CHANGHONG MEILING CO., LTD.
SEMI-ANNUAL FINANCIAL REPORT 2019
(Unaudited)
August 2019
CHANGHONG MEILING CO., LTD
SEMI-ANNUAL FINANCIAL REPORT 2018 (Unaudited)
I. Audit reports
Whether the semi-annual report was audited or not
□ Yes √ No
The semi-annual report was not audited.
II. Financial statements
Units in Notes of Financial Statements is RMB
1. Consolidated Balance Sheet
Prepared by ChangHong Meiling Co., Ltd.
Prepared by ChangHong Meiling Co., Ltd.
2019-6-30
In RMB
Item 2019-6-30 2018-12-31
Current assets:
Monetary funds 4,411,009,307.43 4,596,077,557.40
Settlement provisions
Capital lent
Tradable financial assets 2,703,222.18
Financial assets measured by
fair value and with variation 9,253,635.59
reckoned into current gains/losses
Derivative financial assets
Note receivable 1,840,222,933.51 2,387,830,887.74
Account receivable 2,622,242,540.11 1,670,988,644.76
Receivable financing
Accounts paid in advance 43,742,930.33 86,180,459.26
Insurance receivable
Reinsurance receivables
Contract reserve of
1
reinsurance receivable
Other account receivable 110,758,174.11 62,129,574.17
Including: Interest
8,591,868.56 2,653,712.36
receivable
Dividend
receivable
Buying back the sale of
financial assets
Inventories 2,112,649,738.16 2,174,436,573.67
Contractual assets
Assets held for sale
Non-current asset due within
one year
Other current assets 1,026,747,584.07 1,184,686,956.96
Total current assets 12,170,076,429.90 12,171,584,289.55
Non-current assets:
Loans and payments on
behalf
Debt investment
Finance asset available for
45,000,000.00
sales
Other debt investment
Held-to-maturity investment
Long-term account
receivable
Long-term equity investment 57,722,108.43 61,869,440.55
Investment in other equity
instrument
Other non-current financial
45,000,000.00
assets
Investment real estate 45,647,730.74 46,846,507.41
Fixed assets 1,976,351,355.11 1,733,957,012.14
Construction in progress 401,818,933.56 464,558,352.60
Productive biological asset
Oil and gas asset
Right-of-use assets
2
Intangible assets 866,786,314.46 817,579,958.94
Expense on Research and
65,320,040.34 108,210,966.60
Development
Goodwill
Long-term expenses to be
apportioned
Deferred income tax asset 105,537,108.75 112,203,656.75
Other non-current asset
Total non-current asset 3,564,183,591.39 3,390,225,894.99
Total assets 15,734,260,021.29 15,561,810,184.54
Current liabilities:
Short-term loans 1,809,384,200.27 2,336,373,929.62
Loan from central bank
Capital borrowed
Transactional financial
45,676,424.26
liability
Financial liability measured
by fair value and with variation 55,586,666.70
reckoned into current gains/losses
Derivative financial liability
Note payable 3,579,417,021.26 3,727,754,399.60
Account payable 3,107,804,073.88 2,282,174,981.38
Accounts received in
339,031,201.91 354,551,354.80
advance
Selling financial asset of
repurchase
Absorbing deposit and
interbank deposit
Security trading of agency
Security sales of agency
Wage payable 133,097,829.10 163,638,627.79
Taxes payable 61,815,199.22 109,753,432.17
Other account payable 785,319,497.55 660,320,360.26
Including: Interest payable 14,695,840.49 7,519,756.26
Dividend
21,356,359.44 17,317,286.45
payable
3
Commission charge and
commission payable
Reinsurance payable
Contractual liability
Liability held for sale
Non-current liabilities due
7,300,000.00 273,682,737.85
within one year
Other current liabilities
Total current liabilities 9,868,845,447.45 9,963,836,490.17
Non-current liabilities:
Insurance contract reserve
Long-term loans 301,280,000.00 1,920,000.00
Bonds payable
Including: Preferred stock
Perpetual
capital securities
Lease liability
Long-term account payable 4,370,179.20 5,017,208.00
Long-term wages payable 15,588,518.08 19,073,101.29
Accrual liability 259,358,920.04 273,063,677.21
Deferred income 180,320,644.93 160,250,963.60
Deferred income tax
2,847,503.55 3,098,699.11
liabilities
Other non-current liabilities
Total non-current liabilities 763,765,765.80 462,423,649.21
Total liabilities 10,632,611,213.25 10,426,260,139.38
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 2,684,369,598.46 2,684,369,598.46
Less: Inventory shares
Other comprehensive income -22,554,916.32 -18,143,569.26
4
Reasonable reserve
Surplus public reserve 399,650,743.38 400,673,993.50
Provision of general risk
Retained profit 893,156,403.67 904,232,582.87
Total owner’ s equity attributable
4,999,219,710.19 5,015,730,486.57
to parent company
Minority interests 102,429,097.85 119,819,558.59
Total owner’ s equity 5,101,648,808.04 5,135,550,045.16
Total liabilities and owner’ s
15,734,260,021.29 15,561,810,184.54
equity
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
2. Balance Sheet of Parent Company
In RMB
Item 2019-6-30 2018-12-31
Current assets:
Monetary funds 2,767,852,170.46 2,897,004,041.87
Tradable financial assets 2,703,222.18
Financial assets measured by fair
value and with variation reckoned 9,253,635.59
into current gains/losses
Derivative financial assets
Note receivable 1,809,374,669.32 2,433,243,946.64
Account receivable 1,393,222,371.79 1,050,282,023.37
Receivable financing
Accounts paid in advance 59,536,134.59 58,710,427.38
Other account receivable 98,847,962.68 182,744,033.52
Including: Interest receivable 7,494,128.83 2,653,712.36
Dividend receivable
Inventories 951,935,198.29 911,130,106.30
Contractual assets
5
Assets held for sale
Non-current assets maturing
within one year
Other current assets 984,470,915.67 1,113,987,528.70
Total current assets 8,067,942,644.98 8,656,355,743.37
Non-current assets:
Debt investment
Available-for-sale financial assets 45,000,000.00
Other debt investment
Held-to-maturity investments
Long-term receivables
Long-term equity investments 1,739,960,685.23 1,731,109,903.70
Investment in other equity
instrument
Other non-current financial assets 45,000,000.00
Investment real estate 7,447,430.69 7,618,550.16
Fixed assets 1,104,512,771.39 1,082,915,540.08
Construction in progress 111,683,052.79 125,064,106.10
Productive biological assets
Oil and natural gas assets
Right-of-use assets
Intangible assets 495,599,729.16 462,425,105.64
Research and development costs 41,355,043.26 57,383,653.72
Goodwill
Long-term deferred expenses
Deferred income tax assets 77,299,337.58 78,357,299.17
Other non-current assets
Total non-current assets 3,622,858,050.10 3,589,874,158.57
Total assets 11,690,800,695.08 12,246,229,901.94
Current liabilities
Short-term borrowings 1,399,874,362.25 1,911,719,726.13
Transactional financial liability 9,908,515.00
Financial liability measured by
fair value and with variation 19,893,875.00
reckoned into current gains/losses
6
Derivative financial liability
Notes payable 1,993,454,714.98 2,001,442,110.63
Account payable 1,970,177,920.08 2,011,821,519.82
Accounts received in advance 107,420,882.94 105,815,140.88
Contractual liability
Wage payable 11,286,585.57 31,271,182.48
Taxes payable 16,160,914.16 21,992,129.58
Other accounts payable 450,922,378.20 427,293,961.56
Including: Interest payable 12,358,210.18 5,801,215.14
Dividend payable 21,356,359.44 17,317,286.45
Liability held for sale
Non-current liabilities due within
300,000.00 258,588,504.48
one year
Other current liabilities
Total current liabilities 5,959,506,273.18 6,789,838,150.56
Non-current liabilities:
Long-term loans 301,280,000.00 1,920,000.00
Bonds payable
Including: preferred stock
Perpetual capital securities
Lease liability
Long-term account payable
Long term employee
15,588,518.08 19,073,101.29
compensation payable
Accrued liabilities 252,002,095.28 266,641,323.73
Deferred income 67,561,241.16 53,118,676.50
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 636,431,854.52 340,753,101.52
Total liabilities 6,595,938,127.70 7,130,591,252.08
Owners’ equity:
Share capital 1,044,597,881.00 1,044,597,881.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
7
Capital public reserve 2,753,017,007.10 2,753,017,007.10
Less: Inventory shares
Other comprehensive income
Special reserve
Surplus reserve 399,432,577.70 400,455,827.82
Retained profit 897,815,101.58 917,567,933.94
Total owner’s equity 5,094,862,567.38 5,115,638,649.86
Total liabilities and owner’s
11,690,800,695.08 12,246,229,901.94
equity
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
3. Consolidated Profit Statement
In RMB
Item Semi-annual of 2019 Semi-annual of 2018
I. Total operating income 9,133,162,680.94 9,271,509,569.67
Including: Operating income 9,133,162,680.94 9,271,509,569.67
Interest income
Insurance gained
Commission charge
and commission income
II. Total operating cost 9,117,690,815.20 9,241,256,579.51
Including: Operating cost 7,490,555,537.25 7,758,153,561.09
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
8
Reinsurance expense
Tax and extras 80,639,759.74 65,046,860.70
Sales expense 1,244,391,756.87 1,189,741,101.32
Administrative
164,393,042.70 148,994,790.89
expense
R&D expense 120,048,040.86 92,780,293.44
Financial expense 17,662,677.78 -13,460,027.93
Including: Interest
57,892,999.31 60,155,710.42
expenses
Interest
59,401,426.37 64,297,532.05
income
Add: other income 35,311,208.60 48,561,057.62
Investment income (Loss
11,663,963.45 14,749,419.09
is listed with “-”)
Including: Investment
income on affiliated company and -8,822,000.32 -15,674,377.81
joint venture
The termination of
income recognition for financial
assets measured by amortized
cost(Loss is listed with “-”)
Exchange income (Loss
is listed with “-”)
Net exposure hedging
income (Loss is listed with “-”)
Income from change of
3,364,790.24 -18,790,911.11
fair value (Loss is listed with “-”)
Loss of credit impairment
9,545,495.95
(Loss is listed with “-”)
Losses of devaluation of
-10,615,932.01 -18,938,120.65
asset (Loss is listed with “-”)
Income from assets
-937,771.74 3,283,766.57
disposal (Loss is listed with “-”)
III. Operating profit (Loss is listed
63,803,620.23 59,118,201.68
with “-”)
Add: Non-operating income 2,476,197.02 4,082,102.58
Less: Non-operating expense 2,362,526.37 40,791.25
IV. Total profit (Loss is listed with
63,917,290.88 63,159,513.01
“-”)
9
Less: Income tax expense 17,701,260.34 10,150,948.29
V. Net profit (Net loss is listed with
46,216,030.54 53,008,564.72
“-”)
(i) Classify by business
continuity
1.continuous operating net
46,216,030.54 53,008,564.72
profit (net loss listed with ‘-”)
2.termination of net profit (net
loss listed with ‘-”)
(ii) Classify by ownership
1.Net profit attributable to
54,334,022.57 50,684,231.73
owner’s of parent company
2.Minority shareholders’ gains
-8,117,992.03 2,324,332.99
and losses
VI. Net after-tax of other
-6,957,381.18 -8,939,360.51
comprehensive income
Net after-tax of other
comprehensive income attributable -4,411,347.06 -6,993,349.71
to owners of parent company
(I) Other comprehensive
income items which will not be
reclassified subsequently to profit
of loss
1.Changes of the
defined benefit plans that
re-measured
2.Other comprehensive
income under equity method that
cannot be transfer to gain/loss
3.Change of fair value
of investment in other equity
instrument
4.Fair value change of
enterprise's credit risk
5. Other
(ii) Other comprehensive
income items which will be
-4,411,347.06 -6,993,349.71
reclassified subsequently to profit
or loss
10
1.Other comprehensive
income under equity method that
can transfer to gain/loss
2.Change of fair value
of other debt investment
3.gain/loss of fair
value changes for available-for-sale
financial assets
4.Amount of financial
assets re-classify to other
comprehensive income
5.Gain/loss of
held-to-maturity investments that
re-classify to available-for-sale
financial asset
6.Credit impairment
provision for other debt investment
7.Cash flow hedging
reserve
8.Translation
differences arising on translation of
-4,411,347.06 -6,993,349.71
foreign currency financial
statements
9.Other
Net after-tax of other
comprehensive income attributable -2,546,034.12 -1,946,010.80
to minority shareholders
VII. Total comprehensive income 39,258,649.36 44,069,204.21
Total comprehensive
income attributable to owners of 49,922,675.51 43,690,882.02
parent Company
Total comprehensive income
attributable to minority -10,664,026.15 378,322.19
shareholders
VIII. Earnings per share:
(i) Basic earnings per share 0.0520 0.0485
(ii) Diluted earnings per share 0.0520 0.0485
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
11
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
4. Profit Statement of Parent Company
In RMB
Item Semi-annual of 2019 Semi-annual of 2018
I. Operating income 4,534,756,227.34 4,393,245,102.05
Less: Operating cost 4,032,394,105.20 3,953,902,686.95
Taxes and surcharge 37,629,052.43 29,723,713.26
Sales expenses 338,606,135.03 300,004,706.73
Administration
68,435,172.51 58,197,516.76
expenses
R&D expenses 51,474,328.29 45,645,434.03
Financial expenses 8,505,383.95 13,171,889.86
Including: interest
42,484,006.95 41,526,165.10
expenses
Interest
40,313,424.26 40,939,295.98
income
Add: other income 18,499,284.82 36,053,817.83
Investment income
24,118,870.80 23,950,589.55
(Loss is listed with “-”)
Including: Investment
income on affiliated Company -2,832,319.70 2,089,222.50
and joint venture
The termination of
income recognition for financial
assets measured by amortized cost
(Loss is listed with “-”)
Net exposure hedging
income (Loss is listed with “-”)
Changing income of fair
3,434,946.59 -3,400,358.37
value (Loss is listed with “-”)
Loss of credit
impairment (Loss is listed with 12,788,678.01
“-”)
Losses of devaluation of -2,792,854.97 -4,217,403.31
12
asset (Loss is listed with “-”)
Income on disposal of
-791,312.06 -877,303.84
assets (Loss is listed with “-”)
II. Operating profit (Loss is listed
52,969,663.12 44,108,496.32
with “-”)
Add: Non-operating income 220,590.00 3,746,592.46
Less: Non-operating expense
III. Total Profit (Loss is listed
53,190,253.12 47,855,088.78
with “-”)
Less: Income tax 1,057,961.59 -2,433,879.71
IV. Net profit (Net loss is listed
52,132,291.53 50,288,968.49
with “-”)
(i)continuous operating net
52,132,291.53 50,288,968.49
profit (net loss listed with ‘-”)
(ii) termination of net profit
(net loss 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 of the
defined benefit plans that
re-measured
2.Other
comprehensive income under
equity method that cannot be
transfer to gain/loss
3.Change of fair
value of investment in other
equity instrument
4.Fair value change
of enterprise's credit risk
5. Other
(II) Other comprehensive
income items which will be
reclassified subsequently to profit
or loss
13
1.Other
comprehensive income under
equity method that can transfer to
gain/loss
2.Change of fair
value of other debt investment
3.gain/loss of fair
value changes for
available-for-sale financial assets
4.Amount of financial
assets re-classify to other
comprehensive income
5.Gain/loss of
held-to-maturity investments that
re-classify to available-for-sale
financial asset
6.Credit impairment
provision for other debt
investment
7.Cash flow hedging
reserve
8.Translation
differences arising on translation
of foreign currency financial
statements
9.Other
VI. Total comprehensive income 52,132,291.53 50,288,968.49
VII. Earnings per share:
(i) Basic earnings per share 0.0499 0.0481
(ii) Diluted earnings per
0.0499 0.0481
share
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
5. Consolidated Cash Flow Statement
In RMB
14
Item Semi-annual of 2019 Semi-annual of 2018
I. Cash flows arising from
operating activities:
Cash received from selling
commodities and providing labor 8,808,462,153.80 7,815,961,903.35
services
Net increase of customer
deposit and interbank deposit
Net increase of loan from
central bank
Net increase of capital
borrowed from other financial
institution
Cash received from original
insurance contract fee
Net cash received from
reinsurance business
Net increase of insured
savings and investment
Cash received from interest,
commission charge and
commission
Net increase of capital
borrowed
Net increase of returned
business capital
Net cash received by agents
in sale and purchase of securities
Write-back of tax received 190,487,049.58 287,003,816.39
Other cash received
77,246,943.31 125,462,336.78
concerning operating activities
Subtotal of cash inflow arising
9,076,196,146.69 8,228,428,056.52
from operating activities
Cash paid for purchasing
commodities and receiving labor 7,057,460,101.03 6,674,753,714.94
service
Net increase of customer
loans and advances
Net increase of deposits in
15
central bank and interbank
Cash paid for original
insurance contract compensation
Net increase of financial
assets held for transaction
purposes
Net increase of capital lent
Cash paid for interest,
commission charge and
commission
Cash paid for bonus of
guarantee slip
Cash paid to/for staff and
823,360,788.76 812,465,740.75
workers
Taxes paid 300,839,972.73 176,250,920.48
Other cash paid concerning
521,051,283.98 404,468,319.29
operating activities
Subtotal of cash outflow arising
8,702,712,146.50 8,067,938,695.46
from operating activities
Net cash flows arising from
373,484,000.19 160,489,361.06
operating activities
II. Cash flows arising from
investing activities:
Cash received from
1,384,000,000.00 1,100,000,000.00
recovering investment
Cash received from
31,627,554.38 19,903,288.36
investment income
Net cash received from
disposal of fixed, intangible and 1,677,670.77 335,030.00
other long-term assets
Net cash received from
disposal of subsidiaries and other
units
Other cash received
54,906,734.15 84,470,020.72
concerning investing activities
Subtotal of cash inflow from
1,472,211,959.30 1,204,708,339.08
investing activities
Cash paid for purchasing
202,145,813.88 271,319,288.71
fixed, intangible and other
16
long-term assets
Cash paid for investment 1,254,000,000.00 2,280,000,001.00
Net increase of mortgaged
loans
Net cash received from
subsidiaries and other units
obtained
Other cash paid concerning
11,141,590.61 270,000.00
investing activities
Subtotal of cash outflow from
1,467,287,404.49 2,551,589,289.71
investing activities
Net cash flows arising from
4,924,554.81 -1,346,880,950.63
investing activities
III. Cash flows arising from
financing activities
Cash received from
24,865,000.00
absorbing investment
Including: Cash received
from absorbing minority
24,865,000.00
shareholders’ investment by
subsidiaries
Cash received from loans 1,139,670,561.25 1,505,066,261.86
Cash received from issuing
bonds
Other cash received
concerning financing activities
Subtotal of cash inflow from
1,139,670,561.25 1,529,931,261.86
financing activities
Cash paid for settling debts 1,614,633,080.08 1,614,170,535.14
Cash paid for dividend and
profit distributing or interest 100,227,663.84 53,723,439.04
paying
Including: Dividend and
profit of minority shareholder 2,274,030.00
paid by subsidiaries
Other cash paid concerning
25,441,649.20 2,015,179.95
financing activities
Subtotal of cash outflow from
1,740,302,393.12 1,669,909,154.13
financing activities
17
Net cash flows arising from
-600,631,831.87 -139,977,892.27
financing activities
IV. Influence on cash and cash
equivalents due to fluctuation in 3,541,851.94 2,847,735.86
exchange rate
V. Net increase of cash and cash
-218,681,424.93 -1,323,521,745.98
equivalents
Add: Balance of cash and
cash equivalents at the period 4,484,643,187.93 5,089,765,770.39
-begin
VI. Balance of cash and cash
4,265,961,763.00 3,766,244,024.41
equivalents at the period -end
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
6. Cash Flow Statement of Parent Company
In RMB
Item Semi-annual of 2019 Semi-annual of 2018
I. Cash flows arising from
operating activities:
Cash received from selling
commodities and providing labor 4,398,710,855.09 3,719,566,923.02
services
Write-back of tax received 86,062,145.56 119,492,496.21
Other cash received
30,523,890.39 42,262,676.35
concerning operating activities
Subtotal of cash inflow arising
4,515,296,891.04 3,881,322,095.58
from operating activities
Cash paid for purchasing
commodities and receiving labor 3,813,992,469.51 3,286,810,130.57
service
Cash paid to/for staff and
263,503,252.87 263,976,937.91
workers
Taxes paid 64,988,153.11 41,814,106.04
Other cash paid concerning 197,408,073.39 165,818,202.68
18
operating activities
Subtotal of cash outflow arising
4,339,891,948.88 3,758,419,377.20
from operating activities
Net cash flows arising from
175,404,942.16 122,902,718.38
operating activities
II. Cash flows arising from
investing activities:
Cash received from
1,384,000,000.00 1,060,000,000.00
recovering investment
Cash received from
36,217,554.38 22,524,918.51
investment income
Net cash received from
disposal of fixed, intangible and 1,320,000.00 220,000.00
other long-term assets
Net cash received from
disposal of subsidiaries and other
units
Other cash received
278,374,247.03 72,631,956.88
concerning investing activities
Subtotal of cash inflow from
1,699,911,801.41 1,155,376,875.39
investing activities
Cash paid for purchasing
fixed, intangible and other 93,641,143.54 84,879,645.66
long-term assets
Cash paid for investment 1,260,000,000.00 2,290,704,000.00
Net cash received from
subsidiaries and other units
obtained
Other cash paid concerning
59,266,363.88 30,000,000.00
investing activities
Subtotal of cash outflow from
1,412,907,507.42 2,405,583,645.66
investing activities
Net cash flows arising from
287,004,293.99 -1,250,206,770.27
investing activities
III. Cash flows arising from
financing activities
Cash received from
absorbing investment
Cash received from loans 909,409,999.44 1,144,720,995.00
19
Cash received from issuing
bonds
Other cash received
55,543,648.47 6,540,910.71
concerning financing activities
Subtotal of cash inflow from
964,953,647.91 1,151,261,905.71
financing activities
Cash paid for settling debts 1,373,985,025.00 1,133,072,000.00
Cash paid for dividend and
profit distributing or interest 90,576,186.82 48,536,956.18
paying
Other cash paid concerning
115,345,079.52 119,502,958.37
financing activities
Subtotal of cash outflow from
1,579,906,291.34 1,301,111,914.55
financing activities
Net cash flows arising from
-614,952,643.43 -149,850,008.84
financing activities
IV. Influence on cash and cash
equivalents due to fluctuation in 1,260,766.69 -2,715,680.93
exchange rate
V. Net increase of cash and cash
-151,282,640.59 -1,279,869,741.66
equivalents
Add: Balance of cash and
cash equivalents at the period 2,894,384,811.05 3,410,029,424.54
-begin
VI. Balance of cash and cash
2,743,102,170.46 2,130,159,682.88
equivalents at the period -end
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
20
7. Statement of Changes in Owners’ Equity (Consolidated)
Current period
In RMB
Semi-annual of 2019
Owners’ equity attributable to the parent Company
Other Less
equity instrument : Reas
Item Pref Perpet Inve Other onab Provision Minority Total owners’
Share capital erre ual Capital reserve ntor comprehensive le Surplus reserve of general Retained profit Other Subtotal interests equity
d capital Other y income reser risk
stoc securit shar ve
k ies es
I. Balance at the end
1,044,597,881.00 2,684,369,598.46 -18,143,569.26 400,673,993.50 904,232,582.87 5,015,730,486.57 119,819,558.59 5,135,550,045.16
of the last year
Add: Changes
-1,023,250.12 -2,734,328.91 -3,757,579.03 -4,385,295.55 -8,142,874.58
of accounting policy
Error
correction of the last
period
Enterprise
combine under the
same control
Other
II. Balance at the
beginning of this 1,044,597,881.00 2,684,369,598.46 -18,143,569.26 399,650,743.38 901,498,253.96 5,011,972,907.54 115,434,263.04 5,127,407,170.58
year
III. Increase/
Decrease in this year
-4,411,347.06 -8,341,850.29 -12,753,197.35 -13,005,165.19 -25,758,362.54
(Decrease is listed
with “-”)
(i) Total
-4,411,347.06 54,334,022.57 49,922,675.51 -10,664,026.15 39,258,649.36
comprehensive
21
income
(ii) Owners’
devoted and
decreased capital
1.Common shares
invested by
shareholders
2. Capital invested
by holders of other
equity instruments
3. Amount reckoned
into owners equity
with share-based
payment
4. Other
(III) Profit
-62,675,872.86 -62,675,872.86 -2,341,139.04 -65,017,011.90
distribution
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk
provisions
3. Distribution for
owners (or -62,675,872.86 -62,675,872.86 -2,274,030.00 -64,949,902.86
shareholders)
4. Other -67,109.04 -67,109.04
(IV) Carrying
forward internal
owners’ equity
1. Capital reserves
conversed to capital
(share capital)
2. Surplus reserves
conversed to capital
22
(share capital)
3. Remedying loss
with surplus reserve
4．Carry-over
retained earnings
from the defined
benefit plans
5．Carry-over
retained earnings
from other
comprehensive
income
6. Other
(V) Reasonable
reserve
1. Withdrawal in the
report period
2. Usage in the
report period
(VI)Others
IV. Balance at the
end of the report 1,044,597,881.00 2,684,369,598.46 -22,554,916.32 399,650,743.38 893,156,403.67 4,999,219,710.19 102,429,097.85 5,101,648,808.04
period
Last period
In RMB
Semi-annual of 2018
Owners’ equity attributable to the parent Company
Other Les
equity instrument s: Rea
Provisio
Item Pref Perp Inv Other son Minority Total owners’
Surplus n of Retained
Share capital erre etual Capital reserve ento comprehensiv able Other Subtotal interests equity
reserve general profit
d capit Other ry e income rese
risk
stoc al shar rve
k secur es
23
ities
I. Balance at the
end of the last 1,044,597,881.00 2,684,806,344.07 -7,262,322.02 391,029,420.33 937,894,771.93 5,051,066,095.31 106,110,485.80 5,157,176,581.11
year
Add:
Changes of
accounting policy
Error
correction of the
last period
Enterprise
combine under
the same control
Other
II. Balance at the
beginning of this 1,044,597,881.00 2,684,806,344.07 -7,262,322.02 391,029,420.33 937,894,771.93 5,051,066,095.31 106,110,485.80 5,157,176,581.11
year
III. Increase/
Decrease in this
-418,120.44 -6,993,349.71 -11,991,641.13 -19,403,111.28 22,295,176.11 2,892,064.83
year (Decrease is
listed with “-”)
(i) Total
comprehensive -6,993,349.71 50,684,231.73 43,690,882.02 378,322.19 44,069,204.21
income
(ii) Owners’
devoted and -418,120.44 -418,120.44 22,865,000.00 22,446,879.56
decreased capital
1.Common
shares invested 22,865,000.00 22,865,000.00
by shareholders
2. Capital
invested by
holders of other
24
equity
instruments
3. Amount
reckoned into
owners equity
with share-based
payment
4. Other -418,120.44 -418,120.44 -418,120.44
(III) Profit
-62675872.86 -62,675,872.86 -948,146.08 -63,624,018.94
distribution
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk
provisions
3. Distribution
for owners (or -62,675,872.86 -62,675,872.86 -1,366,265.52 -64,042,138.38
shareholders)
4. Other 418,119.44 418,119.44
(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
25
reserve
4．Carry-over
retained
earnings from
the defined
benefit plans
5．Carry-over
retained earnings
from other
comprehensive
income
6. Other
(V) Reasonable
reserve
1. Withdrawal in
the report period
2. Usage in the
report period
(VI)Others
IV. Balance at the
end of the report 1,044,597,881.00 2,684,388,223.63 -14,255,671.73 391,029,420.33 925,903,130.8 5,031,662,984.03 128,405,661.91 5,160,068,645.94
period
Legal Representative: Wu Dinggang
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)
Current period
In RMB
26
Semi-annual of 2019
Other equity instrument Other
Less:
Item Prefe Perpetual Capital public compreh Reasonable Surplus Retained Total owners’
Share capital Inventor Other
rred capital Other reserve ensive reserve reserve profit equity
y shares
stock securities income
I. Balance at the end of the 1,044,597,881.00 2,753,017,007.10 400,455,827.82 917,567,933.94 5,115,638,649.86
last year
Add: Changes of -1,023,250.12 -9,209,251.03 -10,232,501.15
accounting policy
Error correction of
the last period
Other
II. Balance at the beginning 1,044,597,881.00 2,753,017,007.10 399,432,577.70 908,358,682.91 5,105,406,148.71
of this year
III. Increase/ Decrease in this
year (Decrease is listed with -10,543,581.33 -10,543,581.33
“-”)
(i) Total comprehensive
52,132,291.53 52,132,291.53
income
(ii) Owners’ devoted and
decreased capital
1.Common shares invested by
shareholders
2. Capital invested by holders
of other equity instruments
3. Amount reckoned into
owners equity with
share-based payment
4. Other
(III) Profit distribution -62,675,872.86 -62,675,872.86
1. Withdrawal of surplus
reserves
2. Distribution for owners (or -62,675,872.86 -62,675,872.86
shareholders)
27
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．Carry-over retained
earnings from the defined
benefit plans
5．Carry-over retained
earnings from other
comprehensive income
6. Other
(V) Reasonable reserve
1. Withdrawal in the report
period
2. Usage in the report period
(VI)Others
IV. Balance at the end of the
1,044,597,881.00 2,753,017,007.10 399,432,577.70 897,815,101.58 5,094,862,567.38
report period
Last period
In RMB
Semi-annual of 2018
Other equity instrument Other
Less:
Item Prefe Perpetual Capital public compreh Reasonable Surplus Retained Total owners’
Share capital Inventor Other
rred capital Other reserve ensive reserve reserve profit equity
y shares
stock securities income
I. Balance at the end of the last
1,044,597,881.00 2,753,017,007.10 390,811,254.65 893,442,648.28 5,081,868,791.03
year
28
Add: Changes of
accounting policy
Error correction of
the last period
Other
II. Balance at the beginning of 1,044,597,881.00 2,753,017,007.10 390,811,254.65 893,442,648.28 5,081,868,791.03
this year
III. Increase/ Decrease in this
year (Decrease is listed with -12,386,904.37 -12,386,904.37
“-”)
(i) Total comprehensive
50,288,968.49 50,288,968.49
income
(ii) Owners’ devoted and
decreased capital
1.Common shares invested by
shareholders
2. Capital invested by holders
of other equity instruments
3. Amount reckoned into
owners equity with
share-based payment
4. Other
(III) Profit distribution -62,675,872.86 -62,675,872.86
1. Withdrawal of surplus
reserves
2. Distribution for owners (or
-62,675,872.86 -62,675,872.86
shareholders)
3. Other
(IV) Carrying forward internal
owners’ equity
1. Capital reserves conversed
to capital (share capital)
2. Surplus reserves conversed
to capital (share capital)
29
3. Remedying loss with
surplus reserve
4．Carry-over retained earnings
from the defined benefit plans
5．Carry-over retained earnings
from other comprehensive
income
6. Other
(V) Reasonable reserve
1. Withdrawal in the report
period
2. Usage in the report period
(VI)Others
IV. Balance at the end of the
1,044,597,881.00 2,753,017,007.10 390,811,254.65 881,055,743.91 5,069,481,886.66
report period
Legal Representative: Wu Dinggang
Person in charge of accounting works: Pang Haitao
Person in charge of accounting institute: Luo Bo
30
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
I. Company profile
Changhong Meiling Co., Ltd (hereinafter referred to as “the Company”) ，originally named as Hefei Meiling
Co., Ltd. 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 ownership was 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. 752] issued by SASAC, agrees the above said transferring.
