皖美菱B:2016年年度报告(英文版)

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合肥美菱股份有限公司 HEFEIMEILING CO., LTD.

二〇一六年年度报告

AnnualReport 2016

SectionI.ImportantNotice,ContentsandParaphrase

BoardofDirectors,SupervisoryCommittee,alldirectors,supervisorsandseniorexecutivesof

HefeiMeilingCo.,Ltd.(hereinafterreferredtoastheCompany)herebyconfirmthatthereareno

anyfictitiousstatements,misleadingstatements,orimportantomissionscarriedinthisreport,and

shalltakeallresponsibilities,individualand/orjoint,forthereality,accuracyandcompletionofthe

wholecontents.

Mr. Liu Tibin, Chairman of the Company, Mr. Zhang Xiaolong, person in change of

accountingworkandMr.LuoBo,personinchargerofaccountingorgan(accountantincharge)

hereby confirm that the Financial Report of 2015 Annual Report is authentic, accurate and

complete.

TheCompanydidnothavedirectors,supervisorsandseniorexecutivesoftheCompanycould

notguaranteethereality,accuracyandcompletionofthewholecontentsorhaveobjections.

AllthedirectorsattendedtheboardmeetingondeliberatingtheAnnualReportinbothwaysof

siteandcommunication.

Modifiedauditopinionsnotes

□Applicable√Notapplicable

ShineWingCertifiedPublicAccountantsCo.,Ltd.(LLP)issuedstandardunqualifiedAuditors‘

ReportfortheCompany‘sFinancialReportof2016

Majordefectsininternalcontrol

□Applicable√Notapplicable

TheCompanyhadnomajordefectsininternalcontrolinthereportingperiod.

Riskwariningofconcerningtheforward-lookingstatementswithfutureplanninginvolvedin

annualreport

√Applicable □Notapplicable

Concerningtheforward-lookingstatementswithfutureplanninginvolvedintheReport,they

donotconstituteasubstantialcommitmentforinvestors,investorsandthepersonconcernedshould

maintain adequate risk awareness, furthermore, differences between the plans, forecast and

commitmentsshould becomprehended.Investorsareadvisedto exercisecaution ofinvestment

risks.

Investorsareadvisedtoreadthefulltextofannualreport,andpayparticularattentiontothe

followingriskfactors.

MoredetailsaboutthepossiblerisksandcountermeasuresintheoperationoftheCompanyare

describedinthereport―IV.Prospectsforthefuturedevelopmentofthecompany‖of―SectionIV

analysisanddiscussionoftheoperation‖,investorsareadvisedtoreadtherelevantcontent.

SecuritiesTimes,ChinaSecuritiesJournal,HongKongCommercialDailyandJuchaoWebsite

()arethemediaforinformationdisclosureforyearof2017thatappointedby

theCompany.AllpublicinformationunderthenameoftheCompanydisclosedontheabovesaid

mediaandwebsiteshallprevail,andinvestorsareadvisedtoexercisecaution.

DoestheCompanyneedtocomplywithdisclosurerequrimentsofthespecialindustry:No

Profitdistribution pre-planorcapitalizing ofcommonreserves pre-plandeliberated bythe

Boardinthereportingperiod

√Applicable □Notapplicable

Theprofitdistributionplanforyearof2016,thatdeliberatedandapprovedby29thsessionof

the8thBODwas:taketotalsharesof1,044,597,881sharesasbasedated31December2016，，

distributed0.6Yuan(taxincluded)bonusincashforevery10-shareholdbyallshareholders,no

sharebonusissuedandnocapitalizingofcommonreservescarriedout.

Whetherhascapitalizingofcommonreservescarriedout

□Yes√No

Directorsandsenior executivesof theCompanyrespectivelysigned Written Confirmation

Opinionsfor2016AnnualReport.

Supervisory Committee of the Company formed Written Examination Opinions for 2016

AnnualReport.

Contents

SectionIImportantNotice,ContentsandParaphrase ...... 1

SectionIICompanyProfileandMainFinnaicalIndexes...... 5

SectionIIISummaryofCompanyBusiness ...... 14

SectionIVDiscussionandAnalysisoftheoperation ...... 20

SectionVImportantEvents ...... 61

SectionVIChangesinsharesandparticularaboutshareholders...... 129

SectionVIIPreferredStock……………………………………………………………………145

SectionVIIIParticularsaboutDirectors,Supervisors,SeniorExecutivesandEmployees.... 146

SectionIXCorporateGovernance...... 160

SectionXCorporatebonds...... 177

SectionXIFinancialReport...... 178

SectionXIIDocumentsavailableforreference...... 321

Paraphrase

Items Refersto Contents

Company, the Company or Meiling Refersto HEFEIMEILINGCO.,LTD

Electric

Sichuan Changhong or controlling Refersto SichuanChanghongElectricCo.,Ltd.

shareholder

ChanghongGroup Refersto SichuanChanghongElectronicsHoldingGroupCo.,Ltd.

HongKongChanghong Refersto CHANGHONG(HK)TRADINGLIMITED

MeilingGroup Refersto HefeiMeilingGroupHoldingsLimited

IndustryInvestmntGroup Refersto HefeiIndustryInvestmentHolding(Group)Co.,Ltd.

XingtaiHolding Refersto HefeiXingtaiFinancialHolding(Group)Co.,Ltd.

ShineWing Refersto ShineWingCertifiedPublicAccountants(LLP)

ChanghongAir-conditioner Refersto SichuanChanghongAir-conditionerCo.,Ltd.

ZhongkeMeiling Refersto ZhongkeMeilingCryogenicTechnologyCo.,Ltd.

HongyunVentureCapitalFund Refersto SichuanHongyunNewITVentureCapitalFund

Zhiyijia Refersto SichuanZhiyijiaNetworkTechnologyCo.,Ltd.

ChanghongRidian Refersto GuangdongChanghongRidianTechnologyCo.,Ltd.

ZhongshanChanghong Refersto ZhongshanChanghongElectricCo.,LTD

ChangmeiTechnology Refersto ChangmeiTechnologyCo.,Ltd.

MeilingSoftware Refersto MianyangMeilingSoftwareTechniqueCo.,Ltd.

MianyangRefrigeration Refersto MianyangMeilingRefrigerationCo.,Ltd.

HuayiCompressor Refersto HuayiCompressorCo.,Ltd.

CSRC Refersto ChinaSecuritiesRegulatoryCommission

AnhuiSecuritiesBureau Refersto ChinaSecuritiesRegulatoryCommission,AnhuiProvince

SecuritiesRegulatoryBureau

SSE Refersto ShenzhenStockExchange

SectionIICompanyProfileandMainFinnaicalIndexes

I.Companyinformation

Shortformofthestock MEILINGDIANQI, Stockcode 000521,200521

WANMEILING-B

ShortformoftheStockafter ——

changed(ifapplicable)

Stockexchangeforlisting ShenzhenStockExchange

NameoftheCompany(in 合肥美菱股份有限公司

Chinese)

ShortformoftheCompany(in 美菱电器

Chinese)

ForeignnameoftheCompany HEFEIMEILINGCO.,LTD.

(ifapplicable)

Abbr.ofEnglishnameofthe ——

Company(ifapplicable)

Legalrepresentative LiuTibin

Registrationsadd. No.2163,LianhuaRoad,EconomicandTechnologyDevelopmentZone,Hefei

Codeforregistrationsadd 230601

Officesadd. No.2163,LianhuaRoad,EconomicandTechnologyDevelopmentZone,Hefei

Codesforofficeadd. 230601

website

e-mail info@meiling.com

II.Person/Waytocontact

SecretaryoftheBoard Rep.ofsecurityaffairs

Name LiXia ZhuWenjie

Contactadd. No.2163,LianhuaRoad,Economicand No.2163,LianhuaRoad,Economicand

TechnologyDevelopmentZone,Hefei TechnologyDevelopmentZone,Hefei

Tel. 0551-62219021 0551-62219021

Fax. 0551-62219021 0551-62219021

e-mail lixia@meiling.com wenjie.zhu@meiling.com

III.Informationdisclosureandpreparationplace

Newspaperappointedforinformation Securities Times, China Securities Journal, Hong Kong

disclosure CommercialDaily

Websiteforannualreportpublishappointedby Juchaowebsite:

CSRC

Preparationplaceforannualreport RoomofsecretaryoftheBoard,2/F,administrativecenter,

OfficebuildingoftheCompany

IV.RegistrationchangesoftheCompany

Organizationcode Uniformsocialcreditcode:9134000014918555XK

Changesofmainbusinesssincelisting Nochanges

1.InOctober1993,afterinitiallisting,controllingshareholderofthe

Company--HefeiMeilingIndustrialCorp.(namedHefeiMeilingGroup

Co.,dated23May1994),executingcontrollingrightsoftheCompany

and managementrightofthestate-ownedassetsonbehalfofHefei

State-ownedAssetsManagementOffice,namedatthattime;

2.FromNovember1997toMay2003,controllingshareholderofthe

CompanywasHefeiMeilingGroupHoldingCo.,Ltd.(establishedbase

on former Meiling Group Co.,, ―Meiling Group‖ for short), an

enterprisesolelyownedbytheState;mainlyoperatingthestate-owned

capital in authorized from State-owned Assets Management

CommissionofHefeiCity,ensuringthemaintenanceandappreciation

ofstate-ownedassets;

3. On29May 2003,Meiling Group enteredinto ―EquityTransfer

Agreement‖withShundeGreenKelEnterpriseDevelopmentCo.,ltd.

(―GreenKel‖),the82,852,683state-ownedsharesheldbytheCompany

Previouschangesforcontrolling wastransfertoGreenKel.Aftertransferring,GreenKelcomestothefirst

shareholders largestshareholderoftheCompany.

4. According to the spirit of ―Bulletin of Treatment Opinions on

GreenKelCompanypurchasingState-ownedAssets SharesofListed

Company‖(GZFCQ[2006]No.:44)jointlyissued fromSASACand

MinistryofFinanceinApril2006,MeilingGrouptookbacktheMeiling

Electric82,852,683sharesfromGreenKelbyprocedures,whichhas

beentransferred.InSeptember2006,relevantequitytransferagreement

signedbetweentheMeilingGroupandGreenKelisinvalid,whichwas

confirmed by the ―Award‖ ((2006) HZZ No.: 104) issued from

arbitration commission of Hefei; the state-owned legal person‘s

82,852,683shares,heldbyGreenKel,shouldreturntoMeilingElectric,

and relevantequity considerationwill payto GreenKelbyMeiling

Group.On 29December 2006,the 82,852,683 shares ofMeiling

Electricwere transfer to MeilingGroup byGreenKel,andMeiling

GroupbecomesthecontrollingshareholderofMeilingElectricagain.

5.On18May2006and11January2007,MeilingGroupenteredinto

―EquityTransferAgreementofMeilingElectric‖and―Supplementary

AgreementofEquityTransferofMeiling Electric‖respectivelywith

SichuanChanghongandChanghong Group,amongthe123,396,375

shares held byMeiling Group,82,852,683 shares were transferred

respectivelytoSichuanChanghongandChanghongGroupaccordingto

thetransferwayregulatedinagreement;ofthistransferring,45,000,000

shares(10.88%oftotalsharecapitaloftheCompany)weretransferred

toSichuanChanghong,thefirstlargestshareholderoftheCompany

while37,852,683shares(9.15%oftotalsharecapitaloftheCompany)

weretransferredtoChanghongGroup,thethirdlargestshareholderof

theCompany.

6.On29October2008,Changhong Groupand SichuanChanghong

enteredinto―EquityTransferAgreementofHefeiMeilingCo.,Ltd.‖,

the32078846restrictedcirculationsAsharesofMeilingElectricheldby

Changhong Group were transferred by agreement to Sichuan

Changhong.On23December2008,theaforesaidequitytransferwas

approved by ―Reply on Matters of Equity held by State-owned

Shareholders ofHefeiMeiling Co.,Ltd.‖(GZCQ(2008)No.: 1413)

fromSASAC;on21January2009,theaforesaidtransferwasregistered

for ownership transfer in Shenzhen Branch of China Securities

DepositoryandClearingCorporationLimited.

7.Endedas31December2016,SichuanChanghonganditsconcerted

action Changhong HK totally holds 259,871,791 shares of the

Company,a24.88%intotalsharecapitaloftheCompany;Sichuan

Changhong directly holds234,705,968 A-share of the Company,a

22.47%intotalsharecapitaloftheCompanywhileChanghongHK

holdscirculationB-shareoftheCompanyamountingas25,165,823

shares,a2.41%intotalsharecapitaloftheCompany.

V.Otherrelevantinformation

(I)CPAengagedbytheCompany

NameofCPA ShineWingCertifiedPublicAccountants(LLP)

Officesadd.forCPA 9/F,BlockA,FuHuaMansionNo.8ChaoYangMenBeidajie,DongCheng

District,Beijing,P.R.C

SigningAccountants HeYong,XiaCuiqiong

(II) Sponsor engaged by the Company for performing continuous supervision duties in

reportingperiod

√Applicable □Notapplicable

Sponsorinstitution Officeaddress Sponsorrepresentative Durationofcontinous

supervision

ShenwanHongyuan No.19,Taipingqiao QinMingzheng,QiuFeng 14October2016to31

SecuritiesUnderwriting Steet,XichangDistrict, December2017

SponsorCo.,Ltd. Beijing

(III)Financialconsultant engagedby theCompanyforperforming continuoussupervision

dutiesinreportingperiod

□Applicable√Notapplicable

VI.Mainaccountingdataandfinancialindexes

Whetherithasretroactiveadjustmentorre-statementonpreviousaccountingdataforaccountingpolicy

changedandaccountingerrorcorrectionornot

√Yes □No

Changes

2015 overlast 2014

2016 year

Beforeadjustment Afteradjustment After Beforeadjustment Afteradjustment

adjustment

Operating

income 12,526,710,867.49 10,415,829,226.48 10,754,200,188.12 16.48% 10,764,808,259.00 10,978,535,964.36

(RMB)

Net profit

attributable to

shareholders 220,216,680.96 26,496,345.34 27,104,893.56 712.46% 294,508,518.37 289,842,658.03

of the listed

company(RM

B)

Net profit

attributable to

shareholders

of the listed

companyafter 158,461,015.10 93,951,365.12 93,951,365.12 68.66% 245,759,705.69 245,759,705.69

deducting

non-recurring

gains and

losses(RMB)

Netcashflow

arising from

operating 985,390,895.63 211,468,056.21 229,371,185.23 329.61% 165,462,930.48 205,636,234.26

activities(RM

B)

Basicearnings 0.2717 0.0347 0.0355 665.35% 0.3856 0.3795

per share

(RMB/Share)

Diluted

earnings per 0.2717 0.0347 0.0355 665.35% 0.3856 0.3795

share

(RMB/Share)

Weighted 5percent

averageROE 5.77% 0.78% 0.77% point 8.88% 8.50%

increase

Changes

Endof2015 overend Endof2014

Endof2016 oflastyear

Beforeadjustment Afteradjustment After Beforeadjustment Afteradjustment

adjustment

Total assets12,507,567,310.84 9,066,223,601.14 9,237,288,359.74 35.40% 9,009,014,201.70 9,205,651,651.39

(RMB)

Net assets

attributable to

shareholderof 5,095,160,291.91 3,384,574,993.19 3,475,377,055.14 46.61% 3,422,746,664.67 3,512,940,178.40

listed

company

(RMB)

Notes:theCompanysucceeded toacquire98.856%equity interestsofGuangdong Changhong Ridian

TechnologyCo.,Ltd (―ChanghongRidian‖)throughbiddingattheendof2015,andcompletedregistration

proceduresatcompetentindustrialandcommercialauthorityinrespectofthisequitytransferatearlyFebruary

2016.Uponcompletionofthisequitytransfer,theCompanywastohold98.856%equityinterestsofChanghong

Ridian.UnderrelevantprovisionsofEnterpriseAccountingPrinciplesNo.33-ConsolidatedFinancialStatement,

inrespectofthesubsidiariesandtheirbusinessesacquiredarisingfrombusinessconsolidationunderthesame

controlduringthereportingperiod,parentcompanyshalladjustthebeginningfiguresstatedintheconsolidated

statementandadjusttherelevantitemsinthecomparativestatementaccordinglyasifthereportingentityafterthe

consolidationhadbeeninexistencesincethetimewhentheultimatecontrollercommencedtoexercisecontrol.

Therefore,thebeginningfiguresandthefiguresofthecorrespondingperiodoflastyearhavebeenrestated.

Thecauseoftheaccountingpolicychangeandaccountingerrorcorrection

□Applicable√Notapplicable

TotalsharecapitaloftheCompanyuptoatradingdaybeforedisclosure:

TotalsharecapitaloftheCompanyuptoatrading 1,044,597,881

daybeforedisclosure(Share)

Fullydilutedearningspersharecalculatedwiththe 0.2717

latestsharecapital(RMB/Share)

Whetherhavecorporatebondsornot

□Yes√No

VII.Accountingdatadifferenceunderdomesticandforeignaccountingstandards

(I)Differenceofthenetprofitandnetassetsdisclosedinfinancialreport,underbothIAS

(InternationalAccountingStandards)andChineseGAAP(GenerallyAcceptedAccounting

Principles)

□Applicable√Notapplicable

TheCompanyhasnodifferenceofthenetprofitandnetassetsdisclosedinfinancialreport,

underbothIAS(InternationalAccountingStandards)andChineseGAAP(GenerallyAccepted

AccountingPrinciples)inreportingperiod.

(II)Differenceofthenetprofitandnetassetsdisclosedinfinancialreport,underbothforeign

accountingrulesandChineseGAAP(GenerallyAcceptedAccountingPrinciples)

√Applicable □Notapplicable

InRMB

Netprofitattributabletoshareholdersof Netassetsattributabletoshareholdersof

listedcompany listedcompany

Amountinthisperiod Amountinlast Amountat Amountat

period period-end period-begin

ChineseGAAP 220,216,680.96 27,104,893.565,095,160,291.913,475,377,055.14

Itemsandamountadjustedbyforeignaccountingrules

Foreignaccountingrules 220,216,680.96 27,104,893.565,095,160,291.913,475,377,055.14

TheCompanyhadnodifferenceofthenetprofitornetassetsdisclosedinfinancialreport,

undereitherforeignaccountingrulesorChineseGAAP(GenerallyAcceptedAccountingPrinciples)

intheperiod.

(III)ReasonsforthedifferencesofaccountingdataunderaccountingrulesinandoutofChina

√Applicable □Notapplicable

The―NoticeofRelevantIssuesofAuditforCompanywithDomesticallyForeignShares

Offering‖wasissuedfromCSRCdated12September2007,sincethedayissuing,cancelthe

previous―dualaudit‖requirementforcompanieswhoofferingdomesticallylistedforeignshares

(B-shareenterprise)whileengagingsecuritiespracticequalificationCPAforauditing.The

Companydidnotcompilefinancialreportunderforeignaccountingrulessince2007,thefinancial

reportoftheCompanyiscomplyingonthe―AccountingStandardforBusinessEnterprise‖inChina,

andtherefore,therearenodifferencesofaccountingdataunderaccountingrulesinandoutof

Chinaatperiod-end.

VIII.Quarterlymainfinancialindex

InRMB

Firstquarter Secondquarter Thirdquarter Fourthquarter

Operatingincome 2,926,400,488.89 3,940,230,773.79 3,130,593,704.26 2,529,485,900.55

Net profit attributable to

shareholders of the listed 53,709,680.24 56,283,021.04 55,295,963.61 54,928,016.07

company

Net profit attributable to

shareholders of the listed 41,338,292.32 49,463,362.39 42,159,261.91 25,500,098.48

company after deducting

non-recurringgainsandlosses

Net cash flow arising from 139,597,747.12 732,091,757.77 691,250,144.50 -577,548,753.76

operatingactivities

Whethertherearesignificantdifferencesbetweentheabove-mentionedfinancialindexoritstotalnumber

andtherelevantfinancialindexdisclosedinthecompany‘squarterlyreportandsemi-annualreport

□Yes√No

IX.Itemsandamountsofextraordinaryprofit(gains)/loss

√Applicable□Notapplicable

InRMB

Item 2016 2015 2014 Note

Foundin

Gains/lossesfromthedisposalof ―Non-operating

non-currentasset(includingthe incomeand

write-offthataccruedforimpairment 9,265,320.01 -4,315,502.74 -431,173.22expenditure‖of

ofassets) Notesof

Financial

accountingreport

Governmentalsubsidyreckonedinto Foundin

currentgains/losses(notincludingthe ―Non-operating

subsidyenjoyedinquotaorration 41,152,549.66 29,285,357.05 41,165,417.52income‖ofNotes

accordingtonationalstandards,which ofFinancial

arecloselyrelevanttoenterprise‘s accountingreport

business)

Gain/lossfromdebtrestructure -- -- 955,413.10Withoutpayment

Current net gain/losses of the Changhong

subsidiary merger under the same -- 615,594.18 -4,719,883.10Ridian-merger

controlfrombeginningoftheperiod under the same

tocombinationdate control in the

Period, restate

the statement of

comparative

financialdata

Heldtransactionfinancialasset, Foundin

gains/lossesofchangesoffairvalues ―Investment

fromtransactionfinancialliabilities, income‖and

andinvestmentgainsfromdisposalof ―Changesinfair

transactionfinancialasset,transaction 11,500,963.72 value

2,313,967.35 378,330.00gains/losses‖of

financialliabilitiesandfinancialasset

availableforsales,excludethe Notesof

effectivehedgingbusinessrelevant Financial

withnormaloperationsofthe accounting

Company report‖

Foundin

―Non-operating

Othernon-operatingincomeand incomeand

expenditureexceptforthe 4,948,619.55 -103,646,326.02 10,535,869.24expenditure‖of

aforementioneditems Notesof

Financial

accountingreport

‖Foundin

Gain/lossesitemsqualifieddefinition ―Investment

ofthenon-recurringgains/losses 3,798,660.03 -- -- income‖ofNotes

ofFinancial

accountingreport

Less:impactonincometax 8,534,266.32 -9,078,920.45 3,576,592.95 --

Impactonminorityshareholders‘ 376,180.79 178,481.83 224,428.25 --

equity(post-tax)

Total 61,755,665.86 -66,846,471.56 44,082,952.34 --

Concerning theextraordinary profit (gain)/loss definedby Q&AAnnouncement No.1 onInformation

DisclosureforCompaniesOfferingTheirSecuritiestothePublic---ExtraordinaryProfit/loss,andtheitems

defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A

AnnouncementNo.1 onInformation Disclosurefor Companies Offering TheirSecurities to thePublic ---

ExtraordinaryProfit/loss,explainreasons

√Applicable □Notapplicable

Item Involvedamount Reason

(RMB)

Non-operatingincome 7,122,432.52Duringthereportingperiod,thewhollyownedsubsidiary-

Mianyang Meiling Software Technique Co., Ltd. has

receivedVATrefunds ofsoftware productsaccordingto

"NoticeaboutVATpolicyofsoftwareproductsbyMinistry

ofFinance&StateAdministration of Taxation"CSNo.

[2011] 100 document, and adequately disclosed the

company'sbusinesssituation,inaccordancewithrelevant

provisionsinthethirdarticleoftheseconditemofCSRC

"No. 1 explanatory announcement about information

disclosure of the company publicly issues securities-

non-recurringprofitandloss(2008)",thepublicsubsidies

which are closely related to the company's business,

conform to the national policies and regulations and

continuetobeenjoyedaccordingtoacertainstandardrating

orquantityshouldbeincludedinthecompany'srecurring

gainsandlosses.

SectionIIISummaryofCompanyBusiness

I.Mainbusinessesofthecompanyinthereportingperiod

DoestheCompanyneedtocomplywithdisclosurerequirementsofthespecialindustry

□Yes√No

(I)MainbusinessesoftheCompany

ThecompanyisoneofChina'smajorelectricappliancemanufacturers,possessesfourmajor

domesticmanufacturingbasesinHefei,Mianyang,JingdezhenandZhongshan,andtwooverseas

manufacturing bases in Indonesia and Pakistan, covering the full product line including ice,

washing, air, kitchen and bath,small household appliances and others, at thesame time, the

companyentersintothefreshe-business,bio-medicalandothernewindustrialfields.

Overthepast30years,thecompanyhasalwaysbeenadheringtothe"independentinnovation,

createdin China", elaboratelybuildingthecorecompetitivenessofenterprisesby technological

innovationandproductinnovation.ThecompanyhassetupthefirstRoHSpublictestingcenterin

AnhuiProvince,thestate-levelenterprisetechnologycenterandthetop-endR&Dteam,sothat

Meilingcancontinue to achievebreakthrough resultsin thevariablefrequency,energysaving,

frost-free,cryogenic,intelligenceandotherfields.

Inrecentyears,withtherapiddevelopmentofInternet,cloudcomputing,bigdataandanew

generationofinformationtechnology,theintelligenceofhomeapplianceindustryhasbecomethe

future development direction. Faced with the new changes in the industry development, the

companyputsforwardthe"DoubleThreeOneCore"strategy,"OneCore"isintelligence.Underthe

guidanceof"intelligent"strategy,in 2014,thecompanyreleasedCHiQrefrigerator with"cloud

image recognition" as the coreand CHiQ air conditionerbased on "human state perception"

technology;in2015,thecompanybegantoimplementthe"IntelligentLifeProject"toexplorenew

pathfortheenterprisedevelopment;in2016,thecompanylaunchedthefirst"IntelligentHome

Eco-circle Plan" in the global white goods industry and brought out the world's first

temperature-zonefreecustom-madeInternetofThingsrefrigerator(thesecondgeneration―Space

Intelligence"CHiQrefrigerator)andtheworld'sfirstuserfreecustom-madeintelligentairsteward

(CHiQintelligentairsteward)toacceleratetheimplementationofintelligentstrategy.Atthesame

time,thecompanysuccessfullyraised1.57billionYuan offundsin thecapitalmarketbythe

non-publicofferingofshareswhich weremainlyusedinthreekeyplatformsincludingMeiling

intelligentmanufacturing,intelligentresearchanddevelopmentandintelligentlife,whichprovided

strongsupportsforthecompany'sdevelopmentandintelligenttransformation.Inaddition,sincethe

companylaunched"thewholepeoplechangeforvariablefrequency"activitiesandannouncedto

entirelyeliminatefixedfrequencyrefrigeratorin2015,thecompany‘svariablefrequencyproducts

increasedtheproportion,thetechnicaladvantagesthecompanyhasinvariablefrequencyaswellas

the application of frequency conversion technology enabled the company to have greater

advantagesintheimplementationofnewenergyefficiencystandards.

Duringthereporting period,in thebig environmentofcontinuous downturnin theentire

industry,thecompany'smainproductshavebeenfullofpotentialgains,outperformingthebroader

market.Atthesametime,thecompanyhasexpandedtheproductlinesforhouseholdappliances

andkitchenappliancesbyobtainingthestockrightsofGuangdongChanghongRidianinbidding,in

addition,theexpansionofZhongkeMeilingcryogenicB2Bproductlineandthegoodsdevelopment

momentumofifoodtube freshe-businessplatform indicated thelayoutof thecompany'swhite

goods+smallapplianceshasbeeninitiallycompleted.

Nowadays, with the landing of a series of CHiQ intelligent products, continuous rising

proportionofvariablefrequencyproducts,diversifiedlayoutofproductlines,andconstructionof

fresh businessplatform in Meiling intelligentlife O2O community,the company is gradually

improvingthehomeInternetlayout,acceleratingtheintelligentprocessofhouseholdappliances,

formingthe"hardware+service"dualgrowthengine,drivingthetransformationandupgradingof

thecompany‘sprofitmodel,exploringnewvalue-addedpatternforthehomeapplianceenterprise

services,meetingnewpatternofindustrycompetition,andachievingitsownsustainedandstable

development.

In reporting period, main income of the Company coming from refrigerator(freezer), air

conditioner, washing machine, small home appliances and kitchen& toilet products, total

amountingto12,025.1034millionYuan,a96%oftheoperatingincome.

(II)Conditionsoftheindustrythecompanyinvolved

In2016,China's economywasinthegrowthshiftperiodand painfulstructuraladjustment

period,underthisbackground,homeappliancesindustryfacedseverechallengesandopportunities

fordevelopmentatthesametime,whichmainlyreflectedinfollowingaspects:

Thehomeapplianceindustryhasenteredfromtherapidgrowthperiodintothegraduallystable

replacementperiodand from thebroadermarket growthintotheaggressivegrowth,thewhole

industrywillenterintotheshufflingperiod.

Chinaisinthethirdconsumptionupgradestage,withtheadventofqualityconsumptionand

the upgrading of consumption structure and concept, product structure optimization and

transformationandupgradinghavebecometheindustry'smaintheme.Ontheonehand,thecountry

furtherimproves the industry competition threshold and acceleratesthe upgrading of product

structureafterfullyimplementingthenew energyefficiencystandards. Ontheotherhand, the

deepeningofthesupplysidereformandrisingpricesofrawmaterialsnotonlybringmanagement

pressuretoenterprises,butalsopromotethestructuralupgradingofhomeappliances,getridof

low-endandabnormalpricecompetition,andreturntorationalvaluecompetitionatthesametime,

andputforwardhigherrequirementstoproductdevelopment,brandstatus,terminalpromotion,and

channelcapacityofenterprises.

Withthe developmentof urbanization and the improvement of living standards, thenew

consumer groups pay more attention to high-quality, intelligent and healthy environmental

protectionproducts.Thetraditionalhomeapplianceindustryhasserioushomogenization,allhome

appliance manufacturersactively embrace the Internet, seek for cross-border cooperation, and

developintelligenthome,intelligencehasbecomeanewbrightspotandinevitablechoiceforthe

industrydevelopment.Intelligentwavealsopromotesthecross-bordercooperationbetweenhome

applianceenterprisesandInternetcompanies,soactivelyexploringbusinessmodelinnovationand

enhancingtheuserexperiencehavebecomeanimportantengineforanewroundofrapidgrowthof

householdelectricalapplianceenterprises.

In2016, China's economicoperation has beenslowbut stable, stable and good,thenew

normal featureshave been moreobvious. Inthe "new normal" economic situation, the home

applianceindustryhasbeenweakingrowthandshowingadownwardtrend.Atthesametime,with

the arrival of Internet and intelligence era, influenced by the further strengthening of brand

concentrationratiointheindustry,risingcostsofrawmaterialsandlogistics,structureupgradingof

consumerdemand,cross-borderimpactofInternetcompaniesandotherfactors,thecompetitionin

householdapplianceindustryhasintensified,andpromotedthetransformationandupgradingthe

industry.Highendandintelligencehavebecometheinevitablechoiceforthedevelopmentofhome

applianceindustry.

II.Majorchangesinmainassets

(I)Majorchangesinmainassets

Majorassets Noteofmajorchanges

Equityassets Nomajorchanges.

Fixedassets Nomajorchanges.

Intangibleassets Nomajorchanges.

Constructioninprogress Theintelligentmanufacturingprojectandrelocationexpansionofthe

subsidiaryZhongkeMeilingandMianyangRefrigeration

(II)Mainoverseasassets

√Applicable □Notapplicable

Foreign

assets Whether

Reasonfor Oper Controlmeasureto accounted exist

Contentofassets the Assetsize Location ation ensurethesecurity Income(RMB) fornet significant

formation mode ofassets asssetsof impairment

the risk

Company

Detailsofrisks

controlmeasures

60%equityof Investment US$7.44 havebeen

ChanghongRuba establishmemillion Pakistan Sales disclosedbythe -2,423,682.54 0.91% N

TradingCompanynt Companybyway

ofannouncement

onappointed

media(No.

2011-028,No.

2011-032,No.

2014-023, No.

2014-026,No.

2016-027andNo.

2016-032)on28

May2011,19

April2014and25

March2016

Detailsofrisks

controlmeasures

havebeen

disclosedbythe

40%equityof Companybyway

ChanghongRuba Investment Manuofannouncement

Electric establishmeUS$6.524 Pakistan facturonappointed -2,827,153.12 0.57% N

Company(Private)nt million e media(No.

Ltd. 2011-028,No.

2011-032,No.

2014-023andNo.

2014-026)on28

May2011and19

April2014

Detailsofrisks

controlmeasures

havebeen

100%equity KELAPA disclosedbythe

ofCHANGHONGInvestment US$6 GADING, Companybyway

MEILING establishmemillion JKT, Sales ofannouncement -1,059,555.43 0.38% N

ELECTRIC nt Indonesia onappointed

INDONESIA.PT media(No.

2016-027andNo.

2016-032)on25

March2016

Othernotes N/A

III.CoreCompetitivenessAnalysis

DoestheCompanyneedtocomplywithdisclosurerequirementsofthespecialindustry

□Yes√No

1.Brandcapacity

TheCompanyisoneofthefamoushomeappliancesmanufacturersinthePRC,ownsseveral

productlinessuchasrefrigerator,freezingboxandairconditioner.Meilingtrademarkislistedas

one of themost valuable brands in thePRC. Thetrademark ―Athena‖ in refrigerator, freezer

(services)oftheCompanywasrecognizedasthefamousmarkinAnhuiProvince.TheCompany

releasedCHiQintelligentfirstandsecondgenerationrefrigerator,ACandintelligentairstewardin

succession.Andcreatingahigh-endintelligentbrandimagearoundtheplanof―WisdomHome

Ecosystem‖foropeningawhiteintelligenceera.Whileinordertoenhancethebrandimageand

furtherexpandthemarketinfluenceofthebrand,thecompanyheldaconferencefor"NewLOGO

releaseand offlineofthe10th millionsetoffrequencyconversionproducts" inOctober2015,

comprehensivelyupdated LOGO" ",andlaunchedthenewbrandpropositionof

"Meiling,letthegoodcome".AlongwiththereleaseofnewLOGO,Meilingwillalsoimplementa

brandstrategyof"GoodTrilogy",includingthedirectsensoryexperienceof―experiencethegood",

thespiritsoulenjoymentof―enjoythegood‖,andthelifestylefaithof―believeinthegood‖.

Byoureffortstorebuildourbrand,Meilingwillrealizeayoung,internationalandprofessional

brandimage.ThroughgradualconstructionoftheideasofWonderfulStartPoint,WonderfulLife

CircleandWonderfulEcologyCircle,Meilinghasbecomeapeople-orientedartistspecializingin

whiteappliances,asmarterscientificexpertandamorereliablehousekeeper.

2.Productcapacity

Inmorethan 30 years, thecompanyhas beenfocusing on therefrigeration industry, has

developedavarietyofdifferenttypesofrefrigeratorproductsthatleadtheindustrydevelopment

trend, including two-door and multi-door Athena series of high-end refrigerators, top-level

energy-savingrefrigeratorswithdailypowerconsumptionofonly0.23degrees,CHiQrefrigerator

taking"cloudimagerecognition'technologyasthecore,and2ndgeneration-CHiQrefrigeration,

which can realized the space change along with the food requirements with human-oriented

charateristics.

TheCompanyowned advanced development and quality assurancesystems, and received

certificationofISO9001,ISO14000andOHSAS18001fromdomesticandoverseasauthorities.The

productsoftheCompanyhavegoodqualityandreliablecapacities.Asfortechnologydevelopment,

theCompanyownednationaltechnologycenters,andadvancedcoretechnologiesinenergy-saving,

aircooling,intelligenceandcopiouscooling.Asforproductdevelopment,combinewithtechnology

developmenttrendandcharacteristicsofdemandfromupgradesinconsumers,theCompany,put

moreeffortsonproductsplanning.In2016,continuestoexpandthedevelopmentofmedium&high

qualityproducts,includingCHiQintellectualproducts,inverterproducts,airpatenting,multizone

andlargevolume,theproducthasobviousupgradeinstructures.

Asfortheairconditioningproducts,thecompanyadherestothetechnicalstrategybytaking

intelligenceand variablefrequency as thecore,intensivelystudies the humanstate perception

technology and intelligent interactive technology, focuses on completing the research and

developmentofintelligentvoicerecognitiontechnologyandproductization,successivelyreleases

thefirstgenerationofCHiQairconditioner basedon"humanstateperception"technologyand

CHiQintelligentairstewardthatcanautomaticallychangeair.

Thecompany continues to adhereto theintelligent and variablefrequency products, and

promotethecompany'sproductstocontinuouslytransformtohighendbyboostingthefollow-up

researchanddevelopment,promotionandtechnologyupdatesofintelligentandvariablefrequency

products.Meanwhile, thecompanyimproves themanufacturingefficiency andproduct quality,

reduces productcostsand enhancesproductcompetitiveness bycomprehensively implementing

intelligentupgradingandrebuildingtoallproductionlines.Inaddition,thecompanyimprovesthe

homeapplianceproductlinethroughthelayoutofkitchenandbathandsmallhouseholdappliances

andhas initiallycompletedthelayout forintegrated whitegoods.Based on"Intelligent Home

Eco-circle" plan and taking the existing products as the core,the company will enhance the

development,manufacturing,salesand collaborationcapabilitiesofintegratedwhitegoods,and

provideuserswithasetofintelligentwhitegoodssystemsolutions.

3.Operationcapacity

TheCompanyconductedbenchmarkmanagementtoimproveitsbasicmanagementlevel.In

specific,efficiencyenhancementhasbeenmadeinareasofpersonnel,moneyandmaterials,trying

tocontinuouslyenhancetheinternalmanagement.Aperformancereviewandsharingsystemhas

beenestablishedwithcleartargetandquantityindexbasedonperformanceandlayeredincentive

sharingsystem,thustoinspiretheinternalproductioncapacity.Underthemainlineofvaluechain

management,theCompanycontinuedtocarryoutvaluecreationandimproveitscompetitiveness.

Itsabilitytopreventriskshasbeenalsostrengthenedthroughcontinuousimprovementofinternal

controlsystem.

4.Marketingability

Thecompanyhas established arelatively complete sales network andservice system, the

domesticsaleschannelsemphasizingonlineandofflinecollaborationandintegration,throughthe

businessoperationmodesystemconstruction(targetmanagement,valuechainmanagement,sales

promotion,productmixandchannelstrategy,etc.)andpromotion,thepaceofbusinessthisyear

constantlytendstobebenign,hasabalanceddevelopmentinchain,wholesale,e-commerceand

otherchannels,andtheproductcompetitivenesshasbeenimproved;theoverseasmarkethasbeen

strengthened by increasing the investments in overseas marketing organizations, research and

developmentbases and productionbases,the companyhas beenactivelydevelop theoverseas

market,andtheproductshavebeenexportedtomorethan100countriesandregions.

SectionIVDiscussionandAnalysisoftheOperation

1.Introduction

In2016,asthefirstyearofthecompany's"13thFive-YearPlan",undertheguidanceofthe

strategy"MeilingDream"and"DoubleThreeOneCore",thecompanyadherestotheoperating

principlesof"progressinoppositetrend,innovationandactivation,industrybenchmarking,benign

operation", the company has overcome the negative factors including weak macroeconomic

growthand continuous declineof industrybroad market bythe jointefforts of allstaff, and

achieved a better start.Thereinto,the domestic refrigerators (freezers)have outperformed the

industry market, e-commerce business has greatly grown, the market position of export

refrigerators (freezers) has been improved; domestic sales of air conditioners have largely

increased,exportgrowthspeedisfaster;washingmachineshavearapiddevelopment;kitchenand

bath and small appliances are also increasing rapidly. The company's position in the home

appliancemarkethasbeenfurtherconsolidatedandupgradedandbecomethewhitegoodsbrand

withrapidgrowthindomesticandforeignmarketsinrecentyearswhichhasahugeusergroup,

andmanyyearsofmarketaccumulationsubstantiallypromotesthebrand awarenessandhasa

higherindustrystatus. In2016, thecompanyhas achievedoperating income ofRMB 12.527

billion,anincreaseof16.48%onayear-on-yearbasis;netprofitattributabletotheparentcompany

ofRMB0.220billion,anincreaseof712.46%onayear-on-yearbasis.

II.MainBusinessAnalysis

(I)Overview

ShowsnodifferencewiththesummarydisclosedinReportoftheBoardofDirector

□Yes √No

1.Introduction

Duringthereportingperiod,inthefaceofthecontinuousdeclineinthebroadermarketof

homeapplianceindustry,thecompanyhasovercomethepressure,thewholelinesofmainproduct

sales have outperformed the board market; product line diversification has achieved a

breakthrough,andthelayoutforintegratedwhitegoods+smallhouseholdapplianceproductlines

hasbeeninitiallycompleted;costcontrolandtheefficiencypromotionhaveasignificantresult;

thegoalsestablishedfor2016havebeenachieved,theindustry'smarketpositionhasbeenfurther

enhanced,andtheexportsalesbusinesshasmaintainedthemomentumofrapidgrowth,andhas

becomethewhitebrandwitharapidgrowthindomesticandforeignmarketsinrecentyears.

In2016,refrigeratorandfreezerbusinessachievedrevenueofapproximatelyRMB 6.679

billion, 10.99% increased on a y-o-y basis; air-conditioning business achieved revenue of

approximatelyRMB4.158billion,21.74%upy-o-y; washingmachinebusinessachieverevenue

aroundRMB0.508billion,withyear-on-yeargrowthof42.73%;otherbusinessofsmallhome

applianceandkitchen&toiletproductshaverevenueapproximatelyasRMB0.68billion with

28.36%upy-o-y.atthesametime,revenuefromexportationgainsRMB2.917billion,ay-o-y

growthof33.28%

Thecompany'ssalesindomesticrefrigerator(freezer),airconditioner,washingmachinehas

outperformedtheindustrymarket, andthemarketpositionhavebeenfurtherconsolidatedand

improved.Fromtheofflinemarketsales,CMM‘s(ChinaMarketMonitorCo.,Ltd.)datashowthat

theretailvolumeofrefrigeratorindustrydeclinedby4.59%onayear-on-yearbasis,buttheretail

volumeofthecompany'srefrigeratorroseby3.49%onayear-on-yearbasis;theretailvolumeof

freezer industry declined by 10.02% on a year-on-year basis, but the retail volume of the

company'sfreezerroseby0.23%onayear-on-yearbasis;theretailvolumeofair-conditioning

industry rose by 3.49% on a year-on-year basis, and the retail volume of the company's

air-conditioningroseby15.19%onayear-on-yearbasis;theretailvolumeofwashingmachine

industry declinedby 2.74% on a year-on-year basis, but the retailvolume of the company's

washingmachineroseby34.79%onayear-on-yearbasis.Atthesametime,CMM‘sdataalso

showthatthemarketshareofthecompany‘srefrigeratorretailvolumereached8.70%,risingby

0.84%onayear-on-yearbasis;themarketshareofthecompany‘sfreezerretailvolumereached

9.72%,anincreaseof0.89%onayear-on-yearbasis;andthemarketsharesofairconditioning,

andwashingmachinealsoincreasedonayear-on-yearbasis.

(1)From the online sales, AVC (All View Cloud) data show that the company‘s online

refrigerator(freezer)andairconditioningsaleshavefurtherenlargedtheresults.Theretailsalesof

refrigeratorindustryrose by57.5%on a year-on-yearbasis; theretailsalesof thecompany‘s

refrigeratorroseby74.9%on ayear-on-yearbasis; theretailsales offreezerindustryroseby

84.9%on a year-on-yearbasis; theretailsales ofthecompany‘s freezerrose by88.6% ona

year-on-yearbasis;theretailsalesofair-conditioningindustryroseby73.2%onayear-on-year

basis;theretailsalesofthecompany‘sair-conditioningroseby166.0%onayear-on-yearbasis.At

thesametime,asfortheonlinemarkets,AVCdatashowthatthemarketshareofthecompany‘s

refrigeratorretailsalesreached7.01%,anincreaseof0.70%onayear-on-yearbasis;themarket

shareofthecompany‘sfreezerretailsalesreached10.48%,anincreaseof0.21%onayear-on-year

basis;andthemarketsharesofairconditioning,andwashingmachineretailsalesalsoincreasedon

ayear-on-yearbasis.

(2) As for the export business, the company's refrigerator, freezer, and air-conditioning

productlineshavecontinuedtomaintainarapidgrowthlikeafewyearsago.Accordingtothe

customsdataandstatistics,theamountofexports ofrefrigeratorindustry roseby3.00%ona

year-on-yearbasis,thecompany'samountofexportsroseby17.19%onayear-on-yearbasis;the

amountofexportsof freezer industryroseby 5.43%ona year-on-yearbasis,thecompany's

amount of exports rose by 9.92% on a year-on-year basis; the amount of exports of air

conditioningindustry rose by 5.71% on a year-on-year basis, the amount of exports of the

company'sairconditioningroseby44.81%on a year-on-yearbasis,theexportgrowthof the

company‘srefrigerator(freezer)andairconditioningexceededtheindustry.Intermsofthemarket

shares,accordingtothecustomsdataandstatistics,themarketshareofthecompany‘srefrigerator

exportsreached5.92%,anincreaseof0.71%onayear-on-yearbasis;themarketshareoffreezer

exportsreached2.94%, anincrease of0.12%ona year-on-yearbasis;themarketshare ofair

conditioningexportsreached1.32%,anincreaseof0.36%onayear-on-yearbasis;

2.Progressofthecompany'sdevelopmentstrategyandbusinessplanduringthe

reportingperiod

Duringthe reporting period,in accordancewith thedevelopment strategy and operating

principlesof"progressinoppositetrend,innovationandactivation,industrybenchmarking,benign

operation"in2016,thecompanyhasdeployedtheannualbusinessplan,arrangedtheproduction

andmanagement,andcarriedoutthefollowingactivities:

(1)Progressinoppositetrend

Duringthereportingperiod,thecompany'soperatingincomescalehasincreasedsignificantly,

andthemain profithasalso increased ona year-on-year basis.Amongthem, therefrigerator

(freezer)productshaveachievedupgradesinthedomesticmarketsharebyconstantlypromoting

the variable frequency and intelligence and adjusting the product structure; air-conditioning

products have achieved a year-on-year growth in domestic revenues and improvements in

profitabilitybyactivepromotionofenergyefficiencyupgradeswhilebenefitingfromweatherand

otherfactors; meanwhile,thecompanyhasactivelystrengthened theoverseasbusinessmarket

developmentandproductlineexpansion,achievedtherapidgrowthofexportbusinessthisyear,as

wellasthesustainablegrowthofoperatingincomesfromwashingmachinesandsmallhousehold

appliancebusinesses.

(2)Innovation&Activation

Duringthereportingperiod,thecompanyhasfurtherchangedthesenseofbusinessandway

of thinking, and mobilized and stimulated the competitiveness of all business modules by

innovativemechanisms.Thecompanyhastakenvalue-orientedprinciple,notonlyintensifiedKPI

assessment, but also expanded thescope ofperformance sharing;stimulated the potential by

sinkingincentiveunit,encouragedthepursuitofindividualperformanceandoverallperformance

enhancingtostimulatetheenthusiasmofallbusinessmodules;setuptheinnovation incentive

platformforengineeringandtechnicalpersonnelvalues,andencouragedinnovationintechnology

management.

To achievethetargets ofthecompany's"13th Five-YearPlan", thecompanytakes"high

targets,hightraction,highpay,highreturn"astheguideandcombineswiththeactualsituationof

subordinatebusinessunitsandsubsidiariestoactivelypromotethedesignanddemonstrationand

implementtheinterimperformanceincentiveplan(5years)orequityincentiveplan(5years)toall

subordinatebusinessunitsandsubsidiaries,andstrivetofullyreleasetheenthusiasmofstaff.

(3)Industrybenchmarking

In2016, thecompany has developed management benchmarkingin the market position,

researchanddevelopmentcycle,manufacturingcapacity,efficiencypromotionandotheraspects,

andhasachievedcertainresults.Amongthem,intermsofmarketposition,inadditiontotherise

ofdomesticandexportmarketposition,thedomesticaveragepriceofbenchmarkingprojecthas

achievedsignificantresults,theaveragepricesofMeilingrefrigeratorproductshaveincreasedby

96Yuan/set onayear-on-yearbasis,ofwhichthegrowingratehasrankedfirstamongthe

domestictopfivebrands,andfurthernarrowedthegapwiththetop-rankedbrands;thecompany's

air-conditioningproductshavesuccessfullyselectedfortheenergy-savingleader,first-levelenergy

efficiencyvariablefrequencyledindustryswitching,productstructurehasimprovedsignificantly,

theaveragepricesofonlineproductshaverapidlyincreased;thegrowingrateofMeilingwashing

machinehasrankedtopintheindustry;thestructureofsmallhouseholdappliancesandkitchen

electrical products has continued to be optimized, channel layout has been deepened, and

e-commercebusinesshasbeenrapidlygrowing,sothatthecompanycanbuildkitchenecosphere

andmaintainindustry-leading.IntheR&Dcycle,thecapacitybaselinehasincreasedby29%;in

manufacturingcapacity,theinspectionrateandexporton-timedeliveryrateofrefrigerator(freezer)

largecustomershavecontinuedtoimprovewhilethecumulativerejectrateof productshasbeen

declining;inefficiencypromotion,manpowerefficiencypromotionfocusesontheexplorationof

platform functionsand theorganization optimizationwayof businesssupport separation, and

materialefficiencypromotionfocusesonpersistentlydigestingthebadstockandinactivestockby

strengtheningproductionandmarketingcoordinationandstrictlycontrollingproductionreserves,

and funds efficiency promotion focuses on making a good use of stock funds, expanding

incrementalcapital,andincreasingfinancialincomes.

(4)Benignoperation

Duringthereportingperiod,inthecompany'soperations,ontheonehand,thecompanyhas

pulledthroughthevaluechain,refinedtheaccountingmanagementofoperationunit,improvedthe

marketcontrolandearlywarningcapabilities;ontheotherhand,thecompanyhasemphasizedthe

benign operation of sales, further strengthened the terminal price management, and strictly

controlledthefixedexpendituretobe inthebudgettarget,whichmade thecompany'sannual

operating efficiency further improved. Among them, the company's material efficiency has

increasedby20%ormoreonayear-on-yearbasis,themoneyefficiencyhasincreasedbymore

than5%onayear-on-yearbasis,andmanpowerefficiencyhascontinuedtoimprove.

Atthesametime,duringthereportingperiod,thecompany'sair-conditioningindustryhasa

benignoperation,thesalesscaleandprofitabilityhavegreatlyimprovedcomparedto2015,the

company has released the world's first user free custom-made intelligent air steward (CHiQ

intelligentairsteward),andacceleratedthepromotionandimplementationofintelligentstrategy.

Washingmachineproductshavebeenpromotingtoconstantlytransformandupgradetovariable

frequency,intelligent, quiet,energysaving,healthwashingproductsbyinsistingontheproduct

strategy of large volume+ variable frequency, technological innovation, quality leadership,

differentiatedoperation.

Inaddition,thecompanyhascontinuedtoimprovethehomeapplianceindustrychainand

productline,purchasedChanghongRidianbybiddingthestockrightssoastopossessitsown

platformforkitchenandbath,smallhouseholdappliancesproducts;duringthereportingperiod,

ChanghongRidianhasfurtherstrengthenedthekitchenandbath,andsmallhouseholdappliances

businesses,adjustedtheorganization,establishedtheproductcenters,realizedtheintegrationof

product planning, research and development and cost management, smart small household

applianceshighlightthepracticalityandusability.Atthesametime,thee-commercebusinessof

smallhouseholdappliancesisrapidlydeveloping.

At the same time, during the reporting period, the company's improvement project for

intelligentmanufacturingcapacityhasbeenprogressingsmoothly,phaseIrefrigeratorintelligent

manufacturingbenchmarklineprojecthasenteredpilotconstruction;intelligentR&Dinvestment

haspromotedanewgenerationofintelligentandvariablefrequencyproducts,andtheeffectis

obvious;smartlifeprojecthasbeenadvancingasplanned,ChangmeiScienceandTechnologyCo.,

Ltd.hasbeenestablishedandhadMianyangandHefeibusinessunits,thecompanyhasitsown

freshe-commercebrand―ifoodtube‖whichhasmorethan130,000membersanditsdailyorder

volumepeakcanreachmorethan3,900.

Overall,in2016,facedwithmultipleimpactsofmacroeconomicdownturn,industrydecline,

intensecompetition andcross-borderofInternetcompanies,thecompanyhasoutperformedthe

market in product sales, achievedbreakthroughs in product line diversification, and obtained

remarkableandgoodresultsincostcontrolandefficiencyimprovementthroughthejointeffortsof

allMeiling people.Onthe otherhand, thecompanyhas activelyexplored newpaths for the

transformationandupgradingofhomeapplianceenterprisesunderthein-depthdevelopmentof

Internettechnology,introducedtheindustry'sfirst"IntelligentHomeEco-circlePlan", takenits

ownhardwareproductsastheterminal,andexploredthenewbusinessmodelsaroundthefood,air,

waterandotherneeds.

(II)Revenueandcost

1.Constituteofoperationrevenue

InRMB

2016 2015

Ratioin Ratioin Increase/dec

Amount operation Amount operation reasey-o-y

revenue revenue

Totalofoperation 12,526,710,867.49 100% 10,754,200,188.12 100% 16.48%

revenue

Accordingtoindustries

Manufactureof 12,025,103,352.55 96.00% 10,318,999,424.25 95.95% 16.53%

householdappliances

Other 501,607,514.94 4.00% 435,200,763.87 4.05% 15.26%

Accordingtoproducts

Refrigerator,freezer 6,678,568,374.39 53.32% 6,017,333,150.01 55.95% 10.99%

Air-conditioning 4,158,164,312.32 33.19% 3,415,727,210.45 31.76% 21.74%

Washingmachine 508,133,090.63 4.06% 356,011,057.00 3.31% 42.73%

Smallapplianceand 423,162,351.81 3.38% 288,940,970.60 2.69% 46.45%

kitchen

Otherproducts 257,075,223.40 2.05% 240,987,036.19 2.24% 6.68%

Other 501,607,514.94 4.00% 435,200,763.87 4.05% 15.26%

Accordingtoregion

Domestic 9,603,142,676.83 76.66% 8,562,301,327.00 79.62% 12.16%

Foreign 2,923,568,190.66 23.34% 2,191,898,861.12 20.38% 33.38%

2.Abouttheindustries,products,orregionsaccountingforover10%ofthecompany’s

operatingincomeoroperatingprofit

√Applicable□Notapplicable

InRMB

Increase/decreaIncrease/decreaIncrease/decrea

Operating Operatingcost Grossprofitseofoperatingseofoperating seofgross

revenue ratio revenuey-o-y costy-o-y profitratio

y-o-y

Accordingtoindustries

Manufactureof

household 12,025,103,352.55 9,590,231,985.74 20.25% 16.53% 16.43% 0.07%

appliances

Accordingtoproducts

Refrigerator, 6,678,568,374.39 5,236,031,795.08 21.60% 10.99% 12.94% -1.36%

freezer

Air-conditionin 4,158,164,312.32 3,354,925,254.82 19.32% 21.74% 17.93% 2.61%

g

Accordingtoregion

Domestic 9,108,442,083.44 6,976,734,143.90 23.40% 12.03% 11.22% 0.55%

Foreign 2,916,661,269.11 2,613,497,841.84 10.39% 33.28% 33.10% 0.11%

Undercircumstancesofadjustmentinreportingperiodforstatisticscopeofmainbusiness

data,adjustedmainbusinessbasedonlatestoneyear‘sscopeofperiod-end

□Applicable√Notapplicable

3.Incomefromphysicalsaleslargerthanincomefromlabors

√Yes□No

Industries Item Unit 2016 2015 Increase/decrease

y-o-y(%)

Manufactureof Salesvolume 10thousandpieces/set 1,237.08 957.27 29.23%

household Production 10thousandpieces/set 1,253.24 945.96 32.48%

appliances

industry Inventory 10thousandpieces/set 130.62 114.46 14.12%

Reasonsfory-o-yrelevantdatawithover30%changes

√Applicable □Notapplicable

(1)In reporting period, the Company successful bidding 98.856% equity of Guangdong

ChanghongRidianTechnologyCo.,Ltd.(hereinafterreferredastoChanghongRidian),thedata

abovementionedincludingthedataofChanghongRidian;

(2)Inreportingperiod,productsandsalesoftheproductshasagreatlygrowthona y-o-y

basisdue to therapidly soaring ofwashing machineand kitchen and small homeappliances

products

4.Fulfillmentofthecompany’ssignedsignificantsalescontractsuptothisreporting

period

□Applicable√Notapplicable

5.Constituteofoperationcost

Industryclassification

InRMB

2016 2015 Increase/d

Industries Item Ratioin Ratioinoperation ecrease

Amount operationcost Amount cost y-o-y

Manufactureof

household Raw 8,760,386,320.44 91.58%7,461,553,895.88 90.59% 0.99%

appliances material

industry

6.WhetherthechangesinthescopeofconsolidationinReportingPeriod

√Yes□No

Moredetailscanbeseeninthereport―VII.Changesinthescopeofthemerger‖and―VIII.

Interestsinotherentities‖of―SectionXIFinancialReport‖.

7.Majorchangesoradjustmentinbusiness,productorserviceoftheCompanyin

ReportingPeriod

□Applicable√Notapplicable

8.Majorsalesandmainsuppliers

(1)MajorsalesclientoftheCompany

Totaltopfiveclientsinsales(RMB) 4,437,473,136.69

Proportionintotalannualsalesvolumefortopfiveclients 35.42%

Proportionoftherelatedparties‘salesintotalannualsales 23.74%

volumefortopfiveclients

InformationoftopfiveclientsoftheCompany

Serial Name Sales(RMB) Proportionintotalannualsales

1 ClientI 1,432,924,635.31 11.44%

2 ClientII 1,254,945,781.06 10.02%

3 ClientIII 1,089,287,870.68 8.69%

4 ClientIV 451,034,633.20 3.60%

5 ClientV 209,280,216.44 1.67%

Total -- 4,437,473,136.69 35.42%

Othersituationofmainclients

□Applicable√Notapplicable

(2)MainsuppliersoftheCompany

Totalpurchaseamountfromtopfivesuppliers(RMB) 2,000,373,874.42

Proportionintotalannualpurchaseamountfortopfive 17.98%

suppliers

Proportionofrelatedparty‘spurchaseintotalannualpurchase 11.80%

amountfortopfivesuppliers

InformationoftopfivesuppliersoftheCompany

Serial Name Sales(RMB) Proportionintotalannual

purchase

1 SupplierI 445,928,352.23 4.01%

2 SupplierII 438,755,474.68 3.94%

3 SupplierIII 427,639,189.69 3.84%

4 SupplierIV 404,822,829.32 3.64%

5 SupplierV 283,228,028.50 2.55%

Total -- 2,000,373,874.42 17.98%

OthernotesofmainsuppliersoftheCompany

□Applicable√Notapplicable

(III)Expenses

InRMB

2016 2015 Increase/decre Noteofmajorchanges

asey-o-y

Salesexpense 1,855,396,448.81 1,574,408,045.18 17.85%--

Managementexpense 472,146,980.73 431,057,033.53 9.53%--

Monetaryfundhasagreat

Financialexpense -139,879,189.92 -102,034,012.45 -37.09%operationalefficiency

improvementinthePeriod

Incometaxexpenses 29,044,015.72 11,226,998.22 158.70%Taxableincometaxhasay-o-y

growthinthePeriod

(IV)R&Dexpenses

√Applicable □Notapplicable

In 2016 the company has continued to promote the intelligent strategy, increased the

researchanddevelopmenttoCHiQseriesintelligentrefrigeratorsandintelligentairconditioning.

Intherefrigerator,surroundedbythecoretechnology(intelligent,frequency,energysavingandair

cooling),thecompanyhasbuiltthecorecompetitiveness,releasedandpublishedCHiQsecond

generationrefrigeratorthatis people-centeredandcanrealizespaceintelligentchangeaccording

tothefoodneeds.Thecompanyhasvigorouslypromotedthe0.1℃ inverterseriesrefrigeratorby

theopportunityofimplementingnewenergyefficiencystandardsforrefrigerators,andtheinverter

refrigeratorhascontinuedtosignificantlyincreasetheproportion.Thetechnologydevelopment

mainlysurroundsthecompany'stechnicalplanningandcoretechnologytocarryouttheresearch

on food recognition technology, food preservation technology, odor detection technology,

energy-saving and quite technology, wide speed conversion technology, and air duct design

technology.

Asforairconditioning,thecompanyinsistsonthetechnicalstrategyoftakingintelligence

andfrequencyasthecorebasedonthestrategicplanningofoverallintelligentairecologicalcircle,

takesrecognitiontechnologyasthecore,deeplyresearchesthehumanstateperceptiontechnology

and intelligent interactive technology, focuses on intelligent speech recognition technology

researchand developmentandproducts,and releasesintelligentairsteward;completethecore

technologyresearchanddevelopmentforfourthgenerationofintelligentandcomfortableprecise

temperaturecontroltechnologyplatform,carryoutresearchontheinternalairduct,externalflow

field,heatexchangesimulationandvibrationnoiseCFD&CAE,achievethefullleadershipin

userperception,programcosts,productionefficiency,system reliability;inverter classAseries

productsenterthenational"energyefficiencylead"list;completetheplatformconstructionforL

product,realizethereleaseof"Xiaomanyao"intelligentvoiceking,"Quezhiling"intelligenteye

andotherseriesofair-conditioningproducts,taketheleadinginachievingartificialintelligence

breakthroughintheindustry,createman-machinenaturalinteractionmode,andwinhighpraise

fromtheindustryandconsumers.

Inthecryogenictechnology,thecompany‘ssubsidiarylistedonnewthreeboard-Zhongke

Meilinghasdevelopedthesecondgenerationofdeep-freezingstoragebox.Ithasuniquenarrow

typeappearance;multi-layersealedthermalinsulation,adoptstwo-layerfoamingdoorandthree

rubbersealstripesdesigntomaximumlypreservetheinternalcoolingofthebox;increasesthe

LCDdisplaysystemtotimelygetthetemperatureandcollectionofdata;usesergonomicdoor

handlethatiseasytoopen,andthedoublelockdesignincreasessecurity.Thebloodrefrigerator

hastechnologicalimprovementandadoptsuniqueairductdesignsoastohavebettertemperature

uniformityinrefrigeration;newmulti-functionthermostat,thetemperaturecanbeswitched,while

thethermostathasaUSBjack,youcanwritethetemperaturecurveintoaUdisk,sothatuserscan

get to know the storage temperature of plasma bag easily. In addition, the "Internet+

cryopreservation equipment" in the biological sample management system pushes the

cryopreservationequipmenttotheInternetage,therebytransformthecryopreservationequipment

fromthesalesproducttoprovidingtheuserswithcryopreservationservices.

R&DinvestmentoftheCompany

2016 2015 Changeratio

NumberofR&D(people) 1204 802 50.12%

RatioofnumberofR&D 10.85% 10.68% 0.17percentagepointsup

R&Dinvestment(Yuan) 680,286,093.75 626,725,377.52 8.55%

R&Dinvestmentaccounted 5.43% 5.83%0.40 percentagepointsdown

forR&Dincome

R&D investment 62,282,986.30 64,103,620.26 -2.84%

capitalization(Yuan)

Capitalization R&D

investment accounted for 9.16% 10.23% 1.07percentagepointsdown

R&Dinvestment

The reason of great changes in the proportion of total R&D investment accounted for

operationincomethanlastyear

□Applicable√Notapplicable

ReasonforthegreatchangeinR&Dinvestmentcapitalizationrateandrationaldescription

□Applicable√Notapplicable

(V)Cashflow

InRMB

Item 2016 2015 Y-o-ychanges

Subtotal of cash in-flow 12,094,822,197.35 10,097,011,753.74 19.79%

fromoperationactivity

Subtotal of cash out-flow 11,109,431,301.72 9,867,640,568.51 12.58%

fromoperationactivity

Net cash flow from 985,390,895.63 229,371,185.23 329.61%

operationactivity

Subtotal of cash in-flow 694,384,009.64 538,913,277.50 28.85%

frominvestmentactivity

Subtotal of cash out-flow 1,629,560,848.76 1,090,536,212.59 49.43%

frominvestmentactivity

Net cash flow from -935,176,839.12 -551,622,935.09 -69.53%

investmentactivity

Subtotal of cash in-flow 3,184,640,052.87 1,705,764,746.56 86.70%

fromfinancingactivity

Subtotal of cash out-flow 1,418,900,313.83 1,998,885,682.25 -29.02%

fromfinancingactivity

Net cash flow from 1,765,739,739.04 -293,120,935.69 --

financingactivity

Netincreasedamountof 1,864,937,181.75 -587,935,955.10 --

cashandcashequivalent

Mainreasonsfory-o-ymajorchangesinaspectofrelevantdata

√Applicable □Notapplicable

Netcashflowfromoperationactivityhavemajorchanges,mainlybecausethesalesmoney

receivedinthePeriodincreasedoversameperiodoflastyear;

Netcashflowfrominvestmentactivityhavemajorchanges,mainlybecausetheprincipalof

trustinvestmentpaidintheperiodhasay-o-ygrowth;

Netcash flowfromfinancing activityhavemajorchanges, mainlybecausecollecting the

moneyofnon-publicofferingsharesinthePeriod,andtherearenosuchamountreceivedfroma

yearearlier;

Reasonsofmajordifferencebetweenthecashflowofoperationactivityinreportperiodand

netprofitoftheCompany

√Applicable □Notapplicable

Theoperatingpayableatperiod-endincreasedoverthatofperiod-begin

III.Analysisofthenon-mainbusiness

√Applicable □Notapplicable

InRMB

Amount Ratioin Note Whetherbe

totalprofit sustainable

Investmentincome 14,302,482.67 5.74%Disposalofcompany-MeilingPackagein N

thePeriod

Gainsfromthechangeoffairvalueof

Changesinfairvalue 11,500,963.72 4.61%forwardforeignexchangecontractinthe N

Period

Assetimpairment 1,353,446.69 0.54%Accrualoftheinventoryfallingprice N

reservesinthePeriod

Non-operating 57,917,677.26 23.24%GovernmentgrantsreceivedinthePeriod N

income

Non-operating 5,949,509.51 2.39%Lossesfromdisposalofnon-currentassets N

expense inthePeriod

IV.Assetsandliability

(I)Majorchangesofassetscomposition

InRMB

Endof2016 Endof2015

Ratioin Ratioin Ratio Notesofmajorchanges

Amount total Amount total changes

assets assets

Collectingthemoneyof

Monetaryfund 4,058,869,234.63 32.45% 2,135,189,879.15 23.11% 9.34%non-publicofferingsharesand

salesmoneyinthePeriod

Account 1,118,960,552.49 8.95% 1,338,396,321.83 14.49% -5.54%Nomajorchanges

receivable

Inventory 1,974,526,734.86 15.79% 1,554,946,209.51 16.83% -1.04%Nomajorchanges

Investmentreal 13,275,631.40 0.11% 14,084,213.51 0.15% -0.04%Nomajorchanges

estate

Long-term Nomajorchanges

equity 81,643,631.37 0.65% 74,239,547.01 0.80% -0.15%

investment

Fixassets 1,204,093,169.72 9.63% 1,267,493,931.98 13.72% -4.09%Nomajorchanges

Theintelligentmanufacturing

projectsandconstructionofthe

Constructionin 107,037,409.95 0.86% 56,504,880.99 0.61% 0.25%relocationexpansionproject

progress fromsubsidiary-Zhongke

MeilingandMianyang

Refrigeration

Short-term Theshort-termloansincreased

loans 288,343,724.73 2.31% 58,680,093.19 0.64% 1.67%fromparentcompanyinthe

Period

Long-term Thelong-termloansduewithin

loans 38,908,788.00 0.31% 243,004,866.40 2.63% -2.32%oneyearhastransfer-outfor

re-classify

(II)Assetsandliabilitymeasuredbyfairvalue

√Applicable □Notapplicable

InRMB

Items Amount Changesoffair Accumulativ DevaluatiAmountof Amountof Amountintheend

atthe value echangesof onof purchase saleinthe ofperiod

beginnin gains/lossesin fairvalue withdrawi inthe period

gperiod thisperiod reckonedinto nginthe period

equity period

Financialassets

1.Financialassets

measuredbyfairvalue

andwhosechangeis

recordedincurrent 0 12,060,213.30 12,060,213.30

gainsand

losses(excluding

derivativefinancial

assets)

Subtotaloffinancial 0 12,060,213.30 12,060,213.30

assets

Total 0 12,060,213.30 12,060,213.30

Financialliabilities 0 559,249.58 559,249.58

WhethertherehavemajorchangesonmeasurementattributesformainassetsoftheCompany

inreportperiodornot

□Yes √No

(III)Assetsrightrestrictedendedasreportingperiod

Endedasthereportingperiod,theCompanyhasnomajorassetsbeencloseddown,detain,

freezeorpledgeandguarantee

V.Investment

(I)Overallsituation

√Applicable □Notapplicable

Investmentinthereporting(RMB) Investmentinthesameperiodoflast Changes

year(RMB)

202,350,000 62,000,000 226.37%

(II)Themajorequityinvestmentobtainedinthereportingperiod

√Applicable □Notapplicable

InRMB

Meth Capit Term Type Whet Dateof Indexof

Nameof odof Amountof Sharehol al of of Statusasof Expect Currentinvestment her disclosure

Principalbusiness Partners thebalance ed (if disclosure(if

investee invest investment ding sourc investprodu sheetdate return profitandloss litigat applicable

ment es ment cts ion applicable )

)

Hous

ehold

R&D,productionandsalesof: electr

householdelectricappliances, ical

non-electricalhousehold appli

appliance,kitchen&bathroom ances

of JuchaoWebsite:

furniture,audio-visual small

Guangdong equipment,radio&television Self- home 2015-12-19cn(No.:

Changhong equipment,computers, Equit owneWu Ownership Not 、2015-061,

communicationandother y-pur Changy 20 appli Ofequity

Ridian 95,650,00098.856%d ances applica 17,066,865.91 N 2015-12-24No.:2015-062,

Technology electronicdevicesandindoor chase capitauan,Huyears, has ble 、2016-1-5、No.:2015-066,

Co.,Ltd. hardwarefitting;softwareand d l Zhiheng kitch transferred 2016-2-4No.:2015-067,

ITservices;business en

managementadvisoryservice; No.:2016-001,

the2ndand3rdtypesofmedical and No.:2016-008)

equipmentbusiness; goods toiler

andtechnologyimportand produ

export cts

and

water

purifi

er

Development,productionand

salesofcomputerhardware&

software,technology

development,productionand

salesofinternetofThings

equipment,developmentand

maintenanceofE-commerce Manage

Changmei software,informationservice, Newl ment FreshInvested JuchaoWebsite:

technicaltransferandservices Fund-teamof onlin Not

Technology oftheinternet,domesticAD y 46,320,000 92.64%raisinChangm20 e RMB18 applica -6,857,143.67 N 2016-1-8,o.com.cn(No.:

Co.,Ltd. designing,production, establ g ei years retail millionin ble 2016-11-262016-002,No.:

(note1) agenciesandrelease,salesof ished Technol ers thePeriod 2016-068)

prepackagedfood,dairy ogy

products,generalmerchandise,

alcohol,beverageand

agriculturalproducts,crop

planting,self-supportgoods

andtechnologyimportand

exportbusiness.

Producedthefollowproducts

andspareparts:air-conditioner, Sichuan Hom

refrigerationandfreezer,heat Self- Changh e

Zhongshan pump,waterheater,aircooler, Capit owneong appli Invested Not JuchaoWebsite:

Changhong electricfan,humidifier, al 184,000,000 100%d Air-con 20 ance RMB64 applica 12,507,061.40 N 2016-3-25

ElectricCo., electricheater,clothesdryer, incre capitaditioner years ofair million ble o.com.cn(No.:

LTD(note2) dehumidifier,airpurifier,air ment l Co., condi 2016-027)

watemachine,electric Ltd. tioner

fireplace,kitchenappliance

andtoolsaswellas

refrigeratingunit;importand

exportbusinessofthe

self-producedproductsand

raw/auxiliarymaterials,

equitypmentandtechnology;

softwaredevelopmentand

consulting

Ever

Source Grou Invested

Productionandsalesofthe Science nd RMB5.1

Hongyuan groundheat&coldmachine Capit Self-& heat millionin Not JuchaoWebsite:

GroundHeat andwholemachinesystemas al owneTechnolLong& thePeriod, 261,608.64

Pump wellasthespareparts,salesof 25,500,000 51%d ogy and applica N 2015-4-18

Technology homeappliances,raw incre capitaDevelop-term cold cumulative ble o.com.cn(No.:

Co.,Ltd. materialsofhomeappliances ment l ment all-in contributed 2015-016)

andsparepart Group -one RMB10.2

Co., PC million

Ltd.

TechnologyR&Dofground Ever

energyheater,groundenergy Source

heatingandcoolingintegrator Science Invested

Hongyuan andgroundenergyheating Self-& RMB19.6

GroundEnergypumpenvironmentsystems, Capit owneTechnol Not millionin Not JuchaoWebsite:

Heater systemintegration,sellingand al 24,500,000 49%d ogy Long appli thePeriod, applica -874,437.22 N 2015-4-18

Technology post-sellingserviceofsingle incre capitaDevelop-term cable and ble o.com.cn(No.:

Company unitequipmentandwholeset ment l ment completed 2015-016)

systems;selling,installment, Group investment

maintenanceandafter-sale Co.,

serviceofhomeappliances Ltd.

products

Total -- -- 375,970,000 -- -- -- -- -- -- 22,103,955.06 -- -- --

Note1:Astheimplementationsubjectof"intelligentlife"projectwhichisoneoftheCompany‘snon-publicofferingfundsinvestment

projectsin2016,ChangmeiScienceandTechnologyCo.,Ltd.(hereinafterreferredtoas"ChangmeiTechnology")hasregisteredcapitalof50

millionYuan,ofwhichtheCompanyinvests45millionYuan incashintheoriginalplan,accountingfor90%oftheregisteredcapital,and

themanagementteamofChangmeiTechnologyinvests5millionincash,accountingfor10%oftheregisteredcapital.TheCompanyand

ChangmeiTechnologymanagementteamshouldrespectivelypay40%oftheamountofsubscribedcapitalwithin30daysfromthedateofthe

establishmentofthenewcompany,andtheremainingamountshallbepaidwithin3yearsfrom thedateoftheestablishmentofthenew

company.

Duetothejobtransferofsomenon-corestaffinChangmeiTechnologyresultinginthecorrespondingsubscribedcapitalunpaid,inorder

toensurethesmoothimplementationofthecompany'sinvestmentproject,theresolutionthe27th meetingofthecompany‘s8thBoardof

Directorspassedandagreedthecompanytotransferthesubscribedcapitalunpaidbysomenon-corestaffinChangmeiTechnologybyitsown

funds,i.e.2.64%stockrightsofChangmeiTechnology(1.32millionYuanintotal).Afterthistransferofstockrights,thecompany‘ssubscribed

capitalbecomes46.32millionYuan,accountingfor92.64%ofthestockrights;themanagementteamtotallypayssubscribedcapitalof3.68

millionYuan,accountingfor7.36%ofthestockrights.

Note2:Theresolutionofthe19thmeetingofthe8thBoardofDirectorsofthecompanyagreedthesubsidiary-ZhongshanChanghong

anditspartner-UAERUBAGENERALTRADINGFZECompany(hereinafterreferredtoas"UAERUBACompany")tojointlyincrease

capitalincashaccordingtotheexistingshareholdingratiointhejointventuresalescompany-ChanghongRubaTradingCompany(Private)

LimitedwhichisinvestedandestablishedinPakistanbybothsidesatanearlierstage,thetotalcapitalincreasewasUS$6.4million,ofwhich

ZhongshanChanghonginvestedUS$3.84millionandUAERUBACompanyinvestedUS$2.56million;agreedthesubsidiaries-Zhongshan

ChanghongandChanghongAirConditioningtorespectivelyinvestUS$5.88millionandUS$120,000toestablish"CHANGHONGMEILING

ELECTRIC INDONESIA.PT"in Indonesia. In orderto meet theaforesaidinvestmentmatters, agreedthe companyand ChanghongAir

Conditioningtoincreasecapitalof64millionYuantoZhongshanChanghongaccordingtotheexistingshareholdingratio,thereinto,theamount

ofcapitalincreaseoftheCompanywas57.6millionYuanandtheamountofChanghongAirConditioningwas6.4millionYuan.

(III)Themajornon-equityinvestmentdoinginthereportingperiod

□Applicable√Notapplicable

(IV)Financialassetsinvestment

1.Securitiesinvestment

□Applicable√Notapplicable

Thecompanyhadnosecuritiesinvestmentinthereportingperiod.

2.Derivativeinvestment

√Applicable □Notapplicable

In10thousandYuan

Investme Amountof Ratioof

Relat Wheth nt Amount Amount reservefor investment

ed er Initial amount purchasedin salesinthe devaluatio Investment amountat Actual

Operator relati related Type investment Startdate Enddate at the reporting nof amountat period-endin gains/losses

onshitradeor period-b reporting period withdrawi period-end netassetsofthe inperiod

p not egin period ng (if Companyat

applicable) period-end

Forward

Financial N/A No foreign 56,813.322016-6-8 2017-12-6 0 105,152.67 67,380.74 0 37,890.69 7.33% -118.76

institution exchange

contract

Total 56,813.32 -- -- 0 105,152.67 67,380.74 0 37,890.69 7.33% -118.76

Capitalresource(ifapplicable) Self-ownedcapital

Lawsuitinvolved(ifapplicable) Notapplicable

Disclosuredateforapprovalfromthe

Boardforinvestmentofderivatives(if 2016-3-19

applicable)

Disclosuredateforapprovalfrom

boardofshareholdersforinvestmentof2016-4-7

derivatives(ifapplicable)

Riskanalysisandcontrollingmeasures Riskanalysis:

forderivativesholdingsinthePeriod 1.Marketrisk:domesticandinternationaleconomicsituationchangesmayleadtoexchangeratefluctuations,forwardforeignexchange

(includingbutnotlimitedtomarket transactionsareundercertainmarketrisk.Forwardforeignexchangebusinessisaimingtoreducingimpactoncorporateprofitsbyforeign

risk,liquidityrisk,creditrisks, exchangesettlementandsaleprices,exchangeratefluctuations.TheCompanywillfollowuptheexchangefluctuation,onthebasisoftarget

operationriskandlawrisksetc.) ratedeterminedfromthebusiness,relyingontheresearchoftheforeigncurrencyexchangerates,combinedwithpredictionofconsignments,

andburdeningabilitytopricevariationsduetoexchangeratefluctuations,thendeterminetheplanofforwardforeignexchangecontracts,and

makedynamicmanagementtothebusiness,toensurereasonableprofitlevel.

2.Liquidityrisk:allforeignexchangetransactionsarebasedonareasonableestimateofthefutureimportandexportbusiness,tomeetthe

requirementsofthetradeauthenticity.Inaddition,forwardforeignexchangetransactionsareprocessedwithbankcredit,willnotaffect

liquidityofcompanyfunds.

3.Bankdefaultrisk:ifcooperativebankscollapsewithinthecontracttime,theCompanywillnotbeabletotransacttheoriginalforeign

exchangecontractswithcontractprice,whichleadstheriskofincomeuncertainty.SotheCompanychoseBankofChina,AgriculturalBank

ofChina,IndustrialandCommercialBankofChina,ChinaConstructionBankandotherChineseBanksandpartofthelargerforeignBanks

(suchasDeutscheBank,UOB,OverseasChineseBank,HSBC,etc.)toconductthetradingofforeignexchangecapital.Thesebankssharea

solidstrengthandmanagementwhosefailureandtheriskoflossmaybringtotheCompanyisverylow.

4.Operationalrisk:improperoperationofthepersoninchargeofforwardforeignexchangetransactionsmaycauserelatedriskalso.The

Companyhasformulatedrelatedmanagementsystemwhichdefinestheoperationprocessandresponsibilitytopreventandcontrolrisks.

5.Thelegalrisks:uncleartermsbasedincontractsignedwithbanksforrelatedtransactionsmayleadlegalriskswhenforwardforeign

exchangetransactionsareprocessing.TheCompanywillstrengthenlegalreview,andchoosegoodbanktocarryoutthiskindofbusinessasto

riskcontrol.

Investedderivativeproductshave TheCompanydeterminesfairvalueinaccordancewiththeChapterVII―DeterminationofFairValue‖carriedintheAccountingStandardsfor

changesinmarketpriceorfairvaluein BusinessEnterprisesNo.22-RecognitionandMeasurementofFinancialInstruments.Fair-valueisbasicallyobtainedaccordingtoprices

thePeriod,asforanalysisofthefair offeredbybankandotherpricingservices.Whilefair-valueofderivativesismainlyobtainedaccordingtothebalancebetweenpricesgivenby

valueofderivatives,disclosedspecific outstandingcontractsandforwardpricesgivenbycontractssignedduringthereportingperiodwithbank.Thedifferencesareidentifiedas

appliedmethodsandcorrelation tradingfinancialassetsandliabilities.Duringthereportingperiod,forwardforeignexchangecontractsandlossesoftheCompanyisRMB

assumptionandparametersetting -1.1876Million.

Specific principle of the accounting

policyandcalculationforderivativesinNotapplicable

thePeriodcomparedwithlastperiodin

aspectofmajorchanges

Specialopiniononderivative Uponinspection,theindependentdirectorsoftheCompanybelievesthat:duringthereportingperiod,theCompanycarriedoutitsforeign

investmentandriskcontrolby exchangeforwarddealsinstrictcompliancewiththestandardizedoperationguidelinesforlistedissueronmainboard(2015amended)issued

independentdirectors byShenzhenStockExchange,theArticlesofAssociation,AuthorizationManagementoftheCompany,ManagementSysteminrelatingto

ForeignExchangeForwardDealsofHefeiMeilingCo.,Ltd.,andthesedealswereconductedwithintheauthorizationscopeundergeneral

meetingandboardmeeting.TheCompanyconductsnoforeignexchangetransactionsonthepurposeofgettingprofitonly,alloftheforward

foreignexchangetransactionsareoperatesbasedonnormaloperatingandproduction,whichisrelyingonspecificbusinessoperationswith

purposeofavoidingthepreventingtherisksinexchangerate.TheforwardforeignexchangetransactionsoftheCompanyarebeneficialto

preventtheexchangerisksexposedbyimportandexportbusinessandthusmetitsrequirementforoperationdevelopment.Therewasno

speculativeoperation,nobreakofrelevantrulesandregulationsandrelevantbusinesswasconductedundercorrespondingdecision-making

procedures.InterestsoftheCompanyandentireshareholders,especiallyminorityshareholders,werenotprejudiced.

(V)Applicationofraisedproceeds

√Applicable □Notapplicable

1.Overallapplicationofraisedproceeds

√Applicable □Notapplicable

In10thousandYuan

Totalraised Cumulative Ratioof

Total capitalhas raised cumulative Usageoftheretained Raised

Totalraised Totalraised accumulative purposeof capitalshas raised Totalaccumulative raisedcapitalsandwhat capitalsidle

Year Way capitals capitalused raisedcapitals uses purposeof capitalshas raisedcapitals isexpectedtoinvested formore

inPeriod used changedin uses purposeof unused withthosecapitals thantwo

Period changedin useschanged years

total

Theun-used

fund-raisingwill

continueonthe

investmentonschedule.

Accordingtothe

fund-raisingproject,

Non-publi andbeendeliberated

coffering andapprovedbythe

2016 of 154,073.272276 33,750.503059 33,750.503059 0 0 0% 120,788.994697Boardandshareholders 0

A-shares generalmeeting,the

idlefund-raisedare

purchasedguaranteed

financialproductswith

RMB900millionin

total,restsofthefunds

aresaveinthespecific

accountofraisingfunds

Total -- 154,073.272276 33,750.503059 33,750.503059 0 0 0% 120,788.994697 -- 0

ExplanationonGeneralusageofraisedcapital

Beingdeliberatedandapprovedby1stextraordinaryshareholdersmeetingof2016and17thsessionof8thBOD,andverifiedbytheReplyonPrivatePlacementofHefeiMeiling

Co.,Ltd.(CSRCXK[2016]No.1396)issuedfromCSRC,theCompanysuccessfullyoffering280,858,676shares(A-stock)to7qualifiedinvestors,includingSichuan

ChanghongElectricCo.,Ltd.(hereinafterreferredastoSichuanChanghong),withpriceof5.59Yuan/Shareandfacevalueof1.00Yuan.AccordingtotheVerificationReport

XYZH/2016CDA40272issuedbyShineWingCertifiedPublicAccountants(LLP),totalraisedfundamountingto1,569,999,998.84Yuan,lessvaryissuancechanges(tax

included)29,267,276.08Yuan,raisedfundamountsto1,540,732,722.76Yuan.

Totally337,505,030.59YuanraisedfundusedinthePeriod,includingreplacetheself-raisedfund63,984,738.91Yuan,investedtillendof31October2016;theraised-fund

projecthas2,640,227.91Yuan(includingbankhandlingchargerandcardissuingfee230Yuan)usedfromNovembertoDecemberin2016;extrathe―supplycurrentcapital

project‖usedforcurrentcapitaloftheCompany270,880,063.77Yuan(including147,341.01Yuaninterestincome).Thespecificraised-fundaccounthasbankinterestof

4,662,254.80Yuaninreportingperiod.

Endedas31December2016,thespecificaccountforraised-fundoftheprivateplacementof2016amountingto1,207,889,946.97Yuan(includinginterest4,514,913.79Yuan).

Moreover,theCompanypurchaseguaranteedfinancialproductsof900millionYuanintotalwiththeidleraised-fund.

2.Situationofcommittedprojectofraisedproceed

√Applicable □Notapplicable

In10thousandYuan

Changethe Achieve Major

Committedinvestment project Cumulative Investment Dateofreacha Benefit d changesof

projectsandover-raised (Y/N) Totalraised-fund Investmentafter Investedinthe investment progresstillend predeterminedstate achieve expecte project

fundinvestment (including commitment adjustment(1) period amounttillendofofperiod-end(3) ofuse dinthe d feasibility

partially Period-end(2) ＝(2)/(1) Period benefits (Y/N)

changed) (Y/N)

Committedinvestmentproject

Intelligent

manufacturing

(Hefei) project:

Constructionofintelligent No 39,100.00 39,100.00 2,657.326701 2,657.326701 6.80%end of 2018, -- -- No

manufacturingproject construction

project of

freezer

intelligent:end

ofJune2018

Constructionofintelligent

R&Dcapabilityandnew

productsdevelopmentof No 55,900.00 55,900.00 2,205.149981 2,205.149981 3.94% Endof2018 -- -- No

theintelligentappliance

technology

Intelligentlifeproject No 32,000.00 32,000.00 1,800.0200 1,800.0200 5.63% April 2010 -- -- No

Supplementarythefloating 27,073.272276 27,073.272276 27,088.006377 27,088.006377 100.05% -- -- -- No

capital

Subtotalofcommitted -- 154,073.272276 154,073.272276 33,750.503059 33,750.503059 -- -- -- -- --

investmentproject

Investmentoftheover-raisedfund

No over-raisedfundin thePeriod

Paymentofbankloans(if -- -- -- -- -- -- -- -- -- --

applicable)

Supplementarythefloating -- -- -- -- -- -- -- -- -- --

capital(ifapplicable)

Subtotalofover-raisedfund -- -- -- -- -- -- -- -- -- --

investment

Total -- 154,073.272276 154,073.272276 33,750.503059 33,750.503059 -- -- -- -- --

1.Inthe"intelligentmanufacturingconstructionproject":theplanningconstructionperiodof"intelligentmanufacturing(Hefei)

project" is3 years,duringthereportingperiod,thecompanyhasbasically completedthepilotconstructionofphase I

Conditionsandreasonsoffailuretomeetscheduleor refrigeratorintelligentmanufacturingbenchmarklineproject,includingintelligentlineconstruction,manufacturingexecution

predictedincome(byspecificprojects) systemMESimport,intelligentlogisticssystemprojectandotherconstructioncontents.Theplanningconstructionperiodof

―productionlineconstructionprojectfornewlyincreased600,000setsofenvironmentalprotectionandenergysavingfreezers

withlargeanmediumvolume‖(Hereinafterreferredtoas"freezer intelligentconstructionproject")is1year,during the

reportingperiod,becausetheNo.9plantofcompany‘sfreezerfactorywheretheprojectconstructionsitelocatesisusedbythe

subsidiary-ZhongkeMeilingTechnologyCo.,Ltd.asitsnewplantisstillunderconstruction,theimplementationofthis

projectisaffected,andtheprojectisstillinthefactoryplanningstage.

2.Theplanningconstructionperiodof"intelligentR& Dcapacitybuildingandintelligenthomeappliances technology

developmentproject"is3years,duringthereportingperiod,theprojectisintheprocessofpromotinginaccordancewiththe

investmentplan.

