01 2019AnnualReportofHaierSmartHomeCo.,Ltd..
01 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Important Notice
I. The Board of Directors, the Board of Supervisors, directors, supervisors and senior management
of Haier Smart Home Co., Ltd. (‘the Company’) hereby assure that the content set out in the
annual report is true, accurate and complete, and free from any false record, misleading
representation or material omission, and are individually and collectively responsible for the
content set out therein.II. Information of Directors absent from the Board Meeting.
Position of directorabsent Nameof directorabsent Reasonfortheabsenceof Nameof proxy
fromthe meeting fromthe meeting directorfromthe meeting
Chairman LiangHaishan Ona businesstrip TanLixia
III. Hexin Certified Public Accountants LLP has issued a standard and unqualified audit report for the
Company.IV. Liang Haishan (legal representative of the Company), Gong Wei (chief financial officer of the
Company) and Ying Ke (the person in charge of accounting department) hereby certify that the
financial report set out in the annual report is true, accurate and complete.V. Proposal of profit distribution and proposal of capitalizing capital reserves for the reporting
period examined and reviewed by the Board
Proposal of profit distribution for the reporting period examined and reviewed by the Board: to declare acash dividend of RMB 3.75 per 10 shares (tax inclusive) to all shareholders based on the total number ofshares as at the registration date in respect of future proposal for profit distribution.
VI. Disclaimer in respect of forward-looking statements
√Application □Not applicable
Forward-looking statements such as future plans, development strategies as set out in this report do notconstitute the Company’s substantial commitment to investors. Investors are advised to pay attention toinvestment risks.
02 2019AnnualReportofHaierSmartHomeCo.,Ltd.
VII. Is there any fund occupation by controlling shareholders and their related parties for
non-operational purposes?
NoVIII. Is there any provision of external guarantee in violation of prescribed decision-making
procedures?
NoIX. Important Risk Warnings
For the possible risks which the Company may encounter, please refer to the relevant information setout in the Section of ‘DISCUSSION AND ANALYSIS ON OPERATIONS’ in this report.
X. Others
□Application √Not application
Chairman: Liang Haishan
Haier Smart Home Co., Ltd
28 April 2020
（Note: This Announcement has been prepared in both Chinese and English. Should there be
any discrepancies or misunderstandings between the two versions, the Chinese version shall
prevail.）
03 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Contents
SECTION I DEFINITIONS............................................................................................................................................... 4
SECTION II GENERAL INFORMATION OF THE COMPANY AND KEY FINANCIAL INDICATORS ................ 6
SECTION III SUMMARY OF THE COMPANY’S BUSINESS .................................................................................... 11
SECTION IV DISCUSSION AND ANALYSIS ON OPERATIONS .............................................................................. 19
SECTION V SIGNIFICANT EVENTS ........................................................................................................................... 48
SECTION VI CHANGES IN ORDINARY SHARES AND INFORMATION ABOUT SHAREHOLDERS ................ 85
SECTION VII RELEVANT INFORMATION OF PREFERRED SHARES ................................................................. 94
SECTION VIII DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES ............................. 95
SECTION IX CORPORATE GOVERNANCE ............................................................................................................ 107
SECTION X RELEVANT INFORMATION ON CORPORATE BONDS .................................................................. 116
SECTION XI RESPONSIBILITY STATEMENT ........................................................................................................ 120
SECTION XII FINANCIAL REPORT ......................................................................................................................... 121
SECTION XIII DOCUMENTS AVAILABLE FOR INSPECTION ............................................................................ 307
04 2019AnnualReportofHaierSmartHomeCo.,Ltd.
SECTION I DEFINITIONS
I. Definitions
Unless otherwise stated in context, the following terms should have the following meanings in this
report:
Definitionoffrequentlyusedterms
CSRC ChinaSecuritiesRegulatoryCommission
SSE ShanghaiStockExchange
TheCompany,Haier Haier Smart Home Co., Ltd, its original name is ‘Qingdao Haier Co., Ltd.’,
SmartHome andtheoriginalshortnameis‘QingdaoHaier’
FourMajorSecurities China Securities Journal, Shanghai Securities News, Securities Times,
Newspapers SecuritiesDaily
Haier Electronics Group Co., Ltd. (a company listed in Hong Kong, stock
HaierElectrics,1169 code: 01169.HK), a subsidiary as accounted for in the consolidated
statement of the Company as to a total of 45.87% of its equity as of 31
December 2019.
GEA GE Appliances, namely home appliances assets and business of General
Electric Group,whichbelongstotheCompany.
Fisher & Paykel Appliances Holdings Limited (Chinese name:斐雪派克),
was established in 1934 and is known as the national appliance brand of
New Zealand, the global top-level kitchen appliance brand and the famous
luxury brand of the world. It has products including ventilator, gas stove,
FPA oven, dishwasher, microwave oven, embedded freezer, washing machine,
clothes dryer and etc. Its business covers over 50 countries/area across the
world. InJuly2018,theCompanycompletedtheacquisitionof100%equity
interest in Haier New Zealand Investment Holding Company Limited, thus
FPA becameawholly-ownedsubsidiaryofthecompany.
Candy Group (Candy S.p.A), is an international professional appliances
manufacturer from Italy. Since its establishment in 1945, it has been
committed to enabling the global users to enjoy a higher quality of life
Candy through innovative technologies and quality services. Candy Group has
been prestigiousintheglobalmarketwithusersallovertheworldviaitsten
self-owned professional home appliance brands. In January 2019, Candy
officially becameawholly-ownedsubsidiaryoftheCompany.
China Market MonitorCo., Ltd., as a nationallyrecognized marketresearch
CMM instituteinappliancearea,wasestablishedin1994andhasbeenfocusingon
research ofretailsalesinChinaconsumptionmarketeversince.
Euromonitor, established in 1972, is the leading strategic market
information supplier and owns over 40-years of experience in respect of
Euromonitor publishing market report, commercial reference data and on-line database.
They create data and analysis on thousands of products and servicesaround
the world.
AllViewCloud pAelrlpeVndieiwculaCrlotoudthe(AsmVaCr)thiosmeafibeilgd,dparotavidininteggerantteedrprsisoelsutwiointhpbriogvdidaetar
05 2019AnnualReportofHaierSmartHomeCo.,Ltd.
information services, regular data information services and special data
services.
The International Electrotechnical Commission. Founded in 1906, it is the
world’s first organization for the preparation and publication of
international electrotechnical standardization and is responsible for
international standardization for electrical engineering and electronic
engineering. The goals of the commission include: to effectively meet the
IEC needs of the global market; to ensure that the standards and conformity
assessment programs are applied globally in a prioritized manner and to the
greatest extent; to assess and improve the quality of products and services
involved in its standards; to create conditions for the common use of
complicated systems; to improve the effectiveness of the industrialization
process; to improve human health and safety, and to protect the
environment.
The Institute of Electrical and Electronics Engineers, an international
association of electronic technology and information science engineers, is
currently thelargestnon-profitprofessionaltechnologysocietyin theworld.
IEEE It is committed to the development and research of electrical, electronic,
computer engineering and science-related fields, and has now developed
into an international academic organization with great influence in terms of
the fields of space, computer, telecommunications,biomedicine, power and
consumer electronics.
Shenyang Refrigerator Smart Factory, Foshan Front-Loading Washing
Machine Smart Factory, Zhengzhou Air-conditioner Smart Factory,
Qingdao Mold Smart Factory, Qingdao Water Heater Smart Factory,
Qingdao FPA Electrical Machine Smart Factory, Jiaozhou Air-Conditioner
15martfactories Smart Factory, Huangdao Central Air-Conditioner Smart Factory,
Huangdao SmartKitchen Appliance Range Hood Smart Factory,Huangdao
Smart Kitchen Appliance Stove Smart Factory, Qingdao Front-Loading
Washing Machine Smart Factory, Qingdao Refrigerator Smart Factory,
Laiyang Smart Kitchen Appliance Smart Factory, Haier Russia Washing
Machine SmartFactory,TianjinHaierWashingMachineSmartFactory.
‘5’ refers to five physical spaces where Haier keeps upgrading, including
smart livingroom,smartkitchen,smartbathroom,smartbedroomandsmart
‘5+7+N’smart balcony. ‘7’ represents seven whole-house solutions, namely whole-house
full-scenecustomized air, whole-house water, whole-house cleansing and maintenance,
fullsetprogram whole-house security, whole-house interaction, whole-house health and
whole-house internet, while N refers to variables, i.e. users may customize
their own smart living scene freely based on their living habit, realizing
unlimited possibilities.
‘Ren’ is an employee who has the spirit of two creations (entrepreneurship,
ModelofRenDanHeYi innovation);‘Dan’isthevalueofusers.Eachemployeecreatesvalueforthe
user in a different self-employed business, thereby realizing his own value,
and thecorporatevalueandshareholdervaluearenaturallyreflected.
Distributors/Distributor AgencyordealerintheCompany’sdistributionnetwork.
Users/User Customers who purchased the Company’s products & services and are
currently usingthem.
06 2019AnnualReportofHaierSmartHomeCo.,Ltd.
SECTION II GENERAL INFORMATION OF THE COMPANY AND
KEY FINANCIAL INDICATORS
I. Information of the Company
Chinese name 海尔智家股份有限公司
Chinese shortname 海尔智家
English name HaierSmartHomeCo.,Ltd.
English shortname HaierSmartHome
Legal representative LiangHaishan
II. Contact person and contact Information
Secretary totheBoard Representativeof IR Others
securities affairs
Name MingGuozhen LiuTao YaoSun(Sophie) GlobalCustomer
ServiceHotline
Department of Securities Department of Securities Haier Deutschland
ofHaierSmartHomeCo., of Haier SmartHome Co., GmbH
Address Ltd. Haier InformationLtd. Haier Information Konrad-Zuse-Platz6 /
Industrial Park, No.1 Industrial Park, No.1 81829 M ü nchen,
HaierRoad,QingdaoCity HaierRoad,QingdaoCity Germany
Tel 0532-88931670 0532-88931670 +4916094693601 4006999999
（Germany）
Fax 0532-88931689 0532-88931689 / /
Email finance@haier.com finance@haier.com Y.sun@haier.de /
III. Summary of the General Information
Registered address HaierIndustrialPark,LaoshanDistrict,QingdaoCity
Postal codeoftheregisteredaddress 266101
Business address HaierInformationIndustrialPark,LaoshanDistrict,
QingdaoCity
Postal codeofthebusinessaddress 266101
Website http://www.haier.net/cn/
Email 9999@haier.com
IV. Place for Information Disclosure and Deposit
Designated newspaperforinformation ShanghaiSecuritiesNews,SecuritiesTimes,China
disclosure SecuritiesJournal,SecuritiesDaily
Website forpublishingofannualreportas www.sse.com.cn
designated bytheCSRC
Website forpublishingannualreportbyother www.xetra.com,www.dgap.de
websites
Department ofSecuritiesofHaierSmartHomeCo.,
Deposit placeofannualreport Ltd.HaierInformationIndustrialPark,No.1Haier
Road,QingdaoCity
V. Summarized information of shares of the Company
SummarizedinformationofsharesoftheCompany
07 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Type ofShares StockExchangeof StockShortName StockCode StockShortName
Shares Listed BeforeVariation
A share ShanghaiStock HaierSmartHome 600690 QingdaoHaier
Exchange
D share FrankfurtStock HaierSmartHome 690D QingdaoHaier
Exchange
VI. Other Related Information
Name HexinCertifiedPublicAccountantsLLP
Accountingfirm 26th – 27th Floor, Century Building, No.39 Donghai
engagedbythe Businessaddress RoadWest,QingdaoCity
Company(domestic)
Name ofsigningaccountant ZhaoBo（赵波）,WangLin(王琳)
Name ChinaInternationalCapitalCorporationLimited
Sponsorresponsible Businessaddress 27th & 28th Floor, China World Tower 2, No. 1
forcontinuing JianguomenwaiAvenue,Beijing
supervisionduring Nameofsigningsponsors Sun Lei（孙雷）,LiYang（李扬）
thereportingperiod Periodofcontinuing
supervision 18January2019to31December2020
Note:
Sponsor is responsible for continuing supervision: During the reporting period, the Company had aConvertible bonds issued, and the ‘Haier Convertible Bonds’ were listed on 18 January 2019. ChinaInternational Capital Corporation Limited, as the sponsor of such issue, is responsible for continuingsupervision for the remaining time of the year of listing and the following whole fiscal year.
VII. Key accounting data and financial indicators for the last three years
(I) Key accounting data
Unit and Currency: RMB
Keyaccounting 2018 Yoy
data 2019 Afteradjustment Before ch(a%n)ge 2017
adjustment
Operatingrevenue 200,761,983,256.57 184,108,481,959.27 183,316,560,236.03 9.05 163,428,825,488.56
Net profit
attributable to 8,206,247,105.96 7,483,659,016.04 7,440,228,855.90 9.66 6,907,629,188.39
shareholders of the
listedcompany
Net profit after
deduction of
non-recurring
profit or loss 5,765,164,700.75 6,601,505,599.79 6,601,505,599.79 -12.67 5,624,061,708.46
attributable to
shareholders of the
listedcompany
Net cash flows
from operating 15,082,630,942.73 19,142,782,481.20 18,934,252,899.16 -21.21 16,703,785,279.98
activities
Attheendof Attheendof2018 Yoy Attheendof
2019 Afteradjustment adBjuesftomreentch(a%n)ge 2017
Net assets
attributable to 47,888,319,765.92 39,742,745,893.42 39,402,350,791.68 20.50 39,402,350,791.68
shareholders of the
08 2019AnnualReportofHaierSmartHomeCo.,Ltd.
listedcompany
Totalassets 187,454,236,283.17 168,091,571,652.14 166,699,544,243.79 11.52 166,699,544,243.79
(II) Key financial indicators
Key financialindicators 2019 2018 Yoychange 2017
(%)
After Before
adjustment adjustment
Basic earnings per share 1.286 1.217 1.210 5.67 1.133
(RMBpershare)
Diluted earnings per share 1.212 1.189 1.182 1.93 1.085
(RMBpershare)
Basic earnings per share after
deducting non-recurring 0.903 1.074 1.074 -15.92 0.922
profit or loss (RMB per
share)
Weighted average return on Decreased
netassets(%) 19.12 20.88 21.00 by1.76pct 22.89
pt
Weighted average return on Decreased
net assets after deducting 13.43 18.63 18.63 by5.20pct 19.15
non-recurring profit or loss pt
(%)
Explanation of the key accounting data and financial indicators of the Company as at the end of the
reporting period for the previous three years
□Applicable √Not applicable
VIII. Differences in accounting data under domestic and overseas accounting standards
(I) Differences in net profit and net asset attributable to shareholders of listed company in
financial report disclosed simultaneously according to international accounting standards and
according to China Accounting Standards (CAS)
□Applicable √Not applicable(II) Differences in net profit and net asset attributable to shareholders of listed company in
financial report disclosed simultaneously according to overseas accounting standards and
according to China Accounting Standards (CAS)
□Applicable √Not applicable(III) Reasons for the difference between the domestic and overseas accounting standards:
□Applicable √Not applicableIX. Key financial data of 2019 by quarters
Unit and Currency: RMB
Q1 Q2 Q3 Q4
(January-March) (April-June) (July-September) (October-Decemb
er)
Operatingrevenue 48,043,265,870.34 50,936,527,250.82 49,916,316,735.30 51,865,873,400.11
Net profit attributable to 2,136,268,479.08 3,014,601,078.94 2,621,991,344.79 433,386,203.15
shareholders of listed
09 2019AnnualReportofHaierSmartHomeCo.,Ltd.
company
Net profit after deduction
of non-recurring profit or
loss attributable to 1,887,324,275.73 2,815,856,539.27 1,131,217,490.26 -69,233,604.51
shareholders of listed
company
Net cash flow from 1,323,519,988.31 2,310,313,509.43 5,373,079,070.71 6,075,718,374.28
operating activities
Reasons for difference between quarterly data and disclosed regular reporting data
□Applicable √Not Applicable
X. Non-recurring Profit or Loss Items and Amount
√Applicable □Not Applicable
Unit and Currency: CNY
Non-recurring profitorlossitems Amountin2019
Profitorlossfromdisposalofnon-currentassets 396,961,251.42
Governmentgrantsincludedincurrentprofitorloss,exceptthatclosely
relatedtothenormaloperatingbusiness,compliedwithrequirementsofthe 990,736,933.23
nationalpolicies,continuedtobegrantedwiththeamountandquantity
determinedundercertainstandards
Gainsfromthecostsofinvestmentintheacquisitionofsubsidiaries,
associatedcompaniesandjointventuresbeinglowerthantheshareofthe 3,190,702,632.96
fairvalueoftheinvestee’sidentifiablenetassets
Profitorlossfromfairvaluechangesoffinancialassetsheldfortrading,
financialliabilitiesheldfortradingaswellasinvestmentgainsarisingfrom
disposaloffinancialassetsheldfortrading,financialliabilitiesheldfor 113,442,943.70
tradingandavailable-for-salefinancialassets,excepttheeffectivehedging
relatedtothenormaloperationsoftheCompany
Otheroperatingincomeandexpensesexcepttheaforementioneditems 269,931,284.51
Profitfromdisposaloflong-termequityinvestments 635,595,988.34
Impactonprofitfrombusinesscombinationundercommoncontrol 37,459,163.29
Impactonminorityinterest -2,689,843,840.65
Impactonincometax -503,903,951.59
Total 2,441,082,405.21
XI. Items Measured by Fair Value
√Applicable □Not Applicable
Unit and Currency: RMB
Changesinthe Impactontheprofit
Item Openingbalance Closingbalance currentperiod forthecurrent
period
Forwardforeign -14,961,299.13 -26,180,454.72 -11,219,155.59 72,176,324.08
currencycontract
Short-termwealth
management 1,895,007,733.57 493,161,725.80 -1,401,846,007.77 153,967,730.24
products
Investment in
trading equity 19,322,411.35 24,586,332.05 5,263,920.70 -2,352,817.04
instruments
Interestrateswap 57,228,769.39 -13,991,425.83 -71,220,195.22
agreement
010 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Contingent -5,705,307.28 5,705,307.28 5,679,041.87
consideration
Investment in
other equity 1,400,316,460.34 1,395,959,878.92 -4,356,581.42 39,133,293.28
instruments
Bulkeffective -11,219,272.35 1,916,299.35 13,135,571.70
hedging
Other derivative
financial 95,518,757.96 77,057,328.58 -18,461,429.39 -18,461,429.39
instruments
Obligation of
repurchasing the 1,792,322,337.19 54,598,203.27 -1,737,724,133.92
minority equity
rights
Total 5,227,830,591.04 2,007,107,887.42 -3,220,722,703.63 250,142,143.04
XII. Others
□Applicable √Not Applicable
011 2019AnnualReportofHaierSmartHomeCo.,Ltd.
SECTION III SUMMARY OF THE COMPANY’S BUSINESS
I. Introduction of major business, operating model of the Company and industry background
during the reporting period
The Company mainly engages in research, development, production and sales of home appliancescovering refrigerators/freezers, washing machines, air-conditioners, water heaters, kitchen applianceproducts, small home appliances and other smart home business, as well as offering complete sets ofsmart home solutions to the Company’s users. Through rich portfolios of product, brand and solution, theCompany aims to create a full-scene smart life experience and satisfy the needs of users to customize abetter life.
Since its establishment, the Company has been upholding the operation philosophy of ‘takingusers as right and seeing ourselves as wrong’ and adhering to the corporation value of ‘from zero to onewith people first (人是目的、有生于无)’, while keeping the spirit of entrepreneurship and innovation, tofirmly keep up with developments of each era. In overseas markets, the Company has always adhered toproprietary brand management and through its persistent efforts as well as industry integration, it hassuccessively acquired Sanyo in Japan of its white goods business, the home appliances sector of GE,Fisher & Paykel company in New Zealand, Candy company in Italy, and holds 48.41% equity interest ofMABE in Mexico, to construct local market competitiveness by intensifying the three in one ‘R&D,manufacturing and marketing’. Through continuous optimization of resource integration and platformsharing as well as global strategic synergies, the Company achieves global operation of sevenworld-class brands, including Haier, Casarte, Leader, GE Appliances, Fisher & Paykel, AQUA andCandy. In 2019, revenue from overseas operation represented 47% of the total revenue while near 100%of it was generated from self-managed brands. Oversea business covers five continents, namely Asia,Europe, America, Australia and Africa, providing comprehensive home appliance products and homescenario solutions for hundreds of millions of users worldwide.
In the new era of IoT, the Company actively promotes the transformation, upgrade andimplementation of the ‘5+7+N’ smart home scenario solution across the world, and devotes itself toproviding users with a full-process solution of ‘designing a home, building a home and servicing a home’.(1) Based on advanced and efficient R&D system and manufacturing capacity, the Company’s originaltechnologies and high-end offerings lead the development of the industry and the upgrade ofconsumption. Casarte brand has a share of 40% in the market of high-end refrigerators priced aboveRMB 10,000, and its share in the market of high-end washing machines priced above RMB 10,000 is ashigh as 75.5%. (2) On the channel side, the Company pursues the integration of four networks and thebusiness mode of unified distribution by a single central warehouse, to facilitate the building of anefficient operation platform. In 2019, the distribution capacity of the Company in township areasincreased by 11% year on year; meanwhile, the Company also increased presence in upstream homefurnishing markets, and implemented packaged designs, sales and services, so as to truly provide userswith ‘one-stop, full-scenario and customized’ solutions. (3) As to the experience of end users, the
012 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Company works to create the Smart Home APP under Smart Home scenario, 001 Experience Center and
Internet of Clothes Experience Center, to build a real like sample of a smart scenario solution through
embedded new AR, VR technologies, to promote the replacement of single product sale with
scenario-based sale and the final implementation of the retail terminal of Smart Home scenario. In 2019,
the Company’s income from domestic packaged offerings accounted for 27.48% in its total income, up
5.43 percentage points year on year; the monthly active users of its Smart Home APP increased by 350%
and the monthly active users of its scenario increased by 142%; the income of its IoT ecosystem reached
RMB 4.8 billion, up 68%.
According to Euromonitor, the world’s leading independent provider of strategic market research, in2019, sales of Haier’s large home appliances ranked No. 1 in the world for the 11th consecutive year.Meanwhile, global sales of Haier’s refrigerators, washing machines, wine cellars and freezers continuedto rank No. 1 in the world. The sales of Haier self-cleaning air-conditioner and interconnectedair-conditioner in 2019 represented a global market share of 43.4% and 29.4% respectively and rankedNo. 1 in the world.
2019 Industry Summary
In 2019, global economic growth continue to slow down caused by various factors includingincreasing political uncertainty and tensions in global trade, pressure upon the international trade &cross-border investment, continued weakness of the global manufacturing industry and insufficientglobal aggregate consumption. In terms of domestic economy, in 2019, the total retail sales of consumergoods increased by 8%, it was a new low since 2000; GDP growth declined throughout the year with anincreasing pressure of economic downturn. Meanwhile, consumer demand continued to upgrade, withincreasing proportion of services, and the position of consumption was further consolidated as thedriving force of economic growth.
(I) Domestic home appliances market
In 2019, the industry growth was weak amid falling real estate market, and demand for white goodwas primarily driven by replacement and upgrade. Influenced by many factors such as high inventory ofair-conditioning industry and penetration of E-commerce channels, price wars were more frequently seenand competition was further intensified. According to the report of China Market Monitor in 2019, thetotal retail revenue of China’s home appliances market (excluding 3C) was RMB 898.2 billion,decreasing by 3% compared to same period last year, it was the lowest growth rate since 2012. Amongthem, retail sales of refrigerators, washing machines, household air conditioners, water heaters andkitchen appliances increased by 1.0%, -0.6%, -3.6%, -3.5% and -3% compared to the same period lastyear. According to ChinaIOL, driven by multi-split air conditioner, the revenue of central airconditioners in 2019 reached RMB 88.587 billion, representing an increase of 2.85%.
013 2019AnnualReportofHaierSmartHomeCo.,Ltd.
At the same time, Chinese consumers continued to pursue a higher standard of living, and theconsumer demand of different groups was more diversified and differentiated. Driven by the demand forreplacement and technology iteration, products continued to upgrade in a direction of health, energysaving, large capacity and intelligence. Sales of complete product sets were accelerated by the integrationof home furnishing & appliances. Benefiting from the continuous emergence of new items, products withlow penetration, such as tumble dryers, dishwashers and wall-mounted boiler, grew rapidly. Productexperience was improved by the application of smart, IoT, voice control and other technologies, andcompetition expanded from a single hardware to full range products combining hardware and software,interconnected platform and integrated ecosystem. Enterprises must accelerate the transformationfrom selling single item to providing comprehensive smart homes solutions.
In terms of channel reformation: ①The online market continued to grow, but with a slower ratethan that in 2018. The major e-commerce platforms penetrated low-end market by the construction ofmarketing and product, thus impacting the existing ecosystem and competition; ②The emergence ofshort video and live broadcast and other new tools give rise to user-centered content as a new marketingtrend, further improving the conversion rate; ③The offline channels promoted high-end transformation,and optimized the efficiency by focusing on scene experience, increasing the proportion of middle andhigh-end products and refining the operation. The industry transformation from ‘massmanufacturing and distribution’ to ‘brand manufacturing and retail’ is imperative formanufacturers.
In terms of competition structure: (1) The share of leading players continued to rise in refrigerator,washing machine, air conditioner and water heater while continuous entry of new brands caused thecompetition to intensify and brand concentration to decline in kitchen appliance; (2) According to CMM,the online and offline average prices of refrigerator and washing machine industry were polarized, withthe online average price going down and the offline average price going up; while air conditioner, waterheater and kitchen appliance all experienced downturn in both online/offline average price. ①Affectedby the aggravation of E-commerce price war, the online average prices of refrigerator and washingmachine industries dropped by 7.1% to RMB 1,923 and 8.8% to RMB 1,354 respectively; benefitingfrom the high-end transformation of offline channels and the continuous innovation and structuralupgrade, the offline average prices of refrigerator and washing machine increased by 3.3% to RMB 4,456and 5.3% to RMB 3,128 respectively; ②The air-conditioning industry fell into the mire of price war,and both the offline and online average prices declined significantly. The average online price inair-conditioning industry was RMB 2,687, representing a decrease of 9.2%; the average offline price wasRMB 3,661, representing a decrease of 5.5%; ③The average prices of both kitchen appliances and waterheaters showed a continuous decrease. The average online and offline prices of water heaters fell by8.9% and 4.7% respectively, and both average online and offline prices of range hoods fell by 2.7%.
(II) Overseas home appliances market
014 2019AnnualReportofHaierSmartHomeCo.,Ltd.
The performance of overseas market varied due to different level of economic development andappliances penetration. On the whole, the developed countries driven by stable replacement demand, anddeveloping countries with low penetration maintained a rapid growth:
(1)The US appliances industry declined by 1.5% in 2019 with growth rates of refrigerators, freezers,kitchen appliances and dishwashers at - 3.6%, - 14.9%, - 3.6% and - 0.3% respectively, and washingmachine industry increased by 1.7%. (2) The European market was affected by the slowdown in GDPgrowth, and the performance was flat year-on-year. The overall performance was flat year-on-year. (3)①Indian market was affected by slow economic growth, currency devaluation and rising domesticunemployment rate, and the growth rate in home appliance market fell to 5%. ② Pakistani market wasaffected by continuous depreciation of rupee and tax reform, and the industry decreased by 5%. (4)Southeast Asia market grew steadily and Japanese and Korean brands intensified the local pricecompetition. (5) The Japanese market’s annual sales volume increased by 2% and the product preferencechanged to large capacity and high end with higher price. (6) Australian market was affected byslowdown of economic growth, falling consumer spending and house prices and it had a negative growthof 6.6% in home appliances market, and the profitability was affected by currency fluctuation andaggravation of competition.
2020 Industry Outlook:
(I) Domestic home appliances industry
In 2020, completion area of the domestic real estate market is expected to turn positive, boostingnew demand; the accelerated iteration of product technology will speed up replacement; 5G technologypromotes the development of smart appliances, consumption upgrades, and demand for series-based andscenario-based products. Although the outbreak of the novel coronavirus at the beginning of the year hassuppressed the demand for home appliances in the short term, its impact in the medium and long termwill be limited. After the downturn, the industry is expected to gradually show sign of recovery duringthe year. At the same time, the outbreak of the virus will further stimulate the demand for healthy andsmart home appliances.
Continuous penetration of ecommerce into low-tier market unlocks the demand for low-end products,intensifies price competition, and weakens short-term average price growth momentum. According toAVC, refrigerators, washing machines, air conditioners, water heaters, kitchen appliances will facedownward pressure to varying degrees in 2020. Price competition will continue to increase theconcentration of the industry, impacting small and medium-sized brands that rely on low-price.Leveraging on their advantages in branding, supply chain, distribution channel, R&D and manufacturing,capability leading players will continue to gain market share.
(II) Overseas home appliances market
The easing of the trade war in 2020 is beneficial to the global economy, but the deterioration
caused by the outbreak has a negative impact on global economy and the demand for home appliances.
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II. Explanation on significant change on major assets of the Company during the reporting
period□Applicable √Not ApplicableIII. Analysis on core competitiveness during the reporting period
√Applicable □Not Applicable
Since incorporation in 1984, the Company has always adhered to the principle of grasping thedevelopment trend of the industry and driving the sustainable and healthy development with innovationsystem focusing on the satisfaction of users’ demand for a better life, and it has successfully turned itselffrom a collectively owned small factory which was on the verge of bankruptcy into one of the largesthome appliances manufacturers in the world. The Company is committed to realizing sustainabledevelopment across different cycles through continued innovations in strategy, management model,brand building, R&D, smart manufacturing, and expansion in domestic and foreign marketsglobalization.
(I) World-renowned brand reputation and global leading position in smart home solutions
Based on the all-round deployment of brand, research and development, intellectual manufacturing,channel, service, ecosystem and smart home platform, Haier has built one of the world’s leading whitegoods, kitchen and bathroom production portfolio, offering refrigerators and freezers, washing machines,air conditioners, water heaters, water purifier and kitchen appliances, and it provides consumers with‘Full set, Customized, Iterative’ ‘5+7+N’ smart full set solutions. ‘Full set’ is a one-stop solution to solveusers’ demands of whole-house appliances through a full set service that integrates smart home productsolutions. ‘Customized’ enables users to freely customize smart home scenario based solution. ‘Iterative’refers to upgrade and iterate smart home technology, performance and experience by user’s habits andscene requirements, and constantly adapt to user’s need by collecting and analyzing product use datawith smart home cloud brain.
According to Euromonitor, Haier has been ranked global No. 1 large home appliances brands for 11consecutive years. In category of refrigerators, washing machines, wine cellars, and freezers, theCompany continues to be No. 1 in the world. Facing the rapid changes of the times and the continuousiteration of user needs, the Company has achieved full coverage of user groups around the world, brokendown the global technical and data-sharing barriers as well as promoted the healthy development of theindustry through the global strategic synergy among seven brands, namely Haier, Casarte, Leader, GEAppliances, Fisher & Paykel, AQUA and Candy.
Excellent outstanding brand, R & D and innovation, continuous satisfaction and leading inappliance trend consumption are important to continuous development, and thus directly facilitate itsleadership in high-end market. In 2019, Casarte’s market share of home refrigerator and washingmachine’s price above RMB 10,000 reached 40% and 75.5% respectively, and the market share of air
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conditioner’s price above RMB 15,000 reached 40%; the market share of Fisher & Paykel, the world’s
top home appliance brand, is No. 1 in New Zealand.
(II) Industry-leading R&D and technological competitiveness
1. Global R&D network: Relying on 10 R&D centers across the world (eight are overseas) andmultiple (N) innovation centers that focus on changing users’ demand, Haier has built a ‘10+N’ openinnovation system to form a global network of partners and users, and attracted world-class resources toparticipate in its ‘cooperation, win-win and sharing’ mechanism. Haier therefore plays a leading role inthe development of products and technologies in the industry, and realizes the goal that ‘R&D goeswherever users demand and innovation resources are’ to provide excellent experience for its users.
2. Leadership in the development of international standards: By the end of 2019, Haier hasparticipated in preparation and revision of 67 international standards, and 550 national / industrialstandards revisions cumulatively, ranking No. 1 in the Chinese home appliance industry, covering sevenfields including smart home, mass customization, smart manufacturing, smart factory, smart production,industrial big data and industrial Internet. The Company has comprehensively led the development ofinternational standards for smart home in four international standard organizations (ISO, IEC, IEEE,OCF), and achieved the global leadership of cloud based smart home ecosystem. The Company is theonly Chinese home appliance enterprise with a seat in the International Electrotechnical Commission’sMarket Strategy Bureau (IEC/MSB), and it is also the only home appliance enterprise in China with themembership in International Standards Technical Subcommittee. Haier took the lead in setting up theIEC TC59/SC59M WG4 Refrigeration International Standard Working Group and led the developmentof new international standards for refrigeration. Haier also led the development and release of the world’sfirst AI standard white paper. In addition, the development of IEEE’s Smart Home, Internet of Clothing,Internet of Food and other international standard were also led by Haier.
3. Leadership in technical patents and industrial design: Up to now, the Company has applied formore than 53,000 patents globally, and of which invention patents are more than 33,000 accounting formore than 60% of the total, ranking first in Chinese home appliance industry. With more than 11,000overseas invention patents in 28 different countries, Haier is the home appliance enterprise with thelargest number of overseas patents (11,000). Haier was awarded China Patent Gold Award 9 times,ranking first in the industry. Haier has won 15 ‘State Prizes for Progress in Science and Technology’, thehighest honour in China’s science and technology sector, becoming the home appliance enterprise withthe most State Prizes for Progress in Science and Technology, accounting for over half of the prizesawarded within the industry. Haier has won 3 ‘China Gold Awards on Excellent Industrial Design (中国优秀工业设计金奖)’ issued by Ministry of Industry and Information Technology (MIIT), making itthe only enterprise winning ‘China Gold Awards on Industrial Design (国家工业设计金奖)’ for threeconsecutive years; It has received 3 international gold awards on industrial design and 194 DesignAwards (including the above three gold awards).
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4. Innovative R&D through HOPE platform: In parallel to in-house innovation, Haier opened up itsglobal resources, built HOPE (Haier open innovation platform) to incorporate users, enterprises andresources into the same interactive ecosystem. In addition, Haier continued to make cross-border andrevolutionary innovation through effective collaboration and zero-distance interaction of differentstakeholders within the community.
(III) Competitiveness of industrial smart manufacturing that leads to change
The core competitiveness of Haier’s smart manufacturing lies in its commitment to long-term valuefor users and the transition from large-scale manufacturing to large-scale customization. Haier hasestablished 15 global-leading smart factories as examples for the industry and 2 ‘lighthouse factories (灯塔工厂)’ of the fourth industrial revolution, and continued to upgrade the capacity of inter-connectivity,digital insight and intelligent optimization of the entire ecosystem and with production capabilities inrefrigerators, washing machines, air-conditioners, water heaters, kitchen appliances, to fulfil users’demand for enhanced experiences which contributed to non-warehousing rate of products increasing to75%, the orders from mass customization with full user involvement accounting for 24%, and the ordersfrom mass customization with full distributor involvement reaching 51%.
(IV) The layout of efficient and in-depth distribution network
1. Through an Omni-channel distribution system, the Company has established full coverage of first,second, third and fourth-tier domestic markets and provided convenient shopping experience. TheCompany also maintained strong strategic cooperation with offline distributors including Gome andSuning, as well as e-commerce platforms including Tmall and JD.com. There are more than 8,000county-level stores and more than 27,000 town-level stores in Haier’s distribution network where theCompany maintains close relationship with major regional distributors. In addition, the Company hasaccelerated the expansion of network coverage in home improvement channels, with the number ofcontacts exceeding 2,500 by the end of 2019. Relying on the advantage of multi-brand and complete-setsproduct, the Company will build smart and full-scene experience stores to provide comprehensivedisplays, design, sales and services in the end-market.
2. The Company has constructed. ‘Jushanghui’(巨商汇) platform to provide the order managementfor distributors to digitized procurement, sales and settlement and reduce the management cost. ‘Yilihuo’(易理货) platform covers purchase, sale, inventory and membership management of townshipdistributors. The Company provides direct logistics to the town through cloud based warehouse system,while comprehensively integrating the network of logistics, information, service and sales to improveoverall efficiency.
3. In 2019, the Company promoted the implementation of Smart Home APP, 001 ExperienceCenter and Internet of Clothes Experience Center and, through online terminals and offline experiencestores, displayed Haier Smart Home scenario solutions to distributors, users and commercial partners, soas to improve the conversion rate.
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(V) Excellent global operational capability
Focusing on ‘building proprietary brand portfolio’, the Company has completed its 3-in-1 networkcomprising R&D, manufacturing and marketing in major overseas markets through organic growth andacquisitions, in order to identify and meet local consumers’ demand. The Company’s global salesnetwork covers more than 160 countries, with 54 wholly/partially owned factories overseas.
In 2019, the Company deepened the 3-in-1 global implementation by focusing on creating brandand accelerating high-end transformation, and continued to strengthen leadership in smart home solutionin the IoT era overseas. In 2019, revenue from overseas operation amounted to RMB 94.1 billion,representing 47% of the total revenue while near 100% of the revenue was generated from self-managedbrands. The Company has successfully transformed from a single-brand operation to a multi-brand andcross-regional global business. The Company targets a leap from ‘going out, going in’ to ‘going up’through integration of global resources, and gradually entering the mainstream market. The Company’smarket shares in Pakistan, the US and India ranked No. 1, No. 2 and No. 4; and it is No. 5 in Europe andNo. 2 in Australia.
(VI) Integrity of corporate culture and the win-win under RenDanHeYi management
Integrity based on quality and service is vital to Haier’s development and success. With‘user-oriented’ and ‘persistent honesty’ values, Haier has turned itself from a collectively owned smallfactory which was on the verge of bankruptcy into the largest white goods manufacturers in the world,while keeping a leading position in world-wide innovation in the Internet era. Haier upholds theoperation value of ‘taking the user as right and ourselves as wrong’, which stimulated the spirit ofinnovation, revolution and entrepreneurship. The value of ‘win-win under RenDanHeYi’ is fundamentalto sustainable development of Haier. Haier belongs to all stakeholders, including employees, users,shareholders, business partners and the community. In the era of network, Haier has formed a network ofsuppliers and partners with shared interests to create value which contributes to long term sustainability.In order to achieve this goal, Haier continues to carry out business, develop and refine the win-win modelunder RenDanHeYi where ‘Ren’ refers to employees who have the spirit of entrepreneurship andinnovation, and ‘Dan’ refers to value creation for users. Every employee creates value for users in his/herbusiness unit, thereby realizing their own value, during this process, maximizing shareholders’ andenterprise value..
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SECTION IV DISCUSSION AND ANALYSIS ON OPERATIONSI. Discussion and analysis on operations
The Company followed the strategy of smart home leadership, and promoted the transformationfrom selling single products to providing complete sets of smart home appliance solutions and fromdistribution to retail through the ecosystem microenterprise community (EMC) self-driven mechanismunder RenDanHeYi model. Through product and scenario solution leadership, high-end brand leadership,retail transformation, global operations, and ecological capacity building, the Company managed toachieve business growth amid economic downturn. In 2019, revenue amounted to RMB 200.762 billion,representing a year-on-year increase of 9.1%; and net profit attributable to owners of the ParentCompany amounted to RMB 8.206 billion, representing a year-on-year increase of 9.7%. During thereporting period, a total of RMB 270 million was invested in building smart home platform and industrialinternet platform, in order to cultivate the ecological brand and accelerate the transformation of‘Replacing Products with Scenarios and Incorporating All Industries into the Ecosystem’.
(I) Rising domestic market share, strengthening of high-end leadership.
①According to China Market Monitor Co., Ltd (CMM), the Company's offline and online retailsales market share of refrigerators, washing machines, household air conditioners, water heaters andkitchen appliances continued to grow upward trend, and the offline market share of refrigerators andwashing machines is 3.1 and 2.1 times that of No.2 player while the online market share is 2.2 and 2.2times that of No.2 player. According to ChinaIOL, the Company’s market share of central airconditioners in 2019 was 9.6%, representing a year-on-year increase of 0.3 percentage points. ②Casarterecorded income of RMB 7.4 billion, representing a year-on-year increase of 30%, and its position in thehigh-end market was further consolidated.
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(II) Enhancement of competitiveness overseas.
Based on more than two decades of proprietary independent brand management creation, andcombined with effective industry integration, especially following the acquisition of GEA in 2016, theoverseas operating system and capabilities of the Company continued to be optimized through theconstruction of global collaborative platforms and the implementation of mid-to-high-end transformationstrategies. In 2019, the Company promoted mid-to-high-end leadership and channel retail transformationin various markets around the world, with significant improvements in operating performance. Theoverseas revenue for the year was RMB 94.1 billion, representing a year-on-year increase of 22%, andthe overseas revenue of the Company accounted for 47% of total revenue, 5 pct pt greater than 2018.
(III) Implementation of smart home scenarios and development in ecosystem capabilities.
Relying on complete-set home appliance products, the Company provided comprehensive smarthome solutions leveraging on AI+IoT platform to iterate from ‘connected intelligence → interactiveintelligence → decision intelligence’ and continuously optimize the 5+7+N smart home scenarioexperience; based on the real-time connection of data, equipment, scenarios, and introduction ofecosystem resources, the Company provided users with personalized and value adding; continued toexpansion distribution channels, with scenario interactive experience centers like Haier Smart Home 001Experience Centre, Internet of Clothes, the Company created full scenario immersive experience andincreased the share of complete set of products in the form of live experience and live scenario streamingon Smart Home APP and third platform.
(IV) Honours of the Company.
On 11 June 2019, ‘BrandZ? Top 100 Most Valuable Chinese Brands in 2019’ added IoT eco-brandclass, and Haier became the first and only entry of the Top 100 IoT Eco-brand in BrandZ history; on 22July, the Company was re-listed in Fortune 500 with ranking ascended by 51.
On 9 January 2020, Euromonitor published 2019 global retail sales of large home appliance brandssurvey, naming Haier No.1 for the eleventh time; on 21 January 2019 (US Eastern Time), Times releasedthe lists of ‘World’s Most Admired Companies 2020’, and Haier Smart Home was listed, making it theonly one from home appliance industry outside US.
Main achievements in 2019:
(I) Focusing on innovative technology, and leading industry development.
The Company continuously promoted the collaboration between global R&D centres, maintainedglobal leadership level in modularization, technology, products and R&D. With a focus on creatingbest-selling products, the Company enhanced efficiency of operations through modular design andstreamlining the number of SKUs.
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1. Refrigerator/freezer business
As the global leader in refrigerator industry, the Company is committed to provide users withhealthy, smart and artistic high-quality food preservation solutions through comprehensive and sustainedtechnological innovation and product iteration, thus leading the industry development.
(1) Healthy and preservation technology upgrade. Casarte MSA oxygen-controlling andfresh-keeping technology doubled the preservation time by reducing the oxygen concentration in aspecific room, and the nutrient loss rate was less than 1/10 of that in an ordinary refrigerator. The breezetechnology reduced temperature fluctuation from 2℃ to 0.2℃; and refrigeration time shortened from 270seconds to 0.1 second.
(2) Investment increase in smart products & solutions. In terms of intelligent experience, theCompany released products with TFT smart screen, sliding electric door opening and 270°curvedsurface light source, in order to achieve intelligent experience such as human-computer interaction, smartstorage, and lighting without blind corners, which can endow users with an all-around smart experience;as to home integration, the Company with persistent pursuit of details can provide users with embeddedproducts featured by great sense of style, design and aesthetic appearance. The aforesaid details include,for example, the unification of classic or fashionable colours of home & household appliances, the matchof refrigerators to home environment and overall home decoration style and the refrigerator’s integrationwith cabinet, realization of right-angle wide open and possession of great autonomous heat dissipationcapacity.
(3) Industry leading technologies and products further enhance leading position of theCompany, implementing solutions for smart kitchen. ①Based on the parents’ consumption idea anddemand for infant care who bore in 1980s and 1990s, the Company iterated the Free Embedded ‘YingAi(婴爱)’ Series build-in kitchen appliance, which can provide infrared constant temperature storage anddouble sterilization solution as well as exclusive ‘YingAi’ storage space solutions. ②Focusing on thesmart lifestyle of high-end family, the Company iteratively developed a smart dual-screen series productswith master craftsmanship and embedded family health management system, which achieved health datamonitoring, meal management plans and active service of British butler. In 2019, Casarte refrigeratorrevenue increased by 27%.
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2. Washing machine business
As a global leader in the washing industry, Haier Washing Machine is committed to providing userswith an excellent laundry experience. Through continuous product innovation and technological iteration,it continued to lead the industry to upgrade.
(1) New technologies including IoTs, Smart and Artificial Intelligence were launched and applied tointroduce solutions, such as smart and exclusive laundry which can automatically calculate and match thebest washing procedures based on the information of clothing type, material, stain type and water qualityand deliver washing procedure precisely. (2) Newly launched Haier ‘XianHe (纤合)’ washing machineswere equipped with direct-drive motor and ultrasonic materialized air washing function with a largecylinder diameter to accurately care high-end fabrics, and drive the market share of front-loadingwashing machines priced at or above RMB 6,000 to ascend 5.3 percentage points, reaching 41.7%. Interms of top-loading washing machines, the Company has innovatively proposed the single-cylinderwashing solution for problems that the inner and outer cylinders were subject to stain accumulation,water consumption and space occupation. With research and breakthroughs to solve technical problemssuch as single-cylinder noise reduction and accurate detection, the Company has made the first outercylinder free single-cylinder washing machine in the industry. The technology for such project hasobtained 2 international invention patents, achieving material, water and energy saving of a singlemachine, ushering a new era in the impeller type washing machine industry， and realized the marketshare of the top loading washing machines at or above RMB 5,000 ascended to 3.2 percentage points,reaching 75.6%. (3) Advanced technologies and products assist the Company in implementing the smartsolution for clothing washing and care. Casarte washing machines have always led the industry standard.Casarte introduced a luxury series of integrated gentle washing machines, equipped with upper and lowercylinders and super steam spraying washing, intelligent sensor door, ultraviolet sterilization, precisiondelivery and other functions. Casarte washing machines provided smart clothes care solutions thatintegrated washing, drying and care, bringing the customers the ultimate experience. The Company’smarket share of products above RMB 10,000 reached 75.5%, representing absolutely leading superiority.In 2019, Casarte washing machines recorded a revenue increase of 14%. In the first half of the year, thesupply and demand affected by factors including the upward capacity of the new factory was improved inthe second half of the year, during which the revenue of Casarte washing machines increased by 30%with the recovery of capacity.
3. Household air conditioner business
Focusing on demand upgrades and technology replacement, and under the leadership of quality,function and intelligence, the Company provided healthy air solutions that met the ultimate experience ofusers, and created user awareness of ‘Healthy Air Conditioners Goes to Haier’. ①The pioneering freshair conditioners adopted the dual-power air purification technology, and solved the endangering humanhealth problem caused by indoor CO2 concentration exceeding the standard in case of staying indoor.
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Casarte Yunding (云鼎) air conditioners could detect the air pollution in the room and immediately give
an alarm. The LIEP light ion purification technology could remove PM0.3 from the air and bring fresher
air. Casarte Tianjing (天净) and Tianyue (天悦) air conditioners were provided with antibacterial
solutions: UVC deep ultraviolet rays could kill more than 90% of Staphylococcus albus and
Staphylococcus aureus, more than 93% of H3N2 influenza viruses and over 96% of E. coli at one stop.
Assistance from the moisturizing and anti-bacteria technology ensured clean air for a long time. ②The
Company innovatively developed a full-scale, full-space, and full-scenario intelligent adjustment solution
for healthy air to self-detect air parameters such as indoor temperature, humidity, cleanliness and oxygen
level and analyse user habits through Haier smart air big data, and achieve active service with
self-adjusting and self-processing by air equipment.
In 2019, Casarte Air Conditioner focused on the goal of being No.1 for high-end brands, continuingto enrich its product lineup. The revenue increased by 130%, and its high-end market share continued toincrease: in terms of the share of high-end market at or above RMB 10,000, the Company’s market shareincreased from 13.3% at the beginning of the year to 16.2%. The share of RMB1,5000 and abovecabinets continued to rank the first place, reaching 40%.
In selection of the 15th CHEARI Annual Technical Innovation Award, ‘Haier ConstantTemperature Purification Dual Power Air New Integrated Technology’ and ‘Casarte Conductor AirConditioner CAP725WBA(A1)U1’ were respectively awarded the Technology Innovation AchievementAward and Design Innovation Achievement Award.
4. Central air conditioner business
During the reporting period, the Company accelerated product innovation and core technologydevelopment, and launched a series of smart IoT, energy-saving and healthy products to enhance marketshare: (1)The Company continued to maintain the leading position in technologies including NB-IOT ofcentral air-conditioning, IoT identification and air suspension. Among them, five projects including‘Research and Application of Adaptive Renewal Technology for Multi-split Heat Pump Units’ areappraised as internationally leading. (2)The Company launched energy-saving and environmentallyfriendly green products such as MX8 high heat multi-split air conditioners, Casarte constant temperatureand humidity ultra-thin air duct machine, and introduced the hidden type breeze panels, kitchen airconditioners and other innovative products. (3) The Company managed to develop smart products suchas multi-split cloud service management platform, household central air-conditioning NB-IOT module,and Casarte new controllers to enrich the smart IoT ecosystem and improve users’ experience. (4) TheCompany launched the first IoT central air conditioner in the world, and led the establishment of ‘IoT 5GApplication Joint Laboratory’ and released the NB-IOT IoT duct type air conditioners to meet users’personalized needs for scenario based experiences.
5. Water heater and water purifier business
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Water heater: Focusing on whole-house water and heating solutions, the company managed tobecome No. 1 online and offline in terms of sales volume. (1) Electric water heater: The Companydeveloped technologies in water purification, 3D gradual heating, and storage-in-combination to createfeatures including full-scale descaling, anti-bacteria and instant heating on products with capacity that is8 times the existing models. In 2019, products with water purification functions accounted for more than70% of Haier water heaters. Casarte Tianmu (天沐) series has achieved twelve times the capacity ofsuper large water volume, with the thinnest size and rapid heating in the industry. (2) Gas water heater:In order to improve product safety, reliability and comfort, Haier developed patented technology ineliminating carbon monoxide and waterfall washing with no water. Casarte’s waterfall washing with nocold water technology received annual technical innovation award by China Household ElectricAppliance Research Institute, and it also received German iF Design Award. Haier promptly introducedgas water heaters with five-fold anti-bacteria technology, copper water pipe anti-bacteria, copper watertank anti-bacteria, sterilization by silver ion, and high temperature sterilization at 60℃. (3) The Companyintroduced space energy water heater products based on solar energy and heat pump technology, toprovide users with round-the-clock, efficient and energy-saving heating solutions. During the period,space energy series grew by 107%, and won the National Prize for Progress in Science and Technologyand the AWE Design Award, which effectively established the leading position of Haier in the solarthermal. In 2019, the revenue from Casarte water heaters grew by more than 30%.
Water purifier: Haier currently provides household water terminal purification, whole-housepurification and commercial purification solutions. In 2019, in association with China Association Haierpublished General Technical Guidance for Smart Whole-House Water Purification System, where it ledthe standardization requirements for general technology of smart whole-house water purification systemsbased on consumption upgrade and new user demands in the IoT era for the first time. Casarte’s high-endwhole-house water purification series was equipped with FEV2.0 technology to provide smart experienceof automation + luxury large screen + purification effect visible throughout the process. This seriesinnovatively integrated IoT, cloud platform and big data analysis to provide users with one-stop butlerservices such as water quality monitoring, filter replacement reminder and regular maintenance.
6. Kitchen appliance
The Company integrated global leading platforms of FPA, GEA and Candy to accelerate thedevelopment of products and provide users with high-end smart kitchen solutions; and the Companystrengthened the competitiveness of Casarte kitchen appliances. Revenue from Casarte brand grew bymore than 30%.
Range hoods: The Company focuses on the entire product life cycle from R&D and manufacturingto user’s scenario experience to improve their satisfaction. (1) The Company integrated FPA frequencyconversion control technology and jointly developed more powerful air ducting system; (2) TheCompany iterated Haier’s cleaning-free series. With patented oil-proof screen technology, the productsefficiently split macromolecular particles such as grease and water particles in order to reduce pollution
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inside impeller and motors and achieve efficient purification; (3) The Company launched online sound
quality detection application, upgrading from traditional detection of noise decibel value to dynamic
detection of sound quality index, accurately tracking users’ experience and continuously improving
experience in range hoods’ wind and noise.
Gas stoves: The Company returned to the essence of kitchen cooking. Focusing on the requirementsof ‘easier cooking, healthier catering, safer use, smarter products, and more coordinated & aesthetichouse’, the Company introduced new generation of Casarte smart triple-head stove with accurate firecontrol, automatic cooking and real-time temperature monitoring. Aiming at food nutrition specialty andresearch on global cooking, the product could provide healthy and nutritious cooking, such as bird nestcooking in an automatic way, set up procedures in advance, and based on automatic temperature monitorand heating power adjustment to achieve real-time adjustment of cooking heating power -first achieverapid warming with high heat, so that the edible bird's nest can absorb water and heat, then alternatebetween high and mild heat to separate nutritional organic matters, and finally keep the food warm withgentle heat to extract the essence.
Disinfection cabinets: In response to the needs of specialized users, the Company upgraded lightwave pasteurization to medical-grade standards, and Casarte Commander (指挥家) series has becomethe only disinfection cabinet for food utensils in the industry that reaches the medical-grade disinfectionlevel. The unique patented smart tracking technology monitored the sanitary environment in the cabinetin real time, and started disinfection process automatically.
Ovens: The Company developed directional heating technology based on expertise from GEA andFPA, aiming at accurate heating of different food quickly and conveniently. Casarte Commander serieswas the first with features including automatic door and wireless probe; ②the leading 7.26'TFT largescreen with metal touch buttons improved user experience; ③provided navigation multi-recipes in threescenarios including ‘Enjoy life, Fast Life, Roast/Steam at Your Will’, and customized private menusthrough OTA (Over the Air) online upgrade technology; ④together with FPA, Haier established anoven production line to develop dual temperature & humidity control technology and dual steamdynamic balance technology to improve the taste of ingredients.
Integrated cookers: The Company consolidated global R&D resources, green physical patentedlight wave pasteurization disinfection, NTC smart anti-dry burning technology, anti-spill safetytechnology and steam dynamic accurate heating conduction system into its cookers series, so as toachieve steaming with freshness maintained without tainting, deep V smoke collection chamber withabsorption ratio of 99.9%, to enhance users’ safe and healthy scenario experience in the kitchen.
