2017-12-23 2017-096,2017-100
121
HEFEI MEILING CO., LTD. Annual Report 2017
controlling
shareholder
and ultimate
controller
Other
enterprise
Guangdon
control 2017-3-30; Juchao
g Rent to
under the 2017-5-5; Website(www.cninfo.com.c
Changhon the Office Marketi Spot
106 same 196.86 196.86 0.84% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
g related building ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
Electronic party
shareholder 2017-12-23 2017-096,2017-100
s Co., Ltd.
and ultimate
controller
Other
enterprise
control 2017-3-30; Juchao
Shenzhen Rent to
under the 2017-5-5; Website(www.cninfo.com.c
Yijia’en the Two living Marketi Spot
107 same 2.54 2.54 0.01% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Technolog related area ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
y Co. Ltd. party
shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
Sichuan 2017-3-30; Juchao
enterprise Rent to
Changhon 2017-5-5; Website(www.cninfo.com.c
control the Marketi Spot
108 g Devices workshop 95.74 95.74 0.41% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
under the related ng price exchange
Technolog 2017-9-13; 017-065,2017-066,2017-73,
same party
y Co., Ltd. 2017-12-23 2017-096,2017-100
controlling
122
HEFEI MEILING CO., LTD. Annual Report 2017
shareholder
and ultimate
controller
Other
enterprise
control 2017-3-30; Juchao
Sichuan Rent to
under the 2017-5-5; Website(www.cninfo.com.c
Hongwei the Two living Marketi Spot
109 same 3.52 3.52 0.02% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Technolog related area ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
y Co., Ltd. party
shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
Changhon
enterprise
g
control 2017-3-30; Juchao
Internatio Rent to
under the 2017-5-5; Website(www.cninfo.com.c
nal the Marketi Spot
110 same Office 10.59 10.59 0.05% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Holdings related ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
(Hong party
shareholder 2017-12-23 2017-096,2017-100
Kong)
and ultimate
Co., Ltd.
controller
Sichuan
Changhon Controlling 2017-3-30; Juchao
Rent
g shareholder workshop, 2017-5-5; Website(www.cninfo.com.c
from the Marketi Spot
111 Electronic and staff 16.53 16.53 0.07% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
related ng price exchange
s Holding ultimate dormitories 2017-9-13; 017-065,2017-066,2017-73,
party
Group controller 2017-12-23 2017-096,2017-100
Co., Ltd.
123
HEFEI MEILING CO., LTD. Annual Report 2017
Other
enterprise
Sichuan control 2017-3-30; Juchao
Rent
Changhon under the 2017-5-5; Website(www.cninfo.com.c
from the workshop, Marketi Spot
112 g Property same 198.46 198.46 0.85% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
related offices, etc ng price exchange
Service controlling 2017-9-13; 017-065,2017-066,2017-73,
party
Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Controlling 2017-3-30; Juchao
Sichuan Rent Spot
shareholder 2017-5-5; Website(www.cninfo.com.c
Changhon from the workshop, Marketi exchange,
113 and 1,374.69 1,374.69 5.89% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
g Electric related offices, etc ng price Bank
ultimate 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd. party acceptance
controller 2017-12-23 2017-096,2017-100
Other
enterprise
Chengdu
control 2017-3-30; Juchao
Changhon Rent
under the 2017-5-5; Website(www.cninfo.com.c
g from the workshop, Marketi Spot
114 same 35.26 35.26 0.15% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Electronic related offices, etc ng price exchange
controlling 2017-9-13; 017-065,2017-066,2017-73,
Technolog party
shareholder 2017-12-23 2017-096,2017-100
y Co., Ltd.
and ultimate
controller
Guangdon Other 2017-3-30; Juchao
Rent
g enterprise 2017-5-5; Website(www.cninfo.com.c
from the Employee Marketi Spot
115 Changhon control 43.08 43.08 0.18% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
related dorm ng price exchange
g under the 2017-9-13; 017-065,2017-066,2017-73,
party
Electronic same 2017-12-23 2017-096,2017-100
124
HEFEI MEILING CO., LTD. Annual Report 2017
s Co., Ltd. controlling
shareholder
and ultimate
controller
Other
enterprise
Beijing control 2017-3-30; Juchao
Rent
Changhon under the 2017-5-5; Website(www.cninfo.com.c
from the Marketi Spot
116 g same Office 36.47 36.47 0.16% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
related ng price exchange
Technolog controlling 2017-9-13; 017-065,2017-066,2017-73,
party
y Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
Sichuan
enterprise
Changhon
control 2017-3-30; Juchao
g Purchas Spot
under the 2017-5-5; Website(www.cninfo.com.c
Intelligent e of Equipment Marketi exchange,
117 same 2,659.10 2,659.10 3.93% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Manufact fixed etc ng price Bank
controlling 2017-9-13; 017-065,2017-066,2017-73,
uring assets acceptance
shareholder 2017-12-23 2017-096,2017-100
Technolog
and ultimate
y Co., Ltd.
controller
Sichuan Other
2017-3-30; Juchao
Hongchen enterprise Purchas
2017-5-5; Website(www.cninfo.com.c
g control e of Building Marketi Spot
118 426.18 426.18 0.63% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Constructi under the fixed construction ng price exchange
2017-9-13; 017-065,2017-066,2017-73,
on same assets
2017-12-23 2017-096,2017-100
Engineeri controlling
125
HEFEI MEILING CO., LTD. Annual Report 2017
ng Co., shareholder
Ltd. and ultimate
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Purchas
Hongchen under the 2017-5-5; Website(www.cninfo.com.c
e of Building Marketi Spot
119 g Real same 50.94 50.94 0.08% 6,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
fixed construction ng price exchange
Estate controlling 2017-9-13; 017-065,2017-066,2017-73,
assets
Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Controlling 2017-3-30; Juchao
Sichuan Purchas Spot
shareholder 2017-5-5; Website(www.cninfo.com.c
Changhon e of Information Marketi exchange,
120 and 15.47 15.47 0.02% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
g Electric fixed system, etc ng price Bank
ultimate 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd. assets acceptance
controller 2017-12-23 2017-096,2017-100
Other
enterprise
control Purchas 2017-3-30; Juchao
Sichuan
under the e of 2017-5-5; Website(www.cninfo.com.c
Hongxin Information Marketi Spot
121 same fixed, 641.04 641.04 0.95% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Software systems, etc. ng price exchange
controlling intangib 2017-9-13; 017-065,2017-066,2017-73,
Co., Ltd.
shareholder le assets 2017-12-23 2017-096,2017-100
and ultimate
controller
126
HEFEI MEILING CO., LTD. Annual Report 2017
Other
enterprise
Sichuan control 2017-3-30; Juchao
Purchas
Changhon under the 2017-5-5; Website(www.cninfo.com.c
e of Control Marketi Bank
122 g Jijia same 11.97 11.97 0.02% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
fixed cabinet ng price acceptance
Fine Co., controlling 2017-9-13; 017-065,2017-066,2017-73,
assets
Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
Sichuan control 2017-3-30; Juchao
Purchas
Changhon under the wireless 2017-5-5; Website(www.cninfo.com.c
e of Marketi Spot
123 g Network same networking 22.17 22.17 0.03% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
fixed ng price exchange
Technolog controlling equipment 2017-9-13; 017-065,2017-066,2017-73,
assets
y Co., Ltd. shareholder 2017-12-23 2017-096,2017-100
and ultimate
controller
Other
enterprise
Sichuan
control 2017-3-30; Juchao
Changhon Purchas
under the Security 2017-5-5; Website(www.cninfo.com.c
g e of Marketi Spot
124 same monitoring 9.79 9.79 0.01% 5,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
Electronic fixed ng price exchange
controlling equipment 2017-9-13; 017-065,2017-066,2017-73,
System assets
shareholder 2017-12-23 2017-096,2017-100
Co., Ltd.
and ultimate
controller
127
HEFEI MEILING CO., LTD. Annual Report 2017
Other
Sichuan enterprise
Changhon control 2017-3-30; Juchao
g Gerun under the Sale of 2017-5-5; Website(www.cninfo.com.c
Marketi Spot
125 Renewabl same fixed waste assets 4.48 4.48 0.20% 8,000 No -- 2017-8-22; n)No.:2017-013,2017-031,2
ng price exchange
e controlling assets 2017-9-13; 017-065,2017-066,2017-73,
Resources shareholder 2017-12-23 2017-096,2017-100
Co., Ltd. and ultimate
controller
Total -- -- 705,915.08 -- -- -- -- -- -- --
Detail of sales return with major amount
Not applicable
involved
1. It is estimated that the related transaction amount resulted by purchasing goods (including door shell and plastic products etc.) and accepting fuel and power from
Sichuan Changhong and its subsidiary by the Company for year of 2017 was RMB 1,749 million at most (tax-excluded), actually RMB 1,660,542,600 occurred in
reporting period (tax-excluded).
2. It is estimated that the related transaction amount resulted by purchasing goods (including compressor purchased etc.) from Huayi Compressor and its subsidiary by the
Company for year of 2017 was RMB 600 million at most (tax-excluded), actually RMB 371,696,800 occurred in reporting period (tax-excluded).
3. It is estimated that the related transaction amount resulted by purchasing or selling equipment, software, maintenance and spare parts and molds etc. from Sichuan
Report the actual implementation of the daily Changhong and its subsidiary by the Company for year of 2017 was RMB 50 million at most (tax-excluded), actually RMB 7,004,400 occurred in reporting period
related transactions which were projected about (tax-excluded).
their total amount by types during the reporting
4. It is estimated that the related transaction amount resulted by purchasing goods from and providing fuel and power to Sichuan Changhong and its subsidiary by the
period (if applicable)
Company for year of 2017 was RMB 4,830 million at most (tax-excluded), actually RMB 4,138,012,700 occurred in reporting period (tax-excluded).
5. It is estimated that the related transaction amount resulted by purchasing compressed air, accepting energy, power and service from Huayi Compressor and its
subsidiary by the Company for year of 2017 was RMB 0.65 million at most (tax-excluded), actually RMB 591,000 occurred in reporting period (tax-excluded).
6. It is estimated that the related transaction amount resulted by leasing business from Sichuan Changhong and its subsidiary by the Company for year of 2017 was RMB
50 million at most (tax-excluded), actually RMB 23,243,400 occurred in reporting period (tax-excluded).
7. It is estimated that the related transaction amount from domestic finished goods logistic business outsourcing to Sichuan Changhong Minsheng Logistic Co., Ltd. by the
128
HEFEI MEILING CO., LTD. Annual Report 2017
Company for year of 2017 was RMB 580 million at most (tax-excluded), actually RMB 557,786,000 occurred in reporting period (tax-excluded).
8. It is estimated that the related transaction amount from after sales service of domestic goods outsourcing to Sichuan Service Exp. Appliance Service Chain Co., Ltd. by
the Company for year of 2017 was RMB 200 million at most (tax-excluded), actually RMB 135,965,700 occurred in reporting period.
9. It is estimated that the related transaction amount resulted by accepting other service and labor service etc. or providing other service and labor service etc. to Sichuan
Changhong and its subsidiary by the Company for year of 2017 was RMB 50 million at most (tax-excluded), actually RMB 27,021,400 occurred in reporting period
(tax-excluded).
10. It is estimated that the related transaction amount resulted by selling goods from Sichuan Changhong Electronics Group and its subsidiary by the Company for year of
2017 was RMB 80 million at most (tax-excluded), actually RMB 39,473,800 occurred in reporting period.
11. It is estimated that the related transaction amount resulted by purchasing goods and receiving labor services, fuel power, leasing and purchasing equipment etc. from
Sichuan Changhong Electronics Group and its subsidiary by the Company for year of 2017 was RMB 180 million at most (tax-excluded), actually RMB 97,813,000
occurred in reporting period.
Reasons for major differences between trading
Not applicable
price and market reference price
129
HEFEI MEILING CO., LTD. Annual Report 2017
(2) Related transactions with Finance Company
The resolution of the 34th meeting of the 8th board of directors on August 9, 2017 and the second extraordinary
general meeting of 2017 on September 12, 2017 approved and agreed the company to continue carry out the
financial service cooperation with Sichuan Changhong Group Finance Co., Ltd. (hereinafter referred to as
“Changhong Finance Company”) and sign a triennial Financial Service Agreement, It is agreed that the maximum
deposit balance (including accrued interest and handling fees) and the highest principal and interest of outstanding
loan the Company in any finance company within the three-year validity period from the effective date of the new
agreement shall be adjusted to not exceed RMB 3.8 billion per day. In accordance with the agreement, Changhong
Finance Company shall provide a series of financial services such as deposit and loan in its business scope
according to the requirements of the Company and its subsidiaries. The related transactions between the company
and its subsidiaries and Changhong Finance Company from the beginning of the year to the end of the reporting
period are as follows:
Up to 31 December 2017, the Company and its subsidiaries has opened financial business as savings, note
drawing and notes discounted with Changhong Finance Company. The Company and its subordinate company
owns 2,762,513,703.88 Yuan savings in Changhong Finance Company, takes 26.44% of the deposit taking balance
in Changhong Finance Company without 30% occupied, balance of notes drawing was 721,645,627.87 Yuan and
balance of notes discounted as 699,356,853.98 Yuan. More details are:
In RMB
Interest and
Balance at Increase in the Decrease in the Balance at
Name commission charge
year-begin year year year-end received or paid
I. Savings in
Changhong Group 1,908,842,163.20 32,513,784,867.73 31,660,113,327.05 2,762,513,703.88 75,786,692.80
Finance Company
II. Borrowings
from Changhong
Group Finance
Company
1. Short-term loans - - - - -
2. Long-term loans - - - - -
III. Other financial
business
1. Notes drawing 544,374,441.19 1,962,529,562.09 1,785,258,375.41 721,645,627.87 611,255.32
2. Notes discounted 565,252,574.29 2,037,226,639.09 1,903,122,359.40 699,356,853.98 18,319,048.47
According to the regulations of "Information Disclosure Memorandum No. 2 - Transactions and Connected
Transactions" of Shenzhen Stock Exchange, the Company provided " the Risk Continuous Assessment Report
130
HEFEI MEILING CO., LTD. Annual Report 2017
About Sichuan Changhong Group Finance Co., Ltd." to state the deposits, loans, and other financial business that
the company developed with Changhong Finance Company during the reporting period, and disclosed at
www.cninfo.com.cn on March 30, 2018.
(II) Related transactions by assets acquisition and sold
□ Applicable √ Not applicable
The Company has no related transactions by assets acquisition and sold occurred in reporting
period-end.
(III) Material related transaction of jointly foreign investment
□ Applicable √ Not applicable
The Company has no material related transaction of jointly foreign investment occurred in reporting
period-end.
(IV) Connect of related liability and debt
√ Applicable □ Not applicable
Whether has non-operational contact of related liability and debts or not
□Yes √ No
No non-operational contact of related liability or debts in Period.
131
HEFEI MEILING CO., LTD. Annual Report 2017
1. Claim receivable from related party
Whether has Balance at Current Balance at
Current Current
non-business period-begi interest period-end
Seria newly added recovery Interes
Related party Relationship Causes capital n (10 (10 (10
l (10 thousand (10 thousand t rate
occupying or thousand thousand thousand
Yuan) Yuan)
not Yuan) Yuan) Yuan)
Operational
Sichuan Changhong Controlling shareholder
1 contact of No 161.58 127,295.94 127,276.06 - - 181.46
Electric Co., Ltd. and ultimate controller
related credit
Sichuan Changhong Operational
Controlling shareholder
2 Electronics Holding contact of No 37.62 102.53 130.09 - - 10.06
and ultimate controller
Group Co., Ltd. related credit
Other enterprise control
Sichuan Changhong Operational
under the same
3 International Hotel contact of No 133.47 24.24 157.71 - - -
controlling shareholder
Co., Ltd. related credit
and ultimate controller
Other enterprise control
Anhui Xinhao Operational
under the same
4 Plasma Display contact of No 6.30 - - - - 6.30
controlling shareholder
Panel Co., Ltd. related credit
and ultimate controller
Other enterprise control
Operational
Yibing Hongxing under the same
5 contact of No 14.72 - 14.72 - - -
Electronics Co., Ltd. controlling shareholder
related credit
and ultimate controller
Sichuan Changhong Other enterprise control Operational
6 No - 4.66 4.66 - - -
Xinrui Technology under the same contact of
132
HEFEI MEILING CO., LTD. Annual Report 2017
Co., Ltd controlling shareholder related credit
and ultimate controller
Other enterprise control
Operational
Sichuan Huafeng under the same
7 contact of No - 18.34 18.34 - - -
Corp. Group controlling shareholder
related credit
and ultimate controller
Other enterprise control
Operational
Sichuan Huanyu under the same
8 contact of No - 12.10 12.10 - - -
Industrial Co. Ltd. controlling shareholder
related credit
and ultimate controller
Other enterprise control
Sichuan Changhong Operational
under the same
9 Group Finance Co., contact of No - 4.05 3.12 - - 0.93
controlling shareholder
Ltd. related credit
and ultimate controller
Other enterprise control
Sichuan Changhong Operational
under the same
10 Mold Plastic Tech. contact of No 96.52 12,167.18 12,246.86 - - 16.84
controlling shareholder
Co., Ltd. related credit
and ultimate controller
Other enterprise control
Lejiayi Chain Operational
under the same
11 Management Co., contact of No - 744.44 657.73 - - 86.71
controlling shareholder
Ltd. related credit
and ultimate controller
Other enterprise control
Operational
Hefei Changhong under the same
12 contact of No - 102.71 102.71 - - -
Industrial Co., Ltd. controlling shareholder
related credit
and ultimate controller
13 Huayi Compressor Other enterprise control Operational No 33.48 - 31.50 - - 1.98
133
HEFEI MEILING CO., LTD. Annual Report 2017
Co., Ltd. under the same contact of
controlling shareholder related credit
and ultimate controller
Other enterprise control
Sichuan Changhong Operational
under the same
14 Package Printing contact of No 0.44 5.80 6.24 - - -
controlling shareholder
Co., Ltd. related credit
and ultimate controller
Other enterprise control
Operational
Sichuan Changhong under the same
15 contact of No - 6,789.70 6,590.72 - - 198.98
Jijia Fine Co., Ltd. controlling shareholder
related credit
and ultimate controller
Sichuan Changhong Other enterprise control
Operational
Network under the same
16 contact of No - 20.30 20.30 - - -
Technology Co., controlling shareholder
related credit
Ltd. and ultimate controller
Other enterprise control
Sichuan Hongwei Operational
under the same
17 Technology Co., contact of No 27.15 17.87 8.63 - - 36.39
controlling shareholder
Ltd. related credit
and ultimate controller
Other enterprise control
PT.CHANGHONG Operational
under the same
18 ELECTRICINDON contact of No 2.70 2.62 2.76 - - 2.56
controlling shareholder
ESIA related credit
and ultimate controller
Other enterprise control
CHANGHONG(HK Operational
under the same
19 )TRADINGLIMITE contact of No 6,054.16 36,525.50 33,375.54 - - 9,204.12
controlling shareholder
D related credit
and ultimate controller
134
HEFEI MEILING CO., LTD. Annual Report 2017
Other enterprise control
CHANGHONGELE Operational
under the same
20 CTRIC(AUSTRALI contact of No 14.48 1,946.83 1,064.71 - - 896.60
controlling shareholder
A) related credit
and ultimate controller
Other enterprise control
Operational
Sichuan Changhong under the same
21 contact of No - 322.07 302.20 - - 19.87
Property Co., Ltd. controlling shareholder
related credit
and ultimate controller
Other enterprise control
Sichuan Changhong Operational
under the same
22 Gerun Renewable contact of No 0.00 1,584.29 1,584.29 - - -
controlling shareholder
Resources Co., Ltd. related credit
and ultimate controller
Sichuan Service Other enterprise control
Operational
Exp. Appliance under the same
23 contact of No 20.00 1,804.72 1,759.37 - - 65.35
Service Chain Co., controlling shareholder
related credit
Ltd. and ultimate controller
Chengdu
Other enterprise control
Changhong Operational
under the same
24 Electronic contact of No 43.45 - - - - 43.45
controlling shareholder
Technology Co., related credit
and ultimate controller
Ltd.
Sichuan Zhiyijia Other enterprise control
Operational
Network under the same
25 contact of No 17,404.72 225,620.35 213,768.07 - - 29,257.00
Technology Co., controlling shareholder
related credit
Ltd. and ultimate controller
Guangdong Other enterprise control Operational
26 No - 299.47 298.41 - - 1.06
Changhong under the same contact of
135
HEFEI MEILING CO., LTD. Annual Report 2017
Electronics Co., Ltd. controlling shareholder related credit
and ultimate controller
Other enterprise control
Sichuan Changhong Operational
under the same
27 Power Source Co., contact of No - 36.02 32.98 - - 3.04
controlling shareholder
Ltd. related credit
and ultimate controller
Other enterprise control
Sichuan Changhong Operational
under the same
28 Minsheng Logistics contact of No - 404.00 404.00 - - -
controlling shareholder
Co., LTD related credit
and ultimate controller
Other enterprise control
Sichuan Changhong Operational
under the same
29 Devices Technology contact of No - 207.15 207.15 - - -
controlling shareholder
Co., Ltd. related credit
and ultimate controller
Sichuan Changhong Other enterprise control
Operational
Intelligent Health under the same
30 contact of No - 0.75 0.75 - - -
Technology Co., controlling shareholder
related credit
Ltd. and ultimate controller
Sichuan Changhong
Other enterprise control
Intelligent Operational
under the same
31 Manufacturing contact of No 25.47 27.32 - - - 52.79
controlling shareholder
Technology Co., related credit
and ultimate controller
Ltd.
Mianyang Other enterprise control
Operational
Technology Town under the same
32 contact of No - 0.37 0.37 - - -
Big Data controlling shareholder
related credit
Technology Co., and ultimate controller
136
HEFEI MEILING CO., LTD. Annual Report 2017
Ltd.
Other enterprise control
Operational
BVCH Optronics under the same
33 contact of No - 8.38 8.38 - - -
(Sichuan) Co., Ltd. controlling shareholder
related credit
and ultimate controller
Other enterprise control
Operational
Shenzhen Yijia’en under the same
34 contact of No - 2.54 2.37 - - 0.18
Technology Co. Ltd. controlling shareholder
related credit
and ultimate controller
Sichuan Changhong Other enterprise control
Operational
Precision under the same
35 contact of No - 23.63 22.13 - - 1.50
Electronics Tech. controlling shareholder
related credit
Co., Ltd. and ultimate controller
Sichuan Changhong Other enterprise control
Operational
Education under the same
36 contact of No - 330.36 330.36 - - -
Technology Co., controlling shareholder
related credit
Ltd. and ultimate controller
Other enterprise control
Sichuan Changhong Operational
under the same
37 Property Service contact of No 1.25 5.17 5.65 - - 0.77
controlling shareholder
Co., Ltd. related credit
and ultimate controller
Other enterprise control
Operational
081 Electronic under the same
38 contact of No - 12.78 12.78 - - -
Group controlling shareholder
related credit
and ultimate controller
GuangYuan Other enterprise control Operational
39 No - 122.00 122.00 - - -
Changhong under the same contact of
137
HEFEI MEILING CO., LTD. Annual Report 2017
Electronic controlling shareholder related credit
Technology Co., and ultimate controller
Ltd.
Sichuan Ailian Other enterprise control
Operational
Science & under the same
40 contact of No - 33.97 33.97 - - -
Technology Co., controlling shareholder
related credit
Ltd. and ultimate controller
Other enterprise control
Sichuan Changhong Operational
under the same
41 Innovation contact of No - 0.06 0.06 - - -
controlling shareholder
Investment Co., Ltd. related credit
and ultimate controller
Other enterprise control
GuangYuan Operational
under the same
42 Hongcheng contact of No - 0.10 0.10 - - -
controlling shareholder
Industrial Co., Ltd. related credit
and ultimate controller
Sichuan Changhong Other enterprise control
Operational
Energy Sunshine under the same
43 contact of No - 1.45 1.45 - - -
Technology Co., controlling shareholder
related credit
Ltd. and ultimate controller
Sichuan Changhong Other enterprise control
Operational
Electronic under the same
44 contact of No - 1.18 1.18 - - -
Technology Co., controlling shareholder
related credit
Ltd. and ultimate controller
Other enterprise control
Operational
Sichuan Hongxin under the same
45 contact of No - 4.50 - - - 4.50
Software Co., Ltd. controlling shareholder
related credit
and ultimate controller
138
HEFEI MEILING CO., LTD. Annual Report 2017
Other enterprise control
Operational
Sichuan Hongcheng under the same
46 contact of No - 14.74 - - - 14.74
Real Estate Co., Ltd. controlling shareholder
related credit
and ultimate controller
Other enterprise control
Operational
Sichuan Jiahong under the same
47 contact of No - 11.50 11.13 - - 0.37
Industrial Co., Ltd. controlling shareholder
related credit
and ultimate controller
Sichuan Changhong Other enterprise control
Operational
New Energy under the same
48 contact of No - 147.86 130.54 - - 17.32
Technology Co., controlling shareholder
related credit
Ltd. and ultimate controller
Other enterprise control
Sichuan Changhong Operational
under the same
49 Electronic System contact of No - 3.23 3.23 - - -
controlling shareholder
Co., Ltd. related credit
and ultimate controller
Other enterprise control
Operational
under the same
50 Orion.PDP.Co.,ltd contact of No - 1,785.99 777.69 - - 1,008.30
controlling shareholder
related credit
and ultimate controller
Changhong Other enterprise control
Operational
International under the same
51 contact of No - 11.11 - - - 11.11
Holdings (Hong controlling shareholder
related credit
Kong) Co., Ltd. and ultimate controller
Total 24,077.52 418,611.87 401,545.10 - - 41,144.29
Influence on business performance and financial status of the Company from related
--
liabilities
139
HEFEI MEILING CO., LTD. Annual Report 2017
2. Debts payable to related party
Current
Balance at Current newly Current Balance at
Inter interest
period-begin added recovery period-end
Serial Related party Relationship Causes est (10
(10 thousand (10 thousand (10 thousand (10 thousand
rate thousand
Yuan) Yuan) Yuan) Yuan)
Yuan)
Sichuan Changhong Controlling shareholder Operational contact of
1 5,510.20 40,668.48 39,983.18 - - 6,195.50
Electric Co., Ltd. and ultimate controller related debt
Sichuan Changhong
Controlling shareholder Operational contact of
2 Electronics Holding - 233.88 233.37 - - 0.51
and ultimate controller related debt
Group Co., Ltd.
Other enterprise control
CHANGHONG(HK)TR under the same Operational contact of
3 188.20 58.46 0 - - 246.66
ADINGLIMITED controlling shareholder related debt
and ultimate controller
Other enterprise control
CHANGHONGELECTR under the same Operational contact of
4 3.73 - 3.57 - - 0.16
ICMIDDLEEASTFZE controlling shareholder related debt
and ultimate controller
Other enterprise control
Guangdong Changhong under the same Operational contact of
5 360.75 1,719.24 1,856.10 - - 223.89
Electronics Co., Ltd. controlling shareholder related debt
and ultimate controller
Other enterprise control
Huayi Compressor Co., under the same Operational contact of
6 5,580.63 37,228.78 32,244.38 - - 10,565.03
Ltd. controlling shareholder related debt
and ultimate controller
140
HEFEI MEILING CO., LTD. Annual Report 2017
Other enterprise control
Lejiayi Chain under the same Operational contact of
7 55.98 2.26 50.03 - - 8.22
Management Co., Ltd. controlling shareholder related debt
and ultimate controller
Other enterprise control
081 Electronic Group under the same Operational contact of
8 330.41 - 330.41 - - -
Co., Ltd. controlling shareholder related debt
and ultimate controller
Other enterprise control
Sichuan Zhiyijia
under the same Operational contact of
9 Network Technology - 398.29 341.09 - - 57.19
controlling shareholder related debt
Co., Ltd.
and ultimate controller
Other enterprise control
Sichuan Changhong
under the same Operational contact of
10 Intelligent Manufacturing 137.87 2,932.60 2,039.22 - - 1,031.26
controlling shareholder related debt
Technology Co., Ltd.
and ultimate controller
Other enterprise control
Mianyang Hongrun under the same Operational contact of
11 164.66 - 164.66 - - -
Electronic Co., Ltd. controlling shareholder related debt
and ultimate controller
Other enterprise control
Sichuan Hongwei under the same Operational contact of
12 164.75 49.72 48.63 - - 165.84
Technology Co., Ltd. controlling shareholder related debt
and ultimate controller
Sichuan Service Exp. Other enterprise control
Operational contact of
13 Appliance Service Chain under the same 664.69 13,596.57 13,702.81 - - 558.45
related debt
Co., Ltd. controlling shareholder
141
HEFEI MEILING CO., LTD. Annual Report 2017
and ultimate controller
Other enterprise control
Sichuan Changhong
under the same Operational contact of
14 Package Printing Co., 1,163.25 11,148.32 8,847.67 - - 3,463.89
controlling shareholder related debt
Ltd.
and ultimate controller
Other enterprise control
Sichuan Changhong under the same Operational contact of
15 16.92 - 16.92 - - -
Power Source Co., Ltd. controlling shareholder related debt
and ultimate controller
Other enterprise control
Sichuan Changhong
under the same Operational contact of
16 Devices Technology Co., 829.45 4,112.64 4,001.00 - - 941.09
controlling shareholder related debt
Ltd.
and ultimate controller
Other enterprise control
Sichuan Changhong
under the same Operational contact of
17 Gerun Renewable 29.36 85.51 - - - 114.88
controlling shareholder related debt
Resources Co., Ltd.
and ultimate controller
Other enterprise control
Sichuan Changhong
under the same Operational contact of
18 International Hotel Co., 2.45 34.94 33.10 - - 4.28
controlling shareholder related debt
Ltd.
and ultimate controller
Other enterprise control
Sichuan Changhong Jijia under the same Operational contact of
19 5,132.86 36,883.58 31,403.92 - - 10,612.53
Fine Co., Ltd. controlling shareholder related debt
and ultimate controller
Sichuan Changhong Other enterprise control Operational contact of
20 223.20 5,904.39 2,337.52 - - 3,790.08
Precision Electronics under the same related debt
142
HEFEI MEILING CO., LTD. Annual Report 2017
Tech. Co., Ltd. controlling shareholder
and ultimate controller
Other enterprise control
Sichuan Changhong
under the same Operational contact of
21 Minsheng Logistics Co., 4,071.48 55,778.60 56,581.37 - - 3,268.72
controlling shareholder related debt
LTD
and ultimate controller
Other enterprise control
Sichuan Changhong
under the same Operational contact of
22 Mold Plastic Tech. Co., 11,788.16 69,088.66 62,912.67 - - 17,964.15
controlling shareholder related debt
Ltd.
and ultimate controller
Other enterprise control
Sichuan Changhong
under the same Operational contact of
23 Xinrui Technology Co., 3,133.45 4,902.37 8,005.13 - - 30.69
controlling shareholder related debt
Ltd
and ultimate controller
Other enterprise control
Sichuan Changhong New
under the same Operational contact of
24 Energy Technology Co., 0.02 3.09 3.11 - - -
controlling shareholder related debt
Ltd.
and ultimate controller
Other enterprise control
Beijing Changhong under the same Operational contact of
25 - 36.47 36.47 - - -
Technology Co., Ltd. controlling shareholder related debt
and ultimate controller
Other enterprise control
Sichuan Changhong
under the same Operational contact of
26 Electronic System Co., 7.70 9.79 17.49 - - -
controlling shareholder related debt
Ltd.
and ultimate controller
27 Sichuan Jiahong Other enterprise control Operational contact of 0.61 52.23 50.02 - - 2.83
143
HEFEI MEILING CO., LTD. Annual Report 2017
Industrial Co., Ltd. under the same related debt
controlling shareholder
and ultimate controller
Other enterprise control
Sichuan Hongxin under the same Operational contact of
28 - 774.56 718.10 - - 56.47
Software Co., Ltd. controlling shareholder related debt
and ultimate controller
Other enterprise control
Sichuan Huafeng Corp. under the same Operational contact of
29 28.35 1.40 29.75 - - -
Group controlling shareholder related debt
and ultimate controller
Other enterprise control
Sichuan Hongcheng
under the same Operational contact of
30 Construction Engineering - 426.18 426.18 - - -
controlling shareholder related debt
Co., Ltd.
and ultimate controller
Other enterprise control
Sichuan Changhong
under the same Operational contact of
31 International Travel 1.50 22.60 24.10 - - -
controlling shareholder related debt
Service Co., Ltd.
and ultimate controller
Other enterprise control
Sichuan Changhong
under the same Operational contact of
32 Property Service Co., 0.00 99.61 99.20 - - 0.41
controlling shareholder related debt
Ltd.
and ultimate controller
Other enterprise control
Hefei Changhong New
under the same Operational contact of
33 Energy Science & - 39.55 39.55 - - -
controlling shareholder related debt
Technology Co., Ltd.
and ultimate controller
144
HEFEI MEILING CO., LTD. Annual Report 2017
Other enterprise control
Sichuan Changhong
under the same Operational contact of
34 Diandianbang 0.03 - 0.03 - - -
controlling shareholder related debt
Technology Co., Ltd.
and ultimate controller
Other enterprise control
under the same Operational contact of
35 081 Electronic Group - 353.50 - - - 353.50
controlling shareholder related debt
and ultimate controller
Other enterprise control
Sichuan Ailian Science & under the same Operational contact of
36 - 677.33 495.67 - - 181.66
Technology Co., Ltd. controlling shareholder related debt
and ultimate controller
Other enterprise control
Sichuan Changhong
under the same Operational contact of
37 Education Technology - 21.13 - - - 21.13
controlling shareholder related debt
Co., Ltd.
and ultimate controller
Other enterprise control
Sichuan Changhong
under the same Operational contact of
38 Network Technology - 27.25 27.22 - - 0.02
controlling shareholder related debt
Co., Ltd.
and ultimate controller
Other enterprise control
Shenzhen Yijia’en under the same Operational contact of
39 - 21.02 21.02 - - -
Technology Co. Ltd. controlling shareholder related debt
and ultimate controller
Chengdu Changhong Other enterprise control
Operational contact of
40 Electronic Technology under the same - 35.26 35.26 - - -
related debt
Co., Ltd. controlling shareholder
145
HEFEI MEILING CO., LTD. Annual Report 2017
and ultimate controller
Other enterprise control
Sichuan Hongcheng Real under the same Operational contact of
41 - 50.94 50.94 - - -
Estate Co., Ltd. controlling shareholder related debt
and ultimate controller
Other enterprise control
GuangYuan Changhong
under the same Operational contact of
42 Electronic Technology - 3.71 - - - 3.71
controlling shareholder related debt
Co., Ltd.
and ultimate controller
Other enterprise control
Yibin Red Star under the same Operational contact of
43 - 58.20 - - - 58.20
Electronics Co., Ltd. controlling shareholder related debt
and ultimate controller
Other enterprise control
Hefei Changhong under the same Operational contact of
44 - 0.23 - - - 0.23
Industrial Co., Ltd. controlling shareholder related debt
and ultimate controller
Other enterprise control
ChanghongEuropeElectri under the same Operational contact of
45 - 0.44 - - - 0.44
cs.r.o controlling shareholder related debt
and ultimate controller
Other enterprise control
Sichuan Hongyu Metal under the same Operational contact of
46 47.54 120.38 78.53 - - 89.39
Manufacturing Co., Ltd. controlling shareholder related debt
and ultimate controller
Total 39,638.22 287,662.17 267,289.38 - - 60,011.01
146
HEFEI MEILING CO., LTD. Annual Report 2017
Influence on business performance and financial status of the Company from related
--
debts
For the above-mentioned statement, up to the Period-end, debts payable to related party from the Company and subordinate are amounting as 600,110,100 Yuan in
total, the claim receivable from related party for the Company and subordinate amounting as 413,946,200 Yuan.
147
HEFEI MEILING CO., LTD. Annual Report 2017
(V) Other related transactions
□ Applicable √ Not applicable
No other related transaction in Period.
XVII. Significant contract and implementations
(I) Entrust, contract and leasing
1. Entrust
□ Applicable √ Not applicable
No entrust in Period.
2. Contract
□ Applicable √ Not applicable
No contract in Period.
3. Leasing
√ Applicable □Not applicable
(1) Leasing
Operational leasing of the Company please found more details in “investment real estate”, “fixed assets”, “Lease
of related party” and “Rent of related party” in Note of Financial Statement.
(2) Gains/losses to the Company from projects that reached over 10% in total profit of the Company
in reporting period
□ Applicable √ Not applicable
No gains or losses to the Company from projects that reached over 10% in total profit of the Company in
reporting period.
(II) Major guarantee
√ Applicable □Not applicable
1. Guarantee
During the reporting period, the guarantees that the company provides for its wholly-owned and holding
subsidiaries are for the loans generated by supporting their production and operation, the guaranty type is
assurance; the guarantees that the company and subsidiaries provide for the distributors are to provide joint
liability guarantees for the high quality distributors conforming to certain conditions within the line of credit of
designated banks, the E-bank acceptance bills opened under this line of credit are all used for the distributors to
148
HEFEI MEILING CO., LTD. Annual Report 2017
pay the purchase payment for goods to the Company and subsidiaries, aiming to promote the company’s channel
business development, strengthen the good cooperative relationship between the company and the downstream
distributors, and effectively stimulate the company and its subsidiaries’ sales growth.
Up to 31 December 2017, the company has granted credit to the guarantees of some wholly-owned and holding
subsidiaries, in addition to the wholly-owned subsidiary Changhong Air-conditioner, other subsidiaries have no
actual guarantee; meanwhile, the company and its subsidiaries have granted credit to the guarantees of some high
quality distributors, the amount of guarantees is within the line of credit. The external guarantees of the Company
and subsidiaries are as follows:
In 10 thousand Yuan
Particulars about the external guarantee of the Company and subsidiaries (Barring the guarantee for subsidiaries)
Compl
ete
Name of the Related Guaran Actual date of Actual Guaran Guarantee
implem
Company Announcement tee happening (Date of guarante Guarantee type tee for related
entatio
guaranteed disclosure date limit signing agreement) e limit term party
n or
not
Notice No.:
2015-038,No.:
2015-040 and No.:
2015-064 on 29
August 2015 and 23
Dealer of Hefei
December 2015; Joint liability
Meiling Co., 20,000 2016-9-29 1244.81 1 year No No
Notice No.: guaranty
Ltd.
2016-068,No.:
2016-072 and No.:
2016-077 on 26
November 2016 and
14 December 2016
Notice No.:
2015-038,No.:
2015-040 and No.:
2015-064 on 29
Dealer of
August 2015 and 23
Sichuan
December 2015; Joint liability
Changhong 20,000 2016-10-14 694.0381 1 year No No
Notice No.: guaranty
Air-conditioner
2016-068,No.:
Co., Ltd.
2016-072 and No.:
2016-077 on 26
November 2016 and
14 December 2016
Total actual occurred
Total approving external
0 external guarantee in 1,938.8481
guarantee in report period (A1)
report period (A2)
149
HEFEI MEILING CO., LTD. Annual Report 2017
Total actual balance of
Total approved external
external guarantee at the
guarantee at the end of report 40,000 126
end of report period
period ( A3)
(A4)
Guarantee between the Company and the subsidiaries
Compl
ete
Name of the Related Guaran Actual date of Actual Guaran Guarantee
implem
Company Announcement tee happening (Date of guarante Guarantee type tee for related
entatio
guaranteed disclosure date limit signing agreement) e limit term party
n or
not
Notice No.:
2015-003,No.:
2015-007 and No.: Joint liability
55,000 2015-12-30 17,000 1 year Yes No
2015-015 on 26 guaranty
March 2015 and 18
April 2015
Notice No.: Joint liability
2016-8-5 5,000 1 year Yes No
2016-027,No.: guaranty
2016-031 and No.:
56,500
2016-046 on 25 Joint liability
2016-10-28 5,000 1 year No No
March 2016 and 5 guaranty
Zhongshan May 2016
Changhong
Joint liability
Electric Co., 2017-1-22 5,500 1 year No No
guaranty
LTD.
Joint liability
2017-2-24 6,000 1 year No No
guaranty
Notice No.:
2017-010,No.: Joint liability
2017-3-1 20,000 1 year No No
2017-014 and No.: guaranty
70,000
2017-031 on 30 Joint liability
2017-6-23 10,000 1 year No No
March 2017 and 5 guaranty
May 2017
Joint liability
2017-7-24 5,000 1 year No No
guaranty
Joint liability
2017-11-6 10,000 1 year No No
guaranty
Notice No.: Joint liability
2016-5-5 4,500 1 year Yes No
Guangdong 2016-027,No.: guaranty
Changhong 2016-031 and No.:
8,500
Ridian 2016-046 on 25 Joint liability
2016-9-1 2,000 1 year Yes No
Technology March 2016 and 5 guaranty
Co., Ltd. May 2016
Notice No.: 10,500 2017-6-13 2,000 Joint liability 80 days Yes No
150
HEFEI MEILING CO., LTD. Annual Report 2017
2017-010,No.: guaranty
2017-014 and No.: Joint liability
2017-031 on 30 2017-8-13 4,500 1 year No No
guaranty
March 2017 and 5
Joint liability
May 2017 2017-11-14 4,000 1 year No No
guaranty
Joint liability
2017-12-15 2,000 1 year No No
guaranty
Notice No.: Joint liability
Zhongke 2017-2-16 2,000 1 year No No
2017-010,No.: guaranty
Meiling
2017-014 and No.:
Cryogenic 6,000
2017-031 on 30 Joint liability
Technology 2017-6-23 1,000 1 year No No
March 2017 and 5 guaranty
Co., Ltd.
May 2017
Notice No.:
Sichuan 2017-010,No.:
Changhong Air 2017-014 and No.: 30,000
- - - - - -
Conditioning 2017-031 on 30
Co., Ltd. March 2017 and 5
May 2017
Total amount of actual
Total amount of approving guarantee occurred guarantee for
116,500 88,500
for subsidiaries in report period (B1) subsidiaries in report
period (B2)
Total balance of actual
Total amount of approved guarantee
guarantee for subsidiaries
for subsidiaries at the end of 173,000 75,000
at the end of reporting
reporting period (B3)
period (B4)
Guarantee of the subsidiaries for the subsidiaries
Related Actual date of Complet
Announc happening Actual e
Name of the Company Guarante Guarantee Guarantee Guarantee for
ement (Date of guarantee implem
guaranteed e limit type term related party
disclosure signing limit entation
date agreement) or not
- - - - - - - - -
Total amount of actual
Total amount of approving
occurred guarantee for
guarantee for subsidiaries in 0 0
subsidiaries in report
report period (C1)
period (C2)
Total balance of actual
Total amount of approved
guarantee for
guarantee for subsidiaries at the 0 0
subsidiaries at the end
end of reporting period (C3)
of reporting period (C4)
151
HEFEI MEILING CO., LTD. Annual Report 2017
Total amount of guarantee of the Company (total of three abovementioned guarantee)
Total amount of actual
Total amount of approving
occurred guarantee in
guarantee in report period 116,500 90,438.8481
report period
(A1+B1+C1)
(A2+B2+C2)
Total balance of actual
Total amount of approved
guarantee at the end of
guarantee at the end of report 213,000 75,126
report period
period (A3+B3+C3)
(A4+B4+C4)
Ratio of actual guarantee (A4+B4+C4) in net assets of the
14.87%
Company
Including:
Amount of guarantee for shareholders, actual controller and
0
its related parties (D)
The debts guarantee amount provided for the guaranteed
parties whose assets-liability ratio exceed 70% directly or 61,500
indirectly (E)
Proportion of total amount of guarantee in net assets of the
0
Company exceed 50% (F)
Total amount of the aforesaid three guarantees (D+E+F) 61,500
Explanations on possibly bearing joint and several
liquidating responsibilities for undue guarantees (if N/A
applicable)
Explanations on external guarantee against regulated
N/A
procedures (if applicable)
The above guarantees are all wholly-owned and holding subsidiaries of the Company. Production and operation of
these wholly-owned and holding subsidiaries was normal with no overdue unpaid loans and guarantee risk is
controllable. During the reporting period, the highest level of security the Company provided amounted to 1,165
million Yuan by the approval, the actual amount of guarantee is 885 million Yuan. The highest level of security the
Company and subsidiaries provided outside amounted to 400 million Yuan by the approval, the actual amount of
guarantee is 19.388481 million Yuan. At the end of the reporting period, the practical guarantee balance amounted
to 751.26 million Yuan, accounting for the Company’s latest net assets ratio of 14.87%.
Explanation on guarantee with composite way: Not applicable
2. Guarantee outside against the regulation
□ Applicable √ Not applicable
No guarantee outside against the regulation in Period.
(III) Entrust others to cash asset management
1. Trust financing
152
HEFEI MEILING CO., LTD. Annual Report 2017
√ Applicable □Not applicable
In 10 thousand Yuan
Type Capital resources Amount for entrust Balance un-expired Overdue amount
Bank financing Idle own funds 110,000 0 0
Bank financing Idle raised funds 90,000 0 0
Trust products Idle own funds 60,000 60,000 0
Total 260,000 60,000 0
Details of the single major amount, or high-risk trust investment with low security, poor fluidity and
non-guaranteed:
153
HEFEI MEILING CO., LTD. Annual Report 2017
In 10 thousand Yuan
Amoun
t of Whet
Actual reserve her Whethe
Summary of
Refere collecte for appro r has
Criteria Anticipate Actual the items
Trustee Trust Sourc nce d devalu ved entrust
Star End for d income gains/los and related
institution r ee Type Amount e of Capital investment purpose annual gains/l ation of by finance
t date date fixing (if ses in query index
name type funds rate of osses withdra legal plan in
reward applicable) period (if
return in wing proce the
applicable)
period (if dure future
applica (Y/N)
ble)
Non-gu Mainly invested in the follow
Juchao
Hefei arantee assets conform to relevant
Website
Changjiang d Self- supervisory requirement: high 4.3% Not
2016-12- (www.cninf
East Road Bank floatin 10,000 own 2017-4-6 liquidity assets of bond and annual 4.30% 131.95 131.95 131.95 N/A Yes applica
15 o.com.cn)
Branch of g funds bank savings; creditor’s assets; yield rate ble
(No.:
ICBC income equity assets, other assets or
2016-078)
product portfolio etc.
Under the premise that
customers voluntarily undertake Juchao
relevant market risks, the bank Website
Floatin Self- 3.65% Not
Hefei Branch 2016-12- 2017-3-3 provides customers with the (www.cninf
Bank g 3,000 own annual 3.65% 27 27.38 27.38 N/A Yes applica
of BEA 30 0 structured financial products o.com.cn)
income funds yield rate ble
which link together a certain (No.:
funds with a designated or 2016-083)
several kinds of foreign
154
HEFEI MEILING CO., LTD. Annual Report 2017
currency exchange rates for
investment, the linking
indicator: Australian Dollar
against the US Dollar.
Juchao
The structured deposit product, Website
Hefei Branch Floatin Self- 3.90% Not
2017-1-2 2017-4-2 the structural derivatives tied (www.cninf
of China Bohai Bank g 20,000 own annual 3.90% 194.47 194.47 194.47 N/A Yes applica
3 4 with the 3-month interbank o.com.cn)
Bank income funds yield rate ble
lending rate in London (Libor) (No.:
2017-002)
Juchao
Investment of money market
Guaran Website
Self- instrument and fixed income 3.60% Not
Zhongshan tee (www.cninf
Bank 2,700 own 2017-4-7 2017-6-7 tool, of which, money market annual 3.60% 16.24 16.24 16.24 N/A Yes applica
branch of BOC income o.com.cn)
funds instrument takes 30%-100%, yield rate ble
type (No.:
fixed income tool takes 0-30%.
2017-021)
Money-market instruments and
other inter-bank financing
instruments; inter-bank and
Non-gu
exchange-market bonds and Juchao
arantee
debt financing instruments, Website
Hefei branch d Self- 5.10% Not
2017-5-2 2017-11- other fixed-income short-term (www.cninf
of Industrial Bank floatin 30,000 own annual 5.10% 758.71 758.71 758.71 N/A Yes applica
6 23 investment instruments; trust o.com.cn)
Bank g funds yield rate ble
plans, regulated by regulatory (No.:
income
agencies, broker asset 2017-034)
product
management plans, insurance
debt investment plans, special
funds account and the beneficial
155
HEFEI MEILING CO., LTD. Annual Report 2017
rights of the aforementioned
assets in line with the
regulations of regulatory
agencies, other financial assets
and other combinations of other
various types of transactional
financing products that are
subject to the risk control
provisions of the Industrial
Bank.
Juchao
Investment of money market
Guaran Website
Self- instrument and fixed income 3.90% Not
Zhongshan tee 2017-7-1 (www.cninf
Bank 2,000 own 2017-6-8 tool, of which, money market annual 3.90% 8.55 8.55 8.55 N/A Yes applica
branch of BOC income 8 o.com.cn)
funds instrument takes 30%-100%, yield rate ble
type (No.:
fixed income tool takes 0-30%.
2017-039)
Princip Juchao
Mianyang
al/inco Website
branch of Self- 4.15% Not
me 2017-10- (www.cninf
China Bank 10,000 own 2017-7-7 Structured deposit annual 4.15% 103.75 104.17 104.17 N/A Yes applica
guarant 7 o.com.cn)
Everbright funds yield rate ble
eed (No.:
Bank
type 2017-045)
Juchao
Investment in cash and bond
Hefei Branch Princip Self- 4.70% Not Website
2017-7-1 2017-8-1 assets, of which, bonds are
of Huaxia Bank al-guar 20,000 own annual 4.70% 77.26 77.26 77.26 N/A Yes applica (www.cninf
1 0 invested in high credit rating
Bank Co., Ltd. anteed funds yield rate ble o.com.cn)
bond of AA (inclusive)
(No.:
156
HEFEI MEILING CO., LTD. Annual Report 2017
2017-047)
Non-gu
Juchao
Hefei arantee
Website
ShengliRoad d Self- Money market; fixed gain; non 4.60% Not
2017-9-1 (www.cninf
Branch of Bank floatin 20,000 own 2017-8-7 standardized creditor’s asses and annual 4.60% 88.22 88.22 88.22 N/A Yes applica
1 o.com.cn)
China CITIC g funds other type yield rate ble
(No.:
Bank income
2017-052)
product
The products invested in cash,
government bonds, local
government bonds, central bank
bills, and policy financial bonds,
the short-term financing bill,
medium-term notes,
subordinated debt, enterprise
Non-gu bonds, corporate bonds,
Juchao
Hefei Branch arantee non-publicly-available debt
Website
of Shanghai d Self- financing instruments, ABS, 4.60% Not
2017-8-1 2017-9-1 (www.cninf
Pudong Bank floatin 15,000 own ABN, and ABS sub-category annual 4.60% 56.71 58.60 58.60 N/A Yes applica
8 7 o.com.cn)
Development g funds credit bonds with AA ratings or yield rate ble
(No.:
Bank income above (for credit debt mainly
2017-063)
product underwritten by Shanghai
Pudong Development Bank with
ratings above (including) A-),
the buy-back, inter-bank
borrowing, securities trader
receipts, preferred stocks,
inter-bank deposits, money
funds, and non-standardized
157
HEFEI MEILING CO., LTD. Annual Report 2017
debt assets, securities
traders/funds/insurance oriented
plans and trust plans that meet
regulatory requirements such as
credit assets.
Juchao
Benefit Website
Self- Trust funds are used in 6.2% Not
Sichuan Trust rights 2016-12- 2017-12- 2,063.4 (www.cninf
Trust 35,520 own accordance with the provisions annual 6.60% 2,196.60 2,063.47 N/A Yes applica
Co., Ltd. of trust 28 5 7 o.com.cn)
funds of the trust documents yield rate ble
product (No.:
2016-082)
The trust capital shall be
gathered and used in accordance Juchao
ZHONGRON
with the provisions of trust Website
G Trust Self- 6.30% Not
2017-2-1 documents, and the trust capital (www.cninf
INTERNATIO Trust product 5,000 own 2017-8-3 annual 6.30% 145.85 145.85 145.85 N/A Yes applica
5 shall be mainly invested through o.com.cn)
NAL TRUST s funds yield ble
combination of creditor’s rights, (No.:
CO.,LTD.
equity, income rights, and 2017-003)
claims plus equity.
Juchao
Benefit Website
Self- Use of trust funds collectively in 6.50% Not
Sichuan Trust rights 2017-3-3 2017-10- (www.cninf
Trust 20,000 own accordance with the provision of annual 6.80% 712.33 712.33 712.33 N/A Yes applica
Co., Ltd. of trust 0 16 o.com.cn)
funds trust documents yield rate ble
product (No.:
2017-020)
ZHONGRON Custo Self- The trust plan funds invested in 6.00% Not Juchao
Trust 20,000 2017-6-7 2017-9-7 6.00% 302.47 302.47 302.47 N/A Yes
G m own bank deposits, money market annual applica Website
158
HEFEI MEILING CO., LTD. Annual Report 2017
INTERNATIO made funds funds, bond funds, exchanges yield rate ble (www.cninf
NAL TRUST 92 trust and inter-bank market bonds, o.com.cn)
CO.,LTD. unit and fixed-income products (No.:
(including but not limited to 2017-039)
reverse repurchases,
fixed-income bank financial
products, and other
fixed-income products approved
by the consignor with a time
limit within one year) , and
other purposes as agreed in the
Trust Contract.
The trust plan funds invested in
bank deposits, money market
funds, bond funds, exchanges
and inter-bank market bonds,
and fixed-income products Juchao
ZHONGRON Custo
(including but not limited to Website
G m Self- 5.80% Not
2017-7-2 2017-10- reverse repurchases, (www.cninf
INTERNATIO Trust made 10,000 own annual 5.80% 143.01 143.01 143.01 N/A Yes applica
7 25 fixed-income bank financial o.com.cn)
NAL TRUST 90 trust funds yield rate ble
products, and other (No.:
CO.,LTD. unit
fixed-income products approved 2017-051)
by the consignor with a time
limit within one year) , and
other purposes as agreed in the
Trust Contract.
Fund Self- The bank deposits, government 6.10% Not Juchao
Sichuan Trust 2017-11- 2018-11-
Trust trust 60,000 own bonds, financial bonds, central annual 6.10% 3,660 148.26 148.26 N/A Yes applica Website
Co., Ltd. 30 30
plan funds bank bills, enterprise bonds with yield rate ble (www.cninf
159
HEFEI MEILING CO., LTD. Annual Report 2017
with AA+ rating, enterprise o.com.cn)
use of short-term financing bonds with (No.:
purpos short-term credit ratings of A-1 2017-095)
e and above, bond reverse
designa repurchases, bank financial
ted products, money market funds,
and other money market
products; the asset management
plans issued by securities
companies; the asset
management plans issued by
special fund subsidiaries; the
trust products issued by trust
companies or transferring trust
beneficiary right; the
transferring usufruct of
receivables; the insurance funds
of trust industries, etc.
Juchao
Floatin Invested in other investment Website
Idle 4.00% Not
Anhui Branch g 2016-12- 2017-3-2 tools as interbank deposit (www.cninf
Bank 20,000 raise annual 4.00% 197.26 197.26 197.26 N/A Yes applica
of CBC income 20 0 conform to relevant supervisory o.com.cn)
funds yield rate ble
product requirement (No.:
2016-079)
Princip Juchao
Investment in cash and bond
Hefei Branch al Idle 4.15% Not Website
2016-12- 2017-6-2 assets, of which, bonds are
of Huaxia Bank strateg 30,000 raise annual 4.15% 624.21 624.21 624.21 N/A Yes applica (www.cninf
21 2 invested in high credit rating
Bank Co., Ltd. y funds yield rate ble o.com.cn)
bond of AA (inclusive)
protecti (No.:
160
HEFEI MEILING CO., LTD. Annual Report 2017
on type 2016-079)
Juchao
Investment of money market
Anhui Branch Guaran Website
Idle instrument and fixed income 3.50% Not
of Bank of tee 2016-12- 2017-3-2 (www.cninf
Bank 20,000 raise tool, of which, money market annual 3.50% 174.52 174.52 174.52 N/A Yes applica
Communicatio income 23 4 o.com.cn)
funds instrument takes 30%-100%, yield rate ble
n Co., Ltd. type (No.:
fixed income tool takes 0-30%.
2016-079)
Princip Juchao
al Investment in cash and bond Website
Hefei Branch Idle 4.15% Not
strateg 2016-12- 2017-6-2 assets, of which, bonds are (www.cninf
of Huaxia Bank 20,000 raise annual 4.15% 416.14 416.14 416.14 N/A Yes applica
y 28 8 invested in high credit rating o.com.cn)
Bank Co., Ltd. funds yield rate ble
protecti bond of AA (inclusive) (No.:
on type 2016-080)
Take the funds collected by the
financial product sales as the
Juchao
nominal principal, and trade the
Floatin Website
Idle capital cost of the nominal 4.00% Not
Hefei Branch g 2017-3-2 2017-9-2 (www.cninf
Bank 10,000 raise principal as investment income annual 4.00% 201.64 204.44 204.44 N/A Yes applica
of CMBC income 2 2 o.com.cn)
funds and financial derivatives yield rate ble
type (No.:
transactions related to
2017-008)
USD3M-LIBOR with the
counterparty.
Under the premise that Juchao
Floatin customers voluntarily undertake Website
Idle 4.30% Not
Hefei Branch g 2017-3-2 2017-9-2 relevant market risks, the bank (www.cninf
Bank 10,000 raise annual 4.30% 220.30 223.36 223.36 N/A Yes applica
of BEA income 2 5 provides customers with the o.com.cn)
funds yield rate ble
type structured financial products (No.:
which link together a certain 2017-008)
161
HEFEI MEILING CO., LTD. Annual Report 2017
funds with a designated or
several kinds of foreign
currency exchange rates for
investment, the linking
indicator: Australian Dollar
against the US Dollar.
Juchao
Investment of money market
Anhui Branch Guaran Website
Idle instrument and fixed income 4.10% Not
of Bank of tee 2017-3-2 2017-6-2 (www.cninf
Bank 20,000 raise tool, of which, money market annual 4.10% 206.68 206.68 206.68 N/A Yes applica
Communicatio income 7 7 o.com.cn)
funds instrument takes 30%-100%, yield rate ble
n Co., Ltd. type (No.:
fixed income tool takes 0-30%.
2017-009)
Mainly invest in inter-bank
market central bank bills,
government bonds and financial
bonds, enterprise bonds,
short-term financing, Juchao
Hefei Branch
Guaran medium-term notes, inter-bank Website
of Shanghai Idle 4.50% Not
tee 2017-6-2 2017-9-2 borrowing, inter-bank deposits, (www.cninf
Pudong Bank 10,000 raise annual 4.50% 112.50 112.50 112.50 N/A Yes applica
income 4 4 bonds or bills repurchases, etc., o.com.cn)
Development funds yield rate ble
type meanwhile, the banks increase (No.:
Bank
the yield rate of this product 2017-042)
through proactive management
and by using relevant financial
instruments with simple
structure and low risks.
Hefei Branch Floatin Idle 2017-6-2 2017-12- Under the premise that 4.60% Not Juchao
Bank 10,000 4.60% 235.67 238.94 238.94 N/A Yes
of BEA g raise 3 27 customers voluntarily undertake annual applica Website
162
HEFEI MEILING CO., LTD. Annual Report 2017
income funds relevant market risks, the bank yield rate ble (www.cninf
type provides customers with the o.com.cn)
structured financial products (No.:
which link together a certain 2017-042)
funds with a designated or
several kinds of foreign
currency exchange rates for
investment, the linking
indicator: Australian Dollar
against the US Dollar.
Take the funds collected by the
financial product sales as the
Juchao
nominal principal, and trade the
Floatin Website
Idle capital cost of the nominal 4.60% Not
Hefei Branch g 2017-6-2 2017-12- (www.cninf
Bank 10,000 raise principal as investment income annual 4.60% 233.15 236.39 236.39 N/A Yes applica
of CMBC income 3 25 o.com.cn)
funds and financial derivatives yield rate ble
type (No.:
transactions related to
2017-042)
USD3M-LIBOR with the
counterparty.