3.Astheimplementationsubjectof"intelligentlifeproject",ChangmeiScienceandTechnologyCo.,Ltd.(hereinafterreferred

toas"ChangmeiTechnology")wasestablishedinApril2016.Duringthereportingperiod,thecompanyhascompletedthe

initialcapitalcontributionofRMB18millionYuan,whichnowhasMianyangandHefeitwooperatingunits.Thecompany

hasitsownfreshe-businessbrand"ifoodtube"withmorethan130,000registeredmembers,andthedailyordervolumepeak

canreachmorethan3,900;arrangesofflineintelligentterminalcoldchainequipmentinmorethan80communities,andbuilds

sortingandprocessingcenter,warehouseandothersupportingfacilities;continuestodevelop,improve,andupgradetheonline

softwareforintelligentlifeserviceplatform,strengthensplatformpromotion,marketdevelopment,consumerexperience,urban

andcommunityoperations.Thereportingperiodisthefirstyearoftheprojectconstructionperiod,ChangmeiTechnologyhas

achievedannualsalesrevenue(April2016-December2016)of9,476,000Yuan,andafter-taxprofits(April2016-December

2016)of-7,417,900Yuan.

4.Asoftheendoftheperiod,theinvestmentprogressof"supplementaryliquidityProject"hasfinishedmorethan100%,

mainlyduetotheraisedfundsinuseincludingtointerestondepositofraisedfunds.

Presentationonthemajorchangesinprojectfeasibility Notapplicable

Useprogressoftheraised-fundandpurpose Notapplicable

Changesofthesiteforraised-fundinvestmentprojects Notapplicable

Adjustmentoftheraised-fundinvestmentprojects Notapplicable

Endedas31October2016,theCompanycontributedself-raisedfund63,984,738.91Yuanfortheraised-fundinvestment

Up-frontcostandreplaceoftheraised-fundinvestment project,themoneyhasreplacedas63,984,738.91Yuan.ShineWingCPA(LLP)madeaspecialauditforpre-investmentand

projects carried out an Assurance Report on Invested Self-raised fund to the Raised-fund Investment Before Hand

(XYZH/2016CD40285)(hereinafterreferredastoAssuranceReport).Replacementareas:

In10thousandYuan

Commitment Investmentof

Raised-fund Total capitalfor self-raisedfund Amount

investmentproject investment raised-fund investedtillendof31 replaced

project October2016

Construction of

intelligent 39,870.65 39,100.00 2,545.41 2,545.41

manufacturing

project

Construction of

intelligent R&D

capability and new

products 55,900.00 55,900.00 2,053.06 2,053.06

development of the

intelligentappliance

technology

Intelligent life 32,076.00 32,000.00 1,800.00 1,800.00

project

Total 127,846.65 127,000.00 6,398.47 6,398.47

Thereplacementhasbeendeliberatedandapprovedbythe27thsessionof8thBODand14thsessionof8thsupervisory

committee,independentdirectorsareproposedanagreeableindependentopinion,andsponsorinstitutioncarriedouta

verificationopinionwithoutobjection.

Supplementworkingcapitaltemporarywithidle

raised-fund Notapplicable

Balanceandreasonsoftheimplementationofraised-fund Notapplicable

Theraised-fundhavenotbeenusedwillcontinuestoinvestedontheraised-fundprojectsinabovementionedtable.Meanwhile,

accordingtotheraised-fundinvestmentplan,andbeenapprovedbytheBoardandshareholdergeneralmeeting,agreeable

Useoffundsandfundallocationforun-usedraised-fund independentopinionfromindependentdirectorsandwiththeverificationopinionwithoutobjectionissuedbysponsor

institution,theidleraised-fundcanbeuseforbuyingguaranteedfinancialproducts,totallyamountingto900millionYuan,rests

oftheraised-fundwillsaveinthespecificaccount.

Useoftheraised-fundhasnochangestillrecently.

Useofraised-fundandproblemsorotherconditionin Asfortherelevantinformationofraised-funddisclosed,thereisnoanydisclosureinformationthatreleasedwithouttimely,

disclosure true-ness,accurateandcomplete.Thesavings,usage,managementanddisclosureoftheraised-fundhavenoviolation

conditionsbeenfound.

(3)Thechangedprojectofraisedproceeds

□Applicable√Notapplicable

NochangesofraisedproceedsinthePeriod

VI.Salesofmajorassetsandequity

(I)Salesofmajorassets

□Applicable√Notapplicable

TheCompanyhadnosalesofmajorassetsinthereportingperiod.

(II)Salesofmajorequity

□Applicable√Notapplicable

VII.Analysisofmainholdingcompanyandstock-jointlycompanies

√Applicable □Notapplicable

(I)Particularaboutmainsubsidiariesandstock-jointlycompaniesnetprofitover10%

InRMB

Companyname Type Mainbusiness Registercapital Totalassets NetAssets Operatingrevenue Operatingprofit Netprofit

Researchanddevelopment,

Zhongke Meiling Cryogenic 174,778,352.22 112,894,152.41 93,528,664.17 8,634,967.57 8,112,300.61

Subsidiary manufacturingandsalesof 68,150,000

TechnologyCo.,Ltd.

ultra-lowtemperaturefreezer

Manufacturingofrefrigeration 186,982,468.76 86,611,646.81 393,776,861.26 -1,054,596.33 1,505,079.01

JiangxiMeilingElectricCo.,Ltd. Subsidiary 50,000,000

andfreezer

Mianyang Meiling Refrigeration Co., Manufacturingofrefrigeration 162,633,829.27 97,997,656.33 289,026,321.88 864,180.56 1,002,038.81

Subsidiary 100,000,000

Ltd. andfreezer

Sichuan Changhong Air-conditioner R&D,manufacturingand 2,068,601,856.95 540,705,432.76 3,181,611,510.60 18,334,469.32 30,757,332.18

Subsidiary 200,000,000

Co.,Ltd. domesticsalesofair-conditioner

Zhongshan Changhong Electric Co., R&D,manufacturingandforeign 844,520,689.49 249,371,640.31 1,545,246,107.38 8,615,350.80 10,891,273.04

Subsidiary 184,000,000

LTD salesofair-conditioner

Hefei Meiling Electronic Appliance 391,002,172.29 -308,409,642.03 2,391,219,033.05 -18,447,785.54 -17,763,738.28

Subsidiary Salesofwhitegoods 55,000,000

MarketingCo.,Ltd.

HefeiMeilingGroupHoldingsLimited Subsidiary Salesofwhitegoods 80,000,000 255,208,480.19 82,896,244.05 1,429,639,273.30 10,151,707.70 10,872,844.13

E-businessofagricultural 17,039,986.45 12,054,094.36 9,475,992.16 -7,418,397.22 -7,417,905.64

ChangmeiTechnologyCo.,Ltd. Subsidiary 50,000,000

productsandfresh

R&D,manufacturingandsalesof

Guangdong Changhong Ridian kitchenandtoiletproducts,small 260,498,884.93 109,117,867.30 495,075,275.53 18,093,904.63 17,264,471.30

Subsidiary 83,000,000

TechnologyCo.,Ltd. homeappliancesandwater

purifier

(II)Notesofholdingandshareholdingcompanies

√Applicable □Notapplicable

Themethodof

obtainingand

CompanyName handling Theinfluencetothewholeproductionandperformance

subsidiaries

duringthereport

period

Obtained Improvethehomeapplianceindustrychainandproductlines,

GuangdongChanghongRidian 98.856%equity constructedtheplantformofkitchenandtoilerproductsaswell

TechnologyCo.,Ltd. bypublicbiddingassmallhomeappliances.AchievednetprofitofRMB17.2645

millionin2016

MeilingPackagenolongerintheconsolidatescopeofthe

Company,theequitytransfershownochangesinmain

HefeiMeilingPackageProductsCo.,100%equity businessoftheCompany,andconstitutenomaterialassets

Ltd. publictransferin reorganizationregulatedinMeasuresfortheAdministrationof

listing MaterialAssetReorganizationofListedCompanies,the

Companyrealizedpre-taxincomeofRMB10.52million

approximately

BengbuMeilingAppliance Clearingoff Alittleeffectontheoverallproductionandoperationand

MarketingCo.,Ltd. performanceofthecompany

LuoheMeilingApplianceMarketingClearingoff Alittleeffectontheoverallproductionandoperationand

Co.,Ltd. performanceofthecompany

(III)Notesofholdingandshareholdingcompanies:Nil

VIII.StructuredvehiclecontrolledbytheCompany

□Applicable√Notapplicable

IX.FutureDevelopmentProspects

(I)Competitionpatternanddevelopmenttrend

1.Competitivelandscape:oligopolyseekshegemony,reshufflecontinues

Thecurrentallwalksoflifehaveenteredaperiodofmegacompetition:firstisoverspeed,the

productdevelopmentandnewbusinessmodelshaveveryfastupdatespeed;second isbreaking

bounds, different industries penetrate and compete among each other; third is ultrahigh, the

demographicdividend andrawmaterial dividendsdisappear,bulk rawmaterial pricesrise,and

costsraise;fourthissuperchange,subversivechangesmayoccuratanytime.

Thehomeapplianceindustryhasshiftedfromlarge-scalegrowthtoaggressivegrowth.Home

appliancesoligopolycompetition willbecome themainstream, theshuffle amongthegiantsis

inevitable. The market competition pattern will be more intense, the shuffle will spread

bidirectionallyfromthehomeapplianceretailchannelandhomeappliancemanufacturingsystem,

andshowthenewsituationofoligopolyandtycooncompetition.Atthesametime,influencedby

thenationalsupplysidereformandindustrialrestructuring,therawmaterialsbegintosharplyrise

inprice,thelogisticsindustrywouldraisecostsbecauseof"governingultra",andtransportcostsof

homeappliancessignificantlyincrease.Atthesametime,withtheintroductionofnationalinclusive

policy,homeapplianceindustrywillbidfarewelltolowpricecompetitionandgraduallyreturnto

therationalvaluecompetition.

2.Technicalvariables:artificialintelligence,marketdetonation

InternetofThings,artificialintelligence,andlifetechnologyaretheseveralmajordirections

for the future development of human society. In the home appliance industry, technological

innovationhasbecometheleading,asthedrivecapabilityoftechnologicalinnovationbecomes

moreandmoreimportantinthehomeapplianceindustrycompetition,especiallytheguideofnew

technologiesandnewconceptsinthefirst-lineterminalmarketwillbefavoredbymoreandmore

enterprises.Inaddition,asthepopularityofintelligencehassufferedhomogeneousdilemmainthe

marketandthedevelopmentoftheInternethassteppedintothedepth,artificialintelligencehas

become a new engine to accelerate the landing of smart home appliances and will give

differentiation advantages to different enterprisesin the terminalmarket, thereby becoming an

importantenginetopullthemiddleandhigh-endmarketconsumption,itisexpectedtousherina

centralizeddetonation.

3.Productiteration:competitiveandnewproductsbreakthroughthebottleneck

Influencedbylowpricecompetitioninthemarket,thefunctionofmanywhiteproductsisnot

substantiallyimproved,butwiththeriseofmiddleandhigh-endconsumergroups,especiallythe

fullreleaseofquality,high-endandfashiontechnologyneeds,thehomeappliancesindustrywill

usherinanewroundofconsumerupgrades,thearrivalofqualityconsumptionerawillpromotethe

industrytotransformandupgradetohighendandintelligence.

Underthebackgroundofindustrialrestructuringandupgradingandproductsenteringintothe

upgrading,thehomeappliancemarketthattakescompetitiveandnewproductsastheprinciple

thingtendstohavemoredistinctandclearercompetition,butthecompetitivenessofmanyhome

applianceproducts is facinga newround of bottleneckand homogenization challenge.Sothe

competitivenessofhomeapplianceproductsinthenextstagehastofaceamajorbreakthrough,and

carrythroughthesysteminnovationsinquality,function,appearance,technologyandotheraspects,

not onlypursuing theproduct pragmatismbut also givingtheproduct a senseof science and

technology,whichwillbethedirectionforwholemarketproductiterations.

4.Channelintegration:onlineandoffline,sceneservices

The Internet has entered the deep water area, the user growth rate has slowed down

significantly.Pureonlinepricewarandotherstrategieshavebeguntofail,anditismoreandmore

difficulttoobtainincrementalusers.Theintegrationofonlineandofflinechannelshasbecomethe

developmentdirectionofhouseholdapplianceenterprises,itscoreisthatthehouseholdappliance

enterprisesmusthavetheabilitytoserviceusers.Howtomakefulluseofandintegrateresources

andadvantagesfromdifferentonlineandofflinechannels,completetheintegrationofenterprise

marketing,productpromotionanduserneeds,reinforceandstrengthenitsownabilitytoenhance

customerservicecapabilities,andthusreallyjumpoutofthechanneldisputeandreturntotherapid

landing of products and the strong activation of user demands becomes the must choice for

enterprises.

5.Internationalization:globalmergersandacquisitions,capitaldriving

Internationalizationis theneedadaptto thetimes, theinternationalization ofwhite goods

industrywillbeparticularlyprominent,especiallytheglobalcapitalmergersandacquisitionscan

notonlyquicklyenhancetheenterprises‘brandinfluenceandindustrystatusintheglobalmarket,

butalsopromotethegrowthinoverseasmarketsbythedomesticandoverseasresourcesintegration

andmarket development. Inaddition, theglobal capitalmergers and acquisitionshas notonly

becomeanewdrivingforcefortheenterprises‘growth,butalsocangiveattentionandinfluenceto

enterprisesinthenewcompetitivetrack.

(II)Developmentstrategy

1.Vision

AleadingbrandinChina,WorldClassandrespectablehouseholdapplianceenterprise

2.Strategicthought

In2011,theboardof directorsofthecompanyproposedthestrategicguidingthoughtsof

"MeilingDream"and"DoubleThreeStrategy",andupgradedtheoriginal"DoubleThreeStrategy"

to "Double ThreeOne Core Strategy",Double Three refers to threecore strategieswhich are

productstrategy,talentstrategy,andcostleadershipstrategyandthreesignificantstrategieswhich

are market strategy, brand strategy, and internationalization strategy, One Core refers to

intelligentization.

Inthenextfewyears,thecompanywillstandcorrectly,accuratelyandfirmlyinthedraughts

ofindustry,marketandreformation,continuetopromotethesixinnovationssothatthecompany

shallstepforwardto thedirectionof"MeilingDream", andstrivetocreateanotherMeilingby

2020.

3.Strategicthinkingandtargets

By"twoinsists","twoadheres"and"twotransformations"(i.e.insistonproductdoctrineand

technologydriven,insistonculturaldevelopmentandinstitutionalinnovation;adheretodomestic

andoverseasmarkets,adheretotalentandbrandstrategy;transformfromsingletodiversification,

transformfromB2Cto020andC2B),thecompanyhasstrivedtocreateanotherMeilinginscale,

productionlineandorganizationflowby2020.Detailsinclude:thefirstistocreateanotherMeiling

inscale,i.e.toachievetheannualsalesrevenueof20billionYuan,anddoublethenetassets;the

secondistocreateanotherMeilinginproductionline,i.e.toenlargethemarketshareof main

products of refrigeration, freezer and air conditioner, the washingmachine, kitchen and toilet

productsandsmallhomeappliancescomestonewmainproductsoftheCompany,driventheprofit

modeupgradingandtransformbylayingoutnewbusinessoffreshE-businessandbio-medical;

andthirdly,createanotherMeilinginorganizationprocedures.

(III)Businessplan

1.Businessobjective

Underthecircumstanceofmacroeconomicdownturn,homeapplianceindustrydecline,fierce

brandcompetitionandrisingrawmaterialprices,in2017,thecompanywillstrivetomakethe

operatingincomeincreasebymorethan5%overthepreviousyearandnetprofitsattributableto

parentcompanyincreasebymorethan15%overthepreviousyearundertheleadershipoftheboard

ofdirectors.

2.Operatingprinciples

The company‘s operating principles in 2017 are "product leading, marketing force,

manufacturingbreakthrough,mechanismprotection."

Productleading:Productisthecompany'scorecompetitiveness.Firstly,takethenewlevelof

energyefficiencystandardsfortheindustryasanopportunity,givefullplaytotheadvantagesofthe

company's frequency conversion technology, accelerate the switching speed of new energy

efficiencyandimproveswitchingefficiency,andrealizethesalesvolumeofthenewlevelenergy

efficiency product to be higher than the industry level. Secondly, continue to strengthen the

advantagesofintelligentandfrequencyproducts,enhancethesalesofhigh-endproductsandbrand

influencethroughintelligence,greatlyexpandthefrequencyproductsfromtheofflineindependent

channelstotheonlinechannelsandoverseas markets,andfurtherstrengthentheadvantagesof

differentiatedfrequency.Onceagain,increasethepopularityofair-coolingproducts,enhancethe

proportionoflargeandmedium-sizedair-coolingproductsindomesticandoverseasmarketswhile

explorethemediumand small-sizedair-cooling products,reducetheproportionofstraightcold

refrigerator, and realize the structural upgrading. At the same time, the product lines of the

company‘sairconditioning,washingmachine,kitchenandbath,andsmallapplianceshavetospeed

upthestructureupgrading.

Marketingforce:Marketing isthesource of thecompany'sperformance growth.Further

deepenthevaluechainmanagement,andpromotetheconstructionofmarketinginformationsystem.

Thedomestic market continues to focus onthe eightwords marketingculture concept thatis

"integrity,service,profession,passion",changetheconcept,strengthenthesenseofservice,and

become "themost activebrand in terminal, and the most industrious marketingpeople in the

market".Atthesametime,thedomesticmarketneedstofilltheshortboardofregionalmarket:on

theonehand,strengthentheconstructionofweaklinksinthe onlinechannels,andenhancethe

proportionthrough deep cooperation,on the otherhand, the company's dominant markets are

focusedontheofflinechannels, concentrateon breakingthroughthecompany‘sweak regional

markets.

Furtherenhancetheproductmixandtheproportionoflargecustomersinoverseasmarkets,

strengthen the construction of qualified personnel, and strengthen the company's own brand

promotionandoverseasplantcapacitybuilding.

Manufacturing breakthrough:Manufacturing is the guarantee of thecompany's product

qualityandtechnology.Whollypullthebreakthroughformanufacturingproductionlineefficiency

bypromotingintelligentmanufacturing,largerefrigeratorefficiencyenhancementproject,Jiangxi

Meilinghigh-speedproductionlineproject,high-endrefrigeratorfineengineering,andlaborlifting

project. Intelligent manufacturing is one of the direction of transformation and upgrading in

manufacturingindustry.Takethenon-publicofferinginvestmentproject―intelligentmanufacturing‖

as the core, promote the transformation of "Meiling manufacturing" to "Meiling intelligent

manufacturing", realize the further breakthrough of high-end technology level, improve the

manufacturingflexibility,soastomeettheindividualneedsofdifferentusers.Finallyrealizethe

double improvement for domestic and export fulfillment rate, and significantly reduce the

comprehensivemanufacturingcosts.

Mechanismprotection: Mechanism isthebasisfor thecompany'spositiveoperation. An

enterprise‘sfundamentalisthetalents,andthetalents‘fundamentalisthemechanism.Inorderto

realizethecompany‘s"MeilingDream",thecompetitiveguaranteemechanismisthekey.In2017,

thecompanywillestablishandimprovetheincentivemechanism,talentmechanism,innovation

mechanism,responsibility mechanism,and benchmarkingmechanismsoastoprovidepowerful

guaranteemechanismforthecompany'sdevelopmentin2017.

3.Marketstrategy

(1)Refrigerator(freezer)

Continuetoadheretotheintelligenceandfrequencytwocoreproductstrategy,speedupthe

developmentandupgradingofanewgenerationofintelligentproduct, implementthecompany's

intelligentstrategy, and enhancetheproportionofinverter products.Vigorously investin basic

technologyresearchandproductupgrading,continuetocarryoutintelligence,frequency,cryogenic,

frost-freeandothertechnicalresearches,maintaintechnology-leadingintheindustry,increasethe

development efforts to air-cooling, multiple temperature zone, large volume, frequency, and

intelligent products, promote the company's product structure to upgrade to high end and

intelligence,anddrivethecompany'sindustrialtransformationandupgrading;atthesametime,

improvemanufacturingefficiencyandproductquality,reduceproductcostsandenhanceproduct

competitivenessbyfullyimplementingintelligentupgradingandrebuildingtotheproductionlines.

Thedomesticmarkettakesfrequencyleading,intelligentpilot,multi-doorbecomingstronger,

backto backgetting bigger,air-coolingjumpstartasthethinking,makesreasonableplanning,

promotetheproducts‘combinationability,andenhancethedomesticsalescapacitybyadjustingthe

productstructure.Regardingthechannel,enhancetheofflineterminalsalesabilitythroughtheprice

management,promotionmanagement,userexperiencemanagementandothermeans,atthesame

time,enhancetheonlinesalesabilitybycreatinge-commercehotproducts,enhancingafter-sales

serviceexperience,andcollaborativeoperationsamongallproductlinesandothermeans.

Overseasmarketsshouldadheretothebrandstructureof"ownbrands+OEM/ODM",the

mainstreamhomogeneousproductcoststaketheleadinstrategy,anddifferentiatetheproductswith

insufficientcompetitiveness.Atthesametime,focusonenhancingtheservicecapabilitiestobig

customers,improving the overseas deliveryrate, shorteningthe lead time, and improving the

productquality,especiallyimprovingtheabilitytorespondquicklytosolveproblemsinthefaceof

customerneeds.

(2)Airconditioning

Based on the company's intelligent development strategy, the company‘s air-conditioning

businesswillseizeclassAfrequency,energysaving,intelligence,healthandotherindustrialbright

spots,focusonthecompany‘s"IntelligentHome Eco-circle"plan,developintelligentterminals,

providehealthyandintelligentairsolutions,graduallybuildthetriunebusinessdevelopmentmodel

ofintelligentequipment+applicationscenarios+socialsharing,layoutfromthesensor,control

andequipment,achievemonomerbecomingstronger,systemintegration,andbenigndevelopment,

andbecomeChina's first-classair-conditioningenterprise.At thesametime, vigorouslyexpand

overseasmarkets,carryoutquality,market,product researchanddevelopment,costcontroland

othercapacity building, and ensure to enter intoand stabilize the second group status in air

conditioningindustry in the next three to fiveyears through regional and customer structure

adjustment. In addition, the air conditioning industry will seize the opportunities of coal to

electricityandhomeappliancesenergy-savingleaderpolicy,improveproductlayout,andpromote

enterprisetransformation.

(3)Washingmachine

Ontheonehand,speedupthechannellayout,relyonMeilingrefrigerator(freezer)channels,

assaultwholesalechannels,enterandupgradeG60branches,andcomprehensivelycoverthechain

channels. Enhance research and development capabilities,grasp the technical directionof the

industry,developMeilingwashingmachinecoretechnology,upgradeproductlineup,andimprove

productcompetitiveness.Integratesupplychainresources,strengthenproductquality,andimprove

consumersatisfactionandbrandreputationofMeilingwashingmachine.Createaprofessionalteam,

improveservices,achieverapidsalespromotion,andimprovesalesstructure.Enterintothesecond

campoftheindustryduring―the13thFiveYear‖andbecomeoneofthecompany‘spillarindustry

bymergersandacquisitionsorself-builtproductionbases.

Ontheotherhand,thecompanyhassignedtheStrategicCooperationFrameworkAgreement

(hereinafterreferredtoasthe"CooperationAgreement")withaninternationallyknownprofessional

manufacturerofelectricalappliances-CandyHooverGroupS.r.l.(hereinafterreferredtoas"Candy

Group")inMarch2017.Bothsideswillcarryoutcomprehensiveandin-depthstrategiccooperation

intherefrigerator (freezer),washingmachinesandotherbusinessareas. Regradingthewashing

machine,thecompanyandCandyGroupwilljointlysetupajointventurecompanyworkingonthe

researchanddevelopment,andsalesbusinessofwashingmachineproducts,sothatthecompanycan

furtherstrengthentheindependentresearchanddevelopmentcapabilities,enhancethecompetitive

advantagesofproductlines,expandthecompany'sproductmarketingshare,enhancethecompany's

core competitiveness and brand influence, and enhance the company's profitability and

comprehensivecompetitivenessinvirtueoftherespectiveR&Dandbusinessadvantagesofboth

sides.

(4)Smallappliances

Basedonkitchenand bath,strengthenelectricheating,developwaterpurificationbusiness,

andbuildcorebusiness.Increaseinvestmentsinkitchenandbathandwaterpurificationbusiness,

enhance manufacturing, research and development and market capabilities; relyon intelligent

strategytostrengthenthedevelopmentofintelligentproducts,andstrivetoachievetheindustry

leader in intelligent products; continue to promote research and development, manufacturing,

Marketing,quality,andoperationcapacitybuildingtoenhancetheindustrystatus.

(5)Bio-medicalcare

ThecompanytakesZhongkeMeiling,itssubsidiarylistedonnewthreeboard,astheplatform

forthecomprehensivedevelopmentofbio-medicalindustry.Basedontherelateddiversificationin

thebio-medical field, takesthe single-compression mixed refrigerant as the corerefrigeration

technology,andtakesthestockbusinesslikedeep-freezingstoragefacilitiesasthebasissoasto

rapidlypromote the productupgrading and iteration and realize the diversification ofproduct

categoryand transactionmode;focusesonlife scienceand coldchainstoragecorebusinesses,

combineswithitsowntechnologicaladvantages,takesproductsasthecarrierandmarket-oriented

principleand user-centered management idea to steadily and rapidly expandthe deep-freezing

storagefacilities,medicalfreezingproducts,internetcoldchainterminals,liquidnitrogenstorage

equipmentandotherrelatedindustrialchains,andquicklymakesbiggerandstrongerinbiomedical

field;comprehensivelystartsusing"Meilingbiomedical"brand,increasesmarketingefforts,builds

asoundmarketingchannelsystem,andcontinuetopromotetheperfectcombinationofmarketing

channelsandendproducts.

(6)Intelligentlifenewbusinessmodel

Activelypromotetheinvestmentproject"intelligentlifeproject",andbuildMeilingintelligent

lifeO2Ocommunityfreshbusinessplatform.Focusonthelayoutofthecommunitycoldstorage

selfpick-upcabinet,giveplaytothecompany‘sadvantagesintheintelligentandrefrigerationfields,

andstrivetodevelopthethefreshe-businessO2Obusinessplatformwithacertaininfluenceinthe

industryinthreeto fiveyears.Focusonregionalizationandlocalization,graduallyintegratethe

regionalandnationalbrandenterprisesenteringbusiness,andultimatelycreateMeilingintelligent

lifeprojecttobeanationalintelligentlifeO2Oserviceplatform.Transformtothe"equipment+

service" model by means of food management, provide exploration for the intelligent

transformationofrefrigerator,helpthecompanytomovetowardshigh-frequencyservicesalesfrom

low-frequencyhardwaresales,formthe"hardware+service"doublegrowthengine,anddrivethe

transformationandupgradingofthecompany‘sprofitmodel.

Theabovebusinessplanandbusinessobjectivesdonotrepresentthelistedcompany‘sprofit

forecastof2017,whetheritcanbeachieveddependsonthechangesinmarketcondition,theefforts

ofmanagementteamandotherfactors,therearealotofuncertainties,investorsshouldpayspecial

attentiontoit.

(IV)Possiblerisksandcountermeasures

In 2017, the domestic and foreign macroeconomic situation is still not optimistic, the

competitioninhomeappliancemarketwillbemoreintense,enterprises‘livingenvironmentwillbe

evenworse.In thefuture,the companywillface weak macroeconomicgrowth, grimindustry

situation,intensifiedcompetition,labortension,sharpriseinraw materialprices,transportation

costsandhumanresourcescosts,impactofthenewbusinessmodelandInternetageandotherrisks.

1.Riskofmacroeconomicfluctuations

Theproductsthecompanyproducesandsellsbelongtoconsumerelectricalproducts,ofwhich

themarketdemandsaregreatly impactedbymacroeconomicand consumerconsumptionlevel.

Macroeconomic fluctuations may have a certain impact on consumers‘ income expectations,

purchasingpowerandpurchasingintention.Inaddition,theuncertaintyofthedevelopmentofreal

estateimpactstheconsumers‘demandsforpurchasingelectricalappliancestoacertainextent.If

thefutureeconomicgrowthcontinuestoslowdownordecline,thedemandsandgrossmarginof

household appliances industry may reduce, and thus make negative effectson thecompany's

profitability.

2.Impactofintensifyingindustrycompetitionanddecliningbroadermarket

China'shomeapplianceindustryisacompletecompetingindustry,therearemanydomestic

andforeign-fundedhouseholdappliancesmanufacturersprovidingproductswithahigherdegreeof

homogenizationand fiercecompetition.Withthewithdrawalofnationalpreferentialpolicy, the

industry broadermarket continuesto decline,theindustry entersinto aggressivegrowth from

large-scalegrowth,theindustrybrandconcentrationfurtherstrengthens,thecompetitionamongthe

brandsshowsa newsituation ofoligarchyandgiant competition.In recentyears, theindustry

transformationandupgradingsignificantlyspeedsup,ifacompanycannotaccuratelyjudgeand

keepupwiththeindustry'smarketdynamics,itwillbeeliminated.Increasingcompetitioninthe

industry may cause irrational competition in the market and bring operational risks to the

enterprises.

3.Impactofcross-borderInternetindustryandchallengesofnewbusinessmodel

WiththearrivalofInterneteraandartificialintelligenceera,theInternetenterprisescontinue

to cross boarderand swarm intointelligent home fields,which intensifies competition in the

industry,subversivechangesmayoccuratanytime,andtraditionalhouseholdapplianceenterprises

arefacingseriouschallenges. Atthesametime,undertheimpactofInterneteconomyandnew

businessmodel,thehomeappliancemanufacturersareactivelypromotingthetransformation,new

businessmodelandnewproducts emergeoneafteranotherinthehomeapplianceindustry, the

developmentofintelligenthomeapplianceschangesquickly,ifunabletomakerapidresponseor

catchupwiththedevelopmenttrend,itmaybeeasilyreplacedorevencompletelysubverted.New

rulesofthegamebringstrongsenseofcrisisandsenseofurgencytotheenterprises.

4.Pressureofrawmaterialpricerisingandtransportationcostsrising

In 2016, affected by the growing real estate, the reform of supply side, thepressure of

environmentalprotection,some poormanagementandwithdrawalofcapacity,thepriceofbulk

materialshasaunilateralrise;atthesametime,thetransportationcostsgreatlyriseduetologistics

industry‘sgovernanceto―threeexcesses‖.Itisexpectedthattherawmaterialpriceandlogistics

transportationcostswillcontinuetorisesharplyorrunathighpricesin2017,buttheendproduct

sellingpricewillbeunchangedorwillbedifficulttodigesttheimpactofrisingrawmaterialsprices,

logisticscostsand otherkey resourcecosts,which willbringgreater operating pressureto the

companyandfurtheraffectthecompany'sprofitability.

5.Humanresourcesrisk

Householdapplianceindustryisanindustrywithrelativelyintensivecapital,technology,and

labor.Withthegradualexpansionofthecompany'sbusinessscopeandscale,andthearrivalof

intelligenthome appliancesand the impactof Internet, the company willgreatly increase the

demandsforhigh-levelmanagementpersonnel,technicalpersonnel,andinnovativetalents,talent

introduction becomes one of the key points for human resources management, if it cannot

effectively enhance the company's attraction to high-quality talents from various aspects, the

company'sfuturedevelopmentwillbesubjecttoconstraints.Atthesametime,initsintelligent

manufacturingtransformationperiod,thecompanyneeds higherrequirementsto the technical

capacity and professional quality of workersat the production line, theimprovement for the

company's productquality will be influenced if the comprehensive quality of workers at the

productionline cannot be enhanced. Inaddition, with theincrease in orders,the demandfor

workersattheproductionlineisincreasing,butaffectedbythesupplyanddemandinlabormarket

andthecontinuousrisinglaborcosts,thecompany'scostpressurewillbefurtherenlarged.

Facedwith the above risks, the company on the one hand will raiseawareness of risk

prevention,and makeoverall arrangementsin theproduct,technology,and marketin advance.

Focus on the smooth implementation of the company's intelligent manufacturing, intelligent

researchanddevelopment,andintelligentlifeprojects,strengthentheinnovationanddriveofthe

company's intelligent technology, accelerate the implementation of the company's intelligent

strategy, promote the company's transformation and upgrading from front-end manufacturing,

back-endproductstointelligence,promotethecompany‘stransformationandupgrading,meetthe

newpatternofcompetitionintheindustry,andenhancethecompany'scorecompetitiveness.Atthe

sametime,throughtheactiveexplorationofnewbusinessmodel,ultimatelyrealizethecrossings

from"Meilingmanufacturing"to"Meilingintelligentmanufacturing",fromhardwareproviderto

service provider, from one-time transaction to continuous transaction, from a single product

providertothesystemprovider,drivethetransformationandupgradingofthecompany'sprofit

model.Thecompanywillalwaysputthebasictechnologyresearchinthemostimportantandmost

centralposition,enhancethecorecompetitivenessofproductsbyincreasingtheresearchonbasic

technology;aimingattheuniqueneedsofdifferentusers,seizetheconsumerdemands,accurately

grasptheproductdevelopmentdirection,andstrengthentheapplicationtechnologyresearchonthe

products‘functionalaspects;meanwhile,combinewithitsownproducts,andactivelyexplorethe

researchoncutting-edgetechnology.Atpresent,thecompanyistransformingtodiversificationby

enriching theproduct lines, furtherstrengthens the synergy amongvarious productlines, and

createsacomprehensivehouseholdapplianceenterprisewithstrongcompetitiveness;atthesame

time,focusesonthe"intelligent homeeco-circle"plan,activelyexploresthenewpaths forthe

transformationand upgradingofhomeapplianceenterprisesunderthein-depthdevelopmentof

Internettechnology,takesitsownhardwareproductsastheterminal,focusesonfood,air,waterand

otherneedstoexplorethenewbusinessmodel,seizestheconsumers‘needs,andprovidesusers

withasetofintelligentwhitegoodssystemsolutions.

Ontheother hand,the companywill implement thebusinesspolicy of "product leading,

marketingforce,manufacturingbreakthrough,mechanismprotection"undertheleadershipofthe

boardofdirectorsandundertheguidanceof"MeilingDream":takeglobalizationasaplatform,and

intelligentandfrequencytransformationasabreakthrough,adheretotheintelligentandvariable

frequencyproductstrategyunswervingly,promotetechnologicalinnovation,strengthentheresearch

and development to intelligence, frequency, air-cooling, and cryogenic technologies, create

intelligent, high-end products and personalized products, and enhance the company's product

competitivenessfromquality, highendandfashion technologybyimprovingthemanufacturing

efficiencyandtechnologicallevel.Enhancethedomesticofflineterminalsalescapacity,breakthe

weakregionalmarket,payattentiontothedevelopmentofonlinechannels,speeduptheintegration

betweenonlineand offlinechannels;builda marketingmanagement system centeringon retail

throughdigitization,avaluemanagementsystemcenteringonretailprice,andanoperationand

distribution system taking customer inventory as the core, and promote the marketing

transformationofdigitization.Attachimportancetothedevelopmentofoverseasmarkets,takethe

initiativetoexploretheconstructionofownbrandsinoverseasmarkets,andacceleratethepaceof

overseas mergers and acquisitions. Give full play to the motivation of intra-organization

institutional changes and management mechanism innovation, activate the team independent

innovation,andprovidesecuritymechanismforthecompany'ssustainedandhealthydevelopment.

X.Receptionofresearch,communicationandinterview

(I)Inthereportperiod,receptionofresearch,communicationandinterview

√Applicable □Notapplicable

Time Way Type Basicsituationindexofinvestigation

2016-1-7 Fieldresearch Institute

orSzse.dostockcode=000521

2016-1-15 Fieldresearch Institute

orSzse.dostockcode=000521

2016-1-22 Fieldresearch Institute

orSzse.dostockcode=000521

2016-1-26 Fieldresearch Institute

orSzse.dostockcode=000521

2016-5-11 Fieldresearch Institute

orSzse.dostockcode=000521

2016-5-24 Fieldresearch Institute

orSzse.dostockcode=000521

2016-6-16 Fieldresearch Institute

orSzse.dostockcode=000521

2016-6-27 Fieldresearch Institute

orSzse.dostockcode=000521

2016-7-29 Fieldresearch Institute

orSzse.dostockcode=000521

2016-8-2 Fieldresearch Instituteandnatural

person orSzse.dostockcode=000521

2016-8-3 Fieldresearch Institute

orSzse.dostockcode=000521

2016-8-5 Fieldresearch Institute

orSzse.dostockcode=000521

2016-8-10 Fieldresearch Institute

orSzse.dostockcode=000521

2016-8-23 Fieldresearch Institute

orSzse.dostockcode=000521

2016-8-25 Fieldresearch Institute

orSzse.dostockcode=000521

2016-8-29 Fieldresearch Institute

orSzse.dostockcode=000521

2016-8-31 Fieldresearch Institute

orSzse.dostockcode=000521

2016-9-7 Fieldresearch Institute

orSzse.dostockcode=000521

2016-10-19 Fieldresearch Institute

orSzse.dostockcode=000521

2016-10-24 Fieldresearch Institute

orSzse.dostockcode=000521

2016-10-25 Fieldresearch Institute

orSzse.dostockcode=000521

2016-10-28 Fieldresearch Institute

orSzse.dostockcode=000521

2016-10-31 Fieldresearch Institute

orSzse.dostockcode=000521

2016-11-17 Fieldresearch Institute

orSzse.dostockcode=000521

2016-12-21 Fieldresearch Institute

orSzse.dostockcode=000521

Reception(times) 25

Numberofhospitality 121

Numberofindividualreception 2

Numberofotherreception N/A

Disclosed, released or let out major No

undisclosedinformation

SectionV.IimportantEvents

I.Profitdistributionplanofcommonstockandcapitalizingofcommonreservesplan

Formulation, Implementation and Adjustment of commonstock Profit Distribution Policy

EspeciallyCashDividendpolicyduringtheReportingPeriod

√Applicable□Notapplicable

Duringthereportingperiod,thecompanyhasstrictlyexecutedtheprofitdistributionpolicyin

accordancewiththerevised"ArticlesofAssociation",theformulationandimplementationofthe

company'scashdividendpolicyareinlinewiththeprovisionsof"ArticlesofAssociation"andthe

requirementsoftheresolutionsofshareholders'meeting,thedividendsstandardsandproportion

havebeendefiniteandclear, relevantdecision-makingproceduresandmechanismshavebeen

complete,theresponsibilitiesofindependentdirectorshavebeenclearandhaveplayeditsduerole,

minorityshareholdershavehadtheopportunitiestofullyexpresstheirviewsandaspirations,and

thelegitimateinterestsofminorityshareholdershavebeenmaintained.

Inthereportingperiod,theCompanyimplementedProfitdistributionplanforyearof2015,

thatis,distribute0.6Yuan(taxincluded)incashforevery10sharesheldbyallshareholdersofthe

Companybased ontotal share capital763,739,205 sharesdated 31 December2015 (including

600,875,205sharesofA-shareand162,864,000sharesofB-share),cashdividendof45,824,352.27

Yuanwasdistributedintotal.

Specialexplanationoncashdividendpolicy

SatisfyregulationsofGeneralMeetingorrequirementofArticleof Y

Association(Y/N):

Well-definedandclearlydividendstandardsandproportion(Y/N): Y

Completedrelevantdecision-makingprocessandmechanism(Y/N): Y

Independentdirectorsperformdutiescompletelyandplayaproper Y

role(Y/N):

Minority shareholders have opportunity to express opinions and Y

demandstotallyandtheirlegalrightsarefullyprotected (Y/N):

Conditionandproceduresarecomplianceandtransparentwhilethe Y

cashbonuspolicyadjustedorchanged (Y/N):

(II)Profitdistributionplan(pre-plan)ofcommonstockandcapitalizingofcommonreserves

plan(pre-plan)inlatestthreeyears(includingthereportingperiod)

1.Profitdistributionplanforyearof2014

Distribute0.6Yuan(taxincluded)incashforevery10sharesheldbyallshareholdersofthe

Companybasedontotalsharecapital763,739,205sharesdated31December2014,cashdividend

of45,824,352.30Yuanwasdistributedintotal.

2.Profitdistributionplanforyearof2015

Distribute0.6Yuan(taxincluded)incashforevery10sharesheldbyallshareholdersofthe

Companybasedontotalsharecapital763,739,205sharesdated31December2015,cashdividend

of45,824,352.27Yuanwasdistributedintotal.

3.Profitdistributionplanforyearof2016

Distribute0.6Yuan(taxincluded)incashforevery10sharesheldbyallshareholdersofthe

Companybasedontotalsharecapital1,044,597,881sharesdated31December2016,cashdividend

ofRMB62,675,872.86Yuanwasdistributedintotal.

Thepre-planhadbeendeliberatedandapprovedbytheboardofdirectors,anditneedtobe

submittedtheannualshareholders’generalmeetingof2016foritsconsideration.

(III)Cashdividendofcommonstockinlatestthreeyears(includingthereportingperiod)

InRMB

Netprofit Ratioinnetprofit

attributableto attributableto

Amountforcash commonstock commonstock Amountforcash Proportionfor

Yearforbonus bonus(tax shareholdersof shareholdersof bonusbyother cashbonusby

shares included) listedcompanyin listedcompany ways otherways

consolidation containedin

statementfor consolidation

bonusyear statement

2016 62,675,872.86 220,216,680.96 28.46% — —

2015 45,824,352.27 27,104,893.56 169.06% — —

2014 45,824,352.30 289,842,658.03 15.81% — —

(IV)TheCompanygainsprofitsinreportingperiodandtheretainedprofitofcommonstock

shareholdersprovidedbyparentcompanyispositivebut noplanofcashdividendproposedof

commonstock

□Applicable√Notapplicable

II.ProfitdistributionplanandcapitalizingofcommonreservesplanforthePeriod

√Applicable□Notapplicable

Bonussharesforevery10-share(Share) 0

Dividendsforevery10-share(RMB)(Tax 0.6

included)

Sharesaddedforevery10-sharebase 0

(Share)

Equitybaseofdistributionplan(Share) 1,044,597,881

Totalcashdividend(RMB)(Taxincluded) 62,675,872.86

Distributableprofits(RMB) 956,339,194.01

Ratioofcashdividendintotalprofit 100%

distribution

Cashdividend:

Distribute0.6Yuan(taxincluded)incashforevery10sharesheldbyallshareholdersoftheCompanybasedon

totalsharecapital1,044,597,881sharesdated31December2016,cashdividendofRMB62,675,872.86Yuan

wasdistributedintotal.

Detailexplanationonprofitdistributionorcapitalizationfromcapitalpublicreserve

BeingauditedbyShineWingCertifiedPublicAccountants(LLP),thenetprofitachievedinindividualstatement

oftheparentcompanyamountingtoRMB239,624,261.53Yuan,inlinewithrelevantregulations,afterextract

forstatutorysurplusreserveRMB23,962,426.15Yuan,thedistributableprofitinindividualstatementofthe

parent companyfor yearof 2016 amounting to RMB 215,661,835.38 Yuan;deducted the 2015 profit

distributionRMB45,824,352.27Yuan,plustheretainedprofitatbeginningoftheyearRMB786,501,710.90

Yuan,theaccumulatedretainedprofitinindividualstatementoftheparentcompanyatendof2016amountingto

RMB 956,339,194.01Yuan.Inaddition,theaccumulatedretainedprofitinconsolidatestatementatendofthe

2016amountingtoRMB 968,097,382.98Yuan;thedistributableprofitinconsolidatestatementforyearof

2016amountingtoRMB196,254,254.81Yuan.

Accordingtotherelevantlawsandregulationsandtheprovisionsof"ArticlesofAssociation"andconsidering

theinterests oftheshareholders andthe company's long-termdevelopment needs,theboard ofdirectors

approvedthecompanytodistributethecashbonusof0.6Yuanper10stocks(includingtax)toallshareholders

onthebasisofthegeneralcapitalof1,044,597,881stocksofDecember31,2016,totallythecashbonusRMB

62,675,872.86Yuanhasbeendistributed(Includingtax,thecashbonusaccountsfor29.06%oftheprofit

availablefordistributionintheindividualstatementsoftheparentcompanyinthecurrentyear).Afterthe

distribution,thetotalsharecapitalofthecompanykeepsthesame,accumulatestheremainingundistributed

profitsofRMB893,663,321.15Yuanwhichistobedistributedannuallyaftercarry-over

Thisplanhasbeenconsideredandpassedbytheboardofdirectors,andneedstobesubmittedto2016annual

generalmeetingofthecompanyfordeliberation.

III.Implementationofcommitment

(I)Commitmentsthatthecompany,shareholders,actual controller,offeror,directors,

supervisors,seniormanagementorotherrelatedpartieshavefulfilledduringthereporting

periodandhavenotyetfulfilledbytheendofreportingperiod

√Applicable□Notapplicable

Commitment Acceptor Content Date Term Implemen

tation

1.Theacquirershallnotengageinrefrigeratorbusiness

or activity which competes or will compete with Strictly

business of Meiling Electrical Appliances Co., Ltd. Validforlong implemen

(hereinafter referred to as the ―Meiling Electrical term ted

Appliances‖),or thatwhich has interestconflict with

MeilingElectricalAppliances.

Sichuan Aboutcommittedand2.Theacquirerpromisestoapplyshareholders‘righton Strictly

CommitmentsChanghong promised in order toalegalandreasonablemannerandshallnottakeany Validforlong implemen

madein ElectricCo., prevent horizontalactiontolimitoraffectthenormaloperationofMeiling term ted

acquisition Ltd. competition in theElectricalAppliances.

reportor (hereinafter AcquisitionReportof3.Foranyopportunitytoengageincompetingbusiness,2007-6-12

equitychangereferredtoas Hefei Meiling Co.,theacquirerwilladviseMeilingElectricalAppliancesin

report the―Sichuan Ltd. writtenforengagingsuchbusinessornot.IfMeiling

Changhong‖) ElectricalAppliancesgivesnoclearwrittenreplyasto

whetherengagingthecompetingbusinessornotwithin Validforlong Strictly

20daysafterreceiptoftheaforesaidletter,itshallbe term implemen

deemedthatitwillnotengageinsuchbusiness.The ted

acquirer will onlyengageinnon-competingbusiness

provided thatMeiling Electrical Appliances confirms

not to or is deemed to not engage in such

non-competingbusiness.

Commitment Commitment 1.Itwillnotengageinsuchbusinessoractivitythat Strictly

madeduring Sichuan regardingtoreducing competes with or has interest conflict with that of2010-6-24 Validforlong implemen

the Changhong andpreventing Meiling Electrical Appliances except for the action term ted

non-public competitionwith taken for sake of Meiling Electrical Appliances as

offerof2010 MeilingElectrical requiredbyMeilingElectricalAppliances.

Appliances 2.TheCompanypromisestoapplyshareholders‘right

onalegalandreasonablemannerandshallnottakeany

actiontolimitoraffectthenormaloperationofMeiling

ElectricalAppliances.

3.IncasethatMeilingElectricalAppliancesexpects,on

thebasisofitsexistingbusiness,toexpanditsoperation

scopeintothebusinesswhichtheCompanyhasalready

operated,theCompanyagreestograntpreemptiveright

to Meiling Electrical Appliances regarding such

businessifthesameconditionsaremet,providedthat

the Company is still the controlling shareholder or

actualcontrollerofMeilingElectricalAppliances.

1.Measureswillbeadoptedtopreventcontinuedrelated

transactionwithMeilingElectricalAppliances:astothe

relatedtransactionthatcannotbeprevented,itwillsign

relatedtransaction agreement withMeiling Electrical

Appliancesunderthemarketprinciplesof―equallypaid

Commitment and mutual benefit‖, and fairly determined the

regardingtoreducing transaction price accordingto the market prevailing Strictly

andstandardizing standards. 2010-6-24 Validforlong implemen

relatedtransaction 2.Performthenecessaryobligationstomakerelated term ted

withMeiling directorsand relatedshareholderabstainfrom voting

ElectricalAppliances according to relevant regulation, and observe legal

procedure for approving related transaction and

informationdisclosureobligations.

3. Promise not to hurt legal interests of Meiling

Electrical Appliances and othershareholders through

relatedtransaction.

CommittoauthorizedChanghongAirConditioningandZhongshanAir Validforlong Strictly

ConditioningCo.,Ltd.(hereinafterreferredtoasthe―ZhongshanAir 2010-11-6 term implemen

Conditioning‖)touse―Changhong‖trademarkandrelevantpatentsforfree. ted

1.Committodiscloseperiodicreportsonatruthful,accurate,complete,fairand

promptmanner,todisclosealltheinformationthathaveimportantinfluences

overinvestors,to acceptsupervisionunder theCSRCandShenzhenStock

Exchange.

2.Committomakepublicclarificationinrespectofsuchinformationthatis

releasedfromanypublicmediaandmayresultinmisleadinginfluenceson Strictly

TheCompany stockpriceoncetheCompanyisawareofsuchinformation. 2011-1-7 Validforlong implemen

3.Thedirectors,supervisors,seniormanagementandcoretechniciansofthe term ted

Companywillacceptopinionsandcriticismfromthesocialpublics,andthey

willnottradetheCompany‘ssecurities,directlyorindirectly,withanyinside

information and other illegal methods. The Company promises that the

documentssubmittedtoShenzhenStockExchangeexistnofalsestatementor

materialomission,and norelevantinformationwillbedisclosedduringthe

applicationforlistingwithoutpriorcontentfromShenzhenStockExchange.

Commitment 1.Sincethepropertytransferdidn‘tinvolvethebuildingsandlandcurrently Strictly

made in usedbyChanghongAirConditioning,SichuanChanghongcommits,uponthe Validforlong implemen

transfer of completionofequitytransfer,tocontinuetoleasesuchassetstoChanghongAir term ted

air Sichuan Conditioningatmarketprice. 2009-12-10

conditioningChanghong

2.Aftercompletionofthispropertytransfer,SichuanChanghongcommitsto Validforlong Strictly

assets managetopreventnewrelatedtransactionwithMeilingElectricalAppliances.

property For those which can not be prevented, Sichuan Changhong commits to term implemen

determinethetransactionpricebasedonmarketacceptedmethods,soasto ted

ensurefairnessofrelatedtransactionandprotectionoftheinterestofMeiling

ElectricalAppliances.

3.SichuanChanghongcommitsthatitwillnotengageinairconditioningand

refrigeratorbusinessoractivitywhichcompetesorwillcompetewithbusiness

of Meiling Electrical Appliances, or that whichhas interest conflict with

MeilingElectricalAppliances.

1.MakepromisenottoreducethesharesofMeilingboughtineveryyear

Commitments duringimplementationoftheperformanceincentivefundviaanymarketways2013-8-15; Threeyearsafter

by Annual inthelaterfirstyear,whichwasallowedtobereducedby50%accordingtothe2014-7-3; current sharesImplemen

performance lawsandregulationsinthesecondyear,andtheremaining50%wasallowedto purchased ting

incentive Some of the 2015-7-21

bereducedinthethirdyearinaccordancewiththelawsandregulations.

fund, Directors,

incentive supervisorsand2.Thedirectors,supervisorsandseniormanagementpromisedtomanagein From the date

objects whilesenior accordancewiththerelevantmanagementapproachesinaccordancewiththe when annual

purchasing executives of"CompanyLaw","SecuritiesLaw"and"TheCompany‘ssharesheldbythe incentive fund

stock of thetheCompanyasdirectors,supervisorsandseniormanagementofthelistedcompanyandits2013-8-15; plan deliberated

Company well as otherchangemanagementrules",asobjectsofannualperformanceincentivefundof2014-7-3; andapprovedbyImplemen

with incentive Meiling,includingbutnotlimitedto:duringhistenure,thesharestransferred2015-7-21 general meetingting

performance objects eachyear shallnot exceed25% ofthetotalnumber ofsharesheldofthe to 6mothsafter

incentive Company;shallnotsellthesharesoftheCompanywithinsixmonthsafter director,

funds and boughtitorpurchaseagainsixmonthsaftersoldit;shallnottransfertheshares supervisor and

ownedfund heldwithinsixmonthsafterDismission. seniorexecutives

resigned

CommitmentsSichuan 1.Basedonmarketconditionsandasallowedbylawsandrules,multiple

ofnotto Changhong measureswereadoptedadequatelytoincreaseshareholdingofMeiling Validforlong Strictly

reducingthe ElectricCo., Appliances,soastodemonstrateitsfirmconfidenceonthePRCeconomyand 2015-7-9 term implemen

shares LTDand MeilingApplianceswithitsactualactions,maintainsounddevelopmentof ted

personsacting capitalmarketandpromoterecoveryofhealthymarket;

inconcert 2.TheCompanycontinuedtosupportoperationanddevelopmentoflisted

Changhong company.Itiscommittedtobringingsteadyandrealreturntoinvestors.

(HongKong) 3.SichuanChanghonghascommittedthatSichuanChanghonganditspersons

Trading actinginconcert-Changhong(HongKong)TradingCo.,Ltd.shallnotreduce

Company holdingsof"Meiling"and"AnhuiMeilingB"withinsixmonthssinceJanuary

Limited 18,2016,iftheholdingsof"Meiling"and"AnhuiMeilingB"increasedueto 2016-1-18 2016-7-18 Implemen

Meilingbonusissueorsharecapitalincreasedbytransferring,thecompanywill ted

stillabidebytheabovecommitment.Toviolatetheabovecommitment,all

gainsbyreducingholdingswillbelongtoMeiling.

Sichuan Sharesarenottransferwithinthirty-six(36)monthssinceendoftheprivate 14October2016 Implemen

Changhong placement 2016-3-6 to14October ting

2019

1.Iherebyundertakenottodeliverintereststoother

entitiesorindividualswithoutconsiderationoratunfair

Commitment conditions,nortoprejudicetheCompany‘sinterestsby

made during othermeans. Till the

the Commitment on2. I hereby undertake to restrain my role related completion of

non-public Directors andcompensation ofconsumptionbehaviors. projects invested

offerin2016 senior immediate dilutionof withtheproceedsImplemen

executives ofreturn arising from3.Iherebyundertakenottoconductanyinvestmentand2016-2-23 from thisting

theCompany non-publicissuanceofconsumption whichis not relatedto performance of non-public

shares dutieswithutilizationofanycompanyassets. issuance of

4. I hereby undertakethat the remuneration system shares

determinedbytheboardofdirectorsortheremuneration

andexaminationcommitteebelinkedtoimplementation

ofthecompensationofreturnmeasures.

5. In case that the Company adopts share based

incentive plan in future,Iherebyundertakethatthe

exercise conditions of the incentive plan to be

announcedbytheCompanybelinkedtoimplementation

ofthecompensationofreturnmeasures.

6.Fortheperiodfromthedateofthiscommitmentto

thedateofcompletionofthisnon-publicissuanceof

shares, if the CSRC makes other new regulatory

requirementsoncompensationofreturnmeasuresand

the commitmentthereof, and in case thatthe above

commitments cannot satisfy these new requirements

from the CSRC, I hereby undertake to issue

supplementary commitment in compliance with the

latestCSRCrequirements.

Asoneoftheprincipalsresponsibleforcompensationof

return measures, I, in case of break of the above

commitments or refuse to perform the above

commitments,agreetoreceiverelevantpunishmentor

toadoptrelevantadministrationmeasuresaccordingto

the systems,rules and regulationsoftheCSRC and

ShenzhenStockExchange.

1.Promisetotruly,accurately,completely,fairlyandtimelypublish

periodicreports,discloseallinformationthathassignificantimpacts

on the investors, and accept the supervision and management of Validforlong Strictly

TheCompany China Securities Regulatory Commission and the ShenzhenStock2016-10-12 term implemen

Exchange. ted

2.MakecommitmentsthattheCompanywillpubliclyclarifyintime

afterknowinganyinformationonanypubliccommunicationsmedia

thatmaycausemisleadinginfluenceonthestockprice

3.TheCompany‘sdirectors,supervisorsandseniorexecutiveswill

listencarefullytotheopinionsandcriticismsofthepublicandnever

use anyacquired insideinformation and otherimproper meansto

directlyorindirectlyengageinthetradingactivitiesoftheCompany's

stock.

Sixissuing Promisethattherestrictedperiodof2016non-publicofferingofA

objectexcept sharesofMeilingsubscribedthistimeis12months. 2016-9-9 2016-10-14to Implemen

Sichuan 2017-10-14 ting

Changhong

Performthecommitmentpromptlyor√Yes□No

not

Ifthecommitmentsisnotfulfilledon

time,shallexplainthespecifyreason Non-applicable

andthenextworkplan

Note:forthecommitmentscompletedandexemptionforimplementinginabovementionedtable,theCompanywillnotdiscloseinnextordinaryreport

(II)ConcerningasstsorprojectoftheCompany,whichhasprofitforecast,andreporting

periodstillinforecastingperiod,explainreasonsofreachingtheoriginalprofitforecast

□Applicable√Notapplicable

IV.Non-operationalfundoccupationfromcontrollingshareholdersanditsrelatedparty

□Applicable√Notapplicable

Nonon-operationalfund occupationfrom controllingshareholdersand its relatedpartyin

period.

Disclosuredateforspecific

approvalopiniononfund 2017-3-30

occupationfromCPA

Disclosureindexforspecific Juchao website: of non-operating

approvalopiniononfund capitaloccupationandotherrelatedcapitaltransactionsinHefeiMeilingCo.,

occupationfromCPA Ltd.in2016.

V. Explanation from Board of Directors, Supervisory Committee and Independent

Directors(ifapplicable)for“QualifiedOpinion”thatissuedbyCPA

□Applicable√Notapplicable

VI. Particulars about the changes in aspect of accounting policy, estimates and

calculationmethodcomparedwiththefinancialreportoflastyear

□Applicable√Notapplicable

Noparticulars aboutthe changesin aspect of accountingpolicy, estimates or calculation

methodinPeriod.

VII.Majoraccountingerrorswithinreportingperiodthatneedsretrospective

restatement

□Applicable√Notapplicable

Nomajoraccountingerrorswithinreportingperiodthatneedsretrospectiverestatementforthe

Companyintheperiod.

VIII.Comparewithlastyear’sfinancialreport;explainchangesinconsolidation

statement’sscope

√Applicable□Notapplicable

The consolidated financial statements of the Company cover 50 subsidiaries, including

SichuanChanghongAirConditioningCo.,Ltd.,ZhongshanChanghongElectricCo.,Ltd.,Zhongke

MeilingCryogenicTechnologyCo.,Ltd.andGuangdongChanghongRidianTechnologyCo.,Ltd.

(hereinafter referred to as "Ridian Company"). Compared with the previous year, during the

reportingperiod,threesubsidiariesarenewlyincluded in theconsolidatedfinancial statements,

thereinto,includeRidianCompanyintheCompany‘sconsolidatedfinancialstatementsduetothe

completionof industrialand commercialregistration ofchanges for stockrightassigning after

bidding98.856% stockrights ofRidianCompany.At thesametime, accordingto therelevant

provisions of AccountingStandards for BusinessEnterprises No. 33- Consolidated Financial

Statements,thecompanymadearestatementtothebeginningbalanceoftheconsolidatedfinancial

statementsandthenumberatthesameperiodoflastyear,theresolutionofthe15thmeetingofthe

company‘s8thBoardofDirectorspassedandagreedthecompanytoinvestandbuildChangmei

Scienceand TechnologyCo.,Ltd., theregisteredcapital isRMB50millionYuan,which has

completedtheindustrialandcommercialregistrationinApril2016,andhasbeenincludedinthe

Company‘sconsolidatedstatements;theresolutionofthe19thmeetingofthecompany‘s8thBoard

ofDirectorspassedandagreedthesubsidiariesZhongshanChanghongandSichuanChanghongAir

ConditioningCo.,Ltd.tojointlysetupasubsidiarynamed"CHANGHONGMEILINGELECTRIC

INDONESIA.PT" in Indonesia, with registered capital of US 6 million dollars, which has

completedtheindustrialandcommercialregistrationinAugust2016,andhasbeenincludedinthe

Company‘sconsolidatedstatements.

Inaddition,duringthereportingperiod,twosubsidiariesLuoheMeilingElectricMarketing

Co., Ltd. and Bengbu Meiling Electric Marketing Co., Ltd. were no longer included in the

consolidatedfinancialstatementsduetotheliquidationandwrite-off.ThesubsidiaryHefeiMeiling

PackagingProductCo.,Ltd.wasnolongerincludedintheconsolidatedfinancialstatementsdueto

thepubliclistingfortransfer.

Moredetailscanbeseeninthereport―VII.Changesinthescopeofthemerger‖and―VIII.

Interestsinotherentities‖of―SectionXIFinancialReport‖

IX.Appointmentandnon-reappointment(dismissal)ofCPA

(I)Accountingfirmappointed

Nameofdomesticaccountingfirm ShineWingCertifiedPublicAccountants(LLP)

Remunerationfordomesticaccountingfirm 110

(in10thousandYuan)

Continuous life of auditing service for 8-year

domesticaccountingfirm

NameofdomesticCPA HeYong,XiaCuiqiong

Name of foreign accounting firm (if N/A

applicable)

Remuneration for foreign accounting firm N/A

(10thousandYuan)(ifapplicable)

Continuous life of auditing service for N/A

foreignaccountingfirm(ifapplicable)

NameofforeignCPA(ifapplicable) N/A

(II)Re-appointedaccountingfirmsinthisperiod

□Yes√No

(III)Appointmentofinternalcontrolauditingaccountingfirm,financialconsultantorsponsor

√Applicable □Notapplicable

Inreportingperiod,ShinewingCertifiedPublicAccountants(LLP)wasappointedasaudit

instituteofinternal controlfortheCompany,auditing chargeforinternalcontrolamountingas

RMB250,000.

In reporting period, the Company carrying private placement of shares, and appointed

ShenwanHongyuanSecuritiesUnderwritingSponsorCo.,Ltd.asthesponsorinstitutionandlead

underwriter of the placement. During the offering period, totally expenses 28 million Yuan

includingunderwritingfeeandsponsorfee.

X.Particularaboutsuspendedanddelistingafterannualreportdisclosed

□Applicable√Notapplicable

XI.Bankruptcyreorganization

□Applicable√Notapplicable

NobankruptcyreorganizationfortheCompanyinreportingperiod

XII.SignificantlawsuitsandarbitrationsoftheCompany

□Applicable√Notapplicable

(I)Nosignificantlawsuitsorarbitrationsoccurredinthereportingperiod

(II)Someothersignificantlawsuitsandarbitrationsinthereportingperiod

To maintain the independence and integrityof "Meiling"trademark and trade name, the

companyhaslaunchedaseriesoflitigationandarbitrationrelatedto"Meiling"trademark,please

see2014firstquarterreport,2014semi-annualreport,the2014annualreportdisclosedrespectively

onApril19,2014,August12,2014,andMarch26,2014fortherelevantprogress.Uptonow,Hefei

Meiling Household Appliances Co., Ltd., Hefei Meiling Environmental Protection Equipment

TechnologyCo.,Ltd.,Hefei MeilingPurifyingEquipmentTechnologyCo.,Ltd.,HefeiMeiling

ElectricalAppliancesCo.,Ltd.,HefeiMeilingCabinetElectricalApplianceCo.,Ltd.,HefeiMeiling

VehicleIndustryCo.,Ltd.,HefeiMeilingIntelligentTechnologyCo.,Ltd.(formerHefeiMeiling

Telecommunication Technology Co., Ltd., the company changed its corporate name to Hefei

MeilingIntelligentTechnologyCo., Ltd.on theirowned,we arepursue itslegal responsibility

throughlegalproceedings)havehadnorighttouse"Meiling"trademark.

Atpresent,onlythekitchen ventilator,cooker, waterheater,waterpurifiersand household

electricalappliancesmanufacturedandsoldbytheCompanyandits wholly-ownedsubsidiary-

GuangdongChanghongRidianTechnologyCo.,Ltd.arethecompany'sregularproducts,anyother

smallhouseholdappliancesusingsameorsimilartrademarkasourcompanyorusingthetrade

namesimilartotheCompany’snamearetheCompany’sproducts.Inviewoftheinfringement

totheCompany’s trademarkand tradename,falsepropaganda andunfaircompetition in the

market, the Company has carried out many ways including administrative reports, criminal

investigationand civillitigationtofightagainstinfringementandcounterfeitingbehaviorin the

wholecountry.

XIII.Penaltyandrectification

□Applicable√Notapplicable

NopenaltyandrectificationfortheCompanyinreportingperiod.

XIV.Integrityofthecompanyanditscontrollingshareholdersandactualcontrollers

□Applicable√Notapplicable

Duringthereportingperiod,theCompanyand thecontrollingshareholdersand theactual

controllershavehadgoodreputation,andthereisnolargeamountdueunliquidateddebtsentenced

bythecourt.

XV.Implementationofthecompany’sstockincentiveplan,employeestockownership

planorotheremployeeincentives

√Applicable□Notapplicable

Implementationforannualperformanceincentivefund

OnAugust9,2012 and August28,2012, theCompanyconsiders theadoptionof "Hefei

Meilingannual performanceincentivefund implementation plan"(hereinafterreferred to as ""

stimulus"")onthe16th meetingofthe7thboardofdirectorsandthe2012-secondprovisional

shareholdersmeeting.Detailswere disclosedoninformationdisclosuremedia appointedbythe

Companyas"SecuritiesTimes","ChineseSecuritiesDaily","HongKongCommercialDaily"and

theJuchaonetwork ()onAugust10,2012and August29thin theformof

announcement(No.:2012-028,No.:2012-035).

1.Implementationabout2012,2013and2014performanceincentivefundprovisionand

distributionplan

See details in "Implementation of the company's annual incentive fund" in "XV

Implementationofthecompany'sstockincentiveplan,employeestockownershipplan,orother

employeeincentivemeasures"in"SectionVSignificantEvents"of thecompany's"2015Annual

Report"disclosedonMarch25,2016.

Uptotheendofthisreportingperiod,thecompany'sstockpurchasedbysome2012annual

performance incentive objects (non-directors, supervisors and senior management) with their

granted2012annualperformanceincentivefundsandownfundshasbeenfullydesterilized,the

company'sstockpurchased bysome 2013annual performanceincentiveobjects(non-directors,

supervisorsandseniormanagement)withtheirgranted2013annualperformanceincentivefunds

andownfundshasbeendesterilizedby50%fortermofholdingfortwoyears,seebelowforthe

overallreducingholding-sharesofsomeabove-mentionedincentiveobjects;ifthestockholding

periodofthecompany'sstockpurchasedby2014annualperformanceincentiveobjectswiththeir

granted 2014 annual performance incentive funds and own funds is less than two years, the

purchasedstockofallincentiveobjectsshouldbelockedaccordingtothecommitments.Amongthe

incentiveobjects,thecurrentdirectors,supervisorsandseniormanagementhavenotreducedthe

Company’s shares purchased by implementing 2012, 2013, and 2014 annual performance

incentiveplans.

2.ShareholdingandreducingofperformanceincentiveobjectsoftheCompany

Endedas31December2016,sharesholdbyallincentiveobjectsamountingto10,161,379

shares,a0.973%intotalsharecapitaloftheCompany,including8,828,247A-share,a0.845%in

totalsharecapitaland1,333,132B-share,a0.128%intotalsharecapitaloftheCompany.Endedas

31 December 2016, othergrantees of the 2012 and 2013 incentive plan (not beingdirectors,

supervisorsandseniormanagement)havereducedholdingof3,244,577inaggregate,accounting

forabout0.31%ofthetotalsharecapital,sinceSeptember2014totheendofthereportingperiod,

includingreducedholdingof151,123inthereportingperiod,accountingforabout0.01%ofthe

totalsharecapital.

XVI.Majorrelatedtransaction

(I)Relatedtransactionwithroutineoperationconcerned

√Applicable □Notapplicabl

(1)Relatedtransactionwithroutineoperationconcerned

Whet

her

Trading over

Related Related Propor limit the Clearing Available

Typeof Contentof Pricing transaction transaction tionin formfor Dateof

Seri Related Relationship related related principl price(in10 amount similar approve appro related similar

party transact (in10 transac disclosur Indexofdisclosure

al ion transaction e thousand thousand tions d(in10 ved transactio market

Yuan) n e

Yuan) (%) thousan limite price

dYuan) dor

not

(Y/N)

Electric

melting,

Spot

Sichuan Commo resistors, Juchao

Controlling exchange,

Changhon dity integrated Marketi 2016-3-25 Website()

1 shareholderand 14,456.41 14,456.41 1.48% 100,000 No Bank --

gElectric purchas circuit ngprice ,2016-5-5 No.:2016-027,2016-028,2016

ultimatecontroller acceptanc

Co.,Ltd. ed accessory, -030,2016-046

e

color

masterbatch

Sichuan

Changhon

Commo Juchao

g Controlling

dity Sunstroke Marketi Spot 2016-3-25 Website()

2 Electronic shareholderand 0.37 0.37 0.00% 15,000 No --

purchas supplies ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

sHolding ultimatecontroller

ed -030,2016-046

Group

Co.,Ltd.

Huayi Otherenterprise Commo Compressor Marketi Spot 2016-3-25 Juchao

3 44,592.84 44,592.84 4.57% 70,000 No --

Compress controlunderthe dity etc. ngprice exchange, ,2016-5-5 Website()

orCo., samecontrolling purchas Bank No.:2016-027,2016-028,2016

Ltd. shareholderand ed acceptanc -030,2016-046

ultimatecontroller e

Sichuan

Otherenterprise

Changhon Commo Juchao

controlunderthe Plastic Bank

gMold dity Marketi 2016-3-25 Website()

4 samecontrolling products 42,763.92 42,763.92 4.38% 100,000 No acceptanc --

Plastic purchas ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand etc. e

Tech.Co., ed -030,2016-046

ultimatecontroller

Ltd.

Sichuan Otherenterprise

Commo Juchao

Changhon controlunderthe Doorshell, Bank

dity baseboard Marketi 2016-3-25 Website()

5 gJijia samecontrolling 21,372.67 21,372.67 2.19% 100,000 No acceptanc --

purchas etc. ngprice ,2016-5-5 No.:2016-027,2016-028,2016

FineCo., shareholderand e

ed -030,2016-046

Ltd. ultimatecontroller

Sichuan Otherenterprise

Commo Juchao

Changhon controlunderthe Packing Bank

dity case,printed Marketi 2016-3-25 Website()

6 gPackage samecontrolling 5,862.38 5,862.38 0.60% 100,000 No acceptanc --

purchas matteretc. ngprice ,2016-5-5 No.:2016-027,2016-028,2016

Printing shareholderand e

ed -030,2016-046

Co.,Ltd. ultimatecontroller

CHANG Otherenterprise

Commo Juchao

HONG(H controlunderthe Balckand

dity Marketi Spot 2016-3-25 Website()

7 K)TRADI samecontrolling white 179.34 179.34 0.02% 100,000 No --

purchas ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

NGLIMIT shareholderand material

ed -030,2016-046

ED ultimatecontroller

Sichuan Otherenterprise

Commo Printed Juchao

Changhon controlunderthe Bank

dity board Marketi 2016-3-25 Website()

8 g samecontrolling 770.77 770.77 0.08% 100,000 No acceptanc --

purchas components ngprice ,2016-5-5 No.:2016-027,2016-028,2016

Precision shareholderand e

ed etc. -030,2016-046

Electronic ultimatecontroller

sTech.

Co.,Ltd.

Sichuan

Changhon Otherenterprise

Commo Juchao

gNew controlunderthe Power

dity Marketi Spot 2016-3-25 Website()

9 Energy samecontrolling supply, 6.69 6.69 0.00% 100,000 No --

purchas ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

Technolo shareholderand battery

ed -030,2016-046

gyCo., ultimatecontroller

Ltd.

Otherenterprise

Commo Juchao

081 controlunderthe

dity Transformer Marketi Spot 2016-3-25 Website()

10 Electronic samecontrolling 278.61 278.61 0.03% 15,000 No --

purchas etc. ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

Group shareholderand

ed -030,2016-046

ultimatecontroller

Guangdon

Otherenterprise

g Commo Juchao

controlunderthe

Changhon dity Foampieces Marketi Spot 2016-3-25 Website()

11 samecontrolling etc. 865.98 865.98 0.09% 100,000 No --

g purchas ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand

Electronic ed -030,2016-046

ultimatecontroller

sCo.,Ltd.

Sichuan

Otherenterprise

Hongyu Commo Juchao

controlunderthe Bank

Metal dity Marketi 2016-3-25 Website()

12 samecontrolling Radiator 55.98 55.98 0.01% 100,000 No acceptanc --

Manufact purchas ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand e

ureCo., ed -030,2016-046

ultimatecontroller

Ltd.

Sichuan Otherenterprise Commo Spot Juchao

Marketi 2016-3-25

13 Changhon controlunderthe dity Handpiece 468.62 468.62 0.05% 100,000 No exchange, -- Website()

ngprice ,2016-5-5

g samecontrolling purchas Bank No.:2016-027,2016-028,2016

Intelligent shareholderand ed acceptanc -030,2016-046

Manufact ultimatecontroller e

uring

Technolo

gyCo.,

Ltd.

Sichuan

Otherenterprise Printed

Changhon Commo Juchao

controlunderthe board, Bank

gDevices dity Marketi 2016-3-25 Website()

14 samecontrolling remote 684.44 684.44 0.07% 100,000 No acceptanc --

Technolo purchas ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand controland e

gyCo., ed -030,2016-046

ultimatecontroller transformer

Ltd.

Sichuan

Otherenterprise Spot

Changhon Commo Juchao

controlunderthe Sheetmetal exchange,

gXinrui dity Marketi 2016-3-25 Website()

15 samecontrolling parts,plastic 5,019.64 5,019.64 0.51% 15,000 No Bank --

Technolo purchas ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand partsetc. acceptanc

gyCo., ed -030,2016-046

ultimatecontroller e

Ltd

Sichuan Otherenterprise

Commo Juchao

Hongwei controlunderthe

dity DCpower Marketi Spot 2016-3-25 Website()

16 Technolo samecontrolling 342.66 342.66 0.04% 100,000 No --

purchas supplyetc. ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

gyCo., shareholderand

ed -030,2016-046

Ltd. ultimatecontroller

Sichuan

Otherenterprise

Changhon Commo Juchao

controlunderthe Lightlamp,

gLighting dity Marketi Spot 2016-3-25 Website()

17 samecontrolling lamptube 0.57 0.57 0.00% 100,000 No --

Technolo purchas ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand etc.

gy ed -030,2016-046

ultimatecontroller

Co.,Ltd.

Otherenterprise

Sichuan Commo Juchao

controlunderthe Advertising

Jiahong dity Marketi Spot 2016-3-25 Website()

18 samecontrolling materials, 13.77 13.77 0.00% 15,000 No --

Industrial purchas ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand plantetc.

Co.,Ltd. ed -030,2016-046

ultimatecontroller

Sichuan

Otherenterprise

Zhiyijia Commo Juchao

controlunderthe

Network dity Electronic Marketi Spot 2016-3-25 Website()

19 samecontrolling 2.56 2.56 0.00% 100,000 No --

Technolo purchas products ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand

gyCo., ed -030,2016-046

ultimatecontroller

Ltd.

Sichuan Otherenterprise

Commo Juchao

Changhon controlunderthe

dity Auxiliary Marketi Spot 2016-3-25 Website()

20 gPower samecontrolling 3.68 3.68 0.00% 100,000 No --

purchas parts ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

Source shareholderand

ed -030,2016-046

Co.,Ltd. ultimatecontroller

Otherenterprise

Sichuan Commo Juchao

controlunderthe

Huafeng dity Air Marketi Spot 2016-3-25 Website()

21 samecontrolling 23.04 23.04 0.00% 15,000 No --

Corp. purchas conditioner ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand

Group ed -030,2016-046

ultimatecontroller

Sichuan

Service Otherenterprise Spot

Commo Juchao

Exp. controlunderthe exchange,

dity Threepack Marketi 2016-3-25 Website()

22 Appliance samecontrolling 1.67 1.67 0.00% 100,000 No Bank --

purchas accessories ngprice ,2016-5-5 No.:2016-027,2016-028,2016

Service shareholderand acceptanc

ed -030,2016-046

Chain ultimatecontroller e

Co.,Ltd.

Sichuan

Otherenterprise Spot

Changhon Commo Printed Juchao

controlunderthe exchange,

g dity boards, Marketi 2016-3-25 Website()

23 samecontrolling 3,485.14 3,485.14 0.36% 100,000 No Bank --

Electronic purchas transformers ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand acceptanc

Products ed ,etc. -030,2016-046

ultimatecontroller e

Co.,Ltd.

Otherenterprise

Sichuan Commo Juchao

controlunderthe

Hongxin dity Marketi Spot 2016-3-25 Website()

24 samecontrolling Software 5.09 5.09 0.00% 100,000 No --

Software purchas ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand

Co.,Ltd. ed -030,2016-046

ultimatecontroller

Sichuan Otherenterprise

Commo Juchao

Changhon controlunderthe

dity Marketi Spot 2016-3-25 Website()

25 gProperty samecontrolling Bonsai 0.04 0.04 0.00% 15,000 No --

purchas ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

Service shareholderand

ed -030,2016-046

Co.,Ltd. ultimatecontroller

Information

system Spot

Sichuan Juchao

Controlling Accept services, exchange,

Changhon Marketi 2016-3-25 Website()

26 shareholderand the marketing 2,063.55 2,063.55 1.51% 5,000 No Bank --

gElectric ngprice ,2016-5-5 No.:2016-027,2016-028,2016

ultimatecontroller services fees,repair acceptanc

Co.,Ltd. -030,2016-046

fees,shared e

servicefees

Sichuan

Otherenterprise Spot

Changhon Transportati Juchao

controlunderthe Accept exchange,

g on,storage, Marketi 2016-3-25 Website()

27 samecontrolling the 43,875.55 43,875.55 32.11% 65,000 No Bank --

Minsheng loadingand ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand services acceptanc

Logistics unloading -030,2016-046

ultimatecontroller e

Co.,LTD

Sichuan

Otherenterprise

Changhon Juchao

controlunderthe Accept Bank

gMold maintenance Marketi 2016-3-25 Website()

28 samecontrolling the 5.56 5.56 0.00% 5,000 No acceptanc --

Plastic feeetc. ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand services e

Tech.Co., -030,2016-046

ultimatecontroller

Ltd.

Sichuan

Service Otherenterprise Spot

Juchao

Exp. controlunderthe Accept After-sales exchange,

Marketi 2016-3-25 Website()

29 Appliance samecontrolling the maintenance 11,989.08 11,989.08 8.77% 20,000 No Bank --

ngprice ,2016-5-5 No.:2016-027,2016-028,2016

Service shareholderand services feeetc. acceptanc

-030,2016-046

Chain ultimatecontroller e

Co.,Ltd.

Otherenterprise

Sichuan Juchao

controlunderthe Accept

Hongxin Software Marketi Spot 2016-3-25 Website()

30 samecontrolling the 30.38 30.38 0.02% 5,000 No --

Software usagefee ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand services

Co.,Ltd. -030,2016-046

ultimatecontroller

Guangdon

Otherenterprise

g Juchao

controlunderthe Accept Security

Changhon Marketi Spot 2016-3-25 Website()

31 samecontrolling the service 77.48 77.48 0.06% 5,000 No --

g ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand services charge

Electronic -030,2016-046

ultimatecontroller

sCo.,Ltd.

Otherenterprise

Sichuan Maintenanc Juchao

controlunderthe Accept

Jiahong efee, Marketi Spot 2016-3-25 Website()

32 samecontrolling the 18.82 18.82 0.01% 15,000 No --

Industrial business ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand services

Co.,Ltd. activityfee -030,2016-046

ultimatecontroller

Sichuan

Otherenterprise

Changhon Juchao

controlunderthe Accept

g Business Marketi Spot 2016-3-25 Website()

33 samecontrolling the 18.12 18.12 0.01% 15,000 No --

Internatio activityfee ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand services

nalHotel -030,2016-046

ultimatecontroller

Co.,Ltd.

CHANG Otherenterprise

Juchao

HONG(H controlunderthe Accept

Sales Marketi Spot 2016-3-25 Website()

34 K)TRADI samecontrolling the 9.75 9.75 0.01% 5,000 No --

expense ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

NGLIMIT shareholderand services

-030,2016-046

ED ultimatecontroller

Sichuan

Changhon

Juchao

g Controlling Accept Employee

Marketi Spot 2016-3-25 Website()

35 Electronic shareholderand the physical 11.34 11.34 0.01% 15,000 No --

ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

sHolding ultimatecontroller services examination

-030,2016-046

Group

Co.,Ltd.

Sichuan

Changhon Otherenterprise

Juchao

g controlunderthe Accept

Marketi Spot 2016-3-25 Website()

36 Internatio samecontrolling the Planeticket 11.99 11.99 0.01% 15,000 No --

ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

nalTravel shareholderand services

-030,2016-046

Service ultimatecontroller

Co.,Ltd.

Sichuan Otherenterprise Juchao

Accept Engineering

Changhon controlunderthe Marketi Spot 2016-3-25 Website()

37 the maintenance 0.67 0.67 0.00% 15,000 No --

gProperty samecontrolling ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

services cost

Service shareholderand -030,2016-046

Co.,Ltd. ultimatecontroller

Sichuan

Changhon Otherenterprise

Juchao

g controlunderthe Accept Bank

Maintenanc Marketi 2016-3-25 Website()

38 Precision samecontrolling the 2.84 2.84 0.00% 5,000 No acceptanc --

ecost ngprice ,2016-5-5 No.:2016-027,2016-028,2016

Electronic shareholderand services e

-030,2016-046

sTech. ultimatecontroller

Co.,Ltd.

Sichuan Otherenterprise

Juchao

Hongwei controlunderthe Accept Laboratory

Marketi Spot 2016-3-25 Website()

39 Technolo samecontrolling the technical 23.58 23.58 0.02% 5,000 No --

ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

gyCo., shareholderand services servicefee

-030,2016-046

Ltd. ultimatecontroller

Sichuan

Otherenterprise

Zhiyijia Juchao

controlunderthe Accept

Network After-sale Marketi Spot 2016-3-25 Website()

40 samecontrolling the 0.25 0.25 0.00% 5,000 No --

Technolo service ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand services

gyCo., -030,2016-046

ultimatecontroller

Ltd.

Spot

Sichuan Juchao

Controlling Accept Water, exchange,

Changhon Marketi 2016-3-25 Website()

41 shareholderand fueland electricity 1,658.98 1,658.98 0.17% 100,000 No Bank --

gElectric ngprice ,2016-5-5 No.:2016-027,2016-028,2016

ultimatecontroller power andgasfee acceptanc

Co.,Ltd. -030,2016-046

e

Huayi Otherenterprise Spot Juchao

Accept

Compress controlunderthe Compressed Marketi exchange, 2016-3-25 Website()

42 fueland 48.05 48.05 0.00% 100 No --

orCo., samecontrolling airfee ngprice Bank ,2016-5-5 No.:2016-027,2016-028,2016

power

Ltd. shareholderand acceptanc -030,2016-046

ultimatecontroller e

Guangdon

Otherenterprise Water,

g Juchao

controlunderthe Accept electricity

Changhon Marketi Spot 2016-3-25 Website()

43 samecontrolling fueland and 153.20 153.20 0.02% 100,000 No --

g ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand power compressed

Electronic -030,2016-046

ultimatecontroller airfee

sCo.,Ltd.

Otherenterprise

Sichuan Juchao

controlunderthe Accept Waterand

Jiahong Marketi Spot 2016-3-25 Website()

44 samecontrolling fueland electricity 1.15 1.15 0.00% 15,000 No --

Industrial ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand power fee

Co.,Ltd. -030,2016-046

ultimatecontroller

Hefei

Changhon Otherenterprise

Juchao

gNew controlunderthe Accept

Electricity Marketi Spot 2016-3-25 Website()

45 Energy samecontrolling fueland 24.26 24.26 0.00% 100,000 No --

fee ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

Technolo shareholderand power

-030,2016-046

gyCo., ultimatecontroller

Ltd.

Sichuan

Changhon

Juchao

g Controlling Accept Waterand

Marketi Spot 2016-3-25 Website()

46 Electronic shareholderand fueland electricity 1.02 1.02 0.00% 15,000 No --

ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

sHolding ultimatecontroller power fee

-030,2016-046

Group

Co.,Ltd.

Sichuan Otherenterprise Accept Waterand Marketi Spot 2016-3-25 Juchao

47 4.51 4.51 0.00% 15,000 No --

Changhon controlunderthe fueland electricity ngprice exchange ,2016-5-5 Website()

gProperty samecontrolling power fee No.:2016-027,2016-028,2016

Service shareholderand -030,2016-046

Co.,Ltd. ultimatecontroller

Spot

Sichuan Juchao

Controlling exchange,

Changhon Salesof Air-conditio Marketi 2016-3-25 Website()

48 shareholderand 108,928.79 108,928.79 8.70% 350,000 No Bank --

gElectric goods ner ngprice ,2016-5-5 No.:2016-027,2016-028,2016

ultimatecontroller acceptanc

Co.,Ltd. -030,2016-046

e

Sichuan

Changhon

Juchao

g Controlling

Salesof Marketi Spot 2016-3-25 Website()

49 Electronic shareholderand Food 338.20 338.20 0.03% 10,000 No --

goods ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

sHolding ultimatecontroller

-030,2016-046

Group

Co.,Ltd.

Sichuan Otherenterprise

Juchao

Changhon controlunderthe Doorshell, Bank

Salesof Marketi 2016-3-25 Website()

50 gJijia samecontrolling bottom 4,693.13 4,693.13 0.37% 350,000 No acceptanc --

goods ngprice ,2016-5-5 No.:2016-027,2016-028,2016

FineCo., shareholderand plate,etc. e

-030,2016-046

Ltd. ultimatecontroller

Sichuan

Otherenterprise

Changhon Color Juchao

controlunderthe Bank

gMold Salesof Masterbatch Marketi 2016-3-25 Website()

51 samecontrolling 13,701.81 13,701.81 1.09% 350,000 No acceptanc --

Plastic goods,plastic ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand e

Tech.Co., particle -030,2016-046

ultimatecontroller

Ltd.

Lejiayi Otherenterprise Refrigerator Spot Juchao

Salesof Marketi 2016-3-25

52 Chain controlunderthe ,washing 365.25 365.25 0.03% 350,000 No exchange, -- Website()

goods ngprice ,2016-5-5

Managem samecontrolling machine Bank No.:2016-027,2016-028,2016

entCo., shareholderand acceptanc -030,2016-046

Ltd. ultimatecontroller e

PT.CHA Otherenterprise

Air Juchao

NGHON controlunderthe

Salesof conditioning Marketi Spot 2016-3-25 Website()

53 GELECT samecontrolling 2.60 2.60 0.00% 350,000 No --

goods maintenance ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

RICINDO shareholderand

spareparts -030,2016-046

NESIA ultimatecontroller

CHANG Otherenterprise

Juchao

HONG(H controlunderthe Refrigerator

Salesof Marketi Spot 2016-3-25 Website()

54 K)TRADI samecontrolling ,air 45,103.46 45,103.46 3.60% 350,000 No --

goods ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

NGLIMIT shareholderand conditioner

-030,2016-046

ED ultimatecontroller

CHANG Otherenterprise

Juchao

HONGEL controlunderthe

Salesof Marketi Spot 2016-3-25 Website()

55 ECTRIC( samecontrolling Refrigerator 13.92 13.92 0.00% 350,000 No --

goods ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

AUSTRA shareholderand

-030,2016-046

LIA) ultimatecontroller

Sichuan Otherenterprise

Juchao

Hongwei controlunderthe

Salesof DCpower Marketi Spot 2016-3-25 Website()

56 Technolo samecontrolling 9.76 9.76 0.00% 350,000 No --

goods supplyetc. ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

gyCo., shareholderand

-030,2016-046

Ltd. ultimatecontroller

Sichuan

Otherenterprise Spot

Changhon Juchao

controlunderthe Refrigerator exchange,

g Salesof Marketi 2016-3-25 Website()

57 samecontrolling ,air 87.20 87.20 0.01% 350,000 No Bank --

Minsheng goods ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand conditioner acceptanc

Logistics -030,2016-046

ultimatecontroller e

Co.,LTD

Sichuan

Service Otherenterprise Spot

Juchao

Exp. controlunderthe exchange,

Salesof Maintenanc Marketi 2016-3-25 Website()

58 Appliance samecontrolling 724.69 724.69 0.06% 350,000 No Bank --

goods eparts ngprice ,2016-5-5 No.:2016-027,2016-028,2016

Service shareholderand acceptanc

-030,2016-046

Chain ultimatecontroller e

Co.,Ltd.