On October 29, 2008, Changhong Group Company signed Agreement on Equity Transfer of Hefei Meiling
Co., Ltd with Sichuan Changhong, in which 32,078,846 tradable A-shares with conditional subscription of
the Company (accounting for 7.76% in total shares) held by Changhong Group Company. On 23 December
2008, “Reply of Transfer Freely of Part of the Shares of Hefei Meiling Co., Ltd. held by State-owned
31
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
shareholders” [GZCQ (2008) No. 1413] issued by SASAC agrees the above said share transferring.
On 24 December 2010, being deliberated and approved in 32nd Session of 6th BOD 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 12 th Session of the 8th BOD 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 280,858,676.00
Yuan , increased capital reserve (share premium) of 1,259,874,046.76 Yuan. This capital increase has been
verified by No. ［ XYZH2016CDA40272 ］ capital verification report of ShineWing Certified Public
Accountants special general partnership.
Ended as 30 June 2019, total share capital of the Company amounting to 1,044,597,881shares with ordinary
32
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
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 80,788,526 7.73%
1. State-owned shares
2. State-owned legal person’s shares 70,793,625 6.78%
3. Other domestic shares 8,727,481 0.83%
Including: Domestic legal person’s shares 4,716,077 0.45%
Domestic natural person’s shares 4,011,404 0.38%
4. Foreign shares 1,267,420 0.12%
Including: Overseas natural person’s shares 1,267,420 0.12%
(II)Unrestricted shares 963,809,355 92.27%
1. RMB Ordinary shares 802,212,775 76.80%
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: Wu Dinggang; register capital (paid-in capital): RMB 1,044,597,881; type of company:
limited liability company(joint venture and listed of Taiwan, Hong Kong and Macao) 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& auxiliary materials, machinery equipment, instrument and technology; department
sales and transportation
II. Scope of consolidated financial statement
The Company’s consolidated financial statement included 38 subsidiaries including Sichuan Changhong
Air-conditioner Co., Ltd., Zhongshan Changhong Electric Co., Ltd, Zhongke Meiling Cryogenic Technology
Co., Ltd and so on. As compared to previous year, Nanchang Xiangyou Electronic Appliance Marketing
Co.,Ltd was liquidated out of the scope, Hefei Meiling Wulian Technology Co., Ltd and Anhui Tuoxing
Technology Co., Ltd are established in the period. More detail can be seen in “VII. Changes of consolidated
scope” and “VIII. Rights and interest in other subjects” in the Note.
33
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
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
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
34
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
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
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
35
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
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
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
36
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
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
change of fair value. As for the foreign currency non-monetary items measured by historical cost, conversion
37
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
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 instrument
A financial asset or liability is recognized when the Company becomes a party to a financial instrument
contract. The financial assets and financial liabilities are measured at fair value on initial recognition. For the
financial assets and liabilities measured by fair value and with variation reckoned into current gains/losses,
the related transaction expenses are directly included in current gains or losses; for other types of financial
assets and liabilities, the related transaction costs are included in the initial recognition amount.
(1) Method for determining the fair value of financial assets and financial liabilities
Fair value refers to the price that a market participant can get by selling an asset or has to pay for transferring
a liability in an orderly transaction that occurs on the measurement date. For a financial instrument having an
active market, the Company uses the quoted prices in the active market to determine its fair value.
Quotations in an active market refer to prices that are readily available from exchanges, brokers, industry
associations, pricing services, etc., and represent the prices of market transactions that actually occur in an
arm's length transaction. If there is no active market for a financial instrument, the Company uses valuation
techniques to determine its fair value. Valuation techniques include reference to prices used in recent market
transactions by parties familiar with the situation and through voluntary trade, and reference to current fair
values of other financial instruments that are substantially identical, discounted cash flow methods, and
option pricing models.
(2) Category and measurement on financial assets
The Company divided the financial assets as the follow while initially recognized: the financial assets
measured at amortized cost; the financial assets measured at fair value and whose changes are included in
other comprehensive income; and the financial assets measured by fair value and with variation reckoned
into current gains/losses. The classification of financial assets depends on the business model that the
Company 's enterprises manage the financial assets and the cash flow characteristics of the financial assets.
The financial assets measured at amortized cost
38
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Financial assets are classified as financial assets measured at amortized cost when they also meet the
following conditions: The group's business model for managing the financial assets is to collect contractual
cash flows; the contractual terms of the financial assets stipulate that cash flow generated on a specific date is
only paid for the principal and interest based on the outstanding principal amount. For such financial assets,
the effective interest method is used for subsequent measurement according to the amortized cost, and the
gains or losses arising from amortization or impairment are included in current profits and losses. Such
financial assets mainly include monetary funds, notes receivable, accounts receivable, other receivables, debt
investment and long-term receivables, and so on. The Company lists the debt investment and long-term
receivables due within one year (including one year) from the balance sheet date as non-current assets due
within one year, and lists the debt investment with time limit within one year (including one year) when
acquired as other current assets.
The financial assets measured at fair value and whose changes are included in other comprehensive income
Financial assets are classified as financial assets measured at fair value and whose changes are included in
other comprehensive income when they also meet the following conditions: The Company 's business model
for managing the financial assets is targeted at both the collection of contractual cash flows and the sale of
financial assets; the contractual terms of the financial asset stipulate that the cash flow generated on a
specific date is only the payment of the principal and the interest based on the outstanding principal amount.
For such financial assets, fair value is used for subsequent measurement. The discount or premium is
amortized by using the effective interest method and is recognized as interest income or expenses. Except the
impairment losses and the exchange differences of foreign currency monetary financial assets are recognized
as the current profits and losses, the changes in the fair value of such financial assets are recognized as other
comprehensive income until the financial assets are derecognized, the accumulated gains or losses are
transferred to the current profits and losses. Interest income related to such financial assets is included in the
current profit and loss. Such financial assets are listed as other debt investments, other debt investments due
within one year (including one year) from the balance sheet date are listed as non-current assets due within
one year; and other debt investments with time limit within one year (including one year) when acquired are
listed as other current assets.
Financial assets measured by fair value and with variation reckoned into current gains/losses
Financial assets except for the above-mentioned financial assets measured at amortized cost and financial
assets measured at fair value and whose changes are included in other comprehensive income are classified
as financial assets measured at fair value and whose changes are included in current profits and losses, which
adopt fair value for subsequent measurement and all changes in fair value are included in current profits and
losses. The Company classifies non-trading equity instruments as financial assets measured at fair value and
whose changes are included in current profits and losses. Such financial assets are presented as trading
financial assets, and those expire after more than one year and are expected to be held for more than one year
are presented as other non-current financial assets.
39
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
(2) Devaluation of financial instrument
On the basis of expected credit losses, the Company performs impairment treatment on financial assets
measured at amortized cost and financial assets measured at fair value and whose changes are included in
other comprehensive income and recognize the provisions for loss.
Credit loss refers to the difference between all contractual cash flows that the Company discounts at the
original actual interest rate and are receivable in accordance with contract and all cash flows expected to be
received, that is, the present value of all cash shortages. Among them, for the purchase or source of financial
assets that have suffered credit impairment, the Company discounts the financial assets at the actual interest
rate adjusted by credit.
The Company considers all reasonable and evidenced information, including forward-looking information,
based on credit risk characteristics. When assessing the expected credit losses of receivables, they are
classified according to the specific credit risk characteristics as follows:
1) For receivables and contractual assets and lease receivables (including significant financing components
and not including significant financing components), the Company measures the provisions for loss based on
the amount of expected credit losses equivalent to the entire duration.
①. Evaluate expected credit losses based on individual items: credit notes receivable (including accepted
letters of credit) of financial institutions in notes receivable and accounts receivable, and related party
payments (related parties under the same control and significant related parties); dividends receivable,
interest receivable, reserve funds, investment loans, cash deposits (including warranty), government grants
(including dismantling subsidies) in other receivables, and receivables with significant financing components
(i.e. long-term receivables);
②. Evaluate expected credit losses based on customer credit characteristics and ageing combinations: in
addition to evaluating expected credit losses based on individual items, the Company evaluates the expected
credit losses of notes receivable and accounts receivable and other receivables financial instruments based on
customer credit characteristics and ageing combinations.
The Company considers all reasonable and evidenced information, including forward-looking information,
when assessing expected credit losses. When there is objective evidence that its customer credit
characteristics and ageing combination cannot reasonably reflect its expected credit loss, the current value of
the expected future cash flow is measured by a single item, and the cash flow shortage is directly written
down the book balance of the financial asset.
2) Assess the expected credit losses on a case-by-case basis for other assets to which the financial
instruments are impaired, such as the loan commitments and financial guarantee contracts that are not
40
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
measured at fair value through profit or loss, financial assets measured at fair value and whose changes are
recognized in other comprehensive income; other financial assets measured at amortized cost (such as other
current assets, other non-current financial assets, etc.).
(3) Reorganization 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
ownership, nor given up controlling the financial assets, then confirm the relevant financial assets according
to how it continues to involve into the transferred financial assets and confirm the relevant liabilities
accordingly. The extent of continuing involvement in the transferred financial assets refers to the level of risk
arising from the changes in financial assets value faced by the enterprise.
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.
When the Company sells financial assets adopting the mode of recourse, or endorses and transfers its
financial assets, it is necessary to ensure whether almost all the risks and rewards of ownership of the
financial assets have been transferred. If almost all the risks and rewards of ownership of the financial assets
have been transferred to the transferee, the financial assets shall be derecognized; if almost all the risks and
rewards of ownership of the financial assets are retained, the financial assets shall not be derecognized; if
almost all the risks and rewards of ownership of the financial assets are neither transferred nor retained,
continue to judge whether the company retains control over the assets, and conduct accounting treatment
according to the principles described in the preceding paragraphs.
(4) Category and measurement of financial liability
41
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Financial liability is classified into financial liability measured by fair value and with variation reckoned
into current gains/losses and other financial liability at initially measurement. Financial liability shall be
initially recognized and measured at fair value. As for the financial liability measured by fair value and with
variation reckoned into current gains/losses, relevant trading costs are directly reckoned into current
gains/losses while other financial liability shall be reckoned into the initial amount recognized.
① the financial liability measured by fair value and with variation reckoned into current gains/losses
The conditions to be classified as transactional financial liabilities and as financial liabilities designated to be
measured at fair value and whose changes are included in current profit or loss at the initial recognition are
consistent with the conditions to be classified as transactional financial assets and as financial assets
designated to be measured at fair value and whose changes are included in current profit or loss at the initial
recognition. Financial liabilities measured at fair value and whose changes are included in current profit or
loss are subsequently measured at fair value, and the gain or loss arising from changes in fair value and the
dividends and interest expense related to these financial liabilities are included in current profit or loss.
② Other financial liability
It must go through the delivery of the derivative financial liabilities settled by the equity instrument to link to
the equity instruments that are not quoted in an active market and whose fair value cannot be reliably
measured, and the subsequent measurement is carried out in accordance with the cost. Other financial
liabilities are subsequently measured at amortized cost by using the effective interest method. The gain or
loss arising from derecognition or amortization is included in current profit or loss.
③Financial guarantee contract
The financial guarantee contract of a financial liability which is not designated to be measured at fair value
through profit or loss is initially recognized at fair value, and its subsequent measurement is carried out by
the higher one between the amount confirmed in accordance with the Accounting Standards for Business
Enterprises No. 13 — Contingencies after initial recognition and the balance after deducting the accumulated
amortization amount determined in accordance with the principle of Accounting Standards for Business
Enterprises No. 14—Revenue from the initial recognition amount.
(6) Termination of recognition of financial liability
The financial liability or part of it can only be derecognized when all or part of the current obligation of the
financial liability has been discharged. The Company (debtor) and the creditor sign an agreement to replace
the existing financial liabilities with new financial liabilities, and if the contract terms of the new financial
liabilities are substantially different from the existing financial liabilities, derecognize the existing financial
liabilities and at the same time recognize the new financial liabilities. If the financial liability is derecognized
in whole or in part, the difference between the carrying amount of the derecognized part and the
42
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
consideration paid (including the transferred non-cash assets or the assumed new financial liabilities) is
included in current profits and losses.
(7) Balance-out between the financial assets and liabilities
As the Company has the legal right to balance out the financial liabilities by the net or liquidation of the
financial assets, the balance-out sum between the financial assets and liabilities is listed in the balance sheet.
In addition, the financial assets and liabilities are listed in the balance sheet without being balanced out.
(8) Derivatives and embedded derivatives
Derivatives are initially measured at fair value on the signing date of the relevant contract, and are
subsequently measured at fair value. Except for derivatives that are designated as hedging instruments and
are highly effective in hedging, the gains or losses arising from changes in fair value will be determined
based on the nature of the hedging relationship in accordance with the requirements of the hedge accounting
and be included in the period of profit and loss, other changes in fair value of derivatives are included in
current profits and losses. For a hybrid instrument that includes an embedded derivative, if it is not
designated as a financial asset or financial liability measured at fair value and whose changes are included in
current profit or loss, the embedded derivative does not have a close relationship with the main contract in
terms of economic characteristics and risks, and as with embedded derivatives, if the tools existing separately
conform to the definition of the derivatives, the embedded derivatives are split from the hybrid instruments
and are treated as separate derivative financial instruments. If it is not possible to measure the embedded
derivative separately at the time of acquisition or subsequent balance sheet date, the whole hybrid instrument
is designated as a financial asset or financial liability measured at fair value and whose changes are included
in current profits and losses.
(9) Equity instrument
The equity instrument is the contract to prove the holding of the surplus stock of the assets with the
deduction of all liabilities in the Company. The Company issues (including refinancing), repurchases, sells or
cancels equity instruments as movement of equity. No fair value change of equity instrument would be
recognized by the Company.
Transaction costs associated with equity transactions are deducted from equity. The Company's various
distributions to equity instrument holders (excluding stock dividends) reduce shareholders' equity.
11. Inventories
Inventories of the Company principally include raw materials, stock goods; work in process, self-made
semi-finished product, materials consigned to precede, low-value consumption goods, goods in transit, goods
in process, mould and engineering construction etc.
43
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise 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
44
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Withdrawal proportion for obsolete
Location level
provision
Repair 50%
Awaiting repair 70%
Store return 70%
De-stocking 70%
Overstock 100%
With respect to the inventories and delivered goods which are not vested to the above classification, their
realizable net value will be calculated by the Company based on the estimated selling price of the inventories
less estimated selling expense and related taxes. The Company re-checks the above mentioned proportion at
every end of the year. Calculated the net realizable value by difference between the estimated sale price less
the estimated sales expense and relevant taxation; after comparison with the book value of commodity stocks
and goods in transit, determined whether adjusted the proportion or not. Mould expense will amortize in
installment in usual times. Once the use-life of mould is terminated, and then transfer its remaining cost into
gains/losses, no withdrawal of obsolete provision at period-end.
12. Long-term equity investment
Long-term equity investment of the Company is mainly about investment in subsidiary, investment in
associates and investment in joint-ventures.
For long-term equity investments acquired through business combination under common control, the initial
investment cost shall be the acquirer’s share of the carrying amount of net assets of the acquiree as of the
combination date as reflected in the consolidated financial statement of the ultimate controller. If the carrying
amount of net assets of the acquiree as of the combination date is negative, the investment cost of long-term
equity investment shall be zero. For long-term equity investment acquired through business combination not
under common control, the initial investment cost shall be the combination cost.
Excluding the long-term equity investment acquired through business combination, there is also a king of
long-term equity investment acquired through cash payment, for which the actual payment for the purchase
shall be investment cost; If Long-term equity investments are acquired by issuing equity securities, fair value
of issuing equity investment shall be investment cost; for Long-term equity investments which are invested
by investors, the agreed price in investment contract or agreement shall be investment cost; and for long-term
equity investment which is acquired through debt reorganization and non-monetary assets exchange,
regulations of relevant accounting standards shall be referred to for confirming investment cost.
The Company adopts cost method for investment in subsidiaries, makes calculation for investments in
joint-ventures and associates by equity method.
When calculated by cost method, long-term equity investment is priced according to its investment cost, and
cost of the investment is adjusted when making additional investment or writing off investment; When
calculated by equity method, current investment gains and losses represent the proportion of the net gains
45
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
and losses realized by the invested unit in current year attributable to or undertaken by the investor. When the
Company is believed to enjoy proportion of net gains and losses of invested unit, gains and losses attributable
to the Company according to its shareholding ratio is to computer out according to the accounting policy and
accounting period of the Company, on the basis of the fair value of various recognizable assets of the
invested unit as at the date of obtaining of the investment, after offset of gains and losses arising from
internal transactions with associates and joint-ventures, and finally to make confirmation after adjustment of
net profit of the invested unit. Confirmation on gains and losses from the long-term equity investment in
associates and joint-ventures held by the Company prior to the first execution day, could only stand up with
the precedent condition that debit balance of equity investment straightly amortized according to its original
remaining term has already been deducted, if the aforementioned balance relating to the investment do exist.
In case that investor loses joint control or significant influence over investee due to disposal of part equity
interest investment, the remaining equity interest shall be calculated according to Enterprise Accounting
Principles No.22-Recognition and Measurement of Financial Instrument. Difference between the fair value
of the remaining equity interest as of the date when loss 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 it carrying value and effective price for
obtaining shall be recorded into current investment income. When disposing long-term equity investment
which is calculated by equity method, the proportion originally recorded in owners’ equity shall be
transferred to current investment income according to relevant ratio, except for that other movements of
owners’ equity excluding net gains and losses of the invested units shall be recorded into owners’ equity.
13. Investment real estate
The investment real estate of the Company includes leased houses and buildings, and is accounted value by
its cost. Cost of purchased-in investment real estate consists of payment for purchase, relevant taxes and
other expenditure which is attributable to the assets directly; while cost of self-built investment real estate is
formed with all necessary expenditures occurred before construction completion of the assets arriving at the
estimated utilization state.
Consequent measurement of investment estate shall be measured by cost method. Depreciation is provided
with average service life method pursuant to the predicted service life and net rate of salvage value. The
predicted service life and net rate of salvage value and annual depreciation are listed as follows:
46
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Predicted rate of salvage Depreciation rate per
Category Depreciation term
value annual
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
additional capital, the fixed assets or intangible assets shall switch to investment real estate commencing
from the date of such turning. In situation of switch, the carrying value before the switch shall be deemed as
the credit value after the switch.
When investment is disposed, or out of utilization forever and no economic benefit would be predicted to
obtain through the disposal, the Company shall terminate recognition of such investment real estate. The
amount of income from disposal, transfer, discarding as scrap or damage of investment real estate after
deducting the asset’ s carrying value and relevant taxation shall be written into current gains and losses.
14. Fixed assets
Fixed assets of the Company represent the tangible assets and assets package: held by the Company for
purpose of producing commodities, providing labor service, leasing or operational management, service life
exceeds one year, and unit price exceeds RMB 2,000. Including four categories of houses and buildings,
machinery equipment, transportation equipment and other equipment
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.
47
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
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. Category Depreciation term
value year
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%
3 Transport equipment 5-12 years 4%-5% 7.92%-19.20%
4 Other equipment 8-12 years 4%-5% 7.92%-12.00%
The Company makes re-examination on predicted service life, predicted rate of salvage value and
depreciation method at each year-end. Any change will be treated as accounting estimation change.
15. Construction in process
Construction in process is measured with effective cost. Self-operated constructions projects are measured
with direct materials, direct salaries and direct construction expense; construction projects undertaken by
external are measured with the engineering payment payable; and engineering cost (income abatement) of
equipment-installation projects is confirmed with consideration of value of the equipment, installation fee,
and expenditure arising from trial operation of the projects. Borrowing expense and exchange gains and
losses which should be capitalized are also included in cost of construction in process.
16. Borrowing expense
Borrowing expenses include interest expense, amortization of discount or premium, auxiliary expenses and
exchange difference due to borrowing in foreign currency. The borrowing expense which could be directly
attributable to purchase or production of assets satisfying capitalization condition, starts capitalization when
capital expenditure and borrowing expense occur and when necessary purchase or production conducted for
promoting assets to reach the predicted available-for-use or available-for-sale state; and capitalization shall
cease when purchased or produced assets satisfying capitalization condition have reached the predicted
available-for-use or available-for-sale state. Other borrowing expense is recognized as expense during the
occurrence period.
Capitalization shall be exercised for interest expense actually occurred from special borrowings in current
period after deduction of the interest income arising from unutilized borrowing capital which is saved in
banks or deduction of investment income obtained from temporary investment; For recognization of
capitalized amount of common borrowing, it equals to the weighted average of the assets whose
accumulated expense or capital disburse is more than common borrowing times capitalization rate of
48
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
occupied common borrowing. Capitalization rate is determined according to weighted average interest rate of
common borrowing.
Assets satisfying capitalization principle generally refer to fixed assets, investment real estate and inventories
which can only arrive at predicted available-for-use and available-for-sale state after quite a long time
(generally over one year) in purchase or production activities.
If abnormal interruption happens during purchase or production of assets satisfying capitalization principle
and the interruption lasts over 3 months, the capitalization for the borrowing expense shall pause until the
purchase or production restarts.
17. Intangible assets
The Company holds intangible assets including land use right, trademark, patent technology and non-patent
technology. Intangible assets are measured according to the effective costs paid for obtaining the assets. For
those intangible assets purchased in by the Company, their effective cost consist of actual payment and
relevant other expenditure; for the intangible assets input by investors, effective cost is determined according
to the value agreed in investment contracts and agreements, while if the agreed value is not fair, then
effective value is confirmed according to fair value.
Land use right is averagely amortized according to its transfer term commencing from the sate of transfer;
trademark use-rights averagely amortized by 10 years; patent technology, non-patent technology and other
intangible assets is averagely amortized according to the shortest of their predicted service life, beneficial
term concluded by contract and effective term regulated by laws. Amortization amount is recorded in assets
cost and current gains and losses relevant to beneficial objectives.
Re-examination on predicted service life and amortization method of the intangible assets which have limited
service life shall be conducted at the end of each year. If changed, it would be treated as change of
accounting estimation. Re-examination on predicted service life of intangible assets which have uncertain
service life shall be conducted. For any evidence proving that service life of intangible assets is limited, then
the service life shall be estimated and the Company shall make amortization within the predicted service life
period.
18. Research and development
As for expenditure for research and development, the Company classifies it into expenditure on research
phase and development phase, based on nature of the expenditure and that whether the final intangible assets
formed by research & development is of great uncertainty. Expenditure arising during research should be
recorded in current gains and losses upon occurrence; expenditure arising during development is confirmed
as intangible assets when satisfying the following conditions:
49
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
(1) Completions of the intangible assets make it available for application or sell in technology;
(2) Equipped with plan to complete the intangible asset and apply or sell it;
(3) There is market for products produced with this intangible asset or the intangible asset itself;
(4) Have sufficient technology, financial resource and other resources to support development of the
intangible assets, and have ability to apply or sell the assets;
(5) Expenditure attributable to development of the intangible assets could be reliable measured.
Expenditure arising during development not satisfying the above conditions shall be recorded in current gains
and losses upon occurrence. Development expenditure which had been recorded in gains and losses in
previous period would not be recognized as assets in later period. Expenditure arising during development
phase which has been starting capitalization is listed in balance sheet as development expenditure, and
transferred to intangible assets since the project reaches at predicted utilization state.
19. Impairment of non-financial long-term assets
As at each balance sheet date, the Company has inspection on long-term equity investment, fixed assets,
construction in process and intangible assets with limited service life. When the following indications appear,
assets may be impaired, and the Company would have impairment test. As for goodwill and intangible assets
which have uncertain service life, no matter there is impairment or not, impairment test shall be conducted at
the end of every year. If it is hard to make test on recoverable amount of single asset, test is expected to make
on the basis of the assets Company or assets Company 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
50
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
lower (or higher) than the predicted amount;
(7) Other indications showing possible impairment of assets
20. Goodwill
Goodwill represents balance between equity investment cost or business combination cost under no common
control exceeding the attributable part or fair value of recognizable net assets of party invested or purchased
(obtained through business combination) as of acquisition day or purchase day.
Goodwill relating to subsidiaries is separately listed in consolidated financial statement. And goodwill
relating to associates and joint-ventures is included in carrying value of long-term equity investment.
21. Long-term deferred expenses
Long-term deferred expenses of the Company refer to the expense which has been paid out while should be
amortized from the current period and periods thereafter, with amortization term over 1 year (excluding 1
year). Such expense is averagely amortized during the beneficial period. If such long-term deferred expense
could not bring benefit to following accounting periods, the unamortized value of the item shall be fully
transferred to current gains and losses.
22. Staff remuneration
Employee benefits mainly include all kinds of remuneration incurred in exchange for services rendered by
employees or compensation to the termination of employment relationship such as short-term wages,
post-employment benefits, compensation for the termination of employment relationship and other long-term
employee welfare.
Short-term remuneration includes: staff salary, bonus, allowances and subsidies, staff benefits, social
insurances like medical insurance, work-related injury insurance and maternity insurance, housing fund,
labor union funds and staff education funds, short-term paid absence of duty, short-term profit sharing
scheme, and non-monetary benefits as well as other short-term remuneration. During the accounting period
when staff provides services, the short-term remuneration actually occurred is recognized as liabilities and
shall be included in current gains and losses or related asset costs according to the beneficial items.
Retirement benefits mainly consist of basic pension insurance, unemployment insurance and early-retirement
benefits, etc. retirement benefit scheme represents the agreement reached by the Company and its employees
in respect of retirement benefits, or the rules or regulations established by the Company for providing
retirement benefits to employees. In particular, defined contribution plan means a retirement benefit plan,
pursuant to which, the Company makes fixed contribution to independent fund, upon which, and it is not
obliged to make further payment. Defined benefit plan refers to retirement benefit scheme other than defined
51
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
contribution plan.
The early retirement policy for staff and workers of the Company is the compensation for encouraging staff
and workers to accept the reduction voluntarily. The employees make applications voluntarily, the two
parties sign the compensation agreement after approved by the Company and calculate the compensation
amount according to the compensation standard passed by the staff representative conference, and the
Company confirms it as dismiss welfare and reckons it in current profits and losses. As the Company
promises to adjust the treatment for early retiring staff and workers with the increase of social basic cost of
living allowances, the discount elements will not be considered for calculating the dismiss welfare.
23.Accrual liability
If the business in connection with such contingencies as a security involving a foreign party, commercial
acceptance bill discount, pending litigation or arbitration, product quality assurance, etc. meets all of the
following conditions, the Company will confirm the aforesaid as liabilities: the obligation is an existing
obligation of the Company; performance of the obligation is likely to cause economic benefits to flow out of
the enterprise; the amount of the obligation is reliably measurable.
24. Principle of recognition of revenue and measurement method
The Company’s sales revenue is mainly comprised of revenue from sale of goods, labor providing income
and revenue from assignment of asset use rights. The principle of recognition of such revenue is as follows:
(1) Revenue from the sale of goods shall be recognized when the Company has transferred to the buyer the
significant risks and rewards of ownership of the goods; the Company retains neither continuing managerial
involvement to the degree usually associated with ownership nor effective control over the goods sold; the
amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow
into the Company; The export business is recognized when the packing list is received; and the associated
costs incurred or to be incurred can be measured reliably. Air-conditioner OEM/ODM will recognize revenue
while notes issued after commodity transferring to the shipping space that appointed by the client.
(2) The Company confirms the realization of service income when the gross income and total cost of labor
service cab be unfailingly calculated, the economic benefits related to labor service are likely to flow into the
Company, 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
52
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
service income.
(3) The economy benefits of use-right of transfer assets probably wills inflow to the Company, if the income
can be measure accountability, than use-right income of transfer assets recognized.
25. Government subsidy
Government subsidy is recognized when the Company fulfils the conditions attached to them and there is
reasonable assurance that the grant will be received. The Government subsidy, other than fiscal subsidy,
received by the Company shall be accounted on an aggregate basis. In particular, the Government subsidies
relating to ordinary activities would be included in other income; the Government subsidies not relating to
ordinary activities would be included in non-operating income.
When the Government subsidy 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 subsidy 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 subsidy relating to assets
Government subsidy relating to assets refers to that obtained by the Company for the purpose of acquiring or
otherwise formation of long-term assets. Government subsidy relating to assets is deemed as that relating to
ordinary activities in principle and recognized as deferred income upon receipt. The Government subsidy
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 subsidy relating to income
Government subsidy relating to income refers to the Government subsidy other than that relating to assets.
Government subsidy 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 subsidies 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 subsidy 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
53
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
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.
26. Deferred Income Tax Assets and Deferred Income Tax Liabilities
A deferred tax asset and deferred tax liability shall be determined by a difference (temporary difference)
between the carrying amount of an asset or liability and its tax base. The deferred tax asset shall be
recognized for the carry forward of unused deductible losses that it is probable that future taxable profits will
be available against which the deductible losses can be utilized. For temporary difference arising from initial
recognition of goodwill, no corresponding deferred income tax liabilities will be recognized. For temporary
difference arising from initial recognition of assets and liabilities occurred in the transaction related to
non-business combination which neither affect accounting profit nor assessable income (or deductible 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 deductible temporary difference, deductible losses and tax credits.
27. Lease
The Company categorizes the lease into the financial lease and the operating lease.
