长虹美菱股份有限公司CHANGHONG MEILING CO., LTD.
二〇一九年年度报告
Annual Report 2019
Section I. Important Notice, Contents and InterpretationBoard of Directors, Supervisory Committee, all directors, supervisors and senior executives of ChanghongMeiling Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are no any fictitiousstatements, misleading statements, or important omissions carried in this report, and shall take all responsibilities,individual and/or joint, for the reality, accuracy and completion of the whole contents.Mr. Wu Dinggang, Chairman of the Company, Mr. Pang Haitao, person in charge of accounting work and Mr.Yang Jun, person in charge of accounting organ (accountant in charge) hereby confirm that the Financial Report of2019 Annual Report is authentic, accurate and complete.The Company did not have directors, supervisors and senior executives of the Company could not guaranteethe reality, accuracy and completion of the whole contents or have objections.
All the directors attended the board meeting on deliberating the Report on site and by communication.Modified audit opinions notes
□ Applicable √ Not applicable
Shine Wing Certified Public Accountants Co., Ltd. (LLP) issued standard unqualified Auditors‘ Report forthe Company‘s Financial Report of 2019.
Major defects in internal control
□ Applicable √Not applicable
The Company had no major defects in internal control in the reporting period.
Risk warning of concerning the forward-looking statements with future planning involved in annual report
√ Applicable □Not applicable
Concerning the forward-looking statements with future planning involved in the Report, they do notconstitute a substantial commitment for investors, investors and the person concerned should maintain adequaterisk awareness, furthermore, differences between the plans, forecast and commitments should be comprehended.Investors are advised to exercise caution of investment risks.
Investors are advised to read the full text of annual report, and pay particular attention to the following riskfactors:
More details about the possible risks and countermeasures in the operation of the Company are described inthe report ―IX. Prospects for the future development of the company‖ of ―Section IV. Analysis and discussion ofthe operation‖, investors are advised to read the relevant content.
Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website(www.cninfo.com.cn) are the media for information disclosure for year of 2020 that appointed by the Company.All public information under the name of the Company disclosed on the above said media and website shallprevail, and investors are advised to exercise caution.Does the Company need to comply with disclosure requirements of the special industry: noProfit distribution pre-plan or capitalizing of common reserves pre-plan deliberated by the Board in thereporting period
√ Applicable □ Not applicable
Whether has capitalizing of common reserves carried out
□Yes √ No
The profit distribution plan for year of 2019, that deliberated and approved by 36
th session of the 9
thBODwas: take total shares of 1,044,597,881 shares as base dated 31 December 2019, distributed 0.50 Yuan (taxincluded) bonus in cash for every 10-share hold by all shareholders, no share bonus issued and no capitalizing ofcommon reserves carried out.
Directors, supervisors and senior executives of the Company respectively signed Written ConfirmationOpinions for 2019 Annual Report.
Supervisory Committee of the Company formed Written Examination Opinions for 2019 Annual Report.
Contents
Section I. Important Notice, Contents and Interpretation ............................................................. 1
Section II Company Profile and Main Financial Indexes ...... 5
Section III. Summary of Company Business ................................................................................. 11
Section IV. Discussion and Analysis of the Operation .................................................................. 19
Section V. Important Events ............................................................................................................ 60
Section VI. Changes in shares and particular about shareholders ............................................ 141
Section VII. Preferred Stock ......................................................................................................... 149
Section VIII. Convertible Bonds ................................................................................................... 150Section IX. Particular about Directors, Supervisors, Senior Executives and Employees ....... 151Section X. Corporate Governance ................................................................................................ 165
Section XI. Corporate Bond .......................................................................................................... 181
Section XII. Financial Report ....................................................................................................... 182
Section XIII. Documents available for Reference ....................................................................... 350
Interpretation
| Items | Refers to | Contents |
| Company, The Company, Changhong Meiling or Meiling Electric | Refers to | CHANGHONG MEILING CO.,LTD. |
| Sichuan Changhong or controlling shareholder | Refers to | Sichuan Changhong Electric Co., Ltd. |
| Changhong Group | Refers to | Sichuan Changhong Electronics Holding Group Co., Ltd. |
| Hong Kong Changhong | Refers to | CHANGHONG (HK) TRADING LIMITED |
| Meiling Group | Refers to | Hefei Meiling Group Holdings Limited |
| Industry Investment Group | Refers to | Hefei Industry Investment Holding (Group) Co., Ltd. |
| Shine Wing | Refers to | Shine Wing Certified Public Accountants (LLP) |
| Changhong Air-conditioner | Refers to | Sichuan Changhong Air-conditioner Co., Ltd. |
| Zhongke Meiling | Refers to | Zhongke Meiling Cryogenic Technology Co., Ltd. |
| Jiangxi Meiling | Refers to | Jiangxi Meiling Electric Appliance Co., Ltd. |
| Changhong Ridian | Refers to | Guangdong Changhong Ridian Technology Co., Ltd. |
| Zhongshan Changhong | Refers to | Zhongshan Changhong Electric Co., Ltd. |
| Changmei Technology | Refers to | Changmei Technology Co., Ltd. |
| Changhong Huayi | Refers to | Changhong Huayi Compressor Co., Ltd. |
| Meiling CANDY | Refers to | Meiling CANDY Washing Machine Co., Ltd. |
| Zhiyijia Company | Refers to | Sichuan Zhiyijia Network Technology Co., Ltd. |
| CSRC | Refers to | China Securities Regulatory Commission |
| Anhui Securities Bureau | Refers to | China Securities Regulatory Commission, Anhui Province Securities Regulatory Bureau |
| SSE | Refers to | Shenzhen Stock Exchange |
Section II Company Profile and Main Financial IndexesI. Company profile
| Short form of the stock | Changhong Meiling, Hongmeiling B | Stock code | 000521, 200521 |
| Short form of the Stock after changed (if applicable) | N/A | ||
| Stock exchange for listing | Shenzhen Stock Exchange | ||
| Name of the Company (in Chinese) | 长虹美菱股份有限公司 | ||
| Short form of the Company (in Chinese) | 长虹美菱 | ||
| Foreign name of the Company (if applicable) | CHANGHONG MEILING CO.,LTD. | ||
| Abbr. of English name of the Company (if applicable) | CHML | ||
| Legal representative | Wu Dinggang | ||
| Registrations add. | No. 2163, Lianhua Road, Economic and Technology Development Zone, Hefei | ||
| Code for registrations add | 230601 | ||
| Offices add. | No. 2163, Lianhua Road, Economic and Technology Development Zone, Hefei | ||
| Codes for office add. | 230601 | ||
| Website | http://www.meiling.com | ||
| info@meiling.com | |||
II. Person/Way to contact
| Secretary of the Board | Rep. of security affairs | |
| Name | Li Xia | Zhu Wenjie |
| Contact add. | No. 2163, Lianhua Road, Economic and Technology Development Zone, Hefei | No. 2163, Lianhua Road, Economic and Technology Development Zone, Hefei |
| Tel. | 0551-62219021 | 0551-62219021 |
| Fax. | 0551-62219021 | 0551-62219021 |
| lixia@meiling.com | wenjie.zhu@meiling.com |
III. Information disclosure and preparation place
| Newspaper appointed for information disclosure | Securities Times, China Securities Journal, Hong Kong Commercial Daily |
| Website for annual report publish appointed by CSRC | Juchao website: http://www.cninfo.com.cn |
| Preparation place for annual report | Room of secretary of the Board, 2/F , administrative center, Office building of the Company |
IV. Registration changes of the Company
| Organization code | Uniform social credit code: 9134000014918555XK |
| Changes of main business since listing (if applicable) | No changes |
| Previous changes for controlling shareholders (if applicable) | 1. In October 1993, after initial listing, controlling shareholder of the Company-- Hefei Meiling Industrial Corp. (renamed as Hefei Meiling Group Co., dated 23 May 1994), executing controlling rights of the Company and management right of the state-owned assets on behalf of Hefei State-owned Assets Management Office, named at that time; 2. From November 1997 to May 2003, controlling shareholder of the Company was Hefei Meiling Group Holding Co., Ltd. (established base on former Meiling Group Co.,, ―Meiling Group‖ for short), an enterprise solely owned by the State; mainly operating the state-owned capital in authorized from State-owned Assets Management Commission of Hefei City, ensuring the maintenance and appreciation of state-owned assets; 3. On 29 May 2003, Meiling Group entered into ―Equity Transfer Agreement‖ with Shunde GreenKel Enterprise Development Co., ltd. (―GreenKel‖), the 82,852,683 state-owned shares held by the Company was transfer to GreenKel. After transferring, GreenKel comes to the first largest shareholder of the Company. 4. According to the spirit of ―Bulletin of Treatment Opinions on GreenKel Company purchasing State-owned Assets Shares of Listed Company‖ (GZFCQ[2006] No.: 44) jointly issued from SASAC and Ministry of Finance in April 2006, Meiling Group took back the Meiling Electric 82,852,683 shares from GreenKel by procedures, which has been transferred. In September 2006, relevant equity transfer agreement signed between the Meiling Group and GreenKel is invalid, which was confirmed by the ―Award‖ ((2006) HZZ No.: 104) issued from arbitration commission of Hefei; the state-owned legal person‘s 82,852,683 shares, held by GreenKel, should return to Meiling Electric, and relevant equity consideration will pay to GreenKel by Meiling Group . On 29 December 2006, the 82,852,683 shares of Meiling Electric were transfer to Meiling Group by GreenKel, and Meiling Group becomes the controlling shareholder of Meiling Electric again. 5. On 18 May 2006 and 11 January 2007, Meiling Group entered into ―Equity Transfer Agreement of Meiling Electric‖ and ―Supplementary Agreement of Equity Transfer of Meiling Electric‖ respectively with Sichuan Changhong and Changhong Group, among the 123,396,375 shares held by Meiling Group, 82,852,683 shares were transferred respectively to Sichuan Changhong and Changhong Group according to the transfer way regulated in agreement; of this transferring, 45,000,000 shares (10.88% of total share capital of the Company) were transferred to Sichuan Changhong, the first largest shareholder of the Company while 37,852,683 shares (9.15% of total share capital of the Company) were transferred to Changhong Group, the third largest shareholder of the Company. 6. On 29 October 2008, Changhong Group and Sichuan Changhong entered into ―Equity Transfer Agreement of Hefei Meiling Co., Ltd.‖, the 32,078,846 restricted circulations A shares of Meiling Electric held by Changhong Group were transferred by agreement to Sichuan Changhong. On 23 |
V. Other relevant information(I) CPA engaged by the Company
December 2008, the aforesaid equity transfer was approved by ―Reply on Matters of Equity held byState-owned Shareholders of Hefei Meiling Co., Ltd.‖ (GZCQ(2008) No.: 1413) from SASAC; on 21January 2009, the aforesaid transfer was registered for ownership transfer in Shenzhen Branch of ChinaSecurities Depository and Clearing Corporation Limited. With this, the first majority shareholder of theCompany comes to Sichuan Changhong.
7. From 12 November 2018 to 25 February 2019, Sichuan Changhong and its concerted action HongKong Changhong totally buys 16,231,024 shares of the Company through the secondary market bybidding (including A-stock of 13,751,756 shares and B-stock of 2,479,268 shares), a 1.55% in total sharecapital of the Company. After stake enlarge, Sichuan Changhong and its concerted action HongKong Changhong holds 281,832,434 shares of the Company in total, a 26.98% of the total share capitalof the Company; of which, Sichuan Changhong directly holds 248,457,724 A-share of theCompany, a 23.79% in total share capital of the Company while Hong Kong Changhong holdscirculation B-share of the Company amounting as 33,374,710 shares, a 3.19% in total share capital of theCompany.
8. Ended as 31 December 2019, Sichuan Changhong and its concerted action Hong Kong Changhongtotally holds 281,832,434 shares of the Company, a 26.98% in total share capital of the Company;Sichuan Changhong directly holds 248,457,724 A-share of the Company, a 23.79% in total share capitalof the Company while Hong Kong Changhong holds circulation B-share of the Company amounting as33,374,710 shares, a 3.19% in total share capital of the Company.Name of CPA
| Name of CPA | Shine Wing Certified Public Accountants (LLP) |
| Offices add. for CPA | 8/F, Block A, Fu Hua Mansion No.8 Chao Yang Men Bei da jie, Dong Cheng District, Beijing, P.R.C |
| Signing Accountants | Li Xifu, Xia Cuiqiong |
(II) Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
(III) Financial consultant engaged by the Company for performing continuous supervision duties inreporting period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexesWhether it has retroactive adjustment or re-statement on previous accounting data
□ Yes √ No
| 2019 | 2018 | Changes over last year | 2017 | |
| Operating income (RMB) | 16,553,252,894.93 | 17,490,174,950.01 | -5.36% | 16,797,436,757.36 |
| Net profit attributable to shareholders of the listed company (RMB) | 56,441,479.14 | 38,658,256.97 | 46.00% | 32,473,204.92 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses (RMB) | -50,454,661.39 | -3,142,791.01 | -1505.41% | -97,705,959.02 |
| Net cash flow arising from operating activities (RMB) | 1,285,003,985.04 | -220,560,615.36 | 682.61% | -551,501,994.74 |
| Basic earnings per share (RMB/Share) | 0.0540 | 0.0370 | 45.95% | 0.0311 |
| Diluted earnings per share (RMB/Share) | 0.0540 | 0.0370 | 45.95% | 0.0311 |
| Weighted average ROE | 1.13% | 0.77% | 0.36 percentage points up | 0.64% |
| Year end of 2019 | Year end of 2018 | Changes over end of last year | Year end of 2017 | |
| Total assets (RMB) | 14,202,233,615.47 | 15,561,810,184.54 | -8.74% | 15,961,511,966.81 |
| Net assets attributable to shareholder of listed company (RMB) | 5,004,947,673.36 | 5,015,730,486.57 | -0.21% | 5,051,066,095.31 |
The cause of the accounting policy change and accounting error correction
□ Applicable √ Not applicable
Whether have corporate bonds or not
□Yes √ No
VII. Accounting data difference under domestic and foreign accounting standards(I) Difference of the net profit and net assets disclosed in financial report, under both IAS (InternationalAccounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company has no difference of the net profit and net assets disclosed in financial report, under both IAS(International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles) in reportingperiod.(II) Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rulesand Chinese GAAP (Generally Accepted Accounting Principles)
√ Applicable □ Not applicable
In RMB
| Net profit attributable to shareholders of listed company | Net assets attributable to shareholders of listed company | |||
| Amount in this period | Amount in last period | Amount at period-end | Amount at period-begin | |
| Chinese GAAP | 56,441,479.14 | 38,658,256.97 | 5,004,947,673.36 | 5,011,972,907.54 |
| Items and amount adjusted by foreign accounting rules | ||||
| Foreign accounting rules | 56,441,479.14 | 38,658,256.97 | 5,004,947,673.36 | 5,011,972,907.54 |
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreignaccounting rules or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
(III) Reasons for the differences of accounting data under accounting rules in and out of China
√ Applicable □ Not applicable
The ―Notice of Relevant Issues of Audit for Company with Domestically Foreign Shares Offering‖ was issuedfrom CSRC dated 12 September 2007, since the day issuing, cancel the previous ―dual audit‖ requirement forcompanies who offering domestically listed foreign shares (B-share enterprise) while engaging securities practicequalification CPA for auditing. The Company did not compile financial report under foreign accounting rulessince 2007, the financial report of the Company is complying on the ―Accounting Standard for BusinessEnterprise‖ in China, and therefore, there are no differences of accounting data under accounting rules in and outof China at period-end.VIII. Quarterly main financial index
In RMB
| Q 1 | Q 2 | Q 3 | Q 4 | |
| Operating income | 4,222,693,607.41 | 4,910,469,073.53 | 3,907,875,881.65 | 3,512,214,332.34 |
| Net profit attributable to shareholders of the listed company | 60,526,575.53 | -6,192,552.96 | 26,417,996.84 | -24,310,540.27 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses | 36,385,461.05 | -31,910,064.20 | 8,955,796.33 | -63,885,854.57 |
| Net cash flow arising from operating activities | -921,543,887.11 | 1,295,027,887.30 | -172,257,908.29 | 1,083,777,893.14 |
Whether there are significant differences between the above-mentioned financial index or its total number and therelevant financial index disclosed in the company‘s quarterly report and semi-annual report
□Yes √ No
IX. Items and amounts of non-recurring profit (gains)/losses
√ Applicable □ Not applicable
In RMB
| Item | 2019 | 2018 | 2017 | Note |
| Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets) | -9,537,945.52 | 787,721.32 | -8,203,782.90 | Found more in ―Income from assets disposal‖ |
| Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to national standards, which are closely relevant to enterprise‘s business) | 103,813,820.02 | 90,401,997.63 | 68,403,702.36 | ‖Found more in ―Other income‖, ―Non-operation income‖ |
| Gains and losses arising from contingent proceedings irrelevant to normal operation of the Company | -13,050,649.33 | ‖Found more in ―Non-operation expenditure‖ | ||
| Losses/gains from changes of fair values occurred in holding trading financial assets, derivative financial assets, trading financial liabilities and derivative financial liabilities, and investment income obtaining from the disposal of trading financial assets, derivative financial assets, trading financial liability, derivative financial liability and other debt investment, excluded effective hedging business relevant with normal operations of the Company | 27,685,917.00 | -18,928,688.87 | 92,846,391.02 | Found more in ―Income of fair value changes‖, ―Investment income‖ |
| Reversal of the account receivable and contract assets depreciation reserves subject to separate impairment test | 1,936,952.67 | 2,543,553.45 | Found more in ―Account receivable/other account receivable‖ | |
| Other non-operating income and expenditure except for the aforementioned ones | 1,070,165.28 | -2,614,761.68 | 2,680,908.22 | Found more in ―Non-operation income & expenditure‖ |
| Less: impact on income tax | 15,170,286.77 | 16,236,806.66 | 24,087,520.95 | -- |
| Impact on minority shareholders‘ equity (post-tax) | 2,902,482.15 | 1,101,317.88 | 1,460,533.81 | -- |
| Total | 106,896,140.53 | 41,801,047.98 | 130,179,163.94 | -- |
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
The Company has no items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&AAnnouncement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, inthe period.
Section III. Summary of Company Business
I. Main businesses of the company in the reporting period(i) Main businesses of the CompanyThe Company is one of China's major electric appliance manufacturers, possesses four major domesticmanufacturing bases in Hefei, Mianyang, Jingdezhen and Zhongshan, and two overseas manufacturing bases inIndonesia and Pakistan. Currently, we have completed the industry layout of white electricity basically, coveringthe full product line including refrigerator, washing machine, air conditioner, kitchen and bath, small householdappliances and others, at the same time, the Company enters the new industrial fields as bio-medical and withcertain achievements made.
Over the past 30 years, the Company has always been adhering to the "independent innovation, created inChina", and always focus on refrigeration industry without stop, elaborately building the core competitiveness ofenterprises by technological innovation and product innovation. The company has set up the first RoHS publictesting center in Anhui Province, the state-level enterprise technology center and the top-end R & D team, so thatMeiling can continue to achieve breakthrough results in the variable frequency, intelligence, refreshment,thin-wall, energy-saving, forced air cooling, deep cooling and other fields. In recent years, the Company hassuccessively awarded many honors such as the ―Smart Refrigerator Intelligent Manufacturing Pilot DemonstrationProject‖, the ―National Green Factory‖, the ―National Industrial Design Center‖, the ―Green Pioneer Enterprisefor year of 2019‖ and ―Leading Brand of Preservation Technology in China‘s Refrigeration Industry for year of2019‖. Meanwhile, in 2019, the company‘s M Fresh full-thin series products performed well, three M Freshfull-thin refrigerators (BCD-482WQ3M, BCD-681WQ3S, BCD-686WQ3M) won the Reddot Design Award. Thefull-thin 656WQ3M refrigerator won the 2019 AWE Award, and the full thin BCD-501WQ3S refrigerator won the―Jiadian‖ logo of China Household Electrical Appliances Research Institute. In addition, M-fresh full thin seriesrefrigerators set three world records of the World Record Association, i.e. ―the domestic refrigerators withminimum embedded distance in the world‖, ―the domestic refrigerators with maximum volume ratio in the world‖,and ―the domestic refrigerators with widest storage temperature range in the world‖, which demonstratedMeiling's strong brand strength and innovation ability once again.In recent years, driven by the industry transformation and upgrades and consumption upgrades, the Companyhas adhered to the strategy of smart and variable frequency products, promoted the Company‘s products totransform and upgrade to become intelligent and high-end and comprehensively enhanced the competitiveness ofproducts in the industry by grasping the opportunities of ―refreshment‖, ―thin-wall‖, air cooling and energyefficiency upgrades and effectively resolving the pain points of customers. Under the guidance of the ―intelligent‖
strategy, since 2014, the Company has released and listed a number of CHiQ series of smart refrigerators andair-conditioning products, and continue to promote intellectualized and high-end products. Especially the ―MFresh Life‖ series of refrigerators equipped with water molecule activation and preservation technology launchedin 2017, and the Company has released the M Fresh Life high-end new products ―comprehensive thin‖ seriesrefrigerators with thin body, thin box and thin door in 2019, solve the pain points of users effectively. At the sametime, in order to seize the opportunity of energy efficiency upgrade and consumption upgrade, the Company'sfrequency conversion products accounted for an increasing proportion with the advantage of frequency conversiontechnology application.Facing the future, the Company will further improve the home internet layout, accelerate theintelligentization of home appliances, form a dual-growth engine of ―hardware + services‖, drive thetransformation and upgrading of the Company‘s profitability model, investigate the new value-added servicemodels for home appliance enterprises, meet new competition pattern in the industry, and achieve its ownsustainable and stable development under the guidance of the core values of ―professionalism and shareddevelopment‖. Meanwhile, based on the ―Smart Home Eco-system Project‖ and the existing products, thecompany will enhance the R&D, manufacturing, sales and cooperative capabilities of integrated white goods so asto provide users with a complete set of smart white goods system solutions.In reporting period, main income of the Company coming from refrigerator (freezer), air conditioner,washing machine, kitchen & toilet and small home appliances products, total amounting to 15,241.6670million Yuan, a 92.08% of the operating income.
(ii) Conditions of the industry the company involvedIn 2019, the international trade situation was complex and changeable, competition in the domestic marketwas further intensified, home appliance companies were gradually slowing down the pace of external expansion,and the endogenous growth momentum was significantly enhanced. At the same time, affected by factors such asthe structural upgrade of home appliances, diversified integration of channels, brand transformation, assetrestructuring, and cross-border entry, China's home appliance industry has been struggling to overcome internaland external problems, and the industry's overall operation has remained stable.
1.refrigerator industry
In 2019, the high pressure of the upstream raw materials in the refrigerator industry came to an endtemporarily, the production pressure and profit pressure on the enterprise side have been alleviated significantly,and the refrigerator industry departing from the high pressure of the cost entered a new development cycle. In thenew cycle, the market maintained a demand structure that focused on renewed demand and supplemented by newdemand. The average market price declined significantly, and the overall market showed a slight increase indemand, and going down in retail sales. According to the All View Cloud (AVC) omnichannel data, the China‘sretail volume of refrigerator market in 2019 was 32.78 million units, an increase of 0.2% on a year-on-year basis,retail sales amounted as 91.2 billion Yuan, decreased 4.8% from a year earlier, the refrigerator industry entered thenew development cycle of product price decline.
2. Air conditioning industry
Under the influence of economic downturn, poor real estate performance, and increasing rural marketholdings, the air-conditioning industry encountered a ―cold year‖ in 2019. From the perspective of the demandside, the real estate market was sluggish, and the demand for the third- and fourth-tier markets was insufficient.From the perspective of the supply side, the continuous increasing brands in the air-conditioning market, theexcess production capacity of the industry, the leading companies‘ continuous expansion of their productioncapacity, and the demand for performance growth resulted in oversupply in the industry, and constituted theinevitable background for the price war to return to the market. In addition, in the traditional sales season of theair-conditioning industry in May and June, the enthusiasm of the market was relatively low, leading to increasedmarket competition. In order to cope with market pressure, big brands made price-off promotions to drive themarket demand, and the production space of small and medium-sized brands was squeezed.
3. Washing machine industry
Despite that the macroeconomic situation in 2019 was severe and China‘s home appliance industry facedthree dilemmas, i.e. insufficient growth momentum, high operating costs, and decentralized user traffic, thewashing machine industry has performed steadily under such circumstances, and the retail market has grownbeyond expectations. The washing machine market benefited from significant product upgrades and achieved asmall increase. Front-loading washing machines with dryer were well received by consumers; clothes dryerproducts attracted consumer attention, and the market size expanded rapidly, increasing by nearly 50%. Accordingto the All View Cloud (AVC) omnichannel data, the retail volume of washing machine market in 2019 was 38.31million units, retail sales amounted as 76.4 billion Yuan, an increase of 3.9% and 2.5% respectively on a y-o-ybasis.
On the whole, in the context of the complex and changeable international trade situation and the new normalof China's economic development, the market competition in home appliance industry was intensifying. At thesame time, in the context of continued lack of stimulus in the real estate market, no obvious positives in macroeconomy, and the awakening of consumers‘ autonomous consumption consciousness, the emerging categories ofproducts in the home appliance market became bright spots, consumer demand for home appliances entered aperiod of renewal, and online and offline sales channels tended to balanced and stable development. In themedium and long term, as domestic residents' income continued to grow steadily, national policies guidedindustrial development to green and intelligent acceleration, the revision of mandatory standards forced theindustry upgrading and accelerated the elimination of outdated production capacity, home appliance enterpriseswith core competitiveness would comprehensively promote the high-quality development.II. Major changes in main assets(i) Major changes in main assets
| Major assets | Note of major changes |
| Equity assets | Invested more capital for joint ventures in the period |
| Fixed assets | Transfer-in from construction in progress increased in the period |
| Intangible assets | Land use right increased in the period from subsidiary Changhong Air-conditioner |
| Construction in progress | Construction in progress transfer-in fixed assets in the period |
(ii) Main overseas assets
√ Applicable □ Not applicable
| Content of assets | Reason for the formation | Asset size | Location | Operation mode | Control measure to ensure the security of assets | Income (RMB) | Foreign assets accounted for net assets of the Company | Whether exist significant impairment risk (Y/N) |
| 60% equity of Changhong Ruba Trading Company | Investment establishment | US$ 7.803 million | Pakistan | Sales | Details of risks control measures have been disclosed by the Company by way of announcement on appointed media (No. 2011-028, No. 2011-032, No. 2014-023, No. 2014-026, No. 2016-027, No. 2016-032, No. 2017-053 and No. 2017-059) on 28 May 2011, 19 April 2014, 25 March 2016 and 10 August 2017 | -12,768,353.62 | 0.25% | N |
| 40% equity of Changhong Ruba Electric Company(Private)Ltd. | Investment establishment | US$ 6.9761 million | Pakistan | Manufacture | Details of risks control measures have been disclosed by the Company by way of announcement on appointed media (No. 2011-028, No. 2011-032, No. 2014-023, No. 2014-026, No. 2017-053 and No. 2017-059) on 28 May 2011, 19 April 2014 and 10 August 2017 | -9,015,854.36 | 0.00% | N |
| 100% equity of CHANGHONG MEILING ELECTRIC INDONESIA. PT | Investment establishment | US$ 6 million | KELAPA GADING, JKT, Indonesia | Sales | Details of risks control measures have been disclosed by the Company by way of announcement on appointed media (No. 2016-027 and No. 2016-033) on 25 March 2016 | -1,369,150.34 | 0.48% | N |
| Other notes | N/A | |||||||
III. Core Competitiveness Analysis
(1) Brand capacity
The Company is one of the famous home appliances manufacturers in China, owns several product lines suchas refrigerator, freezing box, air conditioner, washing machine and small household appliances. ―Meiling‖ brand islisted as one of the most valuable brands in China. In recent years, the Company has create the competitiveness ofthe brand by continuously reshaping its brand image, innovating core technology and developing high-end
intelligent products.In terms of reshaping brand image, in order to enhance the brand image and further expand the marketinfluence, the Company reposition the brand by implanting the corporate culture into the brand construction.In October 2015, the Company hold a press conference of "New LOGO release and offline of the 10
th
millionset of frequency conversion products" for renewing LOGO and launching the new brandproposition of ―Meiling, let the good comes‖. Along with the release of new LOGO, Meiling will also implementa brand strategy of "Good Trilogy", including the direct sensory experience of ―experience the good", the spiritsoul enjoyment of ―enjoy the good‖, and the lifestyle faith of ―believe in the good‖.
In terms of continuous innovation of core technologies, on the one hand, the company continuouslypromoted the innovation of intelligent and frequency conversion technologies to maintain the leading position inthe industry in order to meet the needs of industry and market development; on the other hand, in the boosting ofconsumption upgrades, in order to meet consumers‘ individualized, differentiated and diversified needs, thecompany returned to the fresh-keeping nature of refrigerator through the application of ―water molecule-activatedfresh-keeping technology‖, created the first ―1 cm free-embedded refrigerator‖ through research and developmentof full-thin GLS integration technology, achieved thin body and thin cabinet and thin door. The continuousinnovation of the company's key core technologies highlighted Meiling‘s professional capabilities.
In terms of high-end intelligent product development, the company promoted product innovation throughcontinuous technological innovation. Since 2014, the company has successively released CHiQ intelligent seriesproducts, ―M Fresh‖ refrigerators, and ―M Fresh‖ full-thin series products, and created three brand business cards,i.e. ―Meiling Fresh‖ and ―Meiling Thin‖, and ―Meiling Embedding‖ through the introduction of theaforementioned high-end intelligent products, which not only met market demand in a timely manner, but alsoenriched and enhanced the brand image.
Reshaping brand ability through continuous upgrading of products, Meiling will realize a young,international and professional brand image. Through gradual construction of the ideas of Wonderful Start Point,Wonderful Life Circle and Wonderful Ecology Circle, Meiling has become a people-oriented artist specializing inwhite appliances, a smarter scientific expert and a more reliable house keeper.
(2) Product capacity
In more than 30 years, the Company always focus on the refrigeration industry, has developed a variety ofdifferent types of refrigerator products, including three serial produces as ―MELNG美菱, CHiQ and Athena‖.Mainly included ―M Fresh‖ full-thin series fresh-keeping refrigerators equipped with water molecule-activatedfresh-keeping technology, such as BCD-656WQ3M, BCD-681WQ3S, etc., full-thin wall double curved embeddedseries refrigerators such as BCD-482W, CHiQ series high-end intelligent refrigerators and air conditioners,air-cooling cross-shaped side-by-side door series refrigerators such as BCD-501WPUCX and BCD-432WPU9CX,
air-cooling side-by-side door series refrigerators such as BCD-566WUPC, BD-380W air-cooling series productsexporting to Europe, BC / BD-106DTEB, 156DTEB, 211DTEB and dual-temperature BCD-212DTEB 2.0
th
generation thin door series freezer, and YCD-EL / FL289 medical refrigerator freezer combo, etc.
In terms of air-conditioning products, the company adhered to focusing on the core strategy of intelligenceand frequency conversion, and emphasized on the research of new frequency conversion control technologies,among them, the technological achievements of the ―research and application of high-efficiency operation andsecurity control technology of inverter air conditioners based on motor winding temperature measurementmethods‖ has reached international advanced levels, this technology is of great significance to the reliability ofrefrigeration compressors and the safe application of flammable and environmentally-friendly refrigerants inrefrigeration systems in the future; the frequency conversion solutions based on single-chip dual-drive on-boardreactor have been applied to new energy efficiency standard products, and the new energy efficiency productplatform development for new energy of air conditioner from1HP to3HP in 2020 has been completed, and theproduct has been launched in batches. Focused on carrying out the inverter core control technology research anddevelopment and product application such as PMV control technology for infrared temperature measurement andwinding temperature measurement, and vigorously promoted the competitive low-cost frequency conversionhardware solutions and the research and development of new structural products to cope with competition in theair-conditioning market.The Company owned advanced development and quality assurance systems, passed management systemcertification of ISO9001, ISO14001 and ISO45001. Product quality has been quality assurance and productperformance is reliable. At the same time, the company has authoritative certifications including ―national-leveltechnology center‖, ‖national-level industrial design center‖, ―national-level intellectual property demonstrationenterprise‖ as strong guarantees. In terms of technical research, it is committed to applying basic technologyresearch and industrialization transfer, and has established a technical strategic plan with ―intelligence, frequencyconversion, simulation‖ as core technologies, and ―energy saving, fresh keeping, and new materials‖ as keytechnologies, annual technical research project achievements conversion rate reached 85% above. In terms ofproduct development, based on the technological research results and consumption upgrade requirements, updatedthe annual product planning and development outline, increasingly upgraded the product structure, continued toincrease the development of mid-to-high-end products such as thin-wall, air-cooling, large-volume, frequencyconversion, and intelligence, and developed competitive core products. At the strategic level of the company,continued to adhere to the core idea of ―intelligent strategy, productism‖, and promoted the company's producttransformation, technological innovation, and industry leadership by advancing the subsequent research anddevelopment, promotion and technical update of intelligent and frequency conversion products. In addition, thecompany shall continue to improve the home appliance product line, lay out multiple product businesses such aswashing machines, kitchen and bath, small appliances, biomedical, and built a comprehensive home appliancebusiness.
In terms of washing machine products, the company actively developed the core technology of Meiling
washing machines, upgraded its product lineup, and enhanced its competitiveness. The company has successivelydeveloped and launched front-loading products with light luxury appearance, large volume, washing and dryer,and a number of patented pulsator products, among them, the ―One-Key Smart Wash‖ series large-volumetop-loading products represented by B120M500GX realized one-button start and one-button dehydration throughintelligent system, which is convenient and practical. The ―Tianpu‖ series inverter products represented byMB90-660BILG applied the industry-leading DD inverter direct drive and Tianpu washing technology to reduceresidual washing liquid and rinse cleaner and take good care of clothes.
In terms of kitchen and bathroom products, the company adhered to the leading of ―building a smart kitchenand becoming a leading brand of smart kitchen and bathroom products‖, established a smart kitchen voiceinteraction system with large-screen range hoods as its core, and completed the intelligentization layout of allcategories of ―Smart Kitchen‖ to achieve product interconnectivity and human-machine interaction; meanwhile, incombination with its own research and development technology advantages, deepened the productization ofinverter technology in range hoods and gas water heaters, and accelerated the research of zero-cold water gaswater heaters, condensing wall-hung boiler products, and water purification exclusive filter technology, andapplied for 4 invention patents and 4 utility model patents.
In the field of small home appliances, the company was committed to creating an influential brand of ―waterecological household appliances‖ by the operating strategies of ―grasping key categories for scale, strengtheningcore categories for influence establishment, and selecting and cultivating categories for ecology layout‖, launcheda number of intelligent ―water ecological home appliances‖ products, and has gained high recognition in themarket, and the humidifier and water dispenser products ranked in the top five of online industry. At the sametime, the company has continuously increased the investment in research and development of related products,aiming to increase the competitiveness of its products in terms of intelligence, health, and fashion.
In terms of cryogenic products, the company continued to increase investment in research and developmentand promoted the upgrade of technology, products and serve. The Company‘s existing ultra low freezer, plasmablaster freezer, blood bank refrigerator, medical refrigerator, combined refrigerator & freezer and medical freezerand other biomedical products and biological and medical integration solutions are have been widely used inmedical and health, disease control and epidemic prevention, blood systems, research institutes,bio-pharmaceutical, genetic engineering and life sciences and other fields. Especially in ultra low products, theCompany has the -40 °C ~ -164 °C ultra-low freezer storage tank with the largest volume, the widest temperaturezone, and mute design in the world.
(3) Operation capacity
The Company continues to conducted benchmark management to improve its basic management level.Meanwhile, constantly improve the internal management ability by continuously improve the upgrading in aspect
of efficiency of personnel, money and materials. A performance review and sharing system has been establishedwith clear target and quantity index based on performance and layered incentive sharing system, thus to inspirethe internal production capacity. Under the mainline of value chain management, the Company continued to carryout value creation and improve its competitiveness. Its ability to prevent risks has been also strengthened throughcontinuous improvement of internal control system.
(4) Marketing ability
The company has established a relatively complete sales network and service system to accelerate marketingtransformation and achieve the marketing transformation from product line-oriented sales management tochannel- and user-oriented business services, from single-category marketing to full-category marketing. Duringthe reporting period, the company worked on organizations, systems, institutions, procedures, account sets, etc.,and used smart trading platforms to effectively improve operating efficiency, reduce costs, and accumulatestrength for subsequent development. In overseas markets, the company increased the investments in overseasmarketing agencies, research and development bases, production bases, etc., cooperated with internationallyrenowned household appliance brands and distributors, continued to optimize the customer structure and enhancethe product structure, actively explored overseas markets, and exported products to more than 130 countries andregions.
Section IV. Discussion and Analysis of the Operation
I. Introduction
In 2019, China's economic operation as a whole remained within the target range, but under the influence of asignificant slowdown in global economic growth, repeated Sino-US trade frictions, and domestic economicstructural adjustment, the pressure on economic growth increased. Under the influence of many unfavorablefactors, China's home appliance industry was facing an unprecedented difficult situation. According to data fromthe National Appliances Information Center, the scale of retail sales of domestic appliances in 2019 was 803.2billion yuan, with a year-on-year decrease of 2.2%. Affected by the macro environment and its own developmentcycle, coupled with multiple unfavorable factors such as the sluggish real estate, the iterative upgrade ofconsumption structure, insufficient demand, and rising supply chain costs, the overall performance of the homeappliance industry in 2019 was unsatisfactory, and the growth rate slowed. In this context, actively embracing thechanging era, accelerating the brand internationalization construction, increasing the development in overseasmarkets, and promoting the product structural transformation and upgrading have become the starting points forcompetition in home appliance enterprises.II. Main Business Analysis(i) OverviewShows no difference with the summary disclosed in Report of the Board of Director
□Yes √No
1. Introduction
In 2019, refrigerator and freezer business achieved revenue of approximately RMB 7.905 billion, 3.22%decreased on a y-o-y basis; air-conditioning business achieved revenue of approximately RMB 5.909 billion,
12.81% down y-o-y; washing machine business achieve revenue around RMB 0.434 billion, with year-on-yeardecline of 15.53 %; other business of kitchen & toilet products, small home appliance and refrigerationaccessories have revenue approximately as RMB 1.195 billion with 19.47% up y-o-y. At the same time, revenuefrom foreign business gains RMB 3.908 billion, a y-o-y increase of 5.34%.
2. Progress of the company's development strategy and business plan during the reporting period
During the reporting period, in accordance with the development strategy and operating principles of―product leading, marketing transformation, efficiency enhancement and team activation‖ in 2019, the companyhas deployed the annual business plan, arranged the production and management, and carried out the followingactivities:
(1) Product leading
During the reporting period, the company continued to carry out product upgrades around two major productstrategies of intelligence and frequency conversion, took fresh keeping, thin-wall, and energy efficiency upgradesas breakthroughs, thereby comprehensively improved the competitiveness of its products; insisted on user needsas its starting point, carefully built the core competitiveness of enterprise with technological innovation andproduct innovation, and accelerated product upgrades.The company was characterized by ―Meiling Fresh, Meiling Thin, and Meiling Embedding‖, continued tocreate product feature cards, and further promoted the company's refrigerator (freezer) product upgrades and has agood market performance. The ―M Fresh‖ full-thin series refrigerators released in February 2019 developed thefull-thin GLS integrated technology (integrating thin body, thin cabinet and thin door) based on the upgrade ofwater molecule-activated fresh-keeping technology, and comprehensively upgraded product technology, quality,and performance, the products attracted widespread attention from the industry and the media after release andlaunch, both the IFA red dot award and the special report of CCTV News gave the company high evaluation of thefull thin refrigerator. The increase in sales of full thin products in 2019 drove the promotion of Meiling‘s share ofhigh-end refrigerators. According to data from CMM, the product share of Meiling refrigerators with prices ofmore than 11,000 yuan was 3.3%, a year-on-year increase of 1.9%.
(2) Marketing transformation
In the domestic market, after the company increased its investment in Zhiyijia Company, it thoroughlyutilized its intelligent trading platform to conduct marketing collaboration, improved operational efficiency andreduced costs. Through a series of specific marketing transformation measures, realized the transformation fromproduct line-oriented sales management to channel and user experience services, took the ―online and offlineintegration‖ as the main line, promoted omni-channel transformation and upgrade and model change, transformedfrom ―low value, low efficiency, high cost‖ to ―high value, high efficiency, low cost‖. According to the data ofCMM, the average price of the company‘s refrigerator products in the online market in 2019 increased by 25.2%,and the retail sales increased by 0.6%; the average price of the refrigerator offline market increased by 6.5%, andthe retail sales were basically flat. At the same time, the company‘s air-conditioning products seized theopportunity of strategic ODM brand cooperation, and ODM business grew rapidly. In the overseas market,through the transformation from the pursuit of scale to the pursuit of both scale and profit, we have achievedcontinuous improvement in the product structure, for example, the proportion of air-cooling refrigerator productshas exceeded 20%, and the operating quality of overseas refrigerator freezer has continued to improve. Theoverseas air-conditioning business has been actively adjusted, benign changes have been made, and operationscontinued to be improved.
(3) Efficiency promotion:
Focus on efficiency improvement and promote efficiency improvement. During the reporting period, theCompany carried out special work on capital pressure control, the net cash in-flow from operation, inventoryturnover and receivable turnover are increase substantially; continued to promote the ―five -ization and three
easy‖ work at the development end, exceed the annual target in aspect of platform reduction, box reduction andmodel reduction, and the research and development efficiency increased by more than 20% from a year earlier; inthe production side, organized and carried out the work on reducing staff while improving efficiency in theproduct structure optimization, process optimization and one-piece flow, and so on, and the manufacturingefficiency was promoted by more than 20%.
(4) Team activation
Expand the career path of employees through the implementation of the normalized competing mechanismfor cadres to be prepared for both promotion and demotion and the establishment of exit paths for key positions,continue to deepen the performance management mechanism, implement the overall process performanceappraisal for all employees, and realize PDCA cycle for performance management through information integration,reconstruct the incentive mechanism, establish a three-tier incentive system, namely, incentives for businessresults, incentives for value lines, and incentives for special events, to encourage value creation for all employees.(ii) Revenue and cost
1. Constitute of operation revenue
In RMB
| 2019 | 2018 | Increase/decrease y-o-y | |||
| Amount | Ratio in operation revenue | Amount | Ratio in operation revenue | ||
| Total operation revenue | 16,553,252,894.93 | 100% | 17,490,174,950.01 | 100% | -5.36% |
| According to industries | |||||
| Manufacture of household appliances | 15,442,277,862.82 | 93.29% | 16,458,650,756.15 | 94.10% | -6.18% |
| Other business | 1,110,975,032.11 | 6.71% | 1,031,524,193.86 | 5.90% | 7.70% |
| According to products | |||||
| Refrigerator, freezer | 7,904,855,681.11 | 47.76% | 8,167,773,533.33 | 46.70% | -3.22% |
| Air-conditioning | 5,908,762,786.45 | 35.70% | 6,777,093,389.43 | 38.75% | -12.81% |
| Washing machine | 434,111,186.88 | 2.62% | 513,917,450.54 | 2.94% | -15.53% |
| Small appliance and kitchen & toilet | 993,937,389.59 | 6.00% | 689,072,966.20 | 3.94% | 44.24% |
| Other products | 200,610,818.79 | 1.21% | 310,793,416.65 | 1.77% | -35.45% |
| Other business | 1,110,975,032.11 | 6.71% | 1,031,524,193.86 | 5.90% | 7.70% |
| According to region | |||||
| Domestic | 12,638,965,715.02 | 76.35% | 13,768,743,643.18 | 78.72% | -8.21% |
| Foreign | 3,914,287,179.91 | 23.65% | 3,721,431,306.83 | 21.28% | 5.18% |
2. About the industries, products, or regions accounting for over 10% of the company’s operating income oroperating profit
√ Applicable □ Not applicable
In RMB
| Operating revenue | Operating cost | Gross profit ratio | Increase/decrease of operating revenue y-o-y | Increase/decrease of operating cost y-o-y | Increase/decrease of gross profit ratio y-o-y | |
| According to industries | ||||||
| Manufacture of household appliances | 15,442,277,862.82 | 12,416,146,774.23 | 19.60% | -6.18% | -6.46% | 0.25% |
| According to products | ||||||
| Refrigerator, freezer | 7,904,855,681.11 | 6,064,938,890.53 | 23.28% | -3.22% | -5.10% | 1.53% |
| Air-conditioning | 5,908,762,786.45 | 4,996,871,222.18 | 15.43% | -12.81% | -11.35% | -1.40% |
| Small appliance and kitchen & toilet | 993,937,389.59 | 835,102,165.41 | 15.98% | 44.24% | 43.17% | 0.63% |
| According to region | ||||||
| Domestic | 11,534,341,837.69 | 9,040,203,991.36 | 21.62% | -9.53% | -9.50% | -0.03% |
| Foreign | 3,907,936,025.13 | 3,375,942,782.87 | 13.61% | 5.34% | 2.78% | 2.15% |
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted mainbusiness based on latest one year‘s scope of period-end
□ Applicable √ Not applicable
3. Income from physical sales larger than income from labors
√ Yes □ No
| Industries | Item | Unit | 2019 | 2018 | Increase/decrease y-o-y |
| Manufacture of household appliances industry | Sales volume | 10 thousand pieces/set | 1,778.48 | 1,606.40 | 10.71% |
| Production | 10 thousand | 1,747.30 | 1,581.94 | 10.45% |
| pieces/set | ||||
| Inventory | 10 thousand pieces/set | 114.21 | 145.39 | -21.45% |
Reasons for y-o-y relevant data with over 30% changes
□ Applicable √ Not applicable
4. Fulfillment of the company’s signed significant sales contracts up to this reporting period
□ Applicable √ Not applicable
5. Constitute of operation cost
Industry classification
In RMB
| Industries | Item | 2019 | 2018 | Increase/decrease y-o-y | ||
| Amount | Ratio in operation cost | Amount | Ratio in operation cost | |||
| Manufacture of household appliances | Raw material | 11,370,677,092.45 | 91.58% | 12,224,876,343.70 | 92.10% | -0.52% |
Note: nil
6. Whether the changes in the scope of consolidation in Reporting Period
√ Yes □ No
More details can be seen in the report ―VII. Changes in the scope of the merger‖ and ―VIII. Interests in otherentities‖ of ―Section XII Financial Report‖
7. Major changes or adjustment in business, product or service of the Company in Reporting Period
□ Applicable √ Not applicable
8. Major sales and main suppliers
(1) Major sales client of the Company
| Total top five clients in sales (RMB) | 6,099,260,682.93 |
| Proportion in total annual sales volume for top five clients | 36.85% |
| Proportion of the related parties‘ sales in total annual sales volume for top five clients | 20.08% |
Information of top five clients of the Company
| Serial | Name | Sales (RMB) | Proportion in total annual sales |
| 1 | Client I | 2,955,074,284.86 | 17.85% |
| 2 | Client II | 1,194,810,509.75 | 7.22% |
| 3 | Client III | 1,088,958,743.00 | 6.58% |
| 4 | Client IV | 491,287,888.59 | 2.97% |
| 5 | Client V | 369,129,256.73 | 2.23% |
| Total | -- | 6,099,260,682.93 | 36.85% |
Other situation of main clients
□ Applicable √ Not applicable
(2) Main suppliers of the Company
| Total purchase amount from top five suppliers (RMB) | 2,432,644,865.67 |
| Proportion in total annual purchase amount for top five suppliers | 20.28% |
| Proportion of related party‘s purchase in total annual purchase amount for top five suppliers | 12.09% |
Information of top five suppliers of the Company
| Serial | Name | Sales (RMB) | Proportion in total annual purchase |
| 1 | Supplier I | 630,001,756.38 | 5.25% |
| 2 | Supplier II | 504,780,768.62 | 4.21% |
| 3 | Supplier III | 477,640,350.95 | 3.98% |
| 4 | Supplier IV | 437,841,044.49 | 3.65% |
| 5 | Supplier V | 382,380,945.23 | 3.19% |
| Total | -- | 2,432,644,865.67 | 20.28% |
Other notes of main suppliers of the Company
□ Applicable √ Not applicable
(iii) Expenses
In RMB
| 2019 | 2018 | Increase/decrease y-o-y | Note of major changes | |
| Sales expense | 2,320,362,519.95 | 2,576,277,169.86 | -9.93% | - |
| Administrative expense | 330,687,143.82 | 317,917,548.03 | 4.02% | - |
| Financial expense | -14,216,050.60 | -39,305,608.74 | 63.83% | Exchange gains increased in the period |
| R&D expense | 334,218,689.69 | 235,299,398.06 | 42.04% | More investment in R&D in the period |
(iv) Investment in R&D
√ Applicable □ Not applicable
In 2019, the Company continues to insisted on the upgrade of fundamental research on core technology intechnical research, maintained its technological advantages, expanded the innovation and upgrade in thetechnological field, made breakthroughs in differentiation, continued to promote product upgrades, and led thedevelopment orientation in the industry.
In terms of the refrigerator, the Company focused on its technology planning and core technology for technologydevelopment, and carried out the research on human-computer interaction techniques, food refreshmenttechnology, energy saving and mute technology, wide rotation speed variable frequency technology, air ductdesign technology, and vacuum insulation technology, etc. Among them, the launch of the ―full thin‖ seriesrefrigerators once again led the refrigerator to the ―large volume ratio, embedded‖ development direction, greatlyreduced the occupation space and use space of the refrigerator through ―thin body, thin cabinet, and thin door‖; thelaunch of thin door series freezers completed a comprehensive upgrade of household freezer; ―M Fresh‖ seriesrefrigerators equipped with ―water molecule activated fresh keeping technology‖ continued to expand the productlineup, greatly increasing the company's market share of high-end products, brand influence and reputation. Inaddition, the company achieved high-end transformation, technological innovation and industry leadership andcontinued to increase the proportion of intelligent and inverter refrigerators by advancing the continuous researchand development, promotion and technological update of intelligent and inverter products; accelerated thepromotion of 0.1℃ inverter and air-cooling technology and products in overseas markets, and the proportion ofinverter and air-cooling refrigerators in the export markets accelerated. The ―retro‖ series and ―micro-frost‖ seriesrefrigerators have been developed to meet the differentiated and personalized needs of overseas markets.
In air conditioning, according to the strategic planning of holistic intelligent air ecosystem, the Company corewith the technical strategic as intelligence and frequency conversion, carrying out variable frequency control indepth, CFD&CAE simulation, intelligent voice, and basic core ability construction as recognition and interactionetc. In the field of frequency conversion control technology, the technological achievements of the ―research andapplication of high-efficiency operation and security control technology of inverter air conditioners based onmotor winding temperature measurement methods‖ has reached international advanced levels, this technology isof great significance to the reliability of refrigeration compressors and the safe application of flammable andenvironmentally-friendly refrigerants in refrigeration systems in the future; the frequency conversion solutionsbased on single-chip dual-drive on-board reactor have been applied to new energy efficiency standard products,and the new energy efficiency product platform development for new energy of air conditioner from1HP to3HP in2020 has been completed, and the product has been launched in batches. The intelligent Q5D freezer adoptingvoiceprint recognition technology has been launched, leading the personalized service era in the air-conditioningindustry, and greatly improving the brand image. The new energy efficiency first-level inverter series produced for
Xiaomi have begun mass production and launched to the market.
In terms of biomedical, Zhongke Meiling, a new three board listed subsidiary of the company, continuouslyincreased its R&D investment. During the reporting period, the various R & D and innovation work of ZhongkeMeiling proceeded smoothly as planned. New dual-system dual-compressor 289 series refrigerator-freezerproducts and 270 series low-temperature series products were developed and marketed. Intelligent wirelessmonitoring and Android screen control systems equipped with ultra-low temperature and medical refrigerators andother storage equipment to achieve product-end cloud integration; ultra-low temperature energy-saving noisereduction technology has been upgraded, and won the UL‘s ―energy efficiency star‖ certification; other homehealth products were developed and marketed, Meiling biomedical products gradually realized the ecologicallayout. During the whole year of 2019, Zhongke Meiling completed a total of 64 patent applications, including 14invention patents, 21 utility model patents, 21 design patents, and 8 software work patents; and obtained 27 newdomestic patent licensing.
R&D investment of the Company
| 2019 | 2018 | Change ratio | |
| Number of R&D (people) | 1,529 | 1,649 | -7.28% |
| Ratio of number of R&D | 16.62% | 15.52% | 1.10 points up |
| R&D investment (Yuan) | 782,372,129.86 | 821,742,728.27 | -4.79% |
| R&D investment accounted for R&D income | 4.73 % | 4.70% | 0.03 points up |
| R&D investment capitalization (Yuan) | 128,970,096.82 | 152,448,558.04 | -15.40% |
| Capitalization R&D investment accounted for R&D investment | 16.48% | 18.55% | 2.07 points down |
The reason of great changes in the proportion of total R&D investment accounted for operation income than lastyear
□ Applicable √ Not applicable
Reason for the great change in R&D investment capitalization rate and rational description
□ Applicable √ Not applicable
(v) Cash flow
In RMB
| Item | 2019 | 2018 | Increase/decrease y-o-y |
| Subtotal of cash in-flow from operation activity | 17,770,961,164.50 | 16,778,361,372.57 | 5.92% |
| Subtotal of cash out-flow from operation activity | 16,485,957,179.46 | 16,998,921,987.93 | -3.02% |
| Net cash flow from operation activity | 1,285,003,985.04 | -220,560,615.36 | 682.61% |
| Subtotal of cash in-flow from investment activity | 3,292,055,574.16 | 3,668,508,401.66 | -10.26% |
| Subtotal of cash out-flow from investment activity | 2,415,012,035.85 | 4,623,429,604.21 | -47.77% |
| Net cash flow from investment activity | 877,043,538.31 | -954,921,202.55 | 191.84% |
| Subtotal of cash in-flow from financing activity | 1,731,668,612.80 | 3,213,434,868.63 | -46.11% |
| Subtotal of cash out-flow from financing activity | 3,001,416,948.24 | 2,646,463,305.11 | 13.41% |
| Net cash flow from financing activity | -1,269,748,335.44 | 566,971,563.52 | -323.95% |
| Net increased amount of cash and cash equivalent | 901,164,287.58 | -605,122,582.46 | 248.92% |
Main reasons for y-o-y major changes in aspect of relevant data
√Applicable □ Not applicable
In 2019, the net cash flow from operation activity amounted as 1285 million Yuan, increased 1506 million Yuanfrom a year earlier with 682.61% up, mainly because the cash received from good sales and offering labor servicein the period increased from a year earlier;Net cash flow from investment activity has major changes mainly because the entrusted financing expenditure inthe period declined on a y-o-y basis;Net cash flow from financing activity has major changes mainly because the cash received from loans in theperiod declined over that of last year;Reasons of major difference between the cash flow of operation activity in report period and net profit of theCompany
√Applicable □ Not applicable
Mainly because at end of the period, the inventory and operating receivables decreased over that of year-begin.III. Analysis of the non-main business
√Applicable □ Not applicable
In RMB
| Amount | Ratio in total profit | Note | Whether be sustainable (Y/N) | |
| Investment income | -32,695,507.49 | -46.86% | Loss on delivery of the forward foreign exchange contracts in the period | N |
| Gains/losses from fair value changes | 52,993,630.16 | 75.95% | Mainly due to the assessment income of current forward foreign exchange contract | N |
| Asset impairment | -30,409,004.57 | -43.58% | Provision for inventory depreciation increased in the period | N |
| Non-operation income | 6,479,922.98 | 9.29% | -- | N |
| Non-operation expenditure | 5,409,757.70 | 7.75% | -- | N |
| Credit impairment | 4,633,296.89 | 6.64% | -- | N |
IV. Assets and liability(i) Major changes of assets composition
In RMB
| Year-end of 2019 | Year-begin of 2019 | Ratio changes | Note of major changes | |||
| Amount | Ratio in total assets | Amount | Ratio in total assets | |||
| Monetary fund | 5,499,601,030.64 | 38.72% | 4,596,077,557.40 | 29.55% | 9.17% | Collection of the entrust financing in the period |
| Account receivable | 1,387,961,981.66 | 9.77% | 1,673,362,136.29 | 10.76% | -0.99% | Turn over of the account receivable speed up in the period |
| Inventory | 1,460,910,189.06 | 10.29% | 2,174,436,573.67 | 13.98% | -3.69% | Turn over of the inventory speed up in the period |
| Investment real estate | 96,343,760.13 | 0.68% | 46,846,507.41 | 0.30% | 0.38% | Investment real estate from subsidiary increased in the period |
| Long-term equity investment | 88,556,511.70 | 0.62% | 67,552,541.78 | 0.43% | 0.19% | Invested more capital for joint venture in the period |
| Fix assets | 2,180,572,946.87 | 15.35% | 1,733,957,012.14 | 11.15% | 4.20% | Transfer-in from construction in progress increased in the period |
| Construction in progress | 252,494,792.31 | 1.78% | 464,558,352.60 | 2.99% | -1.21% | The construction in progress transfer to fixed assets in the period |
| Short-term loans | 1,103,991,045.96 | 7.77% | 2,336,373,929.62 | 15.02% | -7.25% | Short-term loans are paid in the period |
| Long-term loans | 401,280,000.00 | 2.83% | 1,920,000.00 | 0.01% | 2.82% | Long-term loans increased from parent company in the period |
(ii) Assets and liability measured by fair value
√Applicable □ Not applicable
In RMB
| Items | Amount at the beginning period | Changes of fair value gains/losses in this period | Accumulative changes of fair value reckoned into equity | Devaluation of withdrawing in the period | Amount of purchase in the period | Amount of sale in the period | Other changes | Amount at end of the period |
| Financial assets | ||||||||
| 1.Trading financial assets (derivative financial assets excluded) | 9,253,635.59 | -1,523,366.67 | 7,730,268.92 | |||||
| Subtotal of financial assets | 9,253,635.59 | -1,523,366.67 | 7,730,268.92 | |||||
| Above total | 9,253,635.59 | -1,523,366.67 | 7,730,268.92 | |||||
| Financial liabilities | 55,586,666.70 | -54,516,996.83 | 11,865.06 | 1,081,534.93 | ||||
Other changes:
The exchange difference of the assessment on forward foreign exchange contract of Indonesia Changhong -subsidiary of the CompanyWhether there have major changes on measurement attributes for main assets of the Company in report period ornot
□Yes √ No
(iii) Assets right restricted ended as reporting periodEnded as the reporting period, the Company has no major assets been closed down, detain, freeze or pledge andguarantee. Other information of the assets right restricted found more in relevant content of ―54. Assets withownership or the right to use restricted‖ under VI. Notes to the major items in the consolidated financial
statements carry in Section XII. Financial ReportV. Investment(i) Overall situation
√Applicable □ Not applicable
| Investment in the reporting (RMB) | Investment in the same period of last year ( RMB) | Changes |
| 37,591,140.00 | 46,004,000.00 | -18.29% |
(ii) The major equity investment obtained in the reporting period
√Applicable □ Not applicable
In RMB
| Name of invested | Principal business | Method of investment | Amount of investment | Shareholding | Capital sources | Partners | Term of investment | Type of products | Status as of the balance sheet date | Expected return | Current investment profit and loss | Whether litigation (Y/N) | Date of disclosure (if applicable ) | Index of disclosure (if applicable ) |
| Hefei Meiling Wulian Technology Co., Ltd. | IoT home system and new intelligent hardware design, research and development, integration, sales and technical services; design, research and development, and sales of home appliance controller software and hardware and IoT software and hardware; design , research and development, manufacturing, sales and technical services of household appliances, commercial appliances, car appliances, and daily necessities products; information consulting, technology transfer, technical service and operation management in the field of Internet of Things and Internet technology; Internet data services; development, maintenance and sales of e-commerce software; import and export business of self-operated and agent goods and technologies (except for goods and technologies that are restricted for business operation or prohibited from importing and exporting by the state). | Newly established | 10,000,000 | 100% | Own fund | N/A | 20-year | Software service | Invested 6 million Yuan in the Period | Not applicable | 5,323,042.82 | N | 2018-12-11 | Juchao Website: http://www.cninfo.com.cn (Notice No.: 2018-071) |
| Changhong Ruba Trading | Be engaged in the import, export, distribution | Capital | $ 7.8030 | 60% | Own | RubaGeneral | Long-t | N/A | Increased 2.5041 million | Not app | -12,768,353.62 | N | 2017-8-10 | Juchao Website: http://www.cninfo.c |
| Company(Private) Limited | and sale of household appliances. | increase | million | fund | TradingFZE | erm | Yuan ($363,000) in the period | licable | om.cn (Notice No.: 2017-053 and 2017-059) | |||||
| Anhui Tuoxing Science and Technology Co., Ltd. | Technology research and development, technical consulting, technical services, processing, sales, design, installation, maintenance of refrigeration equipment; mechanical and electrical equipment installation; warehousing services (except dangerous goods); processing and sales of metal products. | Newly established | 10,000,000 | 66.8703% | Own fund | N/A | Long-term | N/A | Business registration completed in the Period | Not applicable | -- | N | 2019-4-20 | Juchao Website: http://www.cninfo.com.cn (Notice No.: 2019-025) |
| Sichuan Zhiyijia Network Technology Co., Ltd. (Note 1) | Development and sales of computer software and hardware and undertake computer network engineering, import & export of goods and technologies (except the items prohibited by laws and regulations, restricted items operating with license), design and production of advertising, design, manufacturing and sales of the model, selling general merchandise, clothing, leather ware, shoes & hats, detergents, cosmetics, photographic apparatus, toys, audio equipment & apparatus, household appliances, electronics, communication equipment, communication device, instruments & apparatus, lamps, electro-mechanical & components, mechanical equipment & accessories, prepackaged food, office supplies, sporting | Capital increase | 35,000,000 | 50% | Own fund | Sichuan Changhong Electric Co., Ltd. | 20-year | N/A | Increase capital of 29.08704 million Yuan in the period (of which: 20 million Yuan contributed for registered capital and 9,087,040 Yuan reckoned in capital reserve) | Not applicable | 6,854,999.85 | N | 2019-8-31, 2019-09-27 | )Juchao Website: http://www.cninfo.com.cn (Notice No.: 2019-058 and 2019-067) |
| goods, hotel facilities, tourism cultural goods, gold-silver jewelry and value-added telecom service (entrusted operation), chemical raw materials & products (hazardous chemicals excluded), solar energy equipment and class-I medical devices through the internet. | ||||||||||||||
| Total | -- | -- | -- | -- | -- | -- | -- | -- | -- | - | -590,310.95 | -- | -- | -- |
Note 1: On 16 December 2014, the Company entered into a joint venture agreement with controlling shareholder Sichuan Changhong Electric Co., Ltd., established the Sichuan ZhiyijiaNetwork Technology Co., Ltd. Jointly. On 5 Jan. 2015, Sichuan Zhiyijia Network Technology Co., Ltd established officially with registered capital of 50 million Yuan, of which, 15 million Yuancontributed by the Company, 30% hold of share-holding ratio, the Sichuan Changhong Electric Co., Ltd. contributed 35 million Yuan with 70% ratio takes. In 2019, the Company increasecapital of 29,087,040.00 Yuan (of which: 20 million Yuan contributed for registered capital and 9,087,040 Yuan reckoned in capital reserve)to Zhiyijia Company, the ratio of shareholding up to50% after increase.(iii) The material non-equity investment in the reporting period
√Applicable □ Not applicable
In RMB
| Project Name | Investment Method | Invested with fixed assets (Y/N) | Industry involved in Investment Projects | Investment Amount in this Reporting Period | Accrued Actual Investment Amount up to the End of Reporting Period | Capital Source | Project Schedule | Anticipated Income | Accrued Realized Income up to the End of Reporting Period | Reasons for not Reaching the Planned Schedule and Anticipated Income | Disclosed Date (if any) | Disclosed Index (if any) |
| 2 million automatic washing machines production base project(Note 1) | Self-built | Y | Manufacture of household appliances | 71,232,933.99 | 269,806,804.13 | Own fund, fund-raising | Currently, phase I of the washing machine project (the production line of full-automatic wave wheel washing machine with capacity of one million sets a | The production capacity of 2 million sets of automatic washing machine shall be formed after this | Project is under construction in the period without income | Not applicable | 2017-3-30, 2017-4-14, 2019-7-9, 2019-7-26 | www.cninfo.com.cn (Announcement(2017-010, 2017-024, 2019-040, 2019-041, 2019-042, 2019-043 |
| industry | nnually in double shifts) has constructed and put into operation. The phase II (roller production line) will invest with the fund-raising and still in construction, most of the infrastructure transformation and equipment installation have been completed and expected to be put into operation in June 2020. | project being put into operation | occurred temporary | and 2019-047) | ||||||||
| Total | -- | -- | -- | 71,232,933.99 | 269,806,804.13 | -- | -- | - | - | -- | -- | -- |
Note 1: According to the Company's strategic development plan, combined with the Company's business needs, and in order to make up for the insufficient research and manufacturing capacityof washing machine industry so as to meet the market demands, the 29
th session of the 8
thBoard of Directors approved and agreed to invest no more than 371,210,000 Yuan in the constructionof the 2 million automatic washing machines production base project. Up to end of the February 2019, phase I (full-automatic wave wheel washing machine with capacity of one million setsannually in double shifts) of the ―production line of annual capacity with 2 million automatic washing machines ‖ project has put into normal operation. In combination with the company'sstrategic development planning and operational needs, and in order to further improve the service efficiency of the company's raised funds, after careful study and argumentation, the 24
th
sessionof the 9th BOD, the 13
thsession of the Supervisory Committee, and the second extraordinary general meeting of shareholders in 2019 passed the resolution and agreed to invest 120 million Yuanof the unused raised funds of the sub-project ―Freezer Intelligent Construction Project‖ of the ―Intelligent Manufacturing Construction Project‖ into the ―production base project (Phase II ) forannual production capacity of 2 million washing machines‖.Found more on Securities Times, China Securities Journal, Hong Kong Commercial Daily and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No.2017-010, No. 2017-024, No. 2019-040, No. 2019-041, No. 2019-042, No. 2019-043, No. 2019-047) on March 30, 2017, April 14, 2017, July 9, 2019 and July 26, 2019 respectively. Currently,the phase II (roller production line) still in construction, most of the infrastructure transformation and equipment installation have been completed and expected to be put into operation in June2020.
(iv) Financial assets investment
1. Securities investment
□Applicable √ Not applicable
The Company had no securities investment in the reporting period.
(2) Derivative investment
√Applicable □ Not applicable
In 10 thousand Yuan
| Operator | Related relationship | Whether related trade or not | Type | Initial investment | Start date | End date | Investment amount at period-begin | Amount purchased in the reporting period | Amount sales in the reporting period | Amount of reserve for devaluation of withdrawing (if applicable) | Investment amount at period-end | Ratio of investment amount at period-end in net assets of the Company at period-end | Actual gains/losses in period |
| Financial institution | N/A | No | Forward foreign exchange contract | 200,656.30 | 2017-9-29 | 2020-8-26 | 149,739.86 | 212,962.52 | 297,358.41 | - | 73,225.52 | 14.63% | -7,881.56 |
| Total | 200,656.30 | -- | -- | 149,739.86 | 212,962.52 | 297,358.41 | - | 73,225.52 | 14.63% | -7,881.56 | |||
| Capital resource | Own fund | ||||||||||||
| Lawsuit involved (if applicable) | Not applicable | ||||||||||||
| Disclosure date for approval from the Board for investment of derivatives (if applicable) | 2019-3-29 | ||||||||||||
| Disclosure date for approval from board of shareholders for investment of derivatives (if applicable) | 2019-5-22 | ||||||||||||
| Risk analysis and controlling measures for derivatives holdings in the Period (including but not limited to market risk, liquidity risk, credit risks, operation risk and law risks etc.) | Risk analysis: 1. Market risk: domestic and international economic situation changes may lead to exchange rate fluctuations, forward foreign exchange transactions are under certain market risk. Forward foreign exchange business is aiming to reducing impact on corporate profits by foreign exchange settlement and sale prices, exchange rate fluctuations. The Company will follow up the exchange fluctuation, on the basis of target rate determined from the business, relying on the research of the foreign currency exchange rates, combined with prediction of consignments, and burdening ability to price variations due to exchange rate fluctuations, then determine the plan of forward foreign exchange | ||||||||||||
| contracts, and make dynamic management to the business, to ensure reasonable profit level. 2. Liquidity risk: all foreign exchange transactions are based on a reasonable estimate of the future import and export business, to meet the requirements of the trade authenticity. In addition, forward foreign exchange transactions are processed with bank credit, will not affect liquidity of company funds. 3. Bank default risk: if cooperative banks collapse within the contract time, the Company will not be able to transact the original foreign exchange contracts with contract price, which leads the risk of income uncertainty. So the Company chose five state-owned banks, the Chinese-funded banks in shareholding enterprise as Everbright Bank, Industrial Bank and the foreign-funded banks as UOB, OCBC, BEA etc. to conduct the trading of foreign exchange capital. These banks share a solid strength and management whose failure and the risk of loss may bring to the Company is very low. 4. Operational risk: improper operation of the person in charge of forward foreign exchange transactions may cause related risk also. The Company has formulated related management system which defines the operation process and responsibility to prevent and control risks. 5. The legal risks: unclear terms based in contract signed with banks for related transactions may lead legal risks when forward foreign exchange transactions are processing. The Company will strengthen legal review, and choose good bank to carry out this kind of business as to risk control. | |
| Invested derivative products have changes in market price or fair value in the Period, as for analysis of the fair value of derivatives, disclosed specific applied methods and correlation assumption and parameter setting | The Company determines fair value in accordance with the Chapter VII ―Determination of Fair Value‖ carried in the Accounting Standards for Business Enterprises No.22 - Recognition and Measurement of Financial Instruments. Fair-value is basically obtained according to prices offered by bank and other pricing services. While fair-value of derivatives is mainly obtained according to the balance between prices given by outstanding contracts and forward prices given by contracts signed during the reporting period with bank. The differences are identified as trading financial assets and liabilities. During the reporting period, forward foreign exchange contracts and losses of the Company is (78,815,600) Yuan. |
| Specific principle of the accounting policy and calculation for derivatives in the Period compared with last period in aspect of major changes | Not applicable |
| Special opinion on derivative investment and risk control by independent directors | Upon inspection, the independent directors of the Company believes that: during the reporting period, the Company carried out its foreign exchange forward deals in strict compliance with the standardized operation guidelines for listed issuer on main board (2015 amended) issued by Shenzhen Stock Exchange, the Articles of Association, Authorization Management of the Company, Management System in relating to Foreign Exchange Forward Deals of Hefei Meiling Co., Ltd., and these deals were conducted within the authorization scope under general meeting and board meeting. The Company conducts no foreign exchange transactions on the purpose of getting profit only, all of the forward foreign exchange transactions are operates based on normal operating and production, which is relying on specific business operations with purpose of avoiding the preventing the risks in exchange rate. The forward foreign exchange transactions of the Company are beneficial to prevent the exchange risks exposed by import and export business and thus met its requirement for operation development. There was no speculative operation, no break of relevant rules and regulations and relevant business was conducted under corresponding decision-making procedures. Interests of the Company and entire shareholders, especially minority shareholders, were not prejudiced. |
(v) Application of raised proceeds
√Applicable □ Not applicable
1. Overall application of raised proceeds
√Applicable □ Not applicable
In 10 thousand Yuan
| Raising year | Way | Total raised capitals | Total raised capital used in Period | Total accumulative raised capitals used | Total raised capital has purpose of uses changed in Period | Cumulative raised capitals has purpose of uses changed in total | Ratio of cumulative raised capitals has purpose of uses changed | Total accumulative raised capitals unused | Usage of the retained raised capitals and what is expected to invested with those capitals | Raised capitals idle for more than two years |
| 2016 | Non-public offering of A-shares | 154,073.272276 | 26,960.225284 | 98,111.611149 | 47,246.035127 | 47,246.035127 | 30.66% | 37,320.244079 | The raised funds that the Company has not run out will continue to complete the corresponding investment as planned. At the same time, according to the planning for equity investment projects, it‘s agreed the Company to use the idle raised funds of no more than 199 million Yuan (The amount can be rolled over) to invest in the principal-protected financial products after being approved by the Company‘s board of directors, board of supervisors, and the resolutions of shareholders‘ meeting, and after the independent directors issuing agreed independent opinions and sponsor agencies issuing unanimous verification opinions. The remaining funds are deposited in the designated raised capital account. | -- |
| Total | -- | 154,073.272276 | 26,960.225284 | 98,111.611149 | 47,246.035127 | 47,246.035127 | 30.66% | 37,320.244079 | -- | |
| Explanation on General usage of raised capital | ||||||||||
2. Situation of committed project of raised proceed
√Applicable □ Not applicable
In 10 thousand Yuan
Being deliberated and approved by 1
st extraordinary shareholders meeting of 2016 and 17
th
session of 8
thBOD, and verified by the Reply on Private Placement of Changhong Meiling Co., Ltd. (CSRC XK [2016]No.1396) issued from CSRC, the Company successfully offering 280,858,676 shares (A-stock) to 7 qualified investors, including Sichuan Changhong Electric Co., Ltd. (hereinafter referred as to Sichuan Changhong),with price of 5.59 Yuan/Share and face value of 1.00 Yuan. According to the Verification Report XYZH/2016CDA40272 issued by Shine Wing Certified Public Accountants (LLP), total raised fund amounting to1,569,999,998.84 Yuan, less vary issuance changes (tax included) 29,267,276.08 Yuan, raised fund amounts to 1,540,732,722.76 Yuan.Ended as 31 December 2019, actually fund of raised used accumulative amounted as 981,116,111.49 Yuan in total, balance of the account for fund raised counted as 373,202,440.79 Yuan (including interest incomeaccumulative amounted as 7,725,012.59 Yuan and income from financial product at expiration 80,711,875.92 Yuan)The Company accumulative used the fund raised amounted as 981,116,111.49 Yuan, the use of purpose including: intelligent construction has 282,924,440.00 Yuan in used; R&D ability for intelligence and newproducts for intelligent household appliance has 382,310,007.72 Yuan in used; smart life project totally used 45,001,600.00 Yuan; used in current fund supplementary counted as 270,880,063.77 Yuan (including savinginterest of 147,341.01 Yuan)Committed investmentprojects and over-raised
fund investment
| Committed investment projects and over-raised fund investment | Change the project (Y/N) (including partially changed) | Total raised-fund commitment | Investment after adjustment (1) | Invested in the period | Cumulative investment amount till end of Period-end (2) | Investment progress till end of period-end (3)＝(2)/(1) | Date of reach a predetermined state of use | Benefit achieved in the Period | Achieved expected benefits (Y/N) | Major changes of project feasibility (Y/N) |
| Committed investment project | ||||||||||
| Construction of intelligent manufacturing project | Partial change | 39,100.00 | 39,100.00 | 15,986.723636 | 28,292.444000 | 72.36% | Intelligent manufacturing (Hefei) project: end of December of 2021; Production line for the annual capacity of 2 million washing machines(Phase II): June 2020 | -- | Not applicable | N |
| Construction of intelligent R&D capability and new products development of the intelligent appliance technology | Partial change, the procedures for final approval completed | 55,900.00 | 48,188.658476 | 10,973.461648 | 38,231.000772 | 79.34% | The project reach the intended usable state at end of the 2019 | -- | Not applicable | N |
| Intelligent life project | Change completed | 32,000.00 | 4,500.16 | 0.0400 | 4,500.16 | 100% | -- | -- | Not applicable | Y |
| Supplementary the floating capital | No changes | 27,073.272276 | 27,073.272276 | 0 | 27,088.006377 | 100.05% | -- | -- | Not applicable | N |
| Subtotal of committed investment project | -- | 154,073.272276 | 118,862.090752 | 26,960.225284 | 98,111.611149 | -- | -- | -- | -- | -- |
| Investment of the over-raised fund | ||||||||||
| No over-raised fund in the Period | ||||||||||
| Payment of bank loans (if applicable) | -- | -- | -- | -- | -- | |||||
| Supplementary the floating capital (if applicable) | -- | -- | -- | -- | -- | |||||
| Subtotal of over-raised fund investment | -- | -- | -- | -- | -- | -- | ||||
| Total | -- | 154,073.272276 | 118,862.090752 | 26,960.225284 | 98,111.611149 | -- | -- | -- | -- | -- |
| Conditions and reasons of failure to meet schedule or predicted income (by specific projects) | Found in Note 1 | |||||||||
| Description of major changes in project feasibility | Found in Note 1 | |||||||||
| Amount, use of purpose and usage progress of the excessive raised fund | Not applicable | |||||||||
| Change of the implementation location of project with investment of raised fund | Not applicable | |||||||||
| Adjustment of the implementation ways of project with investment of raised fund | Found in Note 1 | |||||||||
| Early investment and replacement with the raised fund | Found in Note 2 | |||||||||
| Temporary replacement of the working capital with idle raised funds | Not applicable | |||||||||
| Amount and reasons of cash surplus in raised funds during implementing the project | Found in Note 1 | |||||||||
| Use purpose and destination of the raised funds un-used | Found in Note 3 | |||||||||
| Problems or other circumstances in the use of raised funds and its disclosure | Relevant information with raised funds concerned are disclosed in a timely, true, accurate and complete manner, there is no violation in the deposit, use, management and disclosure of the raised funds. | |||||||||
Note 1:
1.“Construction of intelligent manufacturing project ”:
(1) the original planning construction period of ―construction of intelligent manufacturing project‖ is 3-year, and with purposeof regulating the use of raised funds, the resolution of the 20
th session of the 9
th
BOD and the 11
th session of the 9
thSupervisoryCommittee of the Company passed and agreed to postpone the date that the project achieves the scheduled serviceable condition tothe end of December 2021. Currently, the project is in continuous progress.
(2) The original planning construction period of ―newly increasing 600,000 sets of medium and large-capacity environmentalprotection and energy-saving freezer intelligent production line construction project‖ (hereinafter, the ―freezer intelligent constructionproject‖) is one year. Being deliberated and approved by the resolution of 14
th session of 9
th BOD, 6
th session of 9
thSupervisoryCommittee, the 20
th
session of 9
th BOD and 11
th session of 9
thSupervisory Committee, the Company agreed to postpone the date thatthe project achieves the scheduled serviceable condition to the end of December 2021. However, the project has not beenimplemented because the construction site of the project has been temporarily occupied and the demand for freezers is uncertain dueto the change of market environment.
During the period, the company optimized the layout of the freezer‘s production capacity through intelligent upgrading andrebuilding, improved the freezer‘s production capacity and efficiency, and the freezer‘s production capacity has been able to meet themarket demand. The project had not been implemented, and the feasibility of the project had undergone major changes, if thecompany continued to implement the ―freezer intelligent construction project‖, it would not be able to achieve the expected economicbenefits and would face market and investment risks, therefore, in order to further improve the use efficiency of the funds raised bythe company, the resolutions of the 24
th meeting of the ninth board of directors, the 13
thmeeting of the ninth board of supervisors,and the 2
ndextraordinary shareholders meeting in 2019 agreed the company to change the unused raised funds of 120 million yuanfor the ―intelligent production line construction projects for annual increase of 600,000 sets of medium- and large-volumeenvironmentally-friendly and energy-saving freezers‖ and invest in the ―production base project for annual production of 2 millionsets of washing machines (Phase II)‖.
At the end of the reporting period, ―production base project for annual production of 2 million sets of washing machines (PhaseII)‖ were progressing smoothly. In terms of infrastructure construction, indoor fire protection systems and building renovations werecompleted, outdoor steel structures were completed, plant equipment foundations, steel platforms, and the secondary pipingconstruction except for the injection molding machine were completed. In terms of equipment, the main assembly of the roller finalassembly line was completed, the trial operation has started and the third batch of prototypes were trial-produced, the debugging ofthe cabinet riveting wiring program was completed, and the injection molding machine and supporting equipment could be installedand debugged after being delivered by the suppliers, and the paint spraying line was in the process of environmental impactassessment.
2.“Construction of intelligent R&D capability and new products development of the intelligent appliance technology ”
(1) the original planning construction period of ―Construction of intelligent R&D capability and new products development ofthe intelligent appliance technology‖ (hereinafter, the ―intelligent R&D project‖) is 3-year, and with purpose of regulating the use ofraised funds, being deliberated and approved by the resolution of the Board and Supervisory Committee, the Company agreed topostpone the date that the project achieves the scheduled serviceable condition to the end of December 2021.
(2) In order to accelerate the implementation of the company‘s ―intelligent research and development projects‖, ensure theindependence of intelligent research and development technology, shorten the development cycle of intelligent products, improve thecompany's research and development capabilities, and reduce the repeated investments in resources, the resolutions of the 31stmeeting of the ninth board of directors, the 16th meeting of the ninth board of supervisors, and the 4th extraordinary shareholders‘meeting in 2019 passed and agreed the company to change the use and investment of some of the funds raised in the ―intelligentresearch and development project‖, and use them to purchase intelligent infrastructure platform construction and software R & Dplatforms and other R & D assets from Sichuan Changhong Electric Co., Ltd. and its subsidiaries. The pricing of the relatedtransactions was subject to the appraised value of the underlying asset as of September 30, 2019, and the transaction price wasdetermined to be 46,617,300 yuan.