Sichuan

Changhon Otherenterprise

Juchao

gGerun controlunderthe

Salesof Waste Marketi Spot 2016-3-25 Website()

59 Renewabl samecontrolling 949.01 949.01 0.08% 350,000 No --

goods materials ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

e shareholderand

-030,2016-046

Resources ultimatecontroller

Co.,Ltd.

Hefei Otherenterprise

Juchao

Changhon controlunderthe Bank

Salesof Marketi 2016-3-25 Website()

60 g samecontrolling Packingbox 255.71 255.71 0.02% 350,000 No acceptanc --

goods ngprice ,2016-5-5 No.:2016-027,2016-028,2016

Industrial shareholderand e

-030,2016-046

Co.,Ltd. ultimatecontroller

Otherenterprise

Sichuan Juchao

controlunderthe

Huafeng Salesof Air-conditio Marketi Spot 2016-3-25 Website()

61 samecontrolling 17.25 17.25 0.00% 10,000 No --

Corp. goods ner ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand

Group -030,2016-046

ultimatecontroller

Sichuan Otherenterprise Refrigerator

Juchao

Zhiyijia controlunderthe ,air

Salesof Marketi Spot 2016-3-25 Website()

62 Network samecontrolling conditioner, 143,292.46 143,292.46 11.44% 350,000 No --

goods ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

Technolo shareholderand washing

-030,2016-046

gyCo., ultimatecontroller machine

Ltd.

Otherenterprise

Sichuan Juchao

controlunderthe

Changhon Salesof Marketi Spot 2016-3-25 Website()

63 samecontrolling Food 3.95 3.95 0.00% 350,000 No --

gProperty goods ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand

Co.,Ltd. -030,2016-046

ultimatecontroller

Anhui

Otherenterprise Spot

Xinhao Juchao

controlunderthe exchange,

Plasma Salesof Smallhome Marketi 2016-3-25 Website()

64 samecontrolling 5.13 5.13 0.00% 10,000 No Bank --

Display goods appliances ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand acceptanc

PanelCo., -030,2016-046

ultimatecontroller e

Ltd.

Sichuan

Otherenterprise

Changhon Juchao

controlunderthe

gNetwork Salesof Marketi Spot 2016-3-25 Website()

65 samecontrolling Food 1.57 1.57 0.00% 350,000 No --

Technolo goods ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand

gyCo., -030,2016-046

ultimatecontroller

Ltd.

Chengdu

Changhon Otherenterprise

Juchao

g controlunderthe

Salesof Air-conditio Marketi Spot 2016-3-25 Website()

66 Electronic samecontrolling 1.55 1.55 0.00% 350,000 No --

goods ner ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

Technolo shareholderand

-030,2016-046

gyCo., ultimatecontroller

Ltd.

Sichuan Otherenterprise Juchao

Salesof Marketi Spot 2016-3-25

67 Changhon controlunderthe Food 0.31 0.31 0.00% 350,000 No -- Website()

goods ngprice exchange ,2016-5-5

g samecontrolling No.:2016-027,2016-028,2016

Intelligent shareholderand -030,2016-046

Health ultimatecontroller

Technolo

gyCo.,

Ltd.

Sichuan Otherenterprise

Juchao

Changhon controlunderthe

Salesof Air-conditio Marketi Spot 2016-3-25 Website()

68 gProperty samecontrolling 4.89 4.89 0.00% 10,000 No --

goods ner ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

Service shareholderand

-030,2016-046

Co.,Ltd. ultimatecontroller

Guangdon

Otherenterprise

g Juchao

controlunderthe

Changhon Salesof Smallhome Marketi Spot 2016-3-25 Website()

69 samecontrolling 0.14 0.14 0.00% 350,000 No --

g goods appliances ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand

Electronic -030,2016-046

ultimatecontroller

sCo.,Ltd.

Otherenterprise

Sichuan Juchao

controlunderthe

Huanyu Salesof Marketi Spot 2016-3-25 Website()

70 samecontrolling Food 1.42 1.42 0.00% 10,000 No --

Industrial goods ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand

Co.Ltd. -030,2016-046

ultimatecontroller

Sichuan

Otherenterprise Spot

Changhon Juchao

controlunderthe Sheetmetal exchange,

gXinrui Salesof Marketi 2016-3-25 Website()

71 samecontrolling parts,plastic 75.91 75.91 0.01% 10,000 No Bank --

Technolo goods ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand parts,etc. acceptanc

gyCo., -030,2016-046

ultimatecontroller e

Ltd

Sichuan Otherenterprise Salesof Marketi Spot 2016-3-25 Juchao

72 Food 4.32 4.32 0.00% 350,000 No --

Changhon controlunderthe goods ngprice exchange ,2016-5-5 Website()

g samecontrolling No.:2016-027,2016-028,2016

Intelligent shareholderand -030,2016-046

Manufact ultimatecontroller

uring

Technolo

gyCo.,

Ltd.

Mianyang

Technolo Otherenterprise

Juchao

gyTown controlunderthe

Salesof Marketi Spot 2016-3-25 Website()

73 BigData samecontrolling Food 0.06 0.06 0.00% 350,000 No --

goods ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

Technolo shareholderand

-030,2016-046

gyCo., ultimatecontroller

Ltd.

Otherenterprise

BVCH Juchao

controlunderthe

Optronics Salesof Marketi Spot 2016-3-25 Website()

74 samecontrolling Food 1.91 1.91 0.00% 350,000 No --

(Sichuan) goods ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand

Co.,Ltd. -030,2016-046

ultimatecontroller

Sichuan

Otherenterprise

Changhon Juchao

controlunderthe

g Salesof Marketi Spot 2016-3-25 Website()

75 samecontrolling Food 8.74 8.74 0.00% 350,000 No --

Electronic goods ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand

Products -030,2016-046

ultimatecontroller

Co.,Ltd.

Sichuan Otherenterprise Juchao

Changhon controlunderthe Salesof Marketi Spot 2016-3-25 Website()

76 Food 0.25 0.25 0.00% 10,000 No --

gGroup samecontrolling goods ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

Finance shareholderand -030,2016-046

Co.,Ltd. ultimatecontroller

Otherenterprise Spot

Huayi Juchao

controlunderthe exchange,

Compress Salesof Air-conditio Marketi 2016-3-25 Website()

77 samecontrolling 16.92 16.92 0.00% 350,000 No Bank --

orCo., goods ner ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand acceptanc

Ltd. -030,2016-046

ultimatecontroller e

Sichuan Otherenterprise

Juchao

Changhon controlunderthe Bank

Salesof Air-conditio Marketi 2016-3-25 Website()

78 gPackage samecontrolling 33.31 33.31 0.00% 350,000 No acceptanc --

goods ner ngprice ,2016-5-5 No.:2016-027,2016-028,2016

Printing shareholderand e

-030,2016-046

Co.,Ltd. ultimatecontroller

Sichuan Otherenterprise

Juchao

Changhon controlunderthe Air-conditio

Salesof Marketi Spot 2016-3-25 Website()

79 gPower samecontrolling ner 5.34 5.34 0.00% 350,000 No --

goods ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

Source shareholderand components

-030,2016-046

Co.,Ltd. ultimatecontroller

Sichuan

Changhon Otherenterprise

Juchao

g controlunderthe

Salesof Air-conditio Marketi Spot 2016-3-25 Website()

80 Education samecontrolling 0.31 0.31 0.00% 350,000 No --

goods ner ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

Technolo shareholderand

-030,2016-046

gyCo., ultimatecontroller

Ltd.

Guangdon Otherenterprise

Providin Juchao

g controlunderthe Waterand

gfuel Marketi Spot 2016-3-25 Website()

81 Changhon samecontrolling electricity 95.61 95.61 0.01% 350,000 No --

and ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

g shareholderand fee

power -030,2016-046

Electronic ultimatecontroller

sCo.,Ltd.

Sichuan

Otherenterprise Spot

Changhon Providin Juchao

controlunderthe Waterand exchange,

g gfuel Marketi 2016-3-25 Website()

82 samecontrolling electricity 6.87 6.87 0.00% 350,000 No Bank --

Minsheng and ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand fee acceptanc

Logistics power -030,2016-046

ultimatecontroller e

Co.,LTD

Sichuan

Otherenterprise

Changhon Providin Juchao

controlunderthe Waterand Bank

gDevices gfuel Marketi 2016-3-25 Website()

83 samecontrolling electricity 46.33 46.33 0.00% 350,000 No acceptanc --

Technolo and ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand fee e

gyCo., power -030,2016-046

ultimatecontroller

Ltd.

Sichuan Otherenterprise

Providin Juchao

Changhon controlunderthe Waterand Bank

gfuel Marketi 2016-3-25 Website()

84 gJijia samecontrolling electricity 9.64 9.64 0.00% 350,000 No acceptanc --

and ngprice ,2016-5-5 No.:2016-027,2016-028,2016

FineCo., shareholderand fee e

power -030,2016-046

Ltd. ultimatecontroller

Sichuan

Otherenterprise

Changhon Providin Juchao

controlunderthe Waterand Bank

gMold gfuel Marketi 2016-3-25 Website()

85 samecontrolling electricity 485.62 485.62 0.04% 350,000 No acceptanc --

Plastic and ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand fee e

Tech.Co., power -030,2016-046

ultimatecontroller

Ltd.

Sichuan Otherenterprise Providin Juchao

Waterand

Hongwei controlunderthe gfuel Marketi Spot 2016-3-25 Website()

86 electricity 0.79 0.79 0.00% 350,000 No --

Technolo samecontrolling and ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

fee

gyCo., shareholderand power -030,2016-046

Ltd. ultimatecontroller

Sichuan Otherenterprise Rentalof

Rentto Juchao

Changhon controlunderthe warehouse Bank

the Marketi 2016-3-25 Website()

87 gJijia samecontrolling rental, 58.31 58.31 0.35% 3,000 No acceptanc --

related ngprice ,2016-5-5 No.:2016-027,2016-028,2016

FineCo., shareholderand forklift,two e

party -030,2016-046

Ltd. ultimatecontroller livingarea

Sichuan

Otherenterprise

Changhon Rentto Juchao

controlunderthe Storage Bank

gMold the Marketi 2016-3-25 Website()

88 samecontrolling lease, 132.08 132.08 0.79% 3,000 No acceptanc --

Plastic related ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand workshop e

Tech.Co., party -030,2016-046

ultimatecontroller

Ltd.

Sichuan

Otherenterprise Spot

Changhon Rentto Juchao

controlunderthe Warehouse exchange,

gXinrui the Marketi 2016-3-25 Website()

89 samecontrolling rental, 1.37 1.37 0.01% 10,000 No Bank --

Technolo related ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand forklift acceptanc

gyCo., party -030,2016-046

ultimatecontroller e

Ltd

Sichuan

Otherenterprise Partofthe Spot

Changhon Rentto Juchao

controlunderthe office exchange,

g the Marketi 2016-3-25 Website()

90 samecontrolling rental, 118.24 118.24 0.71% 3,000 No Bank --

Minsheng related ngprice ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand warehousin acceptanc

Logistics party -030,2016-046

ultimatecontroller glease e

Co.,LTD

Sichuan Otherenterprise Rentto Juchao

Service controlunderthe the Apartment Marketi Spot 2016-3-25 Website()

91 21.90 21.90 0.13% 3,000 No --

Exp. samecontrolling related ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

Appliance shareholderand party -030,2016-046

Service ultimatecontroller

Chain

Co.,Ltd.

Hefei Otherenterprise

Rentto Juchao

Changhon controlunderthe

the Apartment Marketi Spot 2016-3-25 Website()

92 g samecontrolling 44.87 44.87 0.27% 3,000 No --

related ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

Industrial shareholderand

party -030,2016-046

Co.,Ltd. ultimatecontroller

Spot

Sichuan Rentto Juchao

Controlling exchange,

Changhon the Apartment Marketi 2016-3-25 Website()

93 shareholderand 6.86 6.86 0.04% 3,000 No Bank --

gElectric related ngprice ,2016-5-5 No.:2016-027,2016-028,2016

ultimatecontroller acceptanc

Co.,Ltd. party -030,2016-046

e

Sichuan

Changhon Otherenterprise

Rentto Juchao

g controlunderthe Bank

the Apartment Marketi 2016-3-25 Website()

94 Precision samecontrolling 6.40 6.40 0.04% 3,000 No acceptanc --

related ngprice ,2016-5-5 No.:2016-027,2016-028,2016

Electronic shareholderand e

party -030,2016-046

sTech. ultimatecontroller

Co.,Ltd.

Otherenterprise

BVCH Rentto Juchao

controlunderthe

Optronics the Cargolift Marketi Spot 2016-3-25 Website()

95 samecontrolling 6.37 6.37 0.04% 3,000 No --

(Sichuan) related ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand

Co.,Ltd. party -030,2016-046

ultimatecontroller

Guangdon Otherenterprise Rentto Juchao

g controlunderthe the Partofthe Marketi Spot 2016-3-25 Website()

96 147.44 147.44 0.88% 3,000 No --

Changhon samecontrolling related officerental ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

g shareholderand party -030,2016-046

Electronic ultimatecontroller

sCo.,Ltd.

Shenzhen Otherenterprise

Yijia‘en Rentto Juchao

controlunderthe Twoliving

the Marketi Spot 2016-3-25 Website()

97 Technolo samecontrolling area 1.81 1.81 0.01% 3,000 No --

related ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

gyCo. shareholderand

party -030,2016-046

Ltd. ultimatecontroller

Sichuan Otherenterprise

Rentto Juchao

Hongwei controlunderthe Twoliving

the Marketi Spot 2016-3-25 Website()

98 Technolo samecontrolling area 0.50 0.50 0.00% 3,000 No --

related ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

gyCo., shareholderand

party -030,2016-046

Ltd. ultimatecontroller

Sichuan Otherenterprise

Rentto Juchao

Changhon controlunderthe Warehousi

the Marketi Spot 2016-3-25 Website()

99 gPackage samecontrolling ngfee 0.42 0.42 0.00% 3,000 No --

related ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

Printing shareholderand

party -030,2016-046

Co.,Ltd. ultimatecontroller

Sichuan

Changho Otherenterprise

ng Rentto Juchao

controlunderthe Workshop

Devices the Marketi Spot 2016-3-25 Website()

100 samecontrolling lease 82.37 82.37 0.49% 3,000 No --

Technolo related ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand

gyCo., party -030,2016-046

ultimatecontroller

Ltd.

Spot

Sichuan Rent Juchao

Controlling exchange,

Changhon fromthe Plantand Marketi 2016-3-25 Website()

101 shareholderand 907.78 907.78 5.43% 3,000 No Bank --

gElectric related office ngprice ,2016-5-5 No.:2016-027,2016-028,2016

ultimatecontroller acceptanc

Co.,Ltd. party -030,2016-046

e

Sichuan

Changhon

Rent Juchao

g Controlling

fromthe Marketi Spot 2016-3-25 Website()

102 Electronic shareholderand Shops 8.98 8.98 0.05% 15,000 No --

related ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

sHolding ultimatecontroller

party -030,2016-046

Group

Co.,Ltd.

Beijing

Changhon Otherenterprise

Rent Juchao

gScience controlunderthe

fromthe Office Marketi Spot 2016-3-25 Website()

103 and samecontrolling 8.91 8.91 0.05% 3,000 No --

related leasing ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

Technolo shareholderand

party -030,2016-046

gyCo., ultimatecontroller

Ltd.

Guangdon

Otherenterprise

g Rent Juchao

controlunderthe

Changhon fromthe Thestaff Marketi Spot 2016-3-25 Website()

104 samecontrolling 52.53 52.53 0.31% 3,000 No --

g related dormitory ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand

Electronic party -030,2016-046

ultimatecontroller

sCo.,Ltd.

Sichuan

Hongchen

Otherenterprise

g Purchas Juchao

controlunderthe

Constructi eof Plant Marketi Spot 2016-3-25 Website()

105 samecontrolling 590.96 590.96 3.42% 15,000 No --

on fixed construction ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand

Engineeri assets -030,2016-046

ultimatecontroller

ngCo.,

Ltd.

Video Spot

Sichuan Purchas Juchao

Controlling conference exchange,

Changhon eof Marketi 2016-3-25 Website()

106 shareholderand equipment 22.14 22.14 0.13% 5,000 No Bank --

gElectric fixed ngprice ,2016-5-5 No.:2016-027,2016-028,2016

ultimatecontroller and acceptanc

Co.,Ltd. assets -030,2016-046

computer e

Purchas

Otherenterprise eof

Sichuan Juchao

controlunderthe fixed

Hongxin Information Marketi Spot 2016-3-25 Website()

107 samecontrolling assets 40.21 40.21 0.23% 5,000 No --

Software system,etc. ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

shareholderand and

Co.,Ltd. -030,2016-046

ultimatecontroller intangib

leassets

Sichuan Otherenterprise Laboratory

Purchas Juchao

Hongwei controlunderthe apparatus

eof Marketi Spot 2016-3-25 Website()

108 Technolo samecontrolling and 137.49 137.49 0.80% 5,000 No --

fixed ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

gyCo., shareholderand computer

assets -030,2016-046

Ltd. ultimatecontroller equipment

Sichuan

Changhon

g Otherenterprise Spot

Purchas Production Juchao

Intelligent controlunderthe exchange,

eof line Marketi 2016-3-25 Website()

109 Manufact samecontrolling 205.38 205.38 1.19% 5,000 No Bank --

fixed transformati ngprice ,2016-5-5 No.:2016-027,2016-028,2016

uring shareholderand acceptanc

assets on -030,2016-046

Technolo ultimatecontroller e

gyCo.,

Ltd.

Sichuan Otherenterprise Purchas Central Bank Juchao

Marketi 2016-3-25

110 Changhon controlunderthe eof control 1.79 1.79 0.01% 5,000 No acceptanc -- Website()

ngprice ,2016-5-5

gJijia samecontrolling fixed cabinet e No.:2016-027,2016-028,2016

FineCo., shareholderand assets -030,2016-046

Ltd. ultimatecontroller

Sichuan

Changhon Otherenterprise

Juchao

gGerun controlunderthe Salesof

Waste Marketi Spot 2016-3-25 Website()

111 Renewabl samecontrolling fixed 3.11 3.11 0.12% 5,000 No --

material ngprice exchange ,2016-5-5 No.:2016-027,2016-028,2016

e shareholderand assets

-030,2016-046

Resources ultimatecontroller

Co.,Ltd.

Total -- - 523,189.36 - - - -- -- -- --

Detailofsalesreturnwithmajoramountinvolved Notapplicable

1.Itisestimatedthattherelatedtransactionamountresultedbypurchasinggoods(includingdoorshellandplasticproductsetc.)andacceptingfuelandpower

fromSichuanChanghonganditssubsidiarybytheCompanyforyearof2016wasRMB1000millionatmost(tax-excluded),actuallyRMB931,650,100yuan

occurredinreportingperiod(tax-excluded).

2.Itisestimatedthattherelatedtransactionamountresultedbypurchasinggoods(includingcompressorpurchasedetc.)fromHuayiCompressoranditssubsidiary

bytheCompanyforyearof2016wasRMB700millionatmost(tax-excluded),actuallyRMB445,928,400yuanoccurredinreportingperiod(tax-excluded).

3.Itisestimatedthattherelatedtransactionamountresultedbypurchasingorsellingequipment,software,maintenanceandsparepartsandmoldsetc.from

SichuanChanghonganditssubsidiarybytheCompanyforyearof2016wasRMB50millionatmost(tax-excluded),actuallyRMB10,010,800yuanoccurredin

Reporttheactualimplementationofthedaily reportingperiod(tax-excluded).

relatedtransactionswhichwereprojectedabout 4.ItisestimatedthattherelatedtransactionamountresultedbypurchasinggoodsfromandprovidingfuelandpowertoSichuanChanghonganditssubsidiaryby

theirtotalamountbytypesduringthereporting theCompanyforyearof2016wasRMB3500millionatmost(tax-excluded),actuallyRMB3,188,510,800yuan occurredinreportingperiod(tax-excluded).

period(ifapplicable) 5.Itisestimatedthattherelatedtransactionamountresultedbypurchasingcompressedair,acceptingenergy,powerandservicefromHuayiCompressorandits

subsidiarybytheCompanyforyearof2016wasRMB1millionatmost(tax-excluded),actuallyRMB480,500yuanoccurredinreportingperiod(tax-excluded).

6.ItisestimatedthattherelatedtransactionamountresultedbyleasingbusinessfromSichuanChanghonganditssubsidiarybytheCompanyforyearof2016was

RMB30millionatmost(tax-excluded),actuallyRMB15,967,900yuanoccurredinreportingperiod(tax-excluded).

7.ItisestimatedthattherelatedtransactionamountfromdomesticfinishedgoodslogisticbusinessoutsourcingandpurchasedcompressortoSichuanChanghong

MinshengLogisticCo.,Ltd.bytheCompanyforyearof2016wasRMB650millionatmost(tax-excluded),actuallyRMB438,755,500yuanoccurredin

reportingperiod(tax-excluded).

8.ItisestimatedthattherelatedtransactionamountfromaftersalesserviceofdomesticgoodsoutsourcingtoSichuanServiceExp.ApplianceServiceChainCo.,

Ltd.bytheCompanyforyearof2016wasRMB200millionatmost(tax-excluded),actuallyRMB119,890,800yuanoccurredinreportingperiod.

9.Itisestimatedthattherelatedtransactionamountresultedbyacceptingotherserviceandlaborserviceetc.orprovidingotherserviceandlaborserviceetc.to

SichuanChanghonganditssubsidiarybytheCompanyforyearof2016wasRMB50millionatmost(tax-excluded),actuallyRMB22,133,900yuanoccurredin

reportingperiod(tax-excluded).

10.ItisestimatedthattherelatedtransactionamountresultedbysellinggoodsfromSichuanChanghongElectronicsGroupanditssubsidiarybytheCompanyfor

yearof2016wasRMB100millionatmost(tax-excluded),actuallyRMB4,444,200yuanoccurredinreportingperiod.

11.Itisestimatedthattherelatedtransactionamountresultedbypurchasinggoodsandreceivinglaborservices,fuelpower,leasingandpurchasingequipmentetc.

fromSichuanChanghongElectronicsGroupanditssubsidiarybytheCompanyforyearof2016wasRMB150millionatmost(tax-excluded),actuallyRMB

60,030,300yuanoccurredinreportingperiod.

Reasonsformajordifferencesbetweentradingpriceandmarket

Notapplicable

referenceprice

(II)RelatedtransactionswithFinanceCompany

1. Related transactions about the “Financial Service Agreement” signed between the

CompanyandSichuanChanghongGroupFinanceCo.,Ltd.

Inorder to expandthefinancing channelsand reduce financingcosts and financialcosts,

combiningthegoodcooperationoverthepastthreeyears,thecompanyheldtheeighteenthmeeting

oftheeighthboardofdirectorsonMarch18,2016andthefirstextraordinarygeneralmeetingof

2016onApril6,2016whichdeliberatedandagreedthecompanyandSichuanChanghongGroup

FinanceCo.,Ltd.(hereinafterreferredtoas"ChanghongFinanceCompany")tocarryonfinancial

servicescooperation and sign a triennial "financial service agreement". Under the agreement,

ChanghongFinance Companywouldprovide a seriesof financialservices withinthebusiness

scopeinaccordancewiththerequirementsoftheCompanyanditssubsidiaries,includingbutnot

limitedtodepositservices,settlementservices,loanservices,billsdiscountingservices,guarantees

andotherservicesapprovedbyChinaBankingRegulatoryCommissionthatafinancecompanycan

engagein.

InMarch2017,theCompanyreceivedthe2016AnnualAuditReportwhichwasprovidedby

Changhong Finance Companyafter being audited by ShineWingCertified Public Accountants

(specialgeneralpartnership)whopossessesrelatedbusinessqualificationsinsecuritiesandfutures.

ThebasicindicatorsofChanghongFinanceCompanyin2016conformtotheEnterpriseGroup

FinanceCompanyManagementMeasuresissuedbyChinaBankingRegulatoryCommissionand

therelevantprovisionsoftheShenzhenStockExchange,ithasbeenspecifiedinthecompany’s

“Risk disposal plan for loans and deposits financial services of Sichuan Changhong Group

FinanceCo.,Ltd.”thatinsomesituationstheriskdisposalproceduresneedtobelaunched,andno

suchsituationhasoccurred.

Accordingtotheprovisionsof"InformationDisclosureMemorandumNo.2–transactions

andrelated transactions"of ShenzhenStock Exchange, thecompanycarries out theloans and

depositsandotherrelatedservicesaccordingtothe"Financial ServicesAgreement"signedwith

Changhong Finance Company, and continues to complete the risk management of loans and

depositsserviceswithChanghongFinanceCompany,regularlymakesspecialriskassessmentsand

issues risk assessment reports, and implements the obligation of information disclosure in

accordancewith relevant regulations.On March 19, April7, July 29,& October18 2016, the

companyhasdisclosedthedetailed informationontheappointed informationdisclosuremedia,

including "SecuritiesTimes", "China Securities Journal","HongKong Commercial Daily" and

(No.2016-020,No.2016-021,No.2016-022,No.

2016-037),"RiskcontinuousassessmentreportaboutSichuanChanghongGroupFinanceCo.,Ltd.",

andonthecompany’s2015annualreport,thefirstquarterreportof2016,thesemi-annualreport

of2016andthethirdquarterreportof2016.

2.RelatedtransactionsbetweentheCompanyandChanghongFinanceCompany

Upto31December2016,theCompanyanditssubsidiarieshasopenedfinancialbusinessas

savings,notedrawingandnotesdiscountedwithChanghongFinanceCompany.TheCompanyand

itssubordinatecompanyowns1,908,842,163.20YuansavingsinChanghong FinanceCompany,

takes25.69%ofthedeposittakingbalanceinChanghongFinanceCompanywithout30%occupied,

balanceof notes drawing was544,374,441.19 Yuanand balance ofnotes discountedas RMB

565,252,574.29Yuan.Moredetailsare:

InRMB

Interestand

Balanceat Increaseinthe Decreaseinthe Balanceat commission

Name year-begin year year year-end chargereceived

orpaid

I.Savingsin

ChanghongGroup 1,260,081,706.55 20,157,897,324.19 19,509,136,867.54 1,908,842,163.20 58,234,199.95

FinanceCompany

II.Borrowingsfrom

ChanghongGroup

FinanceCompany

1.Short-termloans - - - - -

2.Long-termloans - - - - -

III.Otherfinancial

business

1.notesdrawing 733,001,248.18 1,701,833,720.48 1,890,460,527.47 544,374,441.19 -

2.notesdiscounted 236,410,328.55 1,226,847,207.83 898,004,962.09 565,252,574.29 12,054,811.69

Note: The Company purchases Guangdong Changhong Ridian Technology Co., Ltd.

(“ChanghongRIdian”) in earlyof 2016,the abovetableincluding the financialbusinessof

savingsandnotes arisingfromrelatedtransactions betweenChanghongRidianand Changhong

FinanceCompany.

Accordingtotheregulationsof"InformationDisclosureMemorandumNo.2-Transactions

and Connected Transactions" of Shenzhen Stock Exchange, Shine Wing Certified Public

Accountants(special general partnership)provided "Specialinstructions ondeposits, loans and

otherfinancialbusinessthatHefeiMeilingCo.,Ltd.involvedinrelatedtransactionsoffinancial

companyofin2016"tostatethedeposits,loans,and otherfinancialbusinessthatthecompany

developed with Changhong Finance Company during the reporting period, and disclosed at

,2017.

(III)Relatedtransactionsbyassetsacquisitionandsold

√Applicable □Notapplicable

Book AssessedMarketTransClearinTransacti

Typeof valueof valuation fair fer gform ongains

Related Relatio related Contentofrelated Pricing transferr valueof value price for and Dateof

party nship transac transaction principle related disclosure

tion edassetstransferr (in10 (in10transactlosses(in

(in10 edassets thousa thous ion 10

thousand (in10 nd and thousand

Yuan) thousand Yuan) Yuan) Yuan)

Yuan)(if (if

applicablapplica

e) ble)

Biddingthe

98.856%equityof

Guangdong

ChanghongRidian Juchao

TechnologyCo., Website

The Ltd.(including (

Sichuan 88.916%equityof 2015 com.cn)

Changhong control ChanghongRidian -12-

ling 19, No.:

ElectricCo.,shareh directlyheldby 2015-061,

LTD, older Equity Sichuan Public 2015 No.:

Sichuan andits biddingChanghongand bidding 8,984.689,563.93 9,565Cash ---12- 2015-062,

Changhong subordi 9.940%equityof 24,

Innovation ChanghongRidian 2016 No.:

Investment nate geldbysubsidiary -1-5, 2015-066,

Co.,Ltd. subsidi ofSichuan No.:

ary 2016-2-42015-067,

Changhong

–Sichuan No.:

Changhong 2016-008

Innovation

InvestmentCo.,

Ltd.)

Reasonsformajordifferencesbetweentransfer

priceandbookvalueorassessedvaluationvalue Notapplicable

(ifapplicable)

Improvedthehomeapplianceindustrychainandproductionline,constructed

TheimpactontheCompany'soperatingresultsself-ownedkitchenandtoiletproductsplatformaswellassmallappliances.

andfinancialsituation Achievedoperationrevenueof495.0753millionYuanandnetprofitof17.2645

millionYuanin2016

Asfortherelevanttradingwithperformance

agreementinvolved,actualperformanceofthe Notapplicable

Period

(IV)Materialrelatedtransactionofjointlyforeigninvestment

□Applicable√Notapplicable

TheCompanyhasnomaterialrelatedtransactionofjointlyforeigninvestmentoccurredin

reportingperiod-end.

(IV)Connectofrelatedliabilityanddebt

√Applicable □Notapplicable

Whetherhasnon-operationalcontactofrelatedliabilityanddebtsornot

□Yes √No

Nonon-operationalcontactofrelatedliabilityordebtsinPeriod

1.Claimreceivablefromrelatedparty:

Current

Whetherhas Balanceat Currentnewly Current Balanceat

interest

non-business period-begin added recovery Intere period-end

Serial Relatedparty Relationship Causes (10

capital (10thousand (10thousand (10thousand strate (10thousand

thousand

occupyingornot Yuan) Yuan) Yuan) Yuan)

Yuan)

Operational

SichuanChanghong Controllingshareholderand

1 contactof No 258.76 108,935.65 109,032.83 - - 161.58

ElectricCo.,Ltd. ultimatecontroller

relatedcredit

SichuanChanghong Operational

Controllingshareholderand

2 ElectronicsHolding contactof No 220.92 338.2 521.5 - - 37.62

ultimatecontroller

GroupCo.,Ltd. relatedcredit

Otherenterprisecontrolunder

SichuanChanghong Operational

thesamecontrolling

3 InternationalHotelCo., contactof No 285.98 - 152.5 - - 133.47

shareholderandultimate

Ltd. relatedcredit

controller

Otherenterprisecontrolunder

Operational

AnhuiXinhaoPlasma thesamecontrolling

4 contactof No 64.5 5.13 63.33 - - 6.3

DisplayPanelCo.,Ltd. shareholderandultimate

relatedcredit

controller

Otherenterprisecontrolunder

Operational

YibingHongxing thesamecontrolling

5 contactof No 105.8 - 91.09 - - 14.72

ElectronicsCo.,Ltd. shareholderandultimate

relatedcredit

controller

Otherenterprisecontrolunder

SichuanChanghong Operational

thesamecontrolling

6 XinruiTechnologyCo., contactof No - 77.29 77.29 - - -

shareholderandultimate

Ltd relatedcredit

controller

Otherenterprisecontrolunder

Operational

SichuanHuafengCorp. thesamecontrolling

7 contactof No - 17.25 17.25 - - -

Group shareholderandultimate

relatedcredit

controller

Otherenterprisecontrolunder

Operational

SichuanHuanyu thesamecontrolling

8 contactof No - 1.42 1.42 - - -

IndustrialCo.Ltd. shareholderandultimate

relatedcredit

controller

Otherenterprisecontrolunder

SichuanChanghong Operational

thesamecontrolling

9 GroupFinanceCo., contactof No - 0.25 0.25 - - -

shareholderandultimate

Ltd. relatedcredit

controller

Otherenterprisecontrolunder

SichuanChanghong Operational

thesamecontrolling

10 MoldPlasticTech.Co., contactof No 20.75 14,319.50 14,243.73 - - 96.52

shareholderandultimate

Ltd. relatedcredit

controller

Otherenterprisecontrolunder

Operational

LejiayiChain thesamecontrolling

11 contactof No 32.58 365.25 397.83 - - -

ManagementCo.,Ltd. shareholderandultimate

relatedcredit

controller

Otherenterprisecontrolunder

Operational

HefeiChanghong thesamecontrolling

12 contactof No 149.21 300.58 449.79 - - -

IndustrialCo.,Ltd. shareholderandultimate

relatedcredit

controller

Otherenterprisecontrolunder

Operational

HuayiCompressorCo., thesamecontrolling

13 contactof No 26.38 16.92 9.82 - - 33.48

Ltd. shareholderandultimate

relatedcredit

controller

14 SichuanChanghong Otherenterprisecontrolunder Operational No 0.08 33.73 33.37 - - 0.44

PackagePrintingCo., thesamecontrolling contactof

Ltd. shareholderandultimate relatedcredit

controller

Otherenterprisecontrolunder

Operational

SichuanChanghong thesamecontrolling

15 contactof No 0.55 4,761.08 4,761.63 - - -

JijiaFineCo.,Ltd. shareholderandultimate

relatedcredit

controller

Otherenterprisecontrolunder

SichuanChanghong Operational

thesamecontrolling

16 NetworkTechnology contactof No 5.12 1.57 6.69 - - -

shareholderandultimate

Co.,Ltd. relatedcredit

controller

Otherenterprisecontrolunder

Operational

SichuanHongwei thesamecontrolling

17 contactof No 0.9 26.25 0 - - 27.15

TechnologyCo.,Ltd. shareholderandultimate

relatedcredit

controller

Otherenterprisecontrolunder

Operational

PT.CHANGHONGEL thesamecontrolling

18 contactof No 21.24 2.6 21.14 - - 2.7

ECTRICINDONESIA shareholderandultimate

relatedcredit

controller

Otherenterprisecontrolunder

Operational

CHANGHONG(HK)T thesamecontrolling

19 contactof No 13,321.47 45,103.46 52,370.77 - - 6,054.16

RADINGLIMITED shareholderandultimate

relatedcredit

controller

Otherenterprisecontrolunder

Operational

CHANGHONGELECT thesamecontrolling

20 contactof No - 14.48 0 - - 14.48

RIC(AUSTRALIA) shareholderandultimate

relatedcredit

controller

SichuanChanghong Otherenterprisecontrolunder Operational

21 No - 3.95 3.95 - - -

PropertyCo.,Ltd. thesamecontrolling contactof

shareholderandultimate relatedcredit

controller

Otherenterprisecontrolunder

SichuanChanghong Operational

thesamecontrolling

22 GerunRenewable contactof No 0.36 952.12 952.48 - - 0

shareholderandultimate

ResourcesCo.,Ltd. relatedcredit

controller

Otherenterprisecontrolunder

SichuanServiceExp. Operational

thesamecontrolling

23 ApplianceService contactof No 20 746.58 746.58 - - 20

shareholderandultimate

ChainCo.,Ltd. relatedcredit

controller

Otherenterprisecontrolunder

ChengduChanghong Operational

thesamecontrolling

24 ElectronicTechnology contactof No 183.52 1.55 141.62 - - 43.45

shareholderandultimate

Co.,Ltd. relatedcredit

controller

Otherenterprisecontrolunder

SichuanZhiyijia Operational

thesamecontrolling

25 NetworkTechnology contactof No 26,096.46 143,292.46 151,984.21 - - 17,404.72

shareholderandultimate

Co.,Ltd. relatedcredit

controller

Otherenterprisecontrolunder

Operational

GuangdongChanghong thesamecontrolling

26 contactof No - 243.19 243.19 - - -

ElectronicsCo.,Ltd. shareholderandultimate

relatedcredit

controller

Otherenterprisecontrolunder

Operational

SichuanChanghong thesamecontrolling

27 contactof No - 5.34 5.34 - - -

PowerSourceCo.,Ltd. shareholderandultimate

relatedcredit

controller

SichuanChanghong Otherenterprisecontrolunder Operational

28 MinshengLogistics thesamecontrolling contactof No 8.03 212.31 220.34 - - -

Co.,LTD shareholderandultimate relatedcredit

controller

Otherenterprisecontrolunder

SichuanChanghong Operational

thesamecontrolling

29 DevicesTechnology contactof No 0.14 128.7 128.84 - - -

shareholderandultimate

Co.,Ltd. relatedcredit

controller

Otherenterprisecontrolunder

Operational

BVCHOptronics thesamecontrolling

30 contactof No - 6.37 6.37 - - -

(Sichuan)Co.,Ltd. shareholderandultimate

relatedcredit

controller

Otherenterprisecontrolunder

SichuanChanghong Operational

thesamecontrolling

31 IntelligentHealth contactof No - 0.31 0.31 - - -

shareholderandultimate

TechnologyCo.,Ltd. relatedcredit

controller

SichuanChanghong Otherenterprisecontrolunder

Operational

Intelligent thesamecontrolling

32 contactof No - 25.47 0 - - 25.47

Manufacturing shareholderandultimate

relatedcredit

TechnologyCo.,Ltd. controller

Otherenterprisecontrolunder

SichuanChanghong Operational

thesamecontrolling

33 ElectronicProducts contactof No - 8.74 8.74 - - -

shareholderandultimate

Co.,Ltd. relatedcredit

controller

Otherenterprisecontrolunder

MianyangTechnology Operational

thesamecontrolling

34 TownBigData contactof No - 0.06 0.06 - - -

shareholderandultimate

TechnologyCo.,Ltd. relatedcredit

controller

Otherenterprisecontrolunder

Operational

BVCHOptronics thesamecontrolling

35 contactof No - 1.91 1.91 - - -

(Sichuan)Co.,Ltd. shareholderandultimate

relatedcredit

controller

Otherenterprisecontrolunder

ShenzhenYijia‘en Operational

thesamecontrolling

36 contactof No - 1.81 1.81 - - -

TechnologyCo.Ltd. shareholderandultimate

relatedcredit

controller

Otherenterprisecontrolunder

SichuanChanghong Operational

thesamecontrolling

37 PrecisionElectronics contactof No - 6.4 6.4 - - -

shareholderandultimate

Tech.Co.,Ltd. relatedcredit

controller

Otherenterprisecontrolunder

SichuanChanghong Operational

thesamecontrolling

38 EducationTechnology contactof No - 0.31 0.31 - - -

shareholderandultimate

Co.,Ltd. relatedcredit

controller

Otherenterprisecontrolunder

SichuanChanghong Operational

thesamecontrolling

39 PropertyServiceCo., contactof No - 4.89 3.64 - - 1.25

shareholderandultimate

Ltd. relatedcredit

controller

Otherenterprisecontrolunder

Operational

SichuanChanghe thesamecontrolling

40 contactof No - 0.2 0.2 - - -

TechnologyCo.,Ltd. shareholderandultimate

relatedcredit

controller

Total -- 40,822.75 319,963.28 336,708.53 - - 24,077.51

InfluenceonbusinessperformanceandfinancialstatusoftheCompanyfrom

--

relatedliabilities

2.Debtspayabletorelatedparty

Balanceat Current Current Current Balanceat

Serial Relatedparty Relationship Causes period-begin newly recovery Intere interest period-end

(10thousand added (10thousand strate (10 (10

Yuan) (10 Yuan) thousand thousand

thousand Yuan) Yuan)

Yuan)

SichuanChanghong Controllingshareholderand Operational

1 ElectricCo.,Ltd. ultimatecontroller contactof 3,639.39 19,108.86 17,238.04 - - 5,510.20

relateddebt

SichuanChanghong Controllingshareholderand Operational

2 ElectronicsHolding ultimatecontroller contactof 0.41 21.71 22.13 - - -

GroupCo.,Ltd. relateddebt

CHANGHONG(HK) Otherenterprisecontrolunder Operational

3 TRADINGLIMITED thesamecontrollingshareholder contactof 87.66 189.09 88.55 - - 188.2

andultimatecontroller relateddebt

CHANGHONGELEC Otherenterprisecontrolunder Operational

4 TRICMIDDLEEAST thesamecontrollingshareholder contactof 0.16 3.57 0 - - 3.73

FZE andultimatecontroller relateddebt

Guangdong Otherenterprisecontrolunder Operational

5 Changhong thesamecontrollingshareholder contactof 272.53 1,149.19 1,060.97 - - 360.75

ElectronicsCo.,Ltd. andultimatecontroller relateddebt

Guangdong Otherenterprisecontrolunder Operational

6 ChanghongRidian thesamecontrollingshareholder contactof 151.6 - 151.6 - - -

TechnologyCo.,Ltd. andultimatecontroller relateddebt

HuayiCompressor Otherenterprisecontrolunder Operational

7 Co.,Ltd. thesamecontrollingshareholder contactof 14,024.94 44,640.89 53,085.21 - - 5,580.63

andultimatecontroller relateddebt

LejiayiChain Otherenterprisecontrolunder Operational

8 ManagementCo.,Ltd. thesamecontrollingshareholder contactof 0.09 55.89 0 - - 55.98

andultimatecontroller relateddebt

081ElectronicGroup Otherenterprisecontrolunder Operational

9 Co.,Ltd. thesamecontrollingshareholder contactof 14.85 278.61 -36.95 - - 330.41

andultimatecontroller relateddebt

SichuanZhiyijia Otherenterprisecontrolunder Operational

10 NetworkTechnology thesamecontrollingshareholder contactof 4.87 2.81 7.68 - - -

Co.,Ltd. andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

11 Intelligent thesamecontrollingshareholder contactof 3.8 674 539.93 - - 137.87

Manufacturing andultimatecontroller relateddebt

TechnologyCo.,Ltd.

MianyangHongrun Otherenterprisecontrolunder Operational

12 ElectronicCo.,Ltd. thesamecontrollingshareholder contactof 43.88 986.57 865.79 - - 164.66

andultimatecontroller relateddebt

SichuanCCODisplay Otherenterprisecontrolunder Operational

13 DeviceCo.,Ltd. thesamecontrollingshareholder contactof 7.46 - 7.46 - - -

andultimatecontroller relateddebt

SichuanHongwei Otherenterprisecontrolunder Operational

14 TechnologyCo.,Ltd. thesamecontrollingshareholder contactof - 503.74 338.99 - - 164.75

andultimatecontroller relateddebt

SichuanHongyu Otherenterprisecontrolunder Operational

15 MetalManufacture thesamecontrollingshareholder contactof 7.66 55.98 16.1 - - 47.54

Co.,Ltd. andultimatecontroller relateddebt

SichuanServiceExp. Otherenterprisecontrolunder Operational

16 ApplianceService thesamecontrollingshareholder contactof 1,235.06 11,990.75 12,561.13 - - 664.69

ChainCo.,Ltd. andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

17 PackagePrintingCo., thesamecontrollingshareholder contactof 386.57 5,862.38 5,085.70 - - 1,163.25

Ltd. andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

18 PowerSourceCo., thesamecontrollingshareholder contactof 1.77 15.15 0 - - 16.92

Ltd. andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

19 DevicesTechnology thesamecontrollingshareholder contactof 285.7 684.44 145.69 - - 824.45

Co.,Ltd. andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

20 GerunRenewable thesamecontrollingshareholder contactof 36.01 6.65 - - 29.36

ResourcesCo.,Ltd. andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

21 InternationalHotel thesamecontrollingshareholder contactof - 18.12 15.67 - - 2.45

Co.,Ltd. andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

22 JijiaFineCo.,Ltd. thesamecontrollingshareholder contactof 1,854.53 21,374.46 18,096.14 - - 5,132.86

andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

23 PrecisionElectronics thesamecontrollingshareholder contactof 47.44 773.61 597.85 - - 223.2

Tech.Co.,Ltd. andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

24 MinshengLogistics thesamecontrollingshareholder contactof 1,437.86 43,875.55 41,241.93 - - 4,071.48

Co.,LTD andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

25 MoldPlasticTech. thesamecontrollingshareholder contactof 4,798.18 42,769.48 35,779.50 - - 11,788.16

Co.,Ltd. andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

26 XinruiTechnology thesamecontrollingshareholder contactof 1,809.92 5,019.64 3,696.10 - - 3,133.45

Co.,Ltd andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

27 NewEnergy thesamecontrollingshareholder contactof 3.51 6.69 10.17 - - 0.02

TechnologyCo.,Ltd. andultimatecontroller relateddebt

28 SichuanChanghong Otherenterprisecontrolunder Operational 2.85 0.57 3.42 - - -

LightingTechnology thesamecontrollingshareholder contactof

Co.,Ltd. andultimatecontroller relateddebt

BeijingChanghong Otherenterprisecontrolunder Operational

29 Scienceand thesamecontrollingshareholder contactof - 8.91 8.91 - - -

TechnologyCo.,Ltd. andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

30 ElectronicSystem thesamecontrollingshareholder contactof 7.7 - - - - 7.7

Co.,Ltd. andultimatecontroller relateddebt

SichuanJiahong Otherenterprisecontrolunder Operational

31 IndustrialCo.,Ltd. thesamecontrollingshareholder contactof 8.05 33.74 41.17 - - 0.61

andultimatecontroller relateddebt

SichuanHongxin Otherenterprisecontrolunder Operational

32 SoftwareCo.,Ltd. thesamecontrollingshareholder contactof - 75.68 75.68 - - -

andultimatecontroller relateddebt

SichuanHuafeng Otherenterprisecontrolunder Operational

33 Corp.Group thesamecontrollingshareholder contactof - 28.35 0 - - 28.35

andultimatecontroller relateddebt

SichuanHongcheng Otherenterprisecontrolunder Operational

34 Construction thesamecontrollingshareholder contactof - 590.96 590.96 - - -

EngineeringCo.,Ltd. andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

35 ElectronicProducts thesamecontrollingshareholder contactof - 3,485.14 3,480.14 - - 5

Co.,Ltd. andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

36 InternationalTravel thesamecontrollingshareholder contactof - 11.99 10.49 - - 1.5

ServiceCo.,Ltd. andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

37 PropertyServiceCo., thesamecontrollingshareholder contactof - 0.71 0.71 - - 0

Ltd. andultimatecontroller relateddebt

Hefei Changhong Otherenterprisecontrolunder Operational

38 New Energy thesamecontrollingshareholder contactof - 24.26 24.26 - - -

TechnologyCo.,Ltd. andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

39 PropertyServiceCo., thesamecontrollingshareholder contactof - 0.71 0.71 - - -

Ltd. andultimatecontroller relateddebt

SichuanChanghong Otherenterprisecontrolunder Operational

40 Diandianbang thesamecontrollingshareholder contactof - 0.03 0 - - 0.03

TechnologyCo.,Ltd. andultimatecontroller relateddebt

PT.CHANGHONGEL Otherenterprisecontrolunder Operational

41 ECTRICINDONESIA thesamecontrollingshareholder contactof 0.02 0.02 - - -

andultimatecontroller relateddebt

Total 30,174.47 204,322.23 194,858.50 - - 39,638.20

Influenceonbusinessperformanceandfinancialstatus oftheCompanyfrom --

relateddebts

Note:theCompanypurchasedChanghongRidianatbeginningof2016,andit’samergerunderthesamecontrol,theabovementionedhas

re-statethedataatperiod-begin,includingChanghongRidian.Fortheabove-mentionedstatement,upto thePeriod-end,debtspayableto

relatedpartyfromtheCompanyandsubordinateareamountingas396,382,000Yuanintotal,theclaimreceivablefromrelatedpartyforthe

Companyandsubordinateamountingas240,775,100Yuan.

(V)Otherrelatedtransactions

√Applicable □Notapplicable

The private placement of the Company (including issuring price and pricing principal,

numbersissuedandeffectivetermoftheresolution)wasbeingdeliberatedandapprovedbythe

17thsessionofthe8thBODand1stextraordinaryshareholdersgeneralmeetingof2016dated6

March2016and6April2016.

Inviewoftheadjustmentinaspectoftheissuingpriceandpricingprincileandnumbers,the

Resigning of Conditional Entry Subscription Agreement between the Company and Sichuan

ChanghongElectricCo.,Ltd.wasdeliberaedandaprpovedbythe17thsessionofthe8thBODand

1stextraordinaryshareholdersgeneralmeetingof2016.TheCompanyenteredintoaConditional

EntrySubscriptionAgreementwithSichuanChanghongon6March2016,theAgreementhasthe

samecontentwithformeragreement,excepttheclauseofPrincingPrincipleandSubscriptionprice

andIncorporationbyAgreement.

Disclosureinformationforrelatedtransactiontemporarydisclosed

Temporarynotice Dateddisclosed Websitefordisclosure

2016-014: Resolution notice of 17th

meetingof8thsessionoftheBoard

2016-017:Noticeofre-signingthe

―subscriptionagreementofprivately

placementwithentry-into-force 7March2016 JuchaoWebsite:

conditions‖inrelationtorelated 7April2016

transactions

2016-037:Resolutionofthe1st

extraordinaryshareholdersgeneral

meetingof2016

XVII.Significantcontractandimplementations

(I)Entrust,contractandleasing

1.Entrust

□Applicable√Notapplicable

NoentrustinPeriod.

2.Contract

□Applicable√Notapplicable

NocontractinPeriod.

3.Leasing

√Applicable □Notapplicable

(1)leasing

OperationalleasingoftheCompanypleasefoundmoredetailsin ―investmentrealestate‖,

―fixedassets‖,―Leaseofrelatedparty‖and―Rentofrelatedparty‖inNoteofFinancialStatement.

(2)Gains/lossestotheCompanyfromprojectsthatreachedover 10%in totalprofitofthe

Companyinreportingperiod

□Applicable√Notapplicable

NogainsorlossestotheCompanyfromprojectsthatreachedover10%intotalprofitofthe

Companyinreportingperiod.

(ii)Majorguarantee

√Applicable □Notapplicable

1.Guarantee

Duringthereportingperiod,theguaranteesthatthecompanyprovidesforitswholly-owned

andholdingsubsidiariesarefortheloansgeneratedbysupportingtheirproductionandoperation,

theguarantytypeisassurance;theguaranteesthatthecompanyandsubsidiariesprovideforthe

distributorsaretoprovidejointliabilityguaranteesforthehighqualitydistributorsconformingto

certainconditionswithinthelineofcreditofdesignatedbanks,theE-bankacceptancebillsopened

underthislineofcreditareallusedforthedistributorstopaythepurchasepaymentforgoodstothe

Company and subsidiaries, aiming to promote the company‘s channel business development,

strengthenthegoodcooperativerelationshipbetweenthecompanyandthedownstreamdistributors,

andeffectivelystimulatethecompanyanditssubsidiaries‘salesgrowth.

Up to 31 December 2016, the company has granted credit to the guarantees of some

wholly-ownedand holdingsubsidiaries,in addition to thewholly-ownedsubsidiary Zhongshan

Changhong, other subsidiaries have no actual guarantee; meanwhile, the company and its

subsidiarieshavegrantedcredittotheguaranteesofsomehighqualitydistributors,thebalanceof

guaranteesiswithinthelineofcredit.TheexternalguaranteesoftheCompanyandsubsidiariesare

asfollows:

In10thousandYuan

ParticularsabouttheexternalguaranteeoftheCompanyandsubsidiaries(Barringtheguaranteeforsubsidiaries)

Nameofthe Actualdateof Actual Complete Guarantee

Company RelatedAnnouncement Guarantee happening(Dateof guarantee Guarantee Guarant impleme forrelated

guaranteed disclosuredate limit signingagreement) limit type eeterm ntationor party

not

Dealerof NoticeNo.:

Hefei 2016-068,No.:2016-072 Joint

MeilingCo., andNo.:2016-077on 20,0002016-3-11 1,459.09liability 1year No No

Ltd. 26November2016and guaranty

14December2016

Dealerof NoticeNo.:

Sichuan 2016-068,No.:2016-072 Joint

Changhong andNo.:2016-077on 20,0002016-1-15 433.9981liability 1year No No

Air-condition

26November2016and guaranty

erCo.,Ltd. 14December2016

Totalactualoccurred

Totalapprovingexternalguaranteein 40,000

externalguaranteeinreport 1,893.0881

reportperiod(A1)

period(A2)

Totalactualbalanceof

Totalapprovedexternalguaranteeatthe 40,000

externalguaranteeattheend 1,279.6881

endofreportperiod(A3)

ofreport period(A4)

GuaranteebetweentheCompanyandthesubsidiaries

Nameofthe Actualdateof Actual Complete Guarantee

Company RelatedAnnouncement Guarantee happening(Dateof guarantee Guarantee Guarant impleme forrelated

guaranteed disclosuredate limit signingagreement) limit type eeterm ntationor party

not

2015-5-275,000（noteJoint

1）liability 1year Yes No

guaranty

Joint

NoticeNo.: 2015-3-30 8,000liability 1year Yes No

2015-003,No.:2015-007 guaranty

andNo.:2015-015on 55,000

26March2015and18 Joint

Zhongshan April2015 2015-12-29 15,000liability 1year Yes No

Changhong guaranty

ElectricCo., 17,000Joint

LTD 2015-12-30 liability 1year No No

（note2）guaranty

Joint

NoticeNo.: 2016-8-5 5,000liability 1year No No

2016-027,No.:2016-031 guaranty

andNo.:2016-046on 56,500

25March2016and5 Joint

May2016 2016-10-28 5,000liability 1year No No

guaranty

Joint

Guangdong NoticeNo.: 2016-9-1 2,000liability 1year No No

Changhong 2016-027,No.:2016-031 guaranty

Ridian andNo.:2016-046on 8,500

Technology 25March2016and5 Joint

Co.,Ltd. May2016 2016-5-5 4,500liability 1year No No

guaranty

Zhongke NoticeNo.:

Meiling 2016-027,No.:2016-031 Joint

Cryogenic andNo.:2016-046on 2,000- 0liability- - -

Technology 25March2016and5 guaranty

Co.,Ltd. May2016

Totalamountofactual

Totalamountofapprovingguaranteefor 67,000occurredguaranteefor 61,500

subsidiariesinreportperiod(B1) subsidiariesinreportperiod

(B2)

Totalbalanceofactual

Totalamountofapprovedguaranteefor

67,000guaranteeforsubsidiariesat 33,500

subsidiariesattheendofreporting

theendofreportingperiod

period(B3)

(B4)

Guaranteeofthesubsidiariesforthesubsidiaries

Complet

Nameofthe RelatedAnnouncement Guarantee Actualdateof Actual Guarantee Guarant e Guarantee

Company disclosuredate limit happening(Dateof guarantee type eeterm impleme forrelated

guaranteed signingagreement) limit ntation party

ornot

-- -- -- -- ---- -- -- --

Totalamountofactual

Totalamountofapprovingguaranteefor --occurredguaranteefor --

subsidiariesinreportperiod(C1) subsidiariesinreportperiod

(C2)

Totalbalanceofactual

Totalamountofapprovedguaranteefor

--guaranteeforsubsidiariesat --

subsidiariesattheendofreporting

theendofreportingperiod

period(C3)

(C4)

TotalamountofguaranteeoftheCompany(totalofthreeabovementionedguarantee)

Totalamountofapprovingguaranteein Totalamountofactual

107,000

reportperiod(A1+B1+C1) occurredguaranteeinreport 63,393.0881

period(A2+B2+C2)

Totalamountofapprovedguaranteeat Totalbalanceofactual

107,000

theendofreportperiod(A3+B3+C3) guaranteeattheendof 34,779.6881

reportperiod(A4+B4+C4)

Ratioofactrualguarantee(A4+B4+C4)innetassetsoftheCompany 6.83%

Including:

Amountofguaranteeforshareholders,actualcontrolleranditsrelatedparties(D) 0

The debts guarantee amount provided for the guaranteed parties whose 27,000

assets-liabilityratioexceed70%directlyorindirectly(E)

ProportionoftotalamountofguaranteeinnetassetsoftheCompanyexceed 0

50%(F)

Totalamountoftheaforesaidthreeguarantees(D+E+F) 27,000

Explanationsonpossiblybearingjointandseveralliquidatingresponsibilitiesfor

--

undueguarantees(ifapplicable)

Explanationsonexternalguaranteeagainstregulatedprocedures(ifapplicable)

Note1:TheguaranteebusinessofZhongshanChanghongsignedtheagreementon27May

2015,theimplementationtimeis:29September2015to29September2016.

Note 2: The guarantee business of Zhongshan Changhong signed the agreement on 30

December2015,theimplementationtimeis:1January2016to31December2016.

The above guarantees are all wholly-owned and holding subsidiaries of the Company.

Productionand operationof thesewholly-owned and holdingsubsidiarieswasnormal with no

overdueunpaidloansandguaranteeriskiscontrollable.Duringthereportingperiod,thehighest

levelofsecuritytheCompanyprovidedamountedto670millionYuanbytheapproval,theactual

amount of guarantee is 615 million Yuan. The highest level of security the Company and

subsidiariesprovidedoutsideamountedto400millionYuanbytheapproval,theactualamountof

guaranteeis18.930881millionYuan.Attheendofthereportingperiod,thepracticalguarantee

balanceamountedto347.796881millionYuan,accountingfortheCompany’slatestnetassets

ratioof6.83%.

Explanationonguaranteewithcompositeway

□Applicable√Notapplicable

2.Guaranteeoutsideagainsttheregulation

□Applicable√Notapplicable

NoguaranteeoutsideagainsttheregulationinPeriod.

(III)Entrustotherstocashassetmanagement

1.Trustfinancing

√Applicable□Notapplicable

In10thousandYuan

Amountof

reservefor

Whether Principal Actual Actual

devaluation

related Trustfinancing Criteriaforfixing actually Anticipatedgains/los collected

Name Type Startdate Enddate of

tradeor amount reward collectedin income sesin gains/losses

withdrawing

not thePeriod period inperiod

(if

applicable)

AnhuiBranchofBank Floating

ofCommunicationCo.,N proceeds 50,000.00 2015-10-20 2016-1-19 3.9%annualyield 50,000.00 486.16 498.63 498.63

Ltd. products

Floating

HeifeiChangjiangEast

N proceeds 10,000.00 2016-12-15 2017-4-6 4.3%annualyield - 131.95 - -

RoadBranchofICBC

products

Incomeof

entrust

SichuanTrustCo.,Ltd.N 35,520.00 2016-12-28 2017-12-5 6.6%annualyield - 2,196.60 - -

products

transfer

Floating

3.65%annual

HefeiBarnchofBEA N proceeds 3,000.00 2016-12-30 2017-3-30 - 27.00 - -

yield

products

Floating

proceeds 4.00%annual

AnhuiBranchofCBC N 20,000.00 2016-12-20 2017-3-20 yield - 197.26

products

Floating

HefeiBranchofHuaxia 4.15%annual

N proceeds 30,000.00 2016-12-21 2017-6-22 - 624.21 - -

BankCo.,Ltd. yield

products

AnhuiBranchofBank

ofCommunicationCo., Guaranteed

N income 20,000.00 2016-12-23 2017-3-24 3.5%annualyield - 174.52

Ltd.

Floating

HefeiBranchofHuaxia 4.15%annual

N proceeds 20,000.00 2016-12-28 2017-6-29 - 416.14

BankCo.,Ltd. yield

products

Total 188,520.00 -- -- -- 50,000.00 4,253.84 498.63 --

Capitalresource Ownfunds985.2millionYuan;raisedfund900millionYuan

Principaluncollectedforoverdueand

accumulatedearnings 0

Lawsuitinvolved(ifapplicable) Notapplicable

DisclosuredateforapprovalfromtheBoardfor

trustfinancing(ifapplicable) 18October2016and26November2016

Disclosuredateforapprovalfromboardof

2016-12-14

shareholdersfortrustfinancing(ifapplicable)

Whetherhastrustfinancingplaninfuture Y

2.Entrustloans

□Applicable√Notapplicable

Noentrustloansintheperiod

(iv)Othermaterialcontracts

□Applicable√Notapplicable

Noothermaterialcontractsintheperiod

XVIII.Explanationonothersignificantevents

1.Fulfilltheprecisesocialresponsibilityforpovertyalleviation

□Applicable√Notapplicable

2.Performanceofprecisepovertyalleviationsocialresponsibility

ThelistedCompanyanditssubsidiarywhetherbelongstothekeysewageunitsreleasedfrom

enviornmetnalprotectiondepartment

□Yes √No □Notapplicable

Issuedsocialresponsibilityreport

□Yes √No

XIX.Explanationonothersignificantevents

√Applicable □Notapplicable

(i)beingdeliberatedandapprovedonthe18thsessionof8thBODandFirstExtraordinary

shareholdersmeetingof2016,theCompanyandsubsidiaryareagreedtocarryforwardforeign

exchangefundtradingbusinessduring1July2016to30July2017,withbalanceuptoUS$500

million,deliberyperiodforsinglebusinesswillnotlastfor2-year.FoundmoreintheNotice(No.:

2016-020,No.:2016-022andNo.:2016-037)releasedonappointedmediaSecuritiesTimes,China

SecuritiesJournal,HongKongCommercialDailyandJuchaoWebsite()dated

19March2016and7April2016.

(ii)Theresolutionofthe19thmeetingofthe8thBoardofDirectorsofthecompanypassed

andagreedthecompanytoapplyforaspecialcreditlineofbanknotespoolwithamaximumof

300millionYuantoChinaMerchantsBankCo.,Ltd.HefeiBranch,andthecredittermwasone

year,thecreditvarietywasmainlyusedinbanknotespoolspecialbusiness,andadoptedbillpledge.

Thecompanyhasdisclosedthedetailsonthedesignatedinformationdisclosuremedia"Securities

Times","ChinaSecuritiesJournal","HongKongCommercialDaily"and

formsofannouncement(No.2016-027,No.2016-034)onMarch25,2016.

(iii)OnJune2,2016,thecompanyheldthenewsconferenceon"intelligentspacecontrolthe

future-Meilingintelligenthomeeco-circleplanandCHiQsecondgenerationnewproduct".Atthis

pressconference,thecompanylaunchedthe"intelligent homeeco-circle"plan,andreleasedthe

human-centered CHiQsecond-generation refrigerator thatcan realize spaceintelligent changes

accordingtofoodneeds,andCHiQintelligentairstewardthatcanautomaticallychangeair.The

company has disclosedthe details on the designated information disclosure media "Securities

Times","ChinaSecuritiesJournal","HongKongCommercialDaily"and

formsofannouncement(No.2016-050)onJune3,2016.

(iv)Withtheapprovalof―Replytoapprovethenon-publicofferingsharesofHefeiMeiling

Co.,Ltd.‖("CSRCLicenseNo.[2016]1396")ofChinaSecuritiesRegulatory,asthecompanyhas

successfullyissuednon-publicofferingof280,858,676sharesofRMBordinaryshares(Ashares)to

7 specific investors that conformto the related provisions and conditions, including Sichuan

ChanghongElectricCo.,Ltd.Afterthecompletionofthisoffering,thecompany‘sregisteredcapital

increasesfrom736,739,205Yuanto1,044,597,881Yuan.

Accordingtotheauthorizationofthecompany‘ssecondextraordinarygeneralmeetingin2015

totheBoardofDirectors,theresolutionofthe26thmeetingofthe8thBoardofDirectorsofthe

company passed and agreed the company to increase the company‘s registered capital and

correspondinglyrevisesometermsofthe"ArticlesofAssociation"onthebasisoftheactualresults

ofthis non-publicofferingofsharesaccording to therelevantlaws, regulationsand regulatory

documents.Detailshavebeendisclosedonthedesignatedinformationdisclosuremedia"Securities

Times","ChinaSecuritiesJournal","HongKongCommercialDaily"and

formsofannouncement(No.2016-062,No.2016-066)onOctober18,2016.Thecompanyhas

disclosed the full text of revised "Articles of Association of Hefei Meiling Co., Ltd." at

(v)Theresolutionsofthe26thmeetingofthe8thBoardofDirectorsofthecompanyandthe

second extraordinarygeneral meetingin 2016 passedand agreed thecompany to use its own

temporarilyidlefundsoflessthan2billionYuan (theamountcanbescrolledtouse)toinvestand

purchasesteadyfinanceproductswith timelimitwithinone yearfromthefinancialinstitutions

(banks,securitiescompanies,trustcompanies,etc.)withhighsecurity,goodliquidity,andlowrisk

in the premise ofensuring thefund demands for day-to-day management and operations and

effectivelycontrollingtheinvestmentrisks,andtheinvestmentperiodisoneyear(fromthedatethe

deliberationofthecompany‘sstockholders'meetingpassed).Thecompanyhasdisclosedthedetails

onthedesignated informationdisclosure media"Securities Times", "ChinaSecurities Journal",

"HongKongCommercialDaily"and(No.2016-062,

No.2016-067,andNo.2016-077)onOctober18,2016andDecember14,2016.

(vi)Theresolutionsofthe27thmeetingofthe8thBoardofDirectorsofthecompanyandthe

secondextraordinarygeneralmeetingin2016passedandagreedthecompanyandthesubsidiary

ChanghongAirConditioningtocontinuetoprovidejointliabilityguaranteewithinthecreditlineof

designatedbanksforqualifiedsupplierssatisfyingcertainconditionsonconditionthattherisksare

controllable.Thee-bankacceptanceopenedinthiscreditlineshouldallbeusedbydealerstopay

thepurchasepaymenttotheCompanyandthesubsidiaries;thetotalamountofguaranteeshould

notexceed400millionYuan,ofwhichtheguaranteeamountofthecompanytodealersshallnot

exceed200millionYuan,theguaranteeamountof ChanghongAirConditioningto itsdealers

shouldbenomorethan200millionYuan,itissubjecttotheguaranteecontractsignedbythebank,

andtheguaranteeperiodis oneyear.Thecompanyhasdisclosedthedetailsonthedesignated

information disclosure media "Securities Times", "China Securities Journal", "Hong Kong

Commercial Daily" and in forms of announcement (No. 2016-068, No.

2016-072,andNo.2016-077)onNovember26,2016andDecember14,2016.

(vii)Theresolutionsofthe27thmeetingofthe8thBoardofDirectorsofthecompanyandthe

second extraordinary general meeting in 2016 passed and agreed the company to apply for

registrationofissuingultra-short-termfinancingbondsofnomorethan2billionYuan (including

2billionYuan)toNationalAssociationofFinancialMarketInstitutionalInvestorsthroughfinancial

institutionssoastofurtherexpandthefinancingchannelsandreducethefinancingcosts,andadjust

thefinancingstructuretomeetthecompany'sproductionandoperationandinvestmentneeds.The

company has disclosedthe details on the designated information disclosure media "Securities

Times","ChinaSecuritiesJournal","HongKongCommercialDaily"and

formsofannouncement(No.2016-068,No.2016-073,No.2016-077)onNovember26,2016and

December14,2016.

XX.Majoreventofthesubsidiary

√Applicable □Notapplicable

Accordingtotheresolution ofthetenth meetingoftheeighth boardof directorsheldon

August28, 2015, thecompany's board of directors agreed the subsidiary- ZhongkeMeiling

CryogenicsCo.,Ltd.tostarttherestructuringandsetupthelimitedliabilitycompany,andapplyfor

thelistingintheNationalEquitiesExchangeandQuotationsaftertheoverallrestructuring.After

beingaudited and approvedby NationalEquities Exchangeand QuotationsCo.,Ltd., Zhongke

MeilinghasbeenlistedinNationalEquitiesExchangeandQuotationsonFebruary24,2016,the

securityisreferredtoas"ZhongkeMeiling",andthestockcodeis"835892."

InordertosupportthedevelopmentofZhongkeMeiling,establishandimproveitslong-term

incentivemechanism,supplementtheworkingcapitalneededforitsdevelopment,enhanceitsstock

tradingactivityandpromotethesustainabledevelopmentofitsbusinessoperation,theresolutionof

the24thmeetingofthe8thBoardofDirectorsofthecompanypassedandthecompany‘sBoardof

DirectorsagreedZhongkeMeilingto issuenomorethan3,150,000shares(including3,150,000

shares)toitsseniormanagementandcorestaff,theissuingobjectsshouldsubscribeincash,atthe

sametime,the Companywould giveupthepre-emption rightofthis share issuanceonequal

conditions.Theissuepricewasintendedtobe1.63Yuan/shareonthebasisofthenetassets

assessedvalueofZhongkeMeilinguptoJune30,2016,andshouldissuenomorethan3,150,000

shares (including 3,150,000 shares) to its senior management and core staff, the amount of

financingshouldnotexceed5,134,500Yuan (including5,134,500Yuan).

Uptonow,ZhongkeMeilinghassuccessfullycompletedthisprivateplacementworktothe

managementandcorestaff,andcompletedtheindustrialandcommercialchangeregistrationwork.

ZhongkeMeilingfinallyissued315millionsharestoitsseniormanagementandcoreemployees,

withthefinancingamountof5,134,500Yuan.AfterthecompletionofthisintroductionofZhongke

Meiling,theCompany'sshareholdingratioinZhongkeMeilingshallreducefrom70%to66.7645%.

ZhongkeMeiling willstill betheholdingsubsidiary oftheCompanyand stillincluded in the

consolidatedfinancialstatementsoftheCompany.

Foundmorein the Notice(No.: 2015-038, No.: 2015-039,No.: 2015-041, No.:2015-050,

No.:2016-006,No.:2016-013, No.: 2016-055 and No.: 2016-056) released on appointed media

SecuritiesTimes, ChinaSecurities Journal, HongKongCommercialDailyand Juchao Website

dated29August2015,16September2016,3November2015and30January2016,24February

2016and21September.Meanwhile,moreoftheshareissuanceofZhongkeMeilingcanbefound

inthe()NEEQ(NationalEquitiesExchangeandQuotatitions)forreference.

(ii)Theresolutionsofthe19thmeetingofthe8thBoardofDirectorsofthecompanypassed

and agreedthe subsidiaryZhongshan Changhong Electric Co., Ltd. (hereinafterreferred to as

"Zhongshan Changhong") and its partner UAE RUBAGENERALTRADINGFZE company to

jointlyincreasecapitalincashaccordingtotheexistingshareholdingratiotothejointventuresales

company- Changhong Ruba Trading Company (Private) Limited which was invested and

establishedbybothsides inPakistanatanearlierstage,thetotal amountofcapitalincreaseis

US$ 6.4milliondollars.Thecompany hasdisclosedthe detailson thedesignated information

disclosuremedia"SecuritiesTimes","ChinaSecuritiesJournal","HongKongCommercialDaily"

and(No.2016-027,No.2016-032)onMarch25,

2016.

(iii)Theresolutionsofthe19thmeetingofthe8thBoardofDirectorsofthecompanypassed

andagreedthesubsidiaryZhongshanChanghongandSichuanChanghongAirConditioningCo.,

Ltd. to jointly invest and establish the subsidiaryCHANGHONG MEILING ELECTRIC

INDONESIA.PTinIndonesia,withtheregisteredcapitalofUS$6milliondollars.Thecompany

hasdisclosedthedetailsonthedesignatedinformationdisclosuremedia"SecuritiesTimes","China

Securities Journal", "Hong Kong Commercial Daily" and in forms of

announcement(No.2016-027,No.2016-032)onMarch25,2016.

(iv)Theresolutionsofthe23rdmeetingofthe8thBoardofDirectorsofthecompanypassed

andagreedthecompanytotransferits99%stockrightsinMianyangMeilingSoftwareTechnology

Co.,Ltd. (hereinafterreferredtoas"MeilingSoftware")toitswholly-ownedsubsidiarySichuan

ChanghongAirConditioningCo.,Ltd.(hereinafterreferredtoas"ChanghongAirConditioning"),

theequitytransferringpriceisbasedonthenetassetsvalueofMeilingSoftwareuptoJune30,

2016,andtheequitytransferringpriceis5,798,619.62Yuanafterconfirmedbybothsides.After

this transferring, the Company‘s wholly-owned subsidiary Changhong Air Conditioning and

MianyangMeiling Refrigerationshalltotallyhold 100%stockrights in MeilingSoftware. The

company has disclosedthe details on the designated information disclosure media "Securities

Times","ChinaSecuritiesJournal","HongKongCommercialDaily"and

formsofannouncement(No.2016-052)onJuly29,2016.

(v)Inordertooptimizethecompany'sresourceallocationanddivesttheassetsuncorrelatedto

thecompany‘smainbusinessandhavinglowoperatingefficiencyandlosses,theresolutionsofthe

26thmeetingofthe8th BoardofDirectorsofthecompanypassedandagreedthecompanyto

publiclytransferits100%stockrights(thereinto,thecompanydirectlyholds48.26%stockrightsof

Meiling Packaging, and indirectly holds 51.74% stock rights of Meiling Packaging via the

wholly-owned subsidiary Heifei Meiling GroupHoldings Co., Ltd.) in the subsidiary Heifei

Meiling Packaging Products Co., Ltd. (Hereinafter referred to as "Meiling Packaging") at

SouthwestUnitedEquityExchange,thelistedpriceofstockrightshouldbenolessthanestimated

value of 23,218,900 Yuan of all rights and interests of shareholders in Meiling

Packaging(assessmentdate is July31, 2016). OnDecember 28,2016, according to thelisting

results,HefeiQigePackagingMaterialsCo.,Ltd.(hereinafterreferredtoas"QigePackaging")has

theintentiontransfereequalificationandiseventuallytransferredtheaforementionedstockrights

with23,880,000Yuan.

On19January2017,theequitytransfercompleted itschangesin industry andcommerce

bureau,afterownershiptransfer,nosharesofHefeiMeilingPackageProductsCo.,Ltd.areheldby

theCompany.

FoundmoreintheNotice(No.:2016-062,No.:2016-065,No.:2016-075andNo.:2016-081)

releasedonappointedmediaSecuritiesTimes,ChinaSecuritiesJournal,HongKongCommercial

DailyandJuchaoWebsitedated18October201

(vi)Theresolutionsofthe27thmeetingofthe8thBoardofDirectorsofthecompanypassed

andagreedthecompany‘ssubsidiaryHongYuan EarthEnergyHeatPumpTechnologyCo.,Ltd.

(Hereinafterreferredtoasthe"HeatPumpCompany")tosetupHongYuan EarthEnergyHeat

PumpTechnologyCo.,Ltd.GuangdongBranch(tentativename,ultimatelysubjecttotheindustrial

andcommercialregistration)inNantouTown,ZhongshanCity,GuangdongProvince,andtakethis

subsidiaryastheprojectimplementationsubject,invest14,972,000Yuan tobuildproductbasefor

earthenergyheatpumpproductstopromotetheproductioncapacityofHeatPumpCompanyand

effectivelymeetthemarketdemands.Thecompanyhasdisclosedthedetailsonthedesignated

information disclosure media "Securities Times", "China Securities Journal", "Hong Kong

Commercial Daily" and in forms of announcement (No. 2016-068) on

November26,2016.

(vii)Theresolutionsofthe27thmeetingofthe8thBoardofDirectorsofthecompanypassed

andagreedthecompany‘ssubsidiaryZhongshanChanghongElectricCo.,Ltd.(Hereinafterreferred

toas"ZhongshanChanghong")toinvestonemillionYuantosetupawholly-ownedtrading-type

subsidiary Zhongshan Changhong Trading Co., Ltd. (tentative name, ultimatelysubject to the

industrialandcommercialregistration)to engageinproductimportandexporttradingbusiness.

Thecompanyhasdisclosedthedetailsonthedesignatedinformationdisclosuremedia"Securities

Times","ChinaSecuritiesJournal","HongKongCommercialDaily"and

formsofannouncement(No.2016-068)onNovember26,2016.

(viii)Theresolutionsofthe27thmeetingofthe8thBoardofDirectorsofthecompanypassed

and agreed the company‘s subsidiary Guangdong Changhong Ridian Technology Co., Ltd.

(Hereinafterreferredto as"Ridian Company") to investRMB1million Yuan in Zhongshan,

Guangdongtoset upawholly-ownedtrading-typesubsidiaryZhongshanHonglingTradingCo.,

Ltd.(tentativename,ultimatelysubjecttotheindustrialandcommercialregistration)toengagein

product import and export trading business. The company has disclosed the details on the

designatedinformation disclosuremedia "Securities Times", "China Securities Journal", "Hong

KongCommercialDaily"and(No.2016-068)on

November26,2016.

(ix)Theresolutionsofthe27thmeetingofthe8thBoardofDirectorsofthecompanypassed

andagreedthecompany‘ssubsidiarySichuanChanghongAirConditioningCo.,Ltd.(Hereinafter

referredtoas"ChanghongAirConditioning")toinvestabout22,886,000Yuantomaketechnical

transformationof capacityexpansion.Thecompany hasdisclosedthedetails onthedesignated

information disclosure media "Securities Times", "China Securities Journal", "Hong Kong

Commercial Daily" and in forms of announcement (No. 2016-068) on

November26,2016.

(x)Astheoriginalleasingplantofthecompany‘ssubsidiaryMianyangMeilingRefrigeration

Co.,Ltd. (hereinafterreferredto as"Mianyang Meiling")hasbeencollectedand storedbythe

government,theresolutionsofthe27thmeetingofthe8thBoard ofDirectorsof thecompany

passed and agreed Mianyang Meiling to rent plant for removal and invest 52,920,000 Yuan

(excluding rental costs) to build a new environmentally friendly energy-saving refrigerator

productionlineexpansionproject.Aftergoingintooperation,theprojectwillformtheproduction

capacityof800,000newenvironmentallyfriendlyenergy-savingrefrigerators.Thecompanyhas

disclosedthedetailsonthedesignatedinformationdisclosuremedia"SecuritiesTimes", "China

Securities Journal", "Hong Kong Commercial Daily" and in forms of

announcement(No.2016-068)onNovember26,2016.

(xi)Inordertoensuretheorderlypromotionof"IntelligentLife"projectwhichisoneofthe

company'snon-publicofferingfundsinvestmentprojectsin2016,theresolutionofthe15thmeeting

ofthe8thBoardofDirectorsofthecompanypassedandagreedthecompanytoinvestandbuild

ChangmeiScienceandTechnologyCo.,Ltd.(hereinafterreferredtoas"ChangmeiTechnology"),

itsregisteredcapitalis50millionYuan,ofwhichtheCompanyplanstoinvest45millionYuan in

cash,accountingfor90%oftheregisteredcapital,themanagementteamofChangmeiTechnology

invests5millionYuan incash,accountingfor10%oftheregisteredcapital.TheCompanyand

Changmei Technology management team shall respectively pay 40% of the amount of the

subscribedcapitalwithin30daysfromthedateoftheestablishmentofthenewcompany,andthe

remainingamountshallbepaidwithin3yearsfromthedateofestablishmentofthenewcompany.

Due to the job transfer of some non-core staff in Changmei Technology resulting in the

correspondingsubscribed capital unpaid,in order to ensurethe smooth implementation of the

company'sinvestmentproject,theresolutionofthe27thmeetingofthecompany‘s8thboardof

directorspassedandagreedthecompanytotransferthesubscribedcapitalunpaidbysomenon-core

staffinChangmeiTechnologybyitsownfunds,i.e.2.64%stockrightsofChangmeiTechnology

(1.32millionYuanintotal).Afterthistransferofstockrights,thecompany‘ssubscribedcapital

becomes46.32millionYuan,accountingfor92.64% ofthestockrights, themanagementteam

totallypayssubscribedcapitalof3.68millionYuan,accountingfor7.36%ofthestockrights.

FoundmoreintheNotice(No.:2016-002andNo.:2016-068)releasedonappointedmedia

SecuritiesTimes, ChinaSecurities Journal,HongKongCommercial DailyandJuchao Website

dated8January2016and26November.

SectionVI.ChangesinSharesandParticularsaboutShareholders

I.ChangesinShareCapital

(I)ChangesinShareCapital

InShare

BeforetheChange Increase/DecreaseintheChange(+,-) AftertheChange

Capitali

Amount Proportion Newshares Bonus zationof Others Subtotal Amount Proporti

issued shares public on

reserve

I.Restrictedshares 9,965,170 1.30% 280,858,676 0 0 -522,100 280,336,576 290,301,746 27.79%

1. State-owned

0 0.00% 0 0 0 0 0 0 0.00%

shares

2.State-ownedlegal 915,987 0.12% 69,877,638 0 0 0 69,877,638 70,793,625 6.78%

person‘s shares

3. Other domestic

8,049,334 1.05% 210,981,038 0 0 -522,100 210,458,938 218,508,272 20.92%

shares

Including: Domestic

legalperson‘sshares 4,839,035 0.63% 210,981,038 0 0 0 210,981,038 215,820,073 20.66%

Domestic natural

person‘sshares 3,210,299 0.42% 0 0 0 -522,100 -522,100 2,688,199 0.26%

4.Foreignshares 999,849 0.13% 0 0 0 0 0 999,849 0.09%

Including: Foreign

legalperson‘sshares 0 0.00% 0 0 0 0 0 0 0.00%

Foreign natural

person‘sshares 999,849 0.13% 0 0 0 0 0 999,849 0.09%

II. Unrestricted

753,774,035 98.70% 0 0 0 522,100 522,100 754,296,135 72.21%

shares

1. RMB Ordinary 591,909,884 77.50% 0 0 0 522,100 522,100 592,431,984 56.71%

shares

2. Domestically

161,864,151 21.20% 0 0 0 0 0 161,864,151 15.50%

listedforeignshares

3. Overseas listed

0 0.00% 0 0 0 0 0 0 0.00%

foreignshares

4.Others 0 0.00% 0 0 0 0 0 0 0.00%

III.Totalshares 763,739,205 100.00% 280,858,676 0 0 0 280,858,676 1,044,597,881 100.00%

(II)Reasonsforsharechanged

√Applicable□Notapplicable

1.Inreportingperiod,aftersixmonthssinceformerseniorexecutiveMr.DengXiaohuileaved,

thesharesofMr.Deng522,100sharesarereleasefortrading.

2.BeingapprovedbytheReplyonPrivatePlacementofHefeiMeilingCo.,Ltd.(CSRCXK

[2016]No.1396)issuedfromCSRC,theCompanycompletedtheprivateplacementof2016inthe

Period.Accordingtotheplacementresults,280,858,676shares(A-stock)issuedprivatelyto7

investorswithpriceof5.59Yuan/Share,whichhaverestrictedfortrading.

(III)Approvalofsharechanged

√Applicable □Notapplicable

BeingapprovedbytheReplyonPrivatePlacementofHefeiMeilingCo.,Ltd.(CSRCXK

[2016]No.1396)issuedfromCSRC,theCompanysuccessfullyoffering280,858,676shares

(A-stock)to7 qualifiedinvestors,includingSichuanChanghongElectricCo.,Ltd.,withpriceof

5.59Yuan/Share.

(IV)Ownershiptransferofsharechanged

□Applicable √Notapplicable

(V)InfluenceonthebasicEPSanddilutedEPSaswellasotherfinancialindexesofnetassets

pershareattributabletocommonshareholdersofCompanyinlatestyearandperiod

□Applicable√Notapplicable

(VI)OtherinformationnecessarytodisclosefortheCompanyorneedtodisclosedunder

requirementfromsecurityregulators

□Applicable√Notapplicable

(VII)Changesofrestrictedshares

√Applicable□Notapplicable

InShare

Restricted

Shares

Opening Shares Ending

Increased

Shareholders shares releasedin shares Restrictedreasons Dateforreleased

In

restricted Period restricted

the

Period

On6August2015,heisno

longerthedeputypresident

oftheCompanybecauseof

occupation mobility

meanwhile; lift the

Sharelockupinsenior

DengXiaohui 522,100 522,100 0 0 restricted 6 months after

executives

demission.otherrestricted

conditionsfound more in

―III. Implementation of

commitments‖in―Section

V.ImportantEvent‖

SichuanChanghongElectricCo.,Ltd. 0 0 69,877,638 69,877,638 Lockupforprivateplacement 2019-10-15

PingAnBank–PingAnUOBDingtaiFexibleMixStockInvestmentFundPingAn

0 0 12,522,361 12,522,361 Lockupforprivateplacement 2017-10-15

BankCo.,Ltd.-

PingAnUOB-PingAnBank-GuohaiSecuritiesCo.,Ltd. 0 0 12,522,361 12,522,361 Lockupforprivateplacement 2017-10-15

Collectivefundtrustscheme

0 0 23,613,595 23,613,595 Lockupforprivateplacement 2017-10-15

GoldenErgle-SPD-UTrust-UTrustJinYueNo.4CollectedAssetTrustPlan

NationalSocialSecurityFunds-504 0 0 9,838,998 9,838,998 Lockupforprivateplacement 2017-10-15

HarvestFund-PingAnBank-HuaxiaAssetManagementCo.,Ltd. 0 0 9,838,998 9,838,998 Lockupforprivateplacement 2017-10-15

HarvestFund－ABC－ABC-CAFundManagement(Shanghai)Co.,Ltd. 0 0 8,050,089 8,050,089 Lockupforprivateplacement 2017-10-15

HarvestFund－IndustrialBank－ShanghaiXinghanAssetManagementCo.,Ltd. 0 0 8,050,090 8,050,090 Lockupforprivateplacement 2017-10-15

PingAnAnnuityInsuranceCompanyofChina,Ltd.–PingAnPensionRuifuprivate

0 0 23,613,595 23,613,595 Lockupforprivateplacement 2017-10-15

placementNo.1AssestManagementProducts

RongtongFund－GuangzhouRuralCommercialbank－WanlianSecuriteisCo.,Ltd. 0 0 5,879,549 5,879,549 Lockupforprivateplacement 2017-10-15

RongtongFund－NingboBank－UniversalTrustCo.,Ltd. 0 0 293,977 293,977 Lockupforprivateplacement 2017-10-15

RongtongFund－CBC－RongtongRongyiNo.1privateplacementserialspecial

0 0 940,729 940,729 Lockupforprivateplacement 2017-10-15

(multiple)clientsAssetManagementPlan

RongtongFund－CBC－RongtongRongyiNo.2privateplacementserialspecial

0 0 235,181 235,181 Lockupforprivateplacement 2017-10-15

(multiple)clientsAssetManagementPlan

RongtongFund－CBC－RongtongRongyiNo.3 privateplacementserialspecial

0 0 411,569 411,569 Lockupforprivateplacement 2017-10-15

(multiple)clientsAssetManagementPlan

CaitongFund－ICBC－ChinaForeignEconomicRelationsandTradeTrust－Foreign

0 0 3,577,817 3,577,817 Lockupforprivateplacement 2017-10-15

TradeTrust·HengshengPrivatePlacementInvestmentCollectivefundtrustscheme

CaitongFund－ICBC－FuchunprivateplacementZengliNo.13 AssetManagement

0 0 536,673 536,673 Lockupforprivateplacement 2017-10-15

Plan

CaitongFund－ICBC－ChinaConstructionInvestmentTrust－YongquanNo.25

（CaitongprivateplacementNo.1）Collectivefundtrustscheme 0 0 536,673 536,673 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－YuedaJiquanprivateplacementNo.3AssetManagementPlan 0 0 322,003 322,003 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－FuchunYuantongprivateplacementNo.6AssetManagement

0 0 536,673 536,673 Lockupforprivateplacement 2017-10-15

Plan

CaitongFund－ICBC－FuchunprivateplacementBoliNo.8AssetManagementPlan 0 0 536,673 536,673 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－FuchunprivateplacementBoliNo.12AssetManagementPlan 0 0 357,782 357,782 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－CaitongprivateplacementNo.16AssetManagementPlan 0 0 357,782 357,782 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－FuchunprivateplacementBoliNo.13AssetManagementPlan 0 0 5,366,726 5,366,726 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－FuchunprivateplacementNo.1033AssetManagementPlan 0 0 536,673 536,673 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－FuchunprivateplacementBoliNo.17AssetManagementPlan 0 0 2,862,254 2,862,254 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－FuchunprivateplacementBoliNo.18AssetManagementPlan 0 0 894,454 894,454 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－FuchunprivateplacementBoliNo.21AssetManagementPlan 0 0 4,472,272 4,472,272 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－privateplacementEverbrightZengyiNo.1AssetManagement

0 0 1,431,127 1,431,127 Lockupforprivateplacement 2017-10-15

Plan

CaitongFund－ICBC－FuchunprivateplacementNo.1028AssetManagementPlan 0 0 178,891 178,891 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－FuchunprivateplacementNo.1101AssetManagementPlan 0 0 1,788,909 1,788,909 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－HengzengXinxiangNo.8AssetManagementPlan 0 0 393,560 393,560 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－FuchunprivateplacementNo.729AssetManagementPlan 0 0 447,227 447,227 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－ShanghaiChamrichEquityInvestmentFundManagementCo.,

0 0 894,454 894,454 Lockupforprivateplacement 2017-10-15

Ltd.