The financial lease is the lease in which all risks and returns related to the ownership of assets are transferred
in substance. The Company as a lease holder, on the date of lease, the financial lease is recognized as the
fixed asset at lower cost of fair value of the rental asset and the NPV of minimum payment of leasing. The
minimum payment of leasing is recognized as long-term payable and the difference is accounted into
unrecognized financing expense.
The operating lease is the lease apart from the financial lease. The Company, as a lease holder, accounts the
rents into current period by straight line method during the term of the lease. The Company, as a leaser,
accounts the rental income into current period by straight line method during the term of the lease.
28. Held-for-sale
54
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
(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 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.
55
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
(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 asset (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.
29. 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.
30. 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,
56
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
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.
31. 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.
32. 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 equipment which have
impairment indication and long-term assets such as goodwill as at the balance sheet date. The recoverable
amount of relevant assets and assets group shall be the present value of the projected future cash flow which
shall be calculated with accounting estimation.
If the management amends the gross profit margin and discount rate adopted in calculation of future cash
flow of assets and assets group and the amended gross profit margin is lower than the currently adopted one
57
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
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. Instead, 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.
33. Other comprehensive income
Other comprehensive income represents various gains and losses not recognized in current gains and losses
according to other accounting rules.
Other comprehensive income items shall be reported in the following two classes under other relevant
accounting rules:
(1) Other comprehensive income items that can not be reclassified into gains and losses in future accounting
periods, mainly including changes arising from re-measurement of net liabilities or net assets under defined
benefit plan and interest in investee’s other comprehensive income which are measured under equity method
and which can not be reclassified into gains and losses in future accounting periods,and Changes in fair value
58
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
of investments of non-transactional equity instruments that are measured at fair value and whose changes are
included in other comprehensive income, financial liabilities measured at fair value whose changes are
included in current profit or loss, and the amount that is included in other comprehensive income due to
changes in fair value caused by changes in the company's own credit risk;
(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
Changes in fair value occurred in investments of non-transactional equity instruments that are measured at
fair value and whose changes are included in other comprehensive income, when a financial asset measured
at amortized cost is reclassified as a financial asset measured at fair value and whose changes are included in
other comprehensive income, the difference between the original book value included in other
comprehensive income and the fair value, the loss provision for financial assets measured at fair value and
whose changes are included in other comprehensive income, gains or losses occurred by cash flow hedging
instruments attributable to effective hedge, foreign currency financial statement translation difference, etc.
34. Change of significant accounting policies and accounting estimates
(1) Change of significant accounting policy
In 2017, the Ministry of Finance revised and issued the Accounting Standards for Business Enterprises No.
22 - Recognition and Measurement of Financial Instruments and Accounting Standards for Business
Enterprises No. 23 - Transfer of Financial Assets , Accounting Standards for Business Enterprises No. 24 -
Hedge Accounting, and issued the Accounting Standards for Business Enterprises No. 37 – Financial
Instruments Presentation (the above-mentioned standards are collectively referred to as the “New Financial
Instruments Standards”), and the domestic listed companies are required to put them into force from January
1, 2019. And in 2019, the Notice on Revising and Printing the Format of Financial Statements for General
Enterprises in 2019 was issued, the Company and its subsidiaries will implement the above mentioned
Revision on Accounting Standards and Notices, relevant content in financial statement and accounting policy
are changed as:
The Company and its subsidiaries implemented the new financial instrument standards for the first time in
the current period, according to the provisions of CK No. (2019) 6 of the Accounting Department of the
Ministry of Finance, the impacts of the above accounting policy changes on the merger and the opening
balance of the parent company's balance sheet are as follows:
Consolidated balance sheet Balance sheet of parent company
31
December 1 Jan. 2019 31 December 1 Jan. 2019
Item affected Amount Amount
2018 (Amount 2018 (Before (Amount
adjusted adjusted
(Before adjusted) adjustment) adjusted)
adjustment)
59
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Financial assets
measured by
fair value and
with variation 9,253,635.59 -9,253,635.59 9,253,635.59 -9,253,635.59
reckoned into
current
gains/losses
Tradable
9,253,635.59 9,253,635.59 9,253,635.59 9,253,635.59
financial assets
Note receivable 2,387,830,887.74 -17,262,634.10 2,370,568,253.64 2,433,243,946.64 -13,500,000.00 2,419,743,946.64
Account
1,670,988,644.76 2,373,491.53 1,673,362,136.29 1,050,282,023.37 -2,512,900.06 1,047,769,123.31
receivable
Other account
62,129,574.17 1,063,166.76 63,192,740.93 182,744,033.52 97,297.68 182,841,331.20
receivable
Financial assets
available for 45,000,000.00 -45,000,000.00 45,000,000.00 -45,000,000.00
sale
Other
on-current 45,000,000.00 45,000,000.00 45,000,000.00 45,000,000.00
financial assets
Long-term
equity 61,869,440.55 5,683,101.23 67,552,541.78 1,731,109,903.70 5,683,101.23 1,736,793,004.93
investment
Financial
liability
measured by
fair value and
55,586,666.70 -55,586,666.70 19,893,875.00 -19,893,875.00
with variation
reckoned into
current
gains/losses
Tradable
financial 55,586,666.70 55,586,666.70 19,893,875.00 19,893,875.00
liability
Surplus reserves 400,673,993.50 -1,023,250.12 399,650,743.38 400,455,827.82 -1,023,250.12 399,432,577.70
Retained
904,232,582.87 -2,734,328.91 901,498,253.96 917,567,933.94 -9,209,251.03 908,358,682.91
profit
Minority's
119,819,558.59 -4,385,295.55 115,434,263.04
interest
The Company and its subsidiaries prepared the 2019 semi-annual financial statements in accordance with the
financial statements format specified in CK No. (2019) 6, and changed the presentation of relevant financial
60
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
statements by using the retrospective adjustment method. The impacts of the related presentation adjustments
on the consolidation and the opening balance of the parent company's balance sheet are as follows:
Consolidate balance sheet Balance sheet of parent company
31
December 1 Jan. 2019 31 December 1 Jan. 2019
Item affected Amount Amount
2018 (Amount 2018 (Before (Amount
adjusted adjusted
(Before adjusted) adjustment) adjusted )
adjustment)
Account
receivable and 4,043,930,389.93 -4,043,930,389.93 3,467,513,069.95 -3,467,513,069.95
Note receivable
Note receivable 2,370,568,253.64 2,370,568,253.64 2,419,743,946.64 2,419,743,946.64
Account
1,673,362,136.29 1,673,362,136.29 1,047,769,123.31 1,047,769,123.31
receivable
Account
payable and 6,009,929,380.98 -6,009,929,380.98 4,013,263,630.45 -4,013,263,630.45
note payable
Note payable 3,727,754,399.60 3,727,754,399.60 2,001,442,110.63 2,001,442,110.63
Account
2,282,174,981.38 2,282,174,981.38 2,011,821,519.82 2,011,821,519.82
payable
(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 16%/13%; 10%/9%; 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% or 25%
Original Book value of house property×(1-30%)or annual
Real estate tax 1.2% or 12%
rent income
Land use tax Actual land area used 1 Yuan/M2 to 15 Yuan /M2
61
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
2. Preferential tax and approval documents
The Company and its subsidiary Zhongke Meiling Cryogenics Technology Co., Ltd 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 Co., Ltd 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 Co., Ltd continuous to enjoy 15%
rate for the income tax for State Hi-Tech Enterprise for three years term.
Subsidiary Zhongshan Changhong Electric Co., Ltd. was recognized as 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-conditioner Co., Ltd. has passed the review for high-tech enterprise
certification on December 8, 2016, which is valid for three years. And continues to enjoy the 15% income tax
rare for State Hi-Tech Enterprise
The subsidiary Sichuan Hongmei Intelligent Technology Co., Ltd. has passed the certification for high-tech
enterprise certification on December 3, 2018, (Certification No.:GR20185100089) which is valid for three
years. And enjoy the 15% income tax rare for State Hi-Tech Enterprise
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.
Guangdong Changhong Ridian Technology Co., Ltd., a subsidiary of The Company, was authenticated as a
high-tech enterprise by Guangdong Science and Technology Bureau on 9 December 2016, which is valid for
three years. And enjoy the 15% income tax rare for State Hi-Tech Enterprise
The subsidiary Hefei Meiling Nonferrous Metal Products Co., Ltd. has passed the qualification of high-tech
enterprise certification on 26 Oct. 2018 (Certification No.:GR201834001779), which is valid for three years.
And enjoy the 15% enterprise income tax rare for State Hi-Tech Enterprise
VI. Notes to the major items in the consolidated financial statements
With respect to the financial statements figures disclosed below, unless otherwise specified,
62
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
“period-beginning” refers to Jan. 1, 2019; “period-end” refers to 30 June 2019; “Current period” refers to Jan.
1 to June 30, 2019; “the last period” refers to Jan. 1 to June 30, 2018; the currency is RMB.
1. Monetary fund
Item Ending balance Opening balance
Cash 78,985.65 28,650.21
Bank deposit 3,838,408,938.08 4,029,892,318.85
Other monetary fund 572,521,383.70 566,156,588.34
Total 4,411,009,307.43 4,596,077,557.40
Including: total amount deposited in overseas 6,788,017.17 13,722,335.29
Other monetary fund:
Item Ending balance
Margin 562,463,775.63
Account of foreign currency for verification 8,681,795.28
Union Pay online 520,722.01
Taobao account 855,090.78
Total 572,521,383.70
The margin which serves as non cash and cash equivalents refers to the acceptance draft deposit with a term of over three
months, amounting to RMB 118,095,950.92, the amount restricted for used in guarantee money account was RMB
25,200,000.00; the restricted use of balance in condominium account was RMB 1,501,593.51; The third party payment
platforms as Union Pay online and Taobao account have RMB 250,000.00 in restriction use. Utilization of other balance is not
subject to any restriction.
Pars of the goods payment denominated in foreign currency should be transferred to reviewing accounts which may not be used
temporarily. Upon approval of such review, those payments may be transferred to general accounts. Due to the relatively short
time for reviewing foreign exchange, balance of the reviewing accounts is not limited on utilization.
2. Tradable financial assets
Item Ending balance Opening balance
Financial assets measured at fair value and whose
changes are recorded in the profits and losses of 2,703,222.18 9,253,635.59
the current period
Including: Derivative financial assets 2,703,222.18 9,253,635.59
Derivative financial assets refer to the evaluation of forward foreign exchange contracts
3. Note receivable
(1) By category
63
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Item Ending balance Opening balance
Bank acceptance 1,840,222,933.51 2,143,384,546.78
Trade acceptance 227,183,706.86
Total 1,840,222,933.51 2,370,568,253.64
(2) Notes receivable already pledged at the end of the period
Item Amount pledge at period-end
Bank acceptance 458,081,292.13
Note: with purpose of improving the note utilization, the Company draw up bank acceptance by pledge parts of the outstanding
notes receivable to the bank.
(3) Notes endorsement or discount and undue on balance sheet date
Amount derecognition at Amount without
Item
period-end derecognition at period-end
Bank acceptance 1,124,471,307.21
Trade acceptance 284,843,123.16
Total 1,409,314,430.37
(4) By accrual of bad debt provision
Ending amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Note receivable with bad debt provision
accrual on single item
Note receivable with bad debt provision
1,840,222,933.51 100.00% 1,840,222,933.51
accrual on portfolio
Including: Bank acceptance 1,840,222,933.51 100.00% 1,840,222,933.51
Trade acceptance
Total 1,840,222,933.51 100.00% 1,840,222,933.51
(Continued)
Opening amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Note receivable with bad debt
provision accrual on single item
Note receivable with bad debt
2,387,830,887.74 100.00% 17,262,634.10 0.72% 2,370,568,253.64
provision accrual on portfolio
64
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Including: Bank acceptance 2,143,384,546.78 89.76% 2,143,384,546.78
Trade acceptance 244,446,340.96 10.24% 17,262,634.10 7.06% 227,183,706.86
Total 2,387,830,887.74 100.00% 17,262,634.10 0.72% 2,370,568,253.64
(4) Notes transfer to account receivable due for failure implementation by drawer at period-end
4. Account receivable
(1) By account age
Account age Book balance
Within 3 months (3 months included) 2,098,270,504.08
Over 3 months and within 6 months (6 months included) 430,385,767.11
Over 6 months and within one year (One year included) 54,915,758.16
over one year-within 2 years (2 years included) 76,515,726.32
Over 2 years - within 3 years (3 years included) 8,275,660.86
Over 3 years 12,666,691.38
Total 2,681,030,107.91
(2) By category
Ending amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Account receivable that
withdrawal bad debt provision by 1,183,583,204.64 44.15% 9,875,910.75 0.83% 1,173,707,293.89
single item
Including: current payment with
1,058,646,346.15 39.49% 1,058,646,346.15
related party
Account receivable
109,130,688.58 4.07% 109,130,688.58
with letter of credit
Account receivable
with single minor amount but
15,806,169.91 0.59% 9,875,910.75 62.48% 5,930,259.16
withdrawal single item bad debt
provision
Account receivable withdrawal
1,497,446,903.27 55.85% 48,911,657.05 3.27% 1,448,535,246.22
bad debt provision by portfolio
Account receivable of engineering
159,247,725.33 5.94% 6,050,106.32 3.80% 153,197,619.01
customers
65
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Receivables other than engineering
1,338,199,177.94 49.91% 42,861,550.73 3.20% 1,295,337,627.21
customers
Total 2,681,030,107.91 100.00% 58,787,567.80 2.19% 2,622,242,540.11
(Continued)
Opening amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Account receivable that
withdrawal bad debt provision by 785,323,787.31 45.15% 22,978,942.60 2.93% 762,344,844.69
single item
Including: current payment with
693,467,089.57 39.87% 693,467,089.56
related party
Account receivable
59,799,506.83 3.44% 59,799,506.82
with letter of credit
Account receivable
with single minor amount but
32,057,190.91 1.84% 22,978,942.60 71.68% 9,078,248.31
withdrawal single item bad debt
provision
Account receivable withdrawal
953,897,180.86 54.85% 42,879,889.28 4.50% 911,017,291.60
bad debt provision by portfolio
Account receivable of engineering
108,819,204.37 6.26% 5,580,667.36 5.13% 103,238,537.01
customers
Receivables other than engineering
845,077,976.49 48.59% 37,299,221.92 4.41% 807,778,754.59
customers
Total 1,739,220,968.17 100.00% 65,858,831.88 3.79% 1,673,362,136.29
1) 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, 10 clients involved.
2) Account receivable with bad debt provision accrual by aging analysis
Ending balance
Account age
Account receivable Bad debt provision Provision ratio
Within 3 months (3 months included) 1,267,899,202.00 12,039,766.79 0.95%
Over 3 months and within 6 months (6
122,019,889.35 7,720,308.86 6.33%
months included)
Over 6 months and within one year (One
46,501,777.36 5,248,781.47 11.29%
year included)
66
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Ending balance
Account age
Account receivable Bad debt provision Provision ratio
Over one year - within 2 years (2 years
54,429,061.54 18,139,371.29 33.33%
included)
Over 2 years - within 3 years (3 years
4,167,721.91 3,334,177.53 80.00%
included)
Over 3 years 2,429,251.11 2,429,251.11 100.00%
Total 1,497,446,903.27 48,911,657.05 3.27%
(3) Bad debt provision accrual, switch-back (or collected) in the period
Bad debt provision has 6,195,909.85 Yuan accrual in the period; bad debt provision of 662,652.68 Yuan are
switch-back; no trade receivables written-off in previous year was recovered this period.
(4) The bad debt provision of account receivable actually written-off in the period amounted to
12,604,521.25 Yuan.
(5) Pledge of the account receivable at year-end can be found in 53. Assets with ownership or the right to use
restricted in VI.
(6) In the period, top five receivables collected by arrears party amounting to RMB 1,561,840,305.05 in total,
accounted for 58.26% of the receivables at balance of the period-end, the bad debt provision accrual
correspondingly amounting to RMB 8,781,139.92 at period-end balance.
5. Accounts paid in advance
(1) By account age
Ending amount Opening amount
Item
Amount Ratio Amount Ratio
Within one year 42,490,153.49 97.14% 77,433,864.54 89.85%
1-2 years 913,675.89 2.09% 4,345,186.02 5.05%
2-3 years 273,041.20 0.62% 2,115,459.14 2.45%
Over 3 years 66,059.75 0.15% 2,285,949.56 2.65%
Total 43,742,930.33 100.00% 86,180,459.26 100.00%
(2) Top 5 of account paid in advance in balance at period-end amounting to RMB 32,421,122.43, accounted
for 74.12% of the account.
6. Other account receivable
67
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Item Ending balance Opening balance
Interest receivable 8,591,868.56 2,653,712.36
Other account receivable 102,166,305.55 60,539,028.57
Total 110,758,174.11 63,192,740.93
6.1 Interest receivable
(1) Category of interest receivable
Item Ending balance Opening balance
Interest receivable from time deposit 6,366,717.87 1,892,948.46
Income receivable from financial products 2,225,150.69 760,763.90
Total 8,591,868.56 2,653,712.36
(2) Major overdue interest: nil
6.2 Other account receivable
(1) By account age
Account age Book balance
Within 3 months (3 months included) 65,752,387.82
Over 3 months and within 6 months (6 months included) 6,533,583.22
Over 6 months and within one year (One year included) 16,676,458.90
over one year-within two years (2 years included) 8,635,966.49
Over 2 years - within 3 years (3 years included) 5,738,372.12
Over 3 years 2,441,606.34
Total 105,778,374.89
(2) By category
Ending amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Other account receivable that
withdrawal bad debt provision by 104,792,961.07 99.07% 3,124,358.67 2.98% 101,668,602.40
single item
Including: petty cash loan for to
31,490,231.52 29.77% 31,490,231.52
employees
Margin 50,623,360.14 47.86% 3,084,358.67 6.09% 47,539,001.47
68
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Tax rebate 20,520,989.72 19.40% 20,520,989.72
Amount of the related
2,118,379.69 2.00% 2,118,379.69
party outside the consolidated statement
Account receivable with
single minor amount but withdrawal 40,000.00 0.04% 40,000.00 100.00%
single item bad debt provision
Other account receivable withdrawal
985,413.82 0.93% 487,710.67 49.49% 497,703.15
bad debt provision by portfolio
Aging analysis 985,413.82 0.93% 487,710.67 49.49% 497,703.15
Total 105,778,374.89 100.00% 3,612,069.34 3.41% 102,166,305.55
(Continued)
Opening amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Other account receivable that
withdrawal bad debt provision by 64,157,894.08 99.68% 3,757,449.22 5.86% 60,400,444.86
single item
Including: petty cash loan for to
16,248,265.59 25.24% 16,248,265.59
employees
Margin 33,327,405.75 51.78% 3,727,449.22 11.18% 29,599,956.53
Tax rebate 13,081,994.58 20.32% 13,081,994.58
Amount of the related
1,470,228.16 2.29% 1,470,228.16
party outside the consolidated statement
Account receivable with
single minor amount but withdrawal 30,000.00 0.05% 30,000.00 100.00%
single item bad debt provision
Other account receivable withdrawal
209,177.57 0.32% 70,593.86 33.75% 138,583.71
bad debt provision by portfolio
Aging analysis 209,177.57 0.32% 70,593.86 33.75% 138,583.71
Total 64,367,071.65 100.00% 3,828,043.08 5.95% 60,539,028.57
1) As for the other account receivable with single minor amount but withdrawal single item bad debt
provision at period-end, they refer to the other account receivable with minor amount, and whose risk
characteristics cannot be reflected in the bad debt provision according to the combination, there are 2 clients
involved.
2) Other account receivable with bad debt provision accrual by aging analysis
69
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Ending balance
Account age Other account
Bad debt provision Provision ratio
receivable
Within 3 months (3 months included) 11,861.72 118.62 1.00%
Over 3 months and within 6 months (6
29,780.00 2,978.00 10.00%
months included)
Over 6 months and within one year (One
394,995.12 78,999.02 20.00%
year included)
Over one year - within 2 years (2 years
158,447.90 79,223.95 50.00%
included)
Over 2 years - within 3 years (3 years
319,690.00 255,752.00 80.00%
included)
Over 3 years 70,639.08 70,639.08 100.00%
Total 985,413.82 487,710.67 49.49%
(3) Bad debt provision accrual, switch back (or collected) in the period
Bad debt provision of 215,973.74 Yuan is switch back in the period
(4) No actual verification of other receivables in the period
(5) Classification of other accounts receivable according to the nature of account
Nature Ending book balance Opening book balance
Tax rebate 20,520,989.72 12,524,216.47
Loans of employee’s pretty cash 31,490,231.52 16,248,265.59
Margin 49,835,810.14 32,292,605.75
Other 1,812,963.82 1,278,050.57
Related party not in consolidation statement 2,118,379.69 1,470,228.16
Advance money temporary 553,705.11
Total 105,778,374.89 64,367,071.65
(6) Top 5 other receivables collected by arrears party at balance of period-end:
Proportion
in total Endingbalance
Name Nature Endingbalance Account age other of baddebt
receivables provision
at year-end
SAT of Hefei Economic & Within
Tax rebate 20,520,989.72 19.40%
Technological Development Zone one year
70
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Proportion
in total Endingbalance
Name Nature Endingbalance Account age other of baddebt
receivables provision
at year-end
Bureau of agriculture and rural affairs Within
Margin 10,000,000.00 9.45%
in Wuji County one year
Office of the lading group for
Within
construction of new socialist Margin 8,780,849.40 8.30%
one year
countryside in Shunyi District
Development & Reform Bureau of Within
Margin 8,500,000.00 8.04% 425,000.00
Wangdu County one year
Development & Reform Bureau of Within
Margin 5,000,000.00 4.73%
Qingyuan District, Baoding City one year
Total 52,801,839.12 49.92% 425,000.00
(7) No other account receivable involved government subsidies at year-end.
(8) No other receivables terminated recognization due to the transfer of financial assets at year-end.
(9) No assets and liability transfer other receivables and continues to involve at period-end.
7. Inventories
(1) Classification of inventories
Endingamount
Item Impairment
Book balance Book value
provision
Raw materials 180,086,084.43 9,899,251.50 170,186,832.93
Stock commodities 1,555,732,288.79 96,942,836.78 1,458,789,452.01
Low value consumable articles 8,705,320.20 129,883.73 8,575,436.47
Goods in transit 366,493,256.09 1,099,659.85 365,393,596.24
Goods-in-process 9,270,690.88 9,270,690.88
Deferred expense for mould 53,322,354.78 53,322,354.78
Engineering construction 47,111,374.85 47,111,374.85
Total 2,220,721,370.02 108,071,631.86 2,112,649,738.16
(Continued)
Item Openingamount
71
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Impairment
Book balance Book value
provision
Raw materials 143,684,247.48 12,759,205.28 130,925,042.20
Stock commodities 1,735,811,082.70 111,451,370.33 1,624,359,712.37
Low value consumable articles 9,282,634.55 300,940.36 8,981,694.19
Goods in transit 273,895,754.50 975,168.15 272,920,586.35
Goods-in-process 7,262,896.05 7,262,896.05
Deferred expense for mould 59,053,460.64 59,053,460.64
Engineering construction 70,933,181.87 70,933,181.87
Total 2,299,923,257.79 125,486,684.12 2,174,436,573.67
(2) Inventory falling price reserves
Current decreased
Item Opening amount Current increased Switch back Ending amount
Other
or resell
Raw materials 12,759,205.28 263,312.20 3,123,265.98 9,899,251.50
Stock
111,451,370.33 9,511,029.78 24,019,563.33 96,942,836.78
commodities
Goods in
975,168.15 841,590.03 717,098.33 1,099,659.85
transit
Low value
consumable 300,940.36 171,056.63 129,883.73
articles
Total 125,486,684.12 10,615,932.01 28,030,984.27 108,071,631.86
(3) Provision for depreciation of inventory
Reasons for the Switch-back
Item Specific basis for determining of net realizable value
or conversion in the period
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)
Low value
consumable Cost is higher than net realizable value
articles
72
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
8. Other current assets
Item Ending balance Opening balance Nature
Financial products 980,000,000.00 1,110,000,000.00 Bank financial products
Reclassify of value-added tax to be
Value-added tax to be deducted 29,718,923.54 62,040,151.40
deducted
Advance payment of income Reclassify of advance payment of
16,536,254.43 12,057,771.72
tax income tax
Finance lease un-recognized 492,406.10 589,033.84 Finance lease un-recognized
Total 1,026,747,584.07 1,184,686,956.96
73
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
9. Long-term equity investment
Changes in the period
Ending
Provisio
Additiona Investment Other Other Cash dividend balance
Opening n for
Invested enterprise l Disinve income comprehensive equity or profit Oth Ending balance of
balance impair
investme stment recognized income chang announced to er impairme
ment
nt under equity adjustment e issued nt
loss
Associated companies
1.Changhong Ruba
9,049,695.63 -7,052,869.41 -1,008,433.03 988,393.19
Electric Company (Private)Ltd. Note 1
2.Hefei Xingmei Assets Management Co.,
9,420,099.27 -468,074.75 8,952,024.52
Ltd.
3.Sichuan Zhiyijia Network Technology Co.,
9,665,468.00 -766,788.19 8,898,679.81
Ltd. Note 2
4.Hongyuan Ground Energy Heat Tech. Co.,
23,148,936.54 56,527.13 23,205,463.67
Ltd. Note 3
5.Sichuan Tianyou Guigu Technology Co.,
7,110,954.07 -692,415.62 6,418,538.45
Ltd Note 4
6.Chengdu Guigu Environmental Tech. Co.,
9,157,388.27 101,620.52 9,259,008.79
Ltd. Note 5
Total 67,552,541.78 -8,822,000.32 -1,008,433.03 57,722,108.43
Note 1: Zhongshan Changhong, a subsidiary of the Company, entered into a supplemental joint venture agreement with RUBA Comprehensive Trading Company in 2017, pursuant to which, both
parties agreed to increase capital contribution of US$ 1,130,191.00, among which, Zhongshan Changhong subscribed to contribute US$ 452,076.00 (equivalent to RMB 3,001,649.02 on the actual
74
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
contribution date) according to the original shareholding proportion of 40% and RUBA Comprehensive Trading Company subscribed to contribute US$ 678,115.00 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 RMB 50 million, among which, the Company
made contribution of RMB 15 million with shareholding proportion of 30% and Sichuan Changhong Electric Co., LTD made contribution of RMB 35 million with shareholding proportion of 70%.
Note 3: Subsidiary Sichuan Changhong Air Conditioner Co., Ltd (hereinafter referred to as Changhong Air Conditioner) and Hengyouyuan Technology Development Group Co., Ltd. (hereinafter
referred to as Hengyouyuan) cooperated to establish Hongyuan Ground Energy Heat Tech. Co., Ltd. on 28 October 2015. The registered capital of the company is RMB 50 million, among which,
Changhong Air Conditioner contributed RMB 24.5 million, accounting for 49% of the registered capital, and Hengyouyuan contributed RMB 25.5 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 RMB 100 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 Guigu Environmental Tech. Co., Ltd. was incorporated on 22 May 2013 with registered capital of RMB 40 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 ma de 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.
75
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
10. Other non-current financial assets
Ending balance Opening balance
Item Impairme Impairme
Book balance Book value Book balance Book value
nt nt
Non-tradable equity
45,000,000.00 45,000,000.00 45,000,000.00 45,000,000.00
instrument
Total 45,000,000.00 45,000,000.00 45,000,000.00 45,000,000.00
11. Investment real estate
(1) Investment real estate measured at costs
Item House and buildings Land use right Total
I. Original book value
1.Opening balance 54,219,454.78 3,411,848.00 57,631,302.78
2.Current increased 117,882.34 117,882.34
(1) Other 117,882.34 117,882.34
3.Current decreased
4.Ending balance 54,337,337.12 3,411,848.00 57,749,185.12
II. Accumulated depreciation and
accumulated amortization
1.Opening balance 10,244,458.94 540,336.43 10,784,795.37
2.Current increased 892,616.77 424,042.24 1,316,659.01
(1) Accrual or amortization 892,616.77 424,042.24 1,316,659.01
3.Current decreased
4.Ending balance 11,137,075.71 964,378.67 12,101,454.38
III. Impairment loss
IV. Book value
1.Ending book value 43,200,261.41 2,447,469.33 45,647,730.74
2.Opening book value 43,974,995.84 2,871,511.57 46,846,507.41
(2) No investment real estate measured by fair value at period-end.
(3) No particular about mortgage of investment property at period-end.
(4) Investment real estate without property certification held
Reasons for failing to complete
Assets Original value
property rights certificate
76
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Workshop In procedure
23,435,026.46
12. Fixed assets
Item Ending balance Opening balance
Fixed assets 1,900,475,838.00 1,658,081,495.03
Disposal of fixed assets 75,875,517.11 75,875,517.11
Total 1,976,351,355.11 1,733,957,012.14
12.1 Fixed assets
(1) Fixed assets
Machinery Transport
Item Houseandbuildings Otherequipment Total
equipment equipment
I.Original bookvalue
1.Openingbalance 1,190,214,714.89 1,267,678,633.84 31,075,507.90 193,835,760.40 2,682,804,617.03
2.Current increased 224,493,406.00 92,315,173.42 2,088,007.05 16,467,163.24 335,363,749.71
(1) Purchase 140,488.29 1,841,578.86 1,260,839.79 3,265,427.02 6,508,333.96
(2) Construction in process
224,352,917.71 90,473,594.56 827,167.26 13,135,389.85 328,789,069.38
transfer-in
(3) Inventory
66,346.37 66,346.37
transfer-in
3.Current decreased 27,232,791.73 1,248,595.62 3,902,337.31 32,383,724.66
( 1) Dispose orretirement 24,590,084.40 946,780.31 3,346,839.30 28,883,704.01
(2) Construction in process
2,642,707.33 2,642,707.33
transfer-in
(3) Decreased for change of
301,815.31 555,498.01 857,313.32
foreignrate
4.Endingbalance 1,414,708,120.89 1,332,761,015.53 31,914,919.33 206,400,586.33 2,985,784,642.08
II. Accumulated
depreciation
1.Openingbalance 243,448,450.52 679,782,715.32 16,638,654.43 82,743,850.92 1,022,613,671.19
2.Current increased 20,915,830.06 58,923,305.99 1,333,501.98 6,949,134.74 88,121,772.77
(1)Accrual 20,915,830.06 58,923,305.99 1,333,501.98 6,949,134.74 88,121,772.77
3.Current decreased 25,467,150.92 745,184.39 1,146,509.33 27,358,844.64
( 1) Dispose orretirement 23,148,941.51 605,968.94 990,759.97 24,745,670.42
(2) Construction in process 2,318,209.41 2,318,209.41
77
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Machinery Transport
Item Houseandbuildings Otherequipment Total
equipment equipment
transfer-in
(3) Decreased for change
139,215.45 155,749.36 294,964.81
of foreignrate
4.Endingbalance 264,364,280.58 713,238,870.39 17,226,972.02 88,546,476.33 1,083,376,599.32
III. Impairmentloss
1.Openingbalance 1,909,763.11 199,687.70 2,109,450.81
2.Current increased
3.Current decreased 177,246.05 177,246.05
(1) Other 177,246.05 177,246.05
4.Endingbalance 1,732,517.06 199,687.70 1,932,204.76
IVBookvalue
1.Endingbookvalue 1,150,343,840.31 617,789,628.08 14,687,947.31 117,654,422.30 1,900,475,838.00
2.Openingbookvalue 946,766,264.37 585,986,155.41 14,436,853.47 110,892,221.78 1,658,081,495.03
The new fixed assets in this period mainly due to the RMB 328,789,069.38 transfer from construction in process; the fixed
assets declined in the period mainly due to the fixed assets reduction for disposal of scrap
(2) No fixed assets temporary idle at period-end.