(3) As the construction of the ―intelligent research and development project‖ was completed and reached its intended use, inorder to improve the use efficiency of the raised funds, reduce the company's financial expenses, improve the company's liquiditysituation, and ensure the interests of shareholders, the resolutions of the 33rd meeting of the ninth board of directors of the company,the 17th meeting of the ninth board of supervisors, and the 1st extraordinary shareholders‘ meeting in 2020 passed and agreed thecompany to close the ―intelligent research and development project‖ and use the project‘s surplus raised funds of 125,084,220.44yuan (including interest income of 47,970,805.20 yuan from wealth management and deposits) as of November 30, 2019 and theinterest settled in the future to permanently supplement the company‘s working capital, and the specific amount was subject to theactual balance of the special account after deducting the balance of reserved contract and the guarantee deposit on the day the fundswere transferred out. At the same time, a total of 114,368,326.60 yuan, including the balance of the contract to be paid and theguarantee deposit would be reserved in the fund raising account and paid in accordance with the contract agreement.
(4) On January 15, 2020, the company withdrew the remaining raised funds, wealth management and interest income totaling126,766,362.64 yuan after deducting the balance of the contract to be paid and the guarantee deposit from the ―intelligent researchand development project‖ account for permanent supplements of the company‘s working capital. After the withdrawal, the remainingfunds of the special account of the raised funds amounted to 99,576,577.04 yuan, which would continue to be used to pay thecontract balance and guarantee deposit.
3.“Intelligent life project”
As the main body of the company‘s ―Intelligent life project‖, Changmei Technology used its own refrigeration equipmentmanufacturing advantages to look for new paths for enterprise development. However, due to the heavy asset burden, low turnoverrate, high operation and maintenance and property costs, it sustained losses. After careful research, the company considered that theoriginal business model of the smart life project was no longer competitive, if the company continued to implement the investmentproject with the raised funds, it would be difficult to achieve the expected investment income and may even generate greater losses.
In order to improve the use efficiency of raised funds, avoid further investment losses, focus on the main business, continue topromote the intelligent and high-end transformation and upgrade of major products, and safeguard the interests of shareholders, theresolutions of the 24th meeting of the ninth board of directors of the company, the 13th meeting of the ninth board of supervisors, andthe 2nd extraordinary shareholders‘ meeting in 2019 passed and approved the company to terminate the implementation of the―Intelligent life project‖ and use the remaining raised funds and financial management interest of the project to permanentlysupplement the working capital. During the reporting period, the company has withdrawn the remaining funds raised and interest
income from this account, a total of 305,843,051.27 yuan, to permanently supplement the company‘s working capital. After thewithdrawal, the remaining funds of the special account for the raised funds were 0 yuan, and the account was cancelled.At the same time, the company implemented the liquidation and cancellation of Changmei Technology Co., Ltd., the main bodyof the project, and is currently working on the liquidation and cancellation.
4. As of the end of the period, the investment progress of the ―Supplementary Liquidity Project‖ exceeded 100%, mainly due to theuse of raised funds including interest on deposits of raised funds.Note 2: Early investment and replacement with the raised fundEnded as 31 October 2016, the Company contributed self-raised fund 63,984,738.91 Yuan for the raised-fund investment project,the money has replaced as 63,984,738.91Yuan. Shine Wing CPA (LLP) made a special audit for pre-investment and carried out anAssurance Report on Invested Self-raised fund to the Raised-fund Investment Before Hand (XYZH/2016CD40285) (hereinafterreferred as to Assurance Report). Replacement are as:
In 10 thousand Yuan
| Raised-fund investment project | Total investment | Commitment capital for raised-fund project | Investment of self-raised fund invested till end of 31 October 2016 | Amount replaced |
| Construction of intelligent manufacturing project | 39,870.65 | 39,100.00 | 2,545.41 | 2,545.41 |
| Construction of intelligent R&D capability and new products development of the intelligent appliance technology | 55,900.00 | 55,900.00 | 2,053.06 | 2,053.06 |
| Intelligent life project | 32,076.00 | 32,000.00 | 1,800.00 | 1,800.00 |
| Total | 127,846.65 | 127,000.00 | 6,398.47 | 6,398.47 |
The replacement has been deliberated and approved by the 27
th session of 8
th BOD and 14
th session of 8
thsupervisory committee,independent directors are proposed an agreeable independent opinion, and sponsor institution carried out a verification opinionwithout objection.Note 3: Use purpose and destination of the raised funds un-usedThe raised-fund have not been used will continues to completed the corresponding investment according to the projectimplementation plan. Meanwhile, according to the raised-fund investment plan, and been deliberated and approved by the Board, theBoard of supervisors and shareholder general meeting at beginning of 2020, agreeable independent opinion from independentdirectors and with the verification opinion without objection issued by sponsor institution, it‘s agreed the Company to use the idleraised fund of no more than 199 million Yuan (the amount can be rolled over) to invest in principal-protected financial products, theremaining funds are deposit in the designated raised capital account.Use purpose of the raised-fund has no changes till recently.
3.Change of the raised funds
√Applicable □ Not applicable
In 10 thousand Yuan
| Project after changed | Corresponding original commitment item | Total raised funds plans to invest after change (1) | Amount actually invested in the period | Cumulative investment amount actually till end of Period-end (2) | Investment progress till end of period-end (3)＝(2)/(1) | Date of reach a predetermined state of use | Benefit achieved in the Period | Achieved expected benefits (Y/N) | Major changes of project feasibility after changed (Y/N) |
| Production line for the annual capacity of 2 million washing machines(Phase II) | freezer intelligent construction project | 12,000 | 3,418.446292 | 3,418.446292 | 28.49% | June 2020 | -- | -- | N |
| Supplementary the floating capital permanently | Intelligent life project | 30,584.305127 | 30,584.305127 | 30,584.305127 | 100% | -- | -- | Y | N |
| Purchase part of the assets of intelligent R&D project | Self-built part of the assets of intelligent R&D project | 4,661.73 | 0 | 0 | 0% | -- | -- | Y | N |
| Supplemented the working capital permanently with the surplus raised funds of intelligent R&D project | Constructed an intelligent R&D project (completed) | 12,676.636264 | 0 | 0 | 0% | 15 Jan. 2020 | -- | Y | N |
| Total | -- | 59,922.671391 | 34,002.751419 | 34,002.751419 | -- | -- | -- | -- | -- |
| Reasons for changes, decision-making procedures and information disclosure (explain by specific project) | 1. The company optimized the layout of the freezer‘s production capacity through intelligent upgrading and rebuilding, improved the freezer‘s production capacity and efficiency, and the freezer‘s production capacity has been able to meet the market demand. The project had not been implemented, and the feasibility of the project had undergone major changes, if the company continued to implement the ―freezer intelligent construction project‖, it would not be able to achieve the expected economic benefits and would face market and investment risks. Approved by the resolutions of the 24th meeting of the ninth board of directors, the 13th meeting of the ninth board of supervisors, and the 2nd extraordinary shareholders meeting in 2019 agreed the company to change the unused raised funds of 120 million yuan for the ―intelligent construction of freezer‖ invest in the ―production base project for annual production of 2 million sets of washing machines (Phase II)‖. Found more on relevant announcement (Notice No.: 2019-040, 2019-041, 2019-042 and 2019-047) released on 9 July 2019 and on 26 July respectively. 2. As the main body of the company‘s ―Intelligent life project‖, Changmei Technology used its own refrigeration equipment manufacturing advantages to look for new paths for enterprise development. However, due to the heavy asset burden, low turnover rate, high operation and maintenance and property costs, it sustained losses. After careful research, the company considered that the original business model of the smart life project was no longer competitive, if the | ||||||||
| company continued to implement the investment project with the raised funds, it would be difficult to achieve the expected investment income and may even generate greater losses. The resolutions of the 24th meeting of the ninth board of directors of the company, the 13th meeting of the ninth board of supervisors, and the 2nd extraordinary shareholders‘ meeting in 2019 passed and approved the company to terminate the implementation of the ―Intelligent life project‖ and use the remaining raised funds and financial management interest of the project to permanently supplement the working capital. Found more on relevant announcement (Notice No.: 2019-040, 2019-041, 2019-043 and 2019-047) released on 9 July 2019 and on 26 July respectively. 3. In order to accelerate the implementation of the company‘s ―intelligent research and development projects‖, ensure the independence of intelligent research and development technology, shorten the development cycle of intelligent products, improve the company's research and development capabilities, and reduce the repeated investments in resources, the resolutions of the 31st meeting of the ninth board of directors, the 16th meeting of the ninth board of supervisors, and the 4th extraordinary shareholders‘ meeting in 2019 passed and agreed the company to change the use and investment of some of the funds raised in the intelligent R&D ability construction and Development on new products of Household Technology (hereinafter, the ―intelligent research and development project‖), and use them to purchase intelligent infrastructure platform construction and software R & D platforms and other R & D assets from Sichuan Changhong Electric Co., Ltd. and its subsidiaries. The pricing of the related transactions was subject to the appraised value of the underlying asset as of September 30, 2019, and the transaction price was determined to be 46,617,300 yuan. Found more on relevant announcement (Notice No.: 2019-077, 2019-078, 2019-079 and 2019-087) released on 30 October 2019 and on 28 December respectively. 4. As the construction of the ―intelligent research and development project‖ was completed and reached its intended use, the resolutions of the 33rd meeting of the ninth board of directors of the company, the 17th meeting of the ninth board of supervisors, and the 1st extraordinary shareholders‘ meeting in 2020 passed and agreed the company to close the ―intelligent research and development project‖ and use the project‘s surplus raised funds of 125,084,220.44 yuan (including interest income of 47,970,805.20 yuan from wealth management and deposits) as of November 30, 2019 and the interest settled in the future to permanently supplement the company‘s working capital, and the specific amount was subject to the actual balance of the special account after deducting the balance of reserved contract and the guarantee deposit on the day the funds were transferred out. At the same time, a total of 114,368,326.60 yuan, including the balance of the contract to be paid and the guarantee deposit would be reserved in the fund raising account and paid in accordance with the contract agreement. Found more on relevant announcement (Notice No.: 2019-088, 2019-089, 2019-091 and 2020-002) released on 26 December 2019 and on 11 Jan. 2020 respectively. On January 15, 2020, the company withdrew the remaining raised funds, wealth management and interest income totaling 126,766,362.64 yuan after deducting the balance of the contract to be paid and the guarantee deposit from the ―intelligent research and development project‖ account for permanent supplements of the company‘s working capital. After the withdrawal, the remaining funds of the special account of the raised funds amounted to 99,576,577.04 yuan, which would continue to be used to pay the contract balance and guarantee deposit. | |
| Conditions and reasons of failure to meet schedule or predicted income (by specific projects) | Not applicable |
| Presentation on the major changes in project feasibility after changed | N/A |
VI. Sales of major assets and equity(i) Sales of major assets
□Applicable √ Not applicable
No major assets are sold in the period(ii) Sales of major equity
□Applicable √ Not applicable
VII. Analysis of main holding company and stock-jointly companies
√Applicable □ Not applicable
(i) Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
| Company name | Type | Main business | Register capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Zhongke Meiling Cryogenic Technology Co., Ltd. | Subsidiary | Research and development, manufacturing and sales of ultra-low temperature freezer | 68,640,300 | 309,500,258.51 | 154,359,114.08 | 222,867,915.68 | 18,925,495.41 | 16,517,245.60 |
| Jiangxi Meiling Electric Appliance Co., Ltd. | Subsidiary | Manufacturing of refrigeration and freezer | 50,000,000 | 278,394,484.83 | 103,784,889.48 | 964,046,994.20 | 10,899,467.16 | 10,899,867.16 |
| Mianyang Meiling Refrigeration Co., Ltd. | Subsidiary | Manufacturing of refrigeration and freezer | 100,000,000 | 131,681,596.40 | 119,443,440.13 | 294,954,937.05 | 2,408,485.89 | 2,438,371.51 |
| Sichuan Changhong Air-conditioner Co., Ltd. | Subsidiary | R&D, manufacturing and domestic sales of air-conditioning | 850,000,000 | 2,877,152,635.65 | 1,289,120,047.03 | 4,433,502,406.44 | -74,204,533.09 | -85,189,135.69 |
| Zhongshan Changhong Electric Co., Ltd. | Subsidiary | R&D, manufacturing and foreign sales of air-conditioning | 184,000,000 | 911,234,316.54 | -10,199,534.15 | 1,988,177,094.35 | -37,301,441.28 | -47,929,658.88 |
| Hefei Meiling Group Holdings Limited | Subsidiary | Sales of white goods | 80,000,000 | 1,358,945,884.47 | -88,824,059.00 | 4,470,160,912.06 | 26,425,053.68 | 26,607,807.69 |
| Guangdong Changhong Ridian Technology Co., Ltd. | Subsidiary | R&D, manufacturing and sales of kitchen and toilet products, small home appliances and water purifier | 83,000,000 | 524,315,275.74 | 155,582,873.62 | 629,710,961.93 | 21,745,971.94 | 19,614,873.59 |
(ii) Subsidiary obtained and disposed in the period
√Applicable □ Not applicable
| Company name | The method of obtaining and disposing subsidiaries during the report period | The influence to the whole production and performance |
| Hefei Meiling Wulian Technology Co., Ltd. | Investment and Establishment | The company's wholly-owned subsidiary is invested by the Company with a capital investment of 10 million yuan. This company's establishment aims to further enhance the products‘ technology research and development capabilities in intelligence, frequency conversion, fresh-keeping, etc., while providing a platform for the incubation of the company's internal new technology. It has little impact on the company's overall production operations and performance. |
| Anhui Tuoxing Science and Technology Co., Ltd. | Investment and Establishment | Controlling subsidiary of the Company and established with 10 million Yuan contributed from subsidiary of the Company Zhongke Meiling. The enterprise established aims to expand the business of Zhongke Meiling in field of biological medical treatment. It has little impact on the company's overall production operations and performance. |
| Nanchang Xiangyou Electronic Appliance Marketing Co., Ltd | Clearing off | Minor effect on the overall production and operation and performance of the company |
| Changsha Meizlai Electronic Appliance Marketing Co., Ltd | Clearing off | Minor effect on the overall production and operation and performance of the company |
| Zhongshan Hongling Trading Co., Ltd | Clearing off | Minor effect on the overall production and operation and performance of the company |
(iii) Description of the holding company and stock-jointly companiesThe Company has no major holding and stock-jointly enterprise should be disclosed in the periodVIII. Structured entity controlled by the Company
□Applicable √ Not applicable
IX. Future Development Prospects(i) Competition pattern and development trend
In 2019, affected by the investment increase of real estate and the slowdown in the growth of sales of commercialhousing, consumers have gradually slowed the growth of new demand for traditional household appliances, andthe performance of the Chinese home appliance market has been flat. At the same time, 2020 is an important timepoint for China‘s economy to shift to focusing on development quality and the continuous advancement of―supply-side structural reforms‖, the continued novel coronavirus pneumonia epidemic has delayed theresumption of work and production of home appliance companies, and the company will face the risks of weak
macroeconomic growth, gradual weakening of the industry‘s traditional growth momentum, labor shortage, risingraw material prices, substantial increase in transportation costs and human resource costs, and cross-bordercompetition among internet enterprises.
With the gradual increase in the holdings of traditional home appliances, the proportion of renewal demand intotal demand has increased significantly, which is the main driving force for market growth at the current stage. Atthe same time, differentiated products and products touching the consumers‘ pain points and emerging homeappliances that can further improve the life experience of residents will become another momentum of marketgrowth.
1. Macro environment analysis
(1) economic environment
After two years of steady expansion of the global economy, the downside risks have increased significantly,and most countries‘ economic growth tends to weaken. Major financial institutions and organizations havelowered their forecasts for global economic growth in 2020. Although China's economy as a whole was operatingsteadily and staying within the target range in 2019, the trend of unilateral trade protectionism dominated by theUnited States has swept the globe, Sino-U.S. trade frictions have been temporarily suspended, and geopolitics andpublic opinion games will continue, Brexit and other factors have led to instability in Europe, and there are stillmany factors of global economic instability.
In addition, affected by the domestic and global novel coronavirus pneumonia epidemics, according toCMM‘s forecast, the growth of the domestic appliance market in 2020 is ―negative‖, and the decline in exportbusiness will be further expanded.
(2) Market potential
After the rapid growth period, the popularity rate of home appliance products is relatively high, and themarket has shifted from an incremental market to a stock market. The market for the home appliance industry hasseen a significant downward trend, the industry is facing insufficient demand, and the performance growth ofhome appliance companies has been in a trough period. The increase in e-commerce penetration, and changes inthe industry‘s promotional nodes, and the impact of the novel coronavirus pneumonia epidemic have made thepeak season for home appliance sales two months after the Spring Festival in recent years no longer exist. China‘seconomy has entered an important time point for continued reform; the real estate investment, the growth ofcommercial housing sales, and the slowdown in new consumer demand for household appliances have graduallyweakened the growth capacity of the home appliance industry. In addition, in the context of the novel coronaviruspneumonia epidemic, based on changes in consumer demand, health and intelligence will become one of themajor consumer pain points in the market. In recent years, home appliance products have a lot of room forimprovement in these two aspects, the advantages of healthy, intelligent and functional products have graduallyemerged, which has become the trend of home appliance industry transformation and consumption upgrade.
2. Refrigerator (freezer) industry
The inconvenience of road traffic caused by the spread of the novel coronavirus pneumonia epidemic in early2020 has stimulated the consumer‘s ―stock up‖ thought, the consumers‘ demand for refrigerator (freezer) capacityshall expand to a certain extent, the proportion of French, and side-by-side door will continue to increase.Secondly, the long-term storage of fruits and vegetables also reflects the advantages of fresh keeping products,and consumer acceptance of fresh keeping products will further increase. Finally, after the epidemic, consumers‘health and hygiene awareness will also enhance, and the importance of the internal storage environment ofrefrigerators will rise to the next level, the sterilizing and odor removing refrigerator products will also become anew choice.
3. Air-conditioning industry
Affected by the continued sluggish market, the air-conditioning industry has been dragged into the quagmireof ―price war‖, leading brands significantly has reduced their prices, the brand concentration has further increased,the industry competition has intensified, and the second and third tier brands are facing greater pressure. From theperspective of market channels, the online e-commerce platform market continues to grow significantly, and theoffline market is shrinking further. At the same time, the industry is gradually adapting to the impact of the sinkingof e-commerce channels and the network batch mode, and has strengthened the online and offline integratedoperations one after another. Facing the sluggish market, major brands in the industry are constantly seeking newgrowth points through multi-brand development and product innovation. On the one hand, under the general trendof consumer classification, more and more brands adopt separate development strategies for high-end and low-endbrands to meet the needs of different consumers. On the other hand, high-end brands and products continue toinnovate, as industry hotspots such as self-cleaning, comfortable air, and intelligence continue to grow, and newindustry hotspots such as fresh air conditioning have appeared.
In 2020, the overall air-conditioning market will continue its adjustment trend in 2019, the market continuesto be sluggish. With the impact of the novel coronavirus pneumonia epidemic and the implementation of newenergy efficiency policies, the industry‘s uncertainty is further intensified, the competition is extremely fierce, butthe industry‘s tendency to change becomes more obvious, and new channels and industrial structure upgradesusher in new development opportunities. Consumer health awareness will be further enhanced, and attention tofresh air will be further enhanced. In addition, the heat of health air-conditioning products with functions such aspurification of PM2.5, sterilization, dust removal, humidification, and increase of oxygen content will increase.The penetration rate of cleaning air-conditioning market will also further increase; the comfort-typeair-conditioning products to solve direct wind are also selling points to consumers; stimulated by the new energyefficiency policy, the proportion of sales of energy-saving products will continue to increase, and the price warwill continue.
4. Washing machine industry
After the ―Home Appliances Going to the Countryside‖ policy exited, the holding quantity of 100 householdsof washing machine products reached a high level, the industry entered the inventory cycle, and demand tightened.In the context of weak market demand becoming a normal, the main characteristics of the washing machine
industry at this stage are consumption upgrades, the market is transforming and upgrading to quality, and productscontinue to be iteratively updated. From the perspective of product types, washing machine upgrades are mainlyconcentrated in the washing and drying machine market, while from the perspective of washing capacity, they areaffected by demand factors such as the placing space and the rising proportion of small residential households, theupgrade trend is mainly concentrated at 10KG, from the perspective of market segment, the washing machinemarket presents new trends of the health represented by sterilization function, the specialization directed bywashing and care, and the sceneization represented by ultra-thin.In 2020, the washing machine market will still be based on steady development. With the rapidpopularization of mobile communication equipment in recent low-line areas and the decline of online trafficdividends, the washing machine market still maintains a structural traffic dividend, and consumer willingness andconsumption potentiality in rural areas become stronger. At the same time, under the effect of the epidemic,residents‘ awareness of health protection will rapidly increase, drum washing machines with high-temperaturewashing programs and pulsator washing machines with heating washing will become hot products in the market.After the epidemic is over, market education will deepen, and people will pay more attention to healthy washing.Under the concept of health, traditional high-temperature sterilization products, other products with multiplesterilization methods, classified washing products, and mini washing machine products will gain developmentopportunities.
In general, the home appliance industry has entered a consolidation phase, and the demand for refrigeratorand washing machine is almost saturated, there is still some room for popularization of air conditioners in therural market. From the demand side, the need for new replacements is less urgent than the popularization needsand is easily affected and suppressed by the epidemic, the total data of AVC predicts that the omni-channel retailsales of refrigerators, washing machines and air conditioners in 2020 will be -7.6%, -7.1% and -7.3% respectivelyon a year-on-year basis.(ii) Development strategy
1. Vision
Be a leading brand in China, World Class and respectable household appliance enterprise.
2.Strategy direction
Focus on ―products leadership, efficiency breakthrough, intelligent IoT, open cooperation‖, become a creatorwho makes people‘s lives become healthier and better, and realize the ―Meiling Dream‖ of becoming a Chinaleading, world-class and respectable home appliance company China‘s leading, world-class and respected homeappliance company.(iii) Business policy
The company‘s operation policy in 2020 is ―product leadership, marketing transformation, efficiencybreakthrough, and team activation‖, creates hard-core technology in products, advance faster in the market than itscompetitors, have sustainable hematopoietic functions in operations, and establish incentive mechanism of―striving hard without lifting your own whip‖.Product leadership: continue to adhere to ―productism‖, attach importance to product development,increase investment in research and development, increase the success rate of new products to market, andcontinue to create value. With product planning as the traction, energize the sales through technology, R & D, andmanufacturing, and energize for efficiency improvement, and continuously improve product market performanceand competitiveness.
The company builds ―first-class manufacturing‖ through ―improvement of quality, taste and brand‖, ―five-izationand two easy‖, and digital transformation; focuses on product quality details, and implementing quality isdesigned and manufactured, every detail link must be implemented, the market is a measurement of whether ourquality is in place, we has to focus on the key issues reflected by the market to ensure that the product is of highquality.
In 2020, the company will continue to adhere to the two core strategies of intelligence and frequencyconversion, take the M-fresh series and thin-walled series products as starting point to create Meiling‘s corecompetitiveness of ―fresh, thin, embedding‖, continue to promote the development of large-volume refrigerator &freezer, M-fresh refrigerator & freezer, thin-walled products, intelligent and inverter products, focus on boutiqueand hot products, mainly promote the second-generation products of M Fresh and thin-walled series. From therefrigerator fresh keeping and heat transfer mechanism, white goods intelligent fault diagnosis algorithm, airconditioning human comfort mechanism research and lean R & D innovation platform, select hard-coretechnology projects that have great value for users, continue to tackle key issues, and strive to solve consumerpain points, build the industry‘s leading and best products in the world, realize the transformation and upgradingof product structure, and support the implementation of serving the country through industry. At the same time,washing machine products strive to shape the ―ultra-thin, zero-displacement‖ and ―one-button smart washing‖product labels; kitchen and bathroom appliances, and small appliances respectively take the directions of ―smartkitchens‖ and ―water ecological appliances‖ to continuously increase the industry‘s influence.Marketing transformation:
Continue to promote the digital transformation of marketing business, reconstructing three systems withdigitization as the core, namely, establishing a marketing management system with terminal retail as the core,establishing a value management system with retail price as the core, and establishing an operation managementsystem with customer‘s business inventory as the core, actively explore intelligent trading mode. In the domesticmarket, refrigerator and freezer products focus on trendy and hoarding users, strive to create ―boutique‖ + ―hot‖products, continue to lead in ―thin‖ ―fresh‖ ―embedding‖ technologies; air-conditioning products focus on early
adopters and practical users, concentrate on the ―boutique‖ + ―hot‖ products strategy, create brand name cards for―good air‖ and ―good sleep‖ of air conditioning; washing machines focus on ―consolidating basic channels,developing O2O, breaking through TOP customers, starting export sales and OEM / ODM business‖ to carry outwork; kitchens and bathrooms, and small home appliances are working around the strategies of ―strengtheningnew retail and system integration‖ and ―fine products, live channels‖. In terms of overseas markets, the companycontinues to pursue the transformation from pursuing scale to pursuing both scale and profit, continues to improvethe product structure and consolidate the transformation results, at the same time, based on the balance of quantityand profit, we will rely on OEM as a scale support to further improve profitability.Efficiency breakthrough:
Keep up with the industry benchmark, continuously deepen in practice, emphasize that efficiencyimprovement cannot be limited to comparison with oneself, implement ―efficiency is life‖, and achievebreakthroughs in four aspects including capital efficiency, per capita output, single product output, and costreduction to drive the overall efficiency of the company.Team activation:
Formulate strategic planning and implement the ―Yongquan Plan‖, the company has formulated the 14thFive-Year Plan for Human Development, which provides strategic guidance for human resource transformation,talent organization development, and talent incentives. Through the implementation of the ―Yongquan Plan‖,establish a key talent selection mechanism, continue to complete the selection and training of management talents,strengthen the construction of professional and technical talent teams, and improve the company‘s talent reserveconstruction.
Establish the mechanism of ―tapping full potential of talents‖: adhere to the management cadre competitionmechanism, promote the ―two dares‖, that is, dare to make an exception for selecting high-potential talents, dareto eliminate inefficient cadres, and stimulate the team‘s wolf spirit; establish an interchange and dual-channeltalent development mechanism that integrates management lines and professional lines, break the ceiling for talentdevelopment; innovate the credit system to quantify the evaluation criteria and value contribution of R & Dtechnicians, and stimulate the innovation and initiative of R & D technicians.
Establish an incentive mechanism of ―striving hard without lifting your own whip‖: incentives can beexpected, contracting can be implemented, and guarantees for ―brave‖, ―morality‖, and ―intelligence‖ can beprovided; ―four-wheel drive‖ (career, authorization, income, equity) system manages the backbone and activatesthe end, thereby effectively motivating strugglers and entrepreneurs; reduce internal transaction costs, graduallyweaken KPIs, and actively challenge high goals and achieve high growth matching with high incentives.
3. Market strategy
(1) Refrigerator (freezer)
Continue to adhere to the intelligence and frequency two core product strategy; speed up the development
and upgrading of a new generation of intelligent product, implement the Company's intelligent strategy, andenhance the proportion of high-end products. Vigorously invest in basic technology research and productupgrading, continue to carry out intelligence, frequency, forced air cooling, refreshment, thin-wall and othertechnical researches, maintain technology-leading in the industry, promote the Company's product structure toupgrade to high end and intelligence, and drive the Company's industrial transformation and upgrading. By givinggreat impetus to ―enhancing the three-qualities‖, ―five -ization and three easy‖ and ―first-class manufacturing‖,comprehensively improve the efficiency and quality, reduce the product costs and enhance the comprehensivecompetitiveness of products .
In the domestic market, in the context of consumer grading, we adhere to the strategy of ―boutique‖ + ―hot‖products. On the one hand, start from satisfying high-value users pursuing quality of life, adhere to the boutiquestrategy, and continue to build Meiling‘s core competitiveness of ―fresh, thin, embedding‖ through strategies suchas fresh keeping leadership, embedding enhancement, appearance upgrade, and taste improvement, and strengthenits own profitability; on the other hand, start from satisfying low-income users pursuing high performance-to-priceratio, adhere to the ―hot‖ products strategy, and continue to improve the extreme performance-to-price ratio of hotproducts through strategies such as cost reduction and efficiency improvement, and quality improvement, andpromote stable growth in scale.In the overseas markets, quickly expand the scale on the premise of reasonable profits, continue to do a goodjob in ―focusing on products, focusing on markets, focusing on customers‖, and improve product competitivenessthrough continuous promotion of air cooling, inverter, and large volume products; constantly increase marketshare by focusing on strategic markets, key markets, and potential markets, and constantly increase market share;focus on strategic customers and key customers, develop potential customers, and focus and increase customerconcentration.
(2) Air-conditioning
In the domestic market, take the user as the center, seize the opportunities of the company reform andstrategic customer development, implement the ―boutique + hot prodcuts‖ strategy, adhere to the dual brandoperation of ―CHiQ‖ and ―Changhong‖ to create ―good air‖ + ―good sleep‖ products; focus on strong areas tocreate base markets, innovate marketing mode and focus on channels in weak areas; deepen channeltransformation on channels, actively embrace new channels, integrate online and offline operations, focus one-commerce, own channels, and O2O. Adhere to the goal-oriented and striver-oriented, establish value-creationsharing mechanism, strengthen the core technology capacity building such as frequency conversion, intelligenceand simulation, consolidate the foundation, force management, shorten the gap with competing products in cost,delivery time, appearance, quality and service, and continue to create greater value for customers.
In the overseas markets, work on ―improving efficiency, adjusting structure, promoting transformation, and
controlling risks‖, continuously improve product definition and service capabilities, promote the transformationfrom foreign trade thinking into marketing thinking, focus on core customers in key markets, and pay closeattention to the development of blank markets.
(3) Washing machine
Carry out marketing work around ―consolidating basic channels, developing O2O, breaking through TOPcustomers, starting export sales and OEM / ODM business‖, according to the strategic choice of ―excellent qualityand product differentiation‖, take ―quality first‖ and ―follow + innovation‖ as the product quality control strategyand product development strategy, shape the ―ultra-thin, zero-displacement‖ and ―one-button smart washing‖product labels, and build the core competitiveness of the product.
(4) Kitchen and bath, small household appliances
Continue to deepen the ―smart kitchen‖ concept, complete the smart kitchen product array and systemsolutions with ―voice‖ as the entrance, attach importance to usability and practicality, and enhance the smartkitchen operation and scene-based experience. At the same time, focus on the ―water ecological home appliances‖product line, focus on core strengths to create advantageous core product lines, and continuously improve theindustry influence.
(5) Bio-medical care
Unswervingly implement the strategy based on the related diversification in the bio-medical field, center onthe business framework layout of life science, smart cold chain, and family health, promote the product upgradeand service improvement of life science module. Based on cold storage business, rely on life sciences channelsystem and steadily expand the smart cold chain module, at the same time, promote the listing of household healthproducts such as atomizers and oxygen generators, quickly open the market, and promote the company‘s rapidgrowth.
The above business plan and business objectives do not represent the listed Company‘s profit forecast of2020, whether it can be achieved depends on the changes in market condition, the efforts of management team andother factors, there are a lot of uncertainties, investors should pay special attention to it.(iv) Possible risks and countermeasures
In the face of the home appliances market competition is more intense and other objective factors,thesurvival environment of enterprise will be even worse. In 2020, the Company will face risks as weakmacroeconomic growth, severe industry situation, spreading COVID-19 worldwide ,intensified competition andrising costs,Sino-US trade war, new business models and impact of the internet era.
1. Macroeconomic downside risks
After years of rapid growth after the reform and opening up, China's economy has entered a ―new normal‖ ofdeclining year by year. The products produced and sold by the company are consumer electrical products, and themarket demand is usually affected by the macroeconomic and consumer consumption levels. Affected by the
novel coronavirus pneumonia epidemic, China‘s economy faces greater pressure in the first quarter of 2020,which has a certain impact on consumers‘ income, purchasing power and willingness to buy. In addition, theuncertainty of the future development of real estate will also affect the needs of residents to purchase consumerappliances to a certain extent. If the future economic growth continues to slow down or decline, the demand andgross profit margin of the home appliance industry may be lower, which will adversely affect the company‘sprofitability.
2. Risk of spreading COVID-19 worldwide impacting the global economic growth
Since beginning of 2020, the COVID-19 epidemic has a strong impact on economic development in and outof China, home appliance in domestic market presents a ―negative growth‖ trend. Meanwhile, with the expansionand spreading of the epidemic in the world, the adverse impact on home appliances industry aboard is graduallyincreasing. In view of the unpredictable trend and impact of the global epidemic, if the spread of the epidemic isnot effectively contained in global scope for a long time, export business of the Company will suffer declines,which may bring greater market risk to the Company‘s production and operation.
3. Severe industry situation and tough competition
China's home appliance industry is a complete competing industry, there are many domestic andforeign-funded household appliances manufacturers providing products with a higher degree of homogenizationand fierce competition. With the withdrawal of national preferential policy, the industry broader market continuesto decline, the industry enters into aggressive growth from large-scale growth, the industry brand concentrationfurther strengthens, and the competition among the brands shows a new situation of oligarchy and giantcompetition. In recent years, the transformation and upgrading of the industry have been speeding up, and thecompetition for new energy efficiency in the industry has been normalized. Whoever can faster and moreaccurately grasp the opportunity of new energy efficiency switching will be able to enhance the competitivenessof products to a greater extent. If you can't accurately judge and follow the market dynamics of the industry, youmay be eliminated.
4. Impact of cross-border Internet industry and challenges of new business model
With the arrival of Internet era and artificial intelligence era, the Internet enterprises continue to crossboarder and swarm into intelligent home fields, which intensifies competition in the industry, subversive changesmay occur at any time, and traditional household appliance enterprises are facing serious challenges. At the sametime, under the impact of Internet economy and new business model, the home appliance manufacturers areactively promoting the transformation, new business model and new products emerge one after another in thehome appliance industry, the development of intelligent home appliances changes quickly, if unable to make rapidresponse or catch up with the development trend, it may be easily replaced or even completely subverted. Newrules of the game bring strong sense of crisis and sense of urgency to the enterprises.
5. Human resources risk
Household appliance industry is an industry with relatively intensive capital, technology, and labor. With the
gradual expansion of the company's business scope and scale, and the arrival of intelligent home appliances andthe impact of Internet, the company will greatly increase the demands for high-level management personnel,technical personnel, and innovative talents, talent introduction becomes one of the key points for human resourcesmanagement, if it cannot effectively enhance the company's attraction to high-quality talents from various aspects,the company's future development will be subject to constraints. At the same time, in its intelligent manufacturingtransformation period, the company needs higher requirements to the technical capacity and professional qualityof workers at the production line, the improvement for the company's product quality will be influenced if thecomprehensive quality of workers at the production line can not be enhanced. In addition, with the increase inorders, the demand for workers at the production line is increasing, but affected by the supply and demand in labormarket and the continuous rising labor costs, the company's cost pressure will be further enlarged.In view of the above risks, and combined with industry trend of 2020 and the insufficient in 2019, thecompany will continue to adhere to the business policy of ―product leadership, marketing transformation,efficiency breakthroughs, and team activation‖ in 2020, strengthen benchmarking, and quickly improve, and makeadvance arrangements in products, technologies, and markets so as to realize the high-end and intelligenttransformation of the company‘s products, while enriching product lines and creating a comprehensive appliancecompany. The company will carry out the following specific key work:
1. Technology and quality
Continue to carry out technical research on intelligence, frequency conversion, air cooling, fresh keeping,and thin wall, and attach great importance to product technology and quality. Aim at the focus issue of userexperience, implement it to the responsible person and to the specific solutions, and promote the solution ofproblem to maintain the company‘s industry- leading position in technology and quality and continue to improveproduct quality.
2. Improve efficiency and reduce costs
Continue to promote the company‘s work to increase revenue and reduce costs. On the one hand, thecompany‘s marketing end focuses on e-commerce, basic channels, TOP channels, and 2B business, andcontinuously increases the market share of product; on the other hand, all business units focus on various expenses,sort them out item by item, rigidly control various expense budgets, and put them into practice. At the same time,improve the organizational and personnel efficiency of the company‘s various product units, and from marketingheadquarters to branches.
3.Supply chain and manufacturing
Pay attention to the fluctuation of bulk materials, continue to promote the cost reduction of procurement andincrease the material return; pay attention to fund operation efficiency, improve the turnover rate of receivablesand inventory; continue to implement ―first-class manufacturing‖, ―less people engineering‖, ―smart production‖and ―intelligent manufacturing‖ etc. to comprehensively improve efficiency and quality, reduce product costs andenhance the company‘s product competitiveness.
4. Sales
Accelerating marketing transformation and unifying marketing service platforms to better adapt to majorchanges in market competition and consumer consumption behavior; accelerating brand and product collaboration,business and management integration to achieve overall efficiency improvement and cost reductions; activelyexploring interactive new marketing model under epidemic conditions to improve e-commerce organization, andfocus on continuously strengthening e-commerce products, prices, product rendering, product placeholder, onlineretail, and spot rate. Seize the market opportunity for home appliance demand after the novel coronavirusepidemic is over, and formulate corresponding sales strategies based on different markets.
5. Talent mechanism guarantees
Accelerate the implementation of the ―Yongquan Plan‖, and realize ―tapping full potential of talents‖ throughthe incentive mechanism of ―striving hard without lifting your own whip‖. Install a four-wheel drive system(career, authorization, income, and equity) for Meiling strugglers who are willing to struggle; effectively promotethe ―two dares‖, i.e. dare to make an exception for promoting high-potential talents, dare to eliminate inefficientcadres, and stimulate the team‘s wolf spirit; at the same time, promote dual channels for core talents, and providetalents with more adequate development paths from management lines and professional lines.
X. Reception of research, communication and interview(i) In the report period, reception of research, communication and interview
√Applicable □ Not applicable
| Time | Way | Type | Basic situation index of investigation |
| 26 Feb. 2019 | Field research | Institute | https://view.officeapps.live.com/op/view.aspx?src=http%3A%2F%2Fstatic.cninfo.com.cn%2Ffinalpage%2F2019-02-27%2F1205854486.doc |
| 2 Jul. 2019 | Field research | Institute | https://view.officeapps.live.com/op/view.aspx?src=http%3A%2F%2Fstatic.cninfo.com.cn%2Ffinalpage%2F2019-07-03%2F1206425298.doc |
| 27 Nov. 2019 | Field research | Institute | https://view.officeapps.live.com/op/view.aspx?src=http%3A%2F%2Fstatic.cninfo.com.cn%2Ffinalpage%2F2019-11-28%2F1207121910.doc |
| 18 Dec. 2019 | Field research | Institute | https://view.officeapps.live.com/op/view.aspx?src=http%3A%2F%2Fstatic.cninfo.com.cn%2Ffinalpage%2F2019-12-19%2F1207179544.doc |
| Reception (times) | 4 |
| Number of hospitality | 20 |
| Number of individual reception | 0 |
| Number of other reception | N/A |
| Whether to disclose, release or divulge material information that is not publicly available (Y/N) | N |
Section V. Important EventsI. Profit distribution plan of common stock and capitalizing of common reserves plan(i) Formulation, Implementation and Adjustment of common stock Profit Distribution Policy EspeciallyCash Dividend policy during the Reporting Period
√Applicable □ Not applicable
During the reporting period, the company has strictly executed the profit distribution policy in accordance withthe "Articles of Association", the formulation and implementation of the company's cash dividend policy are inline with the provisions of "Articles of Association" and the requirements of the resolutions of shareholders'meeting, the dividends standards and proportion have been definite and clear, relevant decision-makingprocedures and mechanisms have been complete, the responsibilities of independent directors have been clear andhave played its due role, minority shareholders have had the opportunities to fully express their views andaspirations, and the legitimate interests of minority shareholders have been maintained. In addition, the―2018-2020 Shareholder Return Plan‖ approved by the company's board of directors and the resolutions ofshareholders‘ general meeting has made clear plans for the form and priority of profit distribution, the interval ofprofit distribution, the specific conditions and proportions of cash dividends, and the specific conditions forissuing stock dividend.
In the reporting period, the Company implemented Profit distribution plan for year of 2018, that is, distribute 0.6Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on total sharecapital 1,044,597,881 shares dated 31 December 2018 (including 881,733,881 shares of A-share and 162,864,000shares of B-share), cash dividend of 62,675,872.86 Yuan was distributed in total.
| Special explanation on cash dividend policy | |
| Satisfy regulations of General Meeting or requirement of Article of Association (Y/N): | Y |
| Well-defined and clearly dividend standards and proportion (Y/N): | Y |
| Completed relevant decision-making process and mechanism (Y/N): | Y |
| Independent directors perform duties completely and play a proper role (Y/N): | Y |
| Minority shareholders have opportunity to express opinions and demands totally and their legal rights are fully protected (Y/N): | Y |
| Condition and procedures are compliance and transparent while the cash bonus policy adjusted or changed (Y/N): | Y |
(ii) Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan (pre-plan)in latest three years (including the reporting period)
1. Profit distribution plan for year of 2017
Distribute 0.6 Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based ontotal share capital 1,044,597,881 shares dated 31 December 2017, cash dividend of 62,675,872.86 Yuan wasdistributed in total.
2. Profit distribution plan for year of 2018
Distribute 0.6 Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based ontotal share capital 1,044,597,881 shares dated 31 December 2018, cash dividend of 62,675,872.86 Yuan wasdistributed in total.
3. Profit distribution plan for year of 2019
Distribute 0.5 Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based ontotal share capital 1,044,597,881 shares dated 31 December 2019, cash dividend of 52,229,894.05 Yuan wasdistributed in total.
The pre-plan had been deliberated and approved by the board of directors, and it need to be submitted the annualshareholders‘ general meeting of 2019 for its consideration.(iii) Cash dividend of common stock in latest three years (including the reporting period)
In RMB
| Year for bonus shares | Amount for cash bonus (tax included) | Net profit attributable to common stock shareholders of listed company in consolidation statement for bonus year | Ratio of the cash bonus in net profit attributable to common stock shareholders of listed company contained in consolidation statement | Proportion for cash bonus by other ways(i.e. share buy-backs) | Ratio of the cash bonus by other ways in net profit attributable to common stock shareholders of listed company contained in consolidation statement | Total cash bonus (including other ways) | Ratio of the total cash bonus (other ways included) in net profit attributable to common stock shareholders of listed company contained in consolidation statement |
| 2019 | 52,229,894.05 | 56,441,479.14 | 92.54% | - | - | 52,229,894.05 | 92.54% |
| 2018 | 62,675,872.86 | 38,658,256.97 | 162.13% | - | - | 62,675,872.86 | 162.13% |
| 2017 | 62,675,872.86 | 32,473,204.92 | 193.01% | - | - | 62,675,872.86 | 193.01% |
(iv) The Company gains profits in reporting period and the retained profit of common stock shareholdersprovided by parent company is positive but no plan of cash dividend proposed of common stock
□Applicable √ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
√Applicable □ Not applicable
| Bonus shares for every 10-share (Share) | 0 |
| Dividends for every 10-share (RMB) (Tax included) | 0.5 |
| Shares added for every 10-share base (Share) | 0 |
| Equity base of distribution plan (Share) | 1,044,597,881 |
| Total cash dividend (RMB) (Tax included) | 52,229,894.05 |
| Cash dividend for other ways (i.e. repurchased) (RMB) | 0 |
| Total cash dividend (including other way) (RMB) | 52,229,894.05 |
| Profits available for distribution (RMB) | 884,127,743.42 |
| Ratio of cash dividend (including other way) in total profit distribution | 100% |
| Cash dividend | |
| Distribute 0.5 Yuan (tax included) in cash for every 10 shares held by all shareholders of the Company based on total share capital 1,044,597,881 shares dated 31 December 2019, cash dividend of 52,229,894.05 Yuan was distributed in total. | |
| Detail explanation on profit distribution or capitalization from capital public reserve | |
| For year of 2019, the individual statement of the parent company show net profit of 111,361,168.18 Yuan, according to the auditing from Shine Wing Certified Public Accountants (LLP). In accordance with relevant regulations, the retained profit at beginning of Current Year amounted as 908,358,682.91 Yuan, deducted the 2018 profit distributed 62,675,872.86 Yuan and after extract for statutory surplus reserve 11,136,116.82 Yuan, the retained profit in individual statement of the parent company cumulative counted as 945,907,861.41 Yuan at end of 2019. In addition, for year of 2019, the net profit attributable to owners of parent company amounted as 56,441,479.14 Yuan, accumulated retained profit according to the consolidated statement at the end of 2019 counted as 884,127,743.42 Yuan. Pursuit to relevant rules and regulation of Article of Association, and considering the interest of shareholders and long-term development needs of the Company, Board of Directors agrees that, based on total share capital 1,044,597,881 of the Company dated 31 December 2019, distributed 0.5 Yuan (tax included) in cash for every 10 shares held by shareholders, totally 52,229,894.05 Yuan distributed in total(tax included). Total share capital of the Company has no changes after distribution, the retained profit of the parent company amounted as 893,677,967.36 Yuan, rests of the retained profit will carry-over for distribute in later years. This plan has been considered and passed by the board of directors, and needs to be submitted to 2019 annual general meeting of the company for deliberation. | |
III. Implementation of commitment
1.Commitments that the actual controller, shareholders, related party, the buyer and the company havefulfilled during the reporting period and have not yet fulfilled by the end of reporting period
√Applicable □ Not applicable
| Commitment | Commitment party | Type/content | Date | Term | Implementation | |
| Commitments made in acquisition report or equity change report | Sichuan Changhong Electric Co., Ltd.(hereinafter, the ―Sichuan Changhong‖) | About committed and promised in order to prevent horizontal competition in the Acquisition Report of Hefei Meiling Co., Ltd. | 1. The acquirer shall not engage in refrigerator business or activity which competes or will compete with business of Hefei Meiling Co., Ltd. (hereinafter referred to as the ―Meiling Electric ‖),or that which has interest conflict with Meiling Electrical Appliances. | 12 Jun. 2007 | Valid for long term | Strictly implemented |
| 2. The acquirer promises to apply shareholders‘ right on a legal and reasonable manner and shall not take any action to limit or affect the normal operation of Meiling Electric. | Valid for long term | Strictly implemented | ||||
| 3. For any opportunity to engage in competing business, the acquirer will advise Meiling Electric in written for engaging such business or not. If Meiling Electrical Appliances gives no clear written reply as to whether engaging the competing business or not within 20 days after receipt of the aforesaid letter, it shall be deemed that it will not engage in such business. The acquirer will only engage in non-competing business provided that Meiling Electric confirms not to or is deemed to not engage in such non-competing business. | Valid for long term | Strictly implemented | ||||
| Commitment made during the non-public offer of 2010 | Sichuan Changhong | Commitment regarding to reducing and preventing competition with Meiling Electric | 1. It will not engage in such business or activity that competes with or has interest conflict with that of Meiling Electric except for the action taken for sake of Meiling Electric as required by Meiling Electrical Appliances. | 24 Jun. 2010 | Valid for long term | Strictly implemented |
| 2. The Company promises to apply shareholders‘ right on a legal and reasonable manner and shall not take any action to limit or affect the normal operation of Meiling Electric | ||||||
| 3. In case that Meiling Electric expects, on the basis of its existing business, to expand its operation scope into the business which the | ||||||
| Company has already operated, the Company agrees to grant priority acquisition right to Meiling Electric regarding such business if the same conditions are met, provided that the Company is still the controlling shareholder or actual controller of Meiling Electric | |||||
| Commitment regarding to reducing and standardizing related transaction with Meiling Electric | 1. Measures will be adopted to prevent continued related transaction with Meiling Electric: as to the related transaction that can not be prevented, it will sign related transaction agreement with Meiling Electric under the market principles of ―equally paid and mutual benefit‖, and fairly determined the transaction price according to the market prevailing standards. | 24 Jun. 2010 | Valid for long term | Strictly implemented | |
| 2. Perform the necessary obligations to make related directors and related shareholder abstain from voting according to relevant regulation, and observe legal procedure for approving related transaction and information disclosure obligations. | |||||
| 3. Promise not to hurt legal interests of Meiling Electric and other shareholders through related transaction. | |||||
| Commit to authorized Changhong Air-conditioner and Zhongshan Air-conditioner Electric Co., Ltd. (hereinafter referred to as the ―Zhongshan Changhong ‖) to use ―Changhong‖ trademark and relevant patents for free. | 6 Nov. 2010 | Valid for long term | Strictly implemented | ||
| The Company | 1. Commit to disclose periodic reports on a truthful, accurate, complete, fair and prompt manner, to disclose all the information that have important influences over investors, to accept supervision under the CSRC and Shenzhen Stock Exchange. | 7 Jan. 2011 | Valid for long term | Strictly implemented | |
| 2. Commit to make public clarification in respect of such information that is released from any public media and may result in misleading influences on stock price once the Company is aware of such information. | |||||
| 3. The directors, supervisors, senior management and core technicians of the Company will accept opinions and criticism from the social public, and they will not trade the Company‘s securities, | |||||
| directly or indirectly, with any inside information and other illegal methods. The Company promises that the documents submitted to Shenzhen Stock Exchange exist no false statement or material omission, and no relevant information will be disclosed during the application for listing without prior content from Shenzhen Stock Exchange. | |||||
| Commitment made in transfer of air conditioning assets property | Sichuan Changhong | 1. Since the property transfer didn‘t involve the buildings and land currently used by Changhong Air-conditioner, Sichuan Changhong commits, upon the completion of equity transfer, to continue to lease such assets to Changhong Air-conditioner at market price. | 10 Dec. 2009 | Valid for long term | Strictly implemented |
| 2. After completion of this property transfer, Sichuan Changhong commits to manage to prevent new related transaction with Meiling Electric. For those which can not be prevented, Sichuan Changhong commits to determine the transaction price based on market accepted methods, so as to ensure fairness of related transaction and protection of the interest of Meiling Electric | Valid for long term | Strictly implemented | |||
| 3. Sichuan Changhong commits that it will not engage in air conditioning and refrigerator business or activity which competes or will compete with business of Meiling Electric, or that which has interest conflict with Meiling Electric | |||||
| Commitments by Annual performance incentive fund, incentive objects while purchasing stock of the Company with performance incentive funds and owned fund | Some of the Directors, supervisors and senior executives of the Company as well as other incentive objects | 1. Make promise not to reduce the shares of Meiling bought in every year during implementation of the performance incentive fund via any market ways in the later first year, which was allowed to be reduced by 50% according to the laws and regulations in the second year, and the remaining 50% was allowed to be reduced in the third year in accordance with the laws and regulations. | 20 Jun. 2017 | Three years after current shares purchased | Implementing |
| 2. The directors, supervisors and senior management promised to manage in accordance with the relevant management approaches in accordance with the "Company Law", "Securities Law" and "The Company‘s shares held by the directors, supervisors and senior management of the listed company and its change management rules", as objects of annual performance incentive fund of Meiling, including but not limited to: during his tenure, the shares transferred each year shall not exceed 25% of the total number of shares held of the Company; shall not sell the shares of the Company within six months after bought it or purchase again six months after sold it; shall not transfer the shares held within six months after Dismission. | 15 Aug. 2013; 3 Jul. 2014; 21 Jul. 2015; 20 Jun. 2017 | From the date when annual incentive fund plan deliberated and approved by general meeting to 6 moths after director, supervisor and senior executives resigned | Strictly implemented |
| Commitments of not to reducing the shares | Sichuan Changhong Electric Co., Ltd.and persons acting in concert CHANGHONG (HK) TRADING LIMITED | 1. Based on market conditions and as allowed by laws and rules, multiple measures were adopted adequately to increase shareholding of Meiling Electric, so as to demonstrate its firm confidence on the PRC economy and Meiling Electric with its actual actions, maintain sound development of capital market and promote recovery of healthy market | 9 Jul. 2015 | Valid for long term | Strictly implemented | |
| 2. Continued to support operation and development of listed company as always and promoted the achievement of Meiling Electric. It is committed to bringing steady and real return to investors. | ||||||
| Commitment made during the non-public offer in 2016 | Sichuan Changhong | Shares are not transfer within thirty-six (36) months since end of the private placement | 6 Mar. 2016 | 14 Oct. 2016 - 14 Oct. 2019 | Completed | |
| Directors and senior executives of the Company | Commitment on compensation of immediate dilution of return arising from non-public issuance of shares | 1. I hereby undertake not to deliver interests to other entities or individuals without consideration or at unfair conditions, nor to prejudice the Company‘s interests by other means. | 23 Feb. 2016 | Till the completion of projects invested with the proceeds from this non-public issuance of shares | Implementing | |
| 2. I hereby undertake to restrain my role related consumption behaviors. | ||||||
| 3. I hereby undertake not to conduct any investment and consumption which is not related to performance of duties with utilization of any company assets. | ||||||
| 6. For the period from the date of this commitment to the date of completion of this non-public issuance of shares, if the CSRC makes other new regulatory requirements on compensation of return measures and the commitment thereof, and in case that the above commitments cannot satisfy these new requirements from the CSRC, I hereby undertake to issue supplementary commitment in compliance with the latest CSRC requirements. | |||||||
| As one of the principals responsible for compensation of return measures, I, in case of break of the above commitments or refuse to perform the above commitments, agree to receive relevant punishment or to adopt relevant administration measures according to the systems, rules and regulations of the CSRC and Shenzhen Stock Exchange. | |||||||
| The Company | 1. Promise to truly, accurately, completely, fairly and timely publish periodic reports, disclose all information that has significant impacts on the investors, and accept the supervision and management of China Securities Regulatory Commission and the Shenzhen Stock Exchange. | 12 Oct. 2016 | Valid for long term | Strictly implemented | |||
| 2. Make commitments that the Company will publicly clarify in time after knowing any information on any public communications media that may cause misleading influence on the stock price | |||||||
| 3. The Company‘s directors, supervisors and senior executives will listen carefully to the opinions and criticisms of the public and never use any acquired inside information and other improper means to directly or indirectly engage in the trading activities of the Company's stock. | |||||||
| Perform the commitment promptly or not | √ Yes □ No | ||||||
| If the commitment is overdue and has not been fulfilled, the specific reasons for incomplete performance and the work plan for next step shall be explained in detail | Not applicable | ||||||
Note: for the commitments completed and exemption for implementing in above mentioned table, the Company will not disclose in next ordinary report
(ii) Concerning assets or project of the Company, which has profit forecast, and reporting period still inforecasting period, explain reasons of reaching the original profit forecast
□Applicable √ Not applicable
IV. Non-operational fund occupation from controlling shareholders and its related party
□Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.Disclosure date for specific approval opinion on fund occupation from CPA: 28 March 2020Disclosure index for specific approval opinion on fund occupation from CPA: Juchao website:
www.cninfo.com.cn-- Specific Explanation on Non-operational fund occupation and its related capitaltransactions for year of 2019 of Changhong Meiling Co., Ltd.V. Explanation from Board of Directors, Supervisory Committee and Independent Directors (if applicable)for “Qualified Opinion” that issued by CPA
□Applicable √ Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and calculation methodcompared with the financial report of last year
√Applicable □ Not applicable
Found more details in 34. Change of major accounting policy and estimation under IV. Major accounting policyand estimation carried in the Section XII. Financial ReportVII. Major accounting errors within reporting period that needs retrospective restatement
□Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in theperiod.VIII. Compare with last year’s financial report; explain changes in consolidation statement’s scope
√Applicable □ Not applicable
In the reporting period, the consolidated financial statements of the Company cover 38 subsidiaries, includingSichuan Changhong Air-conditioner Co., Ltd, Zhongshan Changhong Electric Co., Ltd. And Zhongke MeilingCryogenic Technology Co., Ltd. etc. Compared with the previous year, during the reporting period two enterprisesare included in the consolidate scope, that is Hefei Meiling Wulian Technology Co., Ltd and Anhui TuoxingScience and Technology Co., Ltd. And the subsidiary Nanchang Xiangyou Electronic Appliance Marketing Co.,Ltd, Changsha Meizlai Electronic Appliance Marketing Co., Ltd and Zhongshan Hongling Trading Co., Ltd arereduced for clearing off.More details can be seen in the report ―VII. Changes in the scope of the merger‖ and ―XIII. Equity in otherentities‖ of ―Section XII Financial Report‖IX. Appointment and non-reappointment (dismissal) of CPA
(i) Accounting firm appointed
| Name of domestic accounting firm | Shine Wing Certified Public Accountants (LLP) |
| Remuneration for domestic accounting firm (in 10 thousand Yuan) | 125 |
| Continuous life of auditing service for domestic accounting firm | 11-year |
| Name of domestic CPA | Li Xifu, Xia Cuiqiong |
| Continuous life of auditing service for domestic CPA | Li Xifu (3 years), Xia Cuiqiong (5 years) |
| Name of foreign accounting firm (if applicable) | N/A |
| Remuneration for foreign accounting firm (10 thousand Yuan) (if applicable) | N/A |
| Continuous life of auditing service for foreign accounting firm (if applicable) | N/A |
| Name of foreign CPA (if applicable) | N/A |
| Continuous life of auditing service for foreign CPA (if applicable) | - |
(ii) Re-appointed accounting firms in this period
□Yes √ No
(iii) Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable □ Not applicable
In reporting period, Shine Wing Certified Public Accountants (LLP) was appointed as audit institute of internalcontrol for the Company, auditing charge for internal control amounting as 250,000 Yuan.X. Particular about suspension and termination of listing after annual report disclosed
□Applicable √ Not applicable
XI. Bankruptcy reorganization
□Applicable √ Not applicable
No bankruptcy reorganization occurred in reporting periodXII. Material lawsuits and arbitration of the Company
□Applicable √ Not applicable
(i) No significant lawsuits or arbitration occurred in the reporting period.(ii) Some other significant lawsuits and arbitration in the reporting period.To maintain the independence and integrity of "Meiling" trademark and trade name, the Company carried outserials of lawsuits, attribution and administration suits with ―Meiling‖ trademark and corporate name concerned,
please found more in 2014 first quarter report, 2014 semi-annual report, the 2014 annual report disclosedrespectively on April 19, 2014, August 12, 2014, and March 26, 2014 for the relevant progress. Up to now, thecompany has stopped the infringement enterprises using ―Meiling‖ trade name, i.e. the infringement of companyname and unfair competition behavior, through litigation and administrative complaints.
During the reporting period, the Company sued Hefei Meiling Electrical Appliances Co., Ltd. (hereinafter referredto as ―Meiling Electrical Appliances‖) for trademark infringement and unfair competition, Shanghai IntellectualProperty Court has concluded the final judgment of second instance, the Company won the case, the court orderedMeiling Electrical Appliances to immediately stop the relevant infringement to the Company, compensate for theinfringement losses and change its company name, and the changed company name shall not contain the word―Meiling‖. That is, any product marked with ―Meiling Electrical Appliances‖ after the expiration of the judgmentexecution period shall be regarded as an infringing and counterfeit product, once found, the Company willresolutely crack down according to law.
At present, only the kitchen ventilator, cooker, water heater, water purifiers and household electrical appliancesmanufactured and sold by the Company and its wholly-owned subsidiary - Hefei Meiling Group Holdings Limitedand Guangdong Changhong Ridian Technology Co., Ltd. are the company's regular products, any other smallhousehold appliances using same or similar trademark as our company or using the trade name similar to theCompany‘s name are the Company‘s products. In view of the infringement to the Company‘s trademark and tradename, false propaganda and unfair competition in the market, the Company has carried out many ways includingadministrative reports, criminal investigation and civil litigation to fight against infringement and counterfeitingbehavior in the whole country.XIII. Penalty and rectification
□Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.XIV. Integrity of the company and its controlling shareholders and actual controllers
□Applicable √ Not applicable
During the reporting period, the Company and the controlling shareholders and the actual controllers have hadgood reputation, and there is no large amount due unliquidated debt sentenced by the court.XV. Implementation of the company’s stock incentive plan, employee stock ownership plan or otheremployee incentives
√Applicable □ Not applicable
Implementation for annual performance incentive fundOn August 9, 2012 and August 28, 2012, the Company considers the adoption of "Hefei Meiling annual
performance incentive fund implementation plan" (hereinafter referred to as "" incentive "") on the 16
thmeeting ofthe 7thboard of directors and the 2012-second provisional shareholders meeting. Details were disclosed oninformation disclosure media appointed by the Company as "Securities Times", "Chinese Securities Daily","Hong Kong Commercial Daily" and the Juchao network (www.cninfo.com.cn) on August 10, 2012 and August29 in the form of announcement (No.: 2012-028, No.:2012-035).
1. Implementation about 2012, 2013, 2014 and 2016 performance incentive fund provision and distributionplanSee details in "Implementation of the company's annual incentive fund" in "XI Implementation of the company'sstock incentive plan, employee stock ownership plan, or other employee incentive measures" in "Section VImportant Events" of the company's "2019 Semi-Annual Report" disclosed on 16 August 2019.Up to the end of this reporting period, the company's stock purchased by some 2012 annual performance incentiveobjects (non-directors, supervisors and senior management), 2013 annual performance incentive objects(non-directors, supervisors and senior management), the 2014 annual performance incentive objects(non-directors, supervisors and senior management) with their granted 2012 annual performance incentive fundsand own funds and 2013 & 2014 annual performance incentive funds and own funds have been fully released fortrading; the stock purchased by some 2016 annual performance incentive objects (non-directors, supervisors andsenior management), with their granted 2016 annual performance incentive funds and own funds are expired fortwo years, 50% of the stock shall be released for trading, details of the share reduction for the above mentionedobjects see below. In the Period, except for the director and deputy president Mr. Zhong Ming, the Company‘sshares purchased by the current directors, supervisors and senior executives among the performance incentivetargets due to the implementation of the 2012, 2013, 2014 and 2016 annual performance incentive plans have notreduced the shareholdings. On 22 August 2019, Mr. Zhong Ming reduced 78,725 stocks of holds throughcentralized bidding, found more on announcement (Notice No.: 2019-055) released on appointed media ChinaSecurities Journal, Securities Times, Hong Kong Commercial Daily and Juchao Website dated 22 August 2019.
2. Shareholding and reducing of performance incentive objects of the CompanyEnded as 31 December 2019, shares hold by all incentive objects amounting to 11,200,217 shares, a 1.0722 % intotal share capital of the Company, including 9,510,324 A-share, a 0.9104% in total share capital and 1,689,893B-share, a 0.1618% in total share capital of the Company. Other grantees of the 2012, 2013, 2014 and 2016incentive plan (including incumbent directors, supervisors and senior management) have reduced holding of5,313,598 in aggregate, accounting for about 0.5087% of the total share capital and 597,213 shares are reduced intotal during the reporting period.XVI. Major related party transaction(i) Related party transaction with routine operation concerned
√Applicable □ Not applicable
1. Related party transaction with routine operation concerned
| Serial | Related party | Relationship | Type of related party transaction | Content of related party transaction | Pricing principle | Trading price (in 10 thousand Yuan) | Trading amount (in 10 thousand Yuan) | Proportion in similar transactions (%) | Trading limit approved (in 10 thousand Yuan) | Whether over the approved limited or not (Y/N) | Clearing form for related transaction | Available similar market price | Date of disclosure | Index of disclosure |
| 1 | Sichuan Changhong Electric Co., Ltd. | Controlling shareholder and ultimate controller | Commodity purchased | Plastic particles, integrated circuit, steel plate & plastic parts and TV etc. | Marketing price | 33,598.70 | 33,598.70 | 2.80% | 60,000 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 2 | Sichuan Changhong Electronics Holding Group Co., Ltd. | Controlling shareholder and ultimate controller | Commodity purchased | TV, Air-conditioning | Marketing price | 9.11 | 9.11 | 0.00% | 155,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 3 | Changhong Huayi Compressor Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Compressor etc. | Marketing price | 38,238.09 | 38,238.09 | 3.19% | 72,000 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 4 | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Plastic products and molds etc. | Marketing price | 63,000.18 | 63,000.18 | 5.25% | 140,000 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 5 | Sichuan Changhong Jijia Fine Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Door shell, baseboard, holder, Sheet metal parts | Marketing price | 24,924.66 | 24,924.66 | 2.08% | 55,000 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 6 | Sichuan Changhong Package Printing Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Plastic box, fixed support block, foam and carton etc. | Marketing price | 8,304.76 | 8,304.76 | 0.69% | 20,000 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 7 | Sichuan Changhong Precision Electronics Tech. Co., Ltd. | Other enterprise control under the same controlling | Commodity purchased | Printed boards and assemblies etc. | Marketing price | 1,270.34 | 1,270.34 | 0.11% | 10,000 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 |
| shareholder and ultimate controller | and 2019-072 | |||||||||||||
| 8 | Sichuan Changhong New Energy Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Battery | Marketing price | 2.18 | 2.18 | 0.00% | 155,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 9 | 081 Electronic Group | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Power transformer | Marketing price | 49.47 | 49.47 | 0.00% | 5,000 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 10 | Guangdong Changhong Electronics Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Foam pieces etc. | Marketing price | 233.81 | 233.81 | 0.02% | 5,000 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 11 | Sichuan Changhong Intelligent Manufacturing Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Frequency conversion integrated board shell, particle | Marketing price | 99.30 | 99.30 | 0.01% | 155,000 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 12 | Panovasic Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Central controller | Marketing price | 426.64 | 426.64 | 0.04% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 13 | Sichuan Changhong International Hotel Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Mid-autumn festival consolation | Marketing price | 18.86 | 18.86 | 0.00% | 155,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 14 | Sichuan Zhiyijia Network Technology Co., Ltd. | Other enterprise control under the same controlling | Commodity purchased | Electronic products | Marketing price | 96.01 | 96.01 | 0.01% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 |
| shareholder and ultimate controller | and 2019-072 | |||||||||||||
| 15 | Sichuan Changhong Power Source Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Battery | Marketing price | 0.30 | 0.30 | 0.00% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 16 | Changhong International Holdings (Hong Kong) Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Television | Marketing price | 39.47 | 39.47 | 0.00% | 5,000 | N | Cash settlement | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 | |
| 17 | Sichuan Changhong Electronic Products Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Voice components, remote control and electrical components etc. | Marketing price | 2,401.66 | 2,401.66 | 0.20% | 6,000 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 18 | Sichuan Hongxin Software Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Information system | Marketing price | 16.98 | 16.98 | 0.00% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 19 | Sichuan Changhong Property Service Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Exit card/permit | Marketing price | 0.03 | 0.03 | 0.00% | 155,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 20 | Sichuan Ailian Science & Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Internet module, drawer guide rail and temperature sensor etc. | Marketing price | 2,073.65 | 2,073.65 | 0.17% | 155,000 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 21 | Sichuan Aichuang Technology Co., Ltd. | Other enterprise control under the same controlling | Commodity purchased | Integrated frequency conversion board, fixed | Marketing price | 9,800.56 | 9,800.56 | 0.82% | 20,000 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 |
| shareholder and ultimate controller | support board and connecting pipe etc. | and 2019-072 | ||||||||||||
| 22 | Sichuan Changhong Electronic System Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | LED display system | Marketing price | 4.74 | 4.74 | 0.00% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 23 | Hunan Grand-Pro Intelligent Tech. Company | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Intelligent vacuum cleaner | Marketing price | 777.09 | 777.09 | 0.06% | 1,000 | N | Bank承兑结算 | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 24 | Sichuan Changhong Network Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Video conference terminal | Marketing price | 9.30 | 9.30 | 0.00% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 25 | Lejiayi Chain Management Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Mid-autumn festival consolation | Marketing price | 5.96 | 5.96 | 0.00% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 26 | GuangYuan Changhong Electronic Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Commodity purchased | Water dispenser | Marketing price | 37.66 | 37.66 | 0.00% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 27 | Sichuan Changhong Electronics Holding Group Co., Ltd. | Controlling shareholder and ultimate controller | Receiving labor services | Shuttle bus fee, staff physical examination fee, inspection and test fee | Marketing price | 68.31 | 68.31 | 0.04% | 155,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 28 | Sichuan Changhong Electric Co., Ltd. | Controlling shareholder and ultimate controller | Receiving labor services | Software usage fee, Information system | Marketing price | 1,569.80 | 1,569.80 | 0.95% | 5,500 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, |
| service fee, inspection and certification fee etc. | Nov. 2019 | 2019-058, 2019-067, 2019-069 and 2019-072 | ||||||||||||
| 29 | Sichuan Changhong Minsheng Logistics Co., LTD | Other enterprise control under the same controlling shareholder and ultimate controller | Receiving labor services | Transportation, storage, loading and unloading | Marketing price | 43,784.10 | 43,784.10 | 26.48% | 60,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 30 | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Receiving labor services | Conference organization fee, market support fee etc. | Marketing price | 10.84 | 10.84 | 0.01% | 5,500 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 31 | Sichuan Service Exp. Appliance Service Chain Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate | Receiving labor services | After sales, installation and maintenance costs etc. | Marketing price | 23,979.17 | 23,979.17 | 14.50% | 35,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| controller | ||||||||||||||
| 32 | Sichuan Hongxin Software Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Receiving labor services | Software usage fee | Marketing price | 34.43 | 34.43 | 0.02% | 5,500 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 33 | Guangdong Changhong Electronics Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Receiving labor services | Network service fee, information consultation fee, etc. | Marketing price | 47.89 | 47.89 | 0.03% | 5,500 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 34 | Sichuan Jiahong Industrial Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Receiving labor services | Business activity fee | Marketing price | 7.08 | 7.08 | 0.00% | 155,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 35 | Sichuan Changhong International Hotel Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Receiving labor services | Business activity fee | Marketing price | 14.62 | 14.62 | 0.01% | 155,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 36 | Sichuan Changhong International Travel Service Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Receiving labor services | Ticketing fee | Marketing price | 53.61 | 53.61 | 0.03% | 155,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 37 | Sichuan Changhong Property Service Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Receiving labor services | Property management fee, maintenance fee, etc | Marketing price | 408.71 | 408.71 | 0.25% | 155,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 38 | Panovasic Co., Ltd. | Other enterprise control under the same controlling | Receiving labor services | Experimental technical service fee | Marketing price | 37.22 | 37.22 | 0.02% | 5,500 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 |
| shareholder and ultimate controller | and 2019-072 | |||||||||||||
| 39 | Sichuan Zhiyijia Network Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Receiving labor services | Platform usage fee | Marketing price | 296.10 | 296.10 | 0.18% | 300 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 40 | Sichuan Changhong Network Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Receiving labor services | Communication fee | Marketing price | 4.57 | 4.57 | 0.00% | 5,500 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 41 | Sichuan Changhong Intelligent Manufacturing Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Receiving labor services | Equipment repair cost, relocation labor cost, etc. | Marketing price | 230.57 | 230.57 | 0.14% | 155,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 42 | Sichuan Changhong Jijia Fine Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Receiving labor services | Equipment repair cost | Marketing price | 3.81 | 3.81 | 0.00% | 5,500 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 43 | Sichuan Changhong Electronic Products Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Receiving labor services | Human resources services | Marketing price | 45.05 | 45.05 | 0.03% | 5,500 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 44 | 081 Electronic Group | Other enterprise control under the same controlling shareholder and ultimate controller | Receiving labor services | Labor cost for relocation | Marketing price | 42 | 42 | 0.03% | 5,500 | N | Bank承兑结算 | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 45 | Sichuan Ailian Science & Technology Co., Ltd. | Other enterprise control under the same controlling | Receiving labor services | Equipment repair cost | Marketing price | 2.63 | 2.63 | 0.00% | 155,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 |
| shareholder and ultimate controller | and 2019-072 | |||||||||||||
| 46 | Sichuan Changhong Electric Co., Ltd. | Controlling shareholder and ultimate controller | Purchase fuel and power | Water, electricity, gas etc. | Marketing price | 1,795.67 | 1,795.67 | 0.15% | 60,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 47 | Changhong Huayi Compressor Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Purchase fuel and power | Steam | Marketing price | 82.59 | 82.59 | 0.01% | 130 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 48 | Guangdong Changhong Electronics Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Purchase fuel and power | Water, electricity etc. | Marketing price | 142.93 | 142.93 | 0.01% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 49 | Hefei Changhong New Energy Science & | Other enterprise control under the same | Purchase fuel and power | Electricity fee | Marketing price | 36.88 | 36.88 | 0.00% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, |
| Technology Co., Ltd. | controlling shareholder and ultimate controller | Nov. 2019 | 2019-058, 2019-067, 2019-069 and 2019-072 | |||||||||||
| 50 | Sichuan Changhong Property Service Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Purchase fuel and power | Electricity fee | Marketing price | 2.19 | 2.19 | 0.00% | 155,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 51 | Sichuan Changhong Electric Co., Ltd. | Controlling shareholder and ultimate controller | Sale of goods | Plastic cement, Air-conditioning, waste materials, small household appliances etc. | Marketing price | 2,277.33 | 2,277.33 | 0.15% | 8,000 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 52 | Sichuan Changhong Electronics Holding Group Co., Ltd. | Controlling shareholder and ultimate controller | Sale of goods | Fresh | Marketing price | 31.91 | 31.91 | 0.00% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 53 | Sichuan Changhong Jijia Fine Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Door shell, color plate and other components | Marketing price | 4,482.46 | 4,482.46 | 0.29% | 10,000 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 54 | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Color masterbatch, plastic particle, Air-conditioning | Marketing price | 20,777.22 | 20,777.22 | 1.35% | 35,000 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 55 | Lejiayi Chain Management Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Refrigerator, freezer, Air-conditioning, Washing machine, small household appliances etc. | Marketing price | 6,254.86 | 6,254.86 | 0.41% | 7,200 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 56 | PT.CHANGHONGELECTRICINDONESIA | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Refrigerator, freezer | Marketing price | 1,024.84 | 1,024.84 | 0.07% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 57 | CHANGHONG(HK)TRADINGLIMITED | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Air-conditioning | Marketing price | 36,912.93 | 36,912.93 | 2.39% | 100,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 58 | CHANGHONGELECTRIC(AUSTRALIA) | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Refrigerator, freezer | Marketing price | 6,629.12 | 6,629.12 | 0.43% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 59 | Panovasic Co., Ltd. | Other enterprise control under the same controlling | Sale of goods | Fresh | Marketing price | 0.76 | 0.76 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 |
| shareholder and ultimate controller | and 2019-072 | |||||||||||||
| 60 | Sichuan Changhong Device Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Air-conditioning | Marketing price | 8.14 | 8.14 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 61 | Sichuan Changhong Minsheng Logistics Co., LTD | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Refrigerator, freezer, small household appliances etc. | Marketing price | 167.50 | 167.50 | 0.01% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 62 | Sichuan Service Exp. Appliance Service Chain Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Maintenance parts etc. | Marketing price | 599.76 | 599.76 | 0.04% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 63 | Sichuan Changhong Gerun Environmental Protection Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Waste materials | Marketing price | 743.53 | 743.53 | 0.05% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 64 | Hefei Changhong Industrial Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Air-conditioning, Washing machine, refrigeration etc. | Marketing price | 111.05 | 111.05 | 0.01% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 65 | Sichuan Huafeng Corp. Group | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Air-conditioning, Fresh | Marketing price | 12.81 | 12.81 | 0.00% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 66 | Sichuan Zhiyijia Network Technology Co., Ltd. | Other enterprise control under the same controlling | Sale of goods | Refrigerator, freezer, Washing machine, | Marketing price | 295,507.43 | 295,507.43 | 19.14% | 480,000 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 |
| shareholder and ultimate controller | Air-conditioning, small household appliances etc. | and 2019-072 | ||||||||||||
| 67 | Sichuan Changhong Property Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Air-conditioning | Marketing price | 95.07 | 95.07 | 0.01% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 68 | Sichuan Changhong Network Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Fresh | Marketing price | 0.10 | 0.10 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 69 | Sichuan Changhong Wisdom Health Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate | Sale of goods | Fresh | Marketing price | 0.44 | 0.44 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| controller | ||||||||||||||
| 70 | Sichuan Changhong Property Service Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Air-conditioning, Fresh | Marketing price | 6.60 | 6.60 | 0.00% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 71 | Guangdong Changhong Electronics Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Air-conditioning, water purifier etc. | Marketing price | 61.73 | 61.73 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 72 | Sichuan Changhong Intelligent Manufacturing Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Electromagnetic furnace | Marketing price | 3.34 | 3.34 | 0.00% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 73 | BVCH Optronics (Sichuan) Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Fresh | Marketing price | 0.68 | 0.68 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 74 | Sichuan Changhong Electronic Products Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Fresh | Marketing price | 8.22 | 8.22 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 75 | Sichuan Changhong Group Finance Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Fresh | Marketing price | 1.84 | 1.84 | 0.00% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 76 | Changhong Huayi Compressor Co., Ltd. | Other enterprise control under the same controlling | Sale of goods | Waste foam | Marketing price | 0.11 | 0.11 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 |
| shareholder and ultimate controller | and 2019-072 | |||||||||||||
| 77 | Sichuan Changhong Package Printing Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Fresh | Marketing price | 0.35 | 0.35 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 78 | Sichuan Changhong Power Source Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Air-conditioning | Marketing price | 8.44 | 8.44 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 79 | Sichuan Changhong Education Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Air-conditioning, health pot | Marketing price | 1,194.40 | 1,194.40 | 0.08% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 80 | 081 Electronic Group | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Compressor, AC contactor | Marketing price | 1.72 | 1.72 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 81 | GuangYuan Changhong Electronic Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Refrigerator, freezer, Air-conditioning, Washing machine | Marketing price | 112.06 | 112.06 | 0.01% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 82 | Sichuan Ailian Science & Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Air-conditioning | Marketing price | 2.09 | 2.09 | 0.00% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 83 | Sichuan Jiahong Industrial Co., Ltd. | Other enterprise control under the same controlling | Sale of goods | Fresh | Marketing price | 13.87 | 13.87 | 0.00% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 |
| shareholder and ultimate controller | and 2019-072 | |||||||||||||
| 84 | Sichuan Changhong New Energy Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Air-conditioning | Marketing price | 8.94 | 8.94 | 0.00% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 85 | Sichuan Changhong International Hotel Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Fresh | Marketing price | 3.62 | 3.62 | 0.00% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 86 | Sichuan Changhong Precision Electronics Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Logic integrated circuit | Marketing price | 0.09 | 0.09 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 87 | Orion.PDP.Co.,ltd | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Refrigerator | Marketing price | 3,473.67 | 3,473.67 | 0.22% | 4,200 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 88 | Changhong International Holdings (Hong Kong) Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Air-conditioning | Marketing price | 164.88 | 164.88 | 0.01% | 100 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 89 | ChanghongEuropeElectrics.r.o | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Refrigerator | Marketing price | 166.90 | 166.90 | 0.01% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 90 | CHANGHONGELECTRICMIDDLEEASTFZCO | Other enterprise control under the same controlling | Sale of goods | Refrigerator, Air-conditioning | Marketing price | 1,285.90 | 1,285.90 | 0.08% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 |
| shareholder and ultimate controller | and 2019-072 | |||||||||||||
| 91 | Sichuan Aichuang Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Small home appliance, Fresh etc. | Marketing price | 47.86 | 47.86 | 0.00% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 92 | Mianyang Huafeng Interconnection Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Air-conditioning | Marketing price | 844.98 | 844.98 | 0.05% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 93 | Hunan Grand-Pro Intelligent Tech. Company | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of goods | Label | Marketing price | 0.29 | 0.29 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 94 | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Provide labor services | Service charge | Marketing price | 7.04 | 7.04 | 0.21% | 5,500 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 95 | Sichuan Changhong Device Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Provide labor services | Technical service fee | Marketing price | 51.08 | 51.08 | 1.55% | 5,500 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 96 | Sichuan Changhong Property Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Provide labor services | Installation service | Marketing price | 64.15 | 64.15 | 1.94% | 5,500 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 97 | Changhong Huayi Compressor Co., Ltd. | Other enterprise control under the same controlling | Provide labor services | Technical service fee | Marketing price | 37.74 | 37.74 | 1.14% | 5,500 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 |
| shareholder and ultimate controller | and 2019-072 | |||||||||||||
| 98 | Sichuan Aichuang Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Provide labor services | Technical service fee, labor processing | Marketing price | 62.03 | 62.03 | 1.88% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 99 | Sichuan Changhong New Energy Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Provide labor services | Service charge | Marketing price | 3.07 | 3.07 | 0.09% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 100 | Sichuan Changhong Minsheng Logistics Co., LTD | Other enterprise control under the same controlling shareholder and ultimate controller | Provide labor services | Maintenance cost | Marketing price | 0.96 | 0.96 | 0.03% | 5,500 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 101 | Sichuan Changhong Jijia Fine Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Provide labor services | Service charge | Marketing price | 4.40 | 4.40 | 0.13% | 5,500 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 102 | Sichuan Changhong Electric Co., Ltd. | Controlling shareholder and ultimate controller | Provide fuel power | Water, Electricity fee | Marketing price | 1.35 | 1.35 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 103 | Guangdong Changhong Electronics Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Provide fuel power | Water, electricity and gas charges | Marketing price | 65.17 | 65.17 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 104 | Sichuan Changhong Minsheng Logistics Co., LTD | Other enterprise control under the same controlling shareholder and ultimate | Provide fuel power | Water, Electricity fee | Marketing price | 7.33 | 7.33 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| controller | ||||||||||||||
| 105 | Sichuan Changhong Jijia Fine Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Provide fuel power | Water, Electricity fee | Marketing price | 13.83 | 13.83 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 106 | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Provide fuel power | Water, electricity and gas charges | Marketing price | 757.35 | 757.35 | 0.05% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 107 | Panovasic Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Provide fuel power | Water, electricity and gas charges | Marketing price | 0.37 | 0.37 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 108 | Sichuan Changhong Precision Electronics Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Provide fuel power | Water, Electricity fee | Marketing price | 1.54 | 1.54 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 109 | Sichuan Changhong Device Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Provide fuel power | Water, Electricity fee | Marketing price | 117.63 | 117.63 | 0.01% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 110 | Sichuan Service Exp. Appliance Service Chain Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Provide fuel power | Water, Electricity fee | Marketing price | 0.95 | 0.95 | 0.00% | 12,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 111 | Guangdong Changhong Electronics Co., Ltd. | Other enterprise control under the same controlling | Rent to related parties | Office building | Marketing price | 19.75 | 19.75 | 0.11% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 |
| shareholder and ultimate controller | and 2019-072 | |||||||||||||
| 112 | Hefei Changhong Industrial Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Rent to related parties | Apartment | Marketing price | 25.73 | 25.73 | 0.14% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 113 | Sichuan Aichuang Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Rent to related parties | Warehouse, forklift | Marketing price | 4.19 | 4.19 | 0.02% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 114 | Sichuan Ailian Science & Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Rent to related parties | Warehouse | Marketing price | 0.27 | 0.27 | 0.00% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 115 | Panovasic Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Rent to related parties | 2# living area, workshop | Marketing price | 4.53 | 4.53 | 0.02% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 116 | Sichuan Huafeng Corp. Group | Other enterprise control under the same controlling shareholder and ultimate controller | Rent to related parties | Conference room | Marketing price | 0.37 | 0.37 | 0.00% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 117 | Sichuan Service Exp. Appliance Service Chain Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Rent to related parties | Office, workshop, forklift truck etc. | Marketing price | 31.83 | 31.83 | 0.17% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 118 | Sichuan Changhong Electric Co., Ltd. | Controlling shareholder and ultimate controller | Rent to related parties | Apartment equipment | Marketing price | 217.20 | 217.20 | 1.18% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 |
| and 2019-072 | ||||||||||||||
| 119 | Sichuan Changhong Jijia Fine Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Rent to related parties | Forklift truck, workshop, Warehouse etc. | Marketing price | 76.86 | 76.86 | 0.42% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 120 | Sichuan Changhong Precision Electronics Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Rent to related parties | Apartment, 2# living area | Marketing price | 12.05 | 12.05 | 0.07% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 121 | Sichuan Changhong Minsheng Logistics Co., LTD | Other enterprise control under the same controlling shareholder and ultimate controller | Rent to related parties | Rent parts of the office building, workshop | Marketing price | 307.18 | 307.18 | 1.67% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 122 | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Rent to related parties | 2# living area, Warehouse etc. | Marketing price | 731.56 | 731.56 | 3.98% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 123 | Sichuan Changhong Device Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Rent to related parties | Warehouse,workshop, Apartment etc. | Marketing price | 147.58 | 147.58 | 0.80% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 124 | Changhong Huayi Compressor Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Rent to related parties | Warehouse | Marketing price | 1.07 | 1.07 | 0.01% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 125 | Changhong International Holdings (Hong Kong) Co., Ltd. | Other enterprise control under the same controlling | Rent to related parties | Office, automobile | Marketing price | 12.63 | 12.63 | 0.07% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 |
| shareholder and ultimate controller | and 2019-072 | |||||||||||||
| 126 | Sichuan Changhong Electric Co., Ltd. | Controlling shareholder and ultimate controller | To lease from related parties | workshop, Office | Marketing price | 362.61 | 362.61 | 1.97% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 127 | Chengdu Changhong Electronic Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | To lease from related parties | Office | Marketing price | 45.45 | 45.45 | 0.25% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 128 | Guangdong Changhong Electronics Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | To lease from related parties | Staff dormitory, workshop | Marketing price | 26.22 | 26.22 | 0.14% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 129 | Sichuan Changhong Electronics Holding Group | Controlling shareholder and ultimate controller | To lease from related parties | Staff dormitory | Marketing price | 4.28 | 4.28 | 0.02% | 155,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, |
| Co., Ltd. | Nov. 2019 | 2019-058, 2019-067, 2019-069 and 2019-072 | ||||||||||||
| 130 | Sichuan Changhong Property Service Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | To lease from related parties | workshop, Office | Marketing price | 0.85 | 0.85 | 0.00% | 155,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 131 | Beijing Changhong Tech. Co. Ltd, | Other enterprise control under the same controlling shareholder and ultimate controller | To lease from related parties | Office | Marketing price | 7.89 | 7.89 | 0.04% | 5,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 132 | Sichuan Changhong Intelligent Manufacturing Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Purchasing fixed assets | Production line transformation etc. | Marketing price | 3,679.69 | 3,679.69 | 4.96% | 7,300 | N | Spot exchange, Bank acceptance | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 133 | Sichuan Hongcheng Real Estate Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Purchasing fixed assets | Production line transformation etc. | Marketing price | 5.66 | 5.66 | 0.01% | 155,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 134 | Sichuan Changhong Electric Co., Ltd. | Controlling shareholder and ultimate controller | Purchasing fixed assets, intangible assets | Production equipment, patent right, Information system etc. | Marketing price | 4,919.78 | 4,919.78 | 6.63% | 7,100 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 135 | Sichuan Hongxin Software Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Purchasing fixed assets | Information system etc. | Marketing price | 327.97 | 327.97 | 0.44% | 7,100 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 136 | Sichuan Changhong Network Technology Co., Ltd. | Other enterprise control under the same controlling | Purchasing fixed assets | Communication network infrastructure of the | Marketing price | 109.84 | 109.84 | 0.15% | 7,100 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 |
| shareholder and ultimate controller | new plant | and 2019-072 | ||||||||||||
| 137 | Sichuan Changhong Electronic System Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Purchasing fixed assets | LED display system | Marketing price | 12.61 | 12.61 | 0.02% | 7,100 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 138 | Sichuan Zhiyijia Network Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Purchasing fixed assets | Projector, Television | Marketing price | 10.47 | 10.47 | 0.01% | 7,100 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 139 | Sichuan Huanyu Industrial Co. Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Purchasing fixed assets | Workshop construction | Marketing price | 1,989.73 | 1,989.73 | 2.68% | 155,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 140 | Sichuan Jiahong Industrial Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Purchasing fixed assets | Infrastructure of the greening for new plant etc. | Marketing price | 134.75 | 134.75 | 0.18% | 155,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 141 | Guangdong Changhong Electronics Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Purchasing fixed assets | Television | Marketing price | 1.27 | 1.27 | 0.00% | 7,100 | N | Cash settlement | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 | |
| 142 | Mianyang Technology Town Big Data Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Purchasing fixed assets | Security engineering of the new plant | Marketing price | 111.28 | 111.28 | 0.15% | 7,100 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 143 | Panovasic Co., Ltd. | Other enterprise control under the same controlling | Purchasing fixed assets | Electronic load | Marketing price | 0.09 | 0.09 | 0.00% | 7,100 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 |
| shareholder and ultimate controller | and 2019-072 | |||||||||||||
| 144 | Sichuan Changhong Energy Sunshine Technology Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Purchasing fixed assets | Street lamp return | Marketing price | -2.33 | -2.33 | 0.00% | 7,100 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 145 | Sichuan Changhong Gerun Environmental Protection Tech. Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of fixed assets | Computer, Air-conditioning etc. | Marketing price | 0.46 | 0.46 | 0.02% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 146 | Sichuan Changhong Electronics Holding Group Co., Ltd. | Controlling shareholder and ultimate controller | Sale of fixed assets | Bookcase, office furniture etc. | Marketing price | 1.74 | 1.74 | 0.06% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 147 | Sichuan Jiahong Industrial Co., Ltd. | Other enterprise control under the same | Sale of fixed assets | Office furniture, freezer | Marketing price | 0.48 | 0.48 | 0.02% | 3,000 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, |
| controlling shareholder and ultimate controller | Nov. 2019 | 2019-058, 2019-067, 2019-069 and 2019-072 | ||||||||||||
| 148 | Changhong Shundatong Tech. Development Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of fixed assets | Computer, office furniture , freezer etc. | Marketing price | 12.82 | 12.82 | 0.46% | 7,100 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 149 | Sichuan Changhong Electric Co., Ltd. | Controlling shareholder and ultimate controller | Sale of fixed assets | Laboratory, instrument etc. | Marketing price | 102.88 | 102.88 | 3.67% | 7,100 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 150 | Sichuan Changhong Jijia Fine Co., Ltd. | Other enterprise control under the same controlling shareholder and ultimate controller | Sale of fixed assets | Crane | Marketing price | 1.00 | 1.00 | 0.04% | 7,100 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 Sept. and 18 Nov. 2019 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 |
| 151 | Yuanxin Financial Lease Co., Ltd. | Other enterprise control under | Financial leasing, factoring | Financial leasing, factoring | Marketing price | 391.67 | 391.67 | -- | 1,500 | N | Cash settlement | - | 11 Dec. and 28 Dec. 2018; 31 Aug., 27 | Juchao Website(www.cninfo.com.cn) Notice No.: 2018-071, |
| the same controlling shareholder and ultimate controller | and financing etc. | and financing | Sept. and 18 Nov. 2019 | 2018-075, 2018-079, 2019-057, 2019-058, 2019-067, 2019-069 and 2019-072 | |||||||||
| Total | -- | -- | 656,238.07 | -- | -- | -- | -- | -- | -- | -- | |||
| Detail of sales return with major amount involved | Not applicable | ||||||||||||
| Report the actual implementation of the daily related transactions which were projected about their total amount by types during the reporting period (if applicable) | 1. It is estimated that the related party transaction amount resulted by purchasing goods (including door shell and plastic products etc.) and purchasing fuel and power from Sichuan Changhong and its subsidiary by the Company for year of 2019 was 2960 million Yuan at most (tax-excluded), actually 1,363,961,200 Yuan occurred in reporting period | ||||||||||||
| 2. It is estimated that the related party transaction amount resulted by purchasing goods (including compressor purchased, robot cleaner etc.) from Changhong Huayi and its subsidiary by the Company for year of 2019 was 730 million Yuan at most (tax-excluded), actually 390,151,800 Yuan occurred in reporting period | |||||||||||||
| 3. It is estimated that the related party transaction amount resulted by purchasing or selling equipment, software, maintenance and spare parts and molds etc. from Sichuan Changhong and its subsidiary by the Company for year of 2019 was 71 million Yuan at most (tax-excluded), actually 56,076,800 Yuan occurred in reporting period | |||||||||||||
| 4. It is estimated that the related party transaction amount resulted by selling goods to and providing fuel and power to Sichuan Changhong and its subsidiary by the Company for year of 2019 was 6523 million Yuan at most (tax-included), actually 3,776,259,000 Yuan occurred in reporting period | |||||||||||||
| 5. It is estimated that the related party transaction amount resulted by accepting energy, power and service etc. from Huayi Compressor and its subsidiary for year of 2019 was 1.3 million Yuan at most (tax-included), actually 825,900 Yuan occurred in reporting period | |||||||||||||
| 6. It is estimated that the related party transaction amount resulted by leasing business from Sichuan Changhong and its subsidiary by the Company for year of 2019 was 50 million Yuan at most (tax-excluded), actually 20,301,400 Yuan occurred in reporting period | |||||||||||||
| 7. It is estimated that the related party transaction amount from domestic finished goods logistic business outsourcing to Sichuan Changhong Minsheng Logistic Co., Ltd. by the Company for year of 2019 was 600 million Yuan at most (tax-excluded), actually 437,841,000 Yuan occurred in reporting period | |||||||||||||
| 8. It is estimated that the related party transaction amount from after sales service of domestic goods outsourcing to Sichuan Service Exp. Appliance Service Chain Co., Ltd. by the Company for year of 2019 was 350 million Yuan at most, actually 239,791,700 Yuan occurred in reporting period. | |||||||||||||
| 9. It is estimated that the related party transaction amount resulted by accepting other service and labor service etc. or providing other service and labor | |||||||||||||
| service etc. to Sichuan Changhong and its subsidiary by the Company for year of 2019 was 58 million Yuan at most (tax-excluded), actually 30,124,800 Yuan occurred in reporting period | |
| 10. It is estimated that the related party transaction amount resulted by selling goods from Sichuan Changhong Electronics Holding Group Co., Ltd and its subsidiary by the Company for year of 2019 was 102 million Yuan at most (tax-excluded), actually 64,620,700 Yuan occurred in reporting period. | |
| 11. It is estimated that the related party transaction amount resulted by purchasing goods and receiving labor services, fuel power, leasing and purchasing equipment etc. from Sichuan Changhong Electronics Holding Group Co., Ltd and its subsidiary by the Company for year of 2019 was 1823 million Yuan at most (tax-excluded), actually 186,063,700 Yuan occurred in reporting period. | |
| 12. It is estimated that the related party transaction amount resulted by accepting the financial leasing and factoring and financing etc. from Yuanxin Financial Lease Co., Ltd. by the Company was 15 million Yuan at most, actually 3,916,700 Yuan occurred in reporting period. | |
| Reasons of major difference between the trading price and market price | Not applicable |
Note: In accordance with relevant regulation of Rules Governing the Listing of Stocks on Shenzhen Stock Exchange and Authorization Management System of the Company, the related partytransaction with the related party in less than 3 million Yuan (3 million Yuan included) will implement after the approval by the President. Therefor, although the related party transaction withChanghong International Holdings (Hong Kong) Co., Ltd exceeds the estimated annual amount, the amount exceeded is within 3 million Yuan, and has being approved by the President of theCompany.