CaitongFund－ICBC－FuchunHuarongSafetyPadNo.1 AssetManagementPlan 0 0 322,004 322,004 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－CaizhiprivateplacementNo.11AssetManagementPlan 0 0 805,009 805,009 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－HengzengXinxiangNo. 9AssetManagementPlan 0 0 822,898 822,898 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－FuchunprivateplacementNo.1089AssetManagementPlan 0 0 894,454 894,454 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－SelectedFortuneVIPZunxiangprivateplacementNo.3Asset

0 0 357,782 357,782 Lockupforprivateplacement 2017-10-15

ManagementPlan

CaitongFund－ICBC－FuchunprivateplacementNo.1016AssetManagementPlan 0 0 447,227 447,227 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－HengzengXinxiangNo.10AssetManagementPlan 0 0 536,673 536,673 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－FuchunprivateplacementXixiangNo.2AssetManagement

0 0 411,449 411,449 Lockupforprivateplacement 2017-10-15

Plan

CaitongFund－ICBC－BetaprivateplacementNo.6AssetManagementPlan 0 0 268,336 268,336 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－FuchunprivateplacementNo.1017AssetManagementPlan 0 0 983,900 983,900 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－FuchunprivateplacementNo.1008AssetManagementPlan 0 0 447,227 447,227 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－XinruiprivateplacementNo.3AssetManagementPlan 0 0 357,782 357,782 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－FuchunprivateplacementNo.1009AssetManagementPlan 0 0 536,673 536,673 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－ShenzhenFangwuInnovationAssetManagementCo.,Ltd. 0 0 715,563 715,563 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－FuchunprivateplacementNo.1018AssetManagementPlan 0 0 608,229 608,229 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－FuchunShanxiprivateplacement No.1AssetManagement

0 0 411,449 411,449 Lockupforprivateplacement 2017-10-15

Plan

CaitongFund－ICBC－ShenzhenPusuCapitalManagementCo.,Ltd. 0 0 2,146,690 2,146,690 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－HaiTanprivateplacementNo.1 AssetManagementPlan 0 0 536,673 536,673 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－YonganFuturesCo.,Ltd. 0 0 357,782 357,782 Lockupforprivateplacement 2017-10-15

CaitongFund－ICBC－FuchunprivateplacementNo.1015AssetManagementPlan 0 0 876,565 876,565 Lockupforprivateplacement 2017-10-15

CaitongFund－EverbrightBank－SoochowSecuritiesCo.,Ltd. 0 0 8,944,544 8,944,544 Lockupforprivateplacement 2017-10-15

CaitongFund－EverbrightBank－ZhangZHongyi 0 0 1,788,909 1,788,909 Lockupforprivateplacement 2017-10-15

CaitongFund－EverbrightBank－ShanghaiTongshengAssetManagementCo.,Ltd. 0 0 715,563 715,563 Lockupforprivateplacement 2017-10-15

CaitongFund－EverbrightBank－CaitongFund－FuchunprivateplacementNo.693

0 0 715,563 715,563 Lockupforprivateplacement 2017-10-15

AssetManagementPlan

CaitongFund－EverbrightBank－ShenzhenUBSJingaoInvestmentManagementCo.,

0 0 357,782 357,782 Lockupforprivateplacement 2017-10-15

Ltd.

CaitongFund－EverbrightBank－CaitongFund－EverbrightFuzunhuiZunpingNo.1

0 0 1,788,909 1,788,909 Lockupforprivateplacement 2017-10-15

AssetManagementPlan

CaitongFund－EverbrightBank－QiJuprivateplacementNo.2 AssetManagement

0 0 536,673 536,673 Lockupforprivateplacement 2017-10-15

Plan

CaitongFund－EverbrightBank－QiJuprivateplacementNo.3AssetManagement

0 0 536,673 536,673 Lockupforprivateplacement 2017-10-15

Plan

CaitongFund－EverbrightBank－QiJuprivateplacementNo.4AssetManagement

0 0 536,673 536,673 Lockupforprivateplacement 2017-10-15

Plan

CaitongFund－EverbrightBank－BohaiSecuritiesCo.,Ltd. 0 0 1,788,909 1,788,909 Lockupforprivateplacement 2017-10-15

CaitongFund－EverbrightBank－CaitongFund－JinXIuprivateplacementNo.1

0 0 894,454 894,454 Lockupforprivateplacement 2017-10-15

AssetManagementPlan

CaitongFund－EverbrightBank－BeijingZRTDXInvestmentManagementCo.,Ltd. 0 0 3,577,817 3,577,817 Lockupforprivateplacement 2017-10-15

CaitongFund－PingAnBank－ShanghaiTonganInvestmentManagementCo.,Ltd. 0 0 536,673 536,673 Lockupforprivateplacement 2017-10-15

CaitongFund－PingAnBank－ChinaSecuritiesCo.,Ltd. 0 0 5,366,726 5,366,726 Lockupforprivateplacement 2017-10-15

CaitongFund－PingAnBank－ShanghaiTonganInvestmentManagementCo.,Ltd. 0 0 894,454 894,454 Lockupforprivateplacement 2017-10-15

CaitongFund－PingAnBank－ShanghaiTonganInvestmentManagementCo.,Ltd. 0 0 357,782 357,782 Lockupforprivateplacement 2017-10-15

CaitongFund－PingAnBank－ShanghaiTonganInvestmentManagementCo.,Ltd. 0 0 357,782 357,782 Lockupforprivateplacement 2017-10-15

CaitongFund－PingAnBank－FortuneSecuritiesCo.,Ltd. 0 0 1,788,909 1,788,909 Lockupforprivateplacement 2017-10-15

CaitongFund－PingAnBank－ShanghaiTonganInvestmentManagementCo.,Ltd. 0 0 626,118 626,118 Lockupforprivateplacement 2017-10-15

CaitongFund－PingAnBank－ShanghaiGoldstateBrillianceAssetManagementCo.,

0 0 894,454 894,454 Lockupforprivateplacement 2017-10-15

Ltd.

CaitongFund－IndustrialBank－CaitongFund－FuchunJinhuiRuiheNo.5Asset

0 0 357,782 357,782 Lockupforprivateplacement 2017-10-15

ManagementPlan

CaitongFund－CBC－YouzengNo.5AssetManagementPlan 0 0 805,009 805,009 Lockupforprivateplacement 2017-10-15

CaitongFund－ShanghaiBank－ShanghaiKuakeYoufuEnterpriseManagement

0 0 268,336 268,336 Lockupforprivateplacement 2017-10-15

ConsultingCo.,Ltd.

CaitongFund－ShanghaiBank－FuchunprivateplacementZengliNo.12Asset

0 0 3,577,817 3,577,817 Lockupforprivateplacement 2017-10-15

ManagementPlan

CaitongFund－ShanghaiBank－ZhejiangHanglianIronandSteelCo.,Ltd. 0 0 894,454 894,454 Lockupforprivateplacement 2017-10-15

CaitongFund－ShanghaiBank－FuchunprivateplacementHuifuNo.1314Asset 0 0 1,252,236 1,252,236 Lockupforprivateplacement 2017-10-15

ManagementPlan

CaitongFund－SPD－CaitongFund－PuhuiNo.2AssetManagementPlan 0 0 1,788,909 1,788,909 Lockupforprivateplacement 2017-10-15

CaitongFund－NingboBank－TibetYuanleshengAssetManagementCo.,Ltd. 0 0 357,782 357,782 Lockupforprivateplacement 2017-10-15

CaitongFund－NingboBank－FuchunprivateplacementNo.916AssetManagement

0 0 393,560 393,560 Lockupforprivateplacement 2017-10-15

Plan

CaitongFund－NingboBank－JiaxiuyiShunxingNo.1AssetManagementPlan 0 0 1,073,345 1,073,345 Lockupforprivateplacement 2017-10-15

CaitongFund-NingboBank-HaitongXingtai(Anhui)EmergingIndustryInvestment

0 0 10,733,452 10,733,452 Lockupforprivateplacement 2017-10-15

Fund(LimitedPartnership)

CaitongFund－HuataiSecurities－CaitongFund－FuchunSelectedprivate

placementNo.1AssetManagementPlan 0 0 1,788,909 1,788,909 Lockupforprivateplacement 2017-10-15

Total 522,100 522,100 280,858,676 280,858,676 -- --

Note1:Intheabovetable,6monthsafterMr.DengXiaohui,aformerseniorexecutiveofthecompany,lefthispost,thelockuptothe

company’sstock heldby himshouldget expired. Thecompany’s sharesheldby theremainingshareholdersaretherestricted shares

subscribedfromthecompany’snon-publicofferingofAsharesin2016,thisnon-publicofferingofsharesincludessevenissuingobjects,a

totalof85subscribers,ofwhich exceptthatthecontrollingshareholder-SichuanChanghonghasdirectlyinvolvedinsubscriptionofthe

company’snon-publicofferingofsharesin2016,theothersixissuingobjects(PingAnDahuaFundManagementCo.,Ltd.,GoldenEagle

FundManagementCo., Ltd., HarvestFundManagementCo., Ltd.,PingAnAnnuityInsuranceCompanyof China,Ltd,Rongtong Fund

ManagementCo.,Ltd.,CaitongFundManagementCo.,Ltd.)hasthetotalallocatedproductsof84subscribers.Seedetailsonthe(iii)Allocated

productsofissuingobjects”in“XIISharesubscriptionofissuingobjects”in“SectionIITheissuingofnewshares”ofthe”Issuing

reportandlistingannouncementsummaryonthenon-publicofferingofsharesofHefeiMeilingCo.,Ltd.”(AnnouncementNo.2016-057)

whichthecompanyhasdisclosedonthedesignatedinformationdisclosuremedia"SecuritiesTimes","ChinaSecuritiesJournal","HongKong

CommercialDaily"and,2016.

Note2:Exceptfortherestrictedshareholderslistedintheabovetable,therewasnochangeinsharesofotherrestrictedshareholdersduring

thereportingperiod,thereasonfortherestrictionwasbecauseofthelegalcommitmentofthecompany'ssharereformorthelockupshareof

seniorexecutives.

II.Securityofferingandlisting

(I)Securityofferinginreportingperiod(Notincludingpreferredstock)

√Applicable □Notapplicable

Stockand Issueprice Circulation Approved Dateof

derivative Issuingdate (interestrate) figures Listingdate trading termination

securities volume

Stock

A-Share 2016-10-13 5.59 280,858,676 2016-10-14 280,858,676 -

Convertiblebond,warrantbondandcorporatebond

N/A

Otherderivativesecurities

N/A

Securityofferinginreportingperiod(Notincludingpreferredstock)

ApprovedbyChinaSecuritiesRegulatoryCommission―Replytothenon-publicofferingof

sharesofHefeiMeilingCo.,Ltd‖(CSRCLicenseNo.2096)No.1396),thecompanyhasissued

280,858,676 shares of RMB common stock (A shares) to 7 specified objects including the

controllingshareholderSichuanChanghongthrough thenon-publicofferingofsharesonOctober

13,2016,theissuepriceis5.59Yuan/share,theraisedfundsamountto1,569,999,998.84Yuan,

afterdeductingtheissuecosts(includingtax)of29,267,276.08Yuan,thenetamountofraised

fundsis1,540,732,722.76Yuan.Thenewsharesofthecompany‘snon-publicofferinghavebeen

listedonOctober14,2016.

(II) Explanation on changes of total shares, shareholders structure and assets& liability

structures

√Applicable □Notapplicable

TheCompanycompletedtheprivateplacementof2016inthePeriod,sharesoftheCompany

up to 1,044,597,881 shares from 763,739,205 shares. Meanwhile, Sichuan Changhong-the

controllingshareholder subscribed 24.88% of the issued shares. After this private placement,

SichuanChanghong stillisthecontrollingshareholderoftheCompanywithoutanycontrolling

rightschanged.

TheprivateplacementoftheCompanyhas1,540,732,722.76Yuanraisedfunds,basedonthe

staticbenchmarkofthefinancialdataon30June2016,afterplacement,totalassetsoftheCompany

raisedtoRMB13,296,708,172.69Yuanwith13.11%up;owner‘equityattributabletoshareholder

ofparentcompanyraisedtoRMB4,982,134,513.34Yuanwith44.77%up;theasset-liabilityratio

(mergeaperture)downsto62.05%with8.13%declined.

(III)Currentsharesheldbyinternalstaffs

□Applicable√Notapplicable

III.ParticularsaboutshareholderandactualcontrolleroftheCompany

(I)AmountofshareholdersoftheCompanyandparticularsaboutsharesholding

InShare

Total

preference

Totalcommon Totalpreference shareholders

shareholdersat shareholders withvoting

Totalshareholdersatendofthe endoflast withvoting rights

Period 59,595monthbefore 56,706rightsrecovered 0recoveredat 0

annualreport atendof endoflast

disclosed reportingperiod monthbefore

(ifapplicable) annualreport

disclosed(if

applicable)

Particularsaboutsharesheldabove5%byshareholdersortop10sharesholding

Proport Total Numberofshare

shareholders Changesin Amountof Amountof pledged/frozen

FullnameofShareholders Natureof ionof restricted un-restricted

shareholder shares at theendof reportperiod Stateof

held reportperiod sharesheld sharesheld Amount

share

Sichuan ChanghongState-owned22.47% 234,705,968 69,877,638 69,877,638 164,828,330 -- --

ElectricCo.,Ltd. legalperson

Hefei Industry InvestmentState-owned 4.58% 47,823,401 0 0 47,823,401 -- --

Holding(Group)Co.,Ltd. legalperson

ChanghongElectric(HongForeign 2.41% 25,165,823 0 0 25,165,823 -- --

Kong)TradingCo.,Ltd. legalperson

PingAnAnnuityInsurance

CompanyofChina,Ltd.–Domestic

Ping An Pension Ruifunon-State-o 2.26% 23,613,595 23,613,595 23,613,595 0 -- --

private placement No.1wned legal

Assest Managementperson

Products

Golden Ergle- SPD-UDomestic

Trust-UTrustJinYueNo.4non-State-o 2.26% 23,613,595 23,613,595 23,613,595 0 -- --

CollectedAssetTrustPlan wned legal

person

CAOSHENGCHUN Foreign 1.30% 13,542,207 0 0 13,542,207 -- --

nature

person

Ping An UOB-Ping AnDomestic

Bank-Guohai Securitiesnon-State-o 1.20% 12,522,361 12,522,361 12,522,361 0 -- --

Co.,Ltd. wned legal

person

PingAnBank–Ping AnDomestic

UOBDingtaiFexible Mixnon-State-o 1.20% 12,522,361 12,522,361 12,522,361 0 -- --

StockInvestmentFund wned legal

person

Caitong Fund- NingboDomestic

Bank-Haitong Xingtainon-State-o

(Anhui)EmergingIndustrywned legal 1.03% 10,733,452 10,733,452 10,733,452 0 -- --

Investment Fund (Limitedperson

Partnership)

Domestic

National Social Securitynon-State-o 0.94% 9,838,998 9,838,998 9,838,998 0 -- --

Funds-504 wned legal

person

Harvest Fund- Ping AnDomestic

Bank- Huaxia Assetnon-State-o 0.94% 9,838,998 9,838,998 9,838,998 0 -- --

ManagementCo.,Ltd. wned legal

person

Amongtheaboveshareholders,"PingAnAnnuityInsuranceCompanyofChina,Ltd-

PingAnEndowmentRuifuDingzengNo.1AssetManagementProducts"hassubscribed

theproductsmanagedbyPingAnAnnuityInsuranceCompanyofChina,Ltdinthe

Company'snon-publicoffering ofsharesin 2016,andPing AnAnnuity Insurance

CompanyofChina,Ltdholds23,613,595sharesofthecompany‘stockthroughthis

product;GoldenErgle-SPD-UTrust-UTrustJinYueNo.4CollectedAssetTrustPlan‖

hassubscribedtheproductsmanagedbyGoldenEagleAssetManagementCo.,Ltd.in

the Company's non-public offering of shares in 2016, and Golden Eagle Asset

Strategy investors or general legalManagementCo.,Ltd.holds23,613,595shares ofthecompany‘stockthroughthis

personbecomestop10shareholdersdueproduct;―PingAnUOB-PingAnBank-GuohaiSecuritiesCo.,Ltd.‖and―PingAnBank

torightsissued(ifapplicable) –PingAnUOBDingtaiFexibleMixStockInvestmentFund‖havehassubscribedthe

productsmanagedbyPingAnDahuaFundManagementCo.,Ltd.intheCompany's

non-publicofferingofsharesin2016,andPingAnDahuaFundManagementCo.,Ltd.

totallyholds25,044,722sharesofthecompany‘stockthroughtheabove-mentionedtwo

products;―CaitongFund-NingboBank-HaitongXingtai(Anhui) EmergingIndustry

InvestmentFund(LimitedPartnership)‖hassubscribedoneoftheproductsmanagedby

CaitongFundManagementCo.,Ltd.intheCompany'snon-publicofferingofsharesin

2016,andCaitongFundManagementCo.,Ltd.totallyholds95,169,946sharesofthe

company‘stockthroughthis productandotherproducts,71productsin total;The

―NationalSocialSecurityFunds-504‖and―HarvestFund-PingAnBank-HuaxiaAsset

Management Co., Ltd.‖ have subscribed the products managed by Harvest Fund

ManagementCo.,Ltd.intheCompany'snon-publicofferingofsharesin2016,and

HarvestFundManagementCo.,Ltd.totallyholds35,778,175sharesofthecompany‘

stockthroughabove-mentionedtwoproductandotherproducts,4productsintotal;See

detailsonthe(iii)Allocatedproductsofissuingobjects‖in―XIISharesubscriptionof

issuingobjects‖in―SectionIITheissuingofnewshares‖ofthe―Issuingreportand

listingannouncementsummaryonthenon-publicofferingofsharesofHefeiMeiling

Co.,Ltd.‖(AnnouncementNo.2016-057)whichthecompanyhas disclosedonthe

designatedinformationdisclosuremedia"SecuritiesTimes","ChinaSecuritiesJournal",

"HongKongCommercialDaily"and,2016.

Theaforesaidshareholdersmakeacommitmentthattherestrictedstocktradeperiodof

thenon-publicofferingofAsharestheyholdbysubscribingfromMeilingElectricin

2016istwelvemonths.ThatisfromOctober14,2016toOctober14,2017.

Amongthe above shareholders,Changhong (Hong Kong) Trade Co.,Ltd. is the

wholly-ownedsubsidiaryofSichuanChanghongElectronicCo.,Ltd.;thereexistedno

associatedrelationshiporbelongtotheconcertedactorsasspecifiedintheMeasuresfor

theAdministrationofInformationDisclosureofShareholderEquityChangesofListed

CompaniesamongSichuanChanghongElectronicCo.,Ltd.,Changhong(HongKong)

TradeCo.,Ltd.andothertop8shareholders;andtoptenshareholderswithunrestricted

subscription;

Explanation on associated relationship"PingAnUOB-PingAnBank-GuohaiSecuritiesCo.,Ltd."and"PingAnBank–Ping

amongtheaforesaidshareholders AnUOBDingtaiFexibleMixStockInvestmentFund"havesubscribedtheproducts

managedbyPingAnDahuaFundManagementCo.,Ltd.intheCompany'snon-public

offeringofsharesin2016;"―NationalSocialSecurityFunds-504‖和―HarvestFund-

PingAnBank-HuaxiaAssetManagementCo.,Ltd.‖havesubscribedtheproducts

managedbyHarvestFundManagementCo.,Ltd.intheCompany'snon-publicoffering

ofsharesin2016.Thecompanyneitherknowswhetherthereisanyassociationamong

othershareholders,norknowswhetherothershareholdersbelongtothepersonsactingin

concertthatisstipulatedinthe―AdministrativeMeasuresonInformationDisclosureof

ChangesinShareholdingofListedCompanies‖.

Particularabouttoptenshareholderswithun-restrictsharesheld

Amountof Typeofshares

Shareholders‘name unrestrictedshares

heldatendofPeriod Type Amount

SichuanChanghongElectricCo.,Ltd. 164,828,330 RMBordinaryshares 164,828,330

HefeiIndustryInvestmentHolding(Group)Co.,Ltd. 47,823,401 RMBordinaryshares 47,823,401

ChanghongElectric(HongKong)TradingCo.,Ltd. 25,165,823 Domesticallylisted 25,165,823

foreignshares

CAOSHENGCHUN 13,542,207 Domesticallylisted 13,542,207

foreignshares

ChinaSecuritiesFinanceCorporationLimited 4,399,500 RMBordinaryshares 4,399,500

NORGESBANK 4,216,432 Domesticallylisted 4,216,432

foreignshares

ChinaConstruction BankCO.,Ltd. –YinhuaChina 4,125,878 RMBordinaryshares 4,125,878

Dream30StockSecuritiesInvestmentFund

ICBC-JianxinSelectedMixStockInvestmentFund 3,526,985 RMBordinaryshares 3,526,985

LongQifang 3,294,937 Domesticallylisted 3,294,937

foreignshares

Bank of China Limited– Taida Hongli Reform

MotivationQuantizationStrategyFlexibleMixStock 3,195,600 RMBordinaryshares 3,195,600

InvestmentFund

Amongtheabove shareholders,Changhong(HongKong)Trade Co.,Ltd.is the

wholly-ownedsubsidiaryofSichuanChanghongElectronicCo.,Ltd.;thereexistedno

Expiation on associated relationship orassociatedrelationshiporbelongtotheconcertedactorsasspecifiedintheMeasures

consistent actors within the top 10fortheAdministrationofInformationDisclosureofShareholderEquityChangesof

un-restrictshareholders andbetween topListedCompaniesamongSichuanChanghongElectronicCo.,Ltd.,Changhong(Hong

10 un-restrict shareholders and top 10Kong) and othertop 8 shareholders; and top ten shareholders withunrestricted

shareholders subscription; as theCompany hasnot knownwhether there existsany business

relationship amongthe othershareholders withunrestricted subscription or they

belongtotheconcertedactorsasspecifiedintheMeasuresfortheAdministrationof

InformationDisclosureofShareholderEquityChangesofListedCompanies.

Explanation on top ten common

shareholdersinvolvingmarginbusiness(ifNotapplicable

applicable)

Note:Intheabovetable,"theshareholdingsituationoftheshareholdersholdmorethan5%of

sharesorthetoptenshareholders"issubjecttothedataonstocktransferbooksprovidedbyChina

SecuritiesDepository andClearing CorporationLimitedShenzhenBranch,duringthereporting

period,7issuingobjectsincludingSichuanChanghongElectricCo.,Ltd.,PingAnDahuaFund

ManagementCo.,Ltd.,GoldenEagleFundManagementCo.,Ltd.,HarvestFundManagementCo.,

Ltd.,PingAnEndowmentInsuranceCo.,Ltd.,RongtongFundManagementCo.,Ltd.,andCaitong

FundManagementCo.,Ltd.havesubscribedthecompany‘snon-publicofferingofsharesin2016,

and these shares are all restricted shares. For the number of subscribed shares of the

above-mentioned7issuingobjectsandtheallocatedproductsofother6issuingobjectsexceptfor

SichuanChanghong,seedetailsonthe―Issuingreportandlistingannouncementsummaryonthe

non-publicofferingofsharesofHefeiMeilingCo.,Ltd.‖(AnnouncementNo.2016-057)whichthe

companyhasdisclosedonthedesignatedinformationdisclosuremedia"SecuritiesTimes","China

SecuritiesJournal","HongKongCommercialDaily"and,2016.

Thetoptenordinaryshareholdersofthecompanyandthetop10ordinaryshareholdersof

unrestrictedconditionshavenotmadetherepurchasetransactionsasagreedduringthereporting

period.

(II)ControllingshareholderoftheCompany

1.Natureofcontrollingshareholders:localstate-ownedholding

2.Typeofcontrollingshareholders:legalperson

Controlling Legal Dated Organization

shareholders‘ rep./personin founded code Mainbusiness

name chargeofunit

Manufactures, sales and maintenance of household appliance,

automotiveelectricalappliance,Electronicproductsandspareparts,

communications equipments, lightingequipment, household products,

computerandotherElectronicequipments,specializedequipmentsof

ElectronicandElectronic,Electronicmachineryandequipment,series

products of batteries, Electronic medicine products, Electronic

equipments, mechanicalequipment, Refrigeration equipment and

accessoriesdigitalmonitoringproducts,metalproducts,apparatusand

instruments,cultureandoffice machines,cultureandeducationand

Sichuan sports products, kitchen cabinet and gas appliance; house and

Changhong 915107002054 equipment rental; packing products and technical services; road

ElectricCo., ZhaoYong 1933-4-8 12308D transportation; storage and discharging convey; R&D, sales and

Ltd. servicesofintegratedcircuitandsoftware;consultancyandservicesof

enterprise management; hi-tech project investment and other

state-permitted business; development and operation of property;

engineeringconstructionforhouseandbuildings;callbackanddisposal

ofobsoleteapplianceandElectronicproducts;servicesofInformation

Technology;consultancyandservicesoffinance;sales,relevantimport

and export business of Chemical raw materials and products(Not

containdangerouschemicals),buildingmaterials,non-ferrousmetal,

Steel, plastics, packing material, mechanical and electrical

equipment, Precious metals, Automotive components, Electronic

components,agentserviceoftelecommunication.

Equity

controllingand 1.Endedas31December2016,28.81percentequityofHuayiCompressorCo.,Ltd.(stockcode:000404),the

jointlyofother listedcompanyinmainboardofSSE,weredirectlyholdbySichuanChanghong.

foreign/domesti2.Upto31December2016,1,008,368,000commonsharesoftheChanghongJiahuaHoldingsLimited(Stock

clisted code:08016),thelistedcompanyinGEMofHongKongStockExchange,wereheldbySichuanChanghongand

companyby itspersonsactinginconcert,representing69.3202percentintotalissuedcommonsharesofChanghuaJiahua

controlling Holding.

shareholderin

reportingperiod

3.Controllingshareholderchangesinreportingperiod

□Applicable√Notapplicable

ControllingshareholderstaysthesameinPeriod

(III)ActualcontrolleroftheCompany

1.Natureofactualcontroller:localstate-ownedassetsmanagement

2.Typeofactualcontroller:legalperson

Legal Dated Organization

Actualcontroller rep./personin founded code Mainbusiness

chargeofunit

State-ownedAssetsSupervision&

AdministrationCommissionofMianyang

State-ownedAssets Municipalityisentrustedbythesamelevel

Supervision& government,togetherperforms

AdministrationCommission -- -- -- decision-makingandmanagementof

ofMianyangMunicipality state-ownedassetowners,andisone

organizationwhichexecutescomprehensive

managementandsupervisiononitsbelonged

state-ownedassets.。

Equity controlling of other

foreign/domestic listedNotapplicable

companybyactualcontroller

inreportingperiod

3.ChangesofactualcontrollerinPeriod

□Applicable √Notapplicable

ActualcontrollerstaysthesameinPeriod

4.PropertyrightsandtheblockdiagramofthecontrolrelationshipbetweentheCompanyand

theactualcontrol

State-ownedAssetsSupervision&AdministrationCommissionof

MianyangMunicipality

100%

SichuanChanghongElectronics%HoldingGroupCo.,

Ltd.

23.20%

%

SichuanChanghongElectricCo., Ltd.

100%

四川 22.47%

Changhong(Hong Kong)省绵Trading 四川省绵

Limited 阳市阳市虹欢

2虹.4欢1% 科技有限

科%技责任公司

HefeiMeilingCo.,Ltd.

有限

5.ActualcontrollercontrollingtheC责o任mpanybymeansofentrustorotherassetsmanagement

公司 %

143

%

□Applicable√Notapplicable

(IV)Otherlegalperson‘sshareholderswithovertenpercentsharesheld

□Applicable√Notapplicable

(V)Limitation and reducing the holdings of shares of controlling shareholders, actual

controllers,restructuringsideandothercommitmentsubjects

√Applicable □Notapplicable

Duringthereportingperiod,approvedbyChinaSecuritiesRegulatoryCommission‘sReplyto

theapprovalofnon-publicofferingofsharesofHefeiMeilingCo.,Ltd.(CSRCLicenseNo.[2016]

1396),thecompanyhastotallyissued280,858,676sharesofRMBordinaryshares(Ashares)to7

specifiedobjectsincludingthecontrollingshareholderSichuanChanghongbynon-publicoffering.

Among the 7 objects of this non-public offering, the company's controlling shareholder

Sichuan Changhong Electric Co., Ltd. has promised the restricted stock trade period of this

subscription is thirty-six months; and other 6 subscribing objects including Caitong Fund

ManagementCo.,Ltd.,HarvestFundManagementCo.,Ltd.,PingAnDahuaFundManagement

Co.,Ltd.,GoldenEagleFundManagementCo.,Ltd.,PingAnEndowmentInsuranceCo.,Ltd.,and

Rongtong FundManagementCo., Ltd. havepromised therestrictedstock trade periodof this

subscriptionistwelvemonths

SectionVII.PreferredStock

□Applicable√Notapplicable

TheCompanyhadnopreferredstockinthereporting.

SectionVIII.ParticularaboutDirectors,Supervisors,Senior

ExecutivesandEmployees

I.Changesofsharesheldbydirectors,supervisorsandseniorexecutive

Amount of Amountof

Sharesheld shares shares Other Shares

Name Title Post Sex Age Officedated Officedated at increasein decreased changes( heldat

status from ended period-begin this inthis Share) period-end

(Share) period(Share) period (Share)

(Share)

Currentl

LiuTibin Chairman yin M 54 2011-11-15 2017-7-3 0 0 0 0 0

office

Xu Deputy Currentl

Bangjun Chairman yin M 52 2016-5-4 2017-7-3 0 0 0 0 0

office

Deputy Currentl

LiWei Chairman, yin M 44 2011-6-20 2017-7-3 1,140,400 0 0 0 1,140,400

President office

Kou Currentl

Huameng Director yin M 47 2014-7-3 2017-7-3 0 0 0 0 0

office

Wu Director, Currentl

Dinggang Deputy yin M 44 2014-7-3 2017-7-3 414,300 0 0 0 414,300

Chairman office

Currentl

GaoJian Director yin M 41 2014-7-3 2017-7-3 0 0 0 0 0

office

Fan IndependeCurrentl

ShengdaontDirector yin M 50 2014-7-3 2017-7-3 0 0 0 0 0

office

IndependeCurrentl

RenJia ntDirector yin M 53 2014-7-3 2017-7-3 0 0 0 0 0

office

Lu IndependeCurrentl

Yingjin ntDirector yin M 52 2014-7-3 2017-7-3 0 0 0 0 0

office

Chairman Currentl

Yu of yin M 46 2014-7-3 2017-7-3 263,300 0 0 0 263,300

WanchunSupervisor office

y

Currentl

YuXiao Supervisor yin M 48 2014-11-5 2017-7-3 0 0 0 0 0

office

Currentl

HuJia Supervisor yin F 42 2013-6-6 2017-7-3 0 0 0 0 0

office

Staff Currentl

DengLi Supervisor yin M 34 2017-2-28 2017-7-3 0 0 0 0 0

office

Zhu Staff Currentl

Wenjie Supervisor yin M 29 2015-4-8 2017-7-3 0 0 0 0 0

office

Liu ExecutiveCurrentl

Hongwei deputy yin M 53 2011-6-20 2017-7-3 1,333,132 0 0 0 1,333,132

president office

Deputy Currentl

LiaoTao Chairman yin M 46 2013-1-28 2017-7-3 548,866 0 0 0 548,866

office

Zhong Deputy Currentl

Ming Chairman yin M 44 2013-12-30 2017-7-3 158,900 0 0 0 158,900

office

Zhang Deputy Currentl

Xiaolong Chairman yin M 41 2013-4-18 2017-7-3 329,700 0 0 0 329,700

andCFO office

Secretary Currentl

LiXia ofthe yin F 36 2009-5-22 2017-7-3 459,100 0 0 0 459,100

Board office

LiJin Deputy Office M 49 2011-6-20 2016-1-20 0 0 0 0 0

chairman leaving

Shang Staff Office M 49 2011-6-20 2017-2-28 269,700 0 0 0 269,700

Wen supervisor leaving

Total -- -- -- -- -- -- 4,917,398 0 0 0 4,917,398

II.Changesofdirectors,supervisorsandseniorexecutives

Name Title Type Date Reasons

XuBangjun Director Beingelected 2016-5-4 Mr.XuBangjunelectedasdirectorofthe

Companyafterbeingdeliberatedandapproved

bytheAGMof2015

Deputy Mr.XuBangjunelectedasdeputychairmanof

chairman Beingelected 2016-5-4 theCompanyafterbeingdeliberatedand

approvedbythe22ndsessionof8thBOD

Deputy Mr.LiWeielectedasdeputychairmanofthe

LiWei chairman Beingelected 2016-5-4 Companyafterbeingdeliberatedandapproved

bythe22ndsessionof8thBOD

Mr.DengLielectedasstaffsupervisorofthe

DengLi StaffSupervisor Beingelected 2017-2-28 Companyafterdemocraticelectionofthe

Workers‘Conference

Heapplyingforquitthedirectorofthe8thBOD

Director,Deputy Office oftheCompany,deputychairman,memberof

LiJin chairman leaving 2016-1-20 strategycommitteeandremunerationand

evaluationcommitteeoftheCompanydueto

personnelworkchanges

ShangWen StaffSupervisor Office 2017-2-28 ServesnostaffsupervisoroftheCompanydueto

leaving personnalreasons

III.Post-holding

(I)Professional background,majorworkingexperienceandpresentmainresponsibilitiesin

Companyofdirectors,supervisorsandseniorexecutiveatthepresentinlatestfiveyears

1. Liu Tibin,member ofthe Communist Party, born in January 1963, senior accountant,

governmentsubsidiesspecialistoftheStateCouncil,andheisthewinnerofNationalLaborMedal.

He-a doctoral candidate, graduated from electronicindustry and financial accounting major,

departmentofindustrialeconomyofHangzhouInstituteofElectronicandTechnology.(Bachelorof

Economics), was doctor student in the enterprise management major, department of business

management,UniversityofElectronicScienceand TechnologyofChina.Heparticipatedin the

workinJuly1984.HehasservedsuccessivelyasthedeputyGM,CFO,executivedeputyGMand

secretaryof Partycommitteein SichuanChanghong ElectronicCo., Ltd.;General Accountant,

deputyGM,secretaryofPartycommitteeandotherpostinSichuanChanghongElectronicGroup

Co.,Ltd.;recentlyheserveasthedeputychairmanandmemberofthePartyCommitteeofSichuan

ChanghongElectronicGroupCo.,Ltd.;andthedeputychairman,GMandmemberoftheParty

Committee of Sichuan Changhong Electronic Co., Ltd. together as the Chairman of Huayi

CompressorCo.,Ltd.,chairmanofSichuanChanghongMinshengLogisticCo.,Ltd.andChairman

oftheCompany.

2.XuBangjun,borninDecember1964,memberofCommunistyPartyofChina,anengineer

withabachelordegree,graduatedfromeconomicmanagementoftheSichuanPartySchool. He

havesuccessivelyheldthepostsofvicedirectorofthemachineryfactoryofSichuanChanghong

ElectricCo.,Ltd.,GMofSichuanChanghongMould&PlasticTechnologyCo.,Ltd.,memberof

PCofSichuanChanghong ElectricCo., Ltd.,employeedirectorand chairmanoftheunion in

Sichuan Changhong Electronics Holding Group Co., Ltd., chairman of the union of Sichuan

ChanghongElectricCo.,Ltd.NowheservesasGMAssistantofSichuanChanghongElectricCo.,

Ltd.,ChairmanoftheHousehouldAppliancesIndustryGroupofSichuanChanghongElectricCo.,

Ltd.,deputychairmanofHuayiCompressorCo.,Ltd.andHefeiMeilingCo.,Ltd.

3.LiWei,wasborninFebruary1973,MemberofCPC,AssistantEconomistwithbachelor

degree,heisreadingEMBAinUSTC.HeevertookthepostofGeneralManagerofXi‘anSales

Filiale of Sichuan Changhong Electronic Co., Ltd, General Manger of Southeast Operation

ManagementCenterofChanghong Electronic(China)MarketingCo.,Ltd.andGM ofSichuan

ChanghongAir-conditionerCo.,Ltd;nowheisthedeputychairmanandpresidentoftheCompany

andchairmanofZhongkeMeilingCryogenicTechnologyCo.,Ltd

4.KouHuameng,wasborninFebruary1970,MemberofCPC,masterdegreecandidate,and

postgraduatedfromSichuanInstituteofBusinessAdministration,EMBAgraduatefromUESTC.

HeservedsuccessivelyasdeputydirectorofproductionofficeofSichuanChanghongElectricCo.,

LTD,directorofGuangxiMarketingmanagementCommittee,directorofFujian-JiangxiMarketing

ManagementanddirectorandGMofGuangdongChanghongDigitalTechnologyCo.,Ltd.Nowhe

servesasdirectoroftheDevelopmentManagementDept.ofSichuanChanghongElectricCo.,LTD,

directorofHuayiCompressorCo.,Ltd.anddirectoroftheCompany.

5.WuDinggang,wasborninMarch1973,MemberofCPC,ownsbachelordegree,graduate

fromTianjin Universityof CommerceChina(Tianjin UniversityofCommercenow),major in

refrigerationequipmentandcryogenictechnique,amaster‘scandidate.Heservedsuccessivelyas

GMofSuiningSaleBranchandChengduSalesBranchofSichuanChanghongElectricCo.,LTD,

directorofChongqingMarketingManagementDepartment ofSichuanChanghongElectricCo.,

LTD,deputyGMofChanghongElectronics(China)MarketingCo.,GMofmarketplanningcenter

ofChanghongMultimediaIndustry,directorand GMofLe-Jia-YiChainManagementCo.,Ltd.

NowheservesasdirectorandDeputyPresidentoftheCompany.

6.GaoJian,wasborninSeptember1975,memberofChinaDemocraticNationalConstruction

Association,ownsbachelordegreeandgraduatefromeconomicmanagementeducatedinAnhui

ProvincialPartyInstitute.HeservedsuccessivelyasdeputychiefofCommercialBureauofLuyang

District,HefeiCity,anddeputychiefofFinanceBureauofLuyangDistrict,HefeiCity,anddeputy

director of Luyang Assets Management Office, deputy director of investment and financing

managementcenter,GMofHefeiLuyangState-ownedAssetsInvestmentHoldingGroupCo.,Ltd.,

thedirectorofAuditingBureauofLuyang,deputychairmanofLuyangCPPCCandchairmanof

LuyangShiyuMicroLoanCo.,Ltd.NowheservesasdeputypresidentofHefeiXingtaiFinancial

Holding(Group)Co.,Ltd.,thedirectorofHefeiScience&TechnologyRuralCommercialbankand

theCompany.

7. Gan Shengdao, was born in March 1967, member of China Democratic National

ConstructionAssociation,adoctoralcandidateandDoctorofEconomic.Heservedsuccessivelyas

teaching assistant, lecturer and associate professor in Department of National Economic

Management of Sichuan University, the associate professor and professor in Department of

BusinessAdministrationofSichuanUniversity.Nowheservesasprofessoranddoctoralsupervisor

in Busines School of Sichuan University, deputy director of Financial Institute of Sichuan

University,ChengduRainbowElectric(Group)Co.,Ltd.,SichuanSunnySealCo.,Ltd.,Liangshan

RuralCommercial Bank Co., Ltd. and SichuanYahua Industrial GroupCo., Ltd, independent

directorofYibingWuliangyeCo.,Ltd.andoutsidedirectorofSichuanHuashiGroupCo.,Ltd.and

independentdirectoroftheCompany.

8. Ren Jia, wasborn in July 1963, postgraduate student, graduated from THU,major in

MaterialsScienceandEngineering.HeservedsuccessivelyasofficedeputymanagerofJiangsu

OverseasGroupCorp.,viceGMofANYKA(Guangzhou)Co.,Ltd.and viceGMofSMV.He

servesasdeputypresidentofShanghaiXinweiElectronicCo.,Ltd.,GMofSIMICDevelopment

Co.,Ltd.andIndependentDirectoroftheCompany.

9.LuYingjin,wasborninOctober1964,MemberofCPC,adoctoralcandidate,Doctorof

ManagementScienceandEngineeringoftheUESTC.HeservedsuccessivelyasAssistantEngineer

ofShenliFieldDrillingTechnicalCompanyandlecturerofStaffEducationandTrainingCenterof

South-WestPetroleumBureau,andheteachesinUESTCsince2002.Andhehasbeenavisiting

scholarinthedepartmentofcomputerscienceattheUniversityofKentuckyintheUnitedStates.

Now he serves as associate professor in Economics and Management School of UESTC and

IndependentDirectoroftheCompany.

10.Yu Wanchun,wasbornin September1970,MemberofCPC,undergraduate degree,a

senioraccountant,graduatedwithabachelordegreeinaccountingmajorofChongqingInstituteof

Commerce.HetookthejobinJuly1994.HeservedsuccessivelyasdeputydirectorofFinancial

DepartmentoftheSichuanChanghongElectricCo.,LTD,anddeputypresidentoftheCompany,

directorofdisciplineinspectionofficeofSichuanChanghongElectronicsHoldingGroupCo.,Ltd.

and director of discipline inspection supervision. Now he serves as chairman of

supervisory,memberofCPCofSichuanChanghongElectricCo.,LTD, directorofauditing

department,memberofCPCoftheSichuanChanghongElectronicHoldingGroupCo.,Ltd.,and

chairmanofsupervisoryofHuayiCompressorCo.,Ltd.andchairmanofsupervisoryoftheSichuan

ElectronicWarIndustryGroupCo.,Ltd,supervisorofAnhuiXinhaoPlasmaDisplayPanelCo.,

Ltd.,SichuanChanghongPropertyCo.,Ltd.,SichuanChanghongJiahuaInformationProductsCo.,

Ltd.andSichuanHongyangInvestmentCo.,Ltd.,andthechairmanofsupervisorycommitteeofthe

Company

11.YuXiao,wasborninAugust1968,MemberofCPC,amasterdegreecandidate,graduated

withaMaster‘sdegreeinBusinessManagementofCollegeofBusinessAdministrationofSichuan

University,asenior accountant.He servedsuccessively asdeputychiefin SichuanChanghong

ElectricCo.,Ltd.,deputychiefinFinancialAccountingOfficeofSales,deputydirectoroftheSales

Department,directoroftheFinancialDepartmentanddirectorofHuayiCompressorCo.,Ltd.Now

heservesasCFOanddeputyGMoftheSichuanChanghongElectronicsHoldingGroupCo.,Ltd.

andsupervisoroftheCompany.

12.HuJia, wasborn inJanuary 1975,MemberofCPC, bachelordegree,graduated from

SichuanUniversitymajorin Accountancyin July1997, asenior accountant, ChineseCertified

PublicAccountant,CPAAustralia,selectedtonationalAccountingTalentsofEngineeringofthe

MinistryofFinanceandthedelegationofthe10thPartyCongressinSichuanProvince.Sheserved

successivelyasdivisionchiefofPricingDivisionofCostControlCenterofSichuanChanghong

ElectricCo.,LTD,thedivisionchiefofPayableDivision,GeneralLedgerOffice,deputydirector

anddirectorofthefinancedepartment.NowsheservesasCFOofSichuanChanghongElectricCo.,

Ltd.,chairmanofSichuanChanghongGroupFinanceCo.,Ltd.,chairmanofChanghong (Hong

Kong)TradingLimitedandsupervisoroftheCompany.

13.DengLi,borninAugust1982,aundergraduate,studyMBAinUniversityofScienceand

TechnologyofChina.HeworkedinHefeiMeilingCo.,Ltd.sinceJuly2006aftergraduated.And

successivelyservedintrainingofficeofHefeiMeilingCo.,,Ltd.andpurchasingofficeoffreezer

business department. Now he serves as administrative chief of logistics department and staff

supervisoroftheCompany.

14.Zhu Wenjie,member ofCommunistPartyof China,bornin January1988,bachelor's

degree,studyMBAinUniversityofScienceandTechnologyofChina.HestartedtoworkinHefei

Meiling Co., Ltd. in July 2010 after graduation, served as an accountant for big customer

accounting in financial management department of Hefei Meiling Co., Ltd., securities affairs

assistantattheofficeofsecretary oftheboard,and directorofsecurities affairs,and currently

servesastherepresentativeoftheCompany'ssecuritiesaffairs,directorofsecuritiesaffairsatthe

officeofsecretaryoftheboard,andemployeesupervisoroftheCompany.

15.LiuHongwei,Male,ChineseAmerican,boredinMay1963,adoctoralcandidate,Doctor

of Applied Mechanics from Lehigh University; he served successively in Kulicke and Soffa

Industries,Pennsylvania;TesseraTechnologyCorporation,Califonia;IntelCorporationinSilicon

Velleg.NowheservesasexecutivedeputypresidentoftheCompany.

16.LiaoTao,MemberofCPC,wasborninSeptember1970,owesauniversitydegree.He

successivelyservedaschieftechnologyofficeofplasticplantandprojectmanagerofoperation&

managementofSichuanChanghongElectricCo.,Ltd.;directorofengineeringdept.ofGuangdong

ChanghongElectronicCo.,Ltd.andviceGMofSichuanChanghongAir-conditionerCo.,ltd.Now

heservesasvicepresidentoftheCompany.

17.ZhongMing,wasborninNovember1972,memberofCPC,adoctoralcandidate,asenior

engineerandaPhDmajorinengineering.Hesuccessivelyservedasdeputydirectorofresearch

institutionof SichuanChanghong Air-conditionerCo., Ltd.,deputyGMofSichuanChanghong

Air-conditioner Co., Ltd. and technical director of household appliance group of Sichuan

ChanghongElectricCo.,LTD.HeservesasdeputypresidentoftheCompanycurrentlyanddirector

ofZhongkeMeilingCryogenicTechnologyCo.,Ltd..

18. Zhong Xiaolong, was born in February 1976, accountant, a bachelor degreed. He

successivelyserved as chiefof management analysisof general management dept.of Sichuan

ChanghongElectricCo.,LTD,GM ofmarketingauditing ofauditdept.ofSichuanChanghong

ElectricCo.,LTD,directoroffinancialdept.ofGuangdongChanghongElectricCo.,Ltd.,deputy

GMoffinancialsharingcenterofSichuanChanghongElectricCo.,LTDandCFOofSichuanCOC

DisplayDeviceCo.,LtdandCFO oftheCompany.Heservesas deputypresidentand finance

manageroftheCompanycurrently.

19.LiXia,wasborninOctober1980,MemberofCPCand IntermediateAccountantwith

MasterDegree.ShegraduatedfromAccountingDepartmentofSichuanUniversityBusinessand

ManagementSchool.InJuly2006,sheworkedinSichuanChanghongElectronicCo.,Ltd.Sheever

wasProjectManagerinFinancing& AcquisitionOfficeofAssetManagementDepartmentand

BusinessExecutiveinBoardOfficeofSichuanChanghongElectronicCo.,Ltd.shetooktheposts

ofDeputyGMandFinancialSupervisorofSichuanChanghongInnovationInvestmentCo.,Ltd.

SheistheSecretaryoftheBoardoftheCompanyrecentlyandchairmanofsupervisorycommittee

ofZhongkeMeilingCryogenicTechnologyCo.,Ltd..

20.LiJin,borninApril1967,aseniorengineerwithadoctoralcandidate,hegraduatedfrom

DepartmentofThermalEngineering,TsinghuaUniversity,specialityofengineeringthermalphysics,

adoctorofengineering.HeobtainedtheMBAmaster‘sdegreeoftheUniversityofGlasgowin

September 2008. He worked since July 1998, and successively served as system designerof

air-conditioningdepartmentinSichuanChanghongElectricCo.,Ltd.,directorofair-conditioning

technologyresearchinstituteanddeputydirectorandchiefengineer,theGMofSichuanChanghong

Air-conditionerCo.,Ltd.,directoranddeputyGMofSichuanChanghongElectricCo.,Ltd.and

deputychairmanofHuayiCompressorCo.,Ltd.nowheservesasdirectgorandGMofSichuan

ChanghongElectronicsHoldingGroupCo.,Ltd.anddirectorofSichuanChanghongElectricCo.,

Ltd..heisnolongerservesasdeputychairmanoftheCompanysince20Janaury2016

21.ShangWen,wasborninAugust1967,MemberofCPC,bachelordegree,workedinHefei

Meiling RefrigeratorPlant since graduate from Anhui University since July 1991. He served

successivelyas propagandist and policy researcher of Hefei Meiling RefrigeratorPlant, GM‘s

secretaryinHefeiMeilingCo.,Ltd.,deputydirector,director,GMassistantoftheGMOfficeand

directorofCEOOffice.HeisnolongerservesasthestaffsupervisoroftheCompanysince28

Feburary2017

(II)Post-holdinginshareholder‘sunit

√Applicable□Notapplicable

Drawing

Startdateof Enddateof remunerationand

Name shareholder‘sunit Title allowancefrom

officeterm officeterm shareholder‘s

unit(Y/N)

SichuanChanghong PartySecretary 2015.12 - N

ElectricCo.,Ltd.

SichuanChanghong

ElectronicsHolding PartySecretary 2015.12 - N

LiuTibin GroupCo.,Ltd.

SichuanChanghong Deputypresident,GM 2005.9 - Y

ElectricCo.,Ltd.

SichuanChanghong

ElectronicsHolding Deputypresident 2005.9 - N

GroupCo.,Ltd.

SichuanChanghong GMAssistant 2016.9.13 - Y

ElectricCo.,Ltd.

XuBangjun

SichuanChanghong ChairmanofHousehold 2016.2.1 - N

ElectricCo.,Ltd. AppliancesIndustryGroup

Kou SichuanChanghong Directorofdevelopmentand 2010.11.29 - Y

Huameng ElectricCo.,Ltd. managementdepartment

HefeiXingtai

FinancialHolding Deputypresident 2013.11 - Y

GaoJian (Group)Co.,Ltd.

HefeiXingtai

FinancialHolding Director 2014.9 - N

(Group)Co.,Ltd.

SichuanChanghong Chiefofauditingdepartment 2013.03.25 - N

ElectricCo.,Ltd.

SichuanChanghong Chairmanofsupervisory 2014.05.28 2017.05.28 Y

ElectricCo.,Ltd. committee

YuWanchun SichuanChanghong

ElectricCo.,Ltd. Directorofsupervisoryoffice 2014.11 - N

SichuanChanghong

ElectronicsHolding Chiefofauditingdepartment 2016.07.01 - N

GroupCo.,Ltd.

SichuanChanghong DeputyGMandchief

YuXiao ElectronicsHolding accountant 2016.01.29 - Y

GroupCo.,Ltd.

SichuanChanghong Financialadministrator 2014.05.28 2017.05.28 Y

ElectricCo.,Ltd.

HuJia Changhong(Hong

Kong)Trading Chairman 2014.08.29 - N

Limited

SichuanChanghong Director 2014.05.28 2017.05.28 N

ElectricCo.,Ltd.

LiJin SichuanChanghong

ElectronicsHolding Director,GM 2015.11.13 - Y

GroupCo.,Ltd.

Post-holdinginshareholdersunit Notapplicable

(III)Post-holdinginotherunit

√Applicable□Notapplicable

Drawing

Startdateof Enddateof remuneration

Name Otherunit Title andallowance

officeterm officeterm fromother

unit(Y/N)

HuayiCompressorCo.,Ltd. Chairman 2008.2.18 - N

LiuTibin SichuanChanghongMinsheng

LogistricCo.,Ltd. Chairman 2006.10 - N

XuBangjun HuayiCompressorCo.,Ltd. Deputychairman 2016.5.6 2018.4.15 N

LiWei ZhongkeMeilingCryogenic Chairman 2015.8.28 2018.8.27 N

TechnologyCo.,Ltd.

KouHuameng HuayiCompressorCo.,Ltd. Director 2015.4.16 - N

GaoJian HefeiScience&TechnologyRural Director 2015.4 - N

Commercialbank

HuayiCompressorCo.,Ltd. Chairmanof 2014.8.25 2018.04.16 N

SupervisoryCommittee

SichuanElectronicWarIndustry Chairmanof 2015.1.14 - N

GroupCo.,Ltd SupervisoryCommittee

AnhuiXinhaoPlasmaDisplayPanel Supervisor 2014.4.15 - N

YuWanchun Co.,Ltd.

SichuanChanghongPropertyCo., Supervisor 2015.3.6 - N

Ltd.

SichuanChanghongJiahua Supervisor 2015.06．10 - N

InformationProductsCo.,Ltd.

SichuanHongyangInvestmentCo., Supervisor 2014.7.14 - N

Ltd.

HuJia SichuanChanghongGroupFinance Chairman 2015.10.29 - N

Co.,Ltd.

Professor,doctoral

supervisor,deputy

BusinessSchoolofSichunUniversity directorofFinancial 1990.7 - Y

InstituteofSichuan

University

ChengduRainbowElectric(Group) IndependentDirector 2012.3.23 - Y

Co.,Ltd.

GanShengdao SichuanSunnySealCo.,Ltd. IndependentDirector 2011.6.21 - Y

LiangshanRuralCommercialBank IndependentDirector 2011.11.18 - Y

Co.,Ltd.

SichuanYahuaIndustrialGroupCo., IndependentDirector 2015.6.9 - Y

Ltd

SichuanHuashiGroupCo.,Ltd. Outsidedirector 2015.8.10 - Y

YibingWuliangyeCo.,Ltd. IndependentDirector 2016.11.18 Y

SIMICHoldingsCo.,Ltd. Deputypresident 2013.1 - Y

RenJia

SIMICDevelopmentCo.,Ltd. GM 2014.7 - N

LuYingjin SchoolofManagementand Associateprofessor 2001.12.30 - Y

EconomicsofUESTC

ZhongMing ZhongkeMeilingCryogenic Director 2015.8.28 2018.8.27 N

TechnologyCo.,Ltd.

LiXia ZhongkeMeilingCryogenic Chairmanof 2015.8.28 2018.8.27 N

TechnologyCo.,Ltd. SupervisoryCommittee

Post-holding Notapplicable

inotherunit

(IV)Punishmentof securities regulatory authorityin recent three years to the company‘s

currentandoutgoingdirectors,supervisorsandseniormanagementduringthereportingperiod

□Applicable√Notapplicable

IV.Remunerationofdirectors,supervisorsandseniorexecutives

(I)Decision-making, determine basis and actually payment of remuneration for directors,

supervisorsandseniorexecutives

1.Procedurefordecidingremunerationsofdirectors,supervisorsandseniormanagement

Implementedinlinewithlaws,regulationsandrelevantrulesof―CompanyLaw‖,―Articleof

Association‖and ―Enforcement Regulation of Remunerationand Evaluation Committee of the

Board‖,including:

(1)AllowanceplanofindependentdirectorsareimplementedafterdeliberatedintheBoard

andapprovedinShareholders‘GeneralMeeting.Otherdirectorsandnon-staffsupervisorsexcept

independentdirectorsarereceivednoremunerationfromtheCompany.

(2)RemunerationofseniorexecutivesaredeliberatedandapprovedbytheBoardaccordingto

remunerationevaluationplantogetherwithopinionsofRemunerationandEvaluationCommittee.

2.Basesonwhichremunerationsofdirectors,supervisorsandseniormanagementaredecided

TheCompanyconducted theperformanceexamination onthetaskofdirectors,supervisors

andseniorexecutivesaccordingtotheHRmanagementpolicy,wagesofdirectors,supervisorsand

seniorexecutivesaredecidedbytheirperformanceandevaluationscheckbytheCompany.All

wagesare performingby theevaluation results according to theonlyevaluation standardthat

carriedbytheCompany.

3.Actualpaymentofremunerationsofdirectors,supervisorsandseniormanagement

Allowance of the independent directors are paid by the standards approved in Annual

Shareholders‘GeneralMeeting,otherdirector,whoservesasseniorexecutiveatthesametime,and

non-staff supervisors except independent directors did not received remuneration from the

Company; remunerationsfor senior executives of theCompany arepaid strictly by the unify

remunerationvaluationmechanismoftheCompany.

Directors,supervisorsandseniorexecutivesoftheCompanyhas19intotalupto31December

2016,actually12personreceivingremunerationfromtheCompany,2staffsupervisorsarereceived

theirremunerationbyactualpositions(non-supervisorpost);furthermore,3independentdirectors

arereceivedtheallowancemonthlyfromtheCompany;theCompanywillpayremunerationto

seniorexecutivesmonthly/quarterly/annually.

Duringthereportingperiod,theCompanyhasestablishedtheexecutivecompensationand

performancemanagementprogramfortheseniormanagementof2016inaccordancewiththemain

scope,theresponsibilities,theimportanceofthemanagementpositionsoftheseniormanagement,

andthecompensationlevelofotherrelevantcompanyandposition,theprogramincludesbutnot

limitedto thecompany'skey performanceindicator(KPI) and performanceevaluationcriteria,

proceduresand major evaluation system;the major programs and systems of the reward and

punishment;reviewtheperformanceofdutiesofthecompany'sseniormanagementandconductthe

annualperformanceappraisal.

Attheendoftheyear,theRemunerationandAppraisalCommitteecombinedtheworkreport

andself-evaluationoftheseniormanagementin2016,followedtheperformanceevaluationcriteria

andprocedures,andevaluatedtheKeyPerformanceIndicator(KPI)oftheseniormanagementin

2016;andotherrelevantindicatorsofperformanceevaluation;proposedtheremunerationamount

and performanceappraisal approach of thesenior management based on the job performance

evaluationresultsandtheremunerationpolicy,andreportedtotheBoardforapproval.

(II)Remunerationfordirectors,supervisorsandseniorexecutivesinreportingperiod

In10thousandYuan

Total Whether

remuneration remuneration

Name Title Sex Age Poststatus obtainedfrom obtainedfrom

theCompany relatedpartyof

(beforetaxes) theCompany

LiuTibin Chairman M 54 Currently in -- Y

office

XuBangjun Deputychairman M 52 Currently in -- Y

office

LiWei Deputychairman, M 44 Currently in 47.36 N

President office

KouHuameng Director M 47 Currently in -- Y

office

WuDinggang Director,deputy M 44 Currently in 45.08 N

President office

GaoJian Director M 41 Currently in -- Y

office

GanShengdao IndependentDirector M 50 Currently in 11.90 N

office

RenJia IndependentDirector M 53 Currently in 11.90 N

office

LuYingjin IndependentDirector M 52 Currently in 11.90 N

office

YuWanchun Chairmanof M 46 Currently in -- Y

supervisorycommittee office

YuXiao Supervisor M 48 Currently in -- Y

office

HuJia Supervisor F 42 Currently in -- Y

office

DengLi Staffsupervisor M 34 Currently in 17.05 N

office

ZhuWenjie Staffsupervisor M 29 Currently in 13.12 N

office

LiuHongwei Executivevice M 53 Currently in 46.59 N

president office

LiaoTao deputyPresident M 46 Currently in 30.07 N

office

ZhongMing deputyPresident M 44 Currently in 32.58 N

office

ZhangXiaolong deputyPresidentand M 41 Currently in 30.85 N

financechief office

LiXia SecretaryoftheBoard F 36 Currently in 21.29 N

office

LiJin Deputychairman M 49 Officeleaving -- Y

ShangWen Staffsupervisor M 49 Officeleaving 17.75 N

Total -- -- -- -- 337.44 --

(III)Equityincentiveauthorizedfordirector,supervisorandseniorexecutiveinreporting

period

TheCompany'sauditedoperatingresultsandactualoperatingconditionsin2015didnot

reachedthegrantedconditionsofannualperformanceincentivefunds,therearenoequityincentive

authorizedinthePeriod

(IV)Equityincentiveauthorizedfordirector,supervisorandseniorexecutiveinreporting

period

□Applicable√Notapplicable

V.StaffoftheCompany

HefeiMeilingCo.,Ltd.anditscontrollingsubsidiariesownedon-jobemployeesof18,967

peopleintotal.Thereare146peopleinretiredareenjoyingexpensespaidbytheCompany.

(I)Numbers,professionalstructureandeducationbackground

On-jobemployeeinparentcompany(people) 6,772

On-jobemployeeinmainsubsidiary(people) 12,195

Totalon-jobemployees(people) 18,967

Currenttotalpayroll(people) 18,967

Numberofretiredemployeeswithexpensespaidbythe 146

parentcompanyandmainsubsidiary(people)

professionalstructure

Typesofprofessionalcategory Numbersofprofessionalcategory(people)

Productionstaff 9,894

Salesman 6,196

Technician 2,229

Financialstaff 239

Administrationstaff 409

-

Total 18,967

Educationbackground

Typeofeducationbackground Numbers(people)

Highschoolandbelow 10,776

Juniorcollege 3,269

Undergraduate 4,788

Masterandabove 134

Total 18,967

(II)Remunerationpolicy

Remuneration policy of the employees: the Company formulated human resources and

compensation policy conducive to sustainable development of enterprise according to the

provisionsofrelevant lawsand policiespromulgatedby thestate andto theCompany's actual

situation;throughtheperformanceappraisal,weguidedmanagersandstafftomakecontributionfor

thedevelopmentoftheCompany.Atthesametime,theCompanyattachesgreatimportancetostaff

development,buildthepositionsystemandpromotionchannels,andenhancestaffcapacitythrough

avarietyoftraining.Wecombinetheincentiveandguaranteecompensation,encouragesmutual

developbetweenemployeesandtheCompany.TheCompaniesconcernedaboutemployeebenefits,

shapingcorporateculturebyprovidingvariousholiday,allowance,sympathy,trafficandorganizing

colorfulactivities,thusimproveemployeesatisfaction.

(III)Trainingplans

Trainingplan:ThecompanyhasformulatedtheStaffTrainingManagementSystem,Credit

ManagementRegulations,ReserveTeamSelectionandTrainingRegulationsandothersystemsand

standardworkflows,setupthetrainingcoursessystem basedonthestaff capacitymodeland

combinedwithstaffdevelopment,combinedthetrainingandstaffprofessionalqualificationswith

thecareerdevelopment.In2016,thecompanyhasfocusedonpromotingthe100-peopleechelon

talent construction project, established the reserve leader, reserve cadres, outstanding college

students and othertalent developmentechelon, established the special reserves talentpool for

overseasfactorymanagementteam,overseasbusinessmanagementteaminordertostrengthenthe

reservesofoverseastalent,andorganizedtargetedandspecialtrainingforthestoragestaffsoasto

providetalentreservesandsupportsforthecompany'sfuturelong-termdevelopment.Atthesame

time,thecompanyhasimprovedthesatisfactionandloyaltyofnewemployeesbycareerplanning

andmanagement,propagandaandguidanceofcorporateculturetonewcollegestudentsandother

newforces.

(IV)Laboroutsourcing

□Applicable √Notapplicable

SectionIX.CorporateGovernance

I.CorporategovernanceoftheCompany

(I)Overviewofthecorporategovernance

InstrictcompliancewiththeCompanyLaw,SecuritiesLaw,GovernancePrinciplesofListed

CompanyissuedbytheCSRC,andtheRulesGoverningtheListingofSecuritiesonShenzhen

Stock Exchange (amended in 2014), the Company continued to construct and perfect its

governancestructure,therebyformingitsdecision-making,supervisionandoperationmanagement

organizationwithgeneralmeeting,theboardofdirectors,theboardofsupervisorsandoperation

managementasthemajorstructure.Thegeneralmeeting,boardofdirectors,boardofsupervisors

andoperationmanagementoftheCompanyhasdefinitetermsofreference,whichcanensurean

effective balance, scientific decision-making process and coordinative operation, laying firm

foundation for making decisions relating to the Company‘s continuous, steady and healthy

development.

Duringthereportingperiod,inaccordancewiththeGuidelinesfortheStandardOperationof

ListedCompaniesontheMainBoardofShenzhenStockExchangeandotherrelevantprovisions,

combiningwiththeissuanceresultsofthecompany‘s non-publicofferingofsharesin2016and

the company‘s actual business development needs, the company has revised the Articles of

AssociationandFinancialProductsInvestmentManagementSystemofHefeiMeilingCo.,Ltd.,

effectively fulfilled the company's internal management and control system, and further

standardized the operation of the company, improved the corporate governance level, and

enhancedthecompany'soveralloperationalefficiency.Overall,duringthereportingperiod,the

actualsituationofcorporategovernancehasbeeninlinewiththerequirementsofrelevantstate

lawsandregulations,andregulatorydocumentsrelevanttogovernanceoflistedcompaniesissued

byChinaSecuritiesRegulatoryCommissionandShenzhenStockExchange.

1.Shareholdersandgeneralmeeting

TheCompany standardizedthe proceduresconcerning convening, holding and votingof

generalmeetinginstrictcompliancewiththeArticlesofAssociationandRulesofProcedureof

GeneralMeeting.Allshareholders,especiallytheminorityshareholders,wereequallytreatedto

ensureallshareholdersshallrankparipassuandcanfullyexercisetheirright.Duringthereporting

period,the Company convened general meetings according to Rules of Procedure of Listed

Issuer‘sGeneralMeeting(amendedin2016)issuedbytheCSRCandtheImplementationRules

Relating to Network Voting at General Meeting of Listed Issuer issued by Shenzhen Stock

Exchange(amendedinSeptember2016).Inadditiontoconveninggeneralmeetinginformsofsite

conference,theCompanyoffered convenience forshareholderstopresentgeneral meetingvia

networkvotingwhich was safe,economicand convenient.Meanwhile, separatecounting was

conductedinrespectofthevotingbyminorityshareholders(othershareholdersotherthanthose

which,serveasdirectors,supervisorsandseniormanagers;individuallyorjointly,holdmorethan

5%ofthesharesof listedissuer),and thevotingresults willbe disclosedpromptly, soasto

practically protect the minority interests and ensure all shareholder, especially the minority

shareholders,canfullyexercisetheirrightsasshareholders.

2.TheCompanyandcontrollingshareholders:

The Company has independent business and independent management capability. The

Companyanditscontrollingshareholdersoweindependentbusiness,personnel,assets,organsand

finance.Duringtheperiod,controllingshareholderabidebyrequirementofArticleofAssociation

and Management System of Related Transactions, strictly regulate their behaviors, and no

controllingshareholderhasdirectlyorindirectlyintervenedintheCompany‘spolicy-makingand

businessactivitiesbeyondthegeneralmeetingofstockholders,nocapitalorassetsoftheCompany

occupiedbycontrollingshareholderanditsaffiliateseither.

3.Thedirectorsandboardofdirectors

BoardMeetingarerevokeandopeninlinewiththeregulationofCompanyLawandArticle

ofAssociationstrictly,votingandinformationdisclosureproceduresappliancewithrelevantrules.

AlldirectorsoftheCompanycarryoutworkaccordingto―RulesofProcedureoftheBoard‖and

―IndependentDirectorSystem‖,seriouslyattendtheboardofdirectorsandshareholders‘meeting,

exerciseobligationsbythelawandfaithfullyperformtheirdutiesvigorously,positivelyparticipate

intrainingsofrelatedknowledgeopenbyShenzhenStockExchangeandSecuritiesBureau,and

getfamiliarwithrelatedlawsandregulations.Independentdirectorsfollowclosetothelineof

InstructionofSettingUpIndependentDirectorsSystem inListedCompanies and Independent

DirectorSystem, take an activepartin decision-making ofthe Companyand presenta prior

approval and independent opinions for related transactions and major events, bring out the

functionsofindependentdirectors.

InthePeriod,BoardoftheCompanysettingupfourspecialcommitteesincludingstrategy,

remunerationandappraisal,auditandnomination,eachspecialcommitteerespectivelyundertakes

thefunctionsofdiscussion,policymaking,supervisionandassessmentaccordingtotherelevant

working instruction, and plays important role in improving the scientific decision-making,

decision-makingefficiencyandqualityfortheBoard.

4.Supervisorsandboardofsupervisors

The Companyconvened and held meetingof supervisors in strict compliance with the

CompanyLawandArticlesofAssociation,andthevotingandinformationdisclosureprocedures

of supervisors‘meeting complied with relevant requirements. The 8th session of board of

supervisorsconsisted or fivesupervisors,two of whom are staff supervisor,the numberand

constitution of which met applicable laws and regulations. Our supervisors can carefully

performed their duties including presenting at general meeting and meeting of the board of

directorsinaccordancetotheRulesofProceduresofBoardofSupervisors,toexercisesupervision

overtheboardofdirectors‘decision-makingprocedures,subjectstobeproposedandouroperation

inlaw,toreviewtheperiodicreportspreparedbytheBoardandformwrittenauditopinionin

respect thereof and to make effective supervision over our material transactions, connected

transaction,financial position as well as the legality and compliance of the performanceby

directorsandseniormanagementandissueindependentopinionsinrespectthereof.

5.Theperformanceappraisalandincentiveandconstraintmechanism

The Company owes and continues to improve fair-ness and transparency performance

appraisalstandardsandincentiveandconstraintmechanismfordirectors,supervisorsandsenior

management,theengagementofmanagersoftheCompanyisopenandtransparentandmeetsthe

provisionsoflawsandregulations.

6.Thestakeholders

TheCompanyfullyrespectsandmaintainsthelegitimaterightsandinterestsofstakeholders;

strengthencommunicationandnegotiationwitheachother,realizesthecoordinationandbalance

ofinterestsforallpartiesincludingsociety,shareholders,companyandstaff,pushesforwardthe

sustainable,steadyandharmoniousdevelopmentoftheCompanytogether.

7.Theinformationdisclosureandtransparency

DuringthePeriod,theCompanystrengthensmanagementofinformationdisclosure,performs

the duty of information disclosure in strict accordance with the rules of related laws and

regulations,RulesGoverningthestocklistedonShenzhenStockExchange(2014Reversion)and

―ManagementSystemofInformationDisclosure‖,andappointsSecuritiesTimes,ChinaSecurities

Journal,HongKongCommercialDailyandJuchaoWebsite()forinformation

disclosuremedial;asforthemajorun-disclosedinsideinformation,exercisestrictlyconfidential

proceduresandcontrollingpersonswithinsideinformationkowned.TheCompanyperformduty

in aspect of truthfully, accurately, timely and completely discloses information, ensures all

investorsobtaintheCompany‘sinformationequallyandotherlegalinterest.

8.Investorrelationsmanagement

TheCompanyhasseriouslydonethejoboftheinvestorrelationsmanagementinaccordance

with the requirements of the "Investor Relations Management System" and "Reception and

Promotionsystem"duringthePeriod.Receivedtheconsultationandresearchoftheprofessional

institutional investors to the company, checking records for visitors and signing letter of

commitment, disclosed the "investor relations activities record" timely. At the same time,

communicated with the investors through the "interact easily" platform of Shenzhen Stock

Exchange Investor Relations; seriously received the suggestion and opinions frominvestors,

protectinterestoftheminorityinvestors,earnestlyacceptedandrepliedthecalls,faxes,andemails

fromtheinvestors;cautiouslydealtwiththemediacoverage.

(II)Isthereanydifferencebetweentheactualconditionofcorporategovernanceand

relevantregulationsaboutcorporategovernanceforlistedcompanyfromCSRC

□Yes√No

Therearenodifferencesbetweentheactualconditionofcorporategovernanceandrelevant

regulationsaboutcorporategovernanceforlistedcompanyfromCSRC.

II. Independency of the Company relative to controlling shareholders’in aspect of

businesses,personnel,assets,organizationandfinance

The Company totally separated in business, personnel, assets, institutions and financial

aspectsfromSichuanChanghong(controllingshareholder),withindependentbusinessaccounting,

responsibilityandriskandindependentbusinessoperationcapability.

1.Thebusiness:theCompanyhasanindependentandcompletebusinessaswellasoperation

ability,with specialized procurement, production, technology, marketing, management, human

resourcesandotherdepartments.Weautonomouslymanage andoperate businessonour own.

Whilethemanagementstaffareindependentfromcontrollingshareholdersandtheirsubordinate

enterprises.TheCompanyisfreefrominterferencebycontrollingshareholdersandotheraffiliates,

andthereisnodependenceoncontrollingshareholdersandotheraffiliates.

2.Thepersonnel: personnel,labor, personneland salaryof theCompanyarecompletely

independent. President, vice president, Secretary of the board of directors and other senior

management personnel are working in the Company and receive salary, not receiving any

remuneration and holding position of any except directors, supervisors in the controlling

shareholderanditssubordinateenterprises.

3.Assets:theCompanyowns placesofproductionandmanagement independentfromits

controllingshareholder,ownscompleteassetsstructure,independentproductionsystem,auxiliary

productionsystemsandsupportingfacilities,landuserights,ownershipofhousesandotherassets,

andindependentpurchaseandsalessystem.Noassetsoccupiedbycontrollingshareholdersand

otheraffiliates.

4. Institutions: the Company established organization completely independent from

controllingshareholders; thegeneral meeting,boardof directors,boardofsupervisorsand the

internalorganizationarecapableoftakingindependentaction,with nocontrollingshareholder

intervention of corporation's decision-making behavior. The Company strengthen the power

restrictionsystemviageneralmeeting,theBoard,supervisorycommittee,independentdirectors

andvarycommittees,formulatedaneffectivestructureforcorporategovernance.

5.Financialaspects:theCompanysetupindependentfinancialmanagement,andindependent

accountingsystemandfinancialmanagementsystem,independentlysettingupbankingaccount

andtaxdeclaration.

III.Horizontalcompetition

□Applicable √Notapplicable

IV.Inthereportperiod,theCompanyheldannualshareholders’generalmeetingand

extraordinaryshareholders’generalmeeting

1.AnnualShareholders’GeneralMeetinginthereportperiod

Ratioof

Sessionof Type investor Date Dateofdisclosure Indexofdisclosure

meeting participati

on

First Juchao

Extraordinary Extraordinary Website—(

General General 34.48% 2016-4-6 2016-4-7.com.cn) ―Resolution

Meetingof Meeting NoticeofFirstextraordinary

2016 generalmeetingof2016‖

No.:2016-037

AGMof2015 AGM 34.03% 2016-5-4 2016-5-5Juchao

Website—(

.com.cn) ―Resolution

NoticeofAnnualGeneral

Meetingof2015‖No.:

2016-046

Juchao

Second Website—(

Extraordinary Extraordinary .com.cn) ―Resolution

General General 31.74% 2016-12-13 2016-12-14NoticeofSecond

Meetingof Meeting extraordinarygeneral

2016 meetingof2016‖No.:

2015-077

2.Requestforextraordinarygeneralmeetingbypreferredstockholderswhosevoting

rightsrestore

□Applicable√Notapplicable

V.Responsibilityperformanceofindependentdirectors

(i)Theattendingofindependentdirectors

to

Boardmeetingsandgeneralmeeting

Theattendingofindependentdirectors

Timesof Timesof Absentthe

Independent Boardmeeting Timesof attendingby Timesof Timesof Meetingfor

Director supposedto presentin communicatio entrusted Absence thesecond

attendinthe person n presence timeinarow

reportperiod (Y/N)

GanShengdao 13 1 12 0 0 否

RenJia 13 0 13 0 0 否

LuYingjin 13 1 12 0 0 否

Timespresentedinshareholders‘

general meeting byindependentGanShengdao:1times RenJia:2times LuYingjin:onetime

directors

ExplanationofabsenttheBoardMeetingforthesecondtimeinarow:

NoindependentdirectorsabsenttheBoardMeetingforthesecondtimeinarow

(ii)Objectionforrelevanteventsfromindependentdirectors

Whetherindependentdirectorscomeupwithobjectionaboutcompany‘srelevantmattersor

not

□Yes√No

Independentdirectorshasnoobjectionsforrelevanteventsinreportingperiod

(iii)Otherexplanationaboutresponsibilityperformanceofindependentdirectors

Whethertheopinionsfromindependentdirectorshavebeenadoptedornot

√Yes□No

Explanationonrecommendationsadoptedorun-adopted:

Duringthereportperiod,theindependentdirectorsofthe8thsessionoftheBoard,Mr.Gao

Shengdao, Mr. Ren Jia and Mr. Lu Yingjin, faithfully performed theirduties, and prudently,

earnestlyanddiligentlyexercisedtheirrightsasindependentdirectorsinstrictaccordancewith

―CorporationLaw‖,―SecuritiesLaw‖,―GuidanceontheEstablishmentofIndependentDirector

System in Listed Companies‖ of China Securities Regulatory Commission, ―Stock listing

Rules‖(Revisedin2014)ofShenzhenStockExchange,―ArticlesofAssociation‖,―Independent

DirectorSystem‖,―AnnualReportWorkingSystemofIndependentDirector‖,andrulesofrelated

lawsandregulations,notinfluencedbythemajorshareholders,actualcontrollers,orotherunits

and individuals having a stake in the Company, actively attended the general meeting of

shareholdersandboardmeeting,madeindependentopinionsonrelatedmatters,gavereasonable

suggestionstotheproductionandmanagementandthebusinessdevelopmentoftheCompany,

gavefull playto the role asindependent directors, and maintained the legitimate rights and

interestsofshareholdersoftheCompany,especiallythemediumandsmallshareholders.

1.DeepenunderstandingoperationoftheCompany.Independentdirectorstakeadvantageof

attendingtheshareholdersmeetingandBoardmeetings,fullyunderstandthesituationofoperation

oftheCompany,listentothereportsofbusinessstatusandoperationfromthemanagement.While

indeliberatedtherelatedtransactions,independentdirectorsareaccreditedandissuedopinionson

theBoardMeeting;asfortheotherpropsoalsthatneedtodecidedbytheBoard,suchasbusiness

development,financialoperationsandriskcontrolling,relevantmaterialsarewell-deliberatedby

independentdirectors,afterreport,theyissuedindependentopinionsandeffectivelypromotedthe

scientificandobjectivityofdecisionsoftheboardofdirectors.

(2)Positivereinforce capacitateprofessional.Independent directorsactively joinedin the

training activities for directors, supervisors and senior management held by the supervision

organization, studied relevant laws and regulations, deepened their understanding to relevant

regulations, especially the regulations involving corporate governance structure and rights

protectionforshareholderswithpublicshares,soastostrengthenandimprovetheirprotective

capabilitiesfortheCompanyand shareholders‘rights and interests,and form theideologyof

consciouslyprotectingtheshareholderswithpublicshares.

(3)Diligentlyperformtheirduties.Intheprocessofestablishmentanddisclosurefor2016

annualreport,theindependentdirectors,Mr.GanShengdao,Mr. RenJia andMr.LuYingjin,

positivelyperformedtheirduties,gavefullplaytotheirindependentrolesintheannualreports,

carefullylistenedthemanagement‘sreportabouttheannualbusinessconditionanddevelopment

ofmajoreventsanddidnecessaryfieldvisits,directlymetandcommunicatedwiththeCertified

Public Accountants for annual report and internal control auditing in the audit process, and

diligentlyperformedtheirdutiesastheindependentdirectors

Inreporting period,independentdirectors propose opinions ontheBoard, and details of

suggestionsas:

Dated Items Agree/against Disclosureindex

2016-03-07 Independentopiniononrelevantproposalof Agreed JuchaoWebsite

the17thsessionof8thBOD ()

2016-03-19 Independentopiniononrelevantproposalof Agreed JuchaoWebsite

the18thsessionof8thBOD ()

2016-03-25 Independentopiniononrelevantproposalof Agreed JuchaoWebsite

the19thsessionof8thBOD ()

2016-07-29 Independentopiniononrelevantproposalof Agreed JuchaoWebsite

the23rdsessionof8thBOD ()

Independentopiniononprivateplacementto

management from controlling subsidiary JuchaoWebsite

2016-09-21 ZhongkeMeilingCryogenicTechnologyCo., Agreed ()

Ltd.andTheCompanywaivingthepriorityof

purchasing

2016-10-18 Independentopiniononrelevantproposalof Agreed JuchaoWebsite

the26thsessionof8thBOD ()

2016-11-26 Independentopiniononrelevantproposalof Agreed JuchaoWebsite

the27thsessionof8thBOD ()

VI.ResponsibilityperformanceofsubordinatespecialcommitteeoftheBoardinreport

period

(I)ResponsibilityperformanceforstrategycommitteeoftheBoard

Inaccordancewiththerequirementsoftherelevantlawsand regulationsoftheCompany

LawandtheListingRulesoftheShenzhenStockExchangeandtherelevantrequirementsofthe

CSRCandtheShenzhenStockExchange,theStrategicCommitteeundertheBoardofDirectorsof

thecompanyhasstrictlyfollowedtheprovisionsoftheArticlesofAssociationandtheWorking

RulesoftheStrategicCommitteeoftheBoardofDirectors,strictlyperformedtheirduties,and

offeredproposalsand carriedout positiveguidesforthecompany'sstrategicdevelopmentand

foreigninvestments,thespecificsituationisasfollows:

OnJanuary6, 2016, theStrategic Committee convenedthe 4th meetingof the Strategy

Committeeofthe8thBoardofDirectorswhichconsideredandapprovedtheProposalonInvesting

andBuildingChangmeiScienceandTechnologyCo.,Ltd.Seedetailson―(i)Performanceofduty

oftheStrategicCommitteeoftheBoardofDirectors‖in―VIPerformanceofdutyofthespecial

committees of theBoard of Directorsduring thereporting period‖ in ―Section IX Corporate

Governance‖ of the company‘s 2015 Annual Report which the company has disclosed at

,2016.

OnMarch 22, 2016, theStrategic Committee convenedthe 5th meetingof the Strategy

Committeeofthe8thBoardofDirectorswhichhasconsideredandapproved theProposalonthe

DevelopmentPlanoftheCompanyin2016,theProposalontheCapitalIncreaseoftheSubsidiary

- Zhongshan Changhong Electric Co., Ltd. to Changhong Ruba Trading Company(Private)

LimitedandtheProposalonjointinvestmentsoftheSubsidiaries-ZhongshanChanghongand

ChanghongAirConditioningin theEstablishmentofIndonesianSubsidiary.Seedetailson―(i)

PerformanceofdutyoftheStrategicCommitteeoftheBoardofDirectors‖in―VIPerformanceof

dutyofthespecialcommitteesoftheBoardofDirectorsduringthereportingperiod‖in―Section

IX Corporate Governance‖ of the company‘s 2015 Annual Report which the company has

disclosedat,2016.

OnNovember23,2016,theStrategicCommitteeconvenedthe6thmeetingoftheStrategy

Committeeofthe8thBoardofDirectorswhichhasconsideredandapprovedtheProposalonthe

Subsidiary-HongYuan EarthEnergyHeatPumpTechnologyCo.,Ltd.toSetupBranchOffices

andInvestintheConstructionofProductionBaseforEarthEnergyandHeatPumpProducts,the

ProposalontheSubsidiary-ZhongshanChanghongElectricCo.,Ltd.toInvestandEstablisha

Wholly-ownedSubsidiary, andtheProposalontheSubsidiary-GuangdongChanghongRidian

TechnologyCo.,Ltd.toInvestandEstablishaWholly-ownedSubsidiary.

According to the business development needs and market demands of the company's

subsidiary-HongYuan EarthEnergyHeatPumpTechnologyCo.,Ltd.(hereinafterreferredtoas

"HeatPumpCompany"),ithasbeenagreedthatHeatPumpCompanysetsupHongYuan Earth

EnergyHeatPumpTechnologyCo.,Ltd.GuangdongBranchinNantouTown,ZhongshanCity,

Guangdong Province (tentative name, and ultimately subject to industrial and commercial

registration),andthisbranchactsastheimplementationsubjectoftheproject,invests14,972,000

Yuan to buildtheproductionbase forearthenergyheat pumpproducts soasto expandthe

productioncapacityofHeatPumpCompanyandeffectivelysatisfythemarket'sneeds.Ithasbeen

agreedtosubmittheinvestmenttotheBoardofDirectorsforconsideration.

Accordingtotheoperationanddevelopmentneedsofthecompany'ssubsidiary-Zhongshan

Changhong,andinordertointegratevarioustypesofsupplychainresources,reduceoperating

costs,andfurtherexpandtheoverseassalesscaleofthecompany'sair-conditioningproductsand

others,ithas beenagreedthatZhongshan Changhong invests1 millionYuan in Zhongshan,

Guangdongtosetuptrade-basedwholly-ownedsubsidiary-ZhongshanChanghongTradingCo.,

Ltd.(tentativename,andultimatelysubjecttoindustrialandcommercialregistration)toengagein

productimportandexporttradingbusiness.Ithasbeenagreedtosubmittheinvestmenttothe

BoardofDirectorsforconsideration.

Accordingtotheoperationanddevelopmentneedsofthecompany'ssubsidiary-Guangdong

ChanghongRidianTechnologyCo.,Ltd.(hereinafterreferredtoas"RidianCompany"),andin

orderto integratevarious typesof supplychainresources, reduceoperating costs,and further

expandtheoverseassalesscaleofthecompany'ssmallhouseholdapplianceproducts,ithasbeen

agreed that Ridian Company invests 1 million Yuan in Zhongshan, Guangdong to set up

trade-basedwholly-ownedsubsidiary-ZhongshanHonglingTradingCo.,Ltd.(tentative name,

andultimatelysubjecttoindustrialandcommercialregistration)toengageinproductimportand

exporttradingbusiness.IthasbeenagreedtosubmittheinvestmenttotheBoardofDirectorsfor

consideration.

OnMarch 18, 2017, theStrategic Committee convenedthe 7th meetingof the Strategy

Committeeofthe8thBoardofDirectorswhichhasconsideredandapprovedtheProposalonthe

DevelopmentPlanoftheCompanyin2017,theProposalontheCompanytoInvestandBuilda

ProductionBase forProducing 2,000,000SetsofWashingMachines,andtheProposalon the

CompanytojointlyinvestwithCandyHooverGroupS.r.l.toEstablishaJointVentureCompany

forWashingMachines.

Accordingto thecompany'smedium andlong term developmentstrategy, thecommittee

memberscombinedwith themacroeconomicsituation andindustrystatusand summarizedthe

annual work situation in 2016, discussed and established the company‘s business ideas and

businessplansin2017,andfurtherensuredthe realizationofthecompany‘smediumandlong

termdevelopmentstrategictargets.

Accordingtothecompany'sstrategicdevelopmentplanandcombinedwiththecompany's

businessdevelopmentneeds,inorder tomakeupforweaknessin researchand development,

manufacturingcapacityofthewashingmachineindustry, ithasbeenagreedthatthecompany

investsnotmorethan371,210,000Yuantobuildaproductionbasethatcanproduce2,000,000sets

ofautomaticwashingmachines.Thecompletionofthisprojectwillpromotethedevelopmentof

thecompany'swashing machineindustry, enhancethecompetitiveness, profitabilityandfuture

sustainable developmentmomentum of washingmachine products, itfits with the company's

long-termstrategicdevelopmentneeds.IthasbeenagreedtosubmittheinvestmenttotheBoardof

Directorsforconsideration.

(3)Accordingtothecompany'sdevelopmentstrategy,andinordertoexpandthemarketsize

ofMeilingwashingmachineproductsanenhancethebrandinfluenceofMeilingwashingmachine

products, it has been agreed that the company and Candy Hoover Group Srl. that has the

internationalsuperiorresourcesinresearchanddevelopment,technology,channelsandoverseas

customersjointlyinvest150millionYuan tosetupMeilingKadi(China)WashingMachineCo.,

Ltd.(pre-approved name, and ultimatelysubject to thename approved by theindustrial and

commercialbureau)tosellwashingmachineproducts,ofwhichthecompanyinvests90million

Yuanwithitsownfunds,accountingfor60%oftheregisteredcapital,CandyGroupinvests60

millionYuanwithitsownfunds,accountingfor40%oftheregisteredcapital.Ithasbeenagreedto

submittheinvestmenttotheBoardofDirectorsforconsideration.

(II)ResponsibilityperformanceforauditcommitteeoftheBoard

AuditcommitteeoftheBoard performedits functionsofsupervision andexaminationto

maintaintheindependenceofauditioninauditingforyearof2016accordingtotherequirements

ofrelatedlawsandregulationssuchasCompanyLawandRulesGoverningtheListingofStocks

onShenzhenStockExchangeandrelatedrequirementsofSecuritiesRegulatoryCommissionand

ShenzhenStockExchangebyabidingofArticlesofIncorporation,ImplementingRegulationsof

AuditCommitteeofBoardoftheDirectors,andAnnual WorkRulesofAudit Committee,the

detailsareasfollows:

1.On29January2016,the―FinancialStatementReportforyearof2015andArrangementof

InternalControlAuditing‖and―Un-audited FinancialAccountingStatementfor yearof2015‖

weredeliberatedandapprovedin9thsessionof8thauditcommitteeoftheBoard.Foundmore

details in ―(II) Responsibility performance for audit committee of the Board‖ of ―VI.

Responsibilityperformance of subordinate special committee of the Board in report period‖

carriedin ―Section IX. CorporateGovernance‖ disclosedin Annual Report 2015,released on

JuchaoWebsite()dated25March2016.