Princip Juchao
Hefei branch al/inco Website
Idle 4.35% Not
of China me 2017-6-2 2017-9-2 (www.cninf
Bank 10,000 raise Structural deposit annual 4.35% 108.75 108.75 108.75 N/A Yes applica
Everbright guarant 8 8 o.com.cn)
funds yield rate ble
Bank eed (No.:
type 2017-044)
Anhui Branch Princip Idle Investment of money market 4.80% Not Juchao
of Bank of Bank al/inco 25,000 raise 2017-7-3 2017-8-3 instrument and fixed income annual 4.80% 101.92 101.92 101.92 N/A Yes applica Website
Communicatio me funds tool, of which, money market yield rate ble (www.cninf
163
HEFEI MEILING CO., LTD. Annual Report 2017
n Co., Ltd. guarant instrument takes 30%-100%, o.com.cn)
eed fixed income tool takes 0-30%. (No.:
type 2017-044)
Princip Juchao
Investment of money market
Anhui Branch al/inco Website
Idle instrument and fixed income 4.40% Not
of Bank of me 2017-10- (www.cninf
Bank 20,000 raise 2017-8-8 tool, of which, money market annual 4.40% 154.30 154.30 154.30 N/A Yes applica
Communicatio guarant 11 o.com.cn)
funds instrument takes 30%-100%, yield rate ble
n Co., Ltd. eed (No.:
fixed income tool takes 0-30%.
type 2017-052)
Under the premise that
customers voluntarily undertake
relevant market risks, the bank
provides customers with the
Juchao
structured financial products
Floatin Website
Idle which link together a certain 4.50% Not
Hefei Branch g 2017-12- (www.cninf
Bank 10,000 raise 2017-8-4 funds with a designated or annual 4.50% 178.77 181.25 181.25 N/A Yes applica
of BEA income 27 o.com.cn)
funds several kinds of foreign yield rate ble
type (No.:
currency exchange rates for
2017-052)
investment, the linking
indicator: Australian Dollar
against the US Dollar.
Take the funds collected by the Juchao
Floatin financial product sales as the Website
Idle 4.60% Not
Hefei Branch g 2017-9-2 2017-12- nominal principal, and trade the (www.cninf
Bank 15,000 raise annual 4.60% 168.25 170.71 170.71 N/A Yes applica
of CMBC income 7 25 capital cost of the nominal o.com.cn)
funds yield rate ble
type principal as investment income (No.:
and financial derivatives 2017-076)
164
HEFEI MEILING CO., LTD. Annual Report 2017
transactions related to
USD3M-LIBOR with the
counterparty.
Under the premise that
customers voluntarily undertake
relevant market risks, the bank
provides customers with the Juchao
Floatin structured financial products Website
Idle 4.50% Not
Hefei Branch g 2017-9-2 2017-12- which link together a certain (www.cninf
Bank 15,000 raise annual 4.50% 168.29 170.63 170.63 N/A Yes applica
of BEA income 7 27 funds with a designated or o.com.cn)
funds yield rate ble
type several kinds of foreign (No.:
currency exchange rates for 2017-076)
investment, the linking
indicator: Australian Dollar
against the US Dollar.
Mainly invest in inter-bank
market central bank bills,
government bonds and financial
bonds, enterprise bonds,
short-term financing, Juchao
Hefei Branch
Guaran medium-term notes, inter-bank Website
of Shanghai Idle 4.40% Not
tee 2017-9-3 2017-12- borrowing, inter-bank deposits, (www.cninf
Pudong Bank 10,000 raise annual 4.40% 108.49 108.78 108.78 N/A Yes applica
income 0 29 bonds or bills repurchases, etc., o.com.cn)
Development funds yield rate ble
type meanwhile, the banks increase (No.:
Bank
the yield rate of this product 2017-076)
through proactive management
and by using relevant financial
instruments with simple
structure and low risks.
165
HEFEI MEILING CO., LTD. Annual Report 2017
Government bonds, central bank
bills, and financial bonds; bank
deposits, large negotiable
certificate of deposit (NCD),
bond repurchases, inter-bank
borrowing; enterprise bonds
with high credit ratings,
corporate bonds (including the
short-term corporate bonds of
securities companies), and
Hefei short-term financing bills,
Juchao
Economy ultra-short-term financing bills,
Guaran Website
Technology Idle medium-term notes, 4.30% Not
tee 2017-10- 2017-12- (www.cninf
Development Bank 20,000 raise asset-backed securities, and annual 4.30% 174.36 174.36 174.36 N/A Yes applica
income 16 29 o.com.cn)
Zone Branch funds non-publicly-directed debt yield rate ble
type (No.:
of Bank of financing instruments; the
2017-081)
China Co., Ltd. investment scope includes asset
management plans for securities
traders, asset management plans
for fund company, and trust
plans of the above-mentioned
financial assets; and other
low-risk and highly-liquid
financial assets with within the
range permitted by the laws,
regulations, and regulatory
requirements.
Total 568,220 -- -- -- -- -- -- 12,408.32 8,786.08 -- -- -- -- --
166
HEFEI MEILING CO., LTD. Annual Report 2017
167
HEFEI MEILING CO., LTD. Annual Report 2017
Entrust financial expected to be unable to recover the principal or impairment might be occurred
□ Applicable √ Not applicable
2. Entrust loans
□ Applicable √ Not applicable
No entrust loans in the period.
(IV) Other material contracts
√ Applicable □Not applicable
1. On 21 March 2017, the Company signed the Strategic Cooperation Framework Agreement
(hereinafter referred to as Cooperation Agreement) with Italy Candy Hoover Group S.r.l. and Candy
S.p.A.(together named as Candy Group). Both parties followed the principles of strategic win-win
and giving full play to the synergistic effects of products and resources, and planned to establish
strategic partnership in refrigerator (freezer), washing machine business areas by friendly
negotiation, expand market together, promote brands, and maximize the commercial value and
social value.
The resolution of the 29th meeting of the company’s 8th Board of Directors approved and
agreed the company to co-invest and establish Meiling Candy Washing Machine Co., Ltd. with
Candy Group with registered capital of RMB150 million, of which the company invested RMB 90
million in cash, a 60% in registered capital; and Candy Group invested RMB 60 million in cash, a
40% takes in registered capital. See details on “Securities Times”, “China Securities Journal”,
“Hong Kong Commercial Daily” and www.cninfo.com.cn that the company disclosed in the
form of announcement (Announcement No. 2017-007 and No. 2017-010) on March 21, 2017 and
March 30, 2017.
2. In order to vitalize the land assets of subsidiaries, maximize the efficiency of assets and
increase the cash inflow of subsidiaries, the resolution of the 29th meeting of the 8th Session of
Board of Directors of the Company passed and agreed the subsidiary Hefei Meiling Nonferrous
Metal Products Co., Ltd. (hereinafter referred to as “Meiling Nonferrous Metal”) to cooperate
and sign the “Cooperation Contract for the Land Project of Meiling Nonferrous Metal Company in
Feidong County” (hereinafter referred to as “Cooperation Contract”) with Hefei Vanke Real
Estate Co., Ltd. (hereinafter referred to as “Hefei Vanke Real Estate”) for a land parcel (land area
of 34.68 acres, land status is industrial land, land certificate No. is DGY2014 No.4119, hereinafter
referred to as “objective land parcel”) which is located at LiaoYuan Road East, Feidong County,
Hefei City and possessed by Meiling Nonferrous Metal. In accordance with the relevant agreement
of the “Cooperation Contract”, both parties have established a project company Hefei Wanmei
Real Estate Co., Ltd. (hereinafter referred to as “Wanmei Real Estate”) in May 2017, and
managed Wanmei Real Estate in accordance with the terms of the Cooperation Contract, and
actively promoted the land upgrading and reconstruction of the objective land parcel. At the same
time, in accordance with the relevant regulations on the transfer of state-owned assets, Meiling
Nonferrous Metal transferred its 99% equity of Wanmei Real Estate through public listing on the
168
HEFEI MEILING CO., LTD. Annual Report 2017
Southwest United Equity Exchange (hereinafter referred to as the “Southwest Exchange”), the
bottom price of transfer was 48.65 million Yuan. According to the results of public listing and the
verification by the Southwest United Equity Exchange, Hefei Vanke Real Estate was determined as
the ultimate transferee. The resolution of the 4th meeting of the 9th Board of Directors of the
Company passed and agreed Hefei Meiling Nonferrous Metal Products Co., Ltd. to transfer its 99%
equity of Wanmei Real Estate to Hefei Vanke Real Estate Co., Ltd., and the price of equity transfer
was 48.65 million Yuan.
See details on “Securities Times”, “China Securities Journal”, “Hong Kong Commercial
Daily” and www.cninfo.com.cn that the company disclosed in the form of announcement
(Announcement No. 2017-010, No. 2017-018, No. 2017-088 and No. 2017-089) on March 30, 2017
and November 10, 2017.
XVIII. Social responsibility
1. Performance of social responsibility: Not applicable
2. Fulfill the precise social responsibility for poverty alleviation
The Company has no precise social responsibility for poverty alleviation in the period and has
no follow-up plan either.
3. Particulars about Environmental Protection
Indicate by tick mark whether the Company or any of its subsidiaries is a heavily polluting
business identified by the environmental protection authorities of China
□ Yes √ No
No such cases in the Reporting Period.
XIX. Explanation on other significant events
√ Applicable □Not applicable
(I) On February 27, 2017, the company received a written notice from the controlling
shareholder Sichuan Changhong Electric Co., Ltd. (hereinafter referred to as “Sichuan
Changhong”), Sichuan Changhong is intended to take part of A share of the Company and the its
fruits (including capital reserve into equity, stock dividend, bonus shares, dividends, etc.) as the
subject for non-public offering of exchangeable bonds. See details on “Securities Times”,
“China Securities Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the
company disclosed in the form of announcement (Announcement No. 2017-004) on February 28,
2017.
(II) The resolution of the 29th meeting of the company’s 8th Board of Directors and the
2016 Annual General Meeting of Shareholders approved and agreed the subsidiaries to carry out the
forward exchange fund transaction business from July 1, 2017 to June 30, 2018, the business
transaction balance should not exceed USD 550 million, the single business delivery period should
169
HEFEI MEILING CO., LTD. Annual Report 2017
be no longer than 1 year. See details on “Securities Times”, “China Securities Journal”,
“Hong Kong Commercial Daily” and www.cninfo.com.cn that the company disclosed in the
form of announcement (Announcement No. 2017-010, No. 2017-017, No. 2017-031) on March 30,
2017 and May 5, 2017.
(III) The resolution of the 29th meeting of the company’s 8th Board of Directors approved
and agreed the company to apply for bank note pool special credit line of maximum RMB 400
million to Hefei Branch of Huaxia Bank Co., Ltd., the credit time limit was one year, and the credit
variety was mainly used in bank note pool special business by adopting endorsement for bill pledge.
See details on “Securities Times”, “China Securities Journal”, “Hong Kong Commercial
Daily” and www.cninfo.com.cn that the company disclosed in the form of announcement
(Announcement No. 2017-010, No. 2017-019) on March 30, 2017.
(IV) On March 28 and May 4, 2017, the resolution of the 29th meeting of the company’s 8th
Board of Directors, the 15th meeting of the 8th Board of Supervisors and the 2016 Annual General
Meeting of Shareholders approved the Company’s 2016 Annual Profit Allocation Plan, at the
same time, the company’s independent directors made independent recognition opinions on the
plan, considering the interests of shareholders and company's long-term development needs, agreed
the company to take the total capital of 1,044,597,881 shares up to December 31, 2016 as the base
and distribute cash dividend of RMB 0.6 (including tax) per 10 shares to all shareholders, totally
distribute cash dividend of RMB 62,675,872.86 (including tax, cash bonus accounts for 29.06% of
the profits available for distribution that the parent company achieves in the current year). After the
distribution, the total share capital of the company remained unchanged, the remaining accumulated
undistributed profit of the parent company was RMB 893,663,321.15, and the remaining
undistributed profit was carried forward to the afterwards year for distribution.
On May 27, 2017, the company disclosed the 2016 annual profit distribution plan
implementation announcement, implemented the above-mentioned profit distribution plan. See
details on “Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily”
and www.cninfo.com.cn that the company disclosed in the form of announcement (Announcement
No. 2017-010, No. 2017-031, No.2017-033) on March 30, May 4, and May 27, 2017.
(V) During the reporting period, the company received the Notice of Acceptance of
Registration (ZSXZ No. [2017]SCP212) issued by National Association of Financial Market
Institutional Investors (hereinafter referred to as the “Investor Association”), the Investor
Association accepted the company’s registration for super short-term financing bond. See details
on “Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and
www.cninfo.com.cn that the company disclosed in the form of announcement (Announcement No.
2016-068, No. 2016-073, No. 2016-077, No. 2017-046) on November 26, 2016, December 14,
2016, and July 13, 2017.
(VI) On May 25, 2017, the company received the Letter About Increasing the Holding of
Circulating Shares of Meiling from the controlling shareholder Sichuan Changhong Electric Co.,
Ltd. (hereinafter referred to as “Sichuan Changhong”), Sichuan Changhong and its persons
acting in concert planed to increase the holding of the Company’s issued circulating shares
through secondary market, the ratio of increased holding of shares didn’t exceed 1% of the
Company’s general capital. On September 29, 2017, the Company received the Notification Letter
170
HEFEI MEILING CO., LTD. Annual Report 2017
About the Completion of Increasing the Shareholding of Tradable Share of Meiling from Sichuan
Changhong, whose persons acting in concert Changhong (Hong Kong) Trading Co., Ltd. had
directly and indirectly increased the shareholding of the Company’s circulating B share of
5,729,619 shares by competitive bidding transactions through the secondary market from April 19,
2017- September 14, 2017, accounting for 0.55% of the Company’s general capital. As of
December 31, 2017, Changhong (Hong Kong) Trading Co., Ltd. totally held the Company’s B
share of 30,895,442 shares, accounting for 2.96% of the Company’s general capital. See details on
“Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and
www.cninfo.com.cn that the company disclosed in the form of announcement (Announcement No.
2017-032 and No. 2017-078) on May 26, 2017 and September 30, 2017.
(VII) being deliberated and approved by 34th session of 8th BOD and 2nd extraordinary
meeting of shareholder general meeting of 2017, the Company agrees to supplemented the business
scope, and revised relevant clauses in Article of Association. See details on “Securities Times”,
“China Securities Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the
company disclosed in the form of announcement (Announcement No. 2017-052, No. 2017-060 and
No. 2017-073) on August 10, 2017 and September 13, 2017.
(VIII) The resolutions of the 35th meeting of the 8th session of the Board of Directors of the
Company and the 2nd extraordinary shareholders’ general meeting in 2017 passed and agreed the
Company to apply for a special credit line of bank notes pool of maximum RMB 400 million from
Hefei Luyang Branch of China Construction Bank Co., Ltd., the credit period was one year, the
credit grants were mainly used for the special business of bank notes pool, and used the
endorsement for pledge. See details on “Securities Times”, “China Securities Journal”,
“Hong Kong Commercial Daily” and www.cninfo.com.cn that the company disclosed in the
form of announcement (Announcement No. 2017-063, No. 2017-068 and No. 2017-073) on March
30, 2017 and September 13, 2017.
(IX) On October 13, 2017, the Company received the “Notification Letter About the Plan for
Shareholding Reduction of Hefei Meiling Co., Ltd.” from the Company’s shareholder Caitong
Fund Management Co., Ltd. (hereinafter referred to as “Caitong Fund”) who has a shareholding
of more than 5% in the Company, Caitong Fund totally held 95,169,946 shares of the Company
(accounting for 9.11% of the Company’s general capital) through its asset management plan, it
planned to reduce the shareholding in the Company of no more than 62,675,866 shares (not
exceeding 6% of the Company’s general capital) by centralized auction trading or block trade
within six months from October 14, 2017. On January 15, 2018, the Company received the
“Notification Letter About the Progress of Caitong Fund Management Co., Ltd. to the Plan for
Shareholding Reduction of Hefei Meiling Co., Ltd.” from Caitong Fund, who totally reduced its
shareholding in the Company of 11,913,134 shares by centralized auction trading or block trade
from November 6, 2017 to January 15, 2018, (accounting for 1.1405% of the Company’s general
capital. See details on “Securities Times”, “China Securities Journal”, “Hong Kong
Commercial Daily” and www.cninfo.com.cn that the company disclosed in the form of
announcement (Announcement No. 2017-080 and No. 2018-003) on October 14, 2017 and January
16, 2018.
(X) The resolution of the second meeting of the 9th session of the Board of Directors of the
171
HEFEI MEILING CO., LTD. Annual Report 2017
Company passed and agreed the Company to transfer its 200 million trust beneficial rights
corresponding to the trust units under the phase I of” Sichuan Trust Jinyi No. 3 Collective Fund
Trust Plan” to Chengdu Houkun Trade Co., Ltd. at the cost of RMB 207,123,287.67, the recovered
funds shall be used for the Company to increase the capital in its wholly-owned subsidiary Sichuan
Changhong Air Conditioning Co., Ltd. to implement its relocation and capacity expansion and
upgrade projects. See details on “Securities Times”, “China Securities Journal”, “Hong Kong
Commercial Daily” and www.cninfo.com.cn that the company disclosed in the form of
announcement (Announcement No. 2017-082) on October 18, 2017.
(XI)The resolutions of the 6th meeting of the 9th session of the Board of Directors of the
Company and the 3rd meeting of the 9th session of the Board of Supervisors of the Company, and
the first extraordinary general meeting of shareholders in 2018 passed and agreed the Company and
its subsidiaries to use their own idle funds not exceeding RMB 1.2 billion (the limit can be rolled
over) to invest in the high security, good liquidity, low risk, and steady bank financial products with
investment product term of no more than one year, and the authorization period shall be valid within
one year from the date of approval by the Company’s general meeting of shareholders. See details
on “Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and
www.cninfo.com.cn that the company disclosed in the form of announcement (Announcement No.
2017-096, No. 2017-097, No. 2017-99, No. 2017-101 and No. 2018-001) on December 23, 2017
and January 10, 2018.
(XII) The resolutions of the 6th meeting of the 9th session of the Board of Directors of the
Company and the 3rd meeting of the 9th session of the Board of Supervisors of the Company, and
the first extraordinary general meeting of shareholders in 2018 passed and agreed the Company to
use its own idle funds not exceeding RMB 1.06 billion (the limit can be rolled over) to invest in the
high security and good liquidity principal-protected financial products with single product term of
no more than one year, and the authorization period shall be valid within one year from the date of
approval by the Company’s general meeting of shareholders. See details on “Securities Times”,
“China Securities Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the
company disclosed in the form of announcement (Announcement No. 2017-096, No. 2017-097, No.
2017-99, No. 2017-101 and No. 2018-001) on December 23, 2017 and January 10, 2018.
XX. Major event of the subsidiary
√ Applicable □Not applicable
(I) The resolution of the 28th meeting of the company’s 8th Board of Directors approved and agreed the company’s
subsidiary Jiangxi Meiling Electric Appliance Co., Ltd. (Hereinafter referred to as “Jiangxi Meiling”) to invest
RMB206.60 million to build one million environmental and energy saving refrigerator intelligent production line
project. At the same time, in order to ensure the smooth implementation of this investment and construction
projects, agreed the company to increase capital of RMB 200 million to Jiangxi Meiling for the project investment.
See details on “Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and
www.cninfo.com.cn that the company disclosed in the form of announcement (Announcement No. 2017-006) on
March 14, 2017.
(II) The resolution of the 28th meeting of the company’s 8th Board of Directors approved and agreed the
172
HEFEI MEILING CO., LTD. Annual Report 2017
company’s subsidiary Zhongshan Changhong Electric Co., Ltd. (Hereinafter referred to as “Zhongshan
Changhong”) to jointly establish Zhongshan Hongyou Heating and Ventilation Equipment Co., Ltd. (Tentative
name, and ultimately subject to the name approved by the industrial and commercial bureau) with Zhuhai Samyou
Environmental Technology Co., Ltd. (Hereinafter referred to as “Samyou Environmental”) that has superior
resources of R & D, technology, channels and overseas customers in the industry, with registered capital of RMB
40 million, of which Zhongshan Changhong invested RMB 24 million of its owned funds, while Samyou
Environmental invested RMB 16 million of its owned funds. See details on “Securities Times”, “China Securities
Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the company disclosed in the form of
announcement (Announcement No. 2017-006) on March 14, 2017.
(III) The resolution of the 34th meeting of the 8th session of the Board of Directors of the Company passed and
agreed Zhongshan Changhong and its partner UAE RUBA Company to jointly add investments in the Pakistan
refrigerator project of the joint venture manufacturing company and joint venture sales company established in the
previous period by capital increase which should be mainly used for the implementation of refrigerator door
foaming and new product development projects. Among them, Zhongshan Changhong increased capital of
815,000 US dollars this time. See details on “Securities Times”, “China Securities Journal”, “Hong Kong
Commercial Daily” and www.cninfo.com.cn that the company disclosed in the form of announcement
(Announcement No. 2017-053 and No. 2017-059) on August 10, 2017.
(IV) Being deliberated and approved by 35th session of 8th BOD, agreed to invested approximately 24.367 million
Yuan on technical improvement in aspect of production line, improving the production ability, technical standards
and manufacturing efficiency of Zhongshan Changhong. See details on “Securities Times”, “China Securities
Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the company disclosed in the form of
announcement (Announcement No. 2017-065) on August 22, 2017.
(V) The resolution of the 33rd meeting of the 8th session of the Board of Directors of the Company passed and
agreed the Company’s holding subsidiary, Guangdong Changhong Ridian Technology Co., Ltd. (hereinafter
referred to as “Ridian Technology”), to invest 5 million Yuan in cash in Handan City, Hebei Province to establish
a wholly-owned subsidiary, Hebei Hongmao Household Appliance Technology Co., Ltd. (subject to the name
finally approved by the industrial and commercial bureau), to engage in the production, research and
development, and sales of gas heating water heaters and other products. See details on “Securities Times”, “China
Securities Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the company disclosed in the
form of announcement (Announcement No. 2017-050) on July 2, 2017.
(VI) Being deliberated and approved by 34th session of 8th BOD, agreed to transfer part of the shares of the
subsidiary Zhongke Meiling Cryogenic Technology Co., Ltd. (hereinafter referred to as Zhongke Meiling) held by
staffs with 1.63 Yuan/Share (652,000 Yuan in total), totally 0.4 million shares transferred. See details on
“Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and www.cninfo.com.cn that the
company disclosed in the form of announcement (Announcement No. 2017-053) on August 10, 2017.
(VII) The resolution of the 35th meeting of the 8th session of the Board of Directors of the Company passed and
173
HEFEI MEILING CO., LTD. Annual Report 2017
agreed Zhongke Meiling to implement the targeted issuance of shares, and the issuing targets, i.e. the management
of Zhongke Meiling, would subscribe in cash, meanwhile, the Company would give up the pre-emption right for
this issuance of shares under the same conditions. See details on “Securities Times”, “China Securities Journal”,
“Hong Kong Commercial Daily” and www.cninfo.com.cn that the company disclosed in the form of
announcement (Announcement No. 2017-065 and No. 2017-067) on August 22, 2017.
(VIII) The resolution of the 34th meeting of the 8th session of the Board of Directors of the Company passed and
agreed the Company’s subsidiary, Sichuan Changhong Air Conditioner Company (hereinafter referred to as
“Changhong Air Conditioner”), to invest 1,090,410,100 Yuan in the removal and capacity expansion and upgrade
project at Mianyang economic development zone, and build a production base with annual output of 4.2 million
sets of air conditioners. At the same time, it’s agreed the Company to increase capital of RMB 650 million to
Changhong Air Conditioner for this removal and capacity expansion and upgrade project, and the remaining funds
would be raised by Changhong Air Conditioner. See details on “Securities Times”, “China Securities Journal”,
“Hong Kong Commercial Daily” and www.cninfo.com.cn that the company disclosed in the form of
announcement (Announcement No. 2017-053, No. 2017-061 and No. 2017-073) on August 22, 2017 and
September 13, 2017.
(IX) Being deliberated and approved by 1st session of 9th BOD, agreed to invested approximately 37.0586 million
Yuan for technical improve in order to improving the production ability and technical standards of Changhong AC.
See details on “Securities Times”, “China Securities Journal”, “Hong Kong Commercial Daily” and
www.cninfo.com.cn that the company disclosed in the form of announcement (Announcement No. 2017-074) on
September 13, 2017.
174
HEFEI MEILING CO., LTD. Annual Report 2017
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
(I) Changes in Share Capital
In Share
Before the Change Increase/Decrease in the Change (+, -) After the Change
Bon Capitaliz
New
Proporti us ation of Proporti
Amount shares Others Subtotal Amount
on shar public on
issued
es reserve
I. Restricted shares 290,301,746 27.79% 0 0 0 -209,443,158 -209,443,158 80,858,588 7.74%
1. State-owned shares 0 0.00% 0 0 0 0 0 0 0.00%
2. State-owned legal person’s
70,793,625 6.78% 0 0 0 0 0 70,793,625 6.78%
shares
3. Other domestic shares 218,508,272 20.92% 0 0 0 -209,710,729 -209,710,729 8,797,543 0.84%
Including: Domestic legal
215,820,073 20.66% 0 0 0 -211,103,996 -211,103,996 4,716,077 0.45%
person’s shares
Domestic natural
2,688,199 0.26% 0 0 0 1,393,267 1,393,267 4,081,466 0.39%
person’s shares
4. Foreign shares 999,849 0.09% 0 0 0 267,571 267,571 1,267,420 0.12%
Including: Foreign legal
0 0.00% 0 0 0 0 0 0 0.00%
person’s shares
Foreign natural
999,849 0.09% 0 0 0 267,571 267,571 1,267,420 0.12%
person’s shares
II. Unrestricted shares 754,296,135 72.21% 0 0 0 209,443,158 209,443,158 963,739,293 92.26%
1. RMB Ordinary shares 592,431,984 56.71% 0 0 0 209,710,729 209,710,729 802,142,713 76.79%
2. Domestically listed foreign
161,864,151 15.50% 0 0 0 -267,571 -267,571 161,596,580 15.47%
shares
3. Overseas listed foreign shares 0 0.00% 0 0 0 0 0 0 0.00%
4. Others 0 0.00% 0 0 0 0 0 0 0.00%
III. Total shares 1,044,597,881 100% 0 0 0 0 0 1,044,597,881 100.00%
(II) Reasons for share changed
√ Applicable □Not applicable
1. In reporting period, former staff supervisor Mr. Shang Wen leave the office for 6 months, the 269,700 shares
held by Mr. Shang are lease for sale.
2. In reporting period, the new director of the 8th BOD Mr. Teng Guangsheng holds 117,600 shares of the
175
HEFEI MEILING CO., LTD. Annual Report 2017
Company, and the shares are lock for trading in relevant regulations since he serves director of the Company in
reporting period.
3. According to the relevant provisions of the Company’s 2016 annual performance incentive fund provision and
distribution plan and in order to enhance the investors’ confidence, some directors and senior executives of the
Company purchased the Company’s stock through the open market with their awarded 2016 annual performance
incentive funds and their own funds. See details on “Securities Times”, “China Securities Journal”, “Hong Kong
Commercial Daily” and www.cninfo.com.cn that the company disclosed in the form of announcement
(Announcement No. 2017-062, No. 2017-064, No. 2017-070, No. 2017-087, No. 2017-090, No. 2017-091 and No.
2017-092) This time, the Company’s five directors and senior executives totally increased the shareholdings of
1,361,834 shares in the Company (including 1,005,073 shares of A share and 356,761 shares of B share), which
accounted for 0.1304% of the Company’s total share capital. At the same time, according to the provisions of the
Company Law, the Securities Law, and the Rules on the Management of Shares Held by Directors, Supervisors,
and Senior Executives of Listed Companies and Their Changes, some of the shares held by the aforementioned
personnel were locked.
4. In reporting period, new deputy president of the Company Mr. Huang Danian holds 356,450 shares of the
Company, part of the shares will lock-up according to relevant regulations since Mr. Huang serves in the period.
5. In reporting period, former chairman of the supervisory committee Mr. Yu Wanchun, former senior executive
Mr. Zhang Xiaolong and Mr. Liao Tao leave the office less than 6 months, according to relevant regulations,
263,300 shares held by Mr. Yu Wanchun, 484,700 shares held by Mr. Zhang Xiaolong and 704,966 shares held by
Liao Tao will lock-up totally.
6. In reporting period, the RMB common 210,981,038 shares (A-stock) are release for 2016 privately placement.
(III) Approval of share changed
□ Applicable √ Not applicable
(IV) Ownership transfer of share changed
√ Applicable □Not applicable
In reporting period, among the restricted shares, the 122,958 shares held by former Tangshan Dongkuang
Hardware Wholesale Company are transfer to Zhang Yong.
(V) Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share
attributable to common shareholders of Company in latest year and period
□ Applicable √ Not applicable
(VI) Other information necessary to disclose for the Company or need to disclosed under requirement from
security regulators
176
HEFEI MEILING CO., LTD. Annual Report 2017
□ Applicable √ Not applicable
(VII) Changes of restricted shares
√ Applicable □Not applicable
177
HEFEI MEILING CO., LTD. Annual Report 2017
In Share
Restricted
Opening Shares Shares
Ending shares
Shareholders shares released in Increase Restricted reasons Date for released
restricted
restricted Period d In the
Period
On February 28, 2017, the staff who no
longer served as employee supervisor of
the Company for personal reason. In
Share lockup in senior
Shang Wen 202,275 269,700 67,425 0 reporting period, Mr. Shang leave the
executives
office for 6 months, shares of the
Company held by Mr. Shang will lease
for sale in total
25% can be lifted the restrictions each
year, at the same time, see details on “III
Share lockup in senior
Teng Guangsheng 0 0 88,200 88,200 Performance of commitments” of
executives
“Section V Important Matters” if the
stock held by them has other restrictions.
Transfer restricted
Tangshan Dongkuang Hardware Wholesale Company 122,958 122,958 0 0 shares to natural 2017-5-9
person Zhang Yong
Transfer the restricted
shares of Tangshan
Dongkuang Hardware
Wholesale Company,
Zhang Yong 0 0 122,958 122,958 After relevant restriction procedures done
restricted for trading
due to the legal
commitment of shares
reform
178
HEFEI MEILING CO., LTD. Annual Report 2017
25% can be lifted the restrictions each
year, at the same time, see details on “III
Share lockup in senior
Li Wei 855,300 0 216,055 1,071,355 Performance of commitments” of
executives
“Section V Important Matters” if the
stock held by them has other restrictions.
25% can be lifted the restrictions each
year, at the same time, see details on “III
Share lockup in senior
Wu Dinggang 310,725 0 117,150 427,875 Performance of commitments” of
executives
“Section V Important Matters” if the
stock held by them has other restrictions.
25% can be lifted the restrictions each
year, at the same time, see details on “III
Share lockup in senior
Liu Hongwei 999,849 0 267,571 1,267,420 Performance of commitments” of
executives
“Section V Important Matters” if the
stock held by them has other restrictions.
25% can be lifted the restrictions each
year, at the same time, see details on “III
Share lockup in senior
Zhongming 119,175 0 117,000 236,175 Performance of commitments” of
executives
“Section V Important Matters” if the
stock held by them has other restrictions.
25% can be lifted the restrictions each
year, at the same time, see details on “III
Share lockup in senior
Li Xia 344,325 0 70,275 414,600 Performance of commitments” of
executives
“Section V Important Matters” if the
stock held by them has other restrictions.
25% can be lifted the restrictions each
Share lockup in senior year, at the same time, see details on “III
Huang Danian 0 0 267,337 267,337
executives Performance of commitments” of
“Section V Important Matters” if the
179
HEFEI MEILING CO., LTD. Annual Report 2017
stock held by them has other restrictions.
On 12 Sept. 2017, Mr. Yu did not served
as chairman of the supervisory committee
for office term ends, shares will released
after 6 months when he leaves;
Share lockup in senior
Yu Wanchun 197,475 0 65,825 263,300 meanwhile, shares held by Mr. Yu have
executives
other restriction conditions, found more
in III. Other implementation of
commitments in Section V. Important
Event
On 21 Nov. 2017, Mr. Liao leaves the
deputy president of the Company for
work changes, shares will released after 6
Share lockup in senior months when he leaves; meanwhile,
Liao Tao 411,649 0 293,317 704,966
executives shares held by Mr. Liao have other
restriction conditions, found more in III.
Other implementation of commitments in
Section V. Important Event
On 24 Oct. 2017, Mr. Zhang leaves the
deputy president and person in charge of
financial of the Company for work
Share lockup in senior changes, shares will released after 6
Zhang Xiaolong 247,275 0 237,425 484,700
executives months when he leaves; meanwhile,
shares held by Mr. Zhang have other
restriction conditions, found more in III.
Other implementation of commitments in
180
HEFEI MEILING CO., LTD. Annual Report 2017
Section V. Important Event
Ping An Bank – Ping An UOB Dingtai Flexible Mix Stock Lock up for private
Investment Fund Ping An Bank Co., Ltd.- 12,522,361 12,522,361 0 0 2017-10-16
placement
Ping An UOB-Ping An Bank-Guohai Securities Co., Ltd. Lock up for private
12,522,361 12,522,361 0 0 2017-10-16
placement
Collective fund trust scheme
Lock up for private
Golden Ergle- SPD-U Trust-U Trust JinYue No.4 Collected 23,613,595 23,613,595 0 0 2017-10-16
placement
Asset Trust Plan
National Social Security Funds-504 Lock up for private
9,838,998 9,838,998 0 0 2017-10-16
placement
Harvest Fund- Ping An Bank- Huaxia Asset Management Co., Lock up for private
9,838,998 9,838,998 0 0 2017-10-16
Ltd. placement
Harvest Fund－ABC－ABC-CA Fund Management Lock up for private
8,050,089 8,050,089 0 0 2017-10-16
(Shanghai) Co., Ltd. placement
Harvest Fund－Industrial Bank－Shanghai Xinghan Asset Lock up for private
8,050,090 8,050,090 0 0 2017-10-16
Management Co., Ltd. placement
Ping An Annuity Insurance Company of China, Ltd. – Ping An
Lock up for private
Pension Ruifu private placement No.1 Assets Management 23,613,595 23,613,595 0 0 2017-10-16
placement
Products
Rongtong Fund－Guangzhou Rural Commercial bank － Lock up for private
5,879,549 5,879,549 0 0 2017-10-16
Wanlian Securities Co., Ltd. placement
181
HEFEI MEILING CO., LTD. Annual Report 2017
Rongtong Fund－Ningbo Bank －Universal Trust Co., Ltd. Lock up for private
293,977 293,977 0 0 2017-10-16
placement
Rongtong Fund－CBC－Rongtong Rongyi No. 1 private
Lock up for private
placement serial special (multiple) clients Asset Management 940,729 940,729 0 0 2017-10-16
placement
Plan
Rongtong Fund－CBC－Rongtong Rongyi No. 2 private
Lock up for private
placement serial special (multiple) clients Asset Management 235,181 235,181 0 0 2017-10-16
placement
Plan
Rongtong Fund－CBC－Rongtong Rongyi No. 3 private
Lock up for private
placement serial special (multiple) clients Asset Management 411,569 411,569 0 0 2017-10-16
placement
Plan
Caitong Fund－ICBC－China Foreign Economic Relations
Lock up for private
and Trade Trust －Foreign Trade TrustHengsheng Private 3,577,817 3,577,817 0 0 2017-10-16
placement
Placement Investment Collective fund trust scheme
Caitong Fund－ICBC－Fuchunprivate placementZengliNo.13 Lock up for private
536,673 536,673 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－China Construction Investment Trust
Lock up for private
－Yongquan No.25（Caitongprivate placement No.1）Collective 536,673 536,673 0 0 2017-10-16
placement
fund trust scheme
Caitong Fund－ICBC－Yueda Jiquan private placement No.3 Lock up for private
322,003 322,003 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－FuchunYuantong private placement Lock up for private
536,673 536,673 0 0 2017-10-16
No.6 Asset Management Plan placement
Caitong Fund－ICBC－Fuchunprivate placementBoli No.8 Lock up for private
536,673 536,673 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－Fuchunprivate placementBoli No.12 357,782 357,782 0 0 Lock up for private 2017-10-16
182
HEFEI MEILING CO., LTD. Annual Report 2017
Asset Management Plan placement
Caitong Fund－ICBC－Caitongprivate placement No.16 Asset Lock up for private
357,782 357,782 0 0 2017-10-16
Management Plan placement
Caitong Fund－ICBC－Fuchunprivate placementBoli No.13 Lock up for private
5,366,726 5,366,726 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－Fuchunprivate placement No.1033 Lock up for private
536,673 536,673 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－Fuchunprivate placementBoli No.17 Lock up for private
2,862,254 2,862,254 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－Fuchunprivate placementBoli No.18 Lock up for private
894,454 894,454 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－Fuchunprivate placementBoli No.21 Lock up for private
4,472,272 4,472,272 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－private placement Everbright Lock up for private
1,431,127 1,431,127 0 0 2017-10-16
ZengyiNo.1 Asset Management Plan placement
Caitong Fund－ICBC－Fuchunprivate placement No.1028 Lock up for private
178,891 178,891 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－Fuchunprivate placement No.1101 Lock up for private
1,788,909 1,788,909 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－Hengzeng Xinxiang No.8 Asset Lock up for private
393,560 393,560 0 0 2017-10-16
Management Plan placement
Caitong Fund－ICBC－Fuchunprivate placement No.729 Lock up for private
447,227 447,227 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－Shanghai Chamrich Equity Investment Lock up for private
894,454 894,454 0 0 2017-10-16
Fund Management Co., Ltd. placement
183
HEFEI MEILING CO., LTD. Annual Report 2017
Caitong Fund－ICBC－Fuchun Huarong Safety Pad No.1 Lock up for private
322,004 322,004 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－Caizhi private placement No.11 Asset Lock up for private
805,009 805,009 0 0 2017-10-16
Management Plan placement
Caitong Fund－ICBC－Hengzeng Xinxiang No. 9 Asset Lock up for private
822,898 822,898 0 0 2017-10-16
Management Plan placement
Caitong Fund－ICBC－Fuchunprivate placement No. 1089 Lock up for private
894,454 894,454 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－Selected Fortune VIP Zunxiang private Lock up for private
357,782 357,782 0 0 2017-10-16
placement No. 3 Asset Management Plan placement
Caitong Fund－ICBC－Fuchunprivate placement No. 1016 Lock up for private
447,227 447,227 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－Hengzeng Xinxiang No. 10 Asset Lock up for private
536,673 536,673 0 0 2017-10-16
Management Plan placement
Caitong Fund－ICBC－Fuchunprivate placement Xixiang Lock up for private
411,449 411,449 0 0 2017-10-16
No.2 Asset Management Plan placement
Caitong Fund－ICBC－Beta private placement No.6 Asset Lock up for private
268,336 268,336 0 0 2017-10-16
Management Plan placement
Caitong Fund－ICBC－Fuchunprivate placement No.1017 Lock up for private
983,900 983,900 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－Fuchunprivate placement No.1008 Lock up for private
447,227 447,227 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－Xinruiprivate placement No.3 Asset Lock up for private
357,782 357,782 0 0 2017-10-16
Management Plan placement
Caitong Fund－ICBC－Fuchunprivate placement No.1009 Lock up for private
536,673 536,673 0 0 2017-10-16
Asset Management Plan placement
184
HEFEI MEILING CO., LTD. Annual Report 2017
Caitong Fund－ICBC－Shenzhen Fangwu Innovation Asset Lock up for private
715,563 715,563 0 0 2017-10-16
Management Co., Ltd. placement
Caitong Fund－ICBC－Fuchunprivate placement No.1018 Lock up for private
608,229 608,229 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－Fuchun Shanxi private placement No.1 Lock up for private
411,449 411,449 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－Shenzhen Pusu Capital Management Lock up for private
2,146,690 2,146,690 0 0 2017-10-16
Co., Ltd. placement
Caitong Fund－ICBC－Hai Tan private placement No.1 Lock up for private
536,673 536,673 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－ICBC－Yongan Futures Co., Ltd. Lock up for private
357,782 357,782 0 0 2017-10-16
placement
Caitong Fund－ICBC－Fuchunprivate placement No. 1015 Lock up for private
876,565 876,565 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－Everbright Bank－Soochow Securities Co., Lock up for private
8,944,544 8,944,544 0 0 2017-10-16
Ltd. placement
Caitong Fund－Everbright Bank－Zhang Zhongyi Lock up for private
1,788,909 1,788,909 0 0 2017-10-16
placement
Caitong Fund－Everbright Bank－Shanghai Tongsheng Asset Lock up for private
715,563 715,563 0 0 2017-10-16
Management Co., Ltd. placement
Caitong Fund－Everbright Bank－Caitong Fund－ Lock up for private
715,563 715,563 0 0 2017-10-16
Fuchunprivate placement No.693 Asset Management Plan placement
Caitong Fund－Everbright Bank－Shenzhen UBS Jingao Lock up for private
357,782 357,782 0 0 2017-10-16
Investment Management Co., Ltd. placement
Caitong Fund－Everbright Bank－Caitong Fund－Everbright Lock up for private
1,788,909 1,788,909 0 0 2017-10-16
Fuzunhui Zunping No. 1 Asset Management Plan placement
185
HEFEI MEILING CO., LTD. Annual Report 2017
Caitong Fund－Everbright Bank－QiJuprivate placement No.2 Lock up for private
536,673 536,673 0 0 2017-10-16
Asset Management Plan placement
Caitong Fund－Everbright Bank－QiJu private placement Lock up for private
536,673 536,673 0 0 2017-10-16
No.3 Asset Management Plan placement
Caitong Fund－Everbright Bank－QiJu private placement No. Lock up for private
536,673 536,673 0 0 2017-10-16
4 Asset Management Plan placement
Caitong Fund－Everbright Bank－Bohai Securities Co., Ltd. Lock up for private
1,788,909 1,788,909 0 0 2017-10-16
placement
Caitong Fund－Everbright Bank－Caitong Fund－JinXIu Lock up for private
894,454 894,454 0 0 2017-10-16
private placement No.1 Asset Management Plan placement
Caitong Fund－Everbright Bank－Beijing ZRTDX Investment Lock up for private
3,577,817 3,577,817 0 0 2017-10-16
Management Co., Ltd. placement
Caitong Fund－Ping An Bank－Shanghai Tongan Investment Lock up for private
536,673 536,673 0 0 2017-10-16
Management Co., Ltd. placement
Caitong Fund－Ping An Bank－China Securities Co., Ltd. Lock up for private
5,366,726 5,366,726 0 0 2017-10-16
placement
Caitong Fund－Ping An Bank－Shanghai Tongan Investment Lock up for private
894,454 894,454 0 0 2017-10-16
Management Co., Ltd. placement
Caitong Fund－Ping An Bank－Shanghai Tongan Investment Lock up for private
357,782 357,782 0 0 2017-10-16
Management Co., Ltd. placement
Caitong Fund－Ping An Bank－Shanghai Tongan Investment Lock up for private
357,782 357,782 0 0 2017-10-16
Management Co., Ltd. placement
Caitong Fund－Ping An Bank－Fortune Securities Co., Ltd. Lock up for private
1,788,909 1,788,909 0 0 2017-10-16
placement
Caitong Fund－Ping An Bank－Shanghai Tongan Investment Lock up for private
626,118 626,118 0 0 2017-10-16
Management Co., Ltd. placement
186
HEFEI MEILING CO., LTD. Annual Report 2017
Caitong Fund－Ping An Bank－Shanghai Goldstate Brilliance Lock up for private
894,454 894,454 0 0 2017-10-16
Asset Management Co., Ltd. placement
Caitong Fund－Industrial Bank－Caitong Fund－Fuchun Lock up for private
357,782 357,782 0 0 2017-10-16
Jinhui Ruihe No. 5 Asset Management Plan placement
Caitong Fund－CBC－Youzeng No. 5 Asset Management Plan Lock up for private
805,009 805,009 0 0 2017-10-16
placement
Caitong Fund－Shanghai Bank－Shanghai Kuake Youfu Lock up for private
268,336 268,336 0 0 2017-10-16
Enterprise Management Consulting Co., Ltd. placement
Caitong Fund－Shanghai Bank－Fuchunprivate placement Lock up for private
3,577,817 3,577,817 0 0 2017-10-16
Zengli No. 12 Asset Management Plan placement
Caitong Fund－Shanghai Bank－Zhejiang Hanglian Iron and Lock up for private
894,454 894,454 0 0 2017-10-16
Steel Co., Ltd. placement
Caitong Fund－Shanghai Bank－Fuchunprivate placement Lock up for private
1,252,236 1,252,236 0 0 2017-10-16
Huifu No. 1314 Asset Management Plan placement
Caitong Fund－SPD－Caitong Fund－Puhui No. 2 Asset Lock up for private
1,788,909 1,788,909 0 0 2017-10-16
Management Plan placement
Caitong Fund－Ningbo Bank －Tibet Yuanlesheng Asset Lock up for private
357,782 357,782 0 0 2017-10-16
Management Co., Ltd. placement
Caitong Fund－Ningbo Bank －Fuchunprivate placement No. Lock up for private
393,560 393,560 0 0 2017-10-16
916 Asset Management Plan placement
Caitong Fund－Ningbo Bank －Jiaxiuyi Shunxing No.1 Asset Lock up for private
1,073,345 1,073,345 0 0 2017-10-16
Management Plan placement
Caitong Fund- Ningbo Bank-Haitong Xingtai (Anhui) Lock up for private
10,733,452 10,733,452 0 0 2017-10-16
Emerging Industry Investment Fund (Limited Partnership) placement
Caitong Fund－Huatai Securities －Caitong Fund－Fuchun Lock up for private
1,788,909 1,788,909 0 0 2017-10-16
Selected private placement No.1 Asset Management Plan placement
187
HEFEI MEILING CO., LTD. Annual Report 2017
Total 214,792,044 211,373,696 1,930,538 5,348,886 -- --
Note 1: In reporting period, former staff supervisor Mr. Shang Wen leave the office for 6 months, shares held by Mr. Shang are released for sales totally; former
senior executive Mr. Yu Wanchun, Mr. Zhang Xiaolong and Mr. Liao Tao leave the office without 6 months, shares held by them are restricted for trading; shares held
by new director Mr. Teng Guangsheng and new senior executive Mr. Huang Danian are lock-up partially in line with relevant regulations of the stock; implemented
performance incentive distribution for year of 2016 in the period, parts of the shares held by senior executives are shares lockup in senior executives, which will lease
for trading 25% annually, meanwhile, shares held by senior executives have other restriction conditions, found more in III. Other implementation of commitments in
Section V. Important Event; shares held by other shareholders are refers to the shares subscript from privately placement of A-Stock issued in 2016. The
privately placement has 7 issuing objects, 85 accounts in total, of which, except the controlling shareholder Sichuan Changhong directly subscribe the
shares, 84 accounts are allocated for other 6 issuing objects (Ping An UOB FMC, Golden Ergle Assets Management Co., Ltd., Harvest Fund
Management Co., Ltd., Ping An Annuity Insurance Co., Ltd., Rongtong Fund Management CO.,Ltd. and Caitong Fund Management Co., Ltd. ) During
the period, the products allocated to above mentioned 6 objects are expired in restriction term, found more in Notice of Suggestion on Circulation of
Restrict Shares of Privately Placement (Notice No.: 2017-079) released on appointed media as Securities Times, China Securities Journal, Hong Kong
Commercial Daily and Juchao Website (www.cninfo.com.cn) dated 13 Oct. 2017
Note 2: Except for the restricted shareholders listed in the above table, there was no change in shares of other restricted shareholders during the reporting period, the
reason for the restriction was because of the legal commitment of the company's share reform.
188
HEFEI MEILING CO., LTD. Annual Report 2017
II. Security offering and listing
(I) Security offering in reporting period (Not including preferred stock)
□ Applicable √ Not applicable
(II) Explanation on changes of total shares, shareholders structure and assets & liability
structures
□ Applicable √ Not applicable
(III) Current shares held by internal staffs
□ Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company
(I) Amount of shareholders of the Company and particulars about shares holding
In Share
Total common Total preference Total preference shareholders
shareholders at shareholders with voting with voting rights recovered at
Total shareholders
61,794 end of last month 61,791 rights recovered at end of 0 end of last month before 0
at end of the Period
before annual reporting period (if annual report disclosed (if
report disclosed applicable) (see note 8) applicable) (see note 8)
Particulars about shares held above 5% by shareholders or top 10 shares holding
Total Number of share
Propor Changes Amount of Amount of
Nature of tion of shareholders pledged/frozen
Full name of Shareholders in report restricted un-restricted
shareholder shares at the end of State of Amo
held period shares held shares held
report period share unt
Sichuan Changhong Electric State-owned 22.47
234,705,968 0 69,877,638 164,828,330 - -
Co., Ltd. legal person %
Hefei Industry Investment State-owned
4.58% 47,823,401 0 0 47,823,401 - -
Holding (Group) Co., Ltd. legal person
Changhong Electric (Hong Foreign legal
2.96% 30,895,442 0 0 30,895,442 - -
Kong) Trading Co., Ltd. person
Ping An Annuity Insurance
Company of China, Ltd. – Domestic
Ping An Pension Ruifu private non-State-owne 2.26% 23,613,595 0 0 23,613,595 - -
placement No.1 Assets d legal person
Management Products
Golden Ergle- SPD-U Trust-U Domestic
Trust JinYue No.4 Collected non-State-owne 2.26% 23,613,595 0 0 23,613,595 - -
Asset Trust Plan d legal person
189
HEFEI MEILING CO., LTD. Annual Report 2017
Foreign natural
CAO SHENGCHUN 1.32% 13,829,383 0 0 13,829,383 - -
person
Ping An UOB-Ping An Domestic
Bank-Guohai Securities Co., non-State-owne 1.20% 12,522,361 0 0 12,522,361 - -
Ltd. d legal person
Caitong Fund- Ningbo
Bank-Haitong Xingtai Domestic
(Anhui) Emerging Industry non-State-owne 1.03% 10,733,452 0 0 10,733,452 - -
Investment Fund (Limited d legal person
Partnership)
Ping An Bank – Ping An UOB Domestic
Dingtai Flexible Mix Stock non-State-owne 1.03% 10,722,373 0 0 10,722,373 - -
Investment Fund d legal person
Domestic
National Social Security
non-State-owne 0.94% 9,838,998 0 0 9,838,998 - -
Funds-504
d legal person
Harvest Fund- Ping An Bank- Domestic
Huaxia Asset Management non-State-owne 0.94% 9,838,998 0 0 9,838,998 - -
Co., Ltd. d legal person
Strategy investors or general legal person
becomes top 10 shareholders due to rights Not applicable
issued (if applicable) (see note 3)
Among the above shareholders, Changhong (Hong Kong) Trade Co., Ltd. is the
wholly-owned subsidiary of Sichuan Changhong Electronic Co., Ltd.; there existed no
associated relationship or belong to the concerted actors as specified in the Measures
for the Administration of Information Disclosure of Shareholder Equity Changes of
Listed Companies among Sichuan Changhong Electronic Co., Ltd., Changhong (Hong
Kong) Trade Co., Ltd. and other top 9 shareholders; and top ten shareholders with
unrestricted subscription; Ping An Annuity Insurance Company of China, Ltd. – Ping
An Pension Ruifu private placement No.1 Assets Management Products refers to the
products of Ping An Annuity Insurance Company of China, Ltd subscribe for privately
Explanation on associated relationship placement of 2016; Golden Ergle- SPD-U Trust-U Trust JinYue No.4 Collected Asset
among the aforesaid shareholders Trust Plan refers to the products of Golden Ergle Fund subscribe for privately
placement of 2016; " Ping An UOB-Ping An Bank-Guohai Securities Co., Ltd. " and "
Ping An Bank – Ping An UOB Dingtai Flexible Mix Stock Investment Fund " have
subscribed the products managed by Ping An Dahua Fund Management Co., Ltd. in the
Company's non-public offering of shares in 2016; Caitong Fund- Ningbo Bank-Haitong
Xingtai (Anhui) Emerging Industry Investment Fund (Limited Partnership) refers to
the products of Caitong Fund Management Co., Ltd. subscribe for privately placement
of 2016; “National Social Security Funds-504” and “Harvest Fund- Ping An Bank-
Huaxia Asset Management Co., Ltd.” have subscribed the products managed by
Harvest Fund Management Co., Ltd. in the Company's non-public offering of shares in
190
HEFEI MEILING CO., LTD. Annual Report 2017
2016. The company neither knows whether there is any association among other
shareholders, nor knows whether other shareholders belong to the persons acting in
concert that is stipulated in the “Administrative Measures on Information Disclosure of
Changes in Shareholding of Listed Companies”.
Particular about top ten shareholders with un-restrict shares held
Amount of Type of shares
Shareholders’ name unrestricted shares
Type Amount
held at end of Period
RMB ordinary
Sichuan Changhong Electric Co., Ltd. 164,828,330 164,828,330
shares
RMB ordinary
Hefei Industry Investment Holding (Group) Co., Ltd. 47,823,401 47,823,401
shares
Domestically
Changhong Electric (Hong Kong) Trading Co., Ltd. 30,895,442 listed foreign 30,895,442
shares
Ping An Annuity Insurance Company of China, Ltd. – Ping An
RMB ordinary
Pension Ruifu private placement No.1 Assets Management 23,613,595 23,613,595
shares
Products
Golden Ergle- SPD-U Trust-U Trust JinYue No.4 Collected RMB ordinary
23,613,595 23,613,595
Asset Trust Plan shares
Domestically
CAO SHENGCHUN 13,829,383 listed foreign 13,829,383
shares
RMB ordinary
Ping An UOB-Ping An Bank-Guohai Securities Co., Ltd. 12,522,361 12,522,361
shares
Caitong Fund- Ningbo Bank-Haitong Xingtai (Anhui) RMB ordinary
10,733,452 10,733,452
Emerging Industry Investment Fund (Limited Partnership) shares
Ping An Bank – Ping An UOB Dingtai Flexible Mix Stock RMB ordinary
10,722,373 10,722,373
Investment Fund shares
RMB ordinary
National Social Security Funds-504 9,838,998 9,838,998
shares
Harvest Fund- Ping An Bank- Huaxia Asset Management Co., RMB ordinary
9,838,998 9,838,998
Ltd. shares
Expiation on associated relationship or consistent actors within
Found more in “Particulars about shares held above 5% by
the top 10 un-restrict shareholders and between top 10
shareholders or top 10 shares holding”
un-restrict shareholders and top 10 shareholders
Explanation on top ten common shareholders involving margin
Not applicable
business (if applicable) (see note 4)
Note 1: At end of the reporting period, the person acting in concert with controlling shareholder Sichuan
Changhong-- Changhong (Hong Kong) Trading Company Limited, holds B-stock of the Company as 30,895,442
191
HEFEI MEILING CO., LTD. Annual Report 2017
shares, among which, 3,817,645 shares are held through Philip Securities (H.K.) Co., Ltd.
Note 2: In the above table, "the shareholding situation of the top ten shareholders" is subject to the data on stock
transfer books provided by China Securities Depository and Clearing Corporation Limited Shenzhen Branch,
during the reporting period, 7 issuing objects including Sichuan Changhong Electric Co., Ltd. , Ping An Dahua
Fund Management Co., Ltd., Golden Eagle Fund Management Co., Ltd., Harvest Fund Management Co., Ltd.,
Ping An Endowment Insurance Co., Ltd., Rongtong Fund Management Co., Ltd., and Caitong Fund Management
Co., Ltd. have subscribed the company’s non-public offering of shares in 2016. Up to the date of disclosure,
except Sichuan Changhong, the shares (210,981,038 shares) held by other 6 objects has their restriction term ends
for 12 months, the shares are circulated for trading on 16 Oct. 2017. See details on the Announcement No.
2016-057 and No. 2017-079 which the company has disclosed on the designated information disclosure media on
October 13, 2016 and October 13, 2017.
Whether the top ten ordinary shareholders of the company and the top 10 ordinary shareholders of unrestricted
conditions have made the repurchase transactions as agreed during the reporting period.
□Yes √ No
The top ten ordinary shareholders of the company and the top 10 ordinary shareholders of unrestricted conditions
have not made the repurchase transactions as agreed during the reporting period.
(II) Controlling shareholder of the Company
1. Nature of controlling shareholders: local state-owned holding
2. Type of controlling shareholders: legal person
Controlling Legal
shareholders’ rep./person in Dated founded Organization code Main business
name charge of unit
Manufactures, sales and maintenance of household
appliance, automotive electrical appliance, Electronic
products and spare parts, communications equipments,
lighting equipment, household products, computer and
other Electronic equipments, specialized equipments
Sichuan of Electronic and Electronic, Electronic machinery
Changhong 1993-4-8 91510700205412308 and equipment, series products of batteries, Electronic
Zhao Yong
Electric Co., D medicine products, Electronic equipments,
Ltd. mechanical equipment , Refrigeration equipment and
accessories digital monitoring products, metal
products, apparatus and instruments, culture and office
machines, culture and education and sports products,
kitchen cabinet and gas appliance; house and
equipment rental; packing products and technical
192
HEFEI MEILING CO., LTD. Annual Report 2017
services; road transportation; storage and discharging
convey; R&D, sales and services of integrated circuit
and software; consultancy and services of enterprise
management; hi-tech project investment and other
state-permitted business; development and operation
of property; engineering construction for house and
buildings; callback and disposal of obsolete appliance
and Electronic products; services of Information
Technology; consultancy and services of finance;
sales, relevant import and export business of Chemical
raw materials and products(Not contain dangerous
chemicals), building materials, non-ferrous metal,
Steel, plastics, packing material, mechanical and
electrical equipment, Precious metals, Automotive
components, Electronic components, agent service of
telecommunication.
Equity
controlling
and jointly of
1. Ended as 31 December 2017, 28.95 percent equity of Huayi Compressor Co., Ltd. (stock code: 000404),
other
the listed company in main board of SSE, were directly hold by Sichuan Changhong.
foreign/domes
2. Up to 31 December 2017, 1,008,368,000 common shares of the Changhong Jiahua Holdings Limited
tic listed
(Stock code: 08016), the listed company in GEM of Hong Kong Stock Exchange, were held by Sichuan
company by
Changhong and its persons acting in concert, representing 69.3202 percent in total issued common shares of
controlling
Changhua Jiahua Holding.
shareholder in
reporting
period
3. Controlling shareholder changes in reporting period
□ Applicable √ Not applicable
Controlling shareholder stays the same in Period.
(III) Actual controller of the Company
1. Nature of actual controller: local state-owned assets management
2. Type of actual controller: legal person
Legal
Organization
Actual controller rep./person in Dated founded Main business
code
charge of unit
State-owned Assets Supervision & State-owned Assets
Administration Commission of -- -- -- Supervision & Administration
Mianyang Municipality Commission of Mianyang
193
HEFEI MEILING CO., LTD. Annual Report 2017
Municipality is entrusted by
the same level government,
together performs
decision-making and
management of state-owned
asset owners, and is one
organization which executes
comprehensive management
and supervision on its
belonged state-owned assets.
Equity controlling of other
foreign/domestic listed company
Not applicable
by actual controller in reporting
period
3. Changes of actual controller in Period
□ Applicable √ Not applicable
Actual controller stays the same in Period
4. Property rights and the block diagram of the control relationship between the Company and the
actual control
State-owned Assets Supervision & Administration Commission of
Mianyang Municipality
100%
%
Sichuan Changhong Electronics Holding Group Co., Ltd.
23.22%
%
Sichuan Changhong Electric Co., Ltd.
100%
四川省绵阳 22.47%
Changhong (Hong Kong) Trading
市虹欢科技
Limited 四川省绵
有限责任公
2.96% 阳市虹欢
司
科技有限
%
Hefei Meiling Co., Ltd. 责任公司
%
5. Actual controller controlling the Company by means of entrust or other% assets management
□ Applicable √ Not applicable
194
HEFEI MEILING CO., LTD. Annual Report 2017
(IV) Other legal person’s shareholders with over ten percent shares held
□ Applicable √ Not applicable
(V) Limitation and reducing the holdings of shares of controlling shareholders, actual
controllers, restructuring side and other commitment subjects
□ Applicable √ Not applicable
195
HEFEI MEILING CO., LTD. Annual Report 2017
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the reporting.