2. Related party transactions with Changhong Finance Company
The resolution of the 34
th session of the 8
thboard of directors on August 9, 2017 and the second extraordinarygeneral meeting of 2017 on September 12, 2017 approved and agreed the company to continue carry out thefinancial service cooperation with Sichuan Changhong Group Finance Co., Ltd. (hereinafter referred to as―Changhong Finance Company‖) and sign a triennial Financial Service Agreement, It is agreed that the maximumdeposit balance (including accrued interest and handling fees) and the highest principal and interest of outstandingloan the Company in any finance company within the three-year validity period from the effective date of the newagreement shall be adjusted to not exceed RMB 3.8 billion per day. In accordance with the agreement, ChanghongFinance Company shall provide a series of financial services such as deposit and loan in its business scopeaccording to the requirements of the Company and its subsidiaries. The related transactions between the companyand its subsidiaries and Changhong Finance Company from the beginning of Current Year to the end of thereporting period are as follows:
Up to 31 December 2019, the Company and its subsidiaries have opened financial business as savings, notedrawing and notes discounted with Changhong Finance Company. The Company and its subordinate companyowns 3,702,382,630.38 Yuan savings in Changhong Finance Company, takes 24.63% of the deposit takingbalance in Changhong Finance Company without 30% occupied, balance of notes drawing at period-end was999,585,345.49 Yuan and balance of notes discounted outstanding as 638,333,179.10 Yuan. More details are:
In RMB/CNY
| Item | Balance at year-begin | Increased in Current Year | Decreased in Current Year | Balance at year-end | Interest and commission charge received or paid |
| I. Savings in Changhong Group Finance Company | 3,119,117,207.91 | 37,090,880,528.48 | 36,507,615,106.01 | 3,702,382,630.38 | 105,577,099.81 |
| II. Borrowings from Changhong Group Finance Company | |||||
| 1.Short-term loans | |||||
| 2.Long-term loans | |||||
| III. Other financial business | |||||
| 1.notes drawing | 819,806,514.07 | 2,158,744,838.85 | 1,978,966,007.43 | 999,585,345.49 | 887,859.77 |
| 2.notes discounted | 772,233,395.98 | 1,593,136,528.75 | 1,727,036,745.63 | 638,333,179.10 | 30,768,183.16 |
According to the regulation of Information Disclosure Business Memorandum No. 2 - Transactions and Related Transactions of theShenzhen Stock Exchange, the company issued the Risk Continuous Assessment Report About Sichuan Changhong Group FinanceCo., Ltd. for the deposit, loan and other financial services that the company carried out with Changhong Finance Company during the
reporting period, and disclosed at www.cninfo.com.cn on 28 March 2020(ii) Related transactions by assets acquisition and sold
□Applicable √ Not applicable
There are no related transactions by assets acquisition and sold in the period(iii) Related party transaction of joint foreign investment
√Applicable □ Not applicable
| Co-investor | Association relationship | Invested enterprise | Main business of the invested enterprise | Registered capital of the invested enterprise | Total assets of the invested enterprise (10 thousand Yuan) | Net assets of the invested enterprise (10 thousand Yuan) | Net profit of the invested enterprise (10 thousand Yuan) |
| Sichuan Changhong Electric Co., Ltd. | Controlling shareholder | Sichuan Zhiyijia Network Technology Co., Ltd. | Development and sales of computer software and hardware and undertake computer network engineering, import & export of goods and technologies (except the items prohibited by laws and regulations, restricted items operating with license), design and production of advertising, design, manufacturing and sales of the model, selling general merchandise, clothing, leather ware, shoes & hats, detergents, cosmetics, photographic apparatus, toys, audio equipment & apparatus, household appliances, electronics, communication equipment, communication device, instruments & apparatus, lamps, electro-mechanical & components, mechanical equipment & accessories, prepackaged food, office supplies, sporting goods, hotel facilities, tourism cultural goods, gold-silver jewelry and value-added telecom service (entrusted operation), chemical raw materials & products (hazardous chemicals excluded), solar energy equipment and class-I medical devices through the internet. Domestic road freight transportation, freight transport agency, manual freight service, warehouse service (hazardous chemicals excluded); installation service of household appliances. | 50 million Yuan (before capital increased); 70 million Yuan (after capital increased) | 336,679.26 | 9,401.92 | 375.54 |
| Progress of major projects under construction of the invested enterprise (if applicable) | N/A | ||||||
After deliberated and approved by the 26
th
session of 9
th BOD and 3
rd
extraordinary shareholders general meeting of 2019 held on 30
August 2019 and 26 September, the Company agreed to increase capital for Sichuan Zhiyijia Network Technology Co., Ltd.(hereinafter, the ―Zhiyijia Company‖) with own fund amounted as 29.08704 million Yuan (of which: 20 million Yuan reckoned inregistered capital and 9.08704 million Yuan reckoned in capital reserves), another shareholder Sichuan Changhong increase zero inthis time. After capital increased, registered capital of Zhiyijia Company up to 70 million Yuan from 50 million Yuan, the Companyand Sichuan Changhong holds 50% equity of the Zhiyijia Company respectively. The investment capital for Zhiyijia amounted as
44.08704 million Yuan in total after increasing the capital, of which, 35 million Yuan reckoned in registered capital and 9.08704million Yuan reckoned in capital reserves. The capital increase for Zhiyijia Company completed in the reporting period. Found moreon announcement (Notice No.: 2019-057, 2019-058, 2019-063 and 2019-067) released on appointed media China Securities Journal,Securities Times, Hong Kong Commercial Daily and Juchao Website dated 31 August 2019, 10 September and 27 Septemberrespectively.(iv) Connect of related liability and debt
√Applicable □ Not applicable
Whether has non-operational contact of related liability and debts or not
□Yes √ No
No non-operational contact of related liability or debts in Period(v) Other related party transactions
√Applicable □ Not applicable
1. On August 30 and September 26, 2019, the resolutions of the 26
thmeeting of the company‘s ninth board ofdirectors and the 3
rdextraordinary shareholders‘ meeting in 2019 passed and agreed to increase the estimatedrelated transactions amount occurred among the company and its holding subsidiaries with Zhiyijia Company in2019 totaling RMB 803 million, such as sales of goods, accepting services, etc.
2. On September 9 and September 26, 2019, the resolutions of the 27
thmeeting of the ninth board of directors ofthe company and the 3
rdextraordinary shareholders‘ meeting in 2019 passed and agreed the company to use itsown funds, together with Changhong Huayi Compressor Co., Ltd., and respectively increase capital of 500 millionyuan to Changhong Finance Company, with a total capital increase of RMB 1 billion. The capital increase wasdetermined based on the 100% equity evaluation value of 2,342,273,700 yuan of Changhong Finance Company asof March 31, 2019, of which 402,998,300 yuan of the Company‘s capital increase of 500 million yuan inChanghong Finance Company was included in its registration capital, and 97,001,700 yuan was included in itscapital reserve, while Changhong Finance Company‘s former shareholders, Changhong Group and SichuanChanghong, gave up their rights to subscribe for capital contributions this time and did not increase capital. Therelated transaction was conducted in accordance with the principles of openness, impartiality, fairness andreasonableness, and there was no situation that damaged the interests of the company and shareholders, especiallythe small and medium shareholders.
3. On October 17, 2019, the resolution of the 28
thmeeting of the ninth board of directors of the company passedand agreed the company to increase the estimated daily related transactions amount occurred among the companyand its holding subsidiaries with Sichuan Changhong Electric Co., Ltd. and its subsidiaries, and with SichuanChanghong Electronics Holding Group Co., Ltd. and its holding subsidiaries in 2019 totaling no more than 118million yuan (excluding tax), such as purchase or sales of equipment, sales of goods, etc.
4. On October 28, 2019, the resolution of the 29
thmeeting of the ninth board of directors of the company passedand agreed the company‘s subsidiary Sichuan Changhong Air-conditioner Co., Ltd. to purchase the land use rightsof four parcels of land (Four parcels of land with an area of 249,830.10 square meters, a total of 374.74 acres, thewarrants are MCGY 2012 No. 00251, MCGY 2012 No. 00254, Chuan 2018 MY Real Estate Property No.0002704, Chuan 2019 MY Real Estate Property No. 0027783). The pricing of this related transaction was subjectto the appraised value of the underlying land as of August 10, 2019, and the transaction price was determined tobe 112,635,100 yuan. The pricing of related transaction was fair and in line with the principles of openness,fairness and impartiality.
5. On November 29 and December 17, 2019, the resolutions of the 31
st
meeting of the ninth board of directors ofthe company, the 16
th meeting of the ninth board of supervisors, and the 4
thextraordinary shareholders‘ meeting of2019 passed and approved the company to change the use and investment of part of the funds raised in the―Intelligent R & D Project‖ and use them to purchase R & D assets such as intelligent infrastructure platformconstruction and software R & D platforms from Sichuan Changhong and its subsidiaries. The pricing of therelated transaction was subject to the appraised value of the underlying asset as of September 30, 2019, and thetransaction price was determined to be 46,617,300 yuan.
6. On November 29 and December 17, 2019, the resolutions of the 31
st
meeting of the ninth board of directors ofthe company, the 16
th meeting of the ninth board of supervisors, and the 4
thextraordinary shareholders‘ meeting of2019 passed and approved the estimated daily related transactions amount occurred among the company and itsholding subsidiaries with the related parties in 2020 totaling no more than 16,536,500,000 yuan (excluding tax),and agreed that the company and Sichuan Changhong Group Finance Co., Ltd. should continue to carry out thefinancial service related transactions such as loans and deposits in 2020.Related searches for disclosure website of interim report with major related transaction concerned
| Interim report | Disclosure date | Website for disclosure |
| Resolution of the 26th session of 9th BOD (2019-057) Resolution of 3rd extraordinary shareholders general meeting of 2019(2019-067) | 31 Aug. 2019, 27 Sept.2019 | Juchao Website: http://www.cninfo.com.cn |
| Resolution of the 27th session of 9th BOD (2019-060) Capital Increased for Sichuan Changhong Group Finance Co., Ltd and Related Party Transaction (2019-061) Resolution of 3rd extraordinary shareholders general meeting of 2019(2019-067) | 10 Sept. 2019, 27 Sept. 2019 | Juchao Website: http://www.cninfo.com.cn |
| Resolution of the 28th session of 9th BOD (2019-069) Increase the forecast announcement of daily related party transactions for year of 2019 (2019-072) | 18 Oct. 2019 | Juchao Website: http://www.cninfo.com.cn |
| Resolution of the 29th session of 9th BOD (2019-073) Purchasing Land Use Right by Subsidiary Sichuan Changhong Air-conditioner Co., Ltd. and Related Party Transaction(2019-074) | 29 Oct. 2019 | Juchao Website: http://www.cninfo.com.cn |
| Resolution of the 31st session of 9th BOD (2019-077) Resolution of the 16th session of 9th Supervisory Committee(2019-078) Change Part of the Usage Direction for Raised Fund and Related Party Transaction(2019-079) Resolution of 4th extraordinary shareholders general meeting of 2019(2019-087) | 30 Nov. 2019, 18 Dec. 2019 | Juchao Website: http://www.cninfo.com.cn |
| Resolution of the 31st session of 9th BOD(2019-077) Resolution of the 16th session of 9th Supervisory Committee(2019-078) Forecast Announcement of Daily Related Party Transactions for year of 2020 (2019-080) Forecast of the Related Party Transaction Continuously With Sichuan Changhong Group Finance Co., Ltd. for year of 2020 (2019-081) Resolution of 4th extraordinary shareholders general meeting of 2019(2019-087) | 30 Nov. 2019, 18 Dec. 2019 | Juchao Website: http://www.cninfo.com.cn |
XVII. Significant contract and implementations(i) Entrust, contract and leasing
1. Entrust
□Applicable √ Not applicable
No entrust in Period.
2. Contract
□Applicable √ Not applicable
No contract in Period.
3. Leasing
□Applicable √ Not applicable
No leasing in the period(ii) Major guarantee
√Applicable □ Not applicable
1. Guarantee
The guarantees provided by the company to the wholly-owned and holding subsidiaries are guarantees forsupporting bank credits generated by its production and operation. The guaranty style is the guarantee. Thecompany and its subsidiaries did not provide guarantees to subjects outside the scope of consolidated statements.The company and its holding subsidiaries had no overdue external guarantees, no external guarantees involvinglitigation, and no losses due to the award of the guarantee. Up to 31 December 2019, the external guarantees ofthe Company and subsidiaries are as follows:
In 10 thousand Yuan
| Particulars about the external guarantee of the Company and subsidiaries (Barring the guarantee for subsidiaries) | |||||||||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening | Actual guarantee limit | Guarantee type | Guarantee term | Complete implementation or not | Guarantee for related party | |||||||
| - | - | - | - | - | - | - | - | - | |||||||
| Total approving external guarantee in report period (A1) | 0 | Total actual occurred external guarantee in report period (A2) | 0 | ||||||||||||
| Total approved external guarantee at the end of report period ( A3) | 0 | Total actual balance of external guarantee at the end of report period (A4) | 0 | ||||||||||||
| Guarantee between the Company and the subsidiaries | |||||||||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee type | Guarantee term | Complete implementation or not | Guarantee for related party | |||||||
| Zhongshan Changhong Electric Co., Ltd. | Notice No.: 2018-005, 2018-009 and 2018-029 released on 30 March, 11 May 2018 respectively | 70,000 | 30 Mar. 2018 | 10,000 | Joint liability guaranty | One year | Y | N | |||||||
| 11 Apr. 2018 | 6,000 | Joint liability guaranty | One year | Y | N | ||||||||||
| 12 Apr. 2018 | 5,000 | Joint liability guaranty | One year | Y | N | ||||||||||
| 18 Apr. 2018 | 5,500 | Joint liability guaranty | One year | Y | N | ||||||||||
| 21 Aug. 2018 | 5,000 | Joint liability guaranty | One year | Y | N | ||||||||||
| 11 Sept. 2018 | 10,000 | Joint liability guaranty | One year | N | N | ||||||||||
| 11 Oct. 2018 | 5,000 | Joint liability guaranty | One year | N | N | ||||||||||
| 25 Oct. 2018 | 10,000 | Joint liability guaranty | One year | Y | N | ||||||||||
| Notice No.: 2019-004, 2019-006 and 2019-012 released on 30 Jan., 23 Feb. 2019 respectively | 130,000 | 22 Jan. 2019 | 10,000 | Joint liability guaranty | One year | N | N | ||||||||
| 4 Apr. 2019 | 5,500 | Joint liability guaranty | One year | N | N | ||||||||||
| 30 Apr. 2019 | 10,000 | Joint liability guaranty | One year | N | N | ||||||||||
| 31 May 2019 | 5,000 | Joint liability guaranty | One year | N | N | ||||||||||
| 3 Jul. 2019 | 5,000 | Joint liability guaranty | 4-month | N | N | ||||||||||
| 23 Jul. 2019 | 15,000 | Joint liability guaranty | One year | N | N | ||||||||||
| 21 Aug. 2019 | 2,000 | Joint liability guaranty | One year | N | N | ||||||||||
| 19 Sept. 2019 | 10,000 | Joint liability guaranty | One year | N | N | ||||||||||
| Guangdong Changhong Ridian Technology Co., Ltd. | Notice No.: 2018-005, 2018-009 and 2018-029 released on 30 March, 11 May 2018 respectively | 25,500 | 31 Aug. 2018 | 4,000 | Joint liability guaranty | 7-month | Y | N | |||||||
| 22 Sept. 2018 | 4,500 | Joint liability guaranty | One year | Y | N | ||||||||||
| Notice No.: 2019-004, 2019-006 and | 26,000 | 22 Jan. 2019 | 2,500 | Joint liability guaranty | One year | N | N | ||||||||
| 30 Apr. 2019 | 4,000 | Joint liability guaranty | One year | N | N | ||||||||||
| 2019-012 released on 30 Jan., 23 Feb. 2019 respectively | 4 Sept. 2019 | 6,500 | Joint liability guaranty | One year | N | N | ||
| Zhongke Meiling Cryogenic Technology Co., Ltd. | Notice No.: 2018-005, 2018-009, 2018-056 and 2018-059 released on 30 March, 11 May and 18 Oct. 2018 respectively | 9,000 | 29 Jun. 2018 | 1,000 | Joint liability guaranty | One year | Y | N |
| 20 Jul. 2018 | 2,000 | Joint liability guaranty | 10-month | Y | N | |||
| Notice No.: 2019-004, 2019-006 and 2019-012 released on 30 Jan., 23 Feb. 2019 respectively | 14,000 | 17 Jul. 2019 | 3,000 | Joint liability guaranty | One year | N | N | |
| 23 Aug. 2019 | 2,000 | Joint liability guaranty | One year | N | N | |||
| 24 Sept. 2019 | 920 | Joint liability guaranty | One year | N | N | |||
| 22 Oct. 2019 | 3,000 | Joint liability guaranty | One year | N | N | |||
| 30 Dec. 2019 | 2,000 | Joint liability guaranty | 11-month | N | N | |||
| Sichuan Changhong Air-conditioner Co., Ltd. | Notice No.: 2019-004, 2019-006 and 2019-012 released on 30 Jan., 23 Feb. 2019 respectively | 100,000 | 30 Jul. 2019 | 20,000 | Joint liability guaranty | 8-month | N | N |
| Changhong RUBA Trade Company | Notice No.:2018-061 and No.: 2018-063 released on 9 Nov. 2018 | 6,264 | 10 Jan. 2019 | 2,062.41 | Joint liability guaranty | One year | N | N |
| 10 Jan. 2019 | 1,888.08 | Joint liability guaranty | 10.5-month | Y | N | |||
| Notice No.: 2019-083, 2019-084 and 2019-087 released on 7 Dec., 18 Dec. 2019 respectively | 6,345 | 23 Dec. 2019 | 2,103.51 | Joint liability guaranty | One year | N | N | |
| Jiangxi Meiling Electric Appliance Co., Ltd. | Notice No.: 2019-004, 2019-006 and 2019-012 released on 30 Jan., 23 Feb. 2019 respectively | 25,000 | 10 Jan. 2019 | 5,000 | Joint liability guaranty | One year | N | N |
| 21 Mar. 2019 | 10,000 | Joint liability guaranty | One year | N | N | |||
| Hefei Meiling Nonferrous Metal Products Co., Ltd | Notice No.: 2019-004, 2019-006 and 2019-012 released on 30 Jan., 23 Feb. 2019 respectively | 3,000 | 19 Jun. 2019 | 500 | Joint liability guaranty | 6-month | Y | N |
The above-mentioned guarantee objects are the wholly-owned and holding subsidiaries of the Company, and these wholly-ownedand holding subsidiaries are in normal production and operation, there are no overdue loans, and the guarantee risks are controllable.During the reporting period, the highest level of security the Company provided amounted to 3043.45 million Yuan by the approval,the actual amount of guarantee is 1959.74 million Yuan. At the end of the reporting period, the practical guarantee balance amountedto 1,355,859,200 Yuan, accounting for the Company‘s latest net assets ratio of 27.09%.Explanation on guarantee with composite way: N/A
2. Guarantee outside against the regulation
| Total amount of approving guarantee for subsidiaries in report period (B1) | 304,345 | Total amount of actual occurred guarantee for subsidiaries in report period (B2) | 195,974.00 | ||||||||
| Total amount of approved guarantee for subsidiaries at the end of reporting period (B3) | 304,345 | Total balance of actual guarantee for subsidiaries at the end of reporting period (B4) | 135,585.92 | ||||||||
| Guarantee of the subsidiaries for the subsidiaries | |||||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening | Actual guarantee limit | Guarantee type | Guarantee term | Complete implementation or not | Guarantee for related party | |||
| - | - | - | - | - | - | - | - | - | |||
| Total amount of approving guarantee for subsidiaries in report period (C1) | 0 | Total amount of actual occurred guarantee for subsidiaries in report period (C2) | 0 | ||||||||
| Total amount of approved guarantee for subsidiaries at the end of reporting period (C3) | 0 | Total balance of actual guarantee for subsidiaries at the end of reporting period (C4) | 0 | ||||||||
| Total amount of guarantee of the Company (total of three above mentioned guarantee) | |||||||||||
| Total amount of approving guarantee in report period (A1+B1+C1) | 304,345 | Total amount of actual occurred guarantee in report period (A2+B2+C2) | 195,974.00 | ||||||||
| Total amount of approved guarantee at the end of report period (A3+B3+C3) | 304,345 | Total balance of actual guarantee at the end of report period (A4+B4+C4) | 135,585.92 | ||||||||
| Ratio of actual guarantee (A4+B4+C4) in net assets of the Company | 27.09% | ||||||||||
| Including: | |||||||||||
| Amount of guarantee for shareholders, actual controller and its related parties (D) | 0 | ||||||||||
| The debts guarantee amount provided for the guaranteed parties whose assets-liability ratio exceed 70% directly or indirectly (E) | 89,665.92 | ||||||||||
| Proportion of total amount of guarantee in net assets of the Company exceed 50% (F) | 0 | ||||||||||
| Total amount of the aforesaid three guarantees (D+E+F) | 89,665.92 | ||||||||||
| Explanations on possibly bearing joint and several liquidating responsibilities for undue guarantees (if applicable) | N/A | ||||||||||
| Explanations on external guarantee against regulated procedures (if applicable) | N/A | ||||||||||
□Applicable √ Not applicable
No guarantee outside against the regulation in Period.(iii) Entrust others to cash asset management
1. Trust financing
√Applicable □ Not applicable
Trust financing in the period
In 10 thousand Yuan
| Type | Capital resources | Amount for entrust | Undue balance | Overdue amount |
| Bank financing products | Idle raised funds | 90,400 | 0 | 0 |
| Own fund | 30,000 | 0 | 0 | |
| Broker financing products | Own fund | 20,000 | 0 | 0 |
| Total | 140,400 | 0 | 0 | |
Details of the single major amount, or high-risk trust investment with low security, poor fluidity andnon-guaranteed:
√Applicable □ Not applicable
In 10 thousand Yuan
| Trustee institution (or name of trustee) | Trustee type | Product type | Amount | Source of funds | Start date | Expiry date | Capital investment purpose | Criteria for fixing reward | Reference annual rate of return | Anticipated income (if applicable) | Actual gains/losses in period | Actual collected gains/losses in period | Amount of reserve for devaluation of withdrawing (if applicable) | Whether approved by legal procedure (Y/N) | Whether has entrust finance plan in the future | Summary of the items and related query index (if applicable) |
| Soochow Securities Co., Ltd. | Broker | Asset management plan | 20,000 | Own fund | 12 Apr. 2018 | Recovered in advance | The asset is planned to invest in the Jinshiqi Phase II debt financing plan of 2018 issued by Jinshiqi International Holdings Co., Ltd. at the Beijing Financial Assets Exchange. | It has been recovered in advance, and determined by the actual holding period | 8.50%(management rate and custody rate excluded) | - | 2,269.50 | 2,269.50 | N/A | Y | Not applicable | Juchao Website(www.cninfo.com.cn) (Notice No.: 2018-014, 2018-015, 2019-025, 2019-060, 2019-076 and 2019-094) |
| Chengdu Branch of Bohai Bank Co., Ltd | Bank | Principal-guaranteed with floating income | 48,000 | Idle raised funds | 21 Dec. 2018 | 10 Jun. 2019 | The structured deposit product, the structural derivatives tied with the 3-month interbank lending rate in London (Libor) | Annualized returns: 4.20% | 4.20% | 944.48 | 944.48 | 944.48 | N/A | Y | Not applicable | Juchao Website(www.cninfo.com.cn) (Notice No.: 2018-078) |
| Hefei Branch of Shanghai | Bank | Principal-guaranteed & | 23,000 | Idle raised | 26 Dec. 2018 | 30 Jan. 2019 | Investment of the central bank bill in bank market, treasury bond, | Annualized returns: | 3.95% | 87.12 | 85.80 | 85.80 | N/A | Y | Not applicable | Juchao Website(www.cni |
| Pudong Development Bank | income-guaranteed | funds | corporate bonds, short-term financing, medium-term bills, inter-bank borrowing, inter-bank deposits, bills or bill repurchase etc. | 3.95% | nfo.com.cn) (Notice No.: 2018-080) | |||||||||||
| Hefei Branch of China Guangfa Bank | Bank | Principal-guaranteed with floating income | 10,000 | Idle raised funds | 27 Dec. 2018 | 28 Jan. 2019 | The principal of funds raised by this structured deposit is included in the unified operations management of the funds of China Guangfa Bank. The proportion of investment in money market instruments (including but not limited to bank deposits, inter-bank lending, buy-back, etc.) ranges from 20% to 100%, and the proportion of bonds (including but not limited to national debt, central bank bills, financial bonds, short-term financing bonds, enterprise bonds, medium-term notes, corporate bonds) and other financial assets ranges from 0% to 80%, and the income is invested in the financial derivatives linking to the exchange rate of the US dollar against the Hong Kong dollar. | Annualized returns: 3.90% | 3.90% | 34.19 | 34.19 | 34.19 | N/A | Y | Not applicable | Juchao Website(www.cninfo.com.cn)(Notice No.: 2018-080) |
| Mianyang Branch of China Everbright | Bank | Principal-guaranteed & income-guaranteed | 10,000 | Idle raised funds | 28 Dec. 2018 | 28 Jan. 2019 | The product is mainly composed of risk-free assets investment and option trading. The product principal is invested in bank fixed time | Annualized returns: 3.75% | 3.75% | 31.85 | 31.25 | 31.25 | N/A | Y | Not applicable | Juchao Website(www.cninfo.com.cn)(Notice No.: 2018-081) |
| Bank | deposits, and the corresponding application of funds is based on the bank deposits, and the income is linked to the bank‘s comprehensive liability cost. | |||||||||||||||
| Anhui Branch of Bank of Communications | Bank | Principal-guaranteed with floating income | 22,400 | Idle raised funds | 31 Jan. 2019 | 2 May 2019 | Take the funds collected by the structured deposit sales as the nominal principal, and trade the capital cost of the nominal principal as investment income and financial derivatives transactions related to comparison value of 3MShibor with the counter party. | Annualized returns: 4.25% | 4.25% | 237.35 | 242.57 | 242.57 | N/A | Y | Not applicable | Juchao Website(www.cninfo.com.cn)(Notice No.: 2019-009) |
| Hefei Branch of Shanghai Pudong Development Bank | Bank | Principal-guaranteed & income-guaranteed | 10,000 | Idle raised funds | 30 Jan. 2019 | 2 May 2019 | Investment of the central bank bill in bank market, treasury bond, corporate bonds, short-term financing, medium-term bills, inter-bank borrowing, inter-bank deposits, bills or bill repurchase etc. | Annualized returns: 4.20% | 4.20% | 105.86 | 110.83 | 110.83 | N/A | Y | Not applicable | Juchao Website(www.cninfo.com.cn)(Notice No.: 2019-009) |
| Hefei Branch of China Guangfa Bank | Bank | Principal-guaranteed with floating income | 10,000 | Idle raised funds | 30 Jan. 2019 | 2 May 2019 | The principal of funds raised by this structured deposit is included in the unified operations management of the funds of China Guangfa Bank. The proportion of investment in money market instruments (including but not limited to bank deposits, inter-bank lending, buy-back, etc.) ranges from 20% to | Annualized returns: 4.25% | 4.25% | 107.12 | 107.12 | 107.12 | N/A | Y | Not applicable | Juchao Website(www.cninfo.com.cn)(Notice No.: 2019-009) |
| 100%, and the proportion of bonds (including but not limited to national debt, central bank bills, financial bonds, short-term financing bonds, enterprise bonds, medium-term notes, corporate bonds) and other financial assets ranges from 0% to 80%, and the income is invested in the financial derivatives linking to the exchange rate of the US dollar against the Hong Kong dollar. | ||||||||||||||||
| Anhui Branch of Bank of Communications | Bank | Principal-guaranteed with floating income | 17,000 | Idle raised funds | 17 May 2019 | 16 Jul. 2019 | The structured deposits of Bank of Communication - win to fortune, and linked to the 3-month Shanghai interbank offered rate (3MShibor) | Annualized returns: 4.10% | 4.10% | 114.58 | 114.58 | 114.58 | N/A | Y | Not applicable | Juchao Website(www.cninfo.com.cn)(Notice No.: 2019-033) |
| Chengdu Branch of Industrial Bank Co., Ltd. | Bank | Principal-guaranteed with floating income | 20,000 | Idle raised funds | 17 May 2019 | 19 Aug. 2019 | This product is a corporate finance structured deposit from Industrial Bank, the annual interest rate its fixed income is 2.01%, and the floating income is linked to the fluctuations of the Shanghai Gold AM base price of the underlying Shanghai Gold Exchange. | Annualized returns: 3.80% | 3.80% | 195.73 | 195.73 | 195.73 | N/A | Y | Not applicable | Juchao Website(www.cninfo.com.cn)(Notice No.: 2019-34) |
| Chengdu Branch of Bohai Bank Co., Ltd | Bank | Principal-guaranteed with floating income | 20,000 | Idle raised funds | 20 Jun. 2019 | 22 Jul. 2019 | The structured deposit product, the structural derivatives tied with the 3-month interbank lending rate in London (Libor) | Annualized returns: 3.55% | 3.55% | 62.25 | 62.25 | 62.25 | N/A | Y | Not applicable | Juchao Website(www.cninfo.com.cn)(Notice No.: 2019-038) |
| Chengdu | Bank | Principal-gu | 26,000 | Idle | 20 Jun. | 18 Dec. | The structured deposit product, the | Annualized | 3.85% | 496.38 | 496.39 | 496.39 | N/A | Y | Not | Juchao |
| Branch of Bohai Bank Co., Ltd | aranteed with floating income | raised funds | 2019 | 2019 | structural derivatives tied with the 3-month interbank lending rate in London (Libor) | returns: 3.85% | applicable | Website(www.cninfo.com.cn)(Notice No.: 2019-038) | ||||||||
| Huaining Road Branch of Hefei Science & Technology Rural Commercial Bank | Bank | Principal-guaranteed with floating income | 5,000 | Idle raised funds | 17 Jul. 2019 | 17 Sept. 2019 | The structured deposit product, contract code of the investment in gold futures: au1912 | Annualized returns: 3.80% | 3.80% | 32.27 | 32.27 | 32.27 | N/A | Y | Not applicable | Juchao Website(www.cninfo.com.cn)(Notice No.: 2019-046) |
| Hefei Branch of Shanghai Pudong Development Bank | Bank | Principal-guaranteed with floating income | 5,000 | Idle raised funds | 18 Jul. 2019 | 24 Sept. 2019 | The structured deposit product, investment of the central bank bill in bank market, treasury bond, corporate bonds, short-term financing, medium-term bills, inter-bank borrowing, inter-bank deposits, bills or bill repurchase etc., and option products with interest rate linked | Annualized returns: 3.80% | 3.80% | 35.39 | 34.83 | 34.83 | N/A | Y | Not applicable | Juchao Website(www.cninfo.com.cn)(Notice No.: 2019-046) |
| Hefei Branch of Huaxia Bank | Bank | Principal-guaranteed with floating income | 7,000 | Idle raised funds | 19 Jul. 2019 | 19 Sept. 2019 | The structured deposit product, all or part of the interest generated by the deposit is linked to the gold futures price | Annualized returns: 3.90% | 3.90% | 46.37 | 46.37 | 46.37 | N/A | Y | Not applicable | Juchao Website(www.cninfo.com.cn)(Notice No.: 2019-046) |
| Chengdu Branch of Industrial Bank Co., Ltd. | Bank | Principal-guaranteed with floating income | 8,700 | Idle raised funds | 23 Aug. 2019 | 25 Nov. 2019 | The structured deposit product. A structured deposit refers to the business product that enables the depositor to obtain higher returns on the basis of taking certain risks by | Annualized returns: 3.80% | 3.80% | 85.14 | 85.14 | 85.14 | N/A | Y | Not applicable | Juchao Website(www.cninfo.com.cn)(Notice No.: 2019-054) |
| being linked to the fluctuation of interest rate, exchange rate and index etc., or the credit status of an entity. | ||||||||||||||||
| Chengdu Wuyang Ave. Branch of China CITIC Bank | Bank | Principal-guaranteed with floating income | 30,000 | Own fund | 26 Aug. 2019 | 25 Nov. 2019 | The structured deposit product, which is invested through structural interest rate swap etc. | Annualized returns: 3.90% | 3.90% | 291.69 | 291.69 | 291.69 | N/A | Y | Not applicable | Juchao Website(www.cninfo.com.cn)(Notice No.: 2019-056) |
| Chengdu Branch of Bohai Bank Co., Ltd | Bank | Principal-guaranteed with floating income | 12,000 | Idle raised funds | 23 Sept. 2019 | 23 Dec. 2019 | The structured deposit product, the structural derivatives tied with the 3-month interbank lending rate in London (Libor) | Annualized returns: 3.95% | 3.95% | 118.75 | 118.18 | 118.18 | N/A | Y | Not applicable | Juchao Website(www.cninfo.com.cn)(Notice No.: 2019-065) |
| Chengdu Branch of Bohai Bank Co., Ltd | Bank | Principal-guaranteed with floating income | 5,000 | Idle raised funds | 26 Sept. 2019 | 23 Dec. 2019 | The structured deposit product, the structural derivatives tied with the 3-month interbank lending rate in London (Libor) | Annualized returns: 3.95% | 3.95% | 47.61 | 47.61 | 47.61 | N/A | Y | Not applicable | Juchao Website(www.cninfo.com.cn)(Notice No.: 2019-066) |
| Total | 309,100 | -- | -- | -- | -- | -- | -- | 3,074.13 | 5,350.78 | -- | -- | -- | -- | -- | ||
Entrust financial expected to be unable to recover the principal or impairment might be occurred
□Applicable √ Not applicable
2. Entrust loans
□Applicable √ Not applicable
No entrust loans in the period.(iv) Other material contracts
□Applicable √ Not applicable
No other material contracts in the periodXVIII. Social responsibility(i) Performance of social responsibility: Not applicable(ii) Fulfill the precise social responsibility for poverty alleviationThe Company has no precise social responsibility for poverty alleviation in the period and has no follow-up planeither.(iii) Environment protectionThe listed Company and its subsidiary whether belongs to the key sewage units released from environmentalprotection department: √ Yes □ No
| Name of company or subsidiary | Major pollutants and name of typical pollutants | Way of discharge | number of discharge outlets | Distribution of discharge outlets | concentration of discharge | Pollutants discharge standards enacted | Total discharge volume | Total discharge volume certified | Discharge beyond the standards |
| Zhongshan Changhong Electric Co., Ltd. | Exhaust constitutes the major pollutants, and the typical pollutants comprise of particulates, NMHC and odor concentration. | High altitude emissions after meeting the treatment standards | 4 | One for 1#Workshop and 2#Workshop each; 3# workshop has 2 | Concentration of particulates discharge＜20mg/m?; Concentration of NMHC emission:4.87mg/ m?; Concentration of stink: 724 non-dimensional. | The Emission Limits for Air Pollutants (DB44/27—2001) applies to exhaust emission. Concentration of particulates discharge:120mg/ m?; Concentration of NMHC emission:120mg/ m?; Concentration of stink: 2000 non-dimensional. | Satisfy the standards for total volume control | 208,800,000 standard cubic meters | Not beyond the standards |
Note: Sichuan Changhong Air Conditioner Co., Ltd. (hereinafter referred to as ―Changhong Air-conditioner‖), a wholly-ownedsubsidiary of the company, is operates located in Mianyang City, Sichuan Province. In 2018, Changhong Air-conditioner wasincluded in the list of key pollutant discharge units in the atmosphere for 2018. However, through active implementation of corporatesocial responsibility and social obligations in daily environmental protection and its pollutant control work, Changhong Air
Conditioning was no longer listed as a key pollutant discharge unit by Mianyang City Environmental Protection Department in 2019.
1.Construction and operation of pollution prevention facilities
The Company and its subsidiaries actively respond to the national ecological civilization construction plan, andactively participate in national environmental protection works in line with the purpose of actively fulfilling itscorporate social responsibility. In recent years, The Company and its subsidiaries have actively explored theintroduction of advanced management concepts and methods, and invested a large amount of money in thepurchase of pollution control equipment and facilities. And realized emission reduction by scientific technicalmethods by the investment in installation of activated carbon adsorption treatment equipment, welding dustpurifier facilities etc. At the same time, in order to ensure the effective operation of the management equipmentand facilities, the Company and its subsidiaries have adopted such management measures as setting up specialpersonnel to manage and maintain the operation of the equipment and facilities, formulating proper rules foroperation and maintenance of the equipment and facilities, emergency disposal regulations, supervision andassessment mechanism, allocating special maintenance funds and so on, so as to ensure the effective operation ofthe governing facilities in a full round, delivering its best to protect and improve the ecological environmentaround the enterprise.
2. Environment impact assessment and other required environment protection administrative license forconstruction projectsThe Company and its subsidiaries earnestly implement the Environmental Protection Law, the EnvironmentalImpact Assessment Law and the Regulations on Environmental Protection Management of Construction Projects,consciously abide by environmental protection laws and regulations, industry requirements and governmentregulations. For new, renovated and expanded projects, the Company and its subsidiaries adhere to the projectenvironmental impact assessment and "three simultaneous" system, fully implement environmental protectionmeasures, act well in environment protection management in respect of project planning, design, construction andoperation, make full use of advanced crafts and technological means to reduce environmental pollution.Environmental impact assessment is carried out synchronously while making the feasibility study for aconstruction project. Third-party professional parties are engaged to analyze the industrial policy, land useplanning, environmental impact and the feasibility of environmental protection measures of the project.Construction will be started only after approved by the competent environmental protection authorities. Duringthe construction, environmental protection requirements are earnestly implemented, environmental protectionfacilities are built synchronously, environmental protection acceptance of the project is arranged in time uponcompletion of the project to ensure that the project meets the acceptance criteria and could be put into officialoperation with all the environmental impact assessment requirements met. During the operation period, theCompany conducts pollution prevention to ensure the normal operation of environmental protection facilities instrict compliance with the relevant environmental impact assessment documents and the reply requirements of thecompetent environmental protection authorities.
3. Emergency plan for environmental emergencies
The Company and its subsidiaries have set up related emergency plans for environmental emergencies. The
Company and its subsidiaries have determined classified warning based on the different extent and severity ofenvironmental impacts that may be caused by the material environmental factors, defined the responsibilities foremergency response, regulated emergency handling procedures, established special team to handle emergenciesand organized regular rehearsal and appraisal of relevant emergency plans, so as to ensure the effectiveness ofthese plans, improve their capability of emergency handling and take precautions against contingent emergencies.
4. Independent plan to monitor environment
The Company and its subsidiaries have established regular monitoring plan for environmental pollutants, set upspecial funds for pollutants monitoring, and engaged third-party authoritative to regularly monitor the operation ofmajor pollution-production links and environmental protection treatment facilities in connection with the majorpollutants produced by the Company and its subsidiaries, to make sure that the Company and its subsidiariescould achieve emission standards in a full round.
5. Other environment information that should be disclosed
According to the Environmental Information Disclosure Measures of Enterprises and Institutions, the Companyand its subsidiaries have realized the disclosure of information relating to environmental impact assessment,project acceptance, pollutants production and discharge, solid waste management, important environmentalfactors, environmental objectives and performance of construction projects.
6. Other environment related information
In order to further realize the scientific and systematic environmental protection work of the Company and itssubsidiaries, the Company and its subsidiaries have established an environmental management system inaccordance with ISO14001 standards, set up an environmental protection organization, acquired environmentalprotection resources, regularly identified, updated and appraised environmental factors, compliance obligations,environmental risks and opportunities, and regularly determined environmental objectives and managementprograms. Through the implementation of management programs and continuous normal improvement, theenvironmental performance of the Company and its subsidiaries has been continuously improved. Through regularinternal audit and management review, as well as the verification and examination of the third parties, theenvironmental management system of the Company and its subsidiaries has been effectively controlled and fullymeets the system management standards and relevant regulations.XIX. Explanation on other significant events
√Applicable □ Not applicable
(1) In January 2019, Mr. Wu Dinggang, the former president of the company, applied for resignation as thepresident of the company due to changes in his personal work, but he continues to serve as the vice-president ofthe company, a member of the strategy committee of the board of directors, and a member of the remuneration andappraisal committee. At the same time, after the resolution of the 18
thmeeting of the ninth board of directors ofthe company, it‘s agreed to authorize Mr. Kou Huameng, the director and vice president of the company, to act onthe president‘s behalf, the term is from the effective date of the board resolution, i.e. January 11, 2019, to the dateon which the board of directors engages a new president. Found more on appointed media ―Securities Times‖,―China Securities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the Company disclosed
in the form of announcement (Announcement No. 2019-001 and No.2019-002) on 12 Jan. 2019.
(2) In 2019, former chairman of the Company Mr. Li Wei, applied for resign the followed positions for workcauses under the name of the Company, including chairman of 9
thBOD, Director, chief members of the strategycommittee member of the nomination committee. At the same time, the resolutions of the 22
th
meeting of the ninthboard of directors of the company passed and agreed to engage Mr. Wu Dinggang as the company‘s chairman ofthe ninth board of directors for a term of office consistent with the term of the current board of directors. Foundmore on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖ andwww.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-029 andNo.2019-030) on 27 April 2019.
(3) On January 14, 2019, the company received a Notification Letter of Caitong Fund Management Co., Ltd.About the Progress of Shareholding Reduction Plan of Changhong Meiling Co., Ltd. from Caitong FundManagement Co., Ltd. (hereinafter referred to as ―Caitong Fund‖) that held more than 5% of the company‘s shares,Caitong Fund reduced its holdings of the company‘s shares of 12,160,298 shares in total by centralized biddingtransactions or block trading from October 18, 2018 to January 13, 2019, accounting for 1.1641% of thecompany's total share capital.On February 13, 2019, the company received the ―Short Form Report on Changes in Equity of ChanghongMeiling Co., Ltd.‖ from Caitong Fund, Caitong Fund reduced its holdings of the shares of Changhong Meiling of2,600,729 shares in total by centralized bidding transactions from January 14, 2019 to February 12, 2019,accounting for 0.25% of the company's total share capital. After this equity change, Caitong Fund holds52,229,844 shares of Changhong Meiling, accounting for 4.999995% of Changhong Meiling's total share capital,which is no longer a shareholder holding more than 5% of the company's shares.On April 15, 2019, the company received a Notification Letter of Caitong Fund Management Co., Ltd. About theProgress of Shareholding Reduction Plan of Changhong Meiling Co., Ltd. from Caitong Fund. Caitong Fundreduced holding of 7,430,612 shares in The Company via collective bidding trading during the period from 13 Feb.2019 to 13 April 2019, accounting for 0.7113% of the total share capital of the Company. After the reduction,Caitong Fund still holds 44,799,232 shares of the company, accounting for 4.2887% of the company's total equity.Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-003,No.2019-011 and No.2019-024) on 15 Jan. 2019, 14 Feb. 2019 and 16 April 2019.
(4)The resolutions of the 19
th meeting of the Ninth Board of Directors, the 10
thmeeting of the Ninth Board ofSupervisors, and the 1
stExtraordinary General Meeting of 2019 passed and agreed the company to provide creditguarantees of 2980 million yuan in total for its wholly-owned and controlled subsidiaries in 2019, the guaranteeperiod is one year for the newly increased guarantee amount for the current year and the amount of renewalinsurance during Current Year.The resolutions passed at the 32
nd
meeting of the company‘s ninth board of directors and the 4
th
extraordinaryshareholders‘ meeting in 2019 agreed that the company would continue to provide domestic guarantees for RUBA
Trading Company‘s application for loans from local banks, the total guarantee amount did not exceed $ 9 millionwith guarantee period of one year, which was used for operating capital turnover of RUBA Trading Company.The resolutions of the 33
rd meeting of the Ninth Board of Directors, the 17
thmeeting of the Ninth Board ofSupervisors, and the 1
stExtraordinary General Meeting of 2020 passed and agreed the company to provide creditguarantees of 3670 million yuan in total for its wholly-owned and controlled subsidiaries in 2020, the guaranteeperiod is one year for the newly increased guarantee amount for the current year and the amount of renewalinsurance during Current Year.Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-004,No.2019-005, No.2019-006, No.2019-008, No.2019-010, No.2019-012, No.2019-083, No.2019-084,No.2019-085, No.2019-087, No.2019-088, No.2019-089, No.2019-090 and No.2020-002) on 30 Jan., 14 Feb., 23Feb., 7 Dec., 18 Dec., 26 Dec. 2019 and 11 Jan. 2020 respectively.
(5) The resolution of the 19
thmeeting of the Ninth Board of Directors of the Company passed and agreed thecompany to apply for a special credit line of up to 300 million yuan in the bank notes pool to Hefei Branch ofChina Everbright Bank; and being deliberated and approved by the resolution of 29
th session of 9
th BOD and 4
th
extraordinary shareholders general meeting of 2019, the Company and its subsidiary are agreed to apply for aspecial credit line of up to 600 million Yuan, 500 million Yuan, one billion Yuan, 300 million Yuan and 500million Yuan in the bank notes pool to Hefei Branch of Hangzhou Bank, Hefei Branch of Huaxia Bank, AnhuiBranch of Bank of Communications, Hefei Branch of Industrial Bank and Hefei Branch of China Zheshang Bankrespectivey, with a credit period of one year, the credit varieties are mainly used for special business of bill pooland bill pledge is adopted. Found more on appointed media ―Securities Times‖, ―China Securities Journal‖,―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the Company disclosed in the form ofannouncement (Announcement No. 2019-004, No.2019-007, No.2019-073, No.2019-075 and No. 2019-087) on30 Jan. and 29 Oct. 2019 respectively.
(6) On February 25, 2019, the company received the Notice of Sichuan Changhong Electric Co., Ltd. and itsConcerted Action Person CHANGHONG (HK) TRADING LIMITED, Ltd. to Increase the Shareholding ofChanghong Meiling Co., Ltd. and the Equity Changes (hereinafter referred to as ―Notice‖). Sichuan Changhongand its concerted action person CHANGHONG (HK) TRADING LIMITED (hereinafter referred to as ―HKChanghong‖ or ―concerted action person‖) bought 16,231,024 shares of Changhong Meiling (including13,751,756 shares of Changhong Meiling A shares and 2,479,268 shares of Changhong Meiling B shares) bybidding transaction method through the secondary market from November 12, 2018 to February 25, 2019,accounting for 1.55% of Changhong Meiling‘s total share capital, consequently, the equity ratio of ChanghongMeiling held by Sichuan Changhong and concerted action person cumulative increased by 5% from September2009 to February 2019.Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-003
and detailed statement of changes in interests) on 26 Feb. 2019 and 28 Feb. 2019.
(7) In late March 2019, the Company received the "Notice of Civil Penalty" issued by U.SDepartmentofEnergy("DOE", i.e. the US Department of Energy) and accepted the settlement proposal proposed by the DOE. As of theend of the reporting period, the company has paid a fine of US$1,901,540 to the US Department of Energy. Foundmore on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖ andwww.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-014) on26 March 2019.
(8) The resolutions of the 20
th meeting of the Ninth Board of Directors, the 11
th
meeting of the Ninth Board ofSupervisors, and the 2018 Annual General Meeting of Shareholders passed and agreed the company to change thecorresponding accounting policies according to the relevant regulations and requirements of the Ministry ofFinance so as to apply to the new regulations. Found more on appointed media ―Securities Times‖, ―ChinaSecurities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the Company disclosed in theform of announcement (Announcement No. 2019-015, No.2019-016, No.2019-018, and No.2019-035) on 29March 2019, and 22 May 2019
(9) The resolutions of the 20
thmeeting of the Ninth Board of Directors and the 2018 Annual General Meeting ofShareholders passed and agreed the company and its subsidiaries to carry out forward foreign exchange fundtrading business from July 1, 2019 to June 30, 2020, the balance of the business transaction does not exceedUS$650 million (mainly including US dollar, Australian dollar, Euro, and other foreign exchanges are allconverted into US dollars), and the maximum single-business delivery period is no more than one year. Foundmore on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖ andwww.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-015,No.2019-020, and No.2019-035) on 29 March 2019, and 22 May 2019
(10) In accordance with the resolutions of the 20
thmeeting of the Ninth Board of Directors and the 2018 AnnualGeneral Meeting of Shareholders, in order to safeguard the company's value and the shareholders' rights, and inlight of the company's actual situation and business development needs, it‘s agreed to revise the relevantprovisions of the repurchase of shares and the business scope of the company in the "Articles of Association","Rules of Procedure of the General Meeting of Shareholders", and ―Rules of Procedure of the Board of Directors".Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-015,No.2019-022, and No.2019-035) on 29 March 2019, and 22 May 2019
(11) The resolutions of the 21
st meeting of the Ninth Board of Directors, the 12
th
meeting of the Ninth Board ofSupervisors passed and agreed the company to implement the new financial instrument standards and change therelevant accounting policies in accordance with the relevant regulations and requirements of the Ministry ofFinance. Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong KongCommercial Daily‖ and www.cninfo.com.cn that the Company disclosed in the form of announcement(Announcement No. 2019-025, No.2019-026, and No.2019-028) on 20 April 2019
(12) The resolutions of the 22
ndmeeting of the Ninth Board of Directors and the 2018 Annual General Meeting ofShareholders of the company passed and agreed the by-election of Mr. Zhong Ming as a non-independent directorof the Ninth Board of Directors of the Company, and his term of office is the same as that of the Ninth Board ofDirectors. Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong KongCommercial Daily‖ and www.cninfo.com.cn that the Company disclosed in the form of announcement(Announcement No. 2019-030, and No.2019-035) on 27 April 2019 and 22 May 2019
(13) In reporting period, the Company and its subordinate controlling subsidiary, have accumulated receivedvarious kinds of government subsidies as 101,096,075.33 Yuan. Found more on appointed media ―SecuritiesTimes‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the Companydisclosed in the form of announcement (Announcement No. 2019-036, No. 2019-048 and No. 2019-093) on 12June, 13 August and 31 December 2019 respectively.
(14) The resolutions of the 20
th meeting of the Ninth Board of Directors, the 11
thmeeting of the Ninth Board ofSupervisors, and the 2018 Annual General Meeting of Shareholders passed the ―Plan for Profit Distribution of theCompany in 2018‖, and the independent directors of the company made independent approval opinions, takinginto account the interests of shareholders and the long-term development needs of the company, agreed thecompany to use the total share capital of 1,044,597,881 shares on December 31, 2018 as the base, and distribute acash dividend of 0.6 yuan (including tax) per every 10 shares to all shareholders, who distributed cash dividendsof 62,675,872.86 yuan (including tax) in total. After this allocation, the company's total share capital remainsunchanged, and the remaining undistributed profit of the parent company is 854,892,061.08 yuan, and theremaining undistributed profits shall be distributed after being carried forward in the subsequent years.On 18 June 2019, the Company released the profit distribution plan for year of 2018 and implemented the plan.Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-015,No.2019-016, No.2019-035, and No.2019-037) on 29 March 2019, 22 May 2019 and 18 June 2019.
(15) On June 28, 2019, the company received the ―Shareholding Reduction Plan‖ from Mr. Zhong Ming, thecompany's director and vice president, Mr. Zhong Ming planned to reduce his holdings of the Company‘s sharesof no more than 78,725 shares (not exceeding 0.0075% of the company's total share capital) by centralizedbidding transactions of the stock exchanges within six months after 15 trading days from the date of theannouncement of the shareholding reduction plan due to his own capital arrangements. On 23 August 2019, the―Notification letter on Completion of Shareholding Reduction plan‖ was received by the Company from Mr.Zhong Ming, the 78,725 shares, above mentioned, are reduced by centralized bidding transactions of the stockexchanges was completed as of 22 August 2019. Found more on appointed media ―Securities Times‖, ―ChinaSecurities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the Company disclosed in theform of announcement (Announcement No. 2019-039 and No. 2019-055) on 29 June 2019.
(16) Approved by the resolution of 25
th session of 9
thBOD, the Company and its subsidiary are agreed to write off
the bad debt of receivables, that irrecoverable- 12,604,521.25 Yuan in total. Found more on appointed media―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that theCompany disclosed in the form of announcement (Announcement No. 2019-039 and No. 2019-052) on 16 August2019.
(17) Approved by the resolution of 26
th
session of 9
th
BOD, the subordinate controlling subsidiary- MeilingCANDY Washing Machine Co., Ltd is agreed to clearing off. Found more on appointed media ―Securities Times‖,―China Securities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the Company disclosedin the form of announcement (Announcement No. 2019-057) on 31 August 2019.
(18) Approved by the 24
th session of 9
th BOD, 13
th
session of 9
th Supervisory Committee and 2
nd
extraordinaryshareholders general meeting of 2019, the implementing body - Changmei Technology of the ―Intelligent lifeproject‖ is agreed to clearing off as an enterprise. Found more on appointed media ―Securities Times‖, ―ChinaSecurities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the Company disclosed in theform of announcement (Announcement No. 2019-040, No. 2019-041, No. 2019-043 and No. 2019-047) on 9 July,26 July 2019 respectively.
(19) Approved by the resolution of 27
th session of 9
th
BOD, the controlling subsidiary - Zhongke Meiling is agreedto implementing the first share issuance plan for year of 2019. The issuing object subscribes in cash and agreedthat the Company waives the right to subscribe for the shares on the same terms. Found more on appointed media―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that theCompany disclosed in the form of announcement (Announcement No. 2019-060 and No. 2019-062) on 10September 2019.XX. Major event of the subsidiary
√Applicable □ Not applicable
(1)The resolution of the 20
thmeeting of the Ninth Board of Directors of the company passed and agreed thecompany's subsidiaries, Zhongshan Changhong Electric Appliance Co., Ltd., Guangdong Changhong TechnologyCo., Ltd. and Hongyuan Geothermal Heat Pump Technology (Zhongshan) Co., Ltd. to donate a total of 130,000yuan to Nantou Town People's Government of Zhongshan City to expand the Nantou Town Central PrimarySchool. Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong KongCommercial Daily‖ and www.cninfo.com.cn that the Company disclosed in the form of announcement(Announcement No. 2019-015 and No.2019-023) on 29 March 2019.
(2)The resolution of the 21
stmeeting of the Ninth Board of Directors of the company passed and agreed ZhongkeMeiling Cryogenic Technology Co., Ltd (hereinafter referred to as ―Zhongke Meiling‖), a holding subsidiary ofthe company, to invest 10 million yuan to set up a wholly-owned subsidiary to engage in refrigeration engineeringequipment sales, design and other services. Found more on appointed media ―Securities Times‖, ―China SecuritiesJournal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that the Company disclosed in the form ofannouncement (Announcement No. 2019-025) on 20 April 2019.
长虹美菱股份有限公司2019年年度报告
(3) The resolution passed at the 32
nd
meeting of the ninth board of directors of the company agreed the companyand five natural persons to jointly invest US$ one million in the Philippines to establish a new trade-type jointventure subsidiary, CH-Meiling International (Philippines) Inc. (the company name is subject to the final approvalof local authorities), to work on the import and wholesale sales of all household appliances and other products.Found more on appointed media ―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖and www.cninfo.com.cn that the Company disclosed in the form of announcement (Announcement No. 2019-083)on 7 December 2019.
(4) Approved by resolution of 33
rd session of 9
thBOD, subordinate subsidiary - Sichuan ChanghongAir-conditioner Co., Ltd is agreed to invested approximately 39843000 Yuan for capacity expansion and technicaltransformation to improve the production capacity and technical standards. Found more on appointed media―Securities Times‖, ―China Securities Journal‖, ―Hong Kong Commercial Daily‖ and www.cninfo.com.cn that theCompany disclosed in the form of announcement (Announcement No. 2019-088) on 26 December 2019.
Section VI. Changes in shares and particular about shareholders
I. Changes in shares(i) Changes in shares
In Share
| Before the Change | Increase/Decrease in the Change (+, -) | After the Change | |||||||
| Amount | Proportion | New shares issued | Bonus shares | Capitalization of public reserve | Others | Subtotal | Amount | Proportion | |
| I. Restricted shares | 80,431,408 | 7.70% | 0 | 0 | 0 | -69,877,638 | -69,877,638 | 10,553,770 | 1.01% |
| 1. State-owned shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. State-owned legal person‘s shares | 70,793,625 | 6.78% | 0 | 0 | 0 | -69,877,638 | -69,877,638 | 915,987 | 0.09% |
| 3. Other domestic shares | 8,370,363 | 0.80% | 0 | 0 | 0 | 0 | 0 | 8,370,363 | 0.80% |
| Including: Domestic legal person‘s shares | 4,716,077 | 0.45% | 0 | 0 | 0 | 0 | 0 | 4,716,077 | 0.45% |
| Domestic natural person‘s shares | 3,654,286 | 0.35% | 0 | 0 | 0 | 0 | 0 | 3,654,286 | 0.35% |
| 4. Foreign shares | 1,267,420 | 0.12% | 0 | 0 | 0 | 0 | 0 | 1,267,420 | 0.12% |
| Including: Foreign legal person‘s shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Foreign natural person‘s shares | 1,267,420 | 0.12% | 0 | 0 | 0 | 0 | 0 | 1,267,420 | 0.12% |
| II. Unrestricted shares | 964,166,473 | 92.30% | 0 | 0 | 0 | 69,877,638 | 69,877,638 | 1,034,044,111 | 98.99% |
| 1. RMB ordinary shares | 802,569,893 | 76.83% | 0 | 0 | 0 | 69,877,638 | 69,877,638 | 872,447,531 | 83.52% |
| 2. Domestically listed foreign shares | 161,596,580 | 15.47% | 0 | 0 | 0 | 0 | 0 | 161,596,580 | 15.47% |
| 3. Overseas listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 4. Others | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| III. Total shares | 1,044,597,881 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,044,597,881 | 100.00% |
1. Reasons for share changed
√ Applicable □ Not applicable
During the reporting period, the 69,877,638 RMB common shares (A-stock), non-publicly offering by theCompany, subscribed by the controlling shareholder- Sichuan Changhong Electric Co., Ltd on 14 Oct. 2016 arereleased for trading dated 15 Oct. 2019. Details can be found in the announcement (No.: 2019-068) released on
appointed media Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website(www.cninfo.com.cn) dated 11 October 2019.
2. Approval of share changed
□ Applicable √ Not applicable
3. Ownership transfer of share changed
□ Applicable √ Not applicable
4. Progress of shares buy-back
□ Applicable √ Not applicable
5. Implementation progress of the reduction of repurchases shares by centralized bidding
□ Applicable √ Not applicable
6. Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributableto common shareholders of Company in latest year and period
□ Applicable √ Not applicable
7. Other information necessary to disclose for the Company or need to disclosed under requirement from securityregulators
□ Applicable √ Not applicable
(ii) Changes of restricted shares
√ Applicable □ Not applicable
In Share
| Shareholders | Opening shares restricted | Shares released in Period | Restricted Shares Increased In the Period | Ending shares restricted | Restricted reasons | Date for released |
| Li Wei | 1,071,355 | 357,118 | 357,118 | 1,071,355 | Share lockup in senior executives | On 25 April 2019, Mr. Li Wei resigned from chairman of the ninth board of director for work remove, the original office term would have expired on 12 September 2020. According to the relevant requirements of the Implementation Rules on Shareholding Reduction by Shareholders, Directors, Supervisors and Senior Management of Listed Companies Issued by Shenzhen Stock Exchange, where a director, supervisor or senior management resigns prior to expiration of his term, shares transferred each year during the term as |
| determined when he takes the position and the six months upon expiration of his term shall not exceed 25% of the total shares held by him in The Company, and he is not allowed to transfer the shares held by him in The Company within six months after his resignation. Therefore, the lifting of restrictions on the sales of Company‘s shares should follow the above provisions | ||||||
| Sichuan Changhong Electric Co., Ltd. | 69,877,638 | 69,877,638 | 0 | 0 | Non-publicly placement with restriction in trading | 2019-10-15 |
| Total | 70,948,993 | 70,234,756 | 357,118 | 1,071,355 | -- | -- |
II. Security offering and listing(i) Security offering in reporting period (Not including preferred stock)
□ Applicable √ Not applicable
(ii) Explanation on changes of total shares, shareholders structure and assets & liability structures
□ Applicable √ Not applicable
(iii) Current shares held by internal staffs
□ Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company(i) Amount of shareholders of the Company and particulars about shares holding
In Share
| Total shareholders at end of the Period | 61,760 | Total common shareholders at end of last month before annual report disclosed | 60,596 | Total preference shareholders with voting rights recovered at end of reporting period (if applicable) | 0 | Total preference shareholders with voting rights recovered at end of last month before annual report disclosed (if applicable) | 0 | ||||||||
| Particulars about shares held above 5% by shareholders or top 10 shares holding | |||||||||||||||
| Full name of Shareholders | Nature of shareholder | Proportion of shares held | Total shareholders at the end of report period | Changes in report period | Amount of restricted shares held | Amount of un-restricted shares held | Number of share pledged/frozen | ||||||||
| State of share | Amount | ||||||||||||||
| Sichuan Changhong Electric Co., Ltd. | State-owned legal person | 23.79% | 248,457,724 | 2,156,200 | 0 | 248,457,724 | - | - | |||||||
| Hefei Industry Investment Holding | State-owned legal person | 4.58% | 47,823,401 | - | 0 | 47,823,401 | - | - | |||||||
| (Group) Co., Ltd. | |||||||||||
| CHANGHONG (HK) TRADING LIMITED | Foreign legal person | 2.59% | 27,077,797 | - | 0 | 27,077,797 | - | - | |||
| CAO SHENGCHUN | Foreign natural person | 1.41% | 14,766,086 | 525,107 | 0 | 14,766,086 | - | - | |||
| Caitong Fund- Ningbo Bank-Haitong Xingtai (Anhui) Emerging Industry Investment Fund (Limited Partnership) | Domestic non-state-owned legal person | 1.03% | 10,733,452 | - | 0 | 10,733,452 | - | - | |||
| Ma Guobin | Domestic nature person | 0.95% | 9,872,934 | 9,872,934 | 0 | 9,872,934 | - | - | |||
| China Construction Bank - Huaxia China Securities Sichuan State-owned enterprise reform exchange traded index securities investment fund | Domestic general legal person | 0.68% | 7,128,900 | 7,128,900 | 0 | 7,128,900 | - | - | |||
| Philip Securities (H.K.) Co., Ltd. | Foreign legal person | 0.60% | 6,296,913 | 434,230 | 0 | 6,296,913 | - | - | |||
| Zheng Huiru | Domestic nature person | 0.59% | 6,173,700 | 3,372,400 | 0 | 6,173,700 | - | - | |||
| Zheng Shumin | Domestic nature person | 0.55% | 5,700,000 | 5,700,000 | 0 | 5,700,000 | - | - | |||
| Strategy investors or general legal person becomes top 10 shareholders due to rights issued (if applicable) | Not applicable | ||||||||||
| Explanation on associated relationship among the aforesaid shareholders | Among the above shareholders, CHANGHONG (HK) TRADING LIMITED (hereinafter referred to as Hong Kong Changhong) is the wholly-owned subsidiary of Sichuan Changhong Electric Co., Ltd.; except the shares of the Company directly held by Hong Kong Changhong, 6,296,913 shares of B-stock are also held through Phillip Securities (Hong Kong) Co., Ltd., the foregoing shareholders constitute persons of uniform action. There existed no associated relationship or belong to the concerted actors as specified in the Measures for the Administration of Information Disclosure of Shareholder Equity Changes of Listed Companies among Sichuan Changhong, Hong Kong Changhong and other top 7 shareholders（Philip Securities (H.K.) Co., Ltd. excluded.）; ―Caitong Fund- Ningbo Bank-Haitong Xingtai (Anhui) Emerging Industry Investment Fund (Limited Partnership) ‖ refers to the products of Caitong Fund Management Company subscribe for privately placement of 2016; The company neither knows whether there is any association among other shareholders, nor knows whether other shareholders belong to the persons acting in concert that is stipulated in the ―Administrative Measures on Information Disclosure of Changes in Shareholding of Listed Companies‖. | ||||||||||
| Particular about top ten shareholders with un-restrict shares held | |||||||||||
| Shareholders‘ name | Amount of unrestricted shares held at end of Period | Type of shares | |||||||||
| Type | Amount | ||||||||||
| Sichuan Changhong Electric Co., Ltd. | 248,457,724 | RMB ordinary shares | 248,457,724 | ||||||||
| Hefei Industry Investment Holding (Group) Co., Ltd. | 47,823,401 | RMB ordinary shares | 47,823,401 | ||||||||
| CHANGHONG (HK) TRADING LIMITED | 27,077,797 | Domestically listed foreign shares | 27,077,797 | ||||||||
| CAO SHENGCHUN | 14,766,086 | Domestically listed foreign shares | 14,766,086 | ||||||||
| Caitong Fund- Ningbo Bank-Haitong Xingtai (Anhui) Emerging Industry Investment Fund (Limited Partnership) | 10,733,452 | RMB ordinary shares | 10,733,452 | ||||||||
| Ma Guobin | 9,872,934 | RMB ordinary shares | 9,872,934 | |
| China Construction Bank - Huaxia China Securities Sichuan State-owned enterprise reform exchange traded index securities investment fund | 7,128,900 | RMB ordinary shares | 7,128,900 | |
| Philip Securities (H.K.) Co., Ltd. | 6,296,913 | Domestically listed foreign shares | 6,296,913 | |
| Zheng Huiru | 6,173,700 | RMB ordinary shares | 6,173,700 | |
| Zheng Shumin | 5,700,000 | RMB ordinary shares | 5,700,000 | |
| Expiation on associated relationship or consistent actors within the top 10 un-restrict shareholders and between top 10 un-restrict shareholders and top 10 shareholders | Found more in ―Particulars about shares held above 5% by shareholders or top 10 shares holding‖ | |||
| Explanation on top ten common shareholders involving margin business (if applicable) | As of 30 December 2019, among the top 10 common shareholders, Ma Guobin holds 9,859,334 shares of the Company through customer credit trading secured account of Founder Securities Co., Ltd., and 13,600 shares hold through common securities account, thus 9,872,934 shares of the Company are held in total. Zheng Shumin holds 2,500,000 shares of the Company through customer credit trading secured account of China Galaxy Securities Co., Ltd., and 3,200,000 shares hold through common securities account, thus 5,700,000 shares of the Company are held in total. | |||
Note 1: At end of the reporting period, the person acting in concert with controlling shareholder SichuanChanghong-- CHANGHONG (HK) TRADING LIMITED, holds B-stock of the Company as 33,374,710 shares,among which, 6,296,913 shares are held through Philip Securities (H.K.) Co., Ltd. by CHANGHONG (HK)TRADING LIMITEDNote 2: In the above table, "Particulars about shares held above 5% by shareholders or top 10 shares holding" issubject to the data on stock transfer books provided by China Securities Depository and Clearing CorporationLimited Shenzhen BranchWhether the top ten ordinary shareholders of the company and the top 10 ordinary shareholders of unrestrictedconditions have made the repurchase transactions as agreed during the reporting period.
□Yes √ No
The top ten ordinary shareholders of the company and the top 10 ordinary shareholders of unrestricted conditionshave not made the repurchase transactions as agreed during the reporting period.(ii) Controlling shareholder of the Company
1. Nature of controlling shareholders: local state-owned holding
2. Type of controlling shareholders: legal person
| Controlling shareholders‘ name | Legal rep./person in charge of unit | Dated founded | Organization code | Main business |
| Sichuan Changhong Electric Co., | Zhao Yong | 1993-4-8 | 91510700205412308D | Manufactures, sales and maintenance of household appliance, automotive electrical appliance, Electronic products and spare parts, communications equipment, lighting equipment, household products, computer and other Electronic equipment, specialized equipment of Electronic and |
| Ltd. | Electronic, Electronic machinery and equipment, series products of batteries, Electronic medicine products, Electronic equipment, mechanical equipment , Refrigeration equipment and accessories digital monitoring products, metal products, apparatus and instruments, culture and office machines, culture and education and sports products, kitchen cabinet and gas appliance; house and equipment rental; packing products and technical services; road transportation; storage and discharging convey; R&D, sales and services of integrated circuit and software; consultancy and services of enterprise management; hi-tech project investment and other state-permitted business; development and operation of property; engineering construction for house and buildings; callback and disposal of obsolete appliance and Electronic products; services of Information Technology; consultancy and services of finance; sales, relevant import and export business of Chemical raw materials and products(Not contain dangerous chemicals), building materials, non-ferrous metal, Steel, plastics, packing material, mechanical and electrical equipment, Precious metals, Automotive components, Electronic components, Value added telecommunication service, agent service of telecommunication; designing, manufacturing, releasing and agency for the advertisement; R&D and design of the drone and unmanned aerial vehicle system as well as the promotion of drone technology; transfer and technical consulting service, production and sales of drone (any projects that needs permission by the law should subject to the approval by relevant authority ) | ||
| Equity controlling and jointly of other foreign/domestic listed company by controlling shareholder in reporting period | 1. Ended as 31 December 2019, 30.60 percent equity of Changhong Huayi Compressor Co., Ltd. (stock code: 000404), the listed company in main board of SSE, were directly hold by Sichuan Changhong. 2. Up to 31 December 2019, 1,008,368,000 common shares of the Changhong IT (Stock code: 08016), the listed company in GEM of Hong Kong Stock Exchange, were held by Sichuan Changhong and its persons acting in concert, representing 69.3202 percent in total issued common shares of Changhong IT | ||
3. Controlling shareholder changes in reporting period
□ Applicable √ Not applicable
Controlling shareholder stays the same in Period.