(II) Chinese distribution network: focusing on efficient retail and continuous reformation
In respond to the diversified customer needs and channel formats, the Company initiated theintegration of four networks including marketing, logistics, after-sales and information management toprovide unified warehousing and distribution for better overall efficiency. Based on the advantages ofcomprehensive product portfolio in multiple categories, the Company increased presence in home
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improvement channels packaged solutions in interior design to delivery and installation of appliances. As
a result, user loyalty was enhanced with greater willingness towards multiple unit purchase. Moreover,
the Company deepened multi-brand operation, leading to multi-dimensional and in-depth coverage of
users group. The Company strengthened its leading position and raised brand's profile by accelerating
marketing transformation, thus realize nearly double digit growth in a declining industry in 4Q19.
1. Integrating marketing, logistics, after-sales and information network, unifying warehousing anddistribution, combining online and offline sales to improve channel efficiency. ① the companypromoted the interconnection amongst products, distributors, users and employees to improve servicequality through providing integrated inventory management and logistic services so as to improveefficiency in products, process, personnel and logistics. ②the company provided marketing managementat town level, rapid handling of defective products and visualization of orders, thereby enhancingoperation and retail competitiveness which promotes distributors to focus on covering village and townmarkets. In addition, the Company can build reputation through standardized delivery & installationservices in towns and villages. ③By the end of December 2019, the unified warehousing anddistribution covered 13,415 villages and towns across the country, achieving a year-on-year increase of11%, a year-on-year decrease of 97% in defective products caused by logistics and a 99.4% on timedelivery.
2. The Company continuously promoted network expansion in channels including homeimprovement market and introducing new distributors with design and installation capabilities in order totap into one stop comprehensive and customized solution business. Haier Smart Home 001 ExperienceCentre in Shanghai pioneered a new model of ‘replacing single product sales with complete-set andscenario based solutions’, and average price of smart scenario package reached RMB 250,000. In 2019,the Company's multiple-unit revenue accounted for 27.48%, representing a year-on-year growth of 5.43percentage points; and sales from home improvement channels amounted to RMB 8.1billion,representing a growth of 37%.
3. The Company accelerated the expansion of e-commerce platform into lower tier markets whilepromoting high-end products. In 2019, complete-set sales accounted for 25% online. In 2019, the onlineand total revenue online reached RMB 35 billion, representing an increase of 25% with an online retailmarket share of 16.4% up 1.2 pct. pts.
4. The company launched alliance with construction business and strengthen property relatedbusiness. During the reporting period, 42 strategic partners were developed and 38 smart pilot projectswere initiated. The Company received market recognition for providing industry-wide complete-setsmart product solutions, rewards including 'Preferred Smart Home Service Provider of Top 500 ChineseReal Estate Developers in 2019’ and ‘Preferred Smart Decoration Brand of China’s Real Estate Industryin 2019’.
5. Multi-brand operation achieving notable results. (1) Net revenue of Casarte brand reached RMB7.4 billion in 2019, representing a year-on-year increase of 30%. The Company continued to expand the
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high-end market advantage. In terms of refrigerators and washing machines over RMB 10,000, the
Company generated a respective market share of 40% and 75.5%; in terms of household air conditioner
over RMB 15,000, the Company generated a market share of 40%. ①The Company led the industry
through introducing original technology and complete-set products, launched Commander series, Dibo
(帝博) series and Free Embedded series products and realized unified design, complete-set introduction
and complete-set display in sets, with proportion of the complete-set users reaching 38%. ②The
Company continued to expand the distribution of contact networks at and above the county level and
currently the coverage of markets at and above the county level up to 80%. ③The Company focused on
community economy, experience economy and sharing economy, and achieved precise interaction and
preparing for users’ future experience fermentation through community based marketing. Casarte,
together with Louvre, France, released its art promotion plan, integrating the art IP resources of Leonardo
da Vinci, and successfully drove the market by covering the whole process of users, distributors and
retail terminals and separated the competition through online release, offline art exhibition of high-end
immersive experience and retail-terminal display. (2) Leader strengthened the brand image of
‘simplicity, fashion and intelligence’ and created the preferred brand for young people in the pursuit of
smart life. The sales from online channels for young people increased by 52%, and market share ranked
No.9, six places higher than that in 2018. The offline channel promotes the expansion of network from
the third- and fourth-tier markets to the first- and second-tier markets. The Company launched joint
products in cross-border cooperation with MUJI and enhanced experience contacts for young users,
leading to increase in brand awareness and user loyalty.
6. Marketing transformation. The Company built the brand moat, enhanced the brand’s volume, andstrengthened the brand’s leading position. ①By participating in the comprehensive exhibition ofhigh-standard large-scale home appliances in the industry such as AWE, IFA and CES, and launching theleading intelligent scenario schemes, the Company strengthened its brand recognition and set up brandbarrier. ②The Company realized the continuous conversion and ignition of its products by establishinginnovative marketing methods in new media such as word of mouth marketing, Micro-blog and WeChatmarketing, TikTok marketing and Xiaohongshu marketing through share of voice in authoritative media,intellectual property and product placement.
(III) Overseas segment: Entering a new stage of development by continuously consolidatingglobal operation capacity with overall growth of high-end brand building
In 2019, The Company recorded RMB 94.1 billion in its overseas revenue, representing ayear-on-year growth of 22%. The total profit margin before tax in overseas market increased by 0.3 pctpts. Looking at various regional markets, the Company achieved revenue growth rate higher than thelocal home appliance industry with an increasing market share in major overseas markets.
028 2019AnnualReportofHaierSmartHomeCo.,Ltd.
In recent years, the overseas business has maintained a good growth trend, which stems from theCompany’s persistent adherence to self-owned brand creation, high-end product leadership and channelnetwork upgrades to create a zero-distance marketing experience, continue to optimize the ‘R&D,manufacturing and marketing’ three-in-one localized layout, and build a localized and efficient operatingsystem. During the reporting period, the Company continued to intensify investment and collaboration inproduct research and development, brand marketing, and production capacity layout in overseas markets,in order to fully leverage on the advantages of global layout, and actively promote the transformation ofsingle products to smart scenarios to provide guarantee for future profitable growth.
1 High-end products leadership. Relying on a world-leading product platform, the Companycreated high-end products and strengthened a high-end brand image, deepened the strategic layout ofsmart scenarios, and embraced the rapid growth of smart connected appliance and products. For example,refrigerators put the focus on ‘freshness and health’, and washing machines had their focus on quietwater and electricity saving through DD DC frequency conversion and free-cleaning, and ‘AC and airpurifier integration frequency conversion’ leading technology was first introduced. In 2019, the revenueof high-end products from Haier brand increased by more than 40%, and its proportion increased by 5 pctpts.
2 Channel upgrade. Based on their own market characteristics, each region has comprehensivelyoptimized channel structure and increased network coverage through measures such as expandingmainstream channels, building its own network, developing e-commerce channels, and strengtheningfront-end channel distribution.
3 Zero-distance marketing experience. ①Social media marketing was transformed and upgradedby sponsoring sports events (Russian KHL and Thailand marathon race) and participating in globalexhibitions (IFA and CES) and other activities. ②Through the standardization of retail terminal display,the establishment of smart model experience stores and with consumer consultants as the touch point, theinteractive experience with local consumers was strengthened, the transformation and upgrade of retailterminal marketing was achieved, and retail terminal retailing capacity was enhanced. ③Through theuse of short video platforms, online delivery and emotional marketing were strengthened, new onlineinteraction models overseas were expanded, and the digital marketing platforms were upgraded foroperation. The number of overseas Facebook followers exceeded 9 million, and the number ofinteractions increased by 52%.
4 Optimizing the operating system and improving the three-in-one layout. ①The globalsynergy advantages were leveraged. Advancement was made in global platform complementarity.Product lineups were improved. Costs were further optimized. A total of 432 collaborative procurementprojects have been implemented and completed. A global R & D platform facilitated the launch offull-size French-type multi-door refrigerators and large front-loading products in the United States. ②Continuous efforts were made to optimize the global production capacity layout. On 29 March 2019, theCompany started building its second industrial park (Haier Northern India Industrial Park) in India. It is
029 2019AnnualReportofHaierSmartHomeCo.,Ltd.
expected to fully cover the huge markets in northern and eastern India at the time of operation; In July
and August, 2019, AQUA Vietnam Front-loading Washing Machine Factory, Haier Russia Washing
Machine Smart Factory have been put into operation successively, with an addition of 700,000 units
production capacity. In June and October 2019, GEA invested to expand the production of kitchen
appliances and water heater factories in the United States. ③The introduction of overseas global GTM
(Go To Market) projects and overseas market ERP promoted the digital transformation of business, and
enabled the operation and upgrade of the entire value chain.
5. The performances of major global markets were summarized as follows:
(1) In the North America market: In 2019, the sales revenue was RMB 57.9 billion, representinga year-on-year increase of 9.7%, and an increase of 5.6% in US dollars; the share of GEA core homeappliances increased by 1.6% and the shares of all core home appliances experienced growth.
①In terms of brand, GEA adhered to the high-end transformation strategy, and continued theinvestment in high-end brand construction and awareness enhancement: its high-end brandCafémaintained rapid growth; ②In terms of the supply chain end, GEA intensified the investment in theconstruction of smart factories and smart storage systems to optimize manufacturing and warehousingefficiency, thus enhancing the degree of automation; ③In terms of marketing, GEA and Haier brandparticipated in the CES Show in Las Vegas, USA, to showcase the transformational achievements of theIoT era, and was well received by the industry. In June 2019, GEA was selected as ‘the company withthe most patents in Kentucky’; The international authoritative market research organization IoTBreakthrough awarded GE Appliances the ‘Internet of Things Breakthrough Annual Award’ for twoconsecutive years: 2019 and 2020 Smart Household Appliance Companies.
Since the acquisition in June 2016, through effective integration and synergy, GEA has maintained agood growth trend and its market share has continued to increase. In 2019, the Company’s NorthAmerican region recorded revenue of RMB 57.9 billion, representing an increase of RMB 10.8 billionfrom RMB 4.71 billion in 2017; representing an increase of 23%.
(2) In the European market: the revenue amounted to RMB 15.2 billion, representing an increaseof 267%, of which the revenue of Haier brand achieved an increase of 12%. In terms of market share: ①Haier multi-door refrigerators gained a market share of over 30% in many Western European countries.②During 2019, the market share of Haier and Candy dual-brand washing machine sales volume in theEuropean market has reached 13.5%, ranking No.2 in the industry; the market share of dual-brand tumbledryer in the European market reached 12.1%, ranking TOP 5.
①Efforts were continuously made to launch products with leading technology to the market, suchas intelligent products like Rapido smart washing machines, smart refrigerators, Super Drum largefront-loading washing machines, etc., and efforts would be made to gradually expand to the ecosystem ofwashing scenarios. ②Adherence to the high-end brand creation strategy was observed. During thereporting period, Haier brand had 350 high-end brand stores in Europe. The average product price
030 2019AnnualReportofHaierSmartHomeCo.,Ltd.
continued to rise. The average price index of Haier refrigerators in 2019 was 121, representing an
increase of 15% over 2018; the average price index of Haier washing machines was 100, representing an
increase of 13.6% over 2018. ③The business integration with Candy was smoothly carried out, with an
aim to achieve the synergy effects that one plus one would be greater than the mere sum. For instance,
Haier UK and Hoover as a high-end brand under Candy improved service efficiency for engineers
through service integration. The on-site timeliness would be increased by 50% year-on-year and the costs
would be decreased by 60%. All those were to guarantee the implementation of the high-end brand
strategy of Haier UK.
(3) In the South Asia market: the revenue amounted to RMB 6.3 billion, representing an increaseof 6%.
In Indian market: revenue growth rate exceeded 20% and the market share reached 8.2% in 2019,ranking top four in the industry, and its gap with TOP3 was continuously narrowed. ①Washingmachines with BM ‘no-need-to bow (不弯腰)’ glass door, partition washing functions andvariable-frequency direct-drive technology, smart air conditioner with air purification functionstrengthened the market leading position ahead; ②Smart scenario leadership: The number of smartcampus laundry network was over 120; efforts were made to promote the application of APP control andvoice interaction on the product end to enhance the experience of smart scenarios.
In Pakistan market: In terms of local currency, the revenue increased by more than 20% as RMBrevenue performance was affected by the substantial depreciation of local exchange rate. The marketshare of refrigerators, household freezers, air conditioners and washing machines ranked No.1. ①Effortswere gradually made to improve the high-/middle-/low-end lineups to better meet the needs of differentconsumer groups. The industrial leading products such as the air purification-integrated conditioners andone-button automatic washing machines were launched. ②The number of sales outlets increased bymore than 20%, achieving full coverage in first-/second-tier cities, and the proportion of Haier franchisedstores continued to increase; in October 2019, the first smart home appliance experience store was builtin Pakistan, which promoted the transformation of smart scenarios at retail terminal.
(4) In the Southeast Asia market: the revenue amounted to RMB 3.7 billion, representing anincrease of 16%. ①T-door and side-by-side refrigerators, smart self-cleaning air-conditioners, twindrum washing machine, and 525 big inner tube washing machine were introduced to optimize thestructure. ②The implementation of smart model home showroom promoted the standardization of smarthome experience display and the transformation to mid-to-high end brands.
(5) In the Australia and New Zealand markets: the revenue amounted to RMB 5.4 billion,representing an increase of 5.8% against the trend. Under the setting of the overall decline of theAustralian and New Zealand home appliance industry, the Company accelerated the implementation ofFPA+Haier dual-brand strategy: high-end FPA 7-9 series products grew by more than 30%, and Haier’sbranded 500-600 high-end products increased by more than 50%. The Company promoted the
031 2019AnnualReportofHaierSmartHomeCo.,Ltd.
construction of scenario brand display area and created high-end retailing experience to achieve high-end
display and sales of complete sets.
(6) In the Japanese market: the revenue amounted to RMB 3.2 billion, representing an increase of10%. The year 2019 was the year of breakthrough for brand creation in Japan. Efforts would becontinued to differentiate high-end transformation, achieve breakthroughs in new categories, andenhance brand competitiveness: refrigerators would be launched as the ultra-thin ultra-big refrigerators ina differentiated and innovative way, which achieved doubling of share for the ultra-large products; GTWwashing and drying machine series has achieved a three-fold growth; the share of horizontal refrigeratoriterations and upgrades ranked No.1; the community washing ecology continued to lead the market, andthe business model made a breakthrough.
(7) In other regions: ①In the Middle East and Africa markets: the Company launched the retailterminal transformation from the direct export trade to local brand creation and outlets establishment.The revenue from those markets increased by 15%, of which in the Egyptian market, construction of asupply chain that integrated production and sales and radiated the surrounding market has been promotedto improve the profitability of the entire process. ②In the Latin American market: Through the entireprocess of coordinated gambling, competitiveness of products and services was improved and stablegrowth was achieved by coordinated gambling throughout the process.
(IV) Full implementation of smart home eco brand strategy
Focusing on AI+IoT capacity building, creating the smart home ‘eco-cloud’, launching Haier SmartHome APP, releasing complete-sets smart home products, building up and operating the first smartscenario interactive experience center and fully enabling the online and offline implementation of thesmart scenario solutions to enhance the development of smart home ecological brand strategy and toaccelerate the transformation of ‘Replacing Products with Scenarios and Incorporating All Industries intothe Ecosystem’.
The year of 2019 was a key year for the full implementation of the Company’s smart home strategy:In March, the Company released a full set of seven brands of smart home products; in June, the Companycompleted the relevant industrial and commercial procedures of renaming into ‘Haier Smart Home’, andthe brand positioning was further clear; In September, the first smart scenario interactive experiencecenter in the industry - Haier Smart Home No.001 Experience Center - was put into operation inShanghai to create a real model of the best solutions for smart home fields in China; in December, theHaier Smart Home APP was released, with the integrate of design, construction and service full-processsolutions and in an effort to build a smart home platform for hundreds of millions of families. In 2019, atotal investment of RMB 510 million was made to the Company’s smart home platform. Furthermore,the activated volume of smart home appliances of the Company increased by 63%, the monthly activeusers of Smart Home APP increased by 350% and the monthly active users of its scenario increased by
032 2019AnnualReportofHaierSmartHomeCo.,Ltd.
142%; the sales of complete sets accounted for 27.48%, representing a year-on-year increase of 5.43 pct
pts; IoT revenue amounted to RMB 4.8 billion, representing a year-on-year increase of 68% .
1. Intensifying ‘AI + IoT’ investment to upgrade the Smart Home cloud technology platformand integrate and launch Smart Home APP. Through the massive data generated by the connectedappliance end and the user image formed by the analysis of cloud brain big data, the Company couldcustomize the differentiated scenarios based on user needs and behavior habits, and thought what was onusers’ mind to take a turn from passive control to active response. ①Having AI in place to controlthe whole house appliances. The Company has introduced high-quality technology and contentresources in the industry and used Haier smart speakers, voice-based refrigerators, voice-based washingmachines, voice-based air conditioners to build a smart home voice portal based on ‘Xiaoyou (小优)’voice assistant to control the smart appliances in the house; through the interconnection among theappliances, the Company achieved the customization of differentiated scenarios from passive response toactive response.②The Company has upgraded the big data cloud brain platform to promote activeservice of home appliances and enhance user experience. Through the analysis of data from networkedappliances, the Company could accurately understand needs from users, and released more than 70personalized and active services, and enabled the upgrade and iteration of the scenario experience, inorder to improve user stickiness and the activity of networked appliances and the APP. ③LaunchingHaier Smart Home APP and improving link interactive trading platform experience. It aggregated thefunctional modules originally scattered on multiple platforms such as U+, Shunguang (顺逛), HaierServices, and Haier.com to create a value interaction platform covering scenario experience, interaction,and iteration. Integrating ‘design, production, sales, interaction, and after-sales’ into one, the APPincluded intelligent control, complete scenario experiences (VR experience, video preview, real caseintroduction), online mall, free customized design, one-button after-sales and other functions, whichprovided users with the full-process solution and full-process care for ‘designing a home, building ahome, serving a home’. On the release day of the APP, the APP had 18 million downloads with a salevolume of RMB 116 million on the entire online platform and over 30,000 units scenario sales.
2. Fully promoting the implementation of the ‘5+7+N’ smart complete solutions in the channelsystem. ①Layout has been made for new smart home channels. The Company brought in newdistributors with design and installation capabilities in home furnishings, HVAC water, and smartfurnishings, in an effort to strengthen capacity building in front-end channels. ②A smart scenarioexperience center was set up to vividly present complete solutions. Shanghai Smart Home No.001 Storeopened on 6 September, and it has realized the transaction unit price and the maximum unit price valueleading the industry. The average transaction price of the smart home scenario solution was RMB250,000. ③Live broadcasting of new ecology for the smart home scenario: Through the livebroadcasting and the spreading on the Smart Home APP and other social media, the designers visited andinteracted with users, and displayed solutions for new community construction and old communityreconstruction on site, which was well received among the users.
033 2019AnnualReportofHaierSmartHomeCo.,Ltd.
3. Continuing the building of eco brand with initiatives such as the Internet of Clothing andthe Internet of Food. (1) Focusing on a full life cycle solution of ‘washing, caring, storing, setting up,purchasing, and recycling’ for user clothing, Haier Internet of Clothing conducted cross-boundarycooperation with different brands in 13 industries including apparel, home textile, laundry detergent,fur, etc. to set up the industrial IoT Ecological Alliance. It has been widely recognized by the industry,with a cumulative introduction of more than 5,300 eco resources. As of the end of 2019, Internet ofClothes has published GB national standards for clothing product codes and RFID tags, initiated thedevelopment of 4 international standards, and participated in the development of 10 national &international standards. (2)The Internet of Food was committed to building a safe food service solutionplatform. Based on the eating habits data generated by the smart kitchen scenarios, it providedvalue-added services such as physical examination and health monitoring, smart cooking, purchase ofsafe ingredients, and formulation of nutrition plans. In 2019, the Internet of Food has integrated reciperesources and established a visual recipe platform to achieve refined, labeled, one-button cooking, andvoice-based interactive recipe recommendation management. It has also launched the services such as therefrigerator-based dietary recommendations for 24 solar terms to meet the needs of multi-scenario reciperequirements. The Internet of Food currently has linked more than 300 resource providers of variousbrands, and has taken the lead in establishing the Internet of Food Ecological Alliance to formulate theworld’s first international standard for the Internet of Food.
(V) Smart manufacturing: Integrating advanced manufacturing with a new generation ofartificial intelligence technology to help enterprises manufacturing transform and upgrade
During the reporting period, the Company worked to transform from mass manufacturing to masscustomization in a use-oriented way and, through building the smart factory and ‘lighthouse factory’,achieve the interconnection and intelligent optimization of its ecosystem.
(1) As of December 2019, 15 smart factories have been built, 2 ‘Lighthouse factories’ for the fourthindustrial revolution, with large-scale customization system centered on users in the IoT era, and formingthe world’s leading benchmark of high-end manufacturing. (2) During the reporting period, the world’sfirst intelligent +5G smart factory was built by Haier in conjunction with, among others, China Mobileand Huawei. Through data-based simulation modeling verification, efficient production collaboration andprecise quality control, more scenario-based and intelligent IoT products, intelligent combinationsolutions and AI technology applications have been explored and practiced to optimize the productivityin production efficiency, manufacturing cost and non-warehousing rate and to achieve the self-perceptionof full-process information, self-decision of full-factor events and self-iteration of full-cycle scenarios,and strengthen the competitiveness of smart manufacturing. (3) Focusing on the goal of ‘the best overallcost, the best quality and the most perfect delivery (最优整机成本、最优质量、最完美交付)’, theproduction efficiency and comprehensive cost efficiency of factories were improved through suchmeasures as model concentration, order concentration, module concentration and layout optimization of
034 2019AnnualReportofHaierSmartHomeCo.,Ltd.
product and capacity, which provided the support of the best cost and quality for the single model’s
market competitiveness of mega-hit products. In addition, in April 2019, Shenyang Refrigerator Super
Smart Factory became one of the first batch of enterprises obtaining the Smart Manufacturing Capability
Maturity Level 4 (国家智能制造能力成熟度四级); in October, Sino-German Refrigerator Super Smart
Factory won the national smart manufacturing benchmark enterprise, becoming one of the first batch of
eight benchmark enterprises. (4) Promoting the construction of COSMOPlat industrial Internet platform,
building ‘1(main platform) + 7(module) + N(industry)’ framework system, and achieving its
cross-industry & cross-domain application. In 2019, the Company’s investment into the platform was
RMB 250 million. For the time being, the underlying platform is able to provide enterprises with a
comprehensive solution of hardware and software in 60 subdivisions of 15 major industries including
architecture, ceramics, RV and agriculture.
(VI) Sticking to RenDanHeYi Model and promoting organizational reform under ecosystemmicro-community (EMC) self-driven mechanism
The EMC self-driven mechanism is the ability of the enterprise’s production and marketing nodes tocontinuously meet the changes of user’s need and to survive by realizing interconnection, synergy anditeration in a highly networked society with constantly changing supply and demand. It is the basicorganizational mechanism guarantee for the Company to keep abreast of times and create a world-classInternet of Things model. EMC organization is an integration of experience-oriented EMC andsolution-oriented EMC. The experience-oriented EMC is a community and touch point that directlyinteracts with users. It constantly interacts with users to obtain user needs in real time. Thesolution-oriented EMC refers to research, development and other nodes, which provides continuouslyiterative scenario solutions by connecting the resources of all parties. Under the same goal, theexperience-oriented EMC and solution-oriented EMC merge and compromise each other to form aself-driven ecosystem that jointly meets the user’s needs. EMC organizations can achieve self-sustainability based on the continuous segmentation of user groups and can also spontaneously emergebased on new market opportunities. It undertakes market-leading goals to ensure continuous iteration ofuser experience. This self-organization and self-driven of EMC can realize the self-adaptation that canmeet the needs of different users. Such self-adaptive non-linear network enables zero-distance integrationbetween the EMC and users and continuously improves transaction efficiency.
II. Principle operating conditions during the reporting period
Please refer to the related statement in ‘I. Discussion and analysis on operations’ of this section.(I) Analysis of principal business
1. Table of movement analysis on the related items in income statement and cash flow statement
Unit and Currency: RMB
Currentperiod Corresponding Change(%)
Items periodoflastyear
Operatingrevenue 200,761,983,256.57 184,108,481,959.27 9.05
035 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Operatingcost 140,868,398,722.26 130,455,086,874.95 7.98
Sellingexpenses 33,682,126,291.31 28,923,144,934.04 16.45
Administrativeexpenses 10,113,263,329.25 8,405,151,809.85 20.32
R&Dexpenses 6,266,936,518.17 5,104,647,278.53 22.77
Financialexpenses 893,017,558.86 931,591,642.48 -4.14
Netcashflowgeneratingfromoperating 15,082,630,942.73 19,142,782,481.20 -21.21
activities
Netcashflowgeneratingfrominvesting -10,961,583,141.21 -7,649,618,833.83 -43.30
activities
Netcashflowgeneratingfromfinancing -6,012,963,226.41 -10,501,977,971.46 42.74
activities
Otherincome 1,282,213,029.53 932,261,059.52 37.54
Investmentincome 5,479,539,484.34 1,924,571,212.54 184.71
Gainsfromchangeinfairvalue 76,716,967.53 -145,191,723.49 152.84
Lossoncreditimpairment -150,370,315.60 -99,632,377.38 -50.93
Gainsfromdisposalofassets 485,727,628.01 267,752,434.20 81.41
Reasons analysis of changes in indicators that change significantly:
1) Other income increased by 37.54% compared to the corresponding period, which mainly resulted
from increase of government grants in the current period;
2) Investment income increased by 184.71% compared to the corresponding period, which mainly
resulted from change in equity of Haier Electrics’s subsidiaries;
3) Gains and losses from change in fair value increased by 152.84% compared to the corresponding
period, which mainly resulted from changes in fair value of the forward foreign exchange trading
contracts in the current period;
4) Loss on credit impairment increased by 50.93% compared to the corresponding period, which
mainly resulted from acquisition of Candy;
5) Gains from disposal of assets increased by 81.41% compared to the corresponding period, which
mainly resulted from the growth of gains on disposal assets by subsidiaries.
2. Analysis of income and cost
□Applicable √Not Applicable
(1). Principle operating activities by sectors, products and regions
Unit and Currency: RMB 0’000
Principleoperatingactivitiesbyproducts
Gross Operating Operating Gross
Operatin Operati profit revenue cost profit
By products g ng margi increased/decrea increased/decrea margin
revenue cost n(%) sedyoy sedyoy increased/decrea
(%) (%) sedyoy(%)
Air-condition 2,912,836 2,003,477 31.22 -8.32 -7.65 Decrease by 0.5
ers 0 pct pt
Refrigerators 5,843,755 3,957,685 32.27 7.54 4.59 Increase by 1.91
pct pt
Kitchen Increaseby 0.16
appliance 2,950,893 2,032,313 31.13 18.27 18.00 pctpt
036 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Waterhome Increase by 0.09
appliances 962,400 521,176 45.85 5.77 5.60 pct pt
Washing 4,471,430 3,008,254 32.72 23.29 25.51 Decrease by 1.1
machines 9 pct pt
Equipment
components Increase by 1.91
andchannel 2,805,757 2,518,049 10.25 4.47 2.30 pct pt
integrated
service
Principle operatingactivitiesbyregions
Gross Operating Operating Gross
Operatin Operati profit revenue cost profit
Byregions g ng margi increased/decrea increased/decrea margin
revenue cost n(%) sedyoy sedyoy increased/decrea
(%) (%) sedyoy(%)
Domestic 10,615,126 7,198,462 32.19 -0.43 -1.04 Increaseby0.35pct
regions pt
Foreign 9,331,943 6,842,491 26.68 21.71 18.92 Increaseby1.72pct
regions pt
Note: The total profit margin before tax in overseas in 2019 was 2.8%, representing an increase of 0.3 pct
pts.
(2). Table of production and sales analysis
√Applicable □Not Applicable
Production Sales Inventory
Main Sales increased/ volume increased/
products Unit Production volume Inventory decreased increased/de decreased
yoy creasedyoy yoy
(%) (%) (%)
Home 10,000 7,677 9,242 1,639 9.2 1.0 27.6
appliances units/set
(3). Table of cost analysis
Unit: RMB 0’000
Percentageof
Percentage Percentageof changeof
of the Amountfor theamount theamount
Amount amount the forthe forthecurrent
Bysectors Cost forthe forthe corresponding corresponding period
component current current periodoflast periodoflast comparedto
period periodin year yearintotal the
totalcosts costs(%) corresponding
(%) periodoflast
year (%)
Principal
business 11,522,904 100.00 10,566,171 100 9.05
cost
Home Raw 9,591,818 83.24 8,869,679 83.94 8.14
appliances material
industry Labor 698,271 6.06 591,570 5.60 18.04
Depreciation 208,163 1.81 175,843 1.66 18.38
Energy 62,414 0.54 61,142 0.58 2.08
Others 962,238 8.35 867,938 8.21 10.86
037 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(4). Major distributors and major suppliers
√Applicable □Not Applicable
Revenue from the top five distributors was RMB 40,264.39 million, representing 20.06% of thetotal sales for the year; among the revenue from the top five distributors, the revenue from related partieswas RMB 0 million, representing 0 % of the total sales for the year.
The purchase amount from the top five suppliers amounted to RMB 35,672.55 million, representing19.32% of the total purchase amount for the year; among the purchase amount from the top five suppliers,the purchase amount from related parties was RMB 20,120.0869 million, representing 10.90% of thetotal purchase amount for the year.
3. Expenses
□Applicable √Not Applicable
4. R&D expenditure
(1). Table of R&D expenditure
√Applicable □Not Applicable
Unit: RMB
ExpensedR&Dexpenditureforthe 6,266,936,518
currentperiod
CapitalizedR&Dexpenditureforthe 444,081,451
currentperiod
TotalR&Dexpenditure 6,711,017,969
TotalR&Dexpenditureasapercentagein 3.34
operatingrevenue(%)
NumberofR&Dpersonnel 16,679
NumberofR&Dpersonnelasa 16.72
percentageintotalemployees(%)
ProportionofcapitalizationofR&D 6.62
expenditure(%)
(2). Explanation of R&D expenditure
□Applicable √Not Applicable
5. Cash flow
√Applicable □Not Applicable
1）Net cash flow generated from investment activities increased by 43.29% compared to the
corresponding period, which mainly resulted from the expenses on acquisition of Candy.
2）Net cash flow generated from financing activities decreased by 42.74% compared to the corresponding
period, which mainly resulted from the payment of liabilities with interest and the acquisition of FPA in
the corresponding period.
(II) Major changes in profits caused by non-principal businesses
□Applicable √Not Applicable
038 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(III) Analysis of assets and liabilities
√Applicable □Not Applicable
1. Assets and liabilities
Unit: RMB
Percentag Percentag
Percentag eof eof
eof amountas changein
Amount asat amount attheend amount
the asatthe Amountasat ofthe from Explanation
Items endofthe endofthe theendof previous theendof s
period period previousperiod period previous
overtotal over periodto
assets total current
(%) assets period
(%) (%)
Mainlydue
to the
decreasein
Financial short-term
assets held 308,135,007.05 0.16 1,775,648,387.76 1.06 -82.65 wealth
for trading management
productsin
thecurrent
period
Mainlydue
tothe
expiration
ofthe
Derivative forward
financial 19,158,132.45 0.01 96,723,164.37 0.06 -80.19 foreign
assets exchange
trading
contactsin
thecurrent
period
Mainly due
to the
Prepayments 1,272,921,546.72 0.68 594,462,998.04 0.35 114.13 increase in
prepayment
to bulk
materials
Mainlydue
toCandy
Other 2,163,517,802.50 1.15 1,656,056,557.69 0.99 30.64 acquired
receivables inthe
current
period
Mainly due
to the
completion
Assetsheld 144,091,213.39 0.09 -100.00 of disposal
for sale of
Shengfeng
Logistics, a
subsidiary
039 2019AnnualReportofHaierSmartHomeCo.,Ltd.
of Haier
Electrics
Mainly due
to Candy
Other current acquired and
assets 6,985,966,115.46 3.73 5,079,674,706.45 3.02 37.53 the increase
inthewealth
management
products
Mainly due
to the
Long-term changes in
equity 20,460,763,915.68 10.92 13,993,750,238.52 8.33 46.21 equity of
investment Haier
Electrics’s
subsidiaries
Mainly due
totransferof
Construction 2,391,364,659.97 1.28 3,873,648,086.10 2.30 -38.27 construction
inprogress in progress
to fixed
assets
Mainly due
to the
right-of-use
Right-of–use 2,755,066,601.59 1.47 100.00 assets
assets recognized
under the
new lease
standards
Mainly due
to the
Development transfer into
cost 193,285,777.10 0.10 538,382,288.33 0.32 -64.10 intangible
assets in the
current
period
Mainly due
to the
increase of
Long-term expenditures
prepaid 437,586,912.58 0.23 231,512,313.15 0.14 89.01 that the
expenses benefit
period more
than one
year
Mainly due
to the
Short-term 8,585,049,237.18 4.58 6,298,504,892.57 3.75 36.30 expenditures
borrowings of
acquisition
Candy
Mainly due
Financial to the
liabilities 42,799,173.35 0.02 218,748,280.33 0.13 -80.43 termination
held forsale of forward
foreign
040 2019AnnualReportofHaierSmartHomeCo.,Ltd.
exchange
Derivative Mainly due
financial 99,548,853.97 0.05 35,603,754.54 0.02 179.60 to Candy
liabilities acquired
Mainly due
to the
Receiptsin completion
advance 14,681,466.58 0.01 -100.00 of the
contracts in
the previous
period
Mainly due
to the
completion
of disposal
Liabilities 32,362,267.88 0.02 -100.00 of
held forsale Shengfeng
Logistics, a
subsidiary
of Haier
Electrics
Mainly due
to the some
long-term
Non-current borrowings
liabilitiesdue will due
within one 7,317,138,918.02 3.90 4,655,206,739.98 2.77 57.18 with one
year year and
Candy
acquired in
the current
period
Mainly due
to the lease
Lease liabilities
liabilities 1,980,271,767.35 1.06 100.00 recognized
under the
new lease
standards
Mainly due
to the
Long-term 142,342,718.45 0.08 106,763,243.99 0.06 33.33 increase in
payables Long-term
payable of
subsidiaries
Mainly due
to Candy
acquired in
Deferred current
incometax 1,154,413,295.72 0.62 405,343,787.76 0.24 184.80 period and
liabilities the changes
in equity of
Haier
Electrics’s
subsidiaries
Other 70,071,490.03 0.04 1,823,866,693.93 1.09 -96.16 Mainly due
non-current to the
041 2019AnnualReportofHaierSmartHomeCo.,Ltd.
liabilities disposal of
long-term
equity
investment
of
Shengfeng
Logistics, a
subsidiary
of Haier
Electrics
Mainly due
to the
Other equity conversion
instruments 431,424,524.07 0.23 904,485,788.71 0.54 -52.30 of
Company’s
convertible
bond
Mainly due
to the
Capital conversion
reserve 4,435,890,845.47 2.37 2,451,667,057.65 1.46 80.93 of
Company’s
convertible
bond
Mainly due
Other to Candy
comprehensi 1,317,988,619.66 0.70 772,632,347.35 0.46 70.58 acquired in
ve income the current
period
Other explanations:
Nil.
2. Restrictions on major assets as of the end of reporting period
□Applicable √Not Applicable
3. Other explanations
□Applicable √Not Applicable
(IV) Analysis of industry operating information
□Applicable √Not Applicable
(V) Analysis of investment
1. Overall analysis on external equity investment
√Applicable □Not Applicable
During the reporting period, investments in external significant equities of the Company amountedto RMB 4.879 billion.
Nameof Major Percentageofthe Amountinvested
investees operating equityinterestof Remark (RMB100
activities investees(%) million)
Candy Production For details, please refer to the
S.p.A and sale of 100 Announcement on the Completion 38.05
(Note) home of Acquiring 100% Shares of
appliances Italian Company Candy by
042 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Qingdao Haier Co., Ltd. disclosed
on 29 September 2018 as well as
relevant announcement of the
Board.
Qingdao Production For details, please refer to the
HSW and sales Announcement on Connected
Water of water Transaction of Planning to
Appliance purification Conduct Equity Replacement by
Co., Ltd. equipment 51 Holding Subsidiary and Haier 10.74
(青岛海 Electronics International Co., Ltd.
施水设备 of Qingdao Haier Co., Ltd.
有 限 公 dwieslclloassedreloenva3n1taAnnuoguunstce2m0e1n8toasf
司) theBoard.
Notes:
(1) The payment amount of the transaction is in Euros, and the estimated exchange rate for the
investment amount is calculated based on the average middle RMB exchange rate in the inter-bank
foreign exchange market on 28 September 2018 as announced by the People’s Bank of China, which
is EUR 1 for RMB 8.0111 when the aforementioned announcement was disclosed.(2) The completion time of the asset delivery of the aforementioned transactions was within the
reporting period.(1) Significant equity investment
√ Applicable?Not Applicable
Please refer to the content in ‘1. Overall analysis on external equity investment’ as set out above.(2) Significant non-equity investment
? Applicable √Not Applicable(3) Financial assets measured at fair value
√ Applicable?Not Applicable
Unit and Currency: RMB
Financialassets Initial Sourceof Current Investment Changesin
measuredat investment funds purchase/ income fairvalue
fairvalue cost sale during during
duringthe thereporting thereporting
reporting period period
period
Bankof Self-owned
Communications 1,803,769.50 408,675.60 -217,960.32
(601328)
BAILIAN 154,770.00 Self-owned 20,875.64
(600827)
Eastsoft(300183) 18,713,562.84 Self-owned 2,243,438.82
Wealth Self-owned
management 459,979,959.34 -1,426,330,128.03 134,291,882.24 19,675,848.00
products
Interestrateswap Self-owned -71,220,195.22
agreement
Forward Self-owned 13,135,571.70
commodity
043 2019AnnualReportofHaierSmartHomeCo.,Ltd.
contract
Forwardforeign Self-owned 36,725,976.17 -11,219,155.59
Exchangecontract
Other derivative Self-owned
financial 89,250,000.00 -18,461,429.39
instruments
Others 1,469,953,570.07 Self-owned 27,514,470.73 38,724,617.68 -20,126,508.02
Total 2,039,855,631.75 -1,398,815,657.30 210,151,151.69 -86,169,514.38
Note: As of 31 December 2019, the aggregate balance of foreign exchange derivative transactionamounted to approximately US$ 2.1 billion
(VI) Sale of material assets and equity
√ Applicable?Not Applicable
(1) Capital increase by COSMOPlat: Haier COSMOPlat IOT Ecosystem Technology Co., Ltd. (海尔卡奥斯物联生态科技有限公司) (hereinafter referred to as ‘COSMOPlat ’), the subsidiary of theCompany proposed to acquire the smart power & energy segment held by Haier Group Corporation(hereinafter referred to as ‘Haier Group’) at a consideration of RMB 375,540,417 by way of privateplacement of registered capital of RMB 74,434,124 to Haier Group, including the 95% equity interests inQingdao Haier Energy & Power Co., Ltd., the 97.57% equity interests in Qingdao Economy andTechnology Development Zone Haier Energy & Power Co., Ltd., the 95.57% equity interests in HefeiHaier Energy & Power Co., Ltd., and the 80% equity interests in Dalian Haier Energy & Power Co., Ltd.(collectively, the ‘Target Energy & Power Equity’) ; in order to enhance its financial strength andfacilitate the promotion of industrial internet ecological platform; COSMOPlat accepts that the PrivateEquity Fund intended to be established by Qingdao HaizhiHuiying Equity Investment Management Co.,Ltd. subscribes for the newly-increased registered capital of RMB 67,827,236 of COSMOPlat throughcapital contribution of RMB 342,206,865 in cash (collectively, the ‘Transaction’). The total amount ofthe Transaction is RMB 717,747,282. The pricing of the Transaction is based on the valuation reportissued by Chung RuiWorldunion Assets Appraisal (Beijing) Co., Ltd. (中瑞世联资产评估（北京）有限公司), which is qualified for carrying out businesses related to securities and futures, and is deemed fairas negotiated among the relevant parties. Upon completion of the Transaction, COSMOPlat will beowned by Haier Group as to 6.40% and the Private Equity Fund will held 5.83% equity in COSMOPlat.
For details of above-mentioned matters, please refer to the Announcement on Acquisition of Assetswith Newly-increased Registered Capital and Introduction of Investors by Controlled Subsidiary andRelated-Party Transaction of Haier Smart Home Co., Ltd. published by the Company on 3 July 2019 andother relevant contents disclosed on the same day.
(2) Asset swap between logistics and water home appliances: In order to further clarify thepositioning of the ‘water home appliance + health home platform’ of the Company’s holding subsidiaryHaier Electronic Appliances’ listing platform, optimize asset portfolio of Haier Smart Home and enhancethe Company’s long-term development potential, the Company strives to achieve strategic synergythrough the integration of the acquired water purifier business and water heater business, etc. and to
044 2019AnnualReportofHaierSmartHomeCo.,Ltd.
realize optimization and efficient use of resources by disposing logistics business, thereby improving
overall operating efficiency. On 30 August 2018, Guanmei Company, a subsidiary of Haier Electronics,
entered into Asset Swap Agreement with Haier Electric Appliances International Co., Ltd., pursuant to
which, Guanmei Company intended to replace the 55% equity interests of Bingji (Shanghai) Enterprise
Management Company Limited (冰戟（上海）企业管理有限公司) held by it with the 51% equity
interests of Qingdao HSW Water Appliance Co., Ltd. held by Haier Electric Appliances International Co.,
Ltd.. The price of the aforesaid transaction was based on the appraisal results of the appraisal agency and
the assets acquired and disposed were in equal amounts without involving any shortfall that needs to be
supplemented. The asset replacement was completed on 26 July 2019.
For details of above-mentioned matters, please refer to the Announcement on ConnectedTransaction of Planning to Conduct Equity Replacement by Holding Subsidiary and Haier ElectronicsInternational Co., Ltd. of Qingdao Haier Co., Ltd. disclosed by the Company on 31 August 2018 as wellas other relevant information disclosed on the same date, the Company’s 2019 interim report and otherinformation disclosed on 31 August 2019.
(VII) Analysis on major subsidiaries and Investees
√ Applicable?Not Applicable
Unit and currency: RMB 0’000
Name ofthe Scopeofbusiness Totalassets Netassets Netprofit
company
HaierElectronics Productionand
GroupCo.,Ltd. saleofhome 4,977,935 2,940,535 739,358
appliances
HaierUS Investment
APPLIANCE holding 4,702,215 2,270,394 210,251
SOLUTIONS,INC
Remark: The financial data of Haier Electronics Group Co., Ltd. is determined in accordance with the
Chinese Accounting Standards and the accounting policies of the Company.
(VIII) Structured entities controlled by the Company
□Applicable √Not ApplicableIII. Discussion and analysis on the Company’s future development(I) Setup and trend of the industry
√ Applicable?Not Applicable
For details, please refer to the relevant contents of ‘SECTION III SUMMARY OF THECOMPANY’S BUSINESS’ in this report.
(II) Development strategies
√ Applicable?Not Applicable
After more than 30 years of development and five strategic development stages of famous brandstrategy, diversification strategy, internationalization strategy, globalization strategy and networking
045 2019AnnualReportofHaierSmartHomeCo.,Ltd.
strategy, the Company has become the world’s leading home appliance company. With the deepening of
the global synergy system construction and continuous optimization of efficiency, the market share and
operating efficiency are expected to further increase. With entering into the sixth strategic stage, which
was a new stage of strategic development of ecological brand, the Company will focus on leading smart
home scenario solutions, committing to building a win-win ecological platform through co-creation with
users and customizing the best experience for a better life.
(III) Business plan
√ Applicable?Not Applicable
The new novel coronavirus epidemic in 2020 will impact domestic and foreign market demand andincrease uncontrollable factors in business operations. Facing a highly complex external environment, theCompany will leverage its advantages in product leadership, multi-brand layout, efficient retail andcombination of global and local operations and strive to turn the risks and challenges into businessdevelopment opportunities, continue to increase its global market share and expand its industry-leadingsuperiority. The Company will focus on providing smart home scenario solutions to users, and build asmart home ecosystem centered on scenarios and user interaction and iteration to promote theCompany’s IoT smart home platform ecosystem transformation.
1. Domestic market. Efforts will be made to promote business retail transformation and continue tobuild an efficient platform. (1) The entry point will be with the nationwide implementation of uniformwarehousing and distribution and the model copy of the uniform distribution model to promote thetransformation and implementation of the retail system; (2) A transparent, data-based and unifiedhigh-efficiency distributor service platform will be established to enhance user experience and distributorexperience; (3) The transformation of products, marketing, services, engineering and other strategies willbe advanced to accelerate online channel construction, and to continuously increase the market sharethrough online and offline sales; and (4) Efforts will be made to accelerate the front-end channel layoutand capacity building, promote the implementation of the ‘5+7+N’ smart home solutions and createbusiness growth.
2. Overseas market. The Company will firmly advance toward the strategic direction ofbrand-leading, high-end transformation, and focus on profitability development with scale advantages,continue to upgrade the ‘smart, healthy, energy-saving, and user-friendly’ global high-end leadingproducts, promote retail terminal transformation and upgrading, and achieve sustainable development ofoverseas businesses through the globalized information sharing platforms, digital precise marketing andthe efficient operating system.
3. Smart Home Platform. With the Smart Home APP as the core entry and the Smart Home cloudbrain as the brain for data analysis, and through full-scenario interconnection of ‘big networkedappliances + small networked appliance + ecological hardware’ and the ‘distributed interactiveexperience where Smart Home APP, voice systems and smart multi-screen functions are everywhere’
046 2019AnnualReportofHaierSmartHomeCo.,Ltd.
and the real-time decision making capability of the back end system to achieve ‘connected intelligence,
interactive intelligence and decision intelligence’. User scenarios experience will be iterated from three
directions of ‘multi-dimensional perception, personalized customization, and active service’ to enable the
‘5+7+N’ smart home scenario experience and build a digital home based on ‘clothing, food, housing,
transportation, entertainment, health and safety’ and care for each family member from the details.
4. Smart manufacturing. To continuously satisfy the best user experience by deepening theintegration and implementation of AI+5G technology& mode in production line and continuouslyupgrading the capacity of interconnectivity, digital insight and intelligent optimization of the entireecosystem with factories as the core. A scheduling and decision-making system has been established forproduction resource with cost linkage of the whole process to improve the operation efficiency of thewhole process, and improve the operation performance of various categories.
(IV) Potential risks of the Company
√ Applicable?Not Applicable
1. Risk of soft demand due to a slowdown in macro-economic growth. As white homeappliance products fall into the category of durable consumer electronic products, the income leveland expectation on future income growth will have an effect on the purchase of white home appliance.In the event of a slowdown in the macro economic growth, which will decrease the purchasing powerof consumers, growth of the industry will be adversely affected. In addition, uncertainties from thereal estate market will have some negative effect on market demand, which will in turn have someindirect effect on terminal demands for home appliance products.
2. Price war risk caused by intensifying industry competition. The industry of white goodsproducts has intense competition with a high homogeneity of products. In recent years, the industry hasshown a trend of increasing concentration. In addition, the increase of industry inventory caused byimbalance between supply and demand in individual sub-industries may lead to price wars and otherrisks.
3. Risk of price fluctuation of raw materials. The Company’s products and core componentsare mainly made of metal raw materials such as steel, aluminum and copper, as well as plastics,foaming materials and other bulk raw materials. The potential increase of prices of raw materials maypose a certain pressure on the Company’s production and operation.
4. Operating risk in overseas market. With the stable development of business globalization,the Company has set up several production bases, research and development centers and marketingcenters in a number of countries around the world, leading to the continuous rise of overseas business.As the overseas market is subject to the impact of local political and economic situation, legal systemand supervisory system, significant changes of such factors would pose risks to the Company’soperation locally. Under the influence of global trade protectionism, the emergence of a series ofproblems, such as superpower games, trade frictions, tariff barriers, foreign exchange fluctuations,together with the complexity of global politics and economy, will increase the international trade cost,
047 2019AnnualReportofHaierSmartHomeCo.,Ltd.
labor cost and foreign exchange transaction cost, as well as the uncertainty of the Company’s overseas
operations.
5. Risk of fluctuation in foreign currency exchange rate. With the deepening of theCompany’s global layout, the import and export of Company’s products involve the exchange offoreign currencies such as US dollars, Euro and Japanese yen. If the exchange rate of relevantcurrencies fluctuates, the Company’s financial situation may be influenced to some extent and itsfinancial costs may be increased.
6. Risk of policy changes. The industry of home appliances is closely related to the consumergoods market and real estate market. The changes in macroeconomic policy, consumption investmentpolicy, real estate policy and other relevant laws and regulations will influence distributor demands ofproducts, and may influence sales of the Company’s products.
7. Risk of the epidemic. The new novel coronavirus epidemic has brought impact on consumerdemand and consumer demand for home appliances, which in turn will affect the Company’s productsales.
(V) Other
√ Applicable?Not Applicable
Future capital expenditure plan: Focuses on investments in global supply chain layout and theconstruction of smart factories, the construction of the smart home living platform, alternation to theparks and other areas. The Company will actively seize opportunities for external development andpromote the Company’s leapfrog development in related industries and regions. Investment funds will befinanced through the Company’s own funds and equity financing, etc.
IV. Explanation of circumstances and reasons for non-disclosure by the Company in
consideration of inapplicable regulations, state secrets and commercial secretes
□Applicable √Not Applicable
048 2019AnnualReportofHaierSmartHomeCo.,Ltd.
SECTION V SIGNIFICANT EVENTS
I. Proposal for profit distribution of ordinary shares or capital reserve conversion into the
increase in share capital(I) Formulation, implementation or adjustment of the cash dividend policies
√ Applicable?Not Applicable
The Company’s 2018 profit distribution plan was passed on its 2018 Annual General Meeting heldon 18 June 2019: based on the Company’s total existing shares of 6,368,474,532 (including6,097,460,559 A shares and 271,013,973 D shares), it was proposed that the Company would distributecash dividends of RMB 3.51 (tax inclusive) per 10 shares to all shareholders, with a total expectedamount before tax of RMB 2,235,334,560.73. The plan was implemented and completed in August 2019.Details were set out in the Announcement on Implementation of Rights and Interests Distribution of Ashares for 2018 of Qingdao Haier Co., Ltd. (No: L2019-058) published by the Company on the fourmajor securities newspapers and the website of Shanghai Stock Exchange on 2 August 2018 and relevantannouncements in respect of dividend distribution of D shares published on the Company’s website andfurther publication platforms.
The Company has always applied a stable and sustainable profit distribution policy. During thereporting period, the Company strictly followed the requirements set out in the Articles of Associationand in the Shareholder Return Plan for the Next Three Years (2018-2020) of the Company. During theformulation of the profit distribution plan, the Company took full account of return for investors, thelong-term interests of the Company, overall interests of all shareholders and sustainable development ofthe Company, and continued to implement the stable dividend distribution policy to provide investors anopportunity to share the growth of value, so that investors could form the expectation of a stable return.The procedures and mechanisms for system decision-making such as Articles of Association andplanning of return of shareholders implemented by the Company were complete in compliance with lawsand regulations. The process was open and transparent while the standard and ratio of dividends wasclear. Responsibilities of independent directors were clear during the policy-making process, andindependent directors were given the opportunities to play their roles. Minority shareholders were alsogiven the opportunity to fully express their views and demands, and the legitimate interests of minorityshareholders were adequately protected.
The dividend distribution plan of 2019 of the Company: based on the total shares as at the date ofprofit distribution, it is proposed that the Company will distribute cash dividend of RMB 3.75 per 10shares (tax inclusive) with expected cash dividend not less than RMB 2,467,337,485.13. The remainingreserved profits will be mainly used for project construction, foreign investment, R&D investment anddaily operations related to the Company’s principal business and therefore to maintain sustainable andstable development and to bring more benefits for investors. The proportion of this distribution is not lessthan 30% of the net profit attributable to parent company of the Company in 2019. 100% dividend of thescheme is paid in cash.
049 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(II) Plans or Proposals for Dividends Distribution of Ordinary Shares and for Capital Reserve
Conversion into Share Capital of the Company in Recent Three Years (Including the
Reporting Period)
Unit and Currency: RMB
Percentage
of thenet
Net profit profit
Number Cash attributabletothe attributable
of dividend Number ordinary tothe
bonus per10 ofshares Amountofcash shareholdersof ordinary
Year of share shares converted dividend(tax thelisted shareholders
distribution forper (RMB) per10 inclusive) companiesinthe ofthelisted
10 (tax shares consolidated companies
shares inclusive) (share) financialstatement inthe
(share) duringtheyearof consolidated
distribution financial
statement
(%)
2019 0 3.75 0 2,467,337,485.13 8,206,247,105.96 30.07
2018 0 3.51 0 2,235,314,261.70 7,440,228,855.90 30.04
2017 0 3.42 0 2,085,311,732.63 6,925,792,321.27 30.11
(III) Share repurchased by cash and included in cash dividend
□Applicable √Not Applicable(IV) The Company made profits and the profits for distribution to the shareholders of ordinary
shares of the Parent Company was positive during the reporting period, but no cash profit
distribution plan for ordinary shares was proposed; the Company should disclose the reasons
in detail and the purpose and use plan of undistributed profits
□Applicable √Not Applicable
050 2019AnnualReportofHaierSmartHomeCo.,Ltd.
II. Performance of undertakings
(I) The undertakings made by the ultimate controllers, shareholders, related parties, acquirer as well as the Company and other relevant parties during
or up to the reporting period
√Applicable □Not Applicable
Whether
Any performed
Background Typeof Dateand deadline ina
of undertakings Covenanter Contentsofundertakings termof for timely
undertakings undertakings performance and
strict
way
During the period from September 2006 to May 2007, the Company
issued shares to Haier Group Corporation (‘Haier Group’) to purchase
the controlling equity in its four subsidiaries, namely Qingdao Haier
Air-Conditioner Electronics Co., Ltd. (青岛海尔空调电子有限公司),
Hefei Haier Air-conditioning Co., Limited (合肥海尔空调器有限公
司）, Wuhan Haier Electronics Co., Ltd. (武汉海尔电器股份有限公
Undertaking Eliminate the 27
relatedto right defects Haier Group 司), Guizhou Haier Electronics Co., Ltd. (贵州海尔电器有限公司). September
significant in land Corporation With regard to the land and property required in the operation of 2006, Yes Yes
reorganization property long-term
etc. Qingdao Haier Air-Conditioner Electronics Co., Ltd. (青岛海尔空调电
子有限公司),Hefei Haier Air-conditioning Co., Limited (合肥海尔空
调器有限公司),Wuhan Haier Electronics Co., Ltd. (武汉海尔电器股
份有限公司) (the ‘Covenantees’), Haier Group made an undertaking
(the ‘2006Undertaking’).Accordingtothecontentof2006Undertaking
and current condition of each Covenantee, Haier Group will constantly
051 2019AnnualReportofHaierSmartHomeCo.,Ltd.
assure thatCovenanteeswillleasethelandandpropertyownedbyHaier
Group for free. Haier Group will make compensation in the event that
the Covenantees suffer loss due to the unavailability of such land and
property.