196
HEFEI MEILING CO., LTD. Annual Report 2017
Section VIII. Particular about Directors, Supervisors, Senior Executives and Employees
I. Changes of shares held by directors, supervisors and senior executive
Amount
Amount of
Shares held of shares
Post shares Other changes Shares held at
at increase in
Name Title Sex Age Office dated from Office dated ended decreased in period-end
status period-begin this (share)
this period (Share)
(Share) period(Sha
(Share)
re)
Curren
Li Wei Chairman tly in M 45 2011-6-20 2020-9-12 1,140,400 288,073 0 0 1,428,473
office
Deputy Curren
Wu
Chairman, tly in M 45 2014-7-3 2020-9-12 414,300 156,200 0 0 570,500
Dinggang
President office
Curren
Kou
Director tly in M 48 2014-7-3 2020-9-12 0 0 0 0 0
Huameng
office
Curren
Shi Qiang Director tly in M 49 2017-9-12 2020-9-12 0 0 0 0 0
office
Curren
Yong
Director tly in M 49 2017-9-12 2020-9-12 0 0 0 0 0
Fengshan
office
Teng Curren
Director M 49 2017-5-4 2020-9-12 117,600 0 0 0 117,600
Guangshe tly in
197
HEFEI MEILING CO., LTD. Annual Report 2017
ng office
Curren
Gan Independent
tly in M 51 2014-7-3 2020-9-12 0 0 0 0 0
Shengdao Director
office
Curren
Independent
Ren Jia tly in M 54 2014-7-3 2020-9-12 0 0 0 0 0
Director
office
Curren
Independent
Lu Yingjin tly in M 53 2014-7-3 2020-9-12 0 0 0 0 0
Director
office
Curren
Chairman of
Shao Min tly in M 35 2017-9-12 2020-9-12 0 0 0 0 0
Supervisory
office
Curren
Huang
Supervisor tly in F 47 2017-9-12 2020-9-12 0 0 0 0 0
Hong
office
Curren
He Xintan Supervisor tly in M 37 2017-9-12 2020-9-12 0 0 0 0 0
office
Curren
Staff
Ji Ge tly in F 36 2017-12-25 2020-9-12 0 0 0 0 0
Supervisor
office
Curren
Zhu Staff
tly in M 30 2015-4-8 2020-9-12 0 0 0 0 0
Wenjie Supervisor
office
Liu Executive Curren M 54 2011-6-20 2020-9-12 1,333,132 356,761 0 0 1,689,893
198
HEFEI MEILING CO., LTD. Annual Report 2017
Hongwei deputy tly in
president office
Curren
Zhong Deputy
tly in M 45 2013-12-30 2020-9-12 158,900 156,000 0 0 314,900
Ming Chairman
office
Curren
Huang Deputy
tly in M 48 2017-9-12 2020-9-12 342,100 14,350 0 0 356,450
Danian Chairman
office
CFO
Curren
Pang (person in
tly in M 42 2017-10-25 2020-9-12 0 0 0 0 0
Haitao charge of
office
finance)
Curren
Secretary of
Li Xia tly in F 37 2009-5-22 2020-9-12 459,100 93,700 0 0 552,800
the Board
office
Office
Liu Tibin Chairman M 55 2011-11-15 2017-7-17 0 0 0 0 0
leaving
Xu Deputy Office
M 53 2016-5-4 2017-4-24 0 0 0 0 0
Bangjun Chairman leaving
Office
Gao Jian Director M 42 2014-7-3 2017-9-12 0 0 0 0 0
leaving
Yu Chairman of Office
M 47 2014-7-3 2017-9-12 263,300 0 0 0 263,300
Wanchun Supervisory leaving
Office
Yu Xiao Supervisor M 49 2014-11-5 2017-9-12 0 0 0 0 0
leaving
Hu Jia Supervisor Office F 43 2013-6-6 2017-9-12 0 0 0 0 0
199
HEFEI MEILING CO., LTD. Annual Report 2017
leaving
Staff Office
Deng Li M 35 2017-2-28 2017-12-25 0 0 0 0 0
Supervisor leaving
Deputy Office
Liao Tao M 47 2013-1-28 2017-11-21 548,866 156,100 0 0 704,966
Chairman leaving
Deputy
Chairman
Zhang Office
and person M 42 2013-4-18 2017-10-24 329,700 155,000 0 0 484,700
Xiaolong leaving
in charge of
finance
Total -- -- -- -- -- -- 5,107,398 1,376,184 0 0 6,483,582
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HEFEI MEILING CO., LTD. Annual Report 2017
II. Changes of directors, supervisors and senior executives
√ Applicable □Not applicable
Name Title Type Date Reasons
Staff Office He did not serves as staff supervisor of the Company for
Shang Wen 2017-2-28
supervisor leaving personal reasons
Being election by democratic election on employees
Election 2017-2-28 congress, Mr. Deng Li agreed to elected as staff
Staff
Deng Li supervisor of 8th supervisory committee of the Company
supervisor
Office He did not serves as staff supervisor of the Company for
2017-12-25
leaving personal reasons
Resigned the posts of deputy president of 8th BOD of the
Deputy Office Company, director, member of strategy committee and
Xu Bangjun 2017-4-24
chairman leaving member of remuneration and appraisal committee due to
personal career moves
Mr. Teng Guangsheng was elected as non-independent
2017-5-4 director of the Company by resolution approved by
AGM of 2016
Teng
Director Election Being deliberated and approved by 2nd extraordinary
Guangsheng
shareholders general meeting of 2017, Mr. Teng
2017-9-12
Guangsheng agreed to elected as non-independent
director of the 9th BOD of the Company
Resigned the posts of deputy president of 8th BOD of the
Office Company, director, member of strategy committee and
Liu Tibin President 2017-7-17
leaving member of remuneration and appraisal committee due to
personal career moves
Mr. Li Wei was elected as president of 8th BOD of the
President Election 2017-7-21 Company by resolution approved in 33rd session of 8th
BOD
Office He resigned from Chairman of the Company for personal
Li Wei Chairman 2017-7-21
leaving work changed
Being deliberated and approved by 1st meeting of 9th
President Election 2017-9-12 BOD, Mr. Li Wei agreed to elected as president of the 9th
BOD of the Company
Mr. Wu Dinggang was appointed as chairman of the
2017-7-21 Company by resolution approved 33rd session of 8th
Appointmen BOD, he has the office term as the Board
Wu Dinggang Chairman
t Being deliberated and approved by 1st meeting of 9th
2017-9-12 BOD, agreed to appointed Mr. Wu Dinggang as
chairman of the Company and shows the same term as
201
HEFEI MEILING CO., LTD. Annual Report 2017
the BOD
Being deliberated and approved by 1st meeting of 9th
Deputy
Election 2017-9-12 BOD, agreed to elected Mr. Wu Dinggang as deputy
chairman
chairman of the 9th BOD of the Company
Being deliberated and approved by 2nd extraordinary
meeting of shareholders general meeting of 2017, agreed
Shi Qiang Director Election 2017-9-12
to elected Mr. Shi Qiang as non-independent director of
the 9th BOD of the Company
Being deliberated and approved by 2nd extraordinary
Yong meeting of shareholders general meeting of 2017, agreed
Director Election 2017-9-12
Fengshan to elected Mr. Yong Fengshan as non-independent
director of the 9th BOD of the Company
Being deliberated and approved by 2nd extraordinary
meeting of shareholders general meeting of 2017, agreed
Director Election 2017-9-12
to elected Mr. Kou Huameng as non-independent
director of the 9th BOD of the Company
Kou Huamen
Being deliberated and approved by5th session of 9th
Deputy Appointmen BOD, agreed to appointed Mr. Kou Huameng as deputy
2017-11-22
chairman t chairman of the Company and shows the same term as
the BOD
Being deliberated and approved by 2nd extraordinary
shareholders general meeting of 2017, agreed to elected
Chairman of
Mr. Shao Min as supervisor of 9th supervisory
Shao Min supervisory Election 2017-9-12
committee; and being deliberated and approved by 1st
board
meeting of 9th supervisory committee, agreed to elected
Mr. Shao Min as chairman of the supervisory board
Being deliberated and approved by 2nd extraordinary
shareholders general meeting of 2017, agreed to elected
Huang Hong Supervisor Election 2017-9-12
Ms. Huang Hong as supervisor of 9th supervisory
committee;
Being deliberated and approved by 2nd extraordinary
shareholders general meeting of 2017, agreed to elected
He Xintan Supervisor Election 2017-9-12
Mr. He Xintan as supervisor of 9th supervisory
committee;
Being deliberated and approved by 1st session of 9th
Deputy Appointmen BOD, agreed to appointed Mr. Huang Danian as deputy
Huang Danian 2017-9-12
president t chairman of the Company and shows the same term as
the BOD
Leave while
General election of the Board and leaves the office for
Gao Jian Director office term 2017-9-12
term end
ends
Chairman of Leave while General election of the supervisory and leaves the office
Yu Wanchun 2017-9-12
supervisory office term for term end
202
HEFEI MEILING CO., LTD. Annual Report 2017
board ends
Leave while
General election of the supervisory and leaves the office
Yu Xiao Supervisor office term 2017-9-12
for term end
ends
Leave while
General election of the supervisory and leaves the office
Hu Jia Supervisor office term 2017-9-12
for term end
ends
Vice chairman
Zhang and person in He resigned deputy president and CFO of the Company
Dismissal 2017-10-24
Xiaolong charge of due to work changes
finance
CFO and
Agreed to appointed Mr. Pang Haitao as CFO (Financial
person in Appointmen
Pang Haitao 2017-10-25 director) of the Company after deliberation and approved
charge of t
by 3rd session of 9th BOD
finance
Deputy He resigned deputy president of the Company due to
Liao Tao Dismissal 2017-11-21
president work changes
Agreed to elected Ms. Ji Ge as the staff supervisor of 9th
Staff
Ji Ge Election 2017-12-25 supervisory committee, after democratic election on 2nd
supervisor
meeting of 8th worker’s congress
203
HEFEI MEILING CO., LTD. Annual Report 2017
III. Post-holding
(I) Professional background, major working experience and present main responsibilities in Company of
directors, supervisors and senior executive at the present
1. Li Wei, male, the Han nationality from Tongliang, Chongqing, was born in February 1973,
Member of CPC, Assistant Economist with bachelor degree, he is reading EMBA in USTC. He ever
took the post of General Manager of Xi’an Sales Filiale of Sichuan Changhong Electronic Co.,
Ltd., General Manger of Southeast Operation Management Center of Changhong Electronic (China)
Marketing Co., Ltd., GM of Sichuan Changhong Air-conditioner Co., Ltd., chairman of Zhongshan
Changhong Electric Co., Ltd., and deputy president, president and deputy chairman of the Company.
Now he serves as GM of Sichuan Changhong Electric Co., Ltd., chairman of the Company and
Meiling CANDY Washing Machine Co., Ltd. etc.
2. Wu Dinggang, male, the Han nationality from Suining, Sichuan Province, was born in
March 1973, Member of CPC, owns bachelor degree, graduate from Tianjin University of
Commerce China (Tianjin University of Commerce now), major in refrigeration equipment and
cryogenic technique. He served successively as GM of Suining Sale Branch and Chengdu Sales
Branch of Sichuan Changhong Electric Co., LTD, director of Sichuan and Chongqing Marketing
Management Department of Sichuan Changhong Electric Co., LTD, deputy GM of Changhong
Electronics (China) Marketing Co., GM of market planning center of Changhong Multimedia
Industry, director and GM of Le-Jia-Yi Chain Management Co., Ltd., Zhongke Meiling Cryogenic
Technology Co., Ltd. director and GM of Sichuan Changong Air Conditioner Co., Ltd and deputy
president of the Company. Now he serves as deputy president and president of the Company,
chairman of Zhongshan Changhong AC Co., Ltd., president of Sichuan Changhong AC Co., Ltd.
and chairman of Zhongke Meiling Cryogenic Technology Co., Ltd. etc.
3. Kou Huameng, male, the Han nationality from Yanting, Sichuan Province, was born in
February 1970, Member of CPC, master degree candidate, EMBA graduate from UESTC. He
served successively as deputy director of production office of Sichuan Changhong Electric Co.,
LTD, director of Guangxi Marketing management Committee, director of Fujian-Jiangxi Marketing
Management and director and GM of Guangdong Changhong Digital Technology Co., Ltd. ，
Sichuan Changhong Electric Co., Ltd, director of development management department of Sichuan
Changhong Electric Co., Ltd.; now he serves as director of Huayi Compressor Co., Ltd., director
and deputy president of the Company etc.
4. Shi Qiang, male, Han nationality, was born in Jiangyou, Sichuan in July 1968, a member of
the Communist Party of China, earned a bachelor’s degree in underwater sound electronic
engineering from Southeast University, and is an engineer. He successively served as the director of
quality management division, the director of goods and material department, the director of asset
management department, the deputy director, the director, and the office director of the board of
directors of Sichuan Changhong Electric Co., Ltd. He currently serves as the deputy secretary of the
party committee, the secretary of the disciplinary committee, Secretary of the Board ,and the
director of Huayi Compressor Co., Ltd., and the director of the Company.
5. Yong Fengshan, male, Han nationality, was born in Dingyuan, Anhui in June 1968, a
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HEFEI MEILING CO., LTD. Annual Report 2017
member of the Communist Party of China, a senior accountant, and a master degree holder. He ever
took the posts of the deputy director and the director of finance department of Hefei Cable Factory,
the director of finance division and the deputy chief accountant of Hefei Meiling Co., Ltd., the
director of Hefei Department Store Co., Ltd., the deputy general manager and chief accountant of
Hefei Meiling Group Holding Co., Ltd., the secretary of the party committee and the president of
Hefei Industrial Investment Holdings Co., Ltd., the president of CAS (Hefei) Institute of
Technology Innovation Co., Ltd., the vice president of Whirlpool (China) Co., Ltd., the president of
Hefei Venture Capital Guidance Fund Co., Ltd. , and the director of the Company.
6. Teng Guangsheng, male, Han nationality, was born in Santai, Sichuan in August 1968, and
earned a bachelor’s degree in history from Beijing Normal University. He ever took the posts of
the manager of marketing management department and the general manager of branch offices of
Sichuan Changhong Electric Co., Ltd., the deputy general manager of Domestic Marketing
Company of Multimedia Industry Company of Sichuan Changhong Electric Co., Ltd., the director
and general manager of Zhongshan Changhong Electric Appliance Co., Ltd., the president and
general manager of Pakistan Changhong RUBA Trading Co., Ltd., and the president and general
manager of Sichuan Changhong Air Conditioning Co., Ltd. He is currently the general manager of
Multimedia Industry Company of Sichuan Changhong Electric Co., Ltd., and the director of the
Company.
7. Gan Shengdao, male, the Han nationality from Tianchang, Anhui Province, was born in
March 1967, member of China Democratic National Construction Association, a doctoral candidate
and Doctor of Economic. He served successively as teaching assistant, lecturer and associate
professor in Department of National Economic Management of Sichuan University, the associate
professor and professor in Department of Business Administration of Sichuan University. Now he
serves as professor and doctoral supervisor in Business School of Sichuan University, deputy
director of Financial Institute of Sichuan University, independent director of Chengdu Rainbow
Electric (Group) Co., Ltd., independent director of Sichuan Sunny Seal Co., Ltd., independent
director of Sichuan Yahua Industrial Group Co., Ltd, independent director of Yibing Wuliangye Co.,
Ltd. and outside director of Sichuan Huashi Group Co., Ltd. and independent director of the
Company.
8. Ren Jia, male, Han nationality, was born in Nantong, Jiangsu in July 1963, a master degree
holder, and graduated from the Department of Materials Science and Engineering of Tsinghua
University. He ever took the posts of the assistant general manager of Beijing Building Materials
Imp. & Exp. Co., Ltd., the department deputy manager of Jiangsu Overseas Group Co., Ltd., the
department deputy manager and assistant general manager of Jiangsu Economic and Trade
Corporation, the general manager of Import and Export Company of Zhejiang Xiangyang Group,
the director and general manager of Nanjing Shenlu Textile & Apparel Co., Ltd., the deputy general
manager of Guangzhou Anyka Microelectronics Co., Ltd., and the deputy general manager of
Shanghai Multimedia Valley Investment Co., Ltd., etc. He currently serves as the vice president of
SIMIC Holdings Electronics Co., Ltd., the chairman and general manger of SIMIC Technology
Development Co., Ltd., the partner of Shanghai Heda Enterprise Management Partnership (limited
partnership), the president of Shanghai Zhongke Xinwei Information Technology Park Co., Ltd.
205
HEFEI MEILING CO., LTD. Annual Report 2017
Long, an independent director of InHand Networks, and an independent director of the Company.
9. Lu Yingjin, male, the Han nationality, was born in October 1964, Member of CPC, a
doctoral candidate, Doctor of Management Science and Engineering of the UESTC. He served
successively as Assistant Engineer of Shenli Field Drilling Technical Company and lecturer of Staff
Education and Training Center of South-West Petroleum Bureau, and he teaches in UESTC since
2002.And he has been a visiting scholar in the department of computer science at the University of
Kentucky in the United States. Now he serves as associate professor in Economics and
Management School of UESTC and Independent Director of the Company.
10. Shao Min, male, Han nationality, was born in Linyi, Shandong in March 1983, and earned
a bachelor’s degree in accounting major from Xi’an Jiaotong University. He joined in work in
July 2004, and ever served as the finance manager of the branch office of Sichuan Changhong
Electric Co., Ltd., the financial director of finance department, the project manager of asset
management department, the director of asset management department, and the director of asset
operation department of Sichuan Changhong Electric Co., Ltd. He currently serves as the deputy
director of asset management department of Sichuan Changhong Electric Co., Ltd., and the
chairman of the Board of Supervisors of the Company.
11. Huang Hong, female, Han nationality, was born in Shehong, Sichuan in June 1970, a
member of the Communist Party of China, a master degree holder, and graduated from the
University of Glasgow as a MBA. She joined in work in July 1992, and ever served as the financial
director of finance department, the audit manager, audit director, and audit chief of auditing
department of Sichuan Changhong Electric Co., Ltd. He currently serves as the deputy director of
auditing department and the deputy director of labor union audit committee of Sichuan Changhong
Electric Co., Ltd., and a supervisor of the Company.
12. He Xintan, male, Han nationality, was born in Xiayi, Henan in April 1980, a member of the
Communist Party of China, an economist, and earned a master’s degree in management science
and engineering from Xi’an Jiaotong University. He joined in work in July 2002, and successively
took the posts of the operations management director of operation management department and the
manager of general management office of Sichuan Changhong Electric Co., Ltd. Currently he
serves as the deputy director of development and management department of Sichuan Changhong
Electric Co., Ltd., and a director of Huayi Compressor Co., Ltd., and a supervisor of the Company.
13. Ji Ge, female, Han nationality, was born in Nanyang, Henan Province in January 1982, a
member of the Communist Party of China, and earned a bachelor’s degree in law from Hunan
University and a master’s degree from Anhui University. She joined Hefei Meiling Co., Ltd. in
July 2005 and once served as the legal specialist of legal department, the sponsor of legal affairs,
and the intellectual property director of the legal department of the Company. She currently serves
as the director of the legal department, a member of the disciplinary committee, a member of the
labor union funds audit committee, and an employee supervisor of the Company.
14. Zhu Wenjie, male, the Han nationality from Hefei, Anhui Province, member of Communist
Party of China, born in January 1988, bachelor's degree, study MBA in University of Science and
Technology of China. He started to work in Hefei Meiling Co., Ltd. in July 2010 after graduation,
served as an accountant for big customer accounting in financial management department of Hefei
206
HEFEI MEILING CO., LTD. Annual Report 2017
Meiling Co., Ltd., securities affairs assistant at the office of secretary of the board, and director of
securities affairs, and currently serves as the representative of the Company's securities affairs,
director of securities affairs at the office of secretary of the board, and employee supervisor of the
Company.
15. Liu Hongwei, Male, Chinese American, bored in May 1963, Doctor of Applied Mechanics
from Lehigh University, graduate from department of mechanical engineering, Tsinghua University.
He served successively in Kulicke and Soffa Industries, Pennsylvania; Tessera Technology
Corporation, Califonia; serves technical and management post in Intel Corporation in Silicon Velleg.
He joints the Hefei Meiling Co., Ltd. in 2007, now he serves as executive deputy president of the
Company.
16. Zhong Ming, male, the Han nationality from Meishan, Sichuan Province, was born in
November 1972, member of CPC, a senior engineer and a PhD major in engineering. He
successively served as deputy director of research institution of Sichuan Changhong Air-conditioner
Co., Ltd., deputy GM of Sichuan Changhong Air-conditioner Co., Ltd. and technical director of
household appliance group of Sichuan Changhong Electric Co., LTD. He serves as deputy president
of the Company currently and director of Zhongke Meiling Cryogenic Technology Co., Ltd.
17. Huang Danian, male, Han nationality, was born in Huaining, Anhui in November 1969, a
member of the Communist Party of China, an engineer, and a master degree holder. He once served
as the logistics director and the deputy general manager of the Sales Company of Hefei Meiling Co.,
Ltd., the director of the human resources department, the director of the comprehensive planning
department, the director of the enterprise management department, and the assistant to the general
manager of Hefei Meiling Co., Ltd. He is now the vice president of Hefei Meiling Co., Ltd.
18. Pang Haitao, male, Han nationality, was born in Qionghai, Hainan in May 1975, a member
of the Communist Party of China, a senior accountant, a senior political engineer, and a bachelor
degree holder, and earned the EMBA degree from Jiangxi University of Finance and Economics. He
used to be a member of the finance department, the director of related transactions and the director
of capital operations of Sichuan Changhong Electric Co., Ltd., the chief of finance office of
Guangdong Changhong Electronics Co., Ltd., the director of general ledger, the head of general
management office, and the head of general ledger management office of the finance department of
Sichuan Changhong Electric Co., Ltd., the deputy general manager and chief financial officer of
Sichuan Changhong Development Co., Ltd., the deputy general manager and chief accountant of
Huayi Compressor Co., Ltd. Currently he is the chief financial officer (financial controller) of the
Company.
19. Li Xia, female, the Han nationality from Qionglai, Sichuan Province, was born in October
1980, Member of CPC and Intermediate Accountant with Master Degree. She graduated from
Accounting Department of Sichuan University Business and Management School. She ever was
Project Manager in Financing & Acquisition Office of Asset Management Department and Business
Executive in Board Office of Sichuan Changhong Electronic Co., Ltd. she took the posts of Deputy
GM and Financial Supervisor of Sichuan Changhong Innovation Investment Co., Ltd. She is the
Secretary of the Board, deputy secretary of the Party and secretary of discipline inspection
commission of the Company recently and chairman of supervisory committee of Zhongke Meiling
Cryogenic Technology Co., Ltd.
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HEFEI MEILING CO., LTD. Annual Report 2017
20. Xu Bangjun, was born in December 1964, member of Communist Party of China, an
engineer with a bachelor degree, graduated from economic management of the Sichuan Party
School. He have successively held the posts of vice director of the machinery factory of Sichuan
Changhong Electric Co., Ltd., GM of Sichuan Changhong Mould & Plastic Technology Co., Ltd.,
member of PC of Sichuan Changhong Electric Co., Ltd., employee director and chairman of the
union in Sichuan Changhong Electronics Holding Group Co., Ltd., chairman of the union of
Sichuan Changhong Electric Co., Ltd., GM Assistant of Sichuan Changhong Electric Co., Ltd.,
Chairman of the Household Appliances Industry Group of Sichuan Changhong Electric Co., Ltd.,
deputy chairman of Huayi Compressor Co., Ltd. and Hefei Meiling Co., Ltd, he did not served as
deputy chairman of the Company since 24 April 2017.
21. Liu Tibin, member of the Communist Party, born in January 1963, senior accountant,
government subsidies specialist of the State Council, and he is the winner of National Labor Medal.
He-a doctoral candidate, graduated from electronic industry and financial accounting major,
department of industrial economy of Hangzhou Institute of Electronic and Technology.
(Bachelor of Economics), was doctor student in the enterprise management major, department of
business management, University of Electronic Science and Technology of China. He participated
in the work in July 1984. He has served successively as the deputy GM, CFO, executive deputy GM
and secretary of Party committee in Sichuan Changhong Electronic Co., Ltd.; General Accountant,
deputy GM, secretary of Party committee and other post in Sichuan Changhong Electronic Group
Co., Ltd., the deputy chairman and member of the Party Committee of Sichuan Changhong
Electronic Group Co., Ltd.; and the deputy chairman, GM and member of the Party Committee of
Sichuan Changhong Electronic Co., Ltd. together as the Chairman of Huayi Compressor Co., Ltd.,
chairman of Sichuan Changhong Minsheng Logistic Co., Ltd. and Chairman of the Company. Now
he serves as deputy secretary of the party, deputy chairman and GM of Sichuan Investment Group
Co., Ltd. and did not serve as chairman of the Company since 17 July 2017.
22. Gao Jian, was born in September 1975, member of China Democratic National
Construction Association, owns bachelor degree and graduate from economic management
educated in Anhui Provincial Party Institute. He served successively as deputy chief of Commercial
Bureau of Luyang District, Hefei City, and deputy chief of Finance Bureau of Luyang District,
Hefei City, and deputy director of Luyang Assets Management Office, deputy director of investment
and financing management center, GM of Hefei Luyang State-owned Assets Investment Holding
Group Co.,Ltd., the director of Auditing Bureau of Luyang, deputy chairman of Luyang CPPCC
and chairman of Luyang Shiyu Micro Loan Co., Ltd., director of the Company. Now he serves as
deputy president and director of Hefei Xingtai Financial Holding (Group) Co., Ltd., the director of
Hefei Science & Technology Rural Commercial bank. And he did not serve as director of the
Company since 12 Sept. 2017.
23. Yu Wanchun, born in September 1970, is a member of the Communist Party of China, a
senior accountant, and a bachelor degree holder who graduated from Chongqing Institute of
Commerce (Chongqing Technology and Business University) as an accounting major. He joined in
work in July 1994 and served successively as the deputy director of finance department, the director
of audit department, the chairman of the board of supervisors, and a member of party committee of
Sichuan Changhong Electric Co., Ltd., a member of party committee, the office director of
disciplinary committee, the director of discipline inspection and supervision department, and the
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HEFEI MEILING CO., LTD. Annual Report 2017
director of audit department of Sichuan Changhong Electronic Holdings Group Co., Ltd., the
chairman of the board of supervisors of Sichuan Electronic War Industry Group Co., Ltd., the
chairman of the board of supervisors of Huayi Compressor Co., Ltd., and the chairman of the board
of supervisors of the Company. He currently serves as the chief accountant at Huayi Compressor
Co., Ltd. Since September 12, 2017, he no longer served as the chairman of the board of supervisors
of the Company.
24. Yu Xiao, was born in August 1968, Member of CPC, a master degree candidate, graduated
with a Master’s degree in Business Management of College of Business Administration of
Sichuan University, a senior accountant. He served successively as deputy chief in Sichuan
Changhong Electric Co., Ltd., deputy chief in Financial Accounting Office of Sales, deputy director
of the Sales Department, director of the Financial Department and director of Huayi Compressor
Co., Ltd., CFO and deputy GM of the Sichuan Changhong Electronics Holding Group Co., Ltd. and
supervisor of the Company and did not serve as supervisor of the Company since 12 Sept. 2017.
25. Hu Jia, born in January 1975, a member of the Communist Party of China, a senior
accountant, a certified public accountant, Australian FCPA, ACCA, a national accountant leading
talent of the ministry of finance, a member of the national accounting informationization committee,
a member of the national standardization working group for accounting software data interface, and
a member of the first session of the enterprise accounting standards advisory committee of ministry
of finance, an expert consultant at the industry management accounting research and development
center, a representative of the tenth session of Party Congress of Sichuan Province, a master degree
holder, and a major in financial market and portfolio management from the University of Hong
Kong. He successively served as the director of finance department, the chief financial officer and
the chief information officer of Sichuan Changhong Electric Co., Ltd. He currently serves as the
deputy general manager and chief accountant of Sichuan Changhong Electronic Holdings Group
Co., Ltd., the chairman of Sichuan Changhong Group Finance Co., Ltd., the chairman of
Changhong (Hong Kong) Trading Co., Ltd., and the chairman of Yuanxin Financial Leasing Co.,
Ltd. Since September 12, 2017, he no longer served as a supervisor of the Company.
26. Zhong Xiaolong, male, the Han nationality from Xianyang, Shan’xi Province, was born
in February 1976, an accountant, a master degree candidate. He successively served as chief of
management analysis of general management dept. of Sichuan Changhong Electric Co., LTD, GM
of marketing auditing of audit dept. of Sichuan Changhong Electric Co., LTD, director of financial
dept. of Guangdong Changhong Electric Co., Ltd., deputy GM of financial sharing center of
Sichuan Changhong Electric Co., LTD and CFO of Sichuan COC Display Device Co., Ltd and
deputy president and finance manager of the Company. He is the person in charge of financial in
Sichuan Changhong Electric Co., Ltd. multi-media industrial company. He did not served as deputy
president and CFO of the Company since 24 October 2017
27. Liao Tao, male, the Han nationality from Renshou, Sichuan Province, Member of CPC,
was born in September 1970, owes a university degree. He successively served as chief technology
office of plastic plant and project manager of operation & management of Sichuan Changhong
Electric Co., Ltd.; director of engineering dept. of Guangdong Changhong Electronic Co., Ltd. and
vice GM of Sichuan Changhong Air-conditioner Co., ltd., vice president of the Company. He now
takes deputy GM of 081 Electronic Group. And did not served as deputy president of the Company
209
HEFEI MEILING CO., LTD. Annual Report 2017
since 21 Nov. 2017
28. Deng Li, male, Han nationality, was born in Lu’an, Anhui in August 1982, a master
degree holder, and earned a Master of Business Administration at University of Science and
Technology of China. He joined Hefei Meiling Co., Ltd. in July 2006 after graduation. He
successively held the posts of the training sponsor, purchase sponsor of freezer division, and the
administrative director of administrative logistics department of Hefei Meiling Co., Ltd., and an
employee supervisor of the Company. Since September 25, 2017, he no longer served as an
employee supervisor of the Company.
(II) Post-holding in shareholder’s unit
√ Applicable □Not applicable
Drawing
remuneration
Start date of End date of and allowance
Name Title
Shareholder’s unit office term office term from
shareholder’s
unit (Y/N)
Sichuan Changhong Electric Co.,
Li Wei GM 2017.07.21 - Y
Ltd.
Party
Yong Hefei Industrial Investment Holding
Secretary, 2015.02.13 - Y
Fengshan (Group) Co., Ltd.
Chairman
GM of
Teng Sichuan Changhong Electric Co., multi-medi
2017.11.17 - Y
Guangsheng Ltd. a industry
company
Deputy
director of
Sichuan Changhong Electric Co., assets
Shao Min 2016.01.22 - Y
Ltd. managemen
t
department
Deputy
Sichuan Changhong Electric Co., Chief of
Huang Hong 2011.09.16 - Y
Ltd. auditing
department
Deputy
Chief of
Sichuan Changhong Electric Co., developme
He Xintan 2014.11.11 - Y
Ltd. nt and
managemen
t
210
HEFEI MEILING CO., LTD. Annual Report 2017
department
Post-holding
in
N/A
shareholder’s
unit
(III) Post-holding in other unit
√ Applicable □Not applicable
Drawing
remuneration
Start date of End date of
Name Title and allowance
Other unit office term office term
from other unit
(Y/N)
Meiling CANDY Washing Machine
Chairman 2017.04.24 - N
Co., Ltd.
Guangdong Changhong Electronics
Chairman 2017.10.11 - N
Li Wei Co., Ltd.
Sichuan Changhong Minsheng
Chairman 2017.08.31 - N
Logistics Co., LTD
Lejiayi Chain Management Co., Ltd. Chairman 2017.09 - N
Vice
Whirlpoor (China) Co., Ltd. 2015.04.17 - N
Chairman
Hefei Venture Capital Guidance Fund
Chairman 2015.04.17 - N
Yong Co., Ltd.
Fengshan CAS (Hefei) Technical Innovation
Chairman 2015.04.17 - N
Engineering Institute Co., Ltd.
Hefei International Inland Port
Chairman 2017.12.14 - N
Development Co., Ltd.
Zhongke Meiling Cryogenic
Chairman 2017.08.21 - N
Technology Co., Ltd.
Wu Dinggang
Meiling CANDY Washing Machine
Director 2017.09.27 - N
Co., Ltd.
Director 2017.05.03 - N
Shi Qiang Huayi Compressor Co., Ltd. Secretary of
2018.03.05 - Y
the Board
Kou
Huayi Compressor Co., Ltd. Director 2015.04.16 - N
Huameng
Professor,
Gan Business School of Sichuan
doctoral 1990.07 - Y
Shengdao University
supervisor,
211
HEFEI MEILING CO., LTD. Annual Report 2017
director of
Financial
Institute of
Sichuan
University
Chengdu Rainbow Electric (Group) Independen
2012.03.23 - Y
Co., Ltd. t Director
Independen
Sichuan Sunny Seal Co., Ltd. 2011.06.21 - Y
t Director
Liangshan Rural Commercial Bank Independen
2011.11.18 2017.12.18 Y
Co., Ltd. t Director
Sichuan Yahua Industrial Group Co., Independen
2015.06.09 - Y
Ltd t Director
Outside
Sichuan Huashi Group Co., Ltd. 2015.08.10 - Y
director
Independen
Yibing Wuliangye Co., Ltd. 2016.11.18 - Y
t Director
Deputy
SIMIC Holdings Co., Ltd. 2013.01 - Y
president
Chairman/
SIMIC Development Co., Ltd. 2014.07 - N
GM
Partner /
Shanghai Hefa Enterprise
legal
Ren Jia Management Partnership 2016.05 - N
representati
(Limited Partnership)
ve
Shanghai Zhongke Xinwei IT
Chairman 2018.01 - N
Park Co., Ltd.
Beijing Inhand Networks Co., Independen
2018.01 - Y
Ltd t Director
School of Management and Associate
Lu Yingjin 2001.12.30 - Y
Economics of UESTC professor
He Xintan Huayi Compressor Co., Ltd. Director 2018.01.05 - N
Zhongke Meiling Cryogenic
Zhong Ming Director 2015.08.28 2018.08.27 N
Technology Co., Ltd.
Chairman
Zhongke Meiling Cryogenic of
2015.08.28 2018.08.27 N
Technology Co., Ltd. Supervisory
Li Xia
Committee
Meiling CANDY Washing Machine
Supervisory 2017.04.24 2020.04.23 N
Co., Ltd.
Post-holding N/A
212
HEFEI MEILING CO., LTD. Annual Report 2017
in other unit
(IV) Punishment of securities regulatory authority in recent three years to the company’s
current and outgoing directors, supervisors and senior management during the reporting
period
□ Applicable √ Not applicable
IV. Remuneration of directors, supervisors and senior executives
(I) Decision-making, determine basis and actually payment of remuneration for directors,
supervisors and senior executives
1. Procedure for deciding remunerations of directors, supervisors and senior management
Implemented in line with laws, regulations and relevant rules of “Company Law”, “Article
of Association” and “Enforcement Regulation of Remuneration and Evaluation Committee of the
Board”, including:
(1) Allowance plan of independent directors are implemented after deliberated in the Board
and approved in Shareholders’ General Meeting. Other directors and non-staff supervisors except
independent directors are received no remuneration from the Company.
(2) Remuneration of senior executives are deliberated and approved by the Board according to
remuneration evaluation plan together with opinions of Remuneration and Evaluation Committee.
2. Bases on which remunerations of directors, supervisors and senior management are decided
The Company conducted the performance examination on the task of directors, supervisors
and senior executives according to the HR management policy, wages of directors, supervisors and
senior executives are decided by their performance and evaluations check by the Company. All
wages are performing by the evaluation results according to the only evaluation standard that
carried by the Company.
3. Actual payment of remunerations of directors, supervisors and senior management
Allowance of the independent directors are paid by the standards approved in Annual
Shareholders’ General Meeting, other director, who serves as senior executive at the same time,
and non-staff supervisors except independent directors did not received remuneration from the
Company; remunerations for senior executives of the Company are paid strictly by the unify
remuneration valuation mechanism of the Company.
Directors, supervisors and senior executives of the Company has 19 in total up to 31 December
2017, actually 12 person receiving remuneration from the Company, 2 staff supervisors are received
their remuneration by actual positions (non-supervisor post); furthermore, 3 independent directors
are received the allowance monthly from the Company; the Company will pay remuneration to
senior executives monthly/quarterly/annually.
During the reporting period, the Company has established the executive compensation and
performance management program for the senior management of 2017 in accordance with the main
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HEFEI MEILING CO., LTD. Annual Report 2017
scope, the responsibilities, the importance of the management positions of the senior management,
and the compensation level of other relevant company and position, the program includes but not
limited to the company's key performance indicator (KPI) and performance evaluation criteria,
procedures and major evaluation system; the major programs and systems of the reward and
punishment; review the performance of duties of the company's senior management and conduct the
annual performance appraisal.
At the end of the year, the Remuneration and Appraisal Committee combined the work report
and self-evaluation of the senior management in 2017, followed the performance evaluation criteria
and procedures, and evaluated the Key Performance Indicator (KPI) of the senior management in
2017; and other relevant indicators of performance evaluation; proposed the remuneration amount
and performance appraisal approach of the senior management based on the job performance
evaluation results and the remuneration policy, and reported to the Board for approval.
(II) Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
Total Whether
remuneration remuneration
Name Title Sex Age Post status obtained from obtained from
the Company related party of
(before taxes) the Company
Currently in
Li Wei Chairman M 45 30.24 Y
office
Deputy
Currently in
Wu Dinggang Chairman, M 45 48.09 N
office
President
Director, Vice Currently in
Kou Huameng M 48 5.12 Y
President office
Currently in
Shi Qiang Director M 49 0 Y
office
Yong Currently in
Director M 49 0 Y
Fengshan office
Teng Currently in
Director M 49 33.73 Y
Guangsheng office
Independent Currently in
Gan Shengdao M 51 11.90 N
Director office
Independent Currently in
Ren Jia M 54 11.90 N
Director office
Independent Currently in
Lu Yingjin M 53 11.90 N
Director office
Shao Min Chairman of M 35 Currently in 0 Y
214
HEFEI MEILING CO., LTD. Annual Report 2017
Supervisory office
Currently in
Huang Hong Supervisor F 47 0 Y
office
Currently in
He Xintan Supervisor M 37 0 Y
office
Staff Currently in
Ji Ge F 36 16.38 N
Supervisor office
Staff Currently in
Zhu Wenjie M 30 16.66 N
Supervisor office
Executive
Currently in
Liu Hongwei deputy M 54 48.00 N
office
president
Deputy Currently in
Zhong Ming M 45 33.06 N
Chairman office
Deputy Currently in
Huang Danian M 48 32.90 N
Chairman office
CFO (person in
Currently in
Pang Haitao charge of M 42 6.74 N
office
finance)
Secretary of Currently in
Li Xia F 37 22.56 N
the Board office
Liu Tibin Chairman M 55 Office leaving 0 Y
Deputy
Xu Bangjun M 53 Office leaving 0 Y
Chairman
Gao Jian Director M 42 Office leaving 0 Y
Chairman of Y
Yu Wanchun M 47 Office leaving 0
Supervisory
Yu Xiao Supervisor M 49 Office leaving 0 Y
Hu Jia Supervisor F 43 Office leaving 0 Y
Staff
Deng Li M 35 Office leaving 18.72 N
Supervisor
Deputy
Liao Tao M 47 Office leaving 32.55 Y
Chairman
Deputy
Chairman and
Zhang
person in M 42 Office leaving 28.15 Y
Xiaolong
charge of
finance
Total -- -- -- -- 408.60 --
215
HEFEI MEILING CO., LTD. Annual Report 2017
Note: in reporting period, the remuneration obtained by the above mentioned staff refers to the
pay should be obtained for taking post as senior executives, independent directors or other
administrative post
(III) Equity incentive authorized for director, supervisor and senior executive in
reporting period
The audited operating results and actual operation of the company in 2016 have met the
requirements for awarding the annual performance incentive funds. The company held the 29th
meeting of the 8the Board of Directors and the 15th meeting of the 8th Board of Supervisors and the
Annual General Meeting of Shareholders of 2016 on March 28, 2017 and May 4, 2017,
accreditation by independent directors, reviewed by supervisory committee and director interested
avoiding the voting, the meetings considered and approved the “Proposal on the Provision for the
Company's 2016 Annual Performance Incentive Funds”. In addition, the company held the 32nd
meeting of the 8th Board of Directors, the 17th meeting of the 8th Board of Supervisors, and the
first extraordinary general meeting of shareholders in 2017 on June 2, 2017 and June 20, 2017, the
independent directors made independent opinions, inspection of the supervisory, and the benefited
directors abstained from voting, the meetings considered and approved the “Allocation Plan for
the Company's 2016 Annual Performance Incentive Funds”, the details are as follows:
The performance incentive fund for year of 2016 obtained
Name Post
(in 10 thousand Yuan) (before-tax)
Li Wei Chairman 203
Wu Vice chairman and
109
Dinggang President
Liu
Executive vice president 154
Hongwei
Liao Tao Former vice president 109
Zhong Ming Vice President 109
Former vice president
Zhang
and person in charge of 109
Xiaolong
finance
Huang
Vice President 84
Danian
The Secretary of the board
Li Xia 67
of directors
Total - 944
(IV) Equity incentive authorized for director, supervisor and senior executive in reporting
period
□ Applicable √ Not applicable
V. Staff of the Company
Hefei Meiling Co., Ltd. and its controlling subsidiaries owned on-job employees of 17,179 people in total. There
216
HEFEI MEILING CO., LTD. Annual Report 2017
are 136 people in retired are enjoying expenses paid by the Company.
(I) Numbers, professional structure and education background
On-job employee in parent company (people) 7,086
On-job employee in main subsidiary (people) 10,093
Total on-job employees (people) 17,179
Current total payroll(people) 17,179
Number of retired employees with expenses paid by the
136
parent company and main subsidiary (people)
Professional structure
Types of professional category Numbers of professional category (people)
Production staff 10,706
Salesman 3,596
Technician 2,269
Financial staff 237
Administration staff 371
Total 17,179
Education background
Type of education background Numbers (people)
High school and below 11,736
Junior college 2,691
Undergraduate 2,611
Master and above 141
Total 17,179
(II) Remuneration policy
Remuneration policy of the employees: the Company formulated human resources and compensation policy
conducive to sustainable development of enterprise according to the provisions of relevant laws and policies
promulgated by the state and to the Company's actual situation; through the performance appraisal, we guided
managers and staff to make contribution for the development of the Company. At the same time, the Company
attaches great importance to staff development, build the position system and promotion channels, and enhance
staff capacity through a variety of training. We combine the incentive and guarantee compensation, encourages
mutual develop between employees and the Company. The Companies concerned about employee benefits,
shaping corporate culture by providing various holiday, allowance, sympathy, traffic and organizing colorful
activities, thus improve employee satisfaction.
(III) Training plans
Training plan: The Company has established the Staff Training Management System, Credit Management
Regulations, Reserve Team Selection and Training Regulations and other systems and standard work flows, set up
217
HEFEI MEILING CO., LTD. Annual Report 2017
the staff capacity model, and gradually established the growth mechanism by combining the training with the
individual employee development, and combining the qualification promotion with the career development.
1. The mechanism for the selection, education and use of reserve talents gradually presented. In 2017, the
Company focused on advancing the project for talent construction of 100-person echelon, and optimized the talent
development echelons such as reserve leaders, reserve cadres, overseas businesses, overseas factories, and
outstanding university students, and so on; the 100-person echelon has become an important reservoir for talent
training of the Company.
2. Talent training more effectively supported the Company’s development. In order to effectively support the
Company’s operating principles of “product leading, marketing force, manufacturing breakthrough, and
mechanism guarantee”, on the one hand, the Company improved the training enthusiasm and development ability
of R&D personnel through the project points system, industry exchanges, and other activities; on the other hand,
the Company established the “Three-Year Planning for Talent Development and Career Development Plan” to
effectively support the development of talents. At the same time, the Company standardized the capacity
evaluation and engagement evaluation system for personnel at all levels to provide data supports for formulating a
reasonable management mechanism.
3. Build a competitive enterprise cultural atmosphere. Successfully organized the kick-off meeting for the first
session of enterprise cultural construction, revised the enterprise culture manual, and re-organized the core
concepts of the enterprise, and combined with monthly enterprise cultural construction, sports cultural festivals
and other ways to deepen the awareness and recognition of the Company’s employees to enterprise culture.
(IV) Labor outsourcing
□ Applicable √ Not applicable
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HEFEI MEILING CO., LTD. Annual Report 2017
Section IX. Corporate Governance
I. Corporate governance of the Company
(I) Overview of the corporate governance
In strict compliance with the Company Law, Securities Law, Governance Principles of Listed Company issued by
the CSRC, and the Rules Governing the Listing of Securities on Shenzhen Stock Exchange (amended in 2014),
the Company continued to construct and perfect its governance structure, thereby forming its decision-making,
supervision and operation management organization with general meeting, the board of directors, the board of
supervisors and operation management as the major structure. The general meeting, board of directors, board of
supervisors and operation management of the Company has definite terms of reference, which can ensure an
effective balance, scientific decision-making process and coordinative operation, laying firm foundation for
making decisions relating to the Company’s continuous, steady and healthy development.
During the reporting period, the actual situation of corporate governance has been in line with the requirements of
relevant state laws and regulations, and regulatory documents relevant to governance of listed companies issued
by China Securities Regulatory Commission and Shenzhen Stock Exchange.
1. Shareholders and general meeting
The Company standardized the procedures concerning convening, holding and voting of general meeting in strict
compliance with the Articles of Association and Rules of Procedure of General Meeting. All shareholders,
especially the minority shareholders, were equally treated to ensure all shareholders shall rank equal status and
can fully exercise their right. During the reporting period, the Company convened general meetings according to
Rules of Procedure of Listed Issuer’s General Meeting (amended in 2016)(ZJH Notice[2016] No.22) issued by the
CSRC and the Implementation Rules Relating to Network Voting at General Meeting of Listed Issuer issued by
Shenzhen Stock Exchange (amended in September 2016). In addition to convening general meeting in forms of
site conference, the Company offered convenience for shareholders to present general meeting via network voting
which was safe, economic and convenient. At the same time, the Company strictly implemented the regulations of
Rules of Procedure for Shareholders’ Meeting of Listed Companies (revised in 2016) and Guideline for Articles of
Association of Listed Companies (revised in 2016) (CSRC announcement No. [2016] 23) that the votes of small
and medium investors should be counted separately, all the matters submitted to the Company’s general meeting
of shareholders should count the votes of the small and medium investors separately, and the results of the vote
count should be disclosed timely so as to effectively protect the rights and interests of small and medium investors
and ensure that all shareholders, especially the small and medium shareholders, fully exercise their rights.
2. The Company and controlling shareholders:
The Company has independent business and independent management capability. The Company and its
219
HEFEI MEILING CO., LTD. Annual Report 2017
controlling shareholders owe independent business, personnel, assets, organs and finance. During the period,
controlling shareholder abide by requirement of Article of Association and Management System of Related
Transactions, strictly regulate their behaviors, and no controlling shareholder has directly or indirectly intervened
in the Company’s policy-making and business activities beyond the general meeting of stockholders, no capital or
assets of the Company occupied by controlling shareholder and its affiliates either.
3. The directors and board of directors
Board Meeting are revoke and open in line with the regulation of Company Law and Article of Association
strictly, voting and information disclosure procedures appliance with relevant rules. All directors of the Company
carry out work according to “Rules of Procedure of the Board” and “Independent Director System”, seriously
attend the board of directors and shareholders’ meeting, exercise obligations by the law and faithfully perform
their duties vigorously, positively participate in trainings of related knowledge open by Shenzhen Stock Exchange
and Securities Bureau, and get familiar with related laws and regulations. Independent directors follow close to
the line of Instruction of Setting Up Independent Directors System in Listed Companies and Independent Director
System, take an active part in decision-making of the Company and present a prior approval and independent
opinions for related transactions and major events, bring out the functions of independent directors.
In the Period, Board of the Company setting up four special committees including strategy, remuneration and
appraisal, audit and nomination, each special committee respectively undertakes the functions of discussion,
policy making, supervision and assessment according to the relevant working instruction, and plays important role
in improving the scientific decision-making, decision-making efficiency and quality for the Board.
4. Supervisors and board of supervisors
The Company convened and held meeting of supervisors in strict compliance with the Company Law and Articles
of Association, and the voting and information disclosure procedures of supervisors’ meeting complied with
relevant requirements. The 8th session of board of supervisors consisted or five supervisors, two of whom are staff
supervisor, the number and constitution of which met applicable laws and regulations. Our supervisors can
carefully performed their duties including presenting at general meeting and meeting of the board of directors in
accordance to the Rules of Procedures of Board of Supervisors, to exercise supervision over the board of
directors’ decision-making procedures, subjects to be proposed and our operation in law, to review the periodic
reports prepared by the Board and form written audit opinion in respect thereof and to make effective supervision
over our material transactions, connected transaction, financial position as well as the legality and compliance of
the performance by directors and senior management and issue independent opinions in respect thereof.
5. The performance appraisal and incentive and constraint mechanism
The Company owes and continues to improve fair-ness and transparency performance appraisal standards and
incentive and constraint mechanism for directors, supervisors and senior management, the engagement of
managers of the Company is open and transparent and meets the provisions of laws and regulations.
6. The stakeholders
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The Company fully respects and maintains the legitimate rights and interests of stakeholders; strengthen
communication and negotiation with each other, realizes the coordination and balance of interests for all parties
including society, shareholders, company and staff, pushes forward the sustainable, steady and harmonious
development of the Company together.
7. The information disclosure and transparency
During the Period, the Company strengthens management of information disclosure, performs the duty of
information disclosure in strict accordance with the rules of related laws and regulations, Rules Governing the
stock listed on Shenzhen Stock Exchange (2014 Reversion) and “Management System of Information Disclosure”,
and appoints Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website
(www.cninfo.com.cn) for information disclosure medial; as for the major un-disclosed inside information,
exercise strictly confidential procedures and controlling persons with inside information kowned. The Company
perform duty in aspect of truthfully, accurately, timely and completely discloses information, ensures all investors
obtain the Company’s information equally and other legal interest.
8. Investor relations management
The Company has seriously done the job of the investor relations management in accordance with the
requirements of the "Investor Relations Management System" and "Reception and Promotion system" during the
Period. Received the consultation and research of the professional institutional investors to the company, checking
records for visitors and signing letter of commitment, disclosed the "investor relations activities record" timely.
At the same time, communicated with the investors through the "interact easily" platform of Shenzhen Stock
Exchange Investor Relations; seriously received the suggestion and opinions from investors, protect interest of the
minority investors, earnestly accepted and replied the calls, faxes, and emails from the investors; cautiously dealt
with the media coverage.
(II) Is there any difference between the actual condition of corporate governance and relevant
regulations about corporate governance for listed company from CSRC?
□Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations about
corporate governance for listed company from CSRC.
II. Independency of the Company relative to controlling shareholders’ in aspect of businesses,
personnel, assets, organization and finance
The Company totally separated in business, personnel, assets, institutions and financial aspects from Sichuan
Changhong (controlling shareholder), with independent business accounting, responsibility and risk and
independent business operation capability.
1. The business: the Company has an independent and complete business as well as operation ability, with
specialized procurement, production, technology, marketing, management, human resources and other
departments. We autonomously manage and operate business on our own. While the management staff are
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HEFEI MEILING CO., LTD. Annual Report 2017
independent from controlling shareholders and their subordinate enterprises. The Company is free from
interference by controlling shareholders and other affiliates, and there is no dependence on controlling
shareholders and other affiliates.
2. The personnel: personnel, labor, personnel and salary of the Company are completely independent. President,
vice president, Secretary of the board of directors and other senior management personnel are working in the
Company and receive salary, not receiving any remuneration and holding position of any except directors,
supervisors in the controlling shareholder and its subordinate enterprises.
3. Assets: the Company owns places of production and management independent from its controlling shareholder,
owns complete assets structure, independent production system, auxiliary production systems and supporting
facilities, land use rights, ownership of houses and other assets, and independent purchase and sales system. No
assets occupied by controlling shareholders and other affiliates.
4. Institutions: the Company established organization completely independent from controlling shareholders; the
general meeting, board of directors, board of supervisors and the internal organization are capable of taking
independent action, with no controlling shareholder intervention of corporation's decision-making behavior. The
Company strengthen the power restriction system via general meeting, the Board, supervisory committee,
independent directors and vary committees, formulated an effective structure for corporate governance.
5. Financial aspects: the Company set up independent financial management, and independent accounting system
and financial management system, independently setting up banking account and tax declaration.
III. Horizontal competition
□ Applicable √ Not applicable
IV. In the report period, the Company held annual shareholders’ general meeting and
extraordinary shareholders’ general meeting
1. Annual Shareholders’ General Meeting in the report period
Ratio of
Session of investor
Type Date Date of disclosure Index of disclosure
meeting participati
on
Juchao
Website—(http://www.cninfo
.com.cn) “Resolution
AGM of 2016 AGM 30.73% 2017-5-4 2017-5-5
Notice of Annual General
Meeting of 2016” No.:
2017-031
First Juchao
Extraordinary
Extraordinary Website—(http://www.cninfo
General 30.356% 2017-6-20 2017-6-21
General .com.cn) “Resolution
Meeting
Meeting of Notice of First extraordinary
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HEFEI MEILING CO., LTD. Annual Report 2017
2017 general meeting of 2017”
No.: 2017-041
Juchao
Second Website—(http://www.cninfo
Extraordinary Extraordinary .com.cn) “Resolution
General General 31.63% 2017-9-12 2017-9-13 Notice of Second
Meeting of Meeting extraordinary general
2017 meeting of 2017” No.:
2017-073
2. Request for extraordinary general meeting by preferred stockholders whose voting rights
restore
□ Applicable √ Not applicable
V. Responsibility performance of independent directors
(I)The attending of independent directors to Board meetings and general meeting
The attending of independent directors to Board meetings and general meeting
Times of Absent the Times for
Times of
Board meeting Times of Times of Meeting for attending the
Independent attending by Times of
supposed to present in entrusted the second AGM
Director communicatio Absence
attend in the person presence time in a row
n
report period (Y/N)
Gan Shengdao 14 2 12 0 0 N 2
Ren Jia 14 2 12 0 0 N 3
Lu Yingjin 14 2 12 0 0 N 2
Explanation of absent the Board Meeting for the second time in a row:
No independent directors absent the Board Meeting for the second time in a row.
(II) Objection for relevant events from independent directors
Whether independent directors come up with objection about company’s relevant matters or not
□ Yes √ No
Independent directors has no objections for relevant events in reporting period
(III) Other explanation about responsibility performance of independent directors
Whether the opinions from independent directors have been adopted or not
√Yes □ No
Explanation on recommendations adopted or un-adopted:
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HEFEI MEILING CO., LTD. Annual Report 2017
During the report period, the independent directors of the 8th session of the Board, Mr. Gan Shengdao, Mr. Ren Jia
and Mr. Lu Yingjin, faithfully performed their duties, and prudently, earnestly and diligently exercised their rights
as independent directors in strict accordance with “Corporation Law”, “Securities Law”, “Guidance on the
Establishment of Independent Director System in Listed Companies” of China Securities Regulatory Commission,
“Stock listing Rules”(Revised in 2014) of Shenzhen Stock Exchange, “Articles of Association”, “Independent
Director System”, “Annual Report Working System of Independent Director”, and rules of related laws and
regulations, not influenced by the major shareholders, actual controllers, or other units and individuals having a
stake in the Company, actively attended the general meeting of shareholders and board meeting, made
independent opinions on related matters, gave reasonable suggestions to the production and management and the
business development of the Company, gave full play to the role as independent directors, and maintained the
legitimate rights and interests of shareholders of the Company, especially the medium and small shareholders.
1. Deepen understanding operation of the Company. Independent directors take advantage of attending the
shareholders meeting and Board meetings, fully understand the situation of operation of the Company, listen to
the reports of business status and operation from the management. While in deliberated the related transactions,
independent directors are accredited and issued opinions on the Board Meeting; as for the other proposals that
need to decided by the Board, such as business development, financial operations and risk controlling, relevant
materials are well-deliberated by independent directors, after report, they issued independent opinions and
effectively promoted the scientific and objectivity of decisions of the board of directors.
2. Positive reinforce capacitate professional. Independent directors actively joined in the training activities for
directors, supervisors and senior management held by the supervision organization, studied relevant laws and
regulations, deepened their understanding to relevant regulations, especially the regulations involving corporate
governance structure and rights protection for shareholders with public shares, so as to strengthen and improve
their protective capabilities for the Company and shareholders’ rights and interests, and form the ideology of
consciously protecting the shareholders with public shares.
3. Diligently perform their duties. In the process of establishment and disclosure for 2017 annual report, the
independent directors, Mr. Gan Shengdao, Mr. Ren Jia and Mr. Lu Yingjin, positively performed their duties,
gave full play to their independent roles in the annual reports, carefully listened the management’s report about
the annual business condition and development of major events and did necessary field visits, directly met and
communicated with the Certified Public Accountants for annual report and internal control auditing in the audit
process, and diligently performed their duties as the independent directors
In reporting period, independent directors propose opinions on the Board, and details of suggestions as:
Dated Items Agree/against Disclosure index
Independent opinion on relevant proposal of Juchao Website
2017-03-28 Agreed
the 29th session of 8th BOD (www.cninfo.com.cn)
Independent opinion on carrying out forward
Juchao Website
2017-04-17 foreign exchange fund transaction in 1Q of Agreed
(www.cninfo.com.cn)
2017
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HEFEI MEILING CO., LTD. Annual Report 2017
Independent opinion on distribution plan of Juchao Website
2017-06-02 Agreed
performance incentive fund for year of 2016 (www.cninfo.com.cn)
Independent opinion on relevant proposal of Juchao Website
2017-07-21 Agreed
the 33rd session of 8th BOD (www.cninfo.com.cn)
Independent opinion on relevant proposal of Juchao Website
2017-08-09 Agreed
the 34th session of 8th BOD (www.cninfo.com.cn)
Independent opinion on relevant proposal of Juchao Website
2017-08-21 Agreed
the 35th session of 8th BOD (www.cninfo.com.cn)
Independent opinion on Appointment of Juchao Website
2017-09-12 Agreed
senior executive of the Board (www.cninfo.com.cn)
Independent opinion on carrying out forward
Juchao Website
2017-10-16 foreign exchange fund transaction in 3Q of Agreed
(www.cninfo.com.cn)
2017
Independent opinion on Assignment of
Juchao Website
2017-10-25 deputy chairman of the Company and Agreed
(www.cninfo.com.cn)
appointment of CFO
Independent opinion on relevant proposal of Juchao Website
2017-11-09 Agreed
the 4th session of 9th BOD (www.cninfo.com.cn)
Independent opinion on Assignment of
Juchao Website
2017-11-22 deputy chairman of the Company and Agreed
(www.cninfo.com.cn)
appointment of deputy chairman
Independent opinion on relevant proposal of Juchao Website
2017-12-22 Agreed
the 6th session of 9th BOD (www.cninfo.com.cn)
VI. Responsibility performance of subordinate special committee of the Board in report
period
(I) Responsibility performance for strategy committee of the Board
In accordance with the requirements of the relevant laws and regulations of the Company Law and the Listing
Rules of the Shenzhen Stock Exchange and the relevant requirements of the CSRC and the Shenzhen Stock
Exchange, the Strategic Committee under the Board of Directors of the company has strictly followed the
provisions of the Articles of Association and the Working Rules of the Strategic Committee of the Board of
Directors, strictly performed their duties, and offered proposals and carried out positive guides for the company's
strategic development and foreign investments, the specific situation is as follows:
1. On March 18, 2017, the Strategic Committee convened the 7th meeting of the Strategy Committee of the 8th
Board of Directors, deliberated and approved the proposal as development plans for year of 2017, the investment
on production base for 2 million washing machine construction and established washing machine joint venture by
contribution from the Company and Candy Hoover Group S.r.l.
(1)According to the Company’s medium and long term development strategy, the committee members combined
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HEFEI MEILING CO., LTD. Annual Report 2017
with the macroeconomic situation and industry status and summarized the annual work situation in 2016,
discussed and established the Company’s business thoughts and business plans in 2017, and further ensured the
realization of the Company’s medium and long term development strategic targets.
(2) According to the Company’s strategic development plan and combined with the Company’s business
development needs, in order to make up for weakness in research and development, manufacturing capacity of
the washing machine industry, it has been agreed that the Company invests not more than 371,210,000 Yuan to
build a production base that can produce 2 million sets of automatic washing machines. The completion of this
project will promote the development of the Company’s washing machine industry, enhance the competitiveness,
profitability and future sustainable development momentum of washing machine products, and it fits with the
Company’s long-term strategic development needs. It has been agreed that the investment matter should be
submitted to the board of directors of the Company for deliberation.
(3) According to the Company’s development strategy, and in order to expand the market size of Meiling washing
machine products and enhance the brand influence of Meiling washing machine products, it has been agreed that
the Company and Candy Hoover Group Srl. which has superior resources in research and development,
technology, and channels and overseas customers to jointly invest 150 million Yuan to set up Meiling Kadi (China)
Washing Machine Co., Ltd. (pre-approved name, and ultimately subject to the name approved by the industrial
and commercial bureau) to sell washing machine products, of which the Company invests 90 million Yuan with its
own funds, accounting for 60% of the registered capital, Candy Group invests 60 million Yuan with its own funds,
accounting for 40% of the registered capital. It has been agreed that the investment matter should be submitted to
the board of directors of the Company for deliberation.