4. Other notes
On February 25, 2019, the company received the Notice of Sichuan Changhong Electric Co., Ltd. and itsConcerted Action Person Changhong (Hong Kong) Trading LIMITED. to Increase the Shareholding ofChanghong Meiling Co., Ltd. and the Equity Changes (hereinafter referred to as ―Notice‖). Sichuan Changhongand its concerted action person Changhong (Hong Kong) Trading Co., Ltd. (hereinafter referred to as ―HKChanghong‖ or ―concerted action person‖) bought 16,231,024 shares of Changhong Meiling (including13,751,756 shares of Changhong Meiling A shares and 2,479,268 shares of Changhong Meiling B shares) bybidding transaction method through the secondary market from November 12, 2018 to February 25, 2019,accounting for 1.55% of Changhong Meiling‘s total share capital, consequently, the equity ratio of ChanghongMeiling held by Sichuan Changhong and concerted action person accumulatively increased by 5% fromSeptember 2009 to February 2019. Found more on appointed media Securities Times, China Securities Journal,Hong Kong Commercial Daily and www.cninfo.com.cn that the Company disclosed in the form of announcement(Announcement No. 2019-013) on 26 Feb. 2019
(iii) Actual controller of the Company and its person acting in concert
1. Nature of actual controller: local state-owned assets management
2. Type of actual controller: legal person
| Actual controller | Legal rep./person in charge of unit | Dated founded | Organization code | Main business |
| State-owned Assets Supervision & Administration Commission of Mianyang Municipality | -- | -- | -- | State-owned Assets Supervision & Administration Commission of Mianyang Municipality is entrusted by the same level government, together performs decision-making and management of state-owned asset owners, and is one organization which executes comprehensive management and supervision on its belonged state-owned assets. |
| Equity controlling of other foreign/domestic listed company by actual controller in reporting period | Not applicable | |||
3. Changes of actual controller in Period
□ Applicable √ Not applicable
Actual controller stays the same in Period
4. Property rights and the block diagram of the control relationship between the Company and the actual control(ended as 31
stDecember 2019)
5. Actual controller controlling the Company by means of entrust or other assets management
23.22%
%
100%四川省绵阳市虹欢科技有限责任公司
%
100%四川省绵阳市虹欢科技有限责任公司
%
100%
%
100%
%
Changhong Meiling Co., Ltd.
Changhong Meiling Co., Ltd.
23.79%
四川省绵阳市虹欢科技有限责任公司
%
23.79%
四川省绵阳市虹欢科技有限责任公司
%
3.19%
%
3.19%
%
State-owned Assets Supervision & Administration Commission of Mianyang Municipality
State-owned Assets Supervision & Administration Commission of Mianyang MunicipalitySichuan Changhong Electronics Holding Group Co.,
Ltd.
Sichuan Changhong Electronics Holding Group Co.,
Ltd.Sichuan Changhong Electric Co., Ltd.
Sichuan Changhong Electric Co., Ltd.CHANGHONG (HK) TRADING LIMITED
□ Applicable √ Not applicable
(iv) Other legal person’s shareholders with over ten percent shares held
□ Applicable √ Not applicable
(v) Limitation and reducing the holdings of shares of controlling shareholders, actual controllers,restructuring side and other commitment subjects
□ Applicable √ Not applicable
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the reporting.
Section VIII. Convertible Bonds
□ Applicable √ Not applicable
The Company had no convertible bonds in the Period
Section IX. Particular about Directors, Supervisors, Senior Executives and EmployeesI. Changes of shares held by directors, supervisors and senior executive
| Name | Title | Post status | Sex | Age | Office dated from | Office dated ended | Shares held at period-begin(Share) | Amount of shares increase in this period(Share) | Amount of shares decreased in this period (Share) | Other changes (share) | Shares held at period-end (Share) |
| Li Wei | Former Chairman | Office leaving | M | 47 | 2011-6-20 | 2020-9-12 | 1,428,473 | 0 | 0 | 0 | 1,428,473 |
| Wu Dinggang | Chairman | Currently in office | M | 47 | 2014-7-3 | 2020-9-12 | 570,500 | 0 | 0 | 0 | 570,500 |
| Kou Huameng | Director, Deputy president | Currently in office | M | 50 | 2014-7-3 | 2020-9-12 | 0 | 0 | 0 | 0 | 0 |
| Shi Qiang | Director | Currently in office | M | 51 | 2017-9-12 | 2020-9-12 | 0 | 0 | 0 | 0 | 0 |
| Yong Fengshan | Director | Currently in office | M | 51 | 2017-9-12 | 2020-9-12 | 0 | 0 | 0 | 0 | 0 |
| Zhong Ming | Director, Deputy president | Currently in office | M | 47 | 2013-12-30 | 2020-9-12 | 314,900 | 0 | 78,725 | 0 | 236,175 |
| Hu Zhaogui | Director, Deputy president | Currently in office | M | 46 | 2018-6-21 | 2020-9-12 | 178,050 | 0 | 0 | 0 | 178,050 |
| Gan Shengdao | Independent director | Currently in office | M | 53 | 2014-7-3 | 2020-9-12 | 0 | 0 | 0 | 0 | 0 |
| Ren Jia | Independent director | Currently in office | M | 56 | 2014-7-3 | 2020-9-12 | 0 | 0 | 0 | 0 | 0 |
| Lu Yingjin | Independent director | Currently in office | M | 55 | 2014-7-3 | 2020-9-12 | 0 | 0 | 0 | 0 | 0 |
| Shao Min | Chairman of Supervisory | Currently in office | M | 37 | 2017-9-12 | 2020-9-12 | 0 | 0 | 0 | 0 | 0 |
| Huang Hong | Supervisor | Currently in office | F | 49 | 2017-9-12 | 2020-9-12 | 0 | 0 | 0 | 0 | 0 |
| He Xintan | Supervisor | Currently in office | M | 39 | 2017-9-12 | 2020-9-12 | 0 | 0 | 0 | 0 | 0 |
| Ji Ge | Staff supervisor | Currently in office | F | 38 | 2017-12-25 | 2020-9-12 | 0 | 0 | 0 | 0 | 0 |
| Zhu Wenjie | Staff supervisor | Currently in office | M | 32 | 2015-4-8 | 2020-9-12 | 0 | 0 | 0 | 0 | 0 |
| Liu Hongwei | Executive deputy president | Currently in office | M | 56 | 2011-6-20 | 2020-9-12 | 1,689,893 | 0 | 0 | 0 | 1,689,893 |
| Huang Danian | Deputy president | Currently in office | M | 50 | 2017-9-12 | 2020-9-12 | 356,450 | 0 | 0 | 0 | 356,450 |
| Pang Haitao | CFO (person in charge of finance) | Currently in office | M | 44 | 2017-10-25 | 2020-9-12 | 0 | 0 | 0 | 0 | 0 |
| Li Xia | Secretary of the Board | Currently in office | F | 39 | 2009-5-22 | 2020-9-12 | 552,800 | 0 | 0 | 0 | 552,800 |
| Total | -- | -- | -- | -- | -- | -- | 5,091,066 | 0 | 78,725 | 0 | 5,012,341 |
II. Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
| Name | Title | Type | Date | Reasons |
| Li Wei | Chairman | Office leaving | 2019-4-25 | Resigned his post as chairman of the Company due to personal reasons |
| Wu Dinggang | President | Office leaving | 2019-1-12 | Resigned as President of the Company for personal reasons |
| Chairman | Election | 2019-4-26 | Being approved by the 22th session of 9th BOD, Mr. Wu Dinggang was elected as the chairman of the 9th BOD with service term same as the 9th BOD | |
| Kou Huameng | Acting president works | Appointment | 2019-1-11 |
| Zhong Ming | Director | Election | 2019-5-21 | Being approved by the shareholders general meeting of 2018, Mr. Zhong Ming was elected as the non-independent director of the 9th BOD with service term same as the 9th BOD |
III. Post-holding(i) Professional background, major working experience and present main responsibilities in Company ofdirectors, supervisors and senior executive at the present
1. Li Wei, male, the Han nationality from Tongliang, Chongqing, was born in February 1973, Member of CPC,Assistant Economist with Master degree, he is reading EMBA in USTC. He ever took the post of GeneralManager of Xi‘an Sales Branch of Sichuan Changhong Electronic Co., Ltd., General Manger of SoutheastOperation Management Center of Changhong Electronic (China) Marketing Co., Ltd., GM of Sichuan ChanghongAir-conditioner Co., Ltd., chairman of Zhongshan Changhong Electric Co., Ltd., and deputy president, presidentand deputy chairman of the Company. Now he serves as Director and GM of Sichuan Changhong Electric Co.,Ltd.
2. Wu Dinggang, male, the Han nationality from Suining, Sichuan Province, was born in March 1973, Member ofCPC, owns bachelor degree, graduate from Tianjin University of Commerce China (Tianjin University ofCommerce now), major in refrigeration equipment and cryogenic technique. He served successively as GM ofSuining Sale Branch and Chengdu Sales Branch of Sichuan Changhong Electric Co., LTD, director of Sichuanand Chongqing Marketing Management Department of Sichuan Changhong Electric Co., LTD, deputy GM ofChanghong Electronics (China) Marketing Co., GM of market planning center of Changhong Multimedia Industry,director and GM of Le-Jia-Yi Chain Management Co., Ltd., Zhongke Meiling Cryogenic Technology Co., Ltd.director and GM of Sichuan Changong Air Conditioner Co., Ltd and deputy president, president and deputychairman of the Company. Currently he serves as vice GM of Sichuan Changhong Electric Co., Ltd., partysecretary, chairman of the Company; Chairman of Zhongshan Changhong Electric Co., LTD; Chairman of
Sichuan Changhong Air-conditioner Co., Ltd. and Chairman of Zhongke Meiling Cryogenic Technology Co., Ltd.
3. Kou Huameng, male, the Han nationality from Yanting, Sichuan Province, was born in February 1970, Memberof CPC, master degree candidate, EMBA graduate from UESTC. He served successively as deputy director ofproduction office of Sichuan Changhong Electric Co., LTD, director of Guangxi Marketing managementCommittee, director of Fujian-Jiangxi Marketing Management and director and GM of Guangdong ChanghongDigital Technology Co., Ltd.; Sichuan Changhong Electric Co., Ltd, director of development managementdepartment of Sichuan Changhong Electric Co., Ltd.; now he serves as director and deputy president of theCompany (acting president/conducting works), and director of Changhong Huayi Compressor Co., Ltd.,
4. Shi Qiang, male, Han nationality, was born in July 1968, a member of the Communist Party of China, earned abachelor‘s degree in underwater sound electronic engineering from Southeast University, and is an engineer. Hesuccessively served as the office secretary of Changhong Company, director of quality management division, thedirector of goods and material department, liaison office of overseas marketing, the director of asset managementdepartment, deputy minister, minister, director of the office of the board of directors; Director of SichuanChanghong New Energy Technology Co., Ltd.; Director of Sichuan Changhong Power Source Co., Ltd. Currentlyhe serves as deputy party secretary, discipline inspection commission, director, secretary of Changhong HuayiCompressor Co., Ltd.; Director of Jiaxipera Compressor Co., Ltd., and director of Changhong Grand-Pro Tech.Co., Ltd. and director of the Company
5. Yong Fengshan, male, Han nationality, was born in Dingyuan, Anhui in June 1968, a member of the CommunistParty of China, a senior accountant, and a master degree holder. He ever took the posts of the director of financedepartment of Hefei Cable Factory, the director of finance division and the deputy chief accountant of HefeiMeiling Co., Ltd., the director of Hefei Department Store Co., Ltd., the deputy general manager and chiefaccountant of Hefei Meiling Group Holding Co., Ltd., the secretary of the party committee and the president ofHefei Industrial Investment Holdings Co., Ltd., the president of CAS (Hefei) Institute of Technology InnovationCo., Ltd., the vice president of Whirlpool (China) Co., Ltd., the president of Hefei Venture Capital Guidance FundCo., Ltd. , and the director of the Company.
6. Zhong Ming, male, the Han nationality from Meishan, Sichuan Province, was born in November 1972, memberof CPC, a senior engineer, EMBA master and a PhD major in engineering thermophysics. He successively servedas deputy director of research institution of Sichuan Changhong Air-conditioner Co., Ltd., deputy GM of SichuanChanghong Air-conditioner Co., Ltd. and technical director of household appliance group of Sichuan ChanghongElectric Co., LTD. He serves as director and deputy president of the Company currently and director of ZhongkeMeiling Cryogenic Technology Co., Ltd.
7. Hu Zhaogui, male, the Han nationality, born in Feixi Hefei in October 1974, a member of the Communist Partyof China, holds a master‘s degree, graduated from Chongqing University as a master of business administration.He has served successively as the head of marketing and sales department stationed abroad of Hefei Meiling Co.,Ltd., assistant president and general manager of the freezer and washing machine business division, and generalmanager of the domestic marketing division. He is currently the director and vice president of the Company and
the general manager of Sichuan Changhong Air Conditioner Co., Ltd., a subsidiary of the Company.
8. Gan Shengdao, male, the Han nationality from Tianchang, Anhui Province, was born in March 1967, memberof China Democratic National Construction Association, a doctoral candidate and Doctor of Economic. He servedsuccessively as teaching assistant, lecturer and associate professor in Department of National EconomicManagement of Sichuan University, the associate professor and professor in Department of BusinessAdministration of Sichuan University. An independent director of Liangshan Rural Commercial Bank Co., Ltd.,and an independent director of Chengdu Rainbow Electric (Group) Co., Ltd. Currently serves as a professor anddoctoral supervisor at Business School of Sichuan University, deputy director of the Financial Research Instituteof Sichuan University, an independent director of Sinoseal Holding Co.Ltd., an independent director of SichuanYahua Industrial Group Co., Ltd., an independent director of Yibin Wuliangye Co., Ltd., and an external directorof Sichuan Huashi Group Co., Ltd., Independent director of Chengdu GIMI Technology Co., Ltd., and anindependent director of the Company.
9. Ren Jia, male, Han nationality, was born in Nantong, Jiangsu in July 1963, a master degree holder, andgraduated from the Department of Materials Science and Engineering of Tsinghua University. He ever took theposts of the assistant general manager of Beijing Building Materials Imp. & Exp. Co., Ltd., the department deputymanager of Jiangsu Overseas Group Co., Ltd., the department deputy manager and assistant general manager ofJiangsu Economic and Trade Corporation, the general manager of Import and Export Company of ZhejiangXiangyang Group, the director and general manager of Nanjing Shenlu Textile & Apparel Co., Ltd., the deputygeneral manager of Guangzhou Anyka Microelectronics Co., Ltd., the deputy general manager of ShanghaiMultimedia Valley Investment Co., Ltd., independent director of Kingnet Co., Ltd., the partner of Shanghai HedaEnterprise Management Partnership (limited partnership), and vice president of SIMIC Group Co., Ltd. Hecurrently serves as chairman and general manager of SIMIC Technology Development Co., Ltd., the president ofShanghai Zhongke Xinwei Information Technology Park Co., Ltd., an independent director of InHand Networks,Executive partner of Shanghai Zhihe Technology Partnership，and an independent director of the Company.
10. Lu Yingjin, male, the Han nationality, was born in October 1964, Member of CPC, a doctoral candidate,Doctor of Management Science and Engineering of the UESTC. He served successively as Assistant Engineer ofShenli Field Drilling Technical Company and lecturer of Staff Education and Training Center of South-WestPetroleum Bureau, and he teaches in UESTC since 2002.And he has been a visiting scholar in the department ofcomputer science at the University of Kentucky in the United States. Now he serves as associate professor inEconomics and Management School of UESTC and Independent Director of the Company.
11. Shao Min, male, Han nationality, was born in Linyi, Shandong in March 1983, and earned a bachelor‘s degreein accounting major from Xi‘an Jiaotong University. He joined in work in July 2004, and ever served as thefinance manager of the branch office of Sichuan Changhong Electric Co., Ltd., the financial director of financedepartment, the project manager of asset management department, the director of asset management department,and the director of asset operation department of Sichuan Changhong Electric Co., Ltd. He currently serves as thedeputy director of asset management department of Sichuan Changhong Electric Co., Ltd., and the chairman ofthe Board of Supervisors of the Company.
12. Huang Hong, female, Han nationality, was born in Shehong, Sichuan in June 1970, a member of theCommunist Party of China, a master degree holder, and graduated from the University of Glasgow as a MBA. Shejoined in work in July 1992, and ever served as the financial director of finance department, the audit manager,marketing audit director, and audit chief of auditing department of Sichuan Changhong Electric Co., Ltd. Hecurrently serves as the deputy director of auditing department and the deputy director of labor union auditcommittee of Sichuan Changhong Electric Co., Ltd., and a supervisor of the Company.
13. He Xintan, male, Han nationality, was born in Xiayi, Henan in April 1980, a member of the Communist Partyof China, an economist, and earned a master‘s degree in management science and engineering from Xi‘anJiaotong University. He joined in work in July 2002, and successively took the posts of the operationsmanagement director of operation management department and the manager of general management office ofSichuan Changhong Electric Co., Ltd. Currently he serves as the deputy director of development and managementdepartment of Sichuan Changhong Electric Co., Ltd., and a director of Changhong Huayi Compressor Co., Ltd.,and a supervisor of the Company.
14. Ji Ge, female, Han nationality, was born in Nanyang, Henan Province in January 1982, a member of theCommunist Party of China, and earned a bachelor‘s degree in law from Hunan University and a master‘s degreefrom Anhui University. She joined Hefei Meiling Co., Ltd. in July 2005 and once served as the legal specialist oflegal department, the sponsor of legal affairs, and the intellectual property director of the legal department of theCompany. She currently serves as staff supervisor of the Company, the director of the legal department of theCompany, director of office of Party Committee, member of commission for Discipline Inspection, and director ofDiscipline Inspection office
15. Zhu Wenjie, male, the Han nationality from Hefei, Anhui Province, member of Communist Party of China,born in January 1988, a master degree，graduated from University of science and technology of China as a MBA.He started to work in Hefei Meiling Co., Ltd. in July 2010 after graduation, served as an accountant for bigcustomer accounting in financial management department of Hefei Meiling Co., Ltd., securities affairs assistant atthe office of secretary of the board, and director of securities affairs, and currently serves as the representative ofthe Company's securities affairs, director of securities affairs at the office of secretary of the board, and staffsupervisor of the Company.
16. Liu Hongwei, Male, Chinese American, bored in May 1963, Doctor of Applied Mechanics from LehighUniversity, graduate from department of mechanical engineering, Tsinghua University. He served successively inKulicke and Soffa Industries, Pennsylvania; Tessera Technology Corporation, Califonia; serves technical andmanagement post in Intel Corporation in Silicon Velleg. He joints the Hefei Meiling Co., Ltd. in 2007, now heserves as executive deputy president of the Company.
17. Huang Danian, male, Han nationality, was born in Huaining, Anhui in November 1969, a member of theCommunist Party of China, an engineer, and a master degree holder. He once served as the logistics director andthe deputy general manager, the director of the human resources department, the director of the comprehensiveplanning department, the director of the enterprise management department, and the assistant to the general
manager of Sales Company of Hefei Meiling Co., Ltd. He is now the vice president of Hefei Meiling Co., Ltd.
18. Pang Haitao, male, Han nationality, was born in Qionghai, Hainan in May 1975, a member of the CommunistParty of China, a senior accountant, a senior political engineer, and a bachelor degree holder, and earned theEMBA degree from Jiangxi University of Finance and Economics. He used to be a member of the financedepartment, the director of related transactions and the director of capital operations of Sichuan ChanghongElectric Co., Ltd., the chief of finance office of Guangdong Changhong Electronics Co., Ltd., the director ofgeneral ledger, the head of general management office, and the head of general ledger management office of thefinance department of Sichuan Changhong Electric Co., Ltd., the deputy general manager and chief financialofficer of Sichuan Changhong Development Co., Ltd., the deputy general manager and chief accountant of HuayiCompressor Co., Ltd. Currently he is the chief financial officer (person in charge of finance) of the Company.
19. Li Xia, female, the Han nationality from Qionglai, Sichuan Province, was born in October 1980, Member ofCPC and Intermediate Accountant with Master Degree. She graduated from Accounting Department of SichuanUniversity Business and Management School. She ever was Project Manager in Financing & Acquisition Officeof Asset Management Department and Business Executive in Board Office of Sichuan Changhong Electronic Co.,Ltd. she took the posts of Deputy GM and Financial Supervisor of Sichuan Changhong Innovation Investment Co.,Ltd., and chairman of supervisory committee of Zhongke Meiling Cryogenic Technology Co., Ltd.She is theSecretary of the Board, deputy secretary of the Party and secretary of discipline inspection commission of theCompany recently.(ii) Post-holding in shareholder’s unit
√ Applicable □ Not applicable
| Name | Shareholder‘s unit | Title | Start date of office term | End date of office term | Drawing remuneration and allowance from shareholder‘s unit (Y/N) |
| Wu Dinggang | Sichuan Changhong Electric Co., Ltd. | Deputy GM | 2019.01.12 | 2020.08.28 | Yes, drawing remuneration since work in the unit |
| Yong Fengshan | Hefei Industry Investment Holding (Group) Co., Ltd. | Party Secretary, Chairman | 2015.02.13 | - | Y |
| Shao Min | Sichuan Changhong Electric Co., Ltd. | Deputy director of assets management department | 2019.02.01 | - | Y |
| Huang Hong | Sichuan Changhong Electronics Holding Group Co., Ltd. | Deputy Chief of auditing department | 2011.09.16 | - | Y |
| He Xintan | Sichuan Changhong Electric Co., Ltd. | Deputy Chief of development and management department | 2019.02.01 | - | Y |
| Post-holding in shareholder‘s unit | N/A | ||||
(iii) Post-holding in other unit
√ Applicable □ Not applicable
| Name | Other unit | Title | Start date of office term | End date of office term | Drawing remuneration and allowance from other unit (Y/N) |
| Yong Fengshan | Whirlpoor (China) Co., Ltd. | Director | 2015-05.18 | 2019.06.15 | N |
| Deputy Chairman | 2015.07.10 | N | |||
| Hefei Venture Capital Guidance Fund Co., Ltd. | Chairman | 2015.04.17 | - | N | |
| CAS (Hefei) Technical Innovation Engineering Institute Co., Ltd. | Chairman | 2015.04.17 | - | N | |
| Hefei State-owned Assets Holding Co., Ltd. | Chairman | 2015.04 | - | N | |
| Hefei Industry Investment Holding Co., Ltd. | Chairman, GM | 2014.09 | - | N | |
| Anhui Integrated Circuit Industry Capital Co., Ltd. | Chairman | 2017.05 | - | N | |
| Anhui IT Industry Investment Holdings Co., Ltd. | Director | 2014.01 | - | N | |
| Jianghuai Automobile Co., Ltd. | Director | 2018.07.21 | 2021.07.20 | N | |
| Industrial Investment (HK) Ltd | Director | 2017.04 | - | N | |
| Hefei Smart Energy Innovation Platform Co., Ltd. | Director | 2017.06 | - | N | |
| Wu Dinggang | Sichuan Zhiyijia Network Technology Co., Ltd. | Director | 2015.01 | - | N |
| Shi Qiang | Changhong Huayi Compressor Co., Ltd. | Director | 2017.05.03 | 2021.05.17 | N |
| Secretary of the Board | 2018.03.05 | Y | |||
| Kou Huameng | Changhong Huayi Compressor Co., Ltd. | Director | 2015.04.16 | 2021.05.17 | N |
| Gan Shengdao | Business School of Sichuan University | Professor, doctoral supervisor, deputy director of the Financial Research Institute of Sichuan University | 1990.07 | - | Y |
| Sinoseal Holding Co.Ltd. | Independent | 2011.06.21 | 2021.02.11 | Y |
| director | |||||
| Sichuan Yahua Industrial Group Co., Ltd | Independent director | 2015.06.09 | 2021.06.25 | Y | |
| Sichuan Huashi Group Co., Ltd. | Outside Director | 2015.08.10 | - | Y | |
| Yibing Wuliangye Co., Ltd. | Independent director | 2016.11.18 | - | Y | |
| Ren Jia | SIMIC Holdings Co., Ltd. | Deputy president | 2013.01 | 2019.12.31 | Y |
| SIMIC Development Co., Ltd. | Chairman/GM | 2014.07 | - | N | |
| Shanghai Hefa Enterprise Management Partnership (Limited Partnership) | Partner / legal representative | 2016.05 | 2019.04.19 | N | |
| Shanghai Zhongke Xinwei IT Park Co., Ltd. | Chairman | 2018.01 | - | N | |
| Beijing Inhand Networks Co., Ltd | Independent director | 2017.12.06 | - | Y | |
| Kingnet Co., Ltd. | Independent director | 2018.05.12 | 2019.03.18 | Y | |
| Shanghai Zhizhe Technology Co., Ltd. | Legal representative | 2019.03.19 | - | N | |
| Shanghai Zhihe Technology Partnership | Executive partner | 2019.4.12 | - | N | |
| Lu Yingjin | School of Management and Economics of UESTC | Associate professor | 2001.12.30 | - | Y |
| He Xintan | Changhong Huayi Compressor Co., Ltd. | Director | 2018.01.05 | 2021.05.17 | N |
| Hu Zhaogui | Hongyuan Ground Energy Heat Tech. Co., Ltd. | Deputy Chairman | 2017.12 | - | N |
| Sichuan Tianyou Guigu Technology Co., Ltd. | Director | 2018.01 | - | N | |
| Chengdu Guigu Environmental Tech. Co., Ltd. | Director | 2018.06 | - | N | |
| Sichuan Zhiyijia Network Technology Co., Ltd. | Director | 2018.01 | - | N | |
| Pang Haitao | Hefei Xingmei Asset Management Co., Ltd. | Director | 2018.02 | - | N |
| Post-holding in other unit | N/A | ||||
(iv) Punishment of securities regulatory authority in recent three years to the company’s current andoutgoing directors, supervisors and senior management during the reporting period
□ Applicable √ Not applicable
IV. Remuneration of directors, supervisors and senior executives
(i) Decision-making, determine basis and actually payment of remuneration for directors, supervisors andsenior executives
1. Procedure for deciding remunerations of directors, supervisors and senior managementImplemented in line with laws, regulations and relevant rules of ―Company Law‖, ―Article of Association‖ and―Enforcement Regulation of Remuneration and Evaluation Committee of the Board‖, including:
(1) Allowance plan of independent directors are implemented after deliberated in the Board and approved inShareholders‘ General Meeting. Other directors and non-staff supervisors except independent directors arereceived no remuneration from the Company.
(2) Remuneration of senior executives are deliberated and approved by the Board according to remunerationevaluation plan together with opinions of Remuneration and Evaluation Committee.The remuneration appraisal and payment for directors and senior executive of the Company for Current Year willdisclose in the Annual Report after review without objection from Remuneration & Appraisal Committee of theBoard and submit to the BOD for Current Year.
2. Bases on which remunerations of directors, supervisors and senior management are decidedThe Company conducted the performance examination on the task of directors, supervisors and senior executivesaccording to the HR management policy, wages of directors, supervisors and senior executives are decided bytheir performance and evaluations check by the Company. All wages are performing by the evaluation resultsaccording to the only evaluation standard that carried by the Company.
3. Actual payment of remunerations of directors, supervisors and senior managementAllowance of the independent directors are paid by the standards approved in Annual Shareholders‘ GeneralMeeting, other director, who serves as senior executive at the same time, and non-staff supervisors exceptindependent directors did not received remuneration from the Company; remunerations for senior executives ofthe Company are paid strictly by the unify remuneration valuation mechanism of the Company.
Directors, supervisors and senior executives of the Company has 18 in total up to 31 December 2019, actually 12person receiving remuneration from the Company, 2 staff supervisors are received their remuneration by actualpositions (non-supervisor post); furthermore, 3 independent directors are received the allowance monthly from theCompany; the Company will pay remuneration to senior executives in line with the performance appraisal bymonthly, quarterly and annual.
During the reporting period, the Company has established the executive compensation and performancemanagement program for the senior management of 2019 in accordance with the main scope, the responsibilities,the importance of the management positions of the senior management, and the compensation level of otherrelevant company and position, the program includes but not limited to the company's key performance indicator(KPI) and performance evaluation criteria, procedures and major evaluation system; the major programs andsystems of the reward and punishment; review the performance of duties of the company's senior management andconduct the annual performance appraisal.
At the end of Current Year, the Remuneration and Appraisal Committee combined the work report andself-evaluation of the senior management in 2019, followed the performance evaluation criteria and procedures,and evaluated the Key Performance Indicator (KPI) of the senior management in 2019; and other relevantindicators of performance evaluation; proposed the remuneration amount and performance appraisal approach ofthe senior management based on the job performance evaluation results and the remuneration policy, and reportedto the Board for approval.(ii) Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
| Name | Title | Sex | Age | Post status | Total remuneration obtained from the Company (before taxes) | Whether remuneration obtained from related party of the Company |
| Li Wei | Former chairman | M | 47 | Office leaving | 0 | Yes |
| Wu Dinggang | Present chairman | M | 47 | Currently in office | 0 | Yes |
| Kou Huameng | Director, Deputy president | M | 50 | Currently in office | 41.96 | No |
| Shi Qiang | Director | M | 51 | Currently in office | 0 | Yes |
| Yong Fengshan | Director | M | 51 | Currently in office | 0 | Yes |
| Zhong Ming | Director, Deputy president | M | 47 | Currently in office | 32.35 | No |
| Hu Zhaogui | Director, Deputy president | M | 46 | Currently in office | 38.87 | No |
| Gan Shengdao | Independent director | M | 53 | Currently in office | 11.90 | No |
| Ren Jia | Independent director | M | 56 | Currently in office | 11.90 | No |
| Lu Yingjin | Independent director | M | 55 | Currently in office | 11.90 | No |
| Shao Min | Chairman of Supervisory | M | 37 | Currently in office | 0 | Yes |
| Huang Hong | Supervisor | F | 49 | Currently in office | 0 | Yes |
| He Xintan | Supervisor | M | 39 | Currently in office | 0 | Yes |
| Ji Ge | Staff supervisor | F | 38 | Currently in office | 23.50 | No |
| Zhu Wenjie | Staff supervisor | M | 32 | Currently in office | 18.53 | No |
| Liu Hongwei | Executive deputy president | M | 56 | Currently in office | 49.04 | No |
| Huang Danian | Deputy president | M | 50 | Currently in office | 32.32 | No |
| Pang Haitao | CFO (person in charge of finance) | M | 44 | Currently in office | 32.08 | No |
| Li Xia | Secretary of the Board | F | 39 | Currently in office | 28.89 | No |
| Total | -- | -- | -- | -- | 333.24 | -- |
(iii) Equity incentive authorized for director, supervisor and senior executive in reporting period
□ Applicable √ Not applicable
V. Staff of the CompanyChanghong Meiling Co., Ltd. and its controlling subsidiaries owned on-job employees of 14,017 people in total.There are 58 people in retired are enjoying expenses paid by the Company.(i) Numbers, professional structure and education background
| On-job employee in parent company (people) | 3,995 |
| On-job employee in main subsidiary (people) | 10,022 |
| Total on-job employees (people) | 14,017 |
| Current total payroll(people) | 14,017 |
| Number of retired employees with expenses paid by the parent company and main subsidiary (people) | 58 |
| Professional structure | |
| Types of professional category | Numbers of professional category (people) |
| Production staff | 8,319 |
| Salesman | 2,831 |
| Technician | 2,243 |
| Financial staff | 235 |
| Administration staff | 389 |
| Total | 14,017 |
| Education background | |
| Type of education background | Numbers (people) |
| High school and below | 9,214 |
| Junior college | 2,111 |
| Undergraduate | 2,533 |
| Master and above | 159 |
| Total | 14,017 |
(ii) Remuneration policyThe Company formulated human resources and compensation policy conducive to sustainable development ofenterprise according to the provisions of relevant laws and policies promulgated by the state and to the Company'sactual situation.In order to implement the core values of co-creation and sharing, especially to mobilize the work initiative andenthusiasm of grass-roots employees, the company had a comprehensive review on the incentive plan in 2019,based on authority with corresponding responsibility, further delegated powers to lower levels, made frontlinedecision-making, optimized and established a three-tiered incentive system, i.e. business performance incentives,value mainline incentives, and event incentive, to improve the business unit‘s operating efficiency and vitality;
promoted the development and application of the entire process performance management system, encouragedemployees to develop together with the company, and established a direct link between management and businessperformance; supervisor-level KPIs were linked with performance pay; implemented mandatory performancerankings for professional positions, and guided managers and employees to make performance contributions to thecompany‘s development.
The company established and optimized a unified evaluation mechanism for job promotion, set up positionsystems and promotion channels, implemented the point system evaluation criteria and internal job competitionmechanism, and incorporated annual evaluation and competition into the normalization, and gradually formed theemployment mechanism of ―those who want to do a job have a chance, those who can do a job have a platform,and those who get things done have a status‖. At the same time, the company shaped the corporate culture byproviding various holidays, allowances, condolences, and organizing a variety of leisure activities, sports culturefestival, carnivals, etc. so as to improve the employee satisfaction.(iii) Training plansTraining plan: The Company has established the Human Resources Strategic Layout, Staff Training ManagementProgram, Credit Management Method, Annual Talent Development & Training Plan and other systems andstandard work flows, set up the staff capacity model, built the knowledge assets management system ofChanghong Meiling and gradually established the growth mechanism by combining the training with theindividual employee development, and combining the qualification promotion with the career development.
1. The mechanism for the selection, education and use of reserve talents gradually presented. In 2019, theCompany established a clear evaluation model for talent standards, promote the construction of talent standardsfor management, supervisor level, general manager of domestic sales, and overseas regional managers; focused onadvancing the project for talent construction, and optimized the high-level talent development echelons such asreserve leaders, reserve cadres, reserve leaders, and outstanding university students, and so on; establishsuccession maps for each sequence of talents, and clarify the ability status of existing talent teams and futuretalent succession systems.
2. Talent cultivation is more effective in supporting the development of the company. In order to effectivelysupport the company‘s business policy of ―product leadership, marketing transformation, efficiency improvement,team activation‖, the company released the Human Resources Strategic Plan of Changhong Meiling, on the onehand, improve the training enthusiasm and development capabilities of R & D personnel through the projectpoints-based system, industry exchanges and other activities, on the other hand, aim at the shortcomings of teamand personal ability, and promote accurate training programs, focus on actual working scenes, targeted at the coretalent-oriented push courses, and the training effect gradually appears and the number of talents graduallyincreases.
3.The company coordinated the construction of an internal knowledge asset management system, including thetwo major contents, i.e. the establishment of ―Meiling School‖ and the bench-marking post knowledge extraction.
On the one hand, constructed the online knowledge asset management system ―Meiling School‖ for the first time,comprehensively started and advanced the talent knowledge asset bank of ―Technical School, Management School,Manufacturing School, and Quality School‖; on the other hand, sorted out, extracted, and internalized andintegrated the experience of internal posts into a standardized talent knowledge base for inheritance and influenceby combining the restructuring of ―internal trainer certification system‖ and the introduction of ―bench-markingpost knowledge extraction project‖.(iv) Labor outsourcing
□ Applicable √ Not applicable
Section X. Corporate GovernanceI. Corporate governance of the Company(i) Overview of the corporate governanceIn strict compliance with the Company Law, Securities Law, Governance Principles of Listed Company issued bythe CSRC, and the Rules Governing the Listing of Securities on Shenzhen Stock Exchange (amended in 2018),the Company continued to construct and perfect its governance structure, thereby forming its decision-making,supervision and operation management organization with general meeting, the board of directors, the board ofsupervisors and operation management as the major structure. The general meeting, board of directors, board ofsupervisors and operation management of the Company has definite terms of reference, which can ensure aneffective balance, scientific decision-making process and coordinative operation, laying firm foundation formaking decisions relating to the Company‘s continuous, steady and healthy development.
During the reporting period, the actual situation of corporate governance has been in line with the requirements ofrelevant state laws and regulations, and regulatory documents relevant to governance of listed companies issuedby China Securities Regulatory Commission and Shenzhen Stock Exchange.
1. Shareholders and general meeting
The Company standardized the procedures concerning convening, holding and voting of general meeting in strictcompliance with the Articles of Association and Rules of Procedure of General Meeting. All shareholders,especially the minority shareholders, were equally treated to ensure all shareholders shall rank equal status andcan fully exercise their right. During the reporting period, the Company convened shareholders general meetings.In addition to convening general meeting in forms of site conference, the Company offered convenience forshareholders to present general meeting via network voting which was safe, economic and convenient. At thesame time, all the matters submitted to the Company‘s general meeting of shareholders should count the votes ofthe small and medium investors separately, and the results of the vote count should be disclosed timely so as toeffectively protect the rights and interests of small and medium investors and ensure that all shareholders,especially the small and medium shareholders, fully exercise their rights.
2. The Company and controlling shareholders:
The Company has independent business and independent management capability. The Company and itscontrolling shareholders owe independent business, personnel, assets, organs and finance. During the period,controlling shareholder abide by requirement of Article of Association and Management System of RelatedTransactions, strictly regulate their behaviors, and no controlling shareholder has directly or indirectly intervenedin the Company‘s policy-making and business activities beyond the general meeting of stockholders, no capital orassets of the Company occupied by controlling shareholder and its affiliates either.
3. The directors and board of directors
Board Meeting are revoke and open in line with the regulation of Company Law and Article of Associationstrictly, voting and information disclosure procedures appliance with relevant rules. All directors of the Companycarry out work according to ―Rules of Procedure of the Board‖ and ―Independent Director System‖, seriouslyattend the board of directors and shareholders‘ meeting, exercise obligations by the law and faithfully performtheir duties vigorously, positively participate in trainings of related knowledge open by Shenzhen Stock Exchangeand Securities Bureau, and get familiar with related laws and regulations. Independent directors follow close tothe line of Instruction of Setting Up Independent Directors System in Listed Companies and Independent DirectorSystem, take an active part in decision-making of the Company and present a prior approval and independentopinions for related transactions and major events, bring out the functions of independent directors.
In the Period, Board of the Company setting up four special committees including strategy, remuneration andappraisal, audit and nomination, each special committee respectively undertakes the functions of discussion,policy making, supervision and assessment according to the relevant working instruction, and plays important rolein improving the scientific decision-making, decision-making efficiency and quality for the Board.
4. Supervisors and board of supervisors
The Company convened and held meeting of supervisors in strict compliance with the Company Law and Articlesof Association, and the voting and information disclosure procedures of supervisors‘ meeting complied withrelevant requirements. The 9
th
session of board of supervisors consisted or five supervisors, two of whom are staffsupervisor, the number and constitution of which met applicable laws and regulations. Our supervisors cancarefully performed their duties including presenting at general meeting and meeting of the board of directors inaccordance to the Rules of Procedures of Board of Supervisors, to exercise supervision over the board ofdirectors‘ decision-making procedures, subjects to be proposed and our operation in law, to review the periodicreports prepared by the Board and form written audit opinion in respect thereof and to make effective supervisionover our material transactions, connected transaction, financial position as well as the legality and compliance ofthe performance by directors and senior management and issue independent opinions in respect thereof.
5. The performance appraisal and incentive and constraint mechanism
The Company owes and continues to improve fair-ness and transparency performance appraisal standards andincentive and constraint mechanism for directors, supervisors and senior management, the engagement ofmanagers of the Company is open and transparent and meets the provisions of laws and regulations.
6. The stakeholders
The Company fully respects and maintains the legitimate rights and interests of stakeholders; strengthencommunication and negotiation with each other, realizes the coordination and balance of interests for all partiesincluding society, shareholders, company and staff, pushes forward the sustainable, steady and harmoniousdevelopment of the Company together.
7. The information disclosure and transparency
During the Period, the Company strengthens management of information disclosure, performs the duty ofinformation disclosure in strict accordance with the rules of related laws and regulations, Rules Governing thestock listed on Shenzhen Stock Exchange (2018 Reversion) and ―Management System of Information Disclosure‖,and appoints Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website(www.cninfo.com.cn) for information disclosure medial; as for the major un-disclosed inside information,exercise strictly confidential procedures and controlling persons with inside information kowned. The Companyperform duty in aspect of truthfully, accurately, timely and completely discloses information, ensures all investorsobtain the Company‘s information equally and other legal interest.
8. Investor relations management
The Company has seriously done the job of the investor relations management in accordance with therequirements of the "Investor Relations Management System" and "Reception and Promotion system" during thePeriod. Received the consultation and research of the professional institutional investors to the company, checkingrecords for visitors and signing letter of commitment, disclosed the "investor relations activities record" timely.At the same time, communicated with the investors through the "interact easily" platform of Shenzhen StockExchange Investor Relations; seriously received the suggestion and opinions from investors, protect interest of theminority investors, earnestly accepted and replied the calls, faxes, and emails from the investors; cautiously dealtwith the media coverage.(ii) Is there any difference between the actual condition of corporate governance and relevant regulationsabout corporate governance for listed company from CSRC?
□Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations aboutcorporate governance for listed company from CSRC.II. Independent of the Company relative to controlling shareholders’ in aspect of businesses, personnel,assets, organization and financeThe Company totally separated in business, personnel, assets, institutions and financial aspects from SichuanChanghong (controlling shareholder), with independent business accounting, responsibility and risk andindependent business operation capability.
1. The business: the Company has an independent and complete business as well as operation ability, withspecialized procurement, production, technology, marketing, management, human resources and otherdepartments. We autonomously manage and operate business on our own. While the management staff areindependent from controlling shareholders and their subordinate enterprises. The Company is free frominterference by controlling shareholders and other affiliates, and there is no dependence on controllingshareholders and other affiliates.
2. The personnel: personnel, labor, personnel and salary of the Company are completely independent. President,vice president, person in charge of finance, Secretary of the board of directors and other senior managementpersonnel are working in the Company and receive salary, not receiving any remuneration and holding position of
any except directors, supervisors in the controlling shareholder and its subordinate enterprises.
3. Assets: the Company owns places of production and management independent from its controlling shareholder,owns complete assets structure, independent production system, auxiliary production systems and supportingfacilities, land use rights, ownership of houses and other assets, and independent purchase and sales system. Noassets occupied by controlling shareholders and other affiliates.
4. Institutions: the Company established organization completely independent from controlling shareholders; thegeneral meeting, board of directors, board of supervisors and the internal organization are capable of takingindependent action, with no controlling shareholder intervention of corporation's decision-making behavior. TheCompany strengthen the power restriction system via general meeting, the Board, supervisory committee,independent directors and vary committees, formulated an effective structure for corporate governance.
5. Financial aspects: the Company set up independent financial management, and independent accounting systemand financial management system, independently setting up banking account and tax declaration.
III. Horizontal competition
□ Applicable √ Not applicable
IV. In the report period, the Company held annual shareholders’ general meeting and extraordinaryshareholders’ general meeting
1. Annual Shareholders’ General Meeting in the report period
| Session of meeting | Type | Ratio of investor participation | Date | Date of disclosure | Index of disclosure |
| First Extraordinary General Meeting of 2019 | Extraordinary General Meeting | 32.2110% | 2019-2-22 | 2019-2-23 | Juchao Website—(http://www.cninfo.com.cn) ―Resolution Notice of First extraordinary general meeting of 2019‖ No.: 2019-012 |
| AGM of 2018 | AGM | 32.4336% | 2019-5-21 | 2019-5-22 | Juchao Website—(http://www.cninfo.com.cn) ―Resolution Notice of Annual General Meeting of 2018‖ No.: 2019-035 |
| Second Extraordinary General Meeting of 2019 | Extraordinary General Meeting | 33.06% | 2019-7-25 | 2019-7-26 | Juchao Website—(http://www.cninfo.com.cn) ―Resolution Notice of Second extraordinary general meeting of 2019‖ No.: 2019-047 |
| Third Extraordinary General Meeting of 2019 | Extraordinary General Meeting | 35.44% | 2019-9-26 | 2019-9-27 | Juchao Website—(http://www.cninfo.com.cn) ―Resolution Notice of Third extraordinary general meeting of 2019‖ No.: 2018-067 |
| Fourth Extraordinary General Meeting of 2019 | Extraordinary General Meeting | 33.1795% | 2019-12-17 | 2019-12-18 | Juchao Website—(http://www.cninfo.com.cn) ―Resolution Notice of Fourth extraordinary general meeting of 2019‖ No.: 2019-087 |
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V. Responsibility performance of independent directors(i)The attending of independent directors to Board meetings and general meeting
| The attending of independent directors | |||||||
| Independent director | Times of Board meeting supposed to attend in the report period | Times of present in person | Times of attending by communication | Times of entrusted presence | Times of Absence | Absent the Meeting for the second time in a row (Y/N) | Times of attending the shareholder general meeting |
| Gan Shengdao | 17 | 1 | 16 | 0 | 0 | N | 1 |
| Ren Jia | 17 | 1 | 16 | 0 | 0 | N | 2 |
| Lu Yingjin | 17 | 1 | 16 | 0 | 0 | N | 2 |
Explanation of absent the Board Meeting for the second time in a row:
No independent directors absent the Board Meeting for the second time in a row.(ii) Objection for relevant events from independent directorsWhether independent directors come up with objection about company‘s relevant matters or not
□ Yes √ No
Independent directors has no objections for relevant events in reporting period(iii) Other explanation about responsibility performance of independent directorsWhether the opinions from independent directors have been adopted or not
√ Yes □ No
Explanation on recommendations adopted or un-adopted:
During the report period, the independent directors of the 8
thsession of the Board, Mr. Gan Shengdao, Mr. Ren Jiaand Mr. Lu Yingjin, faithfully performed their duties, and prudently, earnestly and diligently exercised their rightsas independent directors in strict accordance with ―Corporation Law‖, ―Securities Law‖, ―Guidance on theEstablishment of Independent Director System in Listed Companies‖ of China Securities Regulatory Commission,―Stock listing Rules‖(Revised in 2018) of Shenzhen Stock Exchange, ―Articles of Association‖, ―Independent
Director System‖, ―Annual Report Working System of Independent Director‖, and rules of related laws andregulations, not influenced by the major shareholders, actual controllers, or other units and individuals having astake in the Company, actively attended the general meeting of shareholders and board meeting, madeindependent opinions on related matters, gave reasonable suggestions to the production and management and thebusiness development of the Company, gave full play to the role as independent directors, and maintained thelegitimate rights and interests of shareholders of the Company, especially the medium and small shareholders.
In reporting period, independent directors propose opinions on the Board, and details of suggestions as:
| Dated | Items | Agree/against | Disclosure index |
| 2019-01-11 | Independent opinion on Resignation of President and the Authorization of Mr. Kou Huameng (Director and deputy President of the Company) to Perform the Duties of the President | Agreed | Juchao Website(www.cninfo.com.cn) |
| 2019-01-29 | Independent opinion on relevant proposal of the 19th session of 9th BOD | Agreed | Juchao Website(www.cninfo.com.cn) |
| 2019-03-27 | Independent opinion on relevant proposal of the 20th session of 9th BOD | Agreed | Juchao Website(www.cninfo.com.cn) |
| 2019-04-19 | Independent opinion on relevant proposal of the 21st session of 9th BOD | Agreed | Juchao Website(www.cninfo.com.cn) |
| 2019-04-26 | Independent opinion on relevant proposal of the 22nd session of 9th BOD | Agreed | Juchao Website(www.cninfo.com.cn) |
| 2019-07-08 | Independent opinion on relevant proposal of the 24th session of 9th BOD | Agreed | Juchao Website(www.cninfo.com.cn) |
| 2019-08-15 | Independent opinion on relevant proposal of the 25th session of 9th BOD | Agreed | Juchao Website(www.cninfo.com.cn) |
| 2019-08-30 | Independent opinion on Capital Increase for Sichuan Zhiyijia Network Technology Co., Ltd. and Increase Daily Related Party Transaction with Zhiyijia Network Technology | Agreed | Juchao Website(www.cninfo.com.cn) |
| 2019-09-09 | Independent opinion on relevant proposal of the 27th session of 9th BOD | Agreed | Juchao Website(www.cninfo.com.cn) |
| 2019-10-17 | Independent opinion on relevant proposal of the 28th session of 9th BOD | Agreed | Juchao Website(www.cninfo.com.cn) |
| 2019-10-28 | Independent opinion on relevant proposal of the 29th session of 9th BOD | Agreed | Juchao Website(www.cninfo.com.cn) |
| 2019-11-29 | Independent opinion on relevant proposal of the 31st session of 9th BOD | Agreed | Juchao Website(www.cninfo.com.cn) |
| 2019-12-06 | Independent opinion on Providing Internal Guarantee | Agreed | Juchao |
| and External Loan to the Overseas Controlling Subsidiary | Website(www.cninfo.com.cn) | ||
| 2019-12-25 | Independent opinion on relevant proposal of the 33rd session of 9th BOD | Agreed | Juchao Website(www.cninfo.com.cn) |
VI. Responsibility performance of subordinate special committee of the Board in report period(i) Responsibility performance for strategy committee of the BoardIn accordance with the requirements of the relevant laws and regulations of the Company Law and the ListingRules of the Shenzhen Stock Exchange and the relevant requirements of the CSRC and the Shenzhen StockExchange, the Strategic Committee under the Board of Directors of the company has strictly followed theprovisions of the Articles of Association and the Working Rules of the Strategic Committee of the Board ofDirectors, strictly performed their duties, and offered proposals and carried out positive guides for the company'sstrategic development and foreign investments, the specific situation is as follows:
1. On 17 March 2019, the Strategic Committee convened the 5
th meeting of the Strategy Committee of the 9
th
Board of Directors, deliberated and approved the one proposal as development plans for year of 2019.According to the Company‘s medium and long term development strategy, the committee members combinedwith the macroeconomic situation and industry status and summarized the annual work situation in 2018,discussed and established the Company‘s business thoughts and business plans in 2019, and further ensured therealization of the Company‘s medium and long term development strategic targets.
2. On August 28, 2019, the Strategy Committee held the 6
th
meeting of the Ninth Board Strategy Committee andreviewed and approved two proposals, i.e. ―Proposal on Increasing Capital in Sichuan Zhiyijia NetworkTechnology Co., Ltd. and Increasing Daily Related Transactions with it‖ and ―Proposal on Liquidation andCancellation of the Subsidiary Meiling Candy Washing Machine Co., Ltd.‖.
(1) Under the industry background of complete set of consumption, scenario-based marketing, and intelligenthome in home appliance market, in order to further utilize Zhiyijia‘s mature smart trading platform, reduce thecompany‘s repeated investment in such platform construction, and use the advantages of smart trading platform togive full play to the synergy advantages of the Company and its controlling shareholder Sichuan Changhong in themarketing of home appliances, so as to better adapt to market competition and consumer consumption behavior.The company submitted to the board of directors for approval of the company to increase capital of RMB29,087,040 yuan (of which 20 million yuan is included in the registered capital and 9,087,040 yuan is included inthe capital reserve) in Zhiyijia Company with its funds, while the other shareholder Sichuan Changhong didn‘tincrease capital this time. At the same time, the company submitted to the board of directors for approval ofincreasing the estimated amount totaling 803 million yuan for the related transactions occurred among thecompany and its holding subsidiaries with Zhiyijia Company in 2019, such as sales of goods and acceptingservices, and increasing the estimated amount totaling 8,526 million yuan for the related transactions occurredamong the company and its holding subsidiaries with Zhiyijia Company in 2020, such as sales of goods andaccepting services. It‘s agreed to submit the proposal to the company‘s board of directors for review.
(2) In view of the change of the actual controller of Italy Candy Hoover Group S.r.l. (hereinafter referred to as―Candy Group‖), another shareholder of the company‘s holding subsidiary Meiling Candy Washing Machine Co.,Ltd. (hereinafter referred to as ―Meiling Candy‖ or ―joint venture‖), due to this change, Meiling Candy sufferedlosses. In order to ensure the interests and future development of Meiling Candy and its shareholders, afterfriendly negotiations with Candy Group, the company submitted to the board of directors for approval ofliquidating and cancelling Meiling Candy. It‘s agreed to submit the proposal to the company‘s board of directorsfor review.
3. On 6 September 2019, the strategy committee held the 7
th meeting of the strategy committee of the 9
thboard ofdirectors, and reviewed and approved the one proposal as Capital Increase for Sichuan Changhong GroupFinance Co., Ltd and Related Party Transaction.
In view of the fact that Changhong Finance Company has provided high-quality financial services such asdeposits and loans to the company and its holding subsidiaries for many years, in order to further enhance thecompany‘s financial business level, increase the company‘s investment and financing ability in the financialmarket, expand the company‘s financing scale, and obtain stable financial investment returns, the companysubmitted to the board of directors for approval of using its own funds together with Changhong Huayi torespectively increase capital of 500 million yuan to Changhong Finance Company, with a total capital increase ofone billion yuan, of which 402,998,300 yuan of the Company‘s capital increase of 500 million yuan in ChanghongFinance Company was included in its registration capital, and 97,001,700 yuan was included in its capital reserve,while Changhong Finance Company‘s former shareholders, Changhong Group and Sichuan Changhong, gave uptheir rights to subscribe for capital contributions this time and did not increase capital. It agreed to submit thematter to the board of directors for consideration.
4. On October 25, 2019, the Strategy Committee held the 8
thmeeting of the Ninth Board Strategy Committee,which considered and approved the ―Proposal on Establishing a Sales Branch of the Subsidiary SichuanChanghong Air-conditioner Co., Ltd.‖.According to the business needs of Changhong Air Conditioning, a subsidiary of the company, it‘s recommendedto agree Changhong Air-conditioner to set up ―Sichuan Changhong Air Conditioning Co., Ltd. Baoding QingyuanBranch‖ in Qingyuan District, Baoding City, Hebei Province (tentative name, subject to industrial and commercialregistration), and use this branch as the main body of Changhong Air-conditioner‘s local electricity replacing coalproject and ground source heat pump reconstruction project to promote business development. It‘s agreed tosubmit the proposal to the company‘s board of directors for review.
5. On December 4, 2019, the Strategy Committee convened the 9
thmeeting of the Ninth Board StrategyCommittee, which considered and approved the ―Proposal on Investment and Establishment of a PhilippineSubsidiary‖.According to the company‘s overseas development strategy, in order to further increase the brand awareness of thecompany‘s products in Southeast Asian countries and expand the company‘s overseas sales volume of home
appliances, it was agreed that the company and five natural persons jointly invest $ 1 million in the Philippines toestablish a new trade-type joint venture subsidiary, CH-Meiling International (Philippines) Inc. (ChanghongMeiling International (Philippines) Co., Ltd., the company name shall be subject to the final approval of the localcompetent authority), to engage in the import, wholesale and sales of household appliances and other products.Among them, the company invested US $ 999,500 with its own funds, accounting for 99.95% of the registeredcapital, and the other five natural persons contributed US $ 500 with its own funds, accounting for 0.05% of theregistered capital. It‘s agreed to submit the proposal to the company‘s board of directors for review.
6. On March 16, 2020, the Strategy Committee held the 10
th
meeting of the Ninth Board Strategy Committee,which reviewed and approved the Proposal on the Company‘s Development Plan in 2020 and the Proposal onCapital Increase in Zhongshan Changhong Electric Co., Ltd.
(1) According to the company‘s medium and long-term development strategy, combined with the company‘smacro environment and industry situation, after analyzing the overall situation of the company‘s work in 2019, itdiscussed and established the company‘s 2020 business ideas and plans, and strive to achieve the annual businessgoals of 2020.
(2) According to the company‘s overseas development strategy and the business development needs of ZhongshanChanghong, a wholly-owned subsidiary, in order to supplement the liquidity of Zhongshan Changhong andquickly reduce the asset-liability ratio, it agreed the company and its wholly-owned subsidiary ChanghongAir-conditioner to increase capital of RMB 150 million to Zhongshan Changhong with its own funds by theexisting shareholding ratio, of which the Company‘s capital increase was 135 million yuan and ChanghongAir-conditioner‘s capital increase was 15 million yuan. After the completion of the capital increase, the registeredcapital of Zhongshan Changhong increased to 334 million yuan, and the shareholding ratios of the company andChanghong Air-conditioner in Zhongshan Changhong remained unchanged, which were 90% and 10%. It‘s agreedto submit the proposal to the company‘s board of directors for review.
(ii) Responsibility performance for audit committee of the BoardAudit committee of the Board performed its functions of supervision and examination to maintain theindependence of audition in auditing for year of 2019 according to the requirements of related laws andregulations such as Company Law and Rules Governing the Listing of Stocks on Shenzhen Stock Exchange andrelated requirements of Securities Regulatory Commission and Shenzhen Stock Exchange by abiding of Articlesof Incorporation, Implementing Regulations of Audit Committee of Board of the Directors, and Annual WorkRules of Audit Committee, the details are as follows:
1. On 24 January 2019, the ―Financial Statement Report for year of 2018 and Arrangement of Internal ControlAuditing‖ and ―Un-audited Financial Accounting Statement for year of 2018‖ were deliberated and approved in
thsession of 9
thaudit committee of the Board. Found more details in ―(II) Responsibility performance for auditcommittee of the Board‖ of ―VI. Responsibility performance of subordinate special committee of the Board inreport period‖ carried in ―Section IX. Corporate Governance‖ disclosed in Annual Report 2018, released onJuchao Website (www.cninfo.com.cn) dated 29 March 2019.
2. On 9 March 2019, the 9
th session of 9
thaudit committee of the Board deliberated the first draft of Annual
Report 2018, after a preliminary audit opinion issued from Shine Wing CPA (LLP). Found more details in ―(II)Responsibility performance for audit committee of the Board‖ of ―VI. Responsibility performance of subordinatespecial committee of the Board in report period‖ carried in ―Section IX. Corporate Governance‖ disclosed inAnnual Report 2018, released on Juchao Website (www.cninfo.com.cn) dated 29 March 2019.
3. On 17 March 2019, the audit committee held the 10
th session of the 9
th
audit committee of the board o whichreviewed and approved six proposals as "The Company's 2018 Annual Audited Financial Reports", "2018 InternalControl Audit Report", "Summary report about the company's 2018 annual audit work taken up by Shine WingCertified Public Accountants", "Motion on reappointment of the audit institution for 2019 annual financial reportand internal controls and its payment", "Motion on the company to carry out forward foreign exchange transactionbusiness" and ―Change of the Accounting Standards‖, and agreed to submit the above motions to the board ofdirectors for consideration.
4. On 17 April 2019, the ―Financial Statement of 1Q of 2019‖ was deliberated and approved in 11
th
session of 9
th
audit committee of the Board, the financial statement present a real, accurate and completed financial status andoperation results of the Company for 1Q of 2019. The financial statements of 1Q of 2019 agree to submit forapproval in the Board.
5. On 5 August 2019, the ―Financial Statement of Semi-annual 2019‖ was deliberated and approved in 12
th
sessionof 9th
audit committee of the Board, the financial statement present a real, accurate and completed financial statusand operation results of the Company for semi-annual of 2019. The company's semi-annual financial report for2019 was not audited. The financial statements of semi-annual 2019 agree to submit for approval in the Board.
6. On 15 October 2019, the ―Financial Statement of 3Q 2019‖ was deliberated and approved in 13
th
session of 9
th
audit committee of the Board, the financial statement present a real, accurate and completed financial status andoperation results of the Company for 3Q of 2019. The financial statement of 3Q 2019 agree to submit for approvalin the Board.
7. On 20 January 2020, the ―Financial Statement Report for year of 2019 and Arrangement of Internal ControlAuditing‖ and ―Un-audited Financial Accounting Statement for year of 2019‖ were deliberated and approved in
th
session of 9
thaudit committee of the Board, the un-audited financial statement presented an objectifiedfinancial status and operation results for year of 2019 basically.
8. On 9 March 2020, the audit committee held the 15
th session of the 9
thaudit committee after the Shine WingCertified Public Account (LLP) issued preliminary audit opinion. Reviewed the auditing draft of financial reportfor year of 2019, proposed specific opinions; members of audit committee communicated with certified publicaccountant who was responsible for audition of the company, the certified public accountant who was beresponsible for annual audition of the company reported related matters and adjusted matters during the auditionto the audit committee, and matters of the company needs to be adjusted have been adjusted according toadjustment opinions of the certified public accountant who was responsible for annual audition. The auditcommittee read the first draft of audited financial accounting statements for 2019 of the company according toaudition condition known from certified public accountant who was responsible for annual audition andproduction operation condition and financial performances reported by management level of the company,considered that the annual financing accounting statements for 2019 audited preliminarily by the Shine Wing
Certified Public Account can truly, correctly and completely reflect the operation condition of the company, andconfirmed the preliminary audit opinions of financing accounting statements of the company issued by the ShineWing Certified Public Account.
9. On 16 March 2020, the 16
th session of the 9
thaudit committee of the Board deliberated and approved thefollowed five proposals as‖ Audited Financial Statement Report of 2019‖, ―Auditing Report of Internal Controlfor year of 2019‖, ?Summary Report on Auditing Works for year of 2019 from Shine Wing Certified PublicAccount‖, ―Auditing Institution for Financial Report of 2020 and Internal Control Auditing Re-engagement andRemuneration Paid‖, and ―Opening Business of Forward Exchange‖, and agreed to submit these auditinginstitutions to board of the directors of the Company for deliberation.(iii) Responsibility performance for nominations committee of the BoardThe nominations committee under the board of directors practically performed their duties on the basis ofrequirements of laws and regulations of ―Company Law‖ and ―Rules Governing the Listing of Stocks on ShenzhenStock Exchange‖ and related requirements of China Securities Regulatory Commission and Shenzhen StockExchange, and in strict accordance with ―Articles of Association‖, ―Implementation Rules of NominationsCommittee of the Board‖, in the reporting period, the nominations committee reviewed and maderecommendations to the engaged senior management that needed to be submitted to the board for considerationand nomination.
1. On 9 Jan. 2019, the nomination committee held its 6
th meeting of the nomination committee of the 9
thboard ofdirectors, deliberated and approved proposal of acting as the chairman by the director and deputy president Mr.Kou Huameng. In view of the resignation of president - Mr. Wu Dinggang, the Company agreed to authorizeddirector and deputy president Mr. Kou Huameng acting as the Chairman of the Company;duration of the actingperiod will end till the new president appointed since 11 Jan. 2019, and submitted to the board of directors fordeliberation.
2. On 24 April 2019, the nomination committee held its 7
th meeting of the nomination committee of the 9
thboardof directors, deliberated and approved two proposal of qualification auditing for the chairman elected as 9
thBODand qualification auditing for the non-independent director elected as 9
thBOD.In view of the resignation of former president Mr. Li Wei due to work causes, he has resigned the post as presidentand director etc. of the 9
thBOD of the Company. In line with the needs of operation management, and completethe by-election work for vacancy of president as soon as possible, after reviewed by the nomination committee ofthe Board, Mr. Wu Dinggang was suggested to serves as the president of 9
th
BOD of the Company by election,office term same as the 9
thBOD‘s. Meanwhile, in view of the Mr. Zhong Ming, recommend by the controllingshareholder - Sichuan Changhong, as a candidate of non-independent director of 9
thBOD, after approval, Mr.Zhong Ming was agreed to nominated as the non-independent director of 9
thBOD of the Company by nominationcommittee, office term same as the 9
th
BOD‘s.(iv) Responsibility performance for remuneration and appraisal committee of the boardIn line with relevant laws and regulation of Company Law and ―Rules Governing the Listing of Stocks onShenzhen Stock Exchange‖ as well as requirement from CSRC and Shenzhen Stock Exchange, remuneration andappraisal committee of the Board, strictly follow rules of ―Article of Association‖ and ―Implementation Rules of
remuneration and appraisal committee of the Board‖, in the reporting period, the committee proposed suggestionson the performance evaluation standards and incentive & restraint mechanism for directors, supervisors and seniorexecutives, and review the appraisal and remuneration of directors, supervisors and senior executives, accrual anddistribution for performance incentive fund included. More details are as:
1. On 19 March 2019, the 2
nd meeting of the Remuneration and Appraisal Committee of the 9
thBoard of Directorswas convened. The meeting reviewed and approved the "Appraisal and Payment of Remuneration of Directorsand Senior Executives in Current Year 2018", and carried out follow opinions:
The committee assessed and reviewed the remunerations and payment status of the Company‘s directors andsenior executives in 2018, and considered that the allowances received by the independent directors of theCompany should be paid at the allowance rate approved by the general meeting of shareholders; theremunerations received by the Company‘s senior executives from the Company should be strictly based on theCompany‘s remuneration and assessment system, the remuneration information disclosed by the Company wastruthful, accurate, and complete and conformed to requirements of ―Content and Format Norm for InformationDisclosure of Companies Publicly Issuing Securities No. 2 - Content and Format of Annual Report (Revised in2017)‖ of China Securities Regulatory CommissionThe Board of Directors of the Company reviewed and passed the remuneration assessment and payment mattersof the directors and senior executives in the Company‘s 2018 annual report based on the remuneration assessmentstatus of senior executives of the Company and the opinions of the remuneration and appraisal committee.
2. On 16 March 2020, the remuneration and appraisal committee of the 9
thSession of Board of Directorsconvened the 3
rdmeeting which reviewed and approved the ―Remuneration Assessment and Payment of Directorsand Senior Executives of the Company in 2019‖ and issued the following review opinions:
The committee assessed and reviewed the remunerations and payment status of the Company‘s directors andsenior executives in 2019, and considered that the allowances received by the independent directors of theCompany should be paid at the allowance rate approved by the general meeting of shareholders; theremunerations received by the Company‘s senior executives from the Company should be strictly based on theCompany‘s remuneration and assessment system, the remuneration information disclosed by the Company wastruthful, accurate, and complete and conformed to requirements of ―Content and Format Norm for InformationDisclosure of Companies Publicly Issuing Securities No. 2 - Content and Format of Annual Report (Revised in2017)‖ of China Securities Regulatory CommissionThe Board of Directors of the Company reviewed and passed the remuneration assessment and payment mattersof the directors and senior executives in the Company‘s 2019 annual report based on the remuneration assessmentstatus of senior executives of the Company and the opinions of the remuneration and appraisal committee.VII. Works from Supervisory CommitteeWhether the Company has risks or not in reporting period that found in supervisory activity from supervisorycommittee
□Yes √ No
Supervisory committee has no objection about supervision events in reporting periodVIII. Appraisal and incentive to senior management
(i) Evaluation mechanism for senior executives of the CompanyThe Company formulated ―Implementation Rules of Remuneration and Appraisal Committee of the Board‖, theremuneration and appraisal committee established 2019 annual compensation and performance management planfor the senior management of the Company in accordance with the main scope, responsibilities, importance oftheir management positions and the remuneration level of other relevant enterprises and positions; the planincluded but not limited to key performance indicator (KPI), performance appraisal standards, procedures andmajor programs and systems of main appraisal system, reward and punishment; investigated the execution of dutyof the senior management and implemented annual performance appraisal to them. After reviewed by thecommittee, submit to the Board for approval.At the end of Current Year, combined with the senior management‘s working reports and self-evaluation of 2019,and according to the performance evaluation criteria and procedures, the Compensation and Appraisal Committeehas carried out performance appraisal to the senior management‘s key performance indication (KPI) in 2019 andother related indicators; proposed the remuneration amount and performance assessment methods for seniormanagement according to the job performance evaluation results and remuneration distribution policy, andreported to the Board of Directors for approval.(ii) Establishment and implementation of performance incentive mechanismThe Company formulated a mid-long term incentive and restraint mechanism, that is ―Implementation Plan ofAnnual Performance Incentive Fund‖ in 2012, on 9 August 2012 and 28 August 2012, the Plan was deliberatedand approved in 16
th meeting of 7
th session of the Board and 2
ndextraordinary general meeting 2012. Details ofthe aforesaid event can be found in the announcement (No.: 2012-028 and No.: 2012-035) released on appointedmedia Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website(www.cninfo.com.cn) dated 10 August 2012 and 29 August 2012. Up November 2017, the annual performanceincentive plan was completed, and we will continue to disclose the follow-up treatment on shares held byincentive objects; implementation of the annual performance incentive fund found more in ― Implementation ofAnnual Performance Incentive Fund‖ of ―XV Implementation of the company‘s stock incentive plan, employeestock ownership plan or other employee incentives‖ in ―Section V. Important Event‖ carried in the Report.IX. Internal Control(i) Details of major defects in IC appraisal report that found in reporting period
□Yes √ No
(ii) Appraisal Report of Internal Control
| Date of evaluation report of internal control disclosed (Full-text) | 2020-3-28 |
| Index of evaluation report of internal control disclosed (Full-text) | Juchao Website (www.cninfo.com.cn) |
| The ratio of the total assets of units included in the scope of evaluation accounting for the total assets on the company's consolidated financial statements | 99.21% |
| The ratio of the operating income of units included in the scope of evaluation accounting for the operating income on the company's consolidated financial statements | 99.16% |
| Defects Evaluation Standards | ||
| Category | Financial Reports | Non-financial Reports |
| Qualitative criteria | 1. Material defect: severally or jointly with other defects, will lead to material wrong reporting in financial reports being not able to prevented or found or rectified in a timely manner. Occurrence of the followings will be deemed as material defect: 1. inefficiency of environment control; 2. fraud of directors, supervisors and senior management; 3. The external auditor finds material wrong reporting in current financial statement, while the Company has not found such reporting during its operation; 4. The material defect identified and reported to the management fails to be rectified in a reasonable time period; 5. The audit committee and audit department of the Company exercise invalid supervision upon internal control; 6. Other defects which may affect financial statement users to make correct judgment. 2. Major defect: severally or jointly with other defects, will lead to wrong reporting in financial reports being not able to prevented or found or rectified in a timely manner which still needs attention from the management though it doesn‘t reach or exceed material defect as described above. Occurrence of the followings will be deemed as major defect: (1) Financial losses caused by guaranteeing and investing in securities and financial derivatives transactions and disposing property right and stock right without authorization; (2) The company's financial staff or other relevant business personnel have unclear powers and responsibilities or job chaos, or are suspected of being involved in economic or job-related crimes and have been transferred to the judiciary; (3) Punishment or severely negative impacts on the company's image due to the bias implementation of the policy or accounting errors, etc.; (4) Financial losses caused by destroying, concealing, or altering the important original evidences at will, such as invoices and checks, etc. (5) Cash income is not entered into the account book, or public funds are deposited in private account or "private coffer" is established by breaking the rules. 3. General defect: other internal control related defects that do not constitute material defects or major defect. | Occurrence of the followings shall be deemed as material defect, otherwise as major defect or general defect subject to the level of influence. 1. breach of national laws, regulations or regulatory documents; 2. procedure for making significant decisions is not scientific; 3. absence of system may lead to invalid system; 4. Material or major defects are not likely to rectify; 5. Large negative effects on the company and disclosed in the form of announcement; 6. Other issues that materially affect the Company. |
| Quantitative standard | 1. Proportion of potential wrong reporting in total operating income: Material defect: wrong reporting ≧0.5%; Major defect: 0.1% ≤ wrong reporting＜0.5%; General defect: wrong reporting＜0.1%. 2. Proportion of potential wrong reporting in total profit: Material defect: wrong reporting ≧10%; Major defect: 5% ≤ wrong reporting＜10%; General defect: wrong reporting＜5%. 3. Proportion of potential wrong reporting in total assets: Material defect: wrong reporting ≧0.5%; Major defect: 0.1% ≤ wrong reporting＜0.5%; General defect: wrong reporting＜0.1%. 4. Proportion of potential wrong reporting in total owners’ equity: Material defect: wrong reporting ≧0.5%; Major defect: 0.1% ≤ wrong reporting＜0.5%; General defect: wrong reporting＜0.1%. | 1. Proportion of direct property loss in total operating income: Material defect: wrong reporting ≧0.1%; Major defect: 0.05% ≤ wrong reporting＜0.1%; General defect: wrong reporting＜0.05%. 2. Proportion of direct property loss in total profit: Material defect: wrong reporting ≧10%; Major defect: 5% ≤ wrong reporting＜10%; General defect: wrong reporting＜5%. 3. Proportion of direct property loss in total assets: Material defect: wrong reporting ≧0.2%; Major defect: 0.1% ≤ wrong reporting＜0.2%; General defect: wrong reporting＜0.1%. 4. Proportion of direct property loss in total owners’ equity: Material defect: wrong reporting ≧0.2%; Major defect: 0.1% ≤ wrong reporting＜0.2%; General defect: wrong reporting＜0.1%. | |
| Amount of significant defects in financial reports | 0 | ||
| Amount of significant defects in non-financial reports | 0 | ||
| Amount of important defects in financial reports | 0 | ||
| Amount of important defects in non-financial reports | 0 | ||
X. Auditing report of internal control
√ Applicable □ Not applicable
| Deliberation section of auditing report of IC | |
| We consider that: in all major aspects, Changhong Meiling Co., Ltd. has efficiency in financial report of internal control dated 31 December 2019 according to Basic Standards of Internal Control for Enterprise and relevant regulations. | |
| Disclosure details of audit report of internal control | Disclosed |
| Disclosure date of audit report of internal control (full-text) | 2020-3-28 |
| Index of audit report of internal control (full-text) | Juchao Website (www.cninfo.com.cn) |
| Opinion type of auditing report of IC | Standard unqualified |
| whether the non-financial report had major defects | No |
Whether CPA carries out qualified opinion for audit report of internal control or not
□Yes √ No
Whether the opinions are consistent in audit report of internal control carrying out by CPA and the self-evaluationreport of the Board or not
√ Yes □ No
Section XI. Corporate BondWhether the Company has a corporation bonds that issuance publicly and listed on stock exchange and withoutdue on the date when annual report approved for released or fail to cash in full on due
□Yes √No
Section XII. Financial ReportI. Audit report
| Type of audit opinion | Standard unqualified opinion |
| Date for signing the report | 2020-3-26 |
| Name of audit institute | Shine Wing Certified Public Accountants (LLP) |
| Serial of Auditing Report | XYZH/2020CDA40020 |
| Name of CPA | Li Xifu, Xia Cuiqiong |
Auditor’s Report
XYZH/2020CDA40020
To Shareholders of Changhong Meiling Co., Ltd.:
I. Auditor’s opinionWe, as the auditors, audited the financial statements of Changhong Meiling Co., Ltd. (the ―Company‖), whichincluded the consolidated balance sheet as of 31 December 2019, the consolidated statement of income, theconsolidated statement of cash flow and the consolidated statement of changes in equity of the Company forCurrent Year ended 31 December 2019, together with the relevant notes thereto.We are the view that the attached financial statements are prepared in accordance with the Business AccountingStandards in all material aspects, which reflect fairly the consolidated financial position of the Company as of 31December 2019 and the operating results and cash flow of the Company for Current Year of 2019.II. Basis for audit opinionsWe conducted this audit under the requirements of the Auditing Standards of the Certified Public Accountant ofthe PRC. The section headed ―Certified Public Accountant‘s responsibility for audit of financial statement‖ in theaudit report has further clarified our responsibilities under these standards. Pursuant to the code of professionalconduct as certified public accountant in the PRC, we are independent of the Company and have performed otherresponsibility as required by our professional ethics. We believe that the audit evidence obtained by us issufficient and adequate, which provides foundation for us to issue audit opinion.III. Key audit issues
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit ofthe financial statements of the current period. These matters were addressed in the context of our audit of thefinancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion onthese matters. The key audit matter we identified is as follows:
| 1.Recognition of revenue | |
| Please refer to note (iv) 24 and note (vi) 37. | |
| Key audit matters | Audit address |
| Sales revenue of the Company was mainly sourced from sales of refrigerator, air conditioner, small household appliances and kitchen and washing machines to both domestic and overseas customers. As indicated in note (vi) 37 of the financial statement - Operating income and cost, the operating income was RMB 16,553,252,894.93 in 2019. Since the truthfulness and completeness of revenue recognition has material impact on operating results, Therefore, the recognition of operating income will consider as the key audit matters. | Main auditing procedures for revenue recognition are including: 1) know and test the cycle internal control of sales and collection, to assess the design and effectiveness of the internal control; 2) understand the business substance, inspect significant sales contract and the corresponding sales invoice, on a random basis, receipt of notes, delivery information confirmed through systems, verify that whether revenue was recognized upon satisfaction of required conditions and whether the revenue recognition was made in right timing, and verify that whether profit was adjusted through aggressive sales policy; 3) Carry out supervision and other procedures to the important inventory at end of the period, well-known the progress of the contracts and follow up the abnormal situations found in inspection; 4) Conduct inquiry through issue of letters, and carry out additional audit procedures for the items for which reply was abnormal; 5) review collection of trade receivables, confirm the conformity between the entities owing receivables and name of customers to verify whether there was collection of receivables from third parties, to review the truthfulness of the collection and revenue; 6) review collection of receivables in subsequent period; 7) make cut-off test and analysis re-review on revenue. |
| 2.Capitalization of development expense | |
| Please refer to note (iv) 18 and note (vi) 15 | |
| Key audit matters | Audit address |
| The development expense occurred for research and development of non-patent technology in 2019 was RMB 128,970,096.82, which was capitalized and accounted for as | 1) Understand the key control of capitalization of development expenditures, implement internal control audit procedures, understand the scope and accounting methods of development expenditures, understand and make research and development on related control systems and processes, and test the effectiveness of |
| development expense in the consolidated financial statement. Development expense could only be capitalized upon satisfaction of all the capitalization conditions set out in note (iv) 18 to the financial statement. Since to confirm whether all the capitalization conditions are met requires the management to make significant judgment and estimate, we deem this matter important in the context of our audit. Therefore, the capitalization of development expenditure will consider as the key audit matters. | relevant internal control design and operation; 2) Implementation: compare the developed projects in intangible assets with machinery models for external sales, and re-verify the truthfulness of capitalization of completely developed projects 3) Dual purpose testing: inspect the project reports and inspection and acceptance reports formed during the research and development and commercialization of developed products, and judge the sufficiency of basis for accounting of development expense |
IV. Other informationThe management of Changhong Meiling Co., Ltd. (the ―Management‖) is responsible for other information whichincludes the information covered in the Company‘s 2019 annual report excluding the financial statement and ouraudit report.The audit opinion issued by us for the financial statement has not covered other information, for which we do notissue any form of assurance opinions.Considering our audit on financial statements, we are liable to read other information, during which, we shallconsider whether other information differs materially from the financial statements or that we understand duringour audit, or whether there is any material misstatement.Based on the works executed by us, we should report the fact if we find any material misstatement in otherinformation. In t his regards, we have nothing to report.V. Responsibilities of management and those charged with governance for the financial statementsThe management is responsible for the preparation of the financial statements in accordance with the AccountingStandards for Enterprise to secure a fair presentation, and for the design, establishment and maintenance of theinternal control necessary to enable the preparation of financial statements that are free from materialmisstatement, whether due to fraud or error.In preparing the financial statements, the management is responsible for assessing the Company‘s ability tocontinue as a going concern, disclosing matters related to going concern and using the going concern assumptionunless the management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.Those charged with governance are responsible for overseeing the Company‘s financial reporting process.VI. Responsibilities of the auditor for the financial statementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an audit report that includes our audit opinion.Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordancewith the CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud orerror and are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of the financial statements.As part of an audit in accordance with the CAS, we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
(1) identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient andappropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by the management.
(4) Conclude on the appropriateness of the management‘s use of the going concern assumption and, based on theaudit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company‘s ability to continue as a going concern. If we conclude that a materialuncertainty exists, we are required by the CAS to draw users‘ attention in audit report to the related disclosures inthe financial statements or, if such disclosures are inadequate, to modify audit opinion. Our conclusions are basedon the information obtained up to the date of audit report. However, future events or conditions may cause theCompany to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and whether the financialstatements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express audit opinion on the financial statements. We are responsible for thedirection, supervision and performance of the group audit. We remain solely responsible for audit opinion.We communicate with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that weidentify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and communicate with them all relationships and other matters that mayreasonably be thought to bear on our independence, and where applicable, related safeguard measures.From the matters communicated with those charged with governance, we determine those matters that were ofmost significance in the audit of the financial statements of the current period and are therefore the key auditmatters. We describe these matters in the auditor‘s report unless law or regulation precludes public disclosureabout the matter or when, in extremely rare circumstances, we determine that a matter should not becommunicated in the auditor‘s report because of the adverse consequences of doing so would reasonably beexpected to outweigh the public interest benefits of such communication.
| Shine Wing Certified Public Accountants (LLP) | Chinese CPA: (engagement partner): Li xifu | |
| Chinese CPA: Xia cuiqiong | ||
| Beijing China | 26 March 2020 |
II. Financial StatementStatement in Financial Notes are carried in RMB/CNY
1. Consolidated balance sheet
Prepared by Changhong Meiling Co., Ltd.