2.On3March2016,the10thsessionof8thauditcommitteeoftheBoarddeliberatedthefirst

draftofAnnualReport2015,afterapreliminaryauditopinionissuedfromShineWingCPA(LLP).

Foundmoredetailsin―(II)ResponsibilityperformanceforauditcommitteeoftheBoard‖of―VI.

Responsibilityperformance of subordinate special committee of the Board in report period‖

carriedin ―Section IX. Corporate Governance‖disclosed inAnnual Report2015, releasedon

JuchaoWebsite()dated25March2016.

3.OnMarch13,2016,theauditcommitteeheldthe11thsessionofthe8thauditcommitteeof

theboard o which reviewed and approved "The Company's 2015 Annual Audited Financial

Reports", "2015 Internal ControlAudit Report", "Summaryreport aboutthe company's2015

annual audit work taken up by ShineWing Certified Public Accountants", "Motion on

reappointmentoftheauditinstitutionfor2016annualfinancialreportandinternalcontrolsandits

payment" and "Motion on the company to carry out forward foreign exchange transaction

business",andagreedtosubmittheabovemotionstotheboardofdirectorsforconsideration.

4.On22April2016,the―FinancialStatementof1Qof2016‖wasdeliberatedandapproved

in12thsessionof8thauditcommitteeoftheBoard,theun-auditedfinancialstatementpresenta

real,accurateandcompletedfinancialstatusandoperationresultsoftheCompanyfor1Qof2016.

Thefinancialstatementsof1Qof2016agreetosubmitforapprovalintheBoard.

5.On17July2016, the―FinancialStatementofSemi-annual2016‖ wasdeliberatedand

approvedin13thsessionof8thauditcommitteeoftheBoard,theun-auditedfinancialstatement

presentareal,accurateandcompletedfinancialstatusandoperationresultsoftheCompanyfor

semi-annualof2016.Thefinancialstatementsofsemi-annual2016agreetosubmitforapprovalin

theBoard.

6.On14October2016,the―FinancialStatementof3Q2016‖wasdeliberatedandapproved

in14thsessionof8thauditcommitteeoftheBoard,theun-auditedfinancialstatementpresenta

real,accurateandcompletedfinancialstatusandoperationresultsoftheCompanyfor3Qof2016.

Thefinancialstatementof3Q2016agreetosubmitforapprovalintheBoard.

7.On24January2017,the―FinancialStatementReportforyearof2016andArrangementof

InternalControlAuditing‖and―Un-audited FinancialAccountingStatementfor yearof2016‖

weredeliberatedandapprovedin15thsessionof8thauditcommitteeoftheBoard,theun-audited

financialstatementpresentedanobjectifiedfinancialstatusandoperationresultsforyearof2016

basically.

8.On3March2017,theauditcommitteeheldthe16thsessionofthe8thauditcommittee

aftertheShineWingCertifiedPublicAccount(LLP)issuedpreliminaryauditopinion.Reviewed

theauditingdraftoffinancialreportforyearof2016,proposedspecificopinions;membersof

auditcommitteecommunicatedwithcertifiedpublicaccountantwhowasresponsibleforaudition

ofthecompany,thecertifiedpublicaccountantwhowasberesponsibleforannualauditionofthe

companyreportedrelatedmattersandadjustedmattersduringtheauditiontotheauditcommittee,

andmatters ofthecompanyneeds tobe adjustedhavebeenadjusted accordingto adjustment

opinionsofthecertifiedpublicaccountantwhowasresponsibleforannualaudition.Theaudit

committeereadthefirstdraftofauditedfinancialaccountingstatementsfor2016ofthecompany

accordingtoauditionconditionknownfromcertifiedpublicaccountantwhowasresponsiblefor

annual audition and production operation condition and financial performances reported by

managementlevelofthecompany,consideredthattheannualfinancingaccountingstatementsfor

2016auditedpreliminarilybytheShineWingCertifiedPublicAccountcantruly,correctlyand

completelyreflecttheoperationconditionofthecompany,andconfirmedthepreliminaryaudit

opinionsoffinancingaccountingstatementsofthecompanyissuedbytheShineWingCertified

PublicAccount.

9.On18March2016,the17thsessionofthe8thauditcommitteeoftheBoarddeliberated

and approved the followed 5 proposals as‖ Audited Financial Statement Report of 2016‖,

―AuditingReportofInternalControlforyearof2016‖,SummaryReportonAuditingWorksfor

yearof2016from ShineWingCertifiedPublicAccount‖,―Auditing Institution forFinancial

Reportof 2017 and Internal Control Auditing Re-engagement and Remuneration Paid‖, and

―OpeningBusinessof ForwardExchange‖,andagreedto submittheseauditinginstitutions to

boardofthedirectorsoftheCompanyfordeliberation.

(III)ResponsibilityperformancefornominationscommitteeoftheBoard

Thenominationscommitteeundertheboardofdirectorspracticallyperformedtheirdutieson

thebasisofrequirementsoflawsandregulationsof―CompanyLaw‖and―RulesGoverningthe

ListingofStockson ShenzhenStockExchange‖and relatedrequirementsofChinaSecurities

RegulatoryCommissionandShenzhenStockExchange,andinstrictaccordancewith―Articlesof

Association‖,―ImplementationRulesofNominationsCommitteeoftheBoard‖,inthereporting

period,thenominations committeereviewedandmaderecommendationstotheengagedsenior

managementthatneededtobesubmittedtotheboardforconsiderationandnomination.

OnMarch 22,2016, thenominationcommitteeheld its thirdmeetingof thenomination

committeeoftheeighthboardofdirectors,themeetingreviewedandapproved"Motiononthe

qualificationexaminationofnon-independentdirectorcandidatesplannedtobeby-electedbythe

company'seighthboardofdirectors"thatthenon-independentdirectorcandidatesfortheeighth

board of directors recommended by the company's controlling shareholders are qualified in

accordancewithrelevantprovisionsofthe"CompanyLaw", "ArticlesofAssociation"and the

ChinaSecuritiesRegulatoryCommissionwhoarenotdeterminedtohavelimitedaccess tothe

market by China Securities Regulatory Commission, and the educational background, work

experience,professional competence and professionalquality of thenon-independent director

candidates meet the job qualifications. We agreed to nominate Mr. Xu Bangjun to be the

non-independentdirectorcandidateoftheCompany'stheeighthboardofdirectorsandsubmitto

theboardofdirectorsforconsideration.

(IV) Responsibility performance for remuneration and appraisal committee of the

board

Inline with relevantlaws and regulation of Company Law and ―Rules Governing the

ListingofStocksonShenzhenStockExchange‖aswellasrequirementfromCSRCandShenzhen

Stock Exchange, remunerationand appraisal committee of theBoard, strictly follow rules of

―ArticleofAssociation‖and―ImplementationRulesofremunerationandappraisalcommitteeof

theBoard‖, in thereporting period, thecommittee proposed suggestions on theperformance

evaluationstandardsand incentive&restraint mechanismfordirectors,supervisorsandsenior

executives, and review the appraisal and remuneration of directors, supervisors and senior

executives,accrualanddistributionforperformanceincentivefundincluded.Moredetailsareas:

OnMarch16,2016,the3rdmeetingoftheRemunerationandAppraisalCommitteeofthe8th

Board of Directors was convened. The meeting reviewed and approved the "Appraisal and

PaymentofRemunerationofDirectorsandSeniorExecutivesintheYear2015".Seedetailson"

（iiii）Performance of duty of the Remuneration and Appraisal Committee of theBoard of

Directors‖in―VIPerformanceofdutyofthespecialcommitteesoftheBoardofDirectorsduring

thereportingperiod‖ in ―Section IXCorporateGovernance‖ ofthe company‘s―2015 Annual

Report‖whichthecompanyhasdisclosedat,2016.

2.OnMarch18,2017,thefourthmeetingoftheRemunerationandAppraisalCommitteeof

the 8th Board of Directors was convened, the meeting has considered and approved the

RemunerationAssessmentandPaymentofDirectorsandSeniorExecutivesoftheCompanyin

2016,andProposalonWithdrawing2016Annual PerformanceIncentiveFund,and issuedthe

followingcomments:

(1)Thecommitteehasassessedandreviewedtheremunerationandpaymentofthedirectors

andseniormanagementofthecompanyin2016,andconsideredthattheallowancesreceivedby

theindependentdirectorsofthecompanyshouldbepaidaccordingtotheallowancesapprovedby

theshareholders' general meeting; the remuneration received by the senior executives of the

companyshouldbepaidinstrictaccordancewiththecompany'sremunerationassessmentsystem,

theremunerationinformationdisclosedbytheCompanyistrue,accurateand completewhich

conforms to the requirements of China Securities Regulatory Commission‘s ―Information

DisclosureContentandFormatoftheCompanyPubliclyIssuesSecuritiesNo.2-contentsand

formatofannualreport(2016Revision)‖.

Accordingtotheremunerationassessmenttoseniorexecutivesofthecompanyandcombined

withthecommentsoftheRemunerationandAppraisalCommittee,theBoardofDirectorsofthe

companyhasreviewedandapprovedtheremunerationassessmentandpaymentofdirectorsand

seniorexecutivesinthe2016annualreportofthecompany.

Accordingto thelatest AccountingStandardsforBusinessEnterprisesNo.9-Employee

CompensationoftheMinistryofFinancerevisedin2014,thecompany'saccountingpoliciesand

theprovisionsofIncentivePlan,aftercalculation,andinaccordancewiththefinancialstatements

andoperatingconditionsofthecompanyauditedin2016,thecompanyhasfulfilledthetermsof

theannualperformanceincentivefundin2016,ithasbeenagreedthatthecompanywithdrawsthe

performanceincentivefundof24,182,150.92Yuan inaccordancewith10%oftheauditednet

profitsin2016(thenetprofitinabovetermsandwithdrawingindicatorsreferstothenetprofit

attributabletotheshareholdersoflistedcompany).Atthesametime,accordingtotheAccounting

StandardsforBusinessEnterprisesNo.9-EmployeeCompensationofMinistryofFinanceandthe

relevant accounting policies of the company, the Company's performance incentive fund

withdrawnin2016shallbeincludedinthecurrentprofitsandlossesandithasbeenagreedto

submitthe―ProposalonWithdrawingtheCompany‘s2016AnnualPerformanceIncentiveFund‖

totheBoardofDirectorsforconsideration.

VII.WorksfromSupervisoryCommittee

WhethertheCompanyhasrisksornotinreportingperiodthatfoundinsupervisoryactivity

fromsupervisorycommittee

□Yes√No

Supervisorycommitteehasnoobjectionaboutsupervisioneventsinreportingperiod

VIII.Appraisalandincentivetoseniormanagement

(I)EvaluationmechanismforseniorexecutivesoftheCompany

TheCompanyformulated―ImplementationRulesofRemunerationandAppraisalCommittee

oftheBoard‖,theremunerationandappraisalcommitteeestablished2016annualcompensation

andperformancemanagementplanfortheseniormanagementoftheCompanyinaccordancewith

themainscope,responsibilities,importanceoftheirmanagementpositionsandtheremuneration

level of other relevant enterprises and positions; the plan included but not limited to key

performanceindicator(KPI),performanceappraisalstandards,proceduresandmajorprogramsand

systemsofmainappraisalsystem,rewardandpunishment;investigatedtheexecutionofdutyof

theseniormanagementandimplementedannualperformanceappraisaltothem.Afterreviewedby

thecommittee,submittotheBoardforapproval.

At the end of the year, combined with the senior management‘s working reports and

self-evaluationof2016,andaccordingtotheperformanceevaluationcriteriaandprocedures,the

Compensation and Appraisal Committee has carried out performance appraisal to the senior

management‘skeyperformanceindication(KPI)in2016andotherrelatedindicators;proposedthe

remunerationamountandperformanceassessmentmethodsforseniormanagementaccordingto

thejobperformanceevaluationresultsandremunerationdistributionpolicy,andreportedtothe

BoardofDirectorsforapproval.

(II)Establishmentandimplementationofperformanceincentivemechanism

1. TheCompany formulateda mid-long term incentive and restraint mechanism, that is

―ImplementationPlanofAnnualPerformanceIncentiveFund‖in2012,on9August2012and28

August2012,thePlanwasdeliberatedandapprovedin16thmeetingof7thsessionoftheBoard

and2ndextraordinarygeneralmeeting2012.Detailsoftheaforesaideventcanbefoundinthe

announcement(No.:2012-028andNo.:2012-035)releasedonappointedmediaSecuritiesTimes,

ChinaSecuritiesJournal,HongKongCommercialDailyandJuchaoWebsite()

dated10August2012and29August2012.Implementationoftheannualperformanceincentive

fund found more in― Implementation of Annual Performance Incentive Fund‖ of ―XV

Implementationofthecompany‘sstockincentiveplan,employeestockownershipplanorother

employeeincentives‖in―SectionV.ImportantEvent‖carriedintheReport.

IX.InternalControl

1.DetailsofmajordefectsinICappraisalreportthatfoundinreportingperiod

□Yes√No

TherearenodetailsofmajordefectsinICappraisalreportinreportingperiod

(ii)AppraisalReportofInternalControl

Dateofevaluationreportofinternalcontrol2017-3-30

disclosed(Full-text)

IndexofevaluationreportofinternalcontrolJuchaowebsite()

disclosed(Full-text)

Theratioofthetotalassetsofunitsincludedin

thescopeofevaluationaccountingforthetotal 97.31%

assetsonthecompany'sconsolidatedfinancial

statements

The ratio of the operating income of units

includedinthescopeofevaluationaccounting 97.24%

for the operatingincome on the company's

consolidatedfinancialstatements

DefectsEvaluationStandards

Category FinancialReports Non-financialReports

1.Materialdefect:defect:severallyorjointlywithotherdefects,Occurrenceofthefollowingsshall

willleadtomaterialwrongreportinginfinancialreportsbeingnotbe deemed as material defect,

able to prevented or found or rectified in a timely manner.otherwise as major defect or

Occurrenceofthefollowingswillbedeemedasmaterialdefect: generaldefectsubjecttothelevel

1.inefficiencyofenvironmentcontrol; ofinfluence.

2.fraudofdirectors,supervisorsandseniormanagement; 1. breach of national laws,

3.Theexternalauditorfindsmaterialwrongreportingincurrentregulations or regulatory

financial statement, while the Company has not found suchdocuments;

Qualitative reportingduringitsoperation; 2.procedureformakingsignificant

criteria 4.Thematerialdefectidentifiedandreportedtothemanagementdecisionsisnotscientific;

failstoberectifiedinareasonabletimeperiod; 3.absenceofsystemmayleadto

5.The audit committee and audit department of theCompanyinvalidsystem;

exerciseinvalidsupervisionuponinternalcontrol; 4.Materialormajordefectsarenot

6.Otherdefectswhichmayaffectfinancialstatementuserstomakelikelytorectify;

correctjudgment. 5. Large negativeeffects on the

2.Majordefect:severallyorjointlywithotherdefects,willleadtocompanyanddisclosedintheform

wrongreportinginfinancialreportsbeingnotabletopreventedorofannouncement;

foundorrectifiedinatimelymannerwhichstillneedsattention6. Other issues that materially

fromthemanagementthoughitdoesn‘treachorexceedmaterialaffecttheCompany.

defectasdescribedabove.Occurrenceofthefollowingswillbe

deemedasmajordefect:

(1) Financial losses caused by guaranteeing and investing in

securities and financial derivatives transactions and disposing

propertyrightandstockrightwithoutauthorization;

(2) The company's financial staff or other relevant business

personnelhaveunclearpowersandresponsibilitiesorjobchaos,or

aresuspectedofbeinginvolvedineconomicorjob-relatedcrimes

andhavebeentransferredtothejudiciary;

(3) Punishmentorseverely negativeimpacts onthe company's

imageduetothebiasimplementationofthepolicyoraccounting

errors,etc.;

(4)Financiallossescausedbydestroying,concealing,oraltering

the importantoriginal evidences at will, such as invoices and

checks,etc.

(5)Cashincomeisnot enteredintotheaccountbook,orpublic

funds are deposited in private account or "private coffer" is

establishedbybreakingtherules.

3.Generaldefect:otherinternalcontrolrelateddefectsthatdonot

constitutematerialdefectsormajordefect.

1.Proportionofdirectproperty

loss in total operating income:

Material defect: wrong reporting

≧0.1%; Major defect: 0.05%≤

1.Proportion ofpotentialwrongreportingintotaloperatingwrong reporting＜0.1%; General

income:Materialdefect:wrongreporting≧0.5%;Majordefect:defect:wrongreporting＜0.05%.

0.1%≤wrongreporting＜0.5%;Generaldefect:wrongreporting＜2.Proportionofdirectproperty

0.1%. loss in total profit: Material

2. Proportion of potential wrong reporting in total profit:defect: wrong reporting≧10%;

Material defect:wrong reporting≧10%; Majordefect: 5%≤Major defect: 5%≤ wrong

Quantitative wrongreporting＜10%;Generaldefect:wrongreporting＜5%. reporting＜10%; General defect:

standard 3. Proportion of potential wrong reporting in total assets:wrongreporting＜5%.

Materialdefect:wrongreporting ≧0.5%;Majordefect:0.1%≤3.Proportionofdirectproperty

wrongreporting＜0.5%;Generaldefect:wrongreporting＜0.1%. loss in total assets: Material

4.Proportionofpotentialwrongreportingintotalowners’ defect: wrong reporting≧0.2%;

equity:Materialdefect:wrongreporting≧0.5%;Majordefect: Major defect: 0.1%≤ wrong

0.1%≤wrongreporting＜0.5%;Generaldefect:wrongreporting＜ reporting＜ 0.2%; General defect:

0.1%. wrongreporting＜0.1%.

4.Proportionofdirectproperty

lossintotalowners’equity:

Materialdefect:wrongreporting

≧0.2%;Majordefect:0.1%≤

wrongreporting＜0.2%;General

defect:wrongreporting＜0.1%.

Amount of

significant 0

defects in

financialreports

Amount of

significant

defects in 0

non-financial

reports

Amount of

importantdefects 0

in financial

reports

Amount of

importantdefects 0

in non-financial

reports

X.Auditingreportofinternalcontrol

√Applicable□Notapplicable

DeliberationsectionofauditingreportofIC

Weconsiderthat:inallmajoraspects,HefeiMeilingCo.,Ltd.hasefficiencyinfinancialreportofinternal

controldated31December2016accordingtoBasicStandardsofInternalControlforEnterpriseandrelevant

regulations.

Disclosure details of auditDisclosed

reportofinternalcontrol

Disclosuredateofauditreport2017-3-30

ofinternalcontrol(full-text)

Index of audit report ofJuchaoWebsite:(ww.cninfo.com.cn)

internalcontrol(full-text)

Opinion type of auditingStandardunqualified

reportofIC

whether the non-financialNo

reporthadmajordefects

WhetherCPAcarriesoutqualifiedopinionforauditreportofinternalcontrolornot

□Yes √No

WhethertheopinionsareconsistentinauditreportofinternalcontrolcarryingoutbyCPA

andtheself-evaluationreportoftheBoardornot

√Yes□No

SectionXCorporateBonds

Whetherthe Companyhasa corporation bondsthat issuancepubliclyand listed onstock

exchangeandwithoutdueonthedatewhenannualreportapprovedforreleasedorfailtocashin

fullondue

□Yes √No

SectionXIFinancialReport

I.AuditReport

Typeofauditopinion Standardunqualifiedauditor‘sreport

Dateofauditreportsigning 2017-3-28

Auditauthority ShineWingCertifiedPublicAccountants(LLP)

AuditingfileNo. XYZH/2017CDA40093

CPA‘sname HeYong,XiaCuiqiong

Auditors’Report

XYZH/2017CDA40093

TotheShareholdersofHefeiMeilingCo.,Ltd.:

WehaveauditedtheCompanyingconsolidatedandparentCompany‘sfinancialstatementsof

HefeiMeilingCo.,Ltd.(―theCompany‖),includingbalancesheetof31December2016andprofit

statement,andcashflowstatement,andstatementonchangesofshareholders‘equityfortheyear

ended,andnotestothefinancialstatementsfortheyearended.

I.Management’sresponsibilityforthefinancialstatements

ManagementoftheCompanyisresponsibleforprepareandpresentfinancialstatementofthe

Company,which including:(1)Preparefinancialstatementswithfairpresentationinlinewith

Accounting Standards for Business Enterprises; (2) Designing, executed and maintaining

necessaryinternalcontrolinordertopreventfundamentalmiscarryinginfinancialstatementfrom

fraudulentorerrors.

II.Auditor'sresponsibility

Ourresponsibilityistoexpressanauditopiniononthesefinancialstatementsbasedonour

audit.WeperformedourauditinaccordancewithChineseCertifiedPublicAccountants'Auditing

Standards.Thosestandardsrequireustocomplywithprofessionalethics,andtoplanandperform

ourauditsoastoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrom

materialmisstatement.

Anaudit involvesperformingproceduresto obtainauditevidenceabouttheamountsand

disclosures of the financial statements. The selective audit procedures depend on auditor's

judgment, including the evaluation of the risk of material misstatement of the consolidated

financialstatementsduetofraudsorerrors.Whenevaluatingrisk,weconsiderinternalcontrol

relatedtofinancialstatements,inordertodesignauditingprocedures,butnotforthepurposeof

expressinganopinionontheinternalcontrol'seffectiveness.Anauditalsoincludesassessingthe

appropriateness of the accounting policies adopted and the reasonableness of the accounting

estimatesmadebymanagement, aswellasevaluatingtheoverall presentationofthefinancial

statements.

Webelievethatwehaveobtainedsufficientandappropriateauditevidencestoprovideabasis

forourauditopinion.

III.Auditingopinion

Inouropinion,theCompany‘sfinancialstatementshavebeenpreparedinaccordancewith

theEnterprisesAccountingStandardsandEnterprisesAccountingSystem,andtheyfairlypresent

thefinancialstatusoftheCompanyandofitsparentcompanyasof31December2016andits

operationresultsandcashflowsfortheyearended.

ShineWingCertifiedPublicAccountants(LLP) ChineseCPA:HeYong

ChineseCPA:XiaCuiqiong

Beijing,P.R.C 28March2017

II.FinancialStatement

StatementinFinancialNotesarecarriedinRMB/CNY

1.Consolidatedbalancesheet

PreparedbyHefeiMeilingCo.,Ltd.

2016-12-31

InRMB

Item Closingbalance Openingbalance

Currentassets:

Monetaryfunds 4,058,869,234.63 2,135,189,879.15

Settlementprovisions

Capitallent

Financialliabilitymeasured

byfairvalueandwithvariation 12,060,213.30

reckonedintocurrentgains/losses

Derivativefinancialliability

Notesreceivable 1,421,429,723.73 1,286,332,682.74

Accountsreceivable 1,118,960,552.49 1,338,396,321.83

Accountspaidinadvance 134,706,488.38 68,041,820.73

Insurancereceivable

Reinsurancereceivables

Contract reserve of

reinsurancereceivable

Interestreceivable 2,645,494.32 1,238,199.65

Dividendreceivable

Otherreceivables 39,553,919.44 39,494,835.30

Purchase restituted finance

asset

Inventories 1,974,526,734.86 1,554,946,209.51

Dividedintoassetsheldfor

sale

Non-currentassetduewithin 12,625,340.00

oneyear

Othercurrentassets 1,454,346,297.42 539,101,578.44

Totalcurrentassets 10,229,723,998.57 6,962,741,527.35

Non-currentassets:

Loansandpaymentson

behalf

Finance asset available for 17,000,000.00 17,000,000.00

sales

Held-to-maturityinvestment

Long-term account

receivable

Long-termequityinvestment 81,643,631.37 74,239,547.01

Investmentproperty 13,275,631.40 14,084,213.51

Fixedassets 1,204,093,169.72 1,267,493,931.98

Constructioninprogress 107,037,409.95 56,504,880.99

Engineeringmaterial

Disposaloffixedasset 75,788,138.47 75,773,138.47

Productivebiologicalasset

Oilandgasasset

Intangibleassets 613,969,271.63 593,449,698.85

Expense on Research and 45,023,750.60 53,344,827.72

Development

Goodwill

Long-term expenses to be 1,132,075.48

apportioned

Deferredincometaxasset 84,264,603.65 78,435,177.86

Othernon-currentasset 34,615,630.00 44,221,416.00

Totalnon-currentasset 2,277,843,312.27 2,274,546,832.39

Totalassets 12,507,567,310.84 9,237,288,359.74

Currentliabilities:

Short-termloans 288,343,724.73 58,680,093.19

Loanfromcentralbank

Absorbing deposit and

interbankdeposit

Capitalborrowed

Financialliabilitymeasured

byfairvalueandwithvariation 559,249.58

reckonedintocurrentgains/losses

Derivativefinancialliability

Notespayable 2,635,051,740.30 2,172,064,923.79

Accountspayable 2,331,899,310.82 1,604,075,191.50

Accounts received in 390,935,440.46 295,604,800.16

advance

Selling financial asset of

repurchase

Commission charge and

commissionpayable

Wagepayable 189,592,039.00 115,297,429.40

Taxespayable 59,849,032.13 70,530,483.54

Interestpayable 1,617,352.01 214,328.89

Dividendpayable 2,545,801.23 2,200,499.91

Otheraccountspayable 622,580,323.43 643,567,087.33

Reinsurancepayables

Insurancecontractreserve

Securitytradingofagency

Securitysalesofagency

Dividedintoliabilityheldfor

sale

Non-current liabilities due 272,202,590.10 11,153,067.68

within1year

Othercurrentliabilities

Totalcurrentliabilities 6,795,176,603.79 4,973,387,905.39

Non-currentliabilities:

Long-termloans 38,908,788.00 243,004,866.40

Bondspayable

Including:preferredstock

Perpetualcapital

securities

Long-termaccountpayable

Long-termwagespayable 29,696,403.85 38,211,463.86

Specialaccountspayable 1,400,000.00

Projectedliabilities 331,575,430.79 338,125,014.55

Deferredincome 142,919,562.49 132,890,618.54

Deferred income tax 1,809,032.00

liabilities

Othernon-currentliabilities

Totalnon-currentliabilities 546,309,217.13 752,231,963.35

Totalliabilities 7,341,485,820.92 5,725,619,868.74

Owner‘sequity:

Sharecapital 1,044,597,881.00 763,739,205.00

Otherequityinstrument

Including:preferredstock

Perpetualcapital

securities

Capitalpublicreserve 2,687,961,060.65 1,529,183,876.13

Less:Inventoryshares

Othercomprehensiveincome 3,474,546.95 -2,280,500.61

Reasonablereserve

Surpluspublicreserve 391,029,420.33 367,066,994.18

Provisionofgeneralrisk

Retainedprofit 968,097,382.98 817,667,480.44

Totalowner‘sequity attributable 5,095,160,291.91 3,475,377,055.14

toparentcompany

Minorityinterests 70,921,198.01 36,291,435.86

Totalowner‘sequity 5,166,081,489.92 3,511,668,491.00

Totalliabilitiesandowner‘s 12,507,567,310.84 9,237,288,359.74

equity

LegalRepresentative: Liu Tibin Personin chargeofaccounting works:ZhangXiaolong

Personinchargeofaccountinginstitute:LuoBo

2.BalanceSheetofParentCompany

PreparedbyHefeiMeilingCo.,Ltd.

InRMB

Item Closingbalance Openingbalance

Currentassets:

Monetaryfunds 3,071,362,771.31 1,654,499,494.28

Financialliabilitymeasured

byfairvalueandwithvariation 12,060,213.30

reckonedintocurrentgains/losses

Derivativefinancialliability

Notesreceivable 1,053,598,721.93 828,061,004.44

Accountsreceivable 1,006,701,894.37 943,328,995.97

Accountpaidinadvance 106,947,474.25 302,567,578.88

Interestreceivable

Dividendsreceivable

Otherreceivables 26,742,423.95 53,255,891.89

Inventories 1,017,090,374.81 869,593,027.59

Dividedintoassetsheldfor

sale

Non-currentassetsmaturing

withinoneyear

Othercurrentassets 1,427,283,451.40 522,617,641.34

Totalcurrentassets 7,721,787,325.32 5,173,923,634.39

Non-currentassets:

Available-for-salefinancial 17,000,000.00 17,000,000.00

assets

Held-to-maturityinvestments

Long-termreceivables

Long-termequity 992,282,289.21 840,634,581.05

investments

Investmentproperty 11,332,015.32 11,805,903.99

Fixedassets 861,163,999.99 890,217,780.00

Constructioninprogress 19,478,121.20 20,365,686.01

Projectmaterials

Disposaloffixedassets 43,494,954.71 43,479,954.71

Productivebiologicalassets

Oilandnaturalgasassets

Intangibleassets 430,435,091.82 438,227,183.15

Research and development 12,797,092.26 2,162,829.06

costs

Goodwill

Long-termdeferredexpenses

Deferredincometaxassets 69,138,686.26 70,170,515.47

Othernon-currentassets

Totalnon-currentassets 2,457,122,250.77 2,334,064,433.44

Totalassets 10,178,909,576.09 7,507,988,067.83

Currentliabilities:

Short-termborrowings 261,843,724.73 34,411,720.00

Financialliabilitymeasured

byfairvalueandwithvariation

reckonedintocurrentgains/losses

Derivativefinancialliability

Notespayable 1,734,774,950.13 1,395,443,530.25

Accountspayable 1,521,019,717.86 1,114,807,199.47

Accountsreceivedin 104,205,506.34 145,333,375.62

advance

Wagepayable 57,714,577.87 42,847,802.62

Taxespayable 25,677,906.64 20,425,867.86

Interestpayable 1,617,352.01 214,328.89

Dividendpayable 2,545,801.23 2,200,499.91

Otheraccountspayable 634,561,307.52 686,009,980.82

Dividedintoliabilityheldfor

sale

Non-currentliabilitiesdue 257,750,238.18 7,487,315.76

within1year

Othercurrentliabilities

Totalcurrentliabilities 4,601,711,082.51 3,449,181,621.20

Non-currentliabilities:

Long-termloans 4,751,000.00 199,341,900.00

Bondspayable

Including:preferredstock

Perpetualcapital

securities

Long-termaccountpayable

Long-termwagespayable 29,696,403.85 38,211,463.86

Specialaccountspayable

Projectedliabilities 331,575,430.79 338,125,014.55

Deferredincome 64,601,290.18 68,050,877.23

Deferredincometax 1,809,032.00

liabilities

Othernon-currentliabilities

Totalnon-currentliabilities 432,433,156.82 643,729,255.64

Totalliabilities 5,034,144,239.33 4,092,910,876.84

Owners‘equity:

Sharecapita 1,044,597,881.00 763,739,205.00

Otherequityinstrument

Including:preferredstock

Perpetualcapital

securities

Capitalpublicreserve 2,753,017,007.10 1,497,987,446.59

Less:Inventoryshares

Othercomprehensiveincome

Reasonablereserve

Surplusreserve 390,811,254.65 366,848,828.50

Retainedprofit 956,339,194.01 786,501,710.90

Totalowner‘sequity 5,144,765,336.76 3,415,077,190.99

Totalliabilitiesandowner‘s 10,178,909,576.09 7,507,988,067.83

equity

LegalRepresentative: Liu Tibin Personin chargeofaccounting works:ZhangXiaolong

Personinchargeofaccountinginstitute:LuoBo

3.ConsolidatedProfitStatement

PreparedbyHefeiMeilingCo.,Ltd.

InRMB

Item CurrentPeriod LastPeriod

I.Totaloperatingincome 12,526,710,867.49 10,754,200,188.12

Including:Operatingincome 12,526,710,867.49 10,754,200,188.12

Interestincome

Insurancegained

Commission charge and

commissionincome

II.Totaloperatingcost 12,355,268,931.56 10,639,235,185.22

Including:Operatingcost 10,028,393,422.32 8,626,957,829.63

Interestexpense

Commission charge and

commissionexpense

Cashsurrendervalue

Netamountofexpenseof

compensation

Netamountofwithdrawalof

insurancecontractreserve

Bonus expense of guarantee

slip

Reinsuranceexpense

Taxandextras 137,857,822.93 87,849,554.99

Salesexpenses 1,855,396,448.81 1,574,408,045.18

Administrationexpenses 472,146,980.73 431,057,033.53

Financialexpenses -139,879,189.92 -102,034,012.45

Lossesofdevaluationofasset 1,353,446.69 20,996,734.34

Add:Changingincomeoffair 11,500,963.72 81,170.00

value(Lossislistedwith―-‖)

Investmentincome(Lossis 14,302,482.67 -12,043,591.71

listedwith―-‖)

Including:Investmentincome

onaffiliatedcompanyandjoint -1,724,205.46 -15,983,663.17

venture

Exchangeincome(Lossis

listedwith―-‖)

III.Operatingprofit (Lossis 197,245,382.32 103,002,581.19

listedwith―-‖)

Add:Non-operatingincome 57,917,677.26 45,525,813.85

Including:Disposalgains 4,155,568.27 1,772,955.83

ofnon-currentasset

Less:Non-operatingexpense 5,949,509.51 115,465,594.34

Including:Disposalloss 5,411,002.25 6,221,387.00

ofnon-currentasset

IV.TotalProfit (Lossislisted 249,213,550.07 33,062,800.70

with―-‖)

Less:Incometaxexpense 29,044,015.72 11,226,998.22

V.Netprofit(Netlossislistedwith 220,169,534.35 21,835,802.48

―-‖)

Netprofitattributableto 220,216,680.96 27,104,893.56

owner‘sofparentcompany

Minorityshareholders‘gainsand -47,146.61 -5,269,091.08

losses

VI.Netafter-taxofother 7,798,783.78 1,288,320.82

comprehensiveincome

Netafter-taxofother

comprehensiveincomeattributable 5,755,047.56 982,398.38

toownersofparentcompany

(I)Othercomprehensive

incomeitemswhichwillnotbe

reclassifiedsubsequentlytoprofit

ofloss

1.Changesasaresult

ofre-measurementofnetdefined

benefitplanliabilityorasset

2.Shareoftheother

comprehensiveincomeofthe

investeeaccountedforusingequity

methodwhichwillnotbe

reclassifiedsubsequentlytoprofit

andloss

(II)Othercomprehensive

incomeitemswhichwillbe 5,755,047.56 982,398.38

reclassifiedsubsequentlytoprofit

orloss

1.Shareoftheother

comprehensiveincomeofthe

investeeaccountedforusingequity

methodwhichwillbereclassified

subsequentlytoprofitorloss

2.Gainsorlosses

arisingfromchangesinfairvalue

ofavailable-for-salefinancialassets

3.Gainsorlosses

arisingfromreclassificationof

held-to-maturityinvestmentas

available-for-salefinancialassets

4.Theeffecthedging

portionofgainsorlossesarising

fromcashflowhedging

instruments

5.Translation

differencesarisingontranslationof 5,755,047.56 982,398.38

foreigncurrencyfinancial

statements

6.Other

Netafter-taxofother

comprehensiveincomeattributable 2,043,736.22 305,922.44

tominorityshareholders

VII.Totalcomprehensiveincome 227,968,318.13 23,124,123.30

Totalcomprehensiveincome

attributabletoownersofparent 225,971,728.52 28,087,291.94

Company

Totalcomprehensiveincome

attributabletominority 1,996,589.61 -4,963,168.64

shareholders

VIII.Earningspershare:

(i)Basicearningspershare 0.2717 0.0355

(ii)Dilutedearningspershare 0.2717 0.0355

Asfor the merger under the same control, the combined partyhas profit of0.00Yuan achieved before

combinationintheyearwhilegains615,594.18Yuaninlastyear.

LegalRepresentative: LiuTibin Personin chargeof accountingworks: ZhangXiaolong

Personinchargeofaccountinginstitute:LuoBo

4.ProfitStatementofParentCompany

PreparedbyHefeiMeilingCo.,Ltd.

InRMB

Item CurrentPeriod LastPeriod

I.Operatingincome 7,446,086,755.52 6,454,683,327.03

Less:Operatingcost 6,433,627,521.78 5,501,158,020.89

Taxandextras 73,861,322.33 46,198,522.96

Salesexpenses 688,401,472.30 628,028,964.03

Administration 208,401,227.95 200,756,534.30

expenses

Financialexpenses -98,934,716.78 -76,986,515.39

Lossesofdevaluationof 2,102,466.99 1,884,756.30

asset

Add:Changingincomeof 12,060,213.30 81,170.00

fairvalue(Lossislistedwith―-‖)

Investmentincome(Loss 83,282,277.41 -4,275,552.10

islistedwith―-‖)

Including:Investment

incomeonaffiliatedcompanyand 3,156,876.73 -7,735,291.56

jointventure

II.Operatingprofit (Lossis 233,969,951.66 149,448,661.84

listedwith―-‖)

Add:Non-operatingincome 29,275,529.00 19,562,063.49

Including:Disposal 269,387.27 14,913.06

gainsofnon-currentasset

Less:Non-operatingexpense 2,534,291.62 86,901,951.21

Including:Disposalloss 2,440,092.05 5,910,524.05

ofnon-currentasset

III.TotalProfit (Lossislisted 260,711,189.04 82,108,774.12

with―-‖)

Less:Incometaxexpense 21,086,927.51 10,009,893.74

IV.Netprofit(Netlossislisted 239,624,261.53 72,098,880.38

with―-‖)

V.Netafter-taxofother

comprehensiveincome

(I)Othercomprehensive

incomeitemswhichwillnotbe

reclassifiedsubsequentlytoprofit

ofloss

1.Changesasaresult

ofre-measurementofnetdefined

benefitplanliabilityorasset

2.Shareoftheother

comprehensiveincomeofthe

investeeaccountedforusing

equitymethodwhichwillnotbe

reclassifiedsubsequentlytoprofit

andloss

(II)Othercomprehensive

incomeitemswhichwillbe

reclassifiedsubsequentlytoprofit

orloss

1.Shareoftheother

comprehensiveincomeofthe

investeeaccountedforusing

equitymethodwhichwillbe

reclassifiedsubsequentlytoprofit

orloss

2.Gainsorlosses

arisingfromchangesinfairvalue

ofavailable-for-salefinancial

assets

3.Gainsorlosses

arisingfromreclassificationof

held-to-maturityinvestmentas

available-for-salefinancialassets

4.Theeffecthedging

portionofgainsorlossesarising

fromcashflowhedging

instruments

5.Translation

differencesarisingontranslation

offoreigncurrencyfinancial

statements

6.Other

VI.Totalcomprehensiveincome 239,624,261.53 72,098,880.38

VII.Earningspershare:

(i)Basicearningspershare 0.2956 0.0944

(ii)Dilutedearningsper 0.2956 0.0944

share

LegalRepresentative: Liu Tibin Personin chargeofaccounting works:ZhangXiaolong

Personinchargeofaccountinginstitute:LuoBo

5.ConsolidatedCashFlowStatement

PreparedbyHefeiMeilingCo.,Ltd.

InRMB

Item CurrentPeriod LastPeriod

I.Cashflowsarisingfrom

operatingactivities:

Cashreceivedfromselling

commoditiesandprovidinglabor 11,699,243,669.11 9,821,704,004.35

services

Netincreaseofcustomer

depositandinterbankdeposit

Netincreaseofloanfrom

centralbank

Netincreaseofcapital

borrowedfromotherfinancial

institution

Cashreceivedfromoriginal

insurancecontractfee

Netcashreceivedfrom

reinsurancebusiness

Netincreaseofinsured

savingsandinvestment

Netincreaseofamountfrom

disposalfinancialassetsthat

measuredbyfairvalueandwith

variationreckonedintocurrent

gains/losses

Cashreceivedfrominterest,

commissionchargeand

commission

Netincreaseofcapital

borrowed

Net increase of returned

businesscapital

Write-backoftaxreceived 335,919,734.52 233,659,161.10

Other cash received 59,658,793.72 41,648,588.29

concerningoperatingactivities

Subtotal of cash inflow arising 12,094,822,197.35 10,097,011,753.74

fromoperatingactivities

Cash paid for purchasing

commoditiesand receivinglabor 8,789,463,121.16 7,699,848,052.80

service

Net increase of customer

loansandadvances

Netincreaseofdepositsin

centralbankandinterbank

Cash paid for original

insurancecontractcompensation

Cash paid for interest,

commission charge and

commission

Cash paid for bonus of

guaranteeslip

Cash paid to/for staff and 1,223,290,043.44 1,169,853,434.73

workers

Taxespaid 449,049,753.97 406,349,536.96

Other cashpaid concerning 647,628,383.15 591,589,544.02

operatingactivities

Subtotal ofcashoutflowarising 11,109,431,301.72 9,867,640,568.51

fromoperatingactivities

Netcashflowsarisingfrom 985,390,895.63 229,371,185.23

operatingactivities

II.Cashflowsarisingfrom

investingactivities:

Cashreceivedfrom 500,000,000.00 400,980,332.00

recoveringinvestment

Cashreceivedfrom 9,533,550.19 3,459,739.46

investmentincome

Netcashreceivedfrom

disposaloffixed,intangibleand 28,393,920.60 2,749,368.50

otherlong-termassets

Net cash received from

disposalofsubsidiariesandother 23,314,758.79

units

Other cash received 133,141,780.06 131,723,837.54

concerninginvestingactivities

Subtotalofcashinflowfrom 694,384,009.64 538,913,277.50

investingactivities

Cash paid for purchasing

fixed, intangible and other 134,749,360.71 93,486,096.59

long-termassets

Cashpaidforinvestment 1,490,783,872.00 987,050,116.00

Netincreaseofmortgaged

loans

Netcashreceivedfrom

subsidiariesandotherunits

obtained

Other cashpaid concerning 4,027,616.05 10,000,000.00

investingactivities

Subtotalofcashoutflowfrom 1,629,560,848.76 1,090,536,212.59

investingactivities

Netcashflowsarisingfrom -935,176,839.12 -551,622,935.09

investingactivities

III.Cashflowsarisingfrom

financingactivities

Cash received from 1,570,791,736.49 4,900,000.00

absorbinginvestment

Including: Cash received 28,791,737.65 4,900,000.00

from absorbing minority

shareholders‘ investment by

subsidiaries

Cashreceivedfromloans 1,613,844,864.58 1,700,864,359.43

Cash received from issuing

bonds

Other cash received 3,451.80 387.13

concerningfinancingactivities

Subtotalofcashinflowfrom 3,184,640,052.87 1,705,764,746.56

financingactivities

Cashpaidforsettlingdebts 1,351,232,591.45 1,899,924,701.39

Cashpaid fordividendand

profit distributing or interest 67,342,850.57 54,515,544.51

paying

Including:Dividendand

profitofminorityshareholder

paidbysubsidiaries

Other cashpaid concerning 324,871.81 44,445,436.35

financingactivities

Subtotal of cash outflow from 1,418,900,313.83 1,998,885,682.25

financingactivities

Netcashflowsarisingfrom 1,765,739,739.04 -293,120,935.69

financingactivities

IV.Influenceoncashandcash

equivalentsduetofluctuationin 48,983,386.20 27,436,730.45

exchangerate

V.Netincreaseofcashandcash 1,864,937,181.75 -587,935,955.10

equivalents

Add: Balance of cash and

cash equivalents at the period 2,121,161,238.01 2,709,097,193.11

-begin

VI.Balanceofcashandcash 3,986,098,419.76 2,121,161,238.01

equivalentsattheperiod-end

Legal Representative: Liu Tibin Person in charge of accounting works: ZhangXiaolong

Personinchargeofaccountinginstitute:LuoBo

6.CashFlowStatementofParentCompany

PreparedbyHefeiMeilingCo.,Ltd.

InRMB

Item CurrentPeriod LastPeriod

I.Cashflowsarisingfrom

operatingactivities:

Cashreceivedfromselling

commoditiesandprovidinglabor 6,286,987,522.89 5,593,115,621.61

services

Write-backoftaxreceived 194,271,770.99 137,031,380.36

Othercashreceived 28,856,943.31 19,541,500.17

concerningoperatingactivities

Subtotalofcashinflowarising 6,510,116,237.19 5,749,688,502.14

fromoperatingactivities

Cashpaidforpurchasing

commoditiesandreceivinglabor 5,059,846,568.26 4,949,806,686.98

service

Cashpaidto/forstaffand 499,890,356.04 462,425,101.84

workers

Taxespaid 131,211,995.78 146,873,149.10

Other cashpaid concerning 308,996,738.10 280,746,768.10

operatingactivities

Subtotal ofcashoutflowarising 5,999,945,658.18 5,839,851,706.02

fromoperatingactivities

Netcashflowsarisingfrom 510,170,579.01 -90,163,203.88

operatingactivities

II.Cashflowsarisingfrom

investingactivities:

Cashreceivedfrom 511,480,198.00 400,000,000.00

recoveringinvestment

Cashreceivedfrom 84,794,863.59 3,459,739.46

investmentincome

Netcashreceivedfrom

disposaloffixed,intangibleand 1,919,834.50 2,456,048.50

otherlong-termassets

Net cash received from

disposalofsubsidiariesandother 5,798,619.62

units

Other cash received 117,071,741.57 101,399,102.52

concerninginvestingactivities

Subtotalofcashinflowfrom 721,065,257.28 507,314,890.48

investingactivities

Cash paid for purchasing

fixed, intangible and other 65,695,722.77 48,147,261.30

long-termassets

Cashpaidforinvestment 1,546,450,000.00 927,000,000.00

Net cash received from

subsidiariesandotherunits

Other cashpaid concerning 70,692,821.70 16,917,669.77

investingactivities

Subtotalofcashoutflowfrom 1,682,838,544.47 992,064,931.07

investingactivities

Netcashflowsarisingfrom -961,773,287.19 -484,750,040.59

investingactivities

III.Cashflowsarisingfrom

financingactivities

Cashreceivedfrom 1,541,999,998.84

absorbinginvestment

Cashreceivedfromloans 1,583,917,936.22 1,588,236,225.91

Cashreceivedfromissuing

bonds

Other cash received 162,688,163.19 179,702,763.86

concerningfinancingactivities

Subtotalofcashinflowfrom 3,288,606,098.25 1,767,938,989.77

financingactivities

Cashpaidforsettlingdebts 1,323,059,487.45 1,796,140,016.74

Cashpaid fordividendand

profit distributing or interest 65,467,602.28 52,330,306.51

paying

Other cashpaid concerning 78,461,124.88 101,955,781.82

financingactivities

Subtotal of cash outflow from 1,466,988,214.61 1,950,426,105.07

financingactivities

Netcashflowsarisingfrom 1,821,617,883.64 -182,487,115.30

financingactivities

IV.Influenceoncashandcash

equivalentsduetofluctuationin 43,156,715.34 21,453,537.47

exchangerate

V.Netincreaseofcashandcash 1,413,171,890.80 -735,946,822.30

equivalents

Add: Balance of cash and

cash equivalents at the period 1,654,499,494.28 2,390,446,316.58

-begin

VI.Balanceofcashandcash 3,067,671,385.08 1,654,499,494.28

equivalentsattheperiod-end

LegalRepresentative:LiuTibin Personinchargeofaccountingworks: ZhangXiaolong

Personinchargeofaccountinginstitute:LuoBo

7.StatementofChangesinOwners’Equity(Consolidated)

PreparedbyHefeiMeilingCo.,Ltd.

ThisPeriod

InRMB

ThisPeriod

Owners‘equityattributabletoparentcompany

Other

Item equityinstrument Less: Totalowners‘

Perpetu Inven Other Reasona Minority

Share capital Capitalreserve tory comprehensiv ble Surplus Provisionof Retained interests equity

Preferr al reserve generalrisk profit

ed capital Other share eincome reserve

stock securiti s

es

I.Balanceat

theendofthe 763,739,205.00 1,529,183,876.13 -2,280,500.61 367,066,994.18 817,667,480.4436,291,435.86 3,511,668,491.00

lastyear

Add:

Changes of

accounting

policy

Error

correction of

thelastperiod

Enterprise

combineunder

the same

control

Other

II. Balance at

the beginning 763,739,205.00 1,529,183,876.13 -2,280,500.61 367,066,994.18 817,667,480.4436,291,435.86 3,511,668,491.00

ofthisyear

III. Increase/

Decreaseinthis

year (Decrease 280,858,676.00 1,158,777,184.52 5,755,047.56 23,962,426.15 150,429,902.5434,629,762.15 1,654,412,998.92

is listed with

―-‖)

(i) Total

comprehensive 5,755,047.56 220,216,680.96 1,996,589.61 227,968,318.13

income

(ii) Owners‘

devoted and 280,858,676.00 1,158,777,184.52 32,984,351.87 1,472,620,212.39

decreased

capital

1.Common

shares invested 280,858,676.00 1,259,874,046.76 27,867,909.83 1,568,600,632.59

byshareholders

2. Capital

invested by

holdersofother

equity

instruments

3. Amount

reckoned into

owners equity

with

share-based

payment

4.Other -101,096,862.24 5,116,442.04 -95,980,420.20

(III) Profit 23,962,426.15 -69,786,778.42 -351,179.33 -46,175,531.60

distribution

1. Withdrawal

of surplus 23,962,426.15 -23,962,426.15

reserves

2. Withdrawal

of general risk

provisions

3. Distribution

for owners (or -45,824,352.27 -351,179.33 -46,175,531.60

shareholders)

4.Other

(IV) Carrying

forwardinternal

owners‘equity

1. Capital

reserves

conversed to

capital (share

capital)

2. Surplus

reserves

conversed to

capital (share

capital)

3. Remedying

loss with

surplusreserve

4.Other

(V)Reasonable

reserve

1. Withdrawal

in the report

period

2.Usageinthe

reportperiod

(VI)Others

IV. Balance at

the end ofthe 1,044,597,881.00 2,687,961,060.65 3,474,546.95 391,029,420.33 968,097,382.9870,921,198.01 5,166,081,489.92

reportperiod

LastPeriod

InRMB

LastPeriod

Owners‘equityattributabletotheparentCompany

Other

Item equityinstrument Less: Totalowners‘

Perpetu Inven Other Reasona Minority

Sharecapital Capitalreserve tory comprehensiv ble Surplus Provisionof Retained interests equity

Preferr al reserve generalrisk profit

ed capital Other share eincome reserve

stock securiti s

es

I.Balanceatthe

end of the last 763,739,205.00 1,549,009,939.03 -3,262,898.99 359,857,106.14 843,596,827.2216,678,477.92 3,529,618,656.32

year

Add:

Changes of

accountingpolicy

Error

correctionofthe

lastperiod

Enterprise

combine under

thesamecontrol

Other

II.Balanceatthe

beginningofthis 763,739,205.00 1,549,009,939.03 -3,262,898.99 359,857,106.14 843,596,827.2216,678,477.92 3,529,618,656.32

year

III. Increase/

Decrease in this -19,826,062.90 982,398.38 7,209,888.04 -25,929,346.7819,612,957.94 -17,950,165.32

year(Decreaseis

listedwith―-‖)

(i) Total

comprehensive 982,398.38 27,104,893.56 -4,963,168.64 23,124,123.30

income

(ii) Owners‘

devoted and -19,826,062.90 24,576,126.58 4,750,063.68

decreasedcapital

1.Common

shares invested 4,900,000.00 4,900,000.00

byshareholders

2. Capital

invested by

holders of other

equity

instruments

3. Amount

reckoned into

owners equity

with share-based

payment

4Other -19,826,062.90 19,676,126.58 -149,936.32

(III) Profit 7,209,888.04 -53,034,240.34 -45,824,352.30

distribution

1.Withdrawalof 7,209,888.04 -7,209,888.04

surplusreserves

2.Withdrawalof

general risk

provisions

3. Distribution

for owners (or -45,824,352.30 -45,824,352.30

shareholders)

4.Other

(IV) Carrying

forward internal

owners‘equity

1. Capital

reserves

conversed to

capital (share

capital)

2. Surplus

reserves

conversed to

capital (share

capital)

3. Remedying

losswithsurplus

reserve

4.Other

(V)Reasonable

reserve

1.Withdrawalin

thereportperiod

2. Usage in the

reportperiod

(VI)Others

IV.Balanceatthe

endofthereport 763,739,205.00 1,529,183,876.13 -2,280,500.61 367,066,994.18 817,667,480.4436,291,435.86 3,511,668,491.00

period

Legal Representative: Liu Tibin Person in charge of accounting works: Zhang Xiaolong

Personinchargeofaccountinginstitute:LuoBo

8.StatementofChangesinOwners’Equity(ParentCompany)

PreparedbyHefeiMeilingCo.,Ltd.

ThisPeriod

InRMB

2016

Other

equityinstrument Less: Other

Item comprehenReasonable Totalowners‘

Sharecapital Perpetual Capitalreserve Inventor sive reserve Surplusreserve Retainedprofit equity

Preferred capital Other yshares

stock income

securities

I.Balanceatthe

end of thelast 763,739,205.00 1,497,987,446.59 366,848,828.50786,501,710.903,415,077,190.99

year

Add:

Changes of

accounting

policy

Error

correctionof

thelastperiod

Other

II. Balance at

thebeginningof 763,739,205.00 1,497,987,446.59 366,848,828.50786,501,710.903,415,077,190.99

thisyear

III. Increase/

Decreaseinthis 280,858,676.00 1,255,029,560.51 23,962,426.15 169,837,483.111,729,688,145.77

year (Decrease

is listed with

―-‖)

(i) Total

comprehensive 239,624,261.53 239,624,261.53

income

(ii) Owners‘

devoted and 280,858,676.00 1,259,877,498.56 1,540,736,174.56

decreased

capital

1.Common

shares invested 280,858,676.00 1,259,874,046.76 1,540,732,722.76

byshareholders

2. Capital

invested by

holdersofother

equity

instruments

3. Amount

reckoned into

owners equity

with

share-based

payment

4.Other 3,451.80 3,451.80

(III) Profit 23,962,426.15 -69,786,778.42 -45,824,352.27

distribution

1. Withdrawal

of surplus 23,962,426.15 -23,962,426.15

reserves

2.Distribution

forowners(or -45,824,352.27 -45,824,352.27

shareholders)

3.Other

(IV) Carrying

forwardinternal

owners‘equity

1. Capital

reserves

conversed to

capital (share

capital)

2. Surplus

reserves

conversed to

capital (share

capital)

3. Remedying

loss with

surplusreserve

4.Other

(V)Reasonable

reserve

1. Withdrawal

in the report

period

2.Usageinthe

reportperiod

(VI)Others -4,847,938.05 -4,847,938.05

IV. Balance at

the end of the1,044,597,881.00 2,753,017,007.10 390,811,254.65 956,339,194.015,144,765,336.76

reportperiod

Lastperiod

InRMB

Item 2015

Other

equityinstrument Less: Other

Sharecapital Capitalreserve InventorcomprehenReasonable Surplusreserve Retainedprofit Totalowners‘

Preferred Perpetual sive reserve equity

capital Other yshares income

stock securities

I.Balanceatthe

end of thelast 763,739,205.00 1,497,987,059.46 359,638,940.46767,437,070.863,388,802,275.78

year

Add:

Changes of

accounting

policy

Error

correctionof

thelastperiod

Other

II. Balance at

thebeginningof 763,739,205.00 1,497,987,059.46 359,638,940.46767,437,070.863,388,802,275.78

thisyear

III. Increase/

Decreaseinthis

year (Decrease 387.13 7,209,888.04 19,064,640.04 26,274,915.21

is listed with

―-‖)

(i) Total

comprehensive 72,098,880.38 72,098,880.38

income

(ii) Owners‘

devoted and 387.13 387.13

decreased

capital

1.Common

shares invested

byshareholders

2. Capital

invested by

holdersofother

equity

instruments

3. Amount

reckoned into

owners equity

with

share-based

payment

4.Other 387.13 387.13

(III) Profit 7,209,888.04 -53,034,240.34 -45,824,352.30

distribution

1. Withdrawal

of surplus 7,209,888.04 -7,209,888.04

reserves

2.Distribution

forowners(or -45,824,352.30 -45,824,352.30

shareholders)

3.Other

(IV) Carrying

forwardinternal

owners‘equity

1. Capital

reserves

conversed to

capital (share

capital)

2. Surplus

reserves

conversed to

capital (share

capital)

3. Remedying

loss with

surplusreserve

4.Other

(V)Reasonable

reserve

1. Withdrawal

in the report

period

2.Usageinthe

reportperiod

(VI)Others

IV. Balance at

the end of the 763,739,205.00 1,497,987,446.59 366,848,828.50786,501,710.903,415,077,190.99

reportperiod

Legal Representative: Liu Tibin Person in charge of accounting works: Zhang Xiaolong

Personinchargeofaccountinginstitute:LuoBo

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

I.Companyprofile

HefeiMeiling Co., Ltd (hereinafter referred to as ―the Company‖) is an incorporated Company

establishedandreorganizedbyHefeiMeilingRefrigeratorGeneralFactoryandapprovedonJune12

th

1992through[WanTiGaiHanZi(1992)No.039]issuedbyoriginalMechanismReformCommitteeof

AnhuiProvince.On August30th1993,through AnhuiProvincialGovernment[Wanzhenmin(1993)

No.166] andre-examination ofChina SecuritiesRegulatoryCommission, the Companymadefirst

publicissuefor30millionAsharesandtheCompanywaslistedonOct.18th,1993inShenzhenStock

Exchange.OnAugust13th,1996,theCompanywasapprovedtoissue100millionBsharestoinvestors

abroadthrough[ZhengWeiFa(1996)No.26]issuedbyChinaSecuritiesRegulatoryCommission.The

CompanywentpublicinShenzhenStockExchangeonAugust28th,1996.

State-ownedAssetsSupervision&AdministrationCommissionoftheStateCouncilapprovedsuch

transferswithDocumentGuoziChanquanNo.253in2007ReplyonMattersofHefeiMeilingGroup

Holdings Company Limited Transferring Partial State-owned Ownership, Hefei Meiling Group

Holdings Company Limited (hereinafter abbreviated as Meiling Group) transferred its holding

37,852,683sharesin82,852,683state-ownedsharesoftheCompanytoSichuanChanghongElectronic

GroupCo.,Ltd(hereinafterabbreviated asChanghongGroup),other45,000,000shares toSichuan

ChanghongElectricCo.Ltd(hereinafterabbreviatedasSichuanChanghong).OnAug15,2007,the

aboveownershipsweretransferredandCleaningCorporationLimited.

On27August2007,State-ownedAssetsSupervision&AdministrationCommissionofAnhuiProvincial

GovernmentrepliedwithDocument[WGZCQH(2007)No.309]Replyon―RelatedMattersofShare

Merger Reformof MeilingCo., Ltd.‖, agreed the Company‘s ownership split reform plan. The

Companymadeconsiderationthatnon-tradableshareholdersdeliver1.5sharestoAshareholdersper

10shares,andoriginalMeilingGroupmadeprepayment3,360,329sharesforsomenon-tradableshare

holdersasconsiderationforsplitreformplan.

On29May2008,concerning34,359,384state-ownedshares(including3,360,329sharespaidforother

non-tradableshareholdersbyoriginalMeilingGroupinsharereform)heldbyoriginalMeilingGroup,

the―NoticeofFreelyTransferofMeilingElectricsEquityheldbyMeilingGroup‖[HGZCQ(2008)No.

59]issuedfrom State-ownedAssetsSupervision&AdministrationCommissionofHefeiMunicipal,

agreestotransfertheabovesaidsharestoHefeiXingtaiHoldingGroupCo.,Ltd.(―XingtaiHolding

Co.,‖)forfree.On7August2008,the―ReplyofTransferFreelyofPartoftheSharesofHefeiMeiling

Co., Ltd.heldbyState-ownedshareholders‖[GZCQ(2007)No. 750]issuedby SASAC,agreesthe

abovesaidtransferring.

OnOctober 29,2008,ChanghongGroupCompanysignedAgreementonEquityTransferofHefei

MeilingCo.,LtdwithSichuanChanghong,inwhich32,078,846tradableA-shareswithconditional

subscription of the Company (accounting for 7.76% in total shares) held by Changhong Group

Company.On23December2008,―ReplyofTransferFreelyofPartoftheSharesofHefeiMeilingCo.,

Ltd.heldbyState-ownedshareholders‖[GZCQ(2008)No.1412]issuedbySASACagreestheabove

saidsharetransferring.

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

On24December2010,beingdeliberatedandapprovedin32ndMeetingof6thSessionoftheBoardand2nd

ExtraordinaryShareholders‘GeneralMeetingof2010aswellasapprovalofdocument[ZJXP(2010)No.

1715]fromCSRC,totally116,731,500RMBordinaryshares(Astock)wereofferingprivatelytotarget

investorswithissuepriceofRMB10.28/share.CapitalcollectingamountingtoRMB1,199,999,820after

issuingexpensesRMB22,045,500deducted,netcapitalcollectedamountingtoRMB1,177,954,320,and

paid-in capital(share capital) increased RMB 116,731,500 with capital reserve(share premium) RMB

1,061,106,088.5increased.The increasingcapitalhasbeenverifiedbyCapitalVerificationReportNo.:

［XYZH2010CDA6021］issuedfromShinwingCPACo.,Ltd.

On20June2011,thegeneralmeetingoftheCompanyconsideredandapprovedthe2010profitdistribution

plan,namelytodistributecashdividendsofRMB0.5(taxincluded)plustwosharesforeverytensharesheld

byshareholderstoallshareholders,basedonthetotalsharecapitalof530,374,449sharesasof31December

2010.ThetotalsharecapitaloftheCompanyuponprofitdistributionincreasedto636,449,338shares.The

capitalincrease wasverifiedbyAnhuiHuashenZhengdaAccounting Firmwiththeverification report

WHSZDKYZ(2011)No.141.

On26June2012,thegeneralmeetingoftheCompanyconsideredandapprovedthe2011profitdistribution

andcapitalizationofcapitalreserveplan,namelytodistributecashdividendsofRMB0.5(taxincluded)plus

twosharesforeverytensharestoallshareholderscapitalizedfromcapitalreserve,basedonthetotalshare

capitalof636,449,338sharesasof31December2011.The totalshare capitaloftheCompanyupon

implementationofcapitalizationofcapitalreserveincreasedto763,739,205sharesfrom636,449,338shares,

and was verified by Anhui Anlian Xinda Accounting Firm with the verification report

WALXDYZ(2012)No.093.

OnNovember18,2015,consideredandapprovedbythe12thmeetingofthe8thBoardofDirectorsofthe

companyandthefirstextraordinarygeneralmeetingin2016,andapprovedbythedocumentofChina

SecuritiesRegulatoryCommission[CSRCLicenseNo.(2016)1396]―Replytotheapprovalofnon-public

offeringofsharesofHefeiMeilingCo.,Ltd.‖,thecompanyhasactuallyraisedfundsof1,569,999,998.84

Yuan bynon-publicofferingofnomorethan334,042,553newsharesatfacevalueofRMB1Yuan per

shareandwithissuepricenolessthanRMB4.70pershare,after

deductingtheissuecostsof29,267,276.08Yuan,thenetamountofraisedfundsis1,540,732,722.76Yuan,

theincreasedpaid-incapital(sharecapital)ofRMB280,858,676.00Yuan,increasedcapitalreserve(share

premium) of 1,259,874,046.76 Yuan. This capital increase has been verified by No.

［XYZH2016CDA40272］capitalverification reportofShineWingCertifiedPublicAccountantsspecial

generalpartnership.

Endedas31December2016,totalsharecapitaloftheCompanyamountingto1,044,597,881shareswith

ordinarysharesinfull.Amongwhich,881,733,881sharesofA-shareaccounting84.41%intotalshares

whileB-sharewith162,864,000sharesaccounting15.59%intotalshares.Detailsharecapitalas:

Typeofstock Quantity Proportion

(I)Restrictedshares 290,301,746 27.79%

1.State-ownedshares

2.State-ownedlegalperson‘s shares 70,793,625 6.78%

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

3.Otherdomesticshares 218,508,272 20.92%

Including:Domesticlegalperson‘sshares 215,820,073 20.66%

Domesticnaturalperson‘sshares 2,688,199 0.26%

4.Foreignshares 999,849 0.09%

(II)Unrestrictedshares 754,296,135 72.21%

1.RMBOrdinaryshares 592,431,984 56.71%

2.Domesticallylistedforeignshares 161,864,151 15.50%

3.Overseaslistedforeignshares

4.Others

Totalshares 1,044,597,881 100.00%

TheCompanybelongstothemanufactureoflightindustry,andengagedintheproductionandsaleof

refrigerator, freezer and air-conditioner. Unified social credit code of the Company:

9134000014918555XK;Address: No.2163,LianhuaRoad, EconomyandTechnologyDevelopment

Zone, Hefei City; Legal Representative: Liu Tibin; register capital(paid-in capital): RMB

10,445,978,810,000;typeofcompany:limitedliabilitycompany(jointventureandlistedofTaiwan,

HongKongandMacau)BusinessScope:Manufactureofcoolingapparatus,air-conditioner,washing

machine, injection plastic machine of computer controlling, computer heater, plastic products,

packaging products and decorations. Business of self-produced products, technology export and

import-export of the raw&auxilary materials, machinery equipment, instrument and technology;

departmentsalesandtransportation

II.Scopeofconsolidatedfinancialstatement

TheCompany‘sconsolidatedfinancialstatementincluded50subsidiariesincludingSichuanChanghong

AirConditionerCO.,Ltd,ZhongshanChanghongHomeAppliancesCompanyLimitedandZhongke

Meiling Low Temperature Technology Co., Ltd, etc. As compared to previous year, Subsidiary

Changmei TechnologyCo. Ltd. andCHONGHONG MEILING ELECTRICINDONESIA,PT was

newlyincludedduetodirectinvestmentinthisyear;SubsidiaryChanghongRidianTechnologyCo.Ltd.

wasnewly includedduetoenterprisemerger underthesamecontrol; Subsidiary BengbuMeiling

AppliancesMarketingCompanyLimitedandLuoheMeilingAppliancesMarketingCompanyLimited

wereexcludedduetoliquidation;SubsidiaryHefeiMeiLingPackingCo.,Ltd.wereexcludeddueto

saleofequity.

Moredetailcanbeseenin―VII.Changesofconsolidatedscope‖and―VIII.Rightsandinterestinother

subjects‖intheNote.

III.Basisforpreparationoffinancialstatement

1.Basisforpreparation

ThefinancialstatementsoftheCompanywerepreparedinaccordancewiththeactualtransactionsand

proceedings,andrelevantregulationofAccountingStandardsforEnterprisereleasedbytheMinistryof

Finance,andwasonthebasisofsustainableoperation,andtheaccountingpolicyandestimationstated

inthe―IV.SignificantAccountingPolicyandAccountingEstimation‖.

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

2.Continuousoperation

TheCompanyrecentlyhasahistoryofprofitabilityoperationandhasfinancialresourcessupporting,

andpreparedthefinancialstatementonbasisofgoingconcernisreasonable.

IV.SignificantAccountingPolicy,AccountingEstimation

1.Statementonobservationofaccountingstandardsforenterprise

ThefinancialstatementpreparedbytheCompanyapplieswiththerequirementsofAccountingStandard

forEnterprise,andreflects thefinancial condition, operationalachievementsand cashflow ofthe

Companyeffectivelyandcompletely.

2.Accountingperiod

TheaccountingperiodoftheCompanyisthecalendardatefrom1Januaryto31December.

3.Standardcurrencyforaccounting

TheCompanytakesRMBasthestandardcurrencyforaccounting.

4. Accountantarrangement methodofbusiness combinationundercommon controlandnot under

commoncontrol

Asacquirer,theCompanymeasurestheassetsandliabilitiesacquiredthroughbusinesscombination

undercommoncontrolattheircarryingvaluesasreflectedintheconsolidatedfinancialstatementofthe

ultimatecontrolleras ofthecombination date.Capitalreserveshallbeadjustedinrespectofany

differencebetweencarryingvalueofthenetassetsacquiredandcarryingvalueofthe combination

considerationpaid.Incasethatcapitalreserveisinsufficienttooffset,theCompanywouldadjust

retainedearnings.

The acquiree‘snet identifiableassets,liabilitiesor contingent liabilitiesacquiredthrough business

combinationnotundercommoncontrolshallbemeasuredatfairvalueasoftheacquisitiondate.The

costofcombinationrepresentsthefairvalueofthecashornon-cashassetspaid,liabilitiesissuedor

committedandequitysecuritiesissuedbytheCompanyasatthedateofcombinationinconsideration

foracquiringthecontrollingpowerintheacquiree,togetherwiththe sumof anydirectlyrelated

expensesoccurred duringbusinesscombination(in caseofsuch businesscombinationas gradually

realizedthroughvarioustransactions,thecombinationcostreferstothesumofeachcostofrespective

separatetransaction).Wherethecostofthecombinationexceedstheacquirer‘sinterestinthefairvalue

oftheacquirer‘sidentifiablenetassetsacquired,thedifferenceisrecognizedasgoodwill;wherethecost

ofcombinationislowerthantheacquirer‘sinterestinthefairvalueoftheacquiree‘sidentifiablenet

assets,theCompanyshallfirstlymakefurtherreviewonthefairvaluesofthenetidentifiableassets,

liabilitiesorcontingentliabilitiesacquiredaswellasthefairvalueofthenon-cashassetsportionof

combinationconsiderationortheequitysecuritiesissuedbytheCompany.IncasethattheCompany

findsthecostofcombinationisstilllowerthantheacquirer‘sinterestinthefairvalueoftheacquiree‘s

identifiablenetassetsaftersuchfurtherreview,thedifferenceisrecognizedinnon-operatingincomefor

thecurrentperiodwhencombinationoccurs.

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

5.MeasuresonPreparationofConsolidatedFinancialStatements

TheCompanyshall putallthesubsidiariescontrolled andmainbodystructured intoconsolidated

financialstatements.

Anydifferencearisingfromtheinconformityofaccountingyearoraccountingpoliciesbetweenthe

subsidiariesandtheCompanyshallbeadjustedintheconsolidatedfinancialstatements.

Allthematerialinter-companytransactions,non-extraordinaryitemsandunrealizedprofitwithinthe

combinationscopearewritten-offwhenpreparingconsolidatedfinancialstatement.Owners‘equityof

subsidiarynotattributabletoparentcompanyandcurrentnetgainsandlosses,othercomprehensive

income and total comprehensive income attributable to minority shareholders are recognized as

non-controlling interests, minority interests, othercomprehensive income attributable to minority

shareholdersandtotal comprehensiveincome attributable tominorityshareholdersinconsolidated

financialstatementrespectively.

Asforsubsidiaryacquiredthroughbusinesscombinationundercommoncontrol,itsoperatingresults

andcashflowwillbeincludedinconsolidatedfinancialstatementsincethebeginningoftheperiod

whencombinationoccurs.Whenpreparingcomparativeconsolidatedfinancialstatement,therelevant

itemsinpreviousyear‘sfinancialstatementshallbeadjustedasifthereportingentityformedupon

combinationhasbeenexistingsincetheultimatecontrollercommencedrelevantcontrol.

Asforequityinterestsoftheinvesteeundercommoncontrolacquiredthroughvarioustransactions

which eventually formedbusiness combination, the Company shall supplement disclosureof the

accountingtreatmentinconsolidatedfinancialstatementinthereportingperiodwhencontrollingpower

isobtained.Forexample,asforequityinterestsoftheinvesteeundercommoncontrolacquiredthrough

varioustransactionswhicheventuallyformedbusinesscombination,adjustmentsshallbemadeasifthe

currentstatus hadbeenexistingwhentheultimatecontrollercommencedcontrolinconnectionof

preparingconsolidatedfinancial statement;inconnectionwithpreparingcomparativestatement,the

Companyshall consolidate therelevant assets andliabilities of the acquiree into the Company‘s

comparative consolidatedfinancial statement to the extent not earlier than the timing when the

Companyandtheacquireeareallundercontroloftheultimatecontroller,andthenetassetsincreased

duetocombinationshallbeusedtoadjustrelevantitemsunderowners‘equityincomparativestatement.

Inordertopreventdoublecomputationofthevalueoftheacquiree‘snetassets,therelevantprofitsand

losses,othercomprehensiveincomeandchangeofothernetassetsrecognizedduringtheperiodfrom

thedatewhentheCompanyacquiresoriginalequityinterestsandthedatewhentheCompanyandthe

acquireeareallunderultimatecontrolofthesameparty(whicheverislater)tothedateofcombination

inrespectofthelong-termequityinvestmentheldbytheCompanybeforesatisfactionofcombination

shallbeutilizedtooffsetthebeginningretainedearningsandcurrentgainsandlossesintheperiodas

thecomparativefinancialstatementinvolves,respectively.

As forsubsidiary acquiredthroughbusiness combinationnotunder commoncontrol,its operating

resultsandcashflowwillbeincludedinconsolidatedfinancialstatementsincetheCompanyobtains

controlling power.Whenpreparing consolidatedfinancial statement,theCompanyshalladjust the

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

subsidiary‘sfinancialstatementbasedonthefairvalueofthevariousidentifiableassets,liabilitiesor

contingentliabilitiesrecognizedasoftheacquisitiondate.

Asforequityinterestsoftheinvesteenotundercommoncontrolacquiredthroughvarioustransactions

which eventually formedbusiness combination, the Company shall supplementdisclosure of the

accountingtreatmentinconsolidatedfinancialstatementinthereportingperiodwhencontrollingpower

isobtained.Forexample,asforequityinterestsoftheinvesteenotundercommoncontrolacquired

through various transactions which eventually formed business combination, when preparing

consolidated financial statement, theCompanywould re-measure the equityinterests held inthe

acquireebeforeacquisitiondateattheirfairvalueasoftheacquisitiondate,andanydifferencebetween

thefair valueandcarryingvalueisincludedincurrentinvestmentincome.incasethat theequity

interests in acquiree held by the Company before the relevant acquisition date involves other

comprehensiveincomeatequitymethodandchangeofotherowners‘equity(otherthannetgainsand

losses,othercomprehensiveincomeandprofitdistribution),thentheequityinterestswouldtransferto

investment gains and losses for the period which the acquisition date falls upon. The other

comprehensiveincomearisingfromchangeofthenetliabilitiesornetassetsunderestablishedbenefit

schemeasacquiree‘sre-measuredsuchschemeisexcluded.

Thetransactionwithnon-controllinginteresttodisposelong-termequityinvestmentinasubsidiary

withoutlosingcontrolrightsoverthesubsidiary,thedifferencebetweentheproceedsfromdisposalof

interestsandthedecreaseofthesharednetassetsofthesubsidiaryisadjustedtocapitalpremium(share

premium).Incasecapitalreserveisnotsufficienttooffsetthedifference,retainedearningswillbe

adjusted.

Asfordisposalofpartequityinvestmentwhichleadstolosingcontrolovertheinvestee,theCompany

wouldre-measuretheremainingequityinterestsattheirfairvalueasofthedatewhentheCompany

loses control over the investee when preparing consolidated financial statement. The sum of

considerationreceivedfromdisposalofequityinterestandfairvalueoftheremainingequityinterest,

lessthenetassetsoftheoriginalsubsidiaryattributabletotheCompanycalculatedbasedontheoriginal

shareholding proportion sincethe acquisition date or thedate then consolidation commences, is

includedininvestmentgainsandlossesfortheperiodwhencontrolislost,meanwhiletooffsetgoodwill.

Othercomprehensiveincomerelatedtoequityinterestinvestmentinoriginalsubsidiariesistransferred

intocurrentinvestmentgainsandlossesuponlostofcontrol.

Ifthedisposaloftheequityinvestmentofasubsidiaryisrealizedthroughmultipletransactionsuntil

lossofcontrolandisapackagedeal,theaccountingtreatmentofthesetransactionsshouldbedealtwith

asonetransactionofdisposalofthesubsidiaryuntil loss of control. However, before the Company

losestotalcontrolofthesubsidiary, thedifferencesbetweenthe actualdisposalpriceandtheshareof

thenetassetsofthesubsidiarydisposedofineverytransactionshouldberecognizedas other

comprehensiveincomeintheconsolidatedfinancialstatements,andtransferredtoprofitorlosswhen

losingcontrol.

6.Accountingtreatmentforjointventurearrangementandjointcontrolledentity

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

ThejointventurearrangementoftheCompanyconsistsofjointcontrolledentityandjointventure.As

forjointlycontrolledentity,theCompanydeterminestheassetsheldandliabilitiesassumedseparately

as a party tothejointly controlled entity, recognizes such assetsand liabilities according to its

proportion, and recognizes relevant income and expense separately under relevant agreement or

accordingtoitsproportion.Asforasset transactionrelatingtopurchaseandsaleswiththejointly

controlledentitywhichdoesnotconstitutebusinessactivity,partofthegainsandlossesarisingfrom

suchtransactionattributabletootherparticipatorsofthejointlycontrolledentityisonlyrecognized.

7.Cashandcashequivalents

CashinthecashflowstatementcomprisestheGroup‘scash onhandanddepositsthatcanbereadily

withdrawnondemand.Cashequivalentsareshort-term,highlyliquidinvestmentsheld bytheGroup,

thatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskof

changesinvalue,includingbutnotlimitedtothefollowingswhichmeettheaforesaidconditions:debt

investmentmaturedwithinthreemonthsupontheacquisitiondate,banktimedepositwhichcanbeearly

withdrewbyservinganoticeandtransferrabledepositreceipt,etc.fortimedepositwhichcannotbe

usedforpaymentatanytime,itwouldbenoterecognizedascash;whileifcanbeusedforsuchpurpose,

itwouldberecognizedascash.Guaranteedepositoverthreemonthsinothermonetarycapitalshallnot

berecognizedascashequivalents,andthoselessthanthreemonthsarerecognizedascashequivalents.

8.Foreigncurrencybusinessandforeigncurrencyfinancialstatementconversion

(1)Foreigncurrencybusiness

Asfortheforeigncurrencybusiness,theCompanyconvertstheforeigncurrencyamountintoRMB

amountpursuanttothespotexchangerateasofthebusinessday.Asatthebalancesheetdate,monetary

itemsexpressedbyforeigncurrencyareconvertedintoRMBpursuanttothespotexchangerateasof

thebalancesheetdate.Theconversiondifferenceoccurredisrecordedintoprevailinggainsandlosses,

otherthanthedisclosurewhichismadeaccordingtocapitalizationrulesfortheexchangedifference

occurredfromthespecialforeigncurrencyborrowingsborrowedforconstructingandproducingthe

assetssatisfyingconditionofcapitalization.Asfortheforeigncurrencynon-monetaryitemsmeasured

byfairvalue,theamountisthenconvertedintoRMBaccordingtothespotexchangerateasofthe

confirmation dayfor fair value. And the conversion difference occurred duringtheprocedure is

recordedintoprevailinggainsandlossesdirectlyaschangeoffairvalue.Asfortheforeigncurrency

non-monetaryitemsmeasuredbyhistoricalcost,conversionismadewiththespotexchangerateasof

thebusinessday,withnochangeinRMBamount.

(2)Conversionofforeigncurrencyfinancialstatement

Spotexchangerateasofthebalancesheetdateisadoptedforconversionofassetsandliabilitiesin

foreigncurrencybalancesheet;asfortheitemsinstatementofowners‘equityexceptfor―Undistributed

profit‖,conversionismadepursuanttothespotexchangerateofbusinessday;incomeandexpense

itemsinincomestatementthenarealsoconvertedpursuanttothespotexchangerateoftransactionday.

Differencearisingfromtheaforementionedconversionsshallbelistedseparatelyinitemsofowners‘

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

equity.Spotexchangerateasoftheoccurrencedateofcashflowisadoptedforconversionofforeign

currencycashflow.Theamountofcashaffectedbyexchangeratemovementshallbelistedseparately

incashflowstatement.

9.Financialassetsandfinancialliabilities

(1)Financialassets

1)Classificationoffinancialassets

Inconsiderationofinvestmenttargetsandeconomicessence,theCompanygroupsthefinancialassets

ownedbyitasfourcategories,namelyfinancialassetsmeasuredbyfairvalueandwhosemovementis

recordedintoprevailinggainsandlosses,held-to-maturityinvestment,loansandaccountsreceivables,

aswellasfinancialassetsavailable-for-sale.

Financialassetsmeasuredbyfairvalueandwhosemovementisrecordedintoprevailinggainsand

lossesrepresentthefinancialassetswhichareheldmainlyfordisposalinashorttimeandlistedas

tradablefinancialassetsinthebalancesheet.

Held-to-maturityinvestmentrepresentsthenon-derivativefinancialassetswhichhasfixedmaturityday,

fixedor available-for-confirmationrecovered amount and forwhich themanagement hasdefinite

intentionandabilitytoholdtillmaturity.

Loansandaccountsreceivablesrepresentthenon-derivativefinancialassetswhichhavenoquotationin

anactivemarketandfixedoravailable-for-confirmationrecoveredamount.

Financialassetsavailable-for-saleincludingthenon-derivativefinancialassetsavailable-for-saleandthe

financialassetswhichhavenotbeengroupedasothersattheinitialconfirmation

2)Recognitionandmeasurementforfinancialassts

Financialassets,whilebecomepartyofthecontractoffinancialinstrumentintheCompany,recognized

inbalancesheetbyfairvalue.Forthefinancialassetswhicharemeasuredbyfairvalueandwhosefair

valuechangeisrecordedintoprevailinggainsandlosses,therelevanttransactionexpensearisingfrom

acquisitionisrecordedintoprevailinggainsandlossesdirectly,whiletherelevanttransactionexpense

ofotherfinancialassetsisrecordedintoinitialrecognitionamount.

Financial assetswhichare measured by fair valueand whosefair value changeis recordedinto

prevailinggainsandlosses,together withfinancial assetsavailable-for-sale,wouldhavefollow-up

measurementaccording tofair value;effective interest methodis adopted forloans andaccounts

receivablesandheld-to-maturityinvestmentwhichareshowninamortizedcost.

Fairvaluechangeoffinancialassetswhicharemeasuredbyfairvalueandwhosefairvaluechangeis

recordedintoprevailinggainsandlossesisrecordedintogainsandlossesoffairvaluechange;interests

orcashdividendacquiredfromholdingassetsarerecognizedasinvestmentincome;whendisposing

suchassets, thedifference betweentheir fairvalueandinitialaccounting amountisrecognizedas

investmentgainsandlosses.Meanwhile,gainsandlossesoffairvalueshallbeadjusted.

Exceptimpairmentlossesandexchangegains/lossfromfinancialassetswithforeigncurrency,variation

ofthefairvalueforfinancialassetsavailableforsaleshouldreckonintoshareholders‘equity.The

variation of fair value accumulative reckon into equity previously should transfer into current

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

gains/losseswhile recognition ofthis financial asset terminated.For theinterest duringperiod of

holdingforinstrumentinvestmentofliabilityavailableforsalebasedonrealinterestrate,andcash

dividendrelatedwithinstrumentinvestmentofequityavailableforsalethatannouncedbyinvested

enterprisesshouldreckonintocurrentgains/lossesasinvestmentincomes.

3)Impairmentoffinancialassets

Exceptforthefinancialassetswhicharemeasuredbyfairvalueandwhosefairvaluechangeisrecorded

intoprevailinggainsandlosses,theCompanywillmakecheckinthecarryingvalueofotherfinancial

assetsasatthebalancesheetdate.Ifthereisobjectiveevidenceprovingimpairmentofcertainfinancial

assets,theCompanythenmakesprovisionforimpairment.

Whenthefinancialassetscalculatedbyamortizedcostdecreaseinvalue,countanddrawtheprovision

forimpairmentaccordingtothebalancebetweenpresentvalueandbookvalueofpredictedfuturecash

flows(Excludingfuturecreditlossesthathaven‘toccurredyet.).Ifthereisanyobjectiveevidenceto

indicatethatthefinancialassetshasrecoveredandisobjectivelyconnectedwithmattersoccurredafter

confirmingthelosses, theformerlyconfirmed impairmentlosseswillbereversed andreckonedin

currentprofitsandlosses.

Whenthefairvalueoffinancialassetsavailableforsalegoesdownsubstantiallyornon-transiently,the

accumulating losses previouslyand directly reckoned in shareholder's equityand formed due to

shrinkageoffairvaluewillbetransferredandreckonedinimpairmentlosses.Asforthedebtinstrument

investmentavailableforsalewithconfirmedimpairmentlosses,ifitsfairvaluerisesafteranditis

objectively connected withmatters occurred after confirming theprimary impairment losses, the

formerlyconfirmedimpairmentlosseswillbereversedandreckonedincurrentprofitsandlosses.And

thedebtinstrumentinvestmentavailableforsalewithconfirmedimpairmentlossesshallbedirectly

reckonedinstockholder'sequityifitsfairvaluerisesafter.

4)Transferoffinancialassets

Thefinancialassetsmeetoneoffollowingrequirementswillbeterminatedrecognition:①Thecontract

rightsofcollectingcashflowofthefinancialassetsisterminated;②Thefinancialassetshasalready

beentransferred,andtheCompanyhastransferredalmostallrisksandremunerationsoffinancialassets

ownershiptothetransferee;③Thefinancialassetshasbeentransferred,eventhoughtheCompanyhas

neithertransferred norkeptalmost all risksand remunerations offinancial assetsownership,the

Companyhasgivenupcontrollingthefinancialassets.

Iftheenterprisehasneithertransferredorkeptalmostallrisksandremunerationsoffinancialassets

ownership,norgivenupcontrollingthefinancial assets,thenconfirmtherelevantfinancial assets

accordingtohowitcontinuestoinvolveintothetransferredfinancialassetsandconfirmtherelevant

liabilitiesaccordingly.Thedegreeofkeepinginvolvingintothetransferredfinancialassetsreferstothe

risklevelwithwhichthefluctuationofthisfinancialassetvaluemakestheenterpriseface.

Iftheentiretransferoffinancial assetssatisfies thedemandforderecognition,reckonthebalance

betweenthebookvalueofthetransferredfinancialassetsandthesumofconsiderationreceivedfrom

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

transferandfluctuationaccumulatedamountoffair valueformerlyreckoned inotherconsolidated

incomeinthecurrentprofitsandlosses.

Ifparttransferoffinancialassetssatisfiesthedemandforderecognition,apportiontheintegralbook

value of the transferred financial assets between the derecognized parts and the parts not yet

derecognized according to each relative fair value, and reckon the balance betweenthe sum of

consideration received from transfer and fluctuation accumulated amount of fair value formerly

reckonedinotherconsolidatedincomethatshouldbeapportionedtothederecognizedpartsandthe

apportionedaforementionedcarryingamountsinthecurrentprofitsandlosses.

(2)Financialliabilities

When making theinitialrecognition for financialliabilities,the Company classifies thefinancial

liabilitiesintooneswhicharemeasuredbyfairvalueandwhosechangeisrecordedintoprevailinggains

andlosses,andotherfinancialliabilities.

Financialliabilitieswhicharemeasuredbyfairvalueandwhosechangeisrecordedintoprevailing

gainsandlossesincludetradablefinancialliabilitiesandfinancialliabilitieswhicharemeasuredbyfair

valueandwhosechangeis recordedintoprevailinggains andlossesattheinitialrecognitionday.

Follow-upmeasurementsaremadebyfairvalue.Recordedintoprevailinggainsandlossesarethegains

orlosses formedthroughfair valuechangeanddividendandinterestexpenditureregarding tothe

financialliabilities.

Asforotherfinancialliabilities,effectiveinterestratemethodisadoptedandfollow-upmeasurementis

madeaccordingtoamortizedcost.

1)Methodforrecognitionoffairvalueoffinancialassetsandliabilities

Forthosefinancialinstrumentsexistinginactivemarkets,marketquotationintheactivemarketisused

toconfirmtheirfairvalues.Inactivemarket,theCompanytakesthepresentbidpriceofalready-held

financial assetsor plan-to-undertake financial liabilities as thefair values of relevant assets and

liabilities; the Company takes the present offer price of plan-to-buy financial assets and

–already-undertakenliabilitiesasthefairvaluesofrelevantassetsandliabilities.Inthesituationthat

therearenopresentbidandofferpriceforfinancialassetsandliabilities,whilethereisnomaterial

changeineconomicenvironmentafterthelatestbusinessday,thenfairvalueofthefinancialassetsand

liabilitiesistoconfirmpursuanttothelatestbusinessmarketquotation.

Fairvalueof thefinancialinstruments whichhaveno activemarket is confirmedbyadoptionof

estimationtechnology.Estimationtechnologyincludesreferencetothepriceappliedbypartieswhich

knowwellsituationandarewillingtomakedealsinthelatestmarketbusiness,referencetothecurrent

fairvalueofotherfinancialassetswhicharethesameinprinciple,referencetodiscountedcashflow

methodandoptionpricingmodel.