Haier Group Corporation undertakes that it will assure Haier Smart
Home anditssubsidiariesoftheconstant,stableandunobstructeduseof
the leased property. In the event that Haier Smart Home or any of its
subsidiaries suffers any economic loss due to the fact that leased
property has no relevantownershipcertificate,HaierGroupCorporation
will makecompensationtoimpairedpartyinatimelyandsufficientway
and takeallreasonableandpracticablemeasurestosupporttheimpaired
Eliminate partytorecovertonormaloperationbeforetheoccurrenceofloss.Upon
Undertaking theright Haier the expiration of relevant leasing period, Haier Group Corporation will 24
relatedto defectsin Group grant or take practicable measures to assure Haier Smart Home and its December Yes Yes
refinancing land Corporation 2013,
property subsidiaries of priority to continue to lease the property at a price not long-term
andetc. higher than the rent in comparable market at that time. Haier Group
Corporation will assure Haier Smart Home and its subsidiaries of the
constant, stable, free and unobstructed use of self-built property and
land of the Group. In the event that Haier Smart Home or any of its
subsidiaries fails to continue to use self-built property according to its
own willorinoriginalwayduetothefactthatself-builtpropertyhasno
relevant ownership certificate, Haier Group Corporation will take all
reasonable and practicable measures to eliminate obstruction and
052 2019AnnualReportofHaierSmartHomeCo.,Ltd.
impact, or will support Haier Smart Home or its affected subsidiary to
obtain alternative property as soon as possible, if Haier Group
Corporation anticipates it is unable to cope with or eliminate the
external obstruction and impact with its reasonable effort. For details,
please refer to the Announcement of Qingdao Haier Co., Ltd. on the
Formation, CurrentSituationoftheDefectiveProperty,theInfluenceon
Operation of Issuer Caused by Uncertainty of Ownership, Solution for
the Defect and Guarantee Measures (L2014-005) published by the
Company on the four major securities newspapers and the website of
Shanghai StockExchangeon29March2014.
The Company undertakes that it will eliminate the property defects of
the Company and main subsidiaries within five years with reasonable
business effort since 24 December 2013, to achieve the legality and
compliance of the Company and main subsidiaries in terms of land and
property. For details, please refer to the Announcement of Qingdao
Eliminate the Haier Co., Ltd. on the Formation, Current Situation of the Defective 24
right defects Haier Smart
in land Home Co., Property,theInfluenceonOperationofIssuerCausedbyUncertaintyof D20e1c3e,mbeeirghtYes Yes
property Ltd. Ownership, Solution for the Defect and Guarantee Measures years
etc. (L2014-005) published by the Company on the four major securities
newspapers and the website of Shanghai Stock Exchange on 29 March
2014. Duringtheaforesaidperiod,theCompanyhasformulatedrelevant
performance guarantee measures, including the re-application by the
Company and its main subsidiaries to the competent government
053 2019AnnualReportofHaierSmartHomeCo.,Ltd.
department for the property ownership certificate and to procure Haier
Group Corporation to make guarantee undertakings in respect of the
defective property owned by it and its subsidiaries. As of the expiration
date, the Company has resolved the property defects of itself and its
eight major subsidiaries, while that of the other remaining five major
subsidiaries is in process. The Company will make reasonable business
efforts to resolve the property defects of these five major subsidiaries.
Because of historical issues and other reasons, the approval procedure
involved in solving some defective property problems is complicated,
including that of multiple government departments, and it takes a long
time to handle and coordinaterelated matters.Due to the aboveexternal
factors, the Company was unable to complete the above undertakings
within the original undertaking period. Therefore, after the approval of
the board meeting held by the Company on 5 November 2018 and the
general meeting held on 21 December 2018, the term of the above
undertakings was extended for three years based on the original
deadline.
Inject the assets of Haier Photoelectric to the Company or dispose such
assets through other waysaccording to the requirementsof the domestic
Other Asset Haier supervision before June 2020. For more details, please refer to the December
undertakings injection Group Announcement of Qingdao Haier Co., Ltd. on the Changes of Funding 2015 to June Yes Yes
Corporation 2020
Commitment ofHaierGroupCorporation(L2015-063)publishedonthe
four major securities newspapers and the website of Shanghai Stock
054 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Exchange on23December2015.
In August 2018,Guanmei(Shanghai)EnterpriseManagementCompany
Limited(贯美（上海）企业管理有限公司)(hereinafter referred to as
‘Guanmei’), an indirectholding subsidiaryof the Companyreplacedthe
55% equity interests of Bingji (Shanghai) Enterprise Management
CompanyLimited(冰戟（上海）企业管理有限公司)heldbyit withthe
51% equity interests of Qingdao HSW Water Appliance Co., Ltd.
(hereinafter referred to as ‘ Water Appliance ‘) held by Haier Electric
Appliances International Co., Ltd. (hereinafter referred to as ‘Haier
Profit Haier International’). In this regard, Haier International promises that the
Other forecast Electric As of 30
undertakings and Appliances cumulative actual net profit recorded by the Water Appliance in the April2021 Yes Yes
compensation International three accounting years during the profit compensation period shall not
Co.,Ltd.
be less than its cumulative forecasted net profit in the corresponding
year, otherwise Haier International shall compensate Guanmei’s results
according to the Assets Replacement Agreement. Details are set out in
the Announcement on Connected Transaction of Planning to Conduct
Equity Replacement by Holding Subsidiary and Haier Electronics
International Co., Ltd. of Qingdao Haier Co., Ltd. (L2018-047)
published by the Company on the four major securities newspapers and
the websiteofShanghaiStockExchangeon31August2018.
055 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(II) The Company’s explanation on whether the earnings estimate on assets or projects was met
and its reasons in the situation that earnings in the Company’s assets or projects is
estimated, and the period of which includes the reporting period.
□Reached □Not Reached √Not Applicable
In August 2018, Guanmei (Shanghai) Enterprise Management Company Limited (贯美（上海）企业管理有限公司) (hereinafter referred to as ‘Guanmei’), an indirect holding subsidiary of the Companyreplaced the 55% equity interests of Bingji (Shanghai) Enterprise Management Company Limited (冰戟（上海）企业管理有限公司) held by it with the 51% equity interests of Qingdao HSW WaterAppliance Co., Ltd. (hereinafter referred to as ‘Water Appliance’) held by Haier Electric AppliancesInternational Co., Ltd. (hereinafter referred to as ‘Haier International’). In this regard, HaierInternational promises that the cumulative actual net profit recorded by the Water Appliance in the threeaccounting years during the profit compensation period (i.e. 2018 to 2020) shall not be less than itscumulative forecasted net profit in the corresponding year, otherwise Haier International shallcompensate Guanmei’s results according to the Assets Replacement Agreement. Details are set out in theAnnouncement on Connected Transaction of Planning to Conduct Equity Replacement by HoldingSubsidiary and Haier Electronics International Co., Ltd. of Qingdao Haier Co., Ltd. (L2018-047)published by the Company on the four major securities newspapers and the website of Shanghai StockExchange on 31 August 2018.
As of the date of this report, the profit compensation measurement period (2018 to 2020) agreed inthe aforementioned agreement of the asset replacement project has not expired, so the Company willmake corresponding disclosures as required after the completion of such period.
(III) Completion of performance commitments and their impact on the impairment test of
goodwill
□Applicable √Not ApplicableIII. Misappropriation and repayment plan of funds during the reporting period
□Applicable √Not ApplicableIV. Explanation of the Company on the ‘non-standard audit report’ issued by the accounting firm
□Applicable √Not ApplicableV. Explanation of the Company’s analysis on reasons and effects of changes in accounting
policies and accounting estimates or correction of significant accounting errors(I) Explanation of the Company’s analysis on reasons and effects of changes in accounting
policies and accounting estimates
√Applicable □Not Applicable
056 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Ministry of Finance promulgated Accounting Standard for Business Enterprises No. 21 —Leases inDecember 2018, and promulgated the Notice of the Ministry of Finance on Revising and Issuing theFormat of Financial Statements of General Enterprises for 2019 (《财政部关于修订印发2019年度一般企业财务报表格式的通知》) (Cai Kuai (2019) No.6) in May 2019. The Company and its subsidiarieshave started to implement the above amendments to the Accounting Standards for Business Enterprisesand the Notice, and adjusted the relevant contents of accounting policies and financial statementsaccordingly since 1 January 2019.
The Company and its subsidiaries prepared the 2019 financial statements in accordance with thefinancial statements format specified in Cai Kuai (2019) No. 6, and changed the presentation of relevantfinancial statements using the retrospective adjustment method.
Please refer to the relevant contents in SECTION XI ‘financial report’ of this report for the aboveadjustments in accounting policies.
(II) Explanation of the Company’s analysis on reasons and effects of correction of significant
accounting errors
□Applicable √Not Applicable(III) Communication with former accounting firm
□Applicable √Not Applicable(IV) Other explanations
□Applicable √Not ApplicableVI. Appointment and dismissal of accounting firm
Unit and Currency: RMB 0’000Current appointment
Nameofdomesticaccountingfirm HexinCertifiedPublicAccountantsLLP
Remunerationofdomesticaccountingfirm 715
Auditperiodofdomesticaccountingfirm 7
Name Remuneration
Internal control audit accounting HexinCertifiedPublicAccountantsLLP 245
firm
Sponsor ChinaInternationalCapitalCorporationLimited 0
Explanation of appointment and dismissal of accounting firm
□Applicable √Not ApplicableExplanation of change of accounting firm during the auditing period
□Applicable √Not Applicable
057 2019AnnualReportofHaierSmartHomeCo.,Ltd.
VII. Possibility of listing suspension
(I) Reasons of listing suspension
□Applicable √Not Applicable(II) Response measures to be taken by the Company
□Applicable √Not ApplicableVIII. Circumstances and reasons for listing termination
□Applicable √Not ApplicableIX. Matters relating to bankruptcy and restructuring
□Applicable √Not ApplicableX. Material litigation and arbitration matters
□Material litigation and arbitration matters during the year √No material litigation and arbitrationmatters in the reporting year
XI. Punishment on the listed company and its directors, supervisors, senior management,
controlling shareholders, ultimate controllers and acquirers and the issue of rectification
□Applicable √Not ApplicableXII. Explanation of the integrity status of the Company and its controlling shareholders and
ultimate controller during the reporting period
□Applicable √Not ApplicableXIII. The Company’s share option incentive scheme, employee shareholding plan or other
employee incentive measures and its influence(I) Matters disclosed in temporary announcements and without any subsequent progress or
change
□Applicable √Not Applicable(II) Share incentives not disclosed in temporary announcements or with subsequent progress
Share Option Incentive
□Applicable √Not Applicable
Other explanations
□Applicable √Not Applicable
Employees Shareholding Plan
058 2019AnnualReportofHaierSmartHomeCo.,Ltd.
√Applicable □Not Applicable（1）The Phase IV Employees Stock Ownership Scheme launched and completion ofbuilding position:
On 29 April 2019, the Company considered and approved relevant resolutions such as the Phase IVStock Ownership Scheme of Core Employees Stock Ownership Scheme of Qingdao Haier Co., Ltd.(Draft) and it’s Summary (《青岛海尔股份有限公司核心员工持股计划之第四期持股计划（草案）及摘要》) at the 27th meeting of the 9th session of the Board of Directors. The 635 staffs whoparticipated into the Stock Ownership Scheme are the directors (excluding independent directors),supervisors, senior management of the Company and regular employees who serve at the Company andits subsidiaries and sign employment contracts with the Company or its subsidiaries and receiveremuneration from them, together holding RMB 273 million in the fund. On 17 July 2019, the Companydisclosed the Announcement on Completion of Shares Purchase in Phase IV Stock Ownership Scheme ofCore Employees Stock Ownership Scheme of Haier Smart Home Co., Ltd. (《海尔智家股份有限公司核心员工持股计划之第四期持股计划完成股票购买公告》), and the Employees Stock OwnershipScheme has been entrusted to Industrial Securities Assets Management Co., Ltd.(兴证证券资产管理有限公司), who will establish a single asset management plan for the Phase IV Stock Ownership Schemeof Core Employees Stock Ownership Scheme of Qingdao Haier Co., Ltd. (‘Assets Management Plan’)for the management. As of 16 July 2019, the Assets Management Plan has purchased an aggregate of16,656,778 shares of the Company, representing 0.26% of the total share capitals of the Companythrough the secondary market at an average trading price of RMB 16.23 per share with a trading volumeof RMB 270,269,262.55. Shares Purchase in Employees Stock Ownership Scheme has completed andthe above purchased shares will be locked in accordance with regulations. The lock-up period is 12months from the date of this announcement, i.e. from 17 July 2019 to 16 July 2020.
（2）Partially vesting of the employee stock ownership plan (ESOP):
During the reporting period, the second vesting of the Company’s Phase II ESOPs (Draft) andSummary under Key Employee Stock Ownership Plan of Qingdao Haier Co., Ltd. (《青岛海尔股份有限公司核心员工持股计划之第二期持股计划（草案）及摘要》) (referred to as ‘Phase II ESOPs’) has beencompleted, and the conditions of the first vesting of the Company’s Phase III ESOPs (Draft) andSummary under Key Employee Stock Ownership Plan of Qingdao Haier Co., Ltd. (《青岛海尔股份有限公司核心员工持股计划之第三期持股计划（草案）及摘要》) (referred to as ‘Phase III ESOPs’) hasbeen completed. According to the Audit Report of Qingdao Haier Co., Ltd. (《青岛海尔股份有限公司审计报告》) (He Xin Shen Zi. (2019) No.000266) issued by Shandong Hexin Certified PublicAccountant LLP, the annual net profits vested in parent company shareholders with allowance fornon-recurring gains and losses in 2018 increased by 17.38% compared to 2017.
On 23 May 2019, the ESOPs Management Committee of the Company convened a meeting,determing: (1) 544 holders of Phase II ESOPs to be allocated with 12,248,613 shares according to
059 2019AnnualReportofHaierSmartHomeCo.,Ltd.
performances for the year 2018 and the results of personal assessment, the shares of the remaining
holders with unsatisfactory assessment or who resigned were suspended for allocation or adjusted for
their shares; (2) 616 holders of Phase III ESOPs to be allocated with 5,869,169 shares according to
performances for the year 2018 and the results of personal assessment, the shares of the remaining
holders with unsatisfactory assessment or who resigned were suspended for allocation or adjusted for
their shares; (3) 177,812 shares that were vested suspend before Phase I Core Employees Stock
Ownership Scheme shall also be vested this time (for details on the progress of Stock Ownership
Scheme, please refer to the Announcement in Relation to Second Quota Distribution and Equity
Allocation in Phase I Core Employees Stock Ownership Scheme of Qingdao Haier Co., Ltd. announced
by the Company on 15 December 2018). A total of 3,538,840 shares can be allocated to the directors, the
supervisors and the senior managements of the Company this time. Any change of the shares they hold
must be subject to provisions of the Rules Governing the Holding of Shares in the Company by
Directors, Supervisors and Senior Managements of Listed Companies and Changes thereof. In summary,
according to the aforementioned resolutions, the Company has completed the transfer of relevant stocks
at China Securities Depository and Clearing Corporation Shanghai Branch on 29 May 2019, with a total
of 18,295,594 shares.
Other incentives
□Applicable √Not ApplicableXIV. Significant related party transactions(I) Related party transactions from routine operation1. Matter disclosed in temporary announcements and with no subsequent progress or change
□Applicable √Not Applicable2. Matter disclosed in temporary announcements and with subsequent progress or change
√Applicable □Not Applicable
The Company made a forecast on the related-party transaction matters of the Company for the yearof 2019 at the 27th meeting of the 9th session of Board Meeting held on 29 April 2019. For details,please refer to the Announcement of Qingdao Haier Co., Ltd. regarding the Anticipation on the DailyRelated-party Transactions for 2019 and relevant announcement on the resolutions of the Boarddisclosed on 30 April 2019.
For the actual implementation of the Related-party transaction of 2019, please refer to ‘XII. Relatedparties and related-party transactions’ under section X - Financial and Accounting Report set out in thisregular report.
3. Matter not disclosed in temporary announcements
□Applicable √Not Applicable
060 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(II) Related-party transactions regarding acquisition or disposal of assets/equity
1. Matter disclosed in temporary announcements and with no subsequent progress or change
√Applicable □Not Applicable
Summary Indexfordetails
Related-partytransactionsof AcquisitionofAssets For details, please refer to the Announcement on
with Newly-increased Registered Capital and Acquisition of Assets with Newly-increased
Introduction of Investors by COSMOPLat: for Registered Capital and Introduction of Investors
details,please refer to ‘(VI) Sale of materialassets by Controlled Subsidiary and Related-Party
and equity’ of ‘Section IV Discussion and Transaction of Haier Smart Home Co., Ltd.
AnalysisonOperations’inthisreport. (L2019-049) and relevant announcements
disclosed bytheCompanyon2July2019.
Related-party transactions of assets swap between For details, please refer to the Announcement on
logistics and water home appliances: for details, Connected Transaction of Planning to Conduct
please refer to ‘(VI) Sale of material assets and Equity Replacement by Holding Subsidiary and
equity’of ‘Section IV Discussion and Analysis on Haier Electronics International Co., Ltd. of
Operations’inthisreport. Qingdao Haier Co., Ltd. disclosed by the
Company on 31 August 2018 as well as other
relevant information disclosed on the same date,
the Company’s 2019 interim report and other
information disclosedon31August2019.
2. Matters that have been disclosed in temporary announcements and with subsequent progress
or change
□ Applicable √Not applicable3. Matters not disclosed in temporary announcements
□ Applicable √Not applicable4. If performance agreement is involved, the performance achieved during the reporting period
shall be disclosed
□ Applicable √Not applicable(III) Significant related-party transactions of joint external investment1. Matters that have been disclosed in temporary announcements and with no subsequent
progress or change
□ Applicable √Not applicable2. Matters that have been disclosed in temporary announcements and with subsequent progress
or change
□ Applicable √Not applicable3. Matters not disclosed in temporary announcements
□ Applicable √Not applicable(IV) Amounts due to or from related parties1. Matters that have been disclosed in temporary announcements and with no subsequent
progress or change
□ Applicable √Not applicable
061 2019AnnualReportofHaierSmartHomeCo.,Ltd.
2. Matters that have been disclosed in temporary announcement and with subsequent progress
or change
□ Applicable √Not applicable3. Matters that haven’t been disclosed in temporary announcements
□ Applicable √Not applicable(V) Others
□ Applicable √Not applicableXV. Significant contracts and their execution(I) Trusteeship, contracting and leasing
1. Trusteeship
□ Applicable √Not applicable
During the reporting period, there was no material trusteeship. To date, the following trusteeshipshave been considered and approved on the general meeting of the Company and still within the validityperiod:
According to the Haier Group’s commitment in 2011 to further support the development ofQingdao Haier and resolve intra-industry competition to reduce related-party transactions, and given thefact that Qingdao Haier Photoelectric Co., Ltd. and its subsidiaries, who purchase of the color TVbusiness from Haier Group, are still under transformation and consolidation period and their financialperformance fails to reach the expectation of the Company. Therefore, Haier Group is unable tocomplete the transfer before the aforementioned commitment period. Haier Group intends to entrust theCompany with the operation and management of assets under custody and will pay RMB 1 millioncustodian fee to the Company each year during the period of custody.
2. Contracting
□ Applicable √Not applicable3. Leasing
□ Applicable √Not applicable(II) Guarantee
√Applicable □Not Applicable
Unit and Currency: RMB 0’000
ExternalguaranteesprovidedbytheCompany(excludingguaranteesforsubsidiaries)
Relatio Amo Date Expir Whet Whet Over Whet
nship Secu unt of Commen ation Type her her due Whether her
Guara betwee red of occurr cement date of the the amou thereisa relate Relatio
ntor nthe part guara ence dateof of guara guara guara ntof counter-gu d nship
guarant y ntee ofthe guarantee guara ntee ntee ntee the arantee party
orand guaran ntee has is guara guara
062 2019AnnualReportofHaierSmartHomeCo.,Ltd.
the tee been overd ntee ntee
listed (date fulfill ue or
compa of ed not
ny agree
ment)
Total amountofguaranteeoccurredduring
the reportingperiod(excludingguarantees
for subsidiaries)
Total balanceofguaranteeattheendofthe
reporting period(A)(excludingguarantees
for subsidiaries)
GuaranteesprovidedbytheCompanyanditssubsidiariesforsubsidiaries
Total amount of guarantees for subsidiaries 3,879,733.48
occurred duringthereportingperiod
Total balance of guaranteesfor subsidiaries 3,079,472.72
at theendofthereportingperiod(B)
Total amountofguaranteesprovidedbytheCompany(includingguaranteesforsubsidiaries)
Total guarantee(A+B) 3,079,472.72
Ratio of total amount of guarantees to net
assets oftheCompany(%)
Among which:
Amount ofguaranteesforshareholders,
ultimate controllersandtheirrelatedparties 0
(C)
Amount ofdebtguaranteesprovideddirectly
or indirectlyforthesecuredpartywith 1,445,200.19
asset-liability ratioexceeding70%(D)
The amountoftotalamountofguaranteein 685,056.74
excess of50%ofnetassets(E)
Total amountoftheabovethreeguarantees 2,130,256.93
(C +D+E)
Explanation of possibly bearing related
discharge dutyforprematureguarantees
The total amount of the aforementioned guarantees
consists oftwoparts:
1. In 2016, the Company acquired the assets of GEA at a
total considerationofUSD5.61billion,whichwassourced
from self-owned funds and loan for merger, of which, the
loan for merger in the amount of USD 3.3 billion was
applied for by Haier US Appliance Solutions, Inc., a
wholly-owned subsidiary of the Company, to China
Explanation ofguaranteestatus Development Bank Co., Ltd. The loan was fully secured
by the Company and Haier Group Corporation. The
balance of the guarantee amounted to approximatelyRMB
6.339 billion as at the end of the reporting period. The
provision of guarantee had been considered and approved
by the Board and the general meeting of shareholders of
the Company;
2. In June 2019, the resolution on the Expected Provision
of Guarantee for subsidiaries in 2019 was passed on the
2018 Annual General Meeting of the Company, according
063 2019AnnualReportofHaierSmartHomeCo.,Ltd.
to which, the Company had provided guarantee in respect
of the application for comprehensive facility made by
certain subsidiaries to financial institutions. During the
reporting period, the accumulated amount of guarantee
offered bythe Companyto subsidiarieswas approximately
RMB 29.475 billion. As of the end of the reporting period,
the balanceguaranteedwasRMB24.456billion.
(III) Entrusted others to manage cash assets
1. Entrusted wealth management
(1) Overall of entrusted wealth management
√Applicable □Not Applicable
Unit and Currency: RMB
Premature Pastdue
Type Sourcesoffunds Amount balance uncollected
amount
Principal-guaranteed
wealth management Self-owned funds 3,563,418,078 3,563,418,078 0
products and structured andraisedfunds
deposit
Overseas US dollar Self-ownedfunds 330,860,412 330,860,412 0
billsandbonds
Swapdeposit Self-ownedfunds 258,275,652 258,275,652 0
Others
√Applicable □Not Applicable
By the end of the reporting period, the balance of the Company’s entrusted wealth managementamounted to RMB 4.153 billion, including three parts: ① temporarily-idle fundraising wealthmanagement: at the end of December 2018, the Company’s proceeds for the issuance of convertiblecorporate bonds were fully landed. In order to improve the yield of temporarily-idle funds, the Companyintended to carry out cash management with the amounts not exceed RMB 1.5 billion after approved bythe Board of Directors. By the end of the reporting period, the balance of the entrusted wealthmanagement amounted to RMB 639 million; ②wealth management of the Company’s Hong Konglisted subsidiary: Haier Electronics Group Co., Ltd. (hereinafter referred to as ‘Haier Electronics’,stock code: 01169.HK), the holding subsidiary of the Company, has purchased some short-termprincipal-protected wealth management and structural deposits from the large commercial banks as anindependently operating Hong Kong listed company in order to increase the efficiency of the use of idlefunds within the authorities of the management and on the premise of safeguarding funds security. In thepurchase process, all the necessary board reports were subject to the procedures such as filling andmanagement’s review according to the regulations requirements for Hong Kong listed company, so as toensure sufficient funds for the day-to-day operations of the main business and improve the shareholders’returns. By the end of the reporting period, the balance of the entrusted wealth management amounted toRMB 3.509 billion. ③Temporary-idle funds wealth management by certain subsidiaries of the
064 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Company: In order to improve the yield of temporarily-idle funds, some subsidiaries of the company
use temporarily-idle funds for cash management within the authority of the general manager’s office
meeting. By the end of the reporting period, the balance of the entrusted wealth management amounted
to RMB 5 million.
065 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(2) Individual entrusted wealth management
√Applicable □Not Applicable
Unit and Currency: RMB
Any
futur
Whe e Amou
Commence Expiration Sour Dete Expect Actu ther plan ntof
Typeofentrusted Amountof mentdateof dateof ces Inve rmin ed al Coll appr for provisi
Trustee wealthmanagement entrustedwealth entrusted entrusted of stme ation Annualiz return gains ectio oved entru onfor
product management wealth wealth fund nt of edyield (if or n by sted impair
managemen manageme s retur any) losse due weal ment
t nt n s proc th (if
ess man any)
age
ment
Qianyuan-ZhouZhouli
QingdaoHaierRoad Open-endPrincipal
sub-branchofChina GuaranteedWealth On-deman Not
ManagementProduct 321,600,000 2019/8/14 3.00% expir YES YESConstructionBankCo., d
Ltd. （乾元-周周利开放式 ed
保本理财产品） Rais
Principalguaranteed ed Not
Qingdaobranchof wealth fund expir
BankofChinaCo.,Ltd. management-linked 120,000,000 2019/12/17 2020/5/18 s 3.50% ed YES YES
structureddepositof from
BankofChina conv
Principalguaranteed ertibl Not
Qingdaobranchof wealth e expir
BankofChinaCo.,Ltd. management-linked 120,000,000 2019/12/17 2020/5/18 bond 3.50% ed YES YES
structureddepositof s
BankofChina
Principalguaranteed Not
Qingdaobranchof wealth 40,000,000 2019/11/15 2020/5/20 3.10% expir YES YES
BankofChinaCo.,Ltd. management-CNYAQ ed
KFwealthmanagement
066 2019AnnualReportofHaierSmartHomeCo.,Ltd.
productofBankof
China
Qingdaobranchof On-deman Not
BankofChinaCo.,Ltd. Certificateofdeposit 37,418,078 2019/1/29 d 3.00% expir YES YES
ed
Self- Not
DBSBankLtd.,Hong own expir
KongBranch Bond 41,752,557 2018/7/12 2020/7/29 ed 5.12% ed YES YES
fund
s
Self- Not
DBSBankLtd.,Hong own expir
KongBranch Bond 10,059,855 2018/7/12 2020/12/16 ed 4.88% ed YES YES
fund
s
Self- Not
DBSBankLtd.,Hong own expir
KongBranch Bill 69,762,000 2018/6/12 2021/6/14 ed 3.00% ed YES YES
fund
s
Bill Self- Not
DBSBankLtd.,Hong own expir
KongBranch 69,762,000 2018/6/13 2021/6/15 ed 3.00% ed YES YES
fund
s
Bill Self- Not
DBSBankLtd.,Hong own expir
KongBranch 69,762,000 2018/6/29 2021/6/25 ed 3.00% ed YES YES
fund
s
Self- Not
DBSBankLtd.,Hong own expir
KongBranch Bill 69,762,000 2018/8/14 2021/8/6 ed 3.00% ed YES YES
fund
s
067 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Self- Not
MizuhoBank,Ltd., own expir
HongKongBranch Swapdeposit 258,275,652 2019/12/16 2020/3/16 ed 3.43% ed YES YES
fund
s
Self- Not
HaierRoadsub-branch own expir
ofConstructionBank Wealthmanagement 225,000,000.00 2019/12/26 2020/6/23 ed 3.25% ed YES YES
fund
s
Self- Not
Qingdaobranchof own expir
BankofChina Wealthmanagement 441,000,000.00 2019/12/24 2020/6/22 ed 3.60% ed YES YES
fund
s
Self- Not
Qingdaobranchof own expir
Bankof Wealthmanagement 296,000,000.00 2019/12/23 2020/6/29 ed 3.70% ed YES YES
Communications fund
s
Self- Not
Qingdaobranchof own expir
Bankof Wealthmanagement 192,200,000.00 2019/4/26 2020/1/23 ed 3.80% ed YES YES
Communications fund
s
Self- Not
Qingdaobranchof own expir
ChinaMinshengBank Wealthmanagement 100,000,000.00 2019/11/15 2020/5/15 ed 3.70% ed YES YES
fund
s
Self- Not
Qingdaobranchof own expir
ChinaMinshengBank Wealthmanagement 109,700,000.00 2019/11/21 2020/5/21 ed 3.70% ed YES YES
fund
s
068 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Self- Not
Qingdaobranchof own expir
BankofChina Wealthmanagement 104,000,000.00 2019/12/27 2020/6/24 ed 3.60% ed YES YES
fund
s
Available Self- Not
HaierRoadsub-branch every own 2.1%~3. expir
ofConstructionBank Wealthmanagement 15,000,000.00 2019/3/13 Wednesda ed 4% ed YES YES
y fund
s
Available Self- Not
HaierRoadsub-branch every own 2.1%~3. expir
ofConstructionBank Wealthmanagement 70,000,000.00 2019/3/20 Wednesda ed 4% ed YES YES
y fund
s
Available Self- Not
HaierRoadsub-branch every own 2.1%~3. expir
ofConstructionBank Wealthmanagement 17,000,000.00 2019/4/17 Wednesda ed 4% ed YES YES
y fund
s
Available Self- Not
HaierRoadsub-branch every own 2.1%~3. expir
ofConstructionBank Wealthmanagement 10,000,000.00 2019/6/26 Wednesda ed 4% ed YES YES
y fund
s
Available Self- Not
HaierRoadsub-branch every own 2.1%~3. expir
ofConstructionBank Wealthmanagement 30,000,000.00 2019/7/31 Wednesda ed 4% ed YES YES
y fund
s
Self- Not
Qingdaobranchof own expir
ChinaZheshangBank Wealthmanagement 210,000,000.00 2019/9/20 2020/9/20 ed 4.30% ed YES YES
fund
s
069 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Qingdaobranchof Self- Not
ChinaZheshangBank own expir
Wealthmanagement 100,000,000.00 2019/9/25 2020/9/25 ed 4.30% ed YES YES
fund
s
Qingdaobranchof Self- Not
ChinaZheshangBank own expir
Wealthmanagement 350,000,000.00 2019/10/25 2020/4/25 ed 4.00% ed YES YES
fund
s
Qingdaobranchof Self- Not
ChinaZheshangBank own expir
Wealthmanagement 250,000,000.00 2019/10/29 2020/4/29 ed 4.00% ed YES YES
fund
s
Self- Not
Qingdaobranchof own expir
ChinaMinshengBank Wealthmanagement 400,000,000.00 2019/10/25 2020/4/24 ed 3.70% ed YES YES
fund
s
Principal-unguarantee Self- Based Not
dandfloatingproceeds On-deman own on expir
ConstructionBank wealthmanagement 4,500,000.0 2019/7/3 d ed investme ed YES YES
products fund ntdays
s
070 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Others
□Applicable √Not Applicable(3) Provisions for impairment of entrusted wealth management
□Applicable √Not Applicable2. Entrusted loans
(1) Overall entrusted loans
□Applicable √Not ApplicableOthers
□Applicable √Not Applicable(2) Individual entrusted loans
□Applicable √Not ApplicableOthers
□Applicable √Not Applicable(3) Provisions for impairment of entrusted loans
□Applicable √Not Applicable3. Others
√Applicable □Not Applicable
Unit and Currency: RMB 0’000
Name Amou Closing
of Initial ntof Amoun balance
party Type investmen purcha tof Impai of
operat of tamount Comme Opening se disposa rment Closing investme Actualprofit
ing deriva in ncement Expirati balanceof during lduring provi balanceof nt orlossforthe
the tives derivative date ondate investment the the sion investment amount reporting
deriva invest s amount reporti reporti (if amount asa period
tives ment investmen ng ng any) percenta
invest t period period geofthe
ment netasset
Forwa
rd
Bank excha 1.212.85 2019/1/ 2019/12 1,212,85 1,062,613 11,246
nge 4 1 /31 4
contra
ct
Interes
t
Bank rate/ex 1.938.854 2016/5/ 2021/6/ 1,938,854 428,824 4,747
chang 1 2
e rate
swap
Source of funds for Entirelyself-ownedfundsoftheCompany
derivativeinvestment
Market prices or fair value
change of invested Changeinmarketpriceorproductfairvalue:
derivatives during the 1.ProfitorlossofforeignexchangeforwardcontractduringthereportingperiodwasRMB112.46million;
reporting period, including 2.Profitorlossofinterestrate/exchangerateduringtheswapreportingperiodwasRMB47.47million.
the specific methods, Specific methods, assumptions and parameters: quotes for swaps and forwards of foreign exchange and
assumptions and parameters interestrateprovidedbyfinancialinstitutes.
adoptedinthe analysisofthe
fairvaluesofthederivatives
071 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(IV) Other Major Contracts
□Applicable √Not ApplicableXVI. Other major events
√Applicable □Not Applicable
During the Reporting Period, the Company disclosed the following information and all theinformation will be disclosed on SSE (www.sse.com.cn):
Subjectmatter NameofNewspaperandPage Dateofpublication
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B005)
AnnouncementonSigningAgreementson ShanghaiSecuritiesNews(49) 3January2019
SupervisionoverSavingofSpecialAccountfor SecuritiesTimes(B24)
RaisedFundsamongThreeParties（L2019-001） SecurityDaily(D25)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B005)
AnnouncementonDeliveryCompletionof ShanghaiSecuritiesNews(73) 8January2019
Purchasing100%EquityofItalyCandyS.p.A SecuritiesTimes(B16)
（L2019-002） SecurityDaily(B4)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B008)
AnnouncementonElectingEmployeeSupervisor ShanghaiSecuritiesNews(116) 9January2019
（L2019-003） SecuritiesTimes(B17)
SecurityDaily(D68)
AnnouncementontheListingofthe SChhainnaghSaeicSuerictuiersitiJeosuNrneawlAs(363)8)
ConvertibleCorporateBondsofQingdao SecuritiesTimes(B006) 16January2019
HaierCo.,Ltd. （L2019-004） SecurityDaily(B4)
‘QingdaoHaierCo.,Ltd.’(theCompany)--Notice ChinaSecuritiesJournal(B005)
ofLesseningHoldingofConvertibleCorporate ShanghaiSecuritiesNews(32) 23January2019
BondsbyActualControllerandConcertedActor SecuritiesTimes(B20)
（L2019-005） SecurityDaily(D26)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B013)
AnnouncementonResolutionsof26thSessionof ShanghaiSecuritiesNews(44) 25January2019
9thDirectorateMeeting（L2019-006） SecuritiesTimes(B025)
SecurityDaily(D34)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B013)
AnnouncementonResolutionsof22ndSessionof ShanghaiSecuritiesNews(44) 25January2019
9thBoardofSupervisorsMeeting（L2019-007） SecuritiesTimes(B025)
SecurityDaily(D34)
‘QingdaoHaierCo.,Ltd..’(theCompany)-- ChinaSecuritiesJournal(B013)
AnnouncementonReplacingSelf-raisedFunds ShanghaiSecuritiesNews(44)
InvestedinAdvanceinInvestmentProjects SecuritiesTimes(B025) 25January2019
FinancedbyRaisedFundswithRaisedFunds SecurityDaily(D25)
（L2019-008）
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B013)
AnnouncementonUsingIdleRaisedFundsto ShanghaiSecuritiesNews(44) 25January2019
ConductCashManagement（L2019-009） SecuritiesTimes(B025)
SecurityDaily(D34)
‘QingdaoHaierCo.,Ltd.’(theCompany)--Notice ChinaSecuritiesJournal(B009)
ofLesseningHoldingofConvertibleCorporate ShanghaiSecuritiesNews(25) 13February2019
BondsbyControllingShareholder（L2019-010） SecuritiesTimes(B21)
SecurityDaily(D19)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B016)
AnnouncementonProgressinUsingIdleRaised ShanghaiSecuritiesNews(37) 14February2019
FundsforEntrustedWealthManagement SecuritiesTimes(B024)
（L2019-011） SecurityDaily(D36)
072 2019AnnualReportofHaierSmartHomeCo.,Ltd.
‘QingdaoHaierCo.,Ltd.’(theCompany)--Notice ChinaSecuritiesJournal(B017)
ofLesseningHoldingofConvertibleCorporate ShanghaiSecuritiesNews(24) 23February2019
BondsbyControllingShareholder（L2019-012） SecuritiesTimes(B29)
SecurityDaily(C20)
‘QingdaoHaierCo.,Ltd.’(theCompany)--Notice ChinaSecuritiesJournal(B012)
ofPublishingAnnualPerformanceof2018by ShanghaiSecuritiesNews(28) 28March2019
HoldingSubsidiaryHaierElectronicsGroupCo., SecuritiesTimes(B4)
Ltd.（L2019-013） SecurityDaily(D19)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B338-340)
AnnouncementonResolutionsof27thSessionof ShanghaiSecuritiesNews(281-284) 30April2019
9thDirectorateMeeting（L2019-014） SecuritiesTimes(B449-452)
SecurityDaily(D522-528)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B338-340)
AnnouncementonResolutionsof23rdSessionof ShanghaiSecuritiesNews(281-284) 30April2019
9thBoardofSupervisorsMeeting（L2019-015） SecuritiesTimes(B449-452)
SecurityDaily(D522-528)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B338-340)
AnnouncementonRenewingEngagementof ShanghaiSecuritiesNews(281-284) 30April2019
AccountingFirm（L2019-016） SecuritiesTimes(B449-452)
SecurityDaily(D522-528)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B338-340)
AnnouncementonPredictiononDailyConnected ShanghaiSecuritiesNews(281-284) 30April2019
Transactionsin2019（L2019-017） SecuritiesTimes(B449-452)
SecurityDaily(D522-528)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B338-340)
AnnouncementonPredictiononProviding ShanghaiSecuritiesNews(281-284) 30April2019
GuaranteesforSubsidiariesin2019（L2019-018） SecuritiesTimes(B449-452)
SecurityDaily(D522-528)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B338-340)
AnnouncementonConductingForeignExchange ShanghaiSecuritiesNews(281-284) 30April2019
FundsDerivativesBusiness（L2019-019） SecuritiesTimes(B449-452)
SecurityDaily(D522-528)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B338-340)
AnnouncementonConductingHedgingBusiness ShanghaiSecuritiesNews(281-284) 30April2019
ofBulkRawMaterials（L2019-020） SecuritiesTimes(B449-452)
SecurityDaily(D522-528)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B338-340)
AnnouncementonAmending‘Articlesof ShanghaiSecuritiesNews(281-284) 30April2019
Association’（L2019-021） SecuritiesTimes(B449-452)
SecurityDaily(D522-528)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B338-340)
AnnouncementonTermChangeofDirectorate ShanghaiSecuritiesNews(281-284) 30April2019
（L2019-022） SecuritiesTimes(B449-452)
SecurityDaily(D522-528)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B338-340)
AnnouncementonTermChangeofBoardof ShanghaiSecuritiesNews(281-284) 30April2019
Supervisors（L2019-023） SecuritiesTimes(B449-452)
SecurityDaily(D522-528)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B338-340)
AnnouncementonTermChangeElectionof ShanghaiSecuritiesNews(281-284) 30April2019
EmployeeSupervisors（L2019-024） SecuritiesTimes(B449-452)
SecurityDaily(D522-528)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B338-340)
AnnouncementonChangingSomeInvestment ShanghaiSecuritiesNews(281-284) 30April2019
ProjectsFinancedbyFundsRaisedinIssuanceof SecuritiesTimes(B449-452)
ConvertibleCorporateBonds（L2019-025） SecurityDaily(D522-528)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B338-340)
AnnouncementonReplacingSelf-raisedFunds ShanghaiSecuritiesNews(281-284)
InvestedinAdvanceinInvestmentProjects SecuritiesTimes(B449-452) 30April2019
FinancedbyRaisedFundswithRaisedFunds SecurityDaily(D522-528)
（L2019-026）
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B338-340) 30April2019
AnnouncementonAppointingGeneralManager ShanghaiSecuritiesNews(281-284)
073 2019AnnualReportofHaierSmartHomeCo.,Ltd.
（L2019-027） SecuritiesTimes(B449-452)
SecurityDaily(D522-528)
‘QingdaoHaierCo.,Ltd.’(theCompany)--Notice ChinaSecuritiesJournal(B338-340)
ofConveningAnnualGeneralMeetingof2018 ShanghaiSecuritiesNews(281-284) 30April2019
（L2019-028） SecuritiesTimes(B449-452)
SecurityDaily(D522-528)
‘QingdaoHaierCo.,Ltd.’(theCompany)--Notice ChinaSecuritiesJournal(B338-340)
ofConvening1stMeetingofHoldersofCorporate ShanghaiSecuritiesNews(281-284) 30April2019
Bondsof2019（L2019-029） SecuritiesTimes(B449-452)
SecurityDaily(D522-528)
PhaseIVStockOwnershipSchemeofCore ChinaSecuritiesJournal(B338-340)
EmployeesStockOwnershipSchemeofQingdao ShanghaiSecuritiesNews(281-284) 30April2019
HaierCo.,Ltd.(Draft) SecuritiesTimes(B449-452)
SecurityDaily(D522-528)
ChinaSecuritiesJournal(B338-340)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ShanghaiSecuritiesNews(281-284) 30April2019
Summaryof2018AnnualReport SecuritiesTimes(B449-452)
SecurityDaily(D522-528)
ChinaSecuritiesJournal(B338-340)
‘QingdaoHaierCo.,Ltd.’(theCompany)--First ShanghaiSecuritiesNews(281-284) 30April2019
QuarterlyReportof2019 SecuritiesTimes(B449-452)
SecurityDaily(D522-528)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B025)
AnnouncementonImplementationResultof ShanghaiSecuritiesNews(28) 11May2019
ShareholdingIncreasebyConcertedActorof SecuritiesTimes(B49)
ActualController（L2019-030） SecurityDaily(C86)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B016)
AnnouncementonResolutionsof1stMeetingfor ShanghaiSecuritiesNews(68) 15May2019
HoldersinPhaseIVShareholdingPlanofCore SecuritiesTimes(B44)
StaffShareholdingPlan（L2019-031） SecurityDaily(D29)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B008)
AnnouncementonResolutionsof1stMeetingof ShanghaiSecuritiesNews(72) 30May2019
BondsHoldersin2019（L2019-032） SecuritiesTimes(B106)
SecurityDaily(D80)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B008)
AnnouncementonLineDistributionandRights ShanghaiSecuritiesNews(72) 30May2019
BelongingnessofCoreStaffShareholdingPlan SecuritiesTimes(B106)
（L2019-033） SecurityDaily(D80)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B013)
AnnouncementonProgressinImplementationof ShanghaiSecuritiesNews(40) 4June2019
4thShareholdingPlanofCoreStaffShareholding SecuritiesTimes(B89)
Plan（L2019-034） SecurityDaily(D13)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B024)
AnnouncementonResolutionsof28thSessionof ShanghaiSecuritiesNews(92) 6June2019
9thDirectorateMeeting（L2019-035） SecuritiesTimes(B117)
SecurityDaily(D84)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B024)
AnnouncementonPlanningtoChangethe ShanghaiSecuritiesNews(92) 6June2019
Company’sFullNameandTickerSymbol SecuritiesTimes(B117)
（L2019-036） SecurityDaily(D84)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B024)
AnnouncementonAmending‘Articlesof ShanghaiSecuritiesNews(92) 6June2019
Association’（L2019-037） SecuritiesTimes(B117)
SecurityDaily(D84)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B024)
AnnouncementonAddingSpecialProposalsto ShanghaiSecuritiesNews(92) 6June2019
AnnualGeneralMeetingof2018（L2019-038） SecuritiesTimes(B117)
SecurityDaily(D84)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B024/B028)
AnnouncementonBeginningofConversionof ShanghaiSecuritiesNews(27) 19June2019
‘HaierConvertibleBonds’（L2019-039） SecuritiesTimes(B112)
SecurityDaily(B3)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B024/B028) 19June2019
AnnouncementonResolutionsofAnnualGeneral ShanghaiSecuritiesNews(27)
074 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Meetingof2018（L2019-040） SecuritiesTimes(B112)
SecurityDaily(D5)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B024/B028)
AnnouncementonResolutionsof1stSessionof ShanghaiSecuritiesNews(27) 19June2019
th SecuritiesTimes(B112)10DirectorateMeeting（L2019-041）
SecurityDaily(D5)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B024/B028)
AnnouncementonResolutionsof1stSessionof ShanghaiSecuritiesNews(27) 19June2019
10thBoardofSupervisorsMeeting（L2019-042） SecuritiesTimes(B112)
SecurityDaily(D5)
‘QingdaoHaierCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B020)
AnnouncementonCompletingRegistrationfor ShanghaiSecuritiesNews(32) 22June2019
ChangingNameatIndustrialandCommercial SecuritiesTimes(B31)
AdministrationAuthorities（L2019-043） SecurityDaily(C10)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B013)
NoticeofSellingBackof‘HaierConvertible ShanghaiSecuritiesNews(125) 26June2019
Bonds’（L2019-044） SecuritiesTimes(B84)
SecurityDaily(D38)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B013)
AnnouncementonChangingTickerSymbol ShanghaiSecuritiesNews(125) 26June2019
（L2019-045） SecuritiesTimes(B84)
SecurityDaily(D38)
‘HaierSmartHomeCo.,Ltd.’(theCompany)--1st ChinaSecuritiesJournal(B001)
NoticeofSellingBack‘HaierConvertibleBonds’ ShanghaiSecuritiesNews(48) 27June2019
（L2019-046） SecuritiesTimes(B53)
SecurityDaily(C4)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B009)
2ndNoticeofSellingBack‘HaierConvertible ShanghaiSecuritiesNews(44) 28June2019
Bonds’（L2019-047） SecuritiesTimes(B78)
SecurityDaily(D22)
ChinaSecuritiesJournal(B013)
‘HaierSmartHomeCo.,Ltd..’(theCompany)-- ShanghaiSecuritiesNews(60) 29June2019
AnnouncementonResultofFollow-upRatingto SecuritiesTimes(B97)
ConvertibleCorporateBondsof2019（L2019-048）SecurityDaily(C27)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B033)
AnnouncementonConnectedTransactionof ShanghaiSecuritiesNews(52)
HoldingSubsidiaryNewlyIncreasingRegistered SecuritiesTimes(B112) 2July2019
CapitaltoPurchaseAssetsandIntroduceInvestors SecurityDaily(D94)
（L2019-049）
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B033)
AnnouncementonResolutionsof2ndSessionof ShanghaiSecuritiesNews(52) 2July2019
10thBoardofSupervisorsMeeting（L2019-050） SecuritiesTimes(B112)
SecurityDaily(D94-95)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B033)
AnnouncementonConversionResultof ShanghaiSecuritiesNews(52) 2July2019
ConvertibleBondsandChangeinShares SecuritiesTimes(B112)
（L2019-051） SecurityDaily(D94-95)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B033)
AnnouncementonProgressinImplementationof ShanghaiSecuritiesNews(52) 2July2019
PhaseIVShareholdingPlanofCoreStaff SecuritiesTimes(B112)
ShareholdingPlan（L2019-052） SecurityDaily(D94-95)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B033)
3rdNoticeofSellingBack‘HaierConvertible ShanghaiSecuritiesNews(40) 3July2019
Bonds’（L2019-053） SecuritiesTimes(B87)
SecurityDaily(B3)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B008)
NoticeofSellingBackResultof‘Haier ShanghaiSecuritiesNews(108) 12July2019
ConvertibleBonds’（L2019-054） SecuritiesTimes(B79)
SecurityDaily(D75)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B055)
AnnouncementonSigningAgreementson ShanghaiSecuritiesNews(20) 13July2019
SupervisionoverSavingofSpecialAccountfor SecuritiesTimes(B99)
RaisedFundsamongFourParties（L2019-055） SecurityDaily(C28)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B003) 17July2019
AnnouncementonCompletionofSharesPurchase ShanghaiSecuritiesNews(33)
075 2019AnnualReportofHaierSmartHomeCo.,Ltd.
inPhaseIVShareholdingPlanofCoreStaff SecuritiesTimes(B80)
（L2019-056） SecurityDaily(D33)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B034)
NoticeofContinuousTradingSuspensionof ShanghaiSecuritiesNews(68) 27July2019
ConvertibleBondsWhenImplementingRightsand SecuritiesTimes(B70)
InterestsDistribution（L2019-057） SecurityDaily(C46)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B008)
AnnouncementonImplementationofRightsand ShanghaiSecuritiesNews(33) 2August2019
InterestsDistributionofASharesfor2018 SecuritiesTimes(B64)
（L2019-058） SecurityDaily(D45)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B008)
AnnouncementonAdjustingConversionPriceof ShanghaiSecuritiesNews(33) 2August2019
ConvertibleBonds（L2019-059） SecuritiesTimes(B64)
SecurityDaily(D21)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B032)
AnnouncementonConversionResultof ShanghaiSecuritiesNews(132) 29August2019
ConvertibleBondsandChangeinShares SecuritiesTimes(B43)
（L2019-060） SecurityDaily(D240)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B032)
NoticeofPublishingSemi-annualPerformanceof ShanghaiSecuritiesNews(132) 29August2019
2019byHoldingSubsidiaryHaierElectronics SecuritiesTimes(B43)
GroupCo.,Ltd.’（L2019-061） SecurityDaily(D240)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B131)
AnnouncementonResolutionsof3rdSessionof ShanghaiSecuritiesNews(169) 30August2019
10thDirectorateMeeting（L2019-062） SecuritiesTimes(B177)
SecurityDaily(D53-54)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B131)
AnnouncementonResolutionsof3rdSessionof ShanghaiSecuritiesNews(169) 30August2019
10thBoardofSupervisorsMeeting（L2019-063） SecuritiesTimes(B177)
SecurityDaily(D53-54)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B131)
AnnouncementonUsingSomeIdleRaisedFunds ShanghaiSecuritiesNews(169) 30August2019
toTemporarilySupplementCurrentCapital SecuritiesTimes(B177)
（L2019-064） SecurityDaily(D53-54)
ChinaSecuritiesJournal(B131)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ShanghaiSecuritiesNews(169) 30August2019
Summaryof2019Half-yearReport SecuritiesTimes(B177)
SecurityDaily(D53-54)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B009)
AnnouncementonConversionResultof ShanghaiSecuritiesNews(60) 3September2019
ConvertibleBondsandChangeinShares SecuritiesTimes(B3)
（L2019-065） SecurityDaily(D30)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B021)
AnnouncementonSigningAgreementson ShanghaiSecuritiesNews(92) 12September2019
SupervisionoverSavingofSpecialAccountfor SecuritiesTimes(B85)
RaisedFundsamongFourParties（L2019-066） SecurityDaily(C3)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B009)
AnnouncementonParticipatinginCollective ShanghaiSecuritiesNews(100) 18September2019
ReceptionDayforInvestors（L2019-067） SecuritiesTimes(B21)
SecurityDaily(D39)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B013)
AnnouncementonShareholdingIncreaseof ShanghaiSecuritiesNews(60) 27September2019
OverseasSharesbyActualController’sConcerted SecuritiesTimes(B60)
Actor（L2019-068） SecurityDaily(D37)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B008)
AnnouncementonConversionResultof ShanghaiSecuritiesNews(65) 8October2019
ConvertibleBondsandChangeinShares SecuritiesTimes(B62)
（L2019-069） SecurityDaily(C3)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B200)
AnnouncementonResolutionsof4thSessionof ShanghaiSecuritiesNews(220) 31October2019
10thDirectorateMeeting（L2019-070） SecuritiesTimes(B289)
SecurityDaily(D281)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B200) 31October2019
AnnouncementonResolutionsof4thSessionof ShanghaiSecuritiesNews(220)
076 2019AnnualReportofHaierSmartHomeCo.,Ltd.