In RMB
| Item | 2019-12-31 | 2018-12-31 |
| Current assets: | ||
| Monetary funds | 5,499,601,030.64 | 4,596,077,557.40 |
| Settlement provisions | ||
| Capital lent | ||
| Tradable financial assets | 7,730,268.92 | |
| Financial assets measured at fair value and whose changes are included in current gains/losses | 9,253,635.59 | |
| Derivative financial assets | ||
| Note receivable | 1,865,165,499.50 | 2,387,830,887.74 |
| Account receivable | 1,387,961,981.66 | 1,670,988,644.76 |
| Receivable financing | ||
| Accounts paid in advance | 25,270,406.37 | 86,180,459.26 |
| Insurance receivable | ||
| Reinsurance receivables | ||
| Contract reserve of reinsurance receivable | ||
| Other account receivable | 97,241,894.80 | 62,129,574.17 |
| Including: Interest receivable | 9,510,208.63 | 2,653,712.36 |
| Dividend receivable | 661,434.48 | |
| Buying back the sale of financial assets | ||
| Inventories | 1,460,910,189.06 | 2,174,436,573.67 |
| Contractual assets | ||
| Assets held for sale | ||
| Non-current asset due within one year | ||
| Other current assets | 63,604,031.96 | 1,184,686,956.96 |
| Total current assets | 10,407,485,302.91 | 12,171,584,289.55 |
| Non-current assets: |
| Loans and payments on behalf | ||
| Debt investment | ||
| Finance asset available for sales | 45,000,000.00 | |
| Other debt investment | ||
| Held-to-maturity investment | ||
| Long-term account receivable | ||
| Long-term equity investment | 88,556,511.70 | 61,869,440.55 |
| Investment in other equity instrument | ||
| Other non-current financial assets | 45,000,000.00 | |
| Investment real estate | 96,343,760.13 | 46,846,507.41 |
| Fixed assets | 2,180,572,946.87 | 1,733,957,012.14 |
| Construction in progress | 252,494,792.31 | 464,558,352.60 |
| Productive biological asset | ||
| Oil and gas asset | ||
| Right-of-use assets | ||
| Intangible assets | 933,248,463.84 | 817,579,958.94 |
| Expense on Research and Development | 101,078,659.57 | 108,210,966.60 |
| Goodwill | ||
| Long-term expenses to be apportioned | ||
| Deferred income tax asset | 97,453,178.14 | 112,203,656.75 |
| Other non-current asset | ||
| Total non-current asset | 3,794,748,312.56 | 3,390,225,894.99 |
| Total assets | 14,202,233,615.47 | 15,561,810,184.54 |
| Current liabilities: | ||
| Short-term loans | 1,103,991,045.96 | 2,336,373,929.62 |
| Loan from central bank | ||
| Capital borrowed | ||
| Trading financial liability | 1,081,534.93 | |
| Financial liabilities measured at fair value and whose changes are included in current gains/losses | 55,586,666.70 | |
| Derivative financial liability | ||
| Note payable | 3,490,271,482.40 | 3,727,754,399.60 |
| Account payable | 2,343,116,374.58 | 2,282,174,981.38 |
| Accounts received in advance | 425,149,194.97 | 354,551,354.80 |
| Contractual liability | ||
| Selling financial asset of repurchase | ||
| Absorbing deposit and interbank deposit | ||
| Security trading of agency | ||
| Security sales of agency | ||
| Wage payable | 196,507,174.68 | 163,638,627.79 |
| Taxes payable | 68,558,391.66 | 109,753,432.17 |
| Other account payable | 689,477,603.21 | 660,320,360.26 |
| Including: Interest payable | 12,340,385.61 | 7,519,756.26 |
| Dividend payable | 3,579,491.94 | 17,317,286.45 |
| Commission charge and commission payable | ||
| Reinsurance payable | ||
| Liability held for sale | ||
| Non-current liabilities due within one year | 1,708,193.90 | 273,682,737.85 |
| Other current liabilities | ||
| Total current liabilities | 8,319,860,996.29 | 9,963,836,490.17 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term loans | 401,280,000.00 | 1,920,000.00 |
| Bonds payable | ||
| Including: Preferred stock | ||
| Perpetual capital securities | ||
| Lease liability | ||
| Long-term account payable | 3,016,921.44 | 5,017,208.00 |
| Long-term wages payable | 13,774,110.61 | 19,073,101.29 |
| Accrual liability | 166,099,143.97 | 273,063,677.21 |
| Deferred income | 179,970,971.92 | 160,250,963.60 |
| Deferred income tax liabilities | 6,256,759.14 | 3,098,699.11 |
| Other non-current liabilities | ||
| Total non-current liabilities | 770,397,907.08 | 462,423,649.21 |
| Total liabilities | 9,090,258,903.37 | 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 | 2,684,366,619.10 | 2,684,369,598.46 |
| Less: Inventory shares | ||
| Other comprehensive income | -18,931,430.36 | -18,143,569.26 |
| Reasonable reserve | ||
| Surplus public reserve | 410,786,860.20 | 400,673,993.50 |
| Provision of general risk | ||
| Retained profit | 884,127,743.42 | 904,232,582.87 |
| Total owner‘ s equity attributable to parent company | 5,004,947,673.36 | 5,015,730,486.57 |
| Minority interests | 107,027,038.74 | 119,819,558.59 |
| Total owner‘ s equity | 5,111,974,712.10 | 5,135,550,045.16 |
| Total liabilities and owner‘ s equity | 14,202,233,615.47 | 15,561,810,184.54 |
Legal Representative: Wu DinggangPerson in charge of accounting works: Pang HaitaoPerson in charge of accounting institute: Yang Jun
2. Balance Sheet of Parent Company
In RMB
| Item | 2019-12-31 | 2018-12-31 |
| Current assets: | ||
| Monetary funds | 4,040,632,437.18 | 2,897,004,041.87 |
| Trading financial assets | 5,967,556.00 | |
| Financial assets measured at fair value and whose changes are included in current gains/losses | 9,253,635.59 | |
| Derivative financial assets | ||
| Note receivable | 1,722,707,248.74 | 2,433,243,946.64 |
| Account receivable | 1,158,563,389.33 | 1,050,282,023.37 |
| Receivable financing | ||
| Accounts paid in advance | 34,374,932.07 | 58,710,427.38 |
| Other account receivable | 41,964,639.42 | 182,744,033.52 |
| Including: Interest receivable | 7,880,186.85 | 2,653,712.36 |
| Dividend receivable | 661,434.48 |
| Inventories | 339,728,296.66 | 911,130,106.30 |
| Contractual assets | ||
| Assets held for sale | ||
| Non-current assets maturing within one year | ||
| Other current assets | 11,930,690.86 | 1,113,987,528.70 |
| Total current assets | 7,355,869,190.26 | 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 | 1,698,744,114.99 | 1,731,109,903.70 |
| Investment in other equity instrument | ||
| Other non-current financial assets | 45,000,000.00 | |
| Investment real estate | 7,314,721.80 | 7,618,550.16 |
| Fixed assets | 1,138,092,635.67 | 1,082,915,540.08 |
| Construction in progress | 106,575,581.28 | 125,064,106.10 |
| Productive biological assets | ||
| Oil and natural gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 483,887,751.05 | 462,425,105.64 |
| Research and development costs | 56,295,271.74 | 57,383,653.72 |
| Goodwill | ||
| Long-term deferred expenses | ||
| Deferred income tax assets | 77,849,317.77 | 78,357,299.17 |
| Other non-current assets | ||
| Total non-current assets | 3,613,759,394.30 | 3,589,874,158.57 |
| Total assets | 10,969,628,584.56 | 12,246,229,901.94 |
| Current liabilities | ||
| Short-term borrowings | 1,009,757,944.82 | 1,911,719,726.13 |
| Trading financial liability | 1,016,052.00 | |
| Financial liabilities measured at fair value and whose changes are included in current gains/losses | 19,893,875.00 |
| Derivative financial liability | ||
| Notes payable | 1,936,867,907.42 | 2,001,442,110.63 |
| Account payable | 1,497,704,307.48 | 2,011,821,519.82 |
| Accounts received in advance | 147,365,864.56 | 105,815,140.88 |
| Contractual liability | ||
| Wage payable | 39,633,867.87 | 31,271,182.48 |
| Taxes payable | 20,427,731.13 | 21,992,129.58 |
| Other accounts payable | 520,559,494.30 | 427,293,961.56 |
| Including: Interest payable | 13,175,235.76 | 5,801,215.14 |
| Dividend payable | 3,579,491.94 | 17,317,286.45 |
| Liability held for sale | ||
| Non-current liabilities due within one year | 258,588,504.48 | |
| Other current liabilities | ||
| Total current liabilities | 5,173,333,169.58 | 6,789,838,150.56 |
| Non-current liabilities: | ||
| Long-term loans | 401,280,000.00 | 1,920,000.00 |
| Bonds payable | ||
| Including: preferred stock | ||
| Perpetual capital securities | ||
| Lease liability | ||
| Long-term account payable | ||
| Long term employee compensation payable | 13,774,110.61 | 19,073,101.29 |
| Accrued liabilities | 158,742,319.21 | 266,641,323.73 |
| Deferred income | 67,664,815.53 | 53,118,676.50 |
| Deferred income tax liabilities | 742,725.60 | |
| Other non-current liabilities | ||
| Total non-current liabilities | 642,203,970.95 | 340,753,101.52 |
| Total liabilities | 5,815,537,140.53 | 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 | ||
| Capital public reserve | 2,753,017,007.10 | 2,753,017,007.10 |
| Less: Inventory shares | ||
| Other comprehensive income | ||
| Special reserve | ||
| Surplus reserve | 410,568,694.52 | 400,455,827.82 |
| Retained profit | 945,907,861.41 | 917,567,933.94 |
| Total owner‘s equity | 5,154,091,444.03 | 5,115,638,649.86 |
| Total liabilities and owner‘s equity | 10,969,628,584.56 | 12,246,229,901.94 |
Legal Representative: Wu DinggangPerson in charge of accounting works: Pang HaitaoPerson in charge of accounting institute: Yang Jun
3. Consolidated Profit Statement
In RMB
| Item | 2019 | 2018 |
| I. Total operating income | 16,553,252,894.93 | 17,490,174,950.01 |
| Including: Operating income | 16,553,252,894.93 | 17,490,174,950.01 |
| Interest income | ||
| Insurance gained | ||
| Commission charge and commission income | ||
| II. Total operating cost | 16,579,810,406.62 | 17,455,505,586.22 |
| Including: Operating cost | 13,455,692,376.85 | 14,226,402,020.40 |
| Interest expense | ||
| Commission charge and commission expense | ||
| Cash surrender value | ||
| Net amount of expense of compensation | ||
| Net amount of withdrawal of insurance contract reserve | ||
| Bonus expense of guarantee slip | ||
| Reinsurance expense | ||
| Tax and extras | 153,065,726.91 | 138,915,058.61 |
| Sales expense | 2,320,362,519.95 | 2,576,277,169.86 |
| Administrative expense | 330,687,143.82 | 317,917,548.03 |
| R&D expense | 334,218,689.69 | 235,299,398.06 |
| Financial expense | -14,216,050.60 | -39,305,608.74 |
| Including: Interest expenses | 93,523,492.74 | 101,451,047.10 |
| Interest income | 133,568,862.29 | 127,986,419.36 |
| Add: other income | 110,281,102.69 | 94,938,682.39 |
| Investment income (Loss is listed with ―-‖) | -32,695,507.49 | 3,931,358.68 |
| Including: Investment income on affiliated company and joint venture | -8,049,228.81 | -23,357,648.90 |
| 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 fair value (Loss is listed with ―-‖) | 52,993,630.16 | -45,949,257.12 |
| Loss of credit impairment (Loss is listed with ―-‖) | 4,633,296.89 | |
| Losses of devaluation of asset (Loss is listed with ―-‖) | -30,409,004.57 | -39,253,891.46 |
| Income from assets disposal (Loss is listed with ―-‖) | -9,537,945.52 | 787,721.32 |
| III. Operating profit (Loss is listed with ―-‖) | 68,708,060.47 | 49,123,977.60 |
| Add: Non-operating income | 6,479,922.98 | 6,486,445.70 |
| Less: Non-operating expense | 5,409,757.70 | 21,268,525.58 |
| IV. Total profit (Loss is listed with ―-‖) | 69,778,225.75 | 34,341,897.72 |
| Less: Income tax expense | 26,266,024.94 | -533,886.62 |
| V. Net profit (Net loss is listed with ―-‖) | 43,512,200.81 | 34,875,784.34 |
| (i) Classify by business continuity | ||
| 1.continuous operating net profit (net loss listed with ?-‖) | 43,512,200.81 | 34,875,784.34 |
| 2.termination of net profit (net loss listed with ?-‖) | ||
| (ii) Classify by ownership | ||
| 1.Net profit attributable to owner‘s of parent company | 56,441,479.14 | 38,658,256.97 |
| 2.Minority shareholders‘ gains and losses | -12,929,278.33 | -3,782,472.63 |
| VI. Net after-tax of other comprehensive income | -2,068,017.04 | -15,324,313.47 |
| Net after-tax of other comprehensive income attributable to owners of parent company | -787,861.10 | -10,881,247.24 |
| (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 | -787,861.10 | -10,881,247.24 |
| 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 | -787,861.10 | -10,881,247.24 |
| 9.Other | ||
| Net after-tax of other comprehensive income attributable to minority shareholders | -1,280,155.94 | -4,443,066.23 |
| VII. Total comprehensive income | 41,444,183.77 | 19,551,470.87 |
| Total comprehensive income attributable to owners of parent Company | 55,653,618.04 | 27,777,009.73 |
| Total comprehensive income attributable to minority shareholders | -14,209,434.27 | -8,225,538.86 |
| VIII. Earnings per share: | ||
| (i) Basic earnings per share | 0.0540 | 0.0370 |
| (ii) Diluted earnings per share | 0.0540 | 0.0370 |
As for the enterprise combined under the same control, net profit of 0 Yuan achieved by the merged party beforecombination while 0 Yuan achieved last periodLegal Representative: Wu DinggangPerson in charge of accounting works: Pang HaitaoPerson in charge of accounting institute: Yang Jun
4. Profit Statement of Parent Company
In RMB
| Item | 2019 | 2018 |
| I. Operating income | 9,296,448,243.29 | 9,527,195,962.62 |
| Less: Operating cost | 8,437,561,503.10 | 8,403,695,872.50 |
| Taxes and surcharge | 76,143,013.23 | 60,224,004.51 |
| Sales expenses | 519,213,849.71 | 795,840,509.28 |
| Administration expenses | 135,073,396.64 | 139,521,280.49 |
| R&D expenses | 124,622,622.12 | 100,055,433.15 |
| Financial expenses | 3,761,368.95 | 3,339,104.39 |
| Including: interest expenses | 75,661,399.93 | 78,111,310.86 |
| Interest income | 96,733,624.71 | 78,419,587.54 |
| Add: other income | 71,320,375.50 | 59,460,881.42 |
| Investment income (Loss is listed with ―-‖) | 33,377,287.02 | 45,078,361.41 |
| Including: Investment income on affiliated Company and joint venture | 74,962.32 | -4,601,912.14 |
| 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 value (Loss is listed with ―-‖) | 15,591,743.41 | -8,683,770.89 |
| Loss of credit impairment (Loss is listed with ―-‖) | 9,455,668.24 | |
| Losses of devaluation of asset (Loss is listed with ―-‖) | -17,125,818.42 | -13,569,683.39 |
| Income on disposal of assets (Loss is listed with ―-‖) | -736,644.05 | -3,459,155.14 |
| II. Operating profit (Loss is listed with ―-‖) | 111,955,101.24 | 103,346,391.71 |
| Add: Non-operating income | 907,600.61 | 3,972,014.46 |
| Less: Non-operating expense | 250,826.67 | 13,050,649.33 |
| III. Total Profit (Loss is listed with ―-‖) | 112,611,875.18 | 94,267,756.84 |
| Less: Income tax | 1,250,707.00 | -2,177,974.85 |
| IV. Net profit (Net loss is listed with ―-‖) | 111,361,168.18 | 96,445,731.69 |
| (i)continuous operating net profit (net loss listed with ?-‖) | 111,361,168.18 | 96,445,731.69 |
| (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 | ||
| 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 | 111,361,168.18 | 96,445,731.69 |
| VII. Earnings per share: | ||
| (i) Basic earnings per share | 0.1066 | 0.0923 |
| (ii) Diluted earnings per share | 0.1066 | 0.0923 |
Legal Representative: Wu DinggangPerson in charge of accounting works: Pang HaitaoPerson in charge of accounting institute: Yang Jun
5. Consolidated Cash Flow Statement
In RMB
| Item | 2019 | 2018 |
| I. Cash flows arising from operating activities: | ||
| Cash received from selling commodities and providing labor services | 17,222,030,229.17 | 15,976,109,415.91 |
| 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 | 376,209,568.82 | 513,524,044.20 |
| Other cash received concerning operating activities | 172,721,366.51 | 288,727,912.46 |
| Subtotal of cash inflow arising from operating activities | 17,770,961,164.50 | 16,778,361,372.57 |
| Cash paid for purchasing commodities and receiving labor service | 13,458,134,618.83 | 14,150,885,874.62 |
| Net increase of customer loans and advances | ||
| Net increase of deposits in central bank and interbank |
| Cash paid for original insurance contract compensation | ||
| 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 workers | 1,513,839,139.23 | 1,593,886,073.87 |
| Taxes paid | 526,773,134.14 | 354,788,287.80 |
| Other cash paid concerning operating activities | 987,210,287.26 | 899,361,751.64 |
| Subtotal of cash outflow arising from operating activities | 16,485,957,179.46 | 16,998,921,987.93 |
| Net cash flows arising from operating activities | 1,285,003,985.04 | -220,560,615.36 |
| II. Cash flows arising from investing activities: | ||
| Cash received from recovering investment | 3,091,000,000.00 | 3,440,000,000.00 |
| Cash received from investment income | 53,507,866.92 | 78,170,149.44 |
| Net cash received from disposal of fixed, intangible and other long-term assets | 20,786,170.96 | 18,142,337.83 |
| Net cash received from disposal of subsidiaries and other units | ||
| Other cash received concerning investing activities | 126,761,536.28 | 132,195,914.39 |
| Subtotal of cash inflow from investing activities | 3,292,055,574.16 | 3,668,508,401.66 |
| Cash paid for purchasing fixed, intangible and other long-term assets | 326,109,415.77 | 632,592,327.39 |
| Cash paid for investment | 2,010,087,040.00 | 3,944,000,001.00 |
| Net increase of mortgaged loans | ||
| Net cash received from subsidiaries and other units obtained | ||
| Other cash paid concerning investing activities | 78,815,580.08 | 46,837,275.82 |
| Subtotal of cash outflow from investing activities | 2,415,012,035.85 | 4,623,429,604.21 |
| Net cash flows arising from investing activities | 877,043,538.31 | -954,921,202.55 |
| III. Cash flows arising from financing activities | ||
| Cash received from absorbing investment | 8,441,064.00 | 24,865,000.00 |
| Including: Cash received from absorbing minority shareholders‘ investment by subsidiaries | 8,441,064.00 | 24,865,000.00 |
| Cash received from loans | 1,723,227,548.80 | 3,144,071,966.63 |
| Other cash received concerning financing activities | 44,497,902.00 | |
| Subtotal of cash inflow from financing activities | 1,731,668,612.80 | 3,213,434,868.63 |
| Cash paid for settling debts | 2,820,687,076.56 | 2,514,013,375.52 |
| Cash paid for dividend and profit distributing or interest paying | 148,244,143.81 | 129,757,442.60 |
| Including: Dividend and profit of minority shareholder paid by subsidiaries | 2,274,030.00 | 1,364,418.00 |
| Other cash paid concerning financing activities | 32,485,727.87 | 2,692,486.99 |
| Subtotal of cash outflow from financing activities | 3,001,416,948.24 | 2,646,463,305.11 |
| Net cash flows arising from financing activities | -1,269,748,335.44 | 566,971,563.52 |
| IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 8,865,099.67 | 3,387,671.93 |
| V. Net increase of cash and cash equivalents | 901,164,287.58 | -605,122,582.46 |
| Add: Balance of cash and cash equivalents at the period -begin | 4,484,643,187.93 | 5,089,765,770.39 |
| VI. Balance of cash and cash equivalents at the period -end | 5,385,807,475.51 | 4,484,643,187.93 |
Legal Representative: Wu Dinggang Person in charge of accounting works: Pang HaitaoPerson in charge of accounting institute: Yang Jun
6. Cash Flow Statement of Parent Company
In RMB
| Item | 2019 | 2018 |
| I. Cash flows arising from operating activities: | ||
| Cash received from selling commodities and providing labor services | 8,627,727,420.59 | 7,727,625,739.70 |
| Write-back of tax received | 197,261,437.46 | 252,804,115.39 |
| Other cash received concerning operating activities | 89,705,595.42 | 69,407,867.46 |
| Subtotal of cash inflow arising from operating activities | 8,914,694,453.47 | 8,049,837,722.55 |
| Cash paid for purchasing commodities and receiving labor service | 7,246,530,970.04 | 6,922,851,690.83 |
| Cash paid to/for staff and workers | 411,671,230.56 | 503,716,419.03 |
| Taxes paid | 169,363,775.87 | 70,693,096.67 |
| Other cash paid concerning operating activities | 415,890,005.54 | 375,443,290.96 |
| Subtotal of cash outflow arising from operating activities | 8,243,455,982.01 | 7,872,704,497.49 |
| Net cash flows arising from operating activities | 671,238,471.46 | 177,133,225.06 |
| II. Cash flows arising from investing activities: |
| Cash received from recovering investment | 3,091,000,000.00 | 3,400,000,000.00 |
| Cash received from investment income | 58,097,866.92 | 79,368,449.44 |
| Net cash received from disposal of fixed, intangible and other long-term assets | 12,166,744.58 | 1,977,299.42 |
| Net cash received from disposal of subsidiaries and other units | ||
| Other cash received concerning investing activities | 383,604,810.26 | 159,661,646.80 |
| Subtotal of cash inflow from investing activities | 3,544,869,421.76 | 3,641,007,395.66 |
| Cash paid for purchasing fixed, intangible and other long-term assets | 172,239,570.50 | 230,279,910.34 |
| Cash paid for investment | 2,016,087,040.00 | 3,954,704,000.00 |
| Net cash received from subsidiaries and other units obtained | ||
| Other cash paid concerning investing activities | 75,496,976.70 | 295,811,872.57 |
| Subtotal of cash outflow from investing activities | 2,263,823,587.20 | 4,480,795,782.91 |
| Net cash flows arising from investing activities | 1,281,045,834.56 | -839,788,387.25 |
| III. Cash flows arising from financing activities | ||
| Cash received from absorbing investment | ||
| Cash received from loans | 1,480,244,977.59 | 2,292,940,156.01 |
| Other cash received concerning financing activities | 184,297,930.63 | 29,222,628.76 |
| Subtotal of cash inflow from financing activities | 1,664,542,908.22 | 2,322,162,784.77 |
| Cash paid for settling debts | 2,249,508,734.86 | 1,590,083,600.00 |
| Cash paid for dividend and profit distributing or interest paying | 133,129,179.81 | 114,844,654.18 |
| Other cash paid concerning financing activities | 117,503,039.34 | 472,573,573.53 |
| Subtotal of cash outflow from financing activities | 2,500,140,954.01 | 2,177,501,827.71 |
| Net cash flows arising from financing activities | -835,598,045.79 | 144,660,957.06 |
| IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 6,329,365.90 | 2,349,591.64 |
| V. Net increase of cash and cash equivalents | 1,123,015,626.13 | -515,644,613.49 |
| Add: Balance of cash and cash equivalents at the period -begin | 2,894,384,811.05 | 3,410,029,424.54 |
| VI. Balance of cash and cash equivalents at the period -end | 4,017,400,437.18 | 2,894,384,811.05 |
Legal Representative: Wu Dinggang Person in charge of accounting works: Pang HaitaoPerson in charge of accounting institute: Yang Jun
7. Statement of Changes in Owners’ Equity (Consolidated)
This Period
In RMB
| Item | 2019 | ||||||||||||||
| Owners‘ equity attributable to the parent Company | Minority interests | Total owners‘ equity | |||||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | Other | Subtotal | |||||
| Preferred stock | Perpetual capital securities | Other | |||||||||||||
| I. Balance at the end of the last year | 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 | |||||||
| Add: Changes of accounting policy | -1,023,250.12 | -2,734,328.91 | -3,757,579.03 | -4,385,295.55 | -8,142,874.58 | ||||||||||
| Error correction of the last period | |||||||||||||||
| Enterprise combine under the same control | |||||||||||||||
| Other | |||||||||||||||
| II. Balance at the beginning of this year | 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 | |||||||
| III. Increase/ Decrease in this year (Decrease is listed with ―-‖) | -2,979.36 | -787,861.10 | 11,136,116.82 | -17,370,510.54 | -7,025,234.18 | -8,407,224.30 | -15,432,458.48 | ||||||||
| (i) Total comprehensive income | -787,861.10 | 56,441,479.14 | 55,653,618.04 | -14,209,434.27 | 41,444,183.77 | ||||||||||
| (ii) Owners‘ devoted and decreased capital | -2,979.36 | -2,979.36 | 8,143,349.03 | 8,140,369.67 | |||||||||||
| 1.Common shares invested by shareholders | 8,140,369.67 | 8,140,369.67 | |||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | |||||||||||||||
| 4. Other | -2,979.36 | -2,979.36 | 2,979.36 | ||||||||||||
| (III) Profit distribution | 11,136,116.82 | -73,811,989.68 | -62,675,872.86 | -2,341,139.06 | -65,017,011.92 | ||||||||||
| 1. Withdrawal of surplus reserves | 11,136,116.82 | -11,136,116.82 | |||||||||||||
| 2. Withdrawal of general risk provisions | |||||||||||||||
| 3. Distribution for owners (or shareholders) | -62,675,872.86 | -62,675,872.86 | -2,341,139.06 | -65,017,011.92 | |||||||||||
| 4. Other | |||||||||||||||
| (IV) Carrying forward internal owners‘ equity | |||||||||||||||
| 1. Capital reserves conversed to capital (share capital) | |||||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | |||||||||||||||
| 3. Remedying loss with surplus reserve |
| 4．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 period | 1,044,597,881.00 | 2,684,366,619.10 | -18,931,430.36 | 410,786,860.20 | 884,127,743.42 | 5,004,947,673.36 | 107,027,038.74 | 5,111,974,712.10 |
Last Period
In RMB
| Item | 2018 | ||||||||||||||
| Owners‘ equity attributable to the parent Company | Minority interests | Total owners‘ equity | |||||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | Other | Subtotal | |||||
| Preferred stock | Perpetual capital securities | Other | |||||||||||||
| I. Balance at the end of the last year | 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 | |||||||
| 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 year | 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 | |||||||
| III. Increase/ Decrease in this year (Decrease is listed with ―-‖) | -436,745.61 | -10,881,247.24 | 9,644,573.17 | -33,662,189.06 | -35,335,608.74 | 13,709,072.79 | -21,626,535.95 | ||||||||
| (i) Total comprehensive income | -10,881,247.24 | 38,658,256.97 | 27,777,009.73 | -8,225,538.86 | 19,551,470.87 | ||||||||||
| (ii) Owners‘ devoted and decreased capital | -436,745.61 | -436,745.61 | 23,299,029.65 | 22,862,284.04 | |||||||||||
| 1.Common shares invested by shareholders | 24,865,000.00 | 24,865,000.00 | |||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | |||||||||||||||
| 4. Other | -436,745.61 | -436,745.61 | -1,565,970.35 | -2,002,715.96 | |||||||||||
| (III) Profit distribution | 9,644,573.17 | -72,320,446.03 | -62,675,872.86 | -1,364,418.00 | -64,040,290.86 | ||||||||||
| 1. Withdrawal of surplus reserves | 9,644,573.17 | -9,644,573.17 | |||||||||||||
| 2. Withdrawal of general risk provisions | |||||||||||||||
| 3. Distribution for owners (or shareholders) | -62,675,872.86 | -62,675,872.86 | -1,364,418.00 | -64,040,290.86 |
| 4. Other | |||||||||||||||
| (IV) Carrying forward internal owners‘ equity | |||||||||||||||
| 1. Capital reserves conversed to capital (share capital) | |||||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | |||||||||||||||
| 3. Remedying loss with surplus reserve | |||||||||||||||
| 4．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 period | 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 |
Legal Representative: Wu Dinggang Person in charge of accounting works: Pang HaitaoPerson in charge of accounting institute: Yang Jun
8. Statement of Changes in Owners’ Equity (Parent Company)
This Period
In RMB
| Item | 2019 | |||||||||||
| Share capital | Other equity instrument | Capital public reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Other | Total owners‘ equity | |||
| Preferred stock | Perpetual capital securities | Other | ||||||||||
| I. Balance at the end of the last year | 1,044,597,881.00 | 2,753,017,007.10 | 400,455,827.82 | 917,567,933.94 | 5,115,638,649.86 | |||||||
| Add: Changes of accounting policy | -1,023,250.12 | -9,209,251.03 | -10,232,501.15 | |||||||||
| Error correction of the last period | ||||||||||||
| Other | ||||||||||||
| II. Balance at the beginning of this year | 1,044,597,881.00 | 2,753,017,007.10 | 399,432,577.70 | 908,358,682.91 | 5,105,406,148.71 | |||||||
| III. Increase/ Decrease in this year (Decrease is listed with ―-‖) | 11,136,116.82 | 37,549,178.50 | 48,685,295.32 | |||||||||
| (i) Total comprehensive income | 111,361,168.18 | 111,361,168.18 | ||||||||||
| (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 | 11,136,116.82 | -73,811,989.68 | -62,675,872.86 | |||||||||
| 1. Withdrawal of surplus reserves | 11,136,116.82 | -11,136,116.82 | ||||||||||
| 2. Distribution for owners (or shareholders) | -62,675,872.86 | -62,675,872.86 | ||||||||||
| 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 report period | 1,044,597,881.00 | 2,753,017,007.10 | 410,568,694.52 | 945,907,861.41 | 5,154,091,444.03 |
Legal Representative: Wu DinggangPerson in charge of accounting works: Pang HaitaoPerson in charge of accounting institute: Yang JunLast period
In RMB
| Item | 2018 | |||||||||||
| Share capital | Other equity instrument | Capital public reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Other | Total owners‘ equity | |||
| Preferred stock | Perpetual capital securities | Other | ||||||||||
| I. Balance at the end of the last year | 1,044,597,881.00 | 2,753,017,007.10 | 390,811,254.65 | 893,442,648.28 | 5,081,868,791.03 | |||||||
| Add: Changes of accounting policy | ||||||||||||
| Error correction of the last period | ||||||||||||
| Other | ||||||||||||
| II. Balance at the beginning of this year | 1,044,597,881.00 | 2,753,017,007.10 | 390,811,254.65 | 893,442,648.28 | 5,081,868,791.03 | |||||||
| III. Increase/ Decrease in this year (Decrease is listed with ―-‖) | 9,644,573.17 | 24,125,285.66 | 33,769,858.83 | |||||||||
| (i) Total comprehensive income | 96,445,731.69 | 96,445,731.69 | ||||||||||
| (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 | 9,644,573.17 | -72,320,446.03 | -62,675,872.86 | |||||||||
| 1. Withdrawal of surplus reserves | 9,644,573.17 | -9,644,573.17 | ||||||||||
| 2. Distribution for owners (or shareholders) | -62,675,872.86 | -62,675,872.86 | ||||||||||
| 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 report period | 1,044,597,881.00 | 2,753,017,007.10 | 400,455,827.82 | 917,567,933.94 | 5,115,638,649.86 |
Legal Representative: Wu DinggangPerson in charge of accounting works: Pang HaitaoPerson in charge of accounting institute: Yang Jun
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
I. Company profile
Changhong Meiling Co., Ltd (hereinafter referred to as ―the Company‖) ，originally named as Hefei MeilingCo., Ltd. is an incorporated Company established and reorganized by Hefei Meiling Refrigerator GeneralFactory and approved on June 12
th
1992 through [WanTiGaiHanZi (1992) No.039] issued by originalMechanism Reform Committee of Anhui Province. On August 30
th1993, through Anhui ProvincialGovernment [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. 18
th, 1993in Shenzhen Stock Exchange. On August 13
th, 1996, the Company was approved to issue 100 million Bshares to investors abroad through [ZhengWeiFa (1996) No.26] issued by China Securities RegulatoryCommission. The Company went public in Shenzhen Stock Exchange on August 28
th, 1996.
State-owned Assets Supervision & Administration Commission of the State Council approved such transferswith Document Guozi Chanquan No.253 in 2007 Reply on Matters of Hefei Meiling Group HoldingsCompany Limited Transferring Partial State-owned Ownership, Hefei Meiling Group Holdings CompanyLimited (hereinafter abbreviated as Meiling Group) transferred its holding 37,852,683 shares in 82,852,683state-owned shares of the Company to Sichuan Changhong Electronic Group Co., Ltd (hereinafterabbreviated 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 andCleaning Corporation Limited.
On 27 August 2007, State-owned Assets Supervision & Administration Commission of Anhui ProvincialGovernment replied with Document [WGZCQH (2007) No.309] Reply on ―Related Matters of Share MergerReform of Meiling Co., Ltd.‖, agreed the Company‘s ownership split reform plan. The Company madeconsideration that non-tradable share holders deliver 1.5 shares to A share holders per 10 shares, and originalMeiling Group made prepayment 3,360,329 shares for some non-tradable share holders as consideration forsplit reform plan.
On 29 May 2008, concerning 34,359,384 state-owned shares (including 3,360,329 shares paid for othernon-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 totransfer the above said shares to Hefei Xingtai Holding Group Co., Ltd.(―Xingtai Holding Co.,‖) for free. On7 August 2008, the ―Reply of Transfer Freely of Part of the Shares of Hefei Meiling Co., Ltd. held byState-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 MeilingCo., Ltd with Sichuan Changhong, in which 32,078,846 tradable A-shares with conditional subscription of
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
the Company (accounting for 7.76% in total shares) held by Changhong Group Company. On 23 December2008, ―Reply of Transfer Freely of Part of the Shares of Hefei Meiling Co., Ltd. held by State-ownedshareholders‖ [GZCQ (2008) No. 1413] issued by SASAC agrees the above said share transferring.
On 24 December 2010, being deliberated and approved in 32
nd Session of 6
th BOD and 2
ndExtraordinaryShareholders‘ General Meeting of 2010 as well as approval of document [ZJXP (2010) No. 1715] fromCSRC, totally 116,731,500 RMB ordinary shares (A stock) were offering privately to target investors withissue price of RMB 10.28/share. Capital collecting amounting to RMB 1,199,999,820 after issuing expensesRMB 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 1,061,106,088.5increased. 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 distributionplan, namely to distribute cash dividends of RMB0.5 (tax included) plus two shares for every ten shares heldby shareholders to all shareholders, based on the total share capital of 530,374,449 shares as of 31 December2010. The total share capital of the Company upon profit distribution increased to 636,449,338 shares. Thecapital increase was verified by Anhui Huashen Zhengda Accounting Firm with the verification reportWHSZDKYZ (2011) No.141.
On 26 June 2012, the general meeting of the Company considered and approved the 2011 profit distributionand capitalization of capital reserve plan, namely to distribute cash dividends of RMB0.5 (tax included) plustwo shares for every ten shares to all shareholders capitalized from capital reserve, based on the total sharecapital of 636,449,338 shares as of 31 December 2011. The total share capital of the Company uponimplementation 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 8
thBOD of the company and thefirst extraordinary general meeting in 2016, and approved by the document of China Securities RegulatoryCommission [CSRC License No. (2016) 1396] ―Reply to the approval of non-public offering of shares ofHefei Meiling Co., Ltd.‖, the company has actually raised funds of 1,569,999,998.84 Yuan by non-publicoffering of no more than 334,042,553 new shares at face value of 1 Yuan per share and with issue price noless than RMB 4.70 per share, after deducting the issue costs of 29,267,276.08 Yuan , the net amount ofraised 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 verifiedby No.［XYZH2016CDA40272］capital verification report of Shine Wing Certified Public Accountants
(LLP).
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
Ended as 31 December 2019, total share capital of the Company amounting to 1,044,597,881shares withordinary shares in full. Among which, 881,733,881 shares of A-share accounting 84.41% in total shareswhile 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 | 10,553,770 | 1.01% |
| 1. State-owned shares | ||
| 2. State-owned legal person‘s shares | 915,987 | 0.09% |
| 3. Other domestic shares | 8,370,363 | 0.80% |
| Including: Domestic legal person‘s shares | 4,716,077 | 0.45% |
| Domestic natural person‘s shares | 3,654,286 | 0.35% |
| 4. Foreign shares | 1,267,420 | 0.12% |
| Including: Overseas legal person‘s shares | ||
| Overseas natural person‘s shares | 1,267,420 | 0.12% |
| (II)Unrestricted shares | 1,034,044,111 | 98.99% |
| 1. RMB Ordinary shares | 872,447,531 | 83.52% |
| 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 ofrefrigerator, freezer and air-conditioner. Unified social credit code of the Company: 9134000014918555XK;Address: No.2163, Lianhua Road, Economy and Technology Development Zone, Hefei City; LegalRepresentative: Li Wei; register capital (paid-in capital): RMB 1,044,597,881; type of company: limitedliability 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 ofcomputer controlling, plastic products, metalwork, packaging products and decorations as well as theinstallation and technical consultant services. Business of self-produced products, technology export andimport-export of the raw& auxiliary materials, machinery equipment, instrument and technology; departmentsales and transportation (Excluding dangerous chemicals), computer network system integration, intelligentproduct system integration, software development and technical information services, development,production, sales and service of automation equipment and electronic products, sales services of cold chaintransport vehicles and refrigerator and freezer van, development, production, sales and service of cold chaininsulation boxes, research and development, production, sales and service of cold storage, commercialfreezer chain display cabinets, commercial cold chain products. (Projects that require approval in accordance
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
with the law can only be operated after approval by relevant departments)
II. Scope of consolidated financial statementIn the reporting period, the consolidated financial statements of the Company cover 38 subsidiaries,including Sichuan Changhong Air-conditioner Co., Ltd, Zhongshan Changhong Electric Co., Ltd. AndZhongke Meiling Cryogenic Technology Co., Ltd. etc. Compared with the previous year, during the reportingperiod two enterprises are included in the consolidate scope, that is Hefei Meiling Wulian Technology Co.,Ltd and Anhui Tuoxing Science and Technology Co., Ltd. And the subsidiary Nanchang Xiangyou ElectronicAppliance Marketing Co., Ltd, Changsha Meizlai Electronic Appliance Marketing Co., Ltd and ZhongshanHongling Trading Co., Ltd are out of the scope for clearing off.Found more in ―VII. Changes in the scope of merger‖ and ―VIII. Equity in other entities‖ carry in theNote
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 andproceedings, and relevant regulation of Accounting Standards for Enterprise released by the Ministry ofFinance, 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, andprepared the financial statement on basis of going concern is reasonable.
IV. Significant Accounting Policy and accounting Estimation
1. Statement on observation of accounting standards for enterprise
The financial statement prepared by the Company applies with the requirements of Accounting Standard forEnterprise, and reflects the financial condition, operational achievements and cash flow of the Companyeffectively 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 andliabilities.
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
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 commoncontrolAs acquirer, the Company measures the assets and liabilities acquired through business combination undercommon control at their carrying values as reflected in the consolidated financial statement of the ultimatecontroller as of the combination date. Capital reserve shall be adjusted in respect of any difference betweencarrying value of the net assets acquired and carrying value of the combination consideration paid. In casethat capital reserve is insufficient to offset, the Company would adjust retained earnings.
The acquiree‘s net identifiable assets, liabilities or contingent liabilities acquired through businesscombination not under common control shall be measured at fair value as of the acquisition date. The cost ofcombination represents the fair value of the cash or non-cash assets paid, liabilities issued or committed andequity securities issued by the Company as at the date of combination in consideration for acquiring thecontrolling power in the acquiree, together with the sum of any directly related expenses occurred duringbusiness combination(in case of such business combination as gradually realized through varioustransactions, the combination cost refers to the sum of each cost of respective separate transaction). Wherethe cost of the combination exceeds the acquirer‘s interest in the fair value of the acquirer‘s identifiable netassets acquired, the difference is recognized as goodwill; where the cost of combination is lower than theacquirer‘s interest in the fair value of the acquiree‘s identifiable net assets, the Company shall firstly makefurther review on the fair values of the net identifiable assets, liabilities or contingent liabilities acquired aswell as the fair value of the non-cash assets portion of combination consideration or the equity securitiesissued by the Company. In case that the Company finds the cost of combination is still lower than theacquirer‘s interest in the fair value of the acquiree‘s identifiable net assets after such further review, thedifference 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 financialstatements.
Any difference arising from the inconformity of accounting year or accounting policies between thesubsidiaries and the Company shall be adjusted in the consolidated financial statements.
All the material inter-company transactions, non-extraordinary items and unrealized profit within thecombination scope are written-off when preparing consolidated financial statement. Owners‘ equity ofsubsidiary not attributable to parent company and current net gains and losses, other comprehensive income
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
and total comprehensive income attributable to minority shareholders are recognized as non-controllinginterests, minority interests, other comprehensive income attributable to minority shareholders and totalcomprehensive income attributable to minority shareholders in consolidated financial statement respectively.
As for subsidiary acquired through business combination under common control, its operating results andcash flow will be included in consolidated financial statement since the beginning of the period whencombination occurs. When preparing comparative consolidated financial statement, the relevant items inprevious years financial statement shall be adjusted as if the reporting entity formed upon combination hasbeen existing since the ultimate controller commenced relevant control.
As for equity interests of the investee under common control acquired through various transactions whicheventually formed business combination, the Company shall supplement disclosure of the accountingtreatment in consolidated financial statement in the reporting period when controlling power is obtained. Forexample, as for equity interests of the investee under common control acquired through various transactionswhich eventually formed business combination, adjustments shall be made as if the current status had beenexisting when the ultimate controller commenced control in connection of preparing consolidated financialstatement; in connection with preparing comparative statement, the Company shall consolidate the relevantassets and liabilities of the acquiree into the Company‘s comparative consolidated financial statement to theextent not earlier than the timing when the Company and the acquiree are all under control of the ultimatecontroller, and the net assets increased due to combination shall be used to adjust relevant items underowners‘ equity in comparative statement. In order to prevent double computation of the value of theacquiree‘s net assets, the relevant profits and losses, other comprehensive income and change of other netassets recognized during the period from the date when the Company acquires original equity interests andthe date when the Company and the acquiree are all under ultimate control of the same party (whichever islater) to the date of combination in respect of the long-term equity investment held by the Company beforesatisfaction of combination shall be utilized to offset the beginning retained earnings and current gains andlosses in the period as the comparative financial statement involves, respectively.
As for subsidiary acquired through business combination not under common control, its operating results andcash 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 financialstatement based on the fair value of the various identifiable assets, liabilities or contingent liabilitiesrecognized as of the acquisition date.
As for equity interests of the investee not under common control acquired through various transactions whicheventually formed business combination, the Company shall supplement disclosure of the accountingtreatment in consolidated financial statement in the reporting period when controlling power is obtained. Forexample, as for equity interests of the investee not under common control acquired through varioustransactions which eventually formed business combination, when preparing consolidated financial statement,
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
the Company would re-measure the equity interests held in the acquiree before acquisition date at their fairvalue as of the acquisition date, and any difference between the fair value and carrying value is included incurrent investment income. in case that the equity interests in acquiree held by the Company before therelevant 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 equityinterests 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 establishedbenefit 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 withoutlosing control rights over the subsidiary, the difference between the proceeds from disposal of interests andthe decrease of the shared net assets of the subsidiary is adjusted to capital premium (share premium). In casecapital 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 wouldre-measure the remaining equity interests at their fair value as of the date when the Company loses controlover the investee when preparing consolidated financial statement. The sum of consideration received fromdisposal of equity interest and fair value of the remaining equity interest, less the net assets of the originalsubsidiary attributable to the Company calculated based on the original shareholding proportion since theacquisition date or the date then consolidation commences, is included in investment gains and losses for theperiod when control is lost, meanwhile to offset goodwill. Other comprehensive income related to equityinterest investment in original subsidiaries is transferred into current investment gains and losses upon lost ofcontrol.
If the disposal of the equity investment of a subsidiary is realized through multiple transactions until loss ofcontrol and is a package deal, the accounting treatment of these transactions should be dealt with as onetransaction of disposal of the subsidiary until loss of control. However, before the Company loses totalcontrol of the subsidiary, the differences between the actual disposal price and the share of the net assets ofthe subsidiary disposed of in every transaction should be recognized as other comprehensive income in theconsolidated financial statements, and transferred to profit or loss when losing control.
7. Accounting treatment for joint venture arrangement and joint controlled entityThe joint venture arrangement of the Company consists of joint controlled entity and joint venture. As forjointly controlled entity, the Company determines the assets held and liabilities assumed separately as a partyto the jointly controlled entity, recognizes such assets and liabilities according to its proportion, andrecognizes 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 notconstitute business activity, part of the gains and losses arising from such transaction attributable to otherparticipators of the jointly controlled entity is only recognized.
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
8. Cash and cash equivalents
Cash in the cash flow statement comprises the Group‘s cash on hand and deposits that can be readilywithdrawn on demand. Cash equivalents are short-term, highly liquid investments held by the Group, thatare readily convertible to known amounts of cash and which are subject to an insignificant risk of changes invalue, including but not limited to the followings which meet the aforesaid conditions: debt investmentmatured within three months upon the acquisition date, bank time deposit which can be early withdrew byserving a notice and transferrable deposit receipt, etc. for time deposit which can not be used for payment atany time, it would be note recognized as cash; while if can be used for such purpose, it would be recognizedas cash. Guarantee deposit over three months in other monetary capital shall not be recognized as cashequivalents, 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 amountpursuant to the spot exchange rate as of the business day. As at the balance sheet date, monetary itemsexpressed by foreign currency are converted into RMB pursuant to the spot exchange rate as of the balancesheet date. The conversion difference occurred is recorded into prevailing gains and losses, other than thedisclosure which is made according to capitalization rules for the exchange difference occurred from thespecial foreign currency borrowings borrowed for constructing and producing the assets satisfying conditionof capitalization. As for the foreign currency non-monetary items measured by fair value, the amount is thenconverted into RMB according to the spot exchange rate as of the confirmation day for fair value. And theconversion difference occurred during the procedure is recorded into prevailing gains and losses directly aschange of fair value. As for the foreign currency non-monetary items measured by historical cost, conversionis 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 foreigncurrency balance sheet; as for the items in statement of owners‘ equity except for ―Retained profit‖,conversion is made pursuant to the spot exchange rate of business day; income and expense items in incomestatement then are also converted pursuant to the spot exchange rate of transaction day. Difference arisingfrom the aforementioned conversions shall be listed separately in items of owners‘ equity. Spot exchange rateas of the occurrence date of cash flow is adopted for conversion of foreign currency cash flow. The amountof 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 group 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
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
assets and liabilities measured by fair value and with variation reckoned into current gains/losses, the relatedtransaction expenses are directly included in current gains or losses; for other types of financial assets andliabilities, the related transaction costs are included in the initial recognition amount.
(1) Method for determining the fair value of financial assets and financial liabilitiesFair value refers to the price that a market participant can get by selling an asset or has to pay for transferringa liability in an orderly transaction that occurs on the measurement date. For a financial instrument having anactive 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, industryassociations, pricing services, etc., and represent the prices of market transactions that actually occur in anarm's length transaction. If there is no active market for a financial instrument, the Company uses valuationtechniques to determine its fair value. Valuation techniques include reference to prices used in recent markettransactions by parties familiar with the situation and through voluntary trade, and reference to current fairvalues of other financial instruments that are substantially identical, discounted cash flow methods, andoption pricing models.
(2) Category and measurement on financial assets
The group divided the financial assets as the follow while initially recognized: the financial assets measuredat amortized cost; the financial assets measured at fair value and whose changes are included in othercomprehensive income; and the financial assets measured by fair value and with variation reckoned intocurrent gains/losses. The classification of financial assets depends on the business model that the Group'senterprises manage the financial assets and the cash flow characteristics of the financial assets.
1) The financial assets measured at amortized cost
Financial assets are classified as financial assets measured at amortized cost when they also meet thefollowing conditions: The group's business model for managing the financial assets is to collect contractualcash flows; the contractual terms of the financial assets stipulate that cash flow generated on a specific date isonly 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 thegains or losses arising from amortization or impairment are included in current profits and losses. Suchfinancial assets mainly include monetary funds, notes receivable, accounts receivable, other receivables, debtinvestment and long-term receivables, and so on. The Group lists the debt investment and long-termreceivables due within one year (including one year) from the balance sheet date as non-current assets duewithin one year, and lists the debt investment with time limit within one year (including one year) whenacquired as other current assets.
2) Financial assets measured at fair value and whose changes are included in other comprehensiveincome
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
Financial assets are classified as financial assets measured at fair value and whose changes are included inother comprehensive income when they also meet the following conditions: The Group's business model formanaging the financial assets is targeted at both the collection of contractual cash flows and the sale offinancial assets; the contractual terms of the financial asset stipulate that the cash flow generated on aspecific 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 isamortized by using the effective interest method and is recognized as interest income or expenses. Except theimpairment losses and the exchange differences of foreign currency monetary financial assets are recognizedas the current profits and losses, the changes in the fair value of such financial assets are recognized as othercomprehensive income until the financial assets are derecognized, the accumulated gains or losses aretransferred to the current profits and losses. Interest income related to such financial assets is included in thecurrent profit and loss. Such financial assets are listed as other debt investments, other debt investments duewithin one year (including one year) from the balance sheet date are listed as non-current assets due withinone year; and other debt investments with time limit within one year (including one year) when acquired arelisted as other current assets.
3) Financial assets measured at fair value and whose changes are included in current gains/lossesFinancial assets except for the above-mentioned financial assets measured at amortized cost and financialassets measured at fair value and whose changes are included in other comprehensive income are classifiedas financial assets measured at fair value and whose changes are included in current profits and losses, whichadopt fair value for subsequent measurement and all changes in fair value are included in current profits andlosses. The Group classifies non-trading equity instruments as financial assets measured at fair value andwhose changes are included in current profits and losses. Such financial assets are presented as tradingfinancial assets, and those expire after more than one year and are expected to be held for more than one yearare presented as other non-current financial assets.
(3) Devaluation of financial instrument
On the basis of expected credit losses, the Group performs impairment treatment on financial assetsmeasured at amortized cost and financial assets measured at fair value and whose changes are included inother comprehensive income and recognize the provisions for loss.Credit loss refers to the difference between all contractual cash flows that the Company discounts at theoriginal actual interest rate and are receivable in accordance with contract and all cash flows expected to bereceived, that is, the present value of all cash shortages. Among them, for the purchase or source of financialassets that have suffered credit impairment, the Company discounts the financial assets at the actual interestrate adjusted by credit.The Group 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
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
classified according to the specific credit risk characteristics as follows:
1) For receivables and contractual assets and lease receivables (including significant financing componentsand not including significant financing components), the Group measures the provisions for loss based on theamount of expected credit losses equivalent to the entire duration.
①Evaluate expected credit losses based on individual items: credit notes receivable (including acceptedletters of credit) of financial institutions in notes receivable and accounts receivable, and related partypayments (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);
②Evaluate expected credit losses based on customer credit characteristics and ageing combinations: inaddition to evaluating expected credit losses based on individual items, the Group evaluates the expectedcredit losses of notes receivable and accounts receivable and other receivables financial instruments based oncustomer credit characteristics and ageing combinations.The Group considers all reasonable and evidenced information, including forward-looking information, whenassessing expected credit losses. When there is objective evidence that its customer credit characteristics andageing combination cannot reasonably reflect its expected credit loss, the current value of the expected futurecash flow is measured by a single item, and the cash flow shortage is directly written down the book balanceof the financial asset.
2) Assess the expected credit losses on a case-by-case basis for other assets to which the financialinstruments are impaired, such as the loan commitments and financial guarantee contracts that are notmeasured at fair value through profit or loss, financial assets measured at fair value and whose changes arerecognized in other comprehensive income; other financial assets measured at amortized cost (such as othercurrent assets, other non-current financial assets, etc.).
(4) Reorganization basis and measure method for transfer of financial assets
The financial assets meet one of following requirements will be terminated recognition: ① The contractrights of collecting cash flow of the financial assets is terminated; ②The financial assets has already beentransferred, and the Company has transferred almost all risks and remunerations of financial assets ownershipto the transferee; ③The financial assets has been transferred, even though the Company has neithertransferred nor kept almost all risks and remunerations of financial assets ownership, the Company has givenup controlling the financial assets.
If the enterprise has neither transferred or kept almost all risks and remunerations of financial assetsownership, nor given up controlling the financial assets, then confirm the relevant financial assets according
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
to how it continues to involve into the transferred financial assets and confirm the relevant liabilitiesaccordingly. The extent of continuing involvement in the transferred financial assets refers to the level of riskarising 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 balancebetween the book value of the transferred financial assets and the sum of consideration received fromtransfer and fluctuation accumulated amount of fair value formerly reckoned in other consolidatedincome in the current profits and losses.
If part transfer of financial assets satisfies the demand for derecognition, apportion the integral bookvalue of the transferred financial assets between the derecognized parts and the parts not yetderecognized according to each relative fair value, and reckon the balance between the sum ofconsideration received from transfer and fluctuation accumulated amount of fair value formerlyreckoned in other consolidated income that should be apportioned to the derecognized parts and theapportioned aforementioned carrying amounts in the current profits and losses.
When the Group sells financial assets adopting the mode of recourse, or endorses and transfers its financialassets, it is necessary to ensure whether almost all the risks and rewards of ownership of the financial assetshave been transferred. If almost all the risks and rewards of ownership of the financial assets have beentransferred to the transferee, the financial assets shall be derecognized; if almost all the risks and rewards ofownership of the financial assets are retained, the financial assets shall not be derecognized; if almost all therisks and rewards of ownership of the financial assets are neither transferred nor retained, continue to judgewhether the company retains control over the assets, and conduct accounting treatment according to theprinciples described in the preceding paragraphs.
(5) Category and measurement of financial liability
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 beinitially recognized and measured at fair value. As for the financial liability measured by fair value and withvariation reckoned into current gains/losses, relevant trading costs are directly reckoned into currentgains/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 trading financial liabilities and as financial liabilities designated to bemeasured at fair value and whose changes are included in current profit or loss at the initial recognition areconsistent with the conditions to be classified as trading financial assets and as financial assets designated tobe 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
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
subsequently measured at fair value, and the gain or loss arising from changes in fair value and the dividendsand 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 tothe equity instruments that are not quoted in an active market and whose fair value cannot be reliablymeasured, and the subsequent measurement is carried out in accordance with the cost. Other financialliabilities are subsequently measured at amortized cost by using the effective interest method. The gain orloss 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 valuethrough profit or loss is initially recognized at fair value, and its subsequent measurement is carried out bythe higher one between the amount confirmed in accordance with the Accounting Standards for BusinessEnterprises No. 13 — Contingencies after initial recognition and the balance after deducting the accumulatedamortization amount determined in accordance with the principle of Accounting Standards for BusinessEnterprises 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 terminated for recognized when all or part of the currentobligation of the financial liability has been discharged. The Group (debtor) and the creditor sign anagreement to replace the existing financial liabilities with new financial liabilities, and if the contract termsof the new financial liabilities are substantially different from the existing financial liabilities, terminated forrecognized the existing financial liabilities and at the same time recognize the new financial liabilities. If thefinancial liability is terminated for recognized in whole or in part, the difference between the carryingamount of the part that terminated for recognized and the consideration paid (including the transferrednon-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 Group has the legal right to balance out the financial liabilities by the net or liquidation of thefinancial 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 aresubsequently measured at fair value. Except for derivatives that are designated as hedging instruments andare highly effective in hedging, the gains or losses arising from changes in fair value will be determined
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
based on the nature of the hedging relationship in accordance with the requirements of the hedge accountingand be included in the period of profit and loss, other changes in fair value of derivatives are included incurrent profits and losses. For a hybrid instrument that includes an embedded derivative, if it is notdesignated as a financial asset or financial liability measured at fair value and whose changes are included incurrent profit or loss, the embedded derivative does not have a close relationship with the main contract interms of economic characteristics and risks, and as with embedded derivatives, if the tools existing separatelyconform to the definition of the derivatives, the embedded derivatives are split from the hybrid instrumentsand are treated as separate derivative financial instruments. If it is not possible to measure the embeddedderivative separately at the time of acquisition or subsequent balance sheet date, the whole hybrid instrumentis designated as a financial asset or financial liability measured at fair value and whose changes are includedin 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 thededuction of all liabilities in the Group. The Company issues (including refinancing), repurchases, sells orcancels equity instruments as movement of equity. No fair value change of equity instrument would berecognized by the Company. Transaction costs associated with equity transactions are deducted from equity.The Group's various distributions to equity instrument holders (excluding stock dividends) reduceshareholders' equity.
11. Inventory
Inventories of the Company principally include raw materials, stock goods; work in process, self-madesemi-finished product, materials consigned to precede, low-value consumption goods, goods in transit, goodsin process, mould and engineering construction etc.
Perpetual inventory system is applicable to inventories. For daily calculation, standard price is adopted forraw materials, low-value consumption goods and stock goods. Switch-back cost of the current month isadjusted by distribution price difference at the end of the month, the dispatched goods will share the costdifferences of inventory while in settlement the business income; and low-value consumption goods iscarried forward at once when being applied for use and the mould shall be amortized within one year afterreceipt.Inventory at period-end is valued by the Lower-of-value between the cost and net realizable value. Theprovision for inventory depreciation shall be drawn from the difference between the book cost of asingle inventory item and its net realizable value, and the provision for inventory depreciation shall berecorded into the current profit and loss.
12. Long-term equity investment
Long-term equity investment of the Company is mainly about investment in subsidiary, investment in
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
associates and investment in joint-ventures.For long-term equity investments acquired through business combination under common control, the initialinvestment cost shall be the acquirer‘s share of the carrying amount of net assets of the acquiree as of thecombination date as reflected in the consolidated financial statement of the ultimate controller. If the carryingamount of net assets of the acquiree as of the combination date is negative, the investment cost of long-termequity investment shall be zero. For long-term equity investment acquired through business combination notunder 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 oflong-term equity investment acquired through cash payment, for which the actual payment for the purchaseshall be investment cost; If Long-term equity investments are acquired by issuing equity securities, fair valueof issuing equity investment shall be investment cost; for Long-term equity investments which are investedby investors, the agreed price in investment contract or agreement shall be investment cost; and for long-termequity 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 injoint-ventures and associates by equity method.
When calculated by cost method, long-term equity investment is priced according to its investment cost, andcost of the investment is adjusted when making additional investment or writing off investment; Whencalculated by equity method, current investment gains and losses represent the proportion of the net gainsand losses realized by the invested unit in current year attributable to or undertaken by the investor. When theCompany is believed to enjoy proportion of net gains and losses of invested unit, gains and lossesattributable to the Company according to its shareholding ratio is to computer out according to theaccounting policy and accounting period of the Company, on the basis of the fair value of variousrecognizable assets of the invested unit as at the date of obtaining of the investment, after offset of gains andlosses arising from internal transactions with associates and joint-ventures, and finally to make confirmationafter adjustment of net profit of the invested unit. Confirmation on gains and losses from the long-termequity investment in associates and joint-ventures held by the Company prior to the first execution day, couldonly stand up with the precedent condition that debit balance of equity investment straightly amortizedaccording to its original remaining term has already been deducted, if the aforementioned balance relating tothe investment do exist.
In case that investor loses joint control or significant influence over investee due to disposal of part equityinterest investment, the remaining equity interest shall be calculated according to Accounting Standards forBusiness Enterprise No.22-Recognition and Measurement of Financial Instrument. Difference between thefair value of the remaining equity interest as of the date when loss of joint control or significant influence andthe carrying value is included in current gains and losses. Other comprehensive income recognized in respect
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
of the original equity interest investment under equity method should be treated according to the same basiswhich the investee adopts to directly dispose the relevant assets or liabilities when ceasing adoption of equitymethod calculation; and also switches to cost method for calculating the long-term equity investments whichentitles the Company to have conduct control over the invested units due to its additional investments; andswitches to equity method for calculating the long-term equity investments which entitles the Company toconduct common control or significant influence, while no control over the invested units due to itsadditional investments, or the long-term equity investments which entitles the Company with no control overthe 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 forobtaining shall be recorded into current investment income. When disposing long-term equity investmentwhich is calculated by equity method, the proportion originally recorded in owners‘ equity shall betransferred to current investment income according to relevant ratio, except for that other movements ofowners‘ 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 byits cost. Cost of purchased-in investment real estate consists of payment for purchase, relevant taxes andother expenditure which is attributable to the assets directly; while cost of self-built investment real estate isformed with all necessary expenditures occurred before construction completion of the assets arriving at theestimated utilization state.Consequent measurement of investment estate shall be measured by cost method. Depreciation is providedwith average service life method pursuant to the predicted service life and net rate of salvage value. Thepredicted service life and net rate of salvage value and annual depreciation are listed as follows:
| Category | Depreciation term | Predicted rate of salvage value | Depreciation rate per 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 assetscommencing from the date of such turning. And when self-used real estate turns to be leased out for rental oradditional capital, the fixed assets or intangible assets shall switch to investment real estate commencingfrom the date of such turning. In situation of switch, the carrying value before the switch shall be deemed asthe credit value after the switch.
When investment real estate is disposed, or out of utilization forever and no economic benefit would bepredicted to obtain through the disposal, the Company shall terminate recognition of such investment realestate. The amount of income from disposal, transfer, discarding as scrap or damage of investment real estateafter deducting the asset‘ s carrying value and relevant taxation shall be written into current gains and losses.
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
14. Fixed assets
Fixed assets of the Company represent the tangible assets and assets package: held by the Company forpurpose of producing commodities, providing labor service, leasing or operational management, service lifeexceeds 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 ofpurchased-in fixed assets include bidding price and import duty and relevant taxes, and other expenditurewhich occurs before the fixed assets arrive at the state of predicted utilization and which could be directlyattributable to the assets; while cost of self-built fixed asset is formed with all necessary expendituresoccurred before construction completion of the assets arriving at the estimated utilization state; credit valueof the fixed assets injected by investors is determined based on the agreed value of investment contracts oragreements, while as for the agreed value of investment contracts or agreements which is not fair, it shalltake its fair value as credit value; and for fixed assets which are leased in through finance leasing, creditvalue is the lower of fair value of leased assets and present value of minimized leasing payment as at thecommencing date of leasing.
Consequent expenditure related to fixed assets consists of expenditures for repair and update reform. Forthose 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 meetingrequirements for recognization of fixed assets, they shall be accounted in current gains and losses as long asthey occur. When fixed asset is disposed, or no economic benefit would be predicted to obtain throughutilization or disposal of the asset, the Company shall terminate recognization of such fixed asset. Theamount of income from disposal, transfer, discarding as scrap or damage of fixed asset after deducting theasset‘ s carrying value and relevant taxation shall be written into current gains and losses.
The Company withdraws depreciation for all fixed assets except for those which have been fully depreciatedwhile continuing to use. It adopts average service life method for withdrawing depreciation which is treatedrespectively 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:
| No. | Category | Depreciation term | Predicted rate of salvage value | Depreciation rate per 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 anddepreciation method at each year-end. Any change will be treated as accounting estimation change.
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
15. Construction in progress
Construction in progress is measured with effective cost. Self-operated constructions projects are measuredwith direct materials, direct salaries and direct construction expense; construction projects undertaken byexternal are measured with the engineering payment payable; and engineering cost (income abatement) ofequipment-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 andlosses which should be capitalized are also included in cost of construction in progress.
16. Borrowing expense
Borrowing expenses include interest expense, amortization of discount or premium, auxiliary expenses andexchange difference due to borrowing in foreign currency. The borrowing expense which could be directlyattributable to purchase or production of assets satisfying capitalization condition, starts capitalization whencapital expenditure and borrowing expense occur and when necessary purchase or production conducted forpromoting assets to reach the predicted available-for-use or available-for-sale state; and capitalization shallcease when purchased or produced assets satisfying capitalization condition have reached the predictedavailable-for-use or available-for-sale state. Other borrowing expense is recognized as expense during theoccurrence period.
Capitalization shall be exercised for interest expense actually occurred from special borrowings in currentperiod after deduction of the interest income arising from unutilized borrowing capital which is saved inbanks or deduction of investment income obtained from temporary investment; For recognization ofcapitalized amount of common borrowing, it equals to the weighted average of the assets whose accumulatedexpense or capital disburse is more than common borrowing times capitalization rate of occupied commonborrowing. Capitalization rate is determined according to weighted average interest rate of commonborrowing.
Assets satisfying capitalization principle generally refer to fixed assets, investment real estate and inventorieswhich 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 principleand the interruption lasts over 3 months, the capitalization for the borrowing expense shall pause until thepurchase or production restarts.
17. Intangible assets
The Company holds intangible assets including land use right, trademark, patent technology and non-patenttechnology. Intangible assets are measured according to the effective costs paid for obtaining the assets. Forthose intangible assets purchased in by the Company, their effective cost consist of actual payment and
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
relevant other expenditure; for the intangible assets input by investors, effective cost is determined accordingto the value agreed in investment contracts and agreements, while if the agreed value is not fair, theneffective 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 otherintangible assets is averagely amortized according to the shortest of their predicted service life, beneficialterm concluded by contract and effective term regulated by laws. Amortization amount is recorded in assetscost and current gains and losses relevant to beneficial objectives.
Re-examination on predicted service life and amortization method of the intangible assets which have limitedservice life shall be conducted at the end of each year. If changed, it would be treated as change ofaccounting estimation. Re-examination on predicted service life of intangible assets which have uncertainservice life shall be conducted. For any evidence proving that service life of intangible assets is limited, thenthe service life shall be estimated and the Company shall make amortization within the predicted service lifeperiod.
18. Research and development
As for expenditure for research and development, the Company classifies it into expenditure on researchphase and development phase, based on nature of the expenditure and that whether the final intangible assetsformed by research & development is of great uncertainty. Expenditure arising during research should berecorded in current gains and losses upon occurrence; expenditure arising during development is confirmedas intangible assets when satisfying the following conditions:
(1) Completions of the intangible assets make it available for application or sell in technology;
(2) Equipped with plan to complete the intangible asset and apply or sell it;
(3) There is market for products produced with this intangible asset or the intangible asset itself;
(4) Have sufficient technology, financial resource and other resources to support development of the intangibleassets, 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 currentgains and losses upon occurrence. Development expenditure which had been recorded in gains and losses inprevious period would not be recognized as assets in later period. Expenditure arising during developmentphase which has been starting capitalization is listed in balance sheet as development expenditure, andtransferred to intangible assets since the project reaches at predicted utilization state.
19. Impairment of non-financial long-term assets
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
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 assetswhich have uncertain service life, no matter there is impairment or not, impairment test shall be conducted atthe end of every year. If it is hard to make test on recoverable amount of single asset, test is expected to makeon the basis of the assets group or assets group portfolio where such asset belongs to.
After impairment test, if the carrying value exceeds the recoverable amount of the asset, the balance isrecognized as impairment loss. As long as impairment loss of the aforementioned assets is recognized, itcouldn‘t be switched back in later accounting periods. Recoverable amount of assets refers to the higher offair 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 predicteddrop due to move-on of times or normal utilization;
(2) Economy, technology or law environment where enterprise operates or market where asset is located willhave 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, whichbrings influence in calculating discount rate of present value of predicted future cash flow of assets, whichleads 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 thanprediction, such as that net cash flow created by asset or operation profit (or loss) realized by asset is greatlylower (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 commoncontrol 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 goodwillrelating to associates and joint-ventures is included in carrying value of long-term equity investment.
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
21. Long-term deferred expenses
Long-term deferred expenses of the Company refer to the expense which has been paid out while should beamortized from the current period and periods thereafter, with amortization term over one year (excludingone year). Such expense is averagely amortized during the beneficial period. If such long-term deferredexpense could not bring benefit to following accounting periods, the unamortized value of the item shall befully transferred to current gains and losses.
22. Staff remuneration
Employee benefits mainly include all kinds of remuneration incurred in exchange for services rendered byemployees 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-termemployee welfare.
Short-term remuneration includes: staff salary, bonus, allowances and subsidies, staff benefits, socialinsurances 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 sharingscheme, and non-monetary benefits as well as other short-term remuneration. During the accounting periodwhen staff provides services, the short-term remuneration actually occurred is recognized as liabilities andshall 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-retirementbenefits, etc. retirement benefit scheme represents the agreement reached by the Company and its employees inrespect of retirement benefits, or the rules or regulations established by the Company for providing retirementbenefits 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 furtherpayment. Defined benefit plan refers to retirement benefit scheme other than defined contribution plan.
The early retirement policy for staff and workers of the Company is the compensation for encouraging staffand workers to accept the reduction voluntarily. The employees make applications voluntarily, the twoparties sign the compensation agreement after approved by the Company and calculate the compensationamount according to the compensation standard passed by the staff representative conference, and theCompany confirms it as dismiss welfare and reckons it in current profits and losses. As the Companypromises to adjust the treatment for early retiring staff and workers with the increase of social basic cost ofliving 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, commercialacceptance bill discount, pending litigation or arbitration, product quality assurance, etc. meets all of thefollowing conditions, the Company will confirm the aforesaid as liabilities: the obligation is an existingobligation of the Company; performance of the obligation is likely to cause economic benefits to flow out of
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
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 incomeand 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 thesignificant risks and rewards of ownership of the goods; the Company retains neither continuing managerialinvolvement to the degree usually associated with ownership nor effective control over the goods sold; theamount of revenue can be measured reliably; it is probable that the associated economic benefits will flowinto the Company; The export business is recognized when the packing list is received; and the associatedcosts incurred or to be incurred can be measured reliably. Air-conditioner OEM/ODM will recognize revenuewhile 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 laborservice cab be unfailingly calculated, the economic benefits related to labor service are likely to flow into theGroup, and the progress of labor service can be confirmed reliably. On balance sheet date, with regard tothose with results provided for labor service transactions can be estimated reliably, confirm the relevantservice income according to percentage of completion method and determine the percentage-of-completionmethod by the proportion of the occurred cost in the estimated total cost; as for those with results providedfor labor service transactions can‘t be estimated reliably and with occurred labor cost predicted to be able toget compensation, confirm to provide service income according to labor cost amount occurred and capable ofgetting compensation, and carry over the occurred labor costs; for those with results provided for laborservice transactions can‘t be estimated reliably and with occurred labor cost predicted to be not able to getcompensation, reckon the occurred labor cost in the current profits and losses, but not confirm to provideservice income.
(3) The economy benefits of use-right of transfer assets probably wills inflow to the Company, if the incomecan be measure accountability, than use-right income of transfer assets recognized.
25. Government subsidy
The government subsidy shall be recognized when the Company is able to meet the conditions attached andis able to receive it. The Government subsidy, other than fiscal subsidy, received by the Company shall beaccounted on an aggregate basis. In particular, the Government subsidies relating to ordinary activities wouldbe included in other income; the Government subsidies not relating to ordinary activities would be includedin non-operating income.When the Government subsidy is in the form of monetary assets, it is measured at the actual amount received.The subsidy allocated according to fixed quota standards shall be measured by the amount receivable; When
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
the Government subsidy is in the form of non-monetary assets, it is measured at fair value, and measured atthe nominal value of RMB 1.00 in case of failure to obtain reliable fair value.
(1) Basis of determination and accounting of Government subsidy relating to assetsGovernment subsidy relating to assets refers to that obtained by the Company for the purpose of acquiring orotherwise formation of long-term assets. Government subsidy relating to assets is deemed as that relating toordinary activities in principle and recognized as deferred income upon receipt. The Government subsidyshall 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 incomeGovernment 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 tocompensate the Company‘s expenses or losses for subsequent periods, and shall be accounted in profit orloss for the period during the period in which the relevant expense is recognized. Those grants relating to ourordinary activities are recorded in other income in the period in which the relevant expenses or losses arerecognized. Those grants not relating to our ordinary activities are recorded in non-operating income in theperiod in which the relevant expenses or losses are recognized. Government subsidies used to compensatethe relevant costs or losses incurred by the Company and relating to our ordinary activities shall be accountedin other income directly upon receipt of the grant, and accounted in non-operating income directly uponreceipt if it is not related to our ordinary activities.With respect to Government subsidy comprising both portions relating to assets and income, it shall beaccounted separately based on different portions, and it shall be aggregated as that relating to income if it isdifficult to distinguish the two portions.
(3) The policy-related preferential loan received by the Company shall be accounted separately in thefollowing two manners:
In case that government‘s appropriation of interest subsidy is made to the lending bank, the Company shallaccount for the relevant loan based on the actual amount of loan received by it, and calculate the borrowingexpense 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 appliedthe 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 berecognized for the carry forward of unused deductible losses that it is probable that future taxable profits will
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
be available against which the deductible losses can be utilized. For temporary difference arising from initialrecognition of goodwill, no corresponding deferred income tax liabilities will be recognized. For temporarydifference arising from initial recognition of assets and liabilities occurred in the transaction related tonon-business combination which neither affect accounting profit nor taxable income (or deductible losses),no corresponding deferred income tax assets and deferred income tax liabilities will be recognized. As of thebalance sheet date, deferred income tax assets and deferred income tax liabilities are measured at theeffective 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 taxable income tax which islikely to be obtained to offset deductible temporary difference, deductible losses and tax credits.
27. Lease
The Company categorizes the lease into the financial leasing and the operating leasing.The financial leasing is the lease in which all risks and returns related to the ownership of assets aretransferred in substance. The Company as a lease holder, on the date of lease, the financial lease isrecognized as the fixed asset at lower cost of fair value of the rental asset and the NPV of minimum paymentof leasing. The minimum payment of leasing is recognized as long-term payable and the difference isaccounted into unrecognized financing expense.The operating lease is the lease apart from the financial leasing. The Company, as a lease holder, accounts therents into current period by straight line method during the term of the lease. The Company, as a leaser, accountsthe rental income into current period by straight line method during the term of the lease.
28. Held-for-sale
(1)The Company classifies non-current assets or disposal groups that meet all of the following conditions asheld-for-sale: 1) according to the practice of selling this type of assets or disposal groups in a similartransaction, the non-current assets or disposal group can be sold immediately at its current condition; 2) Thesale is likely to occur, that is, the Company has made resolution on the selling plan and obtained definitepurchase commitment, the selling is estimated to be completed within one year. Those assets whose disposalis subject to approval from relevant authority or supervisory department under relevant requirements aresubject to that approval. Prior to the preliminary classification of non-current assets or disposal group as thecategory of held-for-sale, the Company measures the carrying value of the respective assets and liabilitieswithin the non-current assets or disposal group under relevant accounting standards. For non-current asset ordisposal group held for sale, for which it is found that the carrying value is higher than its fair value lessdisposal expense during the initial measurement or re-measurement on the balance sheet date, the carryingvalue shall be deducted to the net amount of fair value less disposal expense, and the reduced amount shallbe recognized as impairment loss in profit or loss for the period, and provision of impairment of assets heldfor sale shall be provided for accordingly.
(2)The non-current assets or disposal group that the Company has acquired specially for resale are classified
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
as held for sale on the acquisition date when they meet the condition that ―the selling is estimated to becompleted within one year‖ on the acquisition date, and are likely to satisfy other conditions of beingclassified as the type of held for sale in a short-term (usually being 3 months). Non-current assets or disposalgroup classified as held for sale are measured at the lower of their initial measurement amount and the netamount after their fair value less the selling expenses based on the assumption that such non-current assets ordisposal group are not classified as held for sale at the time of initial measurement. Except for thenon-current assets or disposal group acquired in a business combination, the difference arising fromconsidering the net amount of such non-current assets or disposal group after their fair value less the sellingexpenses 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 matterwhether the Company retains part of the equity investment after selling investment in subsidiaries, theinvestment in subsidiaries shall be classified as held for sale on an aggregate basis in the separate financialstatements of the parent company when the investment in subsidiaries proposed to be sold satisfies theconditions for being classified as held for sale; and all the assets and liabilities of the subsidiary shall beclassified 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 balancesheet date increases, the amount previously reduced for accounting shall be recovered and reverted from theimpairment loss recognized after the asset is classified under the category of held for sale, with the amountreverted recorded in profit or loss for the period. Impairment loss recognized before the asset is classifiedunder the category of held for sale shall not be reverted.
(5)For the amount of impairment loss on assets, the carrying value of disposal group‘s goodwill shall beoffset against first, and then offset against the book value of non-current assets according to the proportion ofbook 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 lesssales expenses increases, the amount reduced for accounting in previous periods shall be restored, and shallbe reverted in the impairment loss recognized in respect of the non-current assets which are applicable torelevant measurement provisions after classification into the category of held for sale, with the revertedamount charged in profit or loss for the current period. The written-off carrying value of goodwill andimpairment loss of non-current assets which is recognized prior to classification into the category of held forsale shall not be reverted.The subsequent reversed amount in respect of the impairment loss on assets recognized in the disposal groupheld for sale will increase the book value in proportion of the book value of each non-current asset (otherthan goodwill) in the disposal group.
(6) The non-current assets in the non-current assets or disposal group held for sale is not depreciated oramortized, and the debt interests and other fees in the disposal group held for sale continue to be recognized.
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(7)If the non-current assets or disposal group are no longer classified as held for sale since they no longermeet the condition of being classified as held for sale or the non-current assets are removed from the disposalgroup held for sale, they will be measured at the lower of the following: 1) the amount after their book valuebefore they are classified as held for sale is adjusted based on the depreciation, amortization or impairmentthat 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 thenon-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 ofor is classified as held for sale, and satisfies one of the following conditions: (1) represents a separate majorline of business or geographical area of operations; (2) is part of a single co-ordinate plan to dispose of aseparate major line of business or geographical area of operations; and (3) is a subsidiary acquiredexclusively 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 expensesinclude income tax in the current year and deferred income tax. The income tax associated with the eventsand transactions directly included in the owners‘ equity shall be included in the owners‘ equity; and thedeferred income tax derived from business combination shall be included in the carrying amount of goodwill,except for that above, the income tax expense shall be included in the profit or loss in the current period.
The income tax expense in the current year refers to the tax payable, which is calculated according to the taxlaws on the events and transactions incurred in the current period. The deferred income tax refers to thedifference between the carrying amount and the deferred tax assets and deferred tax liabilities at CurrentYear-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 five parts:
air-conditioning, refrigerator & freezer & washing machine, marketing, small home appliance and others.The transfer price among the segments will recognize based on the market price, common costs willallocated 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 financialstatement which will affect the application of accounting policy and amounts of assets, liabilities, income andexpense. The actual condition may differ from the estimation. Constant evaluation is conducted by the
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
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 andfuture periods.The following accounting estimation and key assumption may result in material adjustment to the book valueof assets and liabilities in future period.
(1) Inventory impairment provision
The Company provides impairment provision according to the type of finished products and goods deliveredunder fixed proportion, and estimates the realizable net value of inventories by reference to the projectedselling price of similar inventories less sales expenses and related taxes on a regular basis, so as to evaluatethe rationality of the provision proportion. If the actual selling price or expense differs from the previousestimation, the management will make corresponding adjustment to the proportion. The estimation resultsbased on existing experiences may differ from the latter actual results, which may result in adjustment to thebook value of inventories in the balance sheet and affect over the gains and losses of the period when theestimation 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 haveimpairment indication and long-term assets such as goodwill as at the balance sheet date. The recoverableamount of relevant assets and assets group shall be the present value of the projected future cash flow whichshall be calculated with accounting estimation.If the management amends the gross profit margin and discount rate adopted in calculation of future cashflow of assets and assets group and the amended gross profit margin is lower than the currently adopted oneor the amended discount rate is higher than the currently adopted one, the Company needs to increaseprovision 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 impairmentprovision 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 foreach future year. Realization of deferred income tax assets depends on whether a company is able to obtainsufficient taxable income in future. Change of future tax rate and switch back of temporary difference couldaffect the balance of income tax expense (gains) and deferred income tax. Change of the aforesaid estimationmay 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 valuerate of fixed assets and intangible assets. The projected usable life and residual value rate are determined by
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
the management based on the historical experiences of similar assets by reference to the estimation generallyused by the same industry with consideration on projected technical upgrade. If material change occurs toprevious estimation, the Company shall accordingly adjust the depreciation expenses and amortizationexpenses 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-countrysidepromotion activity for free for ten years. As to the maintenance expenses that may be increased arising fromsuch commitment, the Company has provided projected liabilities.
Taking into account the various uncertainties during the ten years, the Company considers no discount factorof such projected liabilities. Instead, the Company reviews the parameters (probility, proportion, maintenanceexpense 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 latestparameters 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 lossesaccording to other accounting rules.Other comprehensive income items shall be reported in the following two classes under other relevantaccounting rules:
(1) Other comprehensive income items that can not be reclassified into gains and losses in future accountingperiods, mainly including changes arising from re-measurement of net liabilities or net assets under definedbenefit plan and interest in investee‘s other comprehensive income which are measured under equity methodand which can not be reclassified into gains and losses in future accounting periods;
(2) Other comprehensive income items that will be reclassified into gains and losses in future accountingperiods upon satisfaction of required conditions, mainly includes the share of other comprehensive incomethat is reclassified into profit and loss when the investee‘s subsequent accounting periods are accounted for inaccordance with the equity method and meet the specified conditions, the fair value changes occurred by thedebt investment that is measured at fair value and whose changes are included in other comprehensiveincome, the difference between the original book value included in other comprehensive income and the fairvalue when a financial asset measured at amortized cost is reclassified as a financial asset measured at fairvalue and its changes are included in other comprehensive income, the loss provisions for financial assetsmeasured at fair value and whose changes are included in other comprehensive income, the gains or lossesgenerated from cash flow hedging instruments are part of effective hedging, and the differences inconversion of foreign currency financial statements.