(3) No fixed assets for collateral at period-end.
(4) Fixed assets leased through financing lease at period-end.
Accumulated
Item Original book value Impairment Net book value
depreciation
Machinery equipment 3,433,033.03 611,508.99 2,821,524.04
(5) Fixed assets leased through operating lease at period-end.
Accumulated
Item Original book value Impairment Net book value
depreciation
House and buildings 12,443,336.93 3,408,932.56 9,034,404.37
Machinery equipment 2,987,730.51 2,317,460.72 670,269.79
Other equipment 3,113,478.66 829,287.69 2,284,190.97
Total 18,544,546.10 6,555,680.97 11,988,865.13
(6) Fixed assets without property certificate at period-end
Reason of not complete the
Item Book value
property certificate
78
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Reason of not complete the
Item Book value
property certificate
Canteen 2,716,313.94 In procedure
Freezer salvage station 349,166.88 In procedure
Freezer subsidiary station 4,337,337.08 In procedure
3# makeshift shelter 5,689,907.18 In procedure
5# makeshift shelter 5,140,247.60 In procedure
8# building for skeleton staff 5,178,824.74 In procedure
6# building for skeleton staff 8,930,447.86 In procedure
7# building for skeleton staff 8,215,215.45 In procedure
4# makeshift shelter (dormitory building transfer to
6,651,069.97 In procedure
capital)
Big refrigerator- 3# Workshop 93,646,297.37 In procedure
Big refrigerator -3# finished warehouse 50,085,022.01 In procedure
Freezer- 7# Workshop inspection room 233,741.56 In procedure
II section canteen of living area 26,029,822.03 In procedure
Hot water room for living area 2,914,385.29 In procedure
Comprehensive building 14,211,331.37 In procedure
Workshop 42,747,573.98 In procedure
J01 Workshop 30,701,587.00 In procedure
J02 Workshop 33,123,926.00 In procedure
J03 skill workshop 18,807,186.62 In procedure
J04 molding workshop 31,235,715.44 In procedure
J05 evaporator and condenser workshop 24,446,636.46 In procedure
J06 central air-conditioner workshop 18,605,818.16 In procedure
J07 electrical workshop 36,789,666.41 In procedure
J09 raw material warehouse 6,629,363.24 In procedure
J10 raw material warehouse 4,908,909.14 In procedure
J11 raw material warehouse 4,790,635.87 In procedure
J15 house of refrigerant forklift 1,399,454.36 In procedure
J16 chemical storage 1,256,727.47 In procedure
J17 chemical storage 1,374,363.67 In procedure
J18 switching station 613,454.60 In procedure
J19 main guard room 345,454.40 In procedure
J19a guard room 218,182.27 In procedure
79
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Reason of not complete the
Item Book value
property certificate
J19b guard room 218,181.46 In procedure
J19c guard room 218,181.73 In procedure
J20 air compressor station 1,325,091.05 In procedure
Total 494,085,239.66
(7) No fixed assets held for sale at period-end
12.2 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 75,875,517.11
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 Appliance and Equator
Household 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 RMB 36 million, of which the
consideration for the land use right owned by Equator Appliance and Equator Household Appliance is approximately RMB
10.59 million and RMB 25.41 million, respectively. The Company has completed the relocation of occupants of the premises,
and the net fixed assets in relation to the land will transfer as disposal, accounting treatment will be conduct in line with
relevant rules upon receiving of the relocation compensation.
No impairment of relevant assets disposal for reserved lands at period-end.
13. Construction in process
(1) Details of Construction in process
Item Endingamount Openingamount
80
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Imp
Impai
airm
rment
Bookbalance ent Bookvalue Bookbalance Bookvalue
provi
prov
sion
ision
Production base relocation and
expansion and upgrading project of 271,568,077.26 271,568,077.26 320,579,598.28 320,579,598.28
Changhong Air-conditioner
Construction of washing machine
47,865,841.58 47,865,841.58 54,004,325.69 54,004,325.69
plant
Other sporadic projects 20,354,864.31 20,354,864.31 15,562,870.33 15,562,870.33
Construction of intelligent
19,056,425.46 19,056,425.46 31,389,804.22 31,389,804.22
manufacturing
Construction of laboratory
7,759,307.07 7,759,307.07 4,847,375.61 4,847,375.61
(inspection center)
Project of the application of MES
6,761,092.90 6,761,092.90 3,545,478.16 3,545,478.16
system during manufacturing
Reform project of the EPS house of
3,484,742.01 3,484,742.01 2,826,825.99 2,826,825.99
the Company
Capacity enlargement and
technology improvement project for 3,277,432.40 3,277,432.40 3,188,095.36 3,188,095.36
Air-conditioner Company
Temperature control project of the
manufacturing Company of big 2,837,012.61 2,837,012.61 4,084,254.68 4,084,254.68
refrigerator
Technical transformation project of
2,700,803.05 2,700,803.05 4,119,899.02 4,119,899.02
Zhongshan Changhong
Jiangxi Meiling – construction of the
production line for producing one
2,683,404.41 2,683,404.41 5,065,550.61 5,065,550.61
million energy-saving smart
refrigeration annually
Split door shell molding line project 2,662,430.96 2,662,430.96
Project of cancel spraying for the
2,081,624.56 2,081,624.56 2,021,643.02 2,021,643.02
side panel of refrigerator’s door
Project of production line upgrading
for Mianyang Meiling intelligent 1,809,027.70 1,809,027.70 3,322,079.08 3,322,079.08
refrigeration
Line modification for R290 1,769,230.77 1,769,230.77 1,769,230.77 1,769,230.77
Canning of white material project 1,726,088.96 1,726,088.96
Production efficiency improvement 1,568,534.48 1,568,534.48 2,112,500.01 2,112,500.01
81
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Endingamount Openingamount
Imp
Impai
airm
Item rment
Bookbalance ent Bookvalue Bookbalance Bookvalue
provi
prov
sion
ision
project of the Line C for the overseas
Refrigerator Manufacture Company
Capacity expansion for squeeze
board line and efficient use of 1,122,118.64 1,122,118.64
squeeze board line
Equipment to be installed 730,874.43 730,874.43 1,416,851.00 1,416,851.00
Improvement for the double-gun
2,951,970.77 2,951,970.77
injection of line J
Reform of the overseas air patenting
line; project of cabinet foam line for 1,750,000.00 1,750,000.00
Line D
Total 401,818,933.56 401,818,933.56 464,558,352.60 464,558,352.60
(2) Changes in significant Construction in process
Increase Transfer to Other
Book balance Book balance Sourceof
Item during the fixed assets in decre
at period-begin at period-end funds
period the period ase
Construction of laboratory Raise
4,847,375.61 7,590,771.43 4,678,839.97 7,759,307.07
(inspection center) funds
Construction of washing Self-raise
54,004,325.69 19,210,302.33 25,348,786.44 47,865,841.58
machine plant d
Construction of Raise
31,389,804.22 10,578,628.49 22,912,007.25 19,056,425.46
intelligent manufacturing funds
Production base relocation
and expansion and Self-raise
320,579,598.28 188,213,741.53 237,225,262.55 271,568,077.26
upgrading project of d
Changhong Air-conditioner
Jiangxi Meiling –
construction of the
production line for Self-raise
5,065,550.61 1,114,047.78 3,496,193.98 2,683,404.41
producing one million d
energy-saving smart
refrigeration annually
(Continued)
82
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
including: Interest
Budget Proportion of Accumulated
interest capitaliza
(in 10 project amount of
Projects Progress capitalized tion rate
thousand investment in interest
amount of the of the
Yuan) budget capitalization
period period
Construction of laboratory
10,748.00 64.41% 85.00%
(inspection center)
Construction of washing
37,121.00 66.62% 70.00%
machine plant
Construction of intelligent
26,128.00 72.10% 88.00%
manufacturing
Production base relocation and
expansion and upgrading
84,791.01 60.23% 90.00% 2,570,143.02
project of Changhong
Air-conditioner
Jiangxi Meiling – construction
of the production line for
producing one million 20,960.00 95.60% 100.00%
energy-saving smart
refrigeration annually
(3) No impairment occurred for Construction in process at period-end
14. Intangible assets
(1) According to intangible assets item
Land use Trademark Non-patent
Item Other Total
right right technology
I. Original book
value
1.Opening
750,239,779.01 283,292,439.34 391,210,232.68 5,884,724.81 1,430,627,175.84
balance
2.Current
103,487,206.75 241,379.31 103,728,586.06
increased
(1) Purchase 241,379.31 241,379.31
(2) Internal
103,487,206.75 103,487,206.75
research
3.Current
decreased
4.Ending
750,239,779.01 283,292,439.34 494,697,439.43 6,126,104.12 1,534,355,761.90
balance
83
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Land use Trademark Non-patent
Item Other Total
right right technology
II. Accumulated
amortization
1.Opening
144,782,112.28 278,725,077.89 188,556,900.90 983,125.83 613,047,216.90
balance
2.Current
7,469,341.30 1,941,443.40 44,983,206.93 128,238.91 54,522,230.54
increased
(1) Accrual 7,469,341.30 1,941,443.40 44,983,206.93 128,238.91 54,522,230.54
3.Current
decreased
4.Ending
152,251,453.58 280,666,521.29 233,540,107.83 1,111,364.74 667,569,447.44
balance
III. Impairment
loss
IV. Book value
1.Ending book
597,988,325.43 2,625,918.05 261,157,331.60 5,014,739.38 866,786,314.46
value
2.Opening book
605,457,666.73 4,567,361.45 202,653,331.78 4,901,598.98 817,579,958.94
value
(2) up to end of current period, mortgage of intangible assets is as follows:
Name Property certificate serials Area(M2) Net book value Note
Land use right HGYJCZi No.: 0121 27,120.22 18,602,474.80
15. Development expense
Current increased Current decreased
Opening Internal Included in Ending
Item Othe Confirmed as Othe
balance development current profits balance
r intangible assets r
expenditure and losses
Technology
development for 50,360,181.92 21,754,230.60 1,393,591.25 46,784,598.92 23,936,222.35
Air-conditioner
Technology
development for 57,383,653.72 38,759,858.47 54,788,468.93 41,355,043.26
refrigerator
Other technology
467,130.96 1,475,782.67 1,914,138.90 28,774.73
development
Total 108,210,966.60 61,989,871.74 1,393,591.25 103,487,206.75 65,320,040.34
84
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
16. Goodwill
(1) Original value of goodwill
Current increased Current decreased
Formation Formation
Opening Ending
Invested enterprise from from
balance Other Other balance
enterprise enterprise
merger merger
Hefei Meiling Group Holdings
3,553,367.77 3,553,367.77
Limited
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 loss of goodwill
Opening Current increased Current decreased Ending
Invested enterprise
balance Accrual Other Accrual Other balance
Hefei Meiling Group Holdings
3,553,367.77 3,553,367.77
Limited
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 period-end, the Company conducted impairment test on goodwill, and provided for impairment reserve in
connection with the difference between the predicted future cash flow of the invested and the group of assets including the
goodwill. The recoverable amount is based on the predicted future cash flow of the invested.
17. Deferred income tax assets
(1) Deferred income tax assets without the offset
Ending balance Opening balance
Deductible Deferred Deductible Deferred
Item
temporary income tax temporary income tax
difference assets difference assets
Deferred income tax assets recognized from
134,461,558.41 20,237,929.40 163,800,143.96 25,443,182.41
assets impairment
Deferred income tax assets recognized from
252,002,095.28 37,800,314.29 266,641,323.73 39,996,198.56
accrual liability
Deferred income tax assets recognized from
19,081,234.19 2,862,185.13 23,369,410.19 3,505,411.53
Dismission welfare
Deferred income tax assets recognized from
118,316,274.11 17,747,441.11 113,016,902.89 16,952,535.44
deferred income
85
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Ending balance Opening balance
Deductible Deferred Deductible Deferred
Item
temporary income tax temporary income tax
difference assets difference assets
Deferred income tax assets recognized from
134,866,829.53 20,230,024.43 125,576,447.96 18,836,467.19
ir-reparable losses
Deferred income tax assets recognized from
42,894,762.65 6,434,214.39 46,033,136.96 6,904,970.53
changes in the fair value
Accrued income tax assets 1,500,000.00 225,000.00 3,765,940.62 564,891.09
Total 703,122,754.17 105,537,108.75 742,203,306.31 112,203,656.75
(2) Deferred income tax liabilities without the offset
Ending balance Opening balance
Taxable Deferred Taxable Deferred
Item
temporary income tax temporary income tax
differences liability differences liability
Recognized by fixed assets depreciation 18,983,357.02 2,847,503.55 20,657,994.05 3,098,699.11
(3) Details of unrecognized deferred income tax assets
Item Ending balance Opening balance
Deductible temporary difference 46,598,906.57 44,702,678.05
Deductible loss 593,849,203.59 487,578,430.48
Total 640,448,110.16 532,281,108.53
18. Short-term loans
(1) Category
Category Ending balance Opening balance
Loan in pledge 112,555,000.00 199,260,520.00
Guaranteed loan 31,606,729.90 9,200,000.00
Loan in credit 1,415,222,323.76 1,876,648,262.82
Bill financing 250,000,146.61 251,265,146.80
Total 1,809,384,200.27 2,336,373,929.62
New short-term loans in the period:
1) The Company entered into a Liquidity Loan Contract with economic & technological development zone Branch of Bank of
China with 12 months in terms since the date actually received the funds. Term of borrowing from 14 September 2018 to 12
September 2019. Fixed annual rate of 4.35%, the loan amount is 50,000,000.00 Yuan.
86
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
2) The Company entered into a RMB Fund Transfer Contract with Anhui province Branch of CCB with one year in term. Term
of borrowing from 23 January 2019 to 23 January 2020. Fixed annual rate of 3.57%, the loan amount is 89,000,000.00 Yuan.
3) The Company entered into a RMB Fund Transfer Contract with Anhui province Branch of CCB with one year in term. Term
of borrowing from 8 March 2019 to 6 March 2020. Fixed annual rate of 3.50%, the loan amount is 200,000,000.00 Yuan.
4) The Company entered into an Export Trade Financing Contract with Hefei Baohe District Branch of ABC with 165 days in
term. Term of borrowing from 15 April 2019 to 27 September 2019. Fixed annual rate of 3.40%, the loan amount is
28,000,000.00 Yuan.
5) The Company entered into an Opening Domestic Letter of Credit Contract with economic development zone Branch of
Huishang Bank Corporation Limited. The Company applies for a 70,000,000.00 Yuan short-term loans by means of L/C
without resource. Term of borrowing from 16 April 2019 to 10 April 2020. Borrowing rate of 3.70%.
6) The Company entered into a Domestic L/C Opening Contract with Hefei Branch of China Everbright Bank. The Company
applies for a 80,000,000.00 Yuan short-term loans by means of L/C without resource. Term of borrowing from 16 April 2019 to
10 April 2020. Borrowing rate of 3.48%.
7) The Company entered into a Liquidity Loan Contract with Anhui Province Branch of Bank of Communications with one
year in term. Term of borrowing from 25 April 2019 to 25 April 2020. Fixed interest rate of 4.35%, the loan amount is
70,000,000.00 Yuan.
8) The Company entered into an Export Trade Financing Contract with Hefei Baohe District Branch of ABC with 161 days in
term. Term of borrowing from 20 May 2019 to 28 October 2019. Fixed annual rate of 3.60%, the loan amount is 50,000,000.00
Yuan.
9) The Company entered into a Domestic L/C Opening Contract with Hefei Changjiang East Road Branch of ICBC. The
Company applies for a 25,000,000.00 Yuan short-term loans by means of L/C without resource. Term of borrowing from 27
May 2019 to 18 May 2020. Borrowing rate of 3.78%.
10) The Company entered into a Offshore Loan Contract with Ping An Bank with 12 months in terms. Terms of borrowing
from 15 November 2018 to 5 November 2019. Fixed annual rate of 3.67%, the loan amount is USD 28,000,000.00.
11) The Company entered into a Cross-Border Financing Quota Contract with Macao Branch of China Guangfa Bank with 12
months in terms. Terms of borrowing from 23 November 2018 to 22 November 2019. Fixed annual rate of 3.1%, the loan
amount is USD 7,150,000.00.
12) The Company entered into an Offshore Liquidity Loan Contract with Shanghai Pudong Development Bank with 12 months
in terms. Terms of borrowing from 6 December 2018 to 29 November 2019. Fixed annual rate of 4.3%, the loan amount is
USD 35,816,619.00.
13)Subsidiary Jiangxi Meiling entered into a Forfaiting Business Contract with Jingdezhen Branch of Jiujiang Bank, the
amount of deposit comes to 94,590,163.30 Yuan. Date of value from 12 September 2018 and expire on 6 September 2019,
annual rate as 3.78%.
14) Subsidiary Jiangxi Meiling open a domestic L/C in Hefei Branch of Jiujiang Bank with beneficiary under the name of
Jiangxi Meiling Electric Appliance Co., Ltd. The L/C amounted as 70,757,944.8 Yuan, and issued on 14 March 2019 with
expiration on 13 March 2020. the annual rate as 3.35%.
87
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
15) Subsidiary Jiangxi Meiling entered into a Liquidity Loan Contract with Jingdezhen Branch of Jiujiang Bank. The amount
comes to 10,000,000.00 Yuan. Terms of borrowing from 28 March 2019 to 30 September 2020 with lending rate of 4.57%.
16) According to the Cooperation Agreement on Export Receivable Risk Participation entered into by subsidiary Zhongshan
Changhong Company and Zhongshan Branch of China Construction Bank, the Company applying for a short-term loan of
25,000,000.0 Yuan in way of account receivable factoring. Terms of borrowing from 30 January 2019 to 29 July 2019. Lending
rate of 4.85%.
17) The subsidiary Zhongshan Changhong Company and China Construction Bank Corporation Zhongshan Branch signed the
"Agreement on Export Accounts Receivable Risk Participation and Cooperation", the Company applied for short-term loans of
RMB 18,000,000.00 to the China Construction Bank Corporation Zhongshan Branch in terms of accounts receivable factoring,
the loan period was from March 4, 2019 to August 30, 2019, and the loan interest rate was 4.85%.
18) According to the Comprehensive Credit Contract entered into by subsidiary Zhongshan Changhong Company and
Zhongshan Branch of Bank of Communications, the Company applying for a short-term loan of RMB 19,555,000.00 in way of
export invoice financing with 6 months in terms. Terms of borrowing from 12 March 2019 to 6 September 2019. Lending rate
of 4.5%.
19) According to the Comprehensive Credit Contract entered into by subsidiary Zhongshan Changhong Company and
Zhongshan Branch of ICBC, the Company applying for a short-term loan of RMB 50,000,000.00 in way of export invoice
financing with 6 months in terms. Terms of borrowing from 27 May 2019 to 20 November 2019. Lending rate of 4.60%.
20) Guaranteed by Changhong Meiling, subsidiary Changhong Ruba Trading applying a short-term loan of 356,400,000.00
Rupees, an equivalent to RMB 14,985,550.80 to Lahore Branch of ICBC. Terms of borrowing from 1 February 2019 to 1
February 2020 under stage repayment. The lending rate is increased by 0.9% at the lending rate issued by the Central Bank of
Pakistan.
21) Guaranteed by Changhong Meiling, subsidiary Changhong Ruba Trading applying a short-term loan of 395,300,000.00
Rupees, an equivalent to RMB 16,621,179.10 to Karachi Branch of Bank of China. Terms of borrowing from 28 January 2019
to 28 January 2020 under one-time repayment due. The lending rate is increased by 0.5% at the lending rate issued by the
Central Bank of Pakistan.
22) According to the “Working Capital Loan Contract” signed by the subsidiary Sichuan Changhong Air Conditioning Co., Ltd.
and the Industrial and Commercial Bank of China Co., Ltd. Mianyang Branch, the subsidiary Sichuan Changhong Air
Conditioning Co., Ltd. applied for a total of 60 million yuan of floating loans to the Industrial and Commercial Bank of China
Co., Ltd. Mianyang Branch in the form of credit, of which the borrowing period of 30 million yuan was from October 9, 2018
to August 6, 2019, the borrowing rate was 4.785%; the borrowing period of 22 million yuan and 8 million yuan was from
December 20, 2018 to December 12, 2019, the borrowing rate was 4.785%.
23)According to the RMB Short-term Loans Contract entered into by subsidiary Sichuan Changhong Air-conditioner Co., Ltd.
and Mianyang Branch of Bank of China, Sichuan Changhong Air-conditioner Co., Ltd. applying for a short-term loan of RMB
30 million by credit. Terms of borrowing from 23 November 2018 to 23 November 2019. Lending rate of 4.5675%.
(2) No overdue short-term loans outstanding at period-end.
88
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
19. Tradable financial liability
Item Ending balance Opening balance
Tradable financial liability 45,676,424.26 55,586,666.70
Including: Derivative financial liability 45,676,424.26 55,586,666.70
20. Note payable
Category Ending balance Opening balance
Bank acceptance 3,404,671,736.59 3,284,348,686.53
Trade acceptance 174,745,284.67 443,405,713.07
Total 3,579,417,021.26 3,727,754,399.60
No notes expired at period-end without paid
21. Account payable
(1) Account age
Item Ending balance Opening balance
Total 3,107,804,073.88 2,282,174,981.38
Including:over one year 68,725,917.04 75,298,651.56
(2) No major account payable with over one year book age at period-end.
22. Account received in advance
(1) Account age
Item Ending amount Opening amount
Total 339,031,201.91 354,551,354.80
Including: over one year 16,569,951.63 46,153,276.08
(2) No major account received in advance with over one year age at period-end
23. Wages payable
(1) Category
Item Opening balance Current increased Current decreased Ending balance
Short-term compensation 155,874,082.33 768,835,709.46 801,329,527.57 123,380,264.22
After-service welfare- defined
3,468,236.56 58,039,143.60 55,282,531.39 6,224,848.77
contribution plans
Dismiss welfare 4,296,308.90 1,782,411.59 2,586,004.38 3,492,716.11
89
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Item Opening balance Current increased Current decreased Ending balance
Total 163,638,627.79 828,657,264.65 859,198,063.34 133,097,829.10
(2) Short-term compensation
Item Openingbalance Current increased Current decreased Endingbalance
Wages, bonuses, allowancesandsubsidies 148,199,467.67 691,024,223.47 723,553,933.40 115,669,757.74
Welfare for workers and staff 201,843.00 25,148,647.85 24,848,959.40 501,531.45
Social insurance 1,939,268.68 24,258,292.72 24,277,534.91 1,920,026.49
Including: Medical insurance 1,745,030.71 22,845,477.69 22,836,486.67 1,754,021.73
Work injury insurance 128,176.10 690,149.55 724,777.34 93,548.31
Maternity insurance 66,061.87 722,665.48 716,270.90 72,456.45
Housing accumulation fund 3,685,537.29 27,247,451.77 27,538,339.85 3,394,649.21
Labor union expenditure and
1,847,965.69 1,157,093.65 1,110,760.01 1,894,299.33
personnel education expense
Total 155,874,082.33 768,835,709.46 801,329,527.57 123,380,264.22
(3) Defined contribution plans
Current
Item Opening balance Current increased Ending balance
decreased
Basic endowment insurance 2,680,604.52 56,031,248.87 53,273,240.43 5,438,612.96
Unemployment insurance 787,632.04 2,007,894.73 2,009,290.96 786,235.81
Total 3,468,236.56 58,039,143.60 55,282,531.39 6,224,848.77
24. Tax payable
Item Ending balance Opening balance
Value-added tax 23,796,613.38 63,860,640.63
Enterprise income tax 4,122,854.40 3,112,632.27
Individual income tax 1,303,092.55 2,384,041.50
Urban maintenance and construction tax 2,609,681.30 8,430,591.08
Real estate tax 6,261,744.12 6,527,533.98
Land use tax 2,873,696.99 2,870,637.90
Educational surtax 1,894,410.19 6,043,987.22
Stamp tax 1,389,283.18 1,481,453.67
Construction fund of Water Conservancy Projects 581,969.76 547,748.65
Treatment fund for abandon electrics & electronics 16,954,225.00 14,421,381.00
Other 27,628.35 72,784.27
90
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Item Ending balance Opening balance
Total 61,815,199.22 109,753,432.17
25. Other account payable
Item Ending balance Opening balance
Interest payable 14,695,840.49 7,519,756.26
Dividend payable 21,356,359.44 17,317,286.45
Other account payable 749,267,297.62 635,483,317.55
Total 785,319,497.55 660,320,360.26
25.1 Interest payable
(1) Category
Item Ending balance Opening balance
Interest on long-term borrowings for repayment of principal of
281,020.02 166,494.25
installment maturity
Interest of short-term loans 14,414,820.47 7,353,262.01
Total 14,695,840.49 7,519,756.26
(2) No significant overdue and unpaid interest at period-end.
25.2 Dividends payable
Item Ending balance Opening balance
Sichuan Changhong Electric Co., Ltd. 14,907,463.44 14,082,358.08
Hefei Industry Investment Holding (Group) Co., Ltd. 2,869,404.06
Other units 1,990,465.23 1,822,961.12
City Insurance company 598,054.05 524,279.25
Hefei Branch of BOC 299,027.00 262,139.60
Hefei collective industry association 299,026.54 262,139.20
Entrust Investment Wuhu of Provincial ABC 239,221.62 209,711.70
BOC- Fullgoal Tianyi Securities Investment Fund 153,697.50 153,697.50
Total 21,356,359.44 17,317,286.45
Note: Balance at period-end refers to the common dividends that not receiving by shareholders.
25.3 Other account payable
(1) Other account payable by nature
91
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Nature Ending balance Opening balance
1.Accrued expenses (expenses occurred without reimbursed) 554,752,793.43 467,314,369.66
2. Receivables received temporary and deducted temporary 22,670,169.39 17,869,297.44
3.Deposit, margin 125,359,215.91 92,960,934.56
4.Not the come-and-go with related parties in statement scope 19,369,989.14 7,993,374.18
5. Other 27,115,129.75 49,345,341.71
Total 749,267,297.62 635,483,317.55
(2) At end of the period, the major other account payable with account age over one year mainly refers to the
margin.
26. Non-current liability due within one year
(1) Classification of non-current liability due within one year
Item Ending balance Opening balance
Long term borrowings due within one year 300,000.00 250,300,000.00
Long term account payable due within one year 7,000,000.00 7,000,000.00
Deferred income transfer to gains and losses within one year 16,382,737.85
Total 7,300,000.00 273,682,737.85
Note: Changes of deferred income transfer into gain and loss within one year are the non-current liability due within one year
are switch back to deferred income, which has re-classified originally
27. Long term borrowings
(1) Category of long term borrowings
Category Ending amount Opening amount
Loan in mortgage 1,280,000.00 1,920,000.00
Loan in credit 300,000,000.00
Total 301,280,000.00 1,920,000.00
(2) Long-term borrowings at period-end
Foreign
Borrowing Returning Interest Ending amount Opening
Loan from currenc
day day rate (RMB) amount (RMB)
y
Ministry of Finance of Hefei Note 1 2006.11.09 2021.11.08 RMB 1.80% 1,280,000.00 1,920,000.00
EIBC (Export-Import Bank of
China) Anhui Province Branch 2019.05.30 2021.05.30 RMB 3.685% 300,000,000.00
Note 2
92
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Total 301,280,000.00 1,920,000.00
Note 1: In August of 2006, the Company signed Asset Mortgage Agreement with Ministry of Finance of Hefei. It takes five
industry crusher chambers which cover an area of 2,322.98 square meters as mortgage for the Company to get the lending of
treasury bond fund which has 15-year term and worthy of RMB 7,040,000 from the Ministry of Finance of Hefei. The capital
on-lending began to bear interest from the appropriate date (November 9, 2006), which would be paid by stages in the loan
period to Ministry of Finance of Hefei by the Company. The first four years were grace period, during which the annual interest
rate was subject to floating interest rate (the annual interest rate was the annual interest rate of one year fixed deposit plus
0.3%). On 1 March 2013, according to the Letter Relating to Ceasing Process of Other Securities in respect of the Properties in
Feidong Longgang Industrial Park of Hefei Meiling Co., Ltd. (HCJ (2006) No.85) issued by the finance office of Hefei,
Meiling commenced the national purchase of its land parcels in Longgang in compliance with the land planning of Hefei
municipal government, which required its properties in Longgang land parcel to be unrestricted. The real estate for mortgage
lifted in 2006 of the Company with registration No. HGYJCZ No.0121 which was used as the security for treasury bonds
lending capital (details were set out in Note VI.14).
Note 2: The Company entered into a Loan Contract with EIBC (Export-Import Bank of China) Anhui Province Branch with
contract terms of 2 years. Term of borrowing from 30 May 2019 to 31 May 2021 with fixed annual rate of 3.685%, borrowing
amounted to 300,000,000.00 Yuan.