10.Baddebtprovisionforaccountsreceivable

Allowancemethodisadoptedforthe baddebtlosses whicharelikelytohappen.Andconducting

impairmenttestindependentlyorbycombinationatperiod-end,withdrawnbaddebtprovisionandthen

recordedintocurrentgainsandlosses.Asfortheaccountsreceivablewhicharenotabletocallback

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

throughdefiniteevidence,theyshallbetreatedasbaddebtlossesafterapprovaloftheGroupaccording

toregulatedprocedurestooffsetwithdrawnbaddebtprovision.

Thefollowingsituationasstandardsforconfirmationofbaddebtlossesofaccountsreceivable:revoke,

bankruptcy,insolvency,seriousinsufficiencyofcashflowofitsdebitunits,orthedebitunitshaveto

stopproductionduetoseriousnaturaldisasterandarenotabletosettlethedebtsorinpredictedtime,or

otherdefiniteevidenceshowingthatthedebtisnotavailabletocallbackorthepossibilityofcalling

backistiny.

Accountreceivablesweredividedasfollowcategoriesatperiod-end,whichwasperformedimpairment

testinwayofindividualorgroup,andwithdrawalbaddebtprovision:

(1)Accountreceivablewithsinglesignificantamount:

Determinebasisoramount Iftotallyamounttakesover80%ofthetotalforover5%occupied,than5%ofsingleamount

standards for single intotalamountsrecognizedassinglesignificantamount;iftotallyamounttakeslessthan

significantamount 80%ofthetotalforover5%occupied,thanlowerrecognitionstandardstillqualified80%in

total

Method of bad debt

provisionaccrualforaccount Withdrawalbaddebtprovisionaccordingtodifferencebetweenthecurrentvalueoffuture

receivablewithsinglemajor cashflowandbookvalues;iftherehasnoimpairmentbeenfoundinindividual test,

amount withdrawalbaddebtprovisionwhiletestingbygroup

(2)Accountreceivablewithdrawalbaddebtprovisionbasedoncombination:

Basisforcombinationrecognized

Combination1 Accountreceivableexceptcombination2

Employeereservefund,foreigninvestmentamount,contactwithrelatedpartyinconsolidatedstatement

Combination2 ofChanghongGroup,exporttaxrefundreceivable,accountreceivablewithL/Corinsurance,

governmentsubsidyetc.

Methodsonwithdrawalofbaddebtprovisionbasedoncombination

Combination1 Withdrawalbaddebtprovisionbyproportionindifferentagegroup

Combination2 Risksareundercontrolwithoutbaddebtprovisionaccrual

Incombination1,withdrawalproportionofbaddebtprovisionforaccountreceivablebasedonage

analysis:

Age Withdrawalproportionofaccountreceivable Withdrawalproportionofotheraccount

(%) receivable(%)

Within 1year(1year 5 5

included)

1－2years 15 15

2－3years 35 35

3－4years 55 55

4－5years 85 85

Over5years 100 100

(3)Accountreceivablewithsingleminoramountbutwithdrawalsingleitembaddebtprovision:

Reasons for withdrawalsingleAccountwithminoramountbuthavesignificantinflowriskonpredictedfuturecashflow

itembaddebtprovision

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Withdrawalmethodforbad Impairmenttestonthecurrentvalueofpredictedfuturecashflow,baddebtprovision

debtprovision withdrawal.

11.Inventories

InventoriesoftheCompanyprincipallyincluderawmaterials,stockgoods;workinprocess,self-made

semi-finishedproduct,materialsconsignedtoprecede,low-valueconsumptiongoods,goodsintransit,

goodsinprocessandmouldetc.

Perpetualinventorysystemisapplicabletoinventories.Fordailycalculation,standardpriceisadopted

forrawmaterials,low-valueconsumptiongoodsandstock goods.Switch-backcostofthecurrent

monthisadjustedbydistributionpricedifferenceattheendofthemonth,thedispatchedgoodswill

share the cost differences of inventory while in settlement the business income; and low-value

consumptiongoodsiscarriedforwardatoncewhenbeingappliedforuse;themouldexpenseswill

evenlydeferredsharebasedonbalanceatperiod-beginplusincreaseamountinthisperioddividedby

12months.

Inventoryatperiod-endisvaluedbytheLower-of-valuebetweenthecostandnetrealizablevalue.For

thoseindividualstock,suffering damage,totallyorpartlyoutoffashionorhaslowersalespricethan

cost,predictedrecoverablepartsincost,andwithdrawalprovisionofinventorydepreciationsingle.For

those raw materials, stock commodities and goods in transit, withdrawalprovision of inventory

depreciationbyfollowmethods:

(1)Determinedthenetrealizablevalueofrawmaterialsonthehigheramountbetweenthefinalprices

ofestimatedsale-pricedeductedcost(abouttohappentillproductsfinished),estimatedsalesexpense

andrelevanttaxes,andthefairvalueofexternaldisposal.

(2)Withdrawalobsoleteprovisionforcommoditystocksandgoodsintransitbythefollowproportion:

1)Refrigerator,freezerandwashingmachine

Grade Stockduration Withdrawalproportionforobsolete

provision

Within3months 0%

4-6months 5%

7-12months 15%

Grade-A

1-2years 25%

2-3years 40%

Over3years 100%

Qualified 40%

Grade-B 50%

Grade-C 60%

Unqualified 60%

Disposal 65%

Samplemachine 30%

Specialusertypethatexceedtheorderquantity 50%

2)Air-conditioner

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Withdrawalproportionforobsolete

Locationlevel

provision

Repair 50%

Awaitingrepair 70%

Storereturn 70%

De-stocking 70%

Overstock 100%

Withrespecttotheinventoriesanddeliveredgoodswhicharenotvestedtotheaboveclassification,

theirrealizablenetvaluewillbecalculatedbytheCompanybasedontheestimatedsellingpriceofthe

inventories less estimated selling expense and related taxes. The Company re-checks the above

mentionedproportionateveryendoftheyear.Calculatedthenetrealizablevaluebydifferencebetween

theestimatedsalepricelesstheestimatedsalesexpenseandrelevanttaxation;aftercomparisonwiththe

bookvalueofcommoditystocksandgoodsintransit,determinedwhetheradjustedtheproportionornot.

Mouldexpensewillamortizeininstallmentinusualtimes.Oncetheuse-lifeofmouldisterminated,and

thantransferitsremainingcostintogains/losses,nowithdrawalofobsoleteprovisionatperiod-end.

12.Long-termequityinvestment

Long-termequityinvestmentoftheCompanyismainlyaboutinvestmentinsubsidiary,investmentin

associatesandinvestmentinjoint-ventures.

Forlong-termequityinvestmentsacquiredthroughbusinesscombinationundercommoncontrol,the

initialinvestmentcostshallbetheacquirer‘sshareofthecarryingamountofnetassetsoftheacquiree

asofthecombinationdateasreflectedintheconsolidatedfinancialstatementoftheultimatecontroller.

If thecarryingamount of net assetsof theacquiree as of thecombinationdate is negative, the

investmentcostoflong-termequityinvestmentshallbezero.Forlong-termequityinvestmentacquired

through business combinationnot under common control,theinitial investmentcost shallbe the

combinationcost.

Excludingthelong-termequityinvestmentacquiredthroughbusinesscombination,thereisalsoaking

oflong-termequityinvestmentacquiredthroughcashpayment,forwhichtheactualpaymentforthe

purchaseshallbe investmentcost;IfLong-termequityinvestmentsareacquiredbyissuingequity

securities, fair valueof issuing equityinvestment shallbe investment cost; forLong-termequity

investmentswhichareinvestedbyinvestors,theagreedpriceininvestmentcontractoragreementshall

beinvestmentcost;andforlong-termequityinvestmentwhichisacquiredthroughdebtreorganization

andnon-monetaryassetsexchange,regulationsofrelevantaccountingstandardsshallbereferredtofor

confirminginvestmentcost.

TheCompanyadoptscostmethodforinvestmentinsubsidiaries,makescalculationforinvestmentsin

joint-venturesandassociatesbyequitymethod.

Whencalculatedbycostmethod,long-termequityinvestmentispricedaccordingtoitsinvestmentcost,

andcostoftheinvestmentisadjustedwhenmakingadditionalinvestmentorwritingoffinvestment;

Whencalculatedbyequitymethod,currentinvestmentgainsandlossesrepresenttheproportionofthe

netgainsandlossesrealizedbytheinvestedunitincurrentyearattributabletoorundertakenbythe

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

investor.WhentheCompanyisbelievedtoenjoyproportionofnetgainsandlossesofinvestedunit,

gainsandlossesattributabletotheCompanyaccordingtoitsshareholdingratioistocomputerout

accordingtotheaccountingpolicyandaccountingperiodoftheCompany,onthebasisofthefairvalue

ofvariousrecognizableassetsoftheinvestedunitasatthedateofobtainingoftheinvestment,after

offsetofgainsandlossesarisingfrominternaltransactionswithassociatesandjoint-ventures,and

finallytomakeconfirmationafteradjustmentofnetprofitoftheinvestedunit.Confirmationongains

andlossesfromthelong-termequityinvestmentinassociatesandjoint-venturesheldbytheCompany

priortothefirstexecutionday,couldonlystandupwiththeprecedentconditionthatdebitbalanceof

equityinvestment straightly amortized according toits original remainingterm hasalready been

deducted,iftheaforementionedbalancerelatingtotheinvestmentdoexist.

Incasethatinvestorlosesjointcontrolorsignificantinfluenceoverinvesteeduetodisposalofpart

equityinterest investment,theremainingequityinterestshallbecalculatedaccordingtoEnterprise

Accounting Principles No.22-Recognition and Measurement of Financial Instrument. Difference

betweenthefairvalueoftheremainingequityinterestasofthedatewhenloseofjointcontrolor

significantinfluenceandthecarryingvalueisincludedincurrentgainsandlosses.Othercomprehensive

incomerecognizedinrespectoftheoriginalequityinterestinvestmentunderequitymethodshouldbe

treatedaccordingtothesamebasiswhichtheinvesteeadoptstodirectlydisposetherelevantassetsor

liabilitieswhenceasingadoptionofequitymethodcalculation;andalsoswitchestocostmethodfor

calculatingthelong-termequityinvestmentswhichentitlestheCompanytohaveconductcontrolover

theinvestedunitsduetoitsadditionalinvestments;andswitchestoequitymethodforcalculatingthe

long-termequityinvestmentswhichentitlestheCompanytoconductcommoncontrolorsignificant

influence,whilenocontrolovertheinvestedunitsduetoitsadditionalinvestments,orthelong-term

equityinvestmentswhichentitlestheCompanywithnocontrolovertheinvestedunitsanylongerwhile

withcommoncontrolorsignificantinfluence.

Whendisposinglong-termequityinvestment,thebalancebetweenitscarryingvalueandeffectiveprice

forobtainingshall berecorded into currentinvestment income. When disposinglong-termequity

investmentwhichiscalculatedbyequitymethod,theproportionoriginallyrecordedinowners‘equity

shallbetransferredtocurrentinvestmentincomeaccording torelevant ratio,exceptforthat other

movementsofowners‘equityexcludingnetgainsandlossesoftheinvestedunitsshallberecordedinto

owners‘equity.

13.Investmentrealestate

TheinvestmentrealestateoftheCompanyincludesleasedhousesandbuildings,andisaccountedvalue

byitscost.Costofpurchased-ininvestmentrealestateconsistsofpaymentforpurchase,relevanttaxes

andotherexpenditurewhichisattributabletotheassetsdirectly;whilecostofself-builtinvestmentreal

estateisformedwithallnecessaryexpendituresoccurredbeforeconstructioncompletionoftheassets

arrivingattheestimatedutilizationstate.

Consequentmeasurement ofinvestment estateshall be measuredbycost method.Depreciationis

providedwithaverageservicelifemethodpursuanttothepredictedservicelifeandnetrateofsalvage

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

value.Thepredictedservicelifeandnetrateofsalvagevalueandannualdepreciationarelistedas

follows:

Type Depreciationterm Predictedrateofsalvage Depreciationrateper

value annum

Housesandbuildings 30-40years 4%-5% 2.375%-3.20%

Wheninvestmentrealestateturnstobeusedbyholders,itshallswitchtofixedassetsorintangibleassets

commencingfromthedateofsuchturning.Andwhenself-usedrealestateturnstobeleasedoutforrentalor

additionalcapital,thefixedassetsorintangibleassetsshallswitchtoinvestmentrealestatecommencing

fromthedateofsuchturning.Insituationofswitch,thecarryingvaluebeforetheswitchshallbedeemedas

thecreditvalueaftertheswitch.

Wheninvestmentisdisposed,oroutofutilizationforeverandnoeconomicbenefitwouldbepredictedto

obtainthroughthedisposal,theCompanyshallterminaterecognitionofsuchinvestmentrealestate.The

amountofincomefromdisposal,transfer,discardingasscrapordamageofinvestmentrealestateafter

deductingtheasset‘scarryingvalueandrelevanttaxationshallbewrittenintocurrentgainsandlosses.

14.Fixedassets

FixedassetsoftheCompanyrepresentthetangibleassetsandassetspackage:heldbytheCompanyfor

purposeofproducingcommodities,providinglaborservice,leasingoroperationalmanagement,service

lifeexceedsoneyear,andunitpriceexceedsRMB2,000.Includingfour categoriesofhousesand

buildings,machineryequipments,transportationequipmentsandotherequipments

Theircreditvalueisdeterminedonthebasisofthecosttakenforobtainingthem.Ofwhich,costof

purchased-in fixed assets include bidding price and import duty and relevant taxes, and other

expenditurewhichoccursbeforethefixedassetsarriveatthestateofpredictedutilizationandwhich

couldbe directlyattributabletotheassets;while costof self-builtfixedasset isformed withall

necessaryexpendituresoccurredbeforeconstructioncompletionoftheassetsarrivingattheestimated

utilizationstate;creditvalueofthefixedassetsinjectedbyinvestorsisdeterminedbasedontheagreed

valueofinvestmentcontractsoragreements,whileasfortheagreedvalueofinvestmentcontractsor

agreementswhichisnotfair,itshalltakeitsfairvalueascreditvalue;andforfixedassetswhichare

leasedinthroughfinanceleasing,creditvalueistheloweroffairvalueofleasedassetsandpresent

valueofminimizedleasingpaymentasatthecommencingdateofleasing.

Consequentexpenditurerelatedtofixedassetsconsistsofexpendituresforrepairandupdatereform.

Forthosemeetingrequirementsforrecognizationoffixedassets,theywouldbeaccountedasfixedasset

cost;andforthepartwhichisreplaced,recognizationofitscarryingvalueshallcease;forthosenot

meetingrequirementsforrecognizationoffixedassets,theyshallbeaccountedincurrentgainsand

lossesaslongastheyoccur.Whenfixedassetisdisposed,ornoeconomicbenefitwouldbepredictedto

obtainthroughutilizationordisposaloftheasset,theCompanyshallterminaterecognizationofsuch

fixedasset.Theamountofincomefromdisposal,transfer,discardingasscrapordamageoffixedasset

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

afterdeductingtheasset‘scarryingvalueandrelevanttaxationshallbewrittenintocurrentgainsand

losses.

The Companywithdraws depreciationforall fixedassetsexceptforthosewhichhavebeen fully

depreciatedwhilecontinuingtouse.Itadoptsaverageservicelifemethodforwithdrawingdepreciation

whichistreatedrespectivelyascostorcurrentexpenseofrelevantassetsaccordingtopurposeofuse.

Thedepreciationterm,predictedrateofsalvagevalueanddepreciationrateappliedtofixedassetsofthe

Companyareasfollows:

No. Type Depreciationterm Predictedrateofsalvage Depreciationrateper

value annum

1 Housesandbuildings 30-40years 4%-5% 2.375%-3.20%

2 Machineryequipments 10-14years 4%-5% 6.786%-9.60%

3 Transportequipment 5-12years 4%-5% 7.92%-19.20%

4 Otherequipments 8-12years 4%-5% 7.92%-12.00%

TheCompanymakesre-examinationonpredictedservicelife, predictedrateof salvagevalueand

depreciationmethodateachyear-end.Anychangewillbetreatedasaccountingestimationchange.

15.Constructioninprocess

Construction in process is measured with effective cost. Self-operated constructionsprojects are

measuredwithdirectmaterials,directsalariesanddirectconstructionexpense;constructionprojects

undertakenby externalare measured withtheengineeringpayment payable;andengineering cost

(incomeabatement)ofequipment-installationprojectsisconfirmedwithconsiderationofvalueofthe

equipments,installationfee,andexpenditurearisingfromtrialoperationoftheprojects.Borrowing

expense and exchange gainsand losses whichshould be capitalizedare also includedincostof

constructioninprocess.

16.Borrowingexpense

Borrowingexpensesincludeinterestexpense,amortizationofdiscountorpremium,auxiliaryexpenses

andexchangedifferenceduetoborrowinginforeigncurrency.Theborrowingexpensewhichcouldbe

directly attributable to purchase or production of assets satisfying capitalization condition, starts

capitalizationwhencapitalexpenditureandborrowingexpenseoccurandwhennecessarypurchaseor

productionconductedforpromotingassetstoreachthepredictedavailable-for-useoravailable-for-sale

state; and capitalization shall cease when purchased or produced assets satisfying capitalization

conditionhavereached the predicted available-for-useoravailable-for-sale state. Otherborrowing

expenseisrecognizedasexpenseduringtheoccurrenceperiod.

Capitalizationshallbeexercisedforinterestexpense actuallyoccurred fromspecialborrowingsin

currentperiodafterdeductionoftheinterestincomearisingfromunutilizedborrowingcapitalwhichis

saved in banks or deduction of investment income obtained from temporary investment; For

recognizationofcapitalizedamountofcommonborrowing, itequalstotheweightedaverageofthe

assets whose accumulated expense or capital disburse is more than common borrowing times

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

capitalization rateof occupiedcommon borrowing.Capitalization rateis determined according to

weightedaverageinterestrateofcommonborrowing.

Assetssatisfyingcapitalization principlegenerallyrefertofixedassets, investmentrealestate and

inventorieswhichcanonlyarriveatpredictedavailable-for-useandavailable-for-salestateafterquitea

longtime(generallyoveroneyear)inpurchaseorproductionactivities.

If abnormalinterruption happens duringpurchase orproduction of assetssatisfyingcapitalization

principleandtheinterruptionlastsover3months,thecapitalizationfortheborrowingexpenseshall

pauseuntilthepurchaseorproductionrestarts.

17.Intangibleassets

The Companyholds intangible assetsincluding landuse right,trademark, patent technologyand

non-patenttechnology.Intangibleassetsaremeasuredaccordingtotheeffectivecostspaidforobtaining

theassets.ForthoseintangibleassetspurchasedinbytheCompany,theireffectivecostconsistofactual

paymentandrelevantotherexpenditure;fortheintangibleassetsinputbyinvestors,effectivecostis

determinedaccordingtothevalueagreedininvestmentcontractsandagreements,whileiftheagreed

valueisnotfair,theneffectivevalueisconfirmedaccordingtofairvalue.

Landuserightisaveragelyamortizedaccordingtoitstransfertermcommencingfromthesateof

transfer; trademark use-rights averagely amortized by 10 years; patent technology, non-patent

technologyandotherintangibleassetsisaveragelyamortizedaccordingtotheshortestoftheirpredicted

servicelife,beneficialtermconcludedbycontractandeffectivetermregulatedbylaws.Amortization

amountisrecordedinassetscostandcurrentgainsandlossesrelevanttobeneficialobjectives.

Re-examinationonpredictedservicelifeandamortizationmethodoftheintangibleassetswhichhave

limitedservicelifeshallbeconductedattheendofeachyear.Ifchanged,itwouldbetreatedaschange

ofaccounting estimation.Re-examinationon predictedservicelifeofintangibleassetswhichhave

uncertainservicelifeshallbeconducted.Foranyevidenceprovingthatservicelifeofintangibleassets

islimited,thentheservicelifeshallbeestimatedandtheCompanyshallmakeamortizationwithinthe

predictedservicelifeperiod.

18.Researchanddevelopment

Asforexpenditureforresearchanddevelopment,theCompanyclassifiesitintoexpenditureonresearch

phaseanddevelopmentphase,basedonnatureoftheexpenditureandthatwhetherthefinalintangible

assetsformedbyresearch&developmentisofgreatuncertainty.Expenditurearisingduringresearch

shouldberecordedincurrentgainsandlossesuponoccurrence;expenditurearisingduringdevelopment

isconfirmedasintangibleassetswhensatisfyingthefollowingconditions:

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

(1)Completionsoftheintangibleassetsmakeitavailableforapplicationorsellintechnology;

(2)Equippedwithplantocompletetheintangibleassetandapplyorsellit;

(3)Thereismarketforproductsproducedwiththisintangibleassetsortheintangibleassetitself;

(4)Havesufficienttechnology,financialresourceandotherresourcestosupportdevelopmentofthe

intangibleassets,andhaveabilitytoapplyorselltheassets;

(5)Expenditureattributabletodevelopmentoftheintangibleassetscouldbereliablemeasured.

Expenditurearisingduringdevelopmentnotsatisfyingtheaboveconditionsshallberecordedincurrent

gainsandlossesuponoccurrence.Developmentexpenditurewhichhadbeenrecordedingainsand

lossesinpreviousperiodwouldnotberecognizedasassetsinlaterperiod.Expenditurearisingduring

developmentphasewhichhasbeenstartingcapitalizationislistedinbalancesheetasdevelopment

expenditure,andtransferredtointangibleassetssincetheprojectreachesatpredictedutilizationstate.

19.Impairmentofnon-financiallong-termassets

Asateachbalancesheetdate,theCompanyhasinspectiononlong-termequityinvestment,fixedassets,

constructioninprocessandintangibleassetswithlimitedservicelife.Whenthefollowingindications

appear,assetsmaybeimpaired,andtheCompanywouldhaveimpairmenttest.Asforgoodwilland

intangibleassetswhichhaveuncertainservicelife,nomatterthereisimpairmentornot,impairmenttest

shallbeconductedattheendofeveryyear.Ifitishardtomaketestonrecoverableamountofsingle

asset,testisexpectedtomakeonthebasisoftheassetsgrouporassetsgroupportfoliowheresuchasset

belongsto.

Afterimpairmenttest,ifthecarryingvalueexceedstherecoverableamountoftheasset,thebalanceis

recognizedasimpairmentloss.Aslongasimpairmentlossoftheaforementionedassetsisrecognized,it

couldn‘tbeswitchedbackinlateraccountingperiods.Recoverableamountofassetsreferstothehigher

offairvalueofassetsnetdisposalexpenseandpresentvalueofpredictedcashflowoftheasset.

Indicationsforimpairmentareasfollows:

(1)Marketvalueofassetdropsalotincurrentperiod,thedropscopeisobviouslygreaterthanthe

predicteddropduetomove-onoftimesornormalutilization;

(2)Economy,technologyorlawenvironmentwhereenterpriseoperatesormarketwhereassetislocated

willhavesignificantchangeincurrentorrecentperiods,whichbringsnegativeinfluencetoenterprise;

(3)Marketinterestrateorreturningrateofothermarketinvestmentshaverisenincurrentperiod,which

bringsinfluenceincalculatingdiscountrateofpresentvalueofpredictedfuturecashflowofassets,

whichleadstoagreatdropinrecoverableamountofsuchassets;

(4)Evidenceprovingthatassetisobsoleteandoutoftimeoritsentityhasbeendamaged;

(5)Assethasbeenorwillbekeepaside,terminatingutilizationordisposedadvance;

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

(6)Internalreportofenterpriseshowsthateconomicperformanceofassethasbeenorwillbelower

thanprediction,suchasthatnetcashflowcreatedbyassetoroperationprofit(orloss)realizedbyasset

isgreatlylower(orhigher)thanthepredictedamount;

(7)Otherindicationsshowingpossibleimpairmentofassets

20.Goodwill

Goodwillrepresentsbalancebetweenequityinvestmentcostorbusinesscombinationcostunderno

commoncontrolexceedingtheattributablepartorfairvalueofrecognizablenetassetsofpartyinvested

orpurchased(obtainedthroughbusinesscombination)asofacquisitiondayorpurchaseday.

Goodwillrelatingtosubsidiariesisseparatelylistedinconsolidatedfinancialstatement.Andgoodwill

relatingtoassociatesandjoint-venturesisincludedincarryingvalueoflong-termequityinvestment.

21.Long-termdeferredexpenses

Long-termdeferredexpensesoftheCompanyrefertotheexpensewhichhasbeenpaidoutwhileshould

be amortized from thecurrent period andperiods thereafter, withamortization term over 1 year

(excluding1year).Suchexpenseisaveragelyamortizedduringthebeneficialperiod.Ifsuchlong-term

deferredexpensecouldnotbringbenefittofollowingaccountingperiods,theunamortizedvalueofthe

itemshallbefullytransferredtocurrentgainsandlosses.

22.Staffremuneration

Employeebenefitsmainlyincludeallkindsofremunerationincurredinexchangeforservicesrendered

byemployeesorcompensationtotheterminationofemploymentrelationshipsuchasshort-termwages,

post-employmentbenefits,compensation fortheterminationofemploymentrelationship andother

long-termemployeewelfare.

Short-termremunerationincludes:staffsalary,bonus,allowancesandsubsidies,staffbenefits,social

insuranceslikemedicalinsurance,work-relatedinjuryinsuranceandmaternityinsurance,housingfund,

laborunionfundsandstaffeducationfunds,short-termpaidabsenceofduty,short-termprofitsharing

scheme,non-monetarybenefitsaswellasothershort-termremuneration.Duringtheaccountingperiod

whenstaffprovidesservices,theshort-termremunerationactuallyoccurredisrecognizedasliabilities

andshallbeincludedincurrentgainsandlossesorrelatedassetcostsaccordingtothebeneficialitems.

Retirement benefits mainly consist of basic pension insurance, unemployment insurance and

early-retirement benefits,etc. retirement benefitscheme represents the agreementreached by the

Companyanditsemployeesinrespectofretirementbenefits,ortherulesorregulationsestablishedby

theCompanyforprovidingretirementbenefitstoemployees.Inparticular,definedcontributionplan

means a retirement benefit plan, pursuant to which, the Company makes fixed contribution to

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

independentfund,uponwhich,itisnotobligedtomakefurtherpayment.Definedbenefitplanrefersto

retirementbenefitschemeotherthandefinedcontributionplan.

TheearlyretirementpolicyforstaffandworkersoftheCompanyisthecompensationforencouraging

staffandworkerstoacceptthereductionvoluntarily.Theemployeesmakeapplicationsvoluntarily,the

two parties sign thecompensation agreement after approved by the Company and calculate the

compensation amount according to the compensation standard passed by the staff representative

conference,andtheCompanyconfirmsitasdismisswelfareandreckonsitincurrentprofitsandlosses.

AstheCompanypromisestoadjustthetreatmentforearlyretiringstaffandworkerswiththeincrease

ofsocialbasiccostoflivingallowances,thediscountelementswillnotbeconsideredforcalculatingthe

dismisswelfare.

23.Estimatedliabilities

Ifthebusinessinconnectionwithsuchcontingenciesasasecurityinvolvingaforeignparty,commercial

acceptancebilldiscount,pendinglitigationorarbitration,productqualityassurance,etc.meetsallofthe

followingconditions,theCompanywillconfirmtheaforesaidasliabilities:theobligationisanexisting

obligationoftheCompany;performanceoftheobligationislikelytocauseeconomicbenefitstoflow

outoftheenterprise;theamountoftheobligationisreliablymeasurable.

24.Principleofrecognitionofrevenueandmeasurementmethod

TheCompany‘ssalesrevenueismainlycomprisedofrevenuefromsaleofgoods,laborproviding

incomeandrevenuefromassignmentofassetuserights.Theprincipleofrecognitionofsuchrevenueis

asfollows:

(1)RevenuefromthesaleofgoodsshallberecognizedwhentheCompanyhastransferredtothebuyer

thesignificantrisksandrewardsofownershipofthegoods;theCompanyretainsneithercontinuing

managerialinvolvementtothedegreeusuallyassociatedwithownershipnoreffectivecontroloverthe

goodssold;theamountofrevenuecanbemeasuredreliably;itisprobablethattheassociatedeconomic

benefitswillflowintotheCompany;Theexportbusinessisrecognisedwhenthepackinglistisreceived;

andtheassociatedcostsincurredortobeincurredcanbemeasuredreliably.Air-conditionerOEM/ODM

willrecognizerevenue whilenotes issuedafter commoditytransferringtothe shippingspacethat

appointedbytheclient.

(2)TheCompanyconfirmstherealizationofserviceincomewhenthegrossincomeandtotalcostof

laborservicecabbeunfailinglycalculated,theeconomicbenefitsrelatedtolaborservicearelikelyto

flowintotheGroup,andtheprogressoflaborservicecanbeconfirmedreliably.Onbalancesheetdate,

withregardtothose withresultsprovidedforlaborservicetransactionscanbe estimatedreliably,

confirmtherelevantserviceincomeaccordingtopercentageofcompletionmethodanddeterminethe

percentage-of-completionmethodbytheproportionoftheoccurredcostintheestimatedtotalcost;as

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

forthose withresultsprovidedforlaborservice transactionscan‘t beestimated reliablyandwith

occurredlaborcostpredicted tobe able toget compensation,confirmtoprovideservice income

accordingto laborcostamountoccurredandcapableofgettingcompensation,andcarryoverthe

occurredlaborcosts;forthosewithresultsprovidedforlaborservicetransactionscan‘tbeestimated

reliablyandwithoccurredlaborcostpredictedtobenotabletogetcompensation,reckontheoccurred

laborcostinthecurrentprofitsandlosses,butnotconfirmtoprovideserviceincome.

(3)Theeconomybenefitofuse-rightoftransferassetsprobablywillsinflowtotheCompany,ifthe

incomecanbemeasureaccountability,thanuse-rightincomeoftransferassetsrecognized.

25.Governmentsubsidies

GovernmentsubsidyattheCompanybeabletomeetitsattachedconditions,andcanbeconfirmed

whenreceived.Governmentgrantsformonetaryassets,inaccordancewiththemeasurementofthe

amount actually received, according toa fixed quota for the allocation of the grant criteria, in

accordance with the amount of accounts receivable measurement; government subsidies for

non-monetaryassets,inaccordance withthe fairvalue,fairvalueshouldnotreliablyachieved,in

accordancewiththenotionalamount(RMB1.00)measurement.

Asset-relatedgovernment grants recognizedas deferredincome,andaverage lifeof relatedassets

includedinthe currentprofit andlossdistribution.Withtheproceedsof therelevant government

subsidiestocompensatefortheperiodaftertherelevantcostsorlossesrecognizedasdeferredincome

and,whilerecognizingtheassociatedcostsincludedincurrentperiodprofitandloss;forcompensation

relatedcoststhathaveoccurredorloss,directlygainsandlossesincludedinthecurrentperiod.

26.DeferredIncomeTaxAssetsandDeferredIncomeTaxLiabilities

Adeferredtaxassetanddeferredtaxliabilityshallbedeterminedbyadifference(temporarydifference)

betweenthecarryingamountofanassetorliabilityanditstaxbase.Thedeferredtaxassetshallbe

recognizedforthecarryforwardofunuseddeductiblelossesthatitisprobablethatfuturetaxableprofits

willbeavailableagainstwhichthedeductiblelossescanbeutilized.Fortemporarydifferencearising

frominitialrecognitionofgoodwill,nocorrespondingdeferredincometaxliabilitieswillberecognized.

For temporary difference arising from initialrecognition of assets and liabilitiesoccurred inthe

transactionrelatedtononbusinesscombinationwhichneitheraffectaccountingprofitnorassessable

income(ordeductablelosses),nocorrespondingdeferredincometaxassetsanddeferredincometax

liabilitieswillberecognized.Asofthebalancesheet date,deferredincometaxassetsanddeferred

incometaxliabilitiesaremeasuredattheeffectivetaxrateapplicabletotheperiodwhenrecoveryof

assetsorsettlementofliabilitiesoccur.

TheCompanyrecognizesdeferredincometaxassetstotheextentoffutureassessableincometaxwhich

islikelytobeobtainedtooffsetdeductabletemporarydifference,deductablelossesandtaxcredits.

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

27.Lease

TheCompanycategorizestheleaseintothefinancialleaseandtheoperatinglease.

Thefinancialleaseistheleaseinwhichallrisksandreturnsrelatedtotheownershipofassetsare

transferredinsubstance.TheCompanyasaleaseholder,onthedateoflease,thefinancialleaseis

recognizedasthefixedassetatlowercostoffairvalueoftherentalassetandtheNPVofminimum

paymentofleasing.Theminimumpaymentofleasingisrecognized aslong-termpayable andthe

differenceisaccountedintounrecognizedfinancingexpense.

Theoperatingleaseistheleaseapartfromthefinanciallease.TheCompany,asaleaseholder,accounts

therentsintocurrentperiodbystraightlinemethodduringthetermofthelease.TheCompany,asa

leaser,accountstherentalincomeintocurrentperiodbystraightlinemethodduringthetermofthe

lease.

28.Incometaxaccounting

TheCompanyaccountedtheincometaxinamethodofdebitinbalancesheet.Theincometaxexpenses

includeincometaxinthecurrentyearanddeferredincometax.Theincometaxassociatedwiththe

eventsandtransactionsdirectlyincludedintheowners‘equityshallbeincludedintheowners‘equity;

andthedeferredincometaxderivedfrombusinesscombinationshallbeincludedinthecarryingamount

ofgoodwill,exceptforthatabove,theincometaxexpenseshallbeincludedintheprofitorlossinthe

currentperiod.

Theincometaxexpenseinthecurrentyearreferstothetaxpayable,whichiscalculatedaccordingto

thetaxlawsontheeventsandtransactionsincurredinthecurrentperiod.Thedeferredincometaxrefers

tothedifferencebetweenthecarryingamountandthedeferredtaxassetsanddeferredtaxliabilitiesat

theyear-endrecognizedinthemethodofdebitinthebalancesheet.

29.Segmentinformation

Business segment was the major reporting form of the Company, which divided into 4 parts:

air-conditioner,refrigeratorandfreezer,marketingandothers.Thetransferprice amongthesegments

willrecognizebasedonthemarketprice,commoncostswillallocatedbyincomeproportionbetween

segmentsexceptforthepartsthatwithoutreasonableallocation.

30.Explanationonsignificantaccountingestimation

ThemanagementoftheCompanyneedstoapplyestimationandassumptionwhenpreparingfinancial

statement whichwillaffecttheapplicationofaccounting policyandamounts ofassets, liabilities,

income andexpense. Theactual conditionmaydiffer fromtheestimation.Constant evaluationis

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

conductedbythemanagementinrespectofthekeyassumptioninvolvedintheestimationandjudgment

ofuncertainties.Effectresultingfromchangeofaccountingestimationisrecognizedintheperiodthe

changeoccursandfutureperiods.

Thefollowingaccountingestimationandkeyassumptionmayresultinmaterialadjustmenttothebook

valueofassetsandliabilitiesinfutureperiod.

(1)Inventoryimpairmentprovision

TheCompanyprovidesimpairmentprovisionaccordingtothetypeoffinishedproductsandgoods

deliveredunderfixedproportion,andestimatestherealizablenetvalueofinventoriesbyreferenceto

theprojectedsellingpriceofsimilarinventorieslesssalesexpensesandrelatedtaxesonaregularbasis,

soastoevaluatetherationalityoftheprovisionproportion.Iftheactualsellingpriceorexpensediffers

fromthepreviousestimation,themanagementwillmakecorrespondingadjustmenttotheproportion.

Theestimationresultsbasedonexistingexperiencesmaydifferfromthelatteractualresults,whichmay

resultinadjustmenttothebookvalueofinventoriesinthebalancesheetandaffectoverthegainsand

lossesoftheperiodwhentheestimationchanges.

(2)Accountingestimationonlong-termassetsimpairmentprovision

TheCompanymakesimpairmenttestonfixedassetssuchasbuildings,machineandequipmentswhich

haveimpairmentindicationandlong-termassetssuchasgoodwillasatthebalancesheetdate.The

recoverableamountofrelevantassetsandassetsgroupshallbethepresentvalueoftheprojectedfuture

cashflowwhichshallbecalculatedwithaccountingestimation.

Ifthemanagementamendsthegrossprofitmarginanddiscountrateadoptedincalculationoffuture

cashflowofassetsandassetsgroupandtheamendedgrossprofitmarginislowerthanthecurrently

adoptedoneortheamendeddiscountrateishigherthanthecurrentlyadoptedone,theCompanyneeds

toincreaseprovisionofimpairmentprovision.Iftheactualgrossprofitmarginishigher(orthediscount

rateislower)thantheestimationofmanagement,theCompanycannottransferbackthelongterm

assetsimpairmentprovisionprovidedalready.

(3)Accountingestimationonrealizationofdeferredincometaxassets

Estimationondeferredincometaxassetsneedsestimationonthetaxableincomeandapplicabletaxrate

foreachfutureyear.Realizationofdeferredincometaxassetsdependsonwhetheracompanyisableto

obtainsufficienttaxableincomeinfuture.Changeoffuturetaxrateandswitchbackoftemporary

differencecouldaffectthebalanceofincometaxexpense(gains)anddeferredincometax.Changeof

theaforesaidestimationmayresultinmaterialadjustmenttodeferredincometax.

(4)Usabletermandresidualvaluerateoffixedassetsandintangibleassets

TheCompany,atleastattheendofeachaccountingyear,reviewstheprojectedusablelifeandresidual

valuerateoffixedassetsandintangibleassets.Theprojectedusablelifeandresidualvaluerateare

determinedbythemanagementbasedonthehistoricalexperiencesofsimilarassetsbyreferencetothe

estimationgenerallyusedbythesameindustrywithconsiderationonprojectedtechnicalupgrade.If

materialchangeoccurstopreviousestimation,theCompanyshallaccordinglyadjustthedepreciation

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

expensesandamortizationexpensesforfutureperiod.

(5)Projectedliabilitiesarisingfromproductqualityguarantee

TheCompanycommitstorepairthemajorsparepartsofrefrigeratorssoldthroughgo-to-countryside

promotionactivityforfreefortenyears.Astothemaintenanceexpensesthatmaybeincreasedarising

fromsuchcommitment,theCompanyhasprovidedprojectedliabilities.

Takingintoaccountthevariousuncertaintiesduringthetenyears,theCompanyconsidersnodiscount

factorofsuchprojectedliabilities.Instead,theCompanyreviewstheparameters(probility,proportion,

maintenanceexpensepersingleset)basedontheactualoccurrenceofmaintenanceexpensesasofeach

balancesheet date.If obvious change is found, the Companywill adjust the projected liabilities

accordingtothelatestparameterssoastoreflectthebestestimation.

31.Othercomprehensiveincome

Othercomprehensiveincomerepresentsvariousgainsandlossesnotrecognizedincurrentgainsand

lossesaccordingtootheraccountingrules.

Othercomprehensiveincomeitemsshallbereportedinthefollowingtwoclassesunderotherrelevant

accountingrules:

(1)Othercomprehensiveincomeitemsthatcannotbe reclassifiedintogainsandlosses infuture

accountingperiods,mainlyincludingchangesarisingfromre-measurementofnetliabilitiesornetassets

underdefinedbenefitplanandinterestininvestee‘sothercomprehensiveincomewhicharemeasured

underequitymethodandwhichcannot bereclassifiedintogains andlossesinfutureaccounting

periods;

(2) Other comprehensiveincome items that will be reclassified into gains and losses in future

accountingperiodsuponsatisfactionofrequiredconditions,mainlyincludinginterestininvestee‘sother

comprehensiveincomewhicharemeasuredunderequitymethodandwhichwillbereclassifiedinto

gainsandlossesinfutureaccountingperiodsuponsatisfactionofrequiredconditions,gainsorlosses

arisingfromchangeoffairvalueofavailable-for-salefinancialassets,gainsorlosses arisingfrom

reclassificationofheld-to-maturityinvestmentintoavailable-for-salefinancialassets,gainsorlosses

occurredbycashflowhedginginstrumentsattributabletoeffectivehedge,foreigncurrencyfinancial

statementtranslationdifference,etc.

32.Changeofsignificantaccountingpoliciesandaccountingestimates

(1)Changeofsignificantaccountingpolicies

TheCompanyhadnochangeofsignificantaccountingpoliciesintheyear.

(2)Changeofsignificantaccountingestimates

TheCompanyhadnochangeofsignificantaccountingestimatesintheyear.

V.Taxation

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

1.Majortaxes(expenses)andtaxrates

Tax(expenses) Taxbase Taxrate

VAT Incomefromsalesofgoodsandfromprocessing 17%、13%、11%、6%、5%

Businesstax Rentalincomeandoff-priceexpense 5%

Urban maintenance and Turnovertax 5%or7%

constructiontax

Educationsurcharge Turnovertax 3%

Localeducationsurcharge Turnovertax 2%

Corporateincometax Taxableincome 15%or25%

OriginalBookvalueofhouseproperty×(1-30%)or

HousePropertyTax 1.2%or12%

annualrentincome

Landusetax Actuallandareaused RMB2.5/M2toRMB15/M2

2.Preferentialtaxandapprovaldocuments

TheCompanyanditssubsidiaryZhongkeMeilingCryogenicsTechnologyLimitedCompanywere

recognizedassecondHi-TechEnterpriseforyearof2014inAnhuiProvincewithtermofthreeyears.

Therefore,theCompanyanditssubsidiaryZhongkeMeilingCryogenicsTechnologyLimitedCompany

enjoys15%ratefortheincometaxforStateHi-TechEnterprise.On22January2015,beingrecognized

by―NameListsofFirstHi-TechEnterpriseforyearof2014inAnhuiProvince‖[WGQR(2014)No.37]

fromAnhui Science& TechnologyDepartment, the Companyand Zhongke Meiling Cryogenics

TechnologyLimitedCompanycontinuous toenjoy 15%ratefortheincometaxforStateHi-Tech

Enterpriseforthreeyearsterm.

SubsidiaryZhongshanChanghongElectricCo.,LTD.wasrecognizedasFirstHi-TechEnterprisefor

yearof2008inGuangdongProvincewith15%ratefortheincometaxforStateHi-TechEnterprise

enjoysforterm ofthreeyears.On10October2014,beingrecognizedby―NameListsofSecond

Hi-Tech Enterprise for year of 2014 in Guangdong Province‖[YKGS(2014) No.15] from

GuangdongScience&TechnologyDepartment,ZhongshanChanghong ApplianceCo.,Ltd.

continuoustoenjoy15%ratefortheincometaxforStateHi-TechEnterpriseforthreeyears

term.

Thesubsidiary SichuanChanghong Air Conditioning Co., Ltd. haspassed the review for

high-techenterprisecertificationonDecember8,2016,whichisvalidforthreeyears.After

passingthefilingandauditingoftaxbureau,thecompanywillonlypaythecorporateincome

taxby15%ofthetaxrate.

SubsidiaryMianyangMeilingSoftwareTechnologyCo.,Ltd.passthesoftwareenterprisecertificateon

27 June 2014, and obtained the Software Enterprise Certification [Chuan No.:R-2014-0072].

Calculatingthepromotionperiodsincetheyearofprofit-making,the1styearto2ndyear,theincometax

shallbeexempted,levyincometaxbasedonhalfofthestatutoryratesfromthe3rdyearto5thyear,and

enjoythepreferentialtillexpired

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

SubsidiaryMianyangMeilingSoftwareTechnologyCo.,Ltd.passthesoftwareenterprisecertificateon

27 June 2014, and obtained the Software Enterprise Certification [Chuan No.:R-2014-0072].

Calculatingthepromotionperiodsincetheyearofprofit-making,the1styearto2ndyear,theincometax

shallbeexempted,levyincometaxbasedonhalfofthestatutoryratesfromthe3rdyearto5thyear,and

enjoythepreferentialtillexpired

ThesubsidiaryGuangdong ChanghongRidianTechnologyCo.,Ltd.has appliedfortheaffirmationof

high-techenterprises,onDecember9,2016,thecompanyhasbeenlistedinthe―Listof3rdbatchenterprises

draftedtobeaffirmedashigh-techenterprisesofGuangdongprovincein2016‖releasedbythenational

high-techenterprisesaffirmationmanagementleadinggroupofficeofMinistryofScienceandTechnology,

andwouldpaytheincometaxby15%oftheincometaxwhichisaprivilegetothenationalhigh-tech

enterprises.

VI.Notestothemajoritemsintheconsolidatedfinancialstatements

With respect to the financial statements figures disclosed below, unless otherwise specified,

―year-beginning‖referstoJan.1,2016;―year-end‖referstoDec.31,2016;―theyear‖referstoJan.1to

Dec.31,2016;―thelastyear‖referstoJan.1toDec.31,2015;thecurrencyisRMB.

1.Monetaryfund

Item Balanceatyear-end Balanceatyear-begin

Cash 94,415.53 46,496.63

Bankdeposit 3,827,367,022.13 2,043,331,029.26

OtherMonetaryfund 231,407,796.97 91,812,353.26

Total 4,058,869,234.63 2,135,189,879.15

Including:totalamountdepositedinoverseas 19,067,202.50 3,650,516.73

Othermonetaryfund:

Item Amountatyear-end

Deposits 184,335,513.55

Accountofforeigncurrencyforverification 43,772,022.45

UnionPayonline 2,208,249.18

Taobaoaccount 1,092,011.79

Total 231,407,796.97

Depositwhichservesasnoncashandcashequivalentsreferstothebankingacceptancedraftdepositwitha

termofoverthreemonths,amountingtoRMB44,690,554.87,guaranteemarginamountingtoRMB220,000,

theloanmarginamountingtoRMB27,609,260.ChinaUnionPay,TaobaoaccountandTenPayareallthird

partypaymentplatforms.ExceptforthedepositofRMB251,000.00,utilizationofotherbalanceisnot

subjecttoanyrestriction.

Accordingtothenationalpoliciesrelatingtoforeignexchangemanagement,allgoodspaymentdenominated

inforeigncurrencyshouldbetransferredtoreviewingaccountswhichmaynotbeusedtemporarily.Upon

approvalofsuchreview,thosepaymentsmaybetransferredtogeneralaccounts.Duetotherelativelyshort

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

timeforreviewingforeignexchange,balanceofthereviewingaccountsisnotlimitedonutilization.

2.Financialassetsmeasuredatfairvalueandwhosechangesarerecordedintheprofitsandlossesofthe

currentperiod

Item Balanceatyear-end Balanceatyear-begin

Derivativefinancialassets 12,060,213.30

DerivativefinancialassetsreferstotheRMBforwardexchangefundintheyear

3.Notesreceivable

(1)Categoryofnotesreceivable

Item Amountatyear-end Amountatyear-begin

Bankacceptancebill 1,096,452,069.60 1,286,319,058.59

Commercialacceptancebill 324,977,654.13 13,624.15

Total 1,421,429,723.73 1,286,332,682.74

(2)Notesreceivablemortgagedbyendoftheyear

Item Amountmortgagedbyendoftheyear

Bankacceptance 174,237,778.45

Note:inordertoimprovetheutilizationrateofnotes,theCompanypledgedtobanksthosenotesthat

haven‘texpiredyetinexchangeforissuanceofbankingacceptancedrafts.

(3)Notereceivablesendorsementordiscountatyear-endandarenotexpiredonbalancesheetdate

Terminationconfirmation Notermination

Item amountatyear-end confirmationamountat

year-end

Bankacceptancebill 2,453,613,738.31

Commercialacceptancebill 34,951,039.44

Total 2,488,564,777.75

(4)Notestransfertoaccountreceivableduetothefailureimplementationfromdraweratyear-end:Nil

3.Accountsreceivable

(1)Accountreceivablebycategory

Amountatyear-end

Category Bookbalance Baddebtprovision

Percent Percent Bookvalue

Amount age Amount age

Significantaccountreceivableandwithdrawal

baddebtprovisionsingle

Accountreceivablewithdrawalbaddebt

provisionbycombination

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Combination1 834,543,507.58 71.22% 43,843,529.45 5.25% 790,699,978.13

Combination2 323,321,432.79 27.59% 0.00% 323,321,432.79

Subtotalofcombination 1,157,864,940.37 98.81% 43,843,529.45 3.79% 1,114,021,410.92

Accountreceivablewithsingleminoramount 13,898,468.17 1.19% 8,959,326.60 64.46% 4,939,141.57

butwithdrawalbaddebtprovisionsingly

Total 1,171,763,408.54 100.00% 52,802,856.05 4.51% 1,118,960,552.49

(Continued)

Amountatyear-begin

Category Bookbalance Baddebtprovision

Percent Percent Bookvalue

Amount age Amount age

Significantaccountreceivableandwithdrawal

baddebtprovisionsingle

Accountreceivablewithdrawalbaddebt

provisionbycombination

Combination1 899,278,954.60 64.20% 50,987,076.18 5.67% 848,291,878.42

Combination2 488,135,576.26 34.85% 0.00% 488,135,576.26

Subtotalofcombination 1,387,414,530.86 99.05% 50,987,076.18 3.67% 1,336,427,454.68

Accountreceivablewithsingleminoramount 13,315,915.98 0.95% 11,347,048.83 85.21% 1,968,867.15

butwithdrawalbaddebtprovisionsingly

Total 1,400,730,446.84 100.00% 62,334,125.01 4.45% 1,338,396,321.83

1) No account receivable withsingle majoramount but withdrawal baddebt provisionsinglyat

year-end.

2)Accountreceivablewithwithdrawalbaddebtprovisionforcombination1byagingaccount

Balanceatyear-end

Item

Accountreceivable Baddebtprovision Provisionproportion

Within1year 817,156,334.38 40,857,816.72 5.00%

1-2years 16,240,289.85 2,436,043.48 15.00%

2-3years 709,294.36 248,253.03 35.00%

3-4years 302,606.15 166,433.38 55.00%

4-5years 85.00%

Over5years 134,982.84 134,982.84 100.00%

Total 834,543,507.58 43,843,529.45

3)Accountreceivablewithnowithdrawalbaddebtprovisionforcombination2

Combination Bookbalance

Accountconnectwithrelatedparties 291,315,034.61

LetterofCredit 32,006,398.18

Total 323,321,432.79

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

4)Accountreceivablewithsingleminoramountbutwithdrawalbaddebtprovisionsingly,referstothe

minor single receivables, and withdrawal bad debt provision by combination shows no risk

characteristicofthereceivables,8clientsinvolved.

(2)Baddebtreserveprovidedfor,reversed(orrecovered)duringthisyear

BaddebtreservewrittenoffthisyearwasRMB3,023,539.08,andthebaddebtreservereversedthis

yearwasRMB6,507,729.88.Notradereceivableswritten-offinpreviousyearwasrecoveredthisyear.

(3)Noaccountreceivableactuallywritten-offintheYear.

(4)IntheYear,topfivereceivablescollectedbyarrearspartyamountingtoRMB431,686,312.59in

total,accountedfor36.84%ofthereceivablesatbalanceoftheyear-end,thebaddebtprovisionaccrual

correspondinglyamountingtoRMB8,052,057.89atyear-endbalance.

5.Accountspaidinadvance

(1)Ageofaccountpaidinadvance

Amountatyear-end Amountatyear-begin

Item

Amount Percentage Amount Percentage

Within1year 131,113,656.82 97.33% 66,062,097.51 97.09%

1－2years 2,983,725.64 2.22% 1,427,195.93 2.10%

2－3years 487,258.38 0.36% 84,878.71 0.12%

Over3years 121,847.54 0.09% 467,648.58 0.69%

Total 134,706,488.38 100.00% 68,041,820.73 100.00%

(2) Top5of account paidinadvance inbalanceat year-end amounting toRMB 63,059,987.89,

accountedfor46.81%oftheaccount.

6.Interestreceivable

Item Amountatyear-end Amountatyear-begin

Depositinterestreceivable 2,645,494.32 1,238,199.65

7.Otheraccountsreceivable

(1)Categoryofotheraccountreceivable

Amountatyear-end

Category Bookbalance Baddebtprovision

Percent Bookvalue

Amount Percentage Amount age

Significant other account receivable and

withdrawalbaddebtprovisionsingle

Otheraccountreceivablewithdrawalbad

debtprovisionbycombination

Combination1 8,798,418.31 20.99% 2,091,596.95 23.77% 6,706,821.36

Combination2 32,347,098.08 77.18% 32,347,098.08

Subtotalofcombination 41,145,516.39 98.17% 2,091,596.95 5.08% 39,053,919.44

Otheraccountreceivable withsingleminor 767,932.63 1.83% 267,932.63 34.89% 500,000.00

amountbutwithdrawalbaddebtprovisionsingly

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Amountatyear-end

Category Bookbalance Baddebtprovision

Percent Bookvalue

Amount Percentage Amount age

Total 41,913,449.02 100.00% 2,359,529.58 5.63% 39,553,919.44

(Continued)

Amountatyear-begin

Category Bookbalance Baddebtprovision

Percent Percent Bookvalue

Amount age Amount age

Significant other account receivable and

withdrawalbaddebtprovisionsingle

Otheraccountreceivablewithdrawal bad

debtprovisionbycombination

Combination1 9,229,628.47 21.24% 3,691,780.99 40.00% 5,537,847.48

Combination2 33,956,987.82 78.14% 0.00% 33,956,987.82

Subtotalofcombination 43,186,616.29 99.38% 3,691,780.99 8.55% 39,494,835.30

Other accountreceivable withsingleminor 267,932.63 0.62% 267,932.63 100.00%

amountbutwithdrawalbaddebtprovisionsingly

Total 43,454,548.92 100.00% 3,959,713.62 9.11% 39,494,835.30

1)Nosignificantotheraccountreceivableandnowithdrawalbaddebtprovisionsingleatyear-end.

2)Otheraccountreceivablewithwithdrawalbaddebtprovisionforcombination1byagingaccount

Balanceatyear-end

BookAge

Accountreceivable Baddebtprovision Provisionproportion

Within1year 5,300,340.70 265,017.04 5.00%

1-2years 1,394,115.53 209,117.33 15.00%

2-3years 229,230.00 80,230.50 35.00%

3-4years 610,000.00 335,500.00 55.00%

4-5years 420,000.00 357,000.00 85.00%

Over5years 844,732.08 844,732.08 100.00%

Total 8,798,418.31 2,091,596.95

3)Otheraccountreceivablewithnowithdrawalbaddebtprovisionforcombination2

Combination Bookbalance

Contactwithrelatedparty 12,870,014.08

Employee‘sreserveloans 18,784,317.17

Exportrebate 159,982.87

Pre-paidchargeoftheemployee 532,783.96

Total 32,347,098.08

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

4)Theotheraccountreceivablewithmajoramountatyear-endandaccrualforbaddebtprovisionsingle

referstothereceivableamountof267,932.63YuanfromGuangdongXiongfengElectricCo.,Ltd.,

pre-paidinsuranceindemnity500,000.00Yuan.

(2)Reversal(orwithdraw)ofreserveforbaddebtsintheYear

Releasingbad-debt provisioninthe YearamountingtoRMB1,600,184.04;baddebtrecoveredthe

originalverificationwasRMB6,000.00intheyear.

(3)Noactualverificationofotherreceivablesintheyear

(4)Classificationofotheraccountsreceivableaccordingtothenatureofaccount

Nature Bookbalanceatyear-end Bookbalanceatyear-begin

Employee‘sreserveloans 18,784,317.17 12,957,099.30

Non-consolidatedrelatedparty 12,870,014.08 730,771.79

Deposit 8,062,507.62 3,918,959.87

Advancemoneytemporary 1,413,879.45 140,406.00

Other 622,747.83 5,438,195.23

Exportrebate 159,982.87 20,269,116.73

Total 41,913,449.02 43,454,548.92

(5)Top5otherreceivablescollectedbyarrearspartyatbalanceofyear-end:

Proportionintotal BadBalance

Name Natureofaccount Balanceatyear-end Bookage otherreceivablesat atyear-end

year-end ofdebt

provision

Sichuan Tianyou Guigu Capital-reduct Within1

TechnologyCo.Ltd. ion money 12,500,000.00 year 29.82%

receivable

HanShaofeng Employees 1,545,000.00 Within1 3.69%

deposit year

NanjingCustomesofPRC Cashdeposit 1,344,924.85 Within1 3.21% 67,246.24

year

BeijingTongzhouNewRural Guarantee 1,000,000.00 Within1 2.39% 50,000.00

ConstructionServiceCenter money year

PuLingqiao Employees 901,743.63 Within1 2.15%

deposit year

Total 17,291,668.48 41.26% 117,246.24

(6)Nootheraccountreceivableinvolvedgovernmentsubsidiesatyear-end.

(7)Nootherreceivablesterminatedrecognizationduetothetransferoffinancialassetsatyear-end.

(8)Noassetsandliabilitytransferotherreceivablesandcontinuestoinvolveatyear-end.

8.Inventories

(1)Classificationofinventories

Amountatyear-end

Item

Bookbalance Impairmentprovision Bookvalue

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Amountatyear-end

Item

Bookbalance Impairmentprovision Bookvalue

Rawmaterials 239,470,144.24 2,133,956.27 237,336,187.97

Stockcommodities 1,477,211,122.85 71,224,130.62 1,405,986,992.23

Lowvalueconsumablearticles 11,908,736.75 11,908,736.75

Goodsintransit 245,587,568.44 2,700,789.83 242,886,778.61

Goods-in-process 31,950,329.21 31,950,329.21

Deferredexpenseformoulds 44,457,710.09 44,457,710.09

Total 2,050,585,611.58 76,058,876.72 1,974,526,734.86

(Continues)

Amountatyear-begin

Item

Bookbalance Impairmentprovision Bookvalue

Rawmaterials 142,734,356.80 1,427,876.25 141,306,480.55

Stockcommodities 1,292,031,075.82 79,430,353.78 1,212,600,722.04

Lowvalueconsumablearticles 11,776,746.58 11,776,746.58

Goodsintransit 112,214,773.27 177,014.68 112,037,758.59

Goods-in-process 19,621,573.80 19,621,573.80

Deferredexpenseformoulds 57,602,927.95 57,602,927.95

Total 1,635,981,454.22 81,035,244.71 1,554,946,209.51

(2)Inventoryfallingpricereserves

Amountat

Amountat Increasedinthe Decreasedintheyear

Item year-end

year-begin year

Switch-back Otherswitch-out

Rawmaterials 1,427,876.25 706,080.02 2,133,956.27

Stock 79,430,353.78 6,417,796.55 14,624,019.71 71,224,130.62

commodities

Goods in 177,014.68 3,217,863.71 694,088.56 2,700,789.83

transit

Total 81,035,244.71 10,341,740.28 15,318,108.27 76,058,876.72

(3)Provisionforinventories

Reasonsforthe

Item Specificbasisfordeterminingofnetrealizablevalue Switch-backorconversion

intheyear

Rawmaterials Costishigherthannetrealizablevalue(Theprocessedproductsare

decline)

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Stock Costishigherthannetrealizablevalue(Themarketpriceatyear-end

commodities fell)

Goodsintransit Costishigherthannetrealizablevalue(Themarketpriceatyear-end

fell)

Goodsinprocess Costishigherthannetrealizablevalue(Theprocessedproductsare

decline)

9.Noncurrentassetsduewithinoneyear

Balanceat Nature

Item Balanceatyear-end

year-begin

Timedepositsduewithinone 12,625,340.00 Reclassificationoftimedeposit

year

Note:Thisprojectisthethree-yeartermfixeddepositthatthesubsidiaryZhongshanChanghonghasdepositedatGuangdong

DevelopmentBankZhongshanBranchforgettingthebank‘slong-termloan.ThedepositamountisUS$6,810,000.00dollars,

equivalenttoRMB47,240,970.00Yuan,ofwhichUS$1,820,000.00dollars,equivalenttoRMB12,625,340.00Yuan,will

expirein2017andreclassifytothisproject.

10.Othercurrentassets

Item Balanceatyear-end Balanceatyear-begin Nature

Financialproducts 1,385,200,000.00 500,000,000.00 Bankfinancialproducts

Value-added tax to be 56,525,274.99 12,862,817.57 Reclassifyofvalue-added

deducted taxtobededucted

Advancepaymentofincome 12,357,316.25 24,200,227.82 Reclassifyofadvance

tax paymentofincometax

Advancepaymentoftaxes Re-classifytheprepaid

andsurcharges 263,706.18 2,038,533.05 constructiontaxand

educationsurcharge

Total 1,454,346,297.42 539,101,578.44

11.Financeassetavailableforsales

(1)Financeassetavailableforsales

Balanceatyear-end Balanceatyear-begin

Item Impairm Impairme

Bookbalance ent Bookvalue Bookbalance nt Bookvalue

provision provision

Equityinstrumentavailablefor 17,000,000.00 17,000,000.00 17,000,000.00 17,000,000.00

sales

Including:measuredbycost 17,000,000.00 17,000,000.00 17,000,000.00 17,000,000.00

Total 17,000,000.00 17,000,000.00 17,000,000.00 17,000,000.00

(2)Financeassetavailableforsalesmeasuredbycostatyear-end

Decrease Holding Cash

InvestedUnit Year-begin Increasein inthe Year-end proportion dividend

theyear year ininvested fortheyear

unit

HuishangBankCo.,Ltd. 5,000,000.00 5,000,000.00 0.0972% 1,707,274.11

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Decrease Holding Cash

InvestedUnit Year-begin Increasein inthe Year-end proportion dividend

theyear year ininvested fortheyear

unit

Sichuan Hongyun New it 12,000,000.00 12,000,000.00 16.00%

InvestmentFund

Total 17,000,000.00 17,000,000.00 1,707,274.11

(3)Noimpairmentreserveoffinanceassetavailableforsalesatyear-end.

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

12.Long-termequityinvestment

Changeintheyear Impairmen

InvestedUnit Balanceat Disin Investment Other Other Declarationof Provisio Balanceat treserve

year-begin Additional vestm profitandloss comprehen changes cashdividends nfor Other year-end balanceat

investment ent confirmedby siveincome of orprofits impair year-end

equitymethod adjustment equity ment

Associatedcompanies

1.ChanghongRuba 29,713,680.32 -2,810,304.61 2,411,298.65 29,314,674.36

ElectricCompany(Private)Ltd.

Note1

2. HefeiXingmei Assets Management 12,846,069.09 -451,268.70 12,394,800.39

Co.,Ltd.

3.SichuanZhiyijiaNetworkTechnology 4,813,098.30 4,567,275.37 9,380,373.67

Co.,Ltd.Note

2

4.HengyuanDinengRebaoTechnology 4,045,502.68 19,600,000.00 -874,437.23 22,771,065.45

CompanyLimited

Note3

5.Sichuan TianyouGuigu Technology 22,821,196.62 12,500, -2,538,479.12 7,782,717.50

Co.,Ltd.

Note4 000.00

Total 74,239,547.01 19,600,000.0012,500, -2,107,214.29 2,411,298.65 81,643,631.37

000.00

Note1:on30April2014,oursubsidiaryZhongshanChanghongandRUBAComprehensiveTradingCorporationenteredintoaregisteredcapitalincreaseagreement,pursuanttowhich,bothparties

agreedtoincreaseregisteredcapitalofUSD12,310,000,amongwhich,ZhongshanChanghongagreedtocontributecapitalofUSD4,924,000basedontheoriginalshareholdingproportionof40%,and

RUBAComprehensiveTradingCorporationagreedtocontributecapitalofUSD7,386,000basedontheoriginalshareholdingproportionof60%.

Note2:on16December2014,theCompanyexecutedajointventureagreementwithitscontrollingshareholderSichuanChanghongAppliancesCompanyLimited,targetingtojointlyestablishSichuan

ZhiyijiaNetworkTechnologyCo.,Ltd.On5January2015,SichuanZhiyijiaNetworkTechnologyCo.,LtdwasofficiallyincorporatedwithregisteredcapitalofRMB50million,amongwhich,the

CompanymadecontributionofRMB15millionwithshareholdingproportionof30%andSichuanChanghongAppliancesCompanyLimitedmadecontributionofRMB35millionwithshareholding

proportionof70%.

Note3:oursubsidiarySichuanChanghongAirConditionerCo.,Ltd(―ChanghongAirConditioner‖)andHengyouyuanScience&TechnologyDevelopmentGroup(―Hengyouyuan‖)cooperatedto

establishHengyuanDinengRebaoTechnologyCompanyLimitedon28October2015.TheregisteredcapitalofthecompanyisRMB50million,amongwhich,ChanghongAirConditionercontributed

RMB24.5million,accountingfor49%oftheregisteredcapital,andHengyouyuancontributedRMB25.5million,accountingfor51%oftheregisteredcapital.

Note4:SichuanTianyouGuiguScience&TechnologyCompanywasincorporatedon31March2015withregisteredcapitalofRMB100million.OursubsidiaryChanghongAirConditionermadecapital

contributionofRMB25millionincash,accountingfor25%oftheregisteredcapital.ChengduJiaodaoPropertyDevelopmentCompanymadecapitalcontributionofRMB20million,accountingfor20%

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

oftheregisteredcapital.ChengduSouthwestJiaotongUniversityIndustry(Group)Co.,LtdmadecapitalcontributionofRMB20million,accountingfor20%oftheregisteredcapital.Mianyang

InvestmentHolding(Group)Co.,LtdmadecapitalcontributionofRMB5million,accountingfor5%oftheregisteredcapital.ShanghaiZhongchengXindayaFinancialInformationServiceCo.,Ltdmade

capitalcontributionofRMB5million,accountingfor5%oftheregisteredcapital.JiangsuRunyeInvestmentCo.,LtdmadecapitalcontributionofRMB10million,accountingfor10%oftheregistered

capital.ChengduDongyuShangmaoCo.,LtdmadecapitalcontributionofRMB15million,accountingfor15%oftheregisteredcapital.In2016,shareholdersmeetingofSichuanTianyouGuigu

TechnologyCo.,Ltd.agreedtoreducethe50millionYuancapital,theshareholdersarereducingthecapitalbyratioofshare-holding.Aftercapitalreduction,subsidiaryChanghongAirconditioner

contributed12.5millionYuan,representing25%oftheregisteredcapital.

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

13.Investmentproperties

(1)Investmentpropertiesmeasuredatcosts

Item Housesand Landuserights Total

buildings

I.Originalbookvalue

1.Balanceatyear-begin 23,142,172.83 916,691.38 24,058,864.21

2.Increasedintheyear

3.Decreasedintheyear

4.Balanceatyear-end 23,142,172.83 916,691.38 24,058,864.21

II.Accumulated depreciation and

accumulatedamortization

1.Balanceatyear-begin 9,558,221.21 416,429.49 9,974,650.70

2.Increasedintheyear 770,213.55 38,368.56 808,582.11

(1)provisionoramortization 770,213.55 38,368.56 808,582.11

3.Decreasedintheyear

4.Balanceatyear-end 10,328,434.76 454,798.05 10,783,232.81

III.Provisionforimpairment

IV.Bookvalue

1.Bookvalueatyear-end 12,813,738.07 461,893.33 13,275,631.40

2.Bookvalueatyear-begin 13,583,951.62 500,261.89 14,084,213.51

(2)Noinvestmentrealestatemeasuredbyfairvalueatyear-end.

(3)Noparticularaboutmortgageofinvestmentpropertyatyear-end.

(4)Noinvestmentrealestatehavingnotcompletedthepropertyrightcertificateatyear-end

14.Fixedassets

(1)Detailsoffixedassets

Item Housesand Mechanical Transport Others Total

buildings equipment equipment equipment

I.Originalbookvalue

1.Balanceatyear-begin 921,581,186.91 973,472,601.74 25,328,176.24 157,072,665.55 2,077,454,630.44

2.Increasedintheyear 5,172,711.93 97,327,067.62 1,048,117.67 18,635,668.29 122,183,565.51

(1)Purchase 2,649,436.80 3,177,875.00 824,044.84 4,203,313.85 10,854,670.49

(2) Construction in progress 2,523,275.13 94,149,192.62 39,829.05 8,233,563.01 104,945,859.81

transfer-in

(3)Inventorytransfer-in 6,143,863.48 6,143,863.48

(4)Increasein exchangerate 184,243.78 54,927.95 239,171.73

fluctuation

3.Decreasedintheyear 22,534,991.07 85,380,819.46 2,106,422.98 2,107,846.29 112,130,079.80

(1)disposeorretirement 2,120,034.24 67,563,188.83 1,409,251.58 1,111,584.77 72,204,059.42

(2) Construction in progress 1,608,240.00 1,608,240.00

transfer-in

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Item Housesand Mechanical Transport Others Total

buildings equipment equipment equipment

(3)otherdecrease 20,414,956.83 16,209,390.63 697,171.40 996,261.52 38,317,780.38

4.Balanceatyear-end 904,218,907.77 985,418,849.90 24,269,870.93 173,600,487.55 2,087,508,116.15

II.Accumulated

depreciation

1.Balanceatyear-begin 155,193,162.74 568,413,901.49 16,171,932.43 66,783,601.48 806,562,598.14

2.Increasedintheyear 30,668,440.85 90,305,238.31 1,776,529.45 13,581,814.09 136,332,022.70

(1)provision 30,668,440.85 90,305,238.31 1,776,529.45 13,581,814.09 136,332,022.70

3.Decreasedintheyear 4,317,334.39 53,654,744.81 1,959,421.94 1,356,676.59 61,288,177.73

(1)disposeorretirement 419,682.96 40,047,900.94 1,297,109.11 705,324.61 42,470,017.62

(2) Construction in progress 1,660,254.05 1,660,254.05

transfer-in

(3)otherdecrease 3,897,651.43 11,946,589.82 662,312.83 651,351.98 17,157,906.06

4.Balanceatyear-end 181,544,269.20 605,064,394.99 15,989,039.94 79,008,738.98 881,606,443.11

III.Provision for

impairment

1.Balanceatyear-begin 1,240,639.77 1,950,369.18 7,403.67 199,687.70 3,398,100.32

2.Increasedintheyear

3.Decreasedintheyear 1,240,639.77 348,957.23 1,589,597.00

(1)disposeorretirement 1,240,639.77 348,957.23 1,589,597.00

4.Balanceatyear-end 1,601,411.95 7,403.67 199,687.70 1,808,503.32

IV.Bookvalue

1.Bookvalueatyear-end 722,674,638.57 378,753,042.96 8,273,427.32 94,392,060.87 1,204,093,169.72

2.Bookvalueatyear-begin 765,147,384.40 403,108,331.07 9,148,840.14 90,089,376.37 1,267,493,931.98

ThenewfixedassetsinthisyearmainlyduetotheRMB104,945,859.81transferfromconstructionin

process; decrease of the fixed assets inthe Year mainly because the assets renewal transfer to

constructioninprocessandassetsdisposeforretirement;Otherreducereferstothesalesofsubsidiary

HefeiMeilingPackageProductsCo.,Ltd.

(2)Nofixedasststemporaryidleatyear-end.

(3)Nofixedassetsforcollateralatyear-end.

(4)Nofixedassetsleasedthroughoperatingleaseatyear-end.

(5)Nofixedassetsleasedthroughoperatingleaseatyear-end.

Items Originalbookvalue Accumulated Depreciation Netbookvalue

depreciation provision

Mechanical 40,920.00 34,554.69 6,365.31

equipment

Buildingconstruction 47,869,316.55 7,436,435.07 40,432,881.48

Total 47,910,236.55 7,470,989.76 40,439,246.79

(6)Fixedasstswithoutpropertycertificate

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Item Bookvalue Reasonofnotcompletethe

propertycertificate

IIcanteenoflivingarea 25,910,795.15 Inprocedure

6#buildingforcadremen 8,930,447.86 Inprocedure

7#buildingforcadremen 8,215,215.45 Inprocedure

4#makeshiftshelter(dormitorybuildingtransfertocapital) 6,651,069.97 Inprocedure

3#makeshiftshelter 5,689,907.18 Inprocedure

8#makeshiftshelter 5,178,824.74 Inprocedure

5#makeshiftshelter 5,140,247.60 Inprocedure

Canteen 2,716,313.94 Inprocedure

Total 68,432,821.89

(7)Nofixedassetsreadyforsaleatyear-end

15.Constructioninprogress

(1)Detailsofconstructioninprogress

Amountatyear-end Amountatyear-begin

Imp Bookvalue Imp Bookvalue

air air

Item Book men Book men

balance t balance t

pro pro

visio visio

n n

Relocationandcapacityexpansionprojectof 60,889,270.95 60,889,270.95 4,420,650.01 4,420,650.01

ZhongkeMeiling

Upgradingandreformoftheproductionline

of intelligent refrigerator of Mianyang 11,190,008.45 11,190,008.45

Meiling

Leasingprojectincollege 5,631,371.46 5,631,371.46

ReformoflineR290 4,031,885.46 4,031,885.46 9,920,126.79 9,920,126.79

Constructionofintelligentmanufacturing 12,785,053.55 12,785,053.55 2,944,802.39 2,944,802.39

Equipmentspendingforinstallation 3,490,730.72 3,490,730.72 4,033,590.36 4,033,590.36

Central air conditioning relocation and 1,124,429.99 1,124,429.99 1,092,360.60 1,092,360.60

CapacityUpgradingProject

KAline 792,136.75 792,136.75 1,279,229.95 1,279,229.95

Relocation of the squeeze board line in 593,777.99 593,777.99

JiangxiMeiling

2ndphaseconstructionofthefittinglifezone 165,000.00 165,000.00 1,325,050.00 1,325,050.00

innewindustrialparkofMeiling

Comprehensivepromotionofnonshrinktube 87,220.00 87,220.00 7,725,638.80 7,725,638.80

expander

Phase1VISAlaboratory 4,692,307.69 4,692,307.69

C line small refrigerator production and 2,319,042.81 2,319,042.81

transformationprojects

Thenewpurchaseofevaporatorwith6.35C 2,764,217.07 2,764,217.07

productionline

The freezer front-end equipment capacity 2,332,760.65 2,332,760.65

expansionproject

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Amountatyear-end Amountatyear-begin

Imp Bookvalue Imp Bookvalue

air air

Item Book men Book men

balance t balance t

pro pro

visio visio

n n

Laboratory reconstruction ofwater cooled 1,597,191.46 1,597,191.46

chillerandwatersourceheatpumpunit

Final assembly expanding project of the 1,996,064.77 1,996,064.77

freezer

Projectofmid-largevolumeenvironmenticeboxproduction 540,601.71 540,601.71

annualoutputfor0.6million

Othermiscellaneousitems 6,256,524.63 6,256,524.63 7,521,245.93 7,521,245.93

Total 107,037,409.95 107,037,409.95 56,504,880.99 56,504,880.99

(2)Changesinsignificantconstructioninprogress

Book Increase Transferto Other

Projects balanceat duringthe fixedassets Bookbalance Sourceoffunds

year-begin year decrease atyear-end

intheyear

Relocation and capacity

expansion project of 4,420,650.01 56,468,620.94 60,889,270.95 Self-raised

ZhongkeMeiling

Intelligentmanufacturingproject 2,944,802.39 28,007,852.54 18,022,473.18 145,128.20 12,785,053.55 Raisefunds

Upgrading and reform of

the production line of 11,190,008.45 11,190,008.45 Self-raised

intelligent refrigerator of

MianyangMeiling

(Continued)

Proportionof Accumulated including: Interest

Budget(in10 project Progres amountof interest capitaliza

Projects thousandYuan) investmentin s interest capitalized tionrate

budget capitalizatio amountofthe ofthe

n year year

Relocation and capacity

expansion project of 14,589.74 53.63% 80.00%

ZhongkeMeiling

Intelligentmanufacturingproject 26,128.00 11.85% 16.00%

Upgrading and reform of the

production line of intelligent 4,792.00 23.32% 30.00%

refrigeratorofMianyangMeiling

(3)Nodepreciationreservesforconstructioninprocessatyear-end.

16.Disposaloffixedassets

Item Closingamount Openingamount Reasonsfordisposal

transferred

Relevantassetsdisposalforreservedlands 75,788,138.47 75,773,138.47 Relocationforland

reserve

PursuanttotheurbanplanningrequirementsofthePeople‘sGovernmentofHefeicity,HefeiLand

ReserveCenterplanstopurchaseandstorethelanduserightofanintegratedeconomicdevelopment

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

zoneoftheCompanylocatedatLonggangofHefeiwithanareaof103,978.9sq.m.(Approximately

155.9684mu,LandUseRightCertificateNo.:DongGuoYong(2004)ZiNo.0200,thestateduseofthe

landisforindustrialpurpose).TheestimatedconsiderationforpurchasingandstorageisRMB74.48

million.ThelandismainlyusedfortheCompany‘swarehouse,productfinishingworkshopandthe

factoryofZhongkeMeiling.Pursuanttothepurchasingandstoragerequirementsoflanduseright,the

landwillbepurchasedandstoredwithvacantpossession.InApril2013,theCompanycompletedthe

relocationofoccupantsofthepremises,andthenetfixedassetsinrelationtothelandwilltransferas

disposal, accounting treatment will be conductin linewith relevant rules uponreceiving of the

relocationcompensation.

PursuanttotheurbanplanningrequirementsofHefeiMunicipalGovernmentandtheGovernmentof

Feidongcounty,thelandreservecenterofFeidongcountywillpurchaseandstorethelanduserightof

an economic development zone located at Feidong county, Hefei city, which is owned by the

Company‘ssubordinatecompanies,EquatorElectricandEquatorHomeAppliance,respectively,withan

areaof19,245.09sq.m.(Approximately28.87mu,LandUseRightCertificateNo.: DongGuoYong

(2008)No.0366,thestateduseofthelandisforindustrialpurpose)andanareaof46,161.9sq.m.

(Approximately69.24mu,LandUseRightCertificateNo.: DongGuoYong(2008)No.0367,the

stateduseofthelandisforindustrialpurpose).Thetotalconsiderationforpurchasingandstorageis

approximatelyRMB36million,ofwhichtheconsiderationforthelanduserightownedbyEquator

ElectricandEquatorHomeApplianceisapproximatelyRMB10.59millionandRMB25.41million,

respectively.TheCompanyhascompletedtherelocationofoccupantsofthepremises,andthenetfixed

assetsinrelationtothelandwilltransferasdisposal,accountingtreatmentwillbeconductinlinewith

relevantrulesuponreceivingoftherelocationcompensation.

Noimpairmentofrelevantassetsdisposalforreservedlandsatyear-end.

17.Intangibleassets

(1)Accordingtointangibleassetsitem

Item Landuseright Trademark Non-patent Other Total

specialright technology

I. Original book

value

1.Balance at 621,593,887.18 283,292,439.34 125,275,031.23 12,406.87 1,030,173,764.62

year-begin

2.Increased inthe 70,604,063.42 149,292.45 70,753,355.87

year

(1)purchase 149,292.45 149,292.45

(2)Internalresearch 70,604,063.42 70,604,063.42

3.Decreasedinthe 7,897,049.56 471,794.87 8,368,844.43

year

(1)Disposal 471,794.87 471,794.87

(2)otherdecrease 7,897,049.56 7,897,049.56

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Item Landuseright Trademark Non-patent Other Total

specialright technology

4.Balance at 613,696,837.62 283,292,439.34 195,407,299.78 161,699.32 1,092,558,276.06

year-end

II.Accumulated

depreciation

1.Balance at 104,809,120.83 267,076,417.49 64,838,113.89 413.56 436,724,065.77

year-begin

2.Increased in the 13,001,696.85 3,882,886.80 26,074,656.72 32,339.86 42,991,580.23

year

(1)provision 13,001,696.85 3,882,886.80 26,074,656.72 32,339.86 42,991,580.23

3.Decreasedinthe 1,126,641.57 1,126,641.57

year

(1)otherdecrease 1,126,641.57 1,126,641.57

4.Balance at 116,684,176.11 270,959,304.29 90,912,770.61 32,753.42 478,589,004.43

year-end

III. Provision for

impairment

IV.Bookvalue

1.Book value at 497,012,661.51 12,333,135.05 104,494,529.17 128,945.90 613,969,271.63

year-end

2.Book value at 516,784,766.35 16,216,021.85 60,436,917.34 11,993.31 593,449,698.85

year-begin

(2)Asoftheendof2016,mortgageofintangibleassetsisasfollows:

Name Propertycertificateserials Area(M2) Netbookvalue Note

Landuseright HGYJCZiNo.:0121 27,120.22 20,133,702.23

18.Developmentexpense

Increaseduringtheyear Decreaseduringtheyear

Item Balanceat Internal Includedin Balanceat

year-begin development Other current Confirmedas Other year-end

expenditure profitsand intangibleassets

losses

Technology

development for 50,919,386.00 44,090,189.50 3,660,130.40 60,471,010.63 30,878,434.47

Air-conditioner

Technology

development for 2,397,040.54 19,989,721.44 236,104.86 9,353,564.86 12,797,092.26

refrigerator

Other technology 28,401.18 2,168,640.18 69,329.56 779,487.93 1,348,223.87

development

Total 53,344,827.72 66,248,551.12 3,965,564.82 70,604,063.42 45,023,750.60

19.Goodwill

(1)Originalvalueofgoodwill

Increaseduringthe Decreaseduringthe

year year

Nameofinvested Balanceat Formation Formation Balanceat

unit year-begin from Other from Other year-end

enterprise enterprise

merger merger

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Increaseduringthe Decreaseduringthe

year year

Nameofinvested Balanceat Formation Formation Balanceat

unit year-begin from Other from Other year-end

enterprise enterprise

merger merger

HefeiMeilingGroup 10,922,803.73 7,369,435. 3,553,367.77

HoldingCo.,Ltd. 96

Guangxi Huidian

Household Electrics 5,313,913.50 5,313,913.50

Co.,Ltd

Total 16,236,717.23 7,369,435. 8,867,281.27

96

(2)Impairmentprovisionofgoodwill

Increaseduringthe Decreaseduringthe

Nameofinvested Balanceat year year Balanceat

unit year-begin Provision Other Provision Other year-end

HefeiMeilingGroup 10,922,803.73 7,369,435. 3,553,367.77

HoldingCo.,Ltd. 96

Guangxi Huidian

Household Electrics 5,313,913.50 5,313,913.50

Co.,Ltd

Total 16,236,717.23 7,369,435. 8,867,281.27

96

Note: at the year end, the Company conducted impairment test on goodwill, and provided for

impairmentreserveinconnectionwiththedifferencebetweenthepredictedfuturecashflowofthe

investeeand thegroupof assetsincludingthegoodwill.The recoverableamount is basedonthe

predictedfuturecashflowoftheinvestee.

SubsidiaryHefeiMeilingPackageProductCo.,Ltd.wassoldintheperiod,thegoodwillandaccrual

impairmentprovisionforformerassetsarereducedcorrespondingly

20.Long-termdeferredexpenses

Balanceat Increase Amortization Otherincrease Balanceat

Item year-begin duringtheyear duringthe duringtheyear year-end

year

Relocation expenses of the 1,132,075.48 1,132,075.48

intelligentmanufacturingplant

21.Deferredincometaxassetsanddeferredincometaxliabilities

(1)Deferredincometaxassetswithouttheoffset

Balanceatyear-end Balanceatyear-begin

Item Deductible Deferred Deductible Deferred

temporary incometax temporary incometax

difference assets difference assets

Deferredincometaxassetsrecognizedfrom 107,230,307.69 16,454,229.77 110,979,461.54 16,646,919.23

propertydepreciationpreparation

Deferredincometaxassetsrecognizedfrom 331,575,430.79 49,736,314.62 338,125,014.55 50,718,752.18

accrualliability

Deferredincometaxassetsrecognizedfrom 35,517,365.78 5,327,604.87 45,269,999.29 6,790,499.89

Dismissionwelfare

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Balanceatyear-end Balanceatyear-begin

Item Deductible Deferred Deductible Deferred

temporary incometax temporary incometax

difference assets difference assets

Deferredincometaxassetsrecognizedfrom 82,260,654.75 12,339,098.21 28,526,710.37 4,279,006.56

deferredincome

Deferred income tax assets recognized from 1,293,875.10 323,468.74

ir-reparablelosses

Deferredincometaxassetsrecognizedfrom 559,249.58 83,887.44

changesinthefairvalue

Total 558,436,883.69 84,264,603.65 522,901,185.75 78,435,177.86

(2)Deferredincometaxliabilitieswithouttheoffset

Balanceatyear-end Balanceatyear-begin

Item Deductible Deferred Deductible Deferred

temporary incometax temporary incometax

difference assets difference assets

Deferred income tax liabilitiesrecognized 12,060,213.30 1,809,032.00

fromchangesinthefairvalue

(3)Deferredincometaxassetsorliabilitieslistedafterset-off

Item Inter-neutralizationat Endingbalanceafter Inter-neutralizationat Openingbalanceafter

year-end set-off year-begin set-off

Deferred income 84,264,603.65 78,435,177.86

taxassets

Deferred income 1,809,032.00

taxliabilities

(4)Detailsofunrecognizeddeferredincometaxassets

Item Balanceatyear-end Balanceatyear-begin

Deductibletemporarydifference 26,140,372.22 40,973,787.35

Deductibleloss 373,985,517.42 385,199,882.64

Total 400,125,889.64 426,173,669.99

22.Othernon-currentassets

Item Balanceatyear-end Balanceatyear-begin

Termdepositforpledge 34,615,630.00 44,221,416.00

Note:Thisprojectisthethree-yeartermfixeddepositthatthesubsidiaryZhongshanChanghonghasdepositedatGuangdong

DevelopmentBankZhongshanBranchforgettingthebank‘slong-termloan.ThedepositamountisUS$6,810,000.00dollars,

equivalentto47,240,970.00Yuan,ofwhichUS$1,820,000.00,equivalentto12,625,340.00Yuan,willexpirein2017and

reclassifytothisproject.

23.Short-termloans

(1)Typesofshort-termloans

Typeofloans Balanceatyear-end Balanceatyear-begin

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Typeofloans Balanceatyear-end Balanceatyear-begin

Loaninpledge 26,500,000.00 24,268,373.19

Loanincredit 261,843,724.73 34,411,720.00

Total 288,343,724.73 58,680,093.19

NewloansintheYear:

1)TheCompanyandAgriculturalBankofChinaCo.,Ltd.HefeiJinzhaiRoadBranchhavesigneda"TradeFinancingBusiness

ServiceAgreement",theagreementappointstheserviceperiodisfromJanuary1,2016toDecember31,2016,uptoDecember

31,2016;theamountoffinancingunderthisserviceagreementisUS$37,745,960.03dollars,equivalenttoRMB261,

843,724.73.

2)Accordingtotheappointmenton―ExportTradeFinancingContract‖signedbythesubsidiaryZhongshanChanghong

CompanyandAgriculturalBankofChinaCo.,Ltd.ZhongshanNantouBranch,onSeptember13,2016,ZhongshanChanghong

CompanyhasappliedforfinancingRMB26,500,000.00Yuan toAgriculturalBankofChinaCo.,Ltd.ZhongshanNantou

Branchbyexporttradefinancing,thefinancingrateis3.15%,andthetimelimitisfromSeptember13,2016toSeptember8,

2017.

(2)Nooverdueshorttermborrowingsunredeemedatyear-end.

24.Financialliabilitiesatfairvaluethroughgainsandlosses

Item Balanceat Balanceat

year-end year-begin

Derivativefinancialliabilities 559,249.58

25.Notespayable

Type Balanceatyear-end Balanceatyear-begin

Bankacceptancebill 2,315,706,781.72 2,154,377,903.42

Commercialacceptancebill 319,344,958.58 17,687,020.37

Total 2,635,051,740.30 2,172,064,923.79

Notesexpiredatyear-endwithoutpaid

26.Accountpayable

(1)Ageofaccountpayable

Item Balanceatyear-end Balanceatyear-begin

Total 2,331,899,310.82 1,604,075,191.50

Including:over1year 47,332,805.86 35,963,023.64

(2)Noaccountpayablewithoveroneyearbookageatyear-end.