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
34. Change of significant accounting policies and accounting estimates
(1) Change of significant accounting policy
| Content and reasons | Approval procedure | Note |
| On 31 March 2017, the Ministry of Finance revised the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments, Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets, Accounting Standards for Business Enterprises No. 24 - Hedge Accounting, and the Accounting Standards for Business Enterprises No. 37 – Financial Instruments Presentation, and implemented since 1 Jan. 2019. | Approved by 21st session of 9th BOD | Found below as details |
| Revised the format of financial statement according to the Notice of the Ministry of Finance on Revising and Printing the Format of Financial Statements for General Enterprises in 2019 (CK [2019] No.6) issued by Ministry of Finance on 30 April 2019 | Approved by management level | Found below as details |
New financial instrument standards are implemented by the Company and its subsidiaries for the first time in the period, andaccording to the regulation of Accounting Division of the Ministry of Finance CK[2019] No.6, impacts on balance sheet atperiod-begin of the consolidate and parent company from change of the above mentioned accounting policies are as:
| Item affected | Consolidated balance sheet | Balance sheet of parent company | ||||
| 31 December 2018 (Before adjustment) | Amount adjusted | 1 Jan. 2019 (Amount adjusted) | 31 December 2018 (Before adjustment) | Amount adjusted | 1 Jan. 2019 (Amount adjusted) | |
| Financial assets measured at fair value and whose changes are included in current gains/losses | 9,253,635.59 | -9,253,635.59 | 9,253,635.59 | -9,253,635.59 | ||
| Trading financial assets | 9,253,635.59 | 9,253,635.59 | 9,253,635.59 | 9,253,635.59 | ||
| 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 receivable | 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 |
| Other account receivable | 62,129,574.17 | 1,063,166.76 | 63,192,740.93 | 182,744,033.52 | 97,297.68 | 182,841,331.20 |
| Financial assets available for sale | 45,000,000.00 | -45,000,000.00 | 45,000,000.00 | -45,000,000.00 | ||
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item affected | Consolidated balance sheet | Balance sheet of parent company | ||||
| 31 December 2018 (Before adjustment) | Amount adjusted | 1 Jan. 2019 (Amount adjusted) | 31 December 2018 (Before adjustment) | Amount adjusted | 1 Jan. 2019 (Amount adjusted) | |
| Other non-current financial assets | 45,000,000.00 | 45,000,000.00 | 45,000,000.00 | 45,000,000.00 | ||
| Long-term equity investment | 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 |
| Financial liabilities measured at fair value and whose changes are included in current gains/losses | 55,586,666.70 | -55,586,666.70 | 19,893,875.00 | -19,893,875.00 | ||
| Trading financial liability | 55,586,666.70 | 55,586,666.70 | 19,893,875.00 | 19,893,875.00 | ||
| 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 profit | 904,232,582.87 | -2,734,328.91 | 901,498,253.96 | 917,567,933.94 | -9,209,251.03 | 908,358,682.91 |
| Minority's interest | 119,819,558.59 | -4,385,295.55 | 115,434,263.04 | |||
The financial statement of 2019 was prepared according to the regulation of financial statement format CK [2019] No.6 by theCompany and its subsidiaries and the retroactive adjustment was used to change the presentation of relevant financialstatements. Impacts on balance sheet at period-begin of the consolidate and parent company from adjustment are as:
| Item affected | Consolidate balance sheet | Balance sheet of parent company | ||||
| 31 December 2018 (Before adjustment) | Amount adjusted | 1 Jan. 2019 (Amount adjusted) | 31 December 2018 (Before adjustment) | Amount adjusted | 1 Jan. 2019 (Amount adjusted) | |
| Account receivable and Note receivable | 4,043,930,389.93 | -4,043,930,389.93 | 3,467,513,069.95 | -3,467,513,069.95 | - | |
| Account receivable | 2,370,568,253.64 | 2,370,568,253.64 | 2,419,743,946.64 | 2,419,743,946.64 | ||
| Note receivable | 1,673,362,136.29 | 1,673,362,136.29 | 1,047,769,123.31 | 1,047,769,123.31 | ||
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Account payable and note payable | 6,009,929,380.98 | -6,009,929,380.98 | - | 4,013,263,630.45 | -4,013,263,630.45 | - |
| Account payable | 3,727,754,399.60 | 3,727,754,399.60 | 2,001,442,110.63 | 2,001,442,110.63 | ||
| Note payable | 2,282,174,981.38 | 2,282,174,981.38 | 2,011,821,519.82 | 2,011,821,519.82 |
(2) Change of significant accounting estimates
The Company had no change of significant accounting estimates in Current 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 construction tax | Turnover tax | 5% or 7% |
| Education surcharge | Turnover tax | 3% |
| Local education surcharge | Turnover tax | 2% |
| Corporate income tax | Taxable income | 15% or 25% |
| House Property Tax | Original Book value of house property×(1-30%)or annual rent income | 1.2% or 12% |
| Land use tax | Actual land area used | 1 Yuan/M2 to 15 Yuan /M2 |
2. Preferential tax and approval documents
The Company and its subsidiary Zhongke Meiling Cryogenic Technology Co., Ltd. has passed the review forhigh-tech enterprise certification on 20 July 2017, and continuous to enjoy 15% rate for the income tax forState Hi-Tech Enterprise for three years term.The subsidiary Zhongshan Changhong Electric Co., Ltd. has passed the review for high-tech enterprisecertification on 9 November 2017, and continuous to enjoy 15% rate for the income tax for State Hi-TechEnterprise for three years term.The subsidiary Sichuan Hongmei Intelligent Technology Co., Ltd. has passed the qualification of high-techenterprise certification on 3 December 2018, and enjoys 15% rate for the income tax for State Hi-TechEnterprise for three years term.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
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
encourage industry listed in Directories of Industrial Structure Adjustment (2011) Revised (State LawReform Committee No. 21 Order); which enjoys the preferential tax policy of income tax for the westerndevelopment enterprise. And file in tax bureau with 15% rate for enterprise income tax since 2014 withseven years term.The subsidiary Guangdong Changhong Ridian Technology Co., Ltd. has passed the qualification of high-techenterprise certification on 2 December 2019, and enjoys 15% rate for the income tax for State Hi-TechEnterprise for three years term.The subsidiary Hongyuan Ground Energy Heat Pump Tech. (Zhongshan) Co., Ltd. has passed thequalification of high-tech enterprise certification on 2 December 2019, and enjoys 15% rate for the incometax for State Hi-Tech Enterprise for three years term.The subsidiary Hefei Meiling Nonferrous Metal Products Co., Ltd. has passed the qualification of high-techenterprise certification on 26 October 2018, and enjoys 15% rate for the income tax for State Hi-TechEnterprise for three years term.The subsidiary Jiangxi Meiling Electric Appliance Co., Ltd. has passed the qualification of high-techenterprise certification on 16 September 2019, and enjoys 15% rate for the income tax for State Hi-TechEnterprise for three years term.VI. Notes to the major items in the consolidated financial statements
With respect to the financial statements figures disclosed below, unless otherwise specified, ―year-beginning‖refers to Jan. 1, 2019; ―year-end‖ refers to Dec. 31, 2019; ―Current Year‖ refers to Jan. 1 to Dec. 31, 2019;―the last year‖ refers to Jan. 1 to Dec. 31, 2018; the currency is RMB.
1. Monetary fund
| Item | Balance at year-end | Balance at year-begin |
| Cash | 44,818.07 | 28,650.21 |
| Bank deposit | 4,771,094,609.77 | 4,029,892,318.85 |
| Other Monetary fund | 728,461,602.80 | 566,156,588.34 |
| Total | 5,499,601,030.64 | 4,596,077,557.40 |
| Including: total amount deposited in overseas | 25,326,137.49 | 13,722,335.29 |
Other monetary fund:
| Item | Amount at year-end |
| Cash deposit | 725,366,572.06 |
| Account of foreign currency for verification | 1,691,803.84 |
| Union Pay online | 857,441.03 |
| Taobao account | 545,785.87 |
| Total | 728,461,602.80 |
Cash deposit which serves as non cash and cash equivalents refers to the banking acceptance draft deposit
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
with a term of over three months, amounting to 88,809,556.95 yuan, the amount restricted for used inmanaged account was 1,501,998.18 yuan, balance of the loan guarantee for loans from overseas subsidiaryamounted as 23,232,000.00 yuan. China Union Pay, Taobao account and Ten Pay are all third party paymentplatforms. Except for the deposit of 250,000.00 yuan, utilization of other balance is not subject to anyrestriction.Pars of the goods payment denominated in foreign currency should be transferred to reviewing accountswhich may not be used temporarily. Upon approval of such review, those payments may be transferred togeneral accounts. Due to the relatively short time for reviewing foreign exchange, balance of the reviewingaccounts is not limited on utilization.
2. Tradable financial assets
| Item | Balance at year-end | Balance at year-begin |
| Financial assets measured at fair value and whose changes are included in current gains/losses | 7,730,268.92 | 9,253,635.59 |
| Including: Derivative financial assets | 7,730,268.92 | 9,253,635.59 |
Tradable financial assets refers to the RMB forward exchange fund in Current Year
3. Note receivable
(1) Category of note receivable
| Item | Balance at year-end | Balance at year-begin |
| Bank acceptance | 1,676,718,999.50 | 2,143,384,546.78 |
| Trade acceptance | 190,350,000.00 | 244,446,340.96 |
| Total | 1,867,068,999.50 | 2,387,830,887.74 |
| Less: bad debt provision | 1,903,500.00 | 17,262,634.10 |
| Book value | 1,865,165,499.50 | 2,370,568,253.64 |
(2) Notes receivable already pledged by the Company at the end of year
| Item | Amount pledge at year-end |
| Bank acceptance | 436,428,439.50 |
Note: with purpose of improving the note utilization, the Company draw up bank acceptance by pledge partsof the outstanding notes receivable to the bank. Pledge of the note receivable found more in 54. Assets withownership or the right to use restricted in VI.
(3) Notes endorsement or discount and undue on balance sheet date
| Item | Amount derecognition at year-end | Amount without derecognition at year-end |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Amount derecognition at year-end | Amount without derecognition at year-end |
| Bank acceptance | 807,689,943.50 | |
| Trade acceptance | 211,513,079.75 | |
| Total | 1,019,203,023.25 |
(4) Notes transfer to account receivable due for failure implementation by drawer at year-end
(5) By accrual of bad debt provision
| Category | Amount at year-end | ||||
| Book balance | Bad debt provision | Book value | |||
| Amount | Ratio | Amount | Ratio | ||
| With bad debt provision accrual on single item | 1,676,718,999.50 | 89.80% | 1,676,718,999.50 | ||
| Including: bank acceptance | 1,676,718,999.50 | 89.80% | 1,676,718,999.50 | ||
| with bad debt provision accrual on portfolio | 190,350,000.00 | 10.20% | 1,903,500.00 | 1.00% | 188,446,500.00 |
| Including: trade acceptance | 190,350,000.00 | 10.20% | 1,903,500.00 | 1.00% | 188,446,500.00 |
| Total | 1,867,068,999.50 | 100.00% | 1,903,500.00 | 0.10% | 1,865,165,499.50 |
(Continued)
| Category | Amount at year-begin | ||||
| Book balance | Bad debt provision | Book value | |||
| Amount | Ratio | Amount | Ratio | ||
| With bad debt provision accrual on single item | 2,143,384,546.78 | 89.76% | 2,143,384,546.78 | ||
| Including: bank acceptance | 2,143,384,546.78 | 89.76% | 2,143,384,546.78 | ||
| with bad debt provision accrual on portfolio | 244,446,340.96 | 10.24% | 17,262,634.10 | 7.06% | 227,183,706.86 |
| Including: 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 |
1) Note receivable withdrawal bad debt provision by combination
| Account age | Balance at year-end | ||
| Note receivable | Bad debt provision | Provision ratio | |
| Within 3 months (3 months included) | 190,350,000.00 | 1,903,500.00 | 1.00% |
(6) Provision and reversed in this year
Bad debt provision has 15,359,134.10 Yuan reversed and no collection for accounts charge off previous year
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(7) No note receivable actually written off in this year.
4. Account receivable
(1) Category of account receivable
| Category | Amount at year-end | ||||
| Book balance | Bad debt provision | Book value | |||
| Amount | Ratio | Amount | Ratio | ||
| Account receivable that withdrawal bad debt provision by single item | 746,199,837.64 | 51.49% | 26,519,983.66 | 3.55% | 719,679,853.98 |
| Including: current payment with related party | 614,612,878.93 | 42.41% | 614,612,878.93 | ||
| Account receivable with letter of credit | 52,306,821.66 | 3.61% | 52,306,821.66 | ||
| Account receivable with single minor amount but withdrawal single item bad debt provision | 79,280,137.05 | 5.47% | 26,519,983.66 | 33.45% | 52,760,153.39 |
| Account receivable withdrawal bad debt provision by portfolio | 703,054,274.21 | 48.51% | 34,772,146.53 | 4.95% | 668,282,127.68 |
| Including: account receivable of engineering customers | 141,637,042.88 | 9.77% | 3,940,749.05 | 2.78% | 137,696,293.83 |
| Receivables other than engineering customers | 561,417,231.33 | 38.74% | 30,831,397.48 | 5.49% | 530,585,833.85 |
| Total | 1,449,254,111.85 | 100.00% | 61,292,130.19 | 4.23% | 1,387,961,981.66 |
(Continued)
| Category | Amount at year-begin | ||||
| Book balance | Bad debt provision | Book value | |||
| Amount | Ratio | Amount | Ratio | ||
| Account receivable that withdrawal bad debt provision by single item | 785,323,787.31 | 45.15% | 22,978,942.60 | 2.93% | 762,344,844.71 |
| Including: current payment with related party | 693,467,089.57 | 39.87% | 693,467,089.57 | ||
| Account receivable with letter of credit | 59,799,506.83 | 3.44% | 59,799,506.83 | ||
| Account receivable with single minor amount but withdrawal single item bad debt provision | 32,057,190.91 | 1.84% | 22,978,942.60 | 71.68% | 9,078,248.31 |
| Account receivable withdrawal bad debt provision by portfolio | 953,897,180.86 | 54.85% | 42,879,889.28 | 4.50% | 911,017,291.58 |
| Including: account receivable of | 108,819,204.37 | 6.26% | 5,580,667.36 | 5.13% | 103,238,537.01 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Category | Amount at year-begin | ||||
| Book balance | Bad debt provision | Book value | |||
| Amount | Ratio | Amount | Ratio | ||
| engineering customers | |||||
| Receivables other than engineering customers | 845,077,976.49 | 48.59% | 37,299,221.92 | 4.41% | 807,778,754.57 |
| 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 minorsingle receivables, and withdrawal bad debt provision by combination shows no risk characteristic of thereceivables, 111 clients involved.
2) Account receivable withdrawal bad debt provision by portfolio
A. Account receivable of engineering customers
| Account age | Balance at year-end | ||
| Account receivable | Bad debt provision | Provision ratio | |
| Within 3 months (3 months included) | 76,229,630.55 | ||
| Over 3 months and within 6 months (6 months included) | 8,914,775.64 | ||
| Over 6 months and within one year (One year included) | 38,785,066.51 | ||
| Over one year - within 2 years (2 years included) | 16,376,786.83 | 3,275,357.37 | 20.00% |
| Over 2 years - within 3 years (3 years included) | 1,330,783.35 | 665,391.68 | 50.00% |
| Over 3 years | |||
| Total | 141,637,042.88 | 3,940,749.05 | |
B. Receivables other than engineering customers
| Account age | Balance at year-end | ||
| Account receivable | Bad debt provision | Provision ratio | |
| Within 3 months (3 months included) | 445,907,638.10 | 4,459,076.38 | 1.00% |
| Over 3 months and within 6 months (6 months included) | 47,385,616.83 | 4,738,561.68 | 10.00% |
| Over 6 months and within one year (One year included) | 45,260,325.63 | 9,052,065.13 | 20.00% |
| Over one year - within 2 years (2 years | 19,449,642.72 | 9,724,821.36 | 50.00% |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Account age | Balance at year-end | ||
| Account receivable | Bad debt provision | Provision ratio | |
| included) | |||
| Over 2 years - within 3 years (3 years included) | 2,785,675.62 | 2,228,540.50 | 80.00% |
| Over 3 years | 628,332.43 | 628,332.43 | 100.00% |
| Total | 561,417,231.33 | 30,831,397.48 | |
(2) By account age
| Item | Balance at year-end |
| Within 3 months (3 months included) | 1,079,751,025.93 |
| Over 3 months and within 6 months (6 months included) | 127,558,018.61 |
| Over 6 months and within one year (One year included) | 160,010,922.40 |
| Over one year - within 2 years (2 years included) | 53,738,854.36 |
| Over 2 years - within 3 years (3 years included) | 14,995,538.09 |
| Over 3 years | 13,199,752.46 |
| Total | 1,449,254,111.85 |
(3) Account receivable bad debt reserves
Bad debt provision has 9,974,772.23 Yuan accrual in Current Year; bad debt provision of 1,936,952.67 Yuanis switch-back; no trade receivables written-off in previous year was recovered this year.
(4) Account receivable actually written-off in Current Year
| Item | Written-off amount |
| Account receivable written-off | 12,604,521.25 |
(5) Pledge of the account receivable at year-end can be found in 54. Assets with ownership or the right to userestricted in VI.
(6) In Current Year, top five receivables collected by arrears party amounting to 641,239,275.10 yuan in total,accounted for 44.25% of the receivables at balance of Current Year-end, the bad debt provision accrualcorrespondingly amounting to 4,615,488.10 yuan at year-end balance.
(7) Account receivable terminated recognization due to the transfer of financial assets: nil
(8) No assets and liability transfer Account receivable and continues to involve at year-end.
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
5. Accounts paid in advance
(1) Age of account paid in advance
| Item | Amount at year-end | Amount at year-begin | ||
| Amount | Ratio | Amount | Ratio | |
| Within one year | 23,665,135.72 | 93.65% | 77,433,864.54 | 89.85% |
| 1-2 years | 945,375.38 | 3.74% | 4,345,186.02 | 5.05% |
| 2-3 years | 331,164.45 | 1.31% | 2,115,459.14 | 2.45% |
| Over 3 years | 328,730.82 | 1.30% | 2,285,949.56 | 2.65% |
| Total | 25,270,406.37 | 100.00% | 86,180,459.26 | 100.00% |
(2) Top 5 of account paid in advance in balance at year-end amounting to 7,429,423.33 yuan, accounted for
29.40% of the account.
6. Other account receivable
| Item | Balance at year-end | Balance at year-begin |
| Interest receivable | 9,510,208.63 | 2,653,712.36 |
| Dividend receivable | 661,434.48 | |
| Other account receivable | 87,070,251.69 | 60,539,028.57 |
| Total | 97,241,894.80 | 63,192,740.93 |
6.1 Interest receivable
(1) Category of interest receivable
| Item | Balance at year-end | Balance at year-begin |
| Interest receivable from time deposit | 9,510,208.63 | 1,892,948.46 |
| Income receivable from financial products | 760,763.90 | |
| Total | 9,510,208.63 | 2,653,712.36 |
(2) Major overdue interest: nil
6.2 Dividend receivable
(1) Category of dividend receivable
| Item | Balance at year-end | Balance at year-begin |
| Huishang Bank Corporation Limited | 661,434.48 |
(2) Major dividends receivable with account age over 1 year: Nil
6.3 Other account receivable
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
(1) Category of other account receivable
| Nature | Book balance at year-end | Book balance at year-begin |
| Export rebate | 21,650,454.61 | 12,524,216.47 |
| Cash deposit | 49,470,316.18 | 32,292,605.75 |
| Loans of employee‘s pretty cash | 16,863,753.28 | 16,248,265.59 |
| Related party not in consolidation statement | 1,163,963.53 | 1,470,228.16 |
| Advance money temporary | 332,896.32 | 553,705.11 |
| Other | 2,645,856.29 | 1,278,050.57 |
| Total | 92,127,240.21 | 64,367,071.65 |
(2) Other account receivable bad debt reserves
| Bad debt reserves | First stage | Second stage | Third stage | Total |
| Expected credit loss in next 12 months | Expected credit loss for the whole duration (no credit impairment) | Expected credit loss for the whole duration (credit impairment has occurred) | ||
| Balance as at 1 Jan. 2019 | 3,798,043.08 | 30,000.00 | 3,828,043.08 | |
| Book balance of Other account receivable in Current Year as at 1 Jan. 2019 | — | — | ||
| --Transfer to the second stage | ||||
| -- Transfer to the third stage | ||||
| -- Reversal to the second stage | ||||
| -- Reversal to the first stage | ||||
| Provision in Current Year | 1,206,945.44 | 22,000.00 | 1,228,945.44 | |
| Reversal in Current Year | ||||
| Conversion in Current Year | ||||
| Write off in Current Year | ||||
| Other change | ||||
| Balance as at 31 Dec. 2019 | 5,004,988.52 | 52,000.00 | 5,056,988.52 |
(3) By account age
| Account age | Balance at year-end |
| Within 3 months (3 months included) | 49,979,610.12 |
| Over 3 months and within 6 months (6 months included) | 6,227,315.96 |
| Over 6 months and within one year (One year included) | 13,471,367.20 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Account age | Balance at year-end |
| over one year-within two years (2 years included) | 14,685,221.16 |
| Over 2 years - within 3 years (3 years included) | 4,603,153.94 |
| Over 3 years | 3,160,571.83 |
| Total | 92,127,240.21 |
(4) No actual verification of other receivables in Current Year
(5) Top 5 other receivables collected by arrears party at balance of year-end:
| Name | Nature | Balance at year-end | Account age | Proportion in total other receivables at year-end | Balance at year-end of bad debt provision |
| SAT of Hefei Economic & Technological Development Zone | Tax rebate | 21,650,454.61 | within 3 months | 23.50% | |
| Office of the lading group for construction of new socialist countryside in Shunyi District | Margin | 8,780,849.40 | 6 months to 1 year | 9.53% | |
| Development & Reform Bureau of Wangdu County | Margin | 8,500,000.00 | 1-2 year | 9.23% | 1,700,000.00 |
| Development & Reform Bureau of Qingyuan District, Baoding City | Margin | 5,100,000.00 | 3-6 months & 6 months to 1 year | 5.54% | |
| Office of the Beijing Pinggu District New Socialist Countryside Construction | Margin | 2,148,000.00 | 6 months to 1 year & over 3 years | 2.33% | 500,000.00 |
| Total | 46,179,304.01 | 50.13% | 2,200,000.00 |
(6) No other account receivable involved government subsidies at year-end.
(7) No other receivables terminated recognization due to the transfer of financial assets at year-end.
(8) No assets and liability transfer other receivables and continues to involve at year-end.
7. Inventories
(1) Classification of inventories
| Item | Amount at year-end | ||
| Book balance | Impairment provision | Book value | |
| Raw materials | 151,663,007.21 | 8,222,896.79 | 143,440,110.42 |
| Stock commodities | 1,067,657,584.34 | 85,915,212.96 | 981,742,371.38 |
| Low value consumable articles | 7,450,761.70 | 114,037.76 | 7,336,723.94 |
| Goods in transit | 215,898,485.10 | 4,872,592.90 | 211,025,892.20 |
| Goods-in-process | 10,181,803.47 | 10,181,803.47 | |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Amount at year-end | ||
| Book balance | Impairment provision | Book value | |
| Engineering construction | 70,738,030.16 | 70,738,030.16 | |
| Deferred expense for mould | 36,445,257.49 | 36,445,257.49 | |
| Total | 1,560,034,929.47 | 99,124,740.41 | 1,460,910,189.06 |
(Continued)
| Item | Amount at year-begin | ||
| Book balance | Impairment provision | Book value | |
| 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 | |
| Engineering construction | 70,933,181.87 | 70,933,181.87 | |
| Deferred expense for mould | 59,053,460.64 | 59,053,460.64 | |
| Total | 2,299,923,257.79 | 125,486,684.12 | 2,174,436,573.67 |
(2) Inventory falling price reserves
| Item | Amount at year-begin | Increased in Current Year | Decreased in Current Year | Amount at year-end | ||
| Provision | Other | Switch-back or conversion | Other | |||
| Raw materials | 12,759,205.28 | 1,225,475.31 | 5,761,783.80 | 8,222,896.79 | ||
| Stock commodities | 111,451,370.33 | 15,592,047.64 | 41,128,205.01 | 85,915,212.96 | ||
| Goods in transit | 975,168.15 | 4,128,732.21 | 231,307.46 | 4,872,592.90 | ||
| Low value consumable articles | 300,940.36 | 186,902.60 | 114,037.76 | |||
| Total | 125,486,684.12 | 20,946,255.16 | 47,308,198.87 | 99,124,740.41 | ||
(3) Provision for inventories
| Item | Specific basis for determining of net realizable value | Reasons for the Switch-back or conversion in Current Year |
| Raw materials | Cost is higher than net realizable value (The processed products are decline) | |
| Stock commodities | Cost is higher than net realizable value (The market price at period-end fell) | |
| Goods in transit | Cost is higher than net realizable value (The market price at period-end fell) | |
| Low value consumable articles | Cost is higher than net realizable value |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
8. Other current assets
| Item | Balance at year-end | Balance at year-begin |
| Financial products | 1,110,000,000.00 | |
| Value-added tax to be deducted | 43,809,823.14 | 62,040,151.40 |
| Advance payment of income tax | 18,010,305.85 | 12,057,771.72 |
| Finance lease un-recognized | 589,033.84 | |
| Pakistan local sales tax | 1,337,337.27 | |
| Other unamortized expenses | 446,565.70 | |
| Total | 63,604,031.96 | 1,184,686,956.96 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
9. Long-term equity investment
| Invested enterprise | Balance at year-begin | Changes in Current Year | Balance at year-end | Balance at year-end of impairment | |||||||
| Additional investment | Disinvestment | Investment profit and loss confirmed by equity method | Other comprehensive income adjustment | Other changes of equity | Declaration of cash dividends or profits | Provision for impairment | Other | ||||
| Associated companies | |||||||||||
| 1.Changhong Ruba Electric Company(Private)Ltd. note 1 | 9,049,695.63 | -9,015,854.36 | -33,841.27 | - | |||||||
| 2.Hefei Xingmei Assets Management Co., Ltd. | 9,420,099.27 | -865,485.54 | 8,554,613.73 | ||||||||
| 3.Sichuan Zhiyijia Network Technology Co., Ltd. note 2 | 9,665,468.00 | 29,087,040.00 | 6,854,999.85 | 45,607,507.85 | |||||||
| 4.Hongyuan Ground Energy Heat Tech. Co., Ltd. note 3 | 23,148,936.54 | 226,004.11 | 23,374,940.65 | ||||||||
| 5.Sichuan Tianyou Guigu Technology Co., Ltd. note 4 | 7,110,954.07 | -4,308,730.52 | 2,802,223.55 | ||||||||
| 6..Chengdu Guigu Environmental Tech. Co., Ltd. note 5 | 9,157,388.27 | -940,162.35 | 8,217,225.92 | ||||||||
| Total | 67,552,541.78 | 29,087,040.00 | -8,049,228.81 | -33,841.27 | - | - | - | - | 88,556,511.70 | ||
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 partiesagreed to increase capital contribution of US$ 1,130,191.00, among which, Zhongshan Changhong subscribed to contribute US$ 452,076.00 (equivalent to 3,001,649.02 yuan on the actual contributiondate) 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 of60%.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 ZhiyijiaNetwork Technology Co., Ltd. On 5 January 2015, Sichuan Zhiyijia Network Technology Co., Ltd was officially incorporated with registered capital of 50 million yuan, among which, the Company madecontribution of 15 million yuan with shareholding proportion of 30% and Sichuan Changhong Electric Co., LTD made contribution of 35 million yuan with shareholding proportion of 70%. In 2019, the
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
Company increase capital of 29,087,040.00 yuan (of which: 20 million yuan reckoned in registered capital and 9,087,040 yuan reckoned in capital reserves) to Zhiyijia with shareholding ratio up to 50%.Note 3: subsidiary Sichuan Changhong Air Conditioner Co., Ltd (―Changhong Air Conditioner‖) and Hengyouyuan Technology Development Group Co., Ltd. (―Hengyouyuan‖) cooperated to establishHongyuan Ground Energy Heat Technology Co., Ltd. on 28 October 2015. The registered capital of the company is 50 million yuan, among which, Changhong Air Conditioner contributed 24.5 millionyuan, accounting for 49% of the registered capital, and Hengyouyuan contributed 25.5 million yuan, 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 100 million yuan. Our subsidiary Changhong Air Conditioner made capital contributionof RMB 25 million in cash, accounting for 25% of the registered capital. Chengdu Jiaodao Property Development Company made capital contribution of 20 million yuan, accounting for 20% of theregistered capital. Chengdu Southwest Jiaotong University Industry (Group) Co., Ltd made capital contribution of 20 million yuan, accounting for 20% of the registered capital. Mianyang InvestmentHolding (Group) Co., Ltd made capital contribution of 5 million yuan, accounting for 5% of the registered capital. Shanghai Zhongcheng Xindaya Financial Information Service Co., Ltd made capitalcontribution of 5 million yuan, accounting for 5% of the registered capital. Jiangsu Runye Investment Co., Ltd made capital contribution of 10 million yuan, accounting for 10% of the registered capital.Chengdu Dongyu Shangmao Co., Ltd made capital contribution of 15 million yuan, 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 millionYuan, representing 25% of the registered capital.Note 5: Chengdu Guigu Environmental Tech. Co., Ltd. was incorporated on 22 May 2013 with registered capital of 40 million yuan. Our subsidiary Changhong Air Conditioner made capital contributionof 10 million yuan, accounting for 25% of the registered capital. Chengdu Jiaodao Property Development Company made capital contribution of 8 million yuan, accounting for 20% of the registeredcapital. Chengdu Southwest Jiaotong University Industry (Group) Co., Ltd made capital contribution of 8 million yuan, accounting for 20% of the registered capital. Mianyang Investment Holding (Group)Co., Ltd made capital contribution of 2 million yuan, accounting for 5% of the registered capital. Shanghai Zhongcheng Xindaya Financial Information Service Co., Ltd made capital contribution of 2million yuan, accounting for 5% of the registered capital. Sichuan Shuye Jiachen Property Development Company made capital contribution of 4 million yuan, accounting for 10% of the registered capital.Chengdu Dongyu Shangmao Co., Ltd made capital contribution of 6 million yuan, accounting for 15% of the registered capital.
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
10. Other non-current financial assets
| Item | Balance at year-end | Balance at year-begin |
| Huishang Bank Corporation Limited | 5,000,000.00 | 5,000,000.00 |
| Hongyun Fund | 40,000,000.00 | 40,000,000.00 |
| Total | 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. Balance at year-begin | 54,219,454.78 | 3,411,848.00 | 57,631,302.78 |
| 2. Increased in Current Year | 52,865,867.91 | 52,865,867.91 | |
| (1) Fixed assets transfer-in | 52,708,720.77 | 52,708,720.77 | |
| (2) Other | 157,147.14 | 157,147.14 | |
| 3. Decreased in Current Year | |||
| 4. Balance at year-end | 107,085,322.69 | 3,411,848.00 | 110,497,170.69 |
| II. Accumulated depreciation and accumulated amortization | |||
| 1.Balance at year-begin | 10,244,458.94 | 540,336.43 | 10,784,795.37 |
| 2. Increased in Current Year | 2,928,783.72 | 439,831.47 | 3,368,615.19 |
| (1) Provision or amortization | 2,928,783.72 | 439,831.47 | 3,368,615.19 |
| 3. Decreased in Current Year | |||
| 4. Balance at year-end | 13,173,242.66 | 980,167.90 | 14,153,410.56 |
| III. Impairment loss | |||
| IV. Book value | |||
| 1. Ending book value | 93,912,080.03 | 2,431,680.10 | 96,343,760.13 |
| 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 year-end.
(3) No particular about mortgage of investment property at year-end.
(4) Investment real estate without property certification held
| Item | Original book value | Reasons for failing to complete property rights certificate |
| J04 molding workshop | 31,235,715.44 | Related property rights in procedure |
| J03 Jijia workshop | 18,807,186.62 | Related property rights in procedure |
| J20 air compressor station workshop | 1,325,091.05 | Related property rights in procedure |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Original book value | Reasons for failing to complete property rights certificate |
| J18 opening and closing office | 613,454.60 | Related property rights in procedure |
| Total | 51,981,447.71 |
12. Fixed assets
| Item | Balance at year-end | Balance at year-begin |
| Fixed assets | 2,104,697,429.76 | 1,658,081,495.03 |
| Disposal of fixed assets | 75,875,517.11 | 75,875,517.11 |
| Total | 2,180,572,946.87 | 1,733,957,012.14 |
12.1 Fixed assets
(1) Fixed assets
| Item | House and buildings | Machinery equipment | Transport equipment | Other equipment | Total |
| I. Original book value | |||||
| 1. Balance at year-begin | 1,190,214,714.89 | 1,267,678,633.84 | 31,075,507.90 | 193,835,760.40 | 2,682,804,617.03 |
| 2. Increased in Current Year | 386,624,268.28 | 297,725,124.94 | 4,491,137.03 | 29,057,870.84 | 717,898,401.09 |
| (1) Purchase | 586,888.18 | 80,848,004.63 | 1,643,628.91 | 5,379,124.19 | 88,457,645.91 |
| (2) Construction in progress transfer-in | 386,037,380.10 | 216,877,120.31 | 2,812,333.47 | 23,553,321.30 | 629,280,155.18 |
| (3) Inventory transfer-in | 117,007.40 | 117,007.40 | |||
| (4) Increased for change of foreign rate | 35,174.65 | 8,417.95 | 43,592.60 | ||
| 3. Decreased in Current Year | 52,899,287.42 | 61,885,481.74 | 2,257,130.76 | 43,453,744.37 | 160,495,644.29 |
| (1) Dispose or retirement | 190,566.57 | 46,562,125.98 | 2,082,260.63 | 43,123,859.54 | 91,958,812.72 |
| (2) Construction in progress transfer-in | 14,833,415.77 | 14,833,415.77 | |||
| (3) Transfer to investment real estate | 52,708,720.77 | 52,708,720.77 | |||
| (4) Decreased for change of foreign rate | 174,870.13 | 312,757.96 | 487,628.09 | ||
| (5) Other decrease | 0.08 | 489,939.99 | 17,126.87 | 507,066.94 | |
| 4. Balance at year-end | 1,523,939,695.75 | 1,503,518,277.04 | 33,309,514.17 | 179,439,886.87 | 3,240,207,373.83 |
| II. Accumulated depreciation | |||||
| 1. Balance at year-begin | 243,448,450.52 | 679,782,715.32 | 16,638,654.43 | 82,743,850.92 | 1,022,613,671.19 |
| 2. Increased in Current Year | 44,360,216.73 | 128,473,045.07 | 2,814,053.10 | 15,330,732.37 | 190,978,047.27 |
| (1) Provision | 44,360,216.73 | 128,473,045.07 | 2,808,515.01 | 15,168,783.14 | 190,810,559.95 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | House and buildings | Machinery equipment | Transport equipment | Other equipment | Total |
| (4) Increased for change of foreign rate | 5,538.09 | 161,949.23 | 167,487.32 | ||
| 3. Decreased in Current Year | 79,340.23 | 48,112,970.83 | 1,944,811.14 | 29,676,487.81 | 79,813,610.01 |
| (1) Dispose or retirement | 79,340.23 | 40,614,700.68 | 1,637,399.05 | 29,670,456.38 | 72,001,896.34 |
| (2) Construction in progress transfer-in | 7,481,655.43 | 7,481,655.43 | |||
| (3) Decreased for change of foreign rate | 307,412.09 | 307,412.09 | |||
| (4) Other decrease | 16,614.72 | 6,031.43 | 22,646.15 | ||
| 4. Balance at year-end | 287,729,327.02 | 760,142,789.56 | 17,507,896.39 | 68,398,095.48 | 1,133,778,108.45 |
| III. Impairment loss | |||||
| 1. Balance at year-begin | 1,909,763.11 | 199,687.70 | 2,109,450.81 | ||
| 2. Increased in Current Year | 4,948.38 | 1,793,276.68 | 1,798,225.06 | ||
| 3. Decreased in Current Year | 330,485.35 | 1,845,354.90 | 2,175,840.25 | ||
| (1) Dispose or retirement | 153,239.30 | 1,845,354.90 | 1,998,594.20 | ||
| (2) Construction in progress transfer-in | 177,246.05 | 177,246.05 | |||
| 4. Balance at year-end | 1,584,226.14 | 147,609.48 | 1,731,835.62 | ||
| IV. Book value | |||||
| 1. Ending book value | 1,236,210,368.73 | 741,791,261.34 | 15,801,617.78 | 110,894,181.91 | 2,104,697,429.76 |
| 2. Opening book value | 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 year mainly due to the 629,280,155.18 yuan transfer from construction inprocess; decrease of the fixed assets in Current Year mainly including the investment real estate transfer-in,renewal of the assets transfer to construction in progress and assets dispose for retirement
(2) No fixed assets temporary idle at year-end.
(3) Fixed assets for collateral at year-end
| Item | Original book value | Accumulated depreciation | Impairment loss | Net book value |
| House and buildings | 423,761,109.88 | 97,457,552.80 | 326,303,557.08 |
(4) Fixed assets leased through financing lease at year-end.
| Item | Original book value | Accumulated depreciation | Impairment loss | Net book value |
| Machinery equipment | 2,976,714.26 | 761,157.79 | 2,215,556.47 |
(5) Fixed assets leased through operating lease at year-end.
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Original book value | Accumulated depreciation | Impairment loss | Net book value |
| House and buildings | 16,531,374.51 | 4,769,213.95 | 11,762,160.56 | |
| Machinery equipment | 64,511,884.69 | 14,188,442.94 | 50,323,441.75 | |
| Other equipment | 3,092,038.66 | 979,768.50 | 2,112,270.16 | |
| Total | 84,135,297.86 | 19,937,425.39 | 64,197,872.47 |
(6) Fixed assets without property certificate
| Item | Bookvalue | Reasonofnotcompletethepropertycertificate |
| J01workshop | 30,701,587.00 | Relatedpropertyrightsinprocedure |
| J02workshop | 33,123,926.00 | Relatedpropertyrightsinprocedure |
| J05evaporatorandcondenserworkshop | 24,446,636.46 | Relatedpropertyrightsinprocedure |
| J06centralair-conditionerworkshop | 18,605,818.16 | Relatedpropertyrightsinprocedure |
| J07electricalworkshop | 36,789,666.41 | Relatedpropertyrightsinprocedure |
| J9rawmaterialwarehouse | 6,629,363.24 | Relatedpropertyrightsinprocedure |
| J10rawmaterialwarehouse | 4,908,909.14 | Relatedpropertyrightsinprocedure |
| J52finishedproductwarehouse | 9,302,752.29 | Relatedpropertyrightsinprocedure |
| J11rawmaterialwarehouse | 4,790,635.87 | Relatedpropertyrightsinprocedure |
| J15houseofrefrigerantforklift | 1,399,454.36 | Relatedpropertyrightsinprocedure |
| J16chemicalstorage | 1,256,727.47 | Relatedpropertyrightsinprocedure |
| J17chemicalstorage | 1,374,363.67 | Relatedpropertyrightsinprocedure |
| J19mainguardroom | 345,454.40 | Relatedpropertyrightsinprocedure |
| J19Aguardroom | 218,182.27 | Relatedpropertyrightsinprocedure |
| J19Bguardroom | 218,181.46 | Relatedpropertyrightsinprocedure |
| J19Cguardroom | 218,181.73 | Relatedpropertyrightsinprocedure |
| J08packingmaterialswarehouse | 4,513,761.47 | Relatedpropertyrightsinprocedure |
| J50finishedproductwarehouse | 17,374,678.90 | Relatedpropertyrightsinprocedure |
| J51finishedproductwarehouse | 16,815,963.30 | Relatedpropertyrightsinprocedure |
| J53finishedproductwarehouse | 12,923,352.99 | Relatedpropertyrightsinprocedure |
| J54finishedproductwarehouse | 12,018,679.94 | Relatedpropertyrightsinprocedure |
| J55finishedproductwarehouse | 11,009,174.31 | Relatedpropertyrightsinprocedure |
| J56finishedproductwarehouse | 11,009,174.31 | Relatedpropertyrightsinprocedure |
| J19Dguardroom | 157,798.17 | Relatedpropertyrightsinprocedure |
| J19Eguardroom | 157,798.17 | Relatedpropertyrightsinprocedure |
| Testingandexperimentcenterbuilding | 42,638,726.80 | Relatedpropertyrightsinprocedure |
| IIsectioncanteenoflivingarea | 26,029,822.03 | Relatedpropertyrightsinprocedure |
| 4#makeshiftshelter(dormitorybuildingtransfertocapital) | 6,651,069.97 | Relatedpropertyrightsinprocedure |
| Freezersubsidiarystation | 4,337,337.08 | Relatedpropertyrightsinprocedure |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Bookvalue | Reasonofnotcompletethepropertycertificate |
| Hotwaterroomforlivingarea | 2,914,385.29 | Relatedpropertyrightsinprocedure |
| Circulatingwaterpumproom/equipmentroom | 1,308,241.16 | Relatedpropertyrightsinprocedure |
| Freezersalvagestation | 349,166.88 | Relatedpropertyrightsinprocedure |
| Freezer-7#Workshopinspectionroom | 233,741.56 | Relatedpropertyrightsinprocedure |
| Total | 344,772,712.26 |
(7) No fixed assets held for sale at year-end
12.2 Disposal of fixed assets
| Item | Amount at year-end | Amount at year-begin | Reasons for disposal transferred |
| Relevant assets disposal for reserved lands | 75,875,517.11 | 75,875,517.11 | Relocation for land reserve |
Pursuant to the urban planning requirements of the People‘s Government of Hefei city, Hefei Land Reserve Center plans topurchase and store the land use right of an integrated economic development zone of the Company located at Longgang ofHefei 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 isRMB74.48 million. The land is mainly used for the Company‘s warehouse, product finishing workshop and the factory ofZhongke Meiling. Pursuant to the purchasing and storage requirements of land use right, the land will be purchased and storedwith vacant possession. In April 2013, the Company completed the relocation of occupants of the premises, and the net fixedassets in relation to the land will transfer as disposal, accounting treatment will be conduct in line with relevant rules uponreceiving of the relocation compensation.Pursuant to the urban planning requirements of Hefei Municipal Government and the Government of Feidong county, the landreserve center of Feidong county will purchase and store the land use right of an economic development zone located atFeidong county, Hefei city, which is owned by the Company‘s subordinate companies, Equator Electric and Equator HomeAppliance, respectively, with an area of 19,245.09 sq.m. (Approximately 28.87 mu, Land Use Right Certificate No.: DongGuo 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 industrialpurpose). The total consideration for purchasing and storage is approximately 36 million yuan, of which the consideration forthe land use right owned by Equator Electric and Equator Home Appliance is approximately 10.59 million yuan and 25.41million yuan, respectively. The Company has completed the relocation of occupants of the premises, and the net fixed assets inrelation to the land will transfer as disposal, accounting treatment will be conduct in line with relevant rules upon receiving ofthe relocation compensation.No impairment of relevant assets disposal for reserved lands at year-end.
13. Construction in progress
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Balance at year-end | Balance at year-begin |
| Construction in progress | 252,494,792.31 | 464,558,352.60 |
13.1 Construction in progress
(1) Details of construction in progress
| Item | Balance at year-end | Balance at year-begin | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Changhong Air Conditioner- relocation of production base and upgrading & expansion | 115,113,691.81 | 115,113,691.81 | 320,579,598.28 | 320,579,598.28 | ||
| Construction of washing machine plant | 72,019,665.48 | 72,019,665.48 | 54,004,325.69 | 54,004,325.69 | ||
| Other petty projects | 20,870,100.43 | 20,870,100.43 | 15,562,870.33 | 15,562,870.33 | ||
| Equipment to be installed | 16,790,792.47 | 16,790,792.47 | 1,416,851.00 | 1,416,851.00 | ||
| Project of the application of MES system during manufacturing | 7,259,356.79 | 7,259,356.79 | 3,545,478.16 | 3,545,478.16 | ||
| Capacity enlargement and technology improvement project for Air-conditioner Company | 6,848,640.93 | 6,848,640.93 | 3,188,095.36 | 3,188,095.36 | ||
| Construction of intelligent manufacturing | 4,441,461.82 | 4,441,461.82 | 31,389,804.22 | 31,389,804.22 | ||
| Technical transformation project of Zhongshan Changhong | 2,670,888.52 | 2,670,888.52 | 4,119,899.02 | 4,119,899.02 | ||
| Construction of laboratory (inspection center) | 2,283,246.03 | 2,283,246.03 | 4,847,375.61 | 4,847,375.61 | ||
| Line modification for R290 | 1,769,230.77 | 1,769,230.77 | 1,769,230.77 | 1,769,230.77 | ||
| Production efficiency improvement project of the Line C for the overseas Refrigerator Manufacture Company | 1,327,155.18 | 1,327,155.18 | 2,112,500.01 | 2,112,500.01 | ||
| Upgrade project for the production line of Mianyang Meiling Intelligent Refrigerator | 666,500.00 | 666,500.00 | 3,322,079.08 | 3,322,079.08 | ||
| Jiangxi Meiling – construction of the production line for producing one million energy-saving smart refrigeration annually | 434,062.08 | 434,062.08 | 5,065,550.61 | 5,065,550.61 | ||
| Reform project of the EPS house of the Company | 2,826,825.99 | 2,826,825.99 | ||||
| Temperature control project of the manufacturing Company of big refrigerator | 4,084,254.68 | 4,084,254.68 | ||||
| Improvement for the double-gun injection of line J | 2,951,970.77 | 2,951,970.77 | ||||
| Project of cancel spraying for the side panel of refrigerator‘s door | 2,021,643.02 | 2,021,643.02 | ||||
| Reform of the overseas air patenting line; project of cabinet foam line for Line D | 1,750,000.00 | 1,750,000.00 | ||||
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Balance at year-end | Balance at year-begin | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Total | 252,494,792.31 | 252,494,792.31 | 464,558,352.60 | 464,558,352.60 | ||
(1) Changes in significant construction in progress
| Projects | Book balance at period-begin | Increase in Current Year | Transfer to fixed assets in Current Year | Other decrease | Book balance at year-end | Source of funds |
| Construction of laboratory (inspection center) | 4,847,375.61 | 24,897,451.83 | 27,421,822.48 | 39,758.93 | 2,283,246.03 | Raise |
| Construction of washing machine plant | 54,004,325.69 | 63,026,900.67 | 40,163,569.02 | 4,847,991.86 | 72,019,665.48 | Self-raised/ Raise |
| Construction of intelligent manufacturing | 31,389,804.22 | 15,926,098.17 | 42,137,815.26 | 736,625.31 | 4,441,461.82 | Raise |
| Changhong Air Conditioner- relocation of production base and upgrading & expansion | 320,579,598.28 | 398,819,300.06 | 604,285,206.53 | 115,113,691.81 | Self-raised |
(Continued)
| Projects | Budget (in 10 thousand Yuan) | Proportion of project investment in budget | Progress | Accumulated amount of interest capitalization | including: interest capitalized amount of Current Year | Interest capitalization rate of Current Year |
| Construction of laboratory (inspection center) | 10,748.00 | 79.31% | 90% | |||
| Construction of washing machine plant | 37,121.00 | 77.54% | 80% | |||
| Construction of intelligent manufacturing | 26,128.00 | 73.47% | 95% | |||
| Changhong Air Conditioner- relocation of production base and upgrading & expansion | 84,791.01 | 84.84% | 95% | 2,570,143.02 |
(2) No impairment occurred for construction in progress at year-end
14. Intangible assets
(1) According to intangible assets item
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Land use right | Trademark special right | Non-patent technology | Other | Total |
| I. Original book value | |||||
| 1. Balance at year-begin | 750,239,779.01 | 283,292,439.34 | 391,210,232.68 | 5,884,724.81 | 1,430,627,175.84 |
| 2. Increased in Current Year | 116,070,470.55 | 126,039,983.32 | 8,814,153.52 | 250,924,607.39 | |
| (1) Purchase | 116,070,470.55 | 996,096.28 | 117,066,566.83 | ||
| (2) Internal research | 126,039,983.32 | 7,818,057.24 | 133,858,040.56 | ||
| 3. Decreased in Current Year | 99,611,516.26 | 99,611,516.26 | |||
| (1) Disposal | 99,611,516.26 | 99,611,516.26 | |||
| (2) Other decreased | |||||
| 4. Balance at year-end | 866,310,249.56 | 283,292,439.34 | 417,638,699.74 | 14,698,878.33 | 1,581,940,266.97 |
| II. Accumulated depreciation | |||||
| 1. Balance at year-begin | 144,782,112.28 | 278,725,077.89 | 188,556,900.90 | 983,125.83 | 613,047,216.90 |
| 2. Increased in Current Year | 16,164,616.73 | 3,882,886.80 | 94,820,627.33 | 1,440,043.84 | 116,308,174.70 |
| (1) Provision | 16,164,616.73 | 3,882,886.80 | 94,820,627.33 | 1,440,043.84 | 116,308,174.70 |
| 3. Decreased in Current Year | 400,457.33 | 89,078,182.89 | 89,478,640.22 | ||
| (1) Disposal | 89,078,182.89 | 89,078,182.89 | |||
| (2) Other decreased | 400,457.33 | 400,457.33 | |||
| 4. Balance at year-end | 160,546,271.68 | 282,607,964.69 | 194,299,345.34 | 2,423,169.67 | 639,876,751.38 |
| III. Impairment loss | 4,306,556.42 | 4,508,495.33 | 8,815,051.75 | ||
| IV. Book value | |||||
| 1. Ending book value | 705,763,977.88 | 684,474.65 | 219,032,797.98 | 7,767,213.33 | 933,248,463.84 |
| 2. Opening book value | 605,457,666.73 | 4,567,361.45 | 202,653,331.78 | 4,901,598.98 | 817,579,958.94 |
The intangible assets resulted from internal research takes 8.46% of the balance of intangible assets atyear-end
(2) No land use right without property certification done at year-end
(3) Up to end of the 2019, 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 | 18,296,229.31 | |
| Land use right | Wan(2019) Hefei Property No.: | 477,550.03 | 246,761,869.37 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Name | Property certificate serials | Area(M2) | Net book value | Note |
| 1148244/1148249/1148243/1148240/1148248/1148246/1148241/1148238/1149101/1148242/1148245/1148239/1148237/1148250/1148247/1149102 | ||||
| Land use right | Wan(2019) Feixi County Property No.: 0061435/0061445 | 33,383.10 | 13,866,880.01 | |
| Land use right | Wan(2019) Feixi County Property No.: 0061456/0061447/0061438/0061440/0061452/0061450/0061430/0061657 | 82,850.51 | 19,080,603.99 | |
| Total | 620,903.86 | 298,005,582.68 |
15. Development expense
| Item | Balance at year-begin | Increased in Current Year | Decreased in Current Year | Balance at year-end | |||
| Internal development expenditure | Other | Included in current profits and losses | Confirmed as intangible assets | Other | |||
| Technology development for Air-conditioner | 50,360,181.92 | 54,087,605.91 | 1,401,408.90 | 63,058,463.95 | 39,987,914.98 | ||
| Technology development for refrigerator | 57,383,653.72 | 73,438,034.63 | 842,954.39 | 68,887,989.37 | 61,090,744.59 | ||
| Other technology development | 467,130.96 | 1,444,456.28 | 1,911,587.24 | ||||
| Total | 108,210,966.60 | 128,970,096.82 | 2,244,363.29 | 133,858,040.56 | 101,078,659.57 | ||
16. Goodwill
(1) Original value of goodwill
| Invested enterprise | Balance at year-begin | Increased in Current Year | Decreased in Current Year | Balance at year-end | ||
| Formation from enterprise merger | Other | Formation from enterprise merger | Other | |||
| Hefei Meiling Group Holdings Limited | 3,553,367.77 | 3,553,367.77 | ||||
| Guangxi Huidian Home Appliance Co., Ltd. | 5,313,913.50 | 5,313,913.50 | ||||
| Total | 8,867,281.27 | 8,867,281.27 | ||||
(2) Goodwill Impairment loss
| Invested enterprise | Balance at year-begin | Increased in Current Year | Decreased in Current Year | Balance at year-end | ||
| Provision | Other | Provision | Other | |||
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Invested enterprise | Balance at year-begin | Increased in Current Year | Decreased in Current Year | Balance at year-end | ||
| Provision | Other | Provision | Other | |||
| Hefei Meiling Group Holdings Limited | 3,553,367.77 | 3,553,367.77 | ||||
| Guangxi Huidian Home Appliance Co., Ltd. | 5,313,913.50 | 5,313,913.50 | ||||
| Total | 8,867,281.27 | 8,867,281.27 | ||||
Note: The Company‘s goodwill has been fully accrued for impairment reserves at year-end.
17. Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets without the offset
| Item | Balance at year-end | Balance at year-begin | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Deferred income tax assets recognized from property depreciation preparation | 65,074,900.25 | 9,761,235.04 | 163,800,143.96 | 25,443,182.41 |
| Deferred income tax assets recognized from accrual liability | 158,742,319.21 | 23,811,347.88 | 266,641,323.73 | 39,996,198.56 |
| Deferred income tax assets recognized from Dismission welfare | 16,996,022.45 | 2,549,403.37 | 23,369,410.19 | 3,505,411.53 |
| Deferred income tax assets recognized from deferred income | 109,766,307.31 | 16,464,946.10 | 113,016,902.89 | 16,952,535.44 |
| Deferred income tax assets recognized from ir-reparable losses | 295,681,201.10 | 44,352,180.17 | 125,576,447.96 | 18,836,467.19 |
| Deferred income tax assets recognized from changes in the fair value | 46,033,136.96 | 6,904,970.53 | ||
| Accrued income tax assets | 3,427,103.89 | 514,065.58 | 3,765,940.62 | 564,891.09 |
| Total | 649,687,854.21 | 97,453,178.14 | 742,203,306.31 | 112,203,656.75 |
The Company‘s long-term equity investment impairment provisions are the investments in its subsidiaries, ChangmeiTechnology Co., Ltd. and Meiling Candy Washing Machine Co., Ltd., these two subsidiaries are expected to be cancelled in2020, and the Company also confirmed deferred income tax assets while confirming the impairment provisions. Thesubsidiaries have unrecovered losses, at the consolidation level, the deferred income tax assets recognized in the Company‘slong-term equity investment impairment provisions are adjusted to be the deferred income tax assets generated from therecoverable losses.
(2) Deferred income tax liabilities without the offset
| Item | Balance at year-end | Balance at year-begin | ||
| Taxable temporary differences | Deferred income tax liability | Taxable temporary differences | Deferred income tax liability | |
| Recognized by fixed assets depreciation | 36,760,223.60 | 5,514,033.54 | 20,657,994.05 | 3,098,699.11 |
| Recognized by changes in fair value | 4,951,504.00 | 742,725.60 | ||
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Balance at year-end | Balance at year-begin | ||
| Taxable temporary differences | Deferred income tax liability | Taxable temporary differences | Deferred income tax liability | |
| Total | 41,711,727.60 | 6,256,759.14 | 20,657,994.05 | 3,098,699.11 |
(3) Details of unrecognized deferred income tax assets
| Item | Balance at year-end | Balance at year-begin |
| Deductible temporary difference | 148,160,001.57 | 44,702,678.05 |
| Deductible loss | 721,832,411.79 | 487,578,430.48 |
| Total | 869,992,413.36 | 532,281,108.53 |
18. Short-term loans
(1) Category of short-term loans
| Category | Balance at year-end | Balance at year-begin |
| Loan in pledge | 147,438,160.00 | 199,260,520.00 |
| Guaranteed loan | 46,794,941.14 | 9,200,000.00 |
| Loan in credit | 909,757,944.82 | 1,876,648,262.82 |
| Bill financing | 251,265,146.80 | |
| Total | 1,103,991,045.96 | 2,336,373,929.62 |
Short-term loans at Current Year-end:
1) The Company entered into a RMB Fund Transfer Contract with Anhui province Branch of CCB with oneyear in term. Term of borrowing from 23 January 2019 to 23 January 2020. Fixed interest rate of 3.57%, theloan amount is 89,000,000.00 Yuan.
2) The Company entered into a RMB Fund Transfer Contract with Anhui province Branch of CCB with 365days in term. Term of borrowing from 8 March 2019 to 6 March 2020. Fixed interest rate of 3.50%, the loanamount is 200,000,000.00 Yuan.
3) The Company entered into an Opening Domestic Letter of Credit Contract with economic developmentzone Branch of Huishang Bank Corporation Limited. Term of borrowing from 16 April 2019 to 10 April2020. Borrowing rate of 3.70%, the loan amount is 700,000,000.00 Yuan.
4) The Company entered into a Tripartite Agreement on Buyer‘s Interest Payment under Domestic L/C withHefei Branch of China Everbright Bank, term of borrowing from 16 April 2019 to 10 April 2020. Borrowingrate of 3.48%, the loan amount is 80,000,000.00 Yuan.
5) The Company entered into a Liquidity Loan Contract with Anhui Province Branch of Bank ofCommunications with one year in term. Term of borrowing from 25 April 2019 to 25 April 2020. Fixed
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
interest rate of 4.35%, the loan amount is 70,000,000.00 Yuan.
6) The Company entered into a Domestic L/C Opening Contract with Hefei Changjiang East Road Branch ofICBC. Term of borrowing from 27 May 2019 to 18 May 2020. Fixed interest rate of 3.78%, the loan amountis 25,000,000.00 Yuan.
7)The Company entered into a Contract for Loans in RMB with Huaining Road Branch of Hefei Science
&Technology Rural Commercial Bank, contract agreed to has 12 months in terms, and term of borrowingfrom 19 August 2019 to 19 August 2020. Fixed interest rate of 4.5675%, the loan amount is 5,000,000.00Yuan.
8) The Company entered into a Contract for Loans of Working Capital with Anhui Branch of Bank ofCommunication, contract agreed to has 12 months in terms, and interest counted from the date of loan entry,duration of credit is from 24 Sept. 2019 to 24 Sept. 2020; Fixed interest rate of 4.00 %, the loan amount is100,000,000.00 Yuan.
9)The Company entered into a Contract for Loans of Working Capital with Anhui Development Zone Branchof Bank of China, contract agreed to has 12 months in terms, and counted from the actual withdrawal date.The Company withdrawal on 26 September 2019. Term of borrowing from 26 September 2019 to 25September 2020. every 12 months is a floating period based on floating rate method, the loan amount is50,000,000.00 Yuan.
10)The Company entered into a Contract for Loans of Working Capital with Anhui Branch of Bank of
Communication, contract agreed to has 12 months at most in terms, and counted from the actual lending day.The Company withdrawal on 26 November 2019. Term of borrowing from 26 November 2019 to 25September 2020. Fixed interest rate of 4.00%, the loan amount is 100,000,000.00 Yuan.
11)The Company entered into a Contract for Opening the Domestic L/C with Bank of Jiujiang, the forfaitingcost is 3.3%, opening charge is 0.15% and comprehensive cost is 3.45%. Term of borrowing from 23 October2019 to 22 October 2020. Fixed interest rate of 3.3%, the loan amount is 50,000,000.00 Yuan.
12)The Company entered into a Forfaiting Business Contract with Anhui Branch of Bank of Communication,
applying a short-term loans of 100,000,000.00 yuan with bill pledge method. Term of borrowing from 27December 2019 to 24 December 2020. Fixed interest rate of 3.25%.
13) The Company entered into a Domestic L/C Opening Contract with Bank of Jiujiang, subsidiary -JiangxiMeiling Electric Appliance Co., Ltd. applying a short-term loans of 70,757,944.82 yuan to Hefei branch ofBank of Jiujiang with L/C buy-out without recourse. Term of borrowing from 14 March 2019 to 13 March2020. Borrowing rate of 3.35%.
14)The subsidiary - Zhongshan Changhong Electric Co., Ltd entered into a International Trade Financing
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
Contract of Agricultural Bank of China with Zhongshan Nantou Branch of ABC, the subsidiary applying ashort-term loans of $ 2,500,000.00 to Zhongshan Nantou Branch of ABC with export invoice financing.Term of borrowing from 26 December 2019 to 18 June 2020. Borrowing rate of 2.67%.
15)The subsidiary - Zhongshan Changhong Electric Co., Ltd entered into a International Trade FinancingContract of China Construction Bank with Zhongshan Branch of CCB, the subsidiary applying a short-termloans of $ 4,300,000.00 to Zhongshan Branch of CCB with export invoice financing. Term of borrowingfrom 23 December 2019 to 19 June 2020. Borrowing rate of 2.90%.
16) Subsidiary - Changhong Ruba Trading Company(Private) Limited entered into a Loan Agreement
with Karachi Branch of Bank of China, applying a short-term loans of 395,300,000.00 rupees in January2019 through the guarantee under Changhong Meiling. Term of borrowing from 28 January 2019 to 28January 2020. Borrowing rate of 10.84%.
17) Subsidiary - Changhong Ruba Trading Company(Private) Limited entered into a Loan Agreement
with Karachi Branch of Bank of China, applying a short-term loans of 439,290,000.00 rupees inDecember 2019 through the guarantee under Changhong Meiling. Term of borrowing from 23 December
2019 to 23 December 2020. Fixed interest rate of 14.04%.
18) The subsidiary - Zhongke Meiling Company entered into a Contract for Loans of Working Capital withAnhui Branch of Bank of China, applying a short-term loans of 9,200,000.00 yuan to Anhui Branch ofBOC with guarantee under the Company. Term of borrowing from 29 June 2019 to 29 June 2020, andadopt a floating rate, a floating cycle is every 12 months.
(2) No overdue short-term loans outstanding at year-end.
19. Tradable financial liability
| Item | Balance at year-end | Balance at year-begin |
| Tradable financial liability | 1,081,534.93 | 55,586,666.70 |
| Including: Derivative financial liability | 1,081,534.93 | 55,586,666.70 |
20. Note payable
| Category | Balance at year-end | Balance at year-begin |
| Bank acceptance | 3,298,019,669.51 | 3,284,348,686.53 |
| Trade acceptance | 192,251,812.89 | 443,405,713.07 |
| Total | 3,490,271,482.40 | 3,727,754,399.60 |
Note: no notes expired at period-end without paid
21. Account payable
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
(1) Account age
| Item | Balance at year-end | Balance at year-begin |
| Total | 2,343,116,374.58 | 2,282,174,981.38 |
| Including: over one year | 76,194,618.91 | 75,298,651.56 |
(2) No major account payable with over one year book age at year-end.
22. Account received in advance
(1) Account age
| Item | Balance at year-end | Balance at year-begin |
| Total | 425,149,194.97 | 354,551,354.80 |
| Including: over one year | 20,537,871.81 | 46,153,276.08 |
(2) No major account received in advance with over one year age at year-end
23. Wages payable
(1) Category
| Item | Balance at year-begin | Increased in Current Year | Decreased in Current Year | Balance at year-end |
| Short-term compensation | 155,874,082.33 | 1,486,043,036.01 | 1,464,514,212.31 | 177,402,906.03 |
| After-service welfare- defined contribution plans | 3,468,236.56 | 97,793,926.82 | 93,808,369.66 | 7,453,793.72 |
| Dismiss welfare | 4,296,308.90 | 23,888,181.49 | 16,534,015.46 | 11,650,474.93 |
| Total | 163,638,627.79 | 1,607,725,144.32 | 1,574,856,597.43 | 196,507,174.68 |
(2) Short-term compensation
| Item | Balance at year-begin | Increased in Current Year | Decreased in Current Year | Balance at year-end |
| Wages, bonuses, allowances and subsidies | 148,199,467.67 | 1,354,480,778.53 | 1,332,391,510.98 | 170,288,735.22 |
| Welfare for workers and staff | 201,843.00 | 41,734,765.59 | 41,297,300.23 | 639,308.36 |
| Social insurance | 1,939,268.68 | 45,070,325.52 | 45,239,348.52 | 1,770,245.68 |
| Including: Medical insurance | 1,745,030.71 | 41,963,965.09 | 42,091,207.07 | 1,617,788.73 |
| Work injury insurance | 128,176.10 | 1,622,138.45 | 1,687,123.04 | 63,191.51 |
| Maternity insurance | 66,061.87 | 1,484,221.98 | 1,461,018.41 | 89,265.44 |
| Housing accumulation fund | 3,685,537.29 | 39,998,822.22 | 40,098,243.02 | 3,586,116.49 |
| Labor union expenditure and personnel education expense | 1,847,965.69 | 4,758,344.15 | 5,487,809.56 | 1,118,500.28 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Balance at year-begin | Increased in Current Year | Decreased in Current Year | Balance at year-end |
| Total | 155,874,082.33 | 1,486,043,036.01 | 1,464,514,212.31 | 177,402,906.03 |
(3) Defined contribution plans
| Item | Balance at year-begin | Increased in Current Year | Decreased in Current Year | Balance at year-end |
| Basic endowment insurance | 2,680,604.52 | 92,532,876.66 | 89,999,604.82 | 5,213,876.36 |
| Unemployment insurance | 787,632.04 | 5,261,050.16 | 3,808,764.84 | 2,239,917.36 |
| Total | 3,468,236.56 | 97,793,926.82 | 93,808,369.66 | 7,453,793.72 |
24. Tax payable
| Item | Balance at year-end | Balance at year-begin |
| Value-added tax | 31,073,647.86 | 63,860,640.63 |
| Enterprise income tax | 2,100,004.27 | 3,112,632.27 |
| Individual income tax | 3,080,366.29 | 2,384,041.50 |
| Urban maintenance and construction tax | 3,279,877.94 | 8,430,591.08 |
| Real estate tax | 6,023,111.75 | 6,527,533.98 |
| Land use tax | 2,757,210.52 | 2,870,637.90 |
| Educational surtax | 2,389,535.13 | 6,043,987.22 |
| Stamp tax | 3,033,620.58 | 1,481,453.67 |
| Construction fund of Water Conservancy Projects | 759,372.01 | 547,748.65 |
| Treatment fund for abandon electrics & electronics | 12,489,459.00 | 14,421,381.00 |
| Other | 1,572,186.31 | 72,784.27 |
| Total | 68,558,391.66 | 109,753,432.17 |
25. Other account payable
| Item | Balance at year-end | Balance at year-begin |
| Interest payable | 12,340,385.61 | 7,519,756.26 |
| Dividend payable | 3,579,491.94 | 17,317,286.45 |
| Other account payable | 673,557,725.66 | 635,483,317.55 |
| Total | 689,477,603.21 | 660,320,360.26 |
25.1 Interest payable
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(1) Category
| Item | Balance at year-end | Balance at year-begin |
| Interest on long-term borrowings for repayment of principal of installment maturity | 466,340.02 | 166,494.25 |
| Interest of short-term loans | 11,874,045.59 | 7,353,262.01 |
| Total | 12,340,385.61 | 7,519,756.26 |
(2) No significant overdue and unpaid interest at year-end.
25.2 Dividends payable
| Item | Balance at year-end | Balance at year-begin |
| City Insurance company | 598,054.05 | 524,279.25 |
| BOC- Fullgoal Tianyi Securities Investment Fund | 153,697.50 | 153,697.50 |
| 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 |
| Sichuan Changhong Electric Co., Ltd. | 14,082,358.08 | |
| Other units | 1,990,465.23 | 1,822,961.12 |
| Total | 3,579,491.94 | 17,317,286.45 |
Note: Balance at year-end refers to the common dividends that not receiving by shareholders.
25.3 Other account payable
(1) Other account payable by nature
| Nature | Balance at year-end | Balance at year-begin |
| 1.Accrued expenses (expenses occurred without reimbursed) | 487,992,668.34 | 467,314,369.66 |
| 2. Receivables received temporary and deducted temporary | 14,950,208.02 | 17,869,297.44 |
| 3.Deposit, margin | 114,946,522.03 | 92,960,934.56 |
| 4.Not the come-and-go with related parties in statement scope | 14,101,588.30 | 7,993,374.18 |
| 5. Other | 41,566,738.97 | 49,345,341.71 |
| Total | 673,557,725.66 | 635,483,317.55 |
(2) At end of Current Year, the major other account payable with account age over one year mainly refers tothe sale of margin.
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
26. Non-current liability due within one year
(1) Classification of non-current liability due within one year
| Item | Balance at year-end | Balance at year-begin |
| Long term borrowings due within one year | 250,300,000.00 | |
| Long term account payable due within one year | 1,708,193.90 | 7,000,000.00 |
| Deferred income transfer to gains and losses within one year | 16,382,737.85 | |
| Total | 1,708,193.90 | 273,682,737.85 |
27. Long term borrowings
(1) Category of long term borrowings
| Category | Amount at year-end | Amount at year-begin |
| Loan in mortgage | 101,280,000.00 | 1,920,000.00 |
| Loan in credit | 300,000,000.00 | |
| Total | 401,280,000.00 | 1,920,000.00 |
(2) Long-term borrowings at year-end
| Loan from | Borrowing day | Returning day | Foreign currency | Interest rate | Amount at year-end (RMB) | Amount at year-begin (RMB) |
| 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) Anhui Province Branch Note 2 | 2019/05/30 | 2021/05/30 | RMB | 3.685% | 300,000,000.00 | |
| EIBC (Export-Import Bank) Anhui Province Branch Note 3 | 2019/12/23 | 2026/12/23 | RMB | 4.605% | 100,000,000.00 | |
| Total | 401,280,000.00 | 1,920,000.00 |
1) In August of 2006, the Company signed Asset Mortgage Agreement with Ministry of Finance of Hefei. Ittakes five industry crusher chambers which cover an area of 2,322.98 square meters as mortgage for theCompany to get the lending of treasury bond fund which has 15-year term and worthy of RMB 7,040,000from the Ministry of Finance of Hefei. The capital on-lending began to bear interest from the appropriatedate (November 9, 2006), which would be paid by stages in the loan period to Ministry of Finance of Hefeiby the Company. The first four years were grace period, during which the annual interest rate was subject tofloating 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 theProperties in Feidong Longgang Industrial Park of Hefei Meiling Co., Ltd. (HCJ (2006) No.85) issued by the
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
finance office of Hefei, Meiling commenced the national purchase of its land parcels in Longgang incompliance with the land planning of Hefei municipal government, which required its properties inLonggang land parcel to be unrestricted. The real estate for mortgage lifted in 2006 of the Company withregistration No. HGYJCZ No.0121 which was used as the security for treasury bonds lending capital (detailswere set out in Note VI.14).
2) The Company signed a ―Loan Contract (Export Seller‘s Credit)‖ with the Anhui Branch of theExport-Import Bank, the contract period is 24 months, counting from the actual withdrawal date, the actualwithdrawal date of the company is May 30, 2019, and the loan period is from May 30, 2019 to May 30, 2021.The execution rate of the seller‘s credit interest rate is increased by 10%, and the interest is paid quarterly,the settlement dates are March 20, June 20, September 20, and December 20, and the ending balance is300,000,000.00 yuan.
3) The Company signed a ―Loan Contract (Promoting Domestic Opening-up of Loans-Fixed Assets)‖ withAnhui Branch of the Export-Import Bank of China, taking fixed assets and intangible assets of the Companyas mortgages for the long-term loans of 100 million yuan. The contractual term is 84 months, the borrowingperiod is from December 23, 2019 to December 23, 2026, the borrowing rate is determined by the marketquoted interest rate of loans with a term of more than 5 years minus 0.195%, which fluctuates annually, andthe loan amount is 100,000,000.0 yuan.
28. Long-term payable
| Item | Balance at year-end | Balance at year-begin |
| Long-term account payable | 1,486,921.44 | 3,487,208.00 |
| Special payable | 1,530,000.00 | 1,530,000.00 |
| Total | 3,016,921.44 | 5,017,208.00 |
28.1 Classify by nature
| Nature | Balance at year-end | Balance at year-begin |
| Financing lease | 1,486,921.44 | 3,487,208.00 |
28.2 Special payable
| Item | Balance at year-begin | Increased in Current Year | Decreased in Current Year | Balance at year-end | Reason |
| Special funds for technological transformation from Zhongshan | 1,530,000.00 | 1,530,000.00 | Technology plan project in Zhongshan City |
29. Long-term wage payable
| Item | Balance at year-end | Balance at year-begin |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Balance at year-end | Balance at year-begin |
| Dismissal welfare | 13,774,110.61 | 19,073,101.29 |
According to the internal early retirement policy, the long-term payable dismissal welfare bears by theCompany up to end of Current Year amounting to RMB 13,774,110.61
30. Accrual liability
| Item | Balance at year-end | Balance at year-begin | Reason |
| Product quality guarantee note1 | 15,427,220.80 | 12,952,457.86 | Guarantee of product |
| Guarantee fund for quality service note1 | 150,671,923.17 | 247,060,570.02 | Guarantee of product |
| Penalty expenses | 13,050,649.33 | Penalty | |
| Total | 166,099,143.97 | 273,063,677.21 |
Note 1: Product quality deposit is the maintenance expense provided by the Company under the nationalpolicy, while quality service special guarantees capital is the warranty costs provided for product quality inaddition to such policy. Parts of the commitments on product quality assurance beyond the national threeguarantees policy are expired in 2019, the accrual liability that have not been anticipated has written-off inCurrent Year, actually 94,506,086.18 Yuan written-off.
31. Deferred income
(1) Classification of deferred income
| Item | Amount at year-end | Amount at year-begin |
| Government subsidies---subsidies of development project | 135,392,959.96 | 116,035,026.43 |
| Government subsidies---subsidies of Relocation | 44,578,011.96 | 44,215,937.17 |
| Total | 179,970,971.92 | 160,250,963.60 |
(2) Government subsidy
| Item | Amount at year-begin | New subsidy in Current Year | Amount reckoned into other income in Current Year | Other changes | Amount at year-end | Assets related/Income related |
| Demolition compensation of Changhong Meiling | 40,254,943.27 | 1,999,652.91 | -2,358,104.44 | 40,613,394.80 | Assets related | |
| Technical transformation of the Athena project | 4,877,812.50 | 4,286,250.00 | -4,286,250.00 | 4,877,812.50 | Assets related | |
| Freezer project of Changhong Meiling | 734,062.42 | 734,062.52 | -734,062.52 | 734,062.42 | Assets related | |
| Promoting the new industry ( annual output of 0.6 million medium& large volume environmental protection and | 1,065,443.73 | 304,412.52 | -304,412.52 | 1,065,443.73 | Assets related |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Item | Amount at year-begin | New subsidy in Current Year | Amount reckoned into other income in Current Year | Other changes | Amount at year-end | Assets related/Income related |
| energy saving freezer) | ||||||
| Research and application of the MCU chip for inverter control | 2,300,000.00 | 2,300,000.00 | Assets related | |||
| Subsidies for intelligent transformation & upgrading of enterprises from the new industrialization policy in economic development zone | 3,886,414.58 | 605,675.00 | -605,675.00 | 3,886,414.58 | Assets related | |
| Research and application of the VISA (variable frequency volume integrated intelligent air-conditioner) | 5,872,093.04 | 1,409,302.33 | -1,409,302.33 | 5,872,093.04 | Assets related | |
| Promotion of the energy-saving room air conditioner | 1,069,072.21 | 210,309.24 | -210,309.24 | 1,069,072.21 | Assets related | |
| Adaptability improvement on new coolants production | 11,824,908.42 | 2,364,981.72 | -2,364,981.72 | 11,824,908.42 | Assets related | |
| Industrialization of intelligent white household appliances software platform and typical application research and development | 3,030,303.05 | 727,272.71 | -727,272.71 | 3,030,303.05 | Assets related | |
| Special funds for strategic emerging industry and high-end growth industry | 2,000,000.00 | 2,000,000.00 | Assets related | |||
| Key chip and module for transducer used and detection capacity building | 6,840,000.00 | 6,840,000.00 | Assets related | |||
| Changhong Air Conditioner- relocation of production base and upgrading & expansion | 6,880,000.00 | 6,880,000.00 | Assets related | |||
| Demonstration factory construction for the intelligent manufacturing of intelligent air-conditioner | 49,500,000.00 | 49,500,000.00 | Assets related | |||
| 2018 Zhongshan Special fund for industrial development - Special topic of technical transformation | 730,232.58 | 265,723.80 | -265,723.77 | 730,232.55 | Assets related | |
| Special fund, government subsidy CZ059001 | 4,200,000.00 | 4,200,000.00 | Assets related | |||
| Centre for external cooperation of the environmental protection | 2,538,300.00 | 2,538,300.00 | Assets related | |||
| Special fund for technical improvement | 478,116.29 | 96,727.01 | -96,727.01 | 478,116.29 | Assets related | |
| Technical renovation of air conditioner production line | 286,596.77 | 61,203.83 | -61,203.83 | 286,596.77 | Assets related | |
| Government subsidy for new plant construction - industrialization of cryogenic refrigeration equipment | 3,791,666.67 | 500,000.00 | -500,000.00 | 3,791,666.67 | Assets related |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Amount at year-begin | New subsidy in Current Year | Amount reckoned into other income in Current Year | Other changes | Amount at year-end | Assets related/Income related |
| Subsidy for equipment purchasing for Hefei Tech. Improvement project in 2017 | 1,358,630.00 | 179,160.00 | -179,160.00 | 1,358,630.00 | Assets related | |
| Equipment subsidy for the industrial base technical renovation from Economic and Information Commission | 1,782,083.33 | 235,000.00 | -235,000.00 | 1,782,083.33 | Assets related | |
| Subsidy for the development on production line technical reform for green-friendly high-quality metal pipe | 129,493.23 | 40,892.59 | -40,892.59 | 129,493.23 | Assets related | |
| Refrigerator evaporator workshop | 186,295.31 | 29,033.05 | -29,033.05 | 186,295.31 | Assets related | |
| Demolition compensation of Jiangxi Meiling | 3,960,993.98 | 1,794,257.14 | -1,797,880.32 | 3,964,617.16 | Assets related | |
| Special fund for technical improvement | 171,540.98 | 42,885.24 | -42,885.25 | 171,540.99 | Assets related | |
| Innovation development project for the E-Business | 294,353.71 | 370,429.05 | -76,075.34 | Assets related | ||
| Project construction subsidy | 207,607.53 | 265,393.74 | -57,786.21 | Assets related | ||
| Subsidy for industrial development policy from Hefei for first half of 2018 | 10,000,000.00 | 1,250,000.00 | 8,750,000.00 | Assets related | ||
| Policy funds for manufacturing a strong province, subsidy for equipment for the technological transformation of industrial strong base | 5,000,000.00 | 625,000.00 | 4,375,000.00 | Assets related | ||
| Subsidy for purchase of R & D instruments and equipment | 1,176,000.00 | 113,312.50 | 1,062,687.50 | Assets related | ||
| Subsidy from Zhongshan Finance Bureau (CZ028001 provincial special project 2019) | 2,000,000.00 | 296,646.81 | 1,703,353.19 | Assets related | ||
| Subsidy for characteristic innovation and entrepreneurship carrier project from Hefei economic & development zone | 2,000,000.00 | 2,000,000.00 | Assets related | |||
| Upgrade project for the production line of Mianyang Meiling Intelligent Refrigerator | 1,580,000.00 | 65,833.32 | 1,514,166.68 | Assets related | ||
| Provincial innovation-driven development fund | 2,950,000.00 | 2,950,000.00 | - | Assets related | ||
| Technical transformation of refrigerator evaporator workshop | 485,000.00 | 30,312.50 | 454,687.50 | Assets related | ||
| Total | 160,250,963.60 | 25,191,000.00 | 21,853,729.53 | -16,382,737.85 | 179,970,971.92 |
Note: other changes are the non-current liability due within one year is switch back to deferred income,which has re-classified originally
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
32. Share capital
| Item | Balance at year-begin | Change during the period (+、-) | Balance at year-end | ||||
| New shares issued | Bonus share | Shares transferred from capital reserve | Other | Subtotal | |||
| Total shares | 1,044,597,881.00 | 1,044,597,881.00 | |||||
33. Capital reserve
| Item | Amount at year-begin | Increased in Current Year | Decreased in Current Year | Amount at year-end |
| Share premium | 2,636,196,335.76 | 2,979.36 | 2,636,193,356.40 | |
| Other capital reserve | 48,173,262.70 | 48,173,262.70 | ||
| Total | 2,684,369,598.46 | 2,979.36 | 2,684,366,619.10 |
Note: The changes in the share premium of the current year: 1. As a result of the acquisition of some minority shareholders‘equity in Jinan Xiangyou, there is difference between the newly acquired long-term equity investment and the net asset sharethat shall continue to be calculated by the subsidiary from the date of purchase based on the new shareholding ratio. 2. Thedifference between the equity payment that the subsidiary Zhongke Meiling received from the minority shareholders during thecurrent period and the net asset share that shall continue to be calculated by Zhongke Meiling from the date of purchase inaccordance with the new shareholding ratio.