28. Long-term account payable
Item Ending balance Opening balance
Long-term account payable 2,840,179.20 3,487,208.00
Special payable 1,530,000.00 1,530,000.00
Total 4,370,179.20 5,017,208.00
28.1 Classify by nature
Nature Ending balance Opening balance
Financing lease 2,840,179.20 3,487,208.00
Total 2,840,179.20 3,487,208.00
28.2 Special payable
Opening Current Current Ending
Item Reason
balance increased decreased balance
Zhongshan Special funds Technology plan project
1,530,000.00 1,530,000.00
for Technical renovation in Zhongshan City
29.Long-term wage payable
Item Ending balance Opening balance
Dismissal welfare 15,588,518.08 19,073,101.29
According to the internal early retirement policy, the long-term payable dismissal welfare bears by the Company up to end of
93
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
the period amounting to RMB 15,588,518.08
30. Accrual liability
Item Ending balance Opening balance Reason
Product quality guarantee 13,886,929.14 12,952,457.86 Guarantee of product
Guarantee fund for quality service 245,471,990.90 247,060,570.02 Guarantee of product
Penalty expenses 13,050,649.33 Penalty
Total 259,358,920.04 273,063,677.21
Product quality guarantee 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.
31. Deferred income
(1) Classification of deferred income
Item Ending amount Opening amount
Government subsidies---subsidies of development project 133,945,590.38 116,035,026.43
Government subsidies---subsidies of Relocation 46,375,054.55 44,215,937.17
Total 180,320,644.93 160,250,963.60
(2) Government subsidy
New subsidy Amount Assets
Opening
Government subsidy in the period reckoned into Other changes Endingamount related/Income
amount
other income related
Demonstration factory
construction for the
intelligent manufacturing 49,500,000.00 49,500,000.00 Assets related
of intelligent
air-conditioner
Demolition compensation
40,254,943.27 1,097,927.30 -2,358,104.44 41,515,120.41 Assets related
of Changhong Meiling
Adaptability
improvement on new 11,824,908.42 1,182,490.86 -2,364,981.72 13,007,399.28 Assets related
coolants production
Special funds for
technical transformation 4,877,812.50 2,143,125.00 -4,286,250.00 7,020,937.50 Assets related
of the Athena project
Production base
6,880,000.00 6,880,000.00 Assets related
relocation and expansion
94
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
New subsidy Amount Assets
Opening
Government subsidy in the period reckoned into Other changes Endingamount related/Income
amount
other income related
and upgrading project of
Changhong
Air-conditioner
Key chip modules and
testing capacity building
6,840,000.00 6,840,000.00 Assets related
projects for frequency
converter
Research and application
of the VISA (variable
frequency volume 5,872,093.04 704,651.16 -1,409,302.32 6,576,744.20 Assets related
integrated intelligent
air-conditioner)
Demolition compensation
3,960,993.98 898,940.16 -1,797,880.32 4,859,934.14 Assets related
of Jiangxi Meiling
Municipal funds for
major science &
technology projects
4,200,000.00 4,200,000.00 Assets related
(plans for strong
enterprises in science &
technology)
Subsidies for intelligent
transformation &
upgrading of enterprises
from the new 3,886,414.58 302,837.50 -605,675.00 4,189,252.08 Assets related
industrialization policy in
economic development
zone
Government subsidy for
new plant construction -
industrialization of 3,791,666.67 250,000.00 -500,000.00 4,041,666.67 Assets related
cryogenic refrigeration
equipment
Industrialization of
intelligent white
household appliances
software platform and 3,030,303.05 363,636.36 -727,272.72 3,393,939.41 Assets related
typical application
research and
development
95
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
New subsidy Amount Assets
Opening
Government subsidy in the period reckoned into Other changes Endingamount related/Income
amount
other income related
Centre for external
cooperation of the 2,538,300.00 2,538,300.00 Assets related
environmental protection
Research and application
of the MCU chip for 2,300,000.00 2,300,000.00 Assets related
inverter control
Special funds for
strategic emerging
2,000,000.00 2,000,000.00 Assets related
industry and high-end
growth industry
Equipment subsidy for
the industrial base
technical renovation from 1,782,083.33 117,500.00 -235,000.00 1,899,583.33 Assets related
Economic and
Information Commission
Subsidy for equipment
purchasing of the
1,358,630.00 89,580.00 -179,160.00 1,448,210.00 Assets related
technical renovation from
Hefei for year of 2017
Promoting the new
industry (annual output
of 0.6 million medium&
large volume 1,065,443.73 152,206.26 -304,412.52 1,217,649.99 Assets related
environmental protection
and energy saving
freezer)
Energy-saving intelligent
air conditioner 1,069,072.21 105,154.62 -210,309.24 1,174,226.83 Assets related
industrialization project
Freezer project of
734,062.42 367,031.26 -734,062.52 1,101,093.68 Assets related
Changhong Meiling
2018 Zhongshan Special
fund for industrial
development - Special 730,232.58 132,861.90 -265,723.77 863,094.45 Assets related
topic of technical
transformation
Special funds for
649,657.27 69,806.12 -139,612.26 719,463.41 Assets related
technical renovation
96
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
New subsidy Amount Assets
Opening
Government subsidy in the period reckoned into Other changes Endingamount related/Income
amount
other income related
Innovation development
project for the 294,353.71 38,037.66 -76,075.34 332,391.39 Assets related
E-Business
Technical renovation of
air conditioner 286,596.77 30,601.92 -61,203.83 317,198.68 Assets related
production line
Government subsidy for
the project of ministry of
finance of science and
education 207,607.53 28,893.12 -57,786.21 236,500.62 Assets related
entrepreneurship park in
Mianyang Technology
Town
Equipment investment
for the refrigerator 186,295.31 14,516.52 -29,033.05 200,811.84 Assets related
evaporator workshop
Subsidy for the
development on
production line technical 129,493.23 20,446.30 -40,892.59 149,939.52 Assets related
reform for green-friendly
high-quality metal pipe
Subsidy for
manufacturing
10,000,000.00 625,000.00 9,375,000.00 Assets related
transformation and
upgrading
Project of production line
1,580,000.00 1,580,000.00 Assets related
upgrading
Subsidy for purchasing
882,000.00 39,812.50 842,187.50 Assets related
the research instrument
Provincial
innovation-driven 2,950,000.00 2,950,000.00 Assets related
development fund
Total 160,250,963.60 15,412,000.00 11,725,056.52 -16,382,737.85 180,320,644.93
Note: other changes are the non-current liability due within one year are switch back to deferred income, which has
re-classified originally
97
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
31.Share capital
Change during the period (+、-)
Sharestransferred
Item Opening balance Bonus Ending balance
New shares issued fromcapital Other Subtotal
share
reserve
Total shares 1,044,597,881.00 1,044,597,881.00
32.Capital reserve
Item Opening amount Current increased Current decreased Ending amount
Share premium 2,636,196,335.76 2,636,196,335.76
Other capital reserve 48,173,262.70 48,173,262.70
Total 2,684,369,598.46 2,684,369,598.46
33. Other comprehensive income
Current amount
Less:
written
in other
compreh
ensive
income
in Less:
Belong to Belong to
Opening Account before previous Income
Item parent minority Ending balance
balance income tax in the period tax
company after shareholders after
period and expense
tax tax
carried s
forward
to gains
and
losses in
current
period
Other comprehensive income that will re-classified to gains/losses later
Including: Translation
differences arising on
translation of foreign -18,143,569.26 -6,957,381.18 -4,411,347.06 -2,546,034.12 -22,554,916.32
currency financial
statements
34. Surplus reserves
98
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Item Opening amount Current increased Current decreased Ending amount
Statutory surplus reserve 284,043,041.22 284,043,041.22
Discretionary surplus reserve 115,607,702.16 115,607,702.16
Total 399,650,743.38 399,650,743.38
35. Retained profit
Item Current period Last year
Amount at the end of last year 904,232,582.87 937,894,771.93
Add: Adjustment from undistributed profit at period-begin -2,734,328.91
Including: retroactive adjustment by Accounting Standards for
Business Enterprise
Change of accounting policy -2,734,328.91
Correction of former material error
Change of combination scope under common control
Current opening balance 901,498,253.96 937,894,771.93
Add: net profit attributable to shareholders of parent company for this
54,334,022.57 38,658,256.97
period
Less: withdraw of statutory surplus reserve 9,644,573.17
Withdraw of discretionary surplus reserve
Withdraw of general risk provision
Dividend payable for ordinary shares 62,675,872.86 62,675,872.86
Dividend of ordinary shares transferred to share capital
Current ending balance 893,156,403.67 904,232,582.87
36.Operation income and operation cost
(1)Operation income and operation cost
Item Current period Same period last year
Main business income 8,543,968,799.83 8,757,143,510.24
Other business income 589,193,881.11 514,366,059.43
Total 9,133,162,680.94 9,271,509,569.67
Main business cost 6,942,346,945.06 7,281,761,791.71
Other business cost 548,208,592.19 476,391,769.38
Total 7,490,555,537.25 7,758,153,561.09
(2) Main business classified according to product
99
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Current period Same period last year
Category
Operation income Operation cost Operation income Operation cost
Refrigerator,
3,819,493,665.57 2,965,821,052.02 3,684,406,463.15 3,058,028,464.57
freezer
Air-conditioner 3,990,707,709.01 3,364,231,232.05 4,377,900,401.60 3,651,494,563.49
Washing
205,216,507.29 161,545,734.09 245,765,756.90 194,685,123.72
machine
Small
household
appliances and 456,750,621.11 387,949,800.00 342,326,803.66 289,208,295.28
kitchen and
bathroom
Other 71,800,296.85 62,799,126.90 106,744,084.93 88,345,344.65
Total 8,543,968,799.83 6,942,346,945.06 8,757,143,510.24 7,281,761,791.71
(3) Main business classified according to sales region
Current period Same period last year
Region
Operation income Operation cost Operation income Operation cost
Domestic 6,416,709,241.89 5,079,123,427.39 6,582,227,391.77 5,265,836,158.39
Overseas 2,127,259,557.94 1,863,223,517.67 2,174,916,118.47 2,015,925,633.32
Total 8,543,968,799.83 6,942,346,945.06 8,757,143,510.24 7,281,761,791.71
Top five clients have income in sales of RMB 3,257,767,331.75 in total, a 35.67% in total operation income.
37. Business tax and extra charges
Item Current period Same period last year
Urban maintenance and construction tax 17,260,016.63 8,406,952.52
Extra charge for education and local education surcharge 12,444,121.82 6,193,234.76
Real estate tax 7,655,849.19 6,331,152.39
Treatment fund for abandon electrics & electronics 31,474,957.00 31,447,903.00
Land use tax 3,523,971.33 3,434,654.93
Stamp tax 4,952,161.86 4,753,277.96
Water conservancy fund 3,408,253.81 3,853,591.62
Other -79,571.90 626,093.52
Total 80,639,759.74 65,046,860.70
38.Sales expense
100
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Item Current period Same period last year
Salary and extra charge 313,475,070.08 292,922,520.17
Transport expenses 286,457,370.36 305,836,447.75
Market support fee 194,977,090.49 120,554,254.66
Air conditioner installation fee 181,806,817.80 203,099,493.53
National three guarantees expense 102,855,535.34 115,087,841.60
Storage rental fee 63,667,118.95 46,989,665.76
Travel expenses 24,070,080.12 22,116,566.78
Advertising fee 14,704,579.10 20,439,905.41
Business activities fee 12,174,172.67 11,545,987.12
Rental 9,326,474.23 9,315,946.49
Meeting organization fee 7,727,993.33 5,136,507.36
Depreciation 3,629,916.41 4,681,132.02
Communication expense 3,134,174.08 2,791,642.75
Vehicle consumption 2,398,835.38 3,629,608.16
Exhibition fee 1,316,598.73 1,349,558.46
Other 22,669,929.80 24,244,023.30
Total 1,244,391,756.87 1,189,741,101.32
39. Administration expense
Item Current period Same period last year
Salary and social insurance etc. 88,854,543.67 64,754,878.67
Intangible assets amortization 12,746,300.56 13,100,553.07
Depreciation 9,675,666.50 9,211,393.42
Water and electricity fee 8,528,459.15 4,287,941.37
Domestic travel expenses 3,968,094.14 2,858,919.43
Business activities fee 2,604,837.36 2,544,956.92
Property insurance fee 2,142,321.97 2,525,455.64
Inspection and certification fee 1,732,091.97 402,785.93
Office allowance 1,499,270.12 1,254,941.40
Other expense 32,641,457.26 48,052,965.04
Total 164,393,042.70 148,994,790.89
40. R&D expenses
Item Current period Same period last year
101
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Item Current period Same period last year
Salary and social insurance etc. 45,300,688.74 41,213,181.37
Intangible assets amortization 40,270,721.67 21,912,016.24
Trial fee of R&D 17,704,764.73 16,115,615.67
Depreciation 4,107,066.78 2,939,806.37
Cost of mould 3,381,991.85 1,477,412.22
Inspection and certification fee 3,314,163.26 4,364,420.14
Software royalty 1,868,153.84 687,413.42
Domestic travel expenses 1,069,553.39 862,987.19
Other 3,030,936.60 3,207,440.82
Total 120,048,040.86 92,780,293.44
41. Financial expenses
Item Current period Same period last year
Interest expenditure 57,892,999.31 60,155,710.42
Less: Interest income 59,401,426.37 64,297,532.05
Add: Exchange loss 10,608,433.65 -8,469,817.98
Commission charges 13,172,852.69 7,644,041.40
Discount expenditure -4,610,181.50 -8,492,429.72
Total 17,662,677.78 -13,460,027.93
42. Other income
Item Current period Same period last year
Supplementary fund for characteristic dual creative carriers of
4,000,000.00
borrowing and transferring
Policy-based subsidy for enterprise from Economic and Trade
3,000,000.00
Development Bureau
Provincial innovation-driven development fund 2,950,000.00
VAT refunded on demand for software products 2,649,557.46 2,678,189.08
Special funds for technical transformation of the Athena project 2,143,125.00 2,143,125.00
Logistic subsidy for household appliance enterprise 1,753,000.00 4,090,200.00
Special funds for promoting the steady growth in foreign trade
1,532,797.00
from Zhongshan
Research and industrial application of key energy-saving comfort
1,440,000.00
control technology of frequency conversion air conditioner
Annual award cash fund for the container in Nanjing Port 1,234,485.00 1,414,840.00
102
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Item Current period Same period last year
Adaptability improvement on new coolants production 1,182,490.86 1,182,490.85
Demolition compensation of Changhong Meiling 1,097,927.30 1,195,265.35
Special funds for foreign trade development and port construction 1,057,163.36 1,400,000.00
Subsidy for E-business sales 1,000,000.00
Demolition compensation of Jiangxi Meiling 898,940.16 898,940.16
Research and application of the VISA (variable frequency volume
704,651.16 704,651.16
integrated intelligent air-conditioner)
Reward for clearing up urban land use tax and real estate tax from
671,307.09
high-tech district of Jingdezhen
Subsidy for manufacturing transformation and upgrading 625,000.00
Subsidy for customized household appliance standards of China
574,000.00
household appliance research institute
Project of the technological transformation of industrial enterprise
500,000.00
in high-tech district of Jingdezhen
Freezer project of Changhong Meiling 367,031.26 367,031.24
Industrialization of intelligent white household appliances software
363,636.36
platform and typical application research and development
Subsidies for intelligent transformation & upgrading of enterprises
from the new industrialization policy in economic development 302,837.50 4,845,400.00
zone
Promoting the new industry (annual output of 0.6 million
medium& large volume environmental protection and energy 152,206.26
saving freezer)
2018 Zhongshan Special fund for industrial development - Special
132,861.90
topic of technical transformation
Equipment subsidy for the industrial base technical renovation
117,500.00
from Economic and Information Commission
Energy-saving intelligent air conditioner industrialization project 105,154.62 105,154.63
Subsidy for equipment purchasing of the technical renovation from
89,580.00
Hefei for year of 2017
Special funds for technical renovation 69,806.12
Subsidy for purchasing the research instrument 39,812.50
Innovation development project for the E-Business 38,037.66
Technical renovation of air conditioner production line 30,601.92
Government subsidy for the project of ministry of finance of
science and education entrepreneurship park in Mianyang 28,893.12
Technology Town
103
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Item Current period Same period last year
Other sporadic projects 4,458,804.99 7,354,370.15
Policy-based funds for enterprise 15,410,000.00
Policy award for the development of service industry 1,428,700.00
Provincial-level special funds for industry and informatization for
1,168,000.00
year of 2017 in Zhongshan
Special fund for undertaking industrial transfer and promoting
1,000,000.00
innovation in processing trade
Provincial-level government subsidy for enterprise research and
654,100.00
development in Guangdong Province for year of 2017
Provincial special development funds for science and technology 520,600.00
Total 35,311,208.60 48,561,057.62
43. Investment income
(1) Sources of investment income
Item Current period Same period last year
Long-term equity investment income by equity method -8,822,000.32 -15,674,377.81
Income from financial products 31,627,554.38 34,464,061.27
Investment income obtained from disposal of tradable financial
-11,141,590.61 -4,040,264.37
assets
Total 11,663,963.45 14,749,419.09
(2) Long-term equity investment income by equity method
Same period last Reason of change of this period
Item Current period
year than last period
Hefei Xingmei Assets Management Changes of net profit of the
-468,074.75 -858,103.15
Co., Ltd. invested unit
Changhong Ruba Electric Company
-7,052,869.41 -6,345,139.13
(Private) Ltd.
Sichuan Zhiyijia Network Technology
-766,788.19 -5,514,211.59
Co., Ltd.
Changes of net profit of the
Hongyuan Ground Energy Heat Tech.
56,527.13 -1,343,332.11 invested unit and counter current
Co., Ltd.
transaction offset
Sichuan Tianyou Guigu Technology
-692,415.62 -703,779.88
Co., Ltd
Chengdu Guigu Environmental Tech.
101,620.52 -909,811.95
Co., Ltd.
104
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Same period last Reason of change of this period
Item Current period
year than last period
Total -8,822,000.32 -15,674,377.81
(3) The investment income obtained from the disposal of trading financial assets is the profit and loss arising
from the non-deliverable forwards foreign exchange agreement (NDF) transactions.
44. Changes in fair value gains/loses
Item Current period Same period last year
Tradable financial assets -6,550,413.41 9,424,691.63
Including: Income of fair value changes from derivative financial
-6,550,413.41 9,424,691.63
instruments
Tradable financial liability 9,915,203.65 -28,215,602.74
Including: Income of fair value changes from derivative financial
9,915,203.65 -28,215,602.74
instruments
Total 3,364,790.24 -18,790,911.11
45. Credit impairment loss
Item Current period Same period last year
Credit loss 9,545,495.95
Total 9,545,495.95
46. Assets impairment loss
Item Current period Same period last year
Loss on inventory valuation -10,615,932.01 -3,586,156.55
Bad debt loss -15,351,964.10
Total -10,615,932.01 -18,938,120.65
47. Income from assets disposal
Amount reckoned
into
Same period last
Item Current period non-recurring
year
gains/losses in the
period
Income from non-current assets disposal -937,771.74 3,283,766.57 -937,771.74
Including: income classify to assets ready for sale
income not classify as to assets ready for sale
105
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Amount reckoned
into
Same period last
Item Current period non-recurring
year
gains/losses in the
period
Including: Income from fixed assets disposal -937,771.74 3,283,766.57 -937,771.74
Income from disposal of investment real
estate
Income from intangible assets disposal
Total -937,771.74 3,283,766.57 -937,771.74
48.Non-operation income
(1) Non-operation income
Amount reckoned
into non-recurring
Item Current period Same period last year
gains/losses in the
period
Government subsidy 110,000.00 225,000.00 110,000.00
Income of penalty 379,815.74 277,194.36 379,815.74
Other 1,986,381.28 3,579,908.22 1,986,381.28
Total 2,476,197.02 4,082,102.58 2,476,197.02
(2) Government subsidy
Current Same period
Item Resourceandbasis Assets/incomerelated
period last year
Municipal industrial development
90,000.00 Chuan CJ (2019) No.: 20 Income related
project award for 2018
Other government subsidy 20,000.00 125,000.00 Income related
Clause 9 in IV. Promoting
science & technology
Identify subsidy for high-tech innovation policy from
100,000.00 Income related
enterprise Hefei Economic and
Development Zone for
2017
Total 110,000.00 225,000.00
49.Non-operating expenditure
106
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Amount reckoned
into non-recurring
Item Current period Same period last year
gains/losses in the
period
Relocation expenses 2,131,394.09 2,131,394.09
Penalties and late fees 11,517.95 34,570.26 11,517.95
Other 219,614.33 6,220.99 219,614.33
Total 2,362,526.37 40,791.25 2,362,526.37
50. Income tax expenses
Item Current period Same period last year
Current income tax expenses 11,572,518.08 18,800,557.16
Deferred income tax expenses 6,128,742.26 -8,649,608.87
Total 17,701,260.34 10,150,948.29
51. Other comprehensive income
Found more in 33. Other comprehensive income in VI
52. Items of cash flow statement
(1) Cash received (paid) from (for) other activities relating to operation/investment/financing
1) Cash received from other activities relating to operation
Item Current period Same period last year
Government subsidy and rewards 36,458,594.62 38,722,345.21
Collection of restriction fund 26,400,639.34 71,867,901.70
Rental and trademark income 4,026,499.54 1,962,506.25
Margin, deposit 3,265,073.83 7,680,619.00
Compensations received 1,368,694.98 2,892,909.75
Other 5,727,441.00 2,336,054.87
Total 77,246,943.31 125,462,336.78
2) Cash paid for other activities relating to operation
Item Current amount Same period last year
Market support fee 128,402,307.99 136,499,129.66
Rental fee 94,079,187.33 56,875,333.32
Employees borrow funds, Margin 49,884,342.29 19,861,339.63
Restricted currency movements 35,263,814.30
107
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Item Current amount Same period last year
Travel expenses 30,084,107.15 28,861,389.77
Advertising fee 22,969,354.76 17,501,197.89
Business activities fee 15,643,474.01 15,258,911.52
Penalties and late fees 12,959,457.95 34,570.26
Commission charges 11,238,128.64 5,264,882.17
Inspection and certification fee 8,876,393.23 6,907,016.78
Meeting organization fee 8,454,207.14 5,921,884.86
Office allowance 4,614,465.23 5,225,497.25
Shuttle fare 4,142,833.60 3,869,933.80
Vehicle costs 3,044,978.86 6,397,924.47
Exhibition fee 446,595.32 1,415,180.75
Other 90,947,636.18 94,574,127.16
Total 521,051,283.98 404,468,319.29
3) Cash received from other activities relating to investment
Item Current amount Same period last year
Interest income arising from bank savings 52,972,498.64 67,279,674.91
Government subsidy received with assets concerned 15,511,600.00
Other 1,934,235.51 1,678,745.81
Total 54,906,734.15 84,470,020.72
4) Cash paid for other activities relating to investment
Item Current amount Same period last year
Loses of forward exchange settlement 11,141,590.61
Project bidding bond refund 270,000.00
Total 11,141,590.61 270,000.00
5) Cash paid for other activities relating to financing
Item Current amount Same period last year
Margin payments on loans became limited 24,750,000.00
Financing lease 647,028.80
Handling charge of dividend 44,620.40 10,179.95
Amount refund to minority shareholders due to the
2,000,000.00
cancellation of subsidiary
Handling charge of private placement 5,000.00
108
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Total 25,441,649.20 2,015,179.95
(2) Supplementary of the consolidated cash flow statement
Item Current period Same period last year
1. Net profit is adjusted to cash flow of operation activities:
Net profit 46,216,030.54 53,008,564.72
Add: Ending balance of assets impairment 1,070,436.06 18,938,120.65
Depreciation of fixed assets, consumption of oil gas assets and
89,438,431.78 76,256,307.73
depreciation of productive biological assets
Amortization of intangible assets 54,522,230.54 35,299,207.62
Amortization of long-term retained expense 1,983,197.40
Loss from disposal of fixed assets, intangible assets and other
937,771.74 -3,283,766.57
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 “-”) -3,364,790.24 18,790,911.11
Financial expense (gain is listed with “-”) -2,486,261.85 -12,611,639.61
Investment loss (gain is listed with “-”) -11,663,963.45 -14,749,419.09
Decrease of deferred income tax assets (increase is listed with
6,666,548.00 -9,345,945.02
“-”)
Increase of deferred income tax liabilities (decrease is listed
-251,195.56 709,021.19
with “-”)
Decrease of inventories (increase is listed with “-”) 79,201,887.77 -500,342,261.06
Decrease of operational accounts receivable (increase is listed
-365,235,586.93 -979,401,011.32
with “-”)
Increase of operational accounts payable (decrease is listed with
478,432,461.79 1,475,238,073.31
“-”)
Other
Net cash flow arising from operation activities 373,484,000.19 160,489,361.06
2. Major investment and financing activities that do not involve
cash receipts:
Conversion of debt into capital
Convertible bonds due within one year
Financing lease of fixed assets
3. Net change in cash and cash equivalents:
Ending balance of cash 4,265,961,763.00 3,766,244,024.41
109
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Item Current period Same period last year
Less: Opening balance of cash 4,484,643,187.93 5,089,765,770.39
Add: Ending balance of cash equivalents
Less: Balance of cash equivalents at period-begin
Net increase in cash and cash equivalents -218,681,424.93 -1,323,521,745.98
(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 period Opening amount
Cash 4,265,961,763.00 4,484,643,187.93
Including: cash in stock 78,985.65 28,650.21
Bank deposits available for payment at any time 3,693,361,393.65 4,029,892,318.85
Other monetary fund available for payment at any time 572,521,383.70 454,722,218.87
Cash equivalents
Including: bond investment due within 3 months
Balance of cash and cash equivalents at period-end 4,265,961,763.00 4,484,643,187.93
Including: using the restricted cash and cash equivalents of the
parent company or subsidiary of the group
53. Assets with ownership or the right to use restricted
Item Ending book value Reasons
Monetary fund 145,047,544.43 Margin
Note receivable note 1 458,081,292.13 Pledged
Intangible assets note 2 18,602,474.80 Pledged
Account receivable note 3 133,257,920.84 Pledged
Total 754,989,232.20
Note 1: The note receivable was pledged for: with purpose of improving the note utilization, the Company draw up bank
acceptance by pledge parts of the outstanding notes receivable to the bank
Note 2: intangible assets mortgaged refer to the land use right pledge, found more in “27. Long term borrowings” under this
note VI
Note 3: Pledge of the account receivable refers to the account pledge for export bill financing.
54. Foreign currency
(1) Foreign currency
110
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Ending foreign currency Ending RMB converted
Item Exchange rate
balance balance
Monetary fund
Including: USD 24,733,338.00 6.8747 170,034,278.76
Euro 2,460,031.90 7.8170 19,230,069.34
AUD 2,694,188.59 4.8156 12,974,134.57
Rupee 39,412,370.89 0.042047 1,657,171.96
HKD 3,296.78 0.8797 2,900.18
Indonesian rupiah 4,584,917,182.00 0.000486 2,228,269.75
Account receivable
Including: USD 93,698,853.61 6.8747 644,151,508.89
Euro 1,104,812.44 7.8170 8,636,318.83
AUD 2,941,999.39 4.8156 14,167,492.26
Rupee 2,493,528,236.01 0.042047 104,845,381.74
Indonesian rupiah 31,026,842,789.00 0.000486 15,079,045.60
Other account receivable
Including: USD 66.70 6.8747 458.54
Rupee 28,952,676.00 0.042047 1,217,373.17
Indonesian rupiah 339,861,981.00 0.000486 165,172.92
Account paid in advance
Including: USD 137,241.00 6.8747 943,490.70
Euro 69,459.71 7.8170 542,966.55
Indonesian rupiah 899,870,832.00 0.000486 437,337.22
Account payable
Including: USD 2,278,365.91 6.8747 15,663,082.12
Rupee 1,094,058,233.89 0.042047 46,001,866.56
Other account payable
Including: USD 225,933.49 6.8747 1,553,224.96
Rupee 262,389,473.82 0.042047 11,032,690.21
Indonesian rupiah 4,938,240,639.00 0.000486 2,399,984.95
Account received in advance
Including: USD 12,395,925.26 6.8747 85,218,267.38
Euro 52,919.69 7.8170 413,673.22
Rupee 15,230,417.46 0.042047 640,393.36
Indonesian rupiah 146,700,000.00 0.000486 71,296.20
111
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Ending foreign currency Ending RMB converted
Item Exchange rate
balance balance
Short-term loans
Including: USD 70,966,619.00 6.8747 487,874,215.64
Rupee 751,700,000.00 0.042047 31,606,729.90
(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.