27.Advancepayment

(1)Ageofadvancepayment

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Item Balanceatyear-end Balanceatyear-begin

Total 390,935,440.46 295,604,800.16

Including:over1year 13,605,202.15 17,816,277.00

(2)Nomajoraccountreceivedinadvancewithoveroneyearageatyear-end

28.Wagespayable

(1)Typesofwagespayable

Item Balanceat Increaseinthis Decreaseinthis Balanceat

year-begin year year year-end

Short-termcompensation 104,153,335.66 1,254,948,719.62 1,180,279,200.47 178,822,854.81

After-service welfare- defined 4,085,558.31 89,997,424.04 89,134,760.09 4,948,222.26

contributionplans

Dismisswelfare 7,058,535.43 6,274,897.41 7,512,470.91 5,820,961.93

Total 115,297,429.40 1,351,221,041.07 1,276,926,431.47 189,592,039.00

(2)Short-termcompensation

Item Balanceat Increaseinthis Decreaseinthis Balanceat

year-begin year year year-end

Wages,bonuses,allowancesandsubsidies 94,173,695.60 1,103,672,234.13 1,050,874,026.60 146,971,903.13

Welfareforworkersandstaff 101,706.00 42,958,549.99 42,959,915.99 100,340.00

Socialinsurance 2,357,897.57 41,373,821.06 41,232,735.92 2,498,982.71

Including:Medicalinsurance 2,183,451.95 34,645,902.20 34,483,928.37 2,345,425.78

Workinjuryinsurance 79,354.04 3,444,765.98 3,477,027.37 47,092.65

Maternityinsurance 95,091.58 3,283,152.88 3,271,780.18 106,464.28

Housingaccumulationfund 6,079,965.72 38,776,870.36 41,530,031.54 3,326,804.54

Labor union expenditure and 1,440,070.77 3,985,093.16 3,682,490.42 1,742,673.51

personneleducationexpense

Short-termprofitsharingplan 24,182,150.92 24,182,150.92

Total 104,153,335.66 1,254,948,719.62 1,180,279,200.47 178,822,854.81

(3)Definedcontributionplans

Item Balanceat Increaseinthis Decreaseinthis Balanceat

year-begin year year year-end

Basicendowmentinsurance 3,186,528.80 84,818,196.93 84,137,452.94 3,867,272.79

Unemploymentinsurance 899,029.51 5,179,227.11 4,997,307.15 1,080,949.47

Total 4,085,558.31 89,997,424.04 89,134,760.09 4,948,222.26

29.Taxpayable

Item Balanceatyear-end Balanceatyear-begin

Value-addedtax 19,079,499.27 36,732,243.37

Businesstax 345,276.14

Enterpriseincometax 3,423,898.42 506,399.61

Individualincometax 3,205,739.98 1,807,299.13

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Item Balanceatyear-end Balanceatyear-begin

Urbanmaintenanceandconstructiontax 3,302,546.79 4,102,776.80

Housepropertytax 5,593,587.71 5,722,887.03

Land-userighttax 4,802,263.59 4,688,835.65

Educationalsurtax 2,428,555.60 2,917,920.88

Stamptax 2,944,485.06 2,012,329.38

ConstructionfundofWaterConservancyProjects 745,069.75 496,683.41

Treatmentfundforabandonelectric&electronicsproducts 12,328,067.00 9,140,895.00

Other 1,995,318.96 2,056,937.14

Total 59,849,032.13 70,530,483.54

30.Interestpayable

(1)Classificationofinterestpayable

Item Balanceatyear-end Balanceatyear-begin

Interestonlong-termloansforrepaymentofprincipal 1,617,352.01 214,328.89

ofinstallmentmaturity

(2)Nosignificantoverdueandunpaidinterestatyear-end.

31.Dividendspayable

Item Balanceatyear-end Balanceatyear-begin

CityInsurancecompany 376,729.65 302,954.85

BOC-FullgoalTianyiSecuritiesInvestmentFund 153,697.50 153,697.50

HefeiBranchofBOC 188,364.80 151,477.40

Hefeicollectiveindustryassociation 188,364.52 151,477.18

EntrustInvestmentWuhuofProvincialABC 150,691.86 121,181.94

Otherpiecemealunits 1,487,952.90 1,319,711.04

Total 2,545,801.23 2,200,499.91

Note:Balanceatyear-endreferstothecommondividendsthatnotreceivingbyshareholders.

32.Otherpayable

(1)Classificationofotherpayableaccordingtonatureofaccount

Natureofaccount Balanceatyear-end Balanceatyear-begin

1.Accruedexpenses(expensesoccurredwithoutreimbursed) 479,907,162.28 510,133,656.28

2.receivablesreceivedtemporaryanddeductedtemporary 7,725,476.68 10,538,181.53

3.deposit,margin 88,308,204.63 76,195,308.46

4.notthecome-and-gowithrelatedpartiesinstatementscope 12,959,890.54 7,470,061.10

5.other 33,679,589.30 39,229,879.96

Total 622,580,323.43 643,567,087.33

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

(2)Othersignificantpayablesagingoveroneyearasattheyear-endmainlyreferstotheprocurement

deposit.

33.Non-currentliabilityduewithinoneyear

(1)Classificationofnon-currentliabilityduewithinoneyear

Item Balanceatyear-end Balanceatyear-begin

Longtermloansduewithinoneyear 262,486,600.00

Deferredincometransfertogainsandlosseswithinoneyear 9,715,990.10 11,153,067.68

Total 272,202,590.10 11,153,067.68

(2)Deferredincometransferintoprofitandlosswithin1year

Amountreckoned

Itemofgovernmentsubsidies Amountat intonon-operation Other Amountat Assets-related/

year-begin revenueinthe changes year-end Income-related

Period

Demolition compensation of 1,797,880.32 1,797,880.32 1,797,880.32 1,797,880.32 Assets-related

JiangxiMeiling

DemolitioncompensationofHefei 2,467,003.32 2,445,033.38 2,403,543.22 2,425,513.16 Assets-related

Meiling

technical reform for Athena 4,286,250.00 4,286,250.00 4,286,250.00 4,286,250.00 Assets-related

Project

FreezerprojectofHefeiMeiling 734,062.44 734,062.50 734,062.58 734,062.52 Assets-related

Newgenerationofintelligentenergy-saving 1,700,000.00 -1,700,000.00 Assets-related

ACandindustrializationforkeyopponents

Adaptability improvement

R290/D52/13-R290 project for 167,871.60 167,871.60 167,871.60 167,871.60 Assets-related

productionofFTXS

Promotionofnewindustrialization

(annualoutputof0.6millionlarge

and volume environmental 304,412.50 304,412.50 Assets-related

protection energy-saving freezer

project,)

Total 11,153,067.68 9,431,097.8 7,994,020.22 9,715,990.10

Note1:Theprojectreferstothedeferredincometransfertothenon-currentliabilityduewithinoneyear,

whichwillexpectedtoamortizednextyear

Note2:theindustrializationprojectofthenewenergy-savingintelligentACandkeypartsarenotacceptance

in2016

34.Long-termloans

(1)Classificationoflong-termloans

Type Amountatyear-end Amountatyear-begin

Loaninpledge 34,157,788.00 43,662,966.40

Loaninmortgage 3,200,000.00 3,840,000.00

Loanincredit 1,551,000.00 195,501,900.00

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Type Amountatyear-end Amountatyear-begin

Total 38,908,788.00 243,004,866.40

(2)Detailsoflong-termloansatyear-end

Borrowing Returning Foreign Interest Amountatyear-end Amountat

Loanunit day day currency rate （RMB） year-begin

（RMB）

ZhongshanBranchof ChinaGuangfa 2014.12.24 2017.12.24 USD 3.20% 11,688,480.00

BankNote1

ZhongshanBranchof ChinaGuangfa 2015.01.06 2018.01.06 USD 3.20% 34,157,788.00 31,974,486.40

BankNote2

MinistryofFinanceofHefeiNote3 2002-11-21 2017-11-20 RMB 1.80% 651,000.00 1,301,900.00

MinistryofFinanceofHefeiNote4 2004-12-10 2019-12-10 RMB 1.80% 900,000.00 1,200,000.00

MinistryofFinanceofHefeiNote5 2006-11-9 2021-11-8 RMB 2.25% 3,200,000.00 3,840,000.00

AnhuibranchImportandExportBank 2015-12-18 2017-4-18 RMB 2.65% 193,000,000.00

Note6

Total 38,908,788.00 243,004,866.40

Note1: On 24 December 2014, subsidiary Zhongshan Changhong entered into Foreign Currency

Mid-LongtermLoanContractwithZhongshanBranchofChinaGuangfaBank,agreedthatissuing

foreigncurrencyUSD1,800,000.00totheCompany.Theloansarecontributedforthejointventure

projectinPakistan,whichareZhongshanChanghongElectricsandRUBAGENERALTRADINGFZE.

ThisborrowingwassecuredbythefixeddepositofUSD1,820,000.00savedbyZhongshanChanghong

in China Guangfa Bank Zhongshan Branch. The loans amounting to 12,486,600.00 Yuan after

convertionandtheamounthasre-classifiedtonon-currentliabilityduewithinoneyear

Note2: on6January2015,subsidiaryZhongshanChanghongentered intoMiddleandLongTerm

ForeignCurrencyBorrowingContractwithChinaGuangfaBankZhongshanBranch,whichagreedthat

ChinaGuangfaBankZhongshanBranchwouldprovideloansofUSD4,924,000.00totheCompanyto

financethejointventureprojectconductedbyZhongshanChanghongAppliancesCo.,LtdandRUBA

GENERAL TRADING FZE Company in Pakistan. This borrowing was secured by Zhongshan

ChanghongwiththefixeddepositsofUSD86,000.00andUSD4,904,000.00savedbyitinChina

GuangfaBankZhongshanBranch,respectively.

Note3:on1November2002,theCompanyentered intotheAgreementRelatingtoImplementing

ConstructionProjectsthroughLendingTreasuryBondFundswiththefinanceofficeofHefei,pursuant

towhich,thefinance office of Hefei lent thetreasurebonds or RMB7.16millionrelated toour

―Technology ReformProject in relationto Nanometer Materialsfor RetainingFreshness‖ toour

Company,withatermsof15years.Thelentfundshavebeguntocarryinterestcommencingfromthe

dateofappropriationoffundsbythefinanceofficeofHefei(namely21November 2002),andthe

CompanyshallpaytheintereststothefinanceofficeofHefeiannuallyonanaveragebasisduringthe

lendingperiod.Thefirstfouryearsoftheloanisgraceperiod.Theinterestrateperannumapplicableto

thelentfundsisfloatinginterestratesince1999(forinterestrateperannuminrespectofeachbatchof

Treasurybondlendingcapital,itisdeterminedbyreferencetoone-yeartimedepositrateperannumon

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

valuedateoftheprevailingyearaspublishedbythePBOC,plus0.3percentagepoints).

Note4: ItwasthespecialTreasurybondcapitalappropriatedbyMinistryofFinanceofHefeifor

enterprises‘informationreform,receivedonDec.10th,2004.

Note5:InAugustof2006,theCompanysignedAssetMortgageAgreementwithMinistryofFinanceof

Hefei. Ittakesfiveindustry crusher chamberswhich cover anarea of 2,322.98squaremeters as

mortgagefortheCompanytogetthelendingoftreasurybondfundwhichhas15-yeartermandworthy

ofRMB7,040,000fromtheMinistryofFinanceofHefei.Thecapitalon-lendingbegantobearinterest

fromtheappropriatedate(November9,2006),whichwouldbepaidbystagesintheloanperiodto

MinistryofFinanceofHefeibytheCompany.Thefirstfouryearsweregraceperiod,duringwhichthe

annualinterestratewassubjecttofloatinginterestrate(theannualinterestratewastheannualinterest

rateofoneyearfixeddepositplus0.3%).On1March2013,accordingtotheLetterRelatingtoCeasing

ProcessofOtherSecuritiesinrespectofthePropertiesinFeidongLonggangIndustrialParkofHefei

MeilingCo.,Ltd.(HCJ(2006)No.85)issuedbythefinanceofficeofHefei,Meilingcommencedthe

national purchaseof itsland parcelsinLonggang incompliancewiththeland planningofHefei

municipalgovernment,whichrequireditspropertiesinLongganglandparceltobeunrestricted.The

realestateformortgageliftedin2006oftheCompanywithregistrationNo.HGYJCZNo.0121which

wasusedasthesecurityfortreasurybondslendingcapital(detailsweresetoutinNoteVI.15).

Note6:on18December2015,theCompanyandtheExport-ImportBankAnhuiBranchexecuteda

BorrowingContract(High-techProductsExportSellerCredit)whichagreedthattheExport-Import

Bank AnhuiBranchwould grant totheCompanyloans withtotalfacilities ofRMB250 million.

Utilizationofthisloanissubjecttoexportofhigh-techproductsonly.Thetermoftheloanis16months,

andtheinterestrateisbasedonexportsellercreditrate.Theloanbalanceunderthecontractamounting

to250millionYuanatendoftheyear,andtheamounthasre-classifiedtonon-currentliabilitydue

withinoneyear

35.Long-termwagepayable

Item Balanceatyear-end Balanceat

year-begin

Dismissalwelfare 29,696,403.85 38,211,463.86

Accordingtotheinternalearlyretirementpolicy,thelong-termpayabledismissalwelfarebearsbythe

CompanyuptoendoftheyearamountingtoRMB29,696,403.85.

36.Accountpayablespecialfunds

Item Balanceat Increasein Decrease Balanceat Reason

year-begin theyear intheyear year-end

Special fund of technical Zhongshan Science&

transformation of 1,400,000.00 1,400,000.00 TechnologyPlan

Zhongshan

37.Projectedliability

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Item Balanceatyear-end Balanceatyear-begin Reason

Productqualityguarantee 11,795,030.15 11,146,216.49 Guaranteeofproduct

Guaranteefundforqualityservice 319,780,400.64 326,978,798.06 Guaranteeofproduct

Total 331,575,430.79 338,125,014.55

ProductqualitydepositisthemaintenanceexpenseprovidedbytheCompanyunderthenationalpolicy,

whilequalityservicespecialguaranteecapitalisthewarrantycostsprovidedforproductqualityin

additiontosuchpolicy.

38.Deferredincome

(1)Classificationofdeferredincome

Item Amountatyear-end Amountat

year-begin

Governmentsubsidies---subsidiesofdevelopmentproject 67,032,277.62 52,631,208.54

Governmentsubsidies---subsidiesofRelocation 75,887,284.87 80,259,410.00

Total 142,919,562.49 132,890,618.54

(2)Governmentsubsidy

New Amount Concerned

Item Amountat subsidyin reckonedinto Other Amountat with

year-begin theYear non-operatin changes year-end assets/earni

gincome ngs

Demolition compensation of 47,378,064.70 2,403,543.22 44,974,521.48 Assets

HefeiMeiling concerned

Demolitioncompensation 23,526,710.37 170,701.60 23,356,008.77 Assets

concerned

SpecialfundoftheAthenatechnical 17,736,562.50 4,286,250.00 13,450,312.50 Assets

transformation concerned

Technicaltransformationofpropane 11,661,457.52 11,661,457.52 Assets

andR410a replacetheFCFC-22 concerned

VISAresearchandapplication 10,100,000.00 10,100,000.00 Assets

project concerned

Demolition compensation of 9,354,634.94 1,797,880.32 7,556,754.62 Assets

JiangxiMeiling concerned

Adaptability improvement Assets

R290/D52/13-R290 project for 7,258,396.00 167,871.60 7,090,524.40 concerned

productionofFTXS

Subsidyfundforthenewfactoryof 5,000,000.00 5,000,000.00 Assets

ZhongkeMeiling concerned

Intelligentwhite-goodssoftwareplatform Assets

andresearchandindustrializationoftypical 4,000,000.00 4,000,000.00 concerned

applications

Capitalappropriatedfromthenational Assets

treasury 2,950,000.00 2,950,000.00 concerned

Developmentandproductizationofthe 2,350,000.00 2,350,000.00 Assets

CHIQAC concerned

Promotion ofnew industrialization

(annualoutputof0.6millionlargeand 2,435,300.00 456,618.75 304,412.50 1,674,268.75 Assets

volume environmental protection concerned

energy-savingfreezerproject,)

Researchandapplicationoffrequency Assets

conversioncontrolMCUchip 2,300,000.00 2,300,000.00 concerned

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

New Amount Concerned

Item Amountat subsidyin reckonedinto Other Amountat with

year-begin theYear non-operatin changes year-end assets/earni

gincome ngs

Special fundofstrategy emerging 2,000,000.00 2,000,000.00 Assets

industryandhigh-endgrowthindustry concerned

Freezer project of Hefei 2,936,250.03 734,062.58 2,202,187.45 Assets

Meiling concerned

Industrialization project of the -1,700,000.00 1,700,000.00 Assets

intelligentenergy-savingAC concerned

Subsidyofprojectdevelopment 531,900.00 278,373.00 253,527.00 Assets

concerned

Designandapplicationofenergysaving 300,000.00 300,000.00 Assets

airconditioningduct concerned

Total 132,890,618.54 18,928,657.52 905,693.35 7,994,020.22 142,919,562.49

Note:othermovementsofthisitemareattributabletoreclassificationoftheamounttobeamortized

overoneyeartonon-currentliabilitiesduewithinoneyear.

39.Sharecapital

Changeduringtheyear（+、-）

Balanceat Shares Balanceat

Item year-begin New Bonustransferred year-end

shares share from Other Subtotal

issued capital

reserve

280,8

Totalshares 763,739,205.00 58,67 280,858,676.00 1,044,597,881.00

6.00

40.Capitalreserve

Item Amountat Increaseduringthe Decreaseduring Amountat

year-begin year theyear year-end

Sharepremium 1,481,014,065.23 1,259,874,046.76 101,100,314.04 2,639,787,797.95

Othercapitalreserve 48,169,810.90 3,451.80 48,173,262.70

Total 1,529,183,876.13 1,259,877,498.56 101,100,314.04 2,687,961,060.65

Note:Theincreaseinsharepremiumsforthecurrentyearisduetotheincreaseintheprivateplacementofnewsharesinthe

currentperiodsoastooffsetcapitalreserveofRMB5,141,904.16Yuan byreducingtheacquisitionofminorityshareholding

fromsomemarketingsubsidiaries,offsetcapitalreserveofRMB95,650,000.00Yuan bycombiningGuangdongChanghong

RidianTechnologyCo.,Ltd.underthesamecontrol,andoffsetcapitalreserveofRMB308,409.88Yuan bythesubsidiary

ZhongkeMeilingLowTemperatureTechnologyCo.,Ltd.todilutetheparentcompany‘srightsandintereststhroughprivate

placementofsharestospecificnaturalperson;otherincreaseincapitalreserveisduetothereckoninofrationedshares

difference.

41.Othercomprehensiveincome

Item Balanceat Accountintheyear Balanceat

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

year-begin Less:writtenin year-end

other

comprehensive

Account incomein Less: Belongto Belongto

before previousperiodincometax parent minority

incometaxin andcarried expense company shareholders

theyear forwardto aftertax aftertax

gainsandlosses

incurrent

period

Othercomprehensiveincomere-dividedintogains/losses

Including:conversion

difference arising -2,280,500.61 7,798,783.78 5,755,047.56 2,043,736.22 3,474,546.95

fromforeigncurrency

financialstatement

42.Surplusreserves

Item Amountat Increaseduringthe Decreaseduring Amountat

year-begin year theyear year-end

Statutorysurplusreserve 251,459,292.02 23,962,426.15 275,421,718.17

Discretionarysurplusreserve 115,607,702.16 115,607,702.16

Total 367,066,994.18 23,962,426.15 391,029,420.33

43.Retainedprofit

Item Thisyear Lastyear

Amountattheendoflastyear 817,667,480.44 843,596,827.22

Add:adjustmentfromundistributedprofitatyear-begin

Including:retroactiveadjustmentbyAccountingStandardsfor

BusinessEnterprise

changeofaccountingpolicy

Correctionofformermaterialerror

Changeofcombinationscopeundercommoncontrol

Amountatthebeginningofthisyear 817,667,480.44 843,596,827.22

Add:netprofitattributabletoshareholdersofparentcompanyforthis 220,216,680.96 27,104,893.56

year

Less:withdrawofstatutorysurplusreserve 23,962,426.15 7,209,888.04

withdrawofdiscretionalsurplusreserve

Withdrawofgeneralriskprovision

Dividendpayableforordinaryshares 45,824,352.27 45,824,352.30

Dividendofordinarysharestransferredtosharecapital

Amountattheendofthisyear 968,097,382.98 817,667,480.44

44Operatingincomeandoperatingcost

(1)Operatingincomeandoperatingcost

Item Amountforthisyear Amountforlastyear

Mainbusinessincome 12,025,103,352.55 10,318,999,424.25

Otherbusinessincome 501,607,514.94 435,200,763.87

Total 12,526,710,867.49 10,754,200,188.12

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Item Amountforthisyear Amountforlastyear

Mainbusinesscost 9,590,231,985.74 8,236,606,146.33

Otherbusinesscost 438,161,436.58 390,351,683.30

Total 10,028,393,422.32 8,626,957,829.63

(2)Mainbusinessclassifiedaccordingtoproduct

Amountforthisyear Amountforlastyear

Product

Operationincome Operationcost Operationincome Operationcost

Refrigerator, 6,678,568,374.39 5,236,031,795.08 6,017,333,150.01 4,635,965,558.65

freezer

Air-condition 4,158,164,312.32 3,354,925,254.82 3,415,727,210.45 2,844,833,539.24

Washing 508,133,090.63 404,747,868.32 356,011,057.00 293,117,500.61

machine

Small

appliances and 423,162,351.81 379,811,894.02 288,940,970.60 261,832,731.45

kitchen and

toilet

Other 257,075,223.40 214,715,173.50 240,987,036.19 200,856,816.38

Total 12,025,103,352.55 9,590,231,985.74 10,318,999,424.25 8,236,606,146.33

(3)Mainbusinessclassifiedaccordingtosalesregion

Amountforthisyear Amountforlastyear

Region

Operationincome Operationcost Operationincome Operationcost

Domestic 9,108,442,083.44 6,976,734,143.90 8,130,650,603.41 6,273,110,957.69

Overseas 2,916,661,269.11 2,613,497,841.84 2,188,348,820.84 1,963,495,188.64

Total 12,025,103,352.55 9,590,231,985.74 10,318,999,424.25 8,236,606,146.33

Topfiveclientshaveincomeinsales ofRMB 4,437,473,136.69yuanintotal,a35.42%intotal

operationincome.

45.Businesstaxandextracharges

Item Amountforthisyear Amountforlastyear

Businesstax 895,146.45 1,008,789.43

Cityconstructiontax 25,764,035.98 23,575,164.51

Extrachargeforeducationandlocaleducationsurcharge 18,742,400.86 17,160,932.84

Realestatetax 11,925,656.28 404,921.48

Treatmentfundforabandonelectrics&electronics 53,619,622.00 45,449,658.00

Landtax 11,078,203.69

Stampduty 9,221,240.77

Waterfund 5,293,129.18

Other 1,318,387.72 250,088.73

Total 137,857,822.93 87,849,554.99

AccordingtothefinanceandaccountingoftheMinistryofFinanceNo.[2016]22―AboutPrintingtheNoticeofAccounting

TreatmentProvisionsforValueAddedTax‖,aftertheoveralltrialimplementationofbusinesstaxchangingtovalue-addedtax,

thetitleof"businesstaxandsurcharges"changesto―taxesandsurcharges‖,thisaccountisusedtocalculatetheconsumption

tax,citymaintenanceandconstructiontax,resourcetax,educationsurchargeandpropertytax,landusetax,traveltax,stamp

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

taxandotherrelatedtaxesoccurredinbusinessoperations.Thecompanyadjustspropertytax,landtax,stamptax,water

conservancyfundsandothertaxesandfeestothetaxesandadditionalsubjectaccountingaccordingly.

46.Salesexpense

Item Amountforthisyear Amountforlastyear

Salary,extrachargesandlaboringcharge 516,616,181.17 447,556,061.71

Transportexpenses 453,357,684.29 428,165,323.89

Marketsupport 232,609,376.03 138,065,923.05

Airconditionerinstallationfee 212,014,995.68 132,863,018.76

Nationalthreeguaranteesexpense 153,157,117.74 142,589,930.91

Storageleaseexpenses 110,446,203.15 116,703,905.77

Otherexpenses 48,585,265.28 34,306,907.77

Travellingexpenses 38,814,724.25 38,948,402.40

Advertisementexpenses 38,230,903.17 46,857,777.01

Operationactivitiesexpenses 17,125,348.72 16,501,466.28

Meetingorganization 11,440,400.40 10,618,708.25

House-leaseexpenses 9,484,909.62 9,083,216.04

Depreciationexpenses 6,041,295.37 5,116,523.38

Communicationexpenses 7,472,043.94 7,030,879.96

Total 1,855,396,448.81 1,574,408,045.18

47.Administrationexpense

Item Amountforthisyear Amountforlastyear

Salaryandsocialinsuranceetc. 250,588,937.09 186,321,428.76

TrialfeeofR&D 50,029,204.84 45,792,844.72

Tax 35,909,877.24

Amortizedintangibleassets 42,656,480.50 34,093,373.12

Depreciation 20,636,117.00 19,069,317.84

Utilities 10,655,035.88 10,614,175.78

Domestictravellingfee 9,102,131.63 10,340,291.19

Inspectionandauthenticationfee 7,598,269.93 7,849,745.81

Businessactivities 7,391,394.85 6,129,878.41

Officecharge 6,076,143.02 5,786,777.68

Propertyinsurance 4,198,820.70 2,785,476.37

FundsofBoard 2,743,185.06 2,029,495.42

Others 60,471,260.23 64,334,351.19

Total 472,146,980.73 431,057,033.53

48.Financialexpense

Item Amountforthisyear Amountforlastyear

Interestexpenditure 25,317,436.95 22,074,815.67

Less:Interestincome 115,658,075.99 120,080,403.20

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Add:exchangeloss -51,103,635.28 -11,082,892.47

procedurechargeexpenditure 10,595,347.69 5,064,460.35

discountexpenditure -9,030,263.29 1,860,545.49

otherexpenditure 129,461.71

Total -139,879,189.92 -102,034,012.45

49.LossfromAssetsdepreciation

Item Amountforthisyear Amountforlastyear

Baddebtlosses -8,988,293.59 796,959.27

Provisionforfallingpriceofinventory 10,341,740.28 14,885,861.57

Provisionfordevaluationofgoodwill 5,313,913.50

Total 1,353,446.69 20,996,734.34

50.Changesinfairvaluegains/loses

Item Amountforthisyear Amountforlastyear

Financialassetsmeasuredatfairvalueandwhosemovementsare 12,060,213.30

includedintheprofitandlossofthecurrentperiod

Including:Incomeoffairvaluechangesfromderivativefinancial 12,060,213.30

instruments

Financialliabilitiesmeasuredatfairvalueandwhosemovementsare -559,249.58 81,170.00

includedintheprofitandlossofthecurrentperiod

Including:Incomeoffairvaluechangesfromderivativefinancial -559,249.58 81,170.00

instruments

Total 11,500,963.72 81,170.00

51.Investmentincome

(1)Sourcesofinvestmentincome

Item Amountforthisyear Amountforlastyear

Long-termequityinvestmentincomebyequitymethod -1,724,205.46 -15,983,663.17

Investment income obtained from disposalof long-termequity 10,520,753.99

investment

Investmentincomeobtainedfromheldoffinanceassetavailablefor 6,693,575.48 5,756,139.46

sales

Investment income obtained from disposal of financial assets

measuredatfairvalueandwhosemovementsareincludedinthe -1,187,641.34 -2,296,400.00

profitandlossofthecurrentperiod

Investmentincomeobtainedfromdisposaloffinanceassetavailable 480,332.00

forsales

Total 14,302,482.67 -12,043,591.71

(2)Long-termequityinvestmentincomebyequitymethod

Item Amountfor Amountfor Reasonofchangeofthisyear

thisyear lastyear thanlastyear

HefeiXingmeiAssetsManagementCo.,Ltd. -451,268.70 -225,715.84 Changesof netprofit ofthe

investedunit

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Item Amountfor Amountfor Reasonofchangeofthisyear

thisyear lastyear thanlastyear

ChanghongRubaElectric -2,427,295.78 -2,537,744.93

Company(Private)Limited

SichuanZhiyijiaNetworkTechnologyCo.,Ltd. 4,567,275.37 -10,186,901.7 Changesof netprofit ofthe

0 invested unit and counter

HongyuanDinengRebaoTechnologyCo.Ltd. -874,437.22 -854,497.32 currenttransactionoffset

SichuanTianyouGuiguTechnologyCo.,Ltd. -2,538,479.13 -2,178,803.38

Total -1,724,205.46 -15,983,663.1

7

(3)Investmentincomeobtainedfromdisposaloflong-termequityinvestment

Item Amountforthisyear Amountforlastyear

EquityincomeobtainedfromdisposalofHefeiMeiLing 10,520,753.99

PackagingProductsCo.,Ltd.

(4)Investmentincomeobtainedfromfinancialassetsavailableforsales

Item Amountforthisyear Amountforlastyear

DividendsofHuishangBankCo.,Ltd.(shareholding0.0972%) 1,707,274.11 1,707,274.11

Purchaseofbankfinancialproducts 4,986,301.37 4,048,865.35

Total 6,693,575.48 5,756,139.46

(5)Theinvestmentincomefromdisposaloffinancialassetsatfairvaluethroughprofitorlossrefersto

theprofitorlossoccurredfromnon-deliverableforward(NDF)transaction.

(6)Investmentincomeobtainedfromdisposaloffinanceassetavailableforsales:

Item Amountforthisyear Amountforlastyear

DisposalofequityofFuyangWeiaoApplianceMarketingCo.,Ltd. 480,332.00

Total 480,332.00

52.Non-operationrevenue

(1)Non-operationrevenue

Amountreckoned

Item CurrentYear LastYear intonon-recurring

gains/lossesinthe

Year

Gainsfromdisposalofnon-current 4,155,568.27 1,772,955.83 4,155,568.27

assets

Including:Gains from disposal of 4,155,568.27 1,772,955.83 4,155,568.27

fixedassets

Governmentsubsidy 48,274,982.18 37,650,927.30 41,152,549.66

Incomeofpenalty 688,220.18 714,106.32 688,220.18

Other 4,798,906.63 5,387,824.40 4,798,906.63

Total 57,917,677.26 45,525,813.85 50,795,244.74

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

(2)Governmentsubsidy

Item 2016 2015 Resourcesandbasis Assets/Income

related

VAT drawback for the software 7,122,432.52 7,558,226.97 CS[2011]NO.100 Income-related

products

Project of Athena Luxury 4,286,250.00 4,286,250.00 Deferred income Asset-related

Refrigerators transfer-in

Othersporadicitems 4,096,393.64 4,843,891.28 Income-related

Step-outsubsidyfor2016 4,000,000.00 630,000.00 YSWH [2016] Income-related

Staffdormitorybuildingproject 2,445,033.38 2,467,300.72 Deferred income Asset-related

transfer-in

Special fundofthe internal & external

economic&tradedevelopmentin 2,100,000.00 YSWH [2016]No.30 Income-related

2016andportconstruction

Relocation projectof theJiangxi 1,797,880.32 1,797,880.32 Relocationcompensation Asset-related

MeilingRefrigeration

Special fund of foreign trade HefeiTreasuryPayment

promotionfromCityCommercial 1,733,000.00 1,362,000.00 Income-related

Bureau Center

Policysubsidyofthepromotionof 1,538,700.00 HZ〔2015〕No.36 Income-related

newindustrializationdevelopment

MunicipalFinanceBureauenterprise 1,521,680.00 HZ〔2014〕No.81.

1,717,800.00 Income-related

postsubsidy HZ〔2013〕No.52etc.

Subsidyfortechnicaltransformation 1,217,800.00 HZ〔2015〕No.36 Income-related

offixedassets

TreasuryPaymentCenter

Policysubsidyofserviceindustry 1,120,000.00 ofHefei Economic& Income-related

development Technology

DevelopmentZone

TianjinXingtaiIndustrialEconomic TianjinXintaiIndustrial

1,014,456.72 EconomicDevelopment Income-related

DevelopmentManagementCenter ManagementCenter

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Policy subsidy of promote the TreasuryPaymentCenter

developmentofnewindustrialization 1,000,000.00 ofHefei Economic& Income-related

from Economic& Technology Technology

DevelopmentZone DevelopmentZone

Industrial policy smart home 1,000,000.00 HZ（2016）No.35etc. Income-related

appliancetechnologyawards

Powerdemandsidemanagementin 992,000.00 CQ〔2015〕No.1846etc. Income-related

2016

NJP production trade enterprise 933,835.00 NanjingPort(Group)Co., Income-related

award Ltd.

Zhongshan3rdbatchofscientificand Zhongshan Technology

technologicalinnovationprojectsand 808,200.00 Income-related

funds [2016]No.252

ManagementCommittee

TechnicalTransformationfund(H-N 801,721.90 2,127,801.98 ofJingdezhenHigh& Income-related

refunds) New-TechDevelopment

Zone

Refrigeratorproject 734,062.50 734,062.50 Transfer-in deferred Asset-related

income

SupportingfundofAnhuiBranchof 714,733.00 Hefei GovernmentHZ Income-related

SINOSURE (2014)No.62etc.

Standard award of Quality& 700,000.00 HZ(2016)No.35etc. Income-related

TechnicalSupervisionfromtheCity

Step Out government subsidy 695,439.00 1,379,033.00 Finance Bureau of Income-related

/CZ038001 ZhongshanCity

GovernmentsubsidyforStepOut 500,000.00 ZhongSW[2016]No.: Income-related

20

Awardforthegrowingenterpriseof TreasuryPaymentCenter

promotion of new-type ofHefei Economic&

industrialization development from 500,000.00 Income-related

Hefei Economic& Technology Technology

DevelopmentZone DevelopmentZone

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Industrypolicy-Afterwardssubsidy 500,000.00 HZ(2016)No.35etc. Income-related

andindustrialdesignaward

Policyfundforthe2ndpromotionof

service industrydevelopment and 500,000.00 HefeiFinanceOffice Income-related

financingindustryforyearof2016

Subsidy for overseas sales from TreasuryPaymentCenter

economic and tradedevelopment 490,800.00 ofHefei Economic& Income-related

bureau of Hefei Economic& Technology

TechnologyDevelopmentZone DevelopmentZone

Subsidy for equipment and TreasuryPaymentCenter

instrumentfromR&Dorganization ofHefei Economic&

ofScienceTechnologyBureauof 476,189.00 639,000.00 Income-related

Hefei Economic& Technology Technology

DevelopmentZone DevelopmentZoneetc.

Governmentsubsidyofpromoting 456,618.75 Deferred income Asset-related

newindustries transfer-in

Special funds for technical 455,600.00 541,300.00 ZF[2014]No.108 Income-related

transformationinZhongshan

IndustrialDevelopment 450,600.00 HZ（2016）No.35 Income-related

\HZBM（2016）No.65

Developmentsubsidyforexportation 412,010.25 ZSWZH[2016]No.36 Income-related

enterprise

AnhuiSelectedEnterpriseReward TreasuryPaymentCenter

for the promotion of new-type ofHefei Economic&

industrialization from Hefei 300,000.00 Income-related

Economic& Technology Technology

DevelopmentZone DevelopmentZone

Technicalreformoftheproduction HZ（2016）No.35

line for eco-friendly high-quality 278,373.00 Asset-related

\HZBM（2016）No.65

metalpipe

SubsidyfromHefeiEconomic& 242,600.00 640,650.00 HJQG〔2015〕No.111 Income-related

TechnologyDevelopmentZone etc.

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Relocationofproduction baseof 170,701.60 251,688.93 Deferred income Asset-related

MianyangMeiling transfer-in

R410A adaptive reuse of 167,871.60 167,871.60 Deferred income Asset-related

C/III/S/13/037/coolantsproduction transfer-in

Subsidy for brand propagate 2,000,000.00 YWJMCZ[2013]No.8 Income-related

extensionaboard

Special funds for enterprise 1,100,000.00 WJXJGH(2015)No.502 Income-related

developmentin2015

Exportcertificationfeesin2014 895,500.00 HSWM[2015]No.98 Income-related

NanjingPortContainerDevelopment 810,670.00 NGC[2012]No.12 Income-related

Awardin2014

Second batch of enterprises to

enhancethetrainingofskillstraining 600,000.00 HRSM[2015]No.73 Income-related

subsidiesin2015

Clause10- topromotethe

Rewardforthenewproductsfrom 500,000.00 development of new Income-related

province industrialization policy

awardin2014

CHIQkitech and toilet whole-set Newintelligentterminal

developmentandindustrialization 600,000.00 layout and business Income-related

modelbasedoninternet

Total 48,274,982.18 37,650,927.30

53.Non-operatingexpenditure

Amountreckoned

Item CurrentYear LastYear intonon-recurring

gains/lossesinthe

Year

Loss from disposal of non-current 5,411,002.25 6,221,387.00 5,411,002.25

assets

Including:lossfromdisposaloffixed 5,411,002.25 6,221,387.00 5,411,002.25

assets

Penaltyandlatefee 292,483.57 2,099,844.49 292,483.57

Energysavingwastesettlementloss 103,156,160.00

Other 246,023.69 3,988,202.85 246,023.69

Total 5,949,509.51 115,465,594.34 5,949,509.51

54.Incometaxexpenses

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Item Amountforthisyear Amountforlastyear

Currentincometax 33,057,179.03 5,835,302.27

DeferredIncomeTax -4,013,163.31 5,391,695.95

Total 29,044,015.72 11,226,998.22

55.Othercomprehensiveincome

Foundmorein―VI.41.Othercomprehensiveincome‖intheNote

56.Itemstocashflowstatement

(1)Cashreceived(paid)from(for)otheractivitiesrelatingtooperation/investment/financing

1)Cashreceivedfromotheractivitiesrelatingtooperation

Item Amountforthisyear Amountforlastyear

Governmentsubsidyandrewards 32,627,249.81 19,795,783.78

Margin,deposit 8,003,986.51 6,985,538.71

Royaltyfortrademarkright 1,427,748.49 1,800,000.00

Rentincome 8,011,411.57 3,657,466.43

Collectionofsocialsecurityfund 395,438.83 369,556.28

Other 8,006,198.03 8,947,003.09

Compensations 1,186,760.48 93,240.00

Total 59,658,793.72 41,648,588.29

2)Cashpaidforotheractivitiesrelatingtooperation

Item Amountforthisyear Amountforlastyear

Marketexpenses 219,216,676.44 174,739,404.03

ADcharge 29,701,141.25 57,339,812.53

Businesstravel,meetingandexhibitionexpenses 58,751,632.09 49,453,564.12

Rentalexpense 31,857,198.71 33,566,628.17

Laborservicecharge 2,903,955.79 10,608,044.21

Transportandvehiclecharges 21,940,946.74 13,746,033.62

Businessactivitiesexpenses 23,567,274.72 23,060,460.98

Promotionexpenses 2,465,301.13 3,640,833.44

Technologycooperationfeeandconsultancycharge 675,200.63 1,699,621.68

Chargeofinspection,testing,certificationandevaluation 15,351,654.42 16,095,613.45

laborinsurancepremium 3,373,849.39 861,682.18

handlingCharges 44,361,568.27 15,713,817.60

Communicationfee 9,219,840.88 3,761,928.36

Depositloans 11,429,695.34 14,485,493.43

Officeexpenses 7,971,054.43 3,779,052.25

Transfertolimitedcapital 58,742,173.73

Backsavingenergysubsidies 65,380,000.00

Others 106,099,219.19 103,657,553.97

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Item Amountforthisyear Amountforlastyear

Total 647,628,383.15 591,589,544.02

3)Cashreceivedfromotheractivitiesrelatingtoinvestment

Item Amountforthisyear Amountforlastyear

Interestincomearisingfrombanksavings 114,301,729.54 118,842,201.15

Governmentinvestmentgranted 18,447,427.52 10,600,000.00

Margin 392,623.00 2,281,636.39

Total 133,141,780.06 131,723,837.54

4)Cashpaidforotheractivitiesrelatingtoinvestment

Item Amountforthisyear Amountforlastyear

Equitypurchasemargin 10,000,000.00

Losesofforwardexchangesettlement 4,027,616.05

Total 4,027,616.05 10,000,000.00

5)Cashreceivedfromotheractivitiesrelatingtofinancing

Item Amountforthisyear Amountforlastyear

Oddsharesreturnedbystockexchange 3,451.80 387.13

6)Cashpaidforotheractivitiesrelatingtofinancing

Item Amountforthisyear Amountforlastyear

Pledgedtimedeposit 44,221,416.00

Amount refund to minority shareholders due to the 58,679.33 130,164.45

cancellationofsubsidiary

Handlingchargeofdividend 98,192.48 93,855.90

Handlingchargeofprivateplacement 168,000.00

Total 324,871.81 44,445,436.35

(2)Supplementaryinformationaboutconsolidatedcashflowstatement

Item 2016 2015

1.Netprofitisadjustedtocashflowofoperation

activities:

Netprofit 220,169,534.35 21,835,802.48

Add:provisionfordepreciationofassets 1,353,446.69 20,996,734.34

Depreciationoffixedassets,consumptionofoilgas 136,332,022.70 143,974,672.76

assetsanddepreciationofproductivebiologicalassets

Amortizationofintangibleassets 42,991,580.23 33,243,645.07

Amortizationoflong-termretainedexpense

Lossfromdisposaloffixedassets,intangibleassets 1,255,433.98 4,448,699.92

andotherlongtermassets(gainislistedwith―-‖)

Lossfromdiscardingfixedassetsasuseless(gainis

listedwith―-‖)

Lossfromchangeoffairvalue(gainislistedwith -11,500,963.72 -81,170.00

―-‖)

Financialexpense(gainislistedwith―-‖) -141,444,274.32 -108,181,713.11

Investmentloss(gainislistedwith―-‖) -14,302,482.67 12,043,591.71

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Item 2016 2015

Decreaseofdeferredincometaxassets(increaseis -5,822,195.31 5,391,695.95

listedwith―-‖)

Increaseofdeferredincometaxliabilities(decrease 1,809,032.00

islistedwith―-‖)

Decreaseofinventories(increaseislistedwith―-‖) -414,604,157.36 226,802,180.34

Decrease of operational accounts receivable -41,454,447.96 -193,688,355.76

(increaseislistedwith―-‖)

Increaseofoperationalaccountspayable(decrease 1,283,989,960.74 72,290,455.60

islistedwith―-‖)

Other -73,381,593.72 -9,705,054.07

Netcashflowarisingfromoperationactivities 985,390,895.63 229,371,185.23

2.Majorinvestmentandfinancingactivitiesthatdo

notinvolvecashreceipts:

Conversionofdebtintocapital

SwitchingCompanybondsduewithinoneyear

financingleaseoffixedassets

3.Netchangeincashandcashequivalents:

Balanceatyear-endofcash 3,986,098,419.76 2,121,161,238.01

Less:Balanceatyear-beginofcash 2,121,161,238.01 2,709,097,193.11

Add:Balanceatyear-endofcashequivalents

Less:Balanceatyear-beginofcashequivalents

Netincreaseincashandcashequivalents 1,864,937,181.75 -587,935,955.10

(3)NonetcashpaidforsubsidiaryobtainedintheYear

(4)CashreceivedbydisposalofsubsidiaryintheYear

Item Amountforthisyear

Cashorcashequivalentreceivedintheyearfromdisposalofsubsidiaries 23,835,710.00

Including:HefeiMeiLingPackingProductsCo.,Ltd. 23,835,710.00

Less:Cashandcashequivalentheldbysubsidyondatewhencontrollingrightslose 520,951.21

Including:HefeiMeiLingPackingProductsCo.,Ltd. 520,951.21

Add:Cashandcashequivalentreceivedintheyearfordisposesubsidiaryinprevious

Netcashreceivedfromdisposalofsubsidiaries 23,314,758.79

(5)Cashandcashequivalent

Item Amountforthisyear Amountforlastyear

Cash 3,986,098,419.76 2,121,161,238.01

Including:cashinstock 94,415.53 46,496.63

Bankdepositsavailableforpaymentatanytime. 3,810,367,022.13 2,043,331,029.26

Bankdepositsavailableforpaymentatanytime 175,636,982.10 77,783,712.12

Cashequivalents

including:bondinvestmentduewithin3months

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Balanceofcashandcashequivalentsatyearend 3,986,098,419.76 2,121,161,238.01

Including:usingtherestrictedcashandcashequivalentsofthe

parentcompanyorsubsidiaryofthegroup

57.Assetswithownershiportherighttouserestricted

Item EndingBookvalue Reasons

Monetaryfund 72,770,814.87 Margin

Notesreceivable 174,237,778.45 Pledged

Intangibleassetsnote1 20,133,702.23 Pledged

Othernon-currentassetsnote2 34,615,630.00 Pledged

Non-currentassetsduewithin1 12,625,340.00 Pledged

yearnote2

Total 314,383,265.55

Note1:securityforintangibleassetswassecurityoflanduseright.Fordetails,pleasereferto―34.Long

termborrowings‖underthisnoteVI.

Note2:Othernon-currentassetsandnon-currentasstsduewithinoneyeararepledgedastimedeposit,

foundmorein22.Othernon-currentassetsinNoteVI

58.Foreigncurrency

(1)Foreigncurrency

Item Endingforeigncurrency Exchangerate EndingRMBconverted

balance balance

Monetaryfund

Including:USD 77,034,163.75 6.93700 534,385,993.93

Euro 12,820,549.42 7.30680 93,677,190.50

AUD 976,158.74 5.01570 4,896,119.39

PakistanRupi 8,198,667.73 0.06621 542,833.79

IDR 460,321,136.00 0.00051 234,763.78

Accountreceivable

Including:USD 69,069,088.81 6.93700 479,132,269.07

Euro 8,745,825.04 7.30680 63,903,994.40

AUD 3,925,343.14 5.01570 19,688,343.59

PakistanRupi 728,341,621.50 0.06621 48,223,498.76

Otherreceivables

Including:USD 135,079.07 6.93700 937,043.51

PakistanRupi 32,734,809.97 0.06621 2,167,371.77

IDR 245,783,291.72 0.00051 125,349.48

Advancepayment

Including:USD 263,168.48 6.93700 1,825,599.75

Euro 208,024.91 7.30680 1,519,996.41

PakistanRupi 227,505,716.36 0.06621 15,063,153.48

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Item Endingforeigncurrency Exchangerate EndingRMBconverted

balance balance

IDR 491,041,667.00 0.00051 250,431.25

Accountspayable

Including:USD 1,678,942.56 6.93700 11,646,824.54

PakistanRupi 6,375,951.97 0.06621 422,151.78

Otheraccountspayable

Including:USD 580,465.24 6.93700 4,026,687.37

PakistanRupi 126,010,228.89 0.06621 8,343,137.25

IDR 199,246,613.00 0.00051 101,615.77

Advancereceivable

Including:USD 34,766,233.55 6.93700 241,173,362.14

Euro 4,330,449.92 7.30680 31,641,731.48

AUD 500,731.03 5.01570 2,511,516.63

Short-termloans

Including:USD 37,745,960.03 6.93700 261,843,724.73

Long-termloans

Including:USD 4,924,000.00 6.93700 34,157,788.00

Non-current assetsduewithin

1year

Including:USD 1,800,000.00 6.93700 12,486,600.00

(2)Foreignoperationalentity

The foreignoperationalentityof theCompanywasChanghongRuba TradingCompany(Private)

Limited,mainlyoperatesinLahore,Pakistan;Recordingcurrencyis

Pakistan

Rupi.

CHANGHONG MEILING ELECTRIC INDONESIA,PT, mainly operates in Jakarta; Recording

currencyisIDR.

VII.Changesofconsolidationrage

1.Enterprisecombinedunderthedifferentcontrol:Nil

2.Enterprisecombinedunderthesamecontrol

(1)Enterprisecombinedunderthesamecontrolintheyear

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Revenue Netprofit

Basisof ofthe ofthe

Interest consider combined combined Combined

percentag asthe party party Combined party’snet

Determin party’s

Combined eobtained business Combine ebasisof from from revenue profit

party in merger ddate combined combined combined duringa

business under date year-begi year-begi duringa compariso

comparison

merger thesame ntothe ntothe n

control date date

combined combined

Guangdon Has the

g same Equity

Changhong 98.8554% controlle 2016-1-1 money 349,645,724.0 615,594.18

Ridian r of the paidinfull 3

Technolog Compan

yCo.,Ltd. y

(2)Combinedcost

Item GuangdongChanghongRidianTechnologyCo.,

Ltd.

Cash 95,650,000.00

Total 95,650,000.00

(3)Bookvalueoftheassetsandliabilitiesfromthecombinedpartyoncombinationdate

GuangdongChanghongRidianTechnologyCo.,Ltd.

Item Combineddate Atendoflastyear

Assets:

MonetaryFund 67,851,083.54 67,851,083.54

Notereceivable 33,803,990.75 33,803,990.75

Stock 9,553,171.57 9,553,171.57

Fixedassets 46,666,626.48 46,666,626.48

Intangibleassets 15,414,228.78 15,414,228.78

Liabilities:

Accountspayable 81,435,705.12 81,435,705.12

Netassets 91,853,396.00 91,853,396.00

Less:minorityshareholders'equity 1,051,334.05 1,051,334.05

Netassetsacquired 90,802,061.95 90,802,061.95

3.Reversedtakeover:Nil

4.Disposalofsubsidiary

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Other

Differencebetweenthe comprehensive

disposalpriceand income

Ratioof Determination proportionofthe transferredinto

Priceoftheequity theequity Wayofthe Timepointof basisforthetime subsidiary’snetassetsenjoy investment

Subsidiary disposed disposed equity controlrightlose pointofcontrol inaspectoftheconsolidatedincome,which

(%) disposed rightlose financialstatement,which relatedwiththe

isrespondtothedisposal equity

investment investmentof

original

subsidiary

Hefei MeiLing Equity Transferof

Packing Products23,880,000.00 100% transfer 2016-12-31 controlrights 10,520,753.99

Co.,Ltd.

5.Subsidiaryliquidated

Other

Differencebetweenthe comprehensive

disposalpriceand income

Priceofthe Ratioofthe Wayofthe Determinationbasis proportionofthe transferredinto

Subsidiary equity equity equity Timepointof forthetimepointof subsidiary’snetassetsenjoy investment

disposed disposed disposed controlrightlose controlrightlose inaspectoftheconsolidated income,which

financialstatement,whichis relatedwiththe

respondtothedisposal equityinvestment

investment oforiginal

subsidiary

Bengbu Meiling Liquidation Liquidation

Appliance Marketing 93.50% cancelled 2016.9 completed

Co.,Ltd.

Luohe Meiling Liquidation Liquidation

Appliance Marketing 100.00% cancelled 2016.12 completed

Co.,Ltd.

Total

6.Subsidiaryestablished

Other

balance

Capital that Rati

actually consider oof

Registe Business RC(10 paidat asthe Share-hol voti Consolida Minorit

Subsidiary Type red nature thousan year-en net dingRatio ng ted(Y/N) y’s

place dYuan) d(10 investm (%) righ interest

thousan entfor t

dYuan) subsidia (%)

ryin

nature

Changmei Limite Manufact

Technology d Mianya ureand RMB:5, RMB:1, 92.44 92.4 Yes 911,238

Co.,Ltd. compa ng sale 000 800 4 .03

ny

CHONGHO

NG Limite

MEILING d Jakarta Sale USD： USD:30 100.00 100. Yes

ELECTRIC compa 300 0 00

INDONESI ny

A,PT

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

VIII.Equityinotherentity

1.Equityinsubsidiary

(1)Compositionoftheenterprisegroup

Share-holdingratio

Subsidiary BusinessareaRegistration Business (%) Acquireway

place nature Directly Indirectl

y

ZhongkeMeilingCryogenicTechnologyCo.,Ltd.1) Hefei Hefei Manufactures, 66.76 Investment

sales

MianyangMeilingSoftwareTechnologyCo.,Ltd.2) Mianyang Mianyang Software 100.00 Investment

development

MianyangMeilingRefrigerationCo.,Ltd.3) Mianyang Mianyang Manufactures, 95.00 5.00 Investment

sales

JiangxiMeilingApplianceCo.,Ld.4) Jingdezhen Jingdezhen Manufactures, 98.75 1.25 Investment

sales

HefeiMeilingApplianceMarketingCo.,Ltd.5) Hefei Hefei Sales 99.82 0.18 Investment

GuangxiHuidianHomeApplianceCo.,Ltd.6) Nanning Nanning Sales 100.00 Enterprisecombinedunderthe

differentcontrol

Xi‘anMeilingApplianceMarketingCo.,Ltd.7) Xi‘an Xi‘an Sales 98.50 Investment

WuhuMeilingApplianceMarketingCo.,Ltd.8) Wuhu Wuhu Sales 98.00 Investment

ChangchunMeilingApplianceMarketingCo.,Ltd.9) Changchun Changchun Sales 97.00 Investment

LanzhouMeilingApplianceMarketingCo.,Ltd.10) Lanzhou Lanzhou Sales 100.00 Investment

JinanMeilingApplianceMarketingCo.,Ltd.11) Jinan Jinan Sales 91.40 Investment

NanchangMeilingApplianceMarketingCo.,Ltd.12) Nanchang Nanchang Sales 85.00 Investment

JingzhouMeilingApplianceMarketingCo.,Ltd.13) Jingzhou Jingzhou Sales 96.00 Investment

ShengyangMeilingApplianceMarketingCo.,Ltd.14) Shengyang Shengyang Sales 100.00 Investment

WuhanMeilingApplianceMarketingCo.,Ltd.15) Wuhan Wuhan Sales 91.00 Investment

ZhengzhouMeilingApplianceMarketingCo.,Ltd.16) Zhengzhou Zhengzhou Sales 95.00 Investment

ShijiazhuangMeilingApplianceMarketingCo.,Ltd.17) Shijiazhuang Shijiazhuang Sales 95.33 Investment

MianyangMeilingApplianceMarketingCo.,Ltd.18) Mianyang Mianyang Sales 93.80 Investment

ChengduMeilingApplianceMarketingCo.,Ltd.19) Chengdu Chengdu Sales 94.80 Investment

GuiyangMeilingApplianceMarketingCo.,Ltd.20) Guiyang Guiyang Sales 100.00 Investment

FuzhouMeilingApplianceMarketingCo.,Ltd.21) Fuzhou Fuzhou Sales 99.00 Investment

NanjingMeilingApplianceMarketingCo.,Ltd.22) Nanjing Nanjing Sales 99.00 Investment

HefeiMeilingWhiteApplianceMarketingCo.,Ltd.23) Hefei Hefei Sales 95.00 Investment

TaiyuanMeilingApplianceMarketingCo.,Ltd.24) Taiyuan Taiyuan Sales 100.00 Investment

ChangshaMeilingApplianceMarketingCo.,Ltd.25) Changsha Changsha Sales 97.00 Investment

HohhotMeilingApplianceMarketingCo.,Ltd.26) Hohhot Hohhot Sales 95.00 Investment

HangzhouMeilingApplianceMarketingCo.,Ltd.27) Hangzhou Hangzhou Sales 95.00 Investment

ChongqingMeilingApplianceMarketingCo.,Ltd.28) Chongqing Chongqing Sales 98.00 Investment

KunmingMeilingApplianceMarketingCo.,Ltd.29) Kunming Kunming Sales 95.50 Investment

ShanghaiMeilingApplianceMarketingCo.,Ltd.30) Shanghai Shanghai Sales 99.00 Investment

NantongMeilingApplianceMarketingCo.,Ltd.31) Nantong Nantong Sales 92.00 Investment

GuangzhouMeilingApplianceMarketingCo.,Ltd.32) Guangzhou Guangzhou Sales 98.00 Investment

TianjinMeilingApplianceMarketingCo.,Ltd.33) Tianjin Tianjin Sales 100.00 Investment

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Share-holdingratio

Subsidiary BusinessareaRegistration Business (%) Acquireway

place nature Directly Indirectl

y

UrumchiMeilingApplianceMarketingCo.,Ltd.34) Urumchi Urumchi Sales 90.00 Investment

HarbinMeilingApplianceMarketingCo.,Ltd.35) Harbin Harbin Sales 95.00 Investment

BeijingMeilingApplianceMarketingCo.,Ltd.36) Beijing Beijing Sales 99.00 Investment

HefeiMeiLingNonferrousMetalProductsCo.,Ltd.37) Hefei Hefei Manufactures, 100.00 Enterprisecombinedunderthe

sales differentcontrol

GuangdongChanghongRidianTechnologyCo.,Ltd.38) Zhongshan Zhongshan Manufactures, 99.855 Enterprisecombinedunderthe

sales samecontrol

ChangmeiTechnologyCo.,Ltd.39) Mianyang Mianyang Sales 92.44 Investment

CHONGHONG MEILING ELECTRIC Jakarta Jakarta Sales 100.00 Investment

INDONESIA,PT40）

ChanghongRubaTradingCompany41) Pakistan Pakistan Sales 60.00 Investment

SichuanChanghongAirConditionerCo.,Ltd.42) Mianyang Mianyang Manufactures, 100.00 Enterprisecombinedunderthe

sales samecontrol

ZhongshanChanghongApplianceCo.,Ltd43) Zhongshan Zhongshan Manufactures, 90.00 10.00 Enterprisecombinedunderthe

sales samecontrol

HefeiMeilingGroupHoldingCo.,Ltd.44) Hefei Hefei Manufactures, 100.00 Enterprisecombinedunderthe

sales differentcontrol

MeilingEquatorElectric(Hefei)Co.,Ltd.45) Hefei Hefei Manufactures, 100.00 Enterprisecombinedunderthe

sales differentcontrol

HefeiEquatorElectricCo.,Ltd.46) Hefei Hefei Manufactures, 100.00 Enterprisecombinedunderthe

sales differentcontrol

HongyuanEarthEnergyHeatPumpTechnologyCo. Mianyang Mianyang Manufactures, 51.00 Investment

Ltd.47) sales

Note:

1)ZhongkeMeilingLowTemperatureTechnologyCompanyLimited(―ZhongkeMeiling‖),thepredecessorofwhichwas

ZhongkeMeilingLowTemperatureTechnologyLimitedLiabilityCompany,wasestablishedon29October2002byjoint

contributionfromtheCompanyandTechnicalInstituteofPhysicsandChemistry,CAS(―TIPC‖),withregisteredcapitalof

RMB60millionupontheestablishment,amongwhich,theCompanymadecapitalcontributionofRMB42million(including

theassetsinspecieattheconsiderationofRMB35,573,719.70asevaluatedbyBeijingZhongzhengAppraisalCo.,Ltd.with

issuanceoftheAppraisalReport(ZZPBZ(2002)No.029)andcashcontributionofRMB6,426,280.30)accountingfor70%of

theaforesaidregisteredcapital,andTIPCmadecapitalcontributionofRMB18millionwithintangibleassetsofsuchvalue

(namelythesinglecompressormixtureindustriallowtemperaturerefrigerationtechnology)asevaluatedbyJingzhongziAssets

AppraisalCo.,Ltd.withissuanceoftheAppraisalReport(ZZPBZ(2002)No.225)accountingfor30%oftheaforesaid

registeredcapital.Thepaid-inoftheaboveregisteredcapitalhasbeenverifiedbyHuazhengAccountingFirmbyissuanceof

theAssetsVerificationReport(HZYZ(2002)No.B157)dated16October2002.

InOctober2014,accordingtotherelevantprovisionundertheManagementRulesonApplicationofStateOwnedAssetsby

CentralBusinessOrgans,TIPCtransferredthe30%equityinterestsheldbyitinZhongkeMeilingLowTemperature

TechnologyCompanyLimitedtoitswholly-ownedsubsidiaryZhongkeXianxing(Beijing)AssetsManagementCo.,Ltd

(―ZhongkeXianxing‖)whichwouldperformmanagementovertheoperatingassetsofTIPC.Uponconsiderationandapproval

atthe37thmeetingofthe7thBoardofDirectorsofHefeiMeilingCo.,Ltd,itisagreedtowaivethepre-emptiveright.

On10August2015,allthefounderssignedtheFounderAgreementofZhongkeMeilingLowTemperatureTechnology

CompanyLimited,pursuanttowhich,theydecidedtochangethefirmtypeofZhongkeMeilingLowTemperatureTechnology

CompanyLimitedtoajointstockcompany.BasedonthenetassetsofRMB96,431,978.25asauditedbyXinyongZhonghe

CPAasof30June2015,anaggregateof65,000,000shareshavebeenconvertedattheproportionof1:0.67,whicharetobe

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

heldbytheoriginalshareholdersaccordingtotheirrespectiveentitlement.Incasethatthenetassetsexceedregisteredcapital,

thebalanceshallberecordedincapitalreserve.On28August2015,XinyongZhongheCPAreviewedtheregisteredcapitaland

paid-inthereofinrespectofthestockreform,andissuedAssetsVerificationReport(XYZH/2015CDA40161).TheCompany

registeredindustrialandcommercialinformationon11September2015.

OnNovember25,2016,thefirstExtraordinaryShareholders'GeneralMeetingofZhongkeMeilingLowTemperature

TechnologyCo.,Ltd.in2016consideredandapprovedtheProposalontheIssuancePlanoftheCompany,ZhongkeMeiling

Companyissued3,150,000sharestospecificinvestorsbythenon-publicofferingofsharesat1.63Yuan pershare.The

currentcapitalincreasewasverifiedbytheNo.［XYZH/2016CDA40294］capitalverificationreportissuedbyShineWingCPA

(specialgeneralpartnership).Afterthecompletionoftheissuance,thesharecapitalofZhongkeMeilingCompanyincreasedto

68,150,000sharesandtheCompany'sshareholdingratiowas66.76%.

2)MianyangMeilingSoftwareTechnologyCo.,Ltd.(hereinafterreferredtoasMeilingSoftwareCompany)wasestablishedon

Jan.24,2014.ItisalimitedcompanyjointlyinvestedbytheCompanyandMianyangMeilingRefrigerationCo.,Ltd.,being

approvedbytheIndustrialandCommerceBureauofPeichengDistrict,MianyangCity.Thecompanyowesregisteredcapitalof

RMB5million,includingRMB4.95millioncontributedbyMeilingCompanyincash,accountedfor99%oftheregistered

capital;MianyangMeilingRefrigerationCo.,Ltd.contributedRMB50000incashwith1%oftheregistercapitaloccupied.

TheabovementionedregistercapitalhavebeenverifiedbyverificationreportofChuanjinlaiYanziNo.[2014]B039issuedby

SichuanJinlaiAccountingFirmCo.,Ltd.InJuly2016,thesharesofMianyangMeilingSoftwareTechnologyCo.,Ltd.,heldby

theCompanyhastransferredtoSichuanChanghongACCo.,Ltd.,aftertransferred,ChanghongAChas99%equityof

MianyangSoftware,theCompanyhasnosharesofMianyangSoftwaredirectly

3)MianyangMeilingRefrigerationCo.,Ltd.(hereinafterreferredtoasMianyangMeilingCompany),alimitedliability

companyjointlysetupbytheCompanyandChina-techMeilingCompany,wasfoundedonMar.6,2009.Itsregisteredcapital

andpaid-incapitalwasRMB50millionuponestablishment,ofwhich,theCompanyinvestedRMB45million,accountingfor

90%oftheregisteredcapital;ZhongkeMeilingCompanyinvestedRMB5million,accountingfor10%oftheregisteredcapital.

Thecapitalreceiptwasverifiedbytheverificationreport[CXKY(2009)No.008]ofSichuanXingruiCertifiedPublic

Accountants.On19January2011,theCompanyincreaseRMB50millionincapitalofMianyangMeiling,ofwhichRMB95

millioninvestedbytheCompany,a95%oftotalregistercapitalwhileRMB5millioninvestedbyZhongkeMeiling,a5%of

totalcapitaloccupied.Thepaid-incapitalhasbeenverifiedbyCapitalVerificationReport［XYZH/2010CDA6040］from

ChengduBranchofShinewingCPACO.,Ltd.In2011,ZhongkeMeilingenteredinto―EquityTransferAgreement‖with

JiangxiMeilingRefrigerationCo.,Ltd.5percentequityofMianyangMeilingheldbyZhongkeMeilingwastransferredto

JiangxiMeilingRefrigerator.InSeptember2013,JiangxiMeilingRefrigerationwascombinedbyJiangxiMeilingAppliance

Co.,Ld,than5percentequitywastransfertoJiangxiMeilingAppliance.

4)JiangxiMeilingApplianceCo.,Ld.(JiangxiMeilingApplianceCo.,)wasalimitedliabilitycompanyjointlyestablishedby

theCompanyandMianyangMeilingon23May2011.RegistercapitalofthecompanytotallyasRMB50million,RMB

49.375millioninvestedbytheCompany,98.75%intotalregistercapitalwhileRMB0.625millioninvestedbyMianyang

Meiling,a1.25%intotalregistercapitaloccupied.TheinitialinvestmentRMB10.50millionwasreceiveddated13May2011

withRMB10millionfromtheCompanyandRMB0.5millionfromMianyangMeiling.Restofthecapitalshallbeinvested

fullywithin2yearsafterthejointventuresestablishedaccordingtocapitalrequirement.Theinitialinvestmentcapitalwere

verifiedbytheCapitalVerificationReport[JXKYZi(2011)No.090]issuedfromJingdezhenXingciCPACo.,Ltd.Second

capitalRMB39.5millionwasfullyfundedon28July2011,theCompanycontributedRMB39.375millionwhileMianyang

MeilingCompanyinvestedRMB125,000,thecontributionshavebeenverifiedbythecapitalverificationreport[JingXing

KuaiYanZi(2011)No.:134]issuedfromJDZXingciCPACo.,Ltd.

5)HefeiMeilingApplianceMarketingCo.,Ltd.(MeilingMarketingCompanyforshort)isthelimitedcompanyjointly

investedbytheCompanyandMianyangMeilingCompanyon21Oct.2009.Registeredcapitalandpaid-upcapitalwasRMB

10million,includingRMB9.9millioninvestedbytheCompany,a99%oftheregisteredcapital;MianyangMeilingCompany

contributedRMB0.1million,a1%oftheregisteredcapital. Theabovementionedpaid-upregistercapitalhavebeenverified

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

byverificationreportof[WanAnLianXinDaYanZi(2009)No.074]issuedbyAnhuiAnLianXinDaAccountingFirmCo.,

Ltd.On25Nov.2010,theCompanyincreasedcapitalRMB45million,registeredcapitalamountingtoRMB55million,

includingRMB54.9millioncontributedbytheCompany,a99.82%oftheregisteredcapital,whileMianyangMeilinginvested

RMB0.1million,a0.18%oftheregisteredcapital.Theincreasedcapitalhavebeenverifiedbyverificationreportof[WanHua

ShenZhengDaKuaiYanZi(2010)No.1514]issuedbyAnhuiHuaShenZhengdaCPACo.,Ltd.

6)GuangxiHuidianHomeApplianceCo.,Ltd.(GuangxiHuidianforshort)establishedinMarch2010withregisteredcapital

ofRMB5million.TheCompanyinvestedRMB1million,accountedfor20%oftheregisteredcapital;MeilingMarketing

acquired44%equityinterestsfromtheminorityshareholdersin2014.In2015,MeilingMarketingandJiangxiMeiling

Appliancesenteredintoequitytransferagreementswithminorityshareholdersrespectively,toacquireasthetransfereesthe

35.6%and0.4%equityinterestsofGuangxiWeidianheldbyminorityshareholders.Uponcompletionofequitytransferin

April2015,MeilingMarketingandJiangxiMeilingAppliancesheldtheentireequityinterestsofGuangxiWeidianasawhole.

7)Xi‘anMeilingApplianceMarketingCo.,Ltd.(Xi‘anMeilingforshort)wasestablisheddated13April2011withregistered

capitalofRMB3million;MeilingMarketinginvestedRMB1.83million,accountedfor61%oftheregisteredcapital.After

MeilingMarketingacquired24%equityinterestsfromtheminorityshareholdersin2014,MeilingMarketingacquired13.5%

equityinterestsfromtheminorityshareholdersin2015,MeilingMarketingtheCompanytotallyholds98.5%equityofthe

Xi‘anMeiling.

8)WuhuMeilingApplianceMarketingCo.,Ltd.(WuhuMeilingforshort)wasestablisheddated24December2010with

registeredcapitalofRMB6million;theCompanyinvestedRMB2.16million,accountedfor36%oftheregisteredcapital.

AfterMeilingMarketingacquired65%equityinterestsfromtheminorityshareholdersin2014,MeilingMarketingthe

Companytotallyholds98%equityoftheWuhuMeiling;

9)ChangchunMeilingApplianceMarketingCo.,Ltd.(ChangchunMeilingforshort)wasestablisheddated22December2010

withregisteredcapitalofRMB3million;MeilingMarketinginvestedRMB2.91million,accountedfor97%oftheregistered

capital.

10)LanzhouMeizhilaiMeilingApplianceMarketingCo.,Ltd.,originallynamedLanzhouMeilingApplianceMarketingCo.,

Ltd.(Meilingforshort)wasestablisheddated25March2011withregisteredcapitalofRMB3million;MeilingMarketing

investedRMB1.215million,accountedfor40.50%oftheregisteredcapital.AfterMeilingMarketingacquired11%equity

interestsfromtheminorityshareholdersin2013,MeilingMarketingacquired48.5%equityinterestsfromtheminority

shareholdersin2016,MeilingMarketingtheCompanytotallyholds100%equityofLanzhouMeiling.

11)JinanMeilingApplianceMarketingCo.,Ltd.(JinanMeilingforshort)wasestablisheddated3June2011withregistered

capitalofRMB3million;MeilingMarketinginvestedRMB1.08million,accountedfor36%oftheregisteredcapital;after

MeilingMarketingacquired55.4%equityinterestsfromtheminorityshareholdersin2015,MeilingMarketingtotallyholds

91.4%equityoftheJinanMeiling.

12)NanchangMeilingApplianceMarketingCo.,Ltd.(NanchangMeilingforshort)wasestablisheddated5January2011with

registeredcapitalofRMB3million;MeilingMarketinginvestedRMB1.08million,accountedfor36%oftheregistered

capital.AftertheCompanyacquired49%equityinterestsfromtheminorityshareholdersin2014,MeilingMarketingtotally

holds85%equityofNanchangMeiling.

13)JingzhouMeilingApplianceMarketingCo.,Ltd.(JingzhouMeilingforshort)wasestablisheddated10January2011with

registeredcapitalofRMB4million;MeilingMarketinginvestedRMB2.4million,accountedfor60%oftheregisteredcapital.

In2013,theCompanypurchased20%equityfromminority;AfterMeilingMarketingacquired1%equityinterestsfromthe

minorityshareholdersin2014,MeilingMarketingacquired15%equityinterestsfromtheminorityshareholdersin2016,

MeilingMarketingtotallyholds96%equityofJingzhouMeiling.

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

14)ShengyangMeilingApplianceMarketingCo.,Ltd.(ShengyangMeilingforshort)wasestablisheddated26January 2011with

registeredcapitalofRMB3million;MeilingMarketinginvestedRMB2.844million,accountedfor94.8%oftheregistered

capital.AfterMeilingMarketingacquired5.2%equityinterestsfromtheminorityshareholdersin2016,MeilingMarketing

totallyholds100%equityofShenyangMeiling.

15)WuhanMeilingApplianceMarketingCo.,Ltd.(WuhanMeilingforshort)wasestablisheddated10January2011with

registeredcapitalofRMB5million;MeilingMarketinginvestedRMB4.55million,accountedfor91%oftheregistered

capital.

16)ZhengzhouMeilingApplianceMarketingCo.,Ltd.(ZhengzhouMeilingforshort)wasestablisheddated17January 2011with

registeredcapitalofRMB3million;MeilingMarketinginvestedRMB1.08million,accountedfor36%oftheregistered

capital.In2013,MeilingMarketingpurchased10%equityfromminority;MeilingMarketingsignedequitytransferagreement

withtheminorityshareholdersinApril2015,toacquireasthetransfereethe39%equityinterestsofZhengzhouMeilingheld

byminorityshareholders,MeilingMarketingacquired10%equityinterestsfromtheminorityshareholdersinFebruary2016;

Uponcompletionofsuchequitytransfer,MeilingMarketingheldinaggregatethe95%equityinterestsofZhengzhouMeiling.

17)ShijiazhuangMeilingApplianceMarketingCo.,Ltd.(ShijiazhuangMeilingforshort)wasestablisheddated14January2011

withregisteredcapitalofRMB3million;MeilingMarketinginvestedRMB1.08million,accountedfor36%oftheregistered

capital;AfterMeilingMarketingacquired27.33%equityheldbytheminorityin2014,holding63.33%equityofthe

ShijiazhuangMeiling;AfterMeilingMarketingacquired32%equityheldbytheminorityin2015,totallyholding95.33%

equityofShijiazhuangMeiling;

18)MianyangMeilingApplianceMarketingCo.,Ltd.(MianyangMeilingforshort)wasestablisheddated27January2011with

registeredcapitalofRMB5million;MeilingMarketinginvestedRMB2.6million,accountedfor52%oftheregisteredcapital.

AfterMeilingMarketingpurchased33%equityfromminorityin2013,andpurchased8.8%equityfromminorityin2015,

MeilingMarketingtotallyholds93.8%equityofMianyangMeiling.

19)ChengduMeilingApplianceMarketingCo.,Ltd.(ChengduMeilingforshort)wasestablisheddated26January2011with

registeredcapitalofRMB5million;MeilingMarketinginvestedRMB4.17million,accountedfor83.4%oftheregistered

capital;AfterMeilingMarketingpurchased9%equityfromminorityin2015,andpurchased0.8%equityfromminorityin

2016,MeilingMarketingtotallyholds94.8%equityofChengduMeiling.

20)GuiyangMeilingApplianceMarketingCo.,Ltd.(GuiyangMeilingforshort)wasestablisheddated24January2011with

registeredcapitalofRMB3million;MeilingMarketinginvestedRMB0.78million,accountedfor26%oftheregistered

capital;afterMeilingMarketingpurchased18%equityfromminorityin2013,MeilingMarketingpurchased42%equityfrom

minorityin2015,MeilingMarketingpurchased14%equityfromminorityin2016,MeilingMarketingheldinaggregatethe

100%equityinterestsofGuiyangMeiling.

21)FuzhouMeilingApplianceMarketingCo.,Ltd.(FuzhouMeilingforshort)wasestablisheddated25January2011with

registeredcapitalofRMB3million;MeilingMarketinginvestedRMB2.97million,accountedfor99%oftheregistered

capital.

22)NanjingMeilingApplianceMarketingCo.,Ltd.(NanjingMeilingforshort)wasestablisheddated14Feb.2011with

registeredcapitalofRMB3million;MeilingMarketinginvestedRMB2.97million,accountedfor99%oftheregistered

capital.

23)HefeiMeilingWhiteApplianceMarketingCo.,Ltd.(WhiteApplianceforshort)wasestablisheddated21January2011with

registeredcapitalofRMB6million;MeilingMarketinginvestedRMB5.1million,accountedfor85%oftheregisteredcapital;

MeilingMarketingsignedequitytransferagreementwiththeminorityshareholdersin2015,toacquireasthetransfereethe

10%equityinterestsofWhiteApplianceheldbyminorityshareholders.UponcompletionofsuchequitytransferinFebruary

2015,MeilingMarketingheldinaggregatethe95%equityinterestsofWhiteAppliance.

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

24)TaiyuanMeilingApplianceMarketingCo.,Ltd.(TaiyuanMeilingforshort)wasestablisheddated18January2011with

registeredcapitalofRMB4million;MeilingMarketinginvestedRMB1.59million,accountedfor39.75%oftheregistered

capital;afterMeilingMarketingpurchased45.5%equityfromminorityin2013,MeilingMarketingpurchased14.75%equity

fromminorityin2016,MeilingMarketingtotallyholds100%equityoftheTaiyuanMeiling.

25)ChangshaMeilingApplianceMarketingCo.,Ltd.(ChangshaMeilingforshort)wasestablisheddated26January2011with

registeredcapitalofRMB5million;MeilingMarketinginvestedRMB1.8million,accountedfor36%oftheregisteredcapital;

theCompanyenteredintoequitytransferredagreementwithminorityshareholdersin2014,transferred50%equityof

ChangshaMeilingheldbytheminority,afterMeilingMarketingpurchased11%equityfromminorityin2016,Meiling

Marketingtotallyholds97%equityofChangshaMeiling.

26)HohhotMeilingApplianceMarketingCo.,Ltd.,originallycalledHohhotXiangyouApplianceMarketingCo.,Ltd.(Hohhot

Meilingforshort)wasestablisheddated21Feb.2011withregisteredcapitalofRMB3million;MeilingMarketinginvested

RMB1.65million,accountedfor55%oftheregisteredcapital;afterMeilingMarketingpurchased28%equityfromminority

in2013,MeilingMarketingpurchased12%equityfromminorityin2016,MeilingMarketingtotallyholds95%equityofthe

HohhotMeiling.

27)HangzhouMeilingApplianceMarketingCo.,Ltd.wasestablisheddated17Feb.2011withregisteredcapitalofRMB3

million;MeilingMarketinginvestedRMB2.655million,accountedfor88.5%oftheregisteredcapital;MeilingMarketing

signedequitytransferagreementwiththeminorityshareholdersin2015,toacquireasthetransfereethe6.5%equityinterests

ofHangzhouMeilingheldbyminorityshareholders.UponcompletionofsuchequitytransferinFebruary2015,Meiling

Marketingheldinaggregatethe95%equityinterestsofHangzhouMeiling.

28)ChongqingMeilingApplianceMarketingCo.,Ltd.(ChongqingMeilingforshort)wasestablisheddated1March2011with

registeredcapitalofRMB3million;MeilingMarketinginvestedRMB2.55million,accountedfor85%oftheregistered

capital;AfterMeilingMarketingpurchased13%equityfromminorityin2015,MeilingMarketingtotallyholds98%equityof

ChongqingMeiling.

29)KunmingMeilingApplianceMarketingCo.,Ltd.(KunmingMeilingforshort)wasestablisheddated28Feb.2011with

registeredcapitalofRMB3million;MeilingMarketinginvestedRMB1.395million,accountedfor46.5%oftheregistered

capital;afterMeilingMarketingpurchased40%equityfromminorityin2013,MeilingMarketingpurchased9%equityfrom

minorityin2016,MeilingMarketingtotallyholds95.5%equityoftheKunmingMeiling.

30)ShanghaiMeilingApplianceMarketingCo.,Ltd.(ShanghaiMeilingforshort)wasestablisheddated9March2011with

registeredcapitalofRMB3million;MeilingMarketinginvestedRMB2.97million,accountedfor99%oftheregistered

capital.

31)NantongMeilingApplianceMarketingCo.,Ltd.(NantongMeilingforshort)wasestablisheddated8March2011with

registeredcapitalofRMB3million;MeilingMarketinginvestedRMB1.74million,accountedfor58%oftheregistered

capital;In2013,afterMeilingMarketingpurchased34%equityfromminority,MeilingMarketingtotallyholds92%equityof

theNantongMeiling.

32)GuangzhouMeilingApplianceMarketingCo.,Ltd.(GuangzhouMeilingforshort)wasestablisheddated13May2011with

registeredcapitalofRMB5million;MeilingMarketinginvestedRMB4.3million,accountedfor86%oftheregisteredcapital;

afterMeilingMarketingacquired12%equityinterestsfromtheminorityshareholdersin2014,MeilingMarketingtotallyheld

the98%equityinterestsofGuangzhouMeiling.

33)TianjinMeilingApplianceMarketingCo.,Ltd.(TianjinMeilingforshort)wasestablisheddated2March2011with

registeredcapitalofRMB3million;MeilingMarketinginvestedRMB2.565million,accountedfor85.5%oftheregistered

capital;In2015,MeilingMarketingandJiangxiMeilingAppliancesenteredintoequitytransferagreementswithminority

shareholdersrespectively,toacquireasthetransfereesthe14.1%and0.4%equityinterestsofGuangxiWeidianheldby

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

minorityshareholders.UponcompletionofequitytransferinDecember2015,MeilingMarketingtotallyheldtheentireequity

interestsofTinjianMeiling.

34)UrumchiMeilingApplianceMarketingCo.,Ltd.(UrumchiMeilingforshort)wasestablisheddated4March2011with

registeredcapitalofRMB3million;MeilingMarketinginvestedRMB2.7million,accountedfor90%oftheregisteredcapital.

35)HarbinMeilingApplianceMarketingCo.,Ltd.(HarbinMeilingforshort)wasestablisheddated6April2011withregistered

capitalofRMB3million;MeilingMarketinginvestedRMB1.08million,accountedfor36%oftheregisteredcapital;Meiling

Marketingacquired41.5%equityinterestsfromtheminorityshareholdersin2014,MeilingMarketingacquired17.5%equity

interestsfromtheminorityshareholdersin2015,MeilingMarketingtotallyheldthe95%equityinterestsofHarbinMeiling.

36)BeijingMeilingApplianceMarketingCo.,Ltd.(BeijingMeilingforshort)wasestablisheddated28March2011with

registeredcapitalofRMB3million;MeilingMarketinginvestedRMB2.97million,accountedfor99%oftheregistered

capital.

37)HefeiMeilingNonferrousMetalProductsCo.,Ltd.(NonferrousMetal)wastheSino-foreignjointventurejointlysetupby

originalMeilingGroup,HefeiMeilingCopperCo.,Ltd.AndSingaporeKimShinDevelopmentCo.,Ltd.,whichhavebeenoriginally

approvedbythe[WJMWFZZ(1996)No.349]ofForeignTradeandEconomicCommitteeofAnhuiProvince.Itsregistered

capitalwasUS$2.92millionuponestablishment,ofwhich,originalMeilingGroupinvestedUS$1.46million(monetary

capital),accounting50%oftheregisteredcapital,HefeiMeilingCopperCo.,LtdinvestedUS$0.584million(monetarycapitalofRMB

0.18millionandrealassetsofUS$0.404million),accounting20%ofregisteredcapitalwhileSingaporeKimShinDevelopmentCo.,Ltd

investedUS$0.876million(monetarycapital),accounting30%oftheregisteredcapital.Theabovementionedinvestment

verifiedbytheverificationreportof[HSWZ(1995)No.0737],[HSWZ(1996)No.328]and[HSWZ(1998)No.088]from

AnhuiCPAsCo.,Ltd.InJuly2008,approvedby[HWS(2008)No.53]fromForeignTradeEconomicCooperationBureauof

HefeiCity,30%equityand20%equityheldbySingaporeKimShinDevelopmentCo.,LtdandHefeiMeilingCopperCo.,Ltd

respectivelytransferredtooriginalMeilingGroupTotally.TheCompany‘sregistercapitalcameintoRMB24,286,808.00after

transference,andwasnotthejoint-ventureanymore.

38)GuangdongChanghongRidianTechnologyCo.,Ltd.(hereinafterreferredtoastheCompany,thecompany)isalimited

liabilitycompanyinvestedandestablishedbySichuanChanghongElectricCo.,Ltd.(hereinafterreferredtoasSichuan

Changhong)andSichuanChanghongMotorTransportCo.,Ltd.(hereinafterreferredtoasChanghongMotorTransport

Company)onMay25,2016.Theregisteredcapitalandpaid-incapitalareRMB40millionYuan,ofwhichSichuan

Changhonghasinvested32millionYuan bymonetarycapital,accountingfor80%oftheregisteredcapital;Changhong

MotorTransportCompanyhasinvested8millionYuan,accountingfor20%oftheregisteredcapital.Theofficialreceiptsof

registeredcapitalhavebeenverifiedbyoriginalSichuanJunheAccountingFirm[No.JHYZ(2006)3027].Thecompany

increasedregisteredcapitalof43millionYuan onJanuary4,2007,changingfrom40millionYuan to83millionYuan,for

thenewlyincreased43millionYuan,SichuanChanghonginvested1.8millionYuan,GuangdongXiongfengElectricCo.,Ltd.

invested40millionYuan,andKouHuamengandother9naturalpersonshareholdersinvested1.2millionYuan,atthesame

time,theshareholders'meetingconsideredandagreedtotransfertheinvestmentof8millionYuan ofChanghongMotor

TransportCompanytoSichuanChanghongInnovationInvestmentCo.,Ltd.,thestructureoftheregisteredcapitalafterchanges

wasthatSichuanChanghonginvested33.8millionYuan,accountingfor40.72%；GuangdongXiongfengElectricCo.,Ltd.

invested40millionYuan,accountingfor48.19%;SichuanChanghongInnovationInvestmentCo.,Ltd.Invested8million

Yuan,accountingfor9.64%;KouHuamengandother9naturalpersonshareholdersinvested1.2millionYuan,accountingfor

1.45%.ThechangeofregisteredcapitalwasverifiedbyZhongshanPromiseAccountingFirm[No.ZCHZ(2007)501010].

OnFebruary18,2009,7naturalpersonshareholderstransferredtotal0.76%stockrightstoHuZhiheng,afterthetransfer,the

registeredcapitalofthecompanywasstill83millionYuan,thestructureofregisteredcapitalafterchangeswasthatSichuan

Changhonginvested33.8millionYuan,accountingfor40.72%;GuangdongXiongfengElectricCo.,Ltd.invested40million

Yuan,accountingfor48.19%;SichuanChanghongInnovationInvestmentCo.,Ltd.invested8millionYuan,accountingfor

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

9.64%;HuZhihengandothertwonaturalpersonshareholdersinvested1.2millionYuan,accountingfor1.45%.

OnOctober9,2014,thecompanyheldtheshareholdersmeetingwhichconsideredandagreedKouHuamengtotransferits

stockrightsoftotal250,000Yuan whichaccountsfor0.301%ofthecompany'sregisteredcapitaltoSichuanChanghong

InnovationInvestmentCo.,Ltd.atthecostof317,802Yuan.TheothershareholdersoftheCompanywaivedtherightof

pre-emption.OnDecember11,2014,thecompanyheldtheshareholdersmeetingwhichconsideredandagreedGuangdong

XiongfengElectricCo.,Ltd.totransferitsstockrightsoftotal40millionYuan whichaccountsfor48.19%ofthecompany's

registeredcapitaltoSichuanChanghongElectricCo.,Ltd.atthecostof43,977,300Yuan.Theothershareholdersofthe

Companywaivedtherightofpre-emption.ThestructureofregisteredcapitalafterchangeswasthatSichuanChanghong

invested73.8millionYuan,accountingfor88.92%;SichuanChanghongInnovationInvestmentCo.,Ltd.Invested8.25million

Yuan,accountingfor9.94%;HuZhihengandanothernaturalpersonshareholderinvested950,000Yuan,accountingfor

1.14%.

OnJanuary4,2016,SichuanChanghongandSichuanChanghongInnovationInvestmentCo.,Ltd.transferredtotal98.855%of

theCompany‘sstockrightstheyheldtotheCompany.Afterthetransfer,theCompanydirectlyholds98.855%stockrightsof

ChanghongRidian.

39)ChangmeiTechnologyCo.,Ltd.(ChangmeiTechnologyforshort)wasinvestedandsetuponMay12,2016inorderto

promoteintelligenttransformationandimplementthecompany‘sintelligentlifeprojectaccordingtothecompany'sstrategic

planningandbusinessdevelopmentneeds.ChangmeiTechnologyhasregisteredcapitalof50millionYuan,ofwhichthe

Companysubscribedandpaid45millionYuan incash,accountingfor90%oftheregisteredcapital,andChangmei

ManagementGroupteamsubscribedandpaid5millionYuan incash,accountingfor10%oftheregisteredcapital.

40)CHANGHONGMEILINGELECTRICINDONESIA,PT.(IndonesiaChanghongforshort)isasubsidiaryestablishedin

IndonesiaandjointlyinvestedbyZhongshanChanghongandSichuanChanghongin2016,thecompany‘sregisteredcapitalis

6millionUSdollars,ofwhichZhongshanChanghongsubscribedandpaid5.88millionUSdollarsincash,accountingfor98%

oftheregisteredcapital,ChanghongAirConditioningsubscribedandpaid120,000USdollarsincash,accountingfor2%of

theregisteredcapital.

41)ChanghongRubaTradingCompany(Private)Limited(―ChanghongRuba‖)wasajointventureestablishedbyZhongshan

ChanghongAppliancesCompanyLimitedandRUBAGENERALTRADINGFZECompany(―RUBA‖)on5August2011

withtheapprovalfromGuangdongDevelopmentandReformCommissionbyissuanceoftheApprovalRelatingtoJoint

ConstructionofaManufacturingandSellingPlatformProjectinPakistanbyZhongshanChanghongAppliancesCompany

Limited(YFGWZ(2011)958).Theresolutionofthesecondextraordinaryshareholders'meetingofZhongshanChanghongin

2016passedthe"ProposalontheCompany'sCapitalIncreasetoChanghongRubaTradingCompany(Private)Limited",and

agreedthatthecompanyandUAERUBACompanyjointlyincreasecapitaltoChanghongRubaTradingCompany(Private)

LimitedwhichwasinvestedbybothsidesinPakistanatanearlierstage,ZhongshanChanghonginvested3.84millionUS

dollarsinthiscapitalincrease,andUAERUBACompanyinvested2.56millionUSdollars,thesharesheldbybothsides

remainedunchanged.Afterthecapitalincrease,thecompany‘sregisteredcapitalbecame12.4millionUSdollars,ofwhich

ZhongshanChanghongElectricCo.,Ltd.Invested7.44millionUSdollarsincash,shareholdingratiowas60%,UAERUBA

Companyinvested4.96millionUSdollarsincash,andshareholdingratiowas40%.