34. Other comprehensive income
| Item | Balance at year-begin | Current Year | Balance at year-end | |||||
| Account before income tax in Current Year | Less: written in other comprehensive income in previous period and carried forward to gains and losses in current period | Less：Income tax expenses | Belong to parent company after tax | Belong to minority shareholders after tax | ||||
| Other comprehensive income re-divided into gains/losses | ||||||||
| Including: conversion difference arising from foreign currency financial statement | -18,143,569.26 | -2,068,017.04 | -787,861.10 | -1,280,155.94 | -18,931,430.36 | |||
35. Surplus reserves
| Item | Amount at year-begin | Increased in Current Year | Decreased in Current Year | Amount at year-end |
| Statutory surplus reserve | 284,043,041.22 | 11,136,116.82 | 295,179,158.04 | |
| Discretionary surplus reserve | 115,607,702.16 | 115,607,702.16 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Item | Amount at year-begin | Increased in Current Year | Decreased in Current Year | Amount at year-end |
| Total | 399,650,743.38 | 11,136,116.82 | - | 410,786,860.20 |
36. Retained profit
| Item | Current Year | 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 | ||
| Amount at the beginning of this year | 901,498,253.96 | 937,894,771.93 |
| Add: net profit attributable to shareholders of parent company for this year | 56,441,479.14 | 38,658,256.97 |
| Less: withdraw of statutory surplus reserve | 11,136,116.82 | 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 | ||
| Amount at the end of this year | 884,127,743.42 | 904,232,582.87 |
37. Operation income and operation cost
(1) Operation income and operation cost
| Item | Current Year | Last Year |
| Main business income | 15,442,277,862.82 | 16,458,650,756.15 |
| Other business income | 1,110,975,032.11 | 1,031,524,193.86 |
| Total | 16,553,252,894.93 | 17,490,174,950.01 |
| Main business cost | 12,416,146,774.23 | 13,273,395,942.04 |
| Other business cost | 1,039,545,602.62 | 953,006,078.36 |
| Total | 13,455,692,376.85 | 14,226,402,020.40 |
(2) Main business classified according to product
| Product | Current Year | Last Year | ||
| Operation income | Operation cost | Operation income | Operation cost | |
| Refrigerator, freezer | 7,904,855,681.11 | 6,064,938,890.53 | 8,167,773,533.33 | 6,390,896,089.57 |
| Air-conditioner | 5,908,762,786.45 | 4,996,871,222.18 | 6,777,093,389.43 | 5,636,463,273.39 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Product | Current Year | Last Year | ||
| Operation income | Operation cost | Operation income | Operation cost | |
| Washing machine | 434,111,186.88 | 353,622,961.34 | 513,917,450.54 | 395,766,646.08 |
| Small household appliances and kitchen and bathroom | 993,937,389.59 | 835,102,165.41 | 689,072,966.20 | 583,308,199.41 |
| Other | 200,610,818.79 | 165,611,534.77 | 310,793,416.65 | 266,961,733.59 |
| Total | 15,442,277,862.82 | 12,416,146,774.23 | 16,458,650,756.15 | 13,273,395,942.04 |
(3) Main business classified according to sales region
| Region | Current Year | Last Year | ||
| Operation income | Operation cost | Operation income | Operation cost | |
| Domestic | 11,534,341,837.69 | 9,040,203,991.36 | 12,748,897,296.29 | 9,988,923,192.37 |
| Overseas | 3,907,936,025.13 | 3,375,942,782.87 | 3,709,753,459.86 | 3,284,472,749.67 |
| Total | 15,442,277,862.82 | 12,416,146,774.23 | 16,458,650,756.15 | 13,273,395,942.04 |
Top five clients have income in sales of RMB 6,099,260,682.93 in total, a 36.85% in total operationincome.
38. Business tax and extra charges
| Item | Current Year | Last Year |
| Treatment fund for abandon electrics & electronics | 60,529,942.00 | 60,177,558.00 |
| City construction tax | 30,493,037.22 | 24,305,750.41 |
| Extra charge for education and local education surcharge | 22,102,924.13 | 17,875,282.24 |
| Real estate tax | 17,137,312.39 | 13,856,622.90 |
| Stamp duty | 12,018,022.40 | 8,963,160.80 |
| Land use tax | 7,029,712.20 | 7,021,001.03 |
| Water fund | 2,634,354.33 | 4,342,756.81 |
| Other | 1,120,422.24 | 2,372,926.42 |
| Total | 153,065,726.91 | 138,915,058.61 |
39. Sales expense
| Item | Current Year | Last Year |
| Salary, extra charges and labor service fee | 652,044,483.91 | 635,315,875.59 |
| Transport expenses | 499,344,342.58 | 527,985,392.22 |
| Market support fee | 470,013,932.98 | 491,986,205.05 |
| Air conditioner installation fee | 256,658,116.20 | 397,693,064.53 |
| National three guarantees expense | 103,386,444.62 | 160,967,334.26 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Current Year | Last Year |
| Storage lease expenses | 117,617,330.25 | 131,417,625.27 |
| Travelling expenses | 49,979,196.42 | 52,346,471.72 |
| Advertising fee | 21,419,915.53 | 37,340,848.88 |
| Operation activities expenses | 22,988,306.75 | 23,804,644.95 |
| Meeting organization expenses | 11,046,982.91 | 9,370,395.41 |
| House-lease expenses | 18,973,583.57 | 19,148,254.52 |
| Depreciation expenses | 7,344,357.95 | 7,504,623.38 |
| Communication expenses | 5,715,469.87 | 8,496,026.11 |
| Other | 83,830,056.41 | 72,900,407.97 |
| Total | 2,320,362,519.95 | 2,576,277,169.86 |
40. Administration expense
| Item | Current Year | Last Year |
| Salary and social insurance etc. | 187,993,971.35 | 167,788,089.71 |
| Depreciation | 19,205,351.97 | 20,055,571.17 |
| Amortized intangible assets | 19,321,311.93 | 19,376,395.84 |
| Board fees | 1,546,949.10 | 17,279,114.44 |
| Water and electricity fee | 15,055,164.38 | 10,973,983.83 |
| Domestic travelling fee | 6,681,174.67 | 6,936,778.04 |
| Property insurance fee | 4,539,551.94 | 5,405,723.64 |
| Business activities fee | 5,132,130.61 | 5,175,165.28 |
| Office fee | 5,116,649.46 | 5,051,067.65 |
| Inspection and authentication fee | 2,203,362.58 | 2,825,310.81 |
| Other | 63,891,525.83 | 57,050,347.62 |
| Total | 330,687,143.82 | 317,917,548.03 |
41. R&D expenses
| Item | Current Year | Last Year |
| Salary and social insurance etc. | 110,566,764.34 | 91,047,499.76 |
| Amortized intangible assets | 93,222,550.36 | 58,584,357.96 |
| Trial fee of R&D | 45,301,220.97 | 19,119,854.48 |
| Technical development cost | 15,721,270.26 | 13,885,813.48 |
| Inspection and authentication fee | 13,478,419.82 | 12,977,420.74 |
| Depreciation | 9,640,335.06 | 6,434,865.22 |
| Cost of mould | 5,407,099.44 | 5,310,839.33 |
| Software royalty | 2,424,431.50 | 2,954,351.56 |
| Domestic travel expenses | 1,964,177.16 | 1,931,601.98 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Current Year | Last Year |
| Other | 36,492,420.78 | 23,052,793.55 |
| Total | 334,218,689.69 | 235,299,398.06 |
42. Financial expenses
| Item | Current Year | Last Year |
| Interest expenditure | 93,523,492.74 | 101,451,047.10 |
| Less: Interest income | 133,568,862.29 | 127,986,419.36 |
| Add: exchange loss | 17,118,898.27 | -12,186,113.99 |
| procedure charge expenditure | 8,795,468.59 | 13,167,973.40 |
| discount expenditure | -85,047.91 | -13,752,095.89 |
| Total | -14,216,050.60 | -39,305,608.74 |
43. Other income
| Item | Current Year | Last Year |
| Subsidy for employment stable | 35,675,926.90 | 1,242,818.98 |
| Immediate refund of VAT for software products | 6,349,543.15 | 5,420,015.89 |
| Special funds for technical transformation of the Athena project | 4,286,250.00 | 4,286,250.00 |
| Supplementary fund for characteristic dual creative carriers of borrowing and transferring | 4,000,000.00 | |
| Enterprise policy funds from Economic and Trade Development Bureau in Hefei economic development zone | 3,500,000.00 | 15,410,000.00 |
| Special funds for provincial-level innovation-driven development | 2,950,000.00 | 2,950,000.00 |
| Provincial-level foreign trade fund subsidy from finance bureau in Hefei economic development zone | 2,857,000.00 | 6,424,936.00 |
| Adaptability improvement on new coolants production | 2,364,981.72 | 2,364,981.72 |
| Subsidy for E-business sales | 2,000,000.00 | |
| Demolition compensation of Changhong Meiling | 1,999,652.91 | 2,382,423.84 |
| Some policy subsidies to support the development of digital economy in Anhui | 1,800,000.00 | |
| Demolition compensation of Jiangxi Meiling | 1,794,257.14 | 1,797,880.32 |
| Logistic subsidy | 1,787,400.00 | 4,170,300.00 |
| Subsidy received from the government to activate idle factories | 1,687,464.00 | |
| Special funds for steady growth of foreign trade in Zhongshan for 2017 | 1,532,797.00 | |
| Enterprise special fund | 1,500,000.00 | |
| Industrial development fund | 1,440,000.00 | |
| Research and application of the VISA (variable frequency volume integrated intelligent air-conditioner) | 1,409,302.33 | 1,409,302.32 |
| Subsidy for talent supporting | 1,395,300.00 | 2,030,669.00 |
| Industrial development policy subsidy | 1,250,000.00 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Item | Current Year | Last Year |
| Award subsidy for industrial linkage development | 1,239,100.00 | |
| Special subsidy for Nanjing Port | 1,234,485.00 | 1,414,840.00 |
| Subsidy for cultivation of the enterprise brand | 1,200,000.00 | 1,400,000.00 |
| Subsidy for export credit insurance | 1,157,100.00 | 1,404,475.00 |
| Special funds for foreign economic & trade development and port construction for 2018 | 1,057,163.36 | |
| Subsidy for equipment renewal and modernization | 1,019,312.50 | 404,000.00 |
| Policy funds for manufacturing a strong province, award subsidy for intelligent factory and digital workshop | 1,000,000.00 | |
| Special fund for promoting innovation and development of processing trade | 1,000,000.00 | 1,000,000.00 |
| Provincial special fund for industrial transformation of the 2nd batch for 2019 | 1,000,000.00 | |
| Reward for the smart home appliance technology of the industry policy | 900,000.00 | 1,000,000.00 |
| Subsidy for staff training | 819,422.65 | 981,250.94 |
| Freezer project of Changhong Meiling | 734,062.52 | 734,062.50 |
| Industrialization of intelligent white household appliances software platform and typical application research and development | 727,272.71 | 242,424.24 |
| Award for integration of information technology and industrialization | 699,539.00 | 100,000.00 |
| Policy subsidy for promoting scientific and technological innovation | 679,700.00 | |
| Science and technology innovation and enterprise development fund | 671,307.09 | |
| Subsidies for intelligent transformation & upgrading of enterprises from the new industrialization policy in economic development zone | 605,675.00 | 353,310.42 |
| Tax contribution award | 600,000.00 | |
| Premium subsidy for science & technology insurance | 600,000.00 | |
| Subsidy for home appliance standards customization project from China Household Appliances Research Institute | 574,000.00 | |
| Government subsidy for new plant construction - industrialization of cryogenic refrigeration equipment | 500,000.00 | 500,000.00 |
| Award subsidy for provincial manufacturing industry & internet integration demonstration enterprise | 500,000.00 | |
| Venture expansion fund | 500,000.00 | 1,179,587.32 |
| Special guiding fund for construction of ―Three project and One innovation‖ | 500,000.00 | |
| Special fund for industrial development of Zhongshan City | 465,723.80 | 22,143.65 |
| Award subsidy for intellectual property | 444,400.00 | |
| Special funds for economic development of 2019 | 410,102.00 | |
| Commercial circulating funds for promoting the policy of service industry from economy & development zone | 400,000.00 | |
| National high-Tech award | 400,000.00 | |
| Patent funding | 395,000.00 | 435,820.00 |
| Subsidy for international market development of small & medium-sized enterprise | 380,221.00 | |
| Innovation development project for the E-Business | 370,429.05 | 76,075.30 |
| Policy of promoting the development of new industrialization | 367,800.00 | 330,000.00 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Current Year | Last Year |
| Commission charge refund for individual income tax | 338,175.13 | 329,654.25 |
| Promoting the new industry ( annual output of 0.6 million medium& large volume environmental protection and energy saving freezer) | 304,412.52 | 304,412.50 |
| Subsidy from Zhongshan Finance Bureau (CZ028001 provincial special project 2019) | 296,646.81 | |
| Government subsidy for the project of ministry of finance of science and education entrepreneurship park in Mianyang Technology Town | 265,393.74 | 105,002.26 |
| Subsidy for equipment purchasing for Hefei Tech. Improvement project | 235,000.00 | 253,810.00 |
| Promotion of the energy-saving room air conditioner | 210,309.24 | 210,309.24 |
| Science and technology development special fund project of Zhongshan City | 200,000.00 | |
| Equipment subsidy for the industrial base technical renovation from Economic and Information Commission | 179,160.00 | 332,916.67 |
| Government subsidy CZ028001 technical improvement topic | 96,727.01 | 1,180,256.70 |
| Upgrade project for the production line of Mianyang Meiling Intelligent Refrigerator | 65,833.32 | |
| Government subsidy CZ028001- subsidy in equipment renewal | 61,203.83 | 820,199.40 |
| Special fund for technical improvement | 42,885.24 | 3,573.77 |
| Subsidy for the development on production line technical reform for green-friendly high-quality metal pipe | 40,892.60 | 40,892.59 |
| Technical transformation of refrigerator evaporator workshop | 59,345.54 | 31,671.64 |
| Independent innovation policy | 500,000.00 | |
| Smart life and fresh life project | 886,226.74 | |
| Award of pilot demonstration enterprise for intellectual property | 1,655,100.00 | |
| Special fund for investment promotion from Commercial Bureau | 879,954.00 | |
| Funds for enterprise research and development | 1,120,600.00 | |
| Commission charge refund for individual income tax | 300,000.00 | |
| Award for implementing the quality management system standards from Economic and Information Commission | 500,000.00 | |
| Design and application of the air duct for energy-saving air-conditioner | 300,000.00 | |
| Service industry policy for year of 2017 from economic and trade development bureau in Hefei Economic Development Zone | 1,028,700.00 | |
| Funds for raid growth from Ministry of Finance of Hefei | 500,000.00 | |
| Award for pilot demonstration project of the national intelligent manufacturing | 2,000,000.00 | |
| National level award for the green factory and green products | 4,000,000.00 | |
| Development and production of the whole machine of CHIQ air-conditioner | 4,700,000.00 | |
| Reward for a good start of the investment in industrial and technological transformation in 2018 | 750,000.00 | |
| CCTV publicity fund for the Best Anhui in 2018 | 2,932,124.00 | |
| Provincial-level government subsidy for enterprise research and development in Guangdong Province for year of 2017 | 654,100.00 | |
| The 2nd batch of 2016 city-level supporting funds for side management for power demand | 496,000.00 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Item | Current Year | Last Year |
| Special fund for undertaking industrial transfer and promoting innovation in processing trade for year of 2016 | 1,000,000.00 | |
| Other units | 3,153,426.88 | 5,655,611.19 |
| Total | 110,281,102.69 | 94,938,682.39 |
44. Investment income
| Item | Current Year | Last Year |
| Long-term equity investment income by equity method | -8,049,228.81 | -23,357,648.90 |
| Investment income obtained from disposal of long-term equity investment | 867.43 | |
| Investment income obtained from disposal of tradable financial assets | -78,815,580.08 | -46,564,075.82 |
| Income from financial products | 53,507,866.92 | 73,583,776.64 |
| Investment income of other non-current financial assets during holding period | 661,434.48 | |
| Investment income obtained from held of finance asset available for sales | 268,439.33 | |
| Total | -32,695,507.49 | 3,931,358.68 |
45. Changes in fair value gains
| Item | Current Year | Last Year |
| Trading financial assets | -1,523,366.67 | -6,393,095.89 |
| Including :Income of fair value changes from derivative financial instruments | -1,523,366.67 | -6,393,095.89 |
| Trading financial liability | 54,516,996.83 | -39,556,161.23 |
| Including :Income of fair value changes from derivative financial instruments | 54,516,996.83 | -39,556,161.23 |
| Total | 52,993,630.16 | -45,949,257.12 |
46. Credit impairment loss
| Item | Current Year | Last Year |
| Note receivable bad debt loss | 15,359,134.10 | |
| Account receivable bad debt loss | -9,496,891.77 | |
| Other account receivable bad debt loss | -1,228,945.44 | |
| Total | 4,633,296.89 |
47. Assets impairment loss
| Item | Current Year | Last Year |
| Bad debt loss | -3,008,853.32 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Loss on inventory valuation | -19,795,727.76 | -36,245,038.14 |
| Impairment loss on intangible assets | -8,815,051.75 | |
| Impairment loss on fixed assets | -1,798,225.06 | |
| Total | -30,409,004.57 | -39,253,891.46 |
48. Income from assets disposal
| Item | Current Year | Last Year | Amount reckoned into non-recurring gains/losses in Current Year |
| Income from non-current assets disposal | -9,537,945.52 | 787,721.32 | -9,537,945.52 |
| Including: income classify to assets ready for sale | |||
| income not classify as to assets ready for sale | |||
| Including: Income from fixed assets disposal | -5,493,947.51 | 787,721.32 | -5,493,947.51 |
| Income from intangible assets disposal | -4,043,998.01 | -4,043,998.01 | |
| Total | -9,537,945.52 | 787,721.32 | -9,537,945.52 |
49. Non-operation revenue
(1) Non-operation revenue
| Item | Current Year | Last Year | Amount reckoned into non-recurring gains/losses in Current Year |
| Government subsidy | 115,000.00 | 883,331.13 | 115,000.00 |
| Income of penalty | 863,078.25 | 813,253.72 | 863,078.25 |
| Other | 5,501,844.73 | 4,789,860.85 | 5,501,844.73 |
| Total | 6,479,922.98 | 6,486,445.70 | 6,479,922.98 |
(2) Government subsidy
| Item | Current Year | Last Year | Resource and basis | Assets/income related |
| Award of local collaboration for advance industrial enterprises | 400,000.00 | MFBH (2018)No.105 | Income related | |
| Fund of tax incentive | 121,801.13 | Science and education entrepreneurship park of the technology town in Mianyang | Income related | |
| Other government subsidy | 115,000.00 | 361,530.00 | Income related | |
| Total | 115,000.00 | 883,331.13 |
50. Non-operating expenditure
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Current Year | Last Year | Amount reckoned into non-recurring gains/losses in Current Year |
| Penalty and late fee | 295,126.45 | 13,094,401.47 | 295,126.45 |
| Other | 5,114,631.25 | 8,174,124.11 | 5,114,631.25 |
| Total | 5,409,757.70 | 21,268,525.58 | 5,409,757.70 |
51. Income tax expenses
| Item | Current Year | Last Year |
| Current income tax | 8,656,853.45 | 17,887,061.40 |
| Deferred Income Tax | 17,609,171.49 | -18,420,948.02 |
| Total | 26,266,024.94 | -533,886.62 |
52. Other comprehensive income
Found more in 34. Other comprehensive income in VI
53. 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 Year | Last Year |
| Government subsidy and rewards | 107,265,513.11 | 150,185,767.81 |
| Collection of restriction fund | 35,368,949.87 | 105,951,876.61 |
| Cash deposit, deposit | 14,723,011.12 | 12,959,065.11 |
| Rental income | 7,924,382.64 | 7,553,077.64 |
| Compensations | 3,065,739.13 | 4,420,758.79 |
| Petty cash collection | 95,880.00 | 1,310,946.26 |
| Trademark use fee | 315,726.01 | 102,616.07 |
| Other | 3,962,164.63 | 6,243,804.17 |
| Total | 172,721,366.51 | 288,727,912.46 |
2) Cash paid for other activities relating to operation
| Item | Current Year | Last Year |
| Market expenses | 285,132,543.41 | 332,783,741.64 |
| Rental fee | 173,859,467.31 | 158,008,576.20 |
| Travel expenses, meeting fees and exhibition fees | 73,029,607.07 | 79,056,028.57 |
| Petty cash, deposit, Cash deposit | 73,354,112.01 | 45,279,661.81 |
| Advertising fee | 34,667,697.12 | 39,917,061.79 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Current Year | Last Year |
| Transfer to restriction fund | 14,496,135.53 | 24,070,228.43 |
| Vehicle expenses | 18,419,063.04 | 22,366,556.31 |
| Business activities fee | 29,264,931.29 | 21,958,864.60 |
| Inspection and certification fee, certification charge and reviewing fee | 27,067,600.74 | 21,408,152.10 |
| Technological cooperation costs and consulting charge | 10,935,357.90 | 10,890,258.27 |
| Board fee | 9,409,783.66 | 9,928,756.19 |
| Service supporting fee | 84,858,392.13 | 9,926,383.50 |
| Service Charge | 15,939,966.84 | 9,406,748.71 |
| Office expenses | 8,414,528.45 | 8,849,262.16 |
| Communication fee | 4,356,964.71 | 6,990,290.66 |
| Labor service fee | 10,746,378.64 | 6,452,287.26 |
| Repair charge | 12,704,160.68 | 4,291,510.38 |
| Other | 100,553,596.73 | 87,777,383.06 |
| Total | 987,210,287.26 | 899,361,751.64 |
3) Cash received from other activities relating to investment
| Item | Current Year | Last Year |
| Interest income arising from bank savings | 126,072,829.83 | 130,007,292.58 |
| Cash deposit | 688,706.45 | 2,188,621.81 |
| Total | 126,761,536.28 | 132,195,914.39 |
4) Cash paid for other activities relating to investment
| Item | Current Year | Last Year |
| Loses of forward exchange settlement | 78,815,580.08 | 46,564,075.82 |
| Bid bond refund | 273,200.00 | |
| Total | 78,815,580.08 | 46,837,275.82 |
5) Cash received from other activities relating to financing
| Item | Current Year | Last Year |
| Withdrawal of pledge | 44,497,902.00 |
6) Cash paid for other activities relating to financing
| Item | Current Year | Last Year |
| Amount refund to minority shareholders due to the cancellation of subsidiary | 2,000,000.00 | |
| Financing lease | 1,900,677.91 | 647,028.80 |
| Handling charge of dividend | 44,313.96 | 45,458.19 |
| Loan deposit | 23,232,000.00 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Repayment of investment | 7,000,000.00 | |
| Intermediary service fee from financing | 308,736.00 | |
| Total | 32,485,727.87 | 2,692,486.99 |
(2) Supplementary of the consolidated cash flow statement
| Item | 2019 | 2018 |
| 1. Net profit is adjusted to cash flow of operation activities: | ||
| Net profit | 43,512,200.81 | 34,875,784.34 |
| Add: provision for depreciation of assets | 25,775,707.68 | 39,253,891.46 |
| Depreciation of fixed assets, consumption of oil gas assets and depreciation of productive biological assets | 194,179,175.14 | 158,357,425.01 |
| Amortization of intangible assets | 116,308,174.70 | 79,302,211.24 |
| Amortization of long-term retained expense | 3,635,861.94 | |
| Loss from disposal of fixed assets, intangible assets and other long term assets(gain is listed with ―-‖) | 9,537,945.52 | 787,721.32 |
| Loss from discarding fixed assets as useless (gain is listed with ―-‖) | ||
| Loss from change of fair value(gain is listed with ―-‖) | -52,993,630.16 | 45,949,257.12 |
| Financial expense (gain is listed with ―-‖) | -22,926,471.28 | -38,721,486.24 |
| Investment loss (gain is listed with ―-‖) | 32,695,507.49 | -3,931,358.68 |
| Decrease of deferred income tax assets (increase is listed with ―-‖) | 14,750,478.61 | -21,514,573.12 |
| Increase of deferred income tax liabilities (decrease is listed with ―-‖) | 3,158,060.03 | 3,098,699.11 |
| Decrease of inventories (increase is listed with ―-‖) | 739,888,328.32 | 725,173,756.72 |
| Decrease of operational accounts receivable (increase is listed with ―-‖) | 253,957,057.05 | -127,833,259.28 |
| Increase of operational accounts payable (decrease is listed with ―-‖) | -92,558,557.19 | -1,022,530,821.76 |
| Other | 19,720,008.32 | -96,463,724.54 |
| Net cash flow arising from operation activities | 1,285,003,985.04 | -220,560,615.36 |
| 2. Major investment and financing activities that do not involve cash receipts: | ||
| Conversion of debt into capital | ||
| Switching Company bonds due within one year | ||
| financing lease of fixed assets | ||
| 3. Net change in cash and cash equivalents: | ||
| Balance at year-end of cash | 5,385,807,475.51 | 4,484,643,187.93 |
| Less: Balance at year-begin of cash | 4,484,643,187.93 | 5,089,765,770.39 |
| Add: Balance at year-end of cash equivalents | ||
| Less: Balance at year-begin of cash equivalents | ||
| Net increase in cash and cash equivalents | 901,164,287.58 | -605,122,582.46 |
(3) No net cash paid for subsidiary obtained in Current Year
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
(4) No net cash received from subsidiary disposal in Current Year
(5) Cash and cash equivalent
| Item | CurrentYear | LastYear |
| Cash | 5,385,807,475.51 | 4,484,643,187.93 |
| Including:cashinstock | 44,818.07 | 28,650.21 |
| Bankdepositsavailableforpaymentatanytime. | 4,771,094,609.77 | 4,029,892,318.85 |
| Othermonetaryfundavailableforpaymentatanytime | 614,668,047.67 | 454,722,218.87 |
| Cashequivalents | ||
| Including:bondinvestmentduewithin3months | ||
| Balanceofcashandcashequivalentsatyear-end | 5,385,807,475.51 | 4,484,643,187.93 |
| Including:usingtherestrictedcashandcashequivalentsoftheparentcompanyorsubsidiaryofthegroup |
54. Assets with ownership or the right to use restricted
| Item | Ending book value | Reasons |
| Monetary fund | 113,793,555.13 | Margin |
| Note receivable note 1 | 436,428,439.50 | Pledged |
| Fixed assets | 326,303,557.08 | Pledged |
| Intangible assets note 2 | 298,005,582.68 | Pledged |
| Account receivable note 3 | 60,325,306.54 | Pledged |
| Total | 1,234,856,440.93 |
Note 1: The note receivable was pledged for: short-term financing from the bank; with purpose of improvingthe note utilization, the Company draw up bank acceptance by pledge parts of the outstanding notesreceivable to the bankNote 2: intangible assets mortgaged refer to the land use right pledge, found more in ―27. Long termborrowings‖ under this note VINote 3: Pledge of the account receivable refers to the account pledge for export bill financing.
55. Foreign currency
(1) Foreign currency
| Item | Ending foreign currency balance | Exchange rate | Ending RMB converted balance |
| Monetary fund | |||
| Including: USD | 28,658,710.30 | 6.9762 | 199,928,894.80 |
| Euro | 1,616,601.49 | 7.8155 | 12,634,548.95 |
| AUD | 460,916.74 | 4.8843 | 2,251,255.63 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Ending foreign currency balance | Exchange rate | Ending RMB converted balance |
| Pakistan Rupi | 305,272,922.54 | 0.045046 | 13,751,324.07 |
| IDR | 22,762,538,413.00 | 0.000501 | 11,404,031.74 |
| HKD | 3,296.94 | 0.89578 | 2,953.33 |
| Account receivable | |||
| Including: USD | 106,260,071.41 | 6.9762 | 741,291,510.17 |
| Euro | 3,022,089.29 | 7.8155 | 23,619,138.85 |
| AUD | 7,772,887.00 | 4.8843 | 37,965,111.97 |
| Pakistan Rupi | 1,703,784,545.49 | 0.045046 | 76,748,678.64 |
| IDR | 32,719,003,913.00 | 0.000501 | 16,392,220.96 |
| HKD | 7,277.67 | 0.89578 | 6,519.19 |
| Other account receivable | |||
| Including: USD | 469.68 | 6.9762 | 3,276.58 |
| Pakistan Rupi | 25,478,291.00 | 0.045046 | 1,147,695.10 |
| IDR | 640,095,396.00 | 0.000501 | 320,687.79 |
| Account payable | |||
| Including: USD | 747,839.16 | 6.9762 | 5,217,075.55 |
| Euro | 13,419.32 | 7.8155 | 104,878.70 |
| Pakistan Rupi | 455,550,521.89 | 0.045046 | 20,520,728.81 |
| IDR | 14,030,849,604.00 | 0.000501 | 7,029,455.65 |
| Other account payable | |||
| Including: Pakistan Rupi | 210,986,864.23 | 0.045046 | 9,504,114.29 |
| IDR | 8,532,862,109.00 | 0.000501 | 4,274,963.92 |
| HKD | 46,391.86 | 0.89578 | 41,556.90 |
| Short-term loans | |||
| Including: USD | 6,800,000.00 | 6.9762 | 47,438,160.00 |
| Pakistan Rupi | 834,590,000.00 | 0.045046 | 37,594,941.14 |
(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 MEILINGELECTRIC INDONESIA,PT, mainly operates in Jakarta; Recording currency is IDR.
56. Government subsidy
(1) Government subsidy
| Category | Amount | Item | Amount reckoned into current gain/loss |
| Subsidy for employment stable | 35,675,926.90 | Other income | 35,675,926.90 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Category | Amount | Item | Amount reckoned into current gain/loss |
| Subsidy for industrial development policy from Hefei for first half of 2018 | 10,000,000.00 | Deferred income | 1,250,000.00 |
| Immediate refund of VAT for software products | 6,349,543.15 | Other income | 6,349,543.15 |
| Policy funds for manufacturing a strong province, subsidy for equipment for the technological transformation of industrial strong base | 5,000,000.00 | Deferred income | 625,000.00 |
| Supplementary fund for characteristic dual creative carriers of borrowing and transferring | 4,000,000.00 | Other income | 4,000,000.00 |
| Enterprise policy funds from Economic and Trade Development Bureau in Hefei economic development zone | 3,500,000.00 | Other income | 3,500,000.00 |
| Special funds for provincial-level innovation-driven development | 2,950,000.00 | Deferred income | 2,950,000.00 |
| Provincial-level foreign trade fund subsidy from finance bureau in Hefei economic development zone | 2,857,000.00 | Other income | 2,857,000.00 |
| Subsidy for E-business sales | 2,000,000.00 | Other income | 2,000,000.00 |
| Subsidy from Zhongshan Finance Bureau (CZ028001 provincial special project 2019) | 2,000,000.00 | Deferred income | 296,646.81 |
| Subsidy for characteristic innovation and entrepreneurship carrier project from Hefei economic & development zone | 2,000,000.00 | Deferred income | |
| Some policy subsidies to support the development of digital economy in Anhui | 1,800,000.00 | Other income | 1,800,000.00 |
| Logistic subsidy | 1,787,400.00 | Other income | 1,787,400.00 |
| Subsidy received from the government to activate idle factories | 1,687,464.00 | Other income | 1,687,464.00 |
| Upgrade project for the production line of Mianyang Meiling Intelligent Refrigerator | 1,580,000.00 | Deferred income | 65,833.32 |
| Special funds for steady growth of foreign trade in Zhongshan for 2017 | 1,532,797.00 | Other income | 1,532,797.00 |
| Enterprise special fund | 1,500,000.00 | Other income | 1,500,000.00 |
| Industrial development fund | 1,440,000.00 | Other income | 1,440,000.00 |
| Subsidy for talent supporting | 1,395,300.00 | Other income | 1,395,300.00 |
| Award subsidy for industrial linkage development | 1,239,100.00 | Other income | 1,239,100.00 |
| Special subsidy for Nanjing Port | 1,234,485.00 | Other income | 1,234,485.00 |
| Subsidy for cultivation of the enterprise brand | 1,200,000.00 | Other income | 1,200,000.00 |
| Subsidy for purchase of R & D instruments and equipment | 1,176,000.00 | Deferred income | 113,312.50 |
| Subsidy for export credit insurance | 1,157,100.00 | Other income | 1,157,100.00 |
| Special funds for foreign economic & trade development and port construction for 2018 | 1,057,163.36 | Other income | 1,057,163.36 |
| Provincial special fund for industrial transformation of the 2nd batch for 2019 | 1,000,000.00 | Other income | 1,000,000.00 |
| Special fund for promoting innovation and development of processing trade | 1,000,000.00 | Other income | 1,000,000.00 |
| Policy funds for manufacturing a strong province, award subsidy for intelligent factory and digital workshop | 1,000,000.00 | Other income | 1,000,000.00 |
| Reward for the smart home appliance technology of the industry policy | 900,000.00 | Other income | 900,000.00 |
| Subsidy for staff training | 819,422.65 | Other income | 819,422.65 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Category | Amount | Item | Amount reckoned into current gain/loss |
| Award for integration of information technology and industrialization | 699,539.00 | Other income | 699,539.00 |
| Policy subsidy for promoting scientific and technological innovation | 679,700.00 | Other income | 679,700.00 |
| Science and technology innovation and enterprise development fund | 671,307.09 | Other income | 671,307.09 |
| Premium subsidy for science & technology insurance | 600,000.00 | Other income | 600,000.00 |
| Tax contribution award | 600,000.00 | Other income | 600,000.00 |
| Subsidy for home appliance standards customization project from China Household Appliances Research Institute | 574,000.00 | Other income | 574,000.00 |
| Special guiding fund for construction of ―Three project and One innovation‖ | 500,000.00 | Other income | 500,000.00 |
| Venture expansion fund | 500,000.00 | Other income | 500,000.00 |
| Award subsidy for provincial manufacturing industry & internet integration demonstration enterprise | 500,000.00 | Other income | 500,000.00 |
| Technical transformation of refrigerator evaporator workshop | 485,000.00 | Other income | 30,312.50 |
| Award subsidy for intellectual property | 444,400.00 | Other income | 444,400.00 |
| Special funds for economic development of 2019 | 410,102.00 | Other income | 410,102.00 |
| National high-Tech enterprise award | 400,000.00 | Other income | 400,000.00 |
| Commercial circulating funds for promoting the policy of service industry from economy & development zone | 400,000.00 | Other income | 400,000.00 |
| Patent funding | 395,000.00 | Other income | 395,000.00 |
| Subsidy for international market development of small & medium-sized enterprise | 380,221.00 | Other income | 380,221.00 |
| Policies to promote the development of new industrialization | 367,800.00 | Other income | 367,800.00 |
| Return of service charge of individual income tax | 338,175.13 | Other income | 338,175.13 |
| Subsidy for equipment renovation | 281,000.00 | Other income | 281,000.00 |
| Special fund for industrial development of Zhongshan City | 200,000.00 | Other income | 200,000.00 |
| Science and technology development special fund project of Zhongshan City | 200,000.00 | Other income | 200,000.00 |
| Other sporadic projects | 3,268,426.88 | Other income, Non-operation income | 3,268,426.88 |
| Total | 113,733,373.16 | 93,873,478.29 |
(2) Refund of government subsidy: nil
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019(Unless otherwise 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
| Subsidiary | Price of the equity disposed | Ratio of the equity disposed | Way of the equity disposed | Time point of control right lose | Determination basis for the time point of control right lose | Difference between the disposal price and proportion of the subsidiary’s net assets enjoy in aspect of the consolidated financial statement, which is respond to the disposal investment | Other comprehensive income transferred into investment income , which related with the equity investment of original subsidiary |
| Nanchang Xiangyou Electric Marketing Co., Ltd | 85.00% | Liquidation cancellation | 2019.01 | Liquidation completed | |||
| Changsha Meizhilai Electric Marketing Co., Ltd | 97.00% | Liquidation cancellation | 2019.12 | Liquidation completed | |||
| Zhongshan Hongling Trade Co., Ltd | 100.00% | Liquidation cancellation | 2019.10 | Liquidation completed |
6. Subsidiary newly established:
| Name | New merger reasons | Shareholding ratio | Net asset at year-end | Net profit in Current Year |
| Hefei Meiling Wulian Technology Co., Ltd. | Newly established | 100% | 11,323,042.82 | 5,323,042.82 |
| Anhui Tuoxing Technology Co., Ltd. | Newly established | 100% | 0.00 | 0.00 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
VIII. Equity in other entity
1. Equity in subsidiary
(1) Composition of the enterprise group
| Subsidiary | Main office place | Registration place | Business nature | Shareholding ratio (%) | Acquire by | |
| Directly | Indirectly | |||||
| Zhongke Meiling Cryogenic Technology Co., Ltd.1) | Hefei | Hefei | Manufacturing and sales | 63.2683 | Investment | |
| Sichuan Hongmei Intelligent Technology Co., Ltd.2) | Mianyang | Mianyang | Software development | 100 | Investment | |
| Mianyang Meiling Refrigeration Co., Ltd.3) | Mianyang | Mianyang | Manufacturing and sales | 95 | 5 | Investment |
| Jiangxi Meiling Electric Appliance Co., Ltd. 4) | Jingdezhen | Jingdezhen | Manufacturing and sales | 98.75 | 1.25 | Investment |
| Hefei Meiling Wulian Technology Co., Ltd. 5) | Hefei | Hefei | Software development | 100 | Investment | |
| Hefei Meiling Electric Marketing Co., Ltd.6) | Hefei | Hefei | Sales | 99.82 | 0.18 | Investment |
| Guangxi Huidian Home Appliance Co., Ltd.7) | Nanning | Nanning | Sales | 100 | Enterprise combined under the different control | |
| Hefei Meiling Electric Marketing Co., Ltd.8) | Jinan | Jinan | Sales | 93.4 | Investment | |
| Wuhan Meizirong Electric Marketing Co., Ltd.9) | Wuhan | Wuhan | Sales | 91 | Investment | |
| Zhengzhou Meiling Electric Marketing Co., Ltd.10) | Zhengzhou | Zhengzhou | Sales | 100 | Investment | |
| Chengdu Meiling Electric Marketing Co., Ltd.11) | Chengdu | Chengdu | Sales | 96 | Investment | |
| Fuzhou Meiling Electric Marketing Co., Ltd.12) | Fuzhou | Fuzhou | Sales | 100 | Investment | |
| Nanjing Meiling Electric Marketing Co., Ltd.13) | Nanjing | Nanjing | Sales | 100 | Investment | |
| Taiyuan Meiling Electric Marketing Co., Ltd.14) | Taiyuan | Taiyuan | Sales | 100 | Investment | |
| Hangzhou Meiling Electric Marketing Co., Ltd.15) | Hangzhou | Hangzhou | Sales | 100 | Investment | |
| Shanghai Meiling Electric Marketing Co., Ltd.16) | Shanghai | Shanghai | Sales | 99 | Investment | |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Subsidiary | Main office place | Registration place | Business nature | Shareholding ratio (%) | Acquire by | |
| Directly | Indirectly | |||||
| Guangzhou Meiling Electric Marketing Co., Ltd.17) | Guangzhou | Guangzhou | Sales | 98 | Investment | |
| Tianjin Meiling Electric Marketing Co., Ltd.18) | Tianjin | Tianjin | Sales | 100 | Investment | |
| Beijing Meiling Electric Marketing Co., Ltd.19) | Beijing | Beijing | Sales | 100 | Investment | |
| Hefei Meiling Nonferrous Metal Products Co., Ltd.20) | Hefei | Hefei | Manufacturing and sales | 100 | Enterprise combined under the different control | |
| Guangdong Changhong Ridian Technology Co., Ltd.21) | Zhongshan | Zhongshan | Manufacturing and sales | 98.855 | Enterprise combined under the same control | |
| Changmei Technology Co., Ltd. 22) | Mianyang | Mianyang | Sales | 96.256 | Investment | |
| CHANGHONGMEILINGELECTRICINDONESIA,PT23) | Jakapta | Jakapta | Sales | 100 | Investment | |
| ChanghongRubaTradingCompany(Private) Limited24) | Pakistan | Pakistan | Sales | 60 | Investment | |
| Sichuan Changhong Air-conditioner Co., Ltd. 25) | Mianyang | Mianyang | Manufacturing and sales | 100 | Enterprise combined under the same control | |
| Zhongshan Changhong Electric Co., Ltd.26) | Zhongshan | Zhongshan | Manufacturing and sales | 90 | 10 | Enterprise combined under the same control |
| Hefei Meiling Group Holdings Limited27) | Hefei | Hefei | Manufacturing and sales | 100 | Enterprise combined under the different control | |
| Meiling Equator Household Appliance (Hefei) Co., Ltd28) | Hefei | Hefei | Manufacturing and sales | 100 | Enterprise combined under the different control | |
| Hefei Equator Appliance Co., Ltd.29) | Hefei | Hefei | Manufacturing and sales | 100 | Enterprise combined under the different control | |
| Hongyuan Ground Energy Heat Pump Tech. Co., Ltd.30) | Mianyang | Mianyang | Manufacturing and sales | 51 | Investment | |
| Hongyuan Ground Energy Heat Pump Tech. (Zhongshan) Co., Ltd.31) | Zhongshan | Zhongshan | Manufacturing and sales | 51 | Investment | |
| Meiling CANDY Washing Machine Co., Ltd. 32) | Hefei | Hefei | Manufacturing and sales | 60 | Investment | |
| Guangzhou Changhong Trading Co., Ltd.33) | Guangzhou | Guangzhou | Sales | 100 | Investment | |
| Hebei Hongmao Household Appliance Technology Co., Ltd.34) | Handan | Handan | Manufacturing and sales | 100 | Investment | |
| Anhui Tuoxing Technology Co., Ltd.35) | Hefei | Hefei | Technology R&Dt | 100 | Investment | |
Note:
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
1) Zhongke Meiling Cryogenic Technology Co., Ltd. (hereinafter referred to as Zhongke Meiling), thepredecessor of which was Zhongke Meiling Cryogenic Technology Limited Liability Company, wasestablished on 29 October 2002 by joint contribution from the Company and Technical Institute of Physicsand Chemistry, CAS (―TIPC‖), with registered capital of RMB60 million upon the establishment, amongwhich, the Company made capital contribution of RMB42 million (including the assets in specie at theconsideration of RMB35,573,719.70 as evaluated by Beijing Zhongzheng Appraisal Co., Ltd. with issuanceof the Appraisal Report (ZZPBZ(2002)No.029) and cash contribution of RMB6,426,280.30) accounting for70% of the aforesaid registered capital, and TIPC made capital contribution of RMB18 million withintangible assets of such value (namely the single compressor mixture industrial low temperaturerefrigeration technology) as evaluated by Jingzhongzi Assets Appraisal Co., Ltd. with issuance of theAppraisal Report (ZZPBZ(2002)No.225) accounting for 30% of the aforesaid registered capital. The paid-inof the above registered capital has been verified by Huazheng Accounting Firm by issuance of the AssetsVerification Report (HZYZ (2002) No. B157) dated 16 October 2002.In October 2014, according to the relevant provision under the Management Rules on Application of StateOwned Assets by Central Business Organs, TIPC transferred the 30% equity interests held by it in ZhongkeMeiling Cryogenic Technology Company Limited to its wholly-owned subsidiary Zhongke Xianxing(Beijing) Assets Management Co., Ltd (hereinafter referred to as Zhongke Xianxing) which would performmanagement over the operating assets of TIPC. Upon consideration and approval at the 37
th session of the 7
th
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 CryogenicTechnology Company Limited, pursuant to which, they decided to change the firm type of Zhongke MeilingCryogenic 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 havebeen converted at the proportion of 1:0.67, which are to be held by the original shareholders according totheir respective entitlement. In case that the net assets exceed registered capital, the balance shall be recordedin capital reserve. On 28 August 2015, Xinyong Zhonghe CPA reviewed the registered capital and paid-inthereof in respect of the stock reform, and issued Assets Verification Report (XYZH/2015CDA40161). TheCompany registered industrial and commercial information on 11 September 2015.On November 25, 2016, the first Extraordinary Shareholders' General Meeting of Zhongke MeilingCryogenic Technology Co., Ltd. in 2016 considered and approved the Proposal on the Issuance Plan of theCompany; Zhongke Meiling Company issued 3,150,000 shares to specific investors by the non-publicoffering 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 68,150,000shares and the Company's shareholding ratio was 66.76%.On 15 September 2017, the Proposal of the First Stock Placement of Zhongke Meiling Cryogenic
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
Technology Co., Ltd for year of 2017 was deliberated and approved by 4
thsession extraordinary ofshareholders general meeting of 2017. Zhongke Meiling offering 490,300 shares to specific investors by wayof privately placement, which has 1.72 Yuan per share in amount. The capital increasement has been verifiedby the No. ［XYZH/2017CDA40324］capital verification report issued by ShineWing CPA (special generalpartnership). After the completion of shares placement, stock of the Company increased to 68,640,300 sharesand 66.87% held by the Company.
On September 9, 2019, the 10
thMeeting of the Second Board of Directors and the Fourth ExtraordinaryShareholders‘ Meeting reviewed and approved the Proposal on the First Stock Issuance Plan of ZhongkeMeiling Cryogenic Technology Co., Ltd. in 2019 (Revised Version), the number of shares to be issued thistime does not exceed 3,907,900 shares (including 3,907,900 shares), the issue price is not less than 2.16 yuanper share, and the raised funds are expected to not exceed 8,441,064.00 yuan (including 8,441,064.00 yuan).After the completion of the additional issue, the company‘s share capital increased to 72,548,200 shares,which was verified by [No. XYZH/2020CDA30002] ―Capital Verification Report‖ issued by Shine WingCertified Public Accountants (LLP), and the Company‘s shareholding ratio was 63.2683%.
2) Sichuan Hongmei Intelligent Technology Co., Ltd. (hereinafter referred to as Hongmei Intelligent) wasestablished on Jan. 24, 2014. It is a limited company jointly invested by the Company and Mianyang MeilingRefrigeration 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 millioncontributed by Changhong Meiling Company in cash, accounted for 99% of the registered capital; MianyangMeiling Refrigeration Co., Ltd. contributed RMB 50000 in cash with 1% of the register capital occupied. Theabove 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 AChas 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 liabilitycompany jointly set up by the Company and China-tech Meiling Company, was founded on Mar. 6, 2009. Itsregistered capital and paid-in capital were RMB 50 million upon establishment, of which, the Companyinvested RMB 45 million, accounting for 90% of the registered capital; Zhongke Meiling Company investedRMB 5 million, accounting for 10% of the registered capital. The capital receipt was verified by theverification report [CXKY (2009) No. 008] of Sichuan Xingrui Certified Public Accountants. On 19 January2011, the Company increase RMB 50 million in capital of Mianyang Meiling, of which RMB 95 millioninvested 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 Meilingentered into ―Equity Transfer Agreement‖ with Jiangxi Meiling Refrigeration Co., Ltd. 5 percent equity ofMianyang Meiling held by Zhongke Meiling was transferred to Jiangxi Meiling Refrigerator. In September
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
2013, Jiangxi Meiling Refrigeration was combined by Jiangxi Meiling Electric Appliance Co., Ld, than 5percent 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 totalregister capital occupied. The initial investment RMB 10.50 million was received dated 13 May 2011 withRMB 10 million from the Company and RMB 0.5 million from Mianyang Meiling. Rest of the capital shallbe invested fully within 2 years after the joint ventures established according to capital requirement. Theinitial investment capital were verified by the Capital Verification Report [JXKYZi (2011) No. 090] issuedfrom Jingdezhen Xingci CPA Co., Ltd. Second capital RMB 39.5 million was fully funded on 28 July 2011,the Company contributed RMB 39.375 million while Mianyang Meiling Company invested RMB 125,000,the contributions have been verified by the capital verification report [Jing Xing Kuai Yan Zi (2011) No.: 134]issued from JDZ Xingci CPA Co., Ltd.
5) Hefei Meiling Wulian Technology Co., Ltd. (hereinafter referred to as Wulian Technology) wasestablished dated 21 January 2019 with registered capital of RMB 10 million, and it is the subsidiary of theCompany with fully-owned establishment. As of December 31, 2019, paid in capital is 6 million yuan
6) Hefei Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Meiling Marketing) is the limitedcompany jointly invested by the Company and Mianyang Meiling Company on 21 Oct. 2009. Registeredcapital and paid-up capital were RMB 10 million, including RMB 9.9 million invested by the Company, a99% of the registered capital; Mianyang Meiling Company contributed RMB 0.1 million, a 1% of theregistered 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 55million, including RMB 54.9 million contributed by the Company, a 99.82% of the registered capital, whileMianyang Meiling invested RMB 0.1 million, a 0.18% of the registered capital. The increased capital hasbeen verified by verification report of [Wan Hua Shen Zheng Da Kuai Yan Zi (2010) No. 1514] issued byAnhui Hua Shen Zhengda CPA Co., Ltd.
7) Guangxi Huidian Home Appliance Co., Ltd. (hereinafter referred to as Guangxi Huidian) established inMarch 2010 with registered capital of RMB 5 million. The Company invested RMB 1 million, accounted for20% of the registered capital; Meiling Marketing acquired 44% equity interests from the minorityshareholders in 2014. In 2015, Meiling Marketing and Jiangxi Meiling Appliances entered into equitytransfer 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 inApril 2015, Meiling Marketing and Jiangxi Meiling Appliances held the entire equity interests of GuangxiHuidian as a whole.
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
8) Jinan Xiangyou Electric Marketing Co., Ltd. (hereinafter referred to as Jinan Xiangyou) was establisheddated 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 fromthe minority shareholders in 2015, Meiling Marketing totally holds 91.4% equity of the Jinan Xiangyou, In2019, minority shareholders step out, shares of Jinan Meiling hold by Meiling Marketing changed to 93.4%.
9) Wuhan Meizirong Electric Marketing Co., Ltd. (hereinafter referred to as Wuhan Meizirong) wasestablished 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.
10) Zhengzhou Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Zhengzhou Meiling) wasestablished 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% equityfrom minority; Meiling Marketing signed equity transfer agreement with the minority shareholders in April2015, to acquire as the transferee the 39% equity interests of Zhengzhou Meiling held by minorityshareholders, Meiling Marketing acquired 10% equity interests from the minority shareholders in February2016; and after acquiring 5% equity from minority in 2017, Meiling Marketing totally holds 100% equity ofZhengzhou Meiling.
11) Chengdu Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Chengdu Meiling) wasestablished 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% equityfrom minority in 2015, purchased 0.8% equity from minority in 2016, and purchased 1.2% equity fromminority in 2018, Meiling Marketing totally holds 96% equity of Chengdu Meiling.
12) Fuzhou Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Fuzhou Meiling) was establisheddated 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, MeilingMarketing holds 100% equity of Fuzhou Meiling in total.
13) Nanjing Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Nanjing Meiling) wasestablished dated 14 Feb. 2011 with registered capital of RMB 3 million; Meiling Marketing invested RMB
2.97 million, accounted for 99% of the registered capital; in 2017, after acquiring 1% equity from theminority, Meiling Marketing holds 100% equity of Nanjing Meiling in total.
14) Taiyuan Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Taiyuan Meiling) wasestablished 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 Marketingtotally holds 100% equity of the Taiyuan Meiling.
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
15) Hangzhou Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Hangzhou Meiling) wasestablished 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 transferagreement with the minority shareholders in 2015, to acquire as the transfer the 6.5% equity interests ofHangzhou 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 acquiring5% 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) wasestablished 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) wasestablished dated 13 May 2011 with registered capital of 5 million Yuan; Meiling Marketing invested 4.3million Yuan, accounted for 86% of the registered capital; after Meiling Marketing acquired 12% equityinterests from the minority shareholders in 2014, Meiling Marketing totally held the 98% equity interests ofGuangzhou Meiling.
18) Tianjin Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Tianjin Meiling) was establisheddated 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 Appliancesentered 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 ofequity transfer in December 2015, Meiling Marketing totally held the entire equity interests of TianjinMeiling.
19) Beijing Meiling Electric Marketing Co., Ltd. (hereinafter referred to as Beijing Meiling) was establisheddated 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 minorityshareholders, 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 theSino-foreign joint venture jointly set up by original Meiling Group, Hefei Meiling Copper Co., Ltd. And Singapore KimShin Development Co., Ltd., which have been originally approved by the [WJMWFZZ (1996) No.349] ofForeign Trade and Economic Committee of Anhui Province. Its registered capital was US$ 2.92 million uponestablishment, of which, original Meiling Group invested US$ 1.46 million (monetary capital), accounting50% of the registered capital, Hefei Meiling Copper Co., Ltd invested US$ 0.584 million (monetary capital of RMB
0.18 million and real assets of US$ 0.404 million), accounting 20% of registered capital while Singapore Kim ShinDevelopment 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
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
(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% equityheld by Singapore Kim Shin Development Co., Ltd and Hefei Meiling Copper Co., Ltd respectively transferred tooriginal Meiling Group Totally. The Company‘s register capital came into RMB 24,286,808.00 aftertransference, and was not the joint-venture any more.
21) Guangdong Changhong Ridian Technology Co., Ltd. (hereinafter referred to as Changhong Ridian) is alimited liability company invested and established by Sichuan Changhong Electric Co., Ltd. (hereinafterreferred to as Sichuan Changhong) and Sichuan Changhong Motor Transport Co., Ltd. (hereinafter referredto as Changhong Motor Transport Company) on May 25, 2016. The registered capital and paid-in capital areRMB 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 millionYuan, accounting for 20% of the registered capital. The official receipts of registered capital have beenverified by original Sichuan Junhe Accounting Firm [No. JHYZ (2006) 3027]. Changhong Ridian increasedregistered capital of 43 million Yuan on January 4, 2007, changing from 40 million Yuan to 83 millionYuan , for the newly increased 43 million Yuan , Sichuan Changhong invested 1.8 million Yuan , GuangdongXiongfeng Electric Co., Ltd. invested 40 million Yuan , and Kou Huameng and other 9 natural personshareholders invested 1.2 million Yuan , at the same time, the shareholders' meeting considered and agreed totransfer the investment of 8 million Yuan of Changhong Motor Transport Company to Sichuan ChanghongVenture Investment Co., Ltd, the structure of the registered capital after changes was that SichuanChanghong 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 Invested8 million Yuan , accounting for 9.64%; Kou Huameng and other 9 natural person shareholders invested 1.2million Yuan , accounting for 1.45%. The change of registered capital was verified by Zhongshan PromiseAccounting 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 ofregistered 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%; SichuanChanghong Venture Investment Co., Ltd invested 8 million Yuan , accounting for 9.64%; Hu Zhiheng andother 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 KouHuameng to transfer its stock rights of total 250,000 Yuan which accounts for 0.301% of the ChanghongRidian‘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 XiongfengElectric Co., Ltd. to transfer its stock rights of total 40 million Yuan which accounts for 48.19 % of thecompany's registered capital to Sichuan Changhong Electric Co., Ltd. at the cost of 43,977,300 Yuan. The
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
other shareholders of the Changhong Ridian waived the right of pre-emption. The structure of registeredcapital 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%; HuZhiheng and another natural person shareholder invested 950,000 Yuan , accounting for 1.14%.On 4 January 2016, Sichuan Changhong and Sichuan Changhong Venture Investment Co., Ltd. transferredtotal 98.855% equity of the Changhong Ridian to the Company. After the transfer, the Company directlyholds 98.855% stock rights of Changhong Ridian.
22) Changmei Technology Co., Ltd. (hereinafter referred to as Changmei Technology) was invested and setup on May 12, 2016 in order to promote intelligent transformation and implement the company‘s intelligentlife project according to the company's strategic planning and business development needs. In accordancewith 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, themanagement team contribute 1.872 million Yuan in cash, a 3.744% in contribution capital.
23) CHANGHONG MEILING ELECTRIC INDONESIA, PT.(hereinafter referred to as IndonesiaChanghong) is a subsidiary established in Indonesia and jointly invested by Zhongshan Changhong andSichuan Changhong in 2016, the company‘s registered capital is 6 million US dollars, of which ZhongshanChanghong 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 theregistered capital. On 4 July 2017, rests of the 2.94 million US dollars are subscribed by ZhongshanChanghong in line with the agreement.
24) Changhong Ruba Trading Company (Private) Limited (hereinafter referred to as Changhong Ruba) was ajoint venture established by Zhongshan Changhong Appliances Company Limited and RUBA GENERALTRADING FZE Company (―RUBA‖) on 5 August 2011 with the approval from Guangdong Developmentand Reform Commission by issuance of the Approval Relating to Joint Construction of a Manufacturing andSelling Platform Project in Pakistan by Zhongshan Changhong Appliances Company Limited(YFGWZ(2011)958). The resolution of the second extraordinary shareholders' meeting of ZhongshanChanghong in 2016 passed the "Proposal on the Company's Capital Increase to Changhong Ruba TradingCompany (Private) Limited", and agreed that the company and UAE RUBA Company jointly increase capitalto Changhong Ruba Trading Company(Private) Limited which was invested by both sides in Pakistan at anearlier stage, Zhongshan Changhong invested 3.84 million US dollars in this capital increase, and UAERUBA Company invested 2.56 million US dollars, the shares held by both sides remained unchanged. Afterthe capital increase, the company‘s registered capital became 12.4 million US dollars, of which ZhongshanChanghong Home Appliances Company Limited invested 7.44 million US dollars in cash, shareholding ratiowas 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
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
limited liability company jointly set up by Sichuan Changhong and Changhong Chuangtou, was founded onNovember 28, 2008. Its registered capital was RMB 200 million upon establishment, of which, SichuanChanghong invested RMB 298 million (RMB 210,088,900 invested by monetary capital while RMB87,911,100 invested by real material), equivalent to RMB 198 million shares, accounting for 99% of theregistered capital; and Changhong Chuangtou invested RMB 3 million, accounting for 1% of the registeredcapital with equivalent of RMB 2 million shares. The registered capital receipt was verified by theverification 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 December2009, the Company obtained 100% equity of Changhong Air-conditioner by consolidated under the samecontrol. In 2017, the Company increased capital of 650 million Yuan to Changhong Air Conditioner, aftercapital increased, registered capital of Sichuan Changhong comes to 850 million Yuan from 200 million Yuan,shareholding still counted as 100%.
26) Zhongshan Changhong Electric Co., LTD (hereinafter referred to as Zhongshan Changhong), was theoriginal Guangdong Changhong Electric Co., Ltd., and is a limited liability company jointly set up bySichuan Changhong and China Minmetals on May 22, 2001. Its registered capital was RMB 80 million uponestablishment, of which, Sichuan Changhong invested RMB 72 million, including RMB 69.3 million bidingfor the estate/ non-estate from original Zhongshan Sanrong Air-conditioner Co., Ltd. And its patent use-rightof RMB2.7 million, accounting for 90% of the registered capital; Chine Minmetals invested RMB 8 millionin monetary capital accounting 10% of the registered capital. The Company changed its name originally fromGuangdong 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 Minmetalshas been transferred by Changhong Air-conditioner on April 11, 2010. On 25 May 2014, the Companyincreased 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 ofthe subsidiaries, the Company and the wholly-owned subsidiary Changhong Air Conditioning have increasedcapital 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 ofChanghong Air Conditioning was RMB 6.4 million Yuan. After the completion of this capital increase, theregistered capital Zhongshan Changhong shall increase to RMB 184 million Yuan, the shareholding ratio ofthe company and Changhong Air Conditioning remained unchanged and was still 90% and 10%, of whichthe Company invested 165.6 million Yuan, accounting for 90% of the registered capital, Changhong AirConditioning 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-ownedcompany originally approved by People‘s Government of Hefei Province and established authorized by SASAC ofHefei City. On July 14, 2008, 100% state-owned equity of Meiling Group has freely transferred to XingtaiHolding by Hefei SASAC. Agreement by the approval of < State-owned property agreement transfer fromMeiling Group> [ HGZCQ (2010) No.34] of Hefei SASAC on April 9, 2010, 100% state-owned property of
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
Meiling Group after partial assets and liabilities separated transferred to the Company from Xingtai Holdingas amount of RMB 113.2 million. The re-registration of industrial and commercial procedure for MeilingGroup after separated partial assets liability has finished on July 28, 2010. The new Meiling Group hasregister capital of RMB 80 million, and has been verified by the [AD (2010) YZD No. 016] from AnhuiAuding CPAs Co., Ltd.
28) Meiling Equator Household Appliance (Hefei) Co., Ltd.( hereinafter referred to as Equator HouseholdAppliance) was the Sino-foreign joint venture jointly set up by original Meiling Group and EQUATORINVESTMENTS (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. Itsregistered capital was US$ 3 million upon establishment, of which, Sino company invested US$ 2.25 millionin machinery equipment, accounting 75% of the registered capital while foreign company invested US$ 0.5million 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 reportof [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 EQUATORtransferred to Anhui Meiling Electric Co., Ltd. Totally. The Company‘s register capital came into RMB24,793,200 after transference, and was not the joint-venture any more. 25% equity owned by Anhui MeilingElectric 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 originalMeiling Group and Yingkaite Appliance on September 26, 2007. Its register capital was RMB 12 million, amongwhich, original Meiling Group invested 8,670,600 Yuan in monetary capital, accounting 72.255% inregistered capital; Equator Appliance invested 3,329,400 Yuan in the assessment value of intangible assets(land-use right), accounting 27.745% of total registered capital. The investment being verified by [WYAZ(2004) No. 135] from Anhui Yongan CPAs Co., Ltd.30) Hongyuan Ground Energy Heat Pump Technology Co., Ltd. (hereinafter referred to as Hongyuan GroundEnergy) was established on 28 August 2015, it is a limited liability company authorized by Administrationfor Industry and Commerce of Peicheng District, Mianyang, Sichuan, contributed by Sichuan Changhong AirConditioner Co., Ltd (hereinafter referred to as Changhong Air Conditioner) and Hengyouyuan TechnologyDevelopment Group Co., Ltd. together. Registered capital amounted as 50 million Yuan, including 25.5million 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% inregistered capital.
31) Hongyuan Ground Energy Heat Pump Tech. (Zhongshan) Co., Ltd.(hereinafter referred to as HongyuanZhongshan) was established and invested on 18 July 2017 with registered capital of 15 million Yuan, TheHongyuan Ground Energy Heat Pump Tech. Co., Ltd contributed 1.5 million Yuan with own funds and takes100% in the registered capital.In 2018, the shareholdes of the Hongyuan Zhongshan decided to increase
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
capital of 30 million Yuan, and contributed by the shareholder Hongyuan Ground Energy; thus registeredcapital of Hongyuan Zhongshan up to 45 million Yuan
32) Meiling Candy Washing Machine Co., Ltd. (hereinafter referred to as Meiling Candy) was establishedand 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 theCompany, a 60% in registered capital.
33) Guangzhou Changhong Trading Co., Ltd. (hereinafter referred to as Changhong Trading) was establishedon 6 Jan. 2017, the wholly-owned subsidiary of Zhongshan Changhong Electric Co., LTD (hereinafterreferred to as Zhongshan Changhong) with registered capital of one million Yuan
34) 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 RidianTechnology Co., Ltd. invested 5 million Yuan by own fund and takes 100% in registered capital.
35) Anhui Tuoxing Technology Co., Ltd. (hereinafter referred to as Tuoxing Technology) was established on20 May 2019 with registered capital of 10 million Yuan and it is the subsidiary of Zhongke Meiling withfully-owned establishment. As of December 31, 2019, no capital contributes.
(2) Major non-wholly-owned subsidiary
| Subsidiary | Shareholding ratio of minority | Gains/losses attributable to minority in Current Year | Dividend distributed to minority announced in Current Year | Balance of minority’s interest at year-end |
| Meiling CANDY | 40.00% | -13,220,680.37 | 23,278,075.71 | |
| Changmei Technology | 3.74% | -428,589.49 | -10,172.47 | |
| Zhongke Meiling | 36.73% | 5,642,568.83 | 2,274,030.00 | 56,699,296.01 |
| Hongyuan Ground Energy | 49.00% | 2,626,705.18 | 19,726,070.07 | |
| Changhong Ridian | 1.15% | 224,541.35 | 1,780,801.57 |
(3) Financial information for major non-wholly-owned subsidiary
| Subsidiary | Balance at year-end | |||||
| Current assets | Non-current assets | Total assets | Current liability | Non-current liability | Total liabilities | |
| Meiling CANDY | 107,483,599.72 | 560,471.69 | 108,044,071.41 | 42,492,057.38 | 7,356,824.76 | 49,848,882.14 |
| Changmei Technology | 813,640.04 | 69,816.35 | 883,456.39 | 1,155,157.08 | 0.00 | 1,155,157.08 |
| Zhongke Meiling | 173,698,258.09 | 135,802,000.42 | 309,500,258.51 | 146,202,370.20 | 8,938,774.23 | 155,141,144.43 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Subsidiary | Balance at year-end | |||||
| Hongyuan Ground Energy | 72,495,161.24 | 29,851,452.34 | 102,346,613.58 | 59,872,173.74 | 2,217,153.99 | 62,089,327.73 |
| Changhong Ridian | 469,012,870.35 | 55,302,405.39 | 524,315,275.74 | 368,560,861.13 | 171,540.99 | 368,732,402.12 |
(Continued)
| Subsidiary | Balance at year-begin | |||||
| Current assets | Non-current assets | Total assets | Current liability | Non-current liability | Total liabilities | |
| Meiling CANDY | 208,581,384.55 | 633,265.82 | 209,214,650.37 | 111,545,406.70 | 6,422,353.48 | 117,967,760.18 |
| Changmei Technology | 8,495,444.28 | 12,071,248.03 | 20,566,692.31 | 8,889,062.92 | 501,961.24 | 9,391,024.16 |
| Zhongke Meiling | 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 Energy | 153,229,031.96 | 34,694,234.27 | 187,923,266.23 | 148,809,162.62 | 4,217,440.58 | 153,026,603.20 |
| Changhong Ridian | 307,951,618.55 | 59,236,288.32 | 367,187,906.87 | 231,048,365.86 | 171,540.98 | 231,219,906.84 |
(Continued)
| Subsidiary | Current Year | |||
| Operation income | Net profit | Total comprehensive income | Cash flow from operation activity | |
| Meiling CANDY | 317,770,222.39 | -33,051,700.92 | -33,051,700.92 | -25,713,640.22 |
| Changmei Technology | 8,690,450.15 | -11,447,368.84 | -11,447,368.84 | -5,062,903.93 |
| Zhongke Meiling | 222,867,915.68 | 16,517,245.60 | 16,517,245.60 | 42,134,505.66 |
| Hongyuan Ground Energy | 405,759,143.48 | 5,360,622.82 | 5,360,622.82 | 3,492,950.80 |
| Changhong Ridian | 629,710,961.93 | 19,614,873.59 | 19,614,873.59 | 131,645,676.68 |
(Continued)
| Subsidiary | Last Year | |||
| Operation income | Net profit | Total comprehensive income | Cash flow from operation activity | |
| Meiling CANDY | 468,389,142.46 | -6,768,757.59 | -6,768,757.59 | -24,223,592.67 |
| Changmei Technology | 26,839,141.37 | -17,947,299.32 | -17,947,299.32 | -17,689,892.58 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Subsidiary | Last Year | |||
| Zhongke Meiling | 185,678,757.29 | 15,463,119.14 | 15,463,119.14 | 32,609,413.80 |
| Hongyuan Ground Energy | 448,481,933.01 | -11,363,421.53 | -11,363,421.53 | -7,732,643.87 |
| Changhong Ridian | 525,992,095.11 | 15,367,774.29 | 15,367,774.29 | 57,919,926.89 |
(4) Major limitation on using enterprise group‘s assets and liquidate debts of enterprise group: nil
(5) Offering financial supporting or other supports for structured entity that included in consolidationstatement scope: nil
2. Changes of owner‘ equity shares in subsidiary and its impacts
| Item | Zhongke Meiling | Jinan Xiangyou | Total |
| Original ratio of shares held | 66.8703% | 91.40% | |
| Equity purchased from minority | -3.602% | 2% | |
| Share issuance | |||
| Ratio of shares held at period-end | 63.2683% | 93.40% | |
| Cost of purchasing minority equity | |||
| Less: Ratio of the net assets measured by equity ratio while acquiring the subsidiary | 53,311.81 | -56,291.17 | -2,979.36 |
| Equity dilution for shares issuance | |||
| Balance | 53,311.81 | -56,291.17 | -2,979.36 |
| Including: Capital public reserve adjusted | 53,311.81 | -56,291.17 | -2,979.36 |
In 2019, the subsidiary Zhongke Meiling Cryogenics Technology Co., Ltd. received the subscribed capitalcontribution from the minority shareholders in the current period, resulting in a reduction in the Company‘sshareholding ratio. The difference between the equity payment paid by the minority shareholders and theshare of net assets that should be continuously calculated by Zhongke Meiling from the purchase date inaccordance with the newly increased shareholding ratio was 53,311.81 yuan, which was included in thecapital reserve.In 2019, the subsidiary acquired the minority shareholders‘ equity of Jinan Xiangyou Electric AppliancesMarketing Co., Ltd., and the difference between the newly acquired long-term equity investment and theshare of net assets that should be continuously calculated by the subsidiary from the purchase date inaccordance with the newly increased shareholding ratio was 56,291.17 yuan, which was included in capitalreserve.
3. Equity in joint venture or associate enterprise
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(1) Major joint venture or associate enterprise
| Joint venture or associate enterprise | Main office place | Register place | Business nature | Shareholding ratio (%) | Accounting treatment for investment of joint venture or associate enterprise | |
| Directly | Indirectly | |||||
| Associate enterprise: | ||||||
| 1.ChanghongRubaElectricCompany (Private)Ltd. | Lahore, Pakistan | Lahore | Manufactures, sales | 40.00 | Equity | |
| 2.Hefei Xingmei Assets Management Co., Ltd. | Hefei | Hefei | Rental, agency | 48.28 | Equity | |
| 3.Sichuan Zhiyijia Network Technology Co., Ltd. | Mianyang | Mianyang | Sales | 50.00 | Equity | |
| 4.Hongyuan Ground Energy Heat Tech. Co., Ltd. | Mianyang | Mianyang | R & D, sales, after-sales | 49.00 | Equity | |
| 5.Sichuan Tianyou Guigu Technology Co., Ltd. | Mianyang | Mianyang | Manufactures, sales | 25.00 | Equity | |
| 6..Chengdu Guigu Environmental Tech. Co., Ltd. | Chengdu | Chengdu | R&D, manufacturing and sales | 25.00 | Equity | |
(2) Financial information for major Joint venture: nil
(3) Financial information for associate enterprise
| Item | Balance at year-end / Current Year | |||||
| ChanghongRubaElectricCompany(Private)Ltd. | Hefei Xingmei Assets Management Co., Ltd. | Sichuan Zhiyijia Network Technology Co., Ltd. | Hongyuan Ground Energy Heat Tech. Co., Ltd. | Sichuan Tianyou Guigu Technology Co., Ltd. | .Chengdu Guigu Environmental Tech. Co., Ltd. | |
| Current assets | 104,632,500.22 | 1,833,902.21 | 3,365,539,682.22 | 46,101,621.41 | 21,254,869.83 | 18,277,711.92 |
| Including: cash and cash equivalent | 5,030,479.12 | 1,726,698.95 | 2,349,815,225.85 | 925,625.77 | 11,975,680.17 | 3,026,977.11 |
| Non-current assets | 52,830,981.68 | 17,138,280.87 | 1,252,898.22 | 12,965,065.72 | 39,777.34 | 14,593,410.88 |
| Total assets | 157,463,481.90 | 18,972,183.08 | 3,366,792,580.44 | 59,066,687.13 | 21,294,647.17 | 32,871,122.80 |
| Current liability | 153,934,962.09 | 1,253,430.54 | 3,272,121,806.17 | 11,291,418.86 | 10,066,985.00 | 14,376,055.61 |
| Non-current liability | 651,580.00 | |||||
| Total liabilities | 153,934,962.09 | 1,253,430.54 | 3,272,773,386.17 | 11,291,418.86 | 10,066,985.00 | 14,376,055.61 |
| Minority's interest | 1,059,268.80 | |||||
| Equity attributable to shareholder of parent company | 3,528,519.81 | 17,718,752.54 | 94,019,194.27 | 47,775,268.27 | 11,227,662.17 | 17,435,798.39 |
| Share of net assets measured by shareholding | 1,411,407.92 | 8,554,613.73 | 47,009,597.14 | 23,409,881.45 | 2,806,915.54 | 4,358,949.60 |
| Adjustment | ||||||
| --Goodwill | 821,877.28 | 3,887,027.34 | ||||
| Unrealized profit of the internal downstream | 393,075.11 | 2,223,966.56 | 34,940.80 | 4,691.99 | 28,751.02 | |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Item | Balance at year-end / Current Year | |||||
| ChanghongRubaElectricCompany(Private)Ltd. | Hefei Xingmei Assets Management Co., Ltd. | Sichuan Zhiyijia Network Technology Co., Ltd. | Hongyuan Ground Energy Heat Tech. Co., Ltd. | Sichuan Tianyou Guigu Technology Co., Ltd. | .Chengdu Guigu Environmental Tech. Co., Ltd. | |
| transactions | ||||||
| Unrealized profit of the internal upstream transactions | ||||||
| Other | -1,018,332.81 | |||||
| Book value of the equity investment for associate enterprise | 8,554,613.73 | 45,607,507.85 | 23,374,940.65 | 2,802,223.55 | 8,217,225.92 | |
| Fair value of equity investment for the affiliates with consideration publicly | ||||||
| Operation income | 190,497,799.56 | - | 7,062,900,153.63 | 98,907,938.70 | -285,926.94 | 34,249,377.30 |
| Financial expenses | 369,800.99 | -5,725.41 | -11,188,778.31 | 73.08 | -486,373.04 | 279,703.22 |
| Income tax expenses | 2,656,027.23 | 1,244,095.42 | ||||
| Net profit | -25,031,693.64 | -1,792,637.83 | 3,755,397.84 | 528,794.11 | -17,234,926.28 | -3,921,022.61 |
| Net profit of discontinuing operation | ||||||
| Other comprehensive income | -2,111,831.07 | |||||
| Total comprehensive income | -27,143,524.71 | -1,792,637.83 | 3,755,397.84 | 528,794.11 | -17,234,926.28 | -3,921,022.61 |
| Dividend received from associate enterprise in Current Year | ||||||
(Continued)
| Item | Balance at year-begin /Last Year | |||||
| ChanghongRubaElectricCompany(Private)Ltd. | Hefei Xingmei Assets Management Co., Ltd. | Sichuan Zhiyijia Network Technology Co., Ltd. | Hongyuan Ground Energy Heat Tech. Co., Ltd. | Sichuan Tianyou Guigu Technology Co., Ltd. | .Chengdu Guigu Environmental Tech. Co., 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 equivalent | 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 |
| 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 |
| Total assets | 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 | |||||
| Total liabilities | 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 | 40,402,951.11 | 47,246,474.16 | 28,462,588.45 | 21,246,089.80 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Item | Balance at year-begin /Last Year | |||||
| ChanghongRubaElectricCompany(Private)Ltd. | Hefei Xingmei Assets Management Co., Ltd. | Sichuan Zhiyijia Network Technology Co., Ltd. | Hongyuan Ground Energy Heat Tech. Co., Ltd. | Sichuan Tianyou Guigu Technology Co., Ltd. | .Chengdu Guigu Environmental Tech. Co., Ltd. | |
| shareholder of parent company | ||||||
| Share of net assets measured by shareholding | 14,069,807.22 | 9,420,099.27 | 12,120,885.32 | 23,150,772.34 | 7,115,647.11 | 5,311,522.45 |
| Adjustment | ||||||
| --Goodwill | 3,887,027.34 | |||||
| Unrealized profit of the internal downstream transactions | 5,020,111.59 | 8,138,518.55 | 1,835.80 | 4,693.04 | 41,161.52 | |
| Unrealized profit of the internal upstream transactions | ||||||
| Other | ||||||
| Book value of the equity investment for associate enterprise | 9,049,695.63 | 9,420,099.27 | 3,982,366.77 | 23,148,936.54 | 7,110,954.07 | 9,157,388.27 |
| Fair value of equity investment for the affiliates with consideration publicly | ||||||
| Operation income | 126,228,221.53 | 13,454.00 | 5,175,169,302.80 | 39,721,874.63 | 183,198.16 | 10,363,359.09 |
| Financial expenses | 255,291.28 | -8,196.38 | -3,389,797.02 | 94,474.40 | -506,304.50 | -77,635.70 |
| Income tax expenses | 1,968,285.62 | 3,209,840.03 | ||||
| Net profit | -37,897,887.71 | -2,644,744.77 | -11,083,431.22 | 562,504.24 | -5,354,573.64 | -9,683,757.18 |
| Net profit of discontinuing operation | ||||||
| Other comprehensive income | -9,379,706.16 | |||||
| Total comprehensive income | -47,277,593.87 | -2,644,744.77 | -11,083,431.22 | 562,504.24 | -5,354,573.64 | -9,683,757.18 |
| Dividend received from associate enterprise in Current Year | ||||||
(4) Financial summary for non-important Joint venture and associate enterprise
| Item | Balance at year-end /Current Year | Balance at year-begin /Last Year |
| Associate enterprise: | ||
| Total book value of investment | ||
| Total amount measured by shareholding ratio |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Balance at year-end /Current Year | Balance at year-begin /Last Year |
| --Net profit | -380,361.99 | -1,780,729.52 |
| --Other comprehensive income | ||
| -- Total comprehensive income | -380,361.99 | -1,780,729.52 |
(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 instrumentThe 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 relatedto these financial instruments include exchange risks and interest rate risks. The management of theCompany 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 currencytransaction amount, foreign currency dominated loans and interest expenditure, the Company entered intoseveral forward exchange contracts with banks. Fair value of the forward exchange contract which has beenrecognized as derivative financial instrument has been included in profits and losses. As export business isincreasing, if risks that are out of control of the Company occur such as appreciation of RMB, the Companywill mitigate the relevant risks by adjusting its sales policy.The Company‘s interest rate risk arises from bank borrowings and interest-bearing debt. Financial liabilitiesat floating rate expose the Company to cash flow interest rate risk, and financial liabilities at fixed rateexpose the Company to fair value interest rate risk. The Company will determine the respective proportion ofcontracts at fixed and floating rates based on the prevailing market conditions. As of 31 December 2019, theinterest-bearing debts mainly referred to borrowing contracts at floating rate denominated in RMB with totalamount of 961,037,944.82 Yuan, the floating rate loan contract measured by RMB amounted as459,200,000.00 Yuan in total; borrowing contracts at fixed rate denominated in USD with total amount of47,438,160.00 Yuan; borrowing contracts at fixed rate denominated in IDR with total amount of37,594,941.14 Yuan. Risks relating to change of fair value of financial instruments arising from movement ofinterest rate mainly related to bank borrowings at fixed rate. As for borrowings at fixed rate, the Company
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
aims to keep its floating rate. Risks relating to change of cash flow of financial instruments arising frommovement of interest rate mainly related to bank borrowings at floating rate. The Company establishes itspolicy to keep floating rate for these borrowings so as to eliminate fair value risk arising from movement ofinterest rate.X. Fair value disclosure
1. Asset and liability measured by fair value at end of Current Year and fair value measurement level
| Item | Fair value at year-end | |||
| 1st level | 2nd level | 3rd level | Total | |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | ||||
| 1.Tradable financial assets | ||||
| (1) Derivative financial assets | 7,730,268.92 | 7,730,268.92 | ||
| Financial liabilities measured by fair value and with variation reckoned into current gains/losses | ||||
| 1.Tradable financial liability | ||||
| (1) Derivative financial liability | 1,081,534.93 | 1,081,534.93 | ||
The derivative contract is measured by fair value on 2
nd
level, which is the real-time quote on foreignexchange market on balance sheet dateXI. Related parties and related transaction(I) Relationship of related parties
1. Controlling shareholder and ultimate controller
(1) Controlling shareholder and ultimate controller
| Controlling shareholder and ultimate controller | Registration place | Business nature | Registered capital | Share-holding ratio in the Company | Voting rights ratio in the Company |
| Sichuan Changhong Electric Co., Ltd. | Mianyang | Manufacture and sales | 4,616,244,222.00 | 26.98% | 26.98% |
Sichuan Changhong Electronic Holding Group is the controlling shareholder of Sichuan Changhong ElectricCo., LTD, and the SASAC Mianyang office holds 100.00% equity interests of Sichuan ChanghongElectronic Holding Group, which means that SASAC Mianyang office is the ultimate controller of theCompany.