10thBoardofSupervisorsMeeting（L2019-071） SecuritiesTimes(B289)
SecurityDaily(D281)
HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B200)
AnnouncementonReplacingSelf-raisedFunds ShanghaiSecuritiesNews(220)
InvestedinAdvanceinInvestmentProjects SecuritiesTimes(B289) 31October2019
FinancedbyRaisedFundswithRaisedFunds SecurityDaily(D281)
（L2019-072）
HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B200)
AnnouncementonNameChangeofAuditor ShanghaiSecuritiesNews(220) 31October2019
（L2019-073） SecuritiesTimes(B289)
SecurityDaily(D281)
ChinaSecuritiesJournal(B200)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ShanghaiSecuritiesNews(220) 31October2019
ThirdQuarterlyReportof2019 SecuritiesTimes(B289)
SecurityDaily(D281)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B012)
AnnouncementonConversionResultof ShanghaiSecuritiesNews(52) 5November2019
ConvertibleBondsandChangeinShares SecuritiesTimes(B33)
（L2019-074） SecurityDaily(B4)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B021)
AnnouncementonResolutionsof5thSessionof ShanghaiSecuritiesNews(89/91) 22November2019
10thDirectorateMeeting（L2019-075） SecuritiesTimes(B54/B55)
SecurityDaily(D39-40)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B021)
AnnouncementonResolutionsof5thSessionof ShanghaiSecuritiesNews(89/91) 22November2019
10thBoardofSupervisorsMeeting（L2019-076） SecuritiesTimes(B54/B55)
SecurityDaily(D39-40)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B021)
NoticeofRedemptionof‘HaierConvertibleBond’ ShanghaiSecuritiesNews(89/91) 22November2019
inAdvance（L2019-077） SecuritiesTimes(B54/B55)
SecurityDaily(D39-40)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B021)
AnnouncementonConnectedTransactionofHaier ShanghaiSecuritiesNews(89/91) 22November2019
GroupCo.,Ltd.IncreasingCapitalinSubsidiary SecuritiesTimes(B54/B55)
（L2019-078） SecurityDaily(D39-40)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B021)
AnnouncementonAmending‘Articlesof ShanghaiSecuritiesNews(89/91) 22November2019
Association’（L2019-079） SecuritiesTimes(B54/B55)
SecurityDaily(D39-40)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B044)
AnnouncementonRedemptioninFullAmountand ShanghaiSecuritiesNews(56) 29November2019
Delistingof‘HaierConvertibleBonds’ SecuritiesTimes(A12)
（L2019-080） SecurityDaily(D28)
‘HaierSmartHomeCo.,Ltd.’(theCompany)--1st ChinaSecuritiesJournal(B016)
NoticeofRedemptionof‘HaierConvertible ShanghaiSecuritiesNews(20) 30November2019
Bonds’（L2019-081） SecuritiesTimes(B31)
SecurityDaily(C8)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B016)
AnnouncementonConversionResultof ShanghaiSecuritiesNews(65) 3December2019
ConvertibleBondsandChangeinShares SecuritiesTimes(B75)
（L2019-082） SecurityDaily(D67)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B016)
2ndNoticeofRedemptionof‘HaierConvertible ShanghaiSecuritiesNews(65) 3December2019
Bonds’（L2019-083） SecuritiesTimes(B75)
SecurityDaily(D67)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B013)
3rdNoticeofRedemptionof‘HaierConvertible ShanghaiSecuritiesNews(68) 4December2019
Bonds’（L2019-084） SecuritiesTimes(B61)
SecurityDaily(C3)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B013)
4thNoticeofRedemptionof‘HaierConvertible ShanghaiSecuritiesNews(68) 5December2019
Bonds’（L2019-085） SecuritiesTimes(B45)
SecurityDaily(C3)
HaierSmartHomeCo.,Ltd.’(theCompany)--5th ChinaSecuritiesJournal(B021) 6December2019
NoticeofRedemptionof‘HaierConvertible ShanghaiSecuritiesNews(57)
077 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Bonds’（L2019-086） SecuritiesTimes(B46)
SecurityDaily(D70)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B021)
6thNoticeofRedemptionof‘HaierConvertible ShanghaiSecuritiesNews(52) 7December2019
Bonds’（L2019-087） SecuritiesTimes(B15)
SecurityDaily(C13)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B016)
NoticeofRedemptionofCorporateBondsof ShanghaiSecuritiesNews(64) 10December2019
‘HaierConvertibleBonds’（L2019-088） SecuritiesTimes(B33)
SecurityDaily(D58)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B009)
NoticeofRedemptionofCorporateBondsof ShanghaiSecuritiesNews(80) 11December2019
‘HaierConvertibleBonds’（L2019-089） SecuritiesTimes(B12)
SecurityDaily(D39)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B009)
NoticeofRedemptionofCorporateBondsof ShanghaiSecuritiesNews(84) 12December2019
‘HaierConvertibleBonds’（L2019-090） SecuritiesTimes(B29)
SecurityDaily(D24)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(A08)
NoticeofRedemptionofCorporateBondsof ShanghaiSecuritiesNews(94) 13December2019
‘HaierConvertibleBonds’（L2019-091） SecuritiesTimes(B63)
SecurityDaily(D59)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(A08)
AnnouncementonClarificationofMediaReport ShanghaiSecuritiesNews(94) 13December2019
（L2019-092） SecuritiesTimes(B95)
SecurityDaily(D40)
‘HaierSmartHomeCo.,Ltd.’(theCompany)-- ChinaSecuritiesJournal(B008)
AnnouncementonRedemptionResultof‘Haier ShanghaiSecuritiesNews(25) 18December2019
ConvertibleBonds’andSharesChange SecuritiesTimes(B6)
（L2019-093） SecurityDaily(D22)
XVII. Proactive performance of social responsibilities
(I) Information on poverty alleviation of the listed companies
√Applicable □Not Applicable1. Targeted measures in poverty alleviation plan
√Applicable □Not Applicable
In accordance with the national plan for targeted measures in poverty alleviation and therequirements set out in relevant documents, the Company places great emphasis on poverty alleviation,and carries out initiatives of targeted measures in poverty alleviation within the scope as authorized bythe general meetings on related matters (such as donation). Over the years, the Company has beendevoted to education undertakings and making significant contributions, with a view to targeting theweakest area of education and to blocking the transmission of poverty between generations throughfocused efforts in raising the basic cultural quality in poverty and the skill levels of labor force frompoor families. Up to now, the Company and the Haier Group Corporation (its ultimate controller) and itssubsidiaries (referred to as the ‘Haier Group’) has built over 300 hope primary schools and hope middleschool, covering 26 provinces, municipalities directly under the central government and autonomousregions in China, and continuously provide the above-mentioned schools support in materials and otherrespects in each year including the reporting period. These initiatives have effectively enhanced thebasic educational capabilities in poverty-stricken areas and improved the quality of education.
078 2019AnnualReportofHaierSmartHomeCo.,Ltd.
2. Summary of targeted measures in poverty alleviation during the year
√Applicable □Not Applicable
In 2019, the Company’s expenditures on targeted measures in poverty alleviation wasapproximately RMB 17.82 million, which was mainly utilized in the education improvement, physicaland mental health development of adolescents and children and social welfare. At the same time, as partof its initiatives in response to the government and the performance of its social responsibilities, HaierGroup has also made investments in many aspects, such as poverty alleviation through agriculturaldevelopment, poverty alleviation through improvement of the health of farmers and cultivation ofinnovative talents. Some examples are as follows:
Since 2017, Haier exclusive shops have launched a welfare activity named ‘To Embrace Father’,which has been assuming the role of a station of family love. They not only continue to provide materialsupport for families in need but also directly bring left-behind children to their parents working outside,achieving the reunion of left-behind families. The activity has extended to families over 100 cities,spanning 170 thousand kilometers geographically. In 2019, ‘To Embrace Father’ was developed from asingle welfare activity to a sustainable welfare event, from focusing on left-behind children in rural areasto left-behind children in the first and second tier cities and held welfare exhibitions in Shanghai andShenzhen which has attracted a number of brands to cooperate and arisen highly social concern.
The Company and universities jointly developed applied education courses under WidespreadEntrepreneurship and Innovation. Also, Haier has integrated its cases, experiences and resources ofWidespread Entrepreneurship and Innovation systematically with relevant education in colleges anduniversities. By actively sharing entrepreneurial experience and work experience, the Company will actas an exemplary leader to attract more youths with a spirit of entrepreneurship to engage inentrepreneurial practice. By providing instructive advices and suggestions for youths with an intention toentrepreneurship, the Company will serve as a guide to help them forge ahead in a prospective way. TheCompany and the Group have open entrepreneurial platforms in place to absorb talented innovators,cultivate students’ innovative consciousness and enhance their innovation ability. Such platforms canfacilitate them to realize innovation and entrepreneurship and promote the ‘new drivers of growth’ in thefuture.
3. Results of targeted measures in poverty alleviation
√Applicable □Not Applicable
Unit and Currency: RMB 0’000
Indicator Amountandthestatus
I.Generalinformation
Including:1.Funds 1,782
II.Breakdownoftheuseoffunds
I.Povertyalleviationthrougheducation
Including:1.1Amountinvestedinhelpingpoor 786
students
2.Povertyalleviationthroughhealthenhancement
Including:2.1Amountinvestedinmedicalandhealth 100
resourcesinpovertyareas
3.Basicguarantees
079 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Including:3.1Amountinvestedinhelping‘Rural 40
left-behindchildren,elderlypeopleandwomen’
4.Povertyalleviationinthesociety
Including:4.1Contributedamountintargetedpoverty 130
alleviationworks
4.2Charityfundsforpovertyalleviation 726
4. Subsequent targeted measures in poverty alleviation plans
√Applicable □Not Applicable
The Company will make concerted efforts with Haier Group and continue to implement theproposition of the documents issued by the central government in respect of poverty alleviation, dedicateto improve the education in poverty-stricken areas, promote the revitalization of rural talents, payattention to children’s physical and mental health and other initiatives, and will perform our socialresponsibilities in a proactive manner. At the same time, the Company will continue to integrate globalresources and pay close attention to the recent epidemic development. The Company committed to makegreat efforts with all sectors of society to overcome the epidemic through continuously supportingmaterials and services required by the epidemic areas.
(II) Performance of social responsibilities
√Applicable □Not Applicable
For details, please refer to the 2019 Social Responsibility Report of Haier Smart Home Co., Ltd.disclosed on the date of this periodic report.
(III) Environmental information
1. Explanation of the environmental protection status of companies and their important
subsidiaries that are key emission units announced by the environmental protection
department
√Applicable □Not Applicable
Innovation drive and green development are the development goals of modern manufacturing. TheCompany continues to promote green development, actively promote green consumption, enhance theapplication of energy-saving technologies, and integrate low carbon, cycling, energy saving andemission reduction into all aspects of enterprise development. Besides, the Company also continues topromote technological innovation, research and develop the products integrating smart IoT and greendevelopment to strive to increase the green of products at full life span, extend the green supply chain,lead innovation, green, interaction and win-win of the industry, and contribute to the national greendevelopment.
(1) Pollution discharge information
√Applicable □Not Applicable
The Company’s indirect holding subsidiary Qingdao Economy and Technology Development ZoneHaier Energy & Power Co., Ltd. (hereinafter referred to as ‘Development Zone Energy’) is key emissionunits announced by the environmental protection department.
080 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Development Zone Energy is a non-production unit, which is mainly responsible for the unifiedtreatment of sewage from all production units in the development zone. The main sewage information isannounced as follows:
① Major pollutants:
Wastewater. Pollutant permit has applied and implemented in accordance with the Technicalspecification for application and issuance of pollutant permit-wastewater treatment (on trial)（HJ978-2018）. A total of 17 kinds of pollutants (including particular pollutant) are subject to testing, whichare total cadmium, total Chromium, total mercury, total lead, total arsenic, hexavalent chromium, COD,ammonia nitrogen, total phosphorus, total nitrogen, PH, suspended solids, chroma, petroleum, BOD,flow, temperature.
② Discharge method: indirect discharge
③ Number and distribution of discharge outlets: 1, in the southeast side of the sewage station by
pipeline discharges④ Discharge concentration and total amount, total approved discharges:According to the pollutant permit, the total concentration and total amount of pollutants that need tobe verified are as follows:
Approved Whetherthe
No. Pollutant Discharge Total total discharge
concentration discharges discharges exceedsthe
standard
1 COD 36.58mg/L 9.62tons 159.83tons No
2 Ammonia 5.34mg/L 1.37tons 14.38tons No
nitrogen
3 Total 0.18mg/L 0.04tons 2.55tons No
phosphorus
4 Totalnitrogen 7.98mg/L 1.99tons 22.37tons No
⑤Pollutant discharge standards implemented: Wastewater quality standards for discharge tomunicipal sewers (GBT 31962-2015)
(2) Construction and operation of pollution control facility
√Applicable □Not Applicable
The Development Zone Energy has a wastewater treatment station with a designed processingcapacity of 1,200 tons each day. The construction, maintenance and daily operations of the wastewatertreatment facilities are performed in accordance with national and local environmental laws andregulations. All discharged wastewater data are monitored online during 24 hours. The monitoring datais transmitted in real time with the environmental protection department and all equipment works well.(3) Evaluation of the effect of construction projects on the environment and other environmental
administration license
√Applicable □Not Applicable
081 2019AnnualReportofHaierSmartHomeCo.,Ltd.
The Company and its subsidiaries perform the implementation and production of constructionprojects according to the laws and regulations. The Company performs environmental impact evaluationprocedures in strict accordance with the Three Simultaneous system for environmental protection ofconstruction projects which have been approved in the environmental impact assessment. There are noenvironmental violations such as having constructions without approval.
(4) Emergency plan for environmental emergencies
√Applicable □Not Applicable
The Emergency Plan for Environmental Emergencies is developed according to the laws andregulations by the Company and its subsidiaries. Drills have been organized. The Plan is continuouslyoptimized and upgraded according to the drill results.
(5) Environmental self-monitoring plan
√Applicable □Not Applicable
All pollutant discharges of the Company comply with national and local environmental standards.The sewage is discharged after being collected and treated, and is monitored in real time through theautomatic online sewage monitoring system. The data is connected to the Haier Smart Energy System. InMarch 2017, the Company received and passed the certification of version change of ISO14001environmental management system. In March 2019, the professional certification body conducted thesecond time supervision and audit of the operation of 2019 ISO14001 system after version change. Theoperation was approved and functioned smoothly.
(6) Other environmental information to be disclosed
□ Applicable √Not Applicable2. Statement on environmental protection of companies other than key pollution discharge units
√Applicable □Not Applicable
All units of the Company perform the implementation and production of construction projectsaccording to the requirements of laws and regulations. The Company completes environmental impactevaluation procedures in strict accordance with the Three Simultaneous system for environmentalprotection of construction projects which have been approved in the environmental impact assessment.There are no environmental violations such as having construction without approval.
The Company has established Haier Smart Energy Center, a leading energy big data analysissystem in the industry. It uses automation, information technology and centralized management mode toimplement centralized dynamic monitoring and digital management of main energy for consumptionsuch as water, electricity and gas in all factories across the country; automatically and accurately collectsenergy data, and completes the prediction and analysis of energy consumption data, optimizes energydeployment and reduce the energy consumption by producing a single product, thus truly achievinglow-carbon production.
082 2019AnnualReportofHaierSmartHomeCo.,Ltd.
3. Statement on reasons for non-disclosure of environmental information by companies other
than key pollution discharge units
□ Applicable √Not Applicable4. Statement on subsequent development or changes of environmental information contents
disclosed in the reporting period
√Applicable □Not Applicable
The Company will continue to maintain and keep optimizing existing results and allowsup-to-standard discharge in strict accordance with existing environmental discharge and emissionstandards.
(IV) Other explanations
□Applicable √Not ApplicableXVIII. Convertible corporation bonds
√Applicable □Not Applicable(I) Information on the issuance of convertible bonds
√Applicable □Not Applicable
On 23 November 2017, the Proposal of the Plan of Public Offering of Convertible CorporateBonds of Qingdao Haier Co., Ltd. was passed at the 2017 First Extraordinary General Meeting of theCompany. In accordance with the resolutions passed at this general meeting and the documentsapproved by China Securities Regulatory Commission, the Company has completed the issuance ofconvertible corporate bonds in December 2018, which issued convertible corporate bonds of RMB3.00749 billion in total. Such bonds have been listed on 18 January 2019, with the listed name ‘HaierConvertible Bonds’ and the Bonds Code is 110049. For the details, please refer to relevant documents,such as the Company’s Prospectus on the Public Issuance of the A Share Convertible Corporate Bondsof Qingdao Haier Co., Ltd. disclosed on 14 December 2018 and Announcement on the Listing of theConvertible Corporate Bonds of Qingdao Haier Co., Ltd. disclosed on 16 January 2019. Because theconvertible bonds reached the redemption conditions during the reporting period and the Board of theCompany decided to exercise the redemption right after review and approval. Therefore, the Companyfully redeemed the balance of convertible bonds registered on the redemption registration date. Afterredemption, the Company’s convertible bonds have been delisted on17 December 2019.
(II) Information on holders and guarantors of convertible bonds during the reporting period
□Applicable √Not Applicable(III) Information on the change in convertible bonds during the reporting period
√Applicable □Not Applicable
Unit and Currency: RMB
Name of Priortothe Increaseanddecreaseofthechange Afterthe
083 2019AnnualReportofHaierSmartHomeCo.,Ltd.
convertiblecorporatebonds change Conversion Redemption Back-sell change
2018 Qingdao Haier Co., Ltd. 3,007,490,000 2,998,366,000 9,119,000 5,000 0
convertiblecorporatebonds
Information on the accumulated number of convertible bonds being converted into shares during the
reporting period
√Applicable □Not ApplicableAmount of conversion during the reporting period 2,998,366,000
(RMB)
Converted shares during the reporting period 211,149,927
(share)
Accumulatedconvertedshares(share) 211,149,927
Proportion of accumulated converted shares to
total issued shares of the Company before
conversion(%) 3.32
Amount of remaining convertible bonds not
converted(RMB) 0
Proportion of amount of remaining convertible
bondstototalissuedconvertiblebonds(%) 0
(IV) Information on the past adjustment of prices for conversion into shares
√Applicable □Not Applicable
Unit and Currency: RMB
Conversionprice Adjusted Explanationof
adjustmentday conversion Disclosuretime Disclosuremedia conversionprice
price adjustment
China Securities The conversion price is
Journal, Shanghai required to adjust due to
Securities News, the cash dividend of
8August2019 14.20 2August2019 Security Daily, RMB 0.351 per share of
Securities Times and the Company’s 2018
website of Shanghai equitydistribution
StockExchange
The latest conversion price as
of the end of the reporting 14.20
period
(V) Information on the indebtedness, changes in creditability of the Company and the cash
arrangement for repayment of debts in the coming years
□Applicable √Not Applicable
At the end of the reporting period, the Company’s liabilities amounted to RMB 122,464.3760million in total, including current liabilities of RMB 95,609.7374 million and non-current liabilities ofRMB 26,854.6386 million.
084 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Through the renewal evaluation of the credit status of the Company and the public issuance ofconvertible corporate bonds, United Credit Ratings Co., Ltd. determined the long-term credit rating ofthe Company is AAA, the rating outlook is ‘stable’ and the bond credit rating is AAA.
As of the end of the reporting period, the Company has fully redeemed the balance of convertiblebonds registered on the redemption registration date.
(VI) Explanation on other information regarding convertible bonds
□Applicable √Not Applicable085 2019 Annual Report of Haier Smart Home Co., Ltd.SECTION VI CHANGES IN ORDINARY SHARES AND INFORMATION ABOUT SHAREHOLDERSI. Changes in ordinary share capital
(I) Table of Changes in ordinary shares
1. Table of Changes in ordinary shares
Unit: share
Priortothechange Increaseanddecreaseofthechange(＋,－) Balance
Number Percent Newshares Bonus Sharesconverted Others Subtotal Number %
（%） issued shares fromreserve
I.Shareswithsellingrestrictions
1.Sharesheldbythestate
2.Sharesheldbythestate-owned
legalentities
3.Sharesheldbyotherdomestic
investors
Including:sharesheldby
domesticnon-state-ownedlegal
entities
Sharesheldbydomestic
individuals
4.Sharesheldbyforeign
investors
Including:sharesheldbyforeign
legalentities
Sharesheldbyforeign
individuals
II. Tradableshareswithout 6,368,416,700 100.00 211,149,927 211,149,927 6,579,566,62 100.00
selling restrictions 7
1.RMBordinaryshares 6,097,402,727 95.74 211,149,927 211,149,927 6,308,552,65 95.88
4
2.Domesticlistedforeignshares
3.Overseaslistedforeignshares 271,013,973 4.26 271,013,973 4.12
4.Others
086 2019AnnualReportofHaierSmartHomeCo.,Ltd.
III.Totalordinaryshares 6,368,416,700 100.00 211,149,927 211,149,927 6,579,566,62 100.00
087 2019AnnualReportofHaierSmartHomeCo.,Ltd.
2. Statement on the changes in ordinary shares
√Applicable □Not Applicable
As approved by the Reply on Approving the Public Issuance of Convertible Corporate Bonds byQingdao Haier Co., Ltd.（Zheng Jian Xu Ke [2018] No. 1912） issued by the China SecuritiesRegulatory Commission (hereinafter referred to as the ‘CSRC’), on 18 December 2018, the Companypublicly issued 30,074,900 convertible corporate bonds at a par value of RMB 100 each, and the totalamount issued of RMB 3,007,490,000 for a term of 6 years. With the approval from the Shanghai StockExchange Self-regulation Decision [2019] No. 14, the convertible corporate bonds of RMB3,007,490,000 issued by the Company will be listed and traded on Shanghai Stock Exchange on 18January 2019. The bonds are referred to as ‘Haier Convertible Bonds’ and the bond code is ‘110049’.
According to the relevant requirements of Prospectus of Qingdao Haier Co., Ltd. on PublicIssuance of A-share Convertible Corporate Bonds by the Company, the issuance of Haier ConvertibleBonds can be converted into A-share of the Company since 25 June 2019, the conversion periodcommenced from 25 June 2019 to 17 December 2024. At the same time, the Company had fullyredeemed the outstanding convertible bonds that had not been converted into shares on the redemptionregistration date at the end of the reporting period due to the directors of the Board of the Companydecided to exercise the redemption right during the reporting period. During the reporting period, a totalof 211,149,927 shares were converted and the share capital of the Company changed from6,368,416,700 shares to 6,579,566,627 shares. For details, please refer to the Announcement onRedemption Result of ‘Haier Convertible Bonds’ and Shares Change of Haier Smart Home Co., Ltd.(No.: L2019-093) disclosed on 18 December 2019.
3. Effect of changes in ordinary shares on the financial indicators such as earnings per share
and net assets per share (if any) over the last year and the last reporting period
√Applicable □Not Applicable
In 2019, the Company achieved net profit attributable to shareholders of the Parent Company ofRMB 8,206,247,105.96 ， equity attributable to owners of the Parent Company of RMB47,888,319,765.92, in terms of total share capital of 6,368,416,700 shares before the conversion of theconvertible bonds of the Company at the end of the reporting period, profit was RMB 1.289 per shareand net asset was RMB 7.520 per share accordingly; in terms of total share capital of 6,579,566,627after the conversion of the convertible bonds, profit per share was RMB 1.247 and net asset was RMB7.278 per share accordingly.
4. Other disclosure deemed necessary by the Company or required by securities regulatory
authorities
□Applicable √Not Applicable
088 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(II) Changes in shares with selling restrictions
□Applicable √Not ApplicableII. Issuance and listing of securities(I) Issuance of securities as of the reporting period
√Applicable □Not Applicable
Unit: 0’000 shares Currency: RMB
Type of
shares and Dateof Price(or Numberof Dateof Numberofshares Dateof
its issue interests issuance listing underlisting termination
derivative rate) approval
securities
Convertiblecorporationbonds,convertiblebondswithwarrantsandcorporatebonds
Interest
ratesforthe
Convertible firstyearto
corporation sixthyear
bonds of 18 are0.2%, RMB 18 RMB 17
Qingdao December 0.5%, 3,007,490,000 January 3,007,490,000 December
Haier Co., 2018 1.0%, 2019 2019
Ltd. 1.5%,
1.8%,
2.0%,
respectively
Details of issuance of securities as of the reporting period (please specify separately for bonds with
different interest rates within the duration):
√Applicable □Not Applicable
In September 2017, after considering and approving at the 8th meeting of the 9th session of theBoard of the Company, the Company intended to issue convertible corporate bonds up to RMB5,640,000,000 (subject to the adjustment of the Board with up to RMB 3,007,490,000). After obtainingrelevant approval and examination, the Company issued convertible corporate bonds of RMB3,007,490,000 on 18 December 2018, which listed for trading on 18 January 2019. For details, pleaserefer to relevant announcements, such as Announcement on Public Issuance of Convertible CorporateBonds of Qingdao Haier Co., Ltd. (L2018-079) and Announcement on the Listing of the ConvertibleCorporate Bonds of Qingdao Haier Co., Ltd. (L2019-004) disclosed by the Company on 13 December2018 and 16 January 2019, respectively.
(II) Changes in total ordinary shares and shareholder structure as well as assets and liabilities
structure of the Company
√Applicable □Not Applicable
For the total number of ordinary shares of the Company and changes in shareholder structure,please refer to the relevant expressions in ‘I. Changes in ordinary share capital’ and ‘III. Information on
089 2019AnnualReportofHaierSmartHomeCo.,Ltd.
shareholder and ultimate controllers’ in this chapter. For the impact of the aforesaid changes on ‘Paid-in
capital (or share capital)’ in the Company’s balance sheet and other items, please refer to the relevant
content in ‘SECTION XI FINANCIAL REPORT’ of this report.
(III) Information on existing shares held by the staff
□Applicable √Not ApplicableIII. Information on shareholder and ultimate controllers(I) Total number of shareholders
Total number of ordinary shareholders up to the end of the 142,465
reportingperiod
Total number of ordinary shareholders as at the end of the last
monthpriortothedisclosuredayoftheannualreport 174,731
(II) Table of top ten shareholders, top ten common shareholders (or the shareholders without
selling restrictions) by the end of the reporting period
Unit: share
Shareholdingsoftoptenshareholders
Numbe Statusof
Change rof shares
during Numberof Perce shares pledgedor Natureof
Name ofshareholder(fullname) the sharesheldat ntage held frozen shareholde
reportin theendofthe (%) with Nu r
g period period selling Statu mbe
restrict s r
ions
Domestic
non-state-
HaierElectricAppliancesInternationalCo.,Ltd. 1,258,684,824 19.13 Nil owned
legal
entity
Domestic
non-state-
HaierGroupCorporation 1,072,610,764 16.30 Nil owned
legal
entity
Foreign
HongKongSecuritiesClearingCo.,Ltd. 857,911,223 13.04 Nil legal
entity
ChinaSecuritiesFinanceCorporationLimited 182,592,697 2.78 Nil Unknown
Domestic
Qingdao Haier Venture & Investment Information non-state-
Co.,Ltd. 172,252,560 2.62 Nil owned
legal
entity
Foreign
GICPRIVATELIMITED 161,125,601 2.45 Nil legal
entity
090 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Bank of China Limited- E Fund’s small and 97,000,000 1.47 Nil Unknown
medium-sizedhybridsecuritiesinvestmentfunds
Foreign
CLEARSTREAMBANKINGS.A.(Note) 91,216,350 1.39 Nil legal
entity
Domestic
Qingdao Haichuangzhi Management Consulting non-state-
Enterprise(LimitedPartnership) 73,011,000 1.11 Nil owned
legal
entity
CentralHuijinAssetManagementLtd. 69,539,900 1.06 Nil Unknown
Shareholdings oftoptenshareholdersnotsubjecttosellingrestrictions
Numberoftradable Classandnumberofshares
Nameofshareholder shareswithout Class Number
selling restrictions
HaierElectricAppliancesInternationalCo.,Ltd. 1,258,684,824 RMBordinary 1,258,684,824
HaierGroupCorporation 1,072,610,764 RMBordinary 1,072,610,764
HongKongSecuritiesClearingCo.,Ltd. 857,911,223 RMBordinary 857,911,223
ChinaSecuritiesFinanceCorporationLimited 182,592,697 RMBordinary 182,592,697
QingdaoHaierVenture&InvestmentInformationCo., Ltd. 172,252,560 RMBordinary 172,252,560
GICPRIVATELIMITED 161,125,601 RMBordinary 161,125,601
Bank of China Limited- E Fund’s small and medium-sized 97,000,000 RMBordinary 97,000,000
hybridsecuritiesinvestmentfunds
CLEARSTREAMBANKINGS.A.(Note) 91,216,350 Overseaslisted 91,216,350
foreign shares
Qingdao Haichuangzhi Management Consulting Enterprise 73,011,000 RMBordinary 73,011,000
(LimitedPartnership)
CentralHuijinAssetManagementLtd. 69,539,900 RMBordinary 69,539,900
(1) Haier Electric Appliances International Co., Ltd. is a
holdingsubsidiary of Haier Group Corporation. Haier Group
Corporationholds51.20%ofitsequity.QingdaoHaierVenture
& Investment Information Co., Ltd.(青岛海尔创业投资咨询
Related-parties or parties acting in concert among the 有限公司)andQingdaoHaichuangzhiManagementConsulting
aforesaidshareholders Enterprise (Limited Partnership)（青岛海创智管理咨询企业
（有限合伙）） is a party acting in concert with Haier Group
Corporation;
(2)TheCompanyisnotawareoftheexistenceofany
connectionsofothershareholders.
Explanation of preferential shareholders with restoration of Notapplicable
votingrightsandtheirshareholdings
Note: (1) This account is the Clearstream Banking Collection Account for the Company’s D shares,which is the original data provided by the German securities registration agency to the Company afterthe merger according to local market practices and technical settings, not representing the ultimateshareholder. (2) 57,142,857 shares in this account are held by Haier International Co., Limited, theconcerted actor of the Company’s ultimate controller Haier Group Corporation, accounting for 0.87% ofthe Company’s total share capital.
Number of shares held by top ten shareholders with selling restrictions and the selling restrictions
□Applicable √Not Applicable
091 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(III) Strategic investors or general legal persons who became the top ten shareholders due to
placing of new shares
□Applicable √Not ApplicableIV. Controlling shareholder and the ultimate controller(I) Status of controlling shareholder
1 Legal person
√Applicable □Not ApplicableName Haier Electric Appliances International Co., Ltd.
The person in charge of the
Company or legal ZhangRuimin(张瑞敏)
representative
Establishmentdate 1988-06-30
Manufacturingof freezer,electromagneticstove, house electricalfan,
hairdryer,freezing machine,gas fire, air cleaner,dishwasher, electric
heater, electric cooker, water dispenser, vacuum cleaner, kitchen
Principalbusiness ventilator, gas stove and oven focal; the export of the products
producedby the Company, the import and export of technology and
equipmentfor the Company’s own use and the import business of
rawmaterialsforproduction
Indirect controlling / participating Company: ‘Qingdao Haier
Shareholding of other nBaiomme:ed‘iHcaalieCroB.,ioLmtde.d’ic(a青l’,岛s海toc尔k生co物de医:疗68股81份39有),限Y公ing司ka)ng(stLoicfke
controlling and participating Technology Co., Ltd. (盈康生命科技股份有限公司) (stock name:
domestic and overseas listed ‘Yingkang Life’,stock code: 300143), ‘Qingdao Bank Co., Ltd.’ (青
companies in the reporting
period 岛00银29行48股),份‘H有aie限r公Ele司ct)ro(nsitcosckGnraomupe:C‘Bo.a,nLktodf.’Q(isntogcdkaon’,asmtoec:k‘Hcoadieer:
Elec’,stockcode:01169.HK)etc.
Otherexplanation Nil
2 Natural person
□Applicable √Not Applicable3 Explanation on the absence of controlling shareholders of the Company
□Applicable √Not Applicable4 Index and dates in respect of the changes in controlling shareholders during the reporting
period
□Applicable √Not Applicable5 Framework of the ownership and controlling relationship between the Company and its
controlling shareholder
√Applicable □Not Applicable
092 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(II) Status of the ultimate controller
1 Legal person
√Applicable □Not ApplicableName Haier Group Corporation
Thepersonin chargeof theCompany ZhangRuimin（张瑞敏）
orlegalrepresentative
Establishmentdate 1980-03-24
Manufacturing of home appliances, digital products,
communication equipment, electronic computers and
accessories, ordinary machineries, kitchen utensils and
industrial use robots; domestic commercial wholesale
Principalbusiness distributionandretailsale(excludingthoseoperatedexclusively
bythe State, which are dangerous and limitedby the State); the
import and export business (please refer to Foreign Trade
EnterpriseValidationCertificatefordetails)
Indirect controlling / participating Company: ‘Qingdao Haier
Biomedical Co., Ltd.’ (青岛海尔生物医疗股份有限公司)
(stock name: ‘Haier Biomedical’, stock code: 688139),
Shareholdingof other controllingand Yingkang Life Technology Co., Ltd. (盈康生命科技股份有限
participating domestic and overseas 公司) (stock name: ‘Yingkang Life’, stock code: 300143),
listed companies in the reporting
period ‘Qingdao Bank Co., Ltd.’ (青岛银行股份有限公司) (stock
name: ‘Bank of Qingdao’, stock code: 002948), ‘Haier
Electronics Group Co., Ltd.’ (stock name: ‘Haier Elec’, stock
code:01169.HK)etc.
Otherexplanation Nil
2 Natural person
□Applicable √Not Applicable3 Explanation on the absence of ultimate controller of the Company
□Applicable √Not Applicable4 Index and dates in respect of the changes in ultimate controller during the reporting period
□Applicable √Not Applicable
093 2019AnnualReportofHaierSmartHomeCo.,Ltd.
5 Framework of ownership and controlling relationship between the Company and the ultimate
controllers
√Applicable □Not Applicable6 The ultimate controller controls the Company by way of Trust or other assets management
□Applicable √Not Applicable(III) Introduction of controlling shareholders and ultimate controllers
√Applicable □Not Applicable
Haier Group Company is registered as a joint-stock enterprise. According to the statement issuedby the State-owned Assets Management Office of Qingdao on 1 June 2002, it is believed that theenterprise nature of Haier Group Company is a collective owned enterprise.
V. Other legal shareholders with a shareholding percentage over 10%
□Applicable √Not ApplicableVI. Explanation of reduction of share restrictions
□Applicable √Not Applicable
094 2019AnnualReportofHaierSmartHomeCo.,Ltd.
SECTION VII RELEVANT INFORMATION OF PREFERRED
SHARES
□Applicable √Not Applicable
095 2019AnnualReportofHaierSmartHomeCo.,Ltd.
SECTION VIII DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES
I. Changes of Shareholding and Remuneration
(I) Changes of shareholding and remuneration of current and retired directors, supervisors and senior management during the reporting period
√Applicable □Not Applicable
Unit: share
Total Whether
remuneration receive
Expiration Shareholdings Shareholdings Increase/ Reasonfor receivedfrom remunerati
Name Title(note) Gender Age Appointme dateof atthe attheendof decreasein increase/ theCompany onfrom
ntdate appointment beginningof theyear sharesforthe decrease duringthe the
theyear year reportingperiod Company’
(RMB0’000) srelated
(beforetax) party
Liang Haishan Chairman male 54 2019-06-18 2022-06-17 12,859,062 14,483,466 1,624,404 190 NO
Employee Notreceiving
TanLixia Vicepresident female 50 2019-06-18 2022-06-17 6,836,737 8,136,260 1,299,523 shareholding remuneration YES
scheme fromthe
vested Company
Li Huagang Director, General male 51 2019-06-18 2022-06-17 482,214 653,306 171,092 142.6 NO
manager
WuChangqi Director male 65 2019-06-18 2022-06-17 20 NO
LinSui Director male 64 2019-06-18 2022-06-17 7.5 NO
YanYan Director male 63 2019-06-18 2022-06-17 7.5 NO
DaiDeming Independentdirector male 58 2019-06-18 2021-06-09 20 NO
Shi Tiantao Independentdirector male 58 2019-06-18 2020-05-19 20 NO
Qian Daqun Independentdirector male 67 2019-06-18 2022-06-17 7.5 NO
Wu Independentdirector male 80 2016-05-31 2019-06-18 12.5 NO
Cheng(retired)
Peng Jianfeng Director male 59 2016-05-31 2019-06-18 12.5 NO
(retired)
Zhou Hongbo Director male 58 2016-05-31 2019-06-18 12.5 NO
(retired)
096 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Liu Haifeng Director male 50 2016-05-31 2019-06-18 0 NO
(retired)
Not receiving
WangPeihua Chairman of the male 63 2019-06-18 2022-06-17 91,213 144,764 53,551 remuneration YES
BoardofSupervisors Employee fromthe
shareholding Company
scheme Notreceiving
Ming Guoqing Supervisor male 60 2019-06-18 2022-06-17 59,518 94,505 34,987 vested remuneration YES
fromthe
Company
YuMiao Employeesupervisor male 38 2019-06-18 2022-06-17 21 NO
WangYuqing Employeesupervisor female 45 2016-05-31 2019-01-08 7,532 7,532 0 NO
(retired)
GongWei Chief financial male 47 2019-06-18 2022-06-17 1,450,556 1,671,903 221,347 Employee 65 NO
officer,vicepresident shareholding
Secretaryto the board scheme
Ming Guozhen of directors, vice female 56 2019-06-18 2022-06-17 1,106,579 1,240,515 133,936 vested 60 NO
president
Total / / / / / 22,893,411 26,432,251 3,538,840 / 598.6 /
Name Majorworkexperience
Male, born in 1966, is a seniorengineer.He hadservedas head of the qualitydepartmentof QingdaoHaier RefrigeratorCo., Ltd.,general managerof QingdaoHaierAir
Conditioner Gen Corp., Ltd, senior vice president of Haier Group, rotation president of Haier Group. He is vice president of the board of directors of Haier Group, and
Chairman & CEO of Haier Smart Home Co., Ltd. chairman of 10th session of the Board manager of Haier Smart Home Co., Ltd.; he was rewarded National May 1st
LiangHaishan Labor Medal, Outstanding Leadership Award of the National Light Industry Enterprise Information (全国轻工业企业信息化优秀领导奖), Top 10 Leaders in China
Strategic EmergingIndustriesin recent year;Prize of TechnologyAdvancementfor China HouseholdAppliances,FirstPrize Award of Scienceand TechnologyProgress
of ChinaNationalLightIndustryCouncil,2017ForbesChinaBestCEOofListedCompany,2017TaishanIndustryLeadingTalentofShandongProvince.
Female,born in 1970, had servedas assistantto director and general managerof Haier Air ConditioningElectronicsImportand Export Company(海尔空调电子进出口
TanLixia 公司), the head of integrated department, deputy director, director of department of overseas market development of Haier Group, and head of department of financial
097 2019AnnualReportofHaierSmartHomeCo.,Ltd.
managementof Haier Group, CFOof HaierGroup currentlyserves as the executivevicepresident of Haier Group,the presidentofHaier FinancialHoldings Limited,the
vice chairman of the 10th session of the Board of Haier Smart Home Co., Ltd.. In recent years, she was successively awarded Model Worker of Shandong Province,
Outstanding Entrepreneur of the State, ‘March 8 Red-Banner Holders of the State’, PRC CFO of the Year, China Top Ten Women in Economic Area, China Top Ten
BrandFemale (中国十大品牌女性), member of the 12th Standing Committee of the All-China Women’s Federation and the vice president of the China Women
EntrepreneursAssociationandsoon.
Male, born in 1969. He has served as the chief operating officer and executive director of Haier Electrical Appliances Group Co., Ltd., a controlling subsidiary of the
Company.He is currently the director,general managerand chief marketingofficer of China of Haier SmartHomeCo., Ltd..He graduated fromHuazhong Universityof
LiHuagang Science and Technologywith a bachelor’s degree in economicsin 1991, and graduated fromChina Europe InternationalBusiness School in 2014 with a master’sdegree
in executivemasterofbusinessadministrationfromseniormanagement.
Male, born in 1955, professor and tutor of doctorate students of department of Strategic Management of Guanghua School of Management of Peking University. He
graduated from Shandong Universityin 1982 with a bachelor degree in economics.He graduated from Katholieke Universiteit Leuven in Belgium in 1990, with a MBA
degree and a doctorate degree in applied economics successively. He was an assistant professor and associate professor of Department of Economics of School of
Business and Managementof Hong Kong Universityof Science and Technology,professor and director of Departmentof Strategic Managementof Guanghua School of
WuChangqi Management of Peking University, deputy dean of Guanghua School of Management, Peking University, Director of EMBA degree programme center and so on. He is
currentlythepresidentof theNationalHi-TechIndustrialDevelopmentZoneStrategyResearchInstituteofPekingUniversity (国家高新技术产业开发区发展战略研究
院)andpresidentofGuanghuaLeadershipResearchCenter,dean ofManagementSchoolofShandongUniversity,ShandongUniversitydirectorofthe10thsessionofthe
BoardofHaierSmartHomeCo.,Ltd..
Male, born in 1956. He was a partner of Deloitte China (retired from Deloitte China on 31 May 2019). He has been engaged in international tax consulting work in the
United States and China for nearly 30 years. He has participated in many professional tax consulting services including multinational investment transactions, mergers,
acquisitions and reorganization, listings, financing projects, tax optimization of supply chain, and internal tax risk control in many Chinese international companies. He
LinSui has extensive experience in corporate reorganization, acquisitions, equity arrangements, tax accounting and business transformation. In recent years, he has been mainly
engaged in consultingfor the digitaltransformationof corporate finance and tax management.In1989, he wentto the United Statesto earn creditsfor MBA and tax law.
He joined DeloitteUSA in 1993 and was assignedto DeloitteChina in 2002. He is aU.S. CertifiedPublic Accountant.Prior to returningChina, he was employedby the
098 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Ministry of Science and Technology of China as a member of the National High-tech Development Torch Program Overseas Scholars Advisory Committee and a UN
China Development Project Expert. He is currently invited to be an external teacher of China Europe International Business School and Shanghai National Accounting
Institute, part-time master tutor of Fudan University and Shanghai University of Finance and Economics, deputy director of the advisory committee of the Large
EnterpriseTaxInstitute,anddirectorofthe10thsessionoftheBoardofHaierSmartHomeCo.,Ltd.
Male, born in 1957. He is currently the founding managing partner of SAIF Asia Investment Fund. Prior to founding SAIF, Mr. Yan was the managing director and
director of the Hong Kong office of AIG Asia Infrastructure Investment Fund from 1994 to 2001. From 1989 to 1994, he was an economist at the World Bank
headquartersinWashington,aresearcheratthewell-knownthinktankHudsonInstitute,andadirectorofstrategicplanningandbusinessdevelopmentfortheAsiaPacific
YanYan region at SprintInternationalCorporation. Mr.Yan obtaineda bachelor’sdegree in engineeringfromNanjing Instituteof Aeronauticsin 1982 and specializedin master’s
degree of Sociology in Peking University from 1984 to 1986. He studied his Ph.D. from Princeton University from 1986-1989 and received a master’s degree in
internationaleconomicsin1989.HealsotookadvancedfinanceandaccountancycoursesattheWhartonSchoolofBusinessin1995.
Male, born in 1962. He is a professor and doctoral supervisor of the accounting department of School of Business at Remin University of China. He also concurrently
DaiDeming holdsotherpositionssuchasavice-chairmanofAccountingSocietyofChina,Independentdirectorofthe10thsessionoftheBoardofDirectorsofHaierSmartHome.He
servedasan independentdirectorforBeijingCapitalDevelopmentCo., Ltd.（北京首都开发股份有限公司）.
Male,bornin1962.HecurrentlyservesasaprofessoranddoctoralsupervisoroftheSchoolofLawatTsinghuaUniversityaswellasdirectorofFinance&LawResearch
Center under the School of Law at Tsinghua University. He also serves on the 10th session of the Board of Directors of Haier Smart Home as an independent director.
ShiTiantao Meanwhile,heconcurrentlyholdsotherpositionssuchasavicepresidentoftheChineseResearchAssociationofSecuritiesLaw,anarbitratorofCIETAC,andamember
of theCaseGuidanceCommitteeoftheSupremePeople’sCourt.
Male, born in 1953. He was served as Chairman of IBM Greater China, Chief Executive Officer and CEO of IBM Greater China. He graduated from the Department of
QianDaqun Mathematics, Tamkang University of Taiwan, and studied advanced management courses at Harvard University’s Institute of Business Administration, IBM Global
SeniorManagerCourse,andiscurrentlyanindependentdirectorofthe10thsessionoftheBoardofHaierSmartHomeCo.,Ltd..
Male, born in 1940, expert in information and automation, academician of Chinese Academy of Engineering. He graduated from Tsinghua University in 1962 and got a
Wu Cheng postgraduate degree of Tsinghua University in 1966. He is a professor and doctoral supervisor of department of Automation of Tsinghua University, head of National
(retired) CIMSEngineeringResearchCenter,andwasanindependentdirectorofthe9thsessionoftheBoardofHaierSmartHomeCo.,Ltd..
099 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Male, born in 1961, professor and tutor of doctorate students of School of Labor and Human Resources of Remin University of China, president of China Stone
Peng Jianfeng Management Consulting Group, vice chairman of China Human Resource Development Association, vice director of Management Consulting Committee of China
(retired) Enterprise Confederation. He once was the deputy dean of School of Labor and Human Resources of Remin University of China and a director of the 9th session of the
BoardofHaierSmartHomeCo.,Ltd..
Male,bornin1962,chairmanofUbiLink,memberoftheboardofdirectorsofBeijingHanbangTechnologyCo., Ltd.,part-timechiefscientistofKylandTechnologyCo.,
Ltd(东土科技); he was once the general manager of Beiqi iFoton Co., Ltd. (北汽福田车联网公司), chief software specialist of Tsinghua Tongfang, senior engineer /
managerofresearchanddevelopmentofIBM/OracleandothercompaniesintheUnitedStates,postdoctoralresearcherofOakRidgeNationalLaboratoryofAmericaetc.
Zhou Hongbo He has engaged in the research and development work in supercomputing and cloud computing. He was distinguished expert of Beijing, Guiyang and other municipal
(retired)
government; part-time professor of Beijing Jiaotong University, University of Electronic Science and Technology of China and other colleges; He was the pioneer
engaged in IoT development in Tsinghua Tongfang after his return from abroad in 2003, and has published three treatises at home and abroad, and he is one of the nine
globalIoTexpertsinterviewedbytheinternationallyrenownedmagazine‘Economist’.Hewasadirectorofthe9thsessionoftheBoardofHaierSmartHomeCo.,Ltd..
Male,bornin1970,currentlyisthepresidentofDehongCapital（德弘资本）andwastheKKRglobalpartner,co-headofKKRAsianPrivateEquity(KKR 亚洲私募业
务)and CEO of KKR Greater China Region. He once served as the managing director of Morgan Stanley and co-head of the Direct Investment Department of Morgan
StanleyAsia. In yearsof direct investmentcareer, he achievedan excellentlong-terminvestmentperformance,hewas responsiblefor and leda numberof successfuland
pioneering direct investmentprojects in the Greater China region, such as: Ping An Insurance, Mengniu Dairy,Qingdao Haier, Sunner Development,Belle International,
Liu Haifeng Far East Horizon,Nanfu Battery,China ModernDairy,United EnvirotechLtd.,China InternationalCapitalCorporationLimited (CICC),China Cord Blood Corporation,
(retired)
YongleHousehold Appliances, Hengan International, COFCO Meat, Guangdong Feed(粤海饲料), Asia Dairy, Uxin Limited, Tarena Education and etc. He graduated
from Columbia University, and achieved the highest honor of science degree in Department of Electronic Engineering; he is a member of Tau Beta Pi (National
EngineeringHonor Society of America) (全美工程荣誉学会), and he has won the Edwin Howard Armstrong Award as the most outstanding electronic engineering
studentofColumbiaUniversity.Hewasadirectorofthe9thsessionoftheBoardofHaierSmartHomeCo.,Ltd..
Male,bornin1957,seniorpoliticalanalyst,he has servedas thedeputysecretaryof PartyCommitteeof HaierGroupAir-ConditionerHeadOffice(海尔集团空调本部),
WangPeihua Washing Machine Head Office (洗衣机本部), and Haier Group Freezer & Heater Head Office (海尔集团冷柜电热本部), chairman of the labor union of Haier Group
Technology and EquipmentHead Office, deputysecretary of Discipline Inspection Committee etc.. He is the head of the Organizational Departmentof Haier Group and
0100 2019AnnualReportofHaierSmartHomeCo.,Ltd.
the presidentofthe10thsessionoftheBoardofSupervisorsofHaierSmartHomeCo.,Ltd..
Male, born in 1960, senior political analyst, has served as deputy secretary of Discipline Inspection Committee of Qingdao Refrigerator General Factory, party branch
secretaryand assistant manager of Qingdao Haier Transportation Company (青岛海尔运输公司), head of the comprehensive department of Qingdao Haier Co., Ltd.,
MingGuoqing deputy secretary of party committee and secretaryof discipline inspection committeeof Haier RefrigeratorProducts Head Office (海尔冰箱产品本部),chairman of the
laborunion.HeisthechairmanofthelaborunionofHaierGroup,andthesupervisorofthe10thsessionoftheboardofsupervisorsofHaierSmartHomeCo.,Ltd..
Male, Hannationality,bornin1982,Chinesenationalitywitha masterdegree.He servesasthelegalmanagerandemployeesupervisorofthe 10thsessionoftheboardof
YuMiao supervisorsofHaierSmartHomeCo.,Ltd.sinceApril2012.
Wang Female, born in 1975, has served as the employee supervisor of the board of Supervisors of Haier Smart Home Co., Ltd., the secretary and head of the general manager
Yuqing(retired) officeofHaierSmartHomeCo.,Ltd..
Male, born in 1973, has served as the financial manager of Haier Smart Home Co., Ltd., senior financial manager and senior financial analyst of Haier Group, chief financial
officerof Haier Washing Machine Head Office (海尔洗衣机本部), chief financial officer of Haier Air-Conditioner Head Office (海尔空调本部), chief financial officer of
GongWei White Goods Group, he is currently the vice president and chief financial officer of the Company. He was granted the honorary titles such as Outstanding Youth in Post of
Qingdao City, Outstanding Accounting Workers of Shandong Province, National Outstanding Accounting Workers and so on, and won the awards of Top Ten CFO in China as
appraisedby‘NewMoney’Magazine (《新理财杂志》)in2011.
Female, born in1964, senioreconomist,was the lecturerof the investmentdepartmentof ChinaInstituteof Finance,deputyhead of theTeachingandResearchsectionof
InvestmentEconomyDepartment,a memberoftreasurydepartmentofEverbrightInternational InvestmentConsultancyCompany,deputydirectoranddirectorofgeneral
manager office, general manager of business management department and general manager of personnel department, assistant to the general manager of the Company,
MingGuozhen executive vice president of Everbright International Investment Consultancy Company; she was the office director of analysts professional committee of the Securities
AssociationofChina,vicedirectorof QualificationManagementDepartmentof the Association,vicedirectorof PracticeStandardsCommittee(执业标准委员会)of the
Association.SheiscurrentlythevicegeneralmanagerandsecretarytotheBoardofDirectorsofHaierSmartHomeCo.,Ltd..
Other information
□Applicable √Not Applicable
0101 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(II) Incentive share option granted to directors and senior management during the reporting period
□Applicable √Not ApplicableII. Positions held by current and retired directors, supervisors and senior management during the reporting period(I) Positions held in shareholders’ entities
√Applicable □Not Applicable
Name Company Position Appointmentdate Enddateofappointment
LiangHaishan Haier Electric Appliances International Director November1997
Co., Ltd.
TanLixia Haier Electric Appliances International Director September2014
Co., Ltd.
TanLixia Qingdao Haier Venture & Investment Supervisor
InformationCo., Ltd. (青岛海尔创业投 March2009
资咨询有限公司)
TanLixia HaierGroupCorporation Executivevicepresident February2016
WangPeihua HaierGroupCorporation Head of Organizational
Department
MingGuoqing HaierGroupCorporation ChairmanoftheLaborUnion
LiHuagang Haier Electric Appliances International Director
Co., Ltd.
Positions in shareholders Nil
entities
(II) Positions held in other entities
√Applicable □Not Applicable
Name Company Position Appointmentdate Enddateofappointment
LiangHaishan HaierGroupFinanceCo.,Ltd. Director
LiangHaishan HaierFinancialHoldingsLimited Director
LiangHaishan QingdaoHaiermultimediaCo.,Ltd. Chairman
Tan Lixia HaierGroupFinanceCo.,Ltd. Supervisor
0102 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Tan Lixia HaierFinancialHoldingsLimited Legalrepresentative,director July2014
Tan Lixia BankofQingdaoCo.,Ltd. Non-executivedirector April2012 May2021
TanLixia Wanlian (Chongqing) IoT Technology Co., Ltd.(万 President May2018
链（重庆）物联网科技有限公司)
Tan Lixia YingkangLifeTechnologyCo.,Ltd. Director 16May2019
Tan Lixia QingdaoHaierBiomedicalCo.,Ltd. President July2018
LiHuagang Qingdao Haier Cultural Industry Development Co., Director
Ltd.（青岛海尔文化产业发展有限公司）
Wu Cheng TsinghuaUniversity Professor February1967
Wu Cheng Kingdee International Software Group Company Independent Non-executive March2018
Limited director
Wu Changqi PekingUniversity Professor
Wu Changqi HuaxiaBankCo.,Ltd. Supervisor 12May2015 12May2021
Wu Changqi Beijing Electronic Zone Investment and Independentdirector 28December2012 22April2019
Development Co.,Ltd.
Wu Changqi YijiaheTechnologyCo.,Ltd. Independentdirector 24August2018 24August2021
Wu Changqi ShandongUniversity DeanofManagementSchool October2019
ShiTiantao TsinghuaUniversity Professor 2000
ShiTiantao JiajiayueGroupHoldingCo.,Ltd. Independentdirector
ShiTiantao BeijingZehoWaterfrontCo.,Ltd. Independentdirector
ShiTiantao RongtongFundManagementCo.,Ltd. Independentdirector
LiuHaifeng FarEastHorizonCo.,Ltd Non-executivedirector October2009
LiuHaifeng ChinaInternationalCapitalCorporationLimited Non-executivedirector February2015
LiuHaifeng SunpowerGroup Non-executivedirector November2017
DaiDeming ChinaZheshangBankCo.,Ltd. Independent Non-executive March2015
director
DaiDeming BOCAviationLimited Independent Non-executive May2016
director
DaiDeming ChinaSecuritiesCo.,Ltd. Independent Non-executive August2016
director
DaiDeming PowerConstructionCorporationofChina Independent Non-executive March2018
director
DaiDeming Poly Developments and Holdings Corporation Independent Non-executive September2018
Limited director
0103 2019AnnualReportofHaierSmartHomeCo.,Ltd.
PengJianfeng Beijing Chinastone Enterprise Management ChairmanoftheBoard 2003
Consulting Co.,Ltd.
PengJianfeng School of Labor and Human Resources of Remin Professor 1996
University ofChina
PengJianfeng China Merchants Shekou Industrial Zone Holdings Independentdirector 2015
Co., Ltd.
PengJianfeng JinkoPowerTechnologyCo.,Ltd. Independentdirector 2017
ZhouHongbo BeijingHanbangTechnologyCo.,Ltd. Director November2017 November2020
Lin Sui DeloitteChina Partner From1June2002 31May2019
YanYan SAIFAsiaInvestmentFund(赛富亚洲投资基金) Chiefpartner October2001 To date
YanYan ChinaResourcesLandLimited Independent Non-executive July2006 Todate
director
YanYan Guodian Technology & Environment Group Non-executivedirector June2012 Todate
Corporation Limited
YanYan Beijing BuleFocus Data Technology Co., Ltd.(北 Independentdirector March2014 To date
京蓝色光标数据科技股份有限公司)
YanYan TCLGroupCorporation Independentdirector March2015 Todate
YanYan ATAInc. Director March2005 Todate
YanYan Shanghai WellTech Industrial Automation Co., Director June2019 Todate
Ltd.(上海威尔泰工业自动化股份有限公司)
YanYan 360Finance,Inc Independentdirector October2019 Todate
YanYan Shenzhen Guangfeng Technology Co., Ltd.(深圳光 Director June2019 To date
峰科技股份有限公司)
Ming Guozhen Qingdao Overseas Chinese Industrial Holdings Co., Director July2008
Ltd.
Positions in other Nil
entities
III. Remuneration of directors, supervisors and senior management
√Applicable □Not ApplicableDecision-making procedures of the The procedures for decision-making of remuneration of directors, supervisors and senior management of the Company are
remunerationofdirectors,supervisors establishing platform, clearing standards, communication and consultation, and making objective decision. The
andseniormanagement
0104 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Remuneration Committeeof the Company formulate remuneration standards, adjust principles and assess the principles of
realizing, then propose them to the board of directors for approval, thus form a system platform, then to determine the
actual remunerationof thatyearaccordingtotheprincipleof‘salarypaidbyusers’andthe verticalandhorizontalmatching
statement examination results of the bet against cycle, the vertical and horizontal matching statement annual examination
results andwin-winvalue-addedstatementexaminationresults,andtheEMCcontracts.