42)SichuanChanghongAir-conditionersCo.,Ltd.(ChanghongAir-conditionerforshort),alimitedliabilitycompanyjointlyset

upbySichuanChanghongandChanghongChuangtou,wasfoundedonNovember28,2008.ItsregisteredcapitalwasRMB

200millionuponestablishment,ofwhich,SichuanChanghonginvestedRMB298million(RMB210,088,900investedby

monetarycapitalwhileRMB87,911,100investedbyrealmaterial),equivalenttoRMB198millionshares,accountingfor99%

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

oftheregisteredcapital;andChanghongChuangtouinvestedRMB3million,accountingfor1%oftheregisteredcapitalwith

equivalentofRMB2millionshares.Theregisteredcapitalreceiptwasverifiedbytheverificationreport[CGYYZ(2008)No.

177]ofSichuanGuangyuanCertifiedPublicAccountantsCo.,Ltd.and[HLTHYZ(2008)No.12-006]ofSichuanHenglitai

CertifiedPublicAccountantsCo.,Ltd.InDecember2009,theCompanyobtained100%equityofChanghongAir-conditioner

byconsolidatedunderthesamecontrol.

43)ZhongshanChanghongElectricCo.,Ltd.(ZhongshanChanghong),wastheoriginalGuangdongChanghongElectricCo.,

Ltd.,andisalimitedliabilitycompanyjointlysetupbySichuanChanghongandChinaMinmetalsonMay22,2001.Its

registeredcapitalwasRMB80millionuponestablishment,ofwhich,SichuanChanghonginvestedRMB72million,including

RMB69.3millionbidingfortheestate/non-estatefromoriginalZhongshanSanrongAir-conditionerCo.,Ltd.Anditspatent

use-rightofRMB2.7million,accountingfor90%oftheregisteredcapital;ChineMinmetalsinvestedRMB8millionin

monetarycapitalaccounting10%oftheregisteredcapital.TheCompanychangeditsnameoriginallyfromGuangdong

ChanghongElectricCo.,LtdinJuly2003.InDecember2009,theCompanyobtained90%equityofZhongshanChanghongby

consolidatedundersamecontrol.10%equityheldbyChinaMinmetalshasbeentransferredbyChanghongAir-conditioneron

April11,2010.On25May2014,theCompanyincreasedRMB36milliontoZhongshanChanghong,andChanghongAC

increasedRMB4million.In2016,accordingtotheoverseasdevelopmentstrategyoftheCompanyandthedevelopmentand

operationneedsofthesubsidiaries,theCompanyandthewholly-ownedsubsidiaryChanghongAirConditioninghave

increasedcapitalofRMB64millionYuan toZhongshanChanghongaccordingtotheexistingshareholdingratio,among

whichthecapitalincreaseoftheCompanywasRMB57.6millionYuan,andthecapitalincreaseofChanghongAir

ConditioningwasRMB6.4millionYuan.Afterthecompletionofthiscapitalincrease,theregisteredcapitalZhongshan

ChanghongshallincreasetoRMB184millionYuan,theshareholdingratioofthecompanyandChanghongAirConditioning

remainedunchangedandwasstill90%and10%,ofwhichtheCompanyinvested165.6millionYuan,accountingfor90%of

theregisteredcapital,ChanghongAirConditioninginvested18.4millionYuan,accountingfor10%oftheregisteredcapital.

44)HefeiMeilingGroupHoldingCo.,Ltd(MeilingGroup),wasthestate-ownedcompanyoriginallyapprovedbyPeople‘sGovernmentof

HefeiProvinceandestablishedauthorizedbySASACofHefeiCity.OnJuly14,2008,100%state-ownedequityofMeilingGrouphas

freelytransferredtoXingtaiHoldingbyHefeiSASAC.Agreementbytheapprovalof[HGZCQ(2010)No.34]ofHefeiSASAConApril9,2010,100%state-ownedpropertyof

MeilingGroupafterpartialassetsandliabilitiesseparatedtransferredtotheCompanyfromXingtaiHoldingasamountof

RMB113.2million.There-registrationofindustrialandcommercialprocedureforMeilingGroupafterseparatedpartialassets

liabilityhasfinishedonJuly28,2010.ThenewMeilingGrouphasregistercapitalofRMB80million,andhasbeenverified

bythe[AD(2010)YZDNo.016]fromAnhuiAndingCPAsCo.,Ltd.

45)MeilingEquatorAppliance(Hefei)Co.,Ltd.(EquatorApplianceforshort)wastheSino-foreignjointventurejointlysetupbyoriginal

MeilingGroupandEQUATORINVESTMENTS(USA)INC.(EQUATORforshort),whichhavebeenapprovedbythe

[SWZWFZZ(2004)No.0103]ofApprovalCertificateofForeignEnterprisefromPeople‘sGovernmentofAnhuiProvince.Its

registeredcapitalwasUS$3millionuponestablishment,ofwhich,SinocompanyinvestedUS$2.25millioninmachinery

equipment,accounting75%oftheregisteredcapitalwhileforeigncompanyinvestedUS$0.5millioninmonetarycapitaland

US$0.25millioninintangibleassets,amountingtoUS$0.75million,accounting25%oftheregisteredcapital.Theabove

mentionedinvestmentverifiedbytheverificationreportof[WYAYZ(2004)No.135]fromAnhuiYonganCPAsCo.,Ltd.In

July2007,approvedby[HWJ(2007)No.136]fromForeignTradeEconomicCooperationBureauofHefeiCity,25%equity

heldbyEQUATORtransferredtoAnhuiMeilingElectricCo.,Ltd.Totally.TheCompany‘sregistercapitalcameintoRMB

24,793,200aftertransference,andwasnotthejoint-ventureanymore.25%equityownedbyAnhuiMeilingElectricCo.,Ltd

hasbeentransferredtotallytooriginalMeilingGroupinJuly2009.

46)HefeiEquatorApplianceCo.,Ltd.(EquatorAppliance)wasjointlysetupbyoriginalMeilingGroupandYingkaiteApplianceon

September26,2007.ItsregistercapitalwasRMB12million,amongwhich,originalMeilingGroupinvestedRMB8,670,600in

monetarycapital,accounting72.255%inregisteredcapital;EquatorApplianceinvestedRMB3,329,400intheassessment

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

valueofintangibleassets(land-useright),accounting27.745%oftotalregisteredcapital.Theinvestmentbeingverifiedby

[WYAZ(2004)No.135]fromAnhuiYonganCPAsCo.,Ltd.

47)HongyuanGroundEnergyHeatingPumpTechnologyCompany(―HongyuanGroundEnergy‖)wasestablishedasalimited

liabilitycompanywithjointcapitalcontributionfromSichuanChanghongAirConditionerCompany(―ChanghongAir

Conditioner‖)andHengyouyuanScience&TechnologyDevelopmentGroupon28August2015,withtheapprovalfromthe

IndustrialandCommercialAdministrationOfficeofFuchengdistrict,Mianyang,Sichuanprovince.Theregisteredcapitalof

thecompanyisRMB50million,amongwhich,RMB25.5millioniscontributedbyChanghongAirConditionerincashwith

shareholdingproportionof51%,andtheremainingRMB24.5millioniscontributedbyHengyouyuanScience&Technology

DevelopmentGroupincashwithshareholdingproportionof49%.

(2)Majornon-wholly-ownedsubsidiary

Gains/losses Dividend Balanceof

Shareholdi attributableto distributedto minority’s

Subsidiary ngof minorityinthe minority interestat

minority Year announcedinthe year-end

Year

ZhongkeMeiling 33.23% 2,426,850.66 292,500.00 37,520,947.21

HongyuanGroundEnergy 49.00% 251,349.47 9,722,977.49

ChanghongRidian 1.14% 197,605.39 1,248,939.44

(3)Financialinformationformajornon-wholly-ownedsubsidiary

Endingbalance

Subsidiary Non-current

Currentassets Non-currentassets Totalassets Currentliabilities liability Totalliabilities

Zhongke 95,736,799.26 79,041,552.96 174,778,352.22 56,884,199.81 5,000,000.00 61,884,199.81

Meiling

Hongyuan

Ground 94,131,015.35 214,113.11 94,345,128.46 74,502,317.25 74,502,317.25

Energy

Changhong 201,344,325.02 59,154,559.91 260,498,884.93 151,381,017.63 151,381,017.63

Ridian

(Continued)

Openingbalance

Subsidiary Non-current

Currentassets Non-currentassets Totalassets Currentliabilities liability Totalliabilities

Zhongke 110,871,612.72 23,171,786.54 134,043,399.26 28,073,877.64 5,000,000.00 33,073,877.64

Meiling

Hongyuan

Ground 25,708,356.81 45,480.97 25,753,837.78 16,423,984.68 16,423,984.68

Energy

Changhong 111,208,245.86 62,080,855.26 173,289,101.12 81,435,705.12 81,435,705.12

Ridian

(Continued)

CurrentYear

Subsidiary Totalcomprehensive Cashflowfrom

Operationincome Netprofit income operationactivity

Zhongke 93,528,664.17 8,112,300.61 8,112,300.61 17,598,849.36

Meiling

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Subsidiary CurrentYear

Hongyuan

Ground 43,213,417.74 512,958.11 512,958.11 18,468,908.62

Energy

Changhong 495,075,275.53 17,264,471.30 17,264,471.30 81,480,606.59

Ridian

(Continued)

LastYear

Subsidiary Totalcomprehensive Cashflowfrom

Operationincome Netprofit income operationactivity

Zhongke 92,111,076.79 6,858,233.25 6,858,233.25 -8,138,362.46

Meiling

Hongyuan

Ground 18,346,958.57 -670,146.90 -670,146.90 -79,832.60

Energy

Changhong 349,645,724.03 615,594.18 615,594.18 17,903,129.02

Ridian

(4)Majorlimitationonusingenterprisegroup‘sassetsandliquidatedebtsofenterprisegroup:Nil

(5)Offeringfinancialsupportingorothersupportsforstructuredentitythatincludedinconsolidation

statementscope:Nil

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

2.Changesofowner‘equitysharesinsubsidiaryanditsimpacts

Item ZhongkeMeiling Chengdu Guiyang Kuming Taiyuan Jiangzhou Shenyang Zhengzhou Changsha Hohhot Lanzhou Total

Meiling Meiling Meiling Meiling Meiling Meiling Meiling Huidian Meiling Meiling

Originalratioofsharesheld 70.00% 94.00% 86.00% 86.50% 85.25% 81.00% 94.80% 85.00% 86.00% 83.00% 51.50%

Equity purchased from -3.24% 0.80% 14.00% 9.00% 14.75% 15.00% 5.20% 10.00% 11.00% 12.00% 48.50%

minority

Ratio of shares held at 66.76% 94.80% 100.00% 95.50% 100.00% 96.00% 100.00% 95.00% 97.00% 95.00% 100.00%

period-end

Cash 2.00 4.00 14.00 15.00 11.00 11.00 9.00 15.00 12.00 333,779.00 333,872.00

Acquisitioncost/totaldisposal 2.00 4.00 14.00 15.00 11.00 11.00 9.00 15.00 12.00 333,779.00 333,872.00

consideration

Less:netassetsofsubsidiary

measuredbyequityshares -308,409.88 -207,617.71 98,584.79 -251,298.63 -1,705,062.28 -903,669.21 -495,032.36 -1,080,438.58 167,599.27 -194,991.57 -236,105.88 -5,116,442.04

obtainedbydisposed

Balance 308,409.88 207,619.71 -98,580.79 251,312.63 1,705,077.28 903,680.21 495,043.36 1,080,447.58 -167,584.27 195,003.57 569,884.88 5,450,314.04

Including: -308,409.88 -207,619.71 98,580.79 -251,312.63 -1,705,077.28 -903,680.21 -495,043.36 -1,080,447.58 167,584.27 -195,003.57 -569,884.88 -5,450,314.04

Capitalpublicreserveadjusted

OnNovember25,2016,thefirstextraordinarygeneralmeetingofthesubsidiaryZhongkeMeilingconsideredandapprovedtheProposalontheCompany‘sStockIssuancePlan,theCompanygaveupthe

rightofpreemption,ZhongkeMeilingissuedstockof3,150,000sharesthistime,aftertheissuanceofshares,thestockrightsheldbytheCompanyinZhongkeMeilingweredilutedto66.76%,thebalance

betweenthenetassetsharescalculatedbythenewshareholdingratioafterthestockissuanceofsubsidiaryandthenetassetsharesbeforethestockissuanceofsubsidiarycalculatedbytheproportionof

originalshareholdingratiobeforethestockissuanceofsubsidiarywas-308,409.88Yuan,andshouldbeincludedinthecapitalreserve.

Thebalancebetweenthenewlyachievedlong-termequityinvestmentbypurchasingstockrightsofminorityshareholdersofsomemarketingsubsidiariesandthenetassetsharesheldbythesubsidiary

continuouslycalculatedfromthepurchasedateandcalculatedbythenewlyincreasedshareholdingratiowas-5,141,904.16Yuan,andshouldbeincludedinthecapitalreserve.

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

3.Equityinjointventureoraffiliatedenterprise

(1)Majorjointventureoraffiliatedenterprise

Shareholding

(%) Accounting

treatment for

Mainoffice Registe Business investment of

Jointventureoraffiliatedenterprise place rplace nature Direct Indire

ly ctly joint venture or

affiliated

enterprise

Affiliatedenterprise:

1.ChanghongRubaElectricCompany Lahore, Lahore Manufactures, 40.00 Equity

(Private)Ltd. Pakistan sales

2.HefeiXingmeiAssetsManagementCo., Hefei Hefei Rental, 48.28 Equity

Ltd. agency

3.Sichuan Zhiyijia Network Technology Mianyang Mianyang Sales 30.00 Equity

Co.,Ltd.

4.HongyuanDinengRebaoTechnologyCo. Mianyang Mianyang R&D,sales, 49.00 Equity

Ltd. after-sales

5.SichuanTianyouGuiguTechnologyCo., Mianyang Mianyang Manufactures, 25.00 Equity

Ltd. sales

(2)FinancialinformationformajorJointventure:Nil

(3)Financialinformationforaffiliatedenterprise

Endingbalance/CurrentYear

Item ChanghongRubaEl HefeiXingmei SichuanZhiyijia HongyuanDineng SichuanTianyou

ectricCompany(Pri Assets NetworkTechnology RebaoTechnology GuiguTechnology

vate)Ltd. ManagementCo., Co.,Ltd. Co.Ltd. Co.,Ltd.

Ltd.

Currentassets: 53,816,804.37 4,306,112.28 1,082,166,887.90 110,218,752.45 46,813,516.00

Including:cashandcashequivalent 3,218,558.81 4,230,072.28 432,181,490.05 3,089,747.24 36,370,617.75

Non-currentassets 87,139,096.04 22,951,140.57 14,581,224.90 4,316,949.46 42,568,210.38

Totalassets 140,955,900.41 27,257,252.85 1,096,748,112.80 114,535,701.91 89,381,726.38

Currentliability 51,373,683.63 1,584,509.70 1,058,052,880.39 61,339,639.80 54,110,854.39

Mom-currentliability 1,700,000.00 4,078,409.09

Totalliabilities 51,373,683.63 1,584,509.70 1,059,752,880.39 61,339,639.80 58,189,263.48

Minority‘sinterest 113,729.76

Equityattributabletoshareholderof 89,582,216.78 25,672,743.15 36,995,232.41 53,082,332.35 31,192,462.90

parentcompany

Shareofnetassetsmeasuredby 35,832,886.70 12,394,800.39 11,098,569.71 26,010,342.85 7,798,115.73

shareholding

Adjustmenttime

--Goodwill

Unrealized profit ofthe internal 6,783,242.24 1,718,196.04 3,239,277.40 15,398.22

downstreamtransactions

Unrealized profit ofthe internal 265,029.89

upstreamtransactions

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Other

Bookvalueoftheequityinvestment 29,314,674.36 12,394,800.39 9,380,373.67 22,771,065.45 7,782,717.50

foraffiliate

Fairvalueofequityinvestmentforthe

affiliateswithconsiderationpublicly

Operationincome 123,489,213.94 1,140,362.57 3,453,729,444.24 186,783,858.84 6,509,473.40

Financialexpenses 171,233.87 -4,426.04 -10,069,596.05 -48,439.86 -1,241,884.84

Incometaxexpenses 1,001,622.63

Netprofit -7,067,882.80 -934,690.76 12,027,151.46 2,990,569.80 -10,086,049.29

Netprofitofdiscontinuingoperation

Othercomprehensiveincome 6,028,246.66

Totalcomprehensiveincome -1,039,636.14 -934,690.76 12,027,151.46 2,990,569.80 -10,086,049.29

Dividend receivedfromaffiliates inthe

Year

(Continued)

Openingbalance/LastYear

Item ChanghongRubaEle HefeiXingmei Sichuan Zhiyijia HongyuanDineng SichuanTianyou

ctricCompany Assets NetworkTechnology RebaoTechnology GuiguTechnology

(Private)Ltd ManagementCo., Co.,Ltd. Co.Ltd. Co.,Ltd.

Ltd.

Currentassets: 80,097,168.57 4,422,052.11 1,049,476,856.75 23,764,511.93 72,222,287.99

Including:cashandcashequivalent 7,375,329.25 4,422,051.68 91,309,812.52 8,883,320.31 55,646,748.59

Non-currentassets 89,542,558.20 24,020,971.98 1,601,922.21 735,873.42 33,684,137.62

Totalassets 169,639,726.77 28,443,024.09 1,051,078,778.96 24,500,385.35 105,906,425.61

Currentliability 79,017,873.85 1,835,590.18 1,026,110,698.01 14,504,686.26 7,727,913.42

Mom-currentliability 6,900,000.00

Totalliabilities 79,017,873.85 1,835,590.18 1,026,110,698.01 14,504,686.26 14,627,913.42

Minority‘sinterest

Equityattributabletoshareholderof 90,621,852.92 26,607,433.91 24,968,080.95 9,995,699.09 91,278,512.19

parentcompany

Shareofnetassetsmeasuredby 36,248,741.17 12,846,069.09 7,490,424.28 4,897,892.55 22,819,628.05

shareholding

Adjustmenttime

--Goodwill

Unrealized profit ofthe internal -365,542.81 2,677,325.98 852,389.87 -1,568.58

downstreamtransactions

Unrealized profit ofthe internal 392,444.88

upstreamtransactions

Other

Bookvalueoftheequityinvestment 29,713,680.32 12,846,069.09 4,813,098.30 4,045,502.68 22,821,196.62

foraffiliate

Fairvalueofequityinvestmentforthe

affiliateswithconsiderationpublicly

Operationincome 106,976,700.85 1,770,062.00 2,211,431,774.61 6,373,887.46 2,809,349.48

Financialexpenses 94,584.75 -4,571.75 -4,333,752.73 -1,250.90 -543,578.15

Incometaxexpenses 4,755.05

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Netprofit -5,264,779.35 -467,514.17 -25,031,919.05 -4,300.91 -8,721,487.81

Netprofitofdiscontinuingoperation

Othercomprehensiveincome 1,227,315.18

Totalcomprehensiveincome -4,037,464.17 -467,514.17 -25,031,919.05 -4,300.91 -8,721,487.81

Dividend receivedfrom affiliates inthe

Year

(4)Financialsummaryfornon-importantJointventureandaffiliateenterprise

Item Endingbalance/Current Openingbalance/LastYear

Year

Affiliate:

Totalbookvalueofinvestment

Total amount measured by shareholding

ratio

--netprofit -10,437,028.50 -8,152,786.56

--Othercomprehensiveincome

--Totalcomprehensiveincome -10,437,028.50 -8,152,786.56

(5)MajorlimitationoncapitaltransferabilitytotheCompanyfromjointventureoraffiliates:Nil

(6)Excesslossoccurredinjointventureoraffiliates:Nil

(7)Unconfirmedcommitmentwithjointventureinvestmentconcerned:Nil

(8)Intangibleliabilitywithjointventureoraffiliatesinvestmentconcerned:Nil

4.Majorconductjointoperation:Nil

5.Structuredbodyexcludinginconsolidatefinancialstatement:Nil

IX.Relevantrisksrelatedwithfinancialinstrument

Themajorfinancial instrumentsoftheCompanyincludeborrowings,accountreceivables,account

payables,transactionalfinancialassets,transactionalfinancialliabilities,thedetailsofwhicharesetout

inNote6.Risksrelatedtothesefinancialinstrumentsincludeexchangerisksandinterestraterisks.The

managementoftheCompanycontrolsandmonitorstheriskexposurestoensuretheaboverisksare

undercontrol.

In connection withexchange risks,inorder toprevent fromexchange risksarising fromforeign

currencytransactionamount,foreigncurrencydominatedloansandinterestexpenditure,theCompany

enteredintoseveralforwardexchangecontractswithbanks.Fairvalueoftheforwardexchangecontract

whichhasbeenrecognizedasderivativefinancialinstrumentasof31December2016hasbeenincluded

inprofitsandlosses.Asexportbusinessisincreasing,ifrisksthatareoutofcontroloftheCompany

occursuchasappreciationofRMB,theCompanywillmitigatetherelevantrisksbyadjustingitssales

policy.

TheCompany‘s interestrateriskarisesfrombank borrowingsandinterest-bearing debt.Financial

liabilitiesatfloatingrateexposetheCompanytocashflowinterestraterisk,andfinancialliabilitiesat

fixedrateexpose the Companytofair value interest raterisk. TheCompany willdetermine the

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

respectiveproportionofcontractsatfixedandfloatingratesbasedontheprevailingmarketconditions.

Asof31December2016,theinterest-bearingdebtsmainlyreferredtoborrowingcontractsatfloating

ratedenominatedinRMBwithtotal amountof 281,251,000.00,borrowingcontractsatfixedrate

denominatedinUSDwithtotalamountof308,488,112.73.Risksrelatingtochangeoffairvalueof

financialinstrumentsarisingfrommovementofinterestratemainlyrelatedtobankborrowingsatfixed

rate.Asforborrowingsatfixedrate,theCompanyaimstokeepitsfloatingrate.Risksrelatingto

changeofcashflowoffinancialinstrumentsarisingfrommovementofinterestratemainlyrelatedto

bankborrowingsatfloatingrate.TheCompanyestablishesitspolicytokeepfloatingrateforthese

borrowingssoastoeliminatefairvalueriskarisingfrommovementofinterestrate.

X.Fairvalue

1.Assetandliabilitymeasuredbyfairvalueatendoftheyearandfairvaluemeasurementlevel

Fairvalueatyear-end

Item

1stlevel 2ndlevel 3rdlevel Total

Financialassetsmeasuredbyfairvalueandwithvariationreckonedintocurrentgains/losses

1.Transactionalfinancialassets

(1)Derivativefinancialassets 12,060,213.30 12,060,213.30

Financialliabilitiesmeasuredbyfairvalueandwithvariationreckonedintocurrentgains/losses

1.Transactionalfinancialliabilities

(1)Derivativefinancialliabilities 559,249.58 559,249.58

Thederivativecontractismeasuredbyfairvalueon2ndlevel,whichisthereal-timequoteonforeign

exchangemarketonbalancesheetdate

XI.Relatedpartiesandrelatedtransaction

(I)Relationshipofrelatedparties

1.Controllingshareholderandultimatecontroller

(1)Controllingshareholderandultimatecontroller

Controllingshareholderand Typeof Placeof Natureof Legal Organization

entity registratio business representativ code

ultimatecontroller n e

Sichuan Changhong Electric Co., Mianya Manufactur 4,616,244,222 24.88% 24.88%

LTD ng eandsales

SichuanChanghongElectronicHoldingGroupisthecontrollingshareholderofSichuanChanghong

Appliances,andtheSASACMianyangofficeholds100.00%equityinterestsofSichuanChanghong

ElectronicHoldingGroup,whichmeansthatSASACMianyangofficeistheultimatecontrollerofthe

Company.

(2)Registercapitalandchangethereofofcontrollingshareholder

Increase Decrease

Controllingshareholder Openingbalance duringthe duringthe Endingbalance

year year

Sichuan Changhong Electric Co., 4,616,244,222 4,616,244,222

LTD

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

(3)Sharesheldbythecontrollingshareholderanditschangesonequity

Amountofsharesheld Shareholdingratio(%)

Controllingshareholder Ratioat

Endingbalance Openingbalance Ratioatyear-end year-begin

Sichuan Changhong Electric Co., 259,871,791 189,994,153 24.88% 24.88%

LTD

2.Subsidiary

FoundmoreinNote―VIII.1(1)Enterprisegroupcomposition‖

3.Jointventureandaffiliatedenterprise

MajorJointventureandaffiliatedenterpriseoftheCompanyfoundmoreinNote―VIII.3(1)major

jointventureandaffiliatedenterprise‖.OtherJointventureandaffiliatedenterprisethathaverelated

transactionsoccurredwiththeCompanyintheYearoroccurredinlastperiod,andwithbalanceresults:

Jointventureandaffiliatedenterprise Relationship

HefeiMeilingSoleEnergyTechnologyCo.,Ltd. Affiliatedenterprise ofSubsidiaryMeilingGroup

ChanghongRubaElectricCompany(Private)Ltd. Affiliatedenterprise ofSubsidiaryZhongshanChanghong

HefeiXingmeiAssetsManagementCo.,Ltd. Affiliatedenterprise oftheCompany

Affiliatedenterprise oftheCompany, sharingthesame

SichuanZhiyijiaNetworkTechnologyCo.,Ltd. controlling shareholder with the Company and actual

controller

HongyuanDinengRebaoTechnologyCo.Ltd. Affiliated enterprise of Subsidiary Changhong

Air-conditioning

SichuanTianyouGuiguTechnologyCo.,Ltd. Affiliated enterprise of Subsidiary Changhong

Air-conditioning

4.Otherrelatedparties

Otherrelatedparties Relationship

HuayiCompressorCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanChanghongMoldPlasticTech.Co.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanChanghongJijiaFineCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanChanghongPackagePrintingCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanChanghongPrecisionElectronicsTech.Co.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanJiahongIndustrialCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanChanghongNewEnergyTechnologyCo.,Ltd. Control by same controlling shareholder and ultimate

controller

081ElectronicGroup Control by same controlling shareholder and ultimate

controller

GuangdongChanghongElectronicsCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanChanghongElectronicProductsCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanChanghongXinruiTechnologyCo.,Ltd Control by same controlling shareholder and ultimate

controller

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Otherrelatedparties Relationship

SichuanChanghongPowerSourceCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanChanghongLightingTechnologyCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanHongweiTechnologyCo.,Ltd. Control by same controlling shareholder and ultimate

controller

CHANGHONG(HK)TRADINGLIMITED Control by same controlling shareholder and ultimate

controller

SichuanChanghongInternationalHotelCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanChanghongCommunicationTechnologyCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanServiceExp.ApplianceServiceChainCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanChanghongInternationalTravelAgencyCo.,Ltd. Control by same controlling shareholder and ultimate

controller

PT.CHANGHONGELECTRICINDONESIA Control by same controlling shareholder and ultimate

controller

SichuanCCODisplayDeviceCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanHongxinSoftwareCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanChanghongDevicesTechnologyCo.,Ltd. Control by same controlling shareholder and ultimate

controller

CHANGHONGELECTRICMIDDLEEASTFZE Control by same controlling shareholder and ultimate

controller

SichuanChanghongGerunRenewableResourcesCo.,Ltd. Control by same controlling shareholder and ultimate

controller

HefeiChanghongIndustrialCo.,Ltd. Control by same controlling shareholder and ultimate

controller

LejiayiChainManagementCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanChanghongMinshengLogisticsCo.,LTD Control by same controlling shareholder and ultimate

controller

ChanghongEuropeElectrics.r.o Control by same controlling shareholder and ultimate

controller

ChengduChanghongPropertyCo.,Ltd. Control by same controlling shareholder and ultimate

controller

AnhuiXinhaoPDPCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanHuafengCorp.Group Control by same controlling shareholder and ultimate

controller

SichuanChanghongNetworkTechnologyCo.,Ltd. Control by same controlling shareholder and ultimate

controller

ChengduChanghongElectronicTechnologyCo.,Ltd. Control by same controlling shareholder and ultimate

controller

GuangyuanHongchengIndustrialCo.,Ltd. Control by same controlling shareholder and ultimate

controller

BVCHOptronics(Sichuan)Co.,Ltd. Control by same controlling shareholder and ultimate

controller

BeijingChanghongTechnologyCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanChanghongElectronicSystemCo.,Ltd. Control by same controlling shareholder and ultimate

controller

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Otherrelatedparties Relationship

081ElectronicGroupCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanChanghongGroupFinanceCo.,Ltd. Control by same controlling shareholder and ultimate

controller

YibingHongxingElectronicsCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanChanghongIntelligentManufacturingTechnology Control by same controlling shareholder and ultimate

Co.,Ltd. controller

SichuanChanghongPropertyServiceCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanHongchengConstructionEngineeringCo.,Ltd. Control by same controlling shareholder and ultimate

controller

HefeiChanghongNewEnergyTechnologyCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanChanghongPropertyCo.,Ltd. Control by same controlling shareholder and ultimate

controller

Sichuan Changhong IntelligentHealthTechnology Co., Control by same controlling shareholder and ultimate

Ltd. controller

SichuanHuanyuIndustrialCo.Ltd. Control by same controlling shareholder and ultimate

controller

Mianyang TechnologyTownBigDataTechnologyCo., Control by same controlling shareholder and ultimate

Ltd. controller

SichuanChanghongEducationTechnologyCo.,Ltd. Control by same controlling shareholder and ultimate

controller

ShenzhenYijia‘enTechnologyCo.Ltd. Control by same controlling shareholder and ultimate

controller

CHANGHONGELECTRIC(AUSTRALIA) Control by same controlling shareholder and ultimate

controller

SichuanChanghongDiandianbangTechnologyCo.,Ltd. Control by same controlling shareholder and ultimate

controller

SichuanHongyuMetalManufactureCo.,Ltd. Affiliateenterpriseofcontrollingshareholder

SichuanChangxinRefrigerationPartsCo.,Ltd. Affiliateenterpriseofcontrollingshareholder

MianyangHighlyElectricCo.,Ltd. Affiliateenterpriseofcontrollingshareholder

SichuanChangheTechnologyCo.,Ltd. Affiliateenterpriseofcontrollingshareholder

HengyouyuanTechnologyDevelopmentGroupCo.,Ltd. Theinvestorhasmajorinfluenceonthesubsidiary

(II)Relatedtransactions

1.Purchasingcommodity

CurrentYear LastYear

Relatedparties Content (10thousand (10thousand

Yuan) Yuan)

SichuanChanghongElectricCo.,LTD Purchasing 14,456.41 9,519.51

commodity

SichuanChanghongElectronicsGroupCo.,Ltd. Purchasing 0.37

commodity

HuayiCompressorCo.,Ltd. Purchasing 44,592.84 51,119.55

commodity

SichuanChanghongMoldPlasticTech.Co.,Ltd. Purchasing 42,763.92 34,993.69

commodity

SichuanChanghongJijiaFineCo.,Ltd. Purchasing 21,372.67 15,319.03

commodity

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

CurrentYear LastYear

Relatedparties Content (10thousand (10thousand

Yuan) Yuan)

SichuanChanghongPackagePrintingCo.,Ltd. Purchasing 5,862.38 3,891.38

commodity

CHANGHONG(HK)TRADINGLIMITED Purchasing 179.34 871.32

commodity

SichuanChanghongPrecisionElectronicsTech.Co.,Ltd. Purchasing 770.77 450.53

commodity

SichuanChanghongNewEnergyTechnologyCo.,Ltd. Purchasing 6.69 43.42

commodity

081ElectronicGroupCo.,Ltd. Purchasing 278.61 188.68

commodity

GuangdongChanghongElectronicsCo.,Ltd. Purchasing 865.98 476.21

commodity

SichuanHongyuMetalManufactureCo.,Ltd. Purchasing 55.98 37.51

commodity

SichuanChanghongIntelligentManufacturingTechnology Purchasing 468.62 187.64

Co.,Ltd. commodity

SichuanChanghongDevicesTechnologyCo.,Ltd. Purchasing 684.44 2,929.15

commodity

SichuanChanghongXinruiTechnologyCo.,Ltd Purchasing 5,019.64 8,393.49

commodity

SichuanHongweiTechnologyCo.,Ltd. Purchasing 342.66 17.74

commodity

SichuanChanghongLightingTechnologyCo.,Ltd. Purchasing 0.57 4.79

commodity

SichuanJiahongIndustrialCo.,Ltd. Purchasing 13.77 3.09

commodity

SichuanChanghongInternationalHotelCo.,Ltd. Purchasing 5.74

commodity

SichuanZhiyijiaNetworkTechnologyCo.,Ltd. Purchasing 2.56 1.62

commodity

SichuanChanghongPowerSourceCo.,Ltd. Purchasing 3.68

commodity

SichuanHuafengGroupCo.,Ltd. Purchasing 23.04

commodity

SichuanServiceExp.ApplianceServiceChainCo.,Ltd. Purchasing 1.67

commodity

SichuanChanghongElectronicProductsCo.,Ltd. Purchasing 3,485.14

commodity

SichuanHongxinSoftwareCo.,Ltd. Purchasing 5.09

commodity

SichuanChanghongPropertyServiceCo.,Ltd. Purchasing 0.04

commodity

SichuanChanghongCommunicationTechnologyCo.,Ltd. Purchasing 0.16

commodity

SichuanChangheTechnologyCo.,Ltd. Purchasing 687.31 341.13

commodity

SichuanChangxinRefrigerationPartsCo.,Ltd. Purchasing 20,715.41 11,944.29

commodity

MianyangHighlyElectricCo.,Ltd. Purchasing 18,280.41 14,137.35

commodity

HongyuanDinengRebaoTechnologyCo.Ltd. Purchasing 13,655.96

commodity

SichuanTianyouGuiguTechnologyCo.,Ltd. Purchasing 189.61 23.62

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

CurrentYear LastYear

Relatedparties Content (10thousand (10thousand

Yuan) Yuan)

commodity

Total 194,785.58 154,900.64

2.Laborservicereceive

Relatedparties Content CurrentYear LastYear

SichuanChanghongElectricCo.,LTD Laborservice 20,635,470.36 13,536,578.79

receive

SichuanChanghongMinshengLogisticsCo.,LTD Laborservice 438,755,474.68 420,580,234.83

receive

SichuanChanghongMoldPlasticTech.Co.,Ltd. Laborservice 55,643.55 12,279.45

receive

SichuanServiceExp.ApplianceServiceChainCo.,Ltd. Laborservice 119,890,832.60 125,062,530.99

receive

SichuanHongxinSoftwareCo.,Ltd. Laborservice 303,773.60

receive

GuangdongChanghongElectronicsCo.,Ltd. Laborservice 774,830.62 113,519.53

receive

SichuanJiahongIndustrialCo.,Ltd. Laborservice 188,221.66 29,852.60

receive

SichuanChanghongInternationalHotelCo.,Ltd. Laborservice 181,222.85 17,473.00

receive

CHANGHONG(HK)TRADINGLIMITED Laborservice 97,468.90 2,007,833.37

receive

SichuanChanghongElectronicsGroupCo.,Ltd. Laborservice 113,420.18 12,922.00

receive

SichuanChanghongInternationalTravelAgencyCo.,Ltd. Laborservice 119,887.70

receive

SichuanChanghongPropertyServiceCo.,Ltd. Laborservice 6,733.33

receive

SichuanChanghongPrecisionElectronicsTech.Co.,Ltd. Laborservice 28,408.32

receive

SichuanHongweiTechnologyCo.,Ltd. Laborservice 235,849.05 968,584.90

receive

SichuanZhiyijiaNetworkTechnologyCo.,Ltd. Laborservice 2,529.91

receive

SichuanChanghongJijiaFineCo.,Ltd. Laborservice 4,304.00

receive

Total 581,389,767.31 562,346,113.46

3.Purchaseoffuelsandenergy

Relatedparties Content CurrentYear LastYear

SichuanChanghongElectricCo.,LTD Receivefuelsand 16,589,751.56 14,864,527.96

energy

HuayiCompressorCo.,Ltd. Receivefuelsand 480,530.98 247,361.46

energy

GuangdongChanghongElectronicsCo.,Ltd. Receivefuelsand 1,531,985.67

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

energy

SichuanJiahongIndustrialCo.,Ltd. Receivefuelsand 11,450.26

energy

HefeiChanghongNewEnergyTechnologyCo.,Ltd. Receivefuelsand 242,591.95

energy

SichuanChanghongElectronicsGroupCo.,Ltd. Receivefuelsand 10,243.00 5,396.54

energy

SichuanChanghongPropertyServiceCo.,Ltd. Receivefuelsand 45,132.76

energy

Total 18,911,686.18 15,117,285.96

4.Salesofgoods/laborserviceproviding

Relatedparties Content CurrentYear LastYear

(10thousandYuan)(10thousandYuan)

SichuanChanghongElectricCo.,LTD Salesofgoods 108,928.79 82,925.29

SichuanChanghongElectronicsGroupCo.,Ltd. Salesofgoods 338.20 0.69

SichuanChanghongJijiaFineCo.,Ltd. Salesofgoods 4,693.13 2,906.14

SichuanChanghongMoldPlasticTech.Co.,Ltd. Salesofgoods 13,701.81 12,094.53

LejiayiChainAdministrationCo.,Ltd. Salesofgoods 365.25 570.66

PT.CHANGHONGELECTRICINDONESIA Salesofgoods 2.60 20.92

CHANGHONG(HK)TRADINGLIMITED Salesofgoods 45,103.46 38,162.85

CHANGHONGELECTRIC(AUSTRALIA) Salesofgoods 13.92

SichuanHongweiTechnologyCo.,Ltd. Salesofgoods 9.76 6.00

SichuanChanghongDevicesTechnologyCo.,Ltd. Salesofgoods 0.00 48.60

SichuanChanghongMinshengLogisticsCo.,LTD Salesofgoods 87.2 123.69

SichuanServiceExp.ApplianceServiceChainCo.,Ltd. Salesofgoods 724.69 733.07

SichuanChanghongGerunRenewableResourcesCo.,Ltd. Salesofgoods 949.01 615.73

HefeiChanghongIndustrialCo.,Ltd. Salesofgoods 255.71 439.68

SichuanHuafengGroupCo.,Ltd. Salesofgoods 17.25 4.24

SichuanZhiyijiaNetworkTechnologyCo.,Ltd. Salesofgoods 143,292.46 42,443.59

SichuanChanghongPropertyCo.,Ltd. Salesofgoods 3.95

AnhuiXinhaoPDPCo.,Ltd. Salesofgoods 5.13 62.91

SichuanChanghongNetworkTechnologyCo.,Ltd. Salesofgoods 1.57 4.37

ChengduChanghongElectronicTechnologyCo.,Ltd. Salesofgoods 1.55

SichuanChanghongIntelligentHealthTechnologyCo.,Ltd. Salesofgoods 0.31

GuangdongChanghongElectronicsCo.,Ltd. Salesofgoods 0.14 4.92

SichuanHuanyuIndustrialCo.Ltd. Salesofgoods 1.42

SichuanChanghongXinruiTechnologyCo.,Ltd Salesofgoods 75.91 3,764.42

SichuanChanghongIntelligentManufacturingTechnology Salesofgoods 4.32

Co.,Ltd.

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Relatedparties Content CurrentYear LastYear

(10thousandYuan)(10thousandYuan)

MianyangTechnologyTownBigDataTechnologyCo.,Ltd. Salesofgoods 0.06

BVCHOptronics(Sichuan)Co.,Ltd. Salesofgoods 1.91

SichuanChanghongElectronicProductsCo.,Ltd. Salesofgoods 8.74

SichuanChanghongGroupFinanceCo.,Ltd. Salesofgoods 0.25

HuayiCompressorCo.,Ltd. Salesofgoods 16.92

SichuanChanghongPackagePrintingCo.,Ltd. Salesofgoods 33.31 21.16

SichuanChanghongPowerSourceCo.,Ltd. Salesofgoods 5.34 17.86

SichuanChanghongEducationTechnologyCo.,Ltd. Salesofgoods 0.31

SichuanChanghongInternationalHotelCo.,Ltd. Salesofgoods 1.35

SichuanChanghongPrecisionElectronicsTech.Co.,Ltd. Salesofgoods 14.92

081ElectronicGroupCo.,Ltd. Salesofgoods -6.04

CHANGHONGELECTRICMIDDLEEASTFZE Salesofgoods 15.44

ChanghongEuropeElectrics.r.o Salesofgoods 92.42

ChengduChanghongPropertyCo.,Ltd. Salesofgoods 1.37

HefeiMeiLingSolarEnergyTechnologyCo.,Ltd. Salesofgoods 75.23

GuangyuanHongchengIndustrialCo.,Ltd. Salesofgoods 0.03

FuyangMeilingApplianceMarketingCo.,Ltd. Salesofgoods 333.75

SichuanChanghongPropertyServiceCo.,Ltd. Salesofgoods 4.89

SichuanChangxinRefrigerationPartsCo.,Ltd. Salesofgoods 7,035.25 3,333.09

HongyuanDinengRebaoTechnologyCo.Ltd. Salesofgoods 21,275.51 1,033.72

SichuanTianyouGuiguTechnologyCo.,Ltd. Salesofgoods 229.86 36.01

ChanghongRubaElectricCompany(Private)Ltd. Salesofgoods 3,846.63 3,039.47

MianyangHighlyElectricCo.,Ltd. Salesofgoods 0.46

Total 351,036.52 192,942.54

BusinessesbetweentheCompanyanditsconnectedpersonsaregenerallyconductedundermarket

operationrulesasiftheywerethesameasotherbusinesscounterparties.Forpriceofsaleorpurchase

andprovisionofotherlaborservicebetweentheCompanyanditsrelatedparties,thestatepricingis

applicableifthepricingdoexists;incaseofabsenceofsuchstatepricing,priceisdeterminedunder

marketprice;incaseofabsenceofsuchmarketprice,priceisdeterminedbybothpartiesatactualcost

plusreasonableexpenses;forsomespecialservices,thepriceofwhichcannotbedeterminedunderthe

ruleofcostplusexpense,thepriceshallbedeterminedbybothpartiesbynegotiation.

5.Fuelandenergyproviding

Relatedparties Content CurrentYear LastYear

GuangdongChanghongElectronicsCo.,Ltd. Fuelandenergy 956,099.28 866,165.68

providing

SichuanChanghongMinshengLogisticsCo.,LTD Fuelandenergy 68,684.40 80,271.36

providing

SichuanChanghongDevicesTechnologyCo.,Ltd. Fuelandenergy 463,262.93

providing

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Relatedparties Content CurrentYear LastYear

SichuanChanghongJijiaFineCo.,Ltd. Fuelandenergy 96,364.38 386,615.33

providing

SichuanChanghongMoldPlasticTech.Co.,Ltd. Fuelandenergy 4,856,207.90 5,769,242.83

providing

SichuanHongweiTechnologyCo.,Ltd. Fuelandenergy 7,893.94

providing

SichuanServiceExp.ApplianceServiceChainCo.,Ltd. Fuelandenergy 170.93

providing

Total 6,448,512.83 7,102,466.13

6.Relatedrental

(1)Renting

Lessor Lessee Typeof Leasingincome Leasingincome

assets inthisyear inlastyear

HefeiMeiling SichuanChanghongJijiaFineCo.,Ltd. Forklifttruck 2,792.14 62.74

Co.,Ltd.

HefeiMeiling SichuanChanghongJijiaFineCo.,Ltd. Warehouse 14,060.38

Co.,Ltd.

HefeiMeiling SichuanChanghongJijiaFineCo.,Ltd. Apartment 75,635.43

Co.,Ltd.

HefeiMeiling SichuanChanghongJijiaFineCo.,Ltd. Plant 486,720.81 466,560.00

Co.,Ltd.

HefeiMeiling SichuanChanghongMoldPlasticTech.Co.,Ltd. Warehouse 34,301.89

Co.,Ltd.

HefeiMeiling SichuanChanghongMoldPlasticTech.Co.,Ltd. Plant 661,680.00 1,294,380.00

Co.,Ltd.

HefeiMeiling SichuanChangheTechnologyCo.,Ltd. Warehouse 1,833.96

Co.,Ltd.

HefeiMeiling SichuanChanghongXinruiTechnologyCo.,Ltd Forklifttruck 1,485.85 1,191.51

Co.,Ltd.

HefeiMeiling SichuanChanghongXinruiTechnologyCo.,Ltd Warehouse 12,226.42

Co.,Ltd.

HefeiMeiling SichuanChanghongMinshengLogisticsCo.,LTD Office 10,608.00

Co.,Ltd.

HefeiMeiling SichuanServiceExp.ApplianceServiceChainCo., Office 24,547.72

Co.,Ltd. Ltd.

HefeiMeiling SichuanServiceExp.ApplianceServiceChainCo., Apartment 194,413.33

Co.,Ltd. Ltd.

HefeiMeiling HefeiChanghongIndustrialCo.,Ltd. Apartment 448,681.52

Co.,Ltd.

HefeiMeiling SichuanChanghongElectricCo.,LTD Apartment 68,624.76

Co.,Ltd.

HefeiMeiling SichuanChanghongPrecisionElectronicsTech.Co., Apartment 63,959.42

Co.,Ltd. Ltd.

Changhong BVCHOptronics(Sichuan)Co.,Ltd. Freight 63,720.00 63,720.00

Air-Conditioner elevator

Changhong SichuanChanghongMoldPlasticTech.Co.,Ltd. Machinerayequi 8,177.80

Air-Conditioner pment

Changhong SichuanChanghongJijiaFineCo.,Ltd. Driving 7,000.00

Air-Conditioner

Zhongshan SichuanChanghongJijiaFineCo.,Ltd. 2#livingarea 3,889.43 10,320.21

Changhong

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Lessor Lessee Typeof Leasingincome Leasingincome

assets inthisyear inlastyear

Zhongshan SichuanChanghongMinshengLogisticsCo.,LTD Warehouse 100,000.00

Changhong

Zhongshan GuangdongChanghongElectronicsCo.,Ltd. Office 1,474,415.84 814,103.36

Changhong building

Zhongshan SichuanChanghongMinshengLogisticsCo.,LTD Office 57,509.74 40,659.36

Changhong building

Zhongshan SichuanChanghongMoldPlasticTech.Co.,Ltd. 2#livingarea 89,802.16

Changhong

Zhongshan ShenzhenYijia‘enTechnologyCo.Ltd. 2#livingarea 18,141.15

Changhong

Zhongshan SichuanHongweiTechnologyCo.,Ltd. 2#livingarea 5,047.62

Changhong

Mianyang SichuanChanghongMoldPlasticTech.Co.,Ltd. Warehousin 60,396.23 65,886.80

Refrigeration gfee

Mianyang SichuanChanghongPackagePrintingCo.,Ltd. Warehousin 4,150.94 3,773.59

Refrigeration gfee

Mianyang SichuanChangheTechnologyCo.,Ltd. Warehousin 207.55 271.69

Refrigeration gfee

Mianyang SichuanChangxinRefrigerationPartsCo.,Ltd. Warehousin 207.55 566.03

Refrigeration gfee

Jiangxi SichuanChanghongMoldPlasticTech.Co.,Ltd. RentalofPlant 474,614.85 451,920.00

Electric

Jiangxi SichuanChanghongJijiaFineCo.,Ltd. RentalofPlant 134,064.00

Electric

Jiangxi SichuanChanghongJijiaFineCo.,Ltd. Machinerayequi 99,487.17

Electric pment

Changhong SichuanChanghongDevicesTechnologyCo.,Ltd. Workshop 823,744.00 842,128.00

Ridian lease

Changhong SichuanChanghongMinshengLogisticsCo.,LTD Workshop 1,014,296.40 339,838.08

Ridian lease

Changhong SichuanHongweiTechnologyCo.,Ltd. Workshop 71,539.20

Ridian lease

Total 6,291,715.09 4,715,649.54

(2)Lesseeofrelatedparties

Leasingexpense Leasing

Lessor Lessee Typeofassets inthisyear expenseinlast

year

SichuanChanghongElectricCo.,LTD Sichuan Workshopand 8,374,314.61 7,884,364.10

Changhong office

Sichuan Changhong Electronics Group Sichuan Shopfront 84,263.16 9,767.00

Co.,Ltd. Changhong

Sichuan Changhong Electronics Group MianyangRefrigeration Staffdormitory 5,520.00 7,840.00

Co.,Ltd.

BeijingChanghongTechnologyCo.,Ltd. BeijingMeiling Office 89,128.50 356,514.00

SichuanChanghongElectricCo.,LTD Appliancemarketing Office 493,088.97 535,471.91

GuangdongChanghongElectronicsCo., Changhong Dormitory 525,298.65

Ltd. Ridian rental

SichuanChanghongElectricCo.,LTD Changhong Dormitory 210,433.96

Ridian rental

Total 9,782,047.85 8,793,957.01

7.Relatedguarantee

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Maximumguarantee Completed

Securedparty Sponsoredparty amount(in10 Start End (Y/N)

thousandYuan)

Zhongshan

Hefei Meiling Changhong 15,000.00 2015.12.29 2016.12.29 Y

ElectricAppliance

Zhongshan

Hefei Meiling Changhong 8,000.00 2015.03.30 2016.03.29 Y

ElectricAppliance

Zhongshan

Hefei Meiling Changhong 17,000.00 2016.01.01 2016.12.31 N

ElectricAppliance

Zhongshan

Hefei Meiling Changhong 5,000.00 2015.05.27 2016.05.27 Y

ElectricAppliance

Zhongshan

Hefei Meiling Changhong 5,000.00 2016.08.05 2017.08.04 N

ElectricAppliance

Zhongshan

Hefei Meiling Changhong 5,000.00 2016.10.28 2017.10.28 N

ElectricAppliance

Hefei Meiling ChanghongRidian 2,000.00 2016.09.01 2017.09.01 N

Hefei Meiling ChanghongRidian 4,500.00 2016.05.05 2017.05.05 N

Counter

guarantee:

Zhongshan

Changhong Hefei Meiling 15,000.00 2015.12.29 2016.12.29 Y

ElectricAppliance

Zhongshan

Changhong Hefei Meiling 8,000.00 2015.03.30 2016.03.29 Y

ElectricAppliance

Zhongshan

Changhong Hefei Meiling 17,000.00 2016.01.01 2016.12.31 N

ElectricAppliance

Zhongshan

Changhong Hefei Meiling 5,000.00 2015.05.27 2016.05.27 Y

ElectricAppliance

Zhongshan

Changhong Hefei Meiling 5,000.00 2016.08.05 2017.08.04 N

ElectricAppliance

Zhongshan

Changhong Hefei Meiling 5,000.00 2016.10.28 2017.10.28 N

ElectricAppliance

ChanghongRidian Hefei Meiling 2,000.00 2016.09.01 2017.09.01 N

ChanghongRidian Hefei Meiling 4,500.00 2016.05.05 2017.05.05 N

8.Assetstransfer,debtrestructuringofrelatedparties

Relatedparties Type CurrentYear LastYear

SichuanChanghongElectricCo.,LTD Purchasingfixedassets 221,411.27 3,271,518.77

SichuanHongxinSoftwareCo.,Ltd. Purchasingfixedassets 252,830.20 990,566.04

SichuanHongweiTechnologyCo.,Ltd. Purchasingfixedassets 1,374,917.70

SichuanHongxinSoftwareCo.,Ltd. Purchasingfixedassets 149,292.45

Sichuan Changhong Intelligent Manufacturing Purchasingfixedassets 2,053,812.82

TechnologyCo.,Ltd.

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Relatedparties Type CurrentYear LastYear

SichuanChanghongJijiaFineCo.,Ltd. Purchasingfixedassets 17,948.72

SichuanHongchengConstructionEngineeringCo., Purchaseand

Ltd. constructionoffixed 5,909,615.13

assets

SichuanChanghongElectronicSystemCo.,Ltd. Purchasingfixedassets 714,059.83

081ElectronicGroupCo.,Ltd. Purchasingfixedassets 59,829.06

SichuanChanghongNewEnergyTechnologyCo., Fixedassetssold 15,035.60

Ltd.

Sichuan ChanghongGerun Renewable Resources Fixedassetssold 31,091.89

Co.,Ltd.

SichuanTianyouGuiguTechnologyCo.,Ltd. Fixedassetssold 854.70

Total 10,011,774.88 5,051,009.30

9.RelatedtransactionwithChanghongFinanceCompany

(1)Savingbalance

Company Openingbalance Endingbalance Incomefrombank

saving

HefeiMeilingCo.,Ltd. 929,016,660.03 1,269,669,769.16 46,911,461.33

SichuanChanghongAirConditionerCo., 51,254,783.01 403,311,310.63 5,814,745.44

Ltd.

ZhongshanChanghongApplianceCo.,Ltd 64,705,781.78 67,318,559.05 95,732.71

HefeiMeilingGroupHoldingCo.,Ltd. 3,832.74 1,185,381.05 1,889,048.34

MianyangMeiLingRefrigerationCo.,Ltd. 218,333.30 60,008.27 623,644.26

Zhongke MeiLing Low-temperature 50,772,917.93 25,450,411.46 450,411.46

TechnologyCo.,Ltd.

Jiangxi MeiLingElectric ApplianceCo., 102,164,170.55 2,175,638.22

Ltd.

GuangdongChanghongRidianTechnology 61,945,227.21 125,819,243.83 235,401.39

Co.,Ltd.

HongyuanHeatPumpTechnologyCo.,Ltd. 16,027,479.75 38,116.80

Total 1,260,081,706.55 1,908,842,163.20 58,234,199.95

(2)Notesdiscounted

Company Bankacceptancebook Bankacceptance Expensesof

discountedamount discountedamount discounted

HefeiMeilingCo.,Ltd. 242,871,970.10 240,970,903.54 1,901,066.56

SichuanChanghongAirConditionerCo., 733,975,237.73 726,008,159.25 7,967,078.48

Ltd.

HefeiMeilingGroupHoldingCo.,Ltd. 100,000,000.00 98,373,333.30 1,626,666.70

MianyangMeiLingRefrigerationCo.,Ltd. 150,000,000.00 149,440,000.05 559,999.95

Total 1,226,847,207.83 1,214,792,396.14 12,054,811.69

(3)Notesissued

Company Issuingunit Noteamount Type

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

HefeiMeilingCo.,Ltd. SichuanChanghongGroupFinance 627,233,900.00 Bankacceptance

Co.,Ltd.

SichuanChanghongAirConditioner SichuanChanghongGroupFinance 748,307,945.36 Bankacceptance

Co.,Ltd. Co.,Ltd.

Zhongshan Changhong Appliance SichuanChanghongGroupFinance 270,000,947.24 Bankacceptance

Co.,Ltd Co.,Ltd.

Mianyang MeiLing Refrigeration SichuanChanghongGroupFinance 141,021.36 Bankacceptance

Co.,Ltd. Co.,Ltd.

Guangdong Changhong Ridian SichuanChanghongGroupFinance 56,053,906.52 Bankacceptance

TechnologyCo.,Ltd. Co.,Ltd.

Hefei MeilingGroupHoldingCo., SichuanChanghongGroupFinance 96,000.00 Bankacceptance

Ltd. Co.,Ltd.

Total 1,701,833,720.48

(4)Borrowing:Nil

(5)Accountsreceivablefactoring:Nil

10.Keymanagement‘sremuneration

Item CurrentYear(10thousand LastYear(10thousand

Yuan) Yuan)

Totalremuneration 337.44 340.36

Including:performanceincentivefund

(III)Comeandgobalancewithrelatedparties

1.Receivables

Endingbalance Openingbalance

Item Relatedparties Bad Bad

Bookbalance debt Bookbalance debt

prov prov

ision ision

Account SichuanChanghongElectricCo.,LTD 521,671.35 2,138,556.68

receivable

Account SichuanChanghongElectronicsGroupCo.,Ltd. 376,186.92 2,209,161.87

receivable

Account SichuanChanghongMoldPlasticTech.Co.,Ltd. 965,201.45 207,505.03

receivable

Account CHANGHONGELECTRIC(AUSTRALIA) 144,829.93

receivable

Account HefeiChanghongIndustrialCo.,Ltd. 1,492,108.99

receivable

Account SichuanChanghongPropertyServiceCo.,Ltd. 12,516.00

receivable

Account HuayiCompressorCo.,Ltd. 334,800.00 263,800.00

receivable

Account SichuanChanghongJijiaFineCo.,Ltd. 5,536.56

receivable

Account PT.CHANGHONGELECTRICINDONESIA 26,971.06 212,356.95

receivable

Account CHANGHONG(HK)TRADINGLIMITED 60,541,639.57 133,214,694.78

receivable

Account SichuanChanghongPackagePrintingCo.,Ltd. 4,400.00 800.00

receivable

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Endingbalance Openingbalance

Item Relatedparties Bad Bad

Bookbalance debt Bookbalance debt

prov prov

ision ision

Account SichuanChanghongInternationalHotelCo.,Ltd. 1,334,736.90 2,859,768.75

receivable

Account ChengduChanghong ElectronicTechnologyCo., 434,509.01 1,835,245.20

receivable Ltd.

Account SichuanChanghongGerunRenewableResources 0.60 3,559.52

receivable Co.,Ltd.

Account LejiayiChainAdministrationCo.,Ltd. 325,769.21

receivable

Account SichuanZhiyijiaNetworkTechnologyCo.,Ltd. 174,033,095.60 260,964,612.33

receivable

Account SichuanHongweiTechnologyCo.,Ltd. 7,600.00 8,998.00

receivable

Account AnhuiXinhaoPDPCo.,Ltd. 63,000.00 645,000.00

receivable

Account YibingHongxingElectronicsCo.,Ltd. 147,174.10 1,058,049.10

receivable

Account SichuanChanghongNetworkTechnologyCo.,Ltd. 51,150.00

receivable

Account ChanghongRubaElectricCompany(Private)Ltd 16,296,282.53 34,269,278.41

receivable

Account HongyuanDinengRebaoTechnologyCo.Ltd. 36,070,419.59 12,094,465.83

receivable

Accountpaid SichuanChanghongElectricCo.,LTD 1,054,531.13

inadvance

Accountpaid SichuanChanghongMoldPlasticTech.Co.,Ltd. 5.38

inadvance

Accountpaid SichuanZhiyijiaNetworkTechnologyCo.,Ltd. 14,074.00

inadvance

Accountpaid SichuanHongweiTechnologyCo.,Ltd. 263,948.00

inadvance

Accountpaid Sichuan Changhong Intelligent Manufacturing 254,682.00

inadvance TechnologyCo.,Ltd.

Other SichuanChanghongElectricCo.,LTD 39,617.46 449,090.56

receivables

Other SichuanServiceExp.ApplianceServiceChainCo., 200,000.00 200,000.00

receivables Ltd.

Other SichuanChanghongMinshengLogisticsCo.,LTD 80,265.12

receivables

Other SichuanChanghongDevicesTechnologyCo.,Ltd. 1,416.11

receivables

Other HongyuanDinengRebaoTechnologyCo.Ltd. 130,396.62

receivables

Other SichuanTianyouGuiguTechnologyCo.,Ltd. 12,500,000.00

receivables

Total 305,772,283.82 454,591,194.38

2.Payables

Item Relatedparties Endingbalance Openingbalance

Account

receivedin SichuanChanghongElectricCo.,LTD 36,470,918.03 4,549,701.77

advance

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Item Relatedparties Endingbalance Openingbalance

Account SichuanChanghongDiandianbangTechnologyCo.,

receivedin Ltd. 259.00

advance

Account

receivedin CHANGHONG(HK)TRADINGLIMITED 317.48

advance

Account

receivedin LejiayiChainAdministrationCo.,Ltd. 559,819.59 900.02

advance

Account

receivedin 081ElectronicGroup 2,906,393.55

advance

Account Sichuan Changhong Gerun Renewable Resources

receivedin Co.,Ltd. 273,106.03 339,625.21

advance

Account

receivedin CHANGHONGELECTRICMIDDLEEASTFZE 37,303.37 1,626.32

advance

Account

receivedin PT.CHANGHONGELECTRICINDONESIA 245.39

advance

Account

receivedin SichuanHongshiDisplayDevicesCo.,Ltd. 74,587.00

advance

Account SichuanServiceExp.ApplianceServiceChainCo.,

receivedin Ltd. 52,999.49 25,349.12

advance

Account

receivedin SichuanChanghongPowerSourceCo.,Ltd. 164,400.00

advance

Account SichuanChanghongPrecisionElectronicsTech.Co.,

receivedin Ltd. 0.01

advance

Account

receivedin SichuanChanghongMoldPlasticTech.Co.,Ltd. 27,308.76

advance

Account

receivedin HefeiMeiLingSolarEnergyTechnologyCo.,Ltd. 315,389.49

advance

Account

receivedin SichuanTianyouGuiguTechnologyCo.,Ltd. 269,700.06 148,501.26

advance

Accounts SichuanChanghongElectricCo.,LTD 18,441,774.94 29,851,894.60

payable

Accounts SichuanChanghongMoldPlasticTech.Co.,Ltd. 111,859,645.07 46,397,079.60

payable

Accounts HuayiCompressorCo.,Ltd. 54,756,261.49 139,199,433.03

payable

Accounts SichuanChanghongJijiaFineCo.,Ltd. 49,428,116.49 18,183,863.16

payable

Accounts SichuanChanghongMinshengLogisticsCo.,LTD 40,128,307.43 13,792,125.99

payable

Accounts SichuanChanghongPackagePrintingCo.,Ltd. 11,582,508.82 3,815,726.06

payable

Accounts SichuanChanghongDevicesTechnologyCo.,Ltd. 8,244,251.90 2,856,979.62

payable

Accounts SichuanChanghongLightingTechnologyCo.,Ltd. 28,458.00

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Item Relatedparties Endingbalance Openingbalance

payable

Accounts SichuanChanghongPrecisionElectronicsTech.Co., 2,231,885.31 474,412.43

payable Ltd.

Accounts 081ElectronicGroupCo.,Ltd. 397,568.22 145,004.41

payable

Accounts SichuanChanghongNewEnergyTechnologyCo., 235.76 35,055.83

payable Ltd.

Accounts GuangdongChanghongElectronicsCo.,Ltd. 3,602,882.13 2,698,808.96

payable

Accounts SichuanChanghongPowerSourceCo.,Ltd. 4,806.70 17,694.78

payable

Accounts SichuanHongyuMetalManufacturingCo.,Ltd. 475,411.87 76,605.95

payable

Accounts SichuanServiceExp.ApplianceServiceChainCo., 6,593,913.18 12,325,292.30

payable Ltd.

Accounts SichuanHongweiTechnologyCo.,Ltd. 1,647,512.58

payable

Accounts Sichuan Changhong Gerun Renewable Resources 10,503.63 10,503.63

payable Co.,Ltd.

Accounts SichuanChanghongInternationalHotelCo.,Ltd. 24,483.00

payable

Accounts SichuanChanghongXinruiTechnologyCo.,Ltd 31,134,508.32 17,899,155.35

payable

Accounts Sichuan Changhong Intelligent Manufacturing 1,159,293.19 37,968.00

payable TechnologyCo.,Ltd.

Accounts SichuanChanghongInternationalTravelAgencyCo., 14,981.00

payable Ltd.

Accounts SichuanChanghongElectronicSystemCo.,Ltd. 77,000.00 77,000.00

payable

Accounts SichuanJiahongIndustrialCo.,Ltd. 1500.00 78,317.93

payable

Accounts SichuanChanghongPropertyServiceCo.,Ltd. 28.00

payable

Accounts SichuanHuafengGroupCo.,Ltd. 283,500.63

payable

Accounts HongyuanDinengRebaoTechnologyCo.Ltd. 2,846,000.00

payable

Accounts SichuanTianyouGuiguTechnologyCo.,Ltd. 397,435.50 333,333.01

payable

Accounts SichuanChangxinRefrigerationPartsCo.,Ltd. 16,767,170.82 5,266,539.58

payable

Accounts MianyangHighlyElectricCo.,Ltd. 33,257,152.05 20,557,246.51

payable

Accounts SichuanChangheTechnologyCo.,Ltd. 2,769,516.97 1,288,398.54

payable

Other

accounts SichuanChanghongElectricCo.,LTD 189,285.06 1,992,259.81

payable

Other

accounts SichuanChanghongElectronicsGroupCo.,Ltd. 4,124.00

payable

Other

accounts SichuanChanghongMoldPlasticTech.Co.,Ltd. 6,021,988.84 1,557,408.63

payable

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Item Relatedparties Endingbalance Openingbalance

Other

accounts SichuanChanghongJijiaFineCo.,Ltd. 1,900,500.00 361,466.64

payable

Other Sichuan Changhong Gerun Renewable Resources

accounts Co.,Ltd. 10,000.00 10,000.00

payable

Other

accounts HuayiCompressorCo.,Ltd. 1,050,000.00 1,050,000.00

payable

Other

accounts SichuanChanghongPackagePrintingCo.,Ltd. 50,000.00 50,000.00

payable

Other SichuanChanghongPrecisionElectronicsTech.Co.,

accounts Ltd. 145.16

payable

Other

accounts SichuanChanghongMinshengLogisticsCo.,LTD 586,504.95 594,004.95

payable

Other

accounts CHANGHONG(HK)TRADINGLIMITED 1,881,972.53 876,260.05

payable

Other

accounts SichuanChanghongDevicesTechnologyCo.,Ltd. 260.07

payable

Other

accounts SichuanChanghongXinruiTechnologyCo.,Ltd 200,000.00 200,000.00

payable

Other

accounts SichuanChanghongElectronicProductsCo.,Ltd. 50,000.00

payable

Other

accounts 081ElectronicGroupCo.,Ltd. 169.00 3,549.14

payable

Other

accounts SichuanZhiyijiaNetworkTechnologyCo.,Ltd. 48,707.00

payable

Other

accounts SichuanJiahongIndustrialCo.,Ltd. 4,643.32 2,182.34

payable

Other

accounts GuangdongChanghongElectronicsCo.,Ltd. 4,602.00 26,485.76

payable

Other Sichuan Changhong Intelligent Manufacturing

accounts TechnologyCo.,Ltd. 219,375.00

payable

Other

accounts MianyangHighlyElectricCo.,Ltd. 637,644.61 603,295.12

payable

Other

accounts SichuanChangheTechnologyCo.,Ltd. 100,000.00 50,000.00

payable

Other

accounts SichuanChangxinRefrigerationPartsCo.,Ltd. 50,000.00 50,000.00

payable

Other HengyouyuanTechnologyDevelopmentGroupCo.,

accounts Ltd. 2,800.00

payable

Total 449,302,334.16 330,940,803.04

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

(IV)Commitmentsfromrelatedparties:Nil

XII.Share-basedpayment:Nil

XIII.Contingency

1.Pendingactionorpossibleliabilitiesformedfromarbitration:Nil

2.Contingencyfromexternalguarantee:Nil

3.Othercontingency:nil

XIV.Commitments:Nil

XV.Eventsoccurringafterthebalancesheetdate

1.Importantnon-adjustmentitems:nil

2.Profitdistribution

BeingauditedbyShineWingCertifiedPublicAccountants(LLP),thenetprofitachievedinindividual

statement of the parentcompany amounting toRMB 239,624,261.53Yuan, in linewithrelevant

regulations,afterextractforstatutorysurplusreserveRMB23,962,426.15Yuan,thedistributableprofit

inindividualstatementoftheparentcompanyforyearof2016amountingtoRMB215,661,835.38

Yuan;deductedthe 2015 profitdistributionRMB 45,824,352.27 Yuan, plus theretained profit at

beginning of theyear RMB 786,501,710.90 Yuan, the accumulated retained profit in individual

statementoftheparentcompanyatendof2016amountingtoRMB956,339,194.01Yuan.Inaddition,

theaccumulated retained profitin consolidate statement at endof the 2016 amountingto RMB

968,097,382.98Yuan;thedistributableprofitinconsolidatestatementforyearof2016amountingto

RMB196,254,254.81Yuan.

Accordingtotherelevantlawsandregulationsandtheprovisionsof"ArticlesofAssociation"and

consideringtheinterestsoftheshareholdersandthecompany'slong-termdevelopmentneeds,theboard

ofdirectorsapprovedthecompanytodistributethecashbonusof0.6Yuanper10stocks(includingtax)

toallshareholdersonthebasisofthegeneralcapitalof1,044,597,881stocksofDecember31,2016,

totallythecashbonusRMB62,675,872.86Yuanhasbeendistributed(Includingtax,thecashbonus

accountsfor29.06%oftheprofitavailablefordistributionintheindividualstatementsoftheparent

companyinthecurrentyear).Afterthedistribution,thetotalsharecapitalofthecompanykeepsthe

same,accumulatestheremainingundistributedprofitsofRMB893,663,321.15Yuanwhichistobe

distributedannuallyaftercarry-over

Thisplanhasbeenconsideredandpassedbytheboardofdirectors,andneedstobesubmittedto2016

annualgeneralmeetingofthecompanyfordeliberation.

3.Majorsalesreturn:nil

4.Otherthantheabovementionedevents,theCompanyhavenoothereventsoccurredafterbalance

sheetdate.

XVI.Othersignificantmatters

1.Correctionofpreviousperiodsandinfluence:nil

2.Debtrestructuring:nil

3.Assetsreplacement:nil

4.Pensionplan:nil

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

5.Discontinuingoperation:nil

6.Branchinformation

Item Icecumber AC Marketing Small Other Salesinbranch Total

appliances

Operationincome 707,211.02 447,310.64 239,121.90 49,507.53 29,851.54 220,331.54 1,252,671.09

Including::Incomefromtradingoutside 506,166.07 447,259.55 239,121.90 49,157.11 10,966.45 1,252,671.09

Incomefromtradinginbranch 201,044.95 51.09 350.42 18,885.08 220,331.54

Operationexpenses 689,663.78 447,145.01 240,898.47 47,908.28 28,489.62 214,866.56 1,239,238.60

Operationprofit 17,547.25 165.62 -1,776.57 1,599.25 1,361.92 13,432.49

Totalassets 965,651.61 286,639.75 39,100.22 26,049.89 13,265.58 79,950.31 1,250,756.73

Totalliability 505,141.29 209,092.68 69,941.18 15,138.10 7,998.84 73,163.50 734,148.58

Supplementaryinformation

Depreciationandamortizationexpenses 12,576.04 4,124.59 19.40 372.26 511.38 1.05 17,602.62

Capitalexpenditure 15,522.32 8,544.42 25.98 80.45 827.88 62.51 24,938.54

Non-cashexpensesexceptfordepreciation 60,215.02 57,850.44 35,916.76 1,307.20 757.98 2,107.29 153,940.11

andamortization

7.Othermajortransactionsandeventsshowsimpactoninvestor‘sdecision-making:nil

XVII.Notestomainitemsoffinancialstatementofparentcompany

1.Accountreceivable

(1)Riskstructureofaccountreceivable

Endingamount

Category Bookbalance Baddebtprovision

Bookvalue

Amount Ratio Amount Ratio

Accountreceivablewithsinglesignificant

amountandwithdrawalsingleitembad

debtprovision

Accountreceivablewithdrawalbaddebt

provisionbycombination

Combination1 234,535,499.95 23.02% 12,281,916.10 5.24% 222,253,583.85

Combination2 784,448,310.52 76.98% 784,448,310.52

CombinationSubtotal 1,018,983,810.47 100.00% 12,281,916.10 1.21% 1,006,701,894.37

Account receivable with single minor

amountbutwithdrawalsingleitembad

debtprovision

Total 1,018,983,810.47 100.00% 12,281,916.10 1.21% 1,006,701,894.37

(Continued)

Openingamount

Category Bookbalance Baddebtprovision

Bookvalue

Amount Ratio Amount Ratio

Account receivable with single

significantamountandwithdrawalsingle

itembaddebtprovision

Accountreceivablewithdrawalbaddebt — — — — —

provisionbycombination

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Openingamount

Category Bookbalance Baddebtprovision

Bookvalue

Amount Ratio Amount Ratio

Combination1 153,138,749.45 16.03% 11,767,503.69 7.68% 141,371,245.76

Combination2 801,957,750.21 83.97% 801,957,750.21

CombinationSubtotal 955,096,499.66 100.00% 11,767,503.69 1.23% 943,328,995.97

Accountreceivable with single minor

amountbutwithdrawalsingleitembad

debtprovision

Total 955,096,499.66 100.00% 11,767,503.69 1.23% 943,328,995.97

1)Noaccountreceivablewithsinglesignificantamountandwithdrawalbaddebtprovisionsingleat

year-end.

2)AccountreceivablewithWithdrawalofbaddebtprovisionbyagingaccountincombination1

Endingbalance

BookAge

Accountreceivable Baddebtprovision Provisionratio(%)

Within1year 230,187,998.34 11,509,399.92 5%

1-2years 4,064,533.95 609,680.09 15%

2-3years 184,817.80 64,686.23 35%

3-4years 55%

4-5years 85%

Over5years 98,149.86 98,149.86 100%

Total 234,535,499.95 12,281,916.10 —

3)Accountreceivablewithoutbaddebtprovisionwithdrawalincombination2

Combination Bookbalance

Connectedamountbetweenrelatedparties 752,441,912.34

AccountreceivablewithL/C 32,006,398.18

Total 784,448,310.52

4)Noaccountreceivablewithsingleminoramountbutwithdrawalsingleitembaddebtprovisionat

year-end

(2)Provision,reversal(orrecovery)ofbaddebtprovision

ThebaddebtaccrualintheyearwasRMB514,412.41;norecoveryorreversalbaddebtprovisioninthe

year.

(3)Noaccountreceivableactuallywritten-offatyear-end.

(4)Noarrearsoftheshareholdersholdingmorethan5%(including5%)shareswithvotingrightsofthe

Companyatyear-end.

(5)Thetopfiveaccountreceivableatyear-endhasRMB361,770,254.95intotal,a35.50%intotal

accountreceivable.

(6)Accountreceivablede-recognized:Nil

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

2.Otheraccountreceivable

(1)Categoryofotheraccountreceivable

Endingamount

Category Bookbalance Baddebtprovision

Bookvalue

Amount Ratio Amount Ratio

Other account receivable with single

significantamountandwithdrawalsingle

itembaddebtprovision

Otheraccountreceivablewithdrawalbad

debtprovisionbycombination

Combination1 2,286,196.46 8.50% 164,504.75 7.20% 2,121,691.71

Combination2 24,620,732.24 91.50% 24,620,732.24

CombinationSubtotal 26,906,928.70 100.00% 164,504.75 0.61% 26,742,423.95

Otheraccountreceivablewithsingleminor

amount but withdrawal single itembad

debtprovision

Total 26,906,928.70 100.00% 164,504.75 0.61% 26,742,423.95

(Continued)

Openingamount

Category Bookbalance Baddebtprovision

Bookvalue

Amount Ratio Amount Ratio

Other account receivable with single

significantamountandwithdrawalsingle

itembaddebtprovision

Otheraccountreceivablewithdrawal bad

debtprovisionbycombination

Combination1 4,840,833.66 8.76% 1,976,106.94 40.82% 2,864,726.72

Combination2 50,391,165.17 91.24% 50,391,165.17

CombinationSubtotal 55,231,998.83 100.00% 1,976,106.94 3.58% 53,255,891.89

Otheraccountreceivablewithsingleminor

amountbutwithdrawalsingleitembaddebt

provision

Total 55,231,998.83 100.00% 1,976,106.94 3.58% 53,255,891.89

1)Nootheraccountreceivablewithsinglesignificantamountandnowithdrawalbaddebtprovisionsingleat

year-end

2)Otheraccountreceivablewithwithdrawalbaddebtprovisionbyagingaccountforcombination1

Endingbalance

Item

Accountreceivable Baddebtprovision Provisionratio(%)

Within1year 1,824,247.20 91,212.36 5%

1-2years 451,949.26 67,792.39 15%

2-3years 35%

3-4years 10,000.00 5,500.00 55%

4-5years 85%

Over5years 100%

Total 2,286,196.46 164,504.75

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

3)Otherreceivablewithoutbaddebtprovisionwithdrawalincombination2

Combination Bookbalance

Connectedamountbetweenrelatedparties 21,867,562.15

Loansofemployee‘sprettycash 2,753,170.09

Total 24,620,732.24

4)Nootheraccountreceivablewithsingleminoramountbutwithdrawalbaddebtprovisionsingly,

referstotheminorsinglereceivablesatyear-end.

(2)Reversal(orwithdraw)ofreserveforbaddebtsintheYear

ReleasingbaddebtprovisionintheyearamountingtoRMB1,811,602.19;baddebtrecoveredtheoriginal

verificationwasRMB6,000.00intheyear.

(3)Otheraccountreceivablechargeoffinthisyear:Nil

(4)Noareasfromshareholders‘unitwithover5percent(5percentincluded)votingrightsheldat

year-end

(5)Top5otheraccountreceivablehasRMB24,339,624.01intotal,a90.46%intotalaccountreceivable

atyear-end

(6)Otherreceivablesclassifybynature

Nature Endingbookbalance Openingbookbalance

Relatedparties 21,867,562.15 32,309,376.56

Loansofemployee‘sprettycash 2,753,170.09 3,317,078.21

Margin 1,344,924.85 398,295.60

Advancemoneypaidtemporary 619,956.01

Other 321,315.60 4,442,538.06

Exportrebate 14,764,710.40

Total 26,906,928.70 55,231,998.83

(7)Otherreceivablede-recognized:Nil

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

3.Long-termequityinvestments

(1)Classificationoflong-termequityinvestments

Endingbalance Openingbalance

Item

Bookbalance Impairmentloss Bookvalue Bookbalance Impairmentloss Bookvalue

Investmentinsubsidiaries

HefeiMeilingPackingProductsCo.,Ltd. 12,961,230.52 12,961,230.52

ZhongkeMeiLingLow-temperatureTechnologyCo., 42,000,000.00 42,000,000.00 42,000,000.00 42,000,000.00

Ltd.

Mianyang MeiLing Refrigeration Co., 95,000,000.00 95,000,000.00 95,000,000.00 95,000,000.00

Ltd.

HefeiMeilingApplianceMarketingCo., 54,900,000.00 54,900,000.00 54,900,000.00 54,900,000.00

Ltd.

Zhongshan ChanghongAppliance Co., 169,856,419.37 169,856,419.37 112,256,419.37 112,256,419.37

Ltd

SichuanChanghongAirConditionerCo., 305,600,437.79 305,600,437.79 305,600,437.79 305,600,437.79

Ltd.

HefeiMeilingGroupHoldingCo.,Ltd. 113,630,000.00 113,630,000.00 113,630,000.00 113,630,000.00

JiangxiMeiLingElectricApplianceCo., 79,000,000.00 79,000,000.00 79,000,000.00 79,000,000.00

Ltd.

MianyangMeilingSoftwareTechnology 4,950,000.00 4,950,000.00

Co.,Ltd.

Guangdong Changhong Ridian 90,802,061.95 90,802,061.95

TechnologyCo.,Ltd.

ChangmeiTechnologyCo.,Ltd. 18,000,000.00 18,000,000.00

Investmentinassociates

HefeiXingmeiAssetsManagementCo., 12,394,800.39 12,394,800.39 12,846,069.09 12,846,069.09

Ltd.

Sichuan Zhiyijia Network Technology 11,098,569.71 11,098,569.71 7,490,424.28 7,490,424.28

Co.,Ltd.

Total 992,282,289.21 992,282,289.21 840,634,581.05 840,634,581.05

(2)Investmentinsubsidiaries

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Investedunit Openingbalance Increaseduringthe Decreaseduringthe Endingbalance Provisionforimpairment Endingbalanceof

year year losses impairmentloss

HefeiMeilingPackingProductsCo.,Ltd. 12,961,230.52 12,961,230.52

ZhongkeMeilingCryogenicTechnology 42,000,000.00 42,000,000.00

Co.,Ltd.

Mianyang MeiLing Refrigeration Co., 95,000,000.00 95,000,000.00

Ltd.

HefeiMeilingApplianceMarketingCo., 54,900,000.00 54,900,000.00

Ltd.

Zhongshan ChanghongAppliance Co., 112,256,419.37 57,600,000.00 169,856,419.37

Ltd

SichuanChanghongAirConditionerCo., 305,600,437.79 305,600,437.79

Ltd.

HefeiMeilingGroupHoldingCo.,Ltd. 113,630,000.00 113,630,000.00

JiangxiMeiLingElectricApplianceCo., 79,000,000.00 79,000,000.00

Ltd.

MianyangMeilingSoftwareTechnology 4,950,000.00 4,950,000.00

Co.,Ltd.

Guangdong Changhong Ridian 90,802,061.95 90,802,061.95

TechnologyCo.,Ltd.

ChangmeiTechnologyCo.,Ltd. 18,000,000.00 18,000,000.00

Total 820,298,087.68 166,402,061.95 17,911,230.52 968,788,919.11

(3)Investmentinassociates

ChangesintheYear

Adjustment Ending

Investedunit Openingbalance Additional Negative Investmentincome forother Other Cashdividendor Provisionfor Endingbalance balanceof

Investment Investment recognizedunder comprehensi equity profitannouncedto impairmentloss Other impairment

equity veincome change issued

Hefei Xingmei Assets 12,846,069.09 -451,268.70 12,394,800.39

ManagementCo.,Ltd.

SichuanZhiyijiaNetwork 7,490,424.28 3,608,145.43 11,098,569.71

TechnologyCo.,Ltd.

Total 20,336,493.37 3,156,876.73 23,493,370.10

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

4.Operationincomeandoperationcost

CurrentYear LastYear

Item

Income Cost Income Cost

Mainbusiness 6,507,129,875.91 5,529,452,332.04 5,758,154,658.16 4,822,671,744.03

Otherbusiness 938,956,879.61 904,175,189.74 696,528,668.87 678,486,276.86

Total 7,446,086,755.52 6,433,627,521.78 6,454,683,327.03 5,501,158,020.89

(1)Classifiedaccordingtoproduct

CurrentYear LastYear

Product

Operationincome Operationcost Operationincome Operationcost

Mainbusiness 6,507,129,875.91 5,529,452,332.04 5,758,154,658.16 4,822,671,744.03

Refrigeratorand 6,090,629,825.93 5,184,542,280.26 5,459,207,451.22 4,572,815,730.29

freezer

Washing 416,498,098.94 344,908,193.24 295,337,371.41 249,850,015.80

machine

Airconditioner 5,117.95 4,910.25

Other 1,951.04 1,858.54 3,604,717.58 1,087.69

Otherbusiness 938,956,879.61 904,175,189.74 696,528,668.87 678,486,276.86

Sales of raw 922,463,944.65 902,013,070.81 683,226,603.42 674,964,128.19

materials

Otherincome 16,492,934.96 2,162,118.93 13,302,065.45 3,522,148.67

Total 7,446,086,755.52 6,433,627,521.78 6,454,683,327.03 5,501,158,020.89

(2)Classifiedaccordingtoregion

CurrentYear LastYear

Regions

Operationincome Operationcost Operationincome Operationcost

Domesticincome 5,599,460,298.75 4,804,187,600.08 4,964,248,778.53 4,192,090,273.97

Exportincome 1,846,626,456.77 1,629,439,921.70 1,490,434,548.50 1,309,067,746.92

Total 7,446,086,755.52 6,433,627,521.78 6,454,683,327.03 5,501,158,020.89

TopfiveclientsoftheCompanyoweincomeinsalesofRMB2,703,980,742.68yuan,a36.31%intotal

operationincome.

5.Investmentincome

Item CurrentYear LastYear

Long-termequityinvestmentincomebyequitymethod 3,156,876.73 -7,735,291.56

Investmentincomearisingfromdisposalofthelong-termequity -641,846.86

investment

Investmentincomearisingfromperiodofholdingthelong-term 75,261,313.40

equityinvestment

Investmentincome fromdisposaloffinancialassets,whichis

measuredbyfairvalueandwithitsvariationreckonedintocurrent -1,187,641.34 -2,296,400.00

gains/losses

Investmentincomeduringholdingthefinancialassetsavailablefor 6,693,575.48 5,756,139.46

sale

Total 83,282,277.41 -4,275,552.10

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

XVIII.Approvaloffinancialstatement

ThefinancialstatementhasalreadybeenapprovedfromtheboardofdirectorsoftheCompanyfor

reportingdated28March2017.

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

Supplementaryinformationforfinancialstatement

1.Non-operationalgainsandlossesforthisyear

(1)Non-recurringgainsandlossesregulatedbyExplanationAnnouncementofInformationDisclosureon

StockIssuanceEnterpriseNo.1—Non-recurringgains/losses(2008)fromCSRC:

Item CurrentYear Note

Gainsandlossesfromdisposalofnon-currentassets 9,265,320.01

Taxrefundormitigateduetoexamination-and-approvalbeyondpowerorwithout

officialapprovaldocumentoraccident

Governmentsubsidyrecordedincurrentgainsandlosses 41,152,549.66

Capitaloccupancyexpense,collectedfromnon-financialenterprisesandrecorded

incurrentgainsandlosses

IncomefromtheexceedingpartbetweeninvestmentcostoftheCompanypaidfor

obtainingsubsidiaries,associatesandjoint-venturesandrecognizablenetassetsfair

valueattributabletotheCompanywhenacquiringtheinvestment

Gainsandlossesfromexchangeofnon-monetaryassets

Gainsandlossesfromassetsundertrustedinvestmentormanagement

VariousprovisionforimpairmentofassetswithdrewduetoactofGod,suchas

naturaldisaster

Gainsandlossesfromdebtrestructuring

Enterprisereorganizationexpense

Gainsandlossesofthepartarisingfromtransactioninwhichpriceisnotfairand

exceedingfairvalue

Currentnetgainsandlossesoccurredfromperiod-begintocombinationdayby

subsidiariesresultingfrombusinesscombinationundercommoncontrol

Gainsandlossesarisingfromcontingentproceedingsirrelevanttonormaloperation

oftheCompany

ExceptforeffectivehedgebusinessrelevanttonormaloperationoftheCompany,

gainsandlossesarisingfromfairvaluechangeoftradablefinancialassetsand 11,500,963.72

tradablefinancialliabilities,andinvestmentincomefromdisposaloftradable

financialassets,tradablefinancialliabilitiesandfinancialassetsavailableforsale

Switch-backofprovisionofimpairmentofaccountreceivablewhicharetreated

withseparatedepreciationtest

Gainsandlossesobtainedfromexternaltrustedloans

Gainsandlossesarisingfromchangeoffairvalueofinvestmentrealestatewhose

follow-upmeasurementareconductedaccordingtofairvaluepattern

Affectoncurrentgainsandlosses afteranone-timeadjustmentaccordingto

requirementsoflawsandregulationsregardingtotaxationandaccounting

Trustfeeobtainedfromtrustoperation

Othernon-operatingincomeandexpenditureexceptfortheaforementionedones 4,948,619.55

Othergainsandlossesitemscomplyingwithdefinitionfornon-currentgainsand 3,798,660.03

losses

Subtotal 70,666,112.97

Affectonincometax 8,534,266.32

Affectonminorityequity(aftertaxation) 376,180.79

Total 61,755,665.86

2.Returnonequityandearningspershare

AnnotationstoFinancialStatementsofHefeiMeilingCo.,Ltd.

From1January2016to31December2016

(Unlessotherwisespecified.RMBforrecordinthestatement)

InaccordancewithrequirementoftheNo.9RuleofInformationDisclosureCompilingofPublicListed

Companies:CalculationandDisclosureofReturnonEquityandEarningsperShare(revisedin2010),the

weightedaveragereturnonequity,basicearningspershareanddilutedearningspershareoftheCompany

in2016areasfollow:

Weightedaverage Earningspershare/EPS

Profitduringthereportperiod returnonequity

BasicEPS DilutedEPS

Netprofitattributable toshareholdersof 5.77% 0.2717 0.2717

parentcompany

Netprofitattributable toshareholdersof

parent company after deduction of 4.15% 0.1955 0.1955

non-recurring gainsandlosses

3.AccountingdifferenceundertheaccountingrulesinandoutofChina:Nil

4.Supplementaryinformationforaccountingpolicychanged:Nil

SectionXIIDocumentsavailableforReference

I.FinancialstatementcarryingthesignaturesandsealsoftheChairman,principaloftheaccounting

worksandpersoninchargeofaccountingorgan;

II.OriginalauditingreportcarryingthesealofCPAandautographyandsealoftheaccountants;

III.OriginaldocumentsoftheCompanyandmanuscriptsofpublicnoticesthatdisclosedinthe

websitedesignatedbyCSRCinthereportperiod;

TheaforesaiddocumentsareallavailableatheadquarteroftheCompany.TheCompanywould

providethemtimelywhenCSRCandShenzhenStockExchangerequireortheshareholdersneed

consultationaccordingtotheregulationsandArticlesofAssociation.

Chairman:LiuTibin

HefeiMeilingCo.,Ltd.

30March2017

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