(2) Register capital and change thereof of controlling shareholder
| Controlling shareholder | Balance at year-begin | Increased in Current Year | Decreased in Current Year | Balance at year-end |
| Sichuan Changhong Electric Co., Ltd. | 4,616,244,222.00 | 4,616,244,222.00 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(3) Shares held by the controlling shareholder and its changes on equity
| Controlling shareholder | Amount of shares held | Shareholding ratio | ||
| Balance at year-end | Balance at year-begin | Ratio at year-end | Ratio at year-beginning | |
| 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 jointventure and associated enterprise‖. Other Joint venture and associated enterprise that have relatedtransactions occurred with the Company in Current Year 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 |
| ChanghongRubaElectricCompany(Private)Ltd. | Associated enterprise of subsidiary Zhongshan Changhong |
| Hefei Xingmei Assets Management Co., Ltd. | Associated enterprise of the Company |
| Sichuan Zhiyijia Network Technology Co., Ltd. | Associated enterprise of the Company, has the same controlling shareholder and actual control of the Company |
| Hongyuan Ground Energy Heat Tech. Co., Ltd. | Associated enterprise of subsidiary Changhong Air-conditioner |
| Sichuan Tianyou Guigu Technology Co., Ltd. | Associated enterprise of subsidiary Changhong Air-conditioner |
| .Chengdu Guigu Environmental Tech. Co., Ltd. | Associated enterprise of subsidiary Changhong Air-conditioner |
4. Other related parties
| Related party | Relationship with the company |
| Sichuan Yunyou Internet Tech. Co., Ltd. | Associated enterprise of other enterprise that have the same controlling shareholder |
| Sichuan Changhong International Travel Service Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Hunan Grand-Pro Intelligent Tech. Company | Control by same controlling shareholder and ultimate controller |
| Mianyang Huafeng Interconnection Tech. Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| CHANGHONG ELECTRIC (AUSTRALIA) | Control by same controlling shareholder and ultimate controller |
| Shenzhen YijEn Technology Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| CHANGHONG ELECTRIC MIDDLE EASTFZCO | Control by same controlling shareholder and ultimate controller |
| Sichuan Changhong Electronic Products Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| BVCH Optronics (Sichuan) Co., Ltd. | Control by same controlling shareholder and ultimate controller |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Related party | Relationship with the company |
| Hefei Changhong New Energy Science & Technology 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 |
| Changhong Europe Electric s.r.o | Control by same controlling shareholder and ultimate controller |
| Changhong Huayi Compressor 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 Minsheng Logistics 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 Precision Electronics Tech. Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| PT.CHANGHONG ELECTRIC INDONESIA | Control by same controlling shareholder and ultimate controller |
| CHANGHONG (HK) TRADING LIMITED | Control by same controlling shareholder and ultimate controller |
| Sichuan Changhong Device Tech. Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Chengdu Changhong Electronic Technology Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Lejiayi Chain Management Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Sichuan Hongwei Technology Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Sichuan Changhong Property 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 |
| Hefei Changhong Industrial Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Changhong International Holdings (Hong Kong) Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Guangdong Changhong Electronics 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 Energy Sunshine Technology Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Sichuan Changhong Power Source 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 Electronic System Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Sichuan Changhong Network Technology Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Mianyang Technology Town Big Data 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 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Related party | Relationship with the company |
| Yuanxin Financial Lease Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Changhong Shundatong Tech. Development 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 |
| Sichuan Changhong Venture Investment Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Sichuan Changhong Communication Tech. Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Orion.PDP.Co.,ltd | Control by same controlling shareholder and ultimate controller |
| Guangyuan Hongcheng Industrial Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| 081 Electronic Group | Control by same controlling shareholder and ultimate controller |
| Sichuan Changhong International Hotel Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Sichuan Aichuang Technology Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Sichuan Changhong Intelligent Manufacturing Tech. 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 Huanyu Industrial Co. Ltd. | Control by same controlling shareholder and ultimate controller |
| Sichuan Jiahong Industrial Co. Ltd. | Control by same controlling shareholder and ultimate controller |
| Sichuan Ailian Science & Technology Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Sichuan Changhong Gerun Environmental Protection Tech. 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 Huafeng Corp. Group | Control by same controlling shareholder and ultimate controller |
| Anhui Xinhao Plasma Display Panel 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 |
| Sichuan Changhong Xinrui Tech. Co. Ltd. | Control by same controlling shareholder and ultimate controller |
| Sichuan Changhong Electronics Tech. Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Yibin Red-Star Electronics Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Sichuan Hongcheng Construction Engineering Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Sichuan Changhong Jiahua Information Products Co., Ltd. | Control by same controlling shareholder and ultimate controller |
| Beijing Changhong Tech. Co. Ltd, | Subsidiary of the associated enterprise of controlling |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Related party | Relationship with the company |
| shareholder | |
| Sichuan Changhong Electronics Holding Group Co., Ltd. | Parent company of controlling shareholder |
| Sichuan Hongyu Metal Manufacturing Co., Ltd. | Associated enterprise of other enterprise that have the same controlling shareholder |
| Sichuan Hongran Green Energy Co., Ltd. | Associated enterprise of controlling shareholder |
| Sichuan Changxin Refrigeration Parts Co., Ltd. | Associated enterprise of controlling shareholder |
| Mianyang Highly Electric Co., Ltd. | Associated enterprise of controlling shareholder |
| Sichuan Family Help Electric Service Co., Ltd. | Associated enterprise of controlling shareholder |
| Chengdu HOPE Testing Tech. Co. Ltd. | Associated enterprise of controlling shareholder |
Note: In July 2018, shares of Sichuan Changhe Technology Co., Ltd. hold by Sichuan Changhong Venture Investment Co., Ltdare on sale in total, the Sichuan Changhe Technology Co., Ltd. is not the related party of the Company any more.
(ii) Related transactions
1. Purchasing commodity
| Related party | Content | Current Year (in 10 thousand Yuan) | Last Year (in 10 thousand Yuan) |
| Sichuan Changhong Electric Co., Ltd. | Purchasing commodity | 33,598.70 | 33,040.87 |
| Sichuan Changhong Electronics Holding Group Co., Ltd. | Purchasing commodity | 9.11 | |
| Changhong Huayi Compressor Co., Ltd. | Purchasing commodity | 38,238.09 | 53,248.03 |
| Sichuan Changhong Mold Plastic Tech. Co., Ltd. | Purchasing commodity | 63,000.18 | 73,348.73 |
| Sichuan Changhong Jijia Fine Co., Ltd. | Purchasing commodity | 24,924.66 | 30,669.97 |
| Sichuan Changhong Package Printing Co., Ltd. | Purchasing commodity | 8,304.76 | 10,413.66 |
| Sichuan Changhong Precision Electronics Tech. Co., Ltd. | Purchasing commodity | 1,270.34 | 6,325.00 |
| Sichuan Changhong New Energy Technology Co., Ltd. | Purchasing commodity | 2.18 | 4.18 |
| 081 Electronic Group | Purchasing commodity | 49.47 | 184.39 |
| Guangdong Changhong Electronics Co., Ltd. | Purchasing commodity | 233.81 | 423.80 |
| Sichuan Changhong Intelligent Manufacturing Tech. Co., Ltd. | Purchasing commodity | 99.30 | 47.03 |
| Sichuan Hongwei Technology Co., Ltd. | Purchasing commodity | 426.64 | |
| Sichuan Jiahong Industrial Co. Ltd. | Purchasing commodity | 17.65 | |
| Sichuan Changhong International Hotel Co., Ltd. | Purchasing commodity | 18.86 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Related party | Content | Current Year (in 10 thousand Yuan) | Last Year (in 10 thousand Yuan) |
| Sichuan Zhiyijia Network Technology Co., Ltd. | Purchasing commodity | 96.01 | 20.78 |
| Sichuan Changhong Power Source Co., Ltd. | Purchasing commodity | 0.30 | |
| Changhong International Holdings (Hong Kong) Co., Ltd. | Purchasing commodity | 39.47 | |
| Sichuan Changhong Electronic Products Co., Ltd. | Purchasing commodity | 2,401.66 | 2,885.43 |
| Sichuan Hongxin Software Co., Ltd. | Purchasing commodity | 16.98 | |
| Sichuan Changhong Property Service Co., Ltd. | Purchasing commodity | 0.03 | 0.04 |
| Sichuan Ailian Science & Technology Co., Ltd. | Purchasing commodity | 2,073.65 | 1,167.16 |
| Sichuan Aichuang Technology Co., Ltd. | Purchasing commodity | 9,800.56 | 5,211.18 |
| Sichuan Changhong Communication Tech. Co., Ltd. | Purchasing commodity | 2.58 | |
| Sichuan Changhong Electronic System Co., Ltd. | Purchasing commodity | 4.74 | 4.74 |
| Hunan Grand-Pro Intelligent Tech. Company | Purchasing commodity | 777.09 | 230.21 |
| Sichuan Changhong Network Technology Co., Ltd. | Purchasing commodity | 9.30 | |
| Lejiayi Chain Management Co., Ltd. | Purchasing commodity | 5.96 | |
| GuangYuan Changhong Electronic Technology Co., Ltd. | Purchasing commodity | 37.66 | |
| Sichuan Hongyu Metal Manufacturing Co., Ltd. | Purchasing commodity | 134.82 | |
| Sichuan Changhe Technology Co., Ltd. | Purchasing commodity | 378.56 | |
| Sichuan Changxin Refrigeration Parts Co., Ltd. | Purchasing commodity | 31,004.61 | 32,083.39 |
| Mianyang Highly Electric Co., Ltd. | Purchasing commodity | 20,297.34 | 33,607.77 |
| Sichuan Yunyou Internet Tech. Co., Ltd. | Purchasing commodity | 13.31 | |
| Hongyuan Ground Energy Heat Tech. Co., Ltd. | Purchasing commodity | 32.64 | |
| Changhong Ruba Electric Company (Private) Ltd. | Purchasing commodity | 14,248.25 | 14,566.51 |
| Sichuan Tianyou Guigu Technology Co., Ltd. | Purchasing commodity | -29.26 | |
| .Chengdu Guigu Environmental Tech. Co., Ltd. | Purchasing commodity | 6.46 | 3.71 |
| Total | 250,999.55 | 298,033.50 |
2. Accept the services
| Related party | Content | Current Year | Last Year |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Related party | Content | Current Year | Last Year |
| Sichuan Changhong Electronics Holding Group Co., Ltd. | Accept the services | 683,104.41 | 921,617.88 |
| Sichuan Changhong Electric Co., Ltd. | Accept the services | 15,698,020.68 | 23,257,377.60 |
| Sichuan Changhong Minsheng Logistics Co., LTD | Accept the services | 437,841,044.49 | 537,900,775.75 |
| Sichuan Changhong Mold Plastic Tech. Co., Ltd. | Accept the services | 108,415.22 | 165,894.20 |
| Sichuan Service Exp. Appliance Service Chain Co., Ltd. | Accept the services | 239,791,744.81 | 194,960,696.99 |
| Sichuan Hongxin Software Co., Ltd. | Accept the services | 344,269.80 | 1,130,201.88 |
| Guangdong Changhong Electronics Co., Ltd. | Accept the services | 478,854.47 | 1,032,427.98 |
| Sichuan Jiahong Industrial Co. Ltd. | Accept the services | 70,777.77 | 219,734.50 |
| Sichuan Changhong International Hotel Co., Ltd. | Accept the services | 146,160.13 | 388,596.83 |
| Sichuan Changhong International Travel Service Co., Ltd. | Accept the services | 536,069.03 | 869,951.89 |
| Sichuan Changhong Property Service Co., Ltd. | Accept the services | 4,087,128.07 | 836,614.81 |
| Sichuan Hongwei Technology Co., Ltd. | Accept the services | 372,168.84 | 518,742.29 |
| Sichuan Zhiyijia Network Technology Co., Ltd. | Accept the services | 2,961,015.42 | 7,409,344.17 |
| Sichuan Changhong Network Technology Co., Ltd. | Accept the services | 45,698.47 | 78,651.34 |
| Sichuan Changhong Intelligent Manufacturing Tech. Co., Ltd. | Accept the services | 2,305,673.20 | 5,900,756.90 |
| Sichuan Changhong Jijia Fine Co., Ltd. | Accept the services | 38,056.39 | |
| Sichuan Changhong Gerun Environmental Protection Tech. Co., Ltd. | Accept the services | 115,580.94 | |
| Sichuan Changhong Jiahua Information Products Co., Ltd. | Accept the services | 6,037.74 | |
| BVCH Optronics (Sichuan) Co., Ltd. | Accept the services | 67,935.00 | |
| Sichuan Changhong Electronic Products Co., Ltd. | Accept the services | 450,488.09 | 388,574.88 |
| 081 Electronic Group | Accept the services | 420,000.00 | |
| Sichuan Ailian Science & Technology Co., Ltd. | Accept the services | 26,251.68 | |
| Chengdu HOPE Testing Tech. Co. Ltd. | Accept the services | 7,566.04 | |
| Sichuan Yunyou Internet Tech. Co., Ltd. | Accept the services | 55,440.01 | |
| Total | 706,404,940.97 | 776,232,519.62 |
3. Purchase fuel and power
| Related party | Content | Current Year | Last Year |
| Sichuan Changhong Electric Co., Ltd. | Purchase fuel and power | 17,956,706.73 | 20,264,380.43 |
| Changhong Huayi Compressor Co., Ltd. | Purchase fuel and power | 825,915.60 | 720,372.91 |
| Guangdong Changhong Electronics Co., Ltd. | Purchase fuel and power | 1,429,349.92 | 1,680,446.20 |
| Hefei Changhong New Energy Science & Technology Co., Ltd. | Purchase fuel and power | 368,818.66 | 377,466.06 |
| Sichuan Changhong Property Service Co., Ltd. | Purchase fuel and power | 21,883.45 | 50,683.70 |
| Sichuan Hongran Green Energy Co., Ltd. | Purchase fuel and power | 855,091.21 | - |
| Total | 21,457,765.57 | 23,093,349.30 |
4. Sales of goods/offering labor service
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Related party | Content | Current Year (in 10 thousand Yuan) | Last Year (in 10 thousand Yuan) |
| Sichuan Changhong New Energy Technology Co., Ltd. | Offering labor service | 12.01 | 35.22 |
| CHANGHONG ELECTRIC (AUSTRALIA) | Sales of goods | 6,629.12 | 2,557.96 |
| CHANGHONG ELECTRIC MIDDLE EASTFZCO | Sales of goods | 1,285.90 | 1,125.27 |
| Changhong Europe Electric s.r.o | Sales of goods | 166.9 | 14.14 |
| Changhong Ruba Electric Company (Private) Ltd. | Sales of goods | 7,299.85 | 5,155.69 |
| CHANGHONG (HK) TRADING LIMITED | Sales of goods | 36,912.93 | 21,867.52 |
| Orion.PDP.Co.,ltd | Sales of goods | 3,473.67 | 2,626.30 |
| PT.CHANGHONG ELECTRIC INDONESIA | Sales of goods | 1,024.84 | 711.24 |
| Changhong International Holdings (Hong Kong) Co., Ltd. | Sales of goods | 164.88 | 58.92 |
| .Chengdu Guigu Environmental Tech. Co., Ltd. | Sales of goods | 1,289.69 | 356.37 |
| Guangdong Changhong Electronics Co., Ltd. | Sales of goods | 61.73 | 298.73 |
| GuangYuan Changhong Electronic Technology Co., Ltd. | Sales of goods | 112.06 | 160 |
| Hefei Changhong Industrial Co., Ltd. | Sales of goods | 111.05 | 205.04 |
| Hongyuan Ground Energy Heat Tech. Co., Ltd. | Sales of goods | 9,143.17 | 1,930.51 |
| Changhong Huayi Compressor Co., Ltd. | Sales of goods/Offering labor service | 37.85 | 62.05 |
| Lejiayi Chain Management Co., Ltd. | Sales of goods | 6,254.86 | 2,324.80 |
| 081 Electronic Group | Sales of goods | 1.72 | 434.53 |
| Mianyang Huafeng Interconnection Tech. Co., Ltd. | Sales of goods | 844.98 | |
| Sichuan Aichuang Technology Co., Ltd. | Sales of goods/Offering labor service | 109.88 | 247.39 |
| Sichuan Ailian Science & Technology Co., Ltd. | Sales of goods | 2.09 | 27.8 |
| Sichuan Hongwei Technology Co., Ltd. | Sales of goods | 0.76 | 17.24 |
| Sichuan Huafeng Corp. Group | Sales of goods | 12.81 | 29.84 |
| Sichuan Jiahong Industrial Co. Ltd. | Sales of goods | 13.87 | - |
| Sichuan Service Exp. Appliance Service Chain Co., Ltd. | Sales of goods | 599.76 | 1,443.58 |
| Sichuan Changhong Package Printing Co., Ltd. | Sales of goods | 0.35 | 7.93 |
| Sichuan Changhong Electric Co., Ltd. | Sales of goods/Offering labor service | 2,277.33 | 5,163.23 |
| Sichuan Changhong Power Source Co., Ltd. | Sales of goods | 8.44 | 10.64 |
| Sichuan Changhong Electronics Holding Group Co., Ltd. | Sales of goods | 31.91 | 148.96 |
| Sichuan Changhong Gerun Environmental Protection Tech. Co., Ltd. | Sales of goods | 743.53 | 1,585.49 |
| Sichuan Changhong International Hotel Co., Ltd. | Sales of goods | 3.62 | 36.19 |
| Sichuan Changhong Group Finance Co., Ltd. | Sales of goods | 1.84 | 5.72 |
| Sichuan Changhong Jijia Fine Co., Ltd. | Sales of goods/Offering labor service | 4,486.86 | 5,847.80 |
| Sichuan Changhong Education Technology Co., Ltd. | Sales of goods | 1,194.40 | 59.29 |
| Sichuan Changhong Precision Electronics Tech. Co., Ltd. | Sales of goods | 0.09 | 18.06 |
| Sichuan Changhong Minsheng Logistics Co., LTD | Sales of goods/Offering labor service | 168.46 | 252.69 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Related party | Content | Current Year (in 10 thousand Yuan) | Last Year (in 10 thousand Yuan) |
| Sichuan Changhong Mold Plastic Tech. Co., Ltd. | Sales of goods/Offering labor service | 20,784.26 | 19,906.13 |
| Sichuan Changhong Device Tech. Co., Ltd. | Sales of goods/Offering labor service | 59.22 | 19.1 |
| Sichuan Changhong Network Technology Co., Ltd. | Sales of goods | 0.1 | 29.41 |
| Sichuan Changhong Property Service Co., Ltd. | Sales of goods | 6.6 | 2.71 |
| Sichuan Changhong Wisdom Health Tech. Co., Ltd. | Sales of goods | 0.44 | 1.02 |
| Sichuan Changhong Intelligent Manufacturing Tech. Co., Ltd. | Sales of goods | 3.34 | 52.65 |
| Sichuan Changxin Refrigeration Parts Co., Ltd. | Sales of goods | 10,028.00 | 8,483.30 |
| Sichuan Zhiyijia Network Technology Co., Ltd. | Sales of goods | 295,507.43 | 254,723.26 |
| BVCH Optronics (Sichuan) Co., Ltd. | Sales of goods | 0.68 | 3.35 |
| Sichuan Changhong Property Co., Ltd. | Sales of goods/Offering labor service | 159.22 | 112.08 |
| Chengdu Changhong Electronic Technology Co., Ltd. | Sales of goods | 0.12 | |
| Sichuan Huanyu Industrial Co. Ltd. | Sales of goods | 16.84 | |
| Sichuan Changhong Xinrui Tech. Co. Ltd. | Sales of goods | 0.14 | |
| Mianyang Technology Town Big Data Technology Co., Ltd. | Sales of goods | 0.26 | |
| Sichuan Changhong Venture Investment Co., Ltd. | Sales of goods | 0.2 | |
| Guangyuan Hongcheng Industrial Co., Ltd. | Sales of goods | 14.68 | |
| Sichuan Changhong Energy Sunshine Technology Co., Ltd. | Sales of goods | 2.45 | |
| Sichuan Changhong Electronics Tech. Co., Ltd. | Sales of goods | 1.54 | |
| Sichuan Hongxin Software Co., Ltd. | Sales of goods | 3.8 | |
| Sichuan Hongcheng Real Estate Co., Ltd. | Sales of goods | 9.46 | |
| Sichuan Changhong Electronic System Co., Ltd. | Sales of goods | 2.6 | |
| Sichuan Changhong Electronic Products Co., Ltd. | Sales of goods | 8.22 | 27.04 |
| Yibin Red-Star Electronics Co., Ltd. | Sales of goods | 91.74 | |
| Yuanxin Financial Lease Co., Ltd. | Sales of goods | 0.08 | |
| Hunan Grand-Pro Intelligent Tech. Company | Sales of goods | 0.29 | 0.72 |
| Mianyang Highly Electric Co., Ltd. | Sales of goods | 246.13 | |
| Sichuan Family Help Electric Service Co., Ltd. | Sales of goods | 0.21 | |
| Total | 411,041.01 | 338,577.16 |
Businesses between the Company and its connected persons are generally conducted under market operationrules as if they were the same as other business counter parties. For price of sale or purchase and provision ofother labor service between the Company and its related parties, the state pricing is applicable if the pricingdo exists; in case of absence of such state pricing, price is determined under market price; in case of absenceof such market price, price is determined by both parties at actual cost plus reasonable expenses; for somespecial services, the price of which cannot be determined under the rule of cost plus expense, the price shall
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
be determined by both parties by negotiation.
5. Provide fuels
| Related party | Content | Current Year | Last Year |
| Guangdong Changhong Electronics Co., Ltd. | Provide fuels | 651,741.40 | 307,238.26 |
| Sichuan Hongwei Technology Co., Ltd. | Provide fuels | 3,664.27 | 7,793.08 |
| Sichuan Changhong Precision Electronics Tech. Co., Ltd. | Provide fuels | 15,433.17 | 9,223.08 |
| Sichuan Changhong Minsheng Logistics Co., LTD | Provide fuels | 73,268.48 | 29,159.87 |
| Sichuan Changhong Mold Plastic Tech. Co., Ltd. | Provide fuels | 7,573,536.90 | 7,853,859.29 |
| Sichuan Changhong Jijia Fine Co., Ltd. | Provide fuels | 138,288.90 | 143,889.85 |
| Sichuan Changhong Device Tech. Co., Ltd. | Provide fuels | 1,176,255.91 | 1,015,274.30 |
| Sichuan Service Exp. Appliance Service Chain Co., Ltd. | Provide fuels | 9,503.85 | 3,230.61 |
| Shenzhen YijEn Technology Co., Ltd. | Provide fuels | 5,846.68 | |
| Changhong International Holdings (Hong Kong) Co., Ltd. | Provide fuels | 4,430.19 | |
| Sichuan Changhong Electric Co., Ltd. | Provide fuels | 13,454.51 | |
| Total | 9,655,147.39 | 9,379,945.21 |
6. Related rental
(1) Rent out
| Lessor | Lessee | Type of assets | Leasing income in Current Year | Leasing income in last year |
| Changhong Meiling | Sichuan Changhong Jijia Fine Co., Ltd. | Forklift | 21,204.11 | 7,696.70 |
| Changhong Meiling | Sichuan Changhong Jijia Fine Co., Ltd. | Warehouse | 133,280.16 | 79,184.30 |
| Changhong Meiling | Sichuan Changhong Jijia Fine Co., Ltd. | Apartment | 210,139.44 | 99,247.94 |
| Changhong Meiling | Sichuan Changhong Jijia Fine Co., Ltd. | Workshop | 403,632.66 | 523,746.18 |
| Changhong Meiling | Sichuan Changhong Jijia Fine Co., Ltd. | Appliance | 300.00 | 556.61 |
| Changhong Meiling | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | Warehouse | 448,301.88 | 330,729.23 |
| Changhong Meiling | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | Workshop | 1,427,060.66 | 1,410,924.28 |
| Changhong Meiling | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | Apartment | 628,310.13 | 282,190.49 |
| Changhong Meiling | Sichuan Changhong Minsheng Logistics Co., LTD | Office | 23,944.27 | 18,969.98 |
| Changhong Meiling | Sichuan Changhong Minsheng Logistics Co., LTD | Apartment | 157,161.90 | 176,666.67 |
| Changhong Meiling | Sichuan Service Exp. Appliance Service Chain Co., Ltd. | Apartment | 135,130.67 | 176,352.63 |
| Changhong Meiling | Sichuan Service Exp. Appliance Service Chain Co., Ltd. | Office | 130,377.53 | 42,378.38 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Lessor | Lessee | Type of assets | Leasing income in Current Year | Leasing income in last year |
| Changhong Meiling | Sichuan Service Exp. Appliance Service Chain Co., Ltd. | Workshop | 43,241.00 | 174,545.46 |
| Changhong Meiling | Sichuan Service Exp. Appliance Service Chain Co., Ltd. | Forklift | 9,600.00 | 3,200.00 |
| Changhong Meiling | Sichuan Changhe Technology Co., Ltd. | Warehouse | 3,591.96 | |
| Changhong Meiling | Hefei Changhong Industrial Co., Ltd. | Apartment | 257,283.58 | 313,664.77 |
| Changhong Meiling | Sichuan Changhong Electric Co., Ltd. | Apartment | 60,943.50 | |
| Changhong Meiling | Sichuan Changhong Precision Electronics Tech. Co., Ltd. | Forklift | 2,344.80 | |
| Changhong Meiling | Sichuan Changhong Precision Electronics Tech. Co., Ltd. | Warehouse | 20,125.56 | |
| Changhong Meiling | Sichuan Changhong Precision Electronics Tech. Co., Ltd. | Apartment | 49,032.95 | 69,339.25 |
| Changhong Meiling | Sichuan Ailian Science & Technology Co., Ltd. | Warehouse | 2,686.20 | 2,208.00 |
| Changhong Meiling | Sichuan Aichuang Technology Co., Ltd. | Warehouse | 37,519.68 | 7,232.60 |
| Changhong Meiling | Sichuan Aichuang Technology Co., Ltd. | Forklift | 4,361.18 | 790.57 |
| Changhong Air-conditioner | Sichuan Changxin Refrigeration Parts Co., Ltd. | Houses and buildings | 300,000.00 | |
| Changhong Air-conditioner | .Chengdu Guigu Environmental Tech. Co., Ltd. | Houses and buildings | 28,403.67 | |
| Changhong Air-conditioner | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | Houses and buildings | 3,950,036.56 | |
| Changhong Air-conditioner | Sichuan Changhong Electric Co., Ltd. | Equipment | 2,111,100.00 | |
| Changhong Air-conditioner | Sichuan Huafeng Corp. Group | Conference Room | 3,669.72 | |
| Changhong Air-conditioner | BVCH Optronics (Sichuan) Co., Ltd. | Freight elevator | 52,480.00 | |
| Changhong Air-conditioner | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | Machinery equipment | 24,702.55 | |
| Changhong Air-conditioner | Sichuan Changhong Jijia Fine Co., Ltd. | Driving | 7,000.00 | |
| Changhong Air-conditioner | Sichuan Changxin Refrigeration Parts Co., Ltd. | Processing equipment of U | 300,000.00 | |
| Zhongke Meiling | Sichuan Changhong Minsheng Logistics Co., LTD | Workshop | 2,829,034.65 | 2,575,560.01 |
| Zhongshan Changhong | Guangdong Changhong Electronics Co., Ltd. | Office building | 197,458.25 | 996,579.63 |
| Zhongshan | Sichuan Changhong Minsheng Logistics | Parts of the office | 35,338.99 | 55,958.48 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Lessor | Lessee | Type of assets | Leasing income in Current Year | Leasing income in last year |
| Changhong | Co., LTD | building rent-out | ||
| Zhongshan Changhong | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | 2# living area | 81,240.00 | 137,152.72 |
| Zhongshan Changhong | Sichuan Hongwei Technology Co., Ltd. | 2# living area | 15,092.52 | |
| Zhongshan Changhong | Sichuan Changhong Device Tech. Co., Ltd. | 2# living area | 58,444.98 | 1,012.07 |
| Zhongshan Changhong | Sichuan Changhong Precision Electronics Tech. Co., Ltd. | 2# living area | 71,451.61 | 24,780.88 |
| Zhongshan Changhong | Changhong International Holdings (Hong Kong) Co., Ltd. | 2# living area | 13,902.33 | |
| Jiangxi Meiling | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | Workshop | 780,677.72 | 680,062.00 |
| Jiangxi Meiling | Sichuan Changhong Minsheng Logistics Co., LTD | Workshop office | 26,285.71 | |
| Jiangxi Meiling | Changhong Huayi Compressor Co., Ltd. | Warehouse location lease | 10,666.66 | |
| Mianyang Refrigerator | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | Warehouse | 60,091.95 | |
| Mianyang Refrigerator | Sichuan Changhong Package Printing Co., Ltd. | Warehouse | 540.56 | |
| Mianyang Refrigerator | Sichuan Changhe Technology Co., Ltd. | Warehouse | 162.16 | |
| Changhong Ridian | Sichuan Changhong Device Tech. Co., Ltd. | Workshop | 1,417,391.01 | 1,061,129.66 |
| Changhong Ridian | Sichuan Hongwei Technology Co., Ltd. | Workshop | 45,257.14 | 35,218.29 |
| Changhong Ridian | Changhong International Holdings (Hong Kong) Co., Ltd. | Office | 95,238.86 | 149,724.36 |
| Changhong Ridian | Changhong International Holdings (Hong Kong) Co., Ltd. | Automobile | 31,034.48 | |
| Total | 16,256,241.51 | 9,936,836.53 | ||
(2) Lessee of related parties
| Lessor | Lessee | Type of assets | Leasing expense in Current Year | Leasing expense in last year |
| Sichuan Changhong Property Service Co., Ltd. | Changhong Air-conditioner | Workshop, office | 2,055,453.33 | |
| Sichuan Changhong Electric Co., Ltd. | Changhong Air-conditioner | Workshop, office | 9,194,056.12 | |
| Sichuan Changhong Electric Co., Ltd. | Hongmei Intelligent | Workshop, office | 93,085.18 | 152,546.40 |
| Chengdu Changhong Electronic Technology Co., Ltd. | Hongmei Intelligent | Office | 454,450.37 | 325,957.61 |
| Guangdong Changhong Electronics Co., Ltd. | Ground Energy Heat Pump | Staff dormitory | 147,850.00 | 315,135.70 |
| Guangdong Changhong Electronics Co., Ltd. | Ground Energy Heat Pump | Workshop leasing | 303,721.21 | |
| Sichuan Changhong Electric Co., Ltd. | Mianyang Refrigerator | Workshop leasing | 3,241,100.58 | 2,953,516.48 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Lessor | Lessee | Type of assets | Leasing expense in Current Year | Leasing expense in last year |
| Sichuan Changhong Electronics Holding Group Co., Ltd. | Mianyang Refrigerator | Staff dormitory | 42,752.89 | 55,877.94 |
| Sichuan Changhong Property Service Co., Ltd. | Mianyang Refrigerator | Flower lease | 8,528.25 | 8,624.14 |
| Guangdong Changhong Electronics Co., Ltd. | Changhong Ridian | Staff dormitory | 114,323.85 | 434,916.54 |
| Sichuan Changhong Electric Co., Ltd. | Changhong Ridian | Staff dormitory | 138,965.00 | |
| Beijing Changhong Tech. Co. Ltd, | Meiling Group | Office | 78,932.59 | 364,688.55 |
| Sichuan Changhong Electric Co., Ltd. | Meiling Group | Office | 291,940.55 | 933,023.62 |
| Sichuan Changhong Property Service Co., Ltd. | Changmei Technology | Space rental | 24,435.56 | |
| Chengdu Changhong Electronic Technology Co., Ltd. | Changmei Technology | Office | 153,687.60 | |
| Sichuan Hongwei Technology Co., Ltd. | Changmei Technology | Server leasing | 136,667.56 | |
| Sichuan Changhong Electronics Holding Group Co., Ltd. | Changmei Technology | Office | 98,316.65 | |
| Changhong Huayi Compressor Co., Ltd. | Jiangxi Meiling | Staff dormitory | 33,809.52 | |
| Total | 4,472,964.26 | 17,683,399.53 |
7. Related guarantee
| Secured party | Sponsored party | Maximum guarantee amount (in 10 thousand Yuan) | Start | Date due | Completed (Y/N) |
| 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 | Nonferrous Metals | 500.00 | 2019.06.19 | 2019.12.19 | Y |
| Changhong Meiling | Sichuan Air-conditioning | 20,000.00 | 2019.07.30 | 2020.03.25 | N |
| Changhong Meiling | ChanghongRuba | 1,888.08 | 2019.01.23 | 2019.12.06 | Y |
| Changhong Meiling | ChanghongRuba | 2,062.41 | 2019.01.28 | 2020.02.15 | N |
| Changhong Meiling | ChanghongRuba | 2,103.51 | 2019.12.23 | 2021.01.05 | N |
| Changhong Meiling | Changhong Ridian | 4,500.00 | 2018.08.21 | 2019.08.21 | Y |
| 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 | 6,500.00 | 2019.08.22 | 2020.08.22 | N |
| Changhong Meiling | Changhong Ridian | 2,500.00 | 2019.01.28 | 2020.07.27 | N |
| Changhong | Zhongke Meiling | 1,000.00 | 2018.06.29 | 2019.06.29 | Y |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Secured party | Sponsored party | Maximum guarantee amount (in 10 thousand Yuan) | Start | Date due | Completed (Y/N) |
| Meiling | |||||
| Changhong Meiling | Zhongke Meiling | 2,000.00 | 2018.07.20 | 2019.05.25 | Y |
| Changhong Meiling | Zhongke Meiling | 3,000.00 | 2019.07.18 | 2020.07.17 | N |
| Changhong Meiling | Zhongke Meiling | 3,000.00 | 2019.08.20 | 2020.08.19 | N |
| Changhong Meiling | Zhongke Meiling | 2,000.00 | 2019.08.23 | 2020.08.23 | N |
| Changhong Meiling | Zhongke Meiling | 920.00 | 2019.09.24 | 2020.09.24 | N |
| Changhong Meiling | Zhongke Meiling | 2,000.00 | 2019.12.30 | 2020.11.22 | N |
| Changhong Meiling | Zhongshan Changhong | 6,000.00 | 2018.03.07 | 2019.03.07 | Y |
| Changhong Meiling | Zhongshan Changhong | 10,000.00 | 2018.03.30 | 2019.03.30 | Y |
| Changhong Meiling | Zhongshan Changhong | 5,000.00 | 2018.04.12 | 2019.04.11 | Y |
| Changhong Meiling | Zhongshan Changhong | 5,500.00 | 2018.04.18 | 2019.04.19 | Y |
| Changhong Meiling | Zhongshan Changhong | 10,000.00 | 2018.08.09 | 2019.08.09 | N |
| Changhong Meiling | Zhongshan Changhong | 5,000.00 | 2018.08.21 | 2019.08.20 | Y |
| Changhong Meiling | Zhongshan Changhong | 10,000.00 | 2018.08.22 | 2019.08.21 | Y |
| Changhong Meiling | Zhongshan Changhong | 5,000.00 | 2018.10.23 | 2019.10.23 | N |
| Changhong Meiling | Zhongshan Changhong | 10,000.00 | 2019.01.25 | 2020.01.24 | N |
| Changhong Meiling | Zhongshan Changhong | 5,500.00 | 2019.03.15 | 2020.03.15 | N |
| Changhong Meiling | Zhongshan Changhong | 10,000.00 | 2019.03.31 | 2020.03.30 | N |
| Changhong Meiling | Zhongshan Changhong | 5,000.00 | 2019.04.01 | 2019.08.09 | Y |
| Changhong Meiling | Zhongshan Changhong | 5,000.00 | 2019.06.20 | 2020.06.20 | N |
| Changhong Meiling | Zhongshan Changhong | 15,000.00 | 2019.06.28 | 2020.06.27 | N |
| Changhong Meiling | Zhongshan Changhong | 2,000.00 | 2019.08.21 | 2020.08.20 | N |
| Changhong Meiling | Zhongshan Changhong | 10,000.00 | 2019.08.31 | 2020.08.31 | N |
| Counter guarantee: | |||||
| 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 |
| Nonferrous Metals | Changhong | 500.00 | 2019.06.19 | 2019.12.19 | Y |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Secured party | Sponsored party | Maximum guarantee amount (in 10 thousand Yuan) | Start | Date due | Completed (Y/N) |
| Meiling | |||||
| Sichuan Air-conditioning | Changhong Meiling | 20,000.00 | 2019.07.30 | 2020.03.25 | N |
| ChanghongRuba | Changhong Meiling | 2,062.41 | 2019.01.23 | 2019.12.06 | Y |
| ChanghongRuba | Changhong Meiling | 1,888.08 | 2019.01.28 | 2020.02.15 | N |
| ChanghongRuba | Changhong Meiling | 2,103.51 | 2019.12.23 | 2021.01.05 | N |
| Changhong Ridian | Changhong Meiling | 4,500.00 | 2018.08.21 | 2019.08.21 | Y |
| 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 | 6,500.00 | 2019.08.22 | 2020.08.22 | N |
| Changhong Ridian | Changhong Meiling | 2,500.00 | 2019.01.28 | 2020.07.27 | N |
| Zhongke Meiling | Changhong Meiling | 1,000.00 | 2018.06.29 | 2019.06.29 | Y |
| Zhongke Meiling | Changhong Meiling | 2,000.00 | 2018.07.20 | 2019.05.25 | Y |
| Zhongke Meiling | Changhong Meiling | 3,000.00 | 2019.07.18 | 2020.07.17 | N |
| Zhongke Meiling | Changhong Meiling | 3,000.00 | 2019.08.20 | 2020.08.19 | N |
| Zhongke Meiling | Changhong Meiling | 2,000.00 | 2019.08.23 | 2020.08.23 | N |
| Zhongke Meiling | Changhong Meiling | 920.00 | 2019.09.24 | 2020.09.24 | N |
| Zhongke Meiling | Changhong Meiling | 2,000.00 | 2019.12.30 | 2020.11.22 | N |
| Zhongshan Changhong | Changhong Meiling | 6,000.00 | 2018.03.07 | 2019.03.07 | Y |
| Zhongshan Changhong | Changhong Meiling | 10,000.00 | 2018.03.30 | 2019.03.30 | Y |
| Zhongshan Changhong | Changhong Meiling | 5,000.00 | 2018.04.12 | 2019.04.11 | Y |
| Zhongshan Changhong | Changhong Meiling | 5,500.00 | 2018.04.18 | 2019.04.19 | Y |
| Zhongshan Changhong | Changhong Meiling | 10,000.00 | 2018.08.09 | 2019.08.09 | N |
| Zhongshan Changhong | Changhong Meiling | 5,000.00 | 2018.08.21 | 2019.08.20 | Y |
| Zhongshan Changhong | Changhong Meiling | 10,000.00 | 2018.08.22 | 2019.08.21 | Y |
| Zhongshan Changhong | Changhong Meiling | 5,000.00 | 2018.10.23 | 2019.10.23 | N |
| Zhongshan Changhong | Changhong Meiling | 10,000.00 | 2019.01.25 | 2020.01.24 | N |
| Zhongshan | Changhong | 5,500.00 | 2019.03.15 | 2020.03.15 | N |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Secured party | Sponsored party | Maximum guarantee amount (in 10 thousand Yuan) | Start | Date due | Completed (Y/N) |
| Changhong | Meiling | ||||
| Zhongshan Changhong | Changhong Meiling | 10,000.00 | 2019.03.31 | 2020.03.30 | N |
| Zhongshan Changhong | Changhong Meiling | 5,000.00 | 2019.04.01 | 2019.08.09 | Y |
| Zhongshan Changhong | Changhong Meiling | 5,000.00 | 2019.06.20 | 2020.06.20 | N |
| Zhongshan Changhong | Changhong Meiling | 15,000.00 | 2019.06.28 | 2020.06.27 | N |
| Zhongshan Changhong | Changhong Meiling | 2,000.00 | 2019.08.21 | 2020.08.20 | N |
| Zhongshan Changhong | Changhong Meiling | 10,000.00 | 2019.08.31 | 2020.08.31 | N |
8. Assets transfer, debt restructuring of related parties
| Related party | Type | Current Year | Last Year |
| Sichuan Changhong Intelligent Manufacturing Tech. Co., Ltd. | Purchase/Purchase and construction of fixed assets | 36,796,919.82 | 32,909,220.60 |
| Sichuan Hongcheng Real Estate Co., Ltd. | Purchase and construction of fixed assets | 56,603.77 | 393,162.39 |
| Sichuan Hongcheng Construction Engineering Co., Ltd. | Purchase and construction of fixed assets | 450,450.45 | |
| Sichuan Changhong Electric Co., Ltd. | Purchase and construction of fixed assets | 48,956,440.92 | 7,743,629.01 |
| Sichuan Changhong Electric Co., Ltd. | Purchasing intangible assets | 112,876,479.31 | |
| Sichuan Hongxin Software Co., Ltd. | Purchase/Purchase and construction of fixed assets | 2,826,830.79 | 4,958,562.11 |
| Sichuan Hongxin Software Co., Ltd. | Purchasing intangible assets | 452,830.18 | 245,283.02 |
| Sichuan Changhong Network Technology Co., Ltd. | Purchase/Purchase and construction of fixed assets | 1,098,430.46 | 310,745.57 |
| Sichuan Changhong Electronic System Co., Ltd. | Purchase and construction of fixed assets | 126,106.19 | |
| Sichuan Zhiyijia Network Technology Co., Ltd. | Purchase of fixed assets | 104,693.81 | 2,990.60 |
| Sichuan Changhong Electronics Holding Group Co., Ltd. | Purchase and construction of fixed assets | 3,876,784.91 | |
| Sichuan Huanyu Industrial Co. Ltd. | Purchase/Purchase and construction of fixed assets | 19,897,298.71 | 5,648,270.69 |
| Sichuan Jiahong Industrial Co. Ltd. | Purchase and construction of fixed assets | 1,347,541.41 | |
| Guangdong Changhong Electronics Co., Ltd. | Purchase of fixed assets | 12,743.36 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Related party | Type | Current Year | Last Year |
| Sichuan Aichuang Technology Co., Ltd. | Purchase of fixed assets | 1,943,572.07 | |
| Mianyang Technology Town Big Data Technology Co., Ltd. | Purchase of fixed assets | 260,084.81 | |
| Sichuan Changhong Energy Sunshine Technology Co., Ltd. | Purchase of fixed assets | -23,340.00 | 912,954.96 |
| Hongyuan Ground Energy Heat Tech. Co., Ltd. | Purchase of fixed assets | 1,330,818.96 | |
| Mianyang Technology Town Big Data Technology Co., Ltd. | Purchase and construction of fixed assets | 1,112,815.42 | |
| Sichuan Hongwei Technology Co., Ltd. | Purchase of fixed assets | 924.40 | |
| Sichuan Changhong Gerun Environmental Protection Tech. Co., Ltd. | Sales of fixed assets | 4,570.77 | 28,999.51 |
| Sichuan Changhong Electronics Holding Group Co., Ltd. | Sales of fixed assets | 17,383.08 | |
| 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 | |
| Sichuan Changhong Electric Co., Ltd. | Sales of fixed assets | 1,028,804.28 | |
| Sichuan Changhong Jijia Fine Co., Ltd. | Sales of fixed assets | 9,980.82 | |
| Total | 226,837,070.33 | 61,015,529.66 |
9. Other
| Related party | Content | Current Year (in 10 thousand Yuan) | Last Year (in 10 thousand Yuan) |
| Yuanxin Financial Lease Co., Ltd. | Financing business, financing expenses and financial leasing | 391.67 | 168.68 |
10. Related transaction with Changhong Finance Company
(1) Saving balance
| Name of company | Balance at period-end | Balance at period-begin | Interest income from bank saving in the period |
| Changhong Meiling Co., Ltd. | 3,081,631,716.95 | 2,138,883,580.37 | 76,062,384.86 |
| Hebei Hongmao Household Appliance Technology Co., Ltd36) | 1,799,703.59 | 2,367.66 | |
| Sichuan Changhong Air-conditioner Co., Ltd. | 424,969,027.90 | 824,399,079.98 | 24,921,972.25 |
| Zhongshan Changhong Electric Co., Ltd. | 13,782,922.16 | 5,578,868.71 | 12,384.65 |
| Hefei Meiling Group Holdings Limited | 798.43 | 795.30 | 3.13 |
| Mianyang Meiling Refrigeration Co., Ltd. | 925.37 | 522.79 | 690.40 |
| Zhongke Meiling Cryogenic Technology Co., Ltd. | 90,904,816.77 | 76,807,508.29 | 2,405,843.48 |
| Jiangxi Meiling Electric Appliance Co., Ltd. | 9,504.34 | 946.27 | 8,783.08 |
| Guangdong Changhong Ridian Technology Co., Ltd. | 76,106,470.22 | 41,461,210.41 | 1,556,059.26 |
| Hongyuan Ground Energy Heat Pump Tech. Co., Ltd. | 100,690.19 | 8,201.52 | 531.04 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Hongyuan Ground Energy Heat Pump Tech. (Zhongshan) Co., Ltd. | 13,076,054.46 | 31,976,494.27 | 606,080.00 |
| Total | 3,702,382,630.38 | 3,119,117,207.91 | 105,577,099.81 |
(2) Notes discounted
| Name of company | Trade acceptance book discounted amount | Trade acceptance discounted amount | Expenses of discounted |
| Changhong Meiling Co., Ltd. | 653,197,757.84 | 634,004,398.69 | 19,193,359.15 |
| Sichuan Changhong Air-conditioner Co., Ltd. | 879,946,291.50 | 869,133,491.57 | 10,812,799.93 |
| Guangdong Changhong Ridian Technology Co., Ltd. | 7,743,945.42 | 7,688,876.05 | 55,069.37 |
| Hongyuan Ground Energy Heat Pump Tech. (Zhongshan) Co., Ltd. | 52,248,533.99 | 51,541,579.28 | 706,954.71 |
| Total | 1,593,136,528.75 | 1,562,368,345.59 | 30,768,183.16 |
(3) Notes issued
| Name of company | Issuing unit | Note amount | Type |
| Changhong Meiling Co., Ltd. | Sichuan Changhong Group Finance Co., Ltd. | 894,018,595.87 | Bank acceptance |
| Hebei Hongmao Household Appliance Technology Co., Ltd36) | Sichuan Changhong Group Finance Co., Ltd. | 20,218,149.42 | Bank acceptance |
| Sichuan Changhong Air-conditioner Co., Ltd. | Sichuan Changhong Group Finance Co., Ltd. | 1,092,953,183.10 | Bank acceptance |
| Zhongke Meiling Cryogenic Technology Co., Ltd. | Sichuan Changhong Group Finance Co., Ltd. | 20,270,061.42 | Bank acceptance |
| Guangdong Changhong Ridian Technology Co., Ltd. | Sichuan Changhong Group Finance Co., Ltd. | 85,711,149.56 | Bank acceptance |
| Zhongshan Changhong Electric Co., Ltd. | Sichuan Changhong Group Finance Co., Ltd. | 45,573,699.48 | Bank acceptance |
| Total | 2,158,744,838.85 | ||
(4) Borrowing: nil
(5) Accounts receivable factoring: nil
11. Remuneration for key management
| Item | Current Year (in10 thousand Yuan) | Last Year (in10 thousand Yuan) |
| Total remuneration | 333.24 | 358.72 |
| Including: performance incentive fund |
(iii) Come and go balance with related parties
1. Receivable account
| Item | Related party | Balance at year-end | Balance at year-begin |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Account receivable | CHANGHONG ELECTRIC (AUSTRALIA) | 37,804,702.10 | 16,782,905.91 | ||
| Account receivable | CHANGHONG ELECTRIC MIDDLE EASTFZCO | 1,552,183.58 | 3,391,982.77 | ||
| Account receivable | Changhong Europe Electric s.r.o | 1,664,405.17 | 131,552.00 | ||
| Account receivable | Changhong Ruba Electric Company (Private) Ltd. | 86,214,001.68 | 75,910,256.75 | ||
| Account receivable | Orion.PDP.Co.,ltd | 8,267,321.25 | 22,430,223.12 | ||
| Account receivable | PT.CHANGHONG ELECTRIC INDONESIA | 3,844,393.51 | 3,795,261.09 | ||
| Account receivable | Guangdong Changhong Electronics Co., Ltd. | 224,817.29 | 290,418.22 | ||
| Account receivable | Hefei Changhong Industrial Co., Ltd. | 50,000.00 | |||
| Account receivable | Hongyuan Ground Energy Heat Tech. Co., Ltd. | 10,720,675.24 | 25,559,118.66 | ||
| Account receivable | Lejiayi Chain Management Co., Ltd. | 12,461,940.42 | 2,810,087.88 | ||
| Account receivable | Sichuan Aichuang Technology Co., Ltd. | 43,297.65 | 964,432.39 | ||
| Account receivable | Sichuan Service Exp. Appliance Service Chain Co., Ltd. | 211,621.68 | 225,967.73 | ||
| Account receivable | Sichuan Changhong Minsheng Logistics Co., LTD | 41,163.13 | 275,734.13 | ||
| Account receivable | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | 162,163.72 | 997,299.16 | ||
| Account receivable | Sichuan Changhong Device Tech. Co., Ltd. | 327.80 | |||
| Account receivable | Sichuan Changhong Property Co., Ltd. | 159,690.33 | 112,151.48 | ||
| Account receivable | Sichuan Zhiyijia Network Technology Co., Ltd. | 375,948,123.63 | 505,717,212.18 | ||
| Account receivable | CHANGHONG (HK) TRADING LIMITED | 75,242,050.75 | 29,884,304.94 | ||
| Account receivable | Sichuan Changhong Electric Co., Ltd. | 2,943,118.96 | |||
| Account receivable | Changhong Huayi Compressor Co., Ltd. | 363,524.00 | |||
| Account receivable | Sichuan Changhong Jijia Fine Co., Ltd. | 8,318.75 | |||
| Account receivable | Sichuan Changhong Precision Electronics Tech. Co., Ltd. | 36,056.54 | |||
| Account receivable | Sichuan Changhong International Hotel Co., Ltd. | 2,850.00 | |||
| Account receivable | Chengdu Changhong Electronic Technology Co., Ltd. | 1,656.00 | |||
| Account receivable | Sichuan Hongwei Technology Co., Ltd. | 1,200.00 | |||
| Account receivable | Shenzhen YijEn Technology Co., Ltd. | 14,274.78 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Item | Related party | Balance at year-end | Balance at year-begin | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Account receivable | Sichuan Changhong New Energy Technology Co., Ltd. | 248,132.64 | |||
| Account receivable | Changhong International Holdings (Hong Kong) Co., Ltd. | 21,772.79 | |||
| Account receivable | Sichuan Changhong Intelligent Manufacturing Tech. Co., Ltd. | 547,276.70 | |||
| Account paid in advance | Sichuan Hongran Green Energy Co., Ltd. | 30,988.36 | |||
| Account paid in advance | Sichuan Changhong Minsheng Logistics Co., LTD | 15,295.00 | |||
| Account paid in advance | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | 16.80 | |||
| Account paid in advance | Sichuan Zhiyijia Network Technology Co., Ltd. | 1,622.40 | 3,071.23 | ||
| Account paid in advance | Sichuan Changhong Electronics Holding Group Co., Ltd. | 49,632.00 | |||
| Account paid in advance | Sichuan Changhong Electric Co., Ltd. | 11,324,475.95 | |||
| Account paid in advance | Sichuan Hongwei Technology Co., Ltd. | 113,168.00 | |||
| Account paid in advance | Guangdong Changhong Electronics Co., Ltd. | 0.2 | |||
| Account paid in advance | Sichuan Changhong Intelligent Manufacturing Tech. Co., Ltd. | 15,423,229.03 | |||
| Account paid in advance | 081 Electronic Group | 6.94 | |||
| Account paid in advance | Sichuan Changhong Precision Electronics Tech. Co., Ltd. | 7,797.42 | |||
| Account paid in advance | .Chengdu Guigu Environmental Tech. Co., Ltd. | 58,281.92 | |||
| Other account receivable | Hefei Changhong Industrial Co., Ltd. | 122,396.08 | |||
| Other account receivable | 081 Electronic Group | 204,567.35 | 252,027.35 | ||
| Other account receivable | Sichuan Service Exp. Appliance Service Chain Co., Ltd. | 500,000.00 | 600,000.00 | ||
| Other account receivable | Sichuan Changhong International Hotel Co., Ltd. | 27,589.45 | 27,589.45 | ||
| Other account receivable | Sichuan Changhong Property Co., Ltd. | 309,410.65 | 150,000.00 | ||
| Other account receivable | Sichuan Changhong Property Service Co., Ltd. | 2,952.00 | |||
| Other account receivable | Chengdu Changhong Electronic Technology Co., Ltd. | 434,509.01 | |||
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Related party | Balance at year-end | Balance at year-begin | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Other account receivable | Sichuan Huanyu Industrial Co. Ltd. | 3,150.35 | |||
| Total | 615,824,765.02 | 721,916,980.42 | |||
2. Payable account
| Item | Related party | Balance at year-end | Balance at year-begin |
| Account received in advance | Sichuan Changhong Electric Co., Ltd. | 997,132.81 | 234.16 |
| Account received in advance | Sichuan Changhong Gerun Environmental Protection Tech. Co., Ltd. | 659,496.67 | 578,537.58 |
| Account received in advance | Changhong Huayi Compressor Co., Ltd. | 66,037.73 | |
| Account received in advance | Sichuan Service Exp. Appliance Service Chain Co., Ltd. | 15,364.13 | 81,015.05 |
| Account received in advance | Hefei Changhong Industrial Co., Ltd. | 6,681.11 | 23,593.21 |
| Account received in advance | Sichuan Changhong Electronics Holding Group Co., Ltd. | 5,080.00 | 5,080.00 |
| Account received in advance | Lejiayi Chain Management Co., Ltd. | 2,227.97 | 20,258.00 |
| Account received in advance | CHANGHONG (HK) TRADING LIMITED | 1,011.34 | 994.96 |
| Account received in advance | CHANGHONG ELECTRIC MIDDLE EASTFZCO | 627.86 | |
| Account received in advance | 081 Electronic Group | 25.55 | 25.55 |
| Account received in advance | Sichuan Changhong Precision Electronics Tech. Co., Ltd. | 0.01 | |
| Account received in advance | GuangYuan Changhong Electronic Technology Co., Ltd. | 310,437.76 | |
| Account received in advance | Sichuan Zhiyijia Network Technology Co., Ltd. | 3,816,946.86 | 1,122.20 |
| Account received in advance | Hongyuan Ground Energy Heat Tech. Co., Ltd. | 426,247.52 | |
| Account received in | Sichuan Tianyou Guigu Technology Co., Ltd. | 0.06 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Related party | Balance at year-end | Balance at year-begin |
| advance | |||
| Account payable | Changhong Ruba Electric Company (Private) Ltd. | 20,520,728.81 | 29,257,116.05 |
| Account payable | Guangdong Changhong Electronics Co., Ltd. | 113,504.45 | |
| Account payable | GuangYuan Changhong Electronic Technology Co., Ltd. | 434,414.70 | |
| Account payable | Hefei Changhong Industrial Co., Ltd. | 1,729.50 | |
| Account payable | Lejiayi Chain Management Co., Ltd. | 16,856.00 | |
| Account payable | 081 Electronic Group | 86,951.38 | 25,025.52 |
| Account payable | Mianyang Highly Electric Co., Ltd. | 9,379,903.10 | 12,868,088.45 |
| Account payable | Mianyang Technology Town Big Data Technology Co., Ltd. | 7,540.79 | 1,430.47 |
| Account payable | Sichuan Aichuang Technology Co., Ltd. | 24,466,981.06 | 9,023,993.17 |
| Account payable | Sichuan Ailian Science & Technology Co., Ltd. | 5,500,914.00 | 1,701,913.57 |
| Account payable | Sichuan Hongxin Software Co., Ltd. | 340,000.00 | 21,226.42 |
| Account payable | Sichuan Hongyu Metal Manufacturing Co., Ltd. | 14,662.40 | 14,662.40 |
| Account payable | Sichuan Jiahong Industrial Co. Ltd. | 14,764.05 | 21,109.00 |
| Account payable | Sichuan Service Exp. Appliance Service Chain Co., Ltd. | 127,050.71 | 177,728.16 |
| Account payable | Sichuan Changhong Package Printing Co., Ltd. | 3,080,005.38 | 9,305,115.20 |
| Account payable | Sichuan Changhong Electric Co., Ltd. | 153,791,187.83 | 14,019,713.93 |
| Account payable | Sichuan Changhong Power Source Co., Ltd. | 1,870.82 | 4,910.82 |
| Account payable | Sichuan Changhong Electronic System Co., Ltd. | 5,432.53 | |
| Account payable | Sichuan Changhong International Travel Service Co., Ltd. | 167,858.10 | |
| Account payable | Sichuan Changhong Energy Sunshine Technology Co., Ltd. | 20,076.99 | 52,951.39 |
| Account payable | Sichuan Changhong Jijia Fine Co., Ltd. | 12,883,071.50 | 17,324,860.79 |
| Account payable | Sichuan Changhong Precision Electronics Tech. Co., Ltd. | 1,443,759.01 | 834,733.87 |
| Account payable | Sichuan Changhong Minsheng Logistics Co., LTD | 210,699.13 | 46,671,482.99 |
| Account payable | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | 75,808,653.32 | 27,891,091.24 |
| Account payable | Sichuan Changhong Device Tech. Co., Ltd. | 23,275.25 | |
| Account payable | Sichuan Changhong Network Technology Co., Ltd. | 7,229.72 | 13,456.92 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Related party | Balance at year-end | Balance at year-begin |
| Account payable | Sichuan Changhong New Energy Technology Co., Ltd. | 2,950.00 | |
| Account payable | Sichuan Changhong Intelligent Manufacturing Tech. Co., Ltd. | 15,962,820.73 | 11,377,605.65 |
| Account payable | Sichuan Changxin Refrigeration Parts Co., Ltd. | 692,843.70 | 883,369.88 |
| Account payable | Changhong Huayi Compressor Co., Ltd. | 59,533,997.08 | 105,062,188.37 |
| Account payable | Hunan Grand-Pro Intelligent Tech. Company | 9,095,322.04 | 287,486.83 |
| Account payable | CHANGHONG (HK) TRADING LIMITED | 3,052,516.27 | 1,998,987.22 |
| Account payable | Sichuan Changhong International Hotel Co., Ltd. | 121,538.10 | |
| Account payable | Sichuan Changhong Electronics Holding Group Co., Ltd. | 796,408.02 | |
| Account payable | Sichuan Changhong Electronic Products Co., Ltd. | 2,097,100.40 | 2,054,864.41 |
| Account payable | Sichuan Zhiyijia Network Technology Co., Ltd. | 6,274.34 | |
| Account payable | Sichuan Huanyu Industrial Co. Ltd. | 3,000,000.00 | |
| Account payable | Changhong International Holdings (Hong Kong) Co., Ltd. | 394,743.12 | |
| Other account payable | Mianyang Technology Town Big Data Technology Co., Ltd. | 113,450.00 | 100,000.00 |
| Other account payable | Sichuan Hongxin Software Co., Ltd. | 61,978.23 | |
| Other account payable | Sichuan Jiahong Industrial Co. Ltd. | 20,002.24 | 22,218.04 |
| Other account payable | Sichuan Changhong Package Printing Co., Ltd. | 50,000.00 | 50,000.00 |
| Other account payable | Sichuan Changhong Electric Co., Ltd. | 5,861,224.39 | 1,514,578.28 |
| Other account payable | Sichuan Changhong Gerun Environmental Protection Tech. Co., Ltd. | 10,000.00 | 10,000.00 |
| Other account payable | Sichuan Changhong Energy Sunshine Technology Co., Ltd. | 553,165.00 | |
| Other account payable | Sichuan Changhong Jijia Fine Co., Ltd. | 400,500.00 | 400,500.00 |
| Other account payable | Sichuan Changhong Precision Electronics Tech. Co., Ltd. | 192,717.54 | 200,000.00 |
| Other account payable | Sichuan Changhong Minsheng Logistics Co., LTD | 520,500.00 | 500,500.00 |
| Other account payable | Sichuan Changhong Mold Plastic Tech. Co., Ltd. | 1,700,295.88 | 1,648,151.88 |
| Other account payable | Sichuan Changhong Intelligent Manufacturing Tech. Co., Ltd. | 1,282,495.95 | 343,586.81 |
| Other account payable | Sichuan Changxin Refrigeration Parts Co., Ltd. | 46,702.03 | 50,000.00 |
| Other account payable | Sichuan Zhiyijia Network Technology Co., Ltd. | 41,940.00 | |
| Other account | Yuanxin Financial Lease Co., Ltd. | 1,315,045.86 | 1,686,849.14 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Related party | Balance at year-end | Balance at year-begin |
| payable | |||
| Other account payable | Changhong Huayi Compressor Co., Ltd. | 1,598,900.00 | 1,050,000.00 |
| Other account payable | Hunan Grand-Pro Intelligent Tech. Company | 250,000.00 | 200,000.00 |
| Other account payable | CHANGHONG (HK) TRADING LIMITED | 82,671.18 | 76,036.96 |
| Other account payable | Sichuan Changhong Electronics Holding Group Co., Ltd. | 1,090.65 | |
| Other account payable | Sichuan Yunyou Internet Tech. Co., Ltd. | 139,862.42 | |
| Total | 418,950,358.95 | 304,283,528.67 | |
(iv) Commitments from related parties: NilXII. Share-based payment: NilXIII. Contingency
1. Pending action or possible liabilities formed from arbitration: Nil
2. Contingency from external guarantee: Nil
3. Other contingency: Nil
XIV. Commitments: NilXV. Events occurring after the balance sheet date
1. Important non-adjustment items: Nil
2. Profit distribution:
For year of 2019, the individual statement of the parent company show net profit of 111,361,168.18 Yuan,according to the auditing from ShinWing CPA (LLP). In accordance with relevant regulations, the retainedprofit at beginning of Current Year amounted as 908,358,682.91 Yuan, deducted the 2018 profit distributed62,675,872.86 Yuan and after extract for statutory surplus reserve 11,136,116.82 Yuan, the retained profit inindividual statement of the parent company cumulative counted as 945,907,861.41 Yuan at end of 2019. Inaddition, for year of 2019, the net profit attributable to owners of parent company amounted as
56,441,479.14 Yuan, the retained profit for end of the 2019 counted as 884,127,743.42 Yuan.
Pursuit to relevant rules and regulation of Article of Association, and considering the interest of shareholdersand long-term development needs of the Company, Board of Directors agrees that, based on total sharecapital 1,044,597,881 of the Company dated 31 December 2019, distributed 0.5 Yuan (tax included) in cash
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
for every 10 shares held by shareholders, totally 52,229,894.05 Yuan distributed in total (tax included). Totalshare capital of the Company has no changes after distribution, the retained profit of the parent companyamounted as 893,677,967.36 Yuan, rests of the retained profit will carry-over for distribute in later years.The aforesaid pre-plan has been deliberated and approved by the 36
th session of 9
th
BOD, and ready forapproval from the shareholders general meeting
3. Major sales return: Nil
4. Other than the above mentioned events, the Company have no other events occurred after balance sheetdate.XVI. Other significant matters
1. Correction of previous periods and influence: Nil
2. Debt restructuring: Nil
3. Assets replacement: Nil
4. Pension plan: Nil
5. Discontinuing operation: Nil
6. Branch information
In 10 thousand Yuan
| Item | Refrigerator, freezer Washing machine | Air-conditioner | Marketing | Small home appliances | Other | Sales in branch | Total |
| Operation income | 907,428.73 | 632,921.97 | 59,528.29 | 104,279.83 | 31,254.49 | 80,088.02 | 1,655,325.29 |
| Including: foreign trade income | 847,688.54 | 632,693.49 | 59,527.08 | 104,149.10 | 11,267.08 | 1,655,325.29 | |
| Income from transactions between divisions | 59,740.19 | 228.48 | 1.21 | 130.74 | 19,987.40 | 80,088.02 | |
| Operation income | 899,621.91 | 644,681.10 | 58,609.48 | 101,896.28 | 28,356.94 | 79,629.34 | 1,653,536.37 |
| Operation profit | 7,806.82 | -11,759.13 | 918.81 | 2,383.55 | 2,897.55 | 458.68 | 1,788.92 |
| Total assets | 1,142,091.37 | 375,810.76 | 6,016.22 | 68,079.16 | 17,112.40 | 188,886.55 | 1,420,223.36 |
| Total liability | 638,120.53 | 251,786.17 | 19,246.82 | 50,005.65 | 7,675.25 | 57,808.53 | 909,025.89 |
| Supplementary information | |||||||
| Depreciation and amortization | 19,367.13 | 10,228.11 | 14.11 | 518.98 | 595.94 | -354.24 | 31,078.51 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Item | Refrigerator, freezer Washing machine | Air-conditioner | Marketing | Small home appliances | Other | Sales in branch | Total |
| expenses | |||||||
| Capital expenditure | 6,517.11 | 3,289.07 | 3.28 | 152.48 | 1,107.45 | 20.9 | 11,048.49 |
| Non-cash expenses except for depreciation and amortization | 104,549.46 | 70,404.62 | 1,632.54 | 5,802.42 | 4,016.84 | -458.59 | 186,864.47 |
7. Other major transactions and events shows impact on investor‘s decision-making: NilXVII. Notes to main items of financial statement of parent company
1. Note receivable
(1) Category of note receivable
| Category | Amount at year-end | ||||
| Book balance | Bad debt provision | Book value | |||
| Amount | Ratio | Amount | Ratio | ||
| Account receivable that withdrawal bad debt provision by single item | 1,006,525,937.93 | 86.22% | 3,514,443.05 | 0.35% | 1,003,011,494.88 |
| Including: current payment with related party | 965,981,524.72 | 82.75% | 965,981,524.72 | ||
| Account receivable with letter of credit | 37,029,970.16 | 3.17% | 37,029,970.16 | ||
| Account receivable with single minor amount but withdrawal single item bad debt provision | 3,514,443.05 | 0.30% | 3,514,443.05 | 100.00% | |
| Account receivable withdrawal bad debt provision by portfolio | 160,872,283.13 | 13.78% | 5,320,388.68 | 3.31% | 155,551,894.45 |
| Including: account receivable of engineering customers | 390,215.80 | 0.03% | 390,215.80 | ||
| Receivables other than engineering customers | 160,482,067.33 | 13.75% | 5,320,388.68 | 3.32% | 155,161,678.65 |
| Total | 1,167,398,221.06 | 100.00% | 8,834,831.73 | 0.76% | 1,158,563,389.33 |
(Continued)
| Category | Amount at year-begin |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Book balance | Bad debt provision | Book value | |||
| Amount | Ratio | Amount | Ratio | ||
| Account receivable that withdrawal bad debt provision by single item | 850,209,430.95 | 80.44% | 3,054,598.79 | 0.36% | 847,154,832.16 |
| Including: current payment with related party | 798,250,556.57 | 75.53% | 798,250,556.57 | ||
| Account receivable with letter of credit | 45,978,287.54 | 4.35% | 45,978,287.54 | ||
| Account receivable with single minor amount but withdrawal single item bad debt provision | 5,980,586.84 | 0.57% | 3,054,598.79 | 51.08% | 2,925,988.05 |
| Account receivable withdrawal bad debt provision by portfolio | 206,713,269.30 | 19.56% | 6,098,978.15 | 2.95% | 200,614,291.15 |
| Including: account receivable of engineering customers | |||||
| Receivables other than engineering customers | 206,713,269.30 | 19.56% | 6,098,978.15 | 2.95% | 200,614,291.15 |
| Total | 1,056,922,700.25 | 100.00% | 9,153,576.94 | 0.87% | 1,047,769,123.31 |
1) Account receivable with single minor amount but withdrawal bad debt provision singly, refers to the minorsingle receivables, and withdrawal bad debt provision by combination shows no risk characteristic of thereceivables, 3 clients involved.
2) Account receivable withdrawal bad debt provision by portfolio
A. Account receivable of engineering customers
| Account age | Balance at year-end | ||
| Account receivable | Bad debt provision | Provision ratio | |
| Within 3 months (3 months included) | 147,915,548.67 | 1,479,155.49 | 1.00% |
| Over 3 months and within 6 months (6 months included) | 4,489,095.54 | 448,909.55 | 10.00% |
| Over 6 months and within one year (One year included) | 2,833,508.10 | 566,701.62 | 20.00% |
| Over one year - within 2 years (2 years included) | 4,740,761.94 | 2,370,380.97 | 50.00% |
| Over 2 years - within 3 years (3 years included) | 239,560.14 | 191,648.11 | 80.00% |
| Over 3 years | 263,592.94 | 263,592.94 | 100.00% |
| Total | 160,482,067.33 | 5,320,388.68 | |
B. Receivables other than engineering customers
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
| Account age | Balance at year-end | ||
| Account receivable | Bad debt provision | Provision ratio | |
| Within 3 months (3 months included) | |||
| Over 3 months and within 6 months (6 months included) | 335,925.80 | 0.00% | |
| Over 6 months and within one year (One year included) | 54,290.00 | 0.00% | |
| Over one year - within 2 years (2 years included) | |||
| Over 2 years - within 3 years (3 years included) | |||
| Over 3 years | |||
| Total | 390,215.80 | ||
(2) By account age
| Item | Balance at year-end |
| Within 3 months (3 months included) | 1,062,415,118.17 |
| Over 3 months and within 6 months (6 months included) | 58,046,694.55 |
| Over 6 months and within one year (One year included) | 19,309,838.82 |
| Over one year - within 2 years (2 years included) | 16,793,370.17 |
| Over 2 years - within 3 years (3 years included) | 8,401,216.41 |
| Over 3 years | 2,431,982.94 |
| Total | 1,167,398,221.06 |
(3) Account receivable bad debt reserves
Bad debt provision has 2,566,826.04 Yuan accrual in Current Year; no trade receivables written-off inprevious year was recovered this year.
(4) Account receivable actually written-off in Current Year
| Item | Written-off amount |
| Account receivable written-off | 2,885,571.25 |
(5) In Current Year, top five receivables collected by arrears party amounting to RMB 913,933,567.63 intotal, accounted for 78.29% of the receivables at balance of Current Year-end, the bad debt provisionaccrual correspondingly amounting to RMB 0.00 at year-end balance.
(6) Account receivable terminated recognization due to the transfer of financial assets: nil
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(7) No assets and liability transfer Account receivable and continues to involve at year-end.
2. Other account receivable
| Item | Balance at year-end | Balance at year-begin |
| Interest receivable | 7,880,186.85 | 2,653,712.36 |
| Dividend receivable | 661,434.48 | |
| Other account receivable | 33,423,018.09 | 180,187,618.84 |
| Total | 41,964,639.42 | 182,841,331.20 |
2.1 Interest receivable
(1) Category of interest receivable
| Item | Balance at year-end | Balance at year-begin |
| Interest receivable from time deposit | 7,880,186.85 | 1,892,948.46 |
| Income receivable from financial products | 760,763.90 | |
| Total | 7,880,186.85 | 2,653,712.36 |
(2) Major overdue interest: nil
2.2 Dividend receivable
(1) Category of dividend receivable
| Item | Balance at year-end | Balance at year-begin |
| Huishang Bank Corporation Limited | 661,434.48 |
(2) Major dividends receivable with account age over 1 year: Nil
2.3 Other account receivable
(1) Category of other account receivable
| Nature | Book balance at year-end | Book balance at year-begin |
| Related party in consolidation statement | 4,126,498.15 | 160,930,695.50 |
| Related party not in consolidation statement | 500,000.00 | 500,000.00 |
| Loans of employee‘s pretty cash | 6,014,409.39 | 5,779,671.00 |
| Cash deposit | 1,010,000.00 | 636,260.00 |
| Export rebate | 21,650,454.61 | 12,294,910.68 |
| Other | 133,182.08 | 80,102.08 |
| Total | 33,434,544.23 | 180,221,639.26 |
(2) Other account receivable bad debt reserves
Annotations to Financial Statements of Changhong Meiling Co., Ltd.
From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Bad debt reserves | First stage | Second stage | Third stage | Total |
| Expected credit loss in next 12 months | Expected credit loss for the whole duration (no credit impairment) | Expected credit loss for the whole duration (credit impairment has occurred) | ||
| Balance as at 1 Jan. 2019 | 34,020.42 | 34,020.42 | ||
| Book balance of Other account receivable in Current Year as at 1 Jan. 2019 | — | — | — | |
| --Transfer to the second stage | ||||
| -- Transfer to the third stage | ||||
| -- Reversal to the second stage | ||||
| -- Reversal to the first stage | ||||
| Provision in Current Year | -22,494.28 | -22,494.28 | ||
| Reversal in Current Year | ||||
| Conversion in Current Year | ||||
| Write off in Current Year | ||||
| Other change | ||||
| Balance as at 31 Dec. 2019 | 11,526.14 | 11,526.14 |
(3) By account age
| Account age | Balance at year-end |
| Within 3 months (3 months included) | 25,719,157.43 |
| Over 3 months and within 6 months (6 months included) | 638,550.80 |
| Over 6 months and within one year (One year included) | 1,206,391.20 |
| over one year-within two years (2 years included) | 1,210,156.85 |
| Over 2 years - within 3 years (3 years included) | 777,511.88 |
| Over 3 years | 3,882,776.07 |
| Total | 33,434,544.23 |
(4) No actual verification of other receivables in Current Year
(5) Top 5 other account receivable has RMB 26,819,296.19 in total, a 80.21% in total account receivable atperiod-end, the bad debt provision accrual correspondingly amounting to RMB 0.00 at year-end balance.
(6) No other account receivable involved government subsidies at year-end.
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
(7) No other receivables terminated recognization due to the transfer of financial assets at year-end.
(8) No assets and liability transfer other receivables and continues to involve at year-end.
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise specified. RMB for record in the statement)
3. Long-term equity investments
(1) Classification of long-term equity investments
| Item | Balance at year-end | Balance at year-begin | ||||
| Book balance | Impairment loss | Book value | Book balance | Impairment loss | Book value | |
| Investment in subsidiaries: | ||||||
| Zhongke Meiling Cryogenic Technology Co., Ltd. | 42,652,000.00 | 42,652,000.00 | 42,652,000.00 | 42,652,000.00 | ||
| Mianyang Meiling Refrigeration Co., Ltd. | 95,000,000.00 | 95,000,000.00 | 95,000,000.00 | 95,000,000.00 | ||
| Hefei Meiling Electric Marketing Co., Ltd. | 54,900,000.00 | 54,900,000.00 | 54,900,000.00 | 54,900,000.00 | ||
| 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., Ltd. | 955,600,437.79 | 955,600,437.79 | 955,600,437.79 | 955,600,437.79 | ||
| 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., Ltd. | 79,000,000.00 | 79,000,000.00 | 79,000,000.00 | 79,000,000.00 | ||
| Guangdong Changhong Ridian Technology Co., Ltd. | 90,802,061.95 | 90,802,061.95 | 90,802,061.95 | 90,802,061.95 | ||
| 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., Ltd. | 60,000,000.00 | 25,082,892.26 | 34,917,107.74 | 60,000,000.00 | 60,000,000.00 | |
| Hefei Meiling Wulian Technology Co., Ltd. | 6,000,000.00 | 6,000,000.00 | ||||
| Investment in associates: | ||||||
| Hefei Xingmei Assets Management Co., Ltd. | 8,554,613.73 | 8,554,613.73 | 9,420,099.27 | 9,420,099.27 | ||
| Sichuan Zhiyijia Network Technology Co., Ltd. | 47,831,474.41 | 47,831,474.41 | 17,803,986.55 | 17,803,986.55 | ||
| Total | 1,771,955,007.25 | 73,210,892.26 | 1,698,744,114.99 | 1,736,793,004.93 | 1,736,793,004.93 | |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
(2) Investment in subsidiaries
| Invested enterprise | Balance at year-begin | Increased in Current Year | Decreased in Current Year | Balance at year-end | Provision for impairment losses | Ending balance of impairment |
| Zhongke Meiling Cryogenic Technology Co., Ltd. | 42,652,000.00 | 42,652,000.00 | ||||
| Mianyang Meiling Refrigeration Co., Ltd. | 95,000,000.00 | 95,000,000.00 | ||||
| Hefei Meiling Electric Marketing Co., Ltd. | 54,900,000.00 | 54,900,000.00 | ||||
| Zhongshan Changhong Electric Co., Ltd. | 169,856,419.37 | 169,856,419.37 | ||||
| Sichuan Changhong Air-conditioner Co., Ltd. | 955,600,437.79 | 955,600,437.79 | ||||
| Hefei Meiling Group Holdings Limited | 113,630,000.00 | 113,630,000.00 | ||||
| Jiangxi Meiling Electric Appliance Co., Ltd. | 79,000,000.00 | 79,000,000.00 | ||||
| Guangdong Changhong Ridian Technology Co., Ltd. | 90,802,061.95 | 90,802,061.95 | ||||
| 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., Ltd. | 60,000,000.00 | 60,000,000.00 | 25,082,892.26 | 25,082,892.26 | ||
| Hefei Meiling Wulian Technology Co., Ltd. | 6,000,000.00 | 6,000,000.00 | ||||
| Total | 1,709,568,919.11 | 6,000,000.00 | 1,715,568,919.11 | 73,210,892.26 | 73,210,892.26 |
(3) Investment in associates
| Invested enterprise | Balance at year-begin | Changes in Current Year | Balance at year-end | Ending balance of impairment | |||||||
| Additional Investment | Negative Investment | Investment income recognized under equity | Adjustment for other comprehensive income | Other equity change | Cash dividend or profit announced to issued | Provision for impairment loss | Other | ||||
| Hefei Xingmei Assets Management Co., Ltd. | 9,420,099.27 | -865,485.54 | 8,554,613.73 | ||||||||
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Invested enterprise | Balance at year-begin | Changes in Current Year | Balance at year-end | Ending balance of impairment | |||||||
| Additional Investment | Negative Investment | Investment income recognized under equity | Adjustment for other comprehensive income | Other equity change | Cash dividend or profit announced to issued | Provision for impairment loss | Other | ||||
| Sichuan Zhiyijia Network Technology Co., Ltd. | 17,803,986.55 | 29,087,040.00 | 940,447.86 | 47,831,474.41 | |||||||
| Total | 27,224,085.82 | 29,087,040.00 | 74,962.32 | 56,386,088.14 | |||||||
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
4. Operation income and operation cost
| Item | Current Year | Last Year | ||
| Income | Cost | Income | Cost | |
| Main business | 7,369,698,197.38 | 6,536,718,301.95 | 7,634,344,339.63 | 6,551,561,605.76 |
| Other business | 1,926,750,045.91 | 1,900,843,201.15 | 1,892,851,622.99 | 1,852,134,266.74 |
| Total | 9,296,448,243.29 | 8,437,561,503.10 | 9,527,195,962.62 | 8,403,695,872.50 |
(1) Main business - Classified according to product
| Item | Current Year | Last Year | ||
| Operation income | Operation cost | Operation income | Operation cost | |
| Refrigerator, freezer | 6,827,193,557.28 | 6,050,370,840.17 | 7,303,827,940.51 | 6,259,064,481.80 |
| Washing machine | 123,468,405.74 | 116,909,031.46 | 53,438,809.25 | 47,794,996.27 |
| Small household appliances and kitchen and bathroom | 417,258,605.04 | 368,071,858.55 | 276,833,964.23 | 244,634,846.30 |
| Other | 1,777,629.32 | 1,366,571.77 | 243,625.64 | 67,281.39 |
| Total | 7,369,698,197.38 | 6,536,718,301.95 | 7,634,344,339.63 | 6,551,561,605.76 |
(2) Main business - Classified according to region
| Item | Current Year | Last Year | ||
| Operation income | Operation cost | Operation income | Operation cost | |
| Domestic | 5,194,282,583.68 | 4,678,505,490.95 | 5,523,018,463.01 | 4,746,349,961.02 |
| Overseas | 2,175,415,613.70 | 1,858,212,811.00 | 2,111,325,876.62 | 1,805,211,644.74 |
| Total | 7,369,698,197.38 | 6,536,718,301.95 | 7,634,344,339.63 | 6,551,561,605.76 |
Top five clients in sales revenue amounted as RMB 5,135,648,758.20, a 55.24% in total operationincome.
5. Investment income
| Item | Current Year | Last Year |
| Long-term equity investment income by equity method | 74,962.32 | -4,601,912.14 |
| Investment income obtained from disposal of tradable financial assets | -25,456,976.70 | -26,793,572.57 |
| Income from financial products | 53,507,866.92 | 73,451,406.79 |
| Long-term equity investment income by cost method | 4,590,000.00 | 2,754,000.00 |
| Investment income of other non-current financial assets during holding period | 661,434.48 |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Current Year | Last Year |
| Investment income obtained from held of finance asset available for sales | 268,439.33 | |
| Total | 33,377,287.02 | 45,078,361.41 |
XVIII. Approval of financial statementThe financial statement has already been approved from the board of directors of the Company forreporting dated 26 March 2020
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019
(Unless otherwise 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 onStock Issuance Enterprise No.1—Non-recurring gains/losses (2008) from CSRC:
| Item | Current Year | Note |
| Gains and losses from disposal of non-current assets | -9,537,945.52 | |
| Tax refund or mitigate due to examination-and-approval beyond power or without official approval document or accident | ||
| Government subsidy recorded in current gains and losses | 103,813,820.02 | |
| 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 financial liabilities and financial assets available for sale | 27,685,917.00 | |
| Switch-back of provision of impairment of account receivable which are treated with separate depreciation test | 1,936,952.67 | |
| Gains and losses obtained from external trusted loans | ||
| Gains and losses arising from change of fair value of investment real estate whose follow-up measurement are conducted according to fair value pattern | ||
| Affect on current gains and losses after an one-time adjustment according to requirements of laws and regulations regarding to taxation and accounting |
Annotations to Financial Statements of Changhong Meiling Co., Ltd.From 1 January 2019 to 31 December 2019(Unless otherwise specified. RMB for record in the statement)
| Item | Current Year | Note |
| Trust fee obtained from trust operation | ||
| Other non-operating income and expenditure except for the aforementioned ones | 1,070,165.28 | |
| Other gains and losses items complying with definition for non-recurring gains and losses | ||
| Subtotal | 124,968,909.45 | |
| Impact on income tax | 15,170,286.77 | |
| Impact on minority equity(after taxation) | 2,902,482.15 | |
| Total | 106,896,140.53 |
2. Return on equity and earnings per share
In accordance with requirement of the No. 9 Rule of Information Disclosure Compiling of Public ListedCompanies: Calculation and Disclosure of Return on Equity and Earnings per Share (revised in 2010), theweighted average return on equity, basic earnings per share and diluted earnings per share of the Company in2019 are as follow:
| Profit during the report period | Weighted average return on equity | Earnings per share/EPS (RMB/Share) | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to shareholders of parent company | 1.13% | 0.0540 | 0.0540 |
| Net profit attributable to shareholders of parent company after deduction of non-recurring gains and losses | -1.01% | -0.0483 | -0.0483 |
3. Accounting difference under the accounting rules in and out of China: Nil
4. Supplementary information for accounting policy changed: Nil
长虹美菱股份有限公司2019年年度报告
Section XIII. Documents available for ReferenceI. Financial statement carrying the signatures and seals of the Chairman, principal of the accountingworks and person in charge of accounting organ;II. Original auditing report carrying the seal of CPA and autography and seal of the accountants;III. Original documents of the Company and manuscripts of public notices that disclosed in thewebsite designated by CSRC in the report period;The aforesaid documents are all available at headquarter of the Company. The Company wouldprovide them timely when CSRC and Shenzhen Stock Exchange require or the shareholders needconsultation according to the regulations and Articles of Association.
Chairman: Wu DinggangChanghong Meiling Co., Ltd.
28 March 2020