55. Government subsidy
(1) Government subsidy
Amount
reckoned into
Category Amount Item
current
gain/loss
Subsidy for manufacturing transformation and upgrading 10,000,000.00 Deferred income 625,000.00
Supplementary fund for characteristic dual creative carriers
4,000,000.00 Other income 4,000,000.00
of borrowing and transferring
Policy-based subsidy for enterprise from Economic and
3,000,000.00 Other income 3,000,000.00
Trade Development Bureau
Provincial innovation-driven development fund 2,950,000.00 Deferred income 2,950,000.00
VAT refunded on demand for software products 2,649,557.46 Other income 2,649,557.46
Logistic subsidy for household appliance enterprise 1,753,000.00 Other income 1,753,000.00
Project of production line upgrading 1,580,000.00 Deferred income
Special funds for promoting the steady growth in foreign
1,532,797.00 Other income 1,532,797.00
trade from Zhongshan
Research and industrial application of key energy-saving
comfort control technology of frequency conversion air 1,440,000.00 Other income 1,440,000.00
conditioner
Annual award cash fund for the container in Nanjing Port 1,234,485.00 Other income 1,234,485.00
Special funds for foreign trade development and port
1,057,163.36 Other income 1,057,163.36
construction
Subsidy for E-business sales 1,000,000.00 Other income 1,000,000.00
Subsidy for purchasing the research instrument 882,000.00 Deferred income 39,812.50
Reward for clearing up urban land use tax and real estate
671,307.09 Other income 671,307.09
tax from high-tech district of Jingdezhen
112
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Amount
reckoned into
Category Amount Item
current
gain/loss
Subsidy for customized household appliance standards of
574,000.00 Other income 574,000.00
China household appliance research institute
Project of the technological transformation of industrial
500,000.00 Other income 500,000.00
enterprise in high-tech district of Jingdezhen
Other income,
Other sporadic projects 4,283,842.17 non-operation 4,283,842.17
income
Total 39,108,152.08 27,310,964.58
(2) Refund of government subsidy: nil
113
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
VII. Changes of consolidation rage
1. Enterprise combined under the different control: Nil
2. Enterprise combined under the same control: Nil
3. Reversed takeover: Nil
4. Disposal of subsidiary: Nil
5. Subsidiary liquidated
114
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Differencebetweenthedisposal priceand Othercomprehensiveincome
Price of proportion ofthesubsidiary’s net assetsenjoy transferredintoinvestment
Ratiooftheequity Wayoftheequity Determinationbasisforthetime
Subsidiary the equity Timepoint ofcontrolright lose inaspect of theconsolidatedfinancial income, whichrelatedwiththe
disposed disposed point ofcontrolright lose
disposed statement, whichis respondtothedisposal equityinvestment of original
investment subsidiary
Nanchang Xiangyou Electric Liquidation
85% 2019.1 Liquidation completed
Marketing Co., Ltd cancellation
6. Subsidiary newly established
Register Capital Other item that
Whether in
capital (in actually paid at substantially Shareholdi
Registrat Voting ratio consolidate Minority’s
Subsidiary Type Business nature 10 period-end (in constitute net ng ratio
ion place (%) statement interest
thousand 10 thousand investment in (%)
(Y/N)
Yuan) Yuan) subsidiary
Hefei Meiling Wulian Limited
Hefei R&D 1000 600 100.00 100.00 Y
Technology Co., Ltd. company
Anhui Tuoxing Limited R&Dand
Hefei 1000 0.00 66.87 66.87 Y
Technology Co., Ltd. company manufacturing
115
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
VIII. Equity in other entity
1. Equity in subsidiary
(1) Composition of the enterprise group
Shareholdingratio
Mainoffice Registration (%)
Subsidiary Business nature Acquireby
place place Indirectl
Directly
y
Zhongke Meiling Cryogenic Technology R&Dand
Hefei Hefei 66.87 Investment
Co., Ltd.1) manufacturing
Sichuan Hongmei Intelligent Technology Software
Mianyang Mianyang 100.00 Investment
Co., Ltd. 2) development
Mianyang Meiling Refrigeration Co., R&Dand
Mianyang Mianyang 95.00 5.00 Investment
Ltd.3) manufacturing
Jiangxi Meiling Electric Appliance Co., R&Dand
Jingdezhen Jingdezhen 98.75 1.25 Investment
Ltd. 4) manufacturing
Hefei Meiling Electric Marketing Co.,
Hefei Hefei Sales 99.82 0.18 Investment
Ltd.5)
Guangxi Huidian Home Appliance Co., Enterprise combined under the
Nanning Nanning Sales 100.00
Ltd. 6) different control
Jinan Xiangyou Electric Marketing Co.,
Jinan Jinan Sales 91.40 Investment
Ltd. 7)
Wuhan Meizirong Electric Marketing
Wuhan Wuhan Sales 91.00 Investment
Co., Ltd.8)
Zhengzhou Meiling Electric Marketing
Zhengzhou Zhengzhou Sales 100.00 Investment
Co., Ltd.9)
Chengdu Meiling Electric Marketing Co.,
Chengdu Chengdu Sales 96.00 Investment
Ltd.10)
Fuzhou Meiling Electric Marketing Co.,
Fuzhou Fuzhou Sales 100.00 Investment
Ltd.11)
Nanjing Meiling Electric Marketing Co.,
Nanjing Nanjing Sales 100.00 Investment
Ltd.12)
Taiyuan Meiling Electric Marketing Co.,
Taiyuan Taiyuan Sales 100.00 Investment
Ltd.13)
Changsha Meiling Electric Marketing
Changsha Changsha Sales 97.00 Investment
Co., Ltd.14)
Hangzhou Meiling Electric Marketing
Hangzhou Hangzhou Sales 100.00 Investment
Co., Ltd.15)
Shanghai Meiling Electric Marketing Co., Shanghai Shanghai Sales 99.00 Investment
116
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Shareholdingratio
Mainoffice Registration (%)
Subsidiary Business nature Acquireby
place place Indirectl
Directly
y
Ltd.16)
Guangzhou Meiling Electric Marketing
Guangzhou Guangzhou Sales 98.00 Investment
Co., Ltd.17)
Tianjin Meiling Electric Marketing Co.,
Tianjin Tianjin Sales 100.00 Investment
Ltd.18)
Beijing Meiling Electric Marketing Co.,
Beijing Beijing Sales 100.00 Investment
Ltd.19)
Hefei Meiling Nonferrous Metal Products R&Dand Enterprise combined under the
Hefei Hefei 100.00
Co., Ltd20) manufacturing different control
Guangdong Changhong Ridian R&Dand Enterprise combined under the
Zhongshan Zhongshan 98.855
Technology Co., Ltd.21) manufacturing same control
Changmei Technology Co., Ltd. 22) Mianyang Mianyang Sales 96.256 Investment
CHANGHONG MEILING ELECTRIC
Jakapta Jakapta Sales 100.00 Investment
INDONESIA, PT 23)
ChanghongRubaTradingCompany
Pakistan Pakistan Sales 60.00 Investment
(Private) Limited 24)
Sichuan Changhong Air-conditioner Co., R&Dand Enterprise combined under the
Mianyang Mianyang 100.00
Ltd. 25) manufacturing same control
Zhongshan Changhong Electric Co., R&Dand Enterprise combined under the
Zhongshan Zhongshan 90.00 10.00
Ltd.26) manufacturing same control
Hefei Meiling Group Holdings R&Dand Enterprise combined under the
Hefei Hefei 100.00
Limited27) manufacturing different control
Meiling Equator Household Appliance R&Dand Enterprise combined under the
Hefei Hefei 100.00
(Hefei) Co., Ltd28) manufacturing different control
R&Dand Enterprise combined under the
Hefei Equator Appliance Co., Ltd.29) Hefei Hefei 100.00
manufacturing different control
Hongyuan Ground Energy Heat Pump R&Dand
Mianyang Mianyang 51.00 Investment
Tech. Co., Ltd.30) manufacturing
Hongyuan Ground Energy Heat Pump R&Dand
Zhongshan Zhongshan 51.00 Investment
Tech. (Zhongshan) Co., Ltd31) manufacturing
Meiling CANDY Washing Machine Co., R&Dand
Hefei Hefei 60.00 Investment
Ltd. 32) manufacturing
Guangzhou Changhong Trading Co.,
Guangzhou Guangzhou Sales 100.00 Investment
Ltd.33)
Zhongshan Hongling Trading Co., Zhongshan Zhongshan Sales 98.855 Investment
117
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Shareholdingratio
Mainoffice Registration (%)
Subsidiary Business nature Acquireby
place place Indirectl
Directly
y
Ltd.34)
Hebei Hongmao Household Appliance R&D and
Handan Handan 98.855 Investment
Technology Co., Ltd35) manufacturing
Hefei Meiling Wulian Technology Co.,
Hefei Hefei R&D 100.00 Investment
Ltd. 36)
R&Dand
Anhui Tuoxing Technology Co., Ltd.37) Hefei Hefei 66.87 Investment
manufacturing
Note:
1) Zhongke Meiling Cryogenic Technology Co., Ltd. (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 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 session 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
118
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
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) Sichuan Hongmei Intelligent Technology Co., Ltd. (hereinafter referred to as Hongmei Intelligent) was established on Jan.
24, 2014. It is a limited company jointly invested by the Company and Mianyang Meiling Refrigeration Co., Ltd., being
approved by the Industrial and Commerce Bureau of Peicheng District, Mianyang City. The company owes registered capital of
RMB 5 million, including RMB 4.95 million contributed by Changhong 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 Hongmei Intelligent, held by the Company has
transferred to Sichuan Changhong AC Co., Ltd., after transferred, Changhong AC has 99% equity of Hongmei Intelligent, the
Company has no shares of Hongmei Intelligent directly.
3) Mianyang Meiling Refrigeration Co., Ltd. (hereinafter referred to as Mianyang Meiling), a limited liability company jointl y
set up by the Company and China-tech Meiling Company, was founded on Mar. 6, 2009. Its registered capital and paid-in
capital were 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., Ltd. (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] issued from JDZ Xingci CPA Co., Ltd.
119
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
5) Hefei Meiling Electric 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 were 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 has been verified by verification report of [Wan Hu a
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 Huidian as a whole.
7) Jinan Xiangyou Electric Marketing Co., Ltd. (hereinafter referred to as Jinan Xiangyou) 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 Xiangyou.
8) Wuhan Meizirong Electric 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.
9) Zhengzhou Meiling Electric 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.
10) Chengdu Meiling Electric 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 from minority in 2015, purchased 0.8% equity from minority
in 2016, and purchased 1.2% equity from minority in 2018, Meiling Marketing totally holds 96% equity of Chengdu Meiling.
11) Fuzhou Meiling Electric 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.
12) Nanjing Meiling Electric 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
120
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
capital; in 2017, after acquiring 1% equity from the minority, Meiling Marketing holds 100% equity of Nanjing Meiling in
total.
13) Taiyuan Meiling Electric 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.
14) Changsha Meiling Electric 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
15) Hangzhou Meiling Electric 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
transfer 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.
16) Shanghai Meiling Electric 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.
17) Guangzhou Meiling Electric 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.
18) Tianjin Meiling Electric 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 transfers the 14.1% and 0.4% equity interests of Tianjin Meiling held by
minority shareholders. Upon completion of equity transfer in December 2015, Meiling Marketing totally held the entire equity
interests of Tianjin Meiling.
19) Beijing Meiling Electric 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.
20) 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
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
(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.
21) 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 Venture Investment Co., Ltd, the structure of the registered capital after changes was that
Sichuan Changhong invested 33.8 million Yuan , accounting for 40.72%；Guangdong Xiongfeng Electric Co., Ltd. invested 40
million Yuan , accounting for 48.19%; Sichuan Changhong Venture 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 Venture 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 Venture 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 Venture 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%.
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Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
On 4 January 2016, Sichuan Changhong and Sichuan Changhong Venture 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.
22) 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. In accordance with the Article of Association, registered capital
of Changmei Technology was 50 million Yuan, including 48.128 million Yuan contributed by the Company in cash, a 96.256%
in the contribution capital, the management team contribute 1.872 million Yuan in cash, a 3.744% in contribution capital.
23) CHANGHONG MEILING ELECTRIC INDONESIA, PT.(hereinafter referred to as Indonesia Changhong) is a subsidiary
established in Indonesia and jointly invested by Zhongshan Changhong and Sichuan Changhong in 2016, the company’s
registered capital is 6 million US dollars, of which Zhongshan Changhong subscribed and paid 5.88 million US dollars in cash,
accounting for 98% of the registered capital, Changhong Air Conditioning subscribed and paid 120,000 US dollars in cash,
accounting for 2% of the registered capital. On 4 July 2017, rests of the 2.94 million US dollars are subscribed by Zhongshan
Changhong in line with the agreement.
24) 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%.
25) 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, shareholding still counted as 100%.
123
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
26) Zhongshan Changhong Electric Co., LTD (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 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.
27) Hefei Meiling Group Holdings Limited (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 Auding CPAs Co., Ltd.
28) Meiling Equator Household Appliance (Hefei) Co., Ltd.( hereinafter referred to as Equator Household 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.
29) 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
124
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
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.
30) 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.
31) Hongyuan Ground Energy Heat Pump Tech. (Zhongshan) Co., Ltd.(hereinafter referred to as Hongyuan Zhongshan) was
established and invested on 18 July 2017 with registered capital of 15 million Yuan, The Hongyuan Ground Energy Heat Pump
Tech. Co., Ltd contributed 1.5 million Yuan with own funds and takes 100% in the registered capital.In 2018, the shareholdes
of the Hongyuan Zhongshan decided to increase capital of 30 million Yuan, and contributed by the shareholder Hongyuan
Ground Energy; thus registered capital of Hongyuan Zhongshan up to 45 million Yuan
32) 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.
33) Guangzhou Changhong Trading Co., Ltd. (hereinafter referred to as Changhong Trading) was established on 6 Jan. 2017,
the wholly-owned subsidiary of Zhongshan Changhong Electric Co., LTD (hereinafter referred to as Zhongshan Changhong)
with registered capital of one million Yuan
34) 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 capital.
35) 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.
36) Hefei Meiling Wulian Technology Co., Ltd. (hereinafter referred to as Wulian Technology) was established on 21 January
2019 with registered capital of 10 million Yuan and it is the subsidiary of the Company with fully-owned establishment.
37) Anhui Tuoxing Technology Co., Ltd. (hereinafter referred to as Tuoxing Technology) was established on 20 May 2019 with
registered capital of 10 million Yuan and it is the subsidiary of Zhongke Meiling with fully-owned establishment.
(2) Major non-wholly-owned subsidiary
125
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Dividend distributed
Gains/losses Balance of
Shareholding ratio to minority
Subsidiary attributable to minority’s interest at
of minority announced in the
minority in the year period-end
year
Meiling CANDY 40.00% -4,817,932.22 31,680,823.86
Changmei
3.744% -121,509.06 296,907.95
Technology
Zhongke Meiling 33.13% 2,023,652.97 -2,274,030.00 44,993,322.30
Hongyuan Ground
49.00% -6,206,806.33 10,892,558.56
Energy
Changhong Ridian 1.14% 94,581.90 1,650,842.13
(3) Financial information for major non-wholly-owned subsidiary
Endingbalance
Subsidiary Non-current
Current assets Non-current assets Total assets Current liability Total liabilities
liability
Meiling
142,439,140.12 599,160.77 143,038,300.89 56,479,416.49 7,356,824.76 63,836,241.25
CANDY
Changmei
3,044,417.67 8,694,278.47 11,738,696.14 3,239,570.44 568,892.01 3,808,462.45
Technology
ZhongkeMeiling 138,694,824.19 129,058,195.89 267,753,020.08 124,553,780.06 7,389,460.00 131,943,240.06
Hongyuan Ground
85,155,539.48 30,601,669.45 115,757,208.93 89,824,223.94 3,703,273.65 93,527,497.59
Energy
Changhong
328,968,828.53 56,745,737.60 385,714,566.13 241,290,111.49 192,983.61 241,483,095.10
Ridian
(Continued)
Openingbalance
Subsidiary Non-current
Current assets Non-current assets Total assets Current liability Total liabilities
liability
Meiling
208,581,384.55 633,265.82 209,214,650.37 111,545,406.70 6,422,353.48 117,967,760.18
CANDY
Changmei
8,495,444.28 12,071,248.03 20,566,692.31 8,889,062.92 501,961.24 9,391,024.16
Technology
ZhongkeMeiling 147,151,433.04 128,385,679.37 275,537,112.41 132,039,203.60 6,932,380.00 138,971,583.60
Hongyuan Ground
153,229,031.96 34,694,234.27 187,923,266.23 148,809,162.62 4,217,440.58 153,026,603.20
Energy
Changhong 307,951,618.55 59,236,288.32 367,187,906.87 231,048,365.86 171,540.98 231,219,906.84
126
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Subsidiary Openingbalance
Ridian
(Continued)
Current amount
Subsidiary Total comprehensive Cash flow from
Operation income Net profit
income operation activity
Meiling
202,748,512.94 -12,044,830.55 -12,044,830.55 -19,338,158.67
CANDY
Changmei
8,371,432.27 -3,245,434.46 -3,245,434.46 -3,850,631.51
Technology
ZhongkeMeiling 104,654,118.52 6,108,281.21 6,108,281.21 14,717,867.84
Hongyuan Ground
161,373,764.24 -12,666,951.69 -12,666,951.69 -13,509,130.08
Energy
Changhong
284,981,563.96 8,263,471.00 8,263,471.00 17,513,052.52
Ridian
(Continued)
Same period last year
Subsidiary Total comprehensive Cash flow from
Operation income Net profit
income operation activity
Meiling
220,332,390.00 -1,288,510.69 -1,288,510.69 -31,571,697.09
CANDY
Changmei
12,649,299.45 -6,659,447.77 -6,659,447.77 -10,788,285.42
Technology
ZhongkeMeiling 82,033,715.77 5,790,135.62 5,790,135.62 8,535,856.15
Hongyuan Ground
237,936,886.52 -2,173,347.01 -2,173,347.01 33,553,754.40
Energy
Changhong
254,072,080.05 7,724,351.48 7,724,351.48 2,852,509.78
Ridian
(2) Major limitation on using enterprise group’s assets and liquidate debts of enterprise group: Nil
(3) Offering financial supporting or other supports for structured entity that included in consolidation
statement scope: Nil
127
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
2. Changes of owner’ equity shares in subsidiary and its impacts: nil
3. Equity in joint venture or associate enterprise
(1) Major joint venture or associate enterprise
Shareholding Accounting
ratio (%) treatment for
Main office Registr
Business investment of
Joint venture or associate enterprise place ation
nature Direct Indire joint venture or
place
ly ctly associate
enterprise
Associate enterprise:
R&D and
1.Changhong Ruba Electric Company Lahore,
Lahore manufacturin 40.00 Equity
(Private)Ltd. Pakistan
g
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 Tech. R & D, sales,
Mianyang Mianyang 49.00 Equity
Co., Ltd. after-sales
R&D and
5.Sichuan Tianyou Guigu Technology Co.,
Mianyang Mianyang manufacturin 25.00 Equity
Ltd
g
R&D,
6.Chengdu Guigu Environmental Tech. Co.,
Chengdu Chengdu manufacturin 25.00 Equity
Ltd.
g and sales
(2) Financial information for major Joint venture: Nil
(3) Financial information for associate enterprise
Endingbalance/ Currentamount
HefeiXingmei SichuanZhiyijia Hongyuan SichuanTianyou
ChanghongRuba ChengduGuigu
Item Assets Network Ground Guigu
ElectricCompany Environmental
Management TechnologyCo., EnergyHeat TechnologyCo.,
(Private)Ltd. Tech. Co., Ltd.
Co., Ltd. Ltd. Tech. Co., Ltd. Ltd
Current assets 102,081,181.80 2,148,209.46 2,927,385,121.47 55,304,868.70 21,588,509.76 31,905,416.88
Including: cash and cash
2,903,553.99 2,041,006.20 1,901,758,014.73 719,380.02 4,857,809.70 969,157.76
equivalent
128
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Non-current assets 51,475,772.77 17,670,075.76 9,097,659.16 14,286,659.02 14,514,996.98 14,973,524.68
Totalassets 153,556,954.57 19,818,285.22 2,936,482,780.63 69,591,527.72 36,103,506.74 46,878,941.56
Current liability 144,033,275.72 1,276,395.16 2,884,048,555.28 22,229,071.99 10,410,585.01 24,134,660.20
Non-current liability 968,420.00
Totalliabilities 144,033,275.72 1,276,395.16 2,885,016,975.28 22,229,071.99 10,410,585.01 24,134,660.20
Minority's interest 1,094,706.25
Equity attributable to
shareholder of parent 9,523,678.85 18,541,890.06 51,465,805.35 47,362,455.73 25,692,921.73 21,649,575.11
company
Share of net assets measured
5,610,460.96 8,952,024.52 15,439,741.60 23,207,603.31 6,423,230.43 5,412,393.78
byshareholdingratio
Adjustment
--Goodwill 3,887,027.34
Unrealized profit of the
internal downstream 4,622,067.77 6,541,061.79 2,139.64 4,691.98 40,412.33
transactions
Unrealized profit of the
internal upstream
transactions
Other
Book value of the equity
investment for associate 988,393.19 8,952,024.52 8,898,679.81 23,205,463.67 6,418,538.45 9,259,008.79
enterprise
Fair value of equity
investment for the associate
withconsiderationpublicly
Operationincome 162,916,496.00 2,430,211,379.62 16,939,634.90 -290,705.70 22,927,852.35
Financial expenses 24,206,842.56 -3,153.87 5,617,886.35 -788.08 -163,651.65 89,217.31
Income taxexpenses
Netprofit -18,627,283.09 -969,500.31 -9,710,951.08 115,981.57 -2,769,666.72 403,485.31
Net profit of discontinuing
operation
Other comprehensive
-4,412,343.03
income
Total comprehensive
-23,039,626.12 -969,500.31 -9,710,951.08 115,981.57 -2,769,666.72 403,485.31
income
Dividend received from
associate enterprise in the
129
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
period
(Continued)
Openingbalance/Same period last year
HefeiXingmei Hongyuan SichuanTianyou Chengdu Guigu
ChanghongRuba SichuanZhiyijia
Item Assets Ground Guigu Environmental
ElectricCompany Network
Management EnergyHeat TechnologyCo., Tech. Co., Ltd.
(Private)Ltd. TechnologyCo., Ltd.
Co., Ltd. Tech. Co., Ltd. Ltd
Current assets 91,897,615.22 2,675,645.87 2,183,231,308.63 58,433,074.33 21,327,002.48 14,543,169.26
Including: cash and cash
2,226,184.18 2,568,442.61 1,051,202,920.87 1,874,763.97 14,337,275.36 2,753,804.68
equivalent
Non-current assets 61,362,584.22 18,201,870.67 9,053,276.55 15,117,799.85 17,218,667.66 15,241,625.80
Totalassets 153,260,199.44 20,877,516.54 2,192,284,585.18 73,550,874.18 38,545,670.14 29,784,795.06
Current liability 122,588,154.92 1,366,126.17 2,151,196,374.07 26,304,400.02 10,083,081.69 8,538,705.26
Non-current liability 685,260.00
Totalliabilities 122,588,154.92 1,366,126.17 2,151,881,634.07 26,304,400.02 10,083,081.69 8,538,705.26
Minority's interest
Equity attributable to
30,672,044.52 19,511,390.37 59,346,621.88 47,246,474.16 28,462,588.45 21,246,089.80
shareholder of parent company
Share of net assets measured by
14,069,807.22 9,420,099.27 17,803,986.55 23,150,772.34 7,115,647.11 5,311,522.45
shareholdingratio
Adjustment
--Goodwill 3,887,027.34
Unrealized profit of the internal
5,020,111.59 8,138,518.55 1,835.80 4,693.04 41,161.52
downstreamtransactions
Unrealized profit of the internal
upstreamtransactions
Other
Book value of the equity
investment for associate 9,049,695.63 9,420,099.27 9,665,468.00 23,148,936.54 7,110,954.07 9,157,388.27
enterprise
Fair value of equity investment
for the associate with
considerationpublicly
Operationincome 108,486,469.02 13,454.00 2,102,672,512.79 55,129.17 68,743.85 8,860,955.70
Financial expenses 148,651.36 -4,326.72 -2,422,144.62 94,543.32 -243,473.35 -61,892.19
Income taxexpenses 2,263,914.85 -13,602.01
Net profit -14,531,567.08 -1,777,347.04 9,824,418.82 -2,441,068.96 -2,816,097.00 -3,492,639.55
130
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Net profit of discontinuing
operation
Other comprehensive income -5,900,632.03
Total comprehensiveincome -20,432,199.11 -1,777,347.04 9,824,418.85 -2,441,068.96 -2,816,097.00 -3,492,639.55
Dividend received from
associate enterpriseintheperiod
(4) Financial summary for non-important Joint venture and associate enterprise
Ending balance / Current
Item Opening balance / Last period
amount
Associate enterprise:
Total book value of investment
Total amount measured by shareholding
ratio
--Net profit -144,198.04 -305,913.15
--Other comprehensive income
--Total comprehensive income -144,198.04 -305,913.15
(5) Major limitation on capital transfer ability to the Company from joint venture or affiliates: Nil
(6) Excess loss occurred in joint venture or affiliates: Nil
(7) Unconfirmed commitment with joint venture investment concerned: Nil
(8) Intangible liability with joint venture or affiliates investment concerned: Nil
4. Major conduct joint operation: Nil
5. Structured body excluding in consolidate financial statement: Nil
IX. Relevant risks related with financial instrument
The major financial instruments of the Company include borrowings, account receivables, account payable,
tradable financial assets, tradable financial liability, the details of which are set out in Note VI. 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 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.
131
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise 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 30 June 2019, the
interest-bearing debts mainly referred to borrowing contracts at floating rate denominated in RMB with total
amount of 1,591,483,254.73 Yuan, the floating rate contract denominated in Rupee is converted into RMB
31,606,729.90, and the fixed-rate contracts denominated in US dollars are converted into RMB
487,874,215.64. Risks relating to change of fair value of financial instruments arising from movement of
interest rate mainly related to bank borrowings at fixed rate. As for borrowings at fixed rate, the Company
aims to keep its floating rate. Risks relating to change of cash flow of financial instruments arising from
movement of interest rate mainly related to bank borrowings at floating rate. The Company establishes its
policy to keep floating rate for these borrowings so as to eliminate fair value risk arising from movement of
interest rate.
X. Fair value disclosure
1. Asset and liability measured by fair value at end of the period and fair value measurement level
F a i r va l u e a t p e ri od - e n d
Item
1st level 2nd level 3rd level Total
Tradable financial assets
1. Financial assets measured by fair
value and with variation reckoned into 2,703,222.18
2,703,222.18
current gains/losses
Including: Derivative financial assets 2,703,222.18
2,703,222.18
Tradable financial liability
Including: Derivative financial
45,676,424.26 45,676,424.26
liability
The derivative contract is measured by fair value on 2nd level, which is the real-time quote on foreign exchange market on
balance sheet date
XI. Related parties and related transaction
(i) Relationship of related parties
1. Controlling shareholder and ultimate controller
(1) Controlling shareholder and ultimate controller
132
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
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 26.98% 26.98%
Ltd. ng e and sales
Sichuan Changhong Electronics Holding Group Co., Ltd. is the controlling shareholder of Sichuan Changhong Electric Co.,
Ltd, and the SASAC Mianyang office holds 100.00% equity interests of Sichuan Changhong Electronic Holding Group, which
means that SASAC Mianyang office is the ultimate controller of the Company.
(2) Register capital and change thereof of controlling shareholder
Current Current
Controlling shareholder Opening balance Ending balance
increased decreased
Sichuan Changhong Electric Co., Ltd. 4,616,244,222 4,616,244,222
(3) Shares held by the controlling shareholder and its changes on equity
Amount of shares held Shareholding ratio
Controlling shareholder Ratio at Ratio at
Ending balance Opening balance
period-end period-begin
Sichuan Changhong Electric Co., Ltd. 281,832,434.00 279,200,104.00 26.98% 26.73%
2. Subsidiary
Found more in Note “VIII. 1 (1) Enterprise group composition”
3. Joint venture and associated enterprise
Major Joint venture and associated enterprise of the Company found more in Note “VIII. 3 (1) major joint venture and
associated enterprise”. Other Joint venture and associated enterprise that have related transactions occurred with the Company
in the period or occurred in last period, and with balance results:
Joint venture and associated enterprise Relationship with the company
Hefei Meiling Solar Energy Technology Co., Ltd. Associated enterprise of subsidiary Meiling Group
Changhong Ruba Electric Company (Private)Ltd. Associated enterprise of subsidiary Zhongshan Changhong
Hefei Xingmei Assets Management Co., Ltd. Associated enterprise of the Company
Associated enterprise of the Company, has the same
Sichuan Zhiyijia Network Technology Co., Ltd.
controlling shareholder and actual control of the Company
Associated enterprise of subsidiary Changhong
Hongyuan Ground Energy Heat Tech. Co., Ltd.
Air-conditioner
Associated enterprise of subsidiary Changhong
Sichuan Tianyou Guigu Technology Co., Ltd
Air-conditioner
Associated enterprise of subsidiary Changhong
Chengdu Guigu Environmental Tech. Co., Ltd.
Air-conditioner
133
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
4. Other related party
Other related party Relationship with the company
Changhong Huayi Compressor Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Changhong Jijia Fine Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Changhong Package Printing Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Changhong Precision Electronics Tech. Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Changhong New Energy Technology Co., Ltd. Control by same controlling shareholder and ultimate controller
081 Electronic Group Control by same controlling shareholder and ultimate controller
Guangdong Changhong Electronics Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Changhong Intelligent Manufacturing Tech. Co.,
Control by same controlling shareholder and ultimate controller
Ltd.
Sichuan Hongwei Technology Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Jiahong Industrial Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Changhong Power Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Service Exp. Appliance Service Chain Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Changhong Electronic Products Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Ailian Technology Co., Ltd. Control by same controlling shareholder and ultimate controller
Hunan Grand-Pro Intelligent Tech. Company Control by same controlling shareholder and ultimate controller
Sichuan Aichuang Technology Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Changhong Minsheng Logistic Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Hongxin Software Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Changhong International Hotel Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Changhong International Agency Co., Ltd Control by same controlling shareholder and ultimate controller
Sichuan Changhong Property Service Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Changhong Network Technology Co., Ltd. Control by same controlling shareholder and ultimate controller
Hefei Changhong New Energy Technology Co., Ltd. Control by same controlling shareholder and ultimate controller
Lejiayi Chain Management Co., Ltd. Control by same controlling shareholder and ultimate controller
PT.CHANGHONGELECTRICINDONESIA Control by same controlling shareholder and ultimate controller
CHANGHONG(HK)TRADINGLIMITED Control by same controlling shareholder and ultimate controller
CHANGHONGELECTRIC(AUSTRALIA) Control by same controlling shareholder and ultimate controller
Sichuan Changhong Device Tech. Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Changhong Gerun Environmental Protection
Control by same controlling shareholder and ultimate controller
Tech. Co., Ltd.
Hefei Changhong Industrial Co., Ltd. Control by same controlling shareholder and ultimate controller
134
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Other related party Relationship with the company
Sichuan Changhong Property Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Changhong Wisdom Health Tech. Co., Ltd. Control by same controlling shareholder and ultimate controller
BVCH Optronics (Sichuan) Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Changhong Group Finance Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Changhong Education Technology Co., Ltd. Control by same controlling shareholder and ultimate controller
Guangyuan Changhong Electronic Technology Co., Ltd. Control by same controlling shareholder and ultimate controller
Orion.PDP.Co.,ltd Control by same controlling shareholder and ultimate controller
CHANGHONG ELECTRIC MIDDLE EAST FZCO Control by same controlling shareholder and ultimate controller
Chengdu Changhong Electronic Technology Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Hongcheng Real Estate Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Changhong Electronic System Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Huanyu Industrial Co. Ltd. Control by same controlling shareholder and ultimate controller
Mianyang Science & Technology City Big Data Tech.
Control by same controlling shareholder and ultimate controller
Co., Ltd.
Changhong Shundatong Tech. Development Co., Ltd. Control by same controlling shareholder and ultimate controller
Changhong Europe Electric s.r.o Control by same controlling shareholder and ultimate controller
Shenzhen YijEn Technology Co., Ltd. Control by same controlling shareholder and ultimate controller
Changhong International Holdings (Hong Kong) Co.,
Control by same controlling shareholder and ultimate controller
Ltd.