2. On July 30, 2017, the strategy committee convened the 8th meeting of the strategy committee of the 8th session
of the Board of Directors, which reviewed and approved the “Proposal on the Subsidiary Zhongshan Changhong
Electric Appliance Co., Ltd. to Increase Investment in Pakistan Refrigerator Project” and the “Proposal on the
Subsidiary Sichuan Changhong Air Conditioner Company to Implement the Removal and Expansion and the
Company to Increase Capital in Sichuan Changhong Air Conditioner Company”.
(1) According to the overseas development strategy of the Company and the management and development needs
of its subsidiaries, Zhongshan Changhong Electric Co., Ltd. (hereinafter referred to as “Zhongshan Changhong”),
a subsidiary of the Company, has invested in building the refrigerator projects (production bases and sales, etc.) in
Pakistan in 2014. In order to further promote the development of the Company’s refrigerator business in Pakistan,
improve the product competitiveness, and achieve a rapid increase in local market share, it’s agreed that
Zhongshan Changhong and its partner UAE RUBA Company jointly add investments in the Pakistan refrigerator
project of the joint venture manufacturing company and joint venture sales company established in the previous
period by capital increase which should be mainly used for the implementation of refrigerator door foaming and
new product development projects. Among them, Zhongshan Changhong increased capital of 815,000 US dollars
(equivalent to approximately RMB 5,597,600) this time. It has been agreed that the investment matter should be
submitted to the board of directors of the Company for deliberation.
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HEFEI MEILING CO., LTD. Annual Report 2017
(2) According to the Company’s development strategy and the management and development needs of its
subsidiary, Sichuan Changhong Air Conditioning Co., Ltd. (hereinafter referred to as “Changhong Air
Conditioner”), the plant and office building previously rented from Sichuan Changhong Electric Co., Ltd. can no
longer be rented due to the urban planning of Mianyang City, and Changhong Air Conditioner has to move out.
Combining the current reforming tendency in the air-conditioning industry, in order to further increase the
manufacturing capacity of Changhong Air Conditioner, and enhance the competitiveness and profitability of its
products, it’s agreed that Changhong Air Conditioner invests 1,090,410,100 Yuan in the implementation of the
removal and capacity expansion project at Mianyang economic development zone to build a production base with
annual output of 4.2 million sets of air conditioners.
At the same time, considering the current financial condition of Changhong Air Conditioner, in order to promote
the smooth implementation of this removal and transformation and upgrading project, it’s submitted to the Board
of Directors to agree the Company to increase capital of RMB 650 million to Changhong Air Conditioner for this
removal and expansion project, and the remaining funds should be raised by Changhong Air Conditioner. After the
completion of this capital increase, the registered capital of Changhong Air Conditioner shall be increased from
200 million Yuan to 850 million Yuan, while the Company’s shareholding ratio is still 100%. It has been agreed
that the investment matter should be submitted to the board of directors of the Company and stockholders’
meeting for deliberation.
3. On March 18, 2017, the strategy committee convened the 1st meeting of the strategy committee of the 9th
session of the Board of Directors, which reviewed and approved the “Proposal on the Company’s 2018 Annual
Development Plan” and the “Proposal on the Company’s Shareholder Return Planning in the Next Three Years
(2018-2020)”.
(1) According to the medium and long-term development strategy of the Company, the committee members
summarized the Company’s overall work of 2017 in light of the macro-environmental situation and industry status,
discussed and established the Company’s management concept and business plans for the year 2018, and further
ensured the achievement for the Company’s long-term development strategic goals.
(2) In order to further improve the scientific, sustained and stable shareholder return mechanism, increase the
transparency and operability of profit distribution policy and decision-making, and effectively protect the
legitimate rights and interests of public investors, according to the “Company Law”, the “Notification About the
Further Implementation of Cash Dividends for Listed Companies” (ZJF No. [2012] 37) of China Securities
Regulatory Commission, the “Supervision Guidelines for Listed Companies No.3- Cash Dividends of Listed
Companies (ZJF No. [2013] 43)”, the requirements of other relevant laws, regulations, and normative documents,
and relevant provisions of the “Articles of Association”, and also comprehensively considering the Company’s
operating financial status and other factors, it agreed the Company to establish “the Company’s Shareholder
Return Planning in the Next Three Years (2018-2020)”. It’s agreed to submit this matter to the board of director of
the Company for deliberation.
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HEFEI MEILING CO., LTD. Annual Report 2017
(II) Responsibility performance for audit committee of the Board
Audit committee of the Board performed its functions of supervision and examination to maintain the
independence of audition in auditing for year of 2017 according to the requirements of related laws and
regulations such as Company Law and Rules Governing the Listing of Stocks on Shenzhen Stock Exchange and
related requirements of Securities Regulatory Commission and Shenzhen Stock Exchange by abiding of Articles
of Incorporation, Implementing Regulations of Audit Committee of Board of the Directors, and Annual Work
Rules of Audit Committee, the details are as follows:
1. On 24 January 2017, the “Financial Statement Report for year of 2016 and Arrangement of Internal Control
Auditing” and “Un-audited Financial Accounting Statement for year of 2016” were deliberated and approved in
15th session of 8th audit committee of the Board. Found more details in “(II) Responsibility performance for audit
committee of the Board” of “VI. Responsibility performance of subordinate special committee of the Board in
report period” carried in “Section IX. Corporate Governance” disclosed in Annual Report 2016, released on
Juchao Website (www.cninfo.com.cn) dated 30 March 2017.
2. On 3 March 2017, the 16th session of 8th audit committee of the Board deliberated the first draft of Annual
Report 2016, after a preliminary audit opinion issued from Shine Wing CPA (LLP). Found more details in “(II)
Responsibility performance for audit committee of the Board” of “VI. Responsibility performance of subordinate
special committee of the Board in report period” carried in “Section IX. Corporate Governance” disclosed in
Annual Report 2016, released on Juchao Website (www.cninfo.com.cn) dated 30 March 2017.
3. On March 18, 2017, the audit committee held the 17th session of the 8th audit committee of the board o which
reviewed and approved "The Company's 2016 Annual Audited Financial Reports", "2016 Internal Control Audit
Report", "Summary report about the company's 2016 annual audit work taken up by Shine Wing Certified Public
Accountants", "Motion on reappointment of the audit institution for 2017 annual financial report and internal
controls and its payment" and "Motion on the company to carry out forward foreign exchange transaction
business", and agreed to submit the above motions to the board of directors for consideration.
4. On 14 April 2017, the “Financial Statement of 1Q of 2017” was deliberated and approved in 18th session of 8th
audit committee of the Board, the un-audited financial statement present a real, accurate and completed financial
status and operation results of the Company for 1Q of 2017. The financial statements of 1Q of 2017 agree to
submit for approval in the Board.
5. On 30 July 2017, the “Financial Statement of Semi-annual 2017” was deliberated and approved in 19th session
of 8th audit committee of the Board, the un-audited financial statement present a real, accurate and completed
financial status and operation results of the Company for semi-annual of 2017. The financial statements of
semi-annual 2017 agree to submit for approval in the Board.
6. On 14 October 2017, the “Financial Statement of 3Q 2017” was deliberated and approved in 1st session of 9th
audit committee of the Board, the un-audited financial statement present a real, accurate and completed financial
status and operation results of the Company for 3Q of 2017. The financial statement of 3Q 2017 agree to submit
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HEFEI MEILING CO., LTD. Annual Report 2017
for approval in the Board.
7. On 30 January 2018, the “Financial Statement Report for year of 2017 and Arrangement of Internal Control
Auditing” and “Un-audited Financial Accounting Statement for year of 2017” were deliberated and approved in
2nd session of 9th audit committee of the Board, the un-audited financial statement presented an objectified
financial status and operation results for year of 2017 basically.
8. On 8 March 2018, the audit committee held the 3rd session of the 9th audit committee after the Shine Wing
Certified Public Account (LLP) issued preliminary audit opinion. Reviewed the auditing draft of financial report
for year of 2017, proposed specific opinions; members of audit committee communicated with certified public
accountant who was responsible for audition of the company, the certified public accountant who was be
responsible for annual audition of the company reported related matters and adjusted matters during the audition
to the audit committee, and matters of the company needs to be adjusted have been adjusted according to
adjustment opinions of the certified public accountant who was responsible for annual audition. The audit
committee read the first draft of audited financial accounting statements for 2017 of the company according to
audition condition known from certified public accountant who was responsible for annual audition and
production operation condition and financial performances reported by management level of the company,
considered that the annual financing accounting statements for 2017 audited preliminarily by the Shine Wing
Certified Public Account can truly, correctly and completely reflect the operation condition of the company, and
confirmed the preliminary audit opinions of financing accounting statements of the company issued by the Shine
Wing Certified Public Account.
9. On 18 March 2018, the 4th session of the 9th audit committee of the Board deliberated and approved the
followed 5 proposals as” Audited Financial Statement Report of 2017”, “Auditing Report of Internal Control for
year of 2017”, ‘Summary Report on Auditing Works for year of 2017 from Shine Wing Certified Public Account”,
“Auditing Institution for Financial Report of 2018 and Internal Control Auditing Re-engagement and
Remuneration Paid”, and “Opening Business of Forward Exchange”, and agreed to submit these auditing
institutions to board of the directors of the Company for deliberation.
(III) Responsibility performance for nominations committee of the Board
The nominations committee under the board of directors practically performed their duties on the basis of
requirements of laws and regulations of “Company Law” and “Rules Governing the Listing of Stocks on Shenzhen
Stock Exchange” and related requirements of China Securities Regulatory Commission and Shenzhen Stock
Exchange, and in strict accordance with “Articles of Association”, “Implementation Rules of Nominations
Committee of the Board”, in the reporting period, the nominations committee reviewed and made
recommendations to the engaged senior management that needed to be submitted to the board for consideration
and nomination.
1. On July 19, 2017, the nomination committee held its 4th meeting of the nomination committee of the 8th board
of directors, deliberated and approved proposal of qualification auditing for the chairman elected as 8th BOD and
proposal of qualification auditing for president of 8th BOD. The committee considered that the qualifications of
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HEFEI MEILING CO., LTD. Annual Report 2017
the candidate for the Company’s chairman to be elected and the candidate for the Company’s president to be
engaged were in line with the “Company Law”, “Articles of Association” and the relevant provisions of the China
Securities Regulatory Commission, there were no cases that the China Securities Regulatory Commission
determined as market bans or bans have not been lifted, there were no cases that China Securities Regulatory
Commission and other relevant departments and the stock exchanges gave punishment, there was no case that the
judiciary authorities made investigations due to a suspected crime or the China Securities Regulatory Commission
checked because of violating laws and rules, they were neither the persons subject to enforcement nor the
responsibility main body, there was no case that a candidate was not allowed to be nominated as the president. The
education background, office holding experience, professional competence, and professional qualities of the
people to be elected were in line with the job requirements. It’s agreed to nominate Mr. Li Wei as the chairman of
the 9th session of the board of directors of the Company, and agreed to nominate Mr. Wu Dinggang as the
president of the Company, which was submitted to the board of directors for deliberation.
2. On July 30, 2017, the nomination committee held the 5th meeting of the nomination committee of the Eighth
Session of the Board of Directors, the meeting reviewed and approved the Proposal on the Election of
Non-Independent Directors of the Ninth Session of the Board of Directors of the Company and the Proposal on
the Election of Independent Directors of the Ninth Session of the Board of Directors of the Company.
As the term of office of the eighth session of the Board of Directors expired on July 3, 2017, according to the
“Company Law”, the “Guiding Opinions on Establishing an Independent Director System in Listed Companies”
of China Securities Regulatory Commission, “Articles of Association”, “Rules of Procedure for Board of
Directors”, and “Implementation Rules of the Nomination Committee of the Board of Directors” and other
relevant provisions, considering the needs of the corporate governance structure of the board of directors, and
combined with the actual situation of the Company, it’s suggested that the Company’s 9th session of the board of
directors should consist of 9 directors, including 6 non-independent directors and 3 independent directors.
According to the recommendation letter sent by Sichuan Changhong Electric Co., Ltd., the Company’s controlling
shareholder, and Hefei Industry Investment Holdings (Group) Co., Ltd., a shareholder alone holding more than
3% of the Company’s shares, to the current board of directors, Sichuan Changhong Electric Co., Ltd.
recommended Mr. Li Wei, Mr. Wu Dinggang, Mr. Kou Huameng, Mr. Shi Qiang, and Mr. Teng Guangsheng as the
candidates for the non-independent directors of the 9th session of the board of directors of the Company; Hefei
Industry Investment Holdings (Group) Co., Ltd. recommended Mr. Yong Fengshan as the candidate for the
non-independent directors of the 9th session of the board of directors of the Company. After being nominated by
the Company’s board of directors, Mr. Gan Shengdao, Mr. Ren Jia, and Mr. Lu Yingjin were recommended as the
candidates for the independent directors of the Company’s 9th session of the board of directors.
The committee considered that the education background, office holding experience, professional competence,
and professional qualities of the non-independent director candidates and independent director candidates to be
nominated for the Company’s 9th session of the Board of Directors were in line with the job requirements, there
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HEFEI MEILING CO., LTD. Annual Report 2017
was no case that a candidate was not allowed to be nominated as a director, there was no case that China
Securities Regulatory Commission and other relevant departments and the stock exchanges gave punishment,
there was no case that the judiciary authorities made investigations due to a suspected crime or the China
Securities Regulatory Commission checked because of violating laws and rules, they were neither the persons
subject to enforcement nor the responsibility main body, and were in line with qualifications required by relevant
laws, administrative regulations, departmental rules, normative documents, “stock listing rules” and other relevant
regulations of the exchanges, etc. The above-mentioned director candidates have strong professional knowledge
and rich experience in related industries, which will help to further improve the corporate governance structure of
the Company and help the Company’s long-term business development. It’s agreed to nominate Mr. Li Wei, Mr.
Wu Dinggang, Mr. Kou Huameng, Mr. Shi Qiang, Mr. Yong Fengshan and Mr. Teng Guangsheng as candidates
for the non-independent directors of the 9th session of the board of directors of the Company. It’s agreed to
nominate Mr. Gan Shengdao, Mr. Ren Jia, and Mr. Lu Yingjin as candidates for independent directors of the
Company’s 9th session of the board of directors. At the same time, the above board composition, candidates for
non-independent directors, and candidates for independent directors were submitted to the board of directors for
deliberation.
The qualifications of the Company’s senior executives are in line with the “Company Law”, “Articles of
Association” and the relevant provisions of the China Securities Regulatory Commission, there were no cases that
the China Securities Regulatory Commission determined as market bans or bans have not been lifted. The
education background, office holding experience, professional competence, and professional qualities of the
senior executives to be engaged were in line with the job requirements. We agreed to nominate Mr. Wu Dinggang
as the Company’s general manager of the Company
3. On September 12, 2017, the nomination committee convened the 1st meeting of the nomination committee of
the 9th session of the Board of Directors, the meeting reviewed and approved the “Proposal on the Qualification
Examination of the Company’s Board of Directors for Engaging the Senior Executives of the Company”, and
considered that the candidates to be engaged by the Ninth Session of the Board of Directors, in accordance with
the relevant provisions of the Articles of Association, and nominated by the Company’s president, it was agreed to
nominate Mr. Liu Hongwei as a candidate for the Company’s executive vice president, and agreed to nominate Mr.
Liao Tao and Mr. Zhong Ming as the candidates for the Company’s vice president, and agreed to nominate Mr.
Zhang Xiaolong as a candidate for the Company’s vice president and financial controller, and agreed to nominate
Ms. Li Xia as a candidate for the secretary of the Company’s board, which was submitted to the board of directors
for deliberation.
4. On October 23, 2017, the nomination committee convened the 2nd meeting of the nomination committee of the
9th session of the Board of Directors, the meeting reviewed and approved the “Proposal on the Qualification
Examination of the Company’s Board of Directors for Engaging the Chief Financial Officer of the Company”, and
considered that the qualification examination of the Company’s Board of Directors for engaging the chief
financial officer of the Company conform to the relevant provisions of the “Company Law,” the China Securities
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HEFEI MEILING CO., LTD. Annual Report 2017
Regulatory Commission, the Shenzhen Stock Exchange, and the Articles of Association, there were no cases that
the China Securities Regulatory Commission determined as market bans or bans have not been lifted. The
education background, office holding experience, professional competence, and professional qualities of the vice
president and financial controller to be engaged were in line with the job requirements. In accordance with the
relevant provisions of the Articles of Association, and nominated by the Company’s president, it was agreed to
nominate Mr. Pang Haitao as a candidate for the Company’s chief financial officer (financial controller) and it was
submitted to the board of directors for deliberation.
5. On November 20, 2017, the nomination committee convened the 3rd meeting of the nomination committee of
the 9th session of the Board of Directors, the meeting reviewed and approved the “Proposal on the Qualification
Examination of the Company’s Board of Directors for Engaging the Vice President of the Company”, and
considered that the qualification examination of the Company’s Board of Directors for engaging the vice president
of the Company conform to the relevant provisions of the “Company Law,” the China Securities Regulatory
Commission, the Shenzhen Stock Exchange, and the Articles of Association, there were no cases that the China
Securities Regulatory Commission determined as market bans or bans have not been lifted. The education
background, office holding experience, professional competence, and professional qualities of the vice president
to be engaged were in line with the job requirements. In accordance with the relevant provisions of the Articles of
Association, and nominated by the Company’s president, it was agreed to nominate Mr. Kou Huameng as a
candidate for the Company’s vice president and it was submitted to the board of directors for deliberation.
(IV) Responsibility performance for remuneration and appraisal committee of the board
In line with relevant laws and regulation of Company Law and “Rules Governing the Listing of Stocks on
Shenzhen Stock Exchange” as well as requirement from CSRC and Shenzhen Stock Exchange, remuneration and
appraisal committee of the Board, strictly follow rules of “Article of Association” and “Implementation Rules of
remuneration and appraisal committee of the Board”, in the reporting period, the committee proposed suggestions
on the performance evaluation standards and incentive & restraint mechanism for directors, supervisors and senior
executives, and review the appraisal and remuneration of directors, supervisors and senior executives, accrual and
distribution for performance incentive fund included. More details are as:
1. On March 18, 2017, the 4th meeting of the Remuneration and Appraisal Committee of the 8th Board of Directors
was convened. The meeting reviewed and approved the "Appraisal and Payment of Remuneration of Directors
and Senior Executives in the Year 2016", “accrual of performance incentive fund for year of 2016”. See details on
"（iv）Performance of duty of the Remuneration and Appraisal Committee of the Board of Directors” in “VI
Performance of duty of the special committees of the Board of Directors during the reporting period” in “Section
IX Corporate Governance” of the company’s “2016 Annual Report” which the company has disclosed at
www.cninfo.com.cn on March 30, 2017.
2. On May 31, 2017, the 5th meeting of the Remuneration and Appraisal Committee of the 8th Board of Directors
was convened, the meeting has considered and approved the proposal of distribution plan of performance
incentive fund for year of 2016, and issued the following comments:
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HEFEI MEILING CO., LTD. Annual Report 2017
The incentive objects of this performance incentive fund possess the qualifications required by laws, regulations,
and regulatory documents such as the “Company Law” and “Articles of Association”, neither have been publicly
condemned or declared as inappropriate candidates by the stock exchange in recent three years nor have been
given administrative penalty by China Securities Regulatory Commission for violating laws and rules in recent
three years, conform to the incentive objects scope stipulated in the “Incentive Program” and the subject
qualifications of incentive objects are legal and effective.
It’s agreed to determine the performance incentive allocation plan for the current year based on the proposal of
“2016 Annual Performance Incentive Fund Allocation Plan (Draft)” of the performance incentive fund
management office, i.e. allot 23.63 million Yuan from the withdrawn incentive funds to 39 incentive objects
(senior executives, middle management, core technical personnel and core backbone personnel) who meet the
provisions of “Incentive Plan” according to the job level, employment period, performance appraisal results, and
performance contribution, etc. of the incentive objects in the current year. And then, the incentive objects will use
their performance incentive funds (after paying the corresponding income tax) plus no less than 30% of their total
annual remuneration (in addition to the performance incentive funds, the total annual remuneration after paying
the corresponding income tax and five social insurances and one housing fund) to purchase the Company’s stock
in open market. It has agreed to submit the “2016 Annual Performance Incentive Fund Allocation Plan of the
Company” to the Board of Directors of the Company for consideration.
3. On March 18, 2018, the remuneration and appraisal committee of the Ninth Session of Board of Directors
convened the first meeting which reviewed and approved the “Remuneration Assessment and Payment of
Directors and Senior Executives of the Company in 2017” and issued the following review opinions:
The committee assessed and reviewed the remunerations and payment status of the Company’s directors and
senior executives in 2017, and considered that the allowances received by the independent directors of the
Company should be paid at the allowance rate approved by the general meeting of shareholders; the
remunerations received by the Company’s senior executives from the Company should be strictly based on the
Company’s remuneration and assessment system, the remuneration information disclosed by the Company was
truthful, accurate, and complete and conformed to requirements of “Content and Format Norm for Information
Disclosure of Companies Publicly Issuing Securities No. 2 - Content and Format of Annual Report (Revised in
2017)” of China Securities Regulatory Commission
The Board of Directors of the Company reviewed and passed the remuneration assessment and payment matters
of the directors and senior executives in the Company’s 2017 annual report based on the remuneration assessment
status of senior executives of the Company and the opinions of the remuneration and appraisal committee.
VII. Works from Supervisory Committee
Whether the Company has risks or not in reporting period that found in supervisory activity from supervisory
committee
□Yes √ No
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HEFEI MEILING CO., LTD. Annual Report 2017
Supervisory committee has no objection about supervision events in reporting period
VIII. Appraisal and incentive to senior management
(I) Evaluation mechanism for senior executives of the Company
The Company formulated “Implementation Rules of Remuneration and Appraisal Committee of the Board”, the
remuneration and appraisal committee established 2016 annual compensation and performance management plan
for the senior management of the Company in accordance with the main scope, responsibilities, importance of
their management positions and the remuneration level of other relevant enterprises and positions; the plan
included but not limited to key performance indicator (KPI), performance appraisal standards, procedures and
major programs and systems of main appraisal system, reward and punishment; investigated the execution of duty
of the senior management and implemented annual performance appraisal to them. After reviewed by the
committee, submit to the Board for approval.
At the end of the year, combined with the senior management’s working reports and self-evaluation of 2017, and
according to the performance evaluation criteria and procedures, the Compensation and Appraisal Committee has
carried out performance appraisal to the senior management’s key performance indication (KPI) in 2017 and other
related indicators; proposed the remuneration amount and performance assessment methods for senior
management according to the job performance evaluation results and remuneration distribution policy, and
reported to the Board of Directors for approval.
(II) Establishment and implementation of performance incentive mechanism
The Company formulated a mid-long term incentive and restraint mechanism, that is “Implementation Plan of
Annual Performance Incentive Fund” in 2012, on 9 August 2012 and 28 August 2012, the Plan was deliberated
and approved in 16th meeting of 7th session of the Board and 2nd extraordinary general meeting 2012. Details of
the aforesaid event can be found in the announcement (No.: 2012-028 and No.: 2012-035) released on appointed
media Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website
(www.cninfo.com.cn) dated 10 August 2012 and 29 August 2012. Implementation of the annual performance
incentive fund found more in “ Implementation of Annual Performance Incentive Fund” of “XV Implementation
of the company’s stock incentive plan, employee stock ownership plan or other employee incentives” in “Section
V. Important Event” carried in the Report.
IX. Internal Control
(I) Details of major defects in IC appraisal report that found in reporting period
□Yes √ No
There are no details of major defects in IC appraisal report in reporting period
(II) Appraisal Report of Internal Control
Date of evaluation report of internal control disclosed (Full-text) 2018-3-30
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HEFEI MEILING CO., LTD. Annual Report 2017
Index of evaluation report of internal control disclosed (Full-text) Juchao website (www.cninfo.com.cn)
The ratio of the total assets of units included in the scope of evaluation accounting
98%
for the total assets on the company's consolidated financial statements
The ratio of the operating income of units included in the scope of evaluation
accounting for the operating income on the company's consolidated financial 95%
statements
Defects Evaluation Standards
Category Financial Reports Non-financial Reports
1. Material defect: severally or jointly with other defects, will lead
to material wrong reporting in financial reports being not able to
prevented or found or rectified in a timely manner. Occurrence of
the followings will be deemed as material defect:
1. inefficiency of environment control;
2. fraud of directors, supervisors and senior management;
3. The external auditor finds material wrong reporting in current
financial statement, while the Company has not found such
reporting during its operation; Occurrence of the followings shall
4. The material defect identified and reported to the management be deemed as material defect,
fails to be rectified in a reasonable time period; otherwise as major defect or
5. The audit committee and audit department of the Company general defect subject to the level
exercise invalid supervision upon internal control; of influence.
6. Other defects which may affect financial statement users to make 1. breach of national laws,
correct judgment. regulations or regulatory
2. Major defect: severally or jointly with other defects, will lead to documents;
Qualitative wrong reporting in financial reports being not able to prevented or 2. procedure for making significant
criteria found or rectified in a timely manner which still needs attention decisions is not scientific;
from the management though it doesn’t reach or exceed material 3. absence of system may lead to
defect as described above. Occurrence of the followings will be invalid system;
deemed as major defect: 4. Material or major defects are not
likely to rectify;
(1) Financial losses caused by guaranteeing and investing in
5. Large negative effects on the
securities and financial derivatives transactions and disposing
company and disclosed in the form
property right and stock right without authorization;
of announcement;
(2) The company's financial staff or other relevant business
6. Other issues that materially
personnel have unclear powers and responsibilities or job chaos, or
affect the Company.
are suspected of being involved in economic or job-related crimes
and have been transferred to the judiciary;
(3) Punishment or severely negative impacts on the company's
image due to the bias implementation of the policy or accounting
errors, etc.;
(4) Financial losses caused by destroying, concealing, or altering
the important original evidences at will, such as invoices and
checks, etc.
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HEFEI MEILING CO., LTD. Annual Report 2017
(5) Cash income is not entered into the account book, or public
funds are deposited in private account or "private coffer" is
established by breaking the rules.
3. General defect: other internal control related defects that do not
constitute material defects or major defect.
1. Proportion of direct property
loss in total operating income:
Material defect: wrong reporting
≧ 0.1%; Major defect: 0.05% ≤
wrong reporting ＜ 0.1%; General
1. Proportion of potential wrong reporting in total operating defect: wrong reporting＜0.05%.
income: Material defect: wrong reporting ≧0.5%; Major defect: 2. Proportion of direct property
0.1% ≤ wrong reporting＜0.5%; General defect: wrong reporting＜ loss in total profit: Material
0.1%. defect: wrong reporting ≧ 10%;
2. Proportion of potential wrong reporting in total profit: Major defect: 5% ≤ wrong
Material defect: wrong reporting ≧10%; Major defect: 5% ≤ reporting ＜ 10%; General defect:
Quantitative wrong reporting＜10%; General defect: wrong reporting＜5%. wrong reporting＜5%.
standard 3. Proportion of potential wrong reporting in total assets: 3. Proportion of direct property
Material defect: wrong reporting ≧0.5%; Major defect: 0.1% ≤ loss in total assets: Material
wrong reporting＜0.5%; General defect: wrong reporting＜0.1%. defect: wrong reporting ≧ 0.2%;
4. Proportion of potential wrong reporting in total owners’ Major defect: 0.1% ≤ wrong
equity: Material defect: wrong reporting ≧0.5%; Major defect: reporting＜0.2%; General defect:
0.1% ≤ wrong reporting＜0.5%; General defect: wrong reporting＜ wrong reporting＜0.1%.
0.1%. 4. Proportion of direct property
loss in total owners’ equity:
Material defect: wrong reporting
≧0.2%; Major defect: 0.1% ≤
wrong reporting＜0.2%; General
defect: wrong reporting＜0.1%.
Amount of significant defects in
0
financial reports
Amount of significant defects in
0
non-financial reports
Amount of important defects in financial
0
reports
Amount of important defects in
0
non-financial reports
X. Auditing report of internal control
√ Applicable □Not applicable
Deliberation section of auditing report of IC
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HEFEI MEILING CO., LTD. Annual Report 2017
We consider that: in all major aspects, Hefei Meiling Co., Ltd. has efficiency in financial report of internal control
dated 31 December 2017 according to Basic Standards of Internal Control for Enterprise and relevant regulations.
Disclosure details of audit report of internal control Disclosed
Disclosure date of audit report of internal control (full-text) 2018-3-30
Index of audit report of internal control (full-text) Juchao Website: (ww.cninfo.com.cn)
Opinion type of auditing report of IC Standard unqualified
whether the non-financial report had major defects No
Whether CPA carries out qualified opinion for audit report of internal control or not
□Yes √ No
Whether the opinions are consistent in audit report of internal control carrying out by CPA and the self-evaluation
report of the Board or not
√ Yes □ No
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HEFEI MEILING CO., LTD. Annual Report 2017
Section X. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without
due on the date when annual report approved for released or fail to cash in full on due
□Yes √No
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HEFEI MEILING CO., LTD. Annual Report 2017
Section XI. Financial Report
I. Audit Report
Type of audit opinion Standard unqualified auditor’s report
Date of audit report signing 2018-3-28
Audit authority Shine Wing Certified Public Accountants (LLP)
Auditing file No. XYZH/2018CDA40038
CPA’s name Li Xifu, Xia Cuiqiong
Auditors’ Report
XYZH/2018CDA40038
To the Shareholders of Hefei Meiling Co., Ltd.:
I. Auditing opinions
We have audited the financial statement under the name of Hefei Meiling Co., Ltd. (hereinafter referred to as
Hefei Meiling Company), including the consolidated and parent Company’s balance sheet of 31 December 2017
and profit statement, and cash flow statement, and statement on changes of shareholders’ equity for the year ended,
and notes to the financial statements for the year ended.
In our opinion, the Company’s financial statements have been prepared in accordance with the Enterprises
Accounting Standards and Enterprises Accounting System, and they fairly present the financial status of the
Company and of its parent company as of 31 December 2017 and its operation results and cash flows for the year
ended.
II. Basis of opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our
responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of the
Financial Statements” section of the auditor’s report. We are independent of the Company in accordance with the
Certified Public Accountants of China’s Code of Ethics for Professional Accountants, and we have fulfilled our
other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
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HEFEI MEILING CO., LTD. Annual Report 2017
III. Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. The key audit matter we identified is as follows:
1. Recognition of revenue
Please refer to note (iv) 25 and note (vi) 45.
Key audit matters Audit address
The main auditing procedures related to revenue recognition include:
Sales revenue of the Company was mainly sourced
from sales of refrigerator, air conditioner and 1) Understand and test the internal control of sales and collection cycle, and
washing machines to both domestic and overseas evaluate the effectiveness of internal control design and operation;
customers. As indicated in note (vi)45 of the 2) Implement substantive procedures, check important sales contracts,
financial statement - Operating income and cost, the documents corresponding to sales invoices, receipts, and system-confirmed
operating income was RMB16,797,436,757.36 in goods delivery information, and check whether meet the revenue recognition
2017. Since the truthfulness and completeness of conditions and whether the revenue recognition time are correct.
revenue recognition has material impact on 3) Implement external confirmations procedures and execute alternative
operating results, we attached great importance to procedures for projects with unusual response letter;
recognition of sales revenue. 4) Check the payment collection of receivables for customers, check whether
the unit of account receivables is consistent with the name of the customer unit,
whether there is any third party payment collection, and check the authenticity
of payment collection and income;
5) Check the after date payment collection;
6) Take cut-off test and analytical review to the incomes.
2. Capitalization of development expense
Please refer to note (iv) 19 and note (vi) 18.
Key audit matters Audit address
1. Understand key controls for capitalization of development expenditures and
The development expense occurred for research and
implement internal control audit procedures: 1) Understand the scope and
development of non-patent technology in 2017 was
accounting methods of development expenditures; 2) Understand the related
RMB116,704,686.42, which was capitalized and
control systems and procedures of research and development, and test the
accounted for as development expense in the
effectiveness of relevant internal control design and operation ;
consolidated financial statement. Development
2. Execute substantive procedures: Compare the developed projects in
expense could only be capitalized upon satisfaction
intangible assets with the external sales models, and review the authenticity of
of all the capitalization conditions set out in note
the capitalization of the development projects that have been developed;
(iv)19 to the financial statement. Since to confirm
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HEFEI MEILING CO., LTD. Annual Report 2017
3. Dual-purpose test: Check the project approval report and project acceptance
whether all the capitalization conditions are met
report formed during the research and development process, and determine
requires the management to make significant
whether the basis for development and expenditure accounting treatment is
judgment and estimate, we deem this matter
appropriate.
important in the context of our audit.
IV. Other information
The management of Hefei Meiling Co., Ltd. (the “Management”) is responsible for other information which
includes the information covered in the Company’s 2017 annual report excluding the financial statement and our
audit report.
The audit opinion issued by us for the financial statement has not covered other information, for which we do not
issue any form of assurance opinions.
Considering our audit on financial statements, we are liable to read other information, during which, we shall
consider whether other information differs materially from the financial statements or that we understand during
our audit, or whether there is any material misstatement.
Based on the works executed by us, we should report the fact if we find any material misstatement in other
information. In t his regards, we have nothing to report.
V. Responsibilities of management and those charged with governance for the financial statements
The management is responsible for the preparation of the financial statements in accordance with the Accounting
Standards for Enterprise to secure a fair presentation, and for the design, establishment and maintenance of the
internal control necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing matters related to going concern and using the going concern assumption
unless the management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
VI. Responsibilities of the auditor for the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
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HEFEI MEILING CO., LTD. Annual Report 2017
from material misstatement, whether due to fraud or error, and to issue an audit report that includes our audit
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the CAS will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with the CAS, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
(1)identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern assumption and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required by the CAS to draw users’ attention in audit report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify audit opinion. Our conclusions are based
on the information obtained up to the date of audit report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express audit opinion on the financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
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HEFEI MEILING CO., LTD. Annual Report 2017
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguard measures.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in the auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in the auditor’s report because of the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Shine Wing Certified Public Accountants (LLP) Chinese CPA: (engagement partner)Li xi fu
Chinese CPA: Xia cui qiong
Beijing China 28th March 2018
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HEFEI MEILING CO., LTD. Annual Report 2017
II. Financial Statement
Statement in Financial Notes are carried in RMB/CNY
1. Consolidated balance sheet
Prepared by Hefei Meiling Co., Ltd.
2017-12-31
In RMB
Item Ending balance Opening balance
Current assets:
Monetary funds 5,283,081,788.04 4,058,869,234.63
Settlement provisions
Capital lent
Financial assets measured by fair value and with
15,646,731.48 12,060,213.30
variation reckoned into current gains/losses
Derivative financial liability
Notes receivable 2,074,648,484.36 1,421,429,723.73
Account receivable 1,780,416,509.02 1,118,960,552.49
Accounts paid in advance 200,106,216.59 134,706,488.38
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance receivable
Interest receivable 4,692,303.18 2,645,494.32
Dividend receivable
Other account receivable 64,358,959.73 39,553,919.44
Purchase restituted finance asset
Inventories 2,918,100,650.27 1,974,526,734.86
Assets held for sale
Non-current asset due within one year 44,497,902.00 12,625,340.00
Other current assets 801,894,930.97 1,454,346,297.42
Total current assets 13,187,444,475.64 10,229,723,998.57
Non-current assets:
Loans and payments on behalf
Finance asset available for sales 31,000,000.00 17,000,000.00
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HEFEI MEILING CO., LTD. Annual Report 2017
Held-to-maturity investment
Long-term account receivable
Long-term equity investment 90,534,671.92 81,643,631.37
Investment property 9,569,711.72 13,275,631.40
Fixed assets 1,439,427,226.50 1,204,093,169.72
Construction in progress 174,857,717.15 107,037,409.95
Engineering material
Disposal of fixed asset 75,875,517.11 75,788,138.47
Productive biological asset
Oil and gas asset
Intangible assets 772,853,622.41 613,969,271.63
Expense on Research and Development 85,624,078.79 45,023,750.60
Goodwill
Long-term expenses to be apportioned 3,635,861.94 1,132,075.48
Deferred income tax asset 90,689,083.63 84,264,603.65
Other non-current asset 34,615,630.00
Total non-current asset 2,774,067,491.17 2,277,843,312.27
Total assets 15,961,511,966.81 12,507,567,310.84
Current liabilities:
Short-term loans 1,631,206,000.00 288,343,724.73
Loan from central bank
Absorbing deposit and interbank deposit
Capital borrowed
Financial liability measured by fair value and
16,034,000.00 559,249.58
with variation reckoned into current gains/losses
Derivative financial liability
Notes payable 4,006,765,857.99 2,635,051,740.30
Account receivable 2,869,886,049.19 2,331,899,310.82
Accounts received in advance 438,386,810.72 390,935,440.46
Selling financial asset of repurchase
Commission charge and commission payable
Wage payable 184,819,166.86 189,592,039.00
Taxes payable 61,292,671.72 59,849,032.13
Interest payable 6,441,508.68 1,617,352.01
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HEFEI MEILING CO., LTD. Annual Report 2017
Dividend payable 2,890,364.80 2,545,801.23
Other account payable 834,285,636.00 622,580,323.43
Reinsurance payables
Insurance contract reserve
Security trading of agency
Security sales of agency
Liability held for sale
Non-current liabilities due within 1 year 46,454,376.68 272,202,590.10
Other current liabilities
Total current liabilities 10,098,462,442.64 6,795,176,603.79
Non-current liabilities:
Long-term loans 253,160,000.00 38,908,788.00
Bonds payable
Including: preferred stock
Perpetual capital securities
Long-term account payable 10,953,687.53
Long-term wages payable 24,645,421.94 29,696,403.85
Special accounts payable 1,530,000.00 1,400,000.00
Projected liabilities 313,013,878.20 331,575,430.79
Deferred income 102,569,955.39 142,919,562.49
Deferred income tax liabilities 1,809,032.00
Other non-current liabilities
Total non-current liabilities 705,872,943.06 546,309,217.13
Total liabilities 10,804,335,385.70 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 2,684,806,344.07 2,687,961,060.65
Less: Inventory shares
Other comprehensive income -7,262,322.02 3,474,546.95
Reasonable reserve
Surplus public reserve 391,029,420.33 391,029,420.33
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HEFEI MEILING CO., LTD. Annual Report 2017
Provision of general risk
Retained profit 937,894,771.93 968,097,382.98
Total owner’s equity attributable to parent company 5,051,066,095.31 5,095,160,291.91
Minority interests 106,110,485.80 70,921,198.01
Total owner’s equity 5,157,176,581.11 5,166,081,489.92
Total liabilities and owner’s equity 15,961,511,966.81 12,507,567,310.84
Legal Representative: Li Wei Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
2. Balance Sheet of Parent Company
Prepared by Hefei Meiling Co., Ltd.
In RMB
Item Ending balance Opening balance
Current assets:
Monetary funds 3,411,454,144.54 3,071,362,771.31
Financial assets measured by
fair value and with variation 14,077,531.48 12,060,213.30
reckoned into current gains/losses
Derivative financial liability
Notes receivable 1,748,615,925.92 1,053,598,721.93
Account receivable 1,372,870,968.26 1,006,701,894.37
Account paid in advance 162,232,742.46 106,947,474.25
Interest receivable
Dividends receivable
Other account receivable 39,849,732.36 26,742,423.95
Inventories 1,028,423,929.21 1,017,090,374.81
Assets held for sale
Non-current assets maturing
within one year
Other current assets 615,877,268.44 1,427,283,451.40
Total current assets 8,393,402,242.67 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
247
HEFEI MEILING CO., LTD. Annual Report 2017
Long-term receivables
Long-term equity
1,705,007,815.84 992,282,289.21
investments
Investment property 7,960,789.08 11,332,015.32
Fixed assets 933,149,895.50 861,163,999.99
Construction in progress 67,205,463.02 19,478,121.20
Project materials
Disposal of fixed assets 43,582,333.35 43,494,954.71
Productive biological assets
Oil and natural gas assets
Intangible assets 457,534,626.06 430,435,091.82
Research and development
23,782,085.92 12,797,092.26
costs
Goodwill
Long-term deferred expenses
Deferred income tax assets 76,015,591.58 69,138,686.26
Other non-current assets
Total non-current assets 3,345,238,600.35 2,457,122,250.77
Total assets 11,738,640,843.02 10,178,909,576.09
Current liabilities:
Short-term borrowings 1,186,026,000.00 261,843,724.73
Financial liability measured
by fair value and with variation 16,034,000.00
reckoned into current gains/losses
Derivative financial liability
Notes payable 2,001,732,195.76 1,734,774,950.13
Account receivable 1,674,129,819.20 1,521,019,717.86
Accounts received in
53,558,493.11 104,205,506.34
advance
Wage payable 33,060,896.41 57,714,577.87
Taxes payable 16,641,410.98 25,677,906.64
Interest payable 3,999,358.60 1,617,352.01
Dividend payable 2,890,364.80 2,545,801.23
Other account payable 1,013,257,972.75 634,561,307.52
Liability held for sale
248
HEFEI MEILING CO., LTD. Annual Report 2017
Non-current liabilities due
7,715,255.20 257,750,238.18
within 1 year
Other current liabilities
Total current liabilities 6,009,045,766.81 4,601,711,082.51
Non-current liabilities:
Long-term loans 253,160,000.00 4,751,000.00
Bonds payable
Including: preferred stock
Perpetual capital
securities
Long-term account payable
Long-term wages payable 24,645,421.94 29,696,403.85
Special accounts payable
Accrual liabilities 313,013,878.20 331,575,430.79
Deferred income 56,906,985.04 64,601,290.18
Deferred income tax
1,809,032.00
liabilities
Other non-current liabilities
Total non-current liabilities 647,726,285.18 432,433,156.82
Total liabilities 6,656,772,051.99 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 893,442,648.28 956,339,194.01
Total owner’s equity 5,081,868,791.03 5,144,765,336.76
Total liabilities and owner’s
11,738,640,843.02 10,178,909,576.09
equity
Legal Representative: Li Wei Person in charge of accounting works: Pang Haitao
249
HEFEI MEILING CO., LTD. Annual Report 2017
Person in charge of accounting institute: Luo Bo
3. Consolidated Profit Statement
Prepared by Hefei Meiling Co., Ltd.
In RMB
Item Current period Last period
I. Total operating income 16,797,436,757.36 12,526,710,867.49
Including: Operating income 16,797,436,757.36 12,526,710,867.49
Interest income
Insurance gained
Commission charge and commission income
II. Total operating cost 16,900,689,559.48 12,355,268,931.56
Including: Operating cost 13,802,673,137.30 10,028,393,422.32
Interest expense
Commission charge and commission expense
Cash surrender value
Net amount of expense of compensation
Net amount of withdrawal of insurance contract reserve
Bonus expense of guarantee slip
Reinsurance expense
Tax and extras 149,482,479.91 137,857,822.93
Sales expenses 2,434,337,059.85 1,855,396,448.81
Administration expenses 496,931,743.04 472,146,980.73
Financial expenses -33,648,833.18 -139,879,189.92
Losses of devaluation of asset 50,913,972.56 1,353,446.69
Add: Changing income of fair value(Loss is listed with
-11,888,232.24 11,500,963.72
“-”)
Investment income (Loss is listed with “-”) 102,766,412.15 14,302,482.67
Including: Investment income on affiliated company and
-2,625,710.04 -1,724,205.46
joint venture
Exchange income (Loss is listed with “-”)
Income from assets disposal (Loss is listed with
-8,206,289.88 -1,255,433.98
“-”)
Other income 71,747,005.11 0.00
III. Operating profit (Loss is listed with “-”) 51,166,093.02 195,989,948.34
250
HEFEI MEILING CO., LTD. Annual Report 2017
Add: Non-operating income 5,671,791.04 53,762,108.99
Less: Non-operating expense 222,977.82 538,507.26
IV. Total Profit (Loss is listed with “-”) 56,614,906.24 249,213,550.07
Less: Income tax expense 20,520,373.53 29,044,015.72
V. Net profit (Net loss is listed with “-”) 36,094,532.71 220,169,534.35
(i) net profit from continuous operation (Net loss is
36,094,532.71 220,169,534.35
listed with “-”)
(ii) net profit from discontinued operation (Net loss is
listed with “-”)
Net profit attributable to owner’s of parent company 32,473,204.92 220,216,680.96
Minority shareholders’ gains and losses 3,621,327.79 -47,146.61
VI. Net after-tax of other comprehensive income -14,082,920.83 7,798,783.78
Net after-tax of other comprehensive income attributable to
-10,736,868.97 5,755,047.56
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
-10,736,868.97 5,755,047.56
reclassified subsequently to profit or loss
1. Share of the other comprehensive income of the
investee accounted for using equity method which will be
reclassified subsequently to profit or loss
2. Gains or losses arising from changes in fair
value of available-for-sale financial assets
3. Gains or losses arising from reclassification of
held-to-maturity investment as available-for-sale financial
assets
4. The effect hedging portion of gains or losses
arising from cash flow hedging instruments
5. Translation differences arising on translation of
-10,736,868.97 5,755,047.56
foreign currency financial statements
6. Other
Net after-tax of other comprehensive income attributable to
-3,346,051.86 2,043,736.22
minority shareholders
251
HEFEI MEILING CO., LTD. Annual Report 2017
VII. Total comprehensive income 22,011,611.88 227,968,318.13
Total comprehensive income attributable to owners of
21,736,335.95 225,971,728.52
parent Company
Total comprehensive income attributable to minority
275,275.93 1,996,589.61
shareholders
VIII. Earnings per share:
(i) Basic earnings per share 0.0311 0.2717
(ii) Diluted earnings per share 0.0311 0.2717
As for the enterprise combined under the same control, net profit of 0 Yuan achieved by the merged party before
combination while 0 Yuan achieved last period
Legal Representative: Li Wei Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
4. Profit Statement of Parent Company
Prepared by Hefei Meiling Co., Ltd.
In RMB
Item Current period Last period
I. Operation income 8,517,669,513.46 7,446,086,755.52
Less: Operating cost 7,638,749,033.68 6,433,627,521.78
Tax and extras 68,182,464.42 73,861,322.33
Sales expenses 709,359,125.82 688,401,472.30
Administration expenses 209,439,736.74 208,401,227.95
Financial expenses -17,337,616.73 -98,934,716.78
Losses of devaluation of asset 1,260,709.01 2,102,466.99
Add: Changing income of fair value(Loss is listed
-14,016,681.82 12,060,213.30
with “-”)
Investment income (Loss is listed with “-”) 59,581,326.89 83,282,277.41
Including: Investment income on affiliated
2,649,526.63 3,156,876.73
company and joint venture
Income from assets disposal (Loss is listed with
8,023,508.61 -2,170,704.78
“-”)
Other income 24,681,144.75
II. Operating profit (Loss is listed with “-”) -13,714,641.05 231,799,246.88
Add: Non-operating income 2,670,109.81 29,006,141.73
Less: Non-operating expense 5,994.20 94,199.57
252
HEFEI MEILING CO., LTD. Annual Report 2017
III. Total Profit (Loss is listed with “-”) -11,050,525.44 260,711,189.04
Less: Income tax expense -10,829,795.68 21,086,927.51
IV. Net profit (Net loss is listed with “-”) -220,729.76 239,624,261.53
(i) net profit from continuous operation (Net loss is
-220,729.76 239,624,261.53
listed with “-”)
(ii) net profit from discontinued operation (Net loss is
listed with “-”)
V. Net after-tax of other comprehensive income
(I) Other comprehensive income items which will not
be reclassified subsequently to profit of loss
1. Changes as a result of re-measurement of net
defined benefit plan liability or asset
2. Share of the other comprehensive income of
the investee accounted for using equity method which will
not be reclassified subsequently to profit and loss
(II) Other comprehensive income items which will be
reclassified subsequently to profit or loss
1. Share of the other comprehensive income of
the investee accounted for using equity method which will
be reclassified subsequently to profit or loss
2. Gains or losses arising from changes in fair
value of available-for-sale financial assets
3. Gains or losses arising from reclassification
of 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 -220,729.76 239,624,261.53
VII. Earnings per share:
(i) Basic earnings per share -0.0002 0.2956
(ii) Diluted earnings per share -0.0002 0.2956
Legal Representative: Li Wei Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
253
HEFEI MEILING CO., LTD. Annual Report 2017
5. Consolidated Cash Flow Statement
Prepared by Hefei Meiling Co., Ltd.
In RMB
Item Current period Last period
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing
14,387,433,715.06 11,699,243,669.11
labor services
Net increase of customer deposit and interbank deposit
Net increase of loan from central bank
Net increase of capital borrowed from other financial
institution
Cash received from original insurance contract fee
Net cash received from reinsurance business
Net increase of insured savings and investment
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 481,226,085.12 335,919,734.52
Other cash received concerning operating activities 72,232,660.48 59,658,793.72
Subtotal of cash inflow arising from operating activities 14,940,892,460.66 12,094,822,197.35
Cash paid for purchasing commodities and receiving
12,822,457,926.13 8,789,463,121.16
labor 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 workers 1,412,237,721.51 1,223,290,043.44
Taxes paid 529,295,201.24 449,049,753.97
Other cash paid concerning operating activities 728,403,606.52 647,628,383.15
254
HEFEI MEILING CO., LTD. Annual Report 2017
Subtotal of cash outflow arising from operating activities 15,492,394,455.40 11,109,431,301.72
Net cash flows arising from operating activities -551,501,994.74 985,390,895.63
II. Cash flows arising from investing activities:
Cash received from recovering investment 5,185,762,362.50 500,000,000.00
Cash received from investment income 99,388,295.58 9,533,550.19
Net cash received from disposal of fixed, intangible
16,382,561.67 28,393,920.60
and other long-term assets
Net cash received from disposal of subsidiaries and
23,314,758.79
other units
Other cash received concerning investing activities 150,058,101.10 133,141,780.06
Subtotal of cash inflow from investing activities 5,451,591,320.85 694,384,009.64
Cash paid for purchasing fixed, intangible and other
536,726,917.60 134,749,360.71
long-term assets
Cash paid for investment 4,389,654,061.22 1,490,783,872.00
Net increase of mortgaged loans
Net cash received from subsidiaries and other units
obtained
Other cash paid concerning investing activities 34,559,606.18 4,027,616.05
Subtotal of cash outflow from investing activities 4,960,940,585.00 1,629,560,848.76
Net cash flows arising from investing activities 490,650,735.85 -935,176,839.12
III. Cash flows arising from financing activities
Cash received from absorbing investment 33,078,316.00 1,570,791,736.49
Including: Cash received from absorbing minority
33,078,316.00 28,791,737.65
shareholders’ investment by subsidiaries
Cash received from loans 2,847,116,546.03 1,613,844,864.58
Cash received from issuing bonds
Other cash received concerning financing activities 3,451.80
Subtotal of cash inflow from financing activities 2,880,194,862.03 3,184,640,052.87
Cash paid for settling debts 1,568,796,275.10 1,351,232,591.45
Cash paid for dividend and profit distributing or
104,008,477.82 67,342,850.57
interest paying
Including: Dividend and profit of minority shareholder
paid by subsidiaries
Other cash paid concerning financing activities 755,161.84 324,871.81
Subtotal of cash outflow from financing activities 1,673,559,914.76 1,418,900,313.83
Net cash flows arising from financing activities 1,206,634,947.27 1,765,739,739.04
255
HEFEI MEILING CO., LTD. Annual Report 2017
IV. Influence on cash and cash equivalents due to
-42,116,337.75 48,983,386.20
fluctuation in exchange rate
V. Net increase of cash and cash equivalents 1,103,667,350.63 1,864,937,181.75
Add: Balance of cash and cash equivalents at the
3,986,098,419.76 2,121,161,238.01
period -begin
VI. Balance of cash and cash equivalents at the period -end 5,089,765,770.39 3,986,098,419.76
Legal Representative: Li Wei Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
6. Cash Flow Statement of Parent Company
Prepared by Hefei Meiling Co., Ltd.
In RMB
Item Current period Last period
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing
7,050,861,082.17 6,286,987,522.89
labor services
Write-back of tax received 277,612,425.00 194,271,770.99
Other cash received concerning operating activities 36,403,787.40 28,856,943.31
Subtotal of cash inflow arising from operating activities 7,364,877,294.57 6,510,116,237.19
Cash paid for purchasing commodities and receiving labor
7,234,343,960.87 5,059,846,568.26
service
Cash paid to/for staff and workers 537,308,223.27 499,890,356.04
Taxes paid 141,241,809.02 131,211,995.78
Other cash paid concerning operating activities 241,365,806.44 308,996,738.10
Subtotal of cash outflow arising from operating activities 8,154,259,799.60 5,999,945,658.18
Net cash flows arising from operating activities -789,382,505.03 510,170,579.01
II. Cash flows arising from investing activities:
Cash received from recovering investment 4,535,200,000.00 511,480,198.00
Cash received from investment income 86,311,303.39 84,794,863.59
Net cash received from disposal of fixed, intangible and
13,587,847.40 1,919,834.50
other long-term assets
Net cash received from disposal of subsidiaries and other
5,798,619.62
units
Other cash received concerning investing activities 122,984,125.03 117,071,741.57
Subtotal of cash inflow from investing activities 4,758,083,275.82 721,065,257.28
256
HEFEI MEILING CO., LTD. Annual Report 2017
Cash paid for purchasing fixed, intangible and other
273,777,654.00 65,695,722.77
long-term assets
Cash paid for investment 4,474,076,391.20 1,546,450,000.00
Net cash received from subsidiaries and other units
Other cash paid concerning investing activities 29,844,135.92 70,692,821.70
Subtotal of cash outflow from investing activities 4,777,698,181.12 1,682,838,544.47
Net cash flows arising from investing activities -19,614,905.30 -961,773,287.19
III. Cash flows arising from financing activities
Cash received from absorbing investment 1,541,999,998.84
Cash received from loans 2,362,551,446.03 1,583,917,936.22
Cash received from issuing bonds
Other cash received concerning financing activities 520,583,765.55 162,688,163.19
Subtotal of cash inflow from financing activities 2,883,135,211.58 3,288,606,098.25
Cash paid for settling debts 1,483,860,614.21 1,323,059,487.45
Cash paid for dividend and profit distributing or interest
101,663,528.19 65,467,602.28
paying
Other cash paid concerning financing activities 118,049,145.68 78,461,124.88
Subtotal of cash outflow from financing activities 1,703,573,288.08 1,466,988,214.61
Net cash flows arising from financing activities 1,179,561,923.50 1,821,617,883.64
IV. Influence on cash and cash equivalents due to fluctuation in
-28,206,473.71 43,156,715.34
exchange rate
V. Net increase of cash and cash equivalents 342,358,039.46 1,413,171,890.80
Add: Balance of cash and cash equivalents at the period
3,067,671,385.08 1,654,499,494.28
-begin
VI. Balance of cash and cash equivalents at the period -end 3,410,029,424.54 3,067,671,385.08
Legal Representative: Li Wei Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
257
HEFEI MEILING CO., LTD. Annual Report 2017
7. Statement of Changes in Owners’ Equity (Consolidated)
Prepared by Hefei Meiling Co., Ltd.
Current period
In RMB
Current period
Owners’ equity attributable to parent company
Other
equity instrument
Reas
Item Perpe Less: Provisio Minority Total owners’
Other onabl
tual Invento Surplus n of Retained interests equity
Share capital Preferr Capital reserve comprehensiv e
capita ry reserve general profit
ed Other e income reser
l shares risk
stock ve
securi
ties
I. Balance at the end of the
1,044,597,881.00 2,687,961,060.65 3,474,546.95 391,029,420.33 968,097,382.98 70,921,198.01 5,166,081,489.92
last year
Add: Changes of
accounting policy
Error correction of
the last period
Enterprise
combined under the same
control
Other
II. Balance at the beginning
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 this year
III. Increase/ Decrease in
this year (Decrease is listed -3,154,716.58 -10,736,868.97 -30,202,611.05 35,189,287.79 -8,904,908.81
with “-”)
258
HEFEI MEILING CO., LTD. Annual Report 2017
(i) Total comprehensive
-10,736,868.97 32,473,204.92 3,621,327.79 25,357,663.74
income
(ii) Owners’ devoted and
-3,154,716.58 31,567,960.00 28,413,243.42
decreased capital
1.Common shares invested
32,255,000.00 32,255,000.00
by shareholders
2. Capital invested by
holders of other equity
instruments
3. Amount reckoned into
owners equity with
share-based payment
4. Other -3,154,716.58 -687,040.00 -3,841,756.58
(III) Profit distribution -62,675,815.97 -62,675,815.97
1. Withdrawal of surplus
reserves
2. Withdrawal of general
risk provisions
3. Distribution for owners
-62,675,815.97 -62,675,815.97
(or shareholders)
4. Other
(IV) Carrying forward
internal owners’ equity
1. Capital reserves
conversed to capital (share
capital)
2. Surplus reserves
conversed to capital (share
capital)
3. Remedying loss with
surplus reserve
4. Other
(V) Reasonable reserve
259
HEFEI MEILING CO., LTD. Annual Report 2017
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 2,684,806,344.07 -7,262,322.02 391,029,420.33 937,894,771.93 106,110,485.80 5,157,176,581.11
report period
Last period
In RMB
Last period
Owners’ equity attributable to parent company
Other
equity instrument
Reas
Item Perpe Less: Provisi Minority Total owners’
Other onabl
tual Invento Surplus on of Retained interests equity
Share capital Prefe Capital reserve comprehensiv e
capita ry reserve general profit
rred Other e income reser
l shares risk
stock ve
securi
ties
I. Balance at the end of the last
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
Add: Changes of
accounting policy
Error correction of
the last period
Enterprise combined
under the same control
Other
II. Balance at the beginning of
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
this year
260
HEFEI MEILING CO., LTD. Annual Report 2017
III. Increase/ Decrease in this
year (Decrease is listed with 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
“-”)
(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 by holders
of other equity instruments
3. Amount reckoned into
owners equity with
share-based payment
4 Other -101,096,862.24 5,116,442.04 -95,980,420.20
(III) Profit distribution 23,962,426.15 -69,786,778.42 -351,179.33 -46,175,531.60
1. Withdrawal of surplus
23,962,426.15 -23,962,426.15
reserves
2. Withdrawal of general risk
provisions
3. Distribution for owners (or
-45,824,352.27 -351,179.33 -46,175,531.60
shareholders)
4. Other
(IV) Carrying forward internal
owners’ equity
1. Capital reserves conversed
to capital (share capital)
2. Surplus reserves conversed
to capital (share capital)
3. Remedying loss with
surplus reserve
4. Other
(V) Reasonable reserve
261
HEFEI MEILING CO., LTD. Annual Report 2017
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 2,687,961,060.65 3,474,546.95 391,029,420.33 968,097,382.98 70,921,198.01 5,166,081,489.92
report period
Legal Representative: Li Wei Person in charge of accounting works: Pang Haitao Person in charge of accounting institute: Luo Bo
8. Statement of Changes in Owners’ Equity (Parent Company)
Prepared by Hefei Meiling Co., Ltd.