Determination basis of the The managementpersonnelsalarysystemof the Companyin 2019 reflectsthe high value-added and high sharingnature of
remunerationofdirectors,supervisors ‘salary paid by users’ and is linked to the vertical and horizontal matching statement and the win-win value-added
andseniormanagement
statement, of which the tool is the two-dimensional lattice model (二维点阵模型). The two-dimensional lattice (二维点
阵) could reflect the strategy support and EMC contracts vertically, connecting with the ignition of the enhancement of
EMC/emerging small companies and leading platform, and the global leading market competitiveness and outcome of
ecology horizontally.The highest allowanceof outside directorsof the 9th and 10th sessionof the board of directors of the
Company is RMB 200,000 (before tax) in total per year, including the fixed allowances of RMB 150,000 per year, the
highest performance allowance is RMB 50,000 per year, and the exact amount of performance allowance will be
determined based on the comprehensive consideration of the contribution of directors to the Board decision making, the
effectivenessoftheproposalsandrecommendationstotheboardofdirectors,theparticipationofthemeetingsoftheBoard,
attendance rate of all Board meetings and other factors. The travelling expense for attending the meetings of the board of
directors and shareholders and other expenses necessaryfor performing their duties pursuant to the Articles of Association
shall befullyreimbursed.
Remuneration payables of directors, Paidasrequired.
supervisorsandseniormanagement
Total actual remuneration of all the
directors, supervisors and senior RMB5.986million
management at the end of the
reportingperiod
0105 2019AnnualReportofHaierSmartHomeCo.,Ltd.
IV. Changes in directors, supervisors and senior management of the Company
√Applicable □Not Applicable
Name Position Changes Reasons
PengJianfeng Director Designation Reelection due to the expiry of 9th
sessionoftheBoardofDirectors
ZhouHongbo Director Designation Reelection due to the expiry of 9th
sessionoftheBoardofDirectors
Liu Haifeng Director Designation Reelection due to the expiry of 9th
sessionoftheBoardofDirectors
WuCheng Independentdirector Designation Reelection due to the expiry of 9th
sessionoftheBoardofDirectors
Lin Sui Director Election Establishment to 10th session of the
BoardofDirectors
YanYan Director Election Establishment to 10th session of the
BoardofDirectors
Li Huagang Director Election Establishment to 10th session of the
BoardofDirectors
Qian Daqun Independentdirector Election Establishment to 10th session of the
BoardofDirectors
Liang Haishan Generalmanager Designation Reelection due to the expiry of 9th
sessionoftheBoardofDirectors
Li Huagang Generalmanager Appointment Establishment to 10th session of the
BoardofDirectors
WangYuqing Employeesupervisor Designation ResignfromtheCompany
YuMiao Employeesupervisor Election Appointed
V. Punishment by the Securities Supervisory Institute in last three years
□Applicable √Not Applicable
0106 2019AnnualReportofHaierSmartHomeCo.,Ltd.
VI. Staff of the parent company and principal subsidiaries
(I) Staff information
Numberofstaffoftheparentcompany 3,501
Numberofstaffofprinciplesubsidiaries 96,256
Totalnumberofstaff 99,757
Number of employees whose retirement expenses 0
are borne by the parent company and the principal
subsidiaries
Breakdown byfunction
Function Number
Production 59,581
Sales 19,818
R&D 16,679
Financial 1,509
Administrative 2,170
Total 99,757
Breakdownbyeducation
Education Number(person)
Bachelorandabove 24,175
College 25,346
Technicalsecondaryschoolandothers 50,236
Total 99,757
(II) Remuneration policies
√Applicable □Not Applicable
The Company conducted the system of ‘salary paid by users’, individual paid separately andentirety paid in advanced, which is examined by added-value of user experience and originates from thestrategic balance sheet of Haier, and carried out the evaluation of the creation of user values, the ignitionof the enhancement of EMC/emerging small companies, the budget implementation of the leadingtargets, outcome of the ecology and the continuous optimization based on the EMC contracts, verticaland horizontal matching statement and the win-win value-added statement. The incentive system leadsto ‘salary paid by users’, win-win sharing through everybody creating values to the users who will payfor the values, leading to create ecological value, achieving the brand leading of IoT ecology.
(III) Personnel training
√Applicable □Not Applicable
Please also refer to relevant content set out in 2019 Social Responsibility Report of Haier SmartHome Co., Ltd. published on the same date as this report.
(IV) Labor Outsourcing
□Applicable √Not ApplicableVII. Other
□Applicable √Not Applicable
0107 2019AnnualReportofHaierSmartHomeCo.,Ltd.
SECTION IX CORPORATE GOVERNANCE
I. Explanation of Corporate Governance
√Applicable □Not Applicable
During the reporting period, the Company strictly complied with the requirements under theCompany Law, the Securities Law, Code on Corporate Governance for Listing Company and therequirements of the relevant laws and regulations, to improve its corporate governance structure,regulate its operation, improve its information disclosure system, strengthen the communication withinvestors and elevate the standard of the Company’s corporate governance. In respect of corporategovernance structure, the general meeting, the Board and the management standardized its operation topractically guarantee the legal interests of the Company and its shareholders; all Directors dulydischarged their duties in a diligent way; each committee of the Board of the Company performed theirwork according to their respective detailed working rules to ensure that the Board operate in a moreeffective and scientific way; independent Directors fulfilled their duties independently and issuedindependent opinion on major matters in order to effectively protect the interests of the Company as awhole and the lawful rights and interests of medium and small investors. In respect of informationdisclosure, the Company strictly executed the registration and management system for insiders, achievedthe management of inside information on significant events and eliminating the act of using theCompany’s inside information for stocks trading by insider. Meanwhile, the Company reinforced theaccountability of people who are responsible for annual report disclosure and enhanced the quality andtransparency of information disclosure in annual reports. The Company has placed a lot of emphasis oninformation disclosure and disclosed relevant information on a true, accurate, complete and timely basisstrictly in accordance with the requirements of laws and regulations to ensure all shareholders haveequal access to such information. In respect of the management of investor relation, in accordance withguideline of the Management System for Investor Relation, the Company integrated business andfinancial resources by the office of board secretary and realized positive and all-around access toinvestors in a multi-layer and diversified format through introduction reference, result announcementconference and online forum. Meanwhile, the Company replied investors on a timely basis by ways ofinterview, e-mail, phone, fax and the website (http://sns.sseinfo.com) and enhanced interaction withinvestors, so as to respect and protect the interests of various investors, with the aim of achievingharmonious and mutual success with the Company, staff and investors. The corporate governancestructure of the Company is sound and there is no difference between the corporate governance structureand the requirement of relevant documents from CSRC.
（1）Shareholders and general meeting of shareholders:
The Company could ensure that all shareholders, especially the minority shareholders enjoy equaltreatment and are able to fully exercise their rights; during the reporting period, the convening andprocedure of the shareholders’ general meeting of the Company were in compliance with therequirements of the Articles of Association and Rules Governing Shareholders’ General Meeting of the
0108 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Company. Attendance of shareholders at the meeting is relatively high, which ensured that the
shareholders fully excised voting rights; the Company also engaged lawyers who possess the
qualification to engage in securities business to attend and witness the shareholders’ general meeting; the
resolutions were considered and approved in accordance with legal procedures, which could guarantee
the power and rights of minority shareholders.
（2）Relationship between controlling shareholders and the listed company:
The controlling shareholders acted normatively and did not interfere with the Company’smanagement decisions and operations, directly or indirectly. The Company and the controllingshareholders are independent of each other in terms of their staff, assets, finance, organization andbusiness. Their respective board of directors, the Board of Supervisors and internal administrativedepartments are all independent of each other. The specific requirements for regulating Related-partytransactions and fund flow are set out in the Articles of Association, Fair Decision-Making System forRelated-party Transactions and the Administrative System for Regulation of Fund Flow between theCompany and Related Parties, Risk Control System for Related-party Transaction with Haier GroupFinance Co., Ltd., and Proposal for Emergency Response System for Risk of Deposits with Haier GroupFinance Co., Ltd., which guaranteed the interests of investors. The daily related-party transactions aresubject to the consideration and approval at the annual general meeting and set specialized executionprocedure. The basis of pricing and reasonability of operation agreement shall be supervised andreviewed by special departments, so as to regulate the execution of related-party transactions. Internalcontrol and internal control audit of the Company would also focus on the compliance of therelated-party transactions, in order to protect the interests of minority shareholders and non-relatedshareholders. During the reporting period, further increased self-procurement capability and scope of theself-procurement platforms including Qingdao Haidarui Procurement Service Co., Ltd.(青岛海达瑞采购服务有限公司) and Qingdao Haidayuan Procurement Service Co., Ltd.(青岛海达源采购服务有限公司) and strengthened the procurement capability of the Company, which further reduced related-partytransactions.
（3）Directors and the Board:
During the reporting period, the Board of the Company operated in accordance with rules andcontinued to perform their duties under the Articles of Association and relevant laws and regulationsbetter and practically implement relevant decisions at the shareholders’ general meeting. The numberand composition of the members of the Board complied with relevant laws and regulations; the directorsattended the board meeting and shareholders’ general meeting with diligent and responsible attitude andprotected the interests of the Company. During the reporting period, the Company reelected thepersonnel of its 10th session of the Board smoothly. The Company has 6 external directors, of which 3are independent directors, representing two thirds of the total number of the directors (9 in total) of theCompany. The Board continues to maintain an open structure and efficiently bring ‘smart’ resources tothe Company. Each of the independent directors of the Company respectively acted as member of the
0109 2019AnnualReportofHaierSmartHomeCo.,Ltd.
nomination committee, remuneration and appraisal committee and audit committee of the Board and
practically carried out their duties, which are in accordance with the requirements in the Code of
Corporate Governance for Listed Companies.
During the reporting period, all directors and independent directors performed their dutiesearnestly strictly in compliance with the Articles of Association, the Rules of Procedure for the Board ofDirectors, the System for Independent Directors and relevant requirements under laws and regulationsand each committees of the Board operated normatively according to its own work rules. During thereporting period, the Board of the Company considered and approved the following matters: theEmployees Stock Ownership Scheme and periodical reports, so as to encourage the Company to furtherconsolidate its resources to better implement the networking and globalize development strategy. Duringthe reporting period, the Company reelected the personnel of the Board and senior managementsmoothly.
（4）Supervisors and the Board of Supervisors:
During the reporting period, the Board of Supervisors operated in accordance with rules andcontinued to practically perform their duties under the Articles of Association and relevant laws andregulations. The number and composition of the members of the Board of Supervisors complied withrequirements under laws and regulations. During the reporting period, the Supervisors of the Companyperformed their duties earnestly and adhered to the principle of being responsible to the Company andall shareholders to supervise legality and compliance on finance matters of the Company andperformance of duty by the Company’s directors, managers of the Company and other seniormanagement strictly in accordance with requirements under the Articles of Association, the Rules ofProcedure for the Board of Supervisors and relevant laws and regulations. During the reporting period,the Company reelected the personnel of the board of supervisors smoothly.
（5）Performance evaluation and incentive and disciplinary mechanism:
In accordance with the Articles of Association, the Board shall appoint or remove the generalmanager and the secretary of the Board; the Board shall appoint or remove the deputy general managerand other senior management (including the chief financial officer) of the Company based on thenomination by the general manager and determine their remunerations and rewards and penalties. Thehuman resource department of the Company shall make routine appraisal and evaluation on theperformance of directors, supervisors and senior management and Remuneration and AppraisalCommittee shall make inspection and evaluation on their performance to determine their remunerationsat the end of the year.
During the reporting period, the Company adopted the Phase IV Employees Stock OwnershipScheme which further perfected the incentive and disciplinary mechanism and mechanism of theshareholders shares benefits and risks with the management of the Company, so as to enhance thecompetitiveness and promote the sustainable and sound development of the Company.
（6）Stakeholders:
0110 2019AnnualReportofHaierSmartHomeCo.,Ltd.
The Company was able to fully respect and protect the lawful rights and interests of the suppliers,channels, banks, other creditors, employees, consumers and other stakeholders. Meanwhile, theCompany actively took part in public welfare undertaking in such place where it operates, placed a lot ofemphasis on environment protection, performed its social duties earnestly and worked together withthese stakeholders actively with good communication to promote the sustainable and sound developmentof the Company. For details, please refer to relevant information in 2019 Social Responsibility Report ofHaier Smart Home Co., Ltd. published on the same date of this report.
（7） Information disclosure and transparency:
During the reporting period, the Company positively disclosed the relevant information in a true,accurate and complete manner which was strictly in accordance with relevant laws and regulationsincluding the Articles of Association, Administrative Measure for Information Disclosure andrequirements in the Information Disclosure Management System of the Company, Work Rules andProcedures Regarding the Annual Report and the Management System for Investor Relation, proactivelycommunicated with regulatory authorities and investors and designated newspapers including ShanghaiSecurities News, China Securities Journal, Securities Times and Securities Daily for informationdisclosure to ensure that all shareholders access to such information equally. The Company authorizedthe secretary of the Board to take charge of information disclosure, reception of visits by shareholdersand handling of shareholder’s enquiries. Meanwhile, the Company broadened communication channelsfor investors to get relevant information of the Company through telephone conference calls afterperiodical reporting and occasionally holding on-site and online forums. With respect to the significantRelated-party transactions, the Company performed necessary approval procedures and disclosedrelevant information strictly in compliance with the Articles of Association and Fair Decision-MakingSystem for Related-party Transactions to protect the interests of investors. During the reporting period,the Company further perfected the confidentiality procedure for information disclosure strictly incompliance with the Registration System of Insiders, the Responsibility System for Major Errors inInformation Disclosure in Annual Reports and the Management System of External Information Users toensure the fairness and equity of information disclosure.
（8）Implementation of corporate governance campaign in 2019:
During the reporting period, the Company continued to carry out works relating to ‘solution ofbusiness competition and reduction of related-party transactions’ to maintain the Company’s optimizedgovernance results. In 2019, trading volume of related-party transactions regarding procurementamounted to RMB 20.12 billion, which accounted for 10.9% of the similar transactions, representing adecrease of 0.5 pct pt compared to the same period of the previous year. Trading volume of related-partytransactions regarding sales amounted to RMB 2.63 billion, which accounted for 1.3% of the similartransactions, representing a decrease of 0.2pct pt compared to the same period of the previous year. Theoptimization of the related-party transactions in the previous period has been maintained. The Companywill continue to promote the continuous optimization of related-party transactions (Related-partytransactions herein refer to transactions between the Company and related parties determined in
0111 2019AnnualReportofHaierSmartHomeCo.,Ltd.
accordance with the Rules Governing the Listing of Stocks on Shanghai Stock Exchange and other
regulations. Therefore, the scope and amount of related-party transactions may be different from that
scope as identified under Accounting Standards for Business Enterprises).
Leveraging on the further implementation of governance campaign and enhancing theestablishment of fundamental systems, the Company further improved the corporate governancestructure and improved the corporate governance. The Company carried out various activities tostrengthen the consciousness of learning and further strengthened the consciousness on regulatinggovernance in the listed company among directors, supervisors and senior management of the listedcompany with organizational training to improve the ability to regulate governance and continuouslyimprove and perfect corporate governance of the Company, thus to protect the minority interests and toguarantee and promote the healthy, stable and sustainable development of the Company.
Whether there is a significant difference between the corporate governance and requirements ofrelevant provisions of the CSRC; if so, the reasons should be explained
□Applicable √Not Applicable
II. Brief Introduction to the General Meeting of Shareholders
Meeting Date Indexfordetailsofwebsitesdesignated Dateofdisclosure
for publishingresolutions
For details,pleaserefertothe
Announcement on Resolutions Passed at
2018 the 2018 Annual General Meeting of
Annual 18June2019 Qingdao Haier Co., Ltd. (L2019-040) 19June2019
General published by the Company on the
Meeting website of Shanghai Stock Exchange
(www.sse.com.cn) and the four major
securities newspapers.
Explanation of shareholders’ general meetings
√Applicable □Not Applicable
The 2018 Annual General Meeting of the Company (the ‘2018 AGM’) was held by way ofon-site voting and online voting by poll at Room A108, Haier University, Haier Information Park, No.1Haier Road, Qingdao, the PRC in the afternoon on 18 June 2019 for deliberation of the proposalsconcerning the annual report of the Company and other issues. The Company had a total of6,368,416,700 shares. Attendance of shareholders and proxies at the 2018 AGM is as follows: therewere 314 shareholders of the Company in attendance either in person or by proxy at the 2018 AGM,holding a total of 3,732,277,507 shares, representing 58.61% of the total number of shares of theCompany with voting rights. The directors, supervisors and senior management of the Company as wellas the lawyers engaged by the Company also attended the 2018 AGM. The 2018 AGM was convened bythe Board of the Company. Mr. Liang Haishan, Chairman of the Board, presided over the 2018 AGM.The Company had 9 Directors, of whom 4 Directors attended the 2018 AGM (Directors Wu Changqi,Peng Jianfeng, Zhou Hongbo, Wu Cheng, Liu Haifeng David were unable to attend the 2018 AGM dueto personal engagement); the Company had 3 Supervisors, all of whom attended the 2018 AGM. The
0112 2019AnnualReportofHaierSmartHomeCo.,Ltd.
secretary to the Board of the Company attended the 2018 AGM and other members of senior
management of the Company were invited to attend the 2018 AGM.
III. Performance of duties by directors
(I) Attendance of board meetings and general meetings by directors
Attendan
AttendanceofBoardmeetings ce
ofgeneral
meetings
Whetheran Requir Absence
Name of independent ed Attend fromtwo
director directoror attenda Attend ance Attend consecuti Attendan
not ncesof ance by ance Abse ve ces
Board in teleco by nce meetings atgeneral
meetin person mmun proxy in meetings
gs ication personor
not
LiangHaisan No 8 8 4 0 0 No 1
TanLixia No 8 8 3 0 0 No 1
Li Huagang No 5 5 2 0 0 No 0
WuChangqi No 8 8 6 0 0 No 0
DaiDeming Yes 8 8 5 0 0 No 1
Shi Tiantao Yes 8 8 7 0 0 No 1
LinSui No 5 5 2 0 0 No 0
QianDaqun Yes 5 5 3 0 0 No 0
Yan Yan No 5 5 4 0 0 No 0
WuCheng Yes 3 3 3 0 0 No 0
Peng Jianfeng No 3 3 3 0 0 No 0
Zhou Hongbo No 3 3 3 0 0 No 0
Liu HaifengDavid No 3 2 2 1 0 No 0
Statement for failure to attend the Board meetings in person for two consecutive times
□Applicable √Not ApplicableNumber of Board meetings held in the year 8
Ofwhich:Numberofon-sitemeetings 0
Number of meetings held by 3
telecommunication
Numberof meetings held both on site 5
andbytelecommunication
(II) Independent directors’ objection to the relevant matters of the Company
?Applicable √Not Applicable(III) Other
□Applicable √Not ApplicableIV. Major opinions and suggestions of the Special Committees of the Board in performing their
duties during the reporting period, details should be disclosed if any disagreements
√Applicable □Not Applicable
（1）Audit Committee: during the reporting period, the Company convened 7 meetings of the Audit
0113 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Committee to consider the annual report audit-related work for three times, namely, pre-audit, mid-audit
and post audit and made relevant arrangement. The Audit Committee believed that the 2018 financial
and accounting statement issued by the Company was in compliance with the requirements of the
Accounting Standards for Business Enterprises, and gave a true and fair view of the Company’s assets
and liabilities as of 31 December 2018 and operating results and cash flow for the year 2018. There was
no significant unresolved disagreement between accounting and auditing. There was no material risk
affecting the Company’s operation. The Company operated prudently and would be able to continue as a
going concern. Other meetings considered the plans for the annual budget of related-party transactions,
internal control self-assessment reports, profit distribution plan, engagement of accounting firm, capital
increase in subsidiaries by related parties, the first quarterly report/the semi-annual report/the third
quarterly report of 2019. The Audit Committee agreed the above resolutions and submitted the same to
the Board for consideration.
（2）Remuneration and Appraisal Committee: during the reporting period, the Company convened 1meeting of the Remuneration and Appraisal Committee to consider the Phase IV Stock OwnershipScheme of Core Employees Stock Ownership Scheme and the annual remuneration package of directors,supervisors and senior management. The Remuneration Committee believes that the Company’s salaryincentive system will be further improved, the incentive and restriction mechanism will be strengthenedand a mechanism that shares interests and risks between shareholders of the Company and themanagement will be formulated by implementing such initiatives as Core Employees Stock OwnershipScheme. The remuneration received by the Company’s directors and senior management personnel fromthe Company is strictly evaluated and cashed in accordance with the Company’s evaluation system. Theremuneration disclosed by the Company is consistent with the actual situation. The Remuneration andAppraisal Committee agreed the above resolutions and submitted the same to the Board forconsideration.
（3）Nomination Committee: during the reporting period, the Company convened 1 meeting of theNomination Committee to summarize the reelection of directors/senior management as well as annualperformance of duties by directors, supervisors and senior management. The Nomination Committeebelieves that there are no director / executive candidates who are not allowed to serve as directors of theCompany, and their qualifications meet the requirements for being a director of a listed company andthey are capable to meet the requirements of the relevant positions assigned by the Company; Alldirectors, supervisors and senior management personnel of the Company are fulfilled their diligent andhonesty obligation in accordance with the provisions of laws, regulations and the Articles of Association,and safeguarded the interests of the Company’s shareholders. The Nomination Committee agreed theabove resolutions.
（4）Strategy Committee: during the reporting period, the Company convened 2 meetings of theStrategy Committee to consider and approve the plan for capital increase in subsidiaries of the Companyby related parties, annual performance of duties. The Strategy Committee believes that this capitalincrease can facilitate the Company’s sustainable development and is in line with the Company’s
0114 2019AnnualReportofHaierSmartHomeCo.,Ltd.
long-term development strategy and the long-term interests of all shareholders of the Company. Such
capital increase has no adverse impact on the Company’s sustainable operating capacity, profit or loss
and asset condition. The Strategy Committee agreed the above resolutions and submitted the same to the
Board for consideration.
V. Board of Supervisors’ explanation on risks about the Company
□Applicable √Not ApplicableVI. Statements of the Company on inability to maintain the independence or the ability of
independent operations between the Company and the controlling shareholders with respect
to business, personnel, assets, organization and finance
□Applicable √Not Applicable
Corresponding solutions, working progress and subsequent working plans of the Company in caseof horizontal competition
□Applicable √Not ApplicableVII. Establishment and implementation of appraisal and incentive mechanism for senior
management during the reporting period
√Applicable □Not Applicable
In 2019, the Company adopted a system ―salary paid by users‖ individual paid separately andentirety paid in advanced, which is linked to the vertical and horizontal matching statement and thewin-win value-added statement for management personnel, of which the tool is the two-dimensionallattice model (二维点阵模型). The two-dimensional lattice (二维点阵) could reflect the strategysupport and EMC contracts vertically connecting with the ignition of the enhancement ofEMC/emerging small companies and leading platform, and the global leading market competitivenessand outcome of ecology horizontally. The competitiveness of compensation was determined by suchelements as ‘support for strategy’, ‘competitiveness of market leading target’, ‘emerging smallcompanies, leading platform‖’ and ‘outcome of ecology’. The senior management receives annualappraisal of the annual performance, which was the key factor to performance bonus and development.On the one hand, the Company’s ‘salary paid by users’ overall compensation system of connecting salesforce with their orders and remuneration diversified the way of salary incentive of the management,leading to create user value and create ecological value, and made the compensation mechanism formanagement more flexible on the other hand, which drove the innovation of management.
Meanwhile, the Company’s salary incentive system was further improved, the incentive andrestriction mechanism was strengthened and a mechanism that shares interests and risks with theCompany and the management was formulated in the principle of ―salary paid by users‖ byimplementing such initiatives as Core Employees Stock Ownership Scheme.
0115 2019AnnualReportofHaierSmartHomeCo.,Ltd.
VIII. Whether to disclose the self-assessment report on internal control
√Applicable □Not Applicable
For details, please refer to the 2019 Internal Control Assessment Report of Haier Smart Home Co.,Ltd. disclosed on the same day of this report.
Explanations on material defects found in internal control during the reporting period
□Applicable √Not ApplicableIX. Relevant explanations on the audit report of internal control
√Applicable □Not Applicable
The Company’s auditor Shandong Hexin Certified Public Accountants LLP has audited theefficiency of internal control relating to the financial report of the Company, and has issued its standardunqualified audit report for the Company’s internal control (He Xin Shen Zi.(2020) No.000286).
For the details of Audit Report of Internal Control of Haier Smart Home Co., Ltd., please refer torelevant announcements published on the website of Shanghai Stock Exchange (www.sse.com.cn) onthe same day of this report.
Whether to disclose the audit report on internal control: YesX. Others
□Applicable √Not Applicable
0116 2019AnnualReportofHaierSmartHomeCo.,Ltd.
SECTION X RELEVANT INFORMATION ON CORPORATE BONDS
√Applicable □Not ApplicableI. Overview of corporate bonds
Unit and Currency: RMB 0’000
Method
of
Nameof Abbrev Code Issuing Dateof Balanceof Interest capital Placesof
bonds iation date expiry bonds rate(%) repayme transaction
ntwith
interest
Interestrates
Convertible Haier 18 17 forthefirst
Corporate Conver Decem Decem yeartosixth Onan Shanghai
Bonds of tible 110049 ber ber 300,749 yearare0.2, annual Stock
Qingdao Haier Bonds 2018 2024 0.5,1.0,1.5, basis Exchange
Co., Ltd. 1.8,2.0,
respectively
Interest payment and repayment of corporate bonds
√Applicable □Not Applicable
The interest of convertible corporate bonds in this Issuance is paid on an annual basis, while theprincipal and the interest for the last year of convertible corporate bonds which do not convert to sharesshall be returned when expired. The interest payment day for each year is the date of first anniversary ofthis issuance of convertible corporate bonds. The first interest payment day is 18 December 2019.Because the convertible bonds reached the redemption conditions during the reporting period, the Boardof the Company decided to exercise the redemption right after review and approval since the convertiblebonds satisfied the redemption conditions. Therefore, the Company fully redeemed the balance ofconvertible bonds registered on the redemption registration date. The amounts redeemed include accruedinterest for the current period. After redemption, the Company’s convertible bonds have been delistedon17 December 2019.
Other information on corporate bond
√Applicable □Not Applicable
For other information, please refer to ‘II. Issuance and listing of securities’ under ‘SECTIONVI ―CHANGES IN ORDINARY SHARES AND INFORMATION ABOUT SHAREHOLDERS’ inthis report.
II. Contact person and method of corporate bonds trustee manager and contact method of credit
rating agency
Name UnitedCreditRatingsCo.,Ltd.
Credit ratingagency 12thFloor,PICCOfficeTower,No.2
Address JianguomenOuterStreet,ChaoyangDistrict,
Beijing, China
0117 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Other explanation:
□Applicable √Not ApplicableIII. Use of funds raised from corporate bonds
√Applicable □Not Applicable
As of 31 December 2019, RMB 1,676.65 million of the raised funds have been used with a balanceof RMB 1,355.06 million (the account balance includes income from purchase of wealth managementproducts, current deposit interest, exchange gains and losses and raised funds not invested of theCompany’s). For details of the usage, please refer to the Specific Audit Report on the Deposit and Actualuse of Capital Raised in 2019 of Haier Smart Home Co., Ltd disclosed on the same day of this report.
IV. Introduction of corporate bonds rating
√Applicable □Not Applicable
During the reporting period, United Credit Ratings Co., Ltd. issued the Result Announcement of the2019 Follow-up Rating on the Convertible Corporate Bonds of Qingdao Hair Co., Ltd., according to thisrating report, the main credit rating of the Haier Smart Home Co., Ltd. is AAA and the credit rating ofconvertible corporate bonds is AAA.
V. Corporate bonds credit enhancement mechanism, solvency plan and others during the
reporting period
√Applicable □Not Applicable
The interest of convertible corporate bonds in this issuance is paid on an annual basis, while theprincipal and the interest for the last year of convertible corporate bonds which do not convert to sharesshall be returned when expired. The coupon rate of convertible corporate bonds in the issuance is: 0.20%for the first year, 0.50% for the second year, 1.00% for the third year, 1.50% for the fourth year, 1.80%for the fifth year and 2.00% for the sixth year. During the reporting period, the Company has fullyredeemed convertible bonds that registered on the registration date and the interest in the interest accrualperiod was paid in accordance with the regulations at the time of redemption.
VI. Meeting of corporate bondholders
√Applicable □Not Applicable
During the reporting period, the first bondholders’ meeting in 2019 of the Company was convenedwith both on-site voting and network voting. The meeting was held on the afternoon of 29 May 2019 inroom A108, Haier University, Haier Information Industrial Park, No.1 Haier Road, Qingdao City, toreview the Proposal on Changing Part of the Investment Projects of Funds Raised from ConvertibleCorporate Bonds of Qingdao Haier Co., Ltd. The total number of the convertible corporate bonds is30,074,900 (each with a nominal value of RMB 100), and the total number of bondholders and entrusted
0118 2019AnnualReportofHaierSmartHomeCo.,Ltd.
proxies attending this bondholders’ meeting is 75, representing bonds outstanding for the current period
shall be 6,062,140 in aggregate, accounting for 20.16% of the aggregate number of the Company’s
convertible corporate bonds. In addition, the supervisors, senior management and attorney appointed by
the Company attended this bondholders’ meeting. The general meeting of shareholders was convened by
the Board of Directors of the Company, and the secretary of the Company’s Board of Directors presided
over the meeting. The poll results of the above proposal in this meeting were: the number of affirmative
votes is 6,062,140, accounting for 100.00% of the aggregate number of valid voting bonds attending this
bondholders’ meeting; the number of dissenting votes is 0, accounting for 0.00% of the aggregate
number of valid voting bonds attending this bondholders’ meeting; the number of abstaining votes is 0,
accounting for 0.00% of the aggregate number of valid voting bonds attending this bondholders’
meeting.
VII. Duty fulfillment of corporate bonds trustee manager
□Applicable √Not ApplicableVIII. Accounting data and financial indicators in the last two years of the Company at the end
of the reporting period√Applicable □Not Applicable
Unit and Currency: RMB
Yoychange
Key indicators 2019 2018 （%）
EBITDA 21,042,832,181.06 16,405,780,332.78 28.26
Liquidityratio 1.05 1.16 -0.11
Quickratio 0.76 0.89 -0.13
Debttoassetsratio(%) 65.33 66.80 -2.20
TotalliabilitiesratioofEBITDA 33.53 27.72 5.81
Interestcoverageratio 9.37 9.04 0.34
Cashinterestcoverageratio 8.63 13.06 -4.43
EBITDAinterestcoverageratio 12.04 11.19 0.85
IX. Interest payment of other bonds and debt financing instruments of the Company
□Applicable √Not ApplicableX. Bank credit business of the Company during the reporting period
√Applicable □Not Applicable
During the reporting period, the Company had bank credit business amounted to RMB 95,162.6987
million.
XI. Execution status of promises or commitments in prospectus of corporate bonds during the
reporting period
√Applicable □Not Applicable
0119 2019AnnualReportofHaierSmartHomeCo.,Ltd.
During the reporting period, the Company signed a storage supervision agreement for raised fundsaccount with each of the project implementation entities, sponsor and banks to promote the use of raisedfunds in a compliance manner in accordance with the provisions of the prospectus. For the use of raisedfunds by related projects, please refer to the Specific Audit Report on the Deposit and Actual use ofCapital Raised in 2019 of Haier Smart Home Co., Ltd disclosed on the same day of this report.
XII. Impact of major events on operating status and solvency of the Company
□Applicable √Not Applicable
0120 2019AnnualReportofHaierSmartHomeCo.,Ltd.
SECTION XI RESPONSIBILITY STATEMENT
‘As the executive director of the Board of Haier Smart Home Co., Ltd, we hereby confirms to the best of
our knowledge, and in accordance with the applicable reporting principles, that the financial statements
give a true and fair view of the assets, liabilities, financial position and profit or loss of the company;
and the management report includes a fair review of the development and performance of the business
including the results and the position of the company, together with a description of the principal
opportunities and risks associated with the expected development of the company.’
Qingdao, 29 April 2020
The Board of Haier Smart Home Co., Ltd
Liang Haishan
Tan Lixia
Li Huagang
Wu Changqi
Lin Sui
Yan Yan
0121 2019AnnualReportofHaierSmartHomeCo.,Ltd.
SECTION XII FINANCIAL REPORT
I. Audit Report
√Applicable Not Applicable
Audit Report
He Xin Shen Zi. (2020) No.000287
To all shareholders of Haier Smart Home Co., Ltd.:
I. AUDIT OPINION
We have audited the financial statements of Haier Smart Home Co., Ltd. (hereinafter referred to asthe ‘Haier Smart Home Co., Ltd.’), which comprise the Consolidated and the Company’s Balance Sheetas at 31 December 2019, the Consolidated and the Company’s Income Statement, the Consolidated andthe Company’s Cash Flow Statement, the Consolidated and the Company’s Statement of Changes inShareholders’ Equity for the year 2019, and notes related to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, theConsolidated and the Company’s financial position of the Haier Smart Home Co., Ltd. as at 31December 2019, and the Consolidated and the Company’s financial performance and cash flow for theyear 2019 in accordance with the requirements of Accounting Standards for Business Enterprises.
II. BASIS OF OUR AUDIT OPINION
We conducted our audit in accordance with China Standards on Auditing. Our responsibilitiesunder those standards are further described in Auditor’s responsibilities for the Audit of FinancialStatements section of the report. We are independent of Haier Smart Home Co., Ltd. in accordance withthe CICPA’s Code of Ethics for Professional Accountants (the Code), and we have fulfilled our otherethical responsibilities in accordance with the Code. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
III. KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significancein our audit of the financial statements for the current period. These matters were addressed in thecontext of our audit of the financial statements as a whole, and in forming our opinion thereon, and wedo not provide a separate opinion on these matters. We identify the following matters as the key auditmatters that need to be communicated in the audit report:
KeyAuditMatters AuditResponse
0122 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(Ⅰ)Provisionforimpairmentofgoodwill
Relevantdisclosures are included in note V. 28 Wemainlyimplementedthefollowing
Othersignificantaccountingpoliciesandaccounting auditproceduresontheprovisionsforthe
estimates and note V.19 Impairment of long-term impairmentofgoodwillandintangibleassets
assetstothefinancialstatements. withindefiniteusefullife:
As of 31 December 2019, the book value of (1) Comparedtheactualoperatingresults
goodwill was RMB 23.352 billion, and the book oftherelatedassetsgroupwithpreviousyear’s
valueof intangibleassetswithindefiniteuseful lives forecastedfigures,toassessthereliabilityof
was RMB 2.722 billion, without any provision for themanagementforecastoncashflow;
asset impairment. Whether the provision for (2) Comparedtheinputofcashflow
impairment of long-term assets was sufficient had forecastwithhistoricaldata,approvedbudget
greatinfluencetothefinancialstatements. andbusinessplan;
Significant management judgments are (3) Testedthecalculationaccuracyofthe
involved in calculation of asset group’s recoverable discountedcashflowmodel;
amount, such as revenue growth rate, gross margin, (4)Assessedtheappropriatenessof
discountrate,etc. parametersinthecashflowconversionmodel,
Provision for impairment of goodwill and suchasthediscountrateandtheperpetual
intangible assets with indefinite useful lives is growthrate.Theassessmentisbasedour
considered as the key audit matter due to the understandingoftheCompany’sbusinesses
significant amount and management judgement andtheindustry.
involvedincalculation.
(Ⅱ)Provisionforimpairmentofinventory
Relevantdisclosures are included in note VII.8
Inventorytothefinancialstatements. We mainly implemented the following
TheCompany’sinventoriesaremeasuredatthe audit procedures on the provision for
lower of cost and net realizable value. As of 31 impairmentofinventories:
December 2019, the inventory balance was RMB (1) Obtained the calculation table for
29.197 billion, and the provision for impairment of provision for impairment of inventory of the
inventorywas RMB 968 million and the book value Company, and reviewed the conditions and
was RMB 28.229 billion. Whether the provision for aging of the productsmodelsstated in the table
the impairment of inventories was sufficient and to see whether they are consistent with the
accurate had great influence to the financial information obtained through physical
statements. inventoryonasamplebasis;
The Company determines the net realizable (2) Compared the major parameters
value of inventory based on the estimated selling estimated by management with historical data,
price minus the estimated selling expenses and andassessedtheappropriateness;
relatedtaxes. (3) Assessedthesellingpriceestimatedby
Managementestimates the selling price based the management, and checked the inventory
on the status of inventory. The estimation process againstthe actualsellingprice afterthe balance
involves significant management judgments such as sheetdateonasamplebasis;
inventorystatus,repairrate,discountrate,etc. (4) Assessed selling expenses and related
Provision for inventories is considered as the tax estimated by management and compared
key audit matter due to the significant amount and withactualamountsincurred.
managementjudgementinvolvedincalculation.
(III)Productwarranty
Relevantdisclosures are included in Note VII. We mainly implemented the following
36 Non-current liabilities due within one year and auditproceduresontheestimatedliabilities:
Note VII. 43 Estimated liabilities to the financial (1) Obtained the calculation table on
statements. provisionsofthemanagement;
Estimated liabilities of the Company are (2) Comparedthemainparametersestimated
mainly accrued due to current obligations arising bymanagementwithhistoricaldata;
from product warranty. As of 31 December 2019, (3) Tested the accuracyof the calculation on
the balance of the estimated liabilities and estimatedliabilities;
0123 2019AnnualReportofHaierSmartHomeCo.,Ltd.
non-current liabilities due within one year related to (4) Compared and analyzed the calculation
product warranty was RMB 3.058 billion, and results of the estimated liabilities and the
whether the provision for warranty was sufficient Company’sactualoperation;
and accurate had great influence to the financial
statements.
Estimatedliabilitiesfor productwarrantyof the
Company were measured in accordance with the
best estimate of the cost to fulfill the relevant
currentobligations.
Calculation of the product warranty involves
management’s significant judgments based on
historical experience, such as: replacement rate,
repairrate,andlossduetodisassembleproduct.
Estimated liabilities are considered as the key
audit matters due to the significant amount and
managementjudgementinvolvedincalculation.
IV. OTHER INFORMATION
The management of Haier Smart Home Co., Ltd. (hereinafter referred to as the ‘Management’)isresponsible for other information. Other information includes the information covered in the 2019annual report of Haier Smart Home Co., Ltd., but does not include the financial statements and our auditreports.
Our opinion on the financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact. We have nothing to report in this regard.
V. RESPONSIBILITIES OF THE MANAGEMENT AND THOSE CHARGED WITH
GOVERNANCE FOR THE FINANCIAL STATEMENTS
The Management is responsible for the preparation of the financial statements that give a true andfair view in accordance with the requirements as set out in the Accounting Standards for BusinessEnterprises, and for such internal control as necessary to enable the preparation of financial statementsthat are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Management are responsible for assessing the ability ofHaier Smart Home Co., Ltd. to continue as a going concern, disclosing, as applicable, matters related togoing concern and using the going concern basis of accounting unless the management either intends toliquidate Haier Smart Home Co., Ltd. or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the financial reporting process ofHaier Smart Home Co., Ltd..
0124 2019AnnualReportofHaierSmartHomeCo.,Ltd.
VI. AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an audit reportthat includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee thatan audit conducted in accordance with auditing standards will always detect a material misstatementwhen it exists. Misstatements can arise from fraud or error and are considered material if, individually orin the aggregate, they could reasonably be expected to influence the economic decisions of users takenon the basis of these financial statements.
As part of an audit in accordance with auditing standards, we exercise professional judgment andmaintain professional skepticism throughout the audit. We also perform the following tasks:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsible to those risks, and obtain audit evidencethat is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error, as fraud may involvecollusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances.
(III) Evaluate the appropriateness of accounting policies used by the Management and thereasonableness of accounting estimates and related disclosures made by the Management.
(IV) Conclude on the appropriateness of the Management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty exists related toevents or conditions that may cause significant doubt on the ability of Haier Smart Home Co., Ltd. tocontinue as a going concern. If we conclude that a material uncertainty exists, we are required by theauditing standards to draw attention in our audit report to the related disclosures in the financialstatements or; if such disclosures are inadequate, to modify our opinion. Our conclusions are based onthe audit evidence obtained up to the date of our audit report. However, future events or conditions maycause Haier Smart Home Co., Ltd. to cease to continue as a going concern.
(V) Evaluate the overall presentation, structure and content of the financial statements, andwhether the financial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of theentities or business activities within Haier Smart Home Co., Ltd. to express an opinion on the financialstatements. We are responsible for the direction, supervision and performance of the group audit, andremain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, theplanned scope and timing of the audit and significant audit findings, including any significantdeficiencies in internal control that we identify during our audit.
0125 2019AnnualReportofHaierSmartHomeCo.,Ltd.
We also provide those charged with governance with a statement that we have complied withrelevant ethical requirements regarding independence, and communicate with them all relationships andother matters that may reasonably be thought to bear on our independence, and where applicable, relatedsafeguards.
From the matters communicated with those charged with governance, we determine those mattersthat are of most significance in the audit of the financial statements of the current period and thereforeconstitute the key audit matters. We describe these matters in our audit report unless law or regulationprecludes public disclosure about the matter or when, in extremely rare circumstances, we determine thata matter should not be communicated in our audit report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of such communication.
Hexin Certified Public Accountants LLP
Certified Public Accountant: Zhao Bo (Engagement Partner)
Certified Public Accountant: Wang Lin
Jinan, China
28 April 2020
0126 2019AnnualReportofHaierSmartHomeCo.,Ltd.
II. Financial statements
Consolidated Balance Sheet
31 December 2019
Prepared by: Haier Smart Home Co., Ltd.
Unit and Currency: RMB
Items Notes 31December2019 31December2018
Currentassets:
Monetaryfunds VII.1 36,178,815,683.25 38,370,916,510.92
Provisionofsettlementfund
Fundslent
Financialassetsheldfortrading VII.2 308,135,007.05 1,775,648,387.76
Financialassetsmeasuredatfairvalueand
changesofwhichincludedincurrentprofit
andloss
Derivativefinancialassets VII.3 19,158,132.45 96,723,164.37
Billsreceivable VII.4 13,951,419,893.96 14,300,186,109.12
Accountsreceivable VII.5 11,015,871,060.09 10,533,499,026.83
Financingreceivables
Prepayments VII.6 1,272,921,546.72 594,462,998.04
Premiumsreceivable
Reinsuranceaccountsreceivable
Reinsurancecontractreservesreceivable
Otherreceivables VII.7 2,163,517,802.50 1,656,056,557.69
Including:Interestreceivables 273,009,954.80 234,022,792.03
Dividendsreceivables 4,524,472.84 4,557,432.17
Financialassetspurchasedunderresale
agreements
Inventories VII.8 28,228,600,971.61 22,410,973,571.32
Contractassets VII.9 422,738,398.42 456,781,406.54
Assetsheldforsale VII.10 144,091,213.39
Non-currentassetsdueinoneyear
Othercurrentassets VII.11 6,985,966,115.46 5,079,674,706.45
Totalcurrentassets 100,547,144,611.51 95,419,013,652.43
Non-currentassets:
Loansandadvancesgranted
Debtinvestments
Available-for-salefinancialassets
Otherdebtinvestments
Held-to-maturityinvestments
Long-termreceivables 307,588,203.00 245,791,343.37
Long-termequityinvestments VII.12 20,460,763,915.68 13,993,750,238.52
Investmentsinotherequityinstruments VII.13 1,395,959,878.92 1,400,316,460.34
Othernon-currentfinancialassets VII.14 294,547,364.47 327,358,825.57
Investmentproperties VII.15 29,402,691.38 30,879,147.42
Fixedassets VII.16 21,180,057,212.01 17,393,085,539.69
Constructioninprogress VII.17 2,391,364,659.97 3,873,648,086.10
Biologicalassetsforproduction
Oilandgasassets
Right-of-useassets VII.18 2,755,066,601.59
Intangibleassets VII.19 10,687,071,783.07 9,246,314,657.92
Developmentcost VII.20 193,285,777.10 538,382,288.33
Goodwill VII.21 23,351,729,813.35 21,238,727,027.17
0127 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Long-termprepaidexpenses VII.22 437,586,912.58 231,512,313.15
Deferredincometaxassets VII.23 1,578,901,892.73 1,822,103,089.57
Othernon-currentassets VII.24 1,843,764,965.81 2,330,688,982.56
Totalnon-currentassets 86,907,091,671.66 72,672,557,999.71
Totalassets 187,454,236,283.17 168,091,571,652.14
Currentliabilities:
Short-termborrowings VII.25 8,585,049,237.18 6,298,504,892.57
Borrowingsfromcentralbank
Fundsborrowed
Financialliabilitiesheldfor VII.26 42,799,173.35 218,748,280.33
trading
Financialliabilitiesmeasuredatfairvalue
andchangesofwhichincludedincurrent
profitandloss
Derivativefinancialliabilities VII.27 99,548,853.97 35,603,754.54
Billspayable VII.28 19,308,538,776.92 20,038,016,339.68
Accountspayables VII.29 33,750,567,046.28 27,899,496,560.29
Receiptsinadvance VII.30 14,681,466.58
Contractliabilities VII.31 5,583,008,412.49 5,518,079,019.27
Disposalofrepurchasedfinancialassets
Absorbingdepositanddepositin
inter-bankmarket
Customerdepositsfortradinginsecurities
Amountsduetoissuerfor
securitiesunderwriting
Payablesforstaff’sremuneration VII.32 3,155,572,417.30 2,674,970,750.56
Taxespayable VII.33 2,117,056,381.04 1,846,299,486.82
Otherpayables VII.34 15,156,392,521.82 12,770,158,224.50
Including：Interestpayables 49,395,752.93 104,522,208.28
Dividends payables 145,851,115.28 168,425,466.85
Feesandcommissionspayable
ReinsuranceAccountspayables
Liabilitiesheldforsale VII.35 32,362,267.88
Non-currentliabilitiesduewithinoneyear VII.36 7,317,138,918.02 4,655,206,739.98
Othercurrentliabilities VII.37 494,065,707.54 427,117,731.89
Totalcurrentliabilities 95,609,737,445.91 82,429,245,514.89
Non-currentliabilities:
Depositsforinsurancecontracts
Long-termborrowings VII.38 13,276,452,935.56 15,541,466,325.22
Bondspayable VII.39 7,004,585,761.43 9,191,896,302.70
Including:Preferenceshares
Perpetualbonds
Leaseliabilities VII.40 1,980,271,767.35
Long-termpayables VII.41 142,342,718.45 106,763,243.99
Long-termpayablesforstaff’s VII.42 1,122,350,237.36 934,974,735.49
remuneration
Estimatedliabilities VII.43 1,398,877,746.33 1,206,615,541.95
Deferredincome VII.44 705,272,617.10 643,551,987.30
Deferredincometaxliabilities VII.23 1,154,413,295.72 405,343,787.76
Othernon-currentliabilities VII.45 70,071,490.03 1,823,866,693.93
Totalnon-currentliabilities 26,854,638,569.33 29,854,478,618.34
Totalliabilities 122,464,376,015.24 112,283,724,133.23
Owners’equity(orshareholders’equity):
Paid-incapital(orsharecapital) VII.46 6,579,566,627.00 6,368,416,700.00
0128 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Otherequityinstruments VII.47 431,424,524.07 904,485,788.71
Including:Preferenceshares
Perpetualbonds
Capitalreserve VII.48 4,435,890,845.47 2,451,667,057.65
Less:treasurystock
Othercomprehensiveincome VII.49 1,317,988,619.66 772,632,347.35
Specialreserve
Surplusreserve VII.50 2,655,327,405.46 2,288,301,317.10
Generalriskprovisions
Undistributedprofits VII.51 32,468,121,744.26 26,957,242,682.61
Totalequityattributableto
owners(orshareholders)oftheParent 47,888,319,765.92 39,742,745,893.42
Company
Minorityshareholders’interests 17,101,540,502.01 16,065,101,625.49
Totalowners’equity(orshareholders’ 64,989,860,267.93 55,807,847,518.91
equity)
Totalliabilitiesandowners’equity 187,454,236,283.17 168,091,571,652.14
(orshareholders’equity)
Legal representative: Liang Haishan
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Balance Sheet of the Parent Company
31 December 2019
Prepared by: Haier Smart Home Co., Ltd.
Unit and Currency: RMB
Items Notes 31December2019 31December2018
CurrentAssets:
Monetaryfunds 5,624,406,816.79 7,068,899,574.96
Financialassetsheldfortrading
Financialassetsmeasuredatfairvalueand
changesofwhichincludedincurrentprofit
andloss
Derivativefinancialassets
Billsreceivable
Accountsreceivable XVIII.1 1,182,234,481.49 222,622,017.43
Financingreceivables
Prepayments 30,749,459.11 28,809,797.43
Otherreceivables XVIII.2 5,885,752,905.74 2,082,767,166.58
Including:Interestreceivables 16,753,860.49 6,292,538.22
Dividendsreceivables 3,836,055,151.41 1,912,418,382.82
Inventories 233,688,207.38 124,773,163.23
Contractassets
Assetsheldforsale
Non-currentassetsduewithinoneyear
Othercurrentassets 705,958,670.28 109,865,313.53
Totalcurrentassets 13,662,790,540.79 9,637,737,033.16
Non-currentassets:
Debtinvestments
Available-for-salefinancialassets
Otherdebtinvestments
0129 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Held-to-maturityinvestments
Long-termreceivables
Long-termequityinvestments XVIII.3 35,566,480,370.20 33,844,234,315.30
Investmentsinotherequityinstruments 5,147,131.28 5,262,480.92
Othernon-currentfinancialassets
Investmentproperties
Fixedassets 180,807,176.98 119,546,157.40
Constructioninprogress 65,367,920.02 37,655,076.18
Biologicalassetsforproduction
Oilandgasassets
Right-of-useassets
Intangibleassets 15,779,108.14 17,186,540.33
Developmentcost
Goodwill
Long-termprepaidexpenses 5,405,209.80 5,779,229.64
Deferredincometaxassets 97,384,845.46 81,511,748.07
Othernon-currentassets 3,792,624.04 28,632,829.14
Totalnon-currentassets 35,940,164,385.92 34,139,808,376.98
Totalassets 49,602,954,926.71 43,777,545,410.14
Currentliabilities:
Short-termborrowings 1,500,000,000.00
Financialliabilitiesheldfortrading
Financialliabilitiesmeasuredatfairvalue
andchangesofwhichincludedincurrent
profitandloss
Derivativefinancialliabilities
Billspayable
Accountspayables 3,412,291,778.06 334,747,358.40
Receiptsinadvance
Contractliabilities 16,562,259.31 2,391,211,509.89
Payablesforstaff’s 76,513,196.33 65,387,056.03
remuneration
Taxespayable 86,856,453.32 67,279,606.39
Otherpayables 26,900,844,668.74 21,834,869,774.34
Including:Interestpayable
Dividendspayable
Liabilitiesheldforsale
Non-currentliabilitiesdue
withinoneyear
Othercurrentliabilities 2,149,745.37 2,089,282.56
Totalcurrentliabilities 30,495,218,101.13 26,195,584,587.61
Non-currentliabilities:
Long-termborrowings
Bondspayable 2,510,530,062.86
Including:Preferenceshares
Perpetualbonds
Leaseliabilities
Long-termpayable 20,000,000.00 20,000,000.00
Long-termpayablesforstaff’s
remuneration
Estimatedliabilities
Deferredincome 59,820,000.00 67,360,000.00
Deferredincometaxliabilities 43,325,120.18 29,485,678.28
Othernon-currentliabilities
0130 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Totalnon-currentliabilities 123,145,120.18 2,627,375,741.14
Totalliabilities 30,618,363,221.31 28,822,960,328.75
Owners’equity(or
Shareholders’equity):
Paid-incapital(orsharecapital) 6,579,566,627.00 6,368,416,700.00
Otherequityinstruments 473,061,264.64
Including:Preferenceshares
Perpetualbonds
Capitalreserve 7,036,531,178.83 4,182,825,672.98
Less:treasurystock
Othercomprehensiveincome 11,077,477.45 7,791,344.47
Specialreserve
Surplusreserve 2,050,181,180.01 1,683,155,091.65
Undistributedprofits 3,307,235,242.11 2,239,335,007.65
Totalowners’equity(orshareholders’ 18,984,591,705.40 14,954,585,081.39
equity)
Totalliabilitiesandowners’equity(or 49,602,954,926.71 43,777,545,410.14
shareholders’equity)
Legal representative: Liang Haishan
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Consolidated Profit Statement
January-December 2019
Unit and Currency: RMB
Items Notes 2019 2018
Ⅰ.Totaloperatingrevenue VII.52 200,761,983,256.57 184,108,481,959.27
Including:Operatingrevenue 200,761,983,256.57 184,108,481,959.27
Interestincome
Insurancepremiumsearned
Feeandcommissionincome
Ⅱ.Totalcostofoperations 192,625,787,459.73 174,687,709,671.51
Including:Operatingcost VII.52 140,868,398,722.26 130,455,086,874.95
Interestexpenses
Feeandcommissionexpenses
Insurancewithdrawalpayment
Netpaymentfromindemnity
Netprovisionswithdrewforinsurance
contractliability
Insurancepolicydividendpaid
Reinsurancecost
Taxesandsurcharges VII.53 802,045,039.88 868,087,131.66
Sellingexpenses VII.54 33,682,126,291.31 28,923,144,934.04
Administrativeexpenses VII.55 10,113,263,329.25 8,405,151,809.85
R&Dexpenses VII.56 6,266,936,518.17 5,104,647,278.53
Financialexpenses VII.57 893,017,558.86 931,591,642.48
Including:Interestexpenses 1,747,107,740.65 1,465,865,741.36
Interest income 550,224,661.04 484,742,562.68
Add:Otherincome VII.58 1,282,213,029.53 932,261,059.52
Investmentincome(lossesare VII.59 5,479,539,484.34 1,924,571,212.54
representedby‘-’)
Including:investmentincome
ofassociatesandjointventures
0131 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Incomegeneratedfromthe
derecognitionoffinancialassetsmeasuredat
amortizedcost
Exchangegain(lossesare
representedby‘-’)
Gainsonnetexposurehedges
(lossesarerepresentedby‘-’)
Incomefromchangeinfairvalue VII.60 76,716,967.53 -145,191,723.49
(lossesarerepresentedby‘-’)
Lossoncreditimpairment(lossesare VII.61 -150,370,315.60 -99,632,377.38
representedby‘-’)
Lossonassetsimpairment(lossesare VII.62 -860,578,700.61 -762,514,363.82
representedby‘-’)
Gainfromdisposalofassets VII.63 485,727,628.01 267,752,434.20
(lossesarerepresentedby‘-’)
Ⅲ.Operatingprofit(lossesare 14,449,443,890.04 11,538,018,529.33
representedby‘-’)
Add:non-operatingincome VII.64 390,971,548.74 479,796,796.75
Less:non-operatingexpenses VII.65 209,806,640.82 236,320,293.42
Ⅳ.Totalprofit(totallossesare 14,630,608,797.96 11,781,495,032.66
representedby‘-’)
Less:incometaxexpense VII.66 2,296,216,280.86 1,881,843,052.56
Ⅴ.Netprofit(netlossesarerepresentedby 12,334,392,517.10 9,899,651,980.10
‘-’)
(I)Classificationbycontinuousoperation
1.Netprofitfromcontinuousoperation 9,021,527,220.76 9,532,385,702.59
(netlossesarerepresentedby‘-’)
2.Netprofitfromdiscontinued 3,312,865,296.34 367,266,277.51
operation(netlossesarerepresentedby‘-’)
(II)Classificationbyownershipoftheequity
1.Netprofitattributableto
shareholdersoftheParentCompany(net 8,206,247,105.96 7,483,659,016.04
lossesarerepresentedby‘-’)
2.Profitorlossattributabletominority
shareholders(netlossesarerepresentedby 4,128,145,411.14 2,415,992,964.06
‘-’)
VI.Othercomprehensiveincome,netoftax VII.67 569,276,732.12 843,463,106.56
(I)Othercomprehensiveincome
attributabletoownersoftheParent 545,356,272.31 727,607,989.62
Company,netoftax
1．Othercomprehensiveincomethat -12,605,115.57 51,065,061.29
cannotbereclassifiedintotheprofitorloss
（1）Changesarisingfromre-measurement -9,515,689.78 80,039,412.97
ofdefinedbenefitplans
（2）Othercomprehensiveincomethat
cannotbetransferredintoprofitorlossunder
equitymethod
（3）Changesinfairvalueofinvestments -3,089,425.79 -28,974,351.68
inotherequityinstruments
（4）Changesinfairvalueofcreditrisksof
theenterprise
2．Othercomprehensiveincometobe 557,961,387.88 676,542,928.33
reclassifiedintotheprofitorloss
（1） Othercomprehensiveincomethat 83,635,935.11 166,426,767.08
0132 2019AnnualReportofHaierSmartHomeCo.,Ltd.
canbetransferredintoprofitorlossunder
equitymethod
（2）Changesinfairvalueofotherdebt
investments
（3）Profitorlossfromchangesinfair
valueofavailable-for-salefinancialassets
（4）Reclassifiedfinancialassetsthatare
creditedtoothercomprehensiveincome
（5）Profitorlossarisingfrom
reclassificationfromheld-to-maturity
investmentstoavailable-for-salefinancial
assets
（6）Creditimpairmentprovisionforother
debtinvestments
（7） Reserveforcashflowhedging
(effectiveportionofprofitorlossarising -36,169,378.90 -5,946,207.24
fromcashflowhedging)
（8）Exchangedifferencesontranslation
offinancialstatementsdenominatedin 510,494,831.67 516,062,368.49
foreigncurrencies
（9）Others
(II)Othercomprehensiveincome
attributabletominorityshareholders,netof 23,920,459.81 115,855,116.94
tax
Ⅶ.Totalcomprehensiveincome 12,903,669,249.22 10,743,115,086.66
(I)Totalcomprehensiveincome 8,751,603,378.27 8,211,267,005.66
attributabletotheownersofParentCompany
(II)Totalcomprehensiveincome 4,152,065,870.95 2,531,848,081.00
attributabletotheminorityshareholders
Ⅷ .Earningspershare:
(I)Basicearningspershare(RMB/share) XVIII.1 1.286 1.217
(II)Dilutedearningspershare(RMB XVIII.1 1.212 1.189
/share)
The party being absorbed in the business combination under common control incurred in the current
period recorded a net profit of RMB 87,475,174.99 before the combination.