Sichuan Changhong Jineng Sunshine Technology Co.,
Control by same controlling shareholder and ultimate controller
Ltd.
Mianyang Huafeng Interconnection Tech. Co., Ltd. Control by same controlling shareholder and ultimate controller
Yuanxin Financial Leasing Co., Ltd Control by same controlling shareholder and ultimate controller
Sichuan Changhong Venture Investment Co., Ltd. Control by same controlling shareholder and ultimate controller
Sichuan Hongyu Metal Manufacturing Co., Ltd. Associated enterprise of controlling shareholder
Sichuan Changxin Refrigeration Parts Co., Ltd. Associated enterprise of controlling shareholder
Mianyang Haili Electric Co., Ltd. Associated enterprise of controlling shareholder
Sichuan Hongran Green Energy Co., Ltd. Associated enterprise of controlling shareholder
Subsidiary of the associated enterprise of controlling
Beijing Changhong Tech. Co. Ltd,
shareholder
Associated enterprise of the subsidiary of controlling
Sichuan Yunyou Internet Technology Co., Ltd.
shareholder
(ii) Related transactions
1. Purchasing commodity
135
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Current amount Last period
Related party Content (in 10 thousand (in 10 thousand
Yuan) Yuan)
Purchasing
Sichuan Changhong Electric Co., Ltd. 18,083.03 17,152.85
commodity
Purchasing
Changhong Huayi Compressor Co., Ltd. 20,599.19 29,967.62
commodity
Purchasing
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 38,909.02 42,545.85
commodity
Purchasing
Sichuan Changhong Jijia Fine Co., Ltd. 17,967.00 20,351.17
commodity
Purchasing
Sichuan Changhong Package Printing Co., Ltd. 6,539.21 7,295.70
commodity
Purchasing
Sichuan Changhong Precision Electronics Tech. Co., Ltd. 1,030.50 5,357.47
commodity
Purchasing
Sichuan Changhong New Energy Technology Co., Ltd. 0.59 3.59
commodity
Purchasing
081 Electronic Group 95.04 135.62
commodity
Purchasing
Guangdong Changhong Electronics Co., Ltd. 120.45 176.79
commodity
Sichuan Changhong Intelligent Manufacturing Tech. Co., Purchasing
16.10 8.98
Ltd. commodity
Purchasing
Sichuan Changhong Device Tech. Co., Ltd. 1,933.86
commodity
Purchasing
Sichuan Hongwei Technology Co., Ltd. 168.36
commodity
Purchasing
Sichuan Zhiyijia Network Technology Co., Ltd. 23.61 13.16
commodity
Purchasing
Sichuan Changhong Power Co., Ltd. 0.30
commodity
Purchasing
Sichuan Changhong Electronic Products Co., Ltd. 2,014.78
commodity
Purchasing
Sichuan Ailian Technology Co., Ltd. 1,175.20 599.81
commodity
Purchasing
Hunan Grand-Pro Intelligent Tech. Company 221.15 156.25
commodity
Purchasing
Sichuan Aichuang Technology Co., Ltd. 4,175.90 251.51
commodity
136
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Current amount Last period
Related party Content (in 10 thousand (in 10 thousand
Yuan) Yuan)
Purchasing
Sichuan Hongyu Metal Manufacturing Co., Ltd. 127.32
commodity
Purchasing
Sichuan Changxin Refrigeration Parts Co., Ltd. 25,519.21 23,907.65
commodity
Purchasing
Mianyang Highly Electric Co., Ltd. 15,545.66 27,630.17
commodity
Purchasing
Changhong Ruba Electric Company (Private) Ltd. 12,020.14 13,992.75
commodity
Purchasing
Sichuan Tianyou Guigu Technology Co., Ltd -29.26
commodity
Purchasing
Sichuan Changhe Technology Co., Ltd. 378.56
commodity
Purchasing
Chengdu Guigu Environmental Tech. Co., Ltd. 6.46 1.51
commodity
Total 164,201.64 191,988.19
2.Accept the labor services
Related party Content Current amount Last period
Accept the labor
Sichuan Changhong Electronics Holding Group Co., Ltd. 355,937.03 73,759.20
services
Accept the labor
Sichuan Changhong Electric Co., Ltd. 5,194,850.47 6,230,336.42
services
Accept the labor
Sichuan Changhong Minsheng Logistic Co., Ltd. 234,971,186.87 230,280,688.77
services
Accept the labor
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 82,518.41
services
Accept the labor
Sichuan Service Exp. Appliance Service Chain Co., Ltd. 60,542,230.02 88,220,509.41
services
Accept the labor
Sichuan Hongxin Software Co., Ltd. 560,220.75 253,637.73
services
Accept the labor
Guangdong Changhong Electronics Co., Ltd. 269,770.19 277,345.05
services
Accept the labor
Sichuan Jiahong Industrial Co., Ltd. 59,318.00 162,557.42
services
Accept the labor
Sichuan Changhong International Hotel Co., Ltd. 88,864.48 221,616.95
services
137
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Accept the labor
Sichuan Changhong International Agency Co., Ltd 226,778.81 90,299.48
services
Accept the labor
Sichuan Changhong Property Service Co., Ltd. 1,835,408.94 421,191.81
services
Accept the labor
Sichuan Hongwei Technology Co., Ltd. 106,473.57 358,990.56
services
Accept the labor
Sichuan Zhiyijia Network Technology Co., Ltd. 9,004,733.41 4,179,468.03
services
Accept the labor
Sichuan Changhong Network Technology Co., Ltd. 24,474.11 34,977.69
services
Sichuan Changhong Intelligent Manufacturing Tech. Co., Accept the labor
900,754.83 30,683.76
Ltd. services
Accept the labor
Sichuan Changhong Jijia Fine Co., Ltd. 25,195.83
services
Accept the labor
Sichuan Changhong Jiahua Information Products Co., Ltd 6,037.74
services
Accept the labor
Sichuan Changhong Electronic Products Co., Ltd. 450,488.09
services
Accept the labor
Chengdu HOPE Testing Tech. Co. Ltd. 7,566.04
services
Total 314,699,203.81 330,849,666.06
3.Purchase fuel and power
Related party Content Current amount Last period
Fuel and power
Sichuan Changhong Electric Co., Ltd. 10,300,048.70 8,804,002.78
accepted
Fuel and power
Changhong Huayi Compressor Co., Ltd. 383,150.11 291,471.19
accepted
Fuel and power
Guangdong Changhong Electronics Co., Ltd. 501,569.74 674,472.29
accepted
Fuel and power
Hefei Changhong New Energy Technology Co., Ltd. 147,179.16 144,943.25
accepted
Fuel and power
Sichuan Changhong Property Service Co., Ltd. 9,849.75 7,545.29
accepted
Fuel and power
Sichuan Hongran Green Energy Co., Ltd. 708,567.36
accepted
Total 12,050,364.82 9,922,434.80
4. Sales of goods/provide labor service
138
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Current amount Last period
Related party Content (in 10 thousand (in 10 thousand
Yuan) Yuan)
Sichuan Changhong Electric Co., Ltd. Sales of goods 623.87 3,695.69
Sichuan Changhong Electronics Holding Group Co., Ltd. Sales of goods 31.91 67.87
Sichuan Changhong Jijia Fine Co., Ltd. Sales of goods 2,698.81 3,973.51
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Sales of goods 10,882.50 8,310.71
Lejiayi Chain Management Co., Ltd. Sales of goods 3,428.75 981.20
PT.CHANGHONG ELECTRIC INDONESIA Sales of goods 381.52 54.76
CHANGHONG(HK)TRADING LIMITED Sales of goods 19,688.72 18,132.40
CHANGHONG ELECTRIC(AUSTRALIA) Sales of goods 1,712.51 667.34
Sichuan Hongwei Technology Co., Ltd. Sales of goods 0.76 12.09
Sichuan Changhong Device Tech. Co., Ltd. Sales of goods 49.93 16.53
Sichuan Changhong Minsheng Logistic Co., Ltd. Sales of goods 88.66 151.60
Sichuan Service Exp. Appliance Service Chain Co., Ltd. Sales of goods 330.81 771.61
Sichuan Changhong Gerun Environmental Protection
Sales of goods 444.60 1,077.63
Tech. Co., Ltd.
Hefei Changhong Industrial Co., Ltd. Sales of goods 111.05 137.04
Sichuan Huafeng Corp. Group Sales of goods 18.58
Sichuan Zhiyijia Network Technology Co., Ltd. Sales of goods 105,495.05 132,164.21
Sales of goods/provide
Sichuan Changhong Property Co., Ltd. 157.86 86.52
labor service
Sichuan Changhong Network Technology Co., Ltd. Sales of goods 0.10 21.23
Sichuan Changhong Wisdom Health Tech. Co., Ltd. Sales of goods 0.44 0.84
Sichuan Changhong Property Service Co., Ltd. Sales of goods 4.60 1.94
Guangdong Changhong Electronics Co., Ltd. Sales of goods 1.72
Sichuan Huanyu Industrial Co. Ltd. Sales of goods 14.62
Mianyang Science & Technology City Big Data Tech.
provide labor service 0.16
Co., Ltd.
BVCH Optronics (Sichuan) Co., Ltd. Sales of goods 0.68 7.02
Sichuan Changhong Electronic Products Co., Ltd. Sales of goods 8.22
Sichuan Changhong Group Finance Co., Ltd. Sales of goods 1.84 2.23
Sales of goods/provide
Changhong Huayi Compressor Co., Ltd. 37.85 12.00
labor service
Sichuan Changhong Package Printing Co., Ltd. Sales of goods 0.35 2.20
Sichuan Changhong Power Co., Ltd. Sales of goods 4.41 9.36
139
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Current amount Last period
Related party Content (in 10 thousand (in 10 thousand
Yuan) Yuan)
Sichuan Changhong Education Technology Co., Ltd. Sales of goods 70.86 56.17
081 Electronic Group Sales of goods 1.72
Guangyuan Changhong Electronic Technology Co., Ltd. Sales of goods 63.28 77.09
Sichuan Ailian Technology Co., Ltd. Sales of goods 2.09 12.50
Sichuan Changhong Venture Investment Co., Ltd. Sales of goods 0.17
Sichuan Changhong Jineng Sunshine Technology Co.,
Sales of goods 2.02
Ltd.
Sichuan Changhong Electronics Tech. Co., Ltd. Sales of goods 0.80
Sichuan Hongxin Software Co., Ltd. Sales of goods 3.80
Sichuan Hongcheng Real Estate Co., Ltd. Sales of goods 9.46
Sichuan Jiahong Industrial Co., Ltd. Sales of goods 13.87
Sichuan Changhong New Energy Technology Co., Ltd. provide labor service 3.06 2.61
Sichuan Changhong International Hotel Co., Ltd. Sales of goods 3.62 27.84
Sichuan Changhong Electronic System Co., Ltd. Sales of goods 0.85
Sichuan Changhong Precision Electronics Tech. Co., Ltd. Sales of goods 0.09 6.43
Orion.PDP.Co.,ltd Sales of goods 1,936.82 1,489.79
Changhong International Holdings (Hong Kong) Co.,
Sales of goods 58.80
Ltd.
Changhong Europe Electric s.r.o Sales of goods 0.19
Yibin Red-Star Electronics Co., Ltd. Sales of goods 91.74
CHANGHONG ELECTRIC MIDDLE EAST FZCO Sales of goods 717.43 122.67
Sales of goods/provide
Sichuan Aichuang Technology Co., Ltd. 26.54 101.37
labor service
Sichuan Changxin Refrigeration Parts Co., Ltd. Sales of goods 8,074.51 6,050.49
Mianyang Huafeng Interconnection Tech. Co., Ltd. Sales of goods 324.56
Hongyuan Ground Energy Heat Tech. Co., Ltd. Sales of goods 1,504.84 -6.26
Chengdu Guigu Environmental Tech. Co., Ltd. Sales of goods 893.80 334.18
Changhong Ruba Electric Company (Private) Ltd. Sales of goods 7,299.85 5,155.91
Total 167,124.46 183,989.51
Businesses between the Company and its connected persons are generally conducted under market operation rules as if they
were the same as other business counter parties. 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
140
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
expense, the price shall be determined by both parties by negotiation.
5. Provide fuels
Related party Content Current amount Last period
Guangdong Changhong Electronics Co., Ltd. Provide fuels 591,379.86 9,055.92
Sichuan Changhong Minsheng Logistic Co., Ltd. Provide fuels 46,424.66 8,086.47
Sichuan Changhong Jijia Fine Co., Ltd. Provide fuels 63,436.46 79,169.23
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Provide fuels 3,686,814.01 3,753,050.29
Sichuan Hongwei Technology Co., Ltd. Provide fuels 848.96
Sichuan Changhong Precision Electronics Tech. Co., Ltd. Provide fuels 693.51
Sichuan Changhong Device Tech. Co., Ltd. Provide fuels 402,243.20 457,594.68
Sichuan Service Exp. Appliance Service Chain Co., Ltd. Provide fuels 4,860.07
Shenzhen YijEn Technology Co., Ltd. Provide fuels 52.05
Changhong International Holdings (Hong Kong) Co., Ltd. Provide fuels 1,988.69
Total 4,795,851.77 4,309,846.29
6. Related rental
(1) Rent out
Leasing income Leasing income
Lessor Lessee Type of assets
in this period last period
Changhong
Sichuan Changhong Jijia Fine Co., Ltd. Forklift 8,142.41 2,057.07
Meiling
Changhong
Sichuan Changhong Jijia Fine Co., Ltd. Warehouse 66,640.08 18,569.66
Meiling
Changhong
Sichuan Changhong Jijia Fine Co., Ltd. Apartment 3,417.92 9,283.02
Meiling
Changhong
Sichuan Changhong Jijia Fine Co., Ltd. Workshop 271,283.23 257,200.00
Meiling
Changhong
Sichuan Changhong Jijia Fine Co., Ltd. Appliance 300.00
Meiling
Changhong
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Warehouse 239,218.86 86,093.39
Meiling
Changhong
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Workshop 711,904.98 702,270.00
Meiling
Changhong
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Apartment 295,066.43 133,527.62
Meiling
Changhong Sichuan Changhong Minsheng Logistic Co., Ltd. Apartment 45,794.29
141
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Leasing income Leasing income
Lessor Lessee Type of assets
in this period last period
Meiling
Changhong Sichuan Service Exp. Appliance Service Chain Co.,
Apartment 194,858.53
Meiling Ltd.
Changhong Sichuan Service Exp. Appliance Service Chain Co.,
office 132,641.68 42,378.38
Meiling Ltd.
Changhong Sichuan Service Exp. Appliance Service Chain Co.,
Workshop 43,241.00
Meiling Ltd.
Changhong Sichuan Service Exp. Appliance Service Chain Co.,
Forklift 4,800.00
Meiling Ltd.
Changhong
Hefei Changhong Industrial Co., Ltd. Apartment 96,003.82 64,716.19
Meiling
Changhong
Sichuan Changhong Electric Co., Ltd. Apartment 20,314.50
Meiling
Changhong Sichuan Changhong Precision Electronics Tech. Co.,
Forklift 1,682.54
Meiling Ltd.
Changhong Sichuan Changhong Precision Electronics Tech. Co.,
Warehouse 1,415.09
Meiling Ltd.
Changhong Sichuan Changhong Precision Electronics Tech. Co.,
Apartment 15,657.14 22,367.83
Meiling Ltd.
Changhong
Sichuan Ailian Technology Co., Ltd. Warehouse 1,343.10 552.00
Meiling
Changhong
Sichuan Aichuang Technology Co., Ltd. Warehouse 18,759.84
Meiling
Changhong
Sichuan Changhe Technology Co., Ltd. Warehouse 3,591.96
Meiling
Changhong
Sichuan Aichuang Technology Co., Ltd. Forklift 1,713.68
Meiling
Zhongke
Sichuan Changhong Minsheng Logistic Co., Ltd. Workshop 1,411,295.19 936,567.27
Meiling
Changhong
Freight
Air-conditione BVCH Optronics (Sichuan) Co., Ltd. 52,480.00
elevator
r
Zhongshan Office
Guangdong Changhong Electronics Co., Ltd. 17,477.59 63,646.10
Changhong building
Parts of the
Zhongshan
Sichuan Changhong Minsheng Logistic Co., Ltd. office building 18,637.42 1,693.24
Changhong
rent-out
142
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Leasing income Leasing income
Lessor Lessee Type of assets
in this period last period
Zhongshan
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 2# living area 6,770.00 9,450.49
Changhong
Zhongshan
Sichuan Hongwei Technology Co., Ltd. 2# living area 4,550.38
Changhong
Zhongshan
Sichuan Changhong Device Tech. Co., Ltd. 2# living area 51.76
Changhong
Zhongshan Sichuan Changhong Precision Electronics Tech. Co.,
2# living area 4,050.00
Changhong Ltd.
Zhongshan Changhong International Holdings (Hong Kong) Co.,
2# living area 6,010.39
Changhong Ltd.
Jiangxi
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Workshop 390,338.86 269,600.00
Meiling
Mianyang
Sichuan Changhong Mold Plastic Tech. Co., Ltd. Warehouse 34,030.65
Refrigeration
Mianyang
Sichuan Changhe Technology Co., Ltd. Warehouse 162.16
Refrigeration
Mianyang
Sichuan Changhong Package Printing Co., Ltd. Warehouse 270.28
Refrigeration
Changhong
Sichuan Changhong Device Tech. Co., Ltd. Workshop 711,493.90 501,892.14
Ridian
Changhong
Sichuan Hongwei Technology Co., Ltd. Workshop 45,257.14 35,218.29
Ridian
Changhong Changhong International Holdings (Hong Kong) Co.,
office 74,862.18
Ridian Ltd.
Total 4,535,768.77 3,576,842.90
(2) Lessee of related parties
Leasing expense in Leasing expense
Lessor Lessee Type of assets
this period last period
Sichuan Changhong Property Service Co., Changhong
Workshop, office 984,405.85
Ltd. Air-conditioner
Chengdu Changhong Electronic Technology
Meiling Software office 174,966.21
Co., Ltd.
Chengdu Changhong Electronic Technology
Hongmei Intelligent office 240,812.32
Co., Ltd.
Guangdong Changhong Electronics Co., Ground energy heat
Staff dormitory 12,970.19 149,265.47
Ltd. pump
143
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Leasing expense in Leasing expense
Lessor Lessee Type of assets
this period last period
Mianyang
Sichuan Changhong Electric Co., Ltd. Workshop leasing 1,620,516.65 68,117.78
Refrigeration
Sichuan Changhong Electronics Holding Mianyang
Staff dormitory 14,000.23 11,355.72
Group Co., Ltd. Refrigeration
Sichuan Changhong Property Service Co., Mianyang
Flower rental 1,670.38
Ltd. Refrigeration
Chengdu Changhong Electronic Technology Changmei
office 111,178.80
Co., Ltd. Technology
Sichuan Changhong Property Service Co., Changmei
Venue rental 24,217.08
Ltd. Technology
Changmei
Sichuan Hongwei Technology Co., Ltd. Server rental 136,667.56
Technology
Guangdong Changhong Electronics Co.,
Changhong Ridian Staff dormitory 13,723.93
Ltd.
Beijing Changhong Tech. Co. Ltd, Meiling Group office 78,932.59
Sichuan Changhong Electric Co., Ltd. Meiling Group office 194,009.55 423,932.86
Total 2,161,241.53 2,099,501.64
7. Related guarantee
Maximum guarantee
Completed
Secured party Sponsored party amount (in 10 thousand Start Date due
(Y/N)
Yuan)
Zhongshan
Changhong Meiling 5,000.00 2018.04.12 2019.04.11 Y
Changhong
Zhongshan
Changhong Meiling 6,000.00 2018.03.07 2019.03.07 Y
Changhong
Zhongshan
Changhong Meiling 5,500.00 2018.04.18 2019.04.19 Y
Changhong
Zhongshan
Changhong Meiling 5,500.00 2019.03.15 2020.03.15 N
Changhong
Zhongshan
Changhong Meiling 10,000.00 2018.03.30 2019.03.30 Y
Changhong
Zhongshan
Changhong Meiling 10,000.00 2019.03.31 2020.03.30 N
Changhong
Zhongshan
Changhong Meiling 10,000.00 2018.08.09 2019.08.09 N
Changhong
144
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Maximum guarantee
Completed
Secured party Sponsored party amount (in 10 thousand Start Date due
(Y/N)
Yuan)
Zhongshan
Changhong Meiling 5,000.00 2018.08.21 2019.08.20 N
Changhong
Zhongshan
Changhong Meiling 5,000.00 2018.10.23 2019.10.23 N
Changhong
Zhongshan
Changhong Meiling 10,000.00 2018.08.22 2019.08.21 N
Changhong
Zhongshan
Changhong Meiling 10,000.00 2019.01.25 2020.01.24 N
Changhong
Zhongshan
Changhong Meiling 5,000.00 2019.06.20 2020.06.20 N
Changhong
Changhong Meiling Changhong Ridian 4,500.00 2018.08.21 2019.08.21 N
Changhong Meiling Changhong Ridian 4,000.00 2018.08.31 2019.03.30 Y
Changhong Meiling Changhong Ridian 4,000.00 2019.03.31 2020.03.30 N
Changhong Meiling Changhong Ridian 2,500.00 2019.01.28 2020.01.27 N
Changhong Meiling Zhongke Meiling 2,000.00 2018.07.20 2019.05.25 Y
Changhong Meiling Zhongke Meiling 1,000.00 2018.06.29 2019.06.29 Y
Changhong Meiling Jiangxi Meiling 5,000.00 2019.03.12 2020.03.11 N
Changhong Meiling Jiangxi Meiling 10,000.00 2019.03.14 2020.03.14 N
Changhong Meiling ChanghongRuba 2,062.41 2019.01.28 2020.02.15 N
Changhong Meiling ChanghongRuba 1,888.08 2019.01.23 2020.01.09 N
Changhong Meiling Nonferrous Metal 500.00 2019.06.19 2019.12.19 N
Counter guarantee:
Zhongshan
Changhong Meiling 5,000.00 2018.04.12 2019.04.11 Y
Changhong
Zhongshan
Changhong Meiling 6,000.00 2018.03.07 2019.03.07 Y
Changhong
Zhongshan
Changhong Meiling 5,500.00 2018.04.18 2019.04.19 Y
Changhong
Zhongshan
Changhong Meiling 5,500.00 2019.03.15 2020.03.15 N
Changhong
Zhongshan
Changhong Meiling 10,000.00 2018.03.30 2019.03.30 Y
Changhong
Zhongshan
Changhong Meiling 10,000.00 2019.03.31 2020.03.30 N
Changhong
145
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Maximum guarantee
Completed
Secured party Sponsored party amount (in 10 thousand Start Date due
(Y/N)
Yuan)
Zhongshan
Changhong Meiling 10,000.00 2018.08.09 2019.08.09 N
Changhong
Zhongshan
Changhong Meiling 5,000.00 2018.08.21 2019.08.20 N
Changhong
Zhongshan
Changhong Meiling 5,000.00 2018.10.23 2019.10.23 N
Changhong
Zhongshan
Changhong Meiling 10,000.00 2018.08.22 2019.08.21 N
Changhong
Zhongshan
Changhong Meiling 10,000.00 2019.01.25 2020.01.24 N
Changhong
Zhongshan
Changhong Meiling 5,000.00 2019.06.20 2020.06.20 N
Changhong
Changhong Ridian Changhong Meiling 4,500.00 2018.08.21 2019.08.21 N
Changhong Ridian Changhong Meiling 4,000.00 2018.08.31 2019.03.30 Y
Changhong Ridian Changhong Meiling 4,000.00 2019.03.31 2020.03.30 N
Changhong Ridian Changhong Meiling 2,500.00 2019.01.28 2020.01.27 N
Zhongke Meiling Changhong Meiling 2,000.00 2018.07.20 2019.05.25 Y
Zhongke Meiling Changhong Meiling 1,000.00 2018.06.29 2019.06.29 Y
Jiangxi Meiling Changhong Meiling 5,000.00 2019.03.12 2020.03.11 N
Jiangxi Meiling Changhong Meiling 10,000.00 2019.03.14 2020.03.14 N
ChanghongRuba Changhong Meiling 2,062.41 2019.01.28 2020.02.15 N
ChanghongRuba Changhong Meiling 1,888.08 2019.01.23 2020.01.09 N
Nonferrous Metal Changhong Meiling 500.00 2019.06.19 2019.12.19 N
8. Assets transfer, debt restructuring of related parties
Related party Type Current amount Last period
Sichuan Changhong Intelligent Manufacturing Tech. Purchase & build fixed
27,193,066.98 8,135,804.47
Co., Ltd. assets
Purchase & build fixed
Sichuan Hongcheng Real Estate Co., Ltd. 56,603.77 393,162.39
assets
Sichuan Changhong Electric Co., Ltd. Purchase intangible assets 241,379.31
Purchase & build fixed
Sichuan Changhong Electric Co., Ltd. 32,509,712.14 106,156.65
assets
Sichuan Hongxin Software Co., Ltd. Purchase & build fixed 1,490,566.05 1,606,415.09
146
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Related party Type Current amount Last period
assets
Purchase & build fixed
Sichuan Changhong Network Technology Co., Ltd. 820,476.33
assets
Purchase & build fixed
Sichuan Changhong Electronic System Co., Ltd. 142,500.00
assets
Sichuan Zhiyijia Network Technology Co., Ltd. Purchasing fixed assets 2,990.60
Purchase & build fixed
Sichuan Huanyu Industrial Co. Ltd. 17,007,856.54 193,725.23
assets
Purchase & build fixed
Sichuan Jiahong Industrial Co., Ltd. 1,347,541.41
assets
Sichuan Hongcheng Construction Engineering Co., Ltd. Purchasing fixed assets 450,450.45
Sichuan Changhong Electronics Holding Group Co., Purchase & build fixed
3,773,584.91
Ltd. assets
Sichuan Aichuang Technology Co., Ltd. Purchasing fixed assets 1,344,951.37
Mianyang Science & Technology City Big Data Tech. Purchase & build fixed
1,112,815.42
Co., Ltd. assets
Sichuan Changhong Gerun Environmental Protection
Sales of fixed assets 8,149.87
Tech. Co., Ltd.
Sichuan Changhong Electronics Holding Group Co.,
Sales of fixed assets 13,993.08
Ltd.
Sichuan Jiahong Industrial Co., Ltd. Sales of fixed assets 4,813.70
Changhong Shundatong Tech. Development Co., Ltd. Sales of fixed assets 128,199.13
Total 82,077,673.73 16,007,241.16
9. Other
Current amount (in 10 Last period(in 10 thousand
Nameof company Content
thousand Yuan) Yuan)
Yuanxin Financial Leasing Enterprise payment
184.31
Co., Ltd business, financial leasing
10. Related transaction with Changhong Finance Company
(1) Saving balance
Interest income from
Name of company Ending balance Opening balance
bank saving
Changhong Meiling Co., Ltd. 1,961,099,047.93 2,138,883,580.37 29,218,567.57
Hebei Hongmao Household Appliance
237,001.92
Technology Co., Ltd
147
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Sichuan Changhong Air-conditioner Co., Ltd. 843,519,488.67 824,399,079.98 12,293,971.35
Zhongshan Changhong Electric Co., Ltd. 273,676.03 5,578,868.71 11,821.85
Hefei Meiling Group Holdings Limited 796.85 795.30 1.55
Mianyang Meiling Refrigeration Co., Ltd. 923.54 522.79 688.57
Zhongke Meiling Cryogenic Technology Co.,
70,784,019.16 76,807,508.29 1,232,845.72
Ltd.
Jiangxi Meiling Electric Appliance Co., Ltd. 723.03 946.27 1.77
Guangdong Changhong Ridian Technology
55,802,707.67 41,461,210.41 506,221.80
Co., Ltd.
Hongyuan Ground Energy Heat Pump Tech.
6,398.38 8,201.52 159.66
Co., Ltd.
Hongyuan Ground Energy Heat Pump Tech.
526,186.72 31,976,494.27 356,114.26
(Zhongshan) Co., Ltd
Total 2,932,250,969.90 3,119,117,207.91 43,620,394.10
(2) Notes discounted
Commercial bill
Commercial bill
Name of company book discounted Expenses of discounted
discounted amount
amount
Changhong Meiling Co., Ltd. 352,410,904.48 350,485,005.53 1,925,898.95
Sichuan Changhong Air-conditioner Co., Ltd. 324,278,124.17 321,021,016.66 3,257,107.51
Guangdong Changhong Ridian Technology
7,743,945.42 7,688,876.05 55,069.37
Co., Ltd.
Hongyuan Ground Energy Heat Pump Tech.
35,244,233.99 35,244,233.99
(Zhongshan) Co., Ltd
Total 719,677,208.06 714,439,132.23 5,238,075.83
(3) Notes issued
Nameof company Issuingfrom Noteamount Type
Sichuan Changhong Group Finance
Changhong Meiling Co., Ltd. 467,587,378.17 Bank acceptance
Co., Ltd.
Hebei Hongmao Household Appliance Sichuan Changhong Group Finance
2,370,019.20 Bank acceptance
Technology Co., Ltd Co., Ltd.
Sichuan Changhong Air-conditioner Co., Sichuan Changhong Group Finance
634,963,139.12 Bank acceptance
Ltd. Co., Ltd.
Zhongke Meiling Cryogenic Technology Sichuan Changhong Group Finance
11,417,100.56 Bank acceptance
Co., Ltd. Co., Ltd.
148
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Nameof company Issuingfrom Noteamount Type
Guangdong Changhong Ridian Sichuan Changhong Group Finance
37,412,959.85 Bank acceptance
Technology Co., Ltd. Co., Ltd.
Total 1,153,750,596.90
(4) Borrowing: Nil
(5) Accounts receivable factoring: Nil
(III) Come and go balance with related parties
1. Receivable items
Ending balance Opening balance
Item Related party Bad debt Bad debt
Book balance Book balance
provision provision
Account
Sichuan Changhong Electric Co., Ltd. 4,359,559.99 2,943,118.96
receivable
Account
Orion.PDP.Co.,ltd 10,629,246.24 22,430,223.12
receivable
Account Sichuan Changhong Mold Plastic Tech.
427,636.10 997,299.16
receivable Co., Ltd.
Account
Changhong Europe Electric s.r.o 131,552.00
receivable
Account CHANGHONGELECTRIC(AUSTRAL
14,096,884.27 16,782,905.91
receivable IA)
Account
Changhong Huayi Compressor Co., Ltd. 363,524.00
receivable
Account
Sichuan Changhong Jijia Fine Co., Ltd. 8,318.75
receivable
Account Sichuan Changhong Minsheng Logistic
275,734.13
receivable Co., Ltd.