Current period
In RMB
Current period
Other
Other
Item equity instrument Less: Reason
compreh Surplus Retained Total owners’
Share capital Perpetual Capital reserve Inventory able
Preferred ensive reserve profit equity
capital Other shares reserve
stock income
securities
I. Balance at the end of the last year 1,044,597,881.00 2,753,017,007.10 390,811,254.65 956,339,194.01 5,144,765,336.76
Add: Changes of accounting policy
Error correction of the last period
Other
II. Balance at the beginning of this year 1,044,597,881.00 2,753,017,007.10 390,811,254.65 956,339,194.01 5,144,765,336.76
III. Increase/ Decrease in this year (Decrease
-62,896,545.73 -62,896,545.73
is listed with “-”)
262
HEFEI MEILING CO., LTD. Annual Report 2017
(i) Total comprehensive income -220,729.76 -220,729.76
(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 -62,675,815.97 -62,675,815.97
1. Withdrawal of surplus reserves
2. Distribution for owners (or shareholders) -62,675,815.97 -62,675,815.97
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
1. Withdrawal in the report period
2. Usage in the report period
(VI)Others
IV. Balance at the end of the report period 1,044,597,881.00 2,753,017,007.10 390,811,254.65 893,442,648.28 5,081,868,791.03
Last period
263
HEFEI MEILING CO., LTD. Annual Report 2017
In RMB
Last period
Other
Other
Item equity instrument Less: Reason
compreh Surplus Retained Total owners’
Share capital Perpetual Capital reserve Inventory able
Preferred ensive reserve profit equity
capital Other shares reserve
stock income
securities
I. Balance at the end of the last year 763,739,205.00 1,497,987,446.59 366,848,828.50 786,501,710.90 3,415,077,190.99
Add: Changes of accounting policy
Error correction of the last period
Other
II. Balance at the beginning of this year 763,739,205.00 1,497,987,446.59 366,848,828.50 786,501,710.90 3,415,077,190.99
III. Increase/ Decrease in this year (Decrease is
280,858,676.00 1,255,029,560.51 23,962,426.15 169,837,483.11 1,729,688,145.77
listed with “-”)
(i) Total comprehensive income 239,624,261.53 239,624,261.53
(ii) Owners’ devoted and decreased capital 280,858,676.00 1,259,877,498.56 1,540,736,174.56
1.Common shares invested by shareholders 280,858,676.00 1,259,874,046.76 1,540,732,722.76
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 shareholders) -45,824,352.27 -45,824,352.27
3. Other
(IV) Carrying forward internal owners’ equity
264
HEFEI MEILING CO., LTD. Annual Report 2017
1. Capital reserves conversed to capital (share
capital)
2. Surplus reserves conversed to capital (share
capital)
3. Remedying loss with surplus reserve
4. Other
(V) Reasonable reserve
1. Withdrawal in the report period
2. Usage in the report period
(VI)Others -4,847,938.05 -4,847,938.05
1,044,597,881.0
IV. Balance at the end of the report period 2,753,017,007.10 390,811,254.65 956,339,194.01 5,144,765,336.76
0
Legal Representative: Li Wei Person in charge of accounting works: Pang Haitao Person in charge of accounting institute: Luo Bo
265
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
I. Company profile
Hefei Meiling Co., Ltd (hereinafter referred to as “the Company”) is an incorporated Company established
and reorganized by Hefei Meiling Refrigerator General Factory and approved on June 12th 1992 through
[WanTiGaiHanZi (1992) No.039] issued by original Mechanism Reform Committee of Anhui Province. On
August 30th 1993, through Anhui Provincial Government [Wanzhenmin (1993) No.166] and re-examination
of China Securities Regulatory Commission, the Company made first public issue for 30 million A shares
and the Company was listed on Oct. 18th, 1993 in Shenzhen Stock Exchange. On August 13th, 1996, the
Company was approved to issue 100 million B shares to investors abroad through [ZhengWeiFa(1996) No.26]
issued by China Securities Regulatory Commission. The Company went public in Shenzhen Stock Exchange
on August 28th, 1996.
State-owned Assets Supervision & Administration Commission of the State Council approved such transfers
with Document Guozi Chanquan No.253 in 2007 Reply on Matters of Hefei Meiling Group Holdings
Company Limited Transferring Partial State-owned Ownership, Hefei Meiling Group Holdings Company
Limited (hereinafter abbreviated as Meiling Group) transferred its holding 37,852,683 shares in 82,852,683
state-owned shares of the Company to Sichuan Changhong Electronic Group Co., Ltd (hereinafter
abbreviated as Changhong Group), other 45,000,000 shares to Sichuan Changhong Electric Co. Ltd
(hereinafter abbreviated as Sichuan Changhong). On Aug 15, 2007, the above 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
266
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
2008, “Reply of Transfer Freely of Part of the Shares of Hefei Meiling Co., Ltd. held by State-owned
shareholders”[GZCQ(2008) No. 1412] issued by SASAC agrees the above said share transferring.
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 RMB 4.70 per share, after deducting the issue costs of 29,267,276.08
Yuan , the net amount of raised funds is 1,540,732,722.76 Yuan , the increased paid-in capital (share capital)
of 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.
267
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Ended as 31 December 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
(I)Restricted shares 80,858,588 7.74%
1. State-owned shares
2. State-owned legal person’s shares 70,793,625 6.78%
3. Other domestic shares 8,797,543 0.84%
Including: Domestic legal person’s shares 4,716,077 0.45%
Domestic natural person’s shares 4,081,466 0.39%
4. Foreign shares 1,267,420 0.12%
(II)Unrestricted shares 963,739,293 92.26%
1. RMB Ordinary shares 802,142,713 76.79%
2. Domestically listed foreign shares 161,596,580 15.47%
3. Overseas listed foreign shares
4. Others
Total shares 1,044,597,881 100.00%
The Company belongs to the manufacture of light industry, and engaged in the production and sale of
refrigerator, freezer and air-conditioner. Unified social credit code of the Company: 9134000014918555XK;
Address: No.2163, Lianhua Road, Economy and Technology Development Zone, Hefei City; Legal
Representative: Li Wei; register capital (paid-in capital): RMB 10,445,978,810,000; type of company:
limited liability company(joint venture and listed of Taiwan, Hong Kong and Macau) Business Scope: R&D,
manufacture and sales of cooling apparatus, air-conditioner, washing machine, water heater, kitchenware,
home decoration, bathroom, lamps & lanterns, household & similar appliance, injection plastic machine of
computer controlling, plastic products, metalwork, packaging products and decorations as well as
the installation and technical consultant services. Business of self-produced products, technology export and
import-export of the raw&auxilary materials, machinery equipment, instrument and technology; department
sales and transportation
II. Scope of consolidated financial statement
The Company’s consolidated financial statement included 53 subsidiaries including Sichuan Changhong Air
Conditioner Co., Ltd, Zhongshan Changhong Home Appliances Company Limited and Zhongke Meiling
Cryogenic Technology Co., Ltd, etc. As compared to previous year, subsidiary Meiling Candy Washing
Machine Co., Ltd., Hongyuan Ground Energy Heat Pump Technology (Zhongshan) Co., Ltd., Guangzhou
Changhong Trading Co., Ltd., Zhongshan Hongyou Electric Co., Ltd., Zhongshan Hongling Trading Co., Ltd.
and Hebei Hongmao Household Appliance Technology Co., Ltd were newly included due to direct
investment in this year; subsidiary Xi’an Meizlai Appliances Marketing Co., Ltd., Mianyang Meiling
Appliances Marketing Co., Ltd., Lanzhou Meizlai Appliances Marketing Co., Ltd., Hohhot Xiangyou
Appliances Marketing Co., Ltd., Hefei Meiling White Household Appliances Co., Ltd. and Urumchi Meiling
268
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Appliances Marketing Co., Ltd were 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
“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, Accounting Estimation
1. Statement on observation of accounting standards for enterprise
The financial statement prepared by the Company applies with the requirements of Accounting Standard for
Enterprise, and reflects the financial condition, operational achievements and cash flow of the Company
effectively and completely.
2. Accounting period
The accounting period of the Company is the calendar date from 1 January to 31 December.
3. Operation cycle
Operation cycle of the Company was 12 months, and it is the standard of flow classification for assets and
liabilities.
4. Standard currency for accounting
The Company takes RMB as the standard currency for accounting.
5. Accountant arrangement method of business combination under common control and not under common
control
As acquirer, the Company measures the assets and liabilities acquired through business combination under
common control at their carrying values as reflected in the consolidated financial statement of the ultimate
controller as of the combination date. Capital reserve shall be adjusted in respect of any difference between
carrying value of the net assets acquired and carrying value of the combination consideration paid. In case
269
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
that capital reserve is insufficient to offset, the Company would adjust retained earnings.
The acquiree’s net identifiable assets, liabilities or contingent liabilities acquired through business
combination not under common control shall be measured at fair value as of the acquisition date. The cost of
combination represents the fair value of the cash or non-cash assets paid, liabilities issued or committed and
equity securities issued by the Company as at the date of combination in consideration for acquiring the
controlling power in the acquiree, together with the sum of any directly related expenses occurred during
business combination(in case of such business combination as gradually realized through various
transactions, the combination cost refers to the sum of each cost of respective separate transaction). Where
the cost of the combination exceeds the acquirer’s interest in the fair value of the acquirer’s identifiable net
assets acquired, the difference is recognized as goodwill; where the cost of combination is lower than the
acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the Company shall firstly make
further review on the fair values of the net identifiable assets, liabilities or contingent liabilities acquired as
well as the fair value of the non-cash assets portion of combination consideration or the equity securities
issued by the Company. In case that the Company finds the cost of combination is still lower than the
acquirer’s interest in the fair value of the acquiree’s identifiable net assets after such further review, the
difference is recognized in non-operating income for the current period when combination occurs.
6. Measures on Preparation of Consolidated Financial Statements
The Company shall put all the subsidiaries controlled and main body structured into consolidated financial
statements.
Any difference arising from the inconformity of accounting year or accounting policies between the
subsidiaries and the Company shall be adjusted in the consolidated financial statements.
All the material inter-company transactions, non-extraordinary items and unrealized profit within the
combination scope are written-off when preparing consolidated financial statement. Owners’ equity of
subsidiary not attributable to parent company and current net gains and losses, other comprehensive income
and total comprehensive income attributable to minority shareholders are recognized as non-controlling
interests, minority interests, other comprehensive income attributable to minority shareholders and total
comprehensive income attributable to minority shareholders in consolidated financial statement respectively.
As for subsidiary acquired through business combination under common control, its operating results and
cash flow will be included in consolidated financial statement since the beginning of the period when
combination occurs. When preparing comparative consolidated financial statement, the relevant items in
previous years financial statement shall be adjusted as if the reporting entity formed upon combination has
been existing since the ultimate controller commenced relevant control.
As for equity interests of the investee under common control acquired through various transactions which
eventually formed business combination, the Company shall supplement disclosure of the accounting
treatment in consolidated financial statement in the reporting period when controlling power is obtained. For
example, as for equity interests of the investee under common control acquired through various transactions
which eventually formed business combination, adjustments shall be made as if the current status had been
existing when the ultimate controller commenced control in connection of preparing consolidated financial
270
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
statement; in connection with preparing comparative statement, the Company shall consolidate the relevant
assets and liabilities of the acquiree into the Company’s comparative consolidated financial statement to the
extent not earlier than the timing when the Company and the acquiree are all under control of the ultimate
controller, and the net assets increased due to combination shall be used to adjust relevant items under
owners’ equity in comparative statement. In order to prevent double computation of the value of the
acquiree’s net assets, the relevant profits and losses, other comprehensive income and change of other net
assets recognized during the period from the date when the Company acquires original equity interests and
the date when the Company and the acquiree are all under ultimate control of the same party (whichever is
later) to the date of combination in respect of the long-term equity investment held by the Company before
satisfaction of combination shall be utilized to offset the beginning retained earnings and current gains and
losses in the period as the comparative financial statement involves, respectively.
As for subsidiary acquired through business combination not under common control, its operating results and
cash flow will be included in consolidated financial statement since the Company obtains controlling power.
When preparing consolidated financial statement, the Company shall adjust the subsidiary’s financial
statement based on the fair value of the various identifiable assets, liabilities or contingent liabilities
recognized as of the acquisition date.
As for equity interests of the investee not under common control acquired through various transactions which
eventually formed business combination, the Company shall supplement disclosure of the accounting
treatment in consolidated financial statement in the reporting period when controlling power is obtained. For
example, as for equity interests of the investee not under common control acquired through various
transactions which eventually formed business combination, when preparing consolidated financial statement,
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
271
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
period when control is lost, meanwhile to offset goodwill. Other comprehensive income related to equity
interest investment in original subsidiaries is transferred into current investment gains and losses upon lost of
control.
If the disposal of the equity investment of a subsidiary is realized through multiple transactions until loss of
control and is a package deal, the accounting treatment of these transactions should be dealt with as one
transaction of disposal of the subsidiary until loss of control. However, before the Company loses total
control of the subsidiary, the differences between the actual disposal price and the share of the net assets of
the subsidiary disposed of in every transaction should be recognized as other comprehensive income in the
consolidated financial statements, and transferred to profit or loss when losing control.
7. Accounting treatment for joint venture arrangement and joint controlled entity
The joint venture arrangement of the Company consists of joint controlled entity and joint venture. As for
jointly controlled entity, the Company determines the assets held and liabilities assumed separately as a party
to the jointly controlled entity, recognizes such assets and liabilities according to its proportion, and
recognizes relevant income and expense separately under relevant agreement or according to its proportion.
As for asset transaction relating to purchase and sales with the jointly controlled entity which does not
constitute business activity, part of the gains and losses arising from such transaction attributable to other
participators of the jointly controlled entity is only recognized.
8. Cash and cash equivalents
Cash in the cash flow statement comprises the Group’s cash on hand and deposits that can be readily
withdrawn on demand. Cash equivalents are short-term, highly liquid investments held by the Group, that
are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value, including but not limited to the followings which meet the aforesaid conditions: debt investment
matured within three months upon the acquisition date, bank time deposit which can be early withdrew by
serving a notice and transferrable deposit receipt, etc. for time deposit which can not be used for payment at
any time, it would be note recognized as cash; while if can be used for such purpose, it would be recognized
as cash. Guarantee deposit over three months in other monetary capital shall not be recognized as cash
equivalents, and those less than three months are recognized as cash equivalents.
9. Foreign currency business and foreign currency financial statement conversion
(1) Foreign currency business
As for the foreign currency business, the Company converts the foreign currency amount into RMB amount
pursuant to the spot exchange rate as of the business day. As at the balance sheet date, monetary items
expressed by foreign currency are converted into RMB pursuant to the spot exchange rate as of the balance
sheet date. The conversion difference occurred is recorded into prevailing gains and losses, other than the
disclosure which is made according to capitalization rules for the exchange difference occurred from the
special foreign currency borrowings borrowed for constructing and producing the assets satisfying condition
of capitalization. As for the foreign currency non-monetary items measured by fair value, the amount is then
converted into RMB according to the spot exchange rate as of the confirmation day for fair value. And the
conversion difference occurred during the procedure is recorded into prevailing gains and losses directly as
272
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
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.
10. 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, accounts receivables and financial assets
available-for-sale.
Financial assets at fair value through profit or loss include trading financial assets and financial assets
designated at air value through profit or loss at initial recognition. Financial asset is classified as held for
trading if one of the following conditions is satisfied: It has been acquired principally for the purpose of
selling in the near term; or on initial recognition it is a part of a portfolio of identifiable financial instruments
that the group manages together and there is objective evidence that the group recently manages the portfolio
through the approach of short-term profit-taking; or it is a derivative that is not designated and effective as a
hedging instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by
delivery of an unquoted equity instrument (without a quoted price in an active market) whose fair value
cannot be reliably measured. A financial asset may be designated as at FVTPL upon initial recognition only
when one of the following conditions is satisfied: such designation eliminates or significantly reduces a
measurement or recognition inconsistency that would otherwise result from measuring assets or recognizing
the gains or losses on them on different bases; or the financial asset forms part of a group of financial assets
or a group of financial assets and financial liabilities, which is managed and its performance is evaluated on a
fair value basis, in accordance with the Group’s documented risk management or investment strategy, and
information about the grouping is reported to key management personnel on that basis; hybrid instruments
which contain one or more embedded derivatives, unless the embedded derivatives does not have a
substantial effect on the cash flows of the hybrid instruments, or the embedded derivatives obviously should
not be separated from the relevant hybrid instruments; hybrid instruments that have to be separated but
cannot be individually measured after it has been obtained or the balance sheet date afterwards. Such kind of
financial assets designated by the Company mainly includes forward exchange settlement business. The
Group applies subsequent measurement based on fair value in respect of such kind of financial assets.
273
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Changes in fair values is included in gains or loss from change of fair value; interests or cash dividends
obtained during the period of holding assets, shall be recognized as investment income; difference between
the fair value and the amount initially recorded of the assets shall be recognized as investment gains or losses
on disposal of the assets, and the profit or loss from changes of fair value will be adjusted at the same time.
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. Held-to-maturity investment adopts effective interest rate method for
follow-up measurement according to the amortized cost, the gains or losses from amortization or
depreciation and de-recognization will reckon into current gains/losses.
Accounts receivables represent the non-derivative financial assets which have no quotation in an active
market and fixed or available-for-confirmation recovered amount.
Available-for-sale financial assets refer to the non-derivative financial assets that are designated as available
for sale at initial recognition, and the financial assets that are not classified as other types. Among this type of
assets, the equity instrument investments that are not quoted in an active market and whose fair value cannot
be reliably measured, and the derivative financial assets that are linked to the equity instruments and must be
settled through the delivery of the equity instruments are subsequently measured at cost; others that have the
active market quotes or don’t have the active market quotes but of which the fair value can be reliably
measured should be measured at fair value, and the changes in fair value are included in other comprehensive
income. With regard to such financial assets using fair value for follow-up measurement, except for the
impairment losses and the exchange gains and losses arising from foreign currency monetary financial assets,
the changes in fair value of available-for-sale financial assets are directly reckoned in the shareholders’
equity, the accumulative amount of changes in fair value that originally included directly in equity is
transferred to the current profits and losses until the derecognition of the financial assets. The interests of
available-for-sale debt instrument investments calculated by effective interest method during the holding
period and the cash dividends relevant to available-for-sale equity instrument investments issued by Invested
unit are included in the current profits and losses as investment income. The equity instrument investments
that have no quotes in an active market and whose fair value cannot be reliably measured are measured at
cost.
2) Recognization basis and measure method for transfer of financial assets
The financial assets meet one of following requirements will be terminated recognition: ① The contract
rights of collecting cash flow of the financial assets is terminated; ②The financial assets has already been
transferred, and the Company has transferred almost all risks and remunerations of financial assets ownership
to the transferee; ③The financial assets has been transferred, even though the Company has neither
transferred nor kept almost all risks and remunerations of financial assets ownership, the Company has given
up controlling the financial assets.
If the enterprise has neither transferred or kept almost all risks and remunerations of financial assets
274
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
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.
If the entire transfer of financial assets satisfies the demand for derecognition, reckon the balance between
the book value of the transferred financial assets and the sum of consideration received from transfer and
fluctuation accumulated amount of fair value formerly reckoned in other consolidated income in the current
profits and losses.
If part transfer of financial assets satisfies the demand for derecognition, apportion the integral book value of
the transferred financial assets between the derecognized parts and the parts not yet derecognized according
to each relative fair value, and reckon the balance between the sum of consideration received from transfer
and fluctuation accumulated amount of fair value formerly reckoned in other consolidated income that
should be apportioned to the derecognized parts and the apportioned aforementioned carrying amounts in the
current profits and losses.
3) Method of impairment testing and accounting treatment for 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.
(2)Financial liability
1) Classification, recognization basis and measurement
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.
275
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
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.
2) Condition of the de-recognization of financial liability
A financial liability or a part of financial liability is derecognized when and only when the obligation
specified in the contract is discharged or canceled. An agreement between the Company and a lender to
replace the original financial liability with a new financial liability with substantially different terms is
accounted for as an extinguishment of the original financial liability and the recognition of a new financial
liability. As for substantive changes made to the contract terms (whole or in part) of the existing financial
liabilities, the existing financial liabilities (or part of it) will be derecognized. And financial liabilities after
term revision will be recognized as a new financial liability. The difference between the carrying amount of
the financial liability derecognized and the consideration paid is recognized in profit or loss for the period.
(3)Method for recognition of fair value of financial assets and liabilities
Fair values of financial assets and financial liabilities of the Company are measured at the prices in principal
market. In case there is no principal market, fair values of financial assets and financial liabilities are
calculated using the price which is the most beneficial to the market, and using valuation technology which is
the most appropriate at that time and with sufficient available data and other information. The inputs which
are used to measure the fair value have been divided into 3 levels by the Company: Level 1-inputs consist of
unadjusted quoted prices in active markets for identical assets or liabilities. Level 2-inputs are quoted prices
for the asset or liability (other than those included in Level 1) that are either directly or indirectly observable.
Level 3-inputs are unobservable inputs to the related assets or liabilities. The Level 1 inputs are the first
priority to use by the Group, and level 3 inputs will be the last one to use. The level to which the results of
measurement of fair value belong is subject to the lowest level to which the inputs having great significance
to the measurement of fair value as whole belong.
11. Bad debt provision for accounts receivable
Allowance method is adopted for the bad debt losses which are likely to happen. And conducting impairment
test independently or by combination at period-end, withdrawn bad debt provision and then recorded into
current gains and losses. As for the accounts receivable which are not able to call back 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
276
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
definite evidence showing that the debt is not available to call back or the possibility of calling back is tiny.
Account receivables were divided as follow categories at period-end, which was performed impairment test
in way of individual or group, and withdrawal bad debt provision:
(1) Account receivable with single significant amount:
If totally amount takes over 80% of the total for over 5% occupied, than 5% of single amount
Determine basis or amount
in total amounts recognized as single significant amount; if totally amount takes less than
standards for single
80% of the total for over 5% occupied, than lower recognition standards till qualified 80% in
significant amount
total
Method of bad debt
provision accrual for account Withdrawal bad debt provision according to difference between the current value of future
receivable with single major cash flow and book values; if there has no impairment been found in individual test,
amount withdrawal bad debt provision while testing by group
(2) Account receivable withdrawal bad debt provision based on combination:
Basis for combination recognized
Combination 1 Account receivable except combination 2
Employee reserve fund, foreign investment amount, contact with related party in consolidated statement
Combination 2 of Changhong Group, export tax refund receivable, account receivable with L/C or insurance,
government subsidy etc.
Methods on withdrawal of bad debt provision based on combination
Combination 1 Withdrawal bad debt provision by proportion in different age group
Combination 2 Risks are under control without bad debt provision accrual
In combination 1, withdrawal proportion of bad debt provision for account receivable based on age
analysis:
Withdrawal proportion of account receivable Withdrawal proportion of other account
Age
(%) receivable (%)
Within 1year(1year
5 5
included )
1－2 years 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
Withdrawal method for bad Impairment test on the current value of predicted future cash flow, bad debt provision
debt provision withdrawal.
12. 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, mould and engineering construction etc.
277
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
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
Withdrawal proportion for obsolete
Location level
provision
Repair 50%
278
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Awaiting repair 70%
Store return 70%
De-stocking 70%
Overstock 100%
With respect to the inventories and delivered goods which are not vested to the above classification, their
realizable net value will be calculated by the Company based on the estimated selling price of the inventories
less estimated selling expense and related taxes. The Company re-checks the above mentioned proportion at
every end of the year. Calculated the net realizable value by difference between the estimated sale price less
the estimated sales expense and relevant taxation; after comparison with the book value of commodity stocks
and goods in transit, determined whether adjusted the proportion or not. Mould expense will amortize in
installment in usual times. Once the use-life of mould is terminated, and than transfer its remaining cost into
gains/losses, no withdrawal of obsolete provision at period-end.
13. Long-term equity investment
Long-term equity investment of the Company is mainly about investment in subsidiary, investment in
associates and investment in joint-ventures.
For long-term equity investments acquired through business combination under common control, the initial
investment cost shall be the acquirer’s share of the carrying amount of net assets of the acquiree as of the
combination date as reflected in the consolidated financial statement of the ultimate controller. If the carrying
amount of net assets of the acquiree as of the combination date is negative, the investment cost of long-term
equity investment shall be zero. For long-term equity investment acquired through business combination not
under common control, the initial investment cost shall be the combination cost.
Excluding the long-term equity investment acquired through business combination, there is also a king of
long-term equity investment acquired through cash payment, for which the actual payment for the purchase
shall be investment cost; If Long-term equity investments are acquired by issuing equity securities, fair value
of issuing equity investment shall be investment cost; for Long-term equity investments which are invested
by investors, the agreed price in investment contract or agreement shall be investment cost; and for long-term
equity investment which is acquired through debt reorganization and non-monetary assets exchange,
regulations of relevant accounting standards shall be referred to for confirming investment cost.
The Company adopts cost method for investment in subsidiaries, makes calculation for investments in
joint-ventures and associates by equity method.
When calculated by cost method, long-term equity investment is priced according to its investment cost, and
cost of the investment is adjusted when making additional investment or writing off investment; When
calculated by equity method, current investment gains and losses represent the proportion of the net gains
and losses realized by the invested unit in current year attributable to or undertaken by the 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
279
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
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.
14. Investment real estate
The investment real estate of the Company includes leased houses and buildings, and is accounted value by
its cost. Cost of purchased-in investment real estate consists of payment for purchase, relevant taxes and
other expenditure which is attributable to the assets directly; while cost of self-built investment real estate is
formed with all necessary expenditures occurred before construction completion of the assets arriving at the
estimated utilization state.
Consequent measurement of investment estate shall be measured by cost method. Depreciation is provided
with average service life method pursuant to the predicted service life and net rate of salvage value. The
predicted service life and net rate of salvage value and annual depreciation are listed as follows:
Predicted rate of salvage Depreciation rate per
Type Depreciation term
value annum
House and buildings 30-40 years 4%-5% 2.375%-3.20%
When investment real estate turns to be used by holders, it shall switch to fixed assets or intangible assets
commencing from the date of such turning. And when self-used real estate turns to be leased out for rental or
280
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
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.
15. Fixed assets
Fixed assets of the Company represent the tangible assets and assets package: held by the Company for
purpose of producing commodities, providing labor service, leasing or operational management, service life
exceeds one year, and unit price exceeds RMB 2,000. Including four categories of houses and buildings,
machinery equipments, transportation equipments and other equipments
Their credit value is determined on the basis of the cost taken for obtaining them. Of which, cost of
purchased-in fixed assets include bidding price and import duty and relevant taxes, and other expenditure
which occurs before the fixed assets arrive at the state of predicted utilization and which could be directly
attributable to the assets; while cost of self-built fixed asset is formed with all necessary expenditures
occurred before construction completion of the assets arriving at the estimated utilization state; credit value
of the fixed assets injected by investors is determined based on the agreed value of investment contracts or
agreements, while as for the agreed value of investment contracts or agreements which is not fair, it shall
take its fair value as credit value; and for fixed assets which are leased in through finance leasing, credit
value is the lower of fair value of leased assets and present value of minimized leasing payment as at the
commencing date of leasing.
Consequent expenditure related to fixed assets consists of expenditures for repair and update reform. For
those meeting requirements for recognization of fixed assets, they would be accounted as fixed asset cost;
and for the part which is replaced, recognization of its carrying value shall cease; for those not meeting
requirements for recognization of fixed assets, they shall be accounted in current gains and losses as long as
they occur. When fixed asset is disposed, or no economic benefit would be predicted to obtain through
utilization or disposal of the asset, the Company shall terminate recognization of such fixed asset. The
amount of income from disposal, transfer, discarding as scrap or damage of fixed asset 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 House and buildings 30-40 years 4%-5% 2.375%-3.20%
2 Machinery equipment 10-14 years 4%-5% 6.786%-9.60%
281
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Predicted rate of salvage Depreciation rate per
No. Type Depreciation term
value annum
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.
16. 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.
17. Borrowing expense
Borrowing expenses include interest expense, amortization of discount or premium, auxiliary expenses and
exchange difference due to borrowing in foreign currency. The borrowing expense which could be directly
attributable to purchase or production of assets satisfying capitalization condition, starts capitalization when
capital expenditure and borrowing expense occur and when necessary purchase or production conducted for
promoting assets to reach the predicted available-for-use or available-for-sale state; and capitalization shall
cease when purchased or produced assets satisfying capitalization condition have reached the predicted
available-for-use or available-for-sale state. Other borrowing expense is recognized as expense during the
occurrence period.
Capitalization shall be exercised for interest expense actually occurred from special borrowings in current
period after deduction of the interest income arising from unutilized borrowing capital which is saved in
banks or deduction of investment income obtained from temporary investment; For recognization of
capitalized amount of common borrowing, it equals to the weighted average of the assets whose
accumulated expense or capital disburse is more than common borrowing times capitalization rate of
occupied common borrowing. Capitalization rate is determined according to weighted average interest rate of
common borrowing.
Assets satisfying capitalization principle generally refer to fixed assets, investment real estate and inventories
which can only arrive at predicted available-for-use and available-for-sale state after quite a long time
(generally over one year) in purchase or production activities.
If abnormal interruption happens during purchase or production of assets satisfying capitalization principle
and the interruption lasts over 3 months, the capitalization for the borrowing expense shall pause until the
purchase or production restarts.
18. 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
282
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
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.
19. Research and development
As for expenditure for research and development, the Company classifies it into expenditure on research
phase and development phase, based on nature of the expenditure and that whether the final intangible assets
formed by research & development is of great uncertainty. Expenditure arising during research should be
recorded in current gains and losses upon occurrence; expenditure arising during development is confirmed
as intangible assets when satisfying the following conditions:
(1) Completions of the intangible assets make it available for application or sell in technology;
(2) Equipped with plan to complete the intangible asset and apply or sell it;
(3) There is market for products produced with this intangible 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.
20. 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
283
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
which have uncertain service life, no matter there is impairment or not, impairment test shall be conducted at
the end of every year. If it is hard to make test on recoverable amount of single asset, test is expected to make
on the basis of the assets group or assets group portfolio where such asset belongs to.
After impairment test, if the carrying value exceeds the recoverable amount of the asset, the balance is
recognized as impairment loss. As long as impairment loss of the aforementioned assets is recognized, it
couldn’t be switched back in later accounting periods. Recoverable amount of assets refers to the higher of
fair value of assets net disposal expense and present value of predicted cash flow of the asset.
Indications for impairment are as follows:
(1) Market value of asset drops a lot in current period, the drop scope is obviously greater than the predicted
drop due to move-on of times or normal utilization;
(2) Economy, technology or law environment where enterprise operates or market where asset is located will
have significant change in current or recent periods, which brings negative influence to enterprise;
(3) Market interest rate or returning rate of other market investments have risen in current period, which
brings influence in calculating discount rate of present value of predicted future cash flow of assets, which
leads to a great drop in recoverable amount of such assets;
(4) Evidence proving that asset is obsolete and out of time or its entity has been damaged;
(5) Asset has been or will be keep aside, terminating utilization or disposed advance;
(6) Internal report of enterprise shows that economic performance of asset has been or will be lower than
prediction, such as that net cash flow created by asset or operation profit (or loss) realized by asset is greatly
lower (or higher) than the predicted amount;
(7) Other indications showing possible impairment of assets
21. 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.
22. 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.
23. Staff remuneration
Employee benefits mainly include all kinds of remuneration incurred in exchange for services rendered by
284
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
employees or compensation to the termination of employment relationship such as short-term wages,
post-employment benefits, compensation for the termination of employment relationship and other
long-term employee welfare.
Short-term remuneration includes: staff salary, bonus, allowances and subsidies, staff benefits, social
insurances like medical insurance, work-related injury insurance and maternity insurance, housing fund,
labor union funds and staff education funds, short-term paid absence of duty, short-term profit sharing
scheme, and non-monetary benefits as well as other short-term remuneration. During the accounting period
when staff provides services, the short-term remuneration actually occurred is recognized as liabilities and
shall be included in current gains and losses or related asset costs according to the beneficial items.
Retirement benefits mainly consist of basic pension insurance, unemployment insurance and
early-retirement benefits, etc. retirement benefit scheme represents the agreement reached by the
Company and its employees in respect of retirement benefits, or the rules or regulations established by the
Company for providing retirement benefits to employees. In particular, defined contribution plan means a
retirement benefit plan, pursuant to which, the Company makes fixed contribution to independent fund,
upon which, and it is not obliged to make further payment. Defined benefit plan refers to retirement benefit
scheme other than defined contribution plan.
The early retirement policy for staff and workers of the Company is the compensation for encouraging staff
and workers to accept the reduction voluntarily. The employees make applications voluntarily, the two
parties sign the compensation agreement after approved by the Company and calculate the compensation
amount according to the compensation standard passed by the staff representative conference, and the
Company confirms it as dismiss welfare and reckons it in current profits and losses. As the Company
promises to adjust the treatment for early retiring staff and workers with the increase of social basic cost of
living allowances, the discount elements will not be considered for calculating the dismiss welfare.
24. 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.
25. 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
285
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
costs incurred or to be incurred can be measured reliably. Air-conditioner OEM/ODM will recognize revenue
while notes issued after commodity transferring to the shipping space that appointed by the client.
(2) The Company confirms the realization of service income when the gross income and total cost of labor
service cab be unfailingly calculated, the economic benefits related to labor service are likely to flow into the
Group, and the progress of labor service can be confirmed reliably. On balance sheet date, with regard to
those with results provided for labor service transactions can be estimated reliably, confirm the relevant
service income according to percentage of completion method and determine the percentage-of-completion
method by the proportion of the occurred cost in the estimated total cost; as for those with results provided
for labor service transactions can’t be estimated reliably and with occurred labor cost predicted to be able to
get compensation, confirm to provide service income according to labor cost amount occurred and
capable of getting compensation, and carry over the occurred labor costs; for those with results provided for
labor service transactions can’t be estimated reliably and with occurred labor cost predicted to be not able to
get compensation, reckon the occurred labor cost in the current profits and losses, but not confirm to provide
service income.
(3) The economy 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.
26. Government grant
Government grant is recognized when the Company fulfils the conditions attached to them and there is
reasonable assurance that the grant will be received. The government grant, other than fiscal subsidy,
received by the Company shall be accounted on an aggregate basis. In particular, the government
grants relating to ordinary activities would be included in other income; the government grants not
relating to ordinary activities would be included in non-operating income.
When the government grant is in the form of monetary assets, it is measured at the actual amount
received. When the grant is provided based on a pre-determined rate, it is measured at the fair value of
the amount receivable. When the government grant is in the form of non-monetary assets, it is
measured at fair value, and measured at the nominal value of RMB1.00 in case of failure to obtain
reliable fair value.
(1)Basis of determination and accounting of government grant relating to assets
Government grant relating to assets refers to that obtained by the Company for the purpose of
acquiring or otherwise formation of long-term assets. Government grant relating to assets is deemed
as that relating to ordinary activities in principle and recognized as deferred income upon receipt. The
government grant shall be allocated averagely over the life of use of relevant assets and accounted in
other income.
(2)Basis of determination and accounting of government grant relating to income
Government grant relating to income refers to the government grant other than that relating to assets.
286
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Government grant relating to income shall be recognized as deferred income if the grant is used to
compensate the Company’s expenses or losses for subsequent periods, and shall be accounted in profit
or loss for the period during the period in which the relevant expense is recognized. Those grants
relating to our ordinary activities are recorded in other income in the period in which the relevant
expenses or losses are recognized. Those grants not relating to our ordinary activities are recorded in
non-operating income in the period in which the relevant expenses or losses are recognized.
Government grants used to compensate the relevant costs or losses incurred by the Company and
relating to our ordinary activities shall be accounted in other income directly upon receipt of the grant,
and accounted in non-operating income directly upon receipt if it is not related to our ordinary
activities.
With respect to government grant comprising both portions relating to assets and income, it shall be
accounted separately based on different portions, and it shall be aggregated as that relating to income
if it is difficult to distinguish the two portions.
(3)The policy-related preferential loan received by the Company shall be accounted separately in the
following two manners:
In case that government’s appropriation of interest subsidy is made to the lending bank, the Company
shall account for the relevant loan based on the actual amount of loan received by it, and calculate the
borrowing expense based on the principal of the borrowing and the policy-related preferential interest
rate.
In case that government’s appropriation of interest subsidy is made to the Company, the Company
applied the relevant interest subsidy to offset borrowing expense.
27. 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.
28. Lease
The Company categorizes the lease into the financial lease and the operating lease.
The financial lease is the lease in which all risks and returns related to the ownership of assets are transferred
287
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
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.
29. Held-for-sale
(1)The Company classifies non-current assets or disposal groups that meet all of the following
conditions as held-for-sale: 1) according to the practice of selling this type of assets or disposal groups
in a similar transaction, the non-current assets or disposal group can be sold immediately at its current
condition; 2) The sale is likely to occur, that is, the Company has made resolution on the selling plan
and obtained definite purchase commitment, the selling is estimated to be completed within one year.
Those assets whose disposal is subject to approval from relevant authority or supervisory department
under relevant requirements are subject to that approval. Prior to the preliminary classification of
non-current assets or disposal group as the category of held-for-sale, the Company measures the
carrying value of the respective assets and liabilities within the non-current assets or disposal group
under relevant accounting standards. For non-current asset or disposal group held for sale, for which it
is found that the carrying value is higher than its fair value less disposal expense during the initial
measurement or re-measurement on the balance sheet date, the carrying value shall be deducted to the
net amount of fair value less disposal expense, and the reduced amount shall be recognized as
impairment loss in profit or loss for the period, and provision of impairment of assets held for sale shall
be provided for accordingly.
(2)The non-current assets or disposal group that the Company has acquired specially for resale are
classified as held for sale on the acquisition date when they meet the condition that “the selling is
estimated to be completed within one year” on the acquisition date, and are likely to satisfy other
conditions of being classified as the type of held for sale in a short-term (usually being 3 months).
Non-current assets or disposal group classified as held for sale are measured at the lower of their initial
measurement amount and the net amount after their fair value less the selling expenses based on the
assumption that such non-current assets or disposal group are not classified as held for sale at the time
of initial measurement. Except for the non-current assets or disposal group acquired in a business
combination, the difference arising from considering the net amount of such non-current assets or
disposal group after their fair value less the selling expenses as the initial measurement amount is
recorded in the current profit or loss.
(3)In case of loss of control over the subsidiaries due to the sales of investment in subsidiaries, no
matter whether the Company retains part of the equity investment after selling investment in
subsidiaries, the investment in subsidiaries shall be classified as held for sale on an aggregate basis in
the separate financial statements of the parent company when the investment in subsidiaries proposed to
288
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
be sold satisfies the conditions for being classified as held for sale; and all the assets and liabilities of
the subsidiary shall be classified as held for sale in the consolidated financial statements.
(4)If the net amount of fair value of non-current assets held for sale less sales expense on subsequent
balance sheet date increases, the amount previously reduced for accounting shall be recovered and
reverted from the impairment loss recognized after the asset is classified under the category of held for
sale, with the amount reverted recorded in profit or loss for the period. Impairment loss recognized
before the asset is classified under the category of held for sale shall not be reverted.
(5)For the amount of impairment loss on assets, the carrying value of disposal group’s goodwill shall be
offset against first, and then offset against the book value of non-current assets according to the
proportion of book value of non-current assets.
If the net amount of fair value of the disposal group held for sale on the subsequent balance sheet date
less sales expenses increases, the amount reduced for accounting in previous periods shall be restored,
and shall be reverted in the impairment loss recognized in respect of the non-current assets which are
applicable to relevant measurement provisions after classification into the category of held for sale, with
the reverted amount charged in profit or loss for the current period. The written-off carrying value of
goodwill and impairment loss of non-current assets which is recognized prior to classification into the
category of held for sale shall not be reverted.
The subsequent reversed amount in respect of the impairment loss on assets recognized in the disposal
group held for sale will increase the book value in proportion of the book value of each non-current
assets (other than goodwill) in the disposal group.
(6)The non-current assets in the non-current assets or disposal group held for sale is not depreciated or
amortized, and the debt interests and other fees in the disposal group held for sale continue to be
recognized.
(7)If the non-current assets or disposal group are no longer classified as held for sale since they no
longer meet the condition of being classified as held for sale or the non-current assets are removed from
the disposal group held for sale, they will be measured at the lower of the following: 1) the amount after
their book value before they are classified as held for sale is adjusted based on the depreciation,
amortization or impairment that should have been recognized given they are not classified as held for
sale; 2) the recoverable amount.
(8)The unrecognized profits or loss will be recorded in the current profits or loss when derecognizing
the non-current assets or disposal group held for sale.
30. Discontinued operation
A discontinued operation is a separately identified component of the Group that either has been disposed
of or is classified as held for sale, and satisfies one of the following conditions: (1) represents a separate
major line of business or geographical area of operations; (2) is part of a single co-ordinate plan to
dispose of a separate major line of business or geographical area of operations; and (3) is a subsidiary
acquired exclusively with a view to resale.
289
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
31. 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.
32. Segment information
Business segment was the major reporting form of the Company, which divided into 4 parts: air-conditioner,
refrigerator and freezer, marketing and others. The transfer price among the segments will recognize based
on the market price, common costs will allocated by income proportion between segments except for the
parts that without reasonable allocation.
33. 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 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
290
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
shall be calculated with accounting estimation.
If the management amends the gross profit margin and discount rate adopted in calculation of future cash
flow of assets and assets group and the amended gross profit margin is lower than the currently adopted one
or the amended discount rate is higher than the currently adopted one, the Company needs to increase
provision of impairment provision. If the actual gross profit margin is higher (or the discount rate is lower)
than the estimation of management, the Company can not transfer back the long term assets impairment
provision provided already.
(3) Accounting estimation on realization of deferred income tax assets
Estimation on deferred income tax assets needs estimation on the taxable income and applicable tax rate for
each future year. Realization of deferred income tax assets depends on whether a company is able to obtain
sufficient taxable income in future. Change of future tax rate and switch back of temporary difference could
affect the balance of income tax expense (gains) and deferred income tax. Change of the aforesaid estimation
may result in material adjustment to deferred income tax.
(4) Usable term and residual value rate of fixed assets and intangible assets
The Company, at least at the end of each accounting year, reviews the projected usable life and residual value
rate of fixed assets and intangible assets. The projected usable life and residual value rate are determined by
the management based on the historical experiences of similar assets by reference to the estimation generally
used by the same industry with consideration on projected technical upgrade. If material change occurs to
previous estimation, the Company shall accordingly adjust the depreciation expenses and amortization
expenses for future period.
(5) Projected liabilities arising from product quality guarantee
The Company commits to repair the major spare parts of refrigerators sold through go-to-countryside
promotion activity for free for ten years. As to the maintenance expenses that may be increased arising from
such commitment, the Company has provided projected liabilities.
Taking into account the various uncertainties during the ten years, the Company considers no discount factor
of such projected liabilities. In stead, the Company reviews the parameters (probility, proportion,
maintenance expense per single set) based on the actual occurrence of maintenance expenses as of each
balance sheet date. If obvious change is found, the Company will adjust the projected liabilities according to
the latest parameters so as to reflect the best estimation.
34. Other comprehensive income
Other comprehensive income represents various gains and losses not recognized in current gains and losses
according to other accounting rules.
Other comprehensive income items shall be reported in the following two classes under other relevant
accounting rules:
(1) Other comprehensive income items that can not be reclassified into gains and losses in future accounting
periods, mainly including changes arising from re-measurement of net liabilities or net assets under defined
benefit plan and interest in investee’s other comprehensive income which are measured under equity method
291
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
and which can not be reclassified into gains and losses in future accounting periods;
(2) Other comprehensive income items that will be reclassified into gains and losses in future accounting
periods upon satisfaction of required conditions, mainly including interest in investee’s other comprehensive
income which are measured under equity method and which will be reclassified into gains and losses in
future accounting periods upon satisfaction of required conditions, gains or losses arising from change of fair
value of available-for-sale financial assets, gains or losses arising from reclassification of held-to-maturity
investment into available-for-sale financial assets, gains or losses occurred by cash flow hedging instruments
attributable to effective hedge, foreign currency financial statement translation difference, etc.
35. Change of significant accounting policies and accounting estimates
(1) Change of significant accounting policies
Change of major accounting policy for revision or promulgation on Accounting Rules from Ministry of
Finance:
Content and reasons of change Approval procedures Note
On 28 April 2017, Ministry of Finance promulgates the
“Accounting Standards for Business Enterprise No.42- the current
assets held for sales, disposal groups and discontinued operation”. 7th session of 9th BOD Prospective application
In preparation of the financial statement for year of 2017, the
Company implemented relevant accounting rules and
On 10 May 2017, the Ministry of Finance revised the
“Accounting Standards for Business Enterprises No.
16—Government Subsidies”, when establishing the 2017 annual
7th session of 9th BOD Prospective application
financial statements, the Company implemented the relevant
accounting standards and processed them in accordance with the
relevant convergence rules.
On 25 December 2017, the Ministry of Finance promulgated the
“Notification on Revising, Printing and Distributing the Financial
Statements Format for General Enterprises” (CK No. (2017) 30),
when establishing the 2017 annual financial statements, the 7th session of 9th BOD Note
Company implemented the relevant accounting standards and
processed them in accordance with the relevant convergence
rules.
Note: In preparing the 2017 financial statements, the Company executed the Notice from the Ministry of
Finance relating to Amendment and Printing of the General Business Financial Statement Form
(CK[2017]No.30), pursuant to which, the gains and losses from disposal of non-current assets and gains and
losses from exchange of non-monetary assets are accounted as “gains from assets disposal” instead of
accounted as “non-operating income” and “non-operating expense” as in previous periods. This change of
accounting policy has been dealt with under retrospective adjustment method. In detail, non-operating
income, non-operating expense and gains from assets disposal of RMB 4,155,568.27, RMB 5,411,002.25 and
292
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
RMB 1,255,433.98 are adjusted down for 2016.
(2) Change of significant accounting estimates
The Company had no change of significant accounting estimates in the year.
V. Taxation
1. Major taxes (expenses) and tax rates
Tax(expenses) Tax base Tax rate
VAT Income from sales of goods and from processing 17%, 13%, 11%, 6%, 5%
Urban maintenance and
Turnover tax 5% or 7%
construction tax
Education surcharge Turnover tax 3%
Local education
Turnover tax 2%
surcharge
Corporate income tax Taxable income 15% or25%
Original Book value of house property×(1-30%)or annual
House Property Tax 1.2% or12%
rent income
Land use tax Actual land area used 2.5 元/M2 至 15 元/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 20 July 2017, being recognized by
“Name Lists of First Hi-Tech Enterprise for year of 2017 in Anhui Province”[KG(2017) No. 62] 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 Home Appliances Company Limited was recognized as the first High &
New tech. enterprise (three-years term) for year of 2008 in Guangdong Province, and enjoins the 15%
income tax rate. On 9 November 2017, the company listed in Notice of the First High & New Tech. Enterprise
for year of 2017 in Guangdong Province issued by office of recognization management office, the company
continues to shares the 15% rate in income tax with term of three years.
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
293
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
expired
Subsidiary Mianyang Meiling Refrigeration Co., Ltd. pass the review of Reply [Chuan JX Industrial H(2014)
No.408] from Sichuan Commission of Information on 9 May 2014, and the enterprise belongs to the
encourage industry listed in Directories of Industrial Structure Adjustment (2011) Revised (State Law Reform
Committee No. 21 Order); which enjoys the preferential tax policy of income tax for the western
development enterprise. And file in tax bureau with 15% rate for enterprise income tax since 2014 with
seven years term.
Subsidiary Guangdong Changhong Ridian Technology Co., Ltd. pass the identification as high & new tech.
enterprise through Guangdong Science & Technology Department o 9 December 2016, and it enjoys the
15% tax preference for income tax in the year.
XI. 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; “year-end” refers to Dec. 31, 2017; “the year” refers to Jan. 1 to
Dec. 31, 2017; “the last year” refers to Jan. 1 to Dec. 31, 2016; the currency is RMB.
1. Monetary fund
Item Ending balance Opening balance
Cash 94,415.53
43,454.93
Bank deposit 4,600,242,944.53 3,827,367,022.13
Other Monetary fund 682,795,388.58 231,407,796.97
Total 5,283,081,788.04 4,058,869,234.63
Including: total amount deposited in overseas 16,015,873.59 19,067,202.50
Other monetary fund:
Item Ending amount
Deposits 660,634,774.42
Account of foreign currency for verification 14,542,778.22
Union Pay online 6,138,924.01
Taobao account 1,478,911.93
Total 682,795,388.58
Deposit which serves as non cash and cash equivalents refers to the banking acceptance draft deposit with a
term of over three months, amounting to RMB 131,048,925.45, forward margin amounting to RMB
62,016,092.20. China Union Pay, Taobao account and Ten Pay are all third party payment platforms. Except for
the deposit of RMB 251,000.00, utilization of other balance is not subject to any restriction.
According to the national policies relating to foreign exchange management, all goods payment denominated
in foreign currency should be transferred to reviewing accounts which may not be used temporarily. Upon
approval of such review, those payments may be transferred to general accounts. Due to the relatively short
294
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
time for reviewing foreign exchange, balance of the reviewing accounts is not limited on utilization.
2. Financial assets measured at fair value and whose changes are recorded in the profits and losses of the
current period
Item Ending balance Opening balance
Derivative financial assets 15,646,731.48 12,060,213.30
Derivative financial assets refers to the RMB forward exchange fund in the year
3. Notes receivable
(1) Category of notes receivable
Item Ending balance Opening balance
Bank acceptance 1,865,540,158.79 1,096,452,069.60
Commercial acceptance bill 209,108,325.57 324,977,654.13
Total 2,074,648,484.36 1,421,429,723.73
(2) Notes receivable mortgaged by end of the year
Item Amount mortgaged by end of the year
Bank acceptance 821,910,267.36
Note: in order to improve the utilization rate of notes, the Company pledged to banks those notes that haven’t
expired yet in exchange for issuance of banking acceptance drafts.
(3) Note receivables endorsement or discount at year-end and are not expired on balance sheet date
No termination
Termination confirmation
Item confirmation amount at
amount at year-end
year-end
Bank acceptance 3,062,765,800.34
Commercial acceptance bill 41,497,915.00
Total 3,104,263,715.34
(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
Ending amount
Category Book balance Bad debt provision
Percentag Percent Book value
Amount Amount
e age
Account receivable with single
significant amount and withdrawal single
item bad debt provision
Account receivable withdrawal bad debt
provision by combination
295
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Combination 1 1,099,760,720.22 59.49% 56,934,296.29 5.18% 1,042,826,423.93
Combination 2 720,513,272.25 38.97% 0.00% 720,513,272.25
Subtotal of combination 1,820,273,992.47 98.46% 56,934,296.29 3.13% 1,763,339,696.18
Account receivable with single minor
amount but withdrawal single item bad 28,425,106.80 1.54% 11,348,293.96 39.92% 17,076,812.84
debt provision
Total 1,848,699,099.27 100.00% 68,282,590.25 3.69% 1,780,416,509.02
(Continued)
Opening amount
Category Book balance Bad debt provision
Percentag Percent Book value
Amount Amount
e age
Account receivable with single
significant amount and withdrawal single
item bad debt provision
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 but withdrawal single item bad 13,898,468.17 1.19% 8,959,326.60 64.46% 4,939,141.57
debt provision
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
year-end.
2) Account receivable with withdrawal bad debt provision for combination 1 by aging account
Ending balance
Account age
Account receivable Bad debt provision Provision proportion
Within 1 year 1,091,369,749.60 54,568,487.48 5.00%
1-2 years 4,235,742.41 635,361.36 15.00%
2-3 years 3,281,201.72 1,148,420.60 35.00%
3-4 years 603,810.31 332,095.67 55.00%
4-5 years 135,233.34 114,948.34 85.00%
Over 5 years 134,982.84 134,982.84 100.00%
Total 1,099,760,720.22 56,934,296.29
3) Account receivable with no withdrawal bad debt provision for combination 2
Combination Book balance
296
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Combination Book balance
Account connect with related parties 446,231,575.88
Account receivable already insured 192,795,928.00
Letter of Credit 81,485,768.37
Total 720,513,272.25
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, 16 clients involved.
(2) Bad debt reserve provided for, reversed (or recovered) during this year
Bad debt reserve written off this year was RMB 15,932,686.83, and the bad debt reserve reversed this year
was RMB 452,952.63. No trade receivables written-off in previous year was recovered this year.
(3) No account receivable actually written-off in the Year.
(4) In the Year, top five receivables collected by arrears party amounting to RMB 1,000,795,387.12 in total,
accounted for 54.14% of the receivables at balance of the year-end, the bad debt provision accrual
correspondingly amounting to RMB 30,862,447.31 at year-end balance.
5. Accounts paid in advance
(1) Age of account paid in advance
Ending amount Opening amount
Item
Amount Percentage Amount Percentage
Within 1 year 191,934,459.26 95.92% 131,113,656.82 97.33%
1-2 years 5,283,741.30 2.64% 2,983,725.64 2.22%
2-3 years 2,377,113.61 1.19% 487,258.38 0.36%
Over 3 years 510,902.42 0.25% 121,847.54 0.09%
Total 200,106,216.59 100.00% 134,706,488.38 100.00%
(2) Top 5 of account paid in advance in balance at year-end amounting to RMB 130,636,234.80, accounted
for 65.28% of the account.
6. Interest receivable
Item Ending balance Opening balance
Deposit interest receivable 4,692,303.18 2,645,494.32
7. Other accounts receivable
(1) Category of other account receivable
Ending amount
Category Bookbalance Bad debt provision
Percentag Percentag Bookvalue
Amount Amount
e e
297
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Ending amount
Category Bookbalance Bad debt provision
Percentag Percentag Bookvalue
Amount Amount
e e
Other account receivable with single significant
amount and withdrawal single item bad debt
provision
Other account receivable withdrawal bad debt
provision bycombination
Combination 1 15,360,536.87 22.77% 2,839,700.68 18.49% 12,520,836.19
Combination 2 51,838,123.54 76.83% 51,838,123.54
Subtotal of combination 67,198,660.41 99.60% 2,839,700.68 4.23% 64,358,959.73
Other account receivable with single minor amount
267,932.63 0.40% 267,932.63 100.00%
butwithdrawal singleitembad debtprovision
Total 67,466,593.04 100.00% 3,107,633.31 4.61% 64,358,959.73
(Continued)
Opening amount
Category Bookbalance Bad debt provision
Percentag Percentag Bookvalue
Amount Amount
e e
Other account receivable with single significant
amount and withdrawal single item bad debt
provision
Other account receivable withdrawal bad debt
provision bycombination
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 amount
767,932.63 1.83% 267,932.63 34.89% 500,000.00
butwithdrawal singleitembad debtprovision
Total 41,913,449.02 100.00% 2,359,529.58 5.63% 39,553,919.44
1) No significant other account receivable and no withdrawal bad debt provision single at year-end.
2) Other account receivable with withdrawal bad debt provision for combination 1 by aging account
Ending balance
Book Age
Account receivable Bad debt provision Provision proportion
Within 1 year 10,167,433.54 508,371.68 5.00%
1-2 years 2,261,395.08 339,209.26 15.00%
2-3 years 1,269,746.17 444,411.16 35.00%
3-4 years 107,230.00 58,976.50 55.00%
4-5 years 440,000.00 374,000.00 85.00%
Over 5 years 1,114,732.08 1,114,732.08 100.00%
298
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Ending balance
Book Age
Account receivable Bad debt provision Provision proportion
Total 15,360,536.87 2,839,700.68
3) Other account receivable with no withdrawal bad debt provision for combination 2
Combination Book balance
Contact with related party 657,720.80
Employee’s reserve loans 15,747,553.42
Export rebate 35,017,055.24
Pre-paid charge of the employee 415,794.08
Total 51,838,123.54
4) The other account receivable with major amount at year-end and accrual for bad debt provision
single refers to the receivable amount of 267,932.63 Yuan from Guangdong Xiongfeng Electric Co., Ltd.,
(2) Reversal (or withdraw) of reserve for bad debts in the Year
Bad debt provision accrual in the year amounted as 748,103.73 Yuan
(3) No actual verification of other receivables in the year
(4) Classification of other accounts receivable according to the nature of account
Nature Book balance at year-end Book balance at year-begin
Export rebate 35,017,055.24 159,982.87
Employee’s reserve loans 15,747,553.42 18,784,317.17
Deposit 13,548,566.97 8,062,507.62
Other 2,079,902.53 622,747.83
Related party not in consolidation statement 657,720.80 12,870,014.08
Advance money temporary 415,794.08 1,413,879.45
Total 67,466,593.04 41,913,449.02
(5) Top 5 other receivables collected by arrears party at balance of year-end:
Bad Balance
Proportion in total
Nature of atyear-end
Name Ending balance Bookage other receivables
account of debt
at year-end
provision
SAT of Hefei Economic & Export Within 1
26,321,642.84 39.01%
Technological Development Zone rebates year
Export Within 1
Nantou bureau of Zhongshan SAT 8,556,795.27 12.68%
rebates year
Office of the Beijing Pinggu District
Guarantee
New Socialist Countryside 3,500,000.00 0-2 years 5.19% 225,000.00
money
Construction
Cash Within 1
Nanjing Xingliang Logistic Co., Ltd. 930,000.00 1.38% 46,500.00
deposit year
Cash
Zhongshan Yuehai Electric Co., Ltd. 812,984.00 1-2 years 1.21% 121,947.60
deposit
299
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Bad Balance
Proportion in total
Nature of atyear-end
Name Ending balance Bookage other receivables
account of debt
at year-end
provision
Total 40,121,422.11 59.47% 393,447.60
(6) No other account receivable involved government subsidies at year-end.
(7) No other receivables terminated recognization due to the transfer of financial assets at year-end.
(8) No assets and liability transfer other receivables and continues to involve at year-end.
8. Inventories
(1) Classification of inventories
Ending amount
Item
Book balance Impairment provision Book value
Rawmaterials 333,003,731.78 4,238,458.01 328,765,273.77
Stockcommodities 2,288,756,168.67 99,568,255.11 2,189,187,913.56
Low value consumable articles 13,795,361.33 300,940.36 13,494,420.97
Goodsin transit 206,306,918.31 2,888,710.76 203,418,207.55
Goods-in-process 34,035,823.80 34,035,823.80
Engineering construction 97,609,145.79 97,609,145.79
Deferred expense for moulds 51,589,864.83 51,589,864.83
Total 3,025,097,014.51 106,996,364.24 2,918,100,650.27
(Continued)
Opening amount
Item
Book balance Impairment provision Book value
Rawmaterials 239,470,144.24 2,133,956.27 237,336,187.97
Stockcommodities 1,477,211,122.85 71,224,130.62 1,405,986,992.23
Low value consumable articles 11,908,736.75 11,908,736.75
Goodsin transit 245,587,568.44 2,700,789.83 242,886,778.61
Goods-in-process 31,950,329.21 31,950,329.21
Deferred expense for moulds 44,457,710.09 44,457,710.09
Total 2,050,585,611.58 76,058,876.72 1,974,526,734.86
(2) Inventory falling price reserves
Increase during Decrease during the year
Item Opening amount Ending amount
the year Switch-back Other switch-out
Raw materials 2,133,956.27 2,104,501.74 4,238,458.01
Stock
71,224,130.62 30,867,597.86 2,523,473.37 99,568,255.11
commodities
300
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Increase during Decrease during the year
Item Opening amount Ending amount
the year Switch-back Other switch-out
Goods in
2,700,789.83 373,315.05 185,394.12 2,888,710.76
transit
Low-value
consumption 300,940.36 300,940.36
goods
Total 76,058,876.72 33,646,355.01 2,708,867.49 106,996,364.24
(3) Provision for inventories
Reasons for the Switch-back
Item Specific basis for determining of net realizable value
or conversion in the year
Cost is higher than net realizable value (The processed products are
Raw materials decline)
Cost is higher than net realizable value (The market price at year-end
Stock commodities fell)
Cost is higher than net realizable value (The market price at year-end
Goods in transit fell)
Cost is higher than net realizable value (The processed products are
Raw materials decline)
9. Non current assets due within one year
Item Ending balance Opening balance Nature
Time deposits due within one
44,497,902.00 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, equivalent to RMB 44,497,902.00 Yuan will expire in 2018 and
reclassify to this project.
10. Other current assets
Item Ending balance Opening balance Nature
Financial products 620,000,000.00 1,385,200,000.00 Bank financial products
Reclassify of value-added tax to be
Value-added tax to be deducted 166,730,091.15 56,525,274.99
deducted
Advance payment of income Reclassify of advance payment of
15,071,202.22 12,357,316.25
tax income tax
Finance lease un-recognized 93,637.60 Finance lease un-recognized
Advance payment of taxes and Re-classify the prepaid construction tax
263,706.18
surcharges and education surcharge
Total 801,894,930.97 1,454,346,297.42
11. Finance asset available for sales
(1) Finance asset available for sales
301
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Ending balance Opening balance
Item Impairm Impairme
Book balance ent Book value Book balance nt Book value
provision provision
Equity instrument available for 17,000,000.0
31,000,000.00 31,000,000.00 17,000,000.00
sales 0
17,000,000.0
Including: measured by cost 31,000,000.00 31,000,000.00 17,000,000.00
0
17,000,000.0
Total 31,000,000.00 31,000,000.00 17,000,000.00
0
(2) Finance asset available for sales measured by cost at year-end
Holding
Increase Decrease Cash
proportion
Invested unit Year-begin during the during the Year-end dividend
in invested
year year for the year
unit
Huishang Bank Co., Ltd. 5,000,000.00 5,000,000.00 0.0972% 654,991.95
Sichuan Hongyun New it
12,000,000.00 14,000,000.00 26,000,000.00 16.00%
Investment Fund
Hefei Wanmei Property
9,900,000.00 9,900,000.00 99.00%
Co., Ltd.