Legal representative: Liang Haishan
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Profit Statement of the Parent Company
January-December 2019
Unit and Currency: RMB
Items Notes 2019 2018
I.Operatingincome XVIII.4 6,637,855,488.62 3,260,311,127.79
Less:operatingcost XVIII.4 5,160,746,140.20 2,233,751,914.63
Taxesandsurcharges 20,131,277.44 23,431,092.16
Sellingexpenses 387,604,103.39 297,812,493.19
Administrationexpenses 498,482,577.37 484,750,355.15
R&Dexpenses 319,939,911.68 234,134,826.42
Financialexpenses 122,106,293.64 191,246,337.05
Including:interestexpenses 166,897,467.02 288,596,787.96
Interest income 45,009,504.16 108,547,077.81
Add:otherincome 94,265,388.14 41,275,162.37
0133 2019AnnualReportofHaierSmartHomeCo.,Ltd.
investmentincome(lossesare XVIII.5 3,536,864,902.60 2,649,879,889.56
representedby‘-’)
Including:investmentincomeof
associatesandjointventures
Derecognition incomeon
financialassetsmeasuredatamortizedcost
Gainsonnetexposurehedges(losses
arerepresentedby‘-’)
Incomefromchangeinfairvalue
(lossesarerepresentedby‘-’)
Lossoncreditimpairment(lossesare 383,369.58 974,670.56
representedby‘-’)
Lossonassetsimpairment(lossesare -51,400,268.37 -2,609,224.31
representedby‘-’)
Gainfromdisposalofassets(lossesare 61,268.03 25,693.17
representedby‘-’)
II.Operatingprofit(lossesarerepresentedby 3,709,019,844.88 2,484,730,300.54
‘-’)
Add:non-operatingincome 9,474,684.80 49,665,765.66
Less:non-operatingexpenses 3,019,024.42
III.Totalprofit(totallossesarerepresentedby 3,715,475,505.26 2,534,396,066.20
‘-’)
Less:incometaxexpenses 45,214,621.71 75,669,867.06
IV.Netprofit(netlossesarerepresentedby‘-’) 3,670,260,883.55 2,458,726,199.14
(I) Net profit from continuous
operations (net losses are 3,670,260,883.55 2,458,726,199.14
representedby‘-’)
(II) Net profit from discontinued
operations (net losses are
representedby‘-’)
V.Othercomprehensiveincome,netoftax 3,286,132.98 35,908,964.35
(I)Othercomprehensiveincomethat -98,047.20 -472,690.84
cannotbereclassifiedintotheprofitorloss
1.Changesarisingfromre-measurement
ofdefinedbenefitplans
2.Othercomprehensiveincomethat
cannotbetransferredintoprofitorlossunder
equitymethod
3.Changesinfairvalueofinvestmentsin -98,047.20 -472,690.84
otherequityinstruments
4.Changesin fair value of credit risks of
theenterprise
(II)Othercomprehensiveincometobe 3,384,180.18 36,381,655.19
reclassifiedintotheprofitorloss
1.Othercomprehensiveincomethatcan
betransferredintoprofitorlossunderequity 3,384,180.18 36,381,655.19
method
2.Changesinfairvalueofotherdebt
investments
3.Profitorlossfromchangesinfairvalue
ofavailable-for-salefinancialassets
4.Reclassifiedfinancialassetsthatare
creditedtoothercomprehensiveincome
5.Profitorlossarisingfrom
reclassificationfromheld-to-maturity
investmentstoavailable-for-salefinancial
0134 2019AnnualReportofHaierSmartHomeCo.,Ltd.
assets
6.Creditimpairmentprovisionforother
debtinvestments
7.Reserveforcashflowhedging
(effectiveportionofprofitorlossarisingfrom
cashflowhedging)
8.Exchangedifferencesontranslationof
financialstatementsdenominatedinforeign
currencies
9.Others
VI.Totalcomprehensiveincome 3,673,547,016.53 2,494,635,163.49
VII.Earningspershare:
(I) Basicearningspershare(RMB/share)
(II) Dilutedearningspershare(RMB/share)
Legal representative: Liang Haishan
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Consolidated Cash Flow Statement
January-December 2019
Unit and Currency: RMB
Items Notes 2019 2018
I.Cashflowfromoperatingactivities:
Cashreceivedfromthesaleofgoodsand 204,152,920,970.07 189,746,904,673.47
renderingservices
Netincreaseindistributorandinter-bank
deposits
Netincreaseinborrowingfromthe
centralbank
Netcashincreaseinborrowingfrom
otherfinancialinstitutes
Cashreceivedfrompremiumsunder
originalinsurancecontract
Netcashreceivedfromreinsurance
business
Netincreaseindepositsofpolicyholders
andinvestment
Cashreceivedfrominterest,feeand
commissions
Netincreaseincashborrowed
Netincreaseincashreceivedfrom
repurchaseoperation
Netcashreceivedfromcustomer
depositsfortradinginsecurities
Refundsoftaxes 898,183,873.66 1,049,026,132.96
Cashreceivedfromotherrelated VII.68 2,134,070,599.27 1,411,185,062.87
operatingactivities
Sub-totalofcashinflowsfrom 207,185,175,443.00 192,207,115,869.30
operatingactivities
Cashpaidonpurchaseofgoodsand 141,035,818,536.96 130,115,106,185.56
services
Netincreaseinloansandadvancesof
distributors
NetincreaseindepositsinthePBOCand
inter-bank
0135 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Cashpaidforcompensationpayments
underoriginalinsurancecontact
Netincreaseincashlent
Cashpaidforinterest,bankchargesand
commissions
Cashpaidforinsurancepolicydividend
Cashpaidtoandonbehalfofemployees 22,281,126,153.50 19,659,188,254.77
Cashpaidforalltypesoftaxes 8,909,484,821.52 9,053,346,841.16
Cashpaidtootheroperationrelated VII.69 19,876,114,988.29 14,236,692,106.61
activities
Sub-totalofcashoutflowsfrom 192,102,544,500.27 173,064,333,388.10
operatingactivities
Netcashflowfromoperating VII.74 15,082,630,942.73 19,142,782,481.20
activities
II.Cashflowfrominvestingactivities:
Cashreceivedfromrecoveryof 1,922,506,706.23 665,375,871.37
investments
Cashreceivedfromreturnon 587,572,407.11 333,405,289.21
investments
Netcashreceivedfromthedisposalof
fixedassets,intangibleassetsandother 261,126,967.93 471,243,957.95
long-termassets
Netcashreceivedfromdisposalof 660,267,394.34
subsidiariesandotheroperatingentities
Othercashreceivedfrominvestment VII.70 4,628,544.73 124,732,422.41
activities
Sub-totalofcashinflowsfrom 2,775,834,626.00 2,255,024,935.28
investingactivities
Cashpaidonpurchaseoffixedassets, 6,194,093,049.63 6,759,942,015.50
intangibleassetsandotherlong-termassets
Cashpaidforinvestments 3,891,482,546.25 3,022,793,911.86
Netincreaseinsecuredloans
Netcashpaidonacquisitionof 2,700,119,610.58 103,834,291.75
subsidiariesandotheroperatingentities
Othercashpaidoninvestmentactivities VII.71 951,722,560.75 18,073,550.00
Sub-totalofcashoutflowsfrom 13,737,417,767.21 9,904,643,769.11
investingactivities
Netcashflowfrominvesting -10,961,583,141.21 -7,649,618,833.83
activities
III.Cashflowfromfinancingactivities:
Cashreceivedfromcapitalcontributions 440,579,441.68 2,972,757,948.54
Including:cashreceivedfromcapital
contributionsbyminorityshareholdersof
subsidiaries
Cashreceivedfromborrowings 18,468,949,110.20 15,684,208,193.90
Othercashreceivedfromfinancing VII.72 2,751,630.60 55,102,462.05
activities
Sub-totalofcashinflowsfrom 18,912,280,182.48 18,712,068,604.49
financingactivities
Cashpaidonrepaymentofloans 19,027,731,485.58 22,418,202,111.13
Cashpaidondistributionofdividends, 4,204,473,167.16 3,836,399,421.96
profitsorrepaymentofinterestexpenses
Including:dividendandprofitpaidto
minorityshareholdersbysubsidiaries
Othercashpaidtofinancingactivities VII.73 1,693,038,756.15 2,959,445,042.86
0136 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Sub-totalofcashoutflowsfrom 24,925,243,408.89 29,214,046,575.95
financingactivities
Netcashflowfromfinancing -6,012,963,226.41 -10,501,977,971.46
activities
IV.Effectoffluctuationsinexchange 293,937,069.64 277,396,786.66
ratesoncashandcashequivalents
V.Netincreaseincashandcash -1,597,978,355.25 1,268,582,462.57
equivalents
Add:balanceofcashandcash VII.75 36,560,925,755.10 35,292,343,292.53
equivalentsatthebeginningoftheperiod
VI.Balanceofcashandcashequivalents VII.75 34,962,947,399.85 36,560,925,755.10
attheendoftheperiod
Legal representative: Liang Haishan
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
Cash Flow Statement of the Parent Company
January-December 2019
Unit and Currency: RMB
Items Notes 2019 2018
I.Cashflowfromoperatingactivities:
Cashreceivedfromthesaleofgoodsand 1,740,547,441.74 1,919,626,804.58
renderingofservices
Refundsoftaxes 10,340,498.97 30,486,213.87
Othercashreceivedfromoperating 152,431,584.44 153,333,607.15
activities
Sub-totalofcashinflowsfrom 1,903,319,525.15 2,103,446,625.60
operatingactivities
Cashpaidonpurchaseofgoodsand 619,607,241.38 902,047,204.49
services
Cashpaidtoandonbehalfofemployees 734,773,203.47 786,264,085.93
Cashpaidforalltypesoftaxes 170,125,689.18 195,198,666.67
Othercashpaidtooperationactivities 235,966,622.43 187,916,659.58
Sub-totalofcashoutflowsfrom 1,760,472,756.46 2,071,426,616.67
operatingactivities
Netcashflowfromoperatingactivities 142,846,768.69 32,020,008.93
II.Cashflowfrominvestingactivities:
Cashreceivedfromrecoveryof 1,800,977,000.00 505,207,895.00
investments
Cashreceivedfromreturnon 1,533,550,644.96 1,173,089,808.18
investments
Netcashreceivedfromthedisposalof
fixedassets,intangibleassetsandother
long-termassets
Netcashreceivedfromdisposalof
subsidiariesandotheroperatingentities
Othercashreceivedfrominvestment
activities
Sub-totalofcashinflowsfrom 3,334,527,644.96 1,678,297,703.18
investingactivities
Cashpaidonpurchaseoffixedassets, 38,846,142.08 67,865,088.69
intangibleassetsandotherlong-termassets
Cashpaidforinvestments 4,122,089,854.72 1,291,347,820.45
Netcashpaidonacquisitionof
0137 2019AnnualReportofHaierSmartHomeCo.,Ltd.
subsidiariesandotheroperatingentities
Othercashpaidoninvestmentactivities 320,291,379.00
Sub-totalofcashoutflowsfrom 4,481,227,375.80 1,359,212,909.14
investingactivities
Netcashflowfrominvesting -1,146,699,730.84 319,084,794.04
activities
III.Cashflowfromfinancingactivities:
Cashreceivedfromcapitalinjections 2,187,186,732.01
Cashreceivedfromborrowings 4,483,580,454.50
Othercashreceivedfromfinancing 3,585,075,242.08 326,374,080.44
activities
Sub-totalofcashinflowsfrom 3,585,075,242.08 6,997,141,266.95
financingactivities
Cashpaidonrepaymentofborrowings 1,509,142,243.50
Cashpaidondistributionofdividends, 2,506,226,703.49 2,280,582,650.27
profitsorrepaymentofinterestexpenses
Othercashpaidonfinancingactivities 8,547,229.30 52,345,130.43
Sub-totalofcashoutflowsfrom 4,023,916,176.29 2,332,927,780.70
financingactivities
Netcashflowfromfinancing -438,840,934.21 4,664,213,486.25
activities
IV.Effectoffluctuationsinexchange -1,798,861.81 -16,946,517.23
ratesoncashandcashequivalents
V.Netincreaseincashandcash -1,444,492,758.17 4,998,371,771.99
equivalents
Add:balanceofcashandcash 7,068,899,574.96 2,070,527,802.97
equivalentsatthebeginningoftheperiod
VI.Balanceofcashandcashequivalents 5,624,406,816.79 7,068,899,574.96
attheendoftheperiod
Legal representative: Liang Haishan
Person in charge of accounting function: Gong Wei
Person in charge of accounting department: Ying Ke
0138 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Consolidated Statement of Changes in Owner’s Equity
January-December 2019
Unit and Currency: RMB
2019
Equity attributabletoownersoftheParentCompany
ItemsOintshterrumeqeunittsy Less: Spec Gen Minority Total
Paid-in capital(or prefer Capital treas Other ial Surplus eral Undistributed Ot equity oewqnueitrys’
sharecapital) ence perpe reserve ury comprehensive reser reserve risk profits he Sub-total
share tual Others stock income ve prov rs
s bonds ision
I.Closingbalanceforthe 6,368,416,700.00 904,485,788.7 2,208,773,474.57 772,632,347.35 2,288,301,317.10 26,859,741,163.95 39,402,350,791.68 15,727,928,145.82 55,130,278,937.50
previousyear 1
Add:changesinaccounting
policies
Error correctionforprior
period
Business combination 242,893,583.08 97,501,518.66 340,395,101.74 337,173,479.67 677,568,581.41
undercommoncontrol
Others
II.Openingbalanceforthe 6,368,416,700.00 904,485,788.7 2,451,667,057.65 772,632,347.35 2,288,301,317.10 26,957,242,682.61 39,742,745,893.42 16,065,101,625.49 55,807,847,518.91
currentyear 1
III.Increase/decreaseforthe -473,061,264. 1,984,223,787.8
currentperiod(decreaseis 211,149,927.00 64 2 545,356,272.31 367,026,088.36 5,510,879,061.65 8,145,573,872.50 1,036,438,876.52 9,182,012,749.02
representedby‘-’)
(I)Totalcomprehensive 545,356,272.31 8,206,247,105.96 8,751,603,378.27 4,152,065,870.95 12,903,669,249.22
income
(II)Capitalinjectionand 211,149,927.00 -473,061,264. 1,984,223,787.82 1,722,312,450.18 -2,522,706,368.5 -800,393,918.33
reductionbyowners 64 1
1.Ordinarysharesinvestedby 211,149,927.00 -473,061,264. 2,033,725,374.42 1,771,814,036.78 -2,522,706,368.5 -750,892,331.73
owners 64 1
2.Capitalcontributionby
holdersofotherequity
instruments
138 / 308
0139 2019AnnualReportofHaierSmartHomeCo.,Ltd.
3.Share-basedpayment
includedinowners’equity
4.Others -49,501,586.60 -49,501,586.60 -49,501,586.60
(III)Profitdistribution 367,026,088.36 -2,602,360,649.09 -2,235,334,560.73 -578,699,909.63 -2,814,034,470.36
1.Withdrawalofsurplus 367,026,088.36 -367,026,088.36
reserves
2． Withdrawalofprovisions
forgeneralrisks
3.Distributiontoowners(or -2,235,334,560.73 -2,235,334,560.73 -578,699,909.63 -2,814,034,470.36
shareholders)
4.Others
(IV)Internaltransferof
owner’sequity
1.Transferofcapital
reservesintocapital(orshare
capital)
2.Transferofsurplusreserves
intocapital(orsharecapital)
3.Surplusreservesusedfor
remedyingloss
4.Changesindefinedbenefit
planscarriedforwardto
retainedearnings
5.Othercomprehensiveincome
carriedforwardtoretained
earnings
6.Others
(V)Specialreserve
1．Withdrawalfortheperiod
2.Utilizationfortheperiod
(VI)Others -93,007,395.22 -93,007,395.22 -14,220,716.29 -107,228,111.51
Ⅳ.Closingbalanceforthe 6,579,566,627.00 431,424,524.0 4,435,890,845.47 1,317,988,619.66 2,655,327,405.46 32,468,121,744.26 47,888,319,765.92 17,101,540,502.01 64,989,860,267.93
period 7
Unit and Currency: RMB
2018
Items EquityattributabletoownersoftheParentCompany Minority Total
Otherequity equity owners’
Paid-in instruments Less: Other Special Surplus General Undistrib Others Sub-total equity
139 / 308
0140 2019AnnualReportofHaierSmartHomeCo.,Ltd.
capital(or Prefer Perpetual Capital treasury comprehensive reserve reserve risk uted
share ence bonds Others reserve stock income provision profits
capital) shares
I.Closingbalanceforthe 6,097,402,727 431,424 2,312,32 4,424,024.90 2,103,05 22,350,95 33,299,58 14,549,620,5 47,849,204,109.
previousyear .00 ,524.07 2,267.08 7,782.41 2,230.17 3,555.63 53.66 29
Add: changesin 40,604,722.79 -54,905,5 -14,300,86 -7,036,266.7 -21,337,128.37
accountingpolicies 84.45 1.66 1
Error correctionfor
priorperiod
Business combination 231,743, 69,725,12 301,468,6 244,618,457. 546,087,150.9
undercommoncontrol 568.73 4.64 93.37 55 2
Others
II.Openingbalanceforthe 6,097,402,727 431,424 2,544,065, 45,028,747.69 2,103,057, 22,365,771, 33,586,75 14,787,202,74 48,373,954,131.
currentyear .00 ,524.07 835.81 782.41 770.36 1,387.34 4.50 84
III.Increase/decreasefor 271,013,973.0 473,061 -92,398, 727,603,599.66 185,243, 4,591,470, 6,155,994, 1,277,898,88 7,433,893,387.
thecurrentperiod 0 ,264.64 778.16 534.69 912.25 506.08 0.99 07
(decreaseisrepresentedby
‘-’)
(I)Totalcomprehensive 727,607,989.62 7,483,659, 8,211,267, 2,531,848,08 10,743,115,086.
income 016.04 005.66 1.00 66
(II)Capitalcontribution 271,013,973.0 473,061 -92,398, -4,389.96 -60,597, -545,381, 45,692,99 -685,182,351 -639,489,352.6
andwithdrawalbyowners 0 ,264.64 778.16 907.03 163.32 9.17 .78 1
1.Ordinaryshares 271,013,973.0 473,061 -114,735 629,339,9 -685,182,351 -55,842,436.47
investedbyowners 0 ,264.64 ,322.33 15.31 .78
2.Capitalcontributionby
holdersofotherequity
instruments
3.Share-basedpayment
includedinowners’equity
4.Others 22,336,5 -4,389.96 -60,597, -545,381, -583,646,9 -583,646,916.1
44.17 907.03 163.32 16.14 4
(III)Profitdistribution 245,841, -2,331,15 -2,085,311 -568,766,848 -2,654,078,580
441.72 3,174.35 ,732.63 .23 .86
1.Withdrawalofsurplus 245,841, -245,841,
reserves 441.72 441.72
2． Withdrawalof
provisionsforgeneral
risks
3.Distributiontoowners -2,085,31 -2,085,311 -568,766,848 -2,654,078,580
(orshareholders) 1,732.63 ,732.63 .23 .86
4.Others
140 / 308
0141 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(IV)Internaltransferof
owner’sequity
1.Transferofcapital
reservesintocapital(or
sharecapital)
2.Transferofsurplus
reservesintocapital(or
sharecapital)
3.Surplusreservesused
forremedyingloss
4.Changesindefined
benefitplanscarried
forwardtoretained
earnings
5.Othercomprehensive
incomecarriedforwardto
retainedearnings
6.Others
(V)Specialreserve
1．Withdrawalforthe
period
2.Utilizationforthe
period
(VI)Others -15,653,7 -15,653,76 -15,653,766.12
66.12 6.12
Ⅳ.Closingbalanceforthe 6,368,416,700 904,485 2,451,667, 772,632,347.35 2,288,301, 26,957,242, 39,742,74 16,065,101,62 55,807,847,518.
period .00 ,788.71 057.65 317.10 682.61 5,893.42 5.49 91
Legal representative: Liang Haishan Person in charge of accounting function: Gong Wei Person in charge of accounting department: Ying Ke
141 / 308
0142 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Statement of Changes in Owners’ Equity of the Parent Company
January-December 2019
Unit and Currency: RMB
2019
Paid-in Otherequity
Items capital(or instruments Capital Less: Other Special Surplus Undistributed Total
share Prefer Perpetual Others reserve treasury comprehensive reserve reserve profits oewqnueitrys’
capital) ence bonds stock income
shares
Ⅰ.Closingbalanceforthe 6,368,416,700 473,061, 4,182,825,672.98 7,791,344.47 1,683,155,091.65 2,239,335,007.65 14,954,585,081.39
previousyear .00 264.64
Add: changesin
accountingpolicies
Error correctionfor
prior
period
Others
Ⅱ.Openingbalancefor 6,368,416,700 473,061, 4,182,825,672.98 7,791,344.47 1,683,155,091.65 2,239,335,007.65 14,954,585,081.39
thecurrentyear .00 264.64
III.Increase/decreasefor 211,149,927.0 -473,061 2,853,705,505.85 3,286,132.98 367,026,088.36 1,067,900,234.46 4,030,006,624.01
thecurrentperiod 0 ,264.64
(decreaseisrepresentedby
‘-’)
(I) Totalcomprehensive 3,286,132.98 3,670,260,883.55 3,673,547,016.53
income
(II) Capitalinjectionand 211,149,927.0 -473,061 2,889,898,684.61 2,627,987,346.97
reductionbyowners 0 ,264.64
1.Ordinarysharesinvested 211,149,927.0 -473,061 2,889,898,684.61 2,627,987,346.97
byowners 0 ,264.64
2.Capitalcontributionby
holdersofotherequity
instruments
3.Share-basedpayment
includedinowners’equity
4.Others
(III)Profitdistribution 367,026,088.36 -2,602,360,649.09 -2,235,334,560.73
1.Withdrawalofsurplus 367,026,088.36 -367,026,088.36
reserves
2．Distributiontoowners -2,235,334,560.73 -2,235,334,560.73
142 / 308
0143 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(or
shareholders)
3．Others
(IV) Internaltransferof
owner’s equity
1. Transferofcapital
reserves intocapital(or
share capital)
2. Transferofsurplus
reserves intocapital(or
share capital)
3. Surplusreservesused
for remedyingloss
4. Changesindefined
benefit planscarried
forward toretained
earnings
5. Othercomprehensive
income carriedforwardto
retained earnings
6. Others
(V) Specialreserve
1．Withdrawal forthe
period
2. Utilizationfortheperiod
(VI) Others -36,193,178.76 -36,193,178.76
Ⅳ. Closingbalanceforthe 6,579,566,627 7,036,531,178.83 11,077,477.45 2,050,181,180.01 3,307,235,242.11 18,984,591,705.40
period .00
2018
Paid-in Otherequity
Items capital(or instruments Less: Other Special Surplus Undistributed Total
Prefere Perpetual Others Capital treasury comprehensive owners’sharereserve reserve profits
capital) nce bonds reserve stock income equity
shares
Ⅰ.Closingbalanceforthe 6,097,402,727 2,317,907,947.71 -43,234,737.77 1,437,313,649.93 2,128,502,328.76 11,937,891,915.63
previousyear .00
143 / 308
0144 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Add: changesin 15,117,117.89 -16,428,564.00 -1,311,446.11
accountingpolicies
Error correctionfor
prior
period
Others
Ⅱ.Openingbalanceforthe 6,097,402,727 2,317,907,947.71 -28,117,619.88 1,437,313,649.93 2,112,073,764.76 11,936,580,469.52
currentyear .00
III.Increase/decreasefor 271,013,973.0 473,061, 1,864,917,725.27 35,908,964.35 245,841,441.72 127,261,242.89 3,018,004,611.87
the 0 264.64
currentperiod(decreaseis
representedby‘-’)
(I) Totalcomprehensive 35,908,964.35 2,458,414,417.24 2,494,323,381.59
income
(II) Capitalinjectionand 271,013,973.0 473,061, 1,861,549,590.47 2,605,624,828.11
reductionbyowners 0 264.64
1.Ordinarysharesinvested 271,013,973.0 473,061, 1,861,549,590.47 2,605,624,828.11
byowners 0 264.64
2.Capitalcontributionby
holdersofotherequity
instruments
3.Share-basedpayment
includedinowners’equity
4.Others
(III)Profitdistribution 245,841,441.72 -2,331,153,174.35 -2,085,311,732.63
1.Withdrawalofsurplus 245,841,441.72 -245,841,441.72
reserves
2．Distributiontoowners -2,085,311,732.63 -2,085,311,732.63
(or
shareholders)
3．Others
(IV)Internaltransferof
owner’sequity
1.Transferofcapital
reservesintocapital(or
sharecapital)
2.Transferofsurplus
reservesintocapital(or
sharecapital)
3.Surplusreservesusedfor
144 / 308
0145 2019AnnualReportofHaierSmartHomeCo.,Ltd.
remedyingloss
4.Changesindefined
benefitplanscarried
forwardtoretained
earnings
5.Othercomprehensive
incomecarriedforwardto
retainedearnings
6.Others
(V)Specialreserve
1．Withdrawalforthe
period
2.Utilizationfortheperiod
(VI)Others 3,368,134.80 3,368,134.80
Ⅳ.Closingbalanceforthe 6,368,416,700 473,061, 4,182,825,672.98 7,791,344.47 1,683,155,091.65 2,239,335,007.65 14,954,585,081.39
period .00 264.64
Legal representative: Liang Haishan Person in charge of accounting function: Gong Wei Person in charge of accounting department: Ying Ke
145 / 308
III. General Information of the Company
1. Overview of the Company
√Applicable □Not Applicable
The predecessor of Haier Smart Home Co., Ltd (hereinafter referred to as the Company) wasQingdao Refrigerator Factory, which was established in 1984. As permitted to offering by People’sBank of China, Qingdao Branch on 16 December 1989, with the document of Qing Ti Gai [1989]No.3 issued on 24 March 1989, based on the reconstruction of the original Qingdao RefrigeratorFactory, a limited company was set up by directional fund raising of RMB 150 million. In March andSeptember 1993, as approved by the document of Qing Gu Ling Zi [1993] No. 2 and No. 9 issued bythe pilot leading team of Qingdao joint stock company, the Company was converted from a directionaloffering company to a public subscription company and issued additional 50 million shares to thepublic and listed with trading on Shanghai Stock Exchange in November 1993.
The Company’s registered office is located at the Haier Industrial Park of Laoshan District,Qingdao, Shandong Province, and the headquarters is located at the Haier Industrial Park of LaoshanDistrict, Qingdao, Shandong Province.
The Company is mainly engaged in manufacturing and trading as well as R&D of refrigerator,air-conditioner, freezer, washing machine, water heater, dishwashers, gas stove and relevant productsand commercial circulation business.
The ultimate controlling parent company of the Company is Haier Group Corporation.
These financial statements have been approved for publication by the Board of the Company on28 April 2020.
2. Scope of consolidated financial statements
√Applicable □Not Applicable
For details of changes in the scope of consolidated financial statements for the current period,please refer to ‘VIII. Changes in Consolidation Scope’ and ‘IX. Interest in Other Entities’ of this note.IV. Basis of Preparation of the Financial Statements
1. Basis of preparation
The financial statements of the Company were prepared on the going concern basis according tothe transactions and matters actually occurred, in accordance with the Accounting Standards forEnterprises – Basic Standards published by the Ministry of Finance, specific accounting standards,and guidance on application of accounting standards for enterprises, interpretations to accountingstandards for enterprises and other relevant requirements (hereinafter collectively referred to as the‘Accounting Standards for Enterprises’) which issued subsequently, and in combination with the
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disclosure provisions of the Rules for the Information Disclosure and Compilation of Companies
Publicly Issuing Securities No.15: General Provisions for Financial Report (Revised in 2014) of
CSRC as well as the following significant accounting policies and accounting estimation.
2. Continuing operation
√Applicable □Not Applicable
The Company has ability to continue its operation for at least 12 months since the end of thereporting period and there are no significant events affecting its ability to continue as a going concern.V. Significant accounting policies and accounting estimates
Specific accounting policies and accounting estimates:
√Applicable □Not Applicable
According to the characteristics of its production and operation, the Company formulated a seriesof specific accounting policies and accounting estimates, including the provisions for impairment foraccounts receivable (Note V.10); the measurement of inventories (Note V.11); the depreciation andamortization of the investment properties (Note V.13); the depreciation of fixed assets (Note V.14),the amortization of intangible assets (Note V.18), the criterion for determining of long-term assetsimpairment (Note V.19); and the date of revenue recognition (Note V.25), etc.
1. Statement of compliance with Accounting Standards for Enterprises
The financial statements prepared by the Company meet the requirements of the AccountingStandards for Enterprises, which accurately and completely reflected information relating to thefinancial condition of the Company on 31 December 2019, operation result of 2019 and cash flow.
2. Accounting period
The accounting year of the Company is from 1 January each year to 31 December of the sameyear in solar calendar.
3. Operating period
√Applicable □Not Applicable
The Company takes 12 months as an operating period, which is also the classification basis forthe liquidity of its assets and liabilities.
4. Recording currency
Renminbi is the recording currency of the Company.
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5. Accounting methods of business combinations under common control and not under
common control
√Applicable □Not Applicable
A business combination is a transaction or event that brings together two or more separate entitiesinto one reporting entity. Business combinations are classified into business combinations undercommon control and business combinations not under common control.
(1) Business combinations under common control
A business combination under common control is a business combination in which all of thecombining entities are ultimately controlled by the same party or parties both before and after thecombination, and that control is not transitory. For business combination under common control, theparty that obtains the control over the other parties on the combination date is the acquirer, and otherparties involving in the business combination are the transferors. The combination date is the date onwhich the acquiring party effectively obtains the control over the party being acquired.
In case the consideration for long-term equity investments formed in business combination undercommon control is paid by ways of cash, transfer of non-cash assets or assumption of debts, theCompany will regard the share of carrying amounts of the net assets of the transferor in the ultimatecontroller’s consolidated financial statements obtained as the initial investment cost of long-termequity investments as at the date of combination. For carrying value of net assets of the transferor isnegative as at the date of combination, investment cost of long-term equity investment is calculated aszero. In case the transferor is controlled by the ultimate controller by the business combination undernon-common control before combination, the initial investment cost of the long-term equityinvestment of the acquirer includes relevant goodwill. The Company should adjust the capital reserve(capital premium or share premium) in accordance with the differences between initial investment costof the long-term equity investment and the cash paid, the non-cash assets transferred and the carryingvalue of liability assumed; in case the balance of the capital reserve (capital premium or sharepremium) is insufficient for the elimination, the surplus reserves and undistributed profits shall beused to dilute such expenses in order. In case the consideration for the combination is paid by issuanceof equity instruments, the aggregate nominal value of shares issued will be deemed as the share capital.The difference between the initial investment cost of long-term equity investments and aggregatenominal value of shares issued shall be adjusted to capital reserve (capital premium or share premium),in case the capital reserve (capital premium or share premium) is insufficient for the elimination, thesurplus reserves and undistributed profits shall be used to dilute such expenses in order.
Intermediary fees (such as audit, legal services and valuation consultancy) and other relevantmanagement fees incurred in the business combination by the acquirer are credited in profit or loss in
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the period when they occurred. Trading expenses in direct relation to the issuance of equity instrument
as the consideration for the combination is written down to the capital reserve (share premium), where
the capital reserve (share premium) is insufficient, and to surplus reserves and undistributed profits in
order. Trading expenses in direct relation to the issuance of debt instrument as the consideration for
the combination is included in the initial recognition amount of the debt instrument.
For business combination under common control realized through several transactions step bystep, in case of a package transaction, all the transactions are accounted as one transaction that hasacquired the control; in case of not a package transaction, in the financial statement of parent companythe capital reserve ( share premium) is adjusted by the difference between the initial investment costand the sum of the carrying value of the original long-term equity investment and the book value ofthe new payment consideration for further acquisition of shares with the share of acquirer’s owner’sequity on the date of combination in case calculated on the proportion of shareholding on the date ofcombination as its initial investment cost; where the capital reserve is insufficient, the retainedearnings will be used to offset such expenses.
In the consolidated financial statements, the long-term equity investment held by the combiningparty before the date of acquiring control of the combined parties, and the profit and loss, the othercomprehensive income and changes in the other owners’ equity recognized during the period betweenthe later of the date of acquisition and the date when the combining and the combined parties areunder the common control of the same party and the date of combination, are written down to theretained earnings or profit or loss at the beginning of the comparative reporting period, respectively.
(2) Business combinations involving entities not under common control
A business combination not under common control is a business combination in which all of thecombining entities are not ultimately controlled by the same party or parties both before and after thecombination. For business combination not under common control, the party that obtains the controlof the other parties at the combination date is the acquirer; other parties involving in the businesscombination are the transferors. The combination date is the date on which the acquirer effectivelyobtains control of the transferors.
In business combination involving entities not under common control, the cost of combinationshall be the sum of the assets paid, obligations incurred or assumed and the fair value of the equitysecurities issued by the acquirer for obtaining control of the transferor at the date of acquisition.Intermediary fees (such as audit, legal services and valuation consultancy) and other relevantmanagement fees incurred by the acquirer for the purpose of business combination are credited inprofit or loss in the period when they occurred. Transaction fees for the equity instruments or debtinstruments issued by the acquirer as combination consideration is included in the initial recognitionamount of such equity instruments or debt instruments. Contingent consideration involved shall berecorded as the combination cost based on its fair value on the acquisition date. Should any new or
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further evidence arise within 12 months after the acquisition date and makes it necessary to adjust the
contingent consideration on the acquisition date, the goodwill arising from the business combination
shall be amended accordingly.
The cost of combination and identifiable net assets obtained by the acquirer in a businesscombination are measured at fair value on the acquisition date. Where the cost of the combinationexceeds the acquirer’s interest in the fair value of the transferor’s identifiable net assets, the differenceis recognized as goodwill; where the cost of combination is lower than the acquirer’s interest in thefair value of the transferor’s identifiable net assets, the difference is initially recognized in profit orloss for the current year after a review of computation for the identifiable assets, liabilities or fairvalue of contingent liabilities and combination cost, and where the combination cost is still lower thanthe fair value of the identifiable net assets of the transferor obtained during the course of combination,then the difference is recorded in the profit and loss.
In business combination involving entities not under common control that is realized in phasesthrough multiple exchange transactions, in the Company individual financial statements, the sum ofthe book value of the equity investment of the transferor held before the date of acquisition and thecost of new investment on the date of acquisition are recognized as the initial investment cost of suchinvestment.
In the consolidated financial statement, the equity of the transferor held before the date ofacquisition is re-measured at the fair value on the date of acquisition, and the difference between thefair value and book value is included in current investment income; where the equity of the transferorheld before the date of acquisition involves the other comprehensive income, such equity and relevantother comprehensive income are transferred to current investment income on the date of acquisition,other than the other comprehensive income that cannot be reclassified in the profit or loss.
The fair value on the acquisition date of equity interest in the transferor prior to the acquisitiondate and the fair value of the considerations paid for the acquisition of the new equity on theacquisition date are regarded as the combination costs of the Company, comparing with acquirer’sshare of the fair value on the acquisition date of the transferor’s net identifiable assets on theproportion of the shareholding on the acquisition date to confirm the goodwill that required to berecognized on the acquisition date or the amount that shall be included in the profit or loss.
6. Preparation method of consolidated financial statements
√Applicable □Not Applicable
(1) Scope of consolidated financial statements
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The Company incorporated all of its subsidiaries (including the separate entities controlled by theCompany) into the scope of consolidation financial statements, including the enterprises under theCompany’s control, divisible part in the investees and structured entities.
(2) To unify the accounting policies, balance sheets date and accounting periods of the Companyand subsidiaries
When preparing consolidated financial statements, adjustments are made if subsidiaries’accounting policies or accounting periods are different from that of the Company, in accordance withthe Company’s accounting policies and accounting periods.
(3) Offset matters in the consolidated financial statements
The consolidated financial statements shall be prepared on the basis of the balance sheets of theCompany and subsidiaries, which offset the internal transactions incurred between the Company andsubsidiaries and among subsidiaries. The owner’s equity of the subsidiaries not attributable to theCompany shall be presented as ‘minority equity’ under the owner’s equity item in the consolidatedbalance sheet.
The long-term equity investment of the Company held by the subsidiaries, deemed as treasurystock of the corporate group as well as the reduction of owners’ equity, shall be presented as ‘Less:Treasury stock’ under the owner’s equity item in the consolidated balance sheet.
(4) Accounting treatment of subsidiaries acquired from combination
For subsidiaries acquired from business combination under common control, the assets, liabilities,operating results and cash flow of the subsidiaries are included in the consolidated financialstatements from the beginning of the period in which the combination took place, as if thecombination has taken since the ultimate controller began its control. When preparing the consolidatedfinancial statements, for the subsidiaries acquired from business combination under non-commoncontrol, separate financial statement will be adjusted on the basis of their fair values of the identifiablenet assets on the date of acquisition.
7. Classification of joint arrangement and accounting methods of joint operations
√Applicable □Not Applicable
A joint arrangement refers to an arrangement jointly controlled by two or more parties. Inaccordance with the Company’s rights and obligations under a joint arrangement, the Companyclassifies joint arrangements into joint operations and joint ventures.
Joint operations refer to a joint arrangement in which the Company is a party and is entitled torelevant assets and obligations of this arrangement. The Company recognizes the following items inrelation to its interest in a joint operation, and accounts the same in accordance with relevantaccounting standards for business enterprises:
(1) recognize the assets held solely by the Company, and recognize assets held jointly by the
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Company in appropriation to the share of the Company; (2) recognize the obligations assumed solely
by the Company, and recognize obligations assumed jointly by the Company in appropriation to the
share of the Company; (3) recognize revenue from disposal of joint operations in appropriation to the
share of the Company; (4) recognize revenue from disposal of joint operations in appropriation to the
share of the Company; (5) recognize fees solely occurred by the Company and recognize fees from
joint operations in appropriation to the share of the Company.
When the Company, as a joint venture, invests or sells assets to or purchase assets (the assets donot constitute a business, the same below) from joint operations, the Company shall only recognize thepart of profit or lost from this transaction attributable to other parties of joint operations before theseassets are sold to a third party. In case of an impairment loss incurred on these assets which meets therequirements as set out in Accounting Standards for Business Enterprises No. 8 – Asset Impairment,the Company shall full recognize the amount of this loss in relation to its investment in or sale ofassets to joint operations or recognize the loss according to the Company’s share of commitment inrelation to the its purchase of assets from joint operations.
Joint ventures refer to a joint arrangement during which the Company only is entitled to netassets of this arrangement. Investment in joint venture is accounted for using the equity methodaccording to the accounting policies referred to under ‘12 Long-term equity investment’ of Note V.
8. Recognition standard for cash and cash equivalents
Cash recognized in the cash flow statements represents the cash on hand and deposits availablefor payment of the Company at any time.
Cash equivalents recognized in the cash flow statements refer to short-term, highly liquidinvestments held by the Company that are readily convertible to known amounts of cash and whichare subject to an insignificant risk on change in value.
9. Foreign currency businesses and translation of foreign currency statements
√Applicable □Not Applicable
(1) Foreign currency transactions
If foreign currency transactions occur, they are translated into the amount of functional currencyby applying the spot exchange rate at the transaction date.
Monetary items denominated in foreign currencies are translated into functional currencies at therates of exchange ruling at the balance sheet date. All foreign exchange difference are credited in theprofit or loss, except ①those arising from the funds denominated in foreign currency speciallyborrowed for the establishment of the qualifying assets are treated based on the principal ofcapitalization of borrowing costs; ②those arising from the other changes in the balance other than
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amortized cost of available-for-sale monetary items denominated in foreign currency are recognized in
the other comprehensive income.
Non-monetary items in foreign currency measured at historical cost are translated using the spotexchange rate prevailing on the date when transaction occurred and its functional currency shallremain unchanged. Non-monetary items denominated in foreign currencies that are measured at fairvalue are translated using the foreign exchange rate at the date the fair value is determined; theexchange differences between the translated and original amounts of functional currencies arerecognized in the statement of profit or loss or other comprehensive income as changes in fair value(including changes in exchange rate).
(2) Translation of foreign currency financial statements
If the functional currencies used as the bookkeeping base currency by the subsidiaries, jointventures and associates under the control of the Company are different from that of the Company,their financial statements denominated in foreign currencies shall be translated to perform accountingand prepare the consolidated financial statements.
The assets and liabilities of the balance sheet are translated using the spot exchange rate at thebalance sheet date; all items except for ‘undistributed profits’ of the owner’s equity are translated atthe spot exchange rate on the transaction date. The revenue and expenses in the income statement aretranslated using the approximate rate of the spot exchange rate on the transaction date. Differencesarising from the translation of foreign currency financial statements are presented as the ‘othercomprehensive income’ in the owner’s equity of the balance sheet.
Foreign currency cash flow is translated using the approximate rate of the spot exchange rate onthe transaction date. The impact of exchange rate changes on cash amount is reflected separately in thecash flow.
When disposing overseas operations, the translation difference related to the overseas operationshall be transferred together or as the percentage of disposing the overseas operation to profit or lossin the current period of disposal.
10. Financial instruments
√Applicable □Not ApplicableA financial instrument refers to any contract that gives rise to a financial asset of one entity and afinancial liability or equity instrument of another entity. A financial asset or financial liability isrecognized when the Company becomes a party to the contract of a financial instrument.
(1) Financial assets
①Classification and measurement
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According to the business model for managing financial assets and the contractual cash flowcharacteristics of financial assets, the Company classifies financial assets into: (1) Financial assetsmeasured at amortized cost; (2) financial assets measured at fair value through other comprehensiveincome; (3) financial assets measured at fair value through profit or loss of the current period.
Financial assets are measured at fair value upon initial recognition. For financial assets measuredat fair value through profit and loss of the current period, related transaction costs are directly includedin profit and loss of the current period; for other types of financial assets, related transaction costs areincluded in their initial recognized amounts. For the accounts receivable or bills receivable arisingfrom the sale of products or the provision of labor services that do not contain or consider thesignificant financing components, the Company shall take the consideration amount entitled to bereceived as the initial recognized amount.
a. Debt instrument
The debt instruments held by the Company refer to the tools that are in conformity with thedefinition of financial liability from the perspective of the issuing party, which are measured in thefollowing three ways, respectively:
(a) Measured at amortized cost:
The Company’s business model for managing such financial assets is: With the aim of obtainingcontractual cash flow, the contractual cash flow characteristics of such financial assets shall beconsistent with the basic lending arrangements, that is, the cash flow generated on a specific date isonly the payment for the principal and the interest based on the outstanding principal amount. Forsuch financial assets, the Company recognizes the interest income in accordance with the effectiveinterest method. Such financial assets mainly include cash and cash equivalents, bills receivable andaccounts receivable, other receivables, creditor’s right investment and long-term receivables. TheCompany lists the creditor’s rights investments and long-term receivables matured within one year(including one year) from the balance sheet date as non-current assets matured within one year; thecreditor’s rights investments matured within one year (including one year) when being obtained arelisted as other current assets.
(b) Measured at fair value through other comprehensive income:
The Company’s business mode for managing such financial assets is: With the aim of obtainingcontractual cash flow and selling the financial assets, the contractual cash flow characteristics of suchfinancial assets shall be consistent with the basic lending arrangements. Such financial assets aremeasured at fair value through other comprehensive income, but impairment gains and losses,exchange gains and losses, and interest income calculated by the effective interest method areincluded in profit and loss of the current period. Such financial assets are listed as other creditor’srights investments. Other creditor’s rights investments matured within one year (including one year)from the balance sheet date are listed as non-current assets matured within one year; other creditor’s
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rights investments matured within one year (including one year) when being obtained are listed as
other current assets.
(c) Measured at fair value through profit or loss of the current period:
The Company lists its held debt instruments that are neither measured at amortized cost nor atfair value through other comprehensive income as financial assets held for trading measured at fairvalue through profit or loss of the current period. At the time of initial recognition, in order toeliminate or significantly reduce accounting mismatch, the Company designated some financial assetsas financial assets measured at fair value through profit or loss of the current period. Investments thatare matured more than one year and are expected to be held for more than one year from the balancesheet date are listed as other non-current financial assets.
b. Equity instruments
The Company lists equity instrument investments that have no control, joint control andsignificant influence on itself as financial assets held for trading measured at fair value through profitor loss of the current period; investments that are expected to be held for more than one year from thebalance sheet date are listed as other non-current financial assets.
In addition, the Company designated some non-trading equity instrument investments asfinancial assets measured at fair value through other comprehensive income, which are listed as otherequity instrument investments. The relevant dividends and interest income of such financial assets areincluded in profit and loss of the current period.
②Impairment
For financial assets measured at amortized cost and debt instrument investments measured at fairvalue through other comprehensive income, contract assets and financial guarantee contracts, theCompany recognizes the loss provision based on the expected credit losses.
The Company considers reasonable and reliable information about past events, current conditionsand forecasts of future economic conditions, and takes the risk of default as a weight, and calculatesthe probability-weighted amount of the present value of the difference between the cash flowreceivable and the cash flow expected to be received of the contract to confirm the expected creditlosses.
On each balance sheet date, the Company measures the expected credit losses of financialinstruments in different phases. If the credit risk has not increased significantly since the initialrecognition, the financial instruments are in the first phase. The Company measures the loss provisionaccording to the expected credit losses in the next 12 months; if credit risk has increased significantlybut credit impairment has not yet occurred since the initial recognition, the financial instruments are inthe second phase. The Company measures the loss provision according to the expected credit losses ofthe instruments during the entire duration; if credit impairment has occurred since the initial
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recognition, the financial instruments are in the third phase. The Company measures the loss provision
according to the expected credit losses of the instruments during the entire duration.
For financial instruments with lower credit risk on the balance sheet date, the Company measuresthe loss provision according to the expected credit losses in the next 12 months, assuming that itscredit risk has not increased significantly since the initial recognition.
For financial instruments in the first phase and second phase and financial instruments withrelatively lower credit risk, the Company calculates interest income based on their book balancebefore the deduction of provisions and effective interest rate. For financial instruments in the thirdphase, the Company calculates interest income based on their amortized cost after the impairmentprovision has been deducted from the book balance and effective interest rate.
For bills receivable, accounts receivable and contractual assets, whether there exist significantfinancing components, the Company measures loss provision based on expected credit loss over theentire duration.
The Company classifies accounts receivable into groups on the basis of shared credit riskcharacteristics, and calculates the expected credit losses on groups, the bases of group determinationare as follows:
For each group of bills receivable, the Company applies exposure at default and expected creditlosses rate over the entire duration to calculate the expected credit losses by taking into account thehistorical credit losses experience, the existing conditions and forecast of future economic conditions.
For each group of accounts receivable, the Company makes the comparison of expected creditlosses rates of accounts receivable in overdue days and over the entire duration to calculate theexpected credit losses by taking into account the historical credit losses experience, the existingconditions and forecast of future economic conditions.
For each group of other accounts receivable, the Company applies exposure at default andexpected credit losses rate within the next 12 months or over the entire duration to calculate theexpected credit losses by taking into account the historical credit losses experience, the existingconditions and forecast of future economic conditions.
The Company recognizes the loss impairment provision or reversed in profit or loss of the currentperiod. For held debt instruments at fair value through other comprehensive income, the Companyrecognizes loss/gain on impairment in profit or loss of the current period, and adjusts othercomprehensive income at the same time.
③Derecognition
A financial asset is derecognized when any of the below criteria is met: a. the contractual rightsto receive the cash flow from the financial asset have been transferred; b. the financial asset has beentransferred and the Company transfers substantially all the risks and rewards of ownership of the
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financial asset to the transferee; c. the financial asset has been transferred and the Company has not
retained control of the financial asset, although the Company neither transfers nor retains substantially
all the risks and rewards of ownership of the financial asset.
On de-recognition of other equity instruments investment, the difference between the bookbalance and the sum of the consideration received and any cumulative profit or loss of fair value thathad been recognized in other comprehensive income is recognized in the retained earnings. Onde-recognition of other financial assets, the difference between the book balance and the sum of theconsideration received and any cumulative profit or loss of fair value that had been recognized inother comprehensive income is recognized in the profit and loss of the current period.
(2) Financial liabilities
Financial liabilities are classified as financial liabilities measured at amortized cost and financialliabilities at fair value through profit and loss of the current period at initial recognition.
The financial liabilities of the Company are financial liabilities measured at amortized cost,including bills payable, accounts payable, other payables, borrowings, bonds payable, etc. Suchfinancial liabilities are recognized initially at fair value less transaction costs and subsequentlymeasured using the effective interest method. Financial liabilities with a maturity of less than one year(including one year) are listed as current liabilities: those with maturity of more than one year but aremature within one year from the balance sheet date (including one year) are listed as non-currentliabilities due within one year; the rest are presented as non-current liabilities.
When all or partial current obligations of financial liabilities have been discharged, such financialliabilities or the part with obligations discharged are derecognized by the Company. The differencebetween the carrying amount of a financial liability de-recognized and the consideration paid isrecognized in the profit and loss of the current period.
(3) Determination of fair value of financial instruments
The fair value of a financial instrument that is traded in an active market is determined at thequoted price in the active market. The fair value of a financial instrument that is not traded in an activemarket is determined by using a valuation technique. During the valuation, the Company adopts anapplicable valuation technique under current conditions and there are enough available data and otherinformation to support. Those inputs should be consistent with the inputs a market participant woulduse when pricing the asset or liability, and the Company should maximize the use of relevantobservable inputs. When related observable inputs can’t be acquired or are not feasible to be acquired,then use unobservable inputs.
(4) Significant accounting estimates and judgments
①Significant accounting estimates and key assumptions
Measurement of expected credit loss
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The Company applies exposure at default and expected credit loss rate to calculate expectedcredit loss, and determines expected credit loss rate based on probability of default and loss givendefault. For the determination of expected credit loss rate, the Company applies data including internalhistorical credit losses experience, and adjusts historical data taking account current conditions andforward-looking information. Regarding forward-looking information, indicators used by theCompany include economic downturn risk, growth in expected unemployment rate, changes inexternal market environment, technology environment and customer status. The Company monitorsand reviews assumptions related to the calculation of expected credit loss on a regular basis. No majorchange occurred in the above-mentioned estimate techniques and key assumptions during the year.
②Critical judgments on application of accounting policies
a. Classification of financial assets
On classification of financial assets, critical judgments considered by the Company include thebusiness mode, an analysis of contractual cash flow characteristics and others.
From the dimension of financial asset portfolio, the Company determines the business mode offinancial asset management. Considerations cover assessments, reporting methods of financial assetperformance to key management personnel, risks impacting financial asset performance and relevantmanagement methods, as well as methods of relevant business management personnel receivingremuneration.