Account Sichuan Service Exp. Appliance Service
401,463.48 225,967.73
receivable Chain Co., Ltd.
Account Sichuan Changhong Precision
36,056.54
receivable Electronics Tech. Co., Ltd.
Account PT.CHANGHONGELECTRICINDON
525,604.44 3,795,261.09
receivable ESIA
Account CHANGHONG(HK)TRADINGLIMIT
130,375,573.08 29,884,304.94
receivable ED
149
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Ending balance Opening balance
Item Related party Bad debt Bad debt
Book balance Book balance
provision provision
Account Sichuan Changhong Package Printing
1,152.00
receivable Co., Ltd.
Account Sichuan Changhong International Hotel
11,929.30 2,850.00
receivable Co., Ltd.
Account Chengdu Changhong Electronic
1,656.00
receivable Technology Co., Ltd.
Account
Lejiayi Chain Management Co., Ltd. 20,453,169.80 2,810,087.88
receivable
Account Sichuan Zhiyijia Network Technology
763,295,733.31 505,717,212.18
receivable Co., Ltd.
Account
Sichuan Hongwei Technology Co., Ltd. 1,200.00
receivable
Account
Shenzhen YijEn Technology Co., Ltd. 14,274.78
receivable
Account
Sichuan Changhong Property Co., Ltd. 459,063.58 112,151.48
receivable
Account Sichuan Changhong New Energy
37,985.10 248,132.64
receivable Technology Co., Ltd.
Account
Hefei Changhong Industrial Co., Ltd. 1,057,284.69
receivable
Account Changhong International Holdings
2,392.50 21,772.79
receivable (Hong Kong) Co., Ltd.
Account
Sichuan Jiahong Industrial Co., Ltd. 4,813.70
receivable
Account Guangdong Changhong Electronics Co.,
290,418.22
receivable Ltd.
Account CHANGHONG ELECTRIC MIDDLE
424,725.50 3,391,982.77
receivable EAST FZCO
Account
Sichuan Aichuang Technology Co., Ltd. 21,438.96 964,432.39
receivable
Account Sichuan Changhong Intelligent
547,276.70
receivable Manufacturing Tech. Co., Ltd.
Account Changhong Shundatong Tech.
126,590.96
receivable Development Co., Ltd.
Account Hongyuan Ground Energy Heat Tech.
15,833,604.13 25,559,118.66
receivable Co., Ltd.
150
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Ending balance Opening balance
Item Related party Bad debt Bad debt
Book balance Book balance
provision provision
Account Changhong Ruba Electric Company
96,100,495.02 75,910,256.75
receivable (Private) Ltd.
Account paid Sichuan Changhong Electronics
49,632.00
in advance Holding Group Co., Ltd.
Account paid
Sichuan Changhong Electric Co., Ltd. 11,324,475.95
in advance
Account paid
081 Electronic Group 6.94
in advance
Account paid
Sichuan Hongwei Technology Co., Ltd. 113,168.00
in advance
Account paid Guangdong Changhong Electronics Co.,
0.20
in advance Ltd.
Account paid Sichuan Zhiyijia Network Technology
766.43 3,071.23
in advance Co., Ltd.
Account paid Sichuan Changhong Intelligent
15,423,229.03
in advance Manufacturing Tech. Co., Ltd.
Account paid Sichuan Changhong Precision
8,127.70 7,797.42
in advance Electronics Tech. Co., Ltd.
Account paid Chengdu Guigu Environmental Tech.
58,281.92
in advance Co., Ltd.
Account paid Sichuan Tianyou Guigu Technology
342,300.00
in advance Co., Ltd
Other account Sichuan Service Exp. Appliance Service
672,600.00 600,000.00
receivable Chain Co., Ltd.
Other account Sichuan Changhong Mold Plastic Tech.
575.22
receivable Co., Ltd.
Other account
Sichuan Changhong Property Co., Ltd. 10,037.40 150,000.00
receivable
Other account Sichuan Changhong Property Service
2,952.00
receivable Co., Ltd.
Other account
Sichuan Huanyu Industrial Co. Ltd. 3,150.35
receivable
Other account Chengdu Changhong Electronic
434,509.01
receivable Technology Co., Ltd.
Other account Sichuan Changhong International Hotel
27,589.45 27,589.45
receivable Co., Ltd.
151
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Ending balance Opening balance
Item Related party Bad debt Bad debt
Book balance Book balance
provision provision
Other account
081 Electronic Group 252,027.35 252,027.35
receivable
Other account
Changhong Huayi Compressor Co., Ltd. 56,364.80
receivable
Other account Changhong Ruba Electric Company
1,099,185.47
receivable (Private) Ltd.
Total 1,061,115,919.97 721,916,980.42
2. Payable items
Item Related party Ending balance Opening balance
Account payable Sichuan Changhong Electronics Holding Group Co., Ltd. 796,408.02
Account payable Sichuan Changhong Electric Co., Ltd. 39,398,896.57 14,019,713.93
Account payable Sichuan Changhong Mold Plastic Tech. Co., Ltd. 165,531,197.33 27,891,091.24
Account payable Changhong Huayi Compressor Co., Ltd. 80,474,485.93 105,062,188.37
Account payable Sichuan Changhong Jijia Fine Co., Ltd. 109,313,891.37 17,324,860.79
Account payable Sichuan Changhong Minsheng Logistic Co., Ltd. 328,612.14 46,671,482.99
Account payable Sichuan Changhong Package Printing Co., Ltd. 43,270,126.90 9,305,115.20
Account payable Sichuan Changhong Device Technology Co., Ltd. 23,275.25
Sichuan Changhong Jineng Sunshine Technology Co.,
Account payable 52,951.39 52,951.39
Ltd.
Account payable Sichuan Changhong Precision Electronics Tech. Co., Ltd. 6,651,691.05 834,733.87
Account payable 081 Electronic Group 69,653.76 25,025.52
Account payable Sichuan Changhong New Energy Technology Co., Ltd. 5,900.00
Account payable Guangdong Changhong Electronics Co., Ltd. 1,189,926.19
Account payable Sichuan Changhong Power Co., Ltd. 1,870.82 4,910.82
Account payable Sichuan Hongyu Metal Manufacturing Co., Ltd. 14,662.40 14,662.40
Account payable Sichuan Service Exp. Appliance Service Chain Co., Ltd. 143,009.46 177,728.16
Account payable Sichuan Hongwei Technology Co., Ltd. 827,568.38
Account payable Sichuan Rainbow Consulting&Software Co., Ltd. 321,226.42 21,226.42
Account payable Sichuan Changhong International Hotel Co., Ltd. 121,538.10
Sichuan Changhong Intelligent Manufacturing Tech. Co.,
Account payable 7,185,385.64 11,377,605.65
Ltd.
Account payable Sichuan Changhong International Travel Agency Co., Ltd. 307,064.10
152
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Item Related party Ending balance Opening balance
Account payable Sichuan Changhong Electronic System Co., Ltd. 5,432.53
Account payable Sichuan Jiahong Industrial Co., Ltd. 14,764.05 21,109.00
Account payable Sichuan Changhong Network Technology Co., Ltd. 6,980.51 13,456.92
Account payable Sichuan Changhong Electronic Parts Co., Ltd. 12,491,670.74 2,054,864.41
Account payable CHANGHONG(HK)TRADINGLIMITED 2,959,912.46 1,998,987.22
Account payable Sichuan Ailian Technology Co., Ltd. 7,285,318.85 1,701,913.57
Account payable Sichuan Zhiyijia Network Technology Co., Ltd. 54,068.24 6,274.34
Account payable Sichuan Aichuang Technology Co., Ltd. 24,705,439.66 9,023,993.17
Account payable Hunan Grand-Pro Intelligent Tech. Company 755,585.20 287,486.83
Account payable Sichuan Huanyu Industrial Co. Ltd. 3,000,000.00
Mianyang Science & Technology City Big Data Tech. Co.,
Account payable 7,540.79 1,430.47
Ltd.
Account payable Sichuan Changxin Refrigeration Parts Co., Ltd. 45,718,042.38 883,369.88
Account payable Mianyang Highly Electric Co., Ltd. 36,211,754.17 12,868,088.45
Account payable Chengdu Guigu Environmental Tech. Co., Ltd. 65,100.00
Account payable Changhong Ruba Electric Company (Private) Ltd. 46,001,866.56 29,257,116.05
Account
received in Sichuan Changhong Electric Co., Ltd. 143,714.52 234.16
advance
Account
received in Sichuan Changhong Electronics Holding Group Co., Ltd. 5,080.00 5,080.00
advance
Account
received in Sichuan Changhong Minsheng Logistic Co., Ltd. 245.00
advance
Account
received in Lejiayi Chain Management Co., Ltd. 1,935.00 20,258.00
advance
Account
received in CHANGHONG(HK)TRADINGLIMITED 89,445.99 994.96
advance
Account
received in Changhong Huayi Compressor Co., Ltd. 94,339.62
advance
Account
received in Sichuan Changhong Precision Electronics Tech. Co., Ltd. 0.01
advance
153
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Item Related party Ending balance Opening balance
Account
received in Sichuan Changhong Mold Plastic Tech. Co., Ltd. 0.14
advance
Account
received in Sichuan Changhong Device Technology Co., Ltd. 268,867.92
advance
Account
received in 081 Electronic Group 25.55 25.55
advance
Account
Sichuan Changhong Gerun Environmental Protection
received in 1,053,998.80 578,537.58
Tech. Co., Ltd.
advance
Account
received in Sichuan Service Exp. Appliance Service Chain Co., Ltd. 49,055.09 81,015.05
advance
Account
received in Guangyuan Changhong Electronic Technology Co., Ltd. 45,115.00 310,437.76
advance
Account
received in Sichuan Changhong Power Co., Ltd. 6,150.00
advance
Account
received in Hefei Changhong Industrial Co., Ltd. 2,991.00 23,593.21
advance
Account
received in Sichuan Zhiyijia Network Technology Co., Ltd. 0.45 1,122.20
advance
Account
received in Changhong Europe Electric s.r.o 7,193.21
advance
Account
received in Changhong International Holdings (Hong Kong) Co., Ltd. 36,000.00
advance
Account
received in Chengdu Guigu Environmental Tech. Co., Ltd. 371.10
advance
Account
received in Hongyuan Ground Energy Heat Tech. Co., Ltd. 4,449,056.34 426,247.52
advance
154
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Item Related party Ending balance Opening balance
Account
received in Sichuan Tianyou Guigu Technology Co., Ltd 0.06
advance
Other account
Sichuan Changhong Electric Co., Ltd. 12,662,282.74 1,514,578.28
payable
Other account
Sichuan Changhong Electronics Holding Group Co., Ltd. 1,090.65
payable
Other account
Sichuan Changhong Mold Plastic Tech. Co., Ltd. 1,653,013.68 1,648,151.88
payable
Other account
Sichuan Changhong Jijia Fine Co., Ltd. 400,500.00 400,500.00
payable
Other account Sichuan Changhong Gerun Environmental Protection
10,000.00 10,000.00
payable Tech. Co., Ltd.
Other account
Changhong Huayi Compressor Co., Ltd. 1,598,900.00 1,050,000.00
payable
Other account
Sichuan Changhong Package Printing Co., Ltd. 54,867.26 50,000.00
payable
Other account
Sichuan Changhong Precision Electronics Tech. Co., Ltd. 200,000.00 200,000.00
payable
Other account
Sichuan Changhong Minsheng Logistic Co., Ltd. 500,500.00 500,500.00
payable
Other account
CHANGHONG(HK)TRADINGLIMITED 21,006.71 76,036.96
payable
Other account
Sichuan Jiahong Industrial Co., Ltd. 25,674.44 22,218.04
payable
Other account
Guangdong Changhong Electronics Co., Ltd. 2,722.00
payable
Other account Sichuan Changhong Intelligent Manufacturing Tech. Co.,
469,933.53 343,586.81
payable Ltd.
Other account
Hunan Grand-Pro Intelligent Tech. Company 250,000.00 200,000.00
payable
Other account
Yuanxin Financial Leasing Co., Ltd. 1,196,087.05 1,686,849.14
payable
Other account Mianyang Science & Technology City Big Data Tech. Co.,
100,000.00 100,000.00
payable Ltd.
Other account Sichuan Changhong Jineng Sunshine Technology Co.,
53,165.00
payable Ltd.
Other account Sichuan Changhong Network Technology Co., Ltd. 121,336.73
155
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Item Related party Ending balance Opening balance
payable
Other account
Sichuan Changxin Refrigeration Parts Co., Ltd. 50,000.00 50,000.00
payable
Other account
Sichuan Yunyou Internet Technology Co., Ltd. 139,862.42
payable
Total 656,995,169.86 304,283,528.67
(IV) Commitments from related parties: Nil
XII. Share-based payment: Nil
XIII. Contingency
1. Pending action or possible liabilities formed from arbitration: Nil
2. Contingency from external guarantee: Nil
3. Other contingency: Nil
XIV. Commitments: nil
XV. Events occurring after the balance sheet date
1. Important non-adjustment items: Nil
2. Profit distribution: Nil
3. Major sa l es re t urn: Nil
4. Other than the above mentioned events, the Company have no other events occurred after balance sheet
date.
XVI. Other significant matters
1. C orrecti on of pre vi ous peri ods a n d i nfl uence: Nil
2. Debt re str uc t uri ng: Ni l
3. Ass ets re pla c e me nt: Ni l
4. Pensi on pla n: N il
5. Discont i nui ng opera ti on: N il
6. Branch i nfor ma ti on
In 10 thousand Yuan
156
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Refrigerato
r, freezer, Small home
Item AC Marketing Other Sales inbranch Total
Washing appliances
machine
Operation income 452,361.86 426,399.15 34,878.15 28,498.16 14,068.80 42,889.85 913,316.27
Including: Income from trading
419,547.51 426,242.10 34,877.39 28,413.41 4,235.86 913,316.27
outside
Income from trading in
32,814.35 157.05 0.76 84.75 9,832.94 42,889.85
branch
Operationexpenses 453,846.65 424,125.52 32,451.42 27,791.38 12,857.11 42,703.82 908,368.26
Operationprofit -1,484.79 2,273.63 2,426.73 706.78 1,211.69 186.03 4,948.01
Totalassets 1,178,592.87 513,741.05 7,332.32 38,571.46 16,573.01 181,384.70 1,573,426.01
Totalliability 682,826.84 375,424.90 19,204.71 24,148.31 6,899.20 45,242.84 1,063,261.12
Supplementaryinformation
Depreciation and amortization
9,090.30 4,585.76 7.13 260.56 259.93 -192.39 14,396.07
expenses
Capital expenditure 10,844.21 22,168.33 2.77 25.48 192.29 33,233.08
Non-cash expenses except for
50,951.67 39,097.75 627.61 1,327.20 1,624.22 -106.74 93,735.19
depreciationandamortization
7. Other major transactions and events shows impact on investor’s decision-making: Nil
XVII. Notes to main items of financial statement of parent company
1. Account receivable
(1) By account age
Account age Book balance
Within 3 months (3 months included) 1,031,979,497.85
Over 3 months and within 6 months (6 months included) 291,606,061.47
Over 6 months and within one year (One year included) 49,006,161.64
Over one year - within 2 years (2 years included) 24,186,228.25
Over 2 years - within 3 years (3 years included) 163,774.66
Over 3 years 3,293,917.42
Total 1,400,235,641.29
(2) By category
157
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Ending amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Account receivable that withdrawal
1,173,599,202.14 83.81% 341,332.98 0.03% 1,173,257,869.16
bad debt provision by single item
Including: current payment with
1,138,500,727.13 81.31% 1,138,500,727.13
related party
Account receivable
34,757,142.03 2.48% 34,757,142.03
with letter of credit
Account receivable
with single minor amount but
341,332.98 0.02% 341,332.98 100.00%
withdrawal single item bad debt
provision
Account receivable withdrawal bad
226,636,439.15 16.19% 6,671,936.52 2.94% 219,964,502.63
debt provision by combination
Account receivable of engineering
6,947,254.96 0.50% 6,947,254.96
customers
Receivable except the account
219,689,184.19 15.69% 6,671,936.52 3.04% 213,017,247.67
receivable of engineering customers
Total 1,400,235,641.29 100.00% 7,013,269.50 0.50% 1,393,222,371.79
(Continued)
Opening amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Account receivable that withdrawal
850,209,430.96 80.44% 3,054,598.79 0.36% 847,154,832.17
bad debt provision by single item
Including: current payment with
798,250,556.57 75.52% 798,250,556.57
related party
Account receivable
45,978,287.55 4.35% 45,978,287.55
with letter of credit
Account receivable
with single minor amount but
5,980,586.84 0.57% 3,054,598.79 51.08% 2,925,988.05
withdrawal single item bad debt
provision
Account receivable withdrawal bad
206,713,269.29 19.56% 6,098,978.15 2.95% 200,614,291.14
debt provision by combination
Account receivable of engineering
158
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Opening amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
customers
Receivable except the account
206,713,269.29 19.56% 6,098,978.15 2.95% 200,614,291.14
receivable of engineering customers
Total 1,056,922,700.25 100.00% 9,153,576.94 0.87% 1,047,769,123.31
1) As for the account receivable with single minor amount but withdrawal single item bad debt provision at
period-end, they refer to the account receivable with minor amount, and whose risk characteristics cannot be
reflected in the bad debt provision according to the combination, there is one client involved.
2) Account receivable with bad debt provision accrual by aging analysis
Ending balance
Account age
Account receivable Bad debt provision Provision ratio
Within 3 months (3 months included) 202,373,821.32 1,977,562.20 0.98%
Over 3 months and within 6 months (6
13,868,857.51 1,153,920.36 8.32%
months included)
Over 6 months and within one year (One
6,047,244.42 1,209,448.88 20.00%
year included)
Over one year - within 2 years (2 years
3,974,430.97 1,987,215.49 50.00%
included)
Over 2 years - within 3 years (3 years
141,476.70 113,181.36 80.00%
included)
Over 3 years 230,608.23 230,608.23 100.00%
Total 226,636,439.15 6,671,936.52 2.94%
(3) Accrual, switch back (or collection) of bad debt provision in the period
Accrual of bad debt provision in the period amounted as RMB 745,263.81.
(4) The bad debt provision for account receivable actually written-off in the period amounted as RMB
2,885,571.25.
(5) No arrears of the shareholders holding more than 5% (including 5%) shares with voting rights of the
Company at period-end.
(6) The top five account receivable at period-end has RMB 1,128,951,562.34 in total, a 80.63% in total
account receivable, bad debt provision accrual at period-end amounted as RMB 301,274.61.
(7) Account receivable de-recognized: Nil
159
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
2. Other account receivable
Item Ending balance Opening balance
Interest receivable 7,494,128.83 2,653,712.36
Other account receivable 91,353,833.85 180,187,618.84
Total 98,847,962.68 182,841,331.20
2.1 Interest receivable
(1) Category
Item Ending balance Opening balance
Interest receivable of time deposit 5,268,978.14 1,892,948.46
Interest receivable of financing products 2,225,150.69 760,763.90
Total 7,494,128.83 2,653,712.36
(2) Major overdue interest: nil
2.2 Other account receivable
(1) by account age
Account age Book balance
Within 3 months (3 months included) 27,317,847.27
Over 3 months and within 6 months (6 months included) 53,904,190.31
Over 6 months and within one year (One year included) 3,132,423.77
Over one year - within 2 years (2 years included) 1,968,018.08
Over 2 years - within 3 years (3 years included) 1,347,511.88
Over 3 years 3,683,921.14
Total 91,353,912.45
(2) By category
Ending amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Other account receivable that withdrawal
91,346,052.45 99.99% 91,346,052.45
bad debt provision by single item
Including: petty cash loan for to
13,477,634.76 14.76% 13,477,634.76
employees
Margin 2,166,874.70 2.37% 2,166,874.70
160
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Tax rebate 20,520,989.72 22.46% 20,520,989.72
Related party's amount 55,180,553.27 60.40% 55,180,553.27
Account receivable with
single minor amount but withdrawal
single item bad debt provision
Other account receivable withdrawal
7,860.00 0.01% 78.60 1.00% 7,781.40
bad debt provision by portfolio
Aging analysis 7,860.00 0.01% 78.60 1.00% 7,781.40
Total 91,353,912.45 100.00% 78.60 0.00% 91,353,833.85
(Continued)
Opening amount
Category Book balance Bad debt provision
Book value
Amount Ratio Amount Ratio
Other account receivable that
withdrawal bad debt provision by 180,141,537.18 99.96% 180,141,537.18
single item
Including: petty cash loan for to
5,779,671.00 3.21% 5,779,671.00
employees
Margin 636,260.00 0.35% 636,260.00
Tax rebate 12,294,910.68 6.82% 12,294,910.68
Related party's amount 161,430,695.50 89.58% 161,430,695.50
Account receivable with
single minor amount but withdrawal
single item bad debt provision
Other account receivable withdrawal
80,102.08 0.04% 34,020.42 42.47% 46,081.66
bad debt provision by portfolio
Aging analysis 80,102.08 0.04% 34,020.42 42.47% 46,081.66
Total 180,221,639.26 100.00% 34,020.42 0.02% 180,187,618.84
1) Other account receivable with bad debt provision accrual by aging analysis
Ending balance
Account age Other account
Bad debt provision Provision ratio
receivable
Within 3 months (3 months included) 7,860.00 78.60 1.00%
Over 3 months and within 6 months (6
months included)
161
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Ending balance
Account age Other account
Bad debt provision Provision ratio
receivable
Over 6 months and within one year (One
year included)
Over one year - within 2 years (2 years
included)
Over 2 years - within 3 years (3 years
included)
Over 3 years
Total 7,860.00 78.60 1.00%
(3) Reversal of bad debt provision amounted as 33,941.82 Yuan in the period.
(4) Other account receivable charge off in this period: Nil
(5) No areas from shareholders’ unit with over 5 percent (5 percent included) voting rights held at
period-end.
(6) Top 5 other account receivable has RMB 75,615,554.81 in total, a 82.77% in total account receivable at
period-end, no bad debts accrual correspondingly
(7) Other receivables classify by nature
Nature Ending book balance Opening book balance
Related party 55,180,553.27 161,430,695.50
Export rebate 20,520,989.72 12,294,910.68
Loans of employee’s pretty cash 13,477,634.76 5,779,671.00
Margin 2,166,874.70 636,260.00
Other 7,860.00 80,102.08
Total 91,353,912.45 180,221,639.26
(8) Other receivable de-recognized: Nil
162
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
3. Long-term equity investments
(1) Classification of long-term equity investments
Ending balance Opening balance
Item
Book balance Impairment Book value Book balance Impairment Book value
Investment in subsidiaries:
Zhongke Meiling Cryogenic Technology
42,652,000.00 42,652,000.00 42,652,000.00 42,652,000.00
Co., Ltd.
Mianyang Meiling Refrigeration Co., Ltd. 95,000,000.00 95,000,000.00 95,000,000.00 95,000,000.00
Hefei Meiling Electric Marketing Co.,
54,900,000.00 54,900,000.00 54,900,000.00 54,900,000.00
Ltd.
Zhongshan Changhong Electric Co., Ltd. 169,856,419.37 169,856,419.37 169,856,419.37 169,856,419.37
Sichuan Changhong Air-conditioner Co.,
955,600,437.79 955,600,437.79 955,600,437.79 955,600,437.79
Ltd.
Hefei Meiling Group Holdings Limited 113,630,000.00 113,630,000.00 113,630,000.00 113,630,000.00
Jiangxi Meiling Electric Appliance Co.,
79,000,000.00 79,000,000.00 79,000,000.00 79,000,000.00
Ltd.
Guangdong Changhong Ridian
90,802,061.95 90,802,061.95 90,802,061.95 90,802,061.95
Technology Co., Ltd.
Changmei Technology Co., Ltd. 48,128,000.00 48,128,000.00 48,128,000.00 48,128,000.00
Meiling CANDY Washing Machine Co.,
60,000,000.00 60,000,000.00 60,000,000.00 60,000,000.00
Ltd.
Hefei Meiling Wulian Technology Co.,
6,000,000.00 6,000,000.00
Ltd.
Investment in associates:
163
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Ending balance Opening balance
Item
Book balance Impairment Book value Book balance Impairment Book value
Hefei Xingmei Assets Management Co.,
8,952,024.52 8,952,024.52 9,420,099.27 9,420,099.27
Ltd.
Sichuan Zhiyijia Network Technology
15,439,741.60 15,439,741.60 17,803,986.55 17,803,986.55
Co., Ltd.
Total 1,739,960,685.23 1,739,960,685.23 1,736,793,004.93 1,736,793,004.93
(2) Investment in subsidiaries
Provisionforimpairment Endingbalanceof
Invested enterprise Opening balance Current increased Current decreased Ending balance
lossintheperiod impairment
Zhongke Meiling Cryogenic Technology
42,652,000.00 42,652,000.00
Co., Ltd.
Mianyang Meiling Refrigeration Co., Ltd. 95,000,000.00 95,000,000.00
Hefei Meiling Electric Marketing Co.,
54,900,000.00 54,900,000.00
Ltd.
Zhongshan Changhong Electric Co., Ltd. 169,856,419.37 169,856,419.37
Sichuan Changhong Air-conditioner Co.,
955,600,437.79 955,600,437.79
Ltd.
Hefei Meiling Group Holdings Limited 113,630,000.00 113,630,000.00
Jiangxi Meiling Electric Appliance Co.,
79,000,000.00 79,000,000.00
Ltd.
Guangdong Changhong Ridian
90,802,061.95 90,802,061.95
Technology Co., Ltd.
164
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Provisionforimpairment Endingbalanceof
Invested enterprise Opening balance Current increased Current decreased Ending balance
lossintheperiod impairment
Changmei Technology Co., Ltd. 48,128,000.00 48,128,000.00
Meiling CANDY Washing Machine Co.,
60,000,000.00 60,000,000.00
Ltd.
Hefei Meiling Wulian Technology Co.,
6,000,000.00 6,000,000.00
Ltd.
Total 1,709,568,919.11 6,000,000.00 1,715,568,919.11
(3) Investment in associates
Changes intheperiod
Additio Adjustment Ending
Investm Investment income Other Cashdividendor
Investedenterprise Openingbalance nal forother Provisionfor Othe Endingbalance balanceof
ent recognizedunder equity profit announcedto
Investm comprehensi impairmentloss r impairment
reductio equity change issued
ent ve income
n
Hefei XingmeiAssetsManagement Co., Ltd. 9,420,099.27 -468,074.75 8,952,024.52
Sichuan Zhiyijia Network Technology Co.,
17,803,986.55 -2,364,244.95 15,439,741.60
Ltd.
Total 27,224,085.82 -2,832,319.70 24,391,766.12
165
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
4. Operation income and operation cost
Current period Same period last year
Item
Income Cost Income Cost
Main business 3,595,970,830.12 3,108,565,034.11 3,529,955,814.19 3,105,570,442.13
Other business 938,785,397.22 923,829,071.09 863,289,287.86 848,332,244.82
Total 4,534,756,227.34 4,032,394,105.20 4,393,245,102.05 3,953,902,686.95
(1) Classified according to product
Current period Same period last year
Product
Operation income Operation cost Operation income Operation cost
Refrigerator,
3,359,059,870.90 2,898,999,289.84 3,394,705,796.60 2,987,586,636.93
freezer
Washing machine 60,295,707.79 54,562,704.69 25,008,996.72 21,848,498.47
Small household
appliances and
175,588,336.18 154,221,270.69 110,017,918.11 96,072,502.05
kitchen and
bathroom
Other 1,026,915.25 781,768.89 223,102.76 62,804.68
Total 3,595,970,830.12 3,108,565,034.11 3,529,955,814.19 3,105,570,442.13
(2) Classified according to region
Current period Same period last year
Regions
Operation income Operation cost Operation income Operation cost
Domestic 2,564,886,628.36 2,199,492,611.91 2,561,293,594.65 2,209,857,770.73
Overseas 1,031,084,201.76 909,072,422.20 968,662,219.54 895,712,671.40
Total 3,595,970,830.12 3,108,565,034.11 3,529,955,814.19 3,105,570,442.13
Top five clients in sales income amounted as RMB 2,205,280,387.95, a 48.63% in total operation income.
5. Investment income
Same period last
Item Current period
year
Long-term equity investment income by cost method 4,590,000.00 2,754,000.00
Long-term equity investment income by equity method -2,832,319.70 2,089,222.50
Investment income arising from disposal of trading financial assets -9,266,363.88 -15,224,324.37
Income from financial products 31,627,554.38 34,331,691.42
Total 24,118,870.80 23,950,589.55
166
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
XVIII. Approval of financial statement
The financial statement has already been approved from the board of directors of the Company for reporting
dated 15 August 2019.
167
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Supplementary information for financial statement
1. Non-recurring 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 period Note
Gains and losses from disposal of non-current assets (including the parts that are
-937,771.74
write-off for accrual of the assets impairment provision)
Tax refund or mitigate due to examination-and-approval beyond power or without
official approval document or accident
Governmental subsidy reckoned into current gains/losses, not including the
subsidy enjoyed in quota or ration according to national standards, which 32,661,651.14
are closely relevant to enterprise’s normal business
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
liabilities, and investment income from disposal of tradable financial assets, tradable 23,850,754.01
financial liabilities and financial assets available for sale
Switch-back of provision of impairment of account receivable which are treated with
662,652.68
separate depreciation test
Gains and losses obtained from external trusted loans
168
Annotations of Financial Statements of ChangHong Meiling Co., Ltd.
From 1 January 2019 to 30 June 2019
(Unless other wise specified, RMB for record in the Statement)
Item Current period Note
Gains and losses arising from change of fair value of investment real estate whose
follow-up measurement are conducted according to fair value pattern
Affect on current gains and losses after an one-time adjustment according to requirements
of laws and regulations regarding to taxation and accounting
Trust fee obtained from trust operation
Other non-operating income and expenditure except for the aforementioned ones 113,670.65
Other gains and losses items complying with definition for non-recurring gains and losses
Subtotal
Impact on income tax 6,036,079.73
Impact on minority equity(after taxation)
456,251.29
Total 49,858,625.72
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 the period 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 1.08% 0.0520 0.0520
Net profit attributable to shareholders of parent company
0.09% 0.0043 0.0043
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
ChangHong Meiling Co., Ltd.
16 August 2019
169