Total 17,000,000.00 23,900,000.00 9,900,000.00 31,000,000.00 654,991.95
(3) No impairment reserve of finance asset available for sales at year-end.
302
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
12. Long-term equity investment
Change in the year
Impairmen
Opening Investment Other Other Provisio Ending t reserve
Invested unit Declaration of
balance Additional Disinvest profit and loss comprehen changes n for balance balance at
cash dividends Other
investment ment confirmed by sive income of impair year-end
or profits
equity method adjustment equity ment
Associated companies
1.ChanghongRuba
注1 29,314,674.36 3,001,649.02 -627,501.96 -3,758,186.48 27,930,634.94
Electric Company(Private)Ltd.
2.Hefei Xingmei Assets Management Co.,
12,394,800.39 -1,697,818.35 10,696,982.04
Ltd.
3.Sichuan Zhiyijia Network Technology Co.,
注2 9,380,373.67 1,315,197.31 10,695,570.98
Ltd.
4.Hongyuan Ground Energy Heat
注3 22,771,065.45 -1,626,092.36 21,144,973.09
Technology Co., Ltd.
5. Sichuan Tianyou Guigu Technology Co.,
注4 7,782,717.50 666,148.01
Ltd. 8,448,865.51
6. Chengdu Tianyou Guigu Environmental
注5 12,500,000.00 -882,354.64
Tech. Co., Ltd. 11,617,645.36
Total 81,643,631.37 15,501,649.02 -2,852,421.99 -3,758,186.48 90,534,671.92
Note 1: Zhongshan Changhong, a subsidiary of the Company, entered into a supplemental joint venture agreement with RUMA Comprehensive Trading Company in 2017, pursuant to which, both parties
agreed to increase capital contribution of USD1,130,191.00, among which, Zhongshan Changhong subscribed to contribute USD452,076.00 (equivalent to RMB3,001,649.02 on the actual contribution
date) according to the original shareholding proportion of 40% and RUMA Comprehensive Trading Company subscribed to contribute USD678,115.00 according to the original shareholding proportion of
60%.
Note 2: on 16 December 2014, the Company executed a joint venture agreement with its controlling shareholder Sichuan Changhong Electric Co., LTD, targeting to jointly establish Sichuan Zhiyijia
Network Technology Co., Ltd. On 5 January 2015, Sichuan Zhiyijia Network Technology Co., Ltd was officially incorporated with registered capital of RMB50 million, among which, the Company made
contribution of RMB15 million with shareholding proportion of 30% and Sichuan Changhong Electric Co., LTD made contribution of RMB35 million with shareholding proportion of 70%.
303
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Note 3: our subsidiary Sichuan Changhong Air Conditioner Co., Ltd (“Changhong Air Conditioner”) and Hengyouyuan Technology Development Group Co., Ltd. (“Hengyouyuan”) cooperated to establish
Hongyuan Ground Energy Heat Technology Co., Ltd. on 28 October 2015. The registered capital of the company is RMB50 million, among which, Changhong Air Conditioner contributed RMB24.5
million, accounting for 49% of the registered capital, and Hengyouyuan contributed RMB25.5 million, accounting for 51% of the registered capital.
Note 4: Sichuan Tianyou Guigu Technology Co., Ltd. was incorporated on 31 March 2015 with registered capital of RMB100 million. Our subsidiary Changhong Air Conditioner made capital contribution
of RMB 25 million in cash, accounting for 25% of the registered capital. Chengdu Jiaodao Property Development Company made capital contribution of RMB 20 million, accounting for 20% of the
registered capital. Chengdu Southwest Jiaotong University Industry (Group) Co., Ltd made capital contribution of RMB 20 million, accounting for 20% of the registered capital. Mianyang Investment
Holding (Group) Co., Ltd made capital contribution of RMB 5 million, accounting for 5% of the registered capital. Shanghai Zhongcheng Xindaya Financial Information Service Co., Ltd made capital
contribution of RMB 5 million, accounting for 5% of the registered capital. Jiangsu Runye Investment Co., Ltd made capital contribution of RMB 10 million, accounting for 10% of the registered capital.
Chengdu Dongyu Shangmao Co., Ltd made capital contribution of RMB 15 million, accounting for 15% of the registered capital. In 2016, shareholders meeting of Sichuan Tianyou Guigu Technology Co.,
Ltd. agreed to reduce the 50 million Yuan capital, the shareholders are reducing the capital by ratio of share-holding. After capital reduction, subsidiary Changhong Air conditioner contributed 12.5 million
Yuan, representing 25% of the registered capital.
Note 5: Chengdu Tianyou Guigu Environmental Tech. Co., Ltd. was incorporated on 31 March 2015 with registered capital of RMB40 million. Our subsidiary Changhong Air Conditioner made capital
contribution of RMB 10 million, accounting for 25% of the registered capital. Chengdu Jiaodao Property Development Company made capital contribution of RMB 8 million, accounting for 20% of the
registered capital. Chengdu Southwest Jiaotong University Industry (Group) Co., Ltd made capital contribution of RMB 8 million, accounting for 20% of the registered capital. Mianyang Investment
Holding (Group) Co., Ltd made capital contribution of RMB 2 million, accounting for 5% of the registered capital. Shanghai Zhongcheng Xindaya Financial Information Service Co., Ltd made capital
contribution of RMB 2 million, accounting for 5% of the registered capital. Sichuan Shuye Jiachen Property Development Company made capital contribution of RMB 4 million, accounting for 10% of
the registered capital. Chengdu Dongyu Shangmao Co., Ltd made capital contribution of RMB 6 million, accounting for 15% of the registered capital.
304
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
13. Investment properties
(1) Investment properties measured at costs
Item House and buildings Land use rights Total
I. Original book value
1.Opening balance 23,142,172.83 916,691.38 24,058,864.21
2.Increase during the year
3.Decrease during the year 5,511,485.56 5,511,485.56
(1) Disposal 5,511,485.56 5,511,485.56
4.Ending balance 17,630,687.27 916,691.38 18,547,378.65
II.Accumulated depreciation and
accumulated amortization
1.Opening balance 10,328,434.76 454,798.05 10,783,232.81
2.Increase during the year 770,213.55 38,368.56 808,582.11
(1) provision or amortization 770,213.55 38,368.56 808,582.11
3.Decrease during the year 2,614,147.99 2,614,147.99
(1) Disposal 2,614,147.99 2,614,147.99
4.Ending balance 8,484,500.32 493,166.61 8,977,666.93
III. Provision for impairment
IV. Book value
1.Book value at year-end 9,146,186.95 423,524.77 9,569,711.72
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 year-end.
(3) No particular about mortgage of investment property at year-end.
(4) No investment real estate having not completed the property right certificate at year-end
14. Fixed assets
(1) Details of fixed assets
Machinery Transport Others
Item House and buildings Total
equipment equipment equipment
I. Originalbookvalue
1.Opening balance 904,218,907.77 985,418,849.90 24,269,870.93 173,600,487.55 2,087,508,116.15
2.Increase during theyear 200,167,660.82 156,673,654.03 4,884,761.65 31,887,169.90 393,613,246.40
(1)Purchase 103,309,466.42 25,372,127.00 4,509,593.02 19,550,064.98 152,741,251.42
(2) Construction in progress
96,858,194.40 131,301,527.03 375,168.63 12,337,104.92 240,871,994.98
transfer-in
3.Decreaseduring theyear 12,376,159.57 60,521,795.82 1,810,398.58 24,138,764.72 98,847,118.69
(1)disposeorretirement 12,376,159.57 59,859,030.40 1,338,615.53 24,138,764.72 97,712,570.22
(2) Construction in progress
428,165.42 428,165.42
transfer-in
(3)otherdecrease 234,600.00 471,783.05 706,383.05
4.Ending balance 1,092,010,409.02 1,081,570,708.11 27,344,234.00 181,348,892.73 2,382,274,243.86
305
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Machinery Transport Others
Item House and buildings Total
equipment equipment equipment
II.Accumulated
depreciation
1.Opening balance 181,544,269.20 605,064,394.99 15,989,039.94 79,008,738.98 881,606,443.11
2.Increase during theyear 31,048,292.43 86,048,184.97 1,602,298.46 15,345,013.92 134,043,789.78
(1)provision 31,048,292.43 86,048,184.97 1,602,298.46 15,345,013.92 134,043,789.78
3.Decreaseduring theyear 4,083,536.15 50,414,934.96 1,265,814.68 19,227,921.21 74,992,207.00
(1)disposeorretirement 4,083,536.15 50,111,868.29 1,265,814.68 19,227,921.21 74,689,140.33
(2) Construction in progress
295,748.70 295,748.70
transfer-in
(3)otherdecrease 7,317.97 7,317.97
4.Ending balance 208,509,025.48 640,697,645.00 16,325,523.72 75,125,831.69 940,658,025.89
III.Provision for
impairment
1.Opening balance 1,601,411.95 7,403.67 199,687.70 1,808,503.32
2.Increase during theyear 383,209.19 383,209.19
3.Decreaseduring theyear 2,721.04 2,721.04
(1)disposeorretirement 2,721.04 2,721.04
4.Ending balance 1,981,900.10 7,403.67 199,687.70 2,188,991.47
IV Book value
1.Bookvalue atyear-end 883,501,383.54 438,891,163.01 11,011,306.61 106,023,373.34 1,439,427,226.50
2.Bookvalue atyear-begin 722,674,638.57 378,753,042.96 8,273,427.32 94,392,060.87 1,204,093,169.72
The new fixed assets in this year mainly due to the RMB 240,871,994.98 transfer from construction in
process; decrease of the fixed assets in the Year mainly because the assets renewal transfer to construction in
process and assets dispose for retirement
(2) No fixed assts temporary idle at year-end.
(3) No fixed assets for collateral at year-end.
(4) No fixed assets leased through operating lease at year-end.
(5) No fixed assets leased through operating lease at year-end.
Accumulated Depreciation
Item Original book value Net book value
depreciation provision
House and buildings 64,101,390.83 13,840,392.55 50,260,998.28
Machinery equipment 3,228,380.46 2,128,803.60 1,099,576.86
Other equipment 16,649,139.85 3,443,236.59 13,205,903.26
Total 83,978,911.14 19,412,432.74 64,566,478.40
(6) Fixed assts without property certificate
Reason of not complete the
Item Book value
property certificate
3# makeshift shelter 5,689,907.18 In procedure
306
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Reason of not complete the
Item Book value
property certificate
4# makeshift shelter (dormitory building transfer to capital) 6,651,069.97 In procedure
5# makeshift shelter 5,140,247.60 In procedure
6# building for cadremen 8,930,447.86 In procedure
7# building for cadremen 8,215,215.45 In procedure
8# makeshift shelter 5,178,824.74 In procedure
II canteen of living area 25,910,795.15 In procedure
Canteen 2,716,313.94 In procedure
Total 68,432,821.89
(7) No fixed assets ready for sale at year-end
15. Construction in progress
(1) Details of construction in progress
Ending amount Opening amount
Impai Book value Impairme Book
Item rment Book nt value
Bookbalance
provis balance provision
ion
Jiangxi Meiling – construction of the
production line for producing one million
71,086,744.70 71,086,744.70 12,325.05 12,325.05
energy-saving smart refrigeration
annually
Changhong Air Conditioner- relocation of
production base and upgrading & 44,191,093.23 44,191,093.23
expansion
Construction of intelligent manufacturing 30,302,738.39 30,302,738.39 12,785,053.55 12,785,053.55
Construction of laboratory (inspection
5,735,299.39 5,735,299.39 199,222.61 199,222.61
center)
Reform of the production of larger
3,128,583.30 3,128,583.30
refrigeration in J line
Change of dry &web part of the door
2,050,427.36 2,050,427.36
foaming line
Transformation of line body - R290 1,769,230.77 1,769,230.77 4,031,885.46 4,031,885.46
Transformation of EPS house 1,244,713.14 1,244,713.14
PUR glue 1,220,085.45 1,220,085.45
Equipment to be installed 373,222.76 373,222.76 3,490,730.72 3,490,730.72
Upgrading of the production line for
338,293.66 338,293.66 11,190,008.45 11,190,008.45
Mianyang Meiling intelligent refrigeration
Project of relocation and capacity promotion
1,124,429.99 1,124,429.99
of the central AC
2nd phase construction of the fitting life
165,000.00 165,000.00
zone in new industrial park of Meiling
Relocation of the squeeze board line in
593,777.99 593,777.99
Jiangxi Meiling
Relocation and expansion of Zhongke
60,889,270.95 60,889,270.95
Meiling
Comprehensive promotion of non shrink 87,220.00 87,220.00
307
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Ending amount Opening amount
Impai Book value Impairme Book
Item rment Book nt value
Bookbalance
provis balance provision
ion
tube expander
Leasing project in college 5,631,371.46 5,631,371.46
KA line 792,136.75 792,136.75
Other miscellaneousitems 13,417,285.00 13,417,285.00 6,044,976.97 6,044,976.97
107,037,409.9 107,037,409.9
Total 174,857,717.15 174,857,717.15
5 5
(2) Changes in significant construction in progress
Transfer to
Book Increase Other Book
Item balance at during the fixed assets balance at Source offunds
decrease
year-begin year in the year year-end
Relocation and capacity
expansion project of Zhongke 60,889,270.95 60,889,270.95 Self-raised
Meiling
Intelligentmanufacturingproject 12,785,053.55 42,598,731.81 23,092,556.82 1,988,490.15 30,302,738.39 Raisefunds
Upgrading and reform of the
production line of intelligent
11,190,008.45 24,059,125.45 34,910,840.24 338,293.66 Self-raised
refrigerator of Mianyang
Meiling
Jiangxi Meiling –
construction of the production
line for producing one million 12,325.05 73,014,699.94 1,940,280.29 71,086,744.70 Self-raised
energy-saving smart
refrigeration annually
Changhong Air Conditioner-
relocation of production base 44,191,093.23 44,191,093.23 Self-raised
and upgrading & expansion
(Continued)
Accumulated including: Interest
Budget (in Proportion of
amount of interest capitaliza
10 project
Projects Progress interest capitalized tion rate
thousand investment in
capitalizatio amount of the of the
Yuan) budget
n year year
Relocation and capacity
expansion project of Zhongke 14,589.74 73.31% 100.00%
Meiling
Intelligentmanufacturingproject 26,128.00 33.80% 50.00%
Upgrading and reform of the production
line of intelligent refrigerator of Mianyang 4,792.00 82.06% 90.00%
Meiling
Jiangxi Meiling – construction
of the production line for
producing one million 20,960.00 33.92% 52.74%
energy-saving smart
refrigeration annually
Changhong Air Conditioner- 84,791.01 5.21% 30.00%
308
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
relocation of production base
and upgrading & expansion
(3) No depreciation reserves for construction in process at year-end.
16. Disposal of fixed assets
Reasons for disposal
Item Ending amount Opening amount
transferred
Relocation for land
Relevant assets disposal for reserved lands 75,875,517.11 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 year-end.
17. Intangible assets
(1) According to intangible assets item
Trademark Non-patent
Item Land use right Other Total
special right technology
I. Original book
value
1.Opening balance 613,696,837.62 283,292,439.34 195,407,299.78 161,699.32 1,092,558,276.06
309
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Trademark Non-patent
Item Land use right Other Total
special right technology
2.Increase during
144,537,049.01 70,701,431.25 4,170,486.23 219,408,966.49
the year
(1) purchase 144,537,049.01 1,108,002.78 145,645,051.79
(2)Internal research 70,701,431.25 3,062,483.45 73,763,914.70
3.Decrease during
5,278,616.64 5,278,616.64
the year
(1) Disposal 5,278,616.64 5,278,616.64
4.Ending balance 752,955,269.99 283,292,439.34 266,108,731.03 4,332,185.55 1,306,688,625.91
II.Accumulated
depreciation
1.Opening balance 116,684,176.11 270,959,304.29 90,912,770.61 32,753.42 478,589,004.43
2.Increase during
13,177,537.35 3,882,886.80 38,914,077.49 149,178.97 56,123,680.61
the year
(1) provision 13,177,537.35 3,882,886.80 38,914,077.49 149,178.97 56,123,680.61
3.Decrease during
877,681.54 877,681.54
the year
(1) Disposal 877,681.54 877,681.54
4.Ending balance 128,984,031.92 274,842,191.09 129,826,848.10 181,932.39 533,835,003.50
III. Provision for
impairment
IV. Book value
1.Book value at
623,971,238.07 8,450,248.25 136,281,882.93 4,150,253.16 772,853,622.41
year-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 2017, 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 19,521,211.26
18. Development expense
Increase during the year Decrease during the year
Opening Included in Ending
Item Internal Confirmed as
balance current balance
development Other intangible Other
profits and
expenditure assets
losses
Technology
development for 30,878,434.47 90,084,375.45 2,304,375.00 57,469,723.78 61,188,711.14
Air-conditioner
Technology
development for 12,797,092.26 24,216,701.13 13,231,707.47 23,782,085.92
refrigerator
Other technology
1,348,223.87 2,403,609.84 36,068.53 3,062,483.45 653,281.73
development
Total 45,023,750.60 116,704,686.42 2,340,443.53 73,763,914.70 85,624,078.79
310
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
19. Goodwill
(1) Original value of goodwill
Increase during the
Decrease during the year
year
Opening Formation Formation Ending
Invested unit
balance from from balance
Other Other
enterprise enterprise
merger merger
Hefei Meiling Group Holding
3,553,367.77 3,553,367.77
Co., Ltd.
Guangxi Huidian Home
5,313,913.50 5,313,913.50
Appliance Co., Ltd
Total 8,867,281.27 8,867,281.27
(2) Impairment provision of goodwill
Increase during the
Opening Decrease during the year Ending
Invested unit year
balance balance
Provision Other Provision Other
Hefei Meiling Group Holding
3,553,367.77 3,553,367.77
Co., Ltd.
Guangxi Huidian Home
5,313,913.50 5,313,913.50
Appliance Co., Ltd
Total 8,867,281.27 8,867,281.27
Note: at the year end, the Company conducted impairment test on goodwill, and provided for impairment
reserve in connection with the difference between the predicted future cash flow of the investee and the
group of assets including the goodwill. The recoverable amount is based on the predicted future cash flow of
the investee.
20. Long-term deferred expenses
Increase Amortization
Opening Other increase
Item during the during the Ending balance
balance during the year
year year
Relocation of the intelligent
1,132,075.48 4,033,702.27 1,529,915.81 3,635,861.94
manufacturing plant
21. Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets without the offset
Ending balance Opening balance
Item Deductible Deferred Deductible Deferred
temporary income tax temporary income tax
difference assets difference assets
Deferred income tax assets recognized from
131,024,120.50 20,010,586.00 107,230,307.69 16,454,229.77
property depreciation preparation
Deferred income tax assets recognized from
313,013,878.20 46,952,081.73 331,575,430.79 49,736,314.62
accrual liability
Deferred income tax assets recognized from
29,851,081.96 4,477,662.29 35,517,365.78 5,327,604.87
Dismission welfare
Deferred income tax assets recognized from
49,566,302.74 7,456,073.25 82,260,654.75 12,339,098.21
deferred income
Deferred income tax assets recognized from
75,254,272.72 11,409,917.37 1,293,875.10 323,468.74
ir-reparable losses
311
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Ending balance Opening balance
Item Deductible Deferred Deductible Deferred
temporary income tax temporary income tax
difference assets difference assets
Deferred income tax assets recognized from
387,268.52 58,090.28 559,249.58 83,887.44
changes in the fair value
Accrued income tax assets 2,164,484.73 324,672.71
Total 601,261,409.37 90,689,083.63 558,436,883.69 84,264,603.65
(2) Deferred income tax liabilities without the offset
Ending balance Opening balance
Item Deductible Deferred Deductible Deferred
temporary income tax temporary income tax
difference assets difference assets
Deferred income tax liabilities recognized
12,060,213.30 1,809,032.00
from changes in the fair value
(3) Details of unrecognized deferred income tax assets
Item Ending balance Opening balance
Deductible temporary difference 49,551,458.77 26,140,372.22
Deductible loss 438,730,245.37 373,985,517.42
Total 488,281,704.14 400,125,889.64
22. Other non-current assets
Item Ending balance Opening balance
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 $ 6,810,000.00 dollars, equivalent to 44,497,902.00 Yuan, will expire in 2018 and
reclassify to non-current assets due within one year
23. Short-term loans
(1) Types of short-term loans
Type of loans Ending balance Opening balance
Loan in pledge 266,980,000.00 26,500,000.00
Guaranteed loan 374,226,000.00
Loan in credit 990,000,000.00 261,843,724.73
Total 1,631,206,000.00 288,343,724.73
New loans in the Year:
1)The Company and Tokyo Branch of Bank of Communications entered into the Maximum Liquidity
Borrowing Contract, setting out the agreed term of facility from 23 June 2017 to 22 June 2018, the
maximum facilities of USD80 million bearing interest at fixed rate of 2.60% per annum. As of 31
312
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
December 2017, the financing under this contract is USD30,000,000.00, equivalent to
RMB196,026,000.00. this borrowing is guaranteed by the letter of guarantee issued by Anhui Branch of
Bank of Communications, with Hefei Meiling Co., Ltd. and Tokyo Branch of Bank of Communications
being the secured party and the beneficiary respectively.
2)The Company and Hefei Economic and Technology Development Park Branch of Bank of China
entered into the Liquidity Borrowing Contract with a term of 12 years commencing from the date of
actual drawing. Since the actual drawing made by the Company is 29 September 2017, the term of the
contract begins from 29 September 2017 and ends on 28 September 2018, with fixed interest rate of
4.35% per annum and principal of RMB50,000,000.00;
3)The Company and Anhui Branch of Agricultural Bank of China entered into the Liquidity Borrowing
Contract with a term from 12 June 2017 to 11 June 2018, a fixed interest rate of 4.35% per annum and
a principal of RMB50,000,000.00;
4)The Company and Hefei Branch of China Minsheng Bank entered into the Liquidity Borrowing
Contract with a term from 28 November 2017 to 28 June 2018, a fixed interest rate of 4.611% per
annum and a principal of RMB290,000,000.00;
5)The Company and Hefei Shouchun Branch of Bank of Communications entered into the Liquidity
Borrowing Contract with a term from 1 June 2017 to 29 May 2018, a fixed interest rate of 4.35% per
annum and a principal of RMB200,000,000.00;
6)The Company and Hefei Luyang Branch of China Construction Bank entered into the Liquidity
Borrowing Contract with a term from 1 March 2017 to 28 February 2018, a fixed interest rate of
4.1325% per annum and a principal of RMB200,000,000.00;
7)The Company and Hefei Luyang Branch of Bank of Hangzhou entered into the Liquidity Borrowing
Contract with a term from 26 July 2017 to 25 July 2018, a fixed interest rate of 3.7338% per annum and
a principal of RMB40,000,000.00;
8)The Company and Chengdu Branch of United Overseas Bank entered into the Liquidity Borrowing
Contract with a term from 20 December 2017 to 20 June 2018, a fixed interest rate of 4.57% per
annum and a principal of RMB100,000,000.00;
9)The Company and Hefei Economic and Technology Development Park Branch of Huishang Bank
entered into Issue of Domestic L/C Contract, pursuant to which, the Company applies for issue of an
irrevocable letter of credit with an amount of RMB60,000,000.00 in favor of Jiangxi Meiling Appliances
Co., Ltd. according to the Application Letter of Issue of Domestic L/C of Huishang Bank. The L/C has a
term of 360 days, from 10 November 2017 to 5 November 2018 and bear interest at fixed rate of 4.10%
per annum;
10)Under the Export Trade Financing Contract between our subsidiary Zhongshan Changhong Company
and Zhongshan Nantou Branch of Agriculture Bank of China, Zhongshan Changhong Company applied
for a financing of RMB29,500,000.00 from Zhongshan Nantou Branch of Agriculture Bank of China by
means of export commodities financing at an interest rate of 4.1% during the period from 25 August
313
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
2017 to 23 February 2018;
11)Under the Export Trade Financing Contract between our subsidiary Zhongshan Changhong Company
and Zhongshan Nantou Branch of Agriculture Bank of China, Zhongshan Changhong Company applied
for a financing of RMB57,500,000.00 from Zhongshan Nantou Branch of Agriculture Bank of China by
means of export commodities financing at an interest rate of 4.15% during the period from 19
September 2017 to 19 March 2018;
12)Under the Export Trade Financing Contract between our subsidiary Zhongshan Changhong Company
and Zhongshan Nantou Branch of Agriculture Bank of China, Zhongshan Changhong Company applied
for a financing of RMB57,500,000.00 from Zhongshan Nantou Branch of Agriculture Bank of China by
means of export commodities financing at an interest rate of 4.15% during the period from 22
September 2017 to 22 March 2018;
13)Under the General Agreement on Export Invoice Financing Business between our subsidiary
Zhongshan Changhong Company and Zhongshan Nantou Branch of Industry and Commerce Bank of
China, Zhongshan Changhong Company applied for a financing of RMB52,480,000.00 from Zhongshan
Nantou Branch of Industry and Commerce Bank of China by means of export invoice financing at an
interest rate of 4.35% during the period from 26 December 2017 to 24 June 2018;
14)Under the Liquidity Borrowing Contract between our subsidiary Zhongke Meiling Company and
Anhui Branch of Bank of China, Zhongke Meiling Company applied for a short-term loan of
RMB9,200,000.00 from Anhui Branch of Bank of China by means of guarantee, for which, the Company
acted as the guarantor. The loan has a term commencing from 23 June 2017 and ending on 22 June
2018, and bears interest at floating rate, subject to a floating cycle of every 12 months;
15)Under the Liquidity Borrowing Contract between our subsidiary Meiling Group Company and Hefei
Branch of Agriculture Bank of China, Meiling Group Company applied for a short-term loan of
RMB70,000,000.00 from Hefei Branch of Agriculture Bank of China by pledge of notes, with a term
commencing from 16 November 2017 and ending on 7 March 2018 and a fixed interest rate of 4.35%
per annum;
16)Under the Non-recourse Domestic Factoring Business Contract between our subsidiary Jiangxi
Meiling Company and Hefei Branch of China Merchants Bank, Jiangxi Meiling Company applied for a
short-term loan of RMB100,000,000.00 from Hefei Branch of China Merchants Bank by factoring of
trade receivables, with a term commencing from 29 June 2017 and ending on 28 June 2018 and an
interest rate of 3.915%;
17)Under the Recourse Domestic Factoring Business Contract between our subsidiary Jiangxi Meiling
Company and Anhui Branch of Bank of Communications, Jiangxi Meiling Company applied for a
short-term loan of RMB49,000,000.00 from Anhui Branch of Bank of Communications by factoring of
trade receivables, with a term commencing from 30 September 2017 and ending on 21 March 2018
and an interest rate of 4.550%;
18)Under the Recourse Domestic Factoring Business Contract between our subsidiary Jiangxi Meiling
314
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Company and Anhui Branch of Bank of Communications, Jiangxi Meiling Company applied for a
short-term loan of RMB20,000,000.00 from Anhui Branch of Bank of Communications by factoring of
trade receivables, with a term commencing from 25 December 2017 and ending on 25 June 2018 and
an interest rate of 4.650%.
(2) No overdue short term borrowings unredeemed at year-end.
24. Financial liabilities measured by fair value and with its variation reckoned into current gain/loss
Item Ending balance Opening balance
Derivative financial liabilities 16,034,000.00 559,249.58
25. Notes payable
Type Ending balance Opening balance
Bank acceptance 3,421,210,611.84 2,315,706,781.72
Commercial acceptance bill 585,555,246.15 319,344,958.58
Total 4,006,765,857.99 2,635,051,740.30
No notes expired at year-end without paid
26. Account payable
(1) Age of account payable
Item Ending balance Opening balance
Total 2,869,886,049.19 2,331,899,310.82
Including: over 1 year 55,323,422.28 47,332,805.86
(2) No major account payable with over one year book age at year-end.
27. Advance payment
(1) Age of advance payment
Item Ending amount Opening amount
Total 438,386,810.72 390,935,440.46
Including: over 1 year 18,668,644.77 13,605,202.15
(2) No major account received in advance with over one year age at year-end
28. Wages payable
(1) Types of wages payable
Increase during the Decrease during the
Item Opening balance Ending balance
year year
Short-term compensation 178,822,854.81 1,413,683,869.04 1,420,710,531.82 171,796,192.03
After-service welfare- defined
4,948,222.26 80,361,472.59 77,492,380.04 7,817,314.81
contribution plans
Dismiss welfare 5,820,961.93 5,230,878.76 5,846,180.67 5,205,660.02
315
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Increase during the Decrease during the
Item Opening balance Ending balance
year year
Total 189,592,039.00 1,499,276,220.39 1,504,049,092.53 184,819,166.86
(2) Short-term compensation
Decrease during the
Item Opening balance Increase during theyear Ending balance
year
Wages ,bonuses, allowancesand subsidies 146,971,903.13 1,299,108,192.07 1,283,938,656.65 162,141,438.55
Welfare for workers and staff 100,340.00 44,850,198.62 44,747,152.62 203,386.00
Social insurance 2,498,982.71 38,496,348.96 37,437,991.29 3,557,340.38
Including: Medical insurance 2,345,425.78 33,355,249.76 32,403,431.88 3,297,243.66
Work injury insurance 47,092.65 2,892,128.85 2,840,233.55 98,987.95
Maternity insurance 106,464.28 2,248,970.35 2,194,325.86 161,108.77
Housing accumulation fund 3,326,804.54 28,006,020.18 27,204,431.64 4,128,393.08
Labor union expenditure and
1,742,673.51 3,223,109.21 3,200,148.70 1,765,634.02
personnel education expense
Short-termprofitsharingplan 24,182,150.92 24,182,150.92
Total 178,822,854.81 1,413,683,869.04 1,420,710,531.82 171,796,192.03
(3) Defined contribution plans
Increase during Decrease during
Item Opening balance Ending balance
the year the year
Basic endowment insurance 3,867,272.79 76,929,655.68 74,159,626.57 6,637,301.90
Unemployment insurance 1,080,949.47 3,431,816.91 3,332,753.47 1,180,012.91
Total 4,948,222.26 80,361,472.59 77,492,380.04 7,817,314.81
29. Tax payable
Item Ending balance Opening balance
Value-added tax 9,639,617.86 19,079,499.27
Enterprise income tax 19,295,436.64 3,423,898.42
Individual income tax 4,763,232.23 3,205,739.98
Urban maintenance and construction tax 873,061.03 3,302,546.79
House property tax 6,127,114.13 5,593,587.71
Land-use right tax 2,949,096.59 4,802,263.59
Educational surtax 679,571.16 2,428,555.60
Stamp tax 2,455,816.00 2,944,485.06
Construction fund of Water Conservancy Projects 1,044,508.56 745,069.75
Treatment fund for abandon electric & electronics products 11,579,556.00 12,328,067.00
Other 1,885,661.52 1,995,318.96
Total 61,292,671.72 59,849,032.13
316
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
30. Interest payable
(1) Classification of interest payable
Item Ending balance Opening balance
Interest on long-term loans for repayment of principal of installment
172,254.25 1,617,352.01
maturity
Interest of short-term loans 6,269,254.43
Total 6,441,508.68 1,617,352.01
(2) No significant overdue and unpaid interest at year-end.
31. Dividends payable
Item Ending balance Opening balance
City Insurance company 450,504.45 376,729.65
BOC-Fullgoal Tianyi Securities Investment Fund 153,697.50 153,697.50
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
Other piecemeal units 1,655,457.01 1,487,952.90
Total 2,890,364.80 2,545,801.23
Note: Balance at year-end refers to the common dividends that not receiving by shareholders.
32.Other account payable
(1) Classification of other payable according to nature of account
Nature of account Ending balance Opening balance
1.Accrued expenses(expenses occurred without reimbursed) 550,991,753.72 479,907,162.28
2. receivables received temporary and deducted temporary 27,098,950.42 7,725,476.68
3.deposit, margin 90,748,996.24 88,308,204.63
4.not the come-and-go with related parties in statement scope 9,225,961.80 12,959,890.54
5.other 156,219,973.82 33,679,589.30
Total 834,285,636.00 622,580,323.43
Note: Other refers to the account receivable buyout under the Buyout Agreement of Huaxia Bank, the
bank did not deduct the amount promptly.
(1) The major other account payable with account age over one year at end of the year refers to the
purchase margin
33. Non-current liability due within one year
(1) Classification of non-current liability due within one year
317
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Item Ending balance Opening balance
Long term loans due within one year 32,174,400.80 262,486,600.00
Deferred income transfer to gains and losses within one year 14,279,975.88 9,715,990.10
Total 46,454,376.68 272,202,590.10
(2) Deferred income transfer into profit and loss within 1 year
Amount
reckoned into Assets
Opening Other
Itemofgovernment subsidies non-operation Ending amount related/Income
amount changes
revenue in the related
Period
Demolition compensation of Jiangxi Meiling 1,797,880.32 1,797,880.32 1,797,880.32 1,797,880.32 Assets related
Demolition compensation of Hefei Meiling 2,425,513.16 2,404,563.15 2,369,580.17 2,390,530.18 Assets related
technical reform for Athena Project 4,286,250.00 4,286,250.00 4,286,250.00 4,286,250.00 Assets related
Freezer project of Hefei Meiling 734,062.52 734,062.49 734,062.49 734,062.52 Assets related
Adaptability improvement R290/D52/13-R290
167,871.60 167,871.60 2,364,981.69 2,364,981.69 Assets related
project for production of FTXS
Promoting the new industry ( annual output of 0.6 million
medium& large volume environmental protection and energy 304,412.50 304,412.48 304,412.48 304,412.50 Assets related
savingfreezer)
ProjectofVISAapplication 1,409,302.33 1,409,302.33 Assets related
Industrialization of energy-saving intelligent AC 210,309.28 210,309.28 Assets related
Subsidy for new plant project 500,000.00 500,000.00 Assets related
Smart life and fresh life project 165,279.14 165,279.14 Assets related
Development subsidy for technical reform on
40,892.59 40,892.59 Assets related
production line
Promotion capital of the development of internal
76,075.33 76,075.33 Assets related
trade and circulation service industry
Total 9,715,990.10 9,695,040.04 14,259,025.82 14,279,975.88
Note: The project refers to the deferred income transfer to the non-current liability due within one year,
which will expected to amortized next year
34. Long-term loans
(1) Classification of long-term loans
Type Ending amount Opening amount
Loan in pledge 34,157,788.00
Loan in mortgage 2,560,000.00 3,200,000.00
Loan in credit 250,600,000.00 1,551,000.00
Total 253,160,000.00 38,908,788.00
(2) Details of long-term loans at year-end
Foreign Opening
Borrowing Returning Interest Ending amount
Loan unit currenc amount
day day rate (RMB)
y (RMB)
Zhongshan Branch of China Guangfa 2015.01.06 2018.01.06 USD 3.20% 34,157,788.00
318
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
BankNote1
note
Ministry of Finance of Hefei
2 2002.11.21 2017.11.20 RMB 1.80% 651,000.00
note
Ministry of Finance of Hefei
3 2004.12.10 2019.12.10 RMB 1.80% 600,000.00 900,000.00
Ministry of Finance of Hefei
note 4 2006.11.0.9 2021.11.08 RMB 2.25% 2,560,000.00 3,200,000.00
Anhui branch Import and Export Bank
note 5 2017.05.12 2019.05.12 RMB 3.35% 250,000,000.00
Total 253,160,000.00 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 Home 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. The loans are converted to RMB counted as 32,174,400.80 Yuan at end of the year, and has
classified to non-current liability due within one year
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). The long-term loans are paid in full in 2017
Note 3: It was the special Treasury bond capital appropriated by Ministry of Finance of Hefei for 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
319
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
finance office of Hefei, Meiling commenced the national purchase of its land parcels in Longgang in
compliance with the land planning of Hefei municipal government, which required its properties in
Longgang land parcel to be unrestricted. The real estate for mortgage lifted in 2006 of the Company with
registration No. HGYJCZ No.0121 which was used as the security for treasury bonds lending capital (details
were set out in Note VI.15).
Note 5: On 12 May 2017, the Company entered into a Loan Agreement (seller’s credit on exports) with
Anhui Branch of Import and Export Bank. The loans from Import and Export Bank to the Company
amounted as 250 million Yuan, and the loans will be used on capital turnover for general mechanical and
electrical products; term of the loans was 24 months, and the interest rate will based on the export seller’s
credit rate, fixed annual interest rate agreed as 3.35%. Quarter interest settlement on 20 March, 20 June, 20
September and on 20 December .
35. Long-term payable
Classify by nature
Nature Ending balance Opening balance
Financing lease 3,953,687.53
Supporting fund for technical reconstruction 7,000,000.00
Total 10,953,687.53
Note: Technology upgrade supporting fund represents the amount invested into our subsidiary Zhongshan Changhong by
Zhongshan Zhongying Investment Company pursuant to the relevant requirements under “the provisional regulations on
administration of special capitals to be applied for such industries as supported by fiscal policies of Zhongshan”, which is
specially used for the project of “Expansion of Production Capacity and Upgrade of Facilities and Technology of Air
Conditioner Business of Zhongshan Changhong”.
36. Long-term wage payable
Item Ending balance Opening balance
Dismissal welfare 24,645,421.94 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 year amounting to RMB 24,645,421.94
37. Special payable
Increase Decrease
Opening Ending
Item during the during the 形成原因
balance balance
year year
Special fund of technical
transformation of 1,400,000.00 1,000,000.00 870,000.00 1,530,000.00 中山市科技计划 Item
Zhongshan
38. Accrual liability
Item Ending balance Opening balance Reason
320
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Item Ending balance Opening balance Reason
Product quality guarantee 6,183,877.90 11,795,030.15 Guarantee of product
Guarantee fund for quality service 306,830,000.30 319,780,400.64 Guarantee of product
Total 313,013,878.20 331,575,430.79
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. Due to parts of the product quality assurance commitment out of the national three packs of
policy have expired in 2017, the accrual liability which have not been occurred for withdrawal in relevant
products are verified, actually 7,949,287.74 Yuan being verified.
39. Deferred income
(1) Classification of deferred income
Item Ending amount Opening amount
Government subsidies---subsidies of development project 54,206,139.78 67,032,277.62
Government subsidies---subsidies of Relocation 48,363,815.61 75,887,284.87
Total 102,569,955.39 142,919,562.49
(2) Government subsidy
Amount
New Assets
Opening reckoned into Other
Item subsidy in Ending amount related/Income
amount non-operatin changes
the Year related
g income
Demolition compensation of
7,556,754.62 1,797,880.32 5,758,874.30 Assets related
JiangxiMeiling
Demolition compensation of
44,974,521.48 2,369,580.17 42,604,941.31 Assets related
Hefei Meiling
Athena technical transformation 13,450,312.50 4,286,250.00 9,164,062.50 Assets related
Ice cubeprojectofHefeiMeiling 2,202,187.45 734,062.49 1,468,124.96 Assets related
Promoting thenew industry ( annualoutput
of 0.6 million medium& large volume
1,674,268.75 304,412.48 1,369,856.27 Assets related
environmental protection and energy
savingfreezer)
Research application of inverter control
2,300,000.00 2,300,000.00 Assets related
MCUchip
Projectofsmartlife and fresh life 900,000.00 13,773.26 165,279.14 720,947.60 Assets related
Relocation compensation 23,356,008.77 23,356,008.77 Assets related
Special funs for innovation driven
2,950,000.00 2,950,000.00 Assets related
developmentattheprovinciallevel
Subsidy for development of the technical
253,527.00 42,248.59 40,892.59 170,385.82 Assets related
reformin production line
Design and application of energy saving
300,000.00 300,000.00 Assets related
AC airduct
ProjectofVISAapplication 10,100,000.00 1,409,302.32 1,409,302.33 7,281,395.35 Assets related
Development of CHIQ air-conditioner
2,350,000.00 2,350,000.00 Assets related
and producition ability
Adaptation of new refrigerant production 18,751,981.92 2,197,110.09 2,364,981.69 14,189,890.14 Assets related
321
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Amount
New Assets
Opening reckoned into Other
Item subsidy in Ending amount related/Income
amount non-operatin changes
the Year related
g income
R290Item/D52/13-R290
Smart white-appliance software platform
and typical application R&D 4,000,000.00 4,000,000.00 Assets related
industrialization
Industrialization of energy saving intelligetn
1,700,000.00 210,309.27 210,309.28 1,279,381.45 Assets related
AC
Strategic new industry & high-end growth
2,000,000.00 2,000,000.00 Assets related
industryspecialfund
Development of domestic trade and
500,000.00 53,495.65 76,075.33 370,429.02 Assets related
circulation serviceindustry
Subsidyfornewplant 5,000,000.00 208,333.33 500,000.00 4,291,666.67 Assets related
Total 142,919,562.49 1,400,000.00 27,490,581.28 14,259,025.82 102,569,955.39
Note: other changes of this item are attributable to reclassification of the amount to be amortized over one
year to non-current liabilities due within one year.
40. Share capital
Change during theyear(+, -)
Item Opening balance Sharestransferred Ending balance
Bonus
New sharesissued fromcapital Other Subtotal
share
reserve
Total shares 1,044,597,881.00 1,044,597,881.00
41. Capital reserve
Increase during the Decrease during
Item Opening amount Ending amount
year the year
Share premium 2,639,787,797.95 3,154,716.58 2,636,633,081.37
Other capital reserve 48,173,262.70 48,173,262.70
Total 2,687,961,060.65 3,154,716.58 2,684,806,344.07
Note: the change of share capital premium for the year is mainly attributable to: (1)acquisition of
minority interest of Zhongke Meiling Cryogenic Technology Co., Ltd. on 15 August 2017. The
difference between the new acquired long-term equity investment and share of the subsidiary’s net
assets which are calculated on a continuous basis since the acquisition date based on the increased
shareholding proportion is RMB45,201.87, which is accounted as capital reserve; (2)on 15 September
2017, the subsidiary Zhongke Meiling held the 4th extraordinary general meeting of 2017 to consider
and approve the Resolution Relating to the First Issue of Shares by Cryogenic Technology Co., Ltd. in
2017, for which, the Company waived the pre-emptive right. This issue involves a total shares of
490,300 of Zhongke Meiling. After this issue, the shareholding of the Company in Zhongke Meiling
was reduced to 66.87%. The difference between share of the subsidiary’s net assets after the issue of
shares based on the new shareholding proportion and the share of the subsidiary’s net assets prior to the
issue of shares based on the original shareholding proportion is RMB168,822.44, which is used to offset
capital reserve; (3)Changmei Technology Co., Ltd. acquired minority interests in 2017. The difference
between the new acquired long-term equity investment and share of the subsidiary’s net assets which are
322
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
calculated on a continuous basis since the acquisition date based on the increased shareholding
proportion is RMB383,967.69, which is used to offset capital reserve; (4)the remaining represents
acquisition of minority interest of certain distribution subsidiaries. The difference between the new
acquired long-term equity investment and share of the subsidiaries’ net assets which are calculated on a
continuous basis since the acquisition date based on the increased shareholding proportion is
RMB2,647,128.32, which is used to offset capital reserve;
42. Other comprehensive income
Current Year
Less: written in
other
comprehensive
Opening income in Belong to Belong to Ending
Item Account before Less :
balance previous period parent minority balance
income tax in income tax
and carried company shareholders
the year expense
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 -14,082,920.83 -3,346,051.86 -7,262,322.02
from foreign
currency financial
statement
43. Surplus reserves
Increase during the Decrease during
Item Opening amount Ending amount
year the year
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
44. Retained profit
Item Current Year 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
32,473,204.92 220,216,680.96
year
Less: withdraw of statutory surplus reserve 23,962,426.15
withdraw of discretional surplus reserve
323
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Item Current Year Last Year
Withdraw of general risk provision
Dividend payable for ordinary shares 62,675,815.97 45,824,352.27
Dividend of ordinary shares transferred to share capital
Amount at the end of this year 937,894,771.93 968,097,382.98
45.Operation income, operation cost
(1) Operation income and operation cost
Item Current Year Last Year
Main business income 16,013,327,582.28 12,025,103,352.55
Other business income 784,109,175.08 501,607,514.94
Total 16,797,436,757.36 12,526,710,867.49
Main business cost 13,092,373,731.24 9,590,231,985.74
Other business cost 710,299,406.06 438,161,436.58
Total 13,802,673,137.30 10,028,393,422.32
(2) Main business classified according to product
Current Year Last Year
Product
Operation income Operation cost Operation income Operation cost
Refrigerator,
7,464,503,149.31 6,042,215,238.91 6,678,568,374.39 5,236,031,795.08
freezer
Air-condition 7,005,144,650.67 5,766,992,639.83 4,158,164,312.32 3,354,925,254.82
Washing
705,875,802.77 567,701,772.81 508,133,090.63 404,747,868.32
machine
Small
appliances and
536,291,620.64 456,677,143.84 423,162,351.81 379,811,894.02
kitchen and
toilet
Other 301,512,358.89 258,786,935.85 257,075,223.40 214,715,173.50
Total 16,013,327,582.28 13,092,373,731.24 12,025,103,352.55 9,590,231,985.74
(3) Main business classified according to sales region
Current Year Last Year
Region
Operation income Operation cost Operation income Operation cost
Domestic 12,172,421,690.59 9,465,251,585.24 9,108,442,083.44 6,976,734,143.90
Overseas 3,840,905,891.69 3,627,122,146.00 2,916,661,269.11 2,613,497,841.84
Total 16,013,327,582.28 13,092,373,731.24 12,025,103,352.55 9,590,231,985.74
Top five clients have income in sales of RMB 5,993,839,490.34 Yuan in total, a 35.68% in total operation
income.
46. Business tax and extra charges
Item Current Year Last Year
324
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Item Current Year Last Year
Business tax 895,146.45
City construction tax 29,682,136.75 25,764,035.98
Extra charge for education and local education surcharge 21,916,696.12 18,742,400.86
Real estate tax 12,461,143.82 11,925,656.28
Treatment fund for abandon electrics & electronics 59,778,481.00 53,619,622.00
Land tax 8,300,141.16 11,078,203.69
Stamp duty 11,659,990.71 9,221,240.77
Water fund 6,700,210.74 5,293,129.18
Other -1,016,320.39 1,318,387.72
Total 149,482,479.91 137,857,822.93
47. Sales expense
Item Current Year Last Year
Salary , extra charges and laboring charge 597,704,401.09 516,616,181.17
Transport expenses 583,386,070.18 453,357,684.29
Market support 330,479,707.53 232,609,376.03
Air conditioner installation fee 403,688,837.63 212,014,995.68
National three guarantees expense 157,186,892.56 153,157,117.74
Storage lease expenses 120,029,440.81 110,446,203.15
Other expenses 75,165,692.95 48,585,265.28
Travelling expenses 48,042,729.60 38,814,724.25
Advertisement expenses 53,630,178.78 38,230,903.17
Operation activities expenses 21,412,507.25 17,125,348.72
Meeting organization 12,984,091.73 11,440,400.40
House-lease expenses 16,808,642.70 9,484,909.62
Depreciation expenses 6,308,414.47 6,041,295.37
Communication expenses 7,509,452.57 7,472,043.94
Total 2,434,337,059.85 1,855,396,448.81
48. Administration expense
Item Current Year Last Year
Salary and social insurance etc. 231,721,250.46 250,588,937.09
Trial fee of R&D 62,204,016.56 50,029,204.84
Amortized intangible assets 55,395,659.44 42,656,480.50
Depreciation 26,378,474.68 20,636,117.00
Utilities 12,196,456.64 10,655,035.88
Domestic travelling fee 8,765,832.06 9,102,131.63
Inspection and authentication fee 10,887,979.48 7,598,269.93
Business activities 4,959,505.54 7,391,394.85
325
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Item Current Year Last Year
Office charge 6,277,724.06 6,076,143.02
Property insurance 4,291,247.58 4,198,820.70
Funds of Board 1,970,675.26 2,743,185.06
Others 71,882,921.28 60,471,260.23
Total 496,931,743.04 472,146,980.73
49. Financial expense
Item Current Year Last Year
Interest expenditure 67,750,377.89 25,317,436.95
Less: Interest income 145,489,942.29 115,658,075.99
Add: exchange loss 33,458,318.09 -51,103,635.28
procedure charge expenditure 15,277,598.08 10,595,347.69
discount expenditure -4,645,184.95 -9,030,263.29
Total -33,648,833.18 -139,879,189.92
50. Loss from Assets depreciation
Item Current Year Last Year
Bad debt losses 16,884,408.36 -8,988,293.59
Provision for falling price of inventory 33,646,355.01 10,341,740.28
Provision for devaluation of fixed assets 383,209.19
Total 50,913,972.56 1,353,446.69
51. Changes in fair value gains/loses
Item Current Year Last Year
Financial assets measured at fair value and whose movements are included in
3,586,518.18 12,060,213.30
the profit and loss of the current period
Including :Income of fair value changes from derivative financial instruments 3,586,518.18 12,060,213.30
Financial liabilities measured at fair value and whose movements are included
-15,474,750.42 -559,249.58
in the profit and loss of the current period
Including :Income of fair value changes from derivative financial instruments -15,474,750.42 -559,249.58
Total -11,888,232.24 11,500,963.72
52. Investment income
(1) Sources of investment income
Item Current Year Last Year
Long-term equity investment income by equity method -2,625,710.04 -1,724,205.46
Investment income obtained from disposal of long-term equity investment 2,506.98 10,520,753.99
Investment income obtained from held of finance asset available for sales 88,862,205.90 6,693,575.48
Investment income obtained from disposal of finance asset available for sales 38,750,000.00
Investment income obtained from disposal of financial assets measured at fair -22,222,590.69 -1,187,641.34
value and whose movements are included in the profit and loss of the current
326
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Item Current Year Last Year
period
Total 102,766,412.15 14,302,482.67
(2) Long-term equity investment income by equity method
Reason of change of this year than
Item Current Year Last Year
last year
Changes of net profit of the
Hefei Xingmei Assets Management Co., Ltd. -1,697,818.35 -451,268.70
invested unit
ChanghongRuba Electric
-400,790.01 -2,427,295.78
Company(Private)Limited
Sichuan Zhiyijia Network Technology Co., Ltd. 1,315,197.31 4,567,275.37
Changes of net profit of the
Hongyuan Ground Energy Heat Technology Co.,
-1,626,092.36 -874,437.22 invested unit and counter current
Ltd.
transaction offset
Sichuan Tianyou Guigu Technology Co., Ltd. 666,148.01 -2,538,479.13
Chengdu Tianyou Guigu Environmental Tech.
-882,354.64
Co., Ltd.
Total -2,625,710.04 -1,724,205.46
(3) Investment income obtained from disposal of long-term equity investment
Item Current Year Last Year
Equity income obtained from disposal of Hefei Meiling Packing
2,506.98 10,520,753.99
Products Co., Ltd.
(4) Investment income obtained while holding the financial assets available for sales
Item Current Year Last Year
Dividends of Huishang Bank Co., Ltd. (shareholding 0.0972%) 654,991.95 1,707,274.11
Purchase of bank financial products 88,207,213.95 4,986,301.37
Total 88,862,205.90 6,693,575.48
(5) Investment income obtained from disposal of finance asset available for sales:
Item Current Year Last Year
Hefei Wanmei Property Co., Ltd. 38,750,000.00
(6) 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.
53. Income from assets disposal
327
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Amount reckoned
into
Item Current Year Last Year non-recurring
gains/losses in the
Year
Income from non-current assets disposal -8,206,289.88 -1,255,433.98 -8,223,275.36
Including: income classify to assets ready for sale
income not classify as to assets ready for sale
Including: Income from fixed assets disposal -15,728,849.54 -1,255,433.98 -7,043,172.59
Income from disposal of investment real estate 8,702,662.43
Income from intangible assets disposal -1,180,102.77 -1,180,102.77
Total -8,206,289.88 -1,255,433.98 -8,223,275.36
54. Other income
Item Current Year Last Year
Relocation compensation 23,356,008.77
VATbackofsoftwareproducts 6,111,207.75
Other sporadic items 8,454,166.72
Over-size refrigeration project 1 3,337,500.00
Dormitory building project 2,404,563.15
C/III/S/13/037/ adaptive reform of new refrigeration production
2,364,981.69
R410A
Relocation compensation 1,797,880.32
Subsidy for sales –overseas department of the economic and trade
1,493,511.00
development bureau in Hefei economic development zone
Research and application of the VISA(Variable frequency
1,409,302.32
integrated intelligent AC System)
Project approval fund for Zhongshan Technology Major projects
1,400,000.00
for year of 2017
Steady post subsidy 1,357,784.00
Award of Nanjing Port Production and Trading Enterprise 1,238,685.00
Policy of promoting the new industrialization development 1,217,041.00
"Goingout" subsidy2017 1,003,318.00
Award of the policy of service industrial development 1,000,000.00
Award of industrial policy intelligent household appliance
1,000,000.00
technology
National level green factories and green products award WZ
1,000,000.00
[2017] No. 53
Over-size refrigeration project 2 948,750.00
Made in China – Sichuan Action Plan 2025 850,000.00
Policy of promoting the development of multi-level capital market 800,000.00
Technical reform fund ( High and new tax rebate) 757,289.85
Ice cube project 734,062.49
Economic and Trade Development Bureau- premium subsidy for
652,007.00
export credit insurance
328
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Item Current Year Last Year
Subsidy for foreign engineering contracting and overseas
631,560.00
investment
Personnel bureau of Hefei economic development zone- 2017
620,886.65
multi-level talent support
Policy of promoting the new industrialization development 550,000.00
Special fund for export & credit insurance 526,900.00
Subsidy of Anhui Branch of China Export & Credit Insurance
508,404.98
Corporation
National-level the identification of two integration standards 500,000.00
Hefei economic development zone financial subsidy / Award of
500,000.00
re-financing in service industry
Science & Technology Bureau of Hefei economic development
zone –state-level intellectual property demonstration enterprise 500,000.00
fund
Hefei economic development zone financial subsidy /2016 Award
500,000.00
for promoting new product in the province
Marketing fund from management commission of economic
480,000.00
development zone
Subsidy income (Hefei Enterprise Endowment Insurance
473,901.82
Management Center)
Promoting the policy of scientific & technology innovation 444,650.00
Award from City Science & Technology Bureau 404,000.00
Promotion of the energy –saving room AC 210,309.27
Subsidyfornewplantproject 208,333.33
Total 71,747,005.11
55. Non-operation revenue
(1)Non-operation revenue
Amount reckoned
into non-recurring
Item Current Year Last Year
gains/losses in the
Year
Government subsidy 2,767,905.00 48,274,982.18 2,767,905.00
Income of penalty 800,507.18 688,220.18 800,507.18
Other 2,103,378.86 4,798,906.63 2,103,378.86
Total 5,671,791.04 53,762,108.99 5,671,791.04
(2) Government subsidy
Item CurrentYear LastYear Resource and basis Assets/benefitrelated
VATbackofsoftwareproducts 7,122,432.52 CS [2011]No. 100 Income related
Project of Athena Luxury Refrigerators 4,286,250.00 Deferred income transfer-in Assets related
Other sporadic items 800,005.00 5,255,939.84 Income related
"Goingout" subsidy2016 4,000,000.00 YSWH [2016] Income related
Staff dormitory building project 2,445,033.38 Deferred income transfer-in Assets related
329
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Item CurrentYear LastYear Resource and basis Assets/benefitrelated
Special fund of the internal & external
economic & trade development in 2,100,000.00 YSWH[2016] No. 30 Income related
2016 and port construction
Relocation project of the Jiangxi
1,797,880.32 v Assets related
Meiling Refrigeration
Special fund of foreign trade
Hefei Treasury Payment
promotion from City Commercial 1,733,000.00 Income related
Center
Bureau
Policy subsidy of the promotion of new
1,538,700.00 HZ 〔2015〕No. 36 etc. Income related
industrialization development
HZ (2014) No. 81, HZ
MunicipalFinanceBureau enterprisepostsubsidy 1,521,680.00 Income related
(2013) Bo. 52 etc.
Subsidy for technical transformation of
1,217,800.00 HZ (2015) No. 36 Income related
fixed assets
Treasury Payment Center of
Policy subsidy of service industry Hefei Economic &
1,120,000.00 Income related
development Technology Development
Zone
Tianjin Xintai Industrial
Tianjin Xintai Industrial Economic
1,014,456.72 Economic Development Income related
Development Management Center
Management Center
Policy subsidy of promote the Treasury Payment Center of
development of new industrialization Hefei Economic &
1,000,000.00 Income related
from Economic & Technology Technology Development
Development Zone Zone
Industrial policy smart home appliance
1,000,000.00 HZ (2016) No. 35etc. Income related
technology awards
Power demand side management in
992,000.00 CQ〔2015〕No. 1846 etc. Income related
2016
Nanjing Port (Group) Co.,
NJP production trade enterprise award 933,835.00 Income related
Ltd.
Zhongshan 3rd batch of scientific and
Zhongshan KF [2016] No.
technological innovation projects and 808,200.00 Income related
252
funds
Management Committee of
Technical Transformation fund (H-N Jingdezhen High &
801,721.90 Income related
tax refunds) New-Tech Development
Zone
Refrigerator project 734,062.50 Transfer-in deferred income Assets related
Supporting fund of Anhui Branch of Hefei Government, HZ
714,733.00 Income related
SINOSURE [2014] No.62 etc.
Standard award of Quality & Technical
700,000.00 HZ (2016) No. 35 etc. Income related
Supervision from the City
Step Out government subsidy Finance Bureau of
695,439.00 Income related
/CZ038001 Zhongshan City
Government subsidy for Step Out 500,000.00 ZSW [2016]No. 20 Income related
Award for the growth enterprise of
Treasury Payment Center of
promotion of new-type
Hefei Economic &
industrialization development from 500,000.00 Income related
Technology Development
Hefei Economic & Technology
Zone
Development Zone
Industry policy-Afterwards subsidy
500,000.00 HZ (2016) No. 35 etc. Income related
and industrial design award
Policy fund for the 2nd promotion of 500,000.00 Hefei Finance Office Income related
service industry development and
330
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Item CurrentYear LastYear Resource and basis Assets/benefitrelated
financing industry for year of 2016
Subsidy for overseas sales from Treasury Payment Center of
economic and trade development Hefei Economic &
490,800.00 Income related
bureau of Hefei Economic & Technology Development
Technology Development Zone Zone
Subsidy for equipment and instrument Treasury Payment Center of
from R&D organization of Science Hefei Economic &
476,189.00 Income related
Technology Bureau of Hefei Economic Technology Development
& Technology Development Zone Zone etc.
Government subsidy of promoting new
456,618.75 Deferred income transfer-in Assets related
industries
Special funds for technical transformation in
455,600.00 ZF[2014] No. 108 Income related
Zhongshan
HZ (2016) No. 35\
Industrial Development 450,600.00 Income related
HZBM(2016) No. 65
Exploitation fund for export enterprise 412,010.25 ZSWZH [2016] No. 36 Income related
Special award for province
construction of the city technology 808,000.00 WZ【2017】No. 52 Income related
bureau
Standard award of Economic and Treasury Payment Center of
500,000.00 Income related
Information Commission Hefei Finance Bureau etc.