In assessing the consistency between contractual cash flow of financial assets and the basiclending arrangements, the Company makes the following major judgments: Whether the timedistribution or amount of the principal changes during the duration of the financial assets due toprepayment, etc; and whether the interest includes considerations for the currency time value, creditrisk, as well as other basic borrowing risks, costs and profits. For example, whether the prepaymentamount merely reflects the principal unpaid and interest incurred by the principal unpaid, as well asreasonable compensation paid due to premature termination of contracts.
b. Judgment that credit risk increases significantly
The main standards for the Company to judge significant increase in credit risk are that overduedays are more than 30 days, or that significant changes occur in one or more of the followingindicators: Business environment of debtors, internal and external credit rating, actual or expectedbusiness performance, value of collaterals or significant drop in credit rating of guarantors.
The main standards for the Company to judge incurred credit impairment are that overdue daysare more than 90 days (i.e. default occurred), or that one or more of the following conditions are met:a debtor is under significant financial difficulty; other ongoing debt restructuring or high possibility ofbankruptcy.
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11. Inventories
√Applicable □Not Applicable
(1) Classification of inventories
Inventories refer to the finished goods or commodities held for sale in daily activities, goods inprogress in the production process, consumed materials and supplies in the production process orproviding services of the Company, which mainly include raw materials, revolving materials,entrusted processed materials, wrap page, low-cost consumables, goods in progress, self-madesemi-finished goods, finished goods (merchandise inventory) and engineering construction, etc.
(2) Measurement of inventories transferred out
At delivery, inventories are accounted using the weighted average method
(3) Provision for inventory impairment
At balance sheet date, inventories are stated at the lower of cost or net realizable value.
The net realizable value of inventories (including finished products, merchandize and materialsfor sale) that can be sold directly is determined using the estimated saleable price of such inventorydeducted by the cost of sales and relevant taxation. The net realizable value of materials in inventorythat are held for production is determined using the estimated saleable price of the finished productdeducted by the cost to completion, estimated cost of sales and relevant taxation. The net realizablevalue of inventory held for performance of sales contract or labor service contract is determined basedon the contractual price; in case the amount of inventory held by the enterprise exceeds the contractualamount, the net realizable value of the excess portion of inventory is calculated using the normalsaleable price.
Provision for impairment of inventories is made for individual inventory. For items of inventoriesthat is produced and marketed in the same geographical area and with the same or similar end uses orpurposes, which cannot be practicable evaluated separately from other items, cost and net realizablevalue of inventories may be determined on an aggregate basis. For large quantity and low value itemsof inventories, cost and net realizable value of inventories may be determined on types of inventories.
Provision for impairment of inventories is made and recognized as profit or loss when the cost ishigher than the net realizable value on the balance sheet date. If the factors that give rise to theprovision in prior years are not in effect in current year, provision would be reversed within theimpaired cost, and recognized in the profit or loss.
(4) Inventory system
The Company adopts perpetual inventory system.
(5) Amortization of low-value consumables and packaging
Low-value consumables and packages of the Company are amortized by one-time write-off.
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12. Long-term equity investments
√Applicable □Not Applicable
Long-term equity investments in this section refer to equity investments held by the Company thatgive it control, joint control or significant influence over the investee. Long-term equity investmentswhere the Company does not exercise control, joint control or significant influence over the investeeare accounted for as available-for-sale financial assets.
(1) Recognition of initial cost of investment
①For long-term equity investment obtained from business consolidation under common control,the initial cost is measured at the combining party’s share of the carrying amount of the equity of thecombined party; for a long-term equity investment obtained from business consolidation undernon-common control, the initial cost is the consolidation cost at the date of acquisition;
②For the long-term equity investment acquired in a manner other than business combination: theinitial investment cost of the long-term equity investment acquired by payment in cash shall be thetotal purchase price; the initial investment cost of the long-term equity investment acquired by issuingequity securities shall be the fair value of the equity securities issued；For long-term equity investmentacquired by debt restructuring, the initial investment cost shall be recognized in accordance with therequirements under Accounting Standards for Enterprises No. 12 - Debt Restructuring. For long-termequity investment acquired by the exchange of non-monetary assets, the initial investment cost shallbe recognized in accordance with relevant requirements under the Rules.
（2）Subsequent measurement and profit or loss recognition
①Cost method
Where the investor has a control over the investee, long-term equity investments are measuredusing cost method. For long-term equity investments using cost method, unless increasing or reducingthe investment, the carrying value is unchanged. The Company’s share of the profit distributions orcash dividends declared by the investee are recognized as investment income.
②Equity method
Investor’s long-term equity investments in associates and joint ventures are measured usingequity method. Where part of the equity investments of an investor in its associates are held indirectlythrough venture investment institutions, common fund, trust companies or other similar entitiesincluding investment linked insurance funds, such part of equity investments indirectly held by theinvestor shall be measured at fair value through profit or loss according to relevant requirements ofAccounting Standards for Business Enterprises No.22—Recognition and measurement of FinancialInstruments regardless whether the above entities have significant influence on such part of equityinvestments, while the remaining part shall be measured using equity method.
Under the equity method, where the initial investment cost of a long-term equity investment
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exceeds the Company’s share of the fair value of the investee’s identifiable net assets at the time of
acquisition, no adjustment is made to the initial investment cost. Where the initial investment cost is
less than the Company’s share of the fair value of the investee’s identifiable net assets at the time of
acquisition, the difference is recognized in profit or loss for the period, and the cost of the long-term
equity investment is adjusted accordingly.
For long-term equity investments accounted for using the equity method, the Companyrecognizes the investment income and other comprehensive incomes according to its share of netprofit or loss and other comprehensive incomes of the investee, and the carrying amount of thelong-term equity investments shall be adjusted accordingly; the carrying amount of the investment isreduced by the Company’s share of the profit distribution or cash dividends declared by an investee;for changes in owner’s equity of the investee other than those arising from its net profit or loss, othercomprehensive income and profit distribution, the carrying amount of the long-term equity investmentshall be adjusted and recognized to capital reserve. When recognizing attributable share of the netprofit and losses of the investee, the net profit of the investee shall be recognized after adjustment onthe ground of the fair value of all identifiable assets of the investee when it obtains the investment. Ifthe accounting policies and accounting periods adopted by the investee are different from thoseadopted by the Company, an adjustment shall be made to the financial statements of the investee inaccordance with the accounting policies and accounting periods of the Company and recognize theinvestment incomes and other comprehensive incomes.
The Company’s share of net losses of the investee shall be recognized to the extent that thecarrying amount of the long-term equity investment together with any long-term interests that insubstance form part of the investor’s net investment in the investee are reduced to zero. If theCompany has to assume additional obligations, the estimated obligation assumed shall be provided forand charged to the profit or loss as investment loss for the period. Where the investee is making netprofits in subsequent periods, the Company shall resume recognizing its share of profits after settingoff against the share of unrecognized losses.
(3) Change of the accounting methods for long-term equity investments
①Change of measurement at fair value to accounting under equity method: where the equityinvestment held have no control, joint control or significant impact on the investee and that areaccounted according to the financial instrument recognition and measurement criteria can carry outcommon control or place significant impact due to addition of investment which resulted in theincrease of shareholding, the investee shall plus the fair value of the equity investment originally helddetermined in accordance with the Standards for Recognition and Measurement of FinancialInstruments and the fair value of the consideration payable for new investment as the initialinvestment cost accounted under equity method when changing the equity method.
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②Change of measurement at fair value or accounting under equity method to cost method: theequity investment of the investee held by the investor with no control, joint control or significantimpact and accounted according to the financial instrument recognition and measurement criteria, orthe long-term equity investment in associates or joint venture originally held that can control theinvestee due to addition of investment, shall be accounted in accordance with the long-term equityinvestment formed by combination of enterprises.
③Change of accounting under equity method to measurement at fair value: the long-term equityinvestment originally held with common control or significant impact on the investee that cannotconduct common control or significant impact on the investee due to the decrease of shareholding as aresult of factors such as partial disposal, shall be accounted in accordance with Standards forRecognition and Measurement of Financial Instruments, and the difference between the fair value onthe date when the common control or significant impact is lost and the book value is included inprofit or loss in the relevant year.
④Change of cost method to equity method: where control on the investee change to significantimpact or common control with other investors due to factors such as disposal of investment, thelong-term equity investment cost that ceased to be recognized shall first be carried forward on theproportion of the investment disposed. Then comparing the cost of the remaining long-term equityinvestment with the attributable fair value of the identifiable net assets of the investee at the originalinvestment calculated on proportion of the remaining shareholding, where the former larger than thelater, it belongs to the goodwill as showed in deciding the investment price and will not adjust thecarrying amount of the long-term equity investment; where the former less than the later, the retainedearnings will be adjusted along with the adjustment of the long-term equity investment.
(4) Basis of conclusion for common control and significant influence over the investee
①Joint control over an investee refers to activities which have a significant influence on return ofan arrangement could be decided only by mutual consent of the investing parties sharing the control,which includes the sales and purchase of goods or services, management of financial assets,acquisition and disposal of assets, research and development activities and financing activities, etc.
②Significant influence on the investee refers to significant influence over the investee existswhen holding more than 20% but less than 50% of the shares with voting rights or even if the holdingis below 20%, there is still significant influence if any of the following conditions satisfied:
1）There is representative in the board of directors or similar governing body of the investee;
2）Participating in investee’s policy setting process;
3）Assign management to investee;
4）The investee relies on the technology or technical information of the investor;
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5）Major transactions with the investee.
(5) Impairment test and provision of impairment
At the balance sheet date, the Company reviews whether there is impairment indicator for thelong-term equity investments. When there is impairment indicator, the recoverable amount isdetermined through impairment test and impairment is provided based on the difference between therecoverable amount and the carrying value. Impairment loss is not reversed once provided.
The recoverable amount is the higher of net fair value of long-term equity investments ondisposal and the present value of estimated future cash flow.
(6) Disposal of long-term equity investments
For disposal of long-term equity investment, the difference between the considerations receivedand the carrying amount of the disposed investment is recognized in profit or loss. For long-termequity investment accounted for using the equity method, the part recognized in other comprehensiveincome is accounted on pro rata basis upon disposal in the same way as the relevant assets orliabilities are disposed of directly by the investee.
13. Investment properties
Investment properties of the Company include leased land use rights and leased buildings.
An investment property is initially measured at cost, and cost method is adopted for subsequentmeasurement.
The buildings leased out of investment properties of the Company are depreciated over theiruseful lives using the straight-line method. The specific measurement policy is the same as fixedassets. For land use rights leased out or held for resale after appreciation in value, they are amortizedover their useful lives using the straight-line method. The specific measurement policy is the same asthat of intangible assets.
At the balance sheet date, the Company reviews whether there is impairment indicator forinvestment properties. When there is impairment indicator, the recoverable amount is recognizedthrough an impairment test and impairment is provided based on the difference between the carryingvalue and the recoverable amount. Impairment is not reversed in subsequent periods.
14. Fixed assets
（1）Fixed assets recognition criteria
Fixed assets are tangible assets that are held for production of goods, provision of labor services,leasing or administrative purposes, and have useful life more than one fiscal year, which arerecognized when the following conditions are met:
①economic benefits in relation to the fixed assets are very likely to flow into the enterprise;
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②the cost of the fixed assets can be measured reliably.
（2）Classification and Depreciation method of fixed assets
The fixed assets of the Company can be divided into: buildings and constructions, productionequipment, transportation equipment and office equipment, etc. The straight-line method over usefullives is used to measure depreciation. The useful lives and the expected net residual value of fixedassets are determined according to the nature and usage of various fixed assets. At the end of eachyear, the useful lives, expected net residual value and depreciation method of fixed assets are reviewed,and adjusted if there is variance with original policies; The Company has made provisions for all thefixed assets except for the fixed assets that have been fully depreciated and still in use.
Typeoffixedassets Usefullives Expectedresidualrate
Landownership - -
Housesandbuildings 8-40years 0%-5%
Machineryequipment 4-20years 0%-5%
Vehicles 5-10years 0%-5%
Officeequipmentandothers 3-10years 0%-5%
（3） Test method and provision for impairment of fixed assets
At the balance sheet date, the Company reviews whether there is impairment indicator for thefixed assets. When there is an impairment indicator, the recoverable amount is estimated andimpairment is provided based on the difference between the carrying value and the recoverableamount once the impairment of an asset is recognized, it will not be reversed in the subsequentaccounting period.
（4）Basis for Recognition, measurement of fixed assets held under finance lease
Basis for recognition of fixed assets held under finance lease: leases that transfer all the risks andrewards related to the ownership of the relevant assets. The asset is recognized if one or more of thefollowing criteria is met: ①upon expiry of the lease term, the ownership of the leased asset istransferred to the lessee; ②the lessee has the option to purchase the leased asset at a price expected tobe sufficiently lower than the fair value of the leased asset when the option is exercised and at theinception of the lease, it is reasonably certain that the lessee will exercise the option; ③the lease termapproximates the useful life of the leased asset even if the ownership is not transferred; ④at theinception of the lease, the present value of the minimum lease payments is substantially equivalent tothe fair value of the leased asset; ⑤the leased assets are of such a specialized nature that only thelessee can use them without major modification.
Measurement of fixed assets held under finance lease: fixed assets held under finance lease are
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initially recognized at the lower of fair value of the leased assets at the inception of lease and the
present value of minimum lease payments.
Subsequent measurement of fixed assets held under finance lease is accounted for using thedepreciation and impairment policies of owned fixed assets.
15. Construction in progress
√Applicable □Not Applicable
(1) Types of construction in progress
Construction in progress for the Company is self-operated construction.
(2) Standard and date of transfer from construction in progress to fixed assets
The construction in progress of the Company is transferred to fixed assets when the project iscompleted and ready for its intended use, which shall satisfy one of the following conditions:
①The construction of the fixed assets (including installation) has been completed or substantiallycompleted;
②The fixed asset has been used for trial operation and it is evidenced that the asset can operateordinarily or produce steadily qualified products; or the result of trial operation proves that it canoperate normally;
③Further expenditure incurred for construction is very minimal or remote;
④The constructed fixed asset reaches or almost reaches the design or the requirements of contract,or complies with the design or the requirements of contract.
（3）Impairment test and provision of impairment of construction in progress
At the balance sheet date, the Company reviews the construction in progress to check whetherthere is any sign of impairment and an impairment test is needed to recognize the recoverable amountwhen there are signs that construction in progress may impair. The impairment loss should be thelower of the carrying value and recoverable amount and impairment loss cannot be reversed in thefollowing accounting period if it has been provided.
The recoverable amount of construction in progress should base on the higher value between fairvalue of asset less disposal expense and present value of estimated cash flow in the future.
16. Borrowing costs
√Applicable □Not Applicable
（1）Recognition principles for borrowing cost capitalization
The Company’s borrowing costs that are directly attributable to the acquisition or production of aqualifying asset are capitalized into the cost of relevant assets. Other borrowing costs are recognized
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as expenses in the current profit and loss when incurred. Qualifying assets for capitalization include
fixed assets, investment properties and inventories that necessarily take a substantial period of time for
acquisition, construction or production to get ready for their intended use or sale.
（2）Computation of capitalized amount of borrowing costs
Capitalization period refers to the period from the commencement to the cessation ofcapitalization of borrowing costs, excluding the periods in which capitalization of borrowing costs issuspended.
Capitalization interruption period: Capitalization of borrowing costs is suspended during periodsin which the acquisition or construction of a qualifying asset is interrupted abnormally and theinterruption lasts for more than 3 months.
Computation of capitalized amount of borrowing costs: ①Specific borrowings will be recordedbased on the actual interest expense incurred in the period of special borrowings less the interestincome from unutilized borrowings placed at banks or investment gain from temporary investment;②Normal borrowings utilized are calculated based on the weighted average of expenses of theaggregate asset exceeding the asset expenses of the portion of special borrowings multiplied by thecapitalization ratio of the normal borrowings utilized. Capitalization ratio is calculated based onweighted average interest rate of normal borrowings; ③For borrowings with discount or premium,the discount or premium was amortized over the accounting periods borrowings to adjust the interestin every period using the effective interest rates.
17. Right-of-use assets
√Applicable □Not Applicable
Right-of-use assets are the right of the Company as a lessee to use leased assets during the leaseterm. On the commencement date of the lease term, the Company as lessee shall recognize theright-of-use assets and lease liabilities for the lease, except for short-term leases and low value assetsleases which are treated with practical expedient. The commencement date of the lease term refers tothe start date when the lessor provides the leased assets to make it available to the lessee.
The Company’s right-of-use assets shall be initially measured at the costs. The costs include:
(1) initial amount of the lease liability;
(2) for lease payment on or before the date of commencement of the lease period, where there was
lease incentive, such incentives shall be deducted;
(3) initial direct costs incurred by the Company as lessee;
(4) costs expected to be incurred by the Company for demolition and removal of leased assets,
restoration of the premises where the leased assets are located, or restoration of the leased assets
to the conditions of the lease terms.
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The Company refers to the relevant depreciation provisions of ‘Accounting Standards for BusinessEnterprises No. 4-Fixed Assets’ to accrue depreciation for right-of-use assets. If the Company canreasonably determine that the ownership of the leased asset can be acquired at the expiration of thelease term, the leased asset shall be depreciated within its remaining useful life. If the Companycannot reasonably determine that the ownership of the leased asset can be acquired at the expiration ofthe lease term, the leased asset shall be depreciated within the lease term or its remaining useful life(whichever is shorter).
The Company determines whether the right-of-use assets are impaired in accordance with theprovisions of ‘Accounting Standards for Business Enterprises No. 8 – Asset Impairment’ and performsaccounting treatment on the identified impairment losses.
When the lease liabilities are remeasured, the Company recognizes the amount of theremeasurement of the lease liabilities as an adjustment to the right-of-use assets. If the book value ofthe right-of-use assets is reduced to zero and there is a further reduction in the measurement of thelease liabilities, the Company recognizes any remaining amount of the remeasurement in current profitor loss.
If the lease change results in a narrower lease or a shorter lease term, the Company reduces thebook value of the right-of-use assets accordingly and recognizes the related gains or losses of thepartially terminated or completely terminated leases into current profits and losses. For other leasechanges which result the remeasurement of lease liabilities, the Company adjusts the book value of theright-of-use assets accordingly.
18. Intangible assets
Intangible assets are the identifiable non-monetary assets which have no physical shape and arepossessed or controlled by the Company.
（1）Valuation method of intangible assets
Intangible assets are initially recognized at costs. The actual costs of purchased intangible assetsinclude the consideration and relevant expenses paid. For intangible asset contributed by investors, thevalue agreed in the investment contract or agreement is the actual cost of the intangible asset. But ifthe value agreed in the investment contract or agreement is not a fair value, the fair value of theintangible asset is regarded as the actual cost. The cost of a self-developed intangible asset is the totalexpenditure incurred in bringing the asset to its intended use.
Subsequent measurement of intangible assets of the Company: ①Intangible assets with finiteuseful lives are amortized on a straight-line basis; at the end of each year, the useful lives and
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amortization policy are reviewed, and adjusted if there is any variance with original policies; ②
Intangible assets with indefinite useful lives are not amortized and the useful lives are reviewed at
each year end date. If there is objective evidence that the useful life of an intangible asset is finite, the
intangible asset is amortized using the straight-line method according to the estimated useful life.
（2）Criterion of determining indefinite useful life
The useful life of an intangible asset is indefinite if the period in which the future economicbenefits generated by the intangible asset could not be determined, or the useful life could not beascertained.
Criterion of determining intangible assets with indefinite useful lives: ①For intangible assetsderived from contractual rights or other legal rights and there are no explicit years of use stipulated inthe contract or laws and regulations; ②the period in which generating benefits for the Company stillcould not be estimated after considering the industrial practice or relevant expert opinion.
At the end of each year, the useful lives of the intangible assets with indefinite useful lives arereviewed. The assessment is performed by the departments that use the intangible assets, using thedown-to-top approach, to determine if there are changes to the determining basis of indefinite usefullives.
（3）Methods for impairment test and provision for impairment of intangible assets
As at the balance sheet date, the Company reviews the intangible assets to check whether there isan indication of impairment and an impairment test is needed to recognize the recoverable amountwhen there are signs that intangible assets may impair. The impairment provision should be the lowerof the recoverable amount and carrying value and provision for impairment loss cannot be reversed inthe following accounting periods once it has been provided.
The recoverable amount of intangible assets should be based on the higher value between the netof fair value of asset less disposal expense and present value of estimated cash flow of assets in thefuture.
（4）Basis for research and development stage for internal research and development project andbasis for capitalization of expenditure incurred in development stage
As for an internal research and development project, expenditure incurred in the research stage isrecognized in profit or loss in the period as incurred. Expenses incurred in the development stage arerecognized as intangible assets if all of the following conditions are met: ①the technical feasibility ofcompleting the intangible asset so that it will be available for use or for sale; ②the intention tocomplete the intangible asset for use or for sale; ③how the intangible asset will generate economicbenefits, including there is evidence that the products produced by the intangible asset has a market orthe intangible asset itself has a market; if the intangible asset is for internal use, there is evidence that
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there exists usage for the intangible asset; ④the availability of adequate technical, financial and other
resources to complete the development and the ability to use or sell the intangible asset; ⑤the
expenditures attributable to the development of the intangible asset could be reliably measured.
Basis for distinguishing research stage and development stage of an internal research anddevelopment project: research stage refers to the activities carried out for the planned investigationand search for obtaining new technology and knowledge, which has the characteristics of planning andexploration; before commercial production or other uses, the application of achievements and otherknowledge obtained from the research stage in a plan or design to produce new or substantiallyimproved materials, equipment and products is regarded as development stage, which has thecharacteristics of pinpointing and is very likely to form results.All the expenditures on research anddevelopment which cannot be distinguished between research stage and development stage arerecognized in the profit or loss when incurred.
19. Impairment of long-term assets
√Applicable □Not Applicable
Long-term equity investment, investment properties measured based on cost model, fixed assets,construction in progress, intangible assets and other long-term assets are tested for impairment if thereis any indication that an asset may be impaired at the balance date. If the result of the impairment testindicates that the recoverable amount of the asset is less than its carrying amount, a provision forimpairment will be made for the difference will be recorded in impairment loss. The recoverableamount is the higher of the net of the asset’s fair value less disposal costs and the present value of thefuture cash flow expected to be derived from the asset. Provision for asset impairment is determinedand recognized on the individual asset basis. If it is not possible to estimate the recoverable amount ofan individual asset, the recoverable amount of a group of assets to which the asset belongs isdetermined. A group of assets is the smallest group of assets that can generate independent cashinflows.
Goodwill is tested for impairment at least at each year end.
In terms of impairment test of the goodwill, the carrying amount of the goodwill, arising frombusiness combination, shall be allocated to the related asset groups on reasonable basis since theacquisition date, or to the related asset group portfolios if it is difficult to be allocated to the relatedasset groups. When the carrying amount of the goodwill is allocated to the related asset groups orasset group portfolios, it shall be allocated in the proportion of the fair value of each asset group orasset group portfolio against the total fair value of related asset groups or asset group portfolios. If it isdifficult to measure the fair value reliably, it shall be allocated in the proportion of the carryingamount of each asset group or asset group portfolio against the total carrying amount of related asset
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groups or asset group portfolios.
When impairment test is made to the related asset groups or asset group portfolios includinggoodwill, if there is an indication that the related asset groups or asset group portfolios are prone toimpair, the Company shall firstly test for impairment for the asset groups or asset group portfoliosexcluding goodwill and calculate the recoverable amount and recognize the impairment lossaccordingly by comparing with its carrying amount. The Company shall then test for impairment forthe asset groups or asset group portfolios including goodwill and compare the carrying amount(including the carrying amount of allocated goodwill) with its recoverable amount of related assetgroups or asset group portfolios. Provision for impairment loss shall be recognized when therecoverable amount of the related asset groups or asset group portfolios is lower than its carryingamount.
Once the above impairment loss of assets is recognized, it shall not be reversed in any subsequentaccounting period.
20. Long-term prepaid expense
√Applicable □Not Applicable
Long-term prepaid expenses are expenditures which have incurred but the benefit period is morethan one year (excluding one year). They are amortized evenly over the benefit period of each item ofexpenses. If the long-term prepayments are no longer beneficial to the subsequent accounting periods,the unamortized balance is then fully transferred to profit or loss for the period.
21. Employee benefits
Employee benefits are all forms of compensation and other relevant expenditure given by theCompany in exchange for services rendered by employees, including short-term employee benefits,post-employment benefits, termination benefits and other long-term benefits.
Short-term employee benefits include short-term salaries, bonus, allowance, subsidies, staff’swelfare, housing provident fund, union funds and employee education funds, medical insurance fees,injury insurance fees, maternity insurance fees, short-term paid absence, short-term profit-sharingplans, etc. During the accounting period when employees render services, short-term benefits payablethat actually incurred shall be recognized as liabilities and credited into profit and loss or relevantassets cost on an accrual basis for the benefit objects.
Post-employment benefits mainly include the basic pension insurance, supplementary pension,etc., In accordance with the risks and obligations undertaken by the Company, the post-employmentbenefits are classified as defined contribution plans and defined benefit pension plans. Definedcontribution plans: the Company shall recognize the sinking fund paid to individual entity on balance
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sheet date as a liability in exchange of services from the employee in accounting period, and credited
into profits or losses or related assets costs in accordance with the benefit objects. Defined benefit
plans: the cost of providing benefits is determined using the projected unit credit method, with
actuarial valuations being carried out by independent actuary at the interim and the annual balance
sheet date. Staffs’ benefit costs incurred by the defined benefit plan of the Group are categorized as
follows: (1) service cost, include current period service cost, past-service cost and settlement profit or
loss. Current period service cost means the increase of the present value of defined benefit obligation
resulted from the current year service offered by employee. Past-service cost means the increase or
decrease of the present value of defined benefit obligation resulted from the revision of the defined
benefit plans related to the prior period service offered by employee; (2) interest costs of defined
benefit plans; (3) changes related to the remeasurement of defined benefit plans liabilities. Unless
other accounting standards require or permit to charge the employee benefits into assets cost, the
Company charges (1) and (2) above into profit or loss and recognized (3) above as other
comprehensive income without transferring to profit or loss in subsequent accounting periods.
Termination benefits: the indemnity proposal provided by the Company for employees for thepurpose of terminating labor relation with the employees before the expiry of the labor contract orencouraging employees to accept downsizing voluntarily, when the following conditions are met,recognize and at the same time credited into profit or loss the accrued liabilities arising from theindemnity as a result of terminating labor relation with the employees: the Company has made aformal plan for termination of employment relationship or has made an offer for voluntary redundancywhich will be implemented immediately; and the Company could not unilaterally withdraw from thetermination plan or the redundancy offer. Early retirement benefits will adopt same principles as thetermination benefit. The Company will credit the salaries and social benefits intend to pay for theseearly retirees during the periods from the date of early retirement to the normal retirement date toprofit or loss for the current period when recognition conditions for accrued liabilities are met.
22. Lease liabilities
√Applicable □Not Applicable
On the commencement date of the lease term, the Company as the lessee shall recognize theright-of-use assets and lease liabilities for the lease. The Company’s lease liabilities are initiallymeasured at the present value of the lease payment that has not been paid on the commencement dateof the lease term.
When calculating the present value of the lease payment, the Company adopts interest rateimplicit in lease as discount rate; if it is impossible to determine the interest rate implicit in lease, theincremental borrowing rate of the Company (i.e. lessee) shall be adopted as the discount rate.
The interest rate implicit in lease refers to the interest rate that makes the sum of the present value
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of the lessor’s lease receivable amount and the present value of the unguaranteed residual value equal
to the sum of the fair value of the leased asset and the initial direct cost of the lessor. The lessee’s
incremental borrowing rate refers to the interest rate that the lessee is required to pay for borrowing
funds under similar mortgage conditions in a similar economic environment in order to obtain assets
close to the value of the right-of-use assets.
The Company shall calculate the interest expenses of lease liabilities over the lease term at thefixed periodic interest rate, and include it into current profit or loss or assets cost.
After the commencement date of the lease term, where the assessment results of the renewal ofthe option, the termination of the lease option and the purchase option have changed, the Companyredetermines the lease payments and remeasures the lease liabilities in accordance with the presentvalue of the lease payments after changes and the revised discount rate.
After the commencement date of the lease term, in the event that the future lease payments changedue to a change in expected payment under a guaranteed remaining value or changes in an index orrate used in determing the lease payments, the Company shall remeasure lease liability based onpresent value of the lease payments after changes. In such cases, the discount rate adopted by theCompany shall remain unchanged; But if the change in lease payments results from a change infloating interest rates, the Company shall use a revised discount rate.
23. Estimated liability
√Applicable □Not Applicable
（1）Criterion for determining of estimated liability
If an obligation in relation to contingencies such as external guarantees, discounting ofcommercial acceptance bills, pending litigation or arbitration and product quality assurance is thepresent obligation of the Company and the performance of such obligation is likely to lead.
（2）Measurement of estimated liability
The best estimate of the expenditure from the performance of the current obligation isinitially recorded as accrued liability. When the necessary expenditures fall within a range and theprobability of each result in the range are identical, the best estimate is the median of the range; ifthere are severable items involved, every possible result and relevant probability are taken intoaccount for the best estimation.
At the balance sheet date, the carrying value of estimated liabilities is reviewed. If there isobjective evidence that the carrying value could not reflect the current best estimate, the carryingvalue is adjusted to the best estimated value.
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24. Share-based payments
√Applicable □Not Applicable
For equity-settled share-based payment transaction in return for services from employees, itshall be measured at the fair value of equity instruments granted to the employees. For thepayment of such fair value that may only be exercised if services are fulfilled during the vestingperiod or the specified performance is achieved, the fair value shall, based on the best estimate ofthe number of exercisable instruments during the vesting period, be recognized in relevant costsor expenses in straight-line method with the increase in the capital reserve accordingly.
The cash-settled share-based payment shall be measured at the fair value of liability assumedby the Company, which is calculated and determined based on the shares or other equityinstruments. For the cash-settled share-based payment that may be exercised immediately afterthe grant, the fair value of the liability assumed by the Company shall, on the date of the grant, berecognized in relevant costs or expenses and the liabilities shall be increased accordingly. Forcash-settled share-based payment that may be exercised if services are fulfilled during the vestingperiod or the specified performance is achieved, on each balance sheet date within the vestingperiod, based on the best estimate of exercise, be recognized in relevant costs or expenses at thefair value of the liability assumed by the Company, and the liabilities shall be adjustedcorrespondingly.
At each balanced sheet date and the settlement date prior to the settlement of liabilities, thefair value of the liability is re-measured with its change consolidated in profit/loss.
When there is changes to the Company’s share-based payment plans, if the modificationincreases the fair value of the equity instruments granted, corresponding recognition of serviceincrease in accordance with the increase in the fair value of the equity instruments; if themodification increases the number of equity instruments granted, the increase in fair value of theequity instruments is recognized as a corresponding increase in service achieved. Increase in thefair value of equity instruments refer to the difference between the fair values of the equityinstrument on the modified date before or after the modification. If the Company modifies theexercisable conditions in such manner conductive to the employees, including the shortening ofthe vesting period, change or cancellation of the performance conditions (rather than marketconditions), the Company shall consider the modified exercisable conditions upon the disposal ofexercisable conditions. If the modification reduces the total fair value of shares paid or theCompany uses other methods not conductive to employees to modify the terms and conditions ofshare-based payment plans, it will continue to be accounted for the services obtained in theaccounting treatment, as if the change had not occurred, unless the Company cancelled some or
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all of the equity instruments granted.
During the vesting period, if the Company cancel equity instruments granted will be treatedas accelerating the exercise of rights and the remaining vesting period should be recognizedimmediately in the profit or loss, while at the same time recognize the capital reserve. Employeesor other parties can choose to meet non-vesting conditions, but for those that are not met in thevesting period, the Company will treat it as cancellation of equity instruments granted.
25. Revenue
Revenue is the total inflow of economic benefits formed by the company and its subsidiariesduring day-to-day operations which might lead to increase of shareholders’ equity and beirrelevant to capital invested by shareholders.
The Company and its subsidiaries performed performance obligations stated in the contract,i.e, recognized revenue when the distributor obtains control right of relevant Goods or services.
Where the contract includes two or several performance obligations, during the starting dateof the contract, the company and its subsidiaries allocate transaction price to various singleperformance obligation in accordance with the relevant proportion of separate selling price ofgoods or services promised by various single performance obligation, and record revenue inaccordance with transaction price allocated to various single performance obligation.
Transaction price is the amount of consideration that the company and its subsidiaries areexpected to be entitled to collect due to transfer of goods and services transferred to thedistributor, excluding the amount collected for any third party. The transaction price confirmed bythe company and its subsidiaries does not exceed the amount of recognized revenue whenrelevant uncertainties are eliminated and might not incur material carrying back. The amount thatis expected to be returned to the distributor is taken as liability of returned goods and is notrecorded in transaction price.
When one of the following conditions is met, the company and its subsidiaries performperformance obligations during a certain time horizon, otherwise, it belongs to fulfillingperformance obligations at a certain time point.
①The distributor obtains and consumes economic benefits brought by performance of thecompany and its subsidiaries when the company and its subsidiaries perform the contract.
②The distributor is able to control goods under construction during the process ofperformance of the company and its subsidiaries;
③Goods produced by the company and its subsidiaries during the process of performance
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have the non-replaceable usages, and the company and its subsidiaries are entitled to collect the
amount for the cumulative completed and performed portion till now during the entire contractual
period.
For the performance obligations performed during a certain time horizon, the company andits subsidiaries recognize revenue in accordance with the schedule of performance during suchtime horizon. When the schedule of performance can’t be reasonably recognized, where the coststhat have been incurred by the company and its subsidiaries are estimated to be compensated,revenue shall be recognized in accordance with the amount of costs that has been incurred untilthe schedule of performance can be reasonably confirmed.
For performance obligations performed during a certain time point, the company and itssubsidiaries recognize revenue at the time point when the distributor obtains control right ofrelevant goods or services. When judging whether the distributor has obtained control right overgoods or services, the company and its subsidiaries will consider the following signs:
①The company and its subsidiaries enjoy the right of instant collection over such goods andservices;
②The company and its subsidiaries have transferred the material objects of such goods tothe distributor;
③The company and its subsidiaries have transferred statutory ownership right of the goodsor major risks and remuneration of the ownership right to the distributor;
④The distributor has accepted such Goods or service.
The right that the company and its subsidiaries are entitled to collect the consideration forhaving transferred goods or services to the distributor (and such right depends on other factorsother than time lapse) is presented as contractual asset, and contractual asset is provisionedimpairment on the basis of expected credit losses. The right owned by and unconditionallycollected from the distributor by the company and its subsidiaries (only depend on time lapse)shall be presented as accounts receivable. Obligations that the company and its subsidiaries havecollected or shall collect consideration from the distributor and shall transfer goods or services tothe distributor are presented as contractual obligations.
Specific accounting policies relating to major activities that the company and its subsidiariesobtain revenue are described as follows:
（1）Sale of goods
Generally, contracts for sale of goods between the company and its distributors only includeperformance obligation of transferring the whole machine of home appliance. Generally, on the
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basis of taking into account the following factors comprehensively, revenue is recognized based
on the time point of transfer of control right of goods: the right of instant collection for obtaining
goods, transfer of major risks and remuneration on ownership right of goods, transfer of statutory
ownership right of goods, transfer of assets of material objects of goods, the distributor’s
acceptance of such goods.
（2）Construction contract income
Construction contract between the company and the distributor generally includesperformance obligations of construction and installation of commercial air-conditioner and smarthome, because the distributor is able to control goods under construction during the company’sperformance process, the company takes them as performance obligations performed during acertain time horizon, and recognizes revenue in accordance with the schedule of performance,and it is an exemption when the schedule of performance can’t be reasonably confirmed. Thecompany confirms the schedule of performance of services provided in accordance with theinvestment approach. When the schedule of performance can’t be reasonably confirmed, wherethe costs of the company that have been incurred can be compensated, recognize revenue inaccordance with the amount of costs that has been incurred until the schedule of performance canbe reasonably confirmed.
（3）Warranty obligations
According to contractual rules and regulations of laws, the company provides qualityassurance for goods sold and project constructed. For assurance class of quality assurance inorder to ensure the distributor that goods sold comply with existing standards, the companyconducts accounting treatment in accordance with estimated liabilities. For service class ofquality assurance in order to ensure the distributor to provide a separate service other than that thegoods sold comply with existing standards, the company takes it as a separate performanceobligation, and allocates partial transaction price to service class assurance in accordance with therelevant proportion of separate selling price of quality assurance of goods and services, andrecognizes revenue when the distributor obtains control right over services. When assessingwhether quality assurance provides a separate service other than ensuring the distributor that thegoods sold comply with existing standards, the company shall consider factors such as whethersuch quality assurance is statutory requirements or industrial practices, term of quality assuranceand the nature of the company’s promise for performing tasks.
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26. Government grants
√Applicable □Not Applicable
（1）Types of government grants
Government grants refer to the monetary assets or non-monetary assets obtained by the Companyfrom the government for free, not including the investment made by the government as an owner. Thegovernment grants are mainly divided into asset-related government grants and revenue-relatedgovernment grants.
（2）Accounting treatment of government grants
Asset-related government grants shall be recognized as deferred income in the profit or loss forthe current period and allocated on an even basis over the useful life of the asset；government grantsmeasured at nominal amount shall be recorded directly in profit and loss for the current period.Revenue-related government grants shall be treated as follows: ①those used to compensate relevantexpenses or losses to be incurred by the enterprise in subsequent periods are recognized as deferredincome and recorded in profit or loss for the current period when such expenses are recognized; ②those used to compensate relevant expenses or losses that have been incurred by the enterprise arerecorded directly in profit or loss for the current period.
（3）Basis for determination of asset-related government grant and revenue-related governmentgrant.
If the government grant received by the Company is used for construction or other project thatforms a long-term asset, it is regarded as asset-related government grant.
If the government grant received by the Company is not asset-related, it is regarded asrevenue-related government grant.
Government grant received without clear objective shall be classified as asset-related governmentgrant or revenue-related government grant by:
①Government grant subject to a certain project shall be separated according to the proportion ofexpenditure budget and capitalization budget, and the proportion shall be reviewed and modified ifnecessary on the balance sheet date;
②Government grant shall be categorized as related to income if its usage is just subject to generalstatement and no specific project in relevant document.
（4）Amortization method and determination of amortization period of deferred revenue related togovernment grants
Asset-related government grant received by the Company is recognized as deferred revenue and isevenly amortized to the profit or loss over the estimated useful life of the relevant asset starting fromthe date the asset is available for use.
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（5）Recognition of government grants
Government grant measured at the amounts receivable is recognized at the end of period whenthere is clear evidence that the conditions set out in the financial subsidy policies and regulation arefulfilled and the receipt of such financial subsidy is assured.
Other government grants other than those measured at the amount of receivables are recognizedupon actual receipt of such subsidies.
27. Deferred tax assets/deferred tax liabilities
√Applicable □Not Applicable
Deferred tax assets and deferred tax liabilities of the Company are recognized:
（1）Based on the difference between the carrying amount and the tax base amount of an asset ora liability (items not recognized as assets and liabilities but their tax base is ascertained by the currenttax laws and regulation, the tax base is the difference), deferred income tax asset or deferred incometax-liability is calculated using the applicable tax rate prevailing at the expected time of recovering therelevant asset or discharging the relevant liability.
（2）Deferred tax asset is recognized to the extent that there is enough taxable income for theutilization of the deductible temporary difference. At the balance sheet date, if there is sufficientevidence that there would be enough taxable benefit for the utilization of the deductible temporarydifference, the deferred income tax asset not previously recognized is recognized in current period. Ifthere is no sufficient evidence that there would be enough future taxable income for the deduction ofthe deferred income tax asset, the carrying value of the deferred income tax asset is reduced.
（3）Deferred tax liability is recognized for taxable temporary difference arising frominvestments in subsidiaries and associated companies, unless the Company could control the reversalof the temporary differences and the temporary differences would not be probably reversed in theforeseeable future. For deductible temporary differences arising from investments in subsidiaries andassociated companies, deferred income tax asset is recognized if the temporary difference will be veryprobably reversed in foreseeable future and there will be sufficient future taxable profit to deduct thedeductible temporary difference.
（4）No deferred tax liability is recognized for a temporary difference arising from the initialrecognition of goodwill. No deferred income tax asset or deferred income tax liability is recognizedfor the temporary differences resulting from the initial recognition of assets or liabilities due to atransaction other than a business combination, which affects neither accounting profit nor taxableprofit (or deductible loss). At the balance sheet date, deferred tax assets and deferred tax liabilities are
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measured at the tax rates that are estimated to apply to the period when the asset is realized or the
liability is settled.
28. Other significant accounting policies and accounting estimations
√Applicable □Not Applicable
（1）Asset securitization business
Some of the Company’s receivables are securitized. The Company’s underlying assets are trustedto a special purpose entity which issues securities to investors. The Company serves as the assetservice supplier, providing services including asset maintenance and its daily management,formulation of the annual asset disposal plan, formulation and implementation of the asset disposalplan, signing relevant asset disposal agreements and periodic preparation of asset service report.
The Company evaluates the extent to which it transfers the risks and rewards of ownership of theassets to the other entities and determines whether it retains control while applying the accountingpolicy in respect of asset securitization.
①The financial asset is derecognized when the Company transfers substantially all the risks andrewards of ownership of the financial asset;
②The financial asset is continued to recognize when the Company retains substantially all therisks and rewards of ownership of the financial asset;
③When the Company neither transfers nor retains substantially all the risks and rewards ofownership of the financial asset, the Company evaluates whether it retains control over the financialasset. If the Company does not retain control, it derecognizes the financial asset and recognizesseparately as assets or liabilities any rights and obligations created or retained in the transfer. If theCompany retains control, it continues to recognize the financial asset to the extent of its continuinginvolvement in the financial asset.
（2）Hedge accounting
Hedge refers to risk management activities that enterprises designate financial instruments ashedge instruments in order to manage risk exposure caused by specific risks such as foreign exchangerisk, interest rate risk and credit risk, allow to expect changes in fair value or cash flow of hedgeinstruments to offset all or partial changes in fair value or cash flow of hedge projects.
Hedged projects refer to projects which make enterprises face risks of changes in fair value orcash flow and are designated as hedge objects and can be reliably measured.
A hedging instrument is a financial instrument designated by an enterprise for the purpose ofhedging, whose fair value or cash flow changes are expected to offset the change in the fair value orcash flow of the hedged item.
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The company continuously conducts assessment over whether hedge relationship complies withrequirements of hedge effectiveness on the starting date of hedge and follow-on period. Hedgeeffectiveness refers to the extent that changes in fair value or cash flow of hedge instruments canoffset changes in fair value or cash flow of hedge projects caused by the risks of being hedged. Theportion that the changes in fair value or cash flow of hedge instruments are greater or less thanchanges in fair value or cash flow is the ineffective portion of hedge.
（3）Explanations on significant accounting estimates
Judgments, estimates and assumptions shall be made to book value of the financial statementsitems, which could not be measured accurately, due to the inherent uncertainties of operating activities,while applying accounting policy. Such judgments, estimates and assumptions were based on themanagement’s historical experience and made after considered other various factors. These judgments,estimates and assumptions will influence the amount of revenues, expenses, assets and liabilitiespresented in financial reports and the disclosure of contingent liabilities on the balance sheet date.However, the actual results caused by the uncertainties of these estimations may be different from thecurrent estimates of the management, and thus cause a material adjustment to the carrying amounts ofassets and liabilities affected in the future. The judgments, estimates and assumptions mentionedabove shall be reviewed on a going concern basis. If the revisions to accounting estimates onlyaffected for the current period, relevant adjustment due to the effect shall be recognized for the currentperiod; if the revision affects both the current and future period, the effect shall be recognized in thecurrent and future period.
On the balance sheet date, the significant fields involving judgments, estimates and assumptionsabout financial report items are listed as follows:
①Estimated liability
Provision for product quality guarantee, estimated onerous contracts, and other estimates shall berecognized in accordance with the terms of contract, current knowledge and historical experience. Ifthe contingent event has formed a practical obligation which probably results in outflow of economicbenefits from the Company, an estimated liability shall be recognized on the basis of the best estimateof the expenditures to settle relevant practical obligation. Recognition and measurement of theestimated liability significantly rely on the management’s judgments. In the process of judgment, theCompany takes into consideration the assessment of relevant risks, uncertainties, time value of moneyand other factors related to the contingent events. Among them, the Company will undertakeestimated liabilities with respect to the after-sales services provided for the return, maintenance andinstallation of goods. When estimating liabilities, the Company has considered the maintenanceinformation in recent years, but the previous maintenance experiences may fail to reflect the future
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circumstances. Any increase or decrease in this provision is likely to affect the profits and losses of
the next year.
②Provision of expected credit losses
The company calculates the credit losses in accordance with breach risk exposure and expectedcredit risk ratio, and confirms credit loss rate on the basis of breach possibilities and breach loss rate.When confirming expected credit loss rate, the company uses data such as internal historical creditloss experiences, and conducts adjustments over historical data in combination with current status andforward-looking information. When considering forward-looking information, indexes used by thecompany include risks such as economic downturn, growth of unemployment rate, external marketenvironment, technological environment and changes in distributor conditions. The company regularlymonitors and reviews relevant assumptions relating to calculation of expected credit losses. Theaforesaid techniques and key assumptions have not changed substantially during the year.
③Impairment provision of inventories
Inventories are measured by lower of historical cost or net realizable value method according tothe accounting policies of inventories; for obsolete and unsalable inventories or whose costs are higherthan the net realizable, provision for impairment of inventories shall be incurred. The carrying valueof inventory shall be written down to the net realizable value on the basis of the salability ofinventories and the net realizable value. Inventory impairment requires the management’s obtaining ofsolid evidence, and their judgment and estimations made after considering the purpose of holdinginventories and the effect of events after the balanced sheet date and etc. The difference between theactual outcome and the previously estimated outcome will influence the carrying value of inventoriesand the provision or reversal of impairment of inventories during the period accounting estimates arechanged.
④Fair value of financial instruments
For financial instruments where there is no active market, the Company will determine the fairvalue through a variety of valuation methods. Such valuation methods include discounted cash flowanalysis. In the valuation, the Company shall estimate the future cash flow, credit risk, marketvolatility and correlation, and select the appropriate discount rate. Such related assumptions areuncertain, and their changes may affect the fair value of financial instruments.
⑤Impairment of investment in other equity instruments
The company largely relies on judgments and assumptions of the management when determiningwhether investments of other equity instruments are impaired to determine whether it is needed toconfirm impairment. During the process of conducting judgments or making assumptions, thecompany shall assess the extent and duration period that the fair value of such investments is belowthe cost, as well as financial conditions and short-term business prospects of the invested objects,
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including industry conditions, technological reform, credit rating, breach rate and risks of
counterparties.
⑥ Provision of long-term assets impairment
On the balance sheet date, the Company shall judge whether there is any possible indication ofimpairment against non-current assets other than financial assets. The intangible assets with indefiniteuseful life must be tested for impairment on an annual basis as well as when there is any indication ofimpairment. Other non-current assets other than financial assets shall be tested for impairment whenthere is an indication showing that the carrying value is not recoverable. Impairment occurs while thecarrying value of an asset or asset group is higher than the recoverable value, which is the higher ofthe net of fair value deducted disposal expenses and the present value of expected future cash flow.The net of fair value deducted by disposal expenditure is determined with reference to the price in thesale agreement regarding analogous asset, and observable market price less the increase of cost thatdirectly attributable to the disposal of assets. Significant judgments regarding the production amount,sales price, relevant operating costs of the assets (or assets group) and the discount rate used tocalculate the present value shall be made when determining the present value of future cash flow.Recoverable amount shall be estimated by using all accessible relevant information, includingproduction amount, sales price, and relevant operating costs predictions made based on reasonable andsupportive assumptions. The Company shall test for goodwill impairment at least every year. Thisrequires the Company to estimate the present value of future cash flow for such assets groups or assetgroup portfolios allocated with goodwill. When estimating the present value of future cash flow, theCompany shall not only estimate the future cash flow generated by such asset groups or asset groupportfolios, and select the appropriate discount rate to determine the present value of such future cashflow.
⑦ Depreciation and amortization
Investment properties, fixed assets and intangible assets are depreciated and amortized by astraight-line approach over their estimated useful life by taking into consideration the residual value.Useful life shall be periodically reviewed to determine the depreciation and amortization expenses foreach reporting period and be determined on the basis of historical experience regarding analogousassets and the expected technological innovation. Significant changes to previous accountingestimates will result in adjustments against depreciation and amortization expenses in the futureperiods.
⑧ Deferred tax assets
Deferred tax asset is recognized for all the uncompensated tax losses to the extent that there issufficient taxable income for the deduction of loss. In order to determine the amount of deferred taxassets, the management of the Company needs to predict the timing and the amount of taxable profits
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in the future by taking into account a large amount of judgment, as well as the strategy of tax
planning.
⑨ Income tax
There are certain transactions the tax treatment and calculations undertaken during the ordinarycourse of business for which the ultimate tax determination is uncertain. Whether some items could bepresented before taxation shall be approved by relevant tax authorities. Where the final tax outcome ofthese matters is different from the initial estimated amount, such differences will impact the currentand deferred tax in the period of confirmation.
⑩ Rebate accrual
The Company and its subsidiaries adopt the policy of rebate for all distributors. According to therelevant conventions in the sales agreement, the review of specific transactions, the market situation,the pipeline inventory levels and the historical experiences, the Company and its subsidiaries estimateand accrue rebate on a regular basis with reference to the completion of agreed assessment indexes.Rebate accrual involves the judgment and estimates of the management. In case of any significantchanges in the previous estimates, the difference above will have an impact on the rebate during theperiod when significant changes occur.
29. Main Changes on significant accounting policies and accounting estimation(1) Main Changes on significant accounting policies
√Applicable □Not Applicable
Contentsandreasonsofchangesinaccountingpolicies Publicationtime Implementationtime
AccountingStandardforBusinessEnterprisesNo.21 December2018 1January2019
—lease(CaiKuai(2018)No.35)
NoticeonRevisingandIssuingtheFormatofFinancial
Statements of GeneralEnterprisesfor 2019《(关于修订印发 May2019 1 January2019
2019年度一般企业财务报表格式的通知》) (Cai Kuai
(2019)No.6)
NoticeonRevisingandIssuingtheFormatofConsolidated
Financial Statements (2019)《(关于修订印发合并财务报表 September2019 1 January2019
格式(2019版)的通知》) (CaiKuai (2019) No.16)
AccountingStandardforBusinessEnterprisesNo.7— May2019 10June2019
ExchangeofNon-monetaryAssets(CaiKuai(2019)No.8)
AccountingStandardforBusinessEnterprisesNo.12—Debt May2019 17June2019
Restructuring(CaiKuai(2019)No.9)
In accordance with the newly revised Accounting Standard for Business Enterprises No. 21—Leases, the Company and its subsidiaries made adjustments to the amount of retained earnings andother relevant items in the financial statements at the beginning of the initial application year based on
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the amounts accrued due to the impact of adopting new standards on leases while did not adjust the
information in the comparable period.
Itemsinthebalancesheet Adjustedamounton1January2019
Right-of-use assets 3,042,278,728.96
Deferred income tax assets 22,003,106.46
Current accounts 27,763,677.12
Lease liabilities 3,153,370,882.34
Retained earnings -47,362,103.25
Minority equity interests -13,963,266.55
The Company and its subsidiaries prepared the 2019 financial statements in accordance with thefinancial statement format stipulated by the document Cai Kuai [2019] No. 6 and 16, and changed thepresentation of the relevant financial statements by retrospective adjustment approach. The impact ofthe relevant presentation adjustment on the combined balance sheet at the beginning of the period is asfollows: divide subjects of notes receivable and accounts receivable into subjects of accountsreceivable, accounts receivable; divide subjects of accounts payable and accounts payable intosubjects of notes payable, accounts payable.
The Company and its subsidiaries adopted the relevant provisions of Accounting Standards forBusiness Enterprises No. 7-Exchange of Non-Monetary Assets (Cai Kuai (2019) No.8) from 10 June2019 and shall made adjustments to the exchange of non-monetary assets occurred during the periodform 1 January 2019 to the date of implementation of this standards. No retrospective adjustments arerequired for non-monetary asset exchanges that occurred before 1 January 2019. The Company’sinitial implementation of the standards has no impact on the financial statements.
The Company and its subsidiaries adopted the relevant provisions of Accounting Standard forBusiness Enterprises No. 12 —Debt Restructuring (Cai Kuai (2019) No.9) from 17 June 2019 andshall made adjustments to the debt restructuring occurred during the period form 1 January 2019 to thedate of implementation of this standards. No retrospective adjustments are required for debtrestructuring that occurred before 1 January 2019. The Company’s initial implementation of thestandards has no impact on the financial statements.