Government subsidy 394,000.00 ZFB (2017) No. 20 Income related
Award for supporting the land saving
265,900.00 DZ〔2016〕No. 31 Income related
and intensive use
Total 2,767,905.00 48,274,982.18
56. Non-operating expenditure
Amount reckoned
into non-recurring
Item Current Year Last Year
gains/losses in the
Year
Penalty and late fee 172,208.46 292,483.57 172,208.46
Other 50,769.36 246,023.69 50,769.36
Total 222,977.82 538,507.26 222,977.82
57. Income tax expenses
Item Current Year Last Year
Current income tax 28,772,913.09 33,057,179.03
Deferred Income Tax -8,252,539.56 -4,013,163.31
Total 20,520,373.53 29,044,015.72
58. Other comprehensive income
Found more in 42. Other comprehensive income in VI
59. Items of cash flow statement
1) Cash received from other activities relating to operation
Item Current Year Last Year
331
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Item Current Year Last Year
Government subsidy and rewards 33,703,635.65 32,627,249.81
Margin, deposit 21,140,524.49 8,003,986.51
Rent income 6,656,826.94 8,011,411.57
Compensations 2,542,943.78 1,186,760.48
Collection of restriction fund 2,266,666.23
Collection of social security fund 395,438.83
Royalty for trademark right 900,000.00 1,427,748.49
Other 5,022,063.39 8,006,198.03
Total 72,232,660.48 59,658,793.72
2) Cash paid for other activities relating to operation
Item Current Year Last Year
Market expenses 256,319,854.53 219,216,676.44
Transfer to restriction fund 120,068,801.01 58,742,173.73
Business travel, meeting and exhibition expenses 74,715,805.55 58,751,632.09
Rental expense 41,510,091.99 31,857,198.71
AD charge 38,973,148.94 29,701,141.25
Business activities expenses 27,088,324.43 23,567,274.72
Charge of inspection, testing, certification and evaluation 23,596,401.97 15,351,654.42
Transport and vehicle charges 22,540,416.07 21,940,946.74
Deposit loans 14,995,492.05 11,429,695.34
Office expenses 9,808,261.18 7,971,054.43
Handling Charges 9,747,273.65 44,361,568.27
Technology cooperation fee and consultancy charge 8,102,519.39 675,200.63
Communication fee 7,640,607.42 9,219,840.88
Service charge 3,737,315.12 2,903,955.79
Promotion expenses 3,335,672.06 2,465,301.13
Labor insurance premium 2,075,665.80 3,373,849.39
Others 64,147,955.36 106,099,219.19
Total 728,403,606.52 647,628,383.15
3) Cash received from other activities relating to investment
Item Current Year Last Year
Interest income arising from bank savings 142,267,160.10 114,301,729.54
Supporting fund for technical reconstruction 7,000,000.00
Government investment granted 18,447,427.52
Margin 790,941.00 392,623.00
Total 150,058,101.10 133,141,780.06
332
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
4) Cash paid for other activities relating to investment
Item Current Year Last Year
Loses of forward exchange settlement 33,008,606.18 4,027,616.05
Tender bond of the project refund 1,551,000.00
Total 34,559,606.18 4,027,616.05
5) Cash received from other activities relating to financing
Item Current Year Last Year
Odd shares returned by stock exchange 3,451.80
6) Cash paid for other activities relating to financing
Item Current Year Last Year
Amount refund to minority shareholders due to the
371,865.42 58,679.33
cancellation of subsidiary
Handling charge of dividend 135,296.42 98,192.48
Handling charge of private placement 248,000.00 168,000.00
Total 755,161.84 324,871.81
(2) Supplementary of the consolidated cash flow statement
Item 2017 2016
1. Net profit is adjusted to cash flow of operation activities:
Net profit 36,094,532.71 220,169,534.35
Add: provision for depreciation of assets 50,913,972.56 1,353,446.69
Depreciation of fixed assets, consumption of oil gas assets and
134,852,371.89 136,332,022.70
depreciation of productive biological assets
Amortization of intangible assets 56,123,680.61 42,991,580.23
Amortization of long-term retained expense 1,529,915.81
Loss from disposal of fixed assets, intangible assets and other
8,206,289.88 1,255,433.98
long term assets(gain is listed with “-”)
Loss from discarding fixed assets as useless (gain is listed with
“-”)
Loss from change of fair value(gain is listed with “-”) 11,888,232.24 -11,500,963.72
Financial expense (gain is listed with “-”) -35,623,226.65 -141,444,274.32
Investment loss (gain is listed with “-”) -102,766,412.15 -14,302,482.67
Decrease of deferred income tax assets (increase is listed with
-6,424,479.98 -5,822,195.31
“-”)
Increase of deferred income tax liabilities (decrease is listed
-1,809,032.00 1,809,032.00
with “-”)
Decrease of inventories (increase is listed with “-”) -974,511,402.93 -414,604,157.36
Decrease of operational accounts receivable (increase is listed
-1,383,611,294.16 -41,454,447.96
with “-”)
Increase of operational accounts payable (decrease is listed with
1,817,989,798.16 1,283,989,960.74
“-”)
Other -164,354,940.73 -73,381,593.72
Net cash flow arising from operation activities -551,501,994.74 985,390,895.63
333
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Item 2017 2016
2. Major investment and financing activities that do not involve
cash receipts:
Conversion of debt into capital
Switching Company bonds due within one year
financing lease of fixed assets
3. Net change in cash and cash equivalents:
Balance at year-end of cash 5,089,765,770.39 3,986,098,419.76
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 1,103,667,350.63 1,864,937,181.75
(3) No net cash paid for subsidiary obtained in the Year
(4) No net cash received from subsidiary disposal in the Year
(5) Cash and cash equivalent
Item Current Year Last Year
Cash 5,089,765,770.39 3,986,098,419.76
Including: cash in stock 94,415.53
43,454.93
Bank deposits available for payment at any time. 4,600,242,944.53 3,810,367,022.13
Other monetary fund available for payment at any time 489,479,370.93 175,636,982.10
Cash equivalents
Including: bond investment due within 3 months
Balance of cash and cash equivalents at year end 5,089,765,770.39 3,986,098,419.76
Including: using the restricted cash and cash equivalents of the
parent company or subsidiary of the group
60. Assets with ownership or the right to use restricted
Item Ending Book value Reasons
Monetary fund 193,316,017.65 Margin
Notes receivable 821,910,267.36 Pledged
Intangible assets Note 1 19,521,211.26 Pledged
Note 2
Account receivable 203,316,727.65 Pledged
Non-current assets due within one
44,497,902.00 Pledged
year 产 Note 3
Total 1,282,562,125.92
Note 1: intangible assets mortgaged refer to the land use right pledge, found more in “34. Long term
borrowings” under this note VI
Note 2: Pledge of the account receivable refers to the account pledge for export bill financing.
Note 3: the non-current assets due within one year pledge refers to the fixed deposit pledge, found more
334
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
in 9. Non-current assets due within one year in Note VI
61. Foreign currency
(1) Foreign currency
Ending foreign currency Ending RMB converted
Item Exchange rate
balance balance
Monetary fund
Including:USD 72,688,049.29 6.5342 474,958,251.67
Euro 1,106,018.19 7.8023 8,629,485.72
AUD 2,296,439.53 5.0928 11,695,307.24
Pakistan Rupi 18,785,742.66 0.05902 1,108,734.53
IDR 17,409,627,799.00 0.00048 8,356,621.34
HKD 306,747.96 0.83591 256,413.69
Account receivable
Including:USD 86,357,067.49 6.5342 564,274,350.39
Euro 1,383,493.67 7.8023 10,794,432.66
AUD 2,029,645.00 5.0928 10,336,576.06
Pakistan Rupi 1,656,817,759.57 0.05902 97,785,384.17
IDR 13,892,320,379.00 0.00048 6,668,313.78
Other account receivable
Including:USD 85,793.08 6.5342 560,589.14
Pakistan Rupi 6,339,974.85 0.05902 374,185.32
IDR 1,076,944,094.00 0.00048 516,933.17
Account paid in advance
Including:USD 1,758,153.78 6.5342 11,488,128.43
Euro 5,438,792.07 7.8023 42,435,087.37
Pakistan Rupi 11,499,519.99 0.05902 678,701.67
Account receivable
Including:USD 4,485,342.23 6.5342 29,308,123.20
Euro 389,992.08 7.8023 3,042,835.21
Pakistan Rupi 1,188,105,542.87 0.05902 70,121,989.14
IDR 4,124,953,328.00 0.00048 1,979,977.60
Other account payable
Including: Pakistan Rupi 214,658,925.12 0.05902 12,669,169.76
IDR 707,414,190.00 0.00048 339,558.81
HKD 274,434.17 0.83591 229,402.27
Account received in advance
Including:USD 28,475,990.67 6.5342 186,067,818.24
Euro 330,757.86 7.8023 2,580,672.05
AUD 253,896.00 5.0928 1,293,041.55
335
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Ending foreign currency Ending RMB converted
Item Exchange rate
balance balance
Pakistan Rupi 8,537,489.66 0.05902 503,882.64
IDR 101,359,459.00 0.00048 48,652.54
Short-term loans
Including:USD 30,000,000.00 6.5342 196,026,000.00
Non-current assets due within
one year
Including:USD 6,810,000.00 6.5342 44,497,902.00
Non-current liability due
within one year
Including:USD 4,924,000.00 6.5342 32,174,400.80
(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.
336
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
IV. 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
5. Subsidiary liquidated
Difference betweenthe disposalpriceand Othercomprehensive income
Priceof proportion of thesubsidiary’s netassets enjoy transferredinto investment
Ratio oftheequity Way ofthe equity Determination basisforthe time
Subsidiary the equity Time point of controlrightlose in aspect of theconsolidatedfinancial income ,whichrelatedwith the
disposed disposed point of control rightlose
disposed statement,whichisrespond tothe disposal equity investment of original
investment subsidiary
Liquidation
Xi’an MeizlaiAppliancesMarketing Co., Ltd. 98.50% 2017.6 Liquidation completed
cancelled
Liquidation
MianyangMeilingAppliancesMarketingCo., Ltd 100.00% 2017.12 Liquidation completed
cancelled
Liquidation
Lanzhou MeizlaiAppliancesMarketing Co.,Ltd 100.00% 2017.7 Liquidation completed
cancelled
Liquidation
HohhotXiangyouAppliancesMarketingCo., Ltd. 95.00% 2017.12 Liquidation completed
cancelled
Hefei Meiling White Household Appliances Co., Liquidation
95.00% 2017.11 Liquidation completed
Ltd. cancelled
Liquidation
UrumchiMeilingAppliancesMarketingCo., Ltd 90.00% 2017.10 Liquidation completed
cancelled
6. Subsidiary newly established
Capital Ratio of
Share-h
RC (10 actually paid at Other balance that consider Consoli
Register Business olding voting Minority’s
Subsidiary Type thousand year-end (10 as the net investment for right dated
ed place nature Ratio interest
Yuan) thousand subsidiary in nature (Y/N)
(%) (%)
Yuan)
337
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Capital Ratio of
Share-h
RC (10 actually paid at Other balance that consider Consoli
Register Business olding voting Minority’s
Subsidiary Type thousand year-end (10 as the net investment for right dated
ed place nature Ratio interest
Yuan) thousand subsidiary in nature (Y/N)
(%) (%)
Yuan)
Limited
Research &
Meiling Candy Washing Machine company
Hefei development, 15000 7500 60% 60% Y 29,165,179.88
Co., Ltd. (Sino-foreign
Sales
joint venture)
Guangzhou Changhong Trading Limited Guang
Trading 100 100 100% 100% Y
Co., Ltd company zhou
Zhongshan Hongyou Electric Co., Limited Zhongs Manufactures,
4000 400 60% 60% Y 2,001,199.09
Ltd. company han sales
Zhongshan Hongling Trading Co., Limited Zhongs
Trading 100 100 100% 100% Y
Ltd. company han
Hebei Hongmao Household Appliance Limited Handa Manufactures,
500 500 100% 100% Y
Technology Co., Ltd company n sales
Hongyuan Ground Energy Heat Pump Limited Zhongs Manufactures,
1500 1500 51% 51% Y 8,003,487.62
Technology (Zhongshan) Co., Ltd. company han sales
338
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
V. Equity in other entity
1. Equity in subsidiary
(1) Composition of the enterprise group
Share-holding ratio
Business Registration Business (%)
Subsidiary Acquire way
area place nature Indirectl
Directly
y
Manufactures,
ZhongkeMeilingCryogenicTechnologyCo., Ltd1) Hefei Hefei 66.87 Investment
sales
MianyangMeilingSoftwareTechnologyCo., Ltd. 2) Mianyang Mianyang SoftwareR&D 100.00 Investment
Manufactures,
MianyangMeilingRefrigeration Co., Ltd.3) Mianyang Mianyang 95.00 5.00 Investment
sales
Manufactures,
JiangxiMeilingElectricApplianceCo., Ltd.4) JDZ JDZ 98.75 1.25 Investment
sales
Hefei MeilingApplianceMarketingCo., Ltd.5) Hefei Hefei Sales 99.82 0.18 Investment
Enterprise combined under the
GuangxiHuidian HomeApplianceCo., Ltd6) Nanning Nanning Sales 100.00
differentcontrol
Wuhu MeilingApplianceMarketingCo., Ltd7) Wuhu Wuhu Sales 98.00 Investment
Changchun MeilingApplianceMarketingCo., Ltd8) Changchun Changchun Sales 100.00 Investment
Jinan MeilingApplianceMarketingCo., Ltd9) Jinan Jinan Sales 91.40 Investment
NanchangXiangyouApplianceMarketingCo., Ltd10) Nanchang Nanchang Sales 85.00 Investment
JinzhouMeilingApplianceMarketing Co., Ltd11) Jinzhou Jinzhou Sales 96.00 Investment
ShenyangMeilingApplianceMarketing Co.,Ltd12) Shenyang Shenyang Sales 100.00 Investment
Wuhan MeizhirongApplianceMarketingCo., Ltd113) Wuhan Wuhan Sales 91.00 Investment
ZhengzhouMeilingApplianceMarketingCo., Ltd14) Zhengzhou Zhengzhou Sales 100.00 Investment
Shijiazhuan
ShijiazhuangMeilingApplianceMarketingCo., Ltd15) Shijiazhuang Sales 100.00 Investment
g
ChengduMeilingApplianceMarketingCo., Ltd16) Chengdu Chengdu Sales 94.80 Investment
GuiyangMeilingApplianceMarketing Co., Ltd17) Guiyang Guiyang Sales 100.00 Investment
FuzhouMeilingApplianceMarketing Co., Ltd18) Fuzhou Fuzhou Sales 100.00 Investment
NanjingMeilingApplianceMarketingCo., Ltd19) Nanjing Nanjing Sales 100.00 Investment
TaiyuanMeilingApplianceMarketingCo., Ltd20) Taiyuan Taiyuan Sales 100.00 Investment
ChangshaMeilingApplianceMarketing Co.,Ltd21) Changsha Changsha Sales 97.00 Investment
HangzhouMeilingApplianceMarketingCo., Ltd22) Hangzhou Hangzhou Sales 100.00 Investment
ChongqingMeilingApplianceMarketingCo., Ltd23) Chongqing Chongqing Sales 100.00 Investment
KunmingMeilingApplianceMarketing Co.,Ltd24) Kunming Kunming Sales 97.50 Investment
ShanghaiMeilingApplianceMarketingCo., Ltd25) Shanghai Shanghai Sales 99.00 Investment
NantongMeilingApplianceMarketing Co., Ltd26) Nantong Nantong Sales 100.00 Investment
GuangzhouMeilingApplianceMarketingCo., Ltd27) Guangzhou Guangzhou Sales 98.00 Investment
TianjinMeilingApplianceMarketingCo., Ltd28) Tianjin Tianjin Sales 100.00 Investment
Harbin MeilingApplianceMarketingCo., Ltd29) Harbin Harbin Sales 100.00 Investment
BeijingMeilingApplianceMarketingCo., Ltd30) Beijing Beijing Sales 100.00 Investment
Manufactures, Enterprise combined under the
Hefei Meiling NonferrousMetalProductsCo., Ltd.31) Hefei Hefei 100.00
sales differentcontrol
339
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Share-holding ratio
Business Registration Business (%)
Subsidiary Acquire way
area place nature Indirectl
Directly
y
Manufactures, Enterprise combined under the
GuangdongChanghongRidianTechnologyCo., Ltd.32） Zhongshan Zhongshan 99.855
sales same control
ChangmeiTechnologyCo., Ltd.33） Mianyang Mianyang Sales 95.00 Investment
CHONGHONG MEILING ELECTRIC
Jakapta Jakapta Sales 100.00 Investment
INDONESIA,PT 34）
ChanghongRubaTradingCompany（Private）Limited 35) Pakistan Pakistan Sales 60.00 Investment
Manufactures, Enterprise combined under the
Sichuan ChanghongAirConditionerCo., Ltd36) Mianyang Mianyang 100.00
sales same control
Zhongshan Changhong Home Appliances Company Manufactures, Enterprise combined under the
Zhongshan Zhongshan 90.00 10.00
Limited37) sales same control
Manufactures, Enterprise combined under the
Hefei Meiling Group HoldingCo., Ltd.38) Hefei Hefei 100.00
sales differentcontrol
Manufactures, Enterprise combined under the
Meiling Equator Appliance (Hefei) Co., Ltd.39) Hefei Hefei 100.00
sales differentcontrol
Manufactures, Enterprise combined under the
Hefei Equator Appliance Co., Ltd.40) Hefei Hefei 100.00
sales differentcontrol
Hongyuan Ground Energy Heat Pump Technology Co., Manufactures,
Mianyang Mianyang 51.00 Investment
Ltd41) sales
Hongyuan Ground Energy Heat Pump Technology Manufactures,
Zhongshan Zhongshan 51.00 Investment
(Zhongshan)Co.,Ltd.42) sales
Manufactures,
MeilingCandyWashingMachineCo., Ltd.43） Hefei Hefei 60.00 Investment
sales
Guangzhou ChanghongTrading Co., Ltd44） Guangzhou Guangzhou Sales 100.00 Investment
Manufactures
Zhongshan HongyouElectricCo., Ltd.45） Zhongshan Zhongshan 60.00 Investment
, sales
Zhongshan HonglingTradingCo., Ltd. 46） Zhongshan Zhongshan Sales 100.00 Investment
Hebei Hongmao Household Appliance Technology Co., Manufactures
Handan Handan 100.00 Investment
Ltd47） , sales
Note:
1)Zhongke Meiling Cryogenic Technology Company Limited (hereinafter referred to as Zhongke Meiling),
the predecessor of which was Zhongke Meiling Cryogenic Technology Limited Liability Company, was
established on 29 October 2002 by joint contribution from the Company and Technical Institute of Physics
and Chemistry, CAS (“TIPC”), with registered capital of RMB60 million upon the establishment, among
which, the Company made capital contribution of RMB42 million (including the assets in specie at the
consideration of RMB35,573,719.70 as evaluated by Beijing Zhongzheng Appraisal Co., Ltd. with issuance
of the Appraisal Report (ZZPBZ(2002)No.029) and cash contribution of RMB6,426,280.30) accounting for
70% of the aforesaid registered capital, and TIPC made capital contribution of RMB18 million with
intangible assets of such value (namely the single compressor mixture industrial low temperature
refrigeration technology) as evaluated by Jingzhongzi Assets Appraisal Co., Ltd. with issuance of the
Appraisal Report (ZZPBZ(2002)No.225) accounting for 30% of the aforesaid registered capital. The paid-in
of the above registered capital has been verified by Huazheng Accounting Firm by issuance of the Assets
340
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Verification Report(HZYZ(2002)No.B157) dated 16 October 2002.
In October 2014, according to the relevant provision under the Management Rules on Application of State
Owned Assets by Central Business Organs, TIPC transferred the 30% equity interests held by it in Zhongke
Meiling Cryogenic Technology Company Limited to its wholly-owned subsidiary Zhongke Xianxing
(Beijing) Assets Management Co., Ltd (hereinafter referred to as Zhongke Xianxing) which would perform
management over the operating assets of TIPC. Upon consideration and approval at the 37th 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 Cryogenic
Technology Company Limited, pursuant to which, they decided to change the firm type of Zhongke Meiling
Cryogenic Technology Company Limited to a joint stock company. Based on the net assets of
RMB96,431,978.25 as audited by Xinyong Zhonghe CPA as of 30 June 2015, an aggregate of 65,000,000
shares have been converted at the proportion of 1:0.67, which are to be held by the original shareholders
according to their respective entitlement. In case that the net assets exceed registered capital, the balance
shall be recorded in capital reserve. On 28 August 2015, Xinyong Zhonghe CPA reviewed the registered
capital and paid-in thereof in respect of the stock reform, and issued Assets Verification Report
(XYZH/2015CDA40161). The Company registered industrial and commercial information on 11 September
2015.
On November 25, 2016, the first Extraordinary Shareholders' General Meeting of Zhongke Meiling
Cryogenic Technology Co., Ltd. in 2016 considered and approved the Proposal on the Issuance Plan of the
Company, Zhongke Meiling Company issued 3,150,000 shares to specific investors by the non-public
offering of shares at 1.63 Yuan per share. The current capital increase was verified by the No.
［XYZH/2016CDA40294］capital verification report issued by ShineWing CPA (special general partnership).
After the completion of the issuance, the share capital of Zhongke Meiling Company increased to 68,150,000
shares and the Company's shareholding ratio was 66.76%.
On 15 September 2017, the Proposal of the First Stock Placement of Zhongke Meiling Cryogenic
Technology Co., Ltd for year of 2017 was deliberated and approved by 4th session extraordinary of
shareholders general meeting of 2017. Zhongke Meiling offering 490,300 shares to specific investors by way
of privately placement, which has 1.72 Yuan per share in amount. The capital increasement has been verified
by the No. ［XYZH/2017CDA40324］capital verification report issued by ShineWing CPA (special general
partnership). After the completion of shares placement, stock of the Company increased to 68,640,300 shares
and 66.87% held by the Company.
2) Mianyang Meiling Software Technology Co., Ltd. (hereinafter referred to as Meiling Software) was
established on Jan. 24, 2014. It is a limited company jointly invested by the Company and Mianyang Meiling
341
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Refrigeration Co., Ltd., being approved by the Industrial and Commerce Bureau of Peicheng District,
Mianyang City. The company owes registered capital of RMB 5 million, including RMB 4.95 million
contributed by Meiling Company in cash, accounted for 99% of the registered capital; Mianyang Meiling
Refrigeration Co., Ltd. contributed RMB 50000 in cash with 1% of the register capital occupied. The above
mentioned register capital have been verified by verification report of Chuanjinlai Yanzi No.[2014] B039
issued by Sichuan Jinlai Accounting Firm Co., Ltd. In July 2016, the shares of Mianyang Meiling Software
Technology Co., Ltd., held by the Company has transferred to Sichuan Changhong AC Co., Ltd., after
transferred, Changhong AC has 99% equity of Mianyang Software, the Company has no shares of Mianyang
Software directly
3) Mianyang Meiling Refrigeration Co., Ltd. (hereinafter referred to as Mianyang Meiling), 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 Electric Appliance Co., Ld, than 5
percent equity was transfer to Jiangxi Meiling Electric Appliance.
4) Jiangxi Meiling Electric Appliance Co., Ld.( hereinafter referred to as Jiangxi Meiling Electric Appliance)
was a limited liability company jointly established by the Company and Mianyang Meiling on 23 May 2011.
Register capital of the company totally as RMB 50 million, RMB 49.375 million invested by the Company,
98.75% in total register capital while RMB 0.625 million invested by Mianyang Meiling , a 1.25% in total
register capital occupied. The initial investment RMB 10.50 million was received dated 13 May 2011 with
RMB 10 million from the Company and RMB 0.5 million from Mianyang Meiling. Rest of the capital shall
be invested fully within 2 years after the joint ventures established according to capital requirement. The
initial investment capital were verified by the Capital Verification Report [JXKYZi(2011) No. 090] issued
from Jingdezhen Xingci CPA Co., Ltd. Second capital RMB 39.5 million was fully funded on 28 July 2011,
the Company contributed RMB 39.375 million while Mianyang Meiling Company invested RMB 125,000,
the contributions have been verified by the capital verification report [Jing Xing Kuai Yan Zi (2011) No.: 134]
342
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
issued from JDZ Xingci CPA Co., Ltd.
5) Hefei Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Meiling Marketing) is the limited
company jointly invested by the Company and Mianyang Meiling Company on 21 Oct. 2009. Registered
capital and paid-up capital 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.
6) Guangxi Huidian Home Appliance Co., Ltd. (hereinafter referred to as Guangxi Huidian) established in
March 2010 with registered capital of RMB 5 million. The Company invested RMB 1 million, accounted for
20% of the registered capital; Meiling Marketing acquired 44% equity interests from the minority
shareholders in 2014. In 2015, Meiling Marketing and Jiangxi Meiling Appliances entered into equity
transfer agreements with minority shareholders respectively, to acquire as the transferees the 35.6% and 0.4%
equity interests of Guangxi Weidian held by minority shareholders. Upon completion of equity transfer in
April 2015, Meiling Marketing and Jiangxi Meiling Appliances held the entire equity interests of Guangxi
Weidian as a whole.
7) Wuhu Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Wuhu Meiling) 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. (hereinafter referred to as Changchun Meiling) 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; in 2017, after acquiring 3% equity from the
minority, Meiling Marketing holds 100% equity of Changchun Meiling in total.
9) Jinan Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Jinan Meiling) 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.
10) Nanchang Xiangyou Appliance Marketing Co., Ltd. (hereinafter referred to as Nanchang Xiangyou) was
343
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
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 acquired 49% equity interests from the
minority shareholders in 2014, Meiling Marketing totally holds 85% equity of Nanchang Xiangyou.
11) Jingzhou Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Jingzhou Meiling) was
established dated 10 January 2011 with registered capital of RMB 4 million; Meiling Marketing invested RMB
2.4 million, accounted for 60% of the registered capital. In 2013, the Company purchased 20% equity from
minority; After Meiling Marketing acquired 1% equity interests from the minority shareholders in 2014,
Meiling Marketing acquired 15% equity interests from the minority shareholders in 2016, Meiling Marketing
totally holds 96% equity of Jingzhou Meiling.
12) Shengyang Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Shengyang Meiling) was
established dated 26 January 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB
2.844 million, accounted for 94.8% of the registered capital. After Meiling Marketing acquired 5.2% equity
interests from the minority shareholders in 2016, Meiling Marketing totally holds 100% equity of Shenyang
Meiling.
13) Wuhan Meizirong Appliance Marketing Co., Ltd. (hereinafter referred to as Wuhan Meizirong) was
established dated 10 January 2011 with registered capital of RMB 5 million; Meiling Marketing invested RMB
4.55 million, accounted for 91% of the registered capital.
14) Zhengzhou Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Zhengzhou Meiling) was
established dated 17 January 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB
1.08 million, accounted for 36% of the registered capital. In 2013, Meiling Marketing purchased 10% equity
from minority; Meiling Marketing signed equity transfer agreement with the minority shareholders in April
2015, to acquire as the transferee the 39% equity interests of Zhengzhou Meiling held by minority
shareholders, Meiling Marketing acquired 10% equity interests from the minority shareholders in February
2016; and after acquiring 5% equity from minority in 2017, Meiling Marketing totally holds 100% equity of
Zhengzhou Meiling.
15) Shijiazhuang Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Shijiazhuang Meiling)
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 acquired 32%
equity held by the minority in 2015 and acquiring 4.67% equity from minority in 2017, Meiling Marketing
totally holds 100% equity of Shijiazhuang Meiling.
16) Chengdu Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Chengdu Meiling) was
established dated 26 January 2011 with registered capital of RMB 5 million; Meiling Marketing invested RMB
4.17 million, accounted for 83.4% of the registered capital; After Meiling Marketing purchased 9% equity
344
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
from minority in 2015, and purchased 0.8% equity from minority in 2016, Meiling Marketing totally holds
94.8% equity of Chengdu Meiling.
17) Guiyang Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Guiyang Meiling) 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.
18) Fuzhou Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Fuzhou Meiling) was
established dated 25 January 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB
2.97 million, accounted for 99% of the registered capital; in 2017, after acquiring 1% equity from the
minority, Meiling Marketing holds 100% equity of Fuzhou Meiling in total.
19) Nanjing Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Nanjing Meiling) was
established dated 14 Feb. 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB
2.97 million, accounted for 99% of the registered capital; in 2017, after acquiring 1% equity from the
minority, Meiling Marketing holds 100% equity of Nanjing Meiling in total.
20) Taiyuan Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Taiyuan Meiling) was
established dated 18 January 2011 with registered capital of RMB 4 million; Meiling Marketing invested RMB
1.59 million, accounted for 39.75% of the registered capital; after Meiling Marketing purchased 45.5%
equity from minority in 2013, after purchased 14.75% equity from minority in 2016, Meiling Marketing
totally holds 100% equity of the Taiyuan Meiling.
21) Changsha Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Changsha Meiling) 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 purchased 11% equity from minority in 2016, Meiling Marketing totally holds 97% equity of
Changsha Meiling.
22) Hangzhou Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Hangzhou Meiling) was
established dated 17 Feb. 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB
2.655 million, accounted for 88.5% of the registered capital; Meiling Marketing signed equity transfer
agreement with the minority shareholders in 2015, to acquire as the 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; in 2017, after acquiring
5% equity from the minority, Meiling Marketing holds 100% equity of Hangzhou Meiling in total.
345
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
23) Chongqing Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Chongqing Meiling) 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 and 2% equity in 2017, Meiling Marketing totally holds 100% equity of Chongqing
Meiling.
24) Kunming Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Kunming Meiling) 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, and 9% equity in 2016 as well as 2% equity in 2017, Meiling Marketing totally holds
97.5% equity of the Kunming Meiling.
25) Shanghai Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Shanghai Meiling) was
established dated 9 March 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB
2.97 million, accounted for 99% of the registered capital.
26) Nantong Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Nantong Meiling) was
established dated 8 March 2011 with registered capital of 3 million Yuan; Meiling Marketing invested 1.74
million Yuan, accounted for 58% of the registered capital; In 2013, after Meiling Marketing purchased 34%
equity from minority, after acquiring 8% from minority by Meiling Marketing, 100% equity of the Nantong
Meiling in total are hold by Meing Marketing.
27) Guangzhou Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Guangzhou Meiling) was
established dated 13 May 2011 with registered capital of 5 million Yuan; Meiling Marketing invested 4.3
million Yuan, accounted for 86% of the registered capital; after Meiling Marketing acquired 12% equity
interests from the minority shareholders in 2014, Meiling Marketing totally held the 98% equity interests of
Guangzhou Meiling.
28) Tianjin Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Tianjin Meiling) was
established dated 2 March 2011 with registered capital of 3 million Yuan; Meiling Marketing invested 2.565
million Yuan, accounted for 85.5% of the registered capital; In 2015, Meiling Marketing and Jiangxi Meiling
Appliances entered into equity transfer agreements with minority shareholders respectively, to acquire as the
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.
29) Harbin Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Harbin Meiling) 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
346
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
minority shareholders in 2015, Meiling Marketing totally held the 95% equity interests of Harbin Meiling; in
2017, after acquiring 5% equity from the minority shareholders, Meiling Marketing holds 100% equity of the
Harbin Meiling in total.
30) Beijing Meiling Appliance Marketing Co., Ltd. (hereinafter referred to as Beijing Meiling) was
established dated 28 March 2011 with registered capital of 3 million Yuan; Meiling Marketing invested 2.97
million Yuan, accounted for 99% of the registered capital; in 2017, after acquiring 1% equity from the
minority shareholders, Meiling Marketing holds 100% equity of the Beijing Meiling in total.
31) Hefei Meiling Nonferrous Metal Products Co., Ltd. (hereinafter referred to as Nonferrous Metal) was the
Sino-foreign joint venture jointly set up by original Meiling Group, Hefei Meiling Copper Co., Ltd. And Singapore Kim
Shin Development Co., Ltd., which have been originally approved by the [WJMWFZZ(1996) No.349] of
Foreign Trade and Economic Committee of Anhui Province. Its registered capital was US$ 2.92 million upon
establishment, of which, original Meiling Group invested US$ 1.46 million (monetary capital), accounting
50% of the registered capital, Hefei Meiling Copper Co., Ltd invested US$ 0.584 million (monetary capital of RMB
0.18 million and real assets of US$ 0.404 million), accounting 20% of registered capital while Singapore Kim Shin
Development Co., Ltd invested US$ 0.876 million (monetary capital), accounting 30% of the registered capital.
The above mentioned investment verified by the verification report of [HSWZ(1995) No. 0737],
[HSWZ(1996) No. 328] and [HSWZ(1998) No. 088] from Anhui CPAs Co., Ltd. In July 2008, approved by
[HWS(2008) No.53] from Foreign Trade Economic Cooperation Bureau of Hefei City, 30% equity and 20%
equity held by Singapore Kim Shin Development Co., Ltd and Hefei Meiling Copper Co., Ltd respectively
transferred to original Meiling Group Totally. The Company’s register capital came into RMB 24,286,808.00
after transference, and was not the joint-venture any more.
32) Guangdong Changhong Ridian Technology Co., Ltd. (hereinafter referred to as Changhong Ridian) is a
limited liability company invested and established by Sichuan Changhong Electric Co., Ltd. (hereinafter
referred to as Sichuan Changhong) and Sichuan Changhong Motor Transport Co., Ltd. (hereinafter referred
to as Changhong Motor Transport Company) on May 25, 2016. The registered capital and paid-in capital are
RMB 40 million Yuan , of which Sichuan Changhong has invested 32 million Yuan by monetary capital,
accounting for 80% of the registered capital; Changhong Motor Transport Company has invested 8 million
Yuan , accounting for 20% of the registered capital. The official receipts of registered capital have been
verified by original Sichuan Junhe Accounting Firm [No. JHYZ (2006) 3027]. Changhong Ridian increased
registered capital of 43 million Yuan on January 4, 2007, changing from 40 million Yuan to 83 million
Yuan , for the newly increased 43 million Yuan , Sichuan Changhong invested 1.8 million Yuan , Guangdong
Xiongfeng Electric Co., Ltd. invested 40 million Yuan , and Kou Huameng and other 9 natural person
shareholders invested 1.2 million Yuan , at the same time, the shareholders' meeting considered and agreed to
transfer the investment of 8 million Yuan of Changhong Motor Transport Company to Sichuan Changhong
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.
347
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
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, seven natural person shareholders transferred total 0.76% stock rights to Hu Zhiheng,
after the transfer, the registered capital of Changhong Ridian was still 83 million Yuan , the structure of
registered capital after changes was that Sichuan Changhong invested 33.8 million Yuan , accounting for
40.72%; Guangdong Xiongfeng Electric Co., Ltd. invested 40 million Yuan , accounting for 48.19%; Sichuan
Changhong 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, Changhong Ridian held the shareholders meeting which considered and agreed Kou
Huameng to transfer its stock rights of total 250,000 Yuan which accounts for 0.301% of the Changhong
Ridian’s registered capital to Sichuan Changhong Innovation Investment Co., Ltd. at the cost of 317,802
Yuan . The other shareholders of the Changhong Ridian waived the right of pre-emption. On December 11,
2014, Changhong Ridian held the shareholders meeting which considered and agreed Guangdong Xiongfeng
Electric Co., Ltd. to transfer its stock rights of total 40 million Yuan which accounts for 48.19 % of the
company's registered capital to Sichuan Changhong Electric Co., Ltd. at the cost of 43,977,300 Yuan . The
other shareholders of the Changhong Ridian waived the right of pre-emption. The structure of registered
capital after changes was that Sichuan Changhong invested 73.8 million Yuan, accounting for 88.92%;
Sichuan Changhong 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 4 January 2016, Sichuan Changhong and Sichuan Changhong Innovation Investment Co., Ltd. transferred
total 98.855% equity of the Changhong Ridian to the Company. After the transfer, the Company directly
holds 98.855% stock rights of Changhong Ridian.
33) Changmei Technology Co., Ltd. (hereinafter referred to as Changmei Technology) was invested and set
up on May 12, 2016 in order to promote intelligent transformation and implement the company’s intelligent
life project according to the company's strategic planning and business development needs. 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. According to the
resolution of 1st, 2nd and 3rd shareholders meeting of 2017 under the name of Changmei Technology, and the
4th session of 1st BOD, after acquiring part of the minority shares, the Company holds 95% equity of the
Changmei Technology in total.
34) CHANGHONG MEILING ELECTRIC INDONESIA, PT.(hereinafter referred to as 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
348
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Zhongshan Changhong subscribed and paid 5.88 million US dollars in cash, accounting for 98% of the
registered capital, Changhong Air Conditioning subscribed and paid 120,000 US dollars in cash, accounting
for 2% of the registered capital. On 4 July 2017, rests of the 2.94 million US dollars are subscribed by
Zhongshan Changhong in line with the agreement.
35) Changhong Ruba Trading Company (Private) Limited (hereinafter referred to as Changhong Ruba) was a
joint venture established by Zhongshan Changhong Appliances Company Limited and RUBA GENERAL
TRADING FZE Company (“RUBA”) on 5 August 2011 with the approval from Guangdong Development
and Reform Commission by issuance of the Approval Relating to Joint Construction of a Manufacturing and
Selling Platform Project in Pakistan by Zhongshan Changhong Appliances Company Limited
(YFGWZ(2011)958). The resolution of the second extraordinary shareholders' meeting of Zhongshan
Changhong in 2016 passed the "Proposal on the Company's Capital Increase to Changhong Ruba Trading
Company (Private) Limited", and agreed that the company and UAE RUBA Company jointly increase capital
to Changhong Ruba Trading Company(Private) Limited which was invested by both sides in Pakistan at an
earlier stage, Zhongshan Changhong invested 3.84 million US dollars in this capital increase, and UAE
RUBA Company invested 2.56 million US dollars, the shares held by both sides remained unchanged. After
the capital increase, the company’s registered capital became 12.4 million US dollars, of which Zhongshan
Changhong Home Appliances Company Limited invested 7.44 million US dollars in cash, shareholding ratio
was 60%, UAE RUBA Company invested 4.96 million US dollars in cash, and shareholding ratio was 40%.
36) Sichuan Changhong Air Conditioner Co., Ltd.( hereinafter referred to as Changhong Air Conditioner), 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. In 2017, the Company increased capital of 650 million Yuan to Changhong Air Conditioner, after
capital increased, registered capital of Sichuan Changhong comes to 850 million Yuan from 200 million Yuan,
share holding still counted as 100%.
37) Zhongshan Changhong Home Appliances Company Limited (hereinafter referred to as Zhongshan
Changhong), was the original Guangdong Changhong Electric Co., Ltd., and is a limited liability company
jointly set up by Sichuan Changhong and China Minmetals on May 22, 2001. Its registered capital was RMB
80 million upon establishment, of which, Sichuan Changhong invested RMB 72 million, including RMB
69.3 million biding for the estate/ non-estate from original Zhongshan Sanrong Air-conditioner Co., Ltd. And
its patent use-right of RMB2.7 million, accounting for 90% of the registered capital; Chine Minmetals
invested RMB 8 million in monetary capital accounting 10% of the registered capital. The Company changed
349
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
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.
38) Hefei Meiling Group Holding Co., Ltd (hereinafter referred to as Meiling Group), was the state-owned company
originally approved by People’s Government of Hefei Province and established authorized by SASAC of Hefei City. On
July 14, 2008, 100% state-owned equity of Meiling Group has freely transferred to Xingtai Holding by Hefei
SASAC. Agreement by the approval of < State-owned property agreement transfer from Meiling Group>
[ HGZCQ(2010) No.34] of Hefei SASAC on April 9, 2010, 100% state-owned property of 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.
39) Meiling Equator Appliance (Hefei) Co., Ltd.( hereinafter referred to as Equator Appliance) was the Sino-foreign
joint venture jointly set up by original Meiling Group and EQUATOR INVESTMENTS (USA) INC.( EQUATOR
for short), which have been approved by the [SWZWFZZ(2004) No.0103] of Approval Certificate of Foreign
Enterprise from People’s Government of Anhui Province. Its registered capital was US$ 3 million upon
establishment, of which, Sino company invested US$ 2.25 million in machinery equipment, accounting 75%
of the registered capital while foreign company invested US$ 0.5 million in monetary capital and US$ 0.25
million in intangible assets, amounting to US$0.75 million, accounting 25% of the registered capital. The
above mentioned investment verified by the verification report of [WYAYZ (2004) No. 135] from Anhui
Yongan CPAs Co., Ltd. In July 2007, approved by [HWJ(2007) No.136] from Foreign Trade Economic
Cooperation Bureau of Hefei City, 25% equity held by EQUATOR transferred to Anhui Meiling Electric Co.,
Ltd. Totally. The Company’s register capital came into RMB 24,793,200 after transference, and was not the
joint-venture any more. 25% equity owned by Anhui Meiling Electric Co., Ltd has been transferred totally to
original Meiling Group in July 2009.
350
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
40) Hefei Equator Appliance Co., Ltd.( hereinafter referred to as Equator Appliance) was jointly set up by original
Meiling Group and Yingkaite Appliance on September 26, 2007. Its register capital was RMB 12 million, among
which, original Meiling Group invested 8,670,600 Yuan in monetary capital, accounting 72.255% in
registered capital; Equator Appliance invested 3,329,400 Yuan in the assessment value of intangible assets
(land-use right), accounting 27.745% of total registered capital. The investment being verified by
[WYAZ(2004) No. 135] from Anhui Yongan CPAs Co., Ltd.
41) Hongyuan Ground Energy Heat Pump Technology Co., Ltd(hereinafter referred to as Hongyuan Ground
Energy) was established on 28 August 2015, it is a limited liability company authorized by Administration
for Industry and Commerce of Peicheng District, Mianyang, Sichuan, contributed by Sichuan Changhong Air
Conditioner Co., Ltd (hereinafter referred to as Changhong Air Conditioner) and Hengyouyuan Technology
Development Group Co., Ltd. together. Registered capital amounted as 50 million Yuan, including 25.5
million Yuan contributed by Changhong Air Conditioner in cash, a 51% in total registered capital;
Hengyouyuan Technology Development Group Co., Ltd. invested 24.5 million Yuan in cash, a 49% in
registered capital.
42) Hongyuan Ground Energy Heat Pump Technology (Zhongshan) Co., Ltd. was established and invested
on 18 July 2017 with registered capital of 15 million Yuan, The Hongyuan Ground Energy Heat Pump
Technology Co., Ltd (hereinafter referred to as Hongyuan Ground Energy) contributed 1.5 million Yuan with
own funds and takes 100% in the registered capital.
43) Meiling Candy Washing Machine Co., Ltd. (hereinafter referred to as Meiling Candy) was established
and registered on 27 April 2017, which was contributed by the Company and Candy Hoover Group S.r.l.
together. Registered capital counted as 150 million Yuan, including 90 million Yuan invested by the Company,
a 60% in registered capital.
44) Zhongshan Changhong Trading Co., Ltd. (hereinafter referred to as Changhong Trading) was established
on 6 January 2017, it is the wholly-owned subsidiary of Zhongshan Changhong Home Appliances Company
Limited(hereinafter referred to as Zhongshan Changhong) with registered capital of one hundred million
Yuan.
45)Zhongshan Hongyou Electric Co., Ltd. (“Hongyou Electric”) was established on 11 May 2017 with
registered capital of RMB40 million, among which, Zhongshan Changhong Home Appliances Company
Limited (“Zhongshan Changhong”) invested capital of RMB24 million on its own accounting for 60%
of the registered capital; Zhuhai Sanyou Environment Technology Co., Ltd. invested capital of RMB16
million on its own accounting for 40% of the registered capital.
46) Zhongshan Hongling Trading Co., Ltd. (hereinafter referred to as Hongling Trading) was established on
5 December 2016 with registered capital of one hundred million Yuan. The Guangdong Changhong Ridian
Technology Co., Ltd. contributed one hundred million Yuan with own funds and takes 100% in the registered
351
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
capital.
47) Hebei Hongmao Household Appliance Technology Co., Ltd (hereinafter referred to as Hebei Hongmao)
was established on 21 July 2017 with registered capital of 5 million Yuan. Guangdong Changhong Ridian
Technology Co., Ltd. invested 5 million Yuan by own fund and takes 100% in registered capital.
(2) Major non-wholly-owned subsidiary
Dividend distributed
Gains/losses Balance of
Shareholding of to minority
Subsidiary attributable to minority’s interest at
minority announced in the
minority in the Year year-end
Year
Meiling Candy 40.00% -834,820.12 29,165,179.88
Changmei Tech. 5.00% -869,126.80 661,078.92
Zhongke Meiling 33.13% 4,139,998.29 41,737,202.82
Hongyuan Ground
49.00% -1,719,489.87 8,003,487.62
Energy
Changhong Ridian 1.14% 131,929.57 1,380,869.01
(3) Financial information for major non-wholly-owned subsidiary
Ending balance
Subsidiary Non-current
Current assets Non-current assets Total assets Current liabilities Totalliabilities
liability
Meiling
186,327,159.16 595,603.59 186,922,762.75 114,009,813.05 114,009,813.05
Candy
Changmei
14,227,901.53 7,276,673.50 21,504,575.03 7,839,977.68 446,504.35 8,286,482.03
Tech.
ZhongkeMeiling 137,621,171.43 129,960,368.99 267,581,540.42 136,808,504.89 4,791,666.67 141,600,171.56
Hongyuan Ground
153,447,662.99 20,035,926.82 173,483,589.81 153,196,254.08 3,953,687.53 157,149,941.61
Energy
Changhong
258,631,530.72 58,759,575.56 317,391,106.28 196,746,760.43 196,746,760.43
Ridian
(Continued)
Opening balance
Subsidiary Non-current
Current assets Non-current assets Total assets Current liabilities Totalliabilities
liability
Meiling
Candy
Changmei
13,837,747.09 3,202,239.36 17,039,986.45 4,985,892.09 4,985,892.09
Tech.
ZhongkeMeiling 95,736,799.26 79,041,552.96 174,778,352.22 56,884,199.81 5,000,000.00 61,884,199.81
Hongyuan Ground
94,131,015.35 214,113.11 94,345,128.46 74,502,317.25 74,502,317.25
Energy
Changhong
201,344,325.02 59,154,559.91 260,498,884.93 151,381,017.63 151,381,017.63
Ridian
(Continued)
352
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Current Year
Subsidiary Total comprehensive Cash flow from
Operation income Net profit
income operation activity
Meiling
277,854,553.21 -2,087,050.30 -2,087,050.30 -39,773,751.02
Candy
Changmei
17,810,174.84 -13,495,001.36 -13,495,001.36 -15,043,776.44
Tech.
ZhongkeMeiling 143,090,796.12 12,482,579.70 12,482,579.70 57,581,102.60
Hongyuan Ground
558,282,516.59 -3,509,163.01 -3,509,163.01 7,690,824.95
Energy
Changhong
475,756,667.69 11,526,478.55 11,526,478.55 -1,322,277.27
Ridian
(Continued)
Last Year
Subsidiary Total comprehensive Cash flow from
Operation income Net profit
income operation activity
Meiling
Candy
Changmei
9,475,992.16 -7,417,905.64 -7,417,905.64 -6,307,725.99
Tech.
ZhongkeMeiling 93,528,664.17 8,112,300.61 8,112,300.61 17,598,849.36
Hongyuan Ground
43,213,417.74 512,958.11 512,958.11 18,468,908.62
Energy
Changhong
495,075,275.53 17,264,471.30 17,264,471.30 81,480,606.59
Ridian
(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
353
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
2. Changes of owner’ equity shares in subsidiary and its impacts
Zhongke Changmei Shijiazhuan Mianyang Kunming Chongqing Beijing Changchun Hangzhou Zhengzhou Fuzhou Nanjing Nantong
Item Harbin Total
Meiling Tech. g Meiling Meiling Meiling Meiling Meiling Meiling Meiling Meiling Meiling Meiling Meiling
Original ratio of
66.76% 95.00% 95.33% 93.80% 95.50% 98.00% 99.00% 97.00% 95.00% 95.00% 99.00% 99.00% 92.00% 95.00%
sharesheld
Equity purchased
0.59% -2.56% 4.67% 6.20% 2.00% 2.00% 1.00% 3.00% 5.00% 5.00% 1.00% 1.00% 8.00% 5.00%
fromminority
Shareissuance -0.48%
Ratio of shares
66.87% 92.44% 100.00% 100.00% 97.50% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
held atperiod-end
Cost of purchasing
652,000.00 1 5 4 1 1 1 1 3 1 1 1 1 652,021.00
minorityequity
Less: Ratio of the
net assets
measured by
697,201.87 -383,967.69 -97,380.39 412,939.39 -20,037.95 -48,991.17 -381,676.73 -170,960.56 -735,435.01 -769,777.59 -119,653.94 -117,860.92 -441,685.90 -156,586.55 -2,333,873.14
equity ratio while
acquiring the
subsidiary
Equity dilution for
168,822.44 168,822.44
sharesissuance
Balance 123,620.57 383,967.69 97,381.39 -412,934.39 20,041.95 48,992.17 381,677.73 170,961.56 735,436.01 769,780.59 119,654.94 117,861.92 441,686.90 156,587.55 3,154,716.58
Including:
Capital public -123,620.57 -383,967.69 -97,381.39 412,934.39 -20,041.95 -48,992.17 -381,677.73 -170,961.56 -735,436.01 -769,780.59 -119,654.94 -117,861.92 -441,686.90 -156,587.55 -3,154,716.58
reserve adjusted
On 15 August 2017, the Company acquired minority interest of Zhongke Meiling. The difference between the new acquired long-term equity investment and share of the subsidiary’s net assets which are
calculated on a continuous basis since the acquisition date based on the increased shareholding proportion is RMB45,201.87, which is accounted as capital reserve. After the transfer of equity interest, the
Company’s shareholding proportion changed to 63.75%.
On 15 September 2017, the subsidiary Zhongke Meiling held the 4th extraordinary general meeting of 2017 to consider and approve the Resolution Relating to the First Issue of Shares by Cryogenic
354
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Technology Co., Ltd. in 2017, for which, the Company waived the pre-emptive right. This issue involves total shares of 490,300 of Zhongke Meiling. After this issue, the shareholding of the Company in
Zhongke Meiling was reduced to 66.87%. The difference between share of the subsidiary’s net assets after the issue of shares based on the new shareholding proportion and the share of the subsidiary’s net
assets prior to the issue of shares based on the original shareholding proportion is RMB -168,822.44, which is accounted as capital reserve.
Changmei Technology Co., Ltd. acquired minority interests in 2017. The difference between the new acquired long-term equity investment and share of the subsidiary’s net assets which are calculated on a
continuous basis since the acquisition date based on the increased shareholding proportion is RMB -383,967.69, which is accounted as capital reserve.
The balance between the newly achieved long-term equity investment by purchasing stock rights of minority shareholders of some marketing subsidiaries and the net asset shares held by the subsidiary
continuously calculated from the purchase date and calculated by the newly increased shareholding ratio was -2,647,128.32 Yuan, and should be included in the capital reserve.
355
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
3. Equity in joint venture or affiliated enterprise
(1) Major joint venture or affiliated enterprise
Share holding Accounting
(%) treatment for
Main office Registe Business investment of
Joint venture or affiliated enterprise place r place nature Direct Indire joint venture or
ly ctly 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 Ground Energy Heat R & D, sales,
Mianyang Mianyang 49.00 Equity
Technology Co., Ltd. after-sales
5.Sichuan Tianyou Guigu Technology Co., Manufactures,
Mianyang Mianyang 25.00 Equity
Ltd. sales
R&D,
6.Chengdu Tianyou Guigu Environmental
Chengdu Chengdu manufacturin 25.00 Equity
Tech. Co., Ltd.
g and sales
(2) Financial information for major Joint venture: Nil
(3) Financial information for affiliated enterprise
Ending balance /CurrentYear
Hongyuan
HefeiXingmei Sichuan Zhiyijia SichuanTianyou
Item ChanghongRubaEl Ground Chengdu
Assets Network Guigu
ectricCompany(Pri Energy Heat Tianyou Guigu
Management Technology Co., Technology Co.,
vate)Ltd. Technology Tech. Co.,Ltd.
Co.,Ltd. Ltd. Ltd.
Co.,Ltd.
Currentassets: 101,602,298.41 3,458,484.59 2,008,498,235.31 60,968,256.51 21,724,066.16 21,783,093.01
Including: cash and cash
equivalent
1,684,706.95 3,286,834.15 1,060,479,965.90 371,164.93 16,267,337.47 10,662,530.54
Non-currentassets 78,294,101.64 19,165,528.20 12,785,020.28 22,196,510.71 22,653,214.86 14,763,246.75
Total assets 179,896,400.05 22,624,012.79 2,021,283,255.59 83,164,767.22 44,377,281.02 36,546,339.76
Currentliability 101,946,761.66 467,877.65 1,968,696,873.26 36,418,439.29 10,560,118.93 5,616,492.78
Mom-currentliability 1,100,000.00
Totalliabilities 101,946,761.66 467,877.65 1,969,796,873.26 36,418,439.29 10,560,118.93 5,616,492.78
Minority’sinterest 94,732.30
Equity attributable to
shareholder of parent 77,949,638.39 22,156,135.14 51,486,382.33 46,651,595.63 33,817,162.09 30,929,846.98
company
Share ofnet assets measured
32,980,844.78 10,696,982.04 15,445,914.69 22,859,281.86 8,454,290.52 7,732,461.75
byshareholding
Adjustmenttime
--Goodwill 3,887,027.34
Unrealized profit of the
internal downstream 5,088,527.78 4,750,343.71 1,714,308.77 5,425.01 1,843.72
transactions
356
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Unrealized profit of the
internal upstream 38,317.94
transactions
Other
Book value of the equity
27,930,634.94 10,696,982.04 10,695,570.98 21,144,973.09 8,448,865.51 11,617,645.36
investmentforaffiliate
Fair value of equity
investment for the affiliates
with consideration publicly
Operation income 212,999,989.11 300,194.18 4,370,072,582.79 58,655,187.06 2,795,228.37 10,528,831.02
Financialexpenses 5,983,098.16 -10,564.98 -21,149,435.34 310,303.64 -617,995.91 -296,615.91
Income taxexpenses 2,420,332.80 9,953,258.77 24,574.36
Netprofit -5,238,761.17 -3,516,608.01 14,491,149.92 -6,449,734.18 2,720,616.95 -5,097,364.17
Net profit of discontinuing
operation
Other comprehensive
-9,395,466.24
income
Total comprehensive
-14,634,227.41 -3,516,608.01 14,491,149.92 -6,449,734.18 2,720,616.95 -5,097,364.17
income
Dividend received from
affiliatesin theYear
(Continued)
Opening balance /LastYear
HefeiXingmei Hongyuan Ground
Item ChanghongRubaEl Sichuan Zhiyijia SichuanTianyou
Assets Energy Heat
ectricCompany(Pri NetworkTechnology GuiguTechnology
Management Co., Technology Co.,
vate)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 equivalent 3,218,558.81 4,230,072.28 432,181,490.05 3,089,747.24 36,370,617.75
Non-currentassets 87,139,096.04 22,951,140.57 14,581,224.90 4,316,949.46 42,568,210.38
Total assets 140,955,900.41 27,257,252.85 1,096,748,112.80 114,535,701.91 89,381,726.38
Currentliability 51,373,683.63 1,584,509.70 1,058,052,880.39 61,339,639.80 54,110,854.39
Mom-currentliability 1,700,000.00 4,078,409.09
Totalliabilities 51,373,683.63 1,584,509.70 1,059,752,880.39 61,339,639.80 58,189,263.48
Minority’sinterest 113,729.76
Equity attributable to shareholder of
89,582,216.78 25,672,743.15 36,995,232.41 53,082,332.35 31,192,462.90
parent company
Share of net assets measured by
35,832,886.70 12,394,800.39 11,098,569.71 26,010,342.85 7,798,115.73
shareholding
Adjustmenttime
--Goodwill
Unrealized profit of the internal
6,783,242.24 1,718,196.04 3,239,277.40 15,398.22
downstreamtransactions
Unrealized profit of the internal
265,029.89
upstreamtransactions
Other
Book value of the equity investment 29,314,674.36 12,394,800.39 9,380,373.67 22,771,065.45 7,782,717.50
357
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
for affiliate
Fair value of equity investment for the
affiliateswith consideration publicly
Operation income 123,489,213.94 1,140,362.57 3,453,729,444.24 186,783,858.84 6,509,473.40
Financialexpenses 171,233.87 -4,426.04 -10,069,596.05 -48,439.86 -1,241,884.84
Income taxexpenses 1,001,622.63
Netprofit -7,067,882.80 -934,690.76 12,027,151.46 2,990,569.80 -10,086,049.29
Netprofitofdiscontinuingoperation
Othercomprehensiveincome 6,028,246.66
Total comprehensiveincome -1,039,636.14 -934,690.76 12,027,151.46 2,990,569.80 -10,086,049.29
Dividend received from affiliates in the
Year
(4) Financial summary for non-important Joint venture and affiliate enterprise
Ending balance / Current
Item Opening balance / Last Year
Year
Affiliate:
Total book value of investment
Total amount measured by shareholding
ratio
--net profit -6,505,292.40 -10,437,028.50
--Other comprehensiveincome
-- Total comprehensiveincome -6,505,292.40 -10,437,028.50
(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
VI. Relevant risks related with financial instrument
The major financial instruments of the Company include borrowings, account receivables, account payables,
transactional financial assets, transactional financial liabilities, the details of which are set out in Note 6.
Risks related to these financial instruments include exchange risks and interest rate risks. The management of
the Company controls and monitors the risk exposures to ensure the above risks are under control.
In connection with exchange risks, in order to prevent from exchange risks arising from foreign currency
transaction amount, foreign currency dominated loans and interest expenditure, the Company entered into
several forward exchange contracts with banks. Fair value of the forward exchange contract which has been
recognized as derivative financial instrument as of 31 December 2016 has been included in profits and losses.
As export business is increasing, if risks that are out of control of the Company occur such as appreciation of
RMB, the Company will mitigate the relevant risks by adjusting its sales policy.
358
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
The Company’s interest rate risk arises from bank borrowings and interest-bearing debt. Financial liabilities
at floating rate expose the Company to cash flow interest rate risk, and financial liabilities at fixed rate
expose the Company to fair value interest rate risk. The Company will determine the respective proportion of
contracts at fixed and floating rates based on the prevailing market conditions. As of 31 December 2017, the
interest-bearing debts mainly referred to borrowing contracts at floating rate denominated in RMB with total
amount of 1,675,980,000.00 Yuan, the floating rate loan contract measured by RMB amounted as
12,360,000.00 Yuan in total; borrowing contracts at fixed rate denominated in USD with total amount of
228,200,400.80 Yuan. Risks relating to change of fair value of financial instruments arising from movement
of interest rate mainly related to bank borrowings at fixed rate. As for borrowings at fixed rate, the Company
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.
VII. Fair value disclosure
1. Asset and liability measured by fair value at end of the year and fair value measurement level
F ai r v al u e at y e ar- e n d
Item st
1 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 15,646,731.48 15,646,731.48
Financial liabilities measured by fair value and with variation reckoned into current gains/losses
1. Transactional financial liabilities
(1) Derivative financial liabilities 16,034,000.00 16,034,000.00
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
VIII. Related parties and related transaction
(I) Relationship of related parties
1. Controlling shareholder and ultimate controller
(1) Controlling shareholder and ultimate controller
Registr Share-holdin Voting rights
Controlling shareholder and Business Registered
ation g ratio in the ratio in the
ultimate controller nature capital
place Company Company
Sichuan Changhong Electric Co., Mianya Manufactur
4,616,244,222 25.43% 25.43%
LTD ng e and sales
Sichuan Changhong Electronic Holding Group is the controlling shareholder of Sichuan Changhong Electric
Co., LTD, and the SASAC Mianyang office holds 100.00% equity interests of Sichuan Changhong
359
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Electronic Holding Group, which means that SASAC Mianyang office is the ultimate controller of the
Company.
(2) Register capital and change thereof of controlling shareholder
Increase Decrease
Controlling shareholder Opening balance during the during the Ending balance
year year
Sichuan Changhong Electric Co.,
4,616,244,222 4,616,244,222
LTD
(3)Shares held by the controlling shareholder and its changes on equity
Amount of shares held Shareholding ratio (%)
Controlling shareholder Ratio at
Ending balance Opening balance Ratio at year-end
year-begin
Sichuan Changhong Electric Co.,
265,601,410 259,871,791 25.43% 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 Solar 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 controlling
Sichuan Zhiyijia Network Technology Co., Ltd.
shareholder with the Company and actual controller
Hongyuan Ground Energy Heat Technology Co., Ltd. Affiliated enterprise of Subsidiary Changhong Air Conditioner
Sichuan Tianyou Guigu Technology Co., Ltd. Affiliated enterprise of Subsidiary Changhong Air Conditioner
Chengdu Tianyou Guigu Environmental Tech. Co.,
Affiliated enterprise of Subsidiary Changhong Air Conditioner
Ltd.
4. Other related parties
Other related parties Relationship
Control by same controlling shareholder and ultimate
Huayi Compressor Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Mold Plastic Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Jijia Fine Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Package Printing Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Precision Electronics Tech. Co., Ltd.
controller
Sichuan Jiahong Industrial Co., Ltd. Control by same controlling shareholder and ultimate
360
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Other related parties Relationship
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong New Energy Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Guangdong Changhong Electronics Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Electronic Products Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Xinrui Technology Co., Ltd
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Electric Source Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Solar Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Hongwei Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
CHANGHONG(HK)TRADINGLIMITED
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong International Hotel Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Communication Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Service Exp. Appliance Service Chain Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong International Travel Agency Co., Ltd.
controller
Control by same controlling shareholder and ultimate
PT.CHANGHONGELECTRICINDONESIA
controller
Control by same controlling shareholder and ultimate
Sichuan CCO Display Device Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Hongxing Software Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Devices Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
CHANGHONGELECTRICMIDDLEEASTFZE
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Gerun Renewable Resources Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Hefei Changhong Industrial Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Lejiayi Chain Management Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Minsheng Logistics Co., LTD
controller
Control by same controlling shareholder and ultimate
ChanghongEuropeElectrics.r.o
controller
Control by same controlling shareholder and ultimate
Chengdu Changhong Property Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Anhui Xinhao PDP Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Huafeng Enterprise Group Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Network Tech. Co., Ltd.
controller
361
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Other related parties Relationship
Control by same controlling shareholder and ultimate
Chengdu Changhong Electric Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Guangyuan Hongcheng Industrial Co., Ltd.
controller
Control by same controlling shareholder and ultimate
BVCH Optronics (Sichuan) Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Beijing Changhong Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Electronic System Co., Ltd.
controller
Control by same controlling shareholder and ultimate
081 Electronic Group
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Group Finance Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Yibin Red Star Electronics Co., Ltd.
controller
Sichuan Changhong Intelligent Manufacturing Technology Control by same controlling shareholder and ultimate
Co., Ltd. controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Logistic Service Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Hongcheng Construction Engineering Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Hefei Changhong New Energy Technology Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Property Co., Ltd.
controller
Sichuan Changhong Intelligent Health Technology Co., Control by same controlling shareholder and ultimate
Ltd. controller
Control by same controlling shareholder and ultimate
Sichuan Huanyu Industrial Co. Ltd.
controller
Mianyang Technology Town Big Data Technology Co., Control by same controlling shareholder and ultimate
Ltd. controller
Control by same controlling shareholder and ultimate
Sichuan Changhong Education Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
Shenzhen Enjoy service Tech. Co., Ltd.
controller
Control by same controlling shareholder and ultimate
CHANGHONGELECTRIC(AUSTRALIA)
controller
Control by same controlling shareholder and ultimate
Sichuan Changhong DDB Tech. Co., Ltd.
controller
Sichuan Hongyu Metal Manufacturing Co., Ltd. Affiliate enterprise of controlling shareholder
Sichuan Changxin Refrigeration Parts Co., Ltd. Affiliate enterprise of controlling shareholder
Mianyang Highly Electric Co., Ltd. Affiliate enterprise of controlling shareholder
Sichuan Changhe Technology Co., Ltd. Affiliate enterprise of controlling shareholder
Hengyouyuan Technology Development Group Co., Ltd. The investor has major influence on the subsidiary
Candy Hoover Group S.r.l. The investor has major influence on the subsidiary
(II) Related transactions
1. Purchasing commodity
362
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Current Year Last Year
Related parties Content (10 thousand (10 thousand
Yuan) Yuan)
Purchasing
Sichuan Changhong Electric Co., LTD 35,306.58 14,456.41
commodity
Purchasing
Sichuan Changhong Electronic Holding Group Co., Ltd. 0.49 0.37
commodity
Purchasing
Huayi Compressor Co., Ltd. 37,169.68 44,592.84
commodity
Purchasing
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 69,088.66 42,763.92
commodity
Purchasing
Sichuan Changhong Jijia Fine Co., Ltd. 36,871.44 21,372.67
commodity
Purchasing
Sichuan Changhong Package Printing Co., Ltd. 11,148.32 5,862.38
commodity
Purchasing
CHANGHONG(HK)TRADINGLIMITED 179.34
commodity
Purchasing
Sichuan Changhong Precision Electronics Tech. Co., Ltd. 5,904.39 770.77
commodity
Purchasing
Sichuan Changhong New Energy Tech. Co., Ltd. 3.09 6.69
commodity
Purchasing
081 Electronic Group 334.84 278.61
commodity
Purchasing
Guangdong Changhong Electronics Co., Ltd. 1,460.11 865.98
commodity
Sichuan Changhong Intelligent Manufacturing Technology Purchasing
253.85 468.62
Co., Ltd. commodity
Purchasing
Sichuan Changhong Devices Technology Co., Ltd. 4,112.64 4,169.58
commodity
Purchasing
Sichuan Changhong Xinrui Technology Co., Ltd 4,902.37 5,019.64
commodity
Purchasing
Sichuan Hongwei Technology Co., Ltd. 342.66
commodity
Purchasing
Sichuan Changhong Solar Tech. Co., Ltd. 0.57
commodity
Purchasing
Sichuan Jiahong Industrial Co., Ltd. 13.77
commodity
Purchasing
Sichuan Zhiyijia Network Technology Co., Ltd. 0.92 2.56
commodity
Purchasing
Sichuan Changhong Electric Source Co., Ltd. 3.68
commodity
Purchasing
Sichuan Huafeng Enterprise Group Co., Ltd. 1.40 23.04
commodity
Purchasing
Sichuan Service Exp. Appliance Service Chain Co., Ltd. 1.67
commodity
Purchasing
Sichuan Hongxing Software Co., Ltd. 5.09
commodity
Purchasing
Sichuan Changhong Logistic Service Co., Ltd. 0.04 0.04
commodity
Purchasing
Sichuan Ailian Tech. Co., Ltd. 677.33
commodity
Purchasing
Sichuan Changhong Education Tech. Co., Ltd. 5.03
commodity
Purchasing
Sichuan Hongyu Metal Manufacturing Co., Ltd. 120.38 55.98
commodity
363
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Current Year Last Year
Related parties Content (10 thousand (10 thousand
Yuan) Yuan)
Purchasing
Sichuan Changhe Technology Co., Ltd. 813.46 687.31
commodity
Purchasing
Sichuan Changxin Refrigeration Parts Co., Ltd. 35,945.19 20,715.41
commodity
Purchasing
Mianyang Highly Electric Co., Ltd. 33,122.52 18,280.41
commodity
Purchasing
Hongyuan Ground Energy Heat Technology Co., Ltd. 13,655.96
commodity
Purchasing
Chonghong Ruba Electric Company (Private) Ltd. 18,285.58
commodity
Purchasing
Sichuan Tianyou Guigu Technology Co., Ltd. 189.61
commodity
Purchasing
Chengdu Guigu Environmental Tech. Co., Ltd. 5.81
commodity
Total 295,534.12 194,785.58
2. Labor service receive
Related parties Content Current Year Last Year
Labor service
Sichuan Changhong Electronic Holding Group Co., Ltd. 197,190.60 113,420.18
received
Labor service
Sichuan Changhong Electric Co., LTD 19,837,460.29 20,635,470.36
received
Labor service
Sichuan Changhong Minsheng Logistics Co., LTD 557,786,009.24 438,755,474.68
received
Labor service
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 55,643.55
received
Labor service
Sichuan Service Exp. Appliance Service Chain Co., Ltd. 135,965,733.59 119,890,832.60
received
Labor service
Sichuan Hongxing Software Co., Ltd. 1,335,284.55 303,773.60
received
Labor service
Guangdong Changhong Electronics Co., Ltd. 854,778.18 774,830.62
received
Labor service
Sichuan Jiahong Industrial Co., Ltd. 517,553.29 188,221.66
received
Labor service
Sichuan Changhong International Hotel Co., Ltd. 349,358.51 181,222.85
received
Labor service
CHANGHONG(HK)TRADINGLIMITED 237,531.09 97,468.90
received
Labor service
Sichuan Changhong International Travel Agency Co., Ltd. 226,030.00 119,887.70
received
Labor service
Sichuan Changhong Logistic Service Co., Ltd. 944,958.16 6,733.33
received
Labor service
Sichuan Changhong Precision Electronics Tech. Co., Ltd. 28,408.32
received
Labor service
Sichuan Hongwei Technology Co., Ltd. 497,192.43 235,849.05
received
Labor service
Sichuan Zhiyijia Network Technology Co., Ltd. 3,973,704.63 2,529.91
received
Labor service
Lejiayi Chain Management Co., Ltd. 22,641.51
received
364
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Labor service
Sichuan Changhong Network Tech. Co., Ltd. 50,798.90
received
Sichuan Changhong Intelligent Manufacturing Technology Labor service
196,581.20
Co., Ltd. received
Labor service
Sichuan Changhong Jijia Fine Co., Ltd. 1,794.87
received
Labor service
Sichuan Changhong Gerun Renewable Resources Co., Ltd. 73,226.50
received
Labor service
Shenzhen Enjoy service Tech. Co., Ltd. 210,207.55
received
Total 723,278,035.09 581,389,767.31
3. Purchase of fuels and energy
Related parties Content Current Year Last Year
Purchasing fuels
Sichuan Changhong Electric Co., LTD 19,879,944.22 16,589,751.56
and energy
Purchasing fuels and
Huayi Compressor Co., Ltd. 590,999.14 480,530.98
energy
Purchasing fuels and
Guangdong Changhong Electronics Co., Ltd. 1,305,660.00 1,531,985.67
energy
Purchasing fuels and
Sichuan Jiahong Industrial Co., Ltd. 4,781.60 11,450.26
energy
Purchasing fuels and
Hefei Changhong New Energy Technology Co., Ltd. 395,539.19 242,591.95
energy
Purchasing fuels and
Sichuan Changhong Electronic Holding Group Co., Ltd. 10,243.00
energy
Purchasing fuels and
Sichuan Changhong Logistic Service Co., Ltd. 37,569.05 45,132.76
energy
Total 22,214,493.20 18,911,686.18
4. Sales of goods / labor service providing
Current Year Last Year
Related parties Content
(10 thousand Yuan) (10 thousand Yuan)
Sichuan Changhong Electric Co., LTD Sales of goods 127,288.97 108,928.79
Sichuan Changhong Electronic Holding Group Co., Ltd. Sales of goods 102.53 338.20
Sichuan Changhong Jijia Fine Co., Ltd. Sales of goods 6,714.31 4,693.13
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Sales of goods 11,200.34 13,701.81
Lejiayi Chain Management Co., Ltd. Sales of goods 744.44 365.25
PT.CHANGHONGELECTRICINDONESIA Sales of goods 2.62 2.60
CHANGHONG(HK)TRADINGLIMITED Sales of goods 36,525.50 45,103.46
CHANGHONGELECTRIC(AUSTRALIA) Sales of goods 1,946.83 13.92
Sichuan Hongwei Technology Co., Ltd. Sales of goods 13.50 9.76
Sichuan Changhong Devices Technology Co., Ltd. Sales of goods 28.13 8.74
Sichuan Changhong Minsheng Logistics Co., LTD Sales of goods 285.09 87.20
Sichuan Service Exp. Appliance Service Chain Co., Ltd. Sales of goods 1,780.47 724.69
Sichuan Changhong Gerun Renewable Resources Co., Ltd. Sales of goods 1,579.82 949.01
365
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Current Year Last Year
Related parties Content
(10 thousand Yuan) (10 thousand Yuan)
Hefei Changhong Industrial Co., Ltd. Sales of goods 70.56 255.71
Sichuan Huafeng Enterprise Group Co., Ltd. Sales of goods 18.34 17.25
Sichuan Zhiyijia Network Technology Co., Ltd. Sales of goods 225,620.35 143,292.46
Sichuan Changhong Property Co., Ltd. Sales of goods 322.07 3.95
Anhui Xinhao PDP Co., Ltd. Sales of goods 5.13
Sichuan Changhong Network Tech. Co., Ltd. Sales of goods 20.30 1.57
Chengdu Changhong Electric Tech. Co., Ltd. Sales of goods 1.55
Sichuan Changhong Intelligent Health Technology Co., Ltd. Sales of goods 0.75 0.31
Sichuan Changhong Logistic Service Co., Ltd. Sales of goods 5.17 4.89
Guangdong Changhong Electronics Co., Ltd. Sales of goods 0.14
Sichuan Huanyu Industrial Co. Ltd. Sales of goods 12.10 1.42
Sichuan Changhong Xinrui Technology Co., Ltd Sales of goods 2.97 75.91
Sichuan Changhong Intelligent Manufacturing Technology
Sales of goods 2.76 4.32
Co., Ltd.
Mianyang Technology Town Big Data Technology Co., Ltd. Sales of goods 0.37 0.06
BVCH Optronics (Sichuan) Co., Ltd. Sales of goods 3.13 1.91
Sichuan Changhong Group Finance Co., Ltd. Sales of goods 4.05 0.25
Huayi Compressor Co., Ltd. Sales of goods 16.92
Sichuan Changhong Package Printing Co., Ltd. Sales of goods 5.80 33.31
Sichuan Changhong Electric Source Co., Ltd. Sales of goods 36.02 5.34
Sichuan Changhong Education Tech. Co., Ltd. Sales of goods 330.36 0.31
081 Electronic Group Sales of goods 12.78
Guangyuan Changhong Electronic Tech. Co., Ltd. Sales of goods 122.00
Sichuan Ailian Tech. Co., Ltd. Sales of goods 33.97
Sichuan Changhong Innovation Investment Co., Ltd Sales of goods 0.06
Guangyuan Hongcheng Industrial Co., Ltd. Sales of goods 0.10
Sichuan Changhong Solar Tech. Co., Ltd. Sales of goods 1.45
Sichuan Changhong Electric Technology Co., Ltd. Sales of goods 1.18
Sichuan Hongxing Software Co., Ltd. Sales of goods 2.35
Sichuan Hongcheng Real Estate Co., Ltd. Sales of goods 13.34
Sichuan Jiahong Industrial Co., Ltd. Sales of goods 11.50
Sichuan Changhong New Energy Tech. Co., Ltd. Sales of goods 147.86
Sichuan Changhong International Hotel Co., Ltd. Sales of goods 24.24
Sichuan Changhong Electronic System Co., Ltd. Sales of goods 3.23
Sichuan Changhong Precision Electronics Tech. Co., Ltd. Sales of goods 12.09
Orion.PDP.Co.,ltd Sales of goods 1,785.99
Changhong International Holding (H.K.) Co., Ltd. Sales of goods 0.24
Sichuan Changxin Refrigeration Parts Co., Ltd. Sales of goods 10,302.52 7,035.25
Hongyuan Ground Energy Heat Technology Co., Ltd. Sales of goods 2,859.77 21,275.51
366
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Current Year Last Year
Related parties Content
(10 thousand Yuan) (10 thousand Yuan)
Sichuan Tianyou Guigu Technology Co., Ltd. Sales of goods 36.18 229.86
Chengdu Guigu Environmental Tech. Co., Ltd. Sales of goods 344.04
ChanghongRubaElectricCompany(Private)Ltd. Sales of goods 2,426.80 3,846.63
Total 432,809.34 351,036.52
Businesses between the Company and its connected persons are generally conducted under market operation
rules as if they were the same as other business counterparties. For price of sale or purchase and provision of
other labor service between the Company and its related parties, the state pricing is applicable if the pricing
do exists; in case of absence of such state pricing, price is determined under market price; in case of absence
of such market price, price is determined by both parties at actual cost plus reasonable expenses; for some
special services, the price of which cannot be determined under the rule of cost plus expense, the price shall
be determined by both parties by negotiation.
5. Fuel and energy providing
Related parties Content Current Year Last Year
Guangdong Changhong Electronics Co., Ltd. Fuel and energy
1,026,102.62 956,099.28
providing
Sichuan Changhong Minsheng Logistics Co., LTD Fuel and energy
103,684.29 68,684.40
providing
Sichuan Changhong Jijia Fine Co., Ltd. Fuel and energy
112,448.30 96,364.38
providing
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Fuel and energy
6,941,010.76 4,856,207.90
providing
Sichuan Hongwei Technology Co., Ltd. Fuel and energy
8,533.42 7,893.94
providing
Sichuan Changhong Devices Technology Co., Ltd. Fuel and energy
832,738.52 463,262.93
providing
Total 9,024,517.91 6,448,512.83
6. Related rental
(1) Rent out
Type of Leasing income Leasing income
Lessor Lessee
assets in this year in last year
Hefei Meiling Forklift
Sichuan Changhong Jijia Fine Co., Ltd. 4,837.26 2,792.14
Co.,Ltd. truck
Hefei Meiling
Sichuan Changhong Jijia Fine Co., Ltd. Warehouse 40,618.87 14,060.38
Co.,Ltd.
Hefei Meiling
Sichuan Changhong Jijia Fine Co., Ltd. Apartment 81,670.08 75,635.43
Co.,Ltd.
Hefei Meiling
Sichuan Changhong Jijia Fine Co., Ltd. Plant 507,360.00 486,720.81
Co.,Ltd.
Hefei Meiling
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Warehouse 260,422.64 34,301.89
Co.,Ltd.
Hefei Meiling
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Plant 1,404,540.00 661,680.00
Co.,Ltd.
Hefei Meiling Sichuan Changhong Mold Plastic Tech. Co., Ltd. Apartment 375,219.05 -
367
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Type of Leasing income Leasing income
Lessor Lessee
assets in this year in last year
Co.,Ltd.
Hefei Meiling
Sichuan Changhong Minsheng Logistics Co., LTD Office 21,216.00 10,608.00
Co.,Ltd.
Hefei Meiling
Sichuan Changhong Minsheng Logistics Co., LTD Apartment 211,489.53
Co.,Ltd.
Hefei Meiling Sichuan Service Exp. Appliance Service Chain Co.,
Apartment 200,087.60 194,413.33
Co.,Ltd. Ltd.
Hefei Meiling Sichuan Service Exp. Appliance Service Chain Co.,
Office 42,378.38 24,547.72
Co.,Ltd. Ltd.
Hefei Meiling Forklift
Sichuan Changhong Xinrui Technology Co., Ltd 2,016.51 1,485.85
Co.,Ltd. truck
Hefei Meiling
Sichuan Changhong Xinrui Technology Co., Ltd Warehouse 14,867.93 12,226.42
Co.,Ltd.
Hefei Meiling
Sichuan Changhe Technology Co., Ltd. Warehouse 14,862.27 1,833.96
Co.,Ltd.
Hefei Meiling
Hefei Changhong Industrial Co., Ltd. Apartment 321,493.34 448,681.52
Co.,Ltd.
Hefei Meiling
Sichuan Changhong Electric Co., LTD Apartment 69,668.58 68,624.76
Co.,Ltd.
Hefei Meiling Sichuan Changhong Precision Electronics Tech. Co., Forklift
1,515.57
Co.,Ltd. Ltd. truck
Hefei Meiling Sichuan Changhong Precision Electronics Tech. Co.,
Warehouse 47,207.55
Co.,Ltd. Ltd.
Hefei Meiling Sichuan Changhong Precision Electronics Tech. Co.,
Apartment 58,975.23 63,959.42
Co.,Ltd. Ltd.
Hefei Meiling
Sichuan Ailian Tech. Co., Ltd. Warehouse 84.91
Co.,Ltd.
Changhong
Freight
Air BVCH Optronics (Sichuan) Co., Ltd. 52,480.00 63,720.00
elevator
Conditioner
Changhong
Machinery
Air Sichuan Changhong Mold Plastic Tech. Co., Ltd. 25,433.40
equipment
Conditioner
Changhong
Air Sichuan Changhong Jijia Fine Co., Ltd. Driving 7,000.00
Conditioner
Changhong Little U
Air Sichuan Changxin Refrigeration Parts Co., Ltd. processing 300,000.00
Conditioner equipment
Zhongshan Office
Guangdong Changhong Electronics Co., Ltd. 1,968,611.69 1,474,415.84
Changhong building
Part of the
Zhongshan office
Sichuan Changhong Minsheng Logistics Co., LTD 75,356.98 57,509.74
Changhong building
rent out
Zhongshan
Sichuan Changhong Minsheng Logistics Co., LTD Warehouse 100,000.00
Changhong
Zhongshan 2# living
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 154,992.85 89,802.16
Changhong area
Zhongshan 2# living
Shenzhen Enjoy service Tech. Co., Ltd. 25,428.15 18,141.15
Changhong area
Zhongshan 2# living
Sichuan Changhong Devices Technology Co., Ltd. 14,401.17
Changhong area
368
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Type of Leasing income Leasing income
Lessor Lessee
assets in this year in last year
Zhongshan Sichuan Changhong Precision Electronics Tech. Co., 2# living
7,652.88
Changhong Ltd. area
Zhongshan 2# living
Sichuan Changhong Jijia Fine Co., Ltd. 3,889.43
Changhong area
Zhongshan 2# living
Sichuan Hongwei Technology Co., Ltd. 5,047.62
Changhong area
Jiangxi
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Plant 444,472.38 474,614.85
Meiling
Mianyang
Warehouse
Refrigeratio Sichuan Changhong Mold Plastic Tech. Co., Ltd. 62,342.34 60,396.23
fee
n
Mianyang
Warehouse
Refrigeratio Sichuan Changhong Package Printing Co., Ltd. 4,150.94
fee
n
Mianyang
Warehouse
Refrigeratio Sichuan Changhe Technology Co., Ltd. 243.24 207.55
fee
n
Mianyang
Warehouse
Refrigeratio Sichuan Changxin Refrigeration Parts Co., Ltd. 207.55
fee
n
Changhong
Sichuan Changhong Minsheng Logistics Co., LTD Plant 777,386.70 1,014,296.40
Ridian
Changhong
Sichuan Changhong Devices Technology Co., Ltd. Plant 943,041.61 823,744.00
Ridian
Changhong
Sichuan Hongwei Technology Co., Ltd. Plant 35,218.29
Ridian
Changhong
Changhong International Holding (H.K.) Co., Ltd. Office 105,853.52
Ridian
Total 8,680,446.50 6,291,715.09
(2) Lessee of related parties
Leasing
Leasing expense
Lessor Lessee Type of assets expense last
in this year
year
Sichuan Changhong Electronic Holding Sichuan Air House and
124,807.63 84,263.16
Group Co., Ltd. Conditioner buildings
Sichuan Changhong Logistic Service Co., Sichuan Air House and
1,968,811.61
Ltd. Conditioner buildings
Sichuan Air House and
Sichuan Changhong Electric Co., LTD 8,814,057.30 8,374,314.61
Conditioner buildings
House and
Sichuan Changhong Electric Co., LTD Meiling Software 151,172.10
buildings
Chengdu Changhong Electric Tech. Co., House and
Meiling Software 192,550.12
Ltd. buildings
Guangdong Changhong Electronics Co., Ground Energy
Staff dormitory 4,763.20
Ltd. Heat Pump
Mianyang
Sichuan Changhong Electric Co., LTD Workshop lease 3,522,008.93
Refrigeration
Sichuan Changhong Electronic Holding Mianyang
Staff dormitory 40,476.00 5,520.00
Group Co., Ltd. Refrigeration
Rental for
Sichuan Changhong Logistic Service Co., Mianyang
flowers and 2,561.11
Ltd. Refrigeration
plants
369
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Leasing
Leasing expense
Lessor Lessee Type of assets expense last
in this year
year
Appliances
Sichuan Changhong Electric Co., LTD Office 207,723.40 493,088.97
Marketing
Beijing Changhong Technology Co., Ltd. Beijing Meiling Office 89,128.50
Sichuan Changhong Logistic Service Co.,
Changmei Tech. Office 13,207.55
Ltd.
Chengdu Changhong Electric Tech. Co.,
Changmei Tech. Office 160,097.46
Ltd.
Guangdong Changhong Electronics Co., Changhong
Staff dormitory 426,053.39 525,298.65
Ltd. Ridian
Changhong
Sichuan Changhong Electric Co., LTD Staff dormitory 210,390.57 210,433.96
Ridian
House and
Beijing Changhong Technology Co., Ltd. Meiling Group 364,688.55
buildings
House and
Sichuan Changhong Electric Co., LTD Meiling Group 841,571.05
buildings
Total 17,044,939.97 9,782,047.85
7. Related guarantee
Maximum guarantee
Completed
Secured party Sponsored party amount (in 10 Start End
(Y/N)
thousand Yuan)
Hefei Meiling Changhong Ridian 4,500.00 2016.05.05 2017.05.05 Y
Hefei Meiling Changhong Ridian 2,000.00 2016.09.01 2017.09.01 Y
Hefei Meiling Changhong Ridian 2,000.00 2017.06.13 2017.09.01 Y
Hefei Meiling Changhong Ridian 4,500.00 2017.08.13 2018.08.13 N
Hefei Meiling Changhong Ridian 4,000.00 2017.09.01 2018.08.31 N
Hefei Meiling Changhong Ridian 2,000.00 2017.11.05 2018.11.05 N
Hefei Meiling Zhongke Meiling 2,000.00 2017.02.16 2018.01.05 N
Hefei Meiling Zhongke Meiling 1,000.00 2017.06.23 2018.06.22 N
Zhongshan
Hefei Meiling Changhong Home 5,000.00 2016.08.05 2017.08.04 Y
Appliances
Zhongshan
Hefei Meiling Changhong Home 5,000.00 2016.10.28 2017.10.27 N
Appliances
Zhongshan
Hefei Meiling Changhong Home 6,000.00 2017.01.03 2018.01.03 N
Appliances
Zhongshan
Hefei Meiling Changhong Home 5,500.00 2017.01.22 2018.01.22 N
Appliances
Zhongshan
Hefei Meiling Changhong Home 20,000.00 2017.03.01 2018.03.31 N
Appliances
Zhongshan
Hefei Meiling Changhong Home 10,000.00 2017.03.29 2018.03.29 N
Appliances
Zhongshan
Hefei Meiling Changhong Home 5,000.00 2017.07.24 2018.07.24 N
Appliances
370
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Maximum guarantee
Completed
Secured party Sponsored party amount (in 10 Start End
(Y/N)
thousand Yuan)
Zhongshan
Hefei Meiling Changhong Home 10,000.00 2017.11.06 2018.11.06 N
Appliances
Counter
guarantee:
Changhong Ridian Hefei Meiling 4,500.00 2016.05.05 2017.05.05 Y
Changhong Ridian Hefei Meiling 2,000.00 2016.09.01 2017.09.01 Y
Changhong Ridian Hefei Meiling 2,000.00 2017.06.13 2017.09.01 Y
Changhong Ridian Hefei Meiling 4,500.00 2017.08.13 2018.08.13 N
Changhong Ridian Hefei Meiling 4,000.00 2017.09.01 2018.08.31 N
Changhong Ridian Hefei Meiling 2,000.00 2017.11.05 2018.11.05 N
Zhongke Meiling Hefei Meiling 2,000.00 2017.02.16 2018.01.05 N
Zhongke Meiling Hefei Meiling 1,000.00 2017.06.23 2018.06.22 N
Zhongshan
Changhong Home Hefei Meiling 5,000.00 2016.08.05 2017.08.04 Y
Appliances
Zhongshan
Changhong Home Hefei Meiling 5,000.00 2016.10.28 2017.10.27 N
Appliances
Zhongshan
Changhong Home Hefei Meiling 6,000.00 2017.01.03 2018.01.03 N
Appliances
Zhongshan
Changhong Home Hefei Meiling 5,500.00 2017.01.22 2018.01.22 N
Appliances
Zhongshan
Changhong Home Hefei Meiling 20,000.00 2017.03.01 2018.03.31 N
Appliances
Zhongshan
Changhong Home Hefei Meiling 10,000.00 2017.03.29 2018.03.29 N
Appliances
Zhongshan
Changhong Home Hefei Meiling 5,000.00 2017.07.24 2018.07.24 N
Appliances
Zhongshan
Changhong Home Hefei Meiling 10,000.00 2017.11.06 2018.11.06 N
Appliances
8. Assets transfer, debt restructuring of related parties
Related parties Type Current Year Last Year
Sichuan Changhong Intelligent Manufacturing
Purchasing fixed assets 26,591,007.01 2,053,812.82
Technology Co., Ltd.
Sichuan Hongcheng Construction Engineering Co., Fixed assets acquisition
4,261,765.77 5,909,615.13
Ltd. & construction
Fixed assets acquisition
Sichuan Hongcheng Real Estate Co., Ltd. 509,433.94
& construction
Sichuan Changhong Electric Co., LTD Purchasing fixed assets 154,743.58 221,411.27
Sichuan Hongxing Software Co., Ltd. Purchasing fixed assets 6,259,421.70 252,830.20
371
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Related parties Type Current Year Last Year
Purchasing intangible
Sichuan Hongxing Software Co., Ltd. 150,943.40 149,292.45
assets
Sichuan Changhong Jijia Fine Co., Ltd. Purchasing fixed assets 119,658.12 17,948.72
Sichuan Changhong Network Tech. Co., Ltd. Purchasing fixed assets 221,657.02
Sichuan Changhong Electronic System Co., Ltd. Purchasing fixed assets 97,883.40
Sichuan Hongwei Technology Co., Ltd. Purchasing fixed assets 1,374,917.70
Sichuan Changhong Gerun Renewable Resources
Fixed assets on sale 44,752.67 31,091.89
Co., Ltd.
Sichuan Tianyou Guigu Technology Co., Ltd. Fixed assets on sale 854.70
Total 38,411,266.61 10,011,774.88
9. Related transaction with Changhong Finance Company
(1) Saving balance
Interest income from
Company Ending balance Opening balance
bank saving
Hefei Meiling Co., Ltd. 1,767,413,631.40 1,269,669,769.16 38,422,460.33
Sichuan Changhong Air Conditioner Co.,
931,489,096.17 403,311,310.63 20,988,127.87
Ltd
Zhongshan Changhong Home Appliances
13,293,776.63 67,318,559.05 2,373,369.47
Company Limited
Hefei Meiling Group Holding Co., Ltd. 555,029.59 1,185,381.05 1,075,573.27
Mianyang Meiling Refrigeration Co., Ltd. 58,727.73 60,008.27 59,156.66
Zhongke Meiling Cryogenic Technology
40,708,625.61 25,450,411.46 890,052.73
Co., Ltd
Jiangxi Meiling Electric Appliance Co.,
7,488,946.73 10,215,867.99
Ltd.
Guangdong Changhong Ridian Technology
1,404,653.78 125,819,243.83 953,990.40
Co., Ltd.
Hongyuan Ground Energy Heat Pump
101,216.24 16,027,479.75
Technology Co., Ltd 808,094.08
Total 2,762,513,703.88 1,908,842,163.20 75,786,692.80
(2) Notes discounted
Bank acceptance book Bank acceptance Expenses of
Company
discounted amount discounted amount discounted
Hefei Meiling Co., Ltd. 647,526,993.82 639,254,228.79 8,272,765.03
Sichuan Changhong Air Conditioner Co.,
1,169,547,620.06 1,162,237,243.32 7,310,376.74
Ltd
Mianyang Meiling Refrigeration Co., Ltd. 4,000,000.00 3,971,666.67 28,333.33
Jiangxi Meiling Electric Appliance Co.,
205,000,000.00 202,376,861.14 2,623,138.86
Ltd.
Hongyuan Ground Energy Heat Pump
11,152,025.21 11,067,590.70
Technology Co., Ltd 84,434.51
Total 2,037,226,639.09 2,018,907,590.62 18,319,048.47
The undue note discounted by the Company in Financial Company counted as 699,356,853.98 Yuan,
372
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
the discount charge 3,678,296.52 Yuan are not being accrual
(3) Notes issued
Company Issuing unit Note amount Type
Sichuan Changhong Group
Hefei Meiling Co., Ltd. 318,504,101.89 Bank acceptance
Finance Co., Ltd.
Sichuan Changhong Air Conditioner Sichuan Changhong Group
975,546,937.30 Bank acceptance
Co., Ltd Finance Co., Ltd.
Zhongshan Changhong Home Sichuan Changhong Group
354,705,360.87 Bank acceptance
Appliances Company Limited Finance Co., Ltd.
Mianyang Meiling Refrigeration Co., Sichuan Changhong Group
5,285,811.20 Bank acceptance
Ltd. Finance Co., Ltd.
Guangdong Changhong Ridian Sichuan Changhong Group
27,085,632.33 Bank acceptance
Technology Co., Ltd. Finance Co., Ltd.
Zhongke Meiling Cryogenic Sichuan Changhong Group
29,044,228.00
Technology Co., Ltd Finance Co., Ltd. Bank acceptance
Jiangxi Meiling Electric Appliance Co., Sichuan Changhong Group
200,000,000.00
Ltd. Finance Co., Ltd. Bank acceptance
Hongyuan Ground Energy Heat Pump
Technology Co., Ltd Sichuan Changhong Group
52,357,490.50
Finance Co., Ltd.
Bank acceptance
Total 1,962,529,562.09
(4) Borrowing: Nil
(5) Accounts receivable factoring: Nil
10. Key management’s remuneration
Current Year (10 thousand Last Year (10 thousand
Item
Yuan) Yuan)
Total remuneration 1,352.60 337.44
Including: performance incentive fund 944.00
(III) Come and go balance with related parties
1. Receivable items
Ending balance Opening balance
Bad Bad
Item Related parties debt debt
Book balance Book balance
provis prov
ion ision
Account
Sichuan Changhong Electric Co., LTD 1,814,632.38 521,671.35
receivable
Account Sichuan Changhong Electronic Holding Group Co.,
5,700.00 376,186.92
receivable Ltd.
Account
Orion.PDP.Co.,ltd 10,083,028.46
receivable
Account
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 168,406.71 965,201.45
receivable
Account
CHANGHONGELECTRIC(AUSTRALIA) 8,966,037.32 144,829.93
receivable
373
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Ending balance Opening balance
Bad Bad
Item Related parties debt debt
Book balance Book balance
provis prov
ion ision
Account
Sichuan Changhong Logistic Service Co., Ltd. 12,516.00
receivable
Account
Huayi Compressor Co., Ltd. 19,800.00 334,800.00
receivable
Account
Sichuan Changhong Jijia Fine Co., Ltd. 1,989,845.25
receivable
Account
Sichuan Hongcheng Real Estate Co., Ltd. 147,354.00
receivable
Account Sichuan Service Exp. Appliance Service Chain Co.,
51,528.01
receivable Ltd.
Account Sichuan Changhong Precision Electronics Tech.
14,951.00
receivable Co., Ltd.
Account
PT.CHANGHONGELECTRICINDONESIA 25,614.05 26,971.06
receivable
Account
CHANGHONG(HK)TRADINGLIMITED 92,041,204.28 60,541,639.57
receivable
Account
Sichuan Changhong Package Printing Co., Ltd. 4,400.00
receivable
Account
Sichuan Changhong International Hotel Co., Ltd. 1,334,736.90
receivable
Account
Chengdu Changhong Electric Tech. Co., Ltd. 434,509.01 434,509.01
receivable
Account Sichuan Changhong Gerun Renewable Resources
0.60
receivable Co., Ltd.
Account
Lejiayi Chain Management Co., Ltd. 867,119.47
receivable
Account
Sichuan Zhiyijia Network Technology Co., Ltd. 292,557,278.83 174,033,095.60
receivable
Account
Sichuan Hongwei Technology Co., Ltd. 7,600.00
receivable
Account
Shenzhen Enjoy service Tech. Co., Ltd. 1,777.90
receivable
Account
Anhui Xinhao PDP Co., Ltd. 63,000.00 63,000.00
receivable
Account
Sichuan Changhong Electric Source Co., Ltd. 30,389.18
receivable
Account
Yibin Red Star Electronics Co., Ltd. 147,174.10
receivable
Account
Sichuan Changhong Property Co., Ltd. 48,664.00
receivable
Account
Sichuan Changhong New Energy Tech. Co., Ltd. 173,213.95
receivable
Account
Changhong International Holding (H.K.) Co., Ltd. 111,146.18
receivable
Account
Sichuan Jiahong Industrial Co., Ltd. 3,700.00
receivable
Account
Sichuan Changhong Group Finance Co., Ltd. 9,270.00
receivable
Account Hongyuan Ground Energy Heat Technology Co.,
2,179,945.63 36,070,419.59
receivable Ltd.
374
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Ending balance Opening balance
Bad Bad
Item Related parties debt debt
Book balance Book balance
provis prov
ion ision
Account
ChanghongRubaElectricCompany(Private)Ltd. 34,423,460.27 16,296,282.53
receivable
Account paid Sichuan Changhong Electronic Holding Group Co.,
94,861.98
in advance Ltd.
Account paid
Sichuan Changhong Electric Co., LTD 1,054,531.13
in advance
Account paid Sichuan Service Exp. Appliance Service Chain Co.,
101,945.29
in advance Ltd.
Account paid
Sichuan Hongwei Technology Co., Ltd. 363,948.00 263,948.00
in advance
Account paid
Sichuan Hongxing Software Co., Ltd. 45,000.00
in advance
Account paid
Guangdong Changhong Electronics Co., Ltd. 10,579.20
in advance
Account paid
Sichuan Zhiyijia Network Technology Co., Ltd. 12,721.94 14,074.00
in advance
Account paid Sichuan Changhong Intelligent Manufacturing
527,923.64 254,682.00
in advance Technology Co., Ltd.
Other
account Sichuan Changhong Electric Co., LTD 39,617.46
receivable
Other
Sichuan Service Exp. Appliance Service Chain Co.,
account 500,000.00 200,000.00
Ltd.
receivable
Other
account Sichuan Changhong Property Co., Ltd. 150,000.00
receivable
Other
account Sichuan Changhong Logistic Service Co., Ltd. 7,720.80
receivable
Other
Hongyuan Ground Energy Heat Technology Co.,
account 130,396.62
Ltd.
receivable
Other
account Sichuan Tianyou Guigu Technology Co., Ltd. 12,500,000.00
receivable
Total 448,046,276.73 305,772,283.82
2. Payable items
Item Related parties Ending balance Opening balance
Account
received in Sichuan Changhong Electric Co., LTD 234.16 36,470,918.03
advance
Account
received in Sichuan Changhong Electronic Holding Group Co., Ltd. 5,080.00
advance
Account
received in Lejiayi Chain Management Co., Ltd. 82,193.00 559,819.59
advance
Account Sichuan Changhong Precision Electronics Tech. Co., Ltd. 0.01 0.01
375
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Item Related parties Ending balance Opening balance
received in
advance
Account
received in Sichuan Changhong Mold Plastic Tech. Co., Ltd. 126,849.97
advance
Account
received in CHANGHONGELECTRICMIDDLEEASTFZE 1,636.49 37,303.37
advance
Account
received in 081 Electronic Group 3,050,425.55 2,906,393.55
advance
Account
Sichuan Changhong Gerun Renewable Resources Co.,
received in 1,128,252.00 273,106.03
Ltd.
advance
Account
received in Sichuan Service Exp. Appliance Service Chain Co., Ltd. 36,614.59 52,999.49
advance
Account
received in Guangyuan Changhong Electronic Tech. Co., Ltd. 37,061.00
advance
Account
received in Sichuan Changhong Electric Source Co., Ltd. 164,400.00
advance
Account
received in Yibin Red Star Electronics Co., Ltd. 582,000.00
advance
Account
received in Hefei Changhong Industrial Co., Ltd. 2,297.00
advance
Account
received in Sichuan Zhiyijia Network Technology Co., Ltd. 571,946.94
advance
Account
received in Sichuan Changhong Education Tech. Co., Ltd. 211,325.00
advance
Account
received in Sichuan Changhong DDB Tech. Co., Ltd. 259.00
advance
Account
received in Changhong Europe Electric s.r.o 4,367.63
advance
Account
received in Hefei Meiling Solar Energy Technology Co., Ltd. 315,389.49
advance
Account
received in Chengdu Guigu Environmental Tech. Co., Ltd. 87,460.00
advance
Account
received in Hongyuan Ground Energy Heat Technology Co., Ltd. 1,960,358.42
advance
Account
received in Sichuan Tianyou Guigu Technology Co., Ltd. 0.06 269,700.06
advance
Account
Sichuan Changhong Electric Co., LTD 57,983,674.93 18,441,774.94
receivable
Account
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 177,772,335.72 111,859,645.07
receivable
376
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Item Related parties Ending balance Opening balance
Account
Huayi Compressor Co., Ltd. 104,051,402.67 54,756,261.49
receivable
Account
Sichuan Changhong Jijia Fine Co., Ltd. 105,724,786.63 49,428,116.49
receivable
Account
Sichuan Changhong Minsheng Logistics Co., LTD 32,100,658.75 40,128,307.43
receivable
Account
Sichuan Changhong Package Printing Co., Ltd. 34,588,936.01 11,582,508.82
receivable
Account
Sichuan Changhong Devices Technology Co., Ltd. 9,360,926.77 8,244,251.90
receivable
Account
Sichuan Changhong Precision Electronics Tech. Co., Ltd. 37,900,637.60 2,231,885.31
receivable
Account
081 Electronic Group 484,442.91 397,568.22
receivable
Account
Sichuan Changhong New Energy Tech. Co., Ltd. 235.76
receivable
Account
Guangdong Changhong Electronics Co., Ltd. 2,220,471.94 3,602,882.13
receivable
Account
Sichuan Changhong Electric Source Co., Ltd. 4,806.70
receivable
Account
Sichuan Hongyu Metal Manufacturing Co., Ltd. 893,867.03 475,411.87
receivable
Account
Sichuan Service Exp. Appliance Service Chain Co., Ltd. 5,547,924.93 6,593,913.18
receivable
Account
Sichuan Hongwei Technology Co., Ltd. 1,658,396.58 1,647,512.58
receivable
Account
Sichuan Hongxing Software Co., Ltd. 564,650.00
receivable
Account Sichuan Changhong Gerun Renewable Resources Co.,
10,503.63 10,503.63
receivable Ltd.
Account
Sichuan Changhong International Hotel Co., Ltd. 42,802.10 24,483.00
receivable
Account
Sichuan Changhong Xinrui Technology Co., Ltd 106,912.99 31,134,508.32
receivable
Account Sichuan Changhong Intelligent Manufacturing
10,039,595.23 1,159,293.19
receivable Technology Co., Ltd.
Account Sichuan Changhong International Travel Agency Co.,
14,981.00
receivable Ltd.
Account
Sichuan Changhong Electronic System Co., Ltd. 77,000.00
receivable
Account
Sichuan Jiahong Industrial Co., Ltd. 28,314.00 1,500.00
receivable
Account
Sichuan Changhong Network Tech. Co., Ltd. 227.83
receivable
Account
Sichuan Changhong Logistic Service Co., Ltd. 4,121.00 28.00
receivable
Account
Sichuan Huafeng Enterprise Group Co., Ltd. 283,500.63
receivable
Account
CHANGHONG(HK)TRADINGLIMITED 2,401,351.66
receivable
Account
Sichuan Ailian Tech. Co., Ltd. 1,816,576.71
receivable
Account
Sichuan Family Help Electric Service Co., Ltd. 2,325.00
receivable
377
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Item Related parties Ending balance Opening balance
Account
Sichuan Changxin Refrigeration Parts Co., Ltd. 23,428,798.70 16,767,170.82
receivable
Account
Mianyang Highly Electric Co., Ltd. 33,261,889.61 33,257,152.05
receivable
Account
Chonghong Ruba Electric Company (Private) Ltd. 69,845,918.08
receivable
Account
Sichuan Changhe Technology Co., Ltd. 2,242,158.00 2,769,516.97
receivable
Account
Chengdu Guigu Environmental Tech. Co., Ltd. 409,067.47
receivable
Account
Sichuan Tianyou Guigu Technology Co., Ltd. 397,435.50
receivable
Other account
Sichuan Changhong Electric Co., LTD 3,971,074.18 189,285.06
payable
Other account
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 1,742,341.02 6,021,988.84
payable
Other account
Sichuan Changhong Jijia Fine Co., Ltd. 400,500.00 1,900,500.00
payable
Other account Sichuan Changhong Gerun Renewable Resources Co.,
10,000.00 10,000.00
payable Ltd.
Other account
Huayi Compressor Co., Ltd. 1,598,900.00 1,050,000.00
payable
Other account
Sichuan Changhong Package Printing Co., Ltd. 50,000.00 50,000.00
payable
Other account
Sichuan Changhong Precision Electronics Tech. Co., Ltd. 145.16 145.16
payable
Other account
Sichuan Changhong Minsheng Logistics Co., LTD 586,504.95 586,504.95
payable
Other account
CHANGHONG(HK)TRADINGLIMITED 65,200.87 1,881,972.53
payable
Other account
Sichuan Changhong Devices Technology Co., Ltd. 50,013.43 50,260.07
payable
Other account
Sichuan Changhong Xinrui Technology Co., Ltd 200,000.00 200,000.00
payable
Other account
081 Electronic Group 169.00 169.00
payable
Other account
Sichuan Jiahong Industrial Co., Ltd. 4,643.32
payable
Other account
Guangdong Changhong Electronics Co., Ltd. 18,442.44 4,602.00
payable
Other account Sichuan Changhong Intelligent Manufacturing
272,961.00 219,375.00
payable Technology Co., Ltd.
Other account
Mianyang Highly Electric Co., Ltd. 109,709.75 637,644.61
payable
Other account
Sichuan Changhe Technology Co., Ltd. 100,000.00 100,000.00
payable
Other account
Sichuan Changxin Refrigeration Parts Co., Ltd. 50,000.00 50,000.00
payable
Other account
Hengyouyuan Technology Development Group Co., Ltd. 2,800.00
payable
Total 731,607,738.10 449,302,334.16
(IV) Commitments from related parties: Nil
378
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
IX. Share-based payment: Nil
X. Contingency
1. Pending action or possible liabilities formed from arbitration: Nil
2. Contingency from external guarantee: Nil
3. Other contingency: nil
XI. Commitments: nil
XII. Events occurring after the balance sheet date
1. Important non-adjustment items: nil
2. Profit distribution
After auditing by Shinewing Certified Public Accountants (LLP), in the year of 2017, net profit of the parent
company in individual statement amounted as RMB -220,729.76 Yuan. According to relevant regulations,
retained profit for the year ended counted as RMB 956,339,194.01 Yuan, after deducted the RMB
62,675,815.97 Yuan distributed for year of 2016, and minor change of the net profit for the year RMB
220,729.76 Yuan, the retained profit in individual statement of the parent company counted as RMB
893,442,648.28 Yuan accumulatively. In 2017, the net profit attributable to owners of parent company in
consolidate statement amounted as RMB 32,473,204.92 Yuan. In line with relevant regulations, the profit
achieved for the year of 2017 which is available for distribution amounted as RMB 32,473,204.92 Yuan,
deducted the RMB 62,675,815.97 Yuan distributed for year of 2016 and plus retained profit RMB
968,097,382.98 Yuan at beginning of the year, the retained profit ended as 2017 in consolidate statement
amounted as RMB 937,894,771.93 Yuan accumulatively.
According to the relevant laws and regulations and the provisions of "Articles of Association" and
considering the interests of the shareholders and the company's long-term development needs, the board of
directors approved the company to distribute the cash bonus of 0.6 Yuan per 10 stocks (including tax) to all
shareholders on the basis of the general capital of 1,044,597,881 stocks of December 31, 2017, totally the
cash bonus 62,675,872.86 Yuan has been distributed (Including tax). After the distribution, the total share
capital of the company keeps the same, accumulates the remaining undistributed profits of 830,766,775.42
Yuan which is to be distributed annually after carry-over.
This above plan has been considered and passed by the 7th session of the 9th board of directors, and needs to
be approved by annual general meeting.
3. Major sales re tur n : n il
4. Other than the above mentioned events, the Company have no other events occurred after balance sheet
date.
379
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
XIII. Other significant matters
1. Correction o f p re vio us period s and in flu ence: n il
2. Debt restru ctu ring: n il
3. Assets rep lace men t: n il
4. P ension p lan : n il
5. Discon tinu ing ope ra tion: nil
6. Branch in formation
In 10 thousand Yuan
Small
Item Ice cumber AC Marketing home Other Salesin branch Total
appliances
Operation income 846,278.87 754,416.09 129,240.81 47,575.67 27,818.91 125,586.67 1,679,743.68
Including:: Income from trading
739,286.62 754,048.21 129,240.81 47,106.58 10,061.46 1,679,743.68
outside
Income fromtradinginbranch 106,992.25 367.88 469.09 17,757.45 125,586.67 0.00
Operation expenses 768,796.19 753,549.86 119,862.36 46,766.58 26,381.99 18,879.57 1,696,477.41
Operationprofit 77,482.68 866.23 9,378.45 809.09 1,436.92 106,707.10 -16,733.73
Total assets 1,232,665.16 533,072.33 17,760.73 31,739.11 17,140.75 236,151.36 1,596,226.72
Totalliability 689,429.19 386,265.69 39,139.50 19,674.68 9,144.69 63,220.20 1,080,433.55
Supplementaryinformation 0.00
Depreciation and amortization
12,909.06 5,080.20 18.25 405.24 719.24 12.69 19,119.30
expenses
Capital expenditure 10,976.49 25,256.73 33.04 132.79 102.79 -113.50 36,615.34
Non-cash expenses except for
109,351.92 101,433.60 11,498.57 2,538.72 3,955.03 235.18 228,542.66
depreciation and amortization
7. Other major transactions and events shows impact on investor’s decision-making: nil
XIV. Notes to main items of financial statement of parent company
1. Account receivable
(1) Category of account receivable
Ending amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
380
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
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 60,561,254.24 4.40% 3,219,635.79 5.32% 57,341,618.45
Combination 2 1,311,301,579.72 95.23% 0.00% 1,311,301,579.72
Combination Subtotal 1,371,862,833.96 99.63% 3,219,635.79 0.23% 1,368,643,198.17
Account receivable with single minor
amount but withdrawal single item bad 5,118,727.55 0.37% 890,957.46 17.41% 4,227,770.09
debt provision
Total 1,376,981,561.51 100.00% 4,110,593.25 0.30% 1,372,870,968.26
(Continued)
Opening amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Account receivable with single
significant amount and withdrawal single
item bad debt provision
Account receivable withdrawal bad debt
provision by combination
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
year-end.
2) Account receivable with bad debt provision accrual by aging account in combination 1
Ending balance
Account age
Account receivable Bad debt provision Provision ratio (%)
Within 1 year 60,234,710.67 3,011,735.53 5%
1-2 years 36,196.33 5,429.45 15%
2-3 years 6,938.03 2,428.31 35%
3-4 years 185,259.35 101,892.64 55%
4-5 years 85%
Over 5 years 98,149.86 98,149.86 100%
Total 60,561,254.24 3,219,635.79
381
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
3) Account receivable without bad debt provision withdrawal in combination 2
Combination Book balance
Connected amount between related parties 1,096,966,915.77
Account receivable with L/C 21,538,735.96
Account receivable already insured 192,795,927.99
Total 1,311,301,579.72
4) As for the receivable with single minor amount at year-end, and withdrawal bad debt provision
independently, they includes the account receivables with single minor amount, and after accrual bad debts
by combination, the amount did not reflects the risks characteristics, there are 2 clients included
(2) Provision, reversal (or recovery) of bad debt provision
Releasing bad debt provision in the year amounted as RMB 8,171,322.85; no bad debt collected or reverses
in the year
(3) No account receivable actually written-off at year-end.
(4) No arrears of the shareholders holding more than 5% (including 5%) shares with voting rights of the
Company at year-end.
(5) The top five account receivable at year-end has RMB 881,013,711.62 in total, a 63.98% in total account
receivable, bad debt provision accrual at year-end amounted as RMB 2,365,082.22
(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 1,384,957.79 3.45% 261,120.97 18.85% 1,123,836.82
Combination 2 38,725,895.54 96.55% 38,725,895.54
Combination Subtotal 40,110,853.33 100.00% 261,120.97 0.65% 39,849,732.36
Other account receivable with single minor
amount but withdrawal single item bad
debt provision
Total 40,110,853.33 100.00% 261,120.97 0.65% 39,849,732.36
382
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
(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
year-end
2) Other account receivable with withdrawal bad debt provision by aging account for combination 1
Ending balance
Account age
Account receivable Bad debt provision Provision ratio (%)
Within 1 year 549,386.81 27,469.34 5%
1-2 years 318,991.08 47,848.66 15%
2-3 years 506,579.90 177,302.97 35%
3-4 years 55%
4-5 years 10,000.00 8,500.00 85%
Over 5 years 100%
Total 1,384,957.79 261,120.97
3) Other receivable without bad debt provision withdrawal in combination 2
Combination Book balance
Connected amount between related parties 7,896,779.76
Loans of employee’s pretty cash 4,507,472.94
Export tax refund receivable 26,321,642.84
Total 38,725,895.54
4) No other account receivable with single minor amount but withdrawal bad debt provision singly,
refers to the minor single receivables at year-end.
(2) Accrual, reversal (or collection) of reserve for bad debts in the Year
383
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Provision of bad debts in the year amounted as RMB 96,616.22; no bad debt recovered or collected in
the year.
(3) Other account receivable charge off in this year: Nil
(4)No areas from shareholders’ unit with over 5 percent (5 percent included) voting rights held at
year-end
(5) Top 5 other account receivable has RMB 35,372,380.59 in total, a 88.19% in total account receivable
at year-end, ending balance of bad debts provision amounted as RMB177,777.19.
(6) Other receivables classify by nature
Nature Ending book balance Opening book balance
Related parties 7,896,779.76 21,867,562.15
Loans of employee’s pretty cash 4,507,472.94 2,753,170.09
Margin 640,306.68 1,344,924.85
Advance money paid temporary 619,956.01
Other 744,651.11 321,315.60
Export rebate 26,321,642.84
Total 40,110,853.33 26,906,928.70
(7) Other receivable de-recognized: Nil
384
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
3. Long-term equity investments
(1) Classification of long-term equity investments
Ending balance Opening balance
Item
Book balance Impairment loss Book value Book balance Impairment loss Book value
Investment in subsidiaries
ZhongkeMeilingCryogenicTechnologyCo., Ltd 42,652,000.00 42,652,000.00 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 Home Appliances
169,856,419.37 169,856,419.37 169,856,419.37 169,856,419.37
Company Limited
Sichuan Changhong Air Conditioner Co.,
955,600,437.79 955,600,437.79 305,600,437.79 305,600,437.79
Ltd
Hefei Meiling Group Holding Co., Ltd. 113,630,000.00 113,630,000.00 113,630,000.00 113,630,000.00
Jiangxi Meiling Electric Appliance Co.,
79,000,000.00 79,000,000.00 79,000,000.00 79,000,000.00
Ltd.
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. 32,424,000.00 32,424,000.00 18,000,000.00 18,000,000.00
Meiling Candy Washing Machine Co.,
45,000,000.00 45,000,000.00
Ltd.
Investment in associates
Hefei Xingmei Assets Management Co.,
10,696,982.04 10,696,982.04 12,394,800.39 12,394,800.39
Ltd.
Sichuan Zhiyijia Network Technology
15,445,914.69 15,445,914.69 11,098,569.71 11,098,569.71
Co., Ltd.
Total 1,705,007,815.84 1,705,007,815.84 992,282,289.21 992,282,289.21
(2) Investment in subsidiaries
385
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Increase during the Decrease during the Provision forimpairment Ending balance of
Invested unit Opening balance Ending balance
year year losses impairment loss
Zhongke Meiling Cryogenic Technology
42,000,000.00 652,000.00 42,652,000.00
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 Home Appliances
169,856,419.37 169,856,419.37
Company Limited
Sichuan Changhong Air Conditioner Co.,
305,600,437.79 650,000,000.00 955,600,437.79
Ltd
Hefei Meiling Group Holding Co., Ltd. 113,630,000.00 113,630,000.00
Jiangxi Meiling Electric Appliance Co.,
79,000,000.00 79,000,000.00
Ltd.
Guangdong Changhong Ridian
90,802,061.95 90,802,061.95
Technology Co., Ltd.
Changmei Technology Co., Ltd. 18,000,000.00 14,424,000.00 32,424,000.00
Meiling Candy Washing Machine Co.,
45,000,000.00 45,000,000.00
Ltd.
Total 968,788,919.11 710,076,000.00 1,678,864,919.11
(3) Investment in associates
Changes intheYear
Adjustment Ending
Opening Investment income Other Cash dividend or
Invested unit Additional Negative for other Provision for Ending balance balance of
balance recognizedunder equity profitannounced Other
Investment Investment comprehensiv impairment loss impairment
equity change to issued
e income
Hefei Xingmei Assets Management Co.,
12,394,800.39 -1,697,818.35 10,696,982.04
Ltd.
Sichuan Zhiyijia Network Technology Co.,
11,098,569.71 4,347,344.98 15,445,914.69
Ltd.
386
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Changes intheYear
Adjustment Ending
Opening Investment income Other Cash dividend or
Invested unit Additional Negative for other Provision for Ending balance balance of
balance recognizedunder equity profitannounced Other
Investment Investment comprehensiv impairment loss impairment
equity change to issued
e income
Total 23,493,370.10 2,649,526.63 26,142,896.73
387
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
4. Operation income and operation cost
Current Year Last Year
Item
Income Cost Income Cost
Main business 7,279,491,408.48 6,427,777,165.64 6,507,129,875.91 5,529,452,332.04
Other business 1,238,178,104.98 1,210,971,868.04 938,956,879.61 904,175,189.74
Total 8,517,669,513.46 7,638,749,033.68 7,446,086,755.52 6,433,627,521.78
(1) Classified according to product
Current Year Last Year
Product
Operation income Operation cost Operation income Operation cost
Main business 7,279,491,408.48 6,427,777,165.64 6,507,129,875.91 5,529,452,332.04
Refrigerator and
6,899,366,427.27 6,101,569,927.76 6,090,629,825.93 5,184,542,280.26
freezer
Washing
190,179,642.05 163,208,239.33 416,498,098.94 344,908,193.24
machine
Air conditioner 189,674,315.89 162,885,099.06
Other 271,023.27 113,899.49 1,951.04 1,858.54
Other business 1,238,178,104.98 1,210,971,868.04 938,956,879.61 904,175,189.74
Sales of raw
1,221,126,139.76 1,208,004,434.83 922,463,944.65 902,013,070.81
materials
Other income 17,051,965.22 2,967,433.21 16,492,934.96 2,162,118.93
Total 8,517,669,513.46 7,638,749,033.68 7,446,086,755.52 6,433,627,521.78
(2) Classified according to region
Current Year Last Year
Regions
Operation income Operation cost Operation income Operation cost
Domestic 6,406,577,042.20 5,643,877,798.01 5,599,460,298.75 4,804,187,600.08
Overseas 2,111,092,471.26 1,994,871,235.67 1,846,626,456.77 1,629,439,921.70
Total 8,517,669,513.46 7,638,749,033.68 7,446,086,755.52 6,433,627,521.78
Top five clients in sales revenue amounted as RMB 4,718,907,872.70 Yuan, a 55.40% in total operation
income.
5. Investment income
Item Current Year Last Year
Long-term equity investment income by equity method 2,649,526.63 3,156,876.73
Investment income arising from disposal of the long-term equity
2,506.98 -641,846.86
investment
Investment income arising from period of holding the long-term 75,261,313.40
388
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Item Current Year Last Year
equity investment
Investment income from disposal of financial assets, which is
measured by fair value and with its variation reckoned into current -20,754,720.43 -1,187,641.34
gains/losses
Investment income during holding the financial assets available for
77,684,013.71 6,693,575.48
sale
Total 59,581,326.89 83,282,277.41
XV. Approval of financial statement
The financial statement has already been approved from the board of directors of the Company for
reporting dated 28 March 2018
389
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Supplementary information for financial statement
1. Non-operational gains and losses for this year
(1) Non-recurring gains and losses regulated by Explanation Announcement of Information Disclosure on Stock
Issuance Enterprise No.1—Non-recurring gains/losses (2008) from CSRC:
Item Current Year Note
Gains and losses from disposal of non-current assets -8,203,782.90
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 68,403,702.36
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
92,846,391.02
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
390
Annotations to Financial Statements of Hefei Meiling Co., Ltd.
From 1 January 2017 to 31 December 2017
(Unless otherwise specified. RMB for record in the statement)
Item Current Year Note
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 2,680,908.22
Other gains and losses items complying with definition for non-current gains and losses
Subtotal 155,727,218.70
Affect on income tax 24,087,520.95
Affect on minority equity(after taxation) 1,460,533.81
Total 130,179,163.94
2. Return on equity and earnings per share
In accordance with requirement of the No. 9 Rule of Information Disclosure Compiling of Public Listed Companies:
Calculation and Disclosure of Return on Equity and Earnings per Share (revised in 2010), the weighted average
return on equity, basic earnings per share and diluted earnings per share of the Company in 2017 are as follow:
Weighted Earnings per share/EPS
Profit during the report period average return (RMB/Share)
on equity Basic EPS Diluted EPS
Net profit attributable to shareholders of parent company 0.64% 0.0311 0.0311
Net profit attributable to shareholders of parent company
-1.92% -0.0935 -0.0935
after deduction of non-recurring gains and losses
3. Accounting difference under the accounting rules in and out of China: Nil
4. Supplementary information for accounting policy changed: Nil
391
HEFEI MEILING CO., LTD. Annual Report 2017
Section XII. Documents available for Reference
I. Financial statement carrying the signatures and seals of the Chairman, principal of
the accounting works and person in charge of accounting organ;
II. Original auditing report carrying the seal of CPA and autography and seal of the
accountants;
III. Original documents of the Company and manuscripts of public notices that
disclosed in the website designated by CSRC in the report period;
The aforesaid documents are all available at headquarter of the Company. The
Company would provide them timely when CSRC and Shenzhen Stock Exchange
require or the shareholders need consultation according to the regulations and Articles
of Association.
Chairman: Li Wei
Hefei Meiling Co., Ltd.
30 March 2018
392