(2) Changes on significant accounting estimation
□ Applicable √ Not Applicable
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VI. Taxation
1. Main tax categories and rates
Main tax categories and rates conditions
√Applicable □Not Applicable
Taxtypes Basisoftaxation Taxrate
Value-addedtax Taxable revenue from sales of 6%,9%,16%or13%
goods andrenderingservices
City maintenance and Circulationtaxpayable 7%
constructiontax
EIT Taxableincome Statutorytaxrateorpreferential
ratesasfollows
(Local)educationsurcharge Circulationtaxpayable 1%,2%,3%
Disclosure of tax entities with different EIT rates
□Applicable √ Not Applicable2. Preferential tax
√Applicable □Not Applicable
Companies subjected to preferential tax and preferential tax rate:
Company Taxrate Preferentialtax
Haier SmartHomeCo.,Ltd. 15% entitled to the preferential taxation policies
asahi-techenterprise
Qingdao HaierRefrigeratorCo.,Ltd. 15% entitled to the preferential taxation policies
asahi-techenterprise
Qingdao HaierIntelligentElectronicsCo.,Ltd. 15% entitled to the preferential taxation policies
asahi-techenterprise
Qingdao HaierSpecialRefrigeratorCo.,Ltd. 15% entitled to the preferential taxation policies
asahi-techenterprise
Qingdao HaierDishwasherCo.,Ltd. 15% entitled to the preferential taxation policies
asahi-techenterprise
Qingdao HaierSpecialFreezerCo.,Ltd. 15% entitled to the preferential taxation policies
asahi-techenterprise
Qingdao HaierIntelligentHomeApplianceTechnology 15% entitled to the preferential taxation policies
Co., Ltd. asahi-techenterprise
WuhanHaierElectronicsCo.,Ltd. 15% entitled to the preferential taxation policies
asahi-techenterprise
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Wuhan Haier Freezer Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Hefei Haier Refrigerator Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Hefei Haier Air-conditioning Co., Limited 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Zhengzhou Haier Air-conditioning Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Shenyang Haier Refrigerator Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Haier Air-Conditioner Electronics Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Haier Moulds Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Meier Plastic Powder Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Hai Gao Design and Manufacture Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Hairi High Tech Model Co., Ltd 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Haier (Jiaozhou) Air-conditioning Co., 15% entitled to the preferential taxation policies
Limited as a hi-tech enterprise
Beijing Haier Guangke Digital Technology Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Haier Intelligent Technology Development 15% entitled to the preferential taxation policies
Co., Ltd. as a hi-tech enterprise
Foshan Haier Freezer Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Haier Industry Intelligence Research Institute 15% entitled to the preferential taxation policies
Co., Ltd. as a hi-tech enterprise
Qingdao Haier Central Air Conditioning Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Haier Air Conditioner Gen Corp., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Beijing ASU Tech Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Haier U+smart Intelligent Technology (Beijing) Co., 15% entitled to the preferential taxation policies
Ltd. as a hi-tech enterprise
Beijing Zero Micro Technology Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
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Hefei Haier Washing Machine Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Haier Washing Machine Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Jiaonan Haier Washing Machine Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Haier Drum Washing Machine Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Foshan Shunde Haier Electric Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Economic and Technological Development 15% entitled to the preferential taxation policies
Zone Haier Water Heater Co., Ltd. as a hi-tech enterprise
Wuhan Haier Water Heater Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Foshan Drum Washing Machine Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Strauss Water Equipment Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Lejia Electronics Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Haier New Energy Electric Appliance Co., 15% entitled to the preferential taxation policies
Ltd. as a hi-tech enterprise
Foshan Shunde Haier Intelligent Electronics Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Haier Washing Appliance Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Ririshun Lexin Cloud Technology Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Hefei Haier Drum Washing Machine Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Haier Electronic Plastic Co., 15% entitled to the preferential taxation policies
Ltd. as a hi-tech enterprise
Qingdao Penghai Software Co., Ltd（. 青岛鹏海软件 entitled to the preferential taxation policies
有限公司） 15% as a hi-tech enterprise
Qingdao Wei Xi Intelligent Technology Co., Ltd. 15% entitled to the preferential taxation policies
as a hi-tech enterprise
Qingdao Haier Special Refrigerating Appliance 15% entitled to the preferential taxation policies
Co., Ltd. as a hi-tech enterprise
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entitled to half deduction the preferential
Qingdao Haier Technology Co., Ltd. 10% taxation policies as a key software
enterprise
Wuhan Haier Energy and Power Co., Ltd. 10% entitled to the preferential policies as a
small/micro enterprise
Shenyang Haichen Zhilian Technology Co., Ltd（. 沈阳 entitled to the preferential policies as a
海辰智联科技有限公司） 5% small/micro enterprise
Dalian Free Trade Zone Haier Refrigerator 5% entitled to the preferential policies as a
Trading Co., Ltd. small/micro enterprise
Dalian Haier Energy & Power Co., Ltd. 5% entitled to the preferential policies as a
small/micro enterprise
Qingdao Guochuang Intelligent Household Appliance
（青岛国创智能家电研 entitled to the preferential policies as aResearch Institute Co., Ltd. 5%
究院有限公司） small/micro enterprise
Qingdao Hailian Rongchuang Technology 5% entitled to the preferential policies as a
Co., Ltd. small/micro enterprise
Haier Digital Technology (Nanjing) Co., Ltd. 10% entitled to the preferential policies as a
small/micro enterprise
Jiaxing Penghai Information Technology Co., Ltd.（嘉 entitled to the preferential policies as a
兴鹏海信息技术有限公司） 5% small/micro enterprise
Qingdao Haimeihui Management Consulting Co., Ltd. entitled to the preferential policies as a
（青岛海美汇管理咨询有限公司） 5% small/micro enterprise
GE Appliance (Shanghai) Co., Ltd. 10% entitled to the preferential policies as a
small/micro enterprise
Shanghai Haier Zhongzhi Fang Chuang Ke 5% entitled to the preferential policies as a
Management Co., Ltd. small/micro enterprise
Haier Digital Technology (Tianjin) Co., Ltd.（海尔数 entitled to the preferential policies as a
字科技（天津）有限公司） 5% small/micro enterprise
Chongqing Haier Electronics Sales Co., Ltd. and some entitled to the preferential taxation policies
Western companies 15% under the Western Development initiative of
the PRC
Chongqing Xin Ririshun Electric Sales Co., Ltd. and entitled to the preferential taxation policies
some Western companies 15% under the Western Development initiative of
the PRC
entitled to the preferential taxation policies
Chongqing Haier Air-conditioning Co., Ltd. 15% under the Western Development initiative of
the PRC
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entitled to the preferential taxation policies
Chongqing Haier Refrigeration Appliance Co., Ltd. 15% under the Western Development initiative of
the PRC
entitled to the preferential taxation policies
Guizhou Haier Electronics Co., Ltd. 15% under the Western Development initiative of
the PRC
entitled to the preferential taxation policies
Chongqing Haier Precision Plastic Co., Ltd. 15% under the Western Development initiative of
the PRC
entitled to the preferential taxation policies
Chongqing Haier Intelligent Electronics Co., Ltd. 15% under the Western Development initiative of
the PRC
entitled to the preferential taxation policies
Chongqing Haier Washing Machine Co., Ltd 15% under the Western Development initiative of
the PRC
entitled to the preferential taxation policies
Chongqing Haier Water Heater Co., Ltd 15% under the Western Development initiative of
the PRC
entitled to the preferential taxation policies
Chongqing Haier Drum Washing Machine Co., Ltd 15% under the Western Development initiative of
the PRC
VII. Explanatory Notes for Items in Consolidated Financial Statements
Unless otherwise specified, the following closing balance refers to the amount as of 31 December2019, the opening balance refers to the amount as of 31 December 2018. The amount for the currentperiod refers to the amount in the period from 1 January to 31 December 2019, the amount of theprevious period refers to the amount of the period from 1 January to 31 December 2018.
1. Monetary funds
√Applicable □Not Applicable
Unit and Currency: RMB
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0190 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Items Closingbalance Openingbalance
Cash onhand 7,556,892.38 1,380,614.79
Cash inbank 34,502,656,877.99 36,041,217,337.30
Other cashbalances 1,668,601,912.88 2,328,318,558.83
Total 36,178,815,683.25 38,370,916,510.92
Include: —total amount deposit
overseas 8,787,573,078.32 8,103,894,274.56
Other explanation
The cash in the monetary funds deposited in Haier Group Finance Co., Ltd. was RMB16,565,878,044.44 at the end of the period, the balance of which included a fixed deposit of RMB5,070,088,733.14. The investment fund in the closing balance of other monetary funds was RMB363,979,733.00, deposit in third party payment platform was RMB 88,753,896.48 and the securitydeposit was RMB 1,211,307,630.84, the frozen fund was RMB 500,867.52, and the restricted fund wasRMB 4,059,785.04.
2. Financial assets held for trading
Items Closingbalance Openingbalance
Forwardforeignexchangetradingcontracts 84,934,313.67 188,677,068.41
Short-termwealthmanagementproducts 198,614,361.33 1,567,648,908.00
Investmentinotherequityinstruments 24,586,332.05 19,322,411.35
Total 308,135,007.05 1,775,648,387.76
3. Derivative financial assets
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
Interestrateswapagreement 57,228,769.39
Forwardforeignexchangetradingcontracts 17,241,833.10 39,494,394.98
Forwardcommoditycontracts 1,916,299.35
Total 19,158,132.45 96,723,164.37
4. Bills receivable
(1) Details of bills receivable
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0191 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Items Closingbalance Openingbalance
Bankacceptancenotes 462,888,721.91 918,779,105.29
Commerciallyacceptancenotes 13,503,587,868.65 13,381,407,003.83
Balance ofbillsreceivable 13,966,476,590.56 14,300,186,109.12
Allowanceforbaddebts 15,056,696.60
Billsreceivable,net 13,951,419,893.96 14,300,186,109.12
Provision for bad debts is made on a portfolio basis:
? Applicable √Not Applicable
(2) Changes in allowance for bad debts of bills receivable in the current period:
Increaseforthecurrent Decreaseforthecurrentperiod
Opening period Closing
Items balance Other Write-off/ balance
Provision movement Reversal other
movement
Allowance
for bad 15,056,696.60 15,056,696.60
debts
Total 15,056,696.60 15,056,696.60
The bills receivable pledged by the Company at the end of the period was RMB
12,705,833,821.07.
5. Accounts receivable① Accounts receivable are disclosed by aging as follow:
Aging Closingbalance Openingbalance
Withinoneyear 10,948,682,641.60 10,363,416,324.49
1-2years 274,136,141.64 276,477,418.06
2-3years 98,672,021.59 103,360,570.79
Over3years 139,300,727.01 136,030,844.12
Balanceofaccountsreceivable 11,460,791,531.84 10,879,285,157.46
Allowanceforbaddebts 444,920,471.75 345,786,130.63
Accountsreceivable,net 11,015,871,060.09 10,533,499,026.83
② The total amount of the top 5 accounts receivable at the end of the period is RMB 3,670,933,263.49,
accounting for 32.03% of the book balance of accounts receivable.
Provision for bad debts is made on a portfolio basis:
? Applicable √Not Applicable
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0192 2019AnnualReportofHaierSmartHomeCo.,Ltd.
①Changes in allowance for bad debts of accounts receivable in the current period:
Increaseforthecurrentperiod Decreaseforthecurrent
period
Items Opening Write-offand Closing
balance Other balance
Provision movement Reversal other
movement
Allowan
cefor
bad 345,786,130.63 123,990,271.79 122,772,242.44 7,736,990.03 139,891,183.08 444,920,471.75
debts
②Actual write-off of accounts receivable in the current period
The amount of accounts receivable actually written off in the current period is RMB 82,676,852.61and there is no important bad debt write-off of accounts receivable.
③ The company’s accounts receivable that were terminated due to the transfer of financial assets in the
current period
In the current period, the amount of accounts receivable that the company terminated due to thetransfer of financial assets was RMB 6,292,387,563.69, and the transfer method was outright salefactoring/asset securitization.
④ Restricted accounts receivable in the current period
The amount of accounts receivable mortgaged and pledged at the end of the period is RMB395,674,730.67.
6. Prepayments
（1）Prepayments are disclosed by aging as follows：
Aging Closingbalance Openingbalance
Withinoneyear 1,226,300,431.60 521,288,772.57
1-2years 14,275,907.31 31,417,749.94
2-3years 6,036,100.01 39,033,032.18
Over3years 26,309,107.80 2,723,443.35
Total 1,272,921,546.72 594,462,998.04
（2）The total amount of the top 5 in the prepayments at the end of the period is RMB590,827,918.80, which accounts for 46.42% of the prepayment balance.
7. Other receivables
Presented as:
√Applicable □Not Applicable
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0193 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Unit and Currency: RMB
Items Closingbalance Openingbalance
Interest receivable 273,009,954.80 234,022,792.03
Dividend receivable 4,524,472.84 4,557,432.17
Other receivables 1,885,983,374.86 1,417,476,333.49
Total 2,163,517,802.50 1,656,056,557.69
Interest receivable
Closing balance Openingbalance
Aging
Bookvaluebalance Proportion Bookvaluebalance Proportion
Withinoneyear 224,873,084.17 82.36% 173,680,567.06 74.22%
1-2years 26,470,812.60 9.70% 60,342,224.97 25.78%
2-3years 21,666,058.03 7.94%
Total 273,009,954.80 100.00% 234,022,792.03 100.00%
Dividend receivable
Closingbalance Openingbalance
Aging
Bookvaluebalance Proportion Bookvaluebalance Proportion
Withinoneyear 32,959.33 0.72%
1-2years
2-3years
Over3years 4,524,472.84 100.00% 4,524,472.84 99.28%
Total 4,524,472.84 100.00% 4,557,432.17 100.00%
Other receivables
① Other receivables are disclosed by aging as follows:
Aging Closingbalance Openingbalance
Withinoneyear 1,801,028,378.02 1,333,753,654.19
1-2years 65,979,912.86 49,687,361.67
2-3years 26,319,826.19 31,772,279.45
Over3years 64,449,296.31 76,627,635.06
Balanceofotherreceivables 1,957,777,413.38 1,491,840,930.37
Allowanceforbaddebts 71,794,038.52 74,364,596.88
Otherreceivables,net 1,885,983,374.86 1,417,476,333.49
② The total amount of the top 5 other receivables at the end of the period is RMB 932,101,719.03,
193 / 308
0194 2019AnnualReportofHaierSmartHomeCo.,Ltd.
which accounts for 47.61% of the book balance of other receivables.③ Changes in allowance for bad debt provision of other receivables in the current period
Opening Increaseforthecurrentperiod Decreaseforthecurrentperiod Closing
Items balance Provision Other Reversal Write-offand balance
movement othermovement
Allowanc
e for bad 74,364,596.88 16,006,140.97 350,532.67 600,000.00 18,327,232.00 71,794,038.52
debts
④ Other receivables written off during the period
The amount of other receivables actually written off in the current period is RMB 13,853,548.76 andno significant other receivables are written off for bad debts.
⑤Other receivables mainly include deposits, quality guarantees, employee loans, tax refunds, and
advance payments, etc.
8. Inventories
（1）Details of Inventories
Closingbalance Openingbalance
Items Impairment Impairment
Book valuebalance Provision Bookvaluebalance Provision
Rawmaterials 3,068,331,798.61 115,668,613.58 2,530,152,656.33 90,663,625.24
Workinprogress 408,055,609.14 425,020.38 204,722,421.27
Finishedgoods 25,720,392,258.54 852,085,060.72 20,555,190,452.17 788,428,333.21
Total 29,196,779,666.29 968,178,694.68 23,290,065,529.77 879,091,958.45
（2）Impairment provision of inventories
Increaseforthecurrent Decreaseforthecurrent
period period
Items Opening Write-offand Closing
balance Other balance
Provision movement Reversal other
movement
Raw
materials 90,663,625.24 70,574,078.95 33,599,360.86 7,414,323.66 71,754,127.81 115,668,613.58
Work in
progress 425,020.38 425,020.38
Finished
goods 788,428,333.21 544,805,643.98 61,737,941.18 31,989,614.15 510,897,243.50 852,085,060.72
Total 879,091,958.45 615,804,743.31 95,337,302.04 39,403,937.81 582,651,371.31 968,178,694.68
9. Contract assets
(1) Details
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0195 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Closingbalance Openingbalance
Items Impairment Impairment
Book valuebalance Provision Bookvaluebalance Provision
Relating to
construction service 426,392,594.69 3,654,196.27 456,781,406.54
contract
Total 426,392,594.69 3,654,196.27 456,781,406.54
(2) Provision of credit loss
Increase fortheperiod Decreasefortheperiod
Items Opening Other Write-offand Closing
balance Provision Reversal balance
movement othermovement
Relating
to
construct
ion 3,654,196.27 3,654,196.27
service
contract
Total 3,654,196.27 3,654,196.27
10. Assets held for sale
Items Closingbalance Openingbalance
7.71% equity of Shengfeng Logistics
GroupCo.,Ltd 106,010,000.00
Assets in Shanghai Guangfulai Co.,
Ltd. 38,081,213.39
Total 144,091,213.39
11. Other current assets
（1）Details
Closingbalance Openingbalance
Items Impairment Impairment
Book balance provision Bookbalance provision
Bank deposit for
wealth management 3,981,314,321.50 2,838,231,840.90
products
Deductibletaxes 2,578,384,287.03 3,276,161.33 1,658,616,253.86 5,489,980.82
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0196 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Returns cost 374,052,448.32 218,016,000.42 322,726,264.39 162,998,678.53
receivables
Others 273,507,220.36 428,589,006.65
Total 7,207,258,277.21 221,292,161.75 5,248,163,365.80 168,488,659.35
（2）Impairment provision
Increase forthecurrent Decreaseforthecurrent
Items Opening period period Closing
balance Other Write-offand balance
Provision movement Reversal othermovement
Deductible 5,489,980.
inputtax 82 2,213,819.49 3,276,161.33
Returns cost 162,998,6
receivables 78.53 218,016,000.43 162,998,678.54 218,016,000.42
Total 168,54898.3,65218,016,000.43 165,212,498.03 221,292,161.75
12. Long-term equity investments
√Applicable □Not Applicable
Increase/decreaseforthecurrentperiod
Investment
Investees Opening profit Adjustment Other Declaration
balance Investment recognized inother changesin ofcash
increase underequity comprehensi equity dividendsor
method veincome profits
Associate：
Haier
Group
Finance 5,405,958,339.07 722,234,863.55 8,418,525.64 -126,000,000.00
Co.,Ltd.
Bank of
Qingdao 2,592,829,635.67 152,613,715.57 9,083,138.79 -89,573,156.06 -77,995,640.00
Co.,Ltd.
Wolong
Electric
(Jinan) 123,281,802.39 10,313,776.05 -10,040,000.00
Motor Co.,
Ltd.
Qingdao
Hegang
New 262,284,357.65 17,779,416.15
Material
196 / 308
0197 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Technolog
yCo., Ltd.
（青岛河
钢新材料
科技股份
有限公司）
Qingdao
Haier
SAIF
Smart
Home
Industry 362,380,221.29 72,159,881.83
Investment
Center
(Limited
Partnership
)
Mitsubishi
Heavy
Industries
Haier
(Qingdao) 622,643,614.66 87,012,822.20 -66,600,000.00
Air-conditi
oners Co.,
Ltd.
Qingdao
Haier
Carrier
Refrigerati 332,723,126.50 63,210,360.76
on
Equipment
Co.,Ltd.
Qingdao
Haier
Multimedia 555,084,616.71 -119,877,634.76 -2,820,180.69
Co.,Ltd.
Qingdao
Haier
Software 18,193,519.15 1,442,617.60
Investment
Co.,Ltd.
HefeiFeier
Smart 4,000,000.00 -3,241,811.70
197 / 308
0198 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Technolog
yCo.,
Ltd.
Qingdao
Xinaohaizh
i Energy 25,075,683.85 890,361.10
Co.,Ltd.
Qingdao
Zhongzaih
aina
Environme
ntal
Services 2,192,958.60 68,300.10
Co., Ltd.
（青岛中
再海纳环
境服务有
限公司）
Shandong
Haibida
Big Data
Co., Ltd.
（山 东 6,000,000.00 -667,359.90
海必 达
大数 据
有限 公
司）
BeijingMr.
Hi
Network
Technolog 3,757,759.75
y
Company
Limited
Beijing
Xiaobei
Technolog 2,687,341.82
y
Co.,Ltd.
Beijing
ASU Tech 30,062,027.79 -24,199,912.01
Co.,Ltd.
198 / 308
0199 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Shenzhen
Genyuan
Environme
nt
al 7,849,992.00 -935,504.27
Protection
Technolog
y
Co.,Ltd.
Qingdao
Haimu
Investment
Manageme 2,078,341.37 119,935.09
nt
Co.,Ltd.
Qingdao
Haimu
Smart
Home
Investment 48,001,070.25 45,127.39
Partnership
(Limited
Partnership
)
Guangzhou
Heying
Investment
Partnership 176,064,809.68 47,053,825.13 -3,920,000.00
(Limited
Partnership
)
Qingdao
Home
Wow
Cloud
Network 1,216,581.32 -420,718.04 2,372,996.71
Technolog
y
Co.,Ltd..
Beijing
Cangxiaow
ei 791,316.97
Supply
199 / 308
0200 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Chain
Manageme
nt
Co.,Ltd.
Bingji
(Shanghai)
Corporate
Manageme
nt Co., 878,522,519.50 16,017,245.50
Ltd,(冰 戟
（上海）企
业管理有
限公司)
Youjin
(Shanghai)
Corporate
Manageme
nt Co., 1,596,495,489.99 29,122,264.56
Ltd( 优 瑾
（上海）企
业管理有
限公司)
RRS
(Shanghai)
Investment
Co., Ltd.
（日日顺 2,901,900,890.90 52,949,571.92
（上海）投
资有限公
司）
Haier Best
Water
Technolog
yCo., Ltd.
（倍世海 23,401,518.00 -1,676,172.74
尔饮水科
技有限公
司）
Meiling
Candy 36,328,977.10 -13,207,691.18 100,850.46
Washing
200 / 308
0201 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Machine
Co., Ltd.
（美菱卡
迪洗衣机
有限公司）
Konan
Electronic 74,799,791.29 -6,914,358.04 3,595,400.72 -284,085.00
Co.,Ltd.
HNR
Company
(Private) 91,076,038.80 2,019,335.34 11,461,771.51
Limited
HPZ
LIMITED 88,800,332.55 -1,601,945.50 -9,048,835.56
Controlado
raMabe 3,173,153,937.00 353,471,727.58 43,433,537.08 -5,672,471.63 -66,718,276.58
S.A.deC.V
MiddleEast
Air
conditionin
g 18,208,123.96 483,750.85 310,720.85
Company,
Limited
Total 14,021,195,340.09 5,446,649,395.49 1,409,211,965.00 114,408,934.62 -95,692,811.67 -351,558,001.58
(Continued)
Increase/decreaseforthe
currentperiod Closing
Investees Thedisposal Closingbalance balanceof
Other ofthe impairment
movement investment provision
Associate：
HaierGroupFinanceCo.,Ltd. 6,010,611,728.26
BankofQingdaoCo.,Ltd. 2,586,957,693.97
WolongElectric(Jinan)MotorCo.,Ltd. 123,555,578.44
Qingdao Hegang New Material
Technology Co., Ltd（.青岛河钢新材料 280,063,773.80
科技股份有限公司）
Qingdao Haier SAIF Smart
Home Industry Investment Center 434,540,103.12
(LimitedPartnership)
Mitsubishi Heavy Industries Haier 643,056,436.86
201 / 308
0202 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(Qingdao) Air-conditionersCo.,Ltd.
Qingdao Haier Carrier Refrigeration
Equipment 395,933,487.26 21,000,00000.
Co., Ltd.
Qingdao HaierMultimediaCo.,Ltd 432,386,801.26 48,300,00000.
Qingdao Haier Software Investment
Co., Ltd. 19,636,136.75
Hefei FeierSmartTechnologyCo.,Ltd. 758,188.30
Qingdao XinaohaizhiEnergyCo.,Ltd. 25,966,044.95
Qingdao Zhongzaihaina Environmental
Services Co., Ltd.（青岛中再海纳环境 2,261,258.70
服务有限公司）
Shandong Haibida Big Data Co., Ltd.
（山东海必达大数据有限公司） 5,332,640.10
Beijing Mr. Hi Network Technology
Company 3,757,759.75 3,757,759.57
Limited
Beijing XiaobeiTechnologyCo.,Ltd. 2,687,341.82 2,687,341.28
Beijing ASUTechCo.,Ltd. 5,862,115.78
Shenzhen Genyuan Environmental 6,914,487.7
Protection TechnologyCo.,Ltd. 6,914,487.73 3
Qingdao Haimu Investment
Management Co.,Ltd. 2,198,276.46
Qingdao Haimu Smart Home
Investment Partnership (Limited 48,046,197.64
Partnership)
Guangzhou Heying Investment
Partnership (LimitedPartnership) 219,198,634.81
Qingdao Home Wow Cloud
Network 3,168,859.99
Technology Co.,Ltd.
Beijing Cangxiaowei Supply Chain
Management Co.,Ltd. -791,316.97
Bingji (Shanghai) Corporate
Management Co.,Ltd. 894,539,765.00
Youjin (Shanghai) Corporate
Management Co.,Ltd 1,625,617,754.55
RRS (Shanghai) Investment Co., Ltd.
（日日顺（上海）投资有限公司） 2,954,850,462.82
202 / 308
0203 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Haier Best WaterTechnologyCo., Ltd.
（倍世海尔饮水科技有限公司） 21,725,345.26
Meiling Candy Washing Machine Co.,
Ltd.（美菱卡迪洗衣机有限公司） 23,222,136.38
Konan ElectronicCo.,Ltd. 71,196,748.97
HNR Company(Private)Limited 104,557,145.65
HPZ LIMITED 78,149,551.49
Controladora MabeS.A.deC.V. 3,497,668,453.45
Middle East Airconditioning Company,
Limited 19,002,595.66
Total -791,316.97 20,543,423,504.89 82,659,58390.
13. Investment in other equity instruments
（1） Details of investment in other equity instruments
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
SINOPEC Fuel Oil Sales Corporation
Limited（中国石化销售股份有限公司） 1,242,930,000.00 1,261,564,000.00
Other 153,029,878.92 138,752,460.34
Total 1,395,959,878.92 1,400,316,460.34
（2） Dividends from investment in other equity instruments during the current period:
Items Amountforthecurrentperiod
SINOPEC Fuel Oil Sales Corporation Limited（中国石化销售
股份有限公司） 38,549,487.32
Other 583,805.96
Total 39,133,293.28
14. Other non-current financial assets
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
Long-termwealthmanagementproducts 294,547,364.47 327,358,825.57
Total 294,547,364.47 327,358,825.57
15. Investment properties
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0204 2019AnnualReportofHaierSmartHomeCo.,Ltd.
（1）The changes in investment properties measured at cost this year are as follows:
Items Housesandbuildings Landuserights Total
I. Original book value
1.Opening balance 45,999,732.78 2,128,550.51 48,128,283.29
2.Increase for the current period
（1）Outsourced
(2) Inventories\fixed
assets\construction in progress
transferred in
(3) Increase in business combinations
3. Decrease for the current period
（1）Disposal
（2）Disposal of subsidiary
（3）Other transferring out
4. Converted difference in foreign
currency statements 415,651.21 415,651.215. Closing balance 46,415,383.99 2,128,550.51 48,543,934.50II. Accumulated depreciation and
accumulated amortization
1. Opening balance 16,739,224.15 509,911.72 17,249,135.87
2.Increase for the current period
（1）Provision or amortization 1,785,875.56 40,236.22 1,826,111.78
3.Decrease for the current period
（1）Disposal
（2）Disposal of subsidiary
（3）Other transferring out
4. Converted difference in foreign
currency statements 65,995.47 65,995.47
5.Closing balance 18,591,095.18 550,147.94 19,141,243.12
III. Impairment provision
1.Opening balance
2.Increase for the current period
（1）Provision
3. Decrease for the current period
（1）Disposal
（2）Disposal of subsidiary
（3）Other transferring out
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0205 2019AnnualReportofHaierSmartHomeCo.,Ltd.
4. Converted difference in foreign
currency statements
5.Closing balance
IV. Book Value
1. Closing book value 27,824,288.81 1,578,402.57 29,402,691.38
2. Opening book value 29,260,508.63 1,618,638.79 30,879,147.42
（2）The depreciation and amortization amount charge for the period is RMB 1,826,111.78.
（3）The recoverable amount of the investment real estate of the Company at the end of the period isnot less than its book value, so no provision for impairment is made.
16. Fixed assets
Presented as:
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
Fixed assets 21,159,138,731.39 17,392,953,868.76
Disposals offixedassets 20,918,480.62 131,670.93
Total 21,180,057,212.01 17,393,085,539.69
（1） Fixed assets:
Items Housesandbuildings Productionequipment Transportationequipment
I. Original book value:
1.Opening balance 9,409,485,291.38 19,106,141,336.85 233,824,748.01
2. Increase for the current period
（1）Acquisition 23,447,248.82 1,071,129,154.78 3,723,390.92
（2）Construction in progress
transferred in 1,286,439,909.03 3,786,036,511.30 28,570,339.77
（3）Increase in business
combinations 1,201,525,645.96 1,243,238,008.35 22,678,608.29
3. Decrease for the current period
（1）Disposal or Write-off 301,596,547.25 1,158,321,163.60 11,073,709.77
（2）Disposal of subsidiary 1,724,890,969.75 73,133,253.28 104,637,739.76
（3）Transfer to hold for sale
4. Converted difference in foreign
currency statements 95,134,252.87 270,623,846.51 959,073.83
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0206 2019AnnualReportofHaierSmartHomeCo.,Ltd.
5. Closing balance 9,989,544,831.06 24,245,714,440.91 174,044,711.29
II. Accumulated depreciation
1.Opening balance 3,035,141,829.60 8,780,227,901.81 150,746,305.67
2. Increase for the current period
（1）Provision 469,488,408.16 2,146,912,490.25 22,549,550.51
（2）Increase in business
combinations 411,084,804.78 767,277,667.58 18,209,827.16
3. Decrease for the current period
（1）Disposal or write-off 190,931,221.06 805,972,675.58 10,305,576.48
（2）Disposal of subsidiary 345,549,742.40 43,036,816.08 84,994,109.03
（3）Transfer to hold for sale
4. Converted difference in foreign
currency statements 40,714,969.53 171,641,505.03 731,627.35
5.Closing balance 3,419,949,048.61 11,017,050,073.01 96,937,625.18
III. Impairment provision
1.Opening balance 32,900,098.06 16,389,633.59 2,132.47
2.Increase for the current period
（1）Provision 1,162,006.47
（2）Increase in business
combinations 11,173,362.41 78,041.40
3. Decrease for the current period
（1）Disposal or write-off 24,667.42 15,302,429.38
（2）Disposal of subsidiary
（3）Transfer to hold for sale
4. Converted difference in foreign
currency statements 1,586,050.12 1,132,870.46 443.35
5.Closing balance 34,461,480.76 14,555,443.55 80,617.22
IV. Book Value
1.Closing book value 6,535,134,301.69 13,214,108,924.35 77,026,468.89
2.Opening book value 6,341,443,363.72 10,309,523,801.45 83,076,309.87
(Continued)
Items Officefurniture Other Total
I. Originalbookvalue
1.Opening balance 542,107,498.50 868,842,406.68 30,160,401,281.42
2.Increase forthecurrentperiod
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0207 2019AnnualReportofHaierSmartHomeCo.,Ltd.
（1）Acquisition 52,179,903.63 73,567,454.34 1,224,047,152.49
（2）Constructioninprogress
transferredin 216,107,457.35 409,114,176.26 5,726,268,393.71
（3）Increaseinbusiness
combinations 90,074,385.54 957,196,919.46 3,514,713,567.60
3.Decreaseforthecurrentperiod
（1）Disposalorwrite-off 49,955,532.64 58,894,620.17 1,579,841,573.43
（2）Disposalofsubsidiary 97,339.00 21,999,944.53 1,924,759,246.32
（3）Transfertoholdforsale
4.Converteddifferenceinforeign
currencystatements 12,599,005.34 38,739,187.63 418,055,366.18
5.Closingbalance 863,015,378.72 2,266,565,579.67 37,538,884,941.65
II.Accumulateddepreciation
1.Openingbalance 313,806,904.89 434,317,723.31 12,714,240,665.28
2.Increaseforthecurrentperiod
（1）Provision 93,033,696.61 169,092,878.33 2,901,077,023.86
（2）Increaseinbusiness
combinations 69,487,786.57 801,340,846.87 2,067,400,932.96
3.Decreaseforthecurrentperiod
（1）Disposalorwrite-off 45,809,833.57 50,817,884.48 1,103,837,191.17
（2）Disposalofsubsidiary 44,427.64 12,213,225.36 485,838,320.51
（3）Transfertoholdforsale
4.Converteddifferenceinforeign
currencystatements 7,926,543.47 4,949,375.84 225,964,021.22
5.Closingbalance 438,400,670.33 1,346,669,714.51 16,319,007,131.64
III.Impairmentprovision
1.Openingbalance 153,069.07 3,761,814.19 53,206,747.38
2.Increaseforthecurrentperiod
（1）Provision 166,128.98 1,328,135.45
（2）Increaseinbusiness
combinations 368,626.92 7,836,596.29 19,456,627.02
3.Decreaseforthecurrentperiod
（1）Disposalorwrite-off 110,338.31 424,894.88 15,862,329.99
（2）Disposalofsubsidiary
（3）Transfertoholdforsale
4.Converteddifferenceinforeign
currencystatements -342,685.06 233,219.89 2,609,898.76
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0208 2019AnnualReportofHaierSmartHomeCo.,Ltd.
5.Closingbalance 68,672.62 11,572,864.47 60,739,078.62
IV.BookValue
1.Closingbookvalue 424,546,035.77 908,323,000.69 21,159,138,731.39
2.Openingbookvalue 228,147,524.54 430,762,869.18 17,392,953,868.76
（2）In the current period, the balance of the construction in progress transferred to the originalvalue of the fixed assets in a total of RMB 5,726,268,393.71.
（3）The amount of fixed assets mortgage at the end of the period is RMB 54,750,632.82.
（4）Disposals of fixed assets
Reasonfor
Items Closingbalance Openingbalance transferringto
disposal
RelocationofQingdaoIndustrialPark 20,918,480.62 Demolition
Others 131,670.93 Scrapcleanup
Total 20,918,480.62 131,670.93
17. Construction in progress
Presented as
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
Constructioninprogress 2,391,364,659.97 3,873,648,086.10
Constructionmaterials
Total 2,391,364,659.97 3,873,648,086.10
Construction in progress
(1) . Details of construction in progress
√Applicable □Not Applicable
Unit and Currency: RMB
Closing Balance Openingbalance
Items Impairment Impairment
Book balance provision BookValue Bookbalance provision BookValue
Zhengzhou New
Energy Project 339,598,483.94 339,598,483.94 28,345,188.02 28,345,188.02
America GEA 301,439,928.75 34,061,569.61 267,378,359.14 328,202,831.68 23,930,767.80 304,272,063.88
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0209 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Closing Balance Openingbalance
Items Impairment Impairment
Book balance provision BookValue Bookbalance provision BookValue
Project
Qingdao Appliance
Equipment Project 236,539,836.43 236,539,836.43 51,044,968.22 51,044,968.22
Qingdao Washing
Appliance Project 108,566,194.72 108,566,194.72 352,667,044.20 352,667,044.20
Qingdao Special
Refrigeration 101,448,249.30 101,448,249.30 409,431,912.37 409,431,912.37
Appliances Project
New Zealand
FPA Project 83,150,746.03 83,150,746.03 113,126,924.77 113,126,924.77
Haier Vietnam
Project 82,951,773.11 82,951,773.11 31,642,712.64 31,642,712.64
Laiyang Smart
Kitchen Project 81,387,700.67 81,387,700.67 64,617,334.97 64,617,334.97
Haier Smart Home
Project 65,367,920.02 65,367,920.02 37,655,076.18 37,655,076.18
Haier Air
Conditioning 61,168,160.86 61,168,160.86 14,567,091.58 14,567,091.58
Electronics Project
Shunde Washing
Machine Project 47,121,073.88 47,121,073.88 12,298,279.28 12,298,279.28
Tianjin Ririxin
Project 45,468,458.70 45,468,458.70 386,754,022.65 386,754,022.65
Europe CANDY
Project 44,645,629.53 44,645,629.53
Jiaonan Washing
Machine Project 38,432,444.33 38,432,444.33 20,459,333.68 20,459,333.68
Qingdao Haier
Technology Project 36,834,016.09 36,834,016.09 3,308,697.00 3,308,697.00
Haier Dishwasher
Project 33,102,507.96 33,102,507.96 53,552,923.14 53,552,923.14
Haier IndiaProject 32,308,143.64 32,308,143.64 4,465,258.67 4,465,258.67
Hefei Refrigerator
Project 32,162,988.77 32,162,988.77 54,798,396.31 54,798,396.31
Hefei RollerProject 29,722,701.93 29,722,701.93 97,615,033.96 97,615,033.96
Chongqing Washing
Machine Project 28,878,806.80 28,878,806.80 9,581,587.73 9,581,587.73
Goodaymart
Logistics Supply 522,865,557.84 522,865,557.84
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0210 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Closing Balance Openingbalance
Items Impairment Impairment
Book balance provision BookValue Bookbalance provision BookValue
Chain Project
Others 595,130,464.12 595,130,464.12 1,300,578,679.01 1,300,578,679.01
Total 2,425,426,229.58 34,061,569.61 2,391,364,659.97 3,897,578,853.90 23,930,767.80 3,873,648,086.10
（2）Details of significant changes of construction in progress for the period
Converte
d
Increasefor differenc
Project name Opening thecurrent Transferto Other ein Closing Sourceof
balance period fixedassets decrease foreign balance fund
currency
statement
s
Zhengzhou Self-fundin
New Energy 28,345,188.02 313,378,484.59 2,125,188.67 339,598,483.94 g
Project
America GEA 328,202,831.6 694,422,909.4 726,201,306.3 5,015,493.9 301,439,928.7 Self-fundin
Project 8 3 1 5 5 g
Qingdao
Appliance 243,294,616.9 236,539,836.4 Self-fundin
Equipment 51,044,968.22 2 57,799,748.71 3 g
Project
QingdaoWashi Self-fundin
ng Appliance 352,667,044.20 314,040,873.32 558,141,722.80 108,566,194.72 g
Project
Qingdao
Special Self-fundin
Refrigeration 409,431,912.37 157,782,381.03 465,766,044.10 101,448,249.30 g/fund
Appliances raising
Project
NewZealand 113,126,924.7 212,010,877.0 245,399,257.8 3,412,202.0 Self-fundin
FPAProject 7 8 3 1 83,150,746.03 g
Self-fundin
Haier Vietnam
Project 31,642,712.64 68,629,934.80 17,320,874.33 82,951,773.11 g/fund
raising
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0211 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Laiyang Self-fundin
Smart Kitchen 64,617,334.97 184,717,633.76 167,947,268.06 81,387,700.67 g/fund
Project raising
Haier Smart 112,318,504.9 Self-fundin
Home Project 37,655,076.18 6 84,605,661.12 65,367,920.02 g
Haier Air
Conditioning 158,429,909.2 111,828,839.9 Self-fundin
Electronics 14,567,091.58 7 9 61,168,160.86 g
Project
Shunde
Washing 104,840,053.3 Self-fundin
Machine 12,298,279.28 2 70,017,258.72 47,121,073.88 g
Project
Tianjin Ririxin 386,754,022.6 253,792,027.8 595,077,591.8 Self-fundin
Project 5 5 0 45,468,458.70 g
Europe Self-fundin
CANDY 100,122,460.65 51,129,737.42 -4,347,093.70 44,645,629.53 g
Project
Jiaonan
Washing Self-fundin
Machine 20,459,333.68 65,223,799.19 47,250,688.54 38,432,444.33 g
Project
Qingdao Haier Self-fundin
Technology 3,308,697.00 41,158,161.89 7,632,842.80 36,834,016.09 g/fund
Project raising
Haier Self-fundin
Dishwasher 53,552,923.14 54,355,778.11 74,806,193.29 33,102,507.96 g
Project
Self-fundin
Haier India
Project 4,465,258.67 48,547,293.81 20,484,953.12 -219,455.72 32,308,143.64 g/fund
raising
Hefei Self-fundin
Refrigerator 54,798,396.31 62,659,813.36 85,295,220.90 32,162,988.77 g
Project
Hefei Roller 128,962,463.6 Self-fundin
Project 97,615,033.96 61,070,131.61 4 29,722,701.93 g
Chongqing
Washing Self-fundin
Machine 9,581,587.73 56,745,414.37 37,448,195.30 28,878,806.80 g
Project
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0212 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Goodaymart
Logistics 522,865,557.8 179,085,288.2 625,066,753. Self-fundin
Supply 4 2 76,884,092.94 12 g
Chain Project
Self-fundin
Others 1,300,578,67091. 1,388,433,55442. 2,094,143,24332. 6,777,677.96 7,039,151.97 595,130,464.12 g/fund
raising
Total 3,897,578,85930. 4,875,059,90916. 5,726,268,39731. 631,844,43018. 10,900,29581. 2,425,426,22598.
(3)Impairment provision of construction in progress
Opening Increasefor Transferto Other Exchange Closing
Project name balance thecurrent fixedassets decrease differences Balance
period
America GEA
project 23,930,767.80 9,619,271.50 511,530.31 34,061,569.61
18. Right- of-use assets
Items Housesandbuildings Productionequipment Transportationequipment
I. Originalbookvalue:
1.Opening balance
2.Amount recognized by
implementing the new lease 2,803,521,203.21 422,710.95 1,681,046.92
standard asat1January2019
3. Increaseforthecurrentperiod
(1) Increase 1,201,809,861.10 36,889,375.43 165,310,476.87
4. Decreaseforthecurrentperiod
(1) Disposal 14,822,083.87 6,920,230.24 1,793,938.21
(2) Disposalsubsidiary 1,209,045,826.53
5. Converteddifferenceinforeign
currency statements 35,686,867.25 373,843.46 3,327,205.99
6. Closingbalance 2,817,150,021.16 30,765,699.60 168,524,791.57
II. Accumulatedamortization
1. Openingbalance
2. Increaseinthecurrentperiod
(1) Provision 701,845,646.75 4,688,682.05 55,307,542.17
3. Decreaseforthecurrentperiod
(1) Disposal 11,099,423.28 179,908.03 1,700,856.25
(2) Disposalsubsidiary 226,376,405.85
4. Converteddifferenceinforeign 5,987,911.03 51,078.94 1,016,098.60
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0213 2019AnnualReportofHaierSmartHomeCo.,Ltd.
currencystatements
5.Closingbalance 470,357,728.65 4,559,852.96 54,622,784.52
III.Impairmentprovision
1.Openingbalance
2.Increaseinthecurrentperiod
(1)Provision
3.Decreaseforthecurrentperiod
(1)Disposal
(2)Disposalsubsidiary
4. Converteddifferenceinforeign
currencystatements
5.Closingbalance
IV.BookValue
1.Closingbookbalance 2,346,792,292.51 26,205,846.64 113,902,007.05
2.Openingbookbalance
(Continued)
Items Officefurniture Other Total
I. Originalbookvalue:
1.Opening balance
2.Amount recognized by
implementing the new lease 14,242,945.45 222,410,822.43 3,042,278,728.96
standard asat1January2019
3.Increase forthecurrentperiod
(1) Increase 46,828,190.32 82,504,809.71 1,533,342,713.43
4. Decreaseforthecurrentperiod
(1) Disposal 680,486.76 24,216,739.08
(2) Disposalsubsidiary 1,209,045,826.53
5. Converteddifferenceinforeign
currency statements 604,709.03 4,662,346.92 44,654,972.65
6. Closingbalance 60,995,358.04 309,577,979.06 3,387,013,849.43
II. Accumulatedamortization
1.Opening balance
2.Increase inthecurrentperiod
(1)Provision 12,269,302.08 89,627,078.60 863,738,251.65
3.Decrease forthecurrentperiod
(1)Disposal 680,486.76 13,660,674.32
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0214 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(2)Disposalsubsidiary 226,376,405.85
4. Converteddifferenceinforeign
currencystatements 97,818.94 1,093,168.85 8,246,076.36
5.Closingbalance 11,686,634.26 90,720,247.45 631,947,247.84
III.Impairmentprovision
1.Openingbalance
2.Increaseinthecurrentperiod
(1)Provision
3.Decreaseforthecurrentperiod
(1)Disposal
(2)Disposalsubsidiary
4. Converteddifferenceinforeign
currencystatements
5.Closingbalance
IV.BookValue
1.Closingbookbalance 49,308,723.78 218,857,731.61 2,755,066,601.59
2.Openingbookbalance
19. Intangible assets
Items Proprietarytechnology Licensesandfranchises Landuserights
I.Original bookvalue
1.Opening balance 1,593,770,408.63 3,920,820,151.59 2,091,181,628.34
2.Increase forthecurrentperiod
(1)Purchase 27,797,247.75 139,955,824.87 280,127,958.21
(2)Internal research and
development 121,806,942.09
(3)Increase in business
combination 74,964,393.70
3.Decrease forthecurrentperiod
(1)Disposal 16,900,000.00
(2)Disposal subsidiary 1,168,593,346.59
(3)Transfer toholdforsale
4. Converteddifferenceinforeign
currency statements 33,642,700.48 75,751,579.50 6,143,758.90
5.Closing balance 1,777,017,298.95 4,211,491,949.66 1,191,959,998.86
II. Accumulatedamortization
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0215 2019AnnualReportofHaierSmartHomeCo.,Ltd.
1.Openingbalance 543,957,689.12 267,235,743.09 223,598,592.85
2.Increaseinthecurrentperiod
(1)Provision 164,299,865.25 112,072,885.23 34,099,717.37
(2)Increase in business
combination 69,361,531.36
3.Decreaseforthecurrentperiod
(1)Disposal 13,683,813.66
(2)Disposalsubsidiary 98,877,050.16
(3)Transfertoholdforsale
4. Converteddifferenceinforeign
currencystatements 27,422,911.12 3,101,289.72 -117,344.31
5.Closingbalance 735,680,465.49 451,771,449.40 145,020,102.09
III.Impairmentprovision
1.Openingbalance
2.Increaseinthecurrentperiod
(1)Provision
(2)Increase in business
combination
3.Decreaseforthecurrentperiod
(1)Disposal
(2)Disposalsubsidiary
(3)Transfertoholdforsale
4. Converteddifferenceinforeign
currencystatements
5.Closingbalance
IV.BookValue
1.Closingbookbalance 1,041,336,833.46 3,759,720,500.26 1,046,939,896.77
2.Openingbookbalance 1,049,812,719.51 3,653,584,408.50 1,867,583,035.49
(Continued)
Items Trademarkrights Applicationmanagement Total
softwareandothers
I.Original bookvalue
1.Opening balance 1,251,997,712.00 2,392,063,712.92 11,249,833,613.48
2.Increase inthecurrentperiod
(1)Purchase 242,206,243.67 690,087,274.50
(2)Internal research and
development 668,854,327.50 790,661,269.59
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0216 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(3)Increase in business
combination 1,450,931,500.84 394,596,528.99 1,920,492,423.53
3.Decreaseforthecurrentperiod
(1)Disposal 19,581,338.92 36,481,338.92
(2)Disposalsubsidiary 84,825,663.51 1,253,419,010.10
(3)Transfertoholdforsale
4. Converteddifferenceinforeign
currencystatements 18,714,088.63 11,500,459.26 145,752,586.77
5.Closingbalance 2,721,643,301.47 3,604,814,269.91 13,506,926,818.85
II.Accumulatedamortization
1.Openingbalance 958,761,822.54 1,993,553,847.60
2.Increaseinthecurrentperiod
(1)Provision 476,041,161.72 786,513,629.57
(2)Increase in business
combination 59,442,201.25 128,803,732.61
3.Decreaseforthecurrentperiod
(1)Disposal 14,967,018.80 28,650,832.46
(2)Disposalsubsidiary 19,996,802.48 118,873,852.64
(3)Transfertoholdforsale
4. Converteddifferenceinforeign
currencystatements 18,136,546.61 48,543,403.14
5.Closingbalance 1,477,417,910.84 2,809,889,927.82
III.Impairmentprovision
1.Openingbalance 9,965,107.96 9,965,107.96
2.Increaseinthecurrentperiod
(1)Provision
(2)Increase in business
combination
3.Decreaseforthecurrentperiod
(1)disposal
(2)Disposalsubsidiary
(3)Transfertoholdforsale
4. Converteddifferenceinforeign
currencystatements
5.Closingbalance 9,965,107.96 9,965,107.96
IV.BookValue
1.Closingbookbalance 2,721,643,301.47 2,117,431,251.11 10,687,071,783.07
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0217 2019AnnualReportofHaierSmartHomeCo.,Ltd.
2.Openingbookbalance 1,251,997,712.00 1,423,336,782.42 9,246,314,657.92
At the end of the period, the intangible assets developed through the Company accounted for the15.48% of the original value at the end of the period.
20. Development cost
Decrease forthecurrentperiod Converted
Opening Increaseforthe Includedin differencein Closing
Items balance period Recognizedas currentprofit foreign balance
intangibleasset andloss currency
statements
91ABD.ERPIT
Program 508,299,234.90 188,142,702.43 600,956,372.36 3,325,584.51 98,811,149.48
Others 30,083,053.43 398,637,292.69 189,704,897.23 142,698,543.83 -1,842,277.44 94,474,627.62
Total 538,382,288.33 586,779,995.12 790,661,269.59 142,698,543.83 1,483,307.07 193,285,777.10
21. Goodwill
Impact of
Increaseforthe Decreaseforthe fluctuationin
Items Openingbalance currentperiod currentperiod exchangerate Closingbalance
forthecurrent
period
GEA 20,390,297,236.59 334,639,841.98 20,724,937,078.57
Candy 2,009,282,064.54 22,747,919.83 2,032,029,984.37
Other 848,429,790.58 264,693,523.97 11,026,483.80 594,762,750.41
Total 21,238,727,027.17 2,009,282,064.54 264,693,523.97 368,414,245.61 23,351,729,813.35
In the case of a goodwill impairment test, the Group compares the carrying amount of the relevantasset group or asset group combination (including goodwill) with its recoverable amount. If therecoverable amount is less than the book value, corresponding difference will be recognized in currentprofit or loss.
The recoverable amount of the asset group (including goodwill) is calculated with discountedestimated future cash flow method based on a management-approved 5-10 years budget. Future cashflows beyond the budget period are estimated using the estimated perpetual annual growth rate. Theperpetual annual growth rate (mainly 2%) adopted by the management is consistent with industryforecast data and does not exceed the long-term average growth rate of each product. The managementdetermines the income growth rate (mainly 2.50%-14.39%) and the EBITDA profit margin (mainly2.22%-6.21%) based on historical experience and market development forecasts, and adopts the pre-taxinterest rate that can reflect the specific risks of the relevant asset group as the discount rate (mainly9.83%-11.12%). The management analyzes the recoverable amount of each asset group based on theseassumptions and believes that there is no need to make provision for goodwill.
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0218 2019AnnualReportofHaierSmartHomeCo.,Ltd.
22. Long-term prepaid expenses
Amortization Converted
Opening Increasefor forthe Other differencein Closing
Items balance thecurrent current decrease foreign balance
period period currency
statements
Renovatio
n 7,220,921.67 224,414,494.62 59,402,549.85 172,232,866.44
Improvem
enton
leased 167,271,750.21 91,946,257.44 37,429,178.82 26,955,249.37 1,880,760.03 196,714,339.49
property
Others 57,019,641.27 39,930,242.34 13,302,785.14 15,009,725.93 2,334.11 68,639,706.65
Total 231,512,313.15 356,290,994.40 110,134,513.18 41,964,975.30 1,883,094.14 437,586,912.58
23. Deferred income tax assets/deferred income tax liabilities
（1）Deferred income tax assets before elimination
Items Closingbalance Openingbalance
Provisionforassetsimpairment 330,149,872.25 242,019,596.69
Liabilities 1,638,698,620.85 1,450,174,770.92
Internalunrealizedearningseliminateddue
tocombination 648,447,634.39 464,499,951.47
Governmentgrants 104,843,341.38 34,135,441.99
Uncoveredlosses 644,817,113.91 545,335,444.16
Others 97,140,142.95 88,784,075.68
Total 3,464,096,725.73 2,824,949,280.91
（2）Deferred income tax liabilities before elimination
Items Closingbalance Openingbalance
Disposalofsubsidiariesandmovementin
investmentinotherequityinstruments 752,137,954.24 94,972,688.60
Withholdingincometaxofoverseas
enterprises 77,190,532.32 77,190,532.32
Differencebetweenthetaxbaseofthe
assetsformedfrommergersand 2,063,021,233.00 1,146,845,953.67
acquisitionsanddepreciation
Changesofthefairvalue 6,607,767.41 4,416,607.36
Others 140,650,641.75 84,764,197.15
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0219 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Total 3,039,608,128.72 1,408,189,979.10
（3）The deferred income tax assets and the deferred income tax liabilities eliminated at the end of
the period was RMB 1,885,194,833.00.24. Other non-current assets
Items Closingbalance Openingbalance
Prepaymentsforequipmentandland 1,423,060,146.73 2,118,776,080.19
Other 420,704,819.08 211,912,902.37
Total 1,843,764,965.81 2,330,688,982.56
25. Short-term borrowings
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
Borrowings-securedbypledge 172,099,117.93 359,230,849.08
Borrowings-securedbymortgage 68,231,758.92 46,843,046.04
Borrowings-securedbyguarantor 3,505,822,164.08 3,983,541,155.25
Borrowings-unsecured 4,838,896,196.25 1,908,889,842.20
Total 8,585,049,237.18 6,298,504,892.57
26. Financial liabilities held for trading
Items Closingbalance Openingbalance
Forwardforeignexchangetrading
contracts 42,799,173.35 211,934,956.99
Forwardforeignexchangeoption 6,813,323.34
Total 42,799,173.35 218,748,280.33
27. Derivative financial liabilities
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
Forwardforeignexchangetrading
contracts 85,557,428.14 24,384,482.19
Forwardcommoditycontracts 11,219,272.35
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0220 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Interest rate swap agreement 13,991,425.83
Total 99,548,853.97 35,603,754.54
28. Bills payable
√Applicable □Not Applicable
Unit and Currency: RMB
Categories Closingbalance Openingbalance
Commercialacceptancebill 2,237,116,468.45 2,402,746,892.66
Bankacceptancebill 17,071,422,308.47 17,635,269,447.02
Total 19,308,538,776.92 20,038,016,339.68
29. Accounts payable
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
Accountspayable 33,750,567,046.28 27,899,496,560.29
Total 33,750,567,046.28 27,899,496,560.29
The book balance at the end of the period was mainly the unpaid expenditures on material, equipment
and labor.
30. Receipts in advance
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
Receiptsinadvance 14,681,466.58
Total 14,681,466.58
31. Contract liabilities
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
Contractliabilities 5,583,008,412.49 5,518,079,019.27
Total 5,583,008,412.49 5,518,079,019.27
The book balance at the end of the period is mainly the receipt in advance.
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32. Payables for staff’s remuneration
（1）Payables for staff’s remuneration
√Applicable □Not Applicable
Unit and Currency: RMB
Items Openingbalance Increaseforthe Decreaseforthe Closingbalance
currentperiod currentperiod
I.Short-termremuneration 2,477,228,146.12 20,931,781,705.29 20,430,379,570.90 2,978,630,280.51
II.Post-employmentbenefits:
definedcontributionplan 26,305,532.76 1,606,917,761.44 1,606,143,308.75 27,079,985.45
III.Terminationbenefits 14,228,664.47 17,332,826.34 21,743,302.40 9,818,188.41
IV.Otherbenefitsdueinone
year 157,208,407.21 35,845,029.40 53,009,473.68 140,043,962.93
Total 2,674,970,750.56 22,591,877,322.47 22,111,275,655.73 3,155,572,417.30
（2） Short-term remuneration
√Applicable □Not Applicable
Unit and Currency: RMB
Items Openingbalance Increaseforthe Decreaseforthe Closingbalance
currentperiod currentperiod
I.Salaries,bonus,allowances
andbenefit 1,505,598,351.67 15,439,290,305.52 14,988,259,905.69 1,956,628,751.50
II.Employeewelfare 291,304,655.82 412,290,047.70 404,801,520.38 298,793,183.14
III.Socialbenefit 158,180,551.65 1,518,175,632.72 1,530,383,961.22 145,972,223.15
IV.Housingfund 6,138,737.72 364,734,779.82 369,134,487.46 1,739,030.08
V.Laborunionfeeand
educationfund 3,784,144.36 90,317,353.70 92,852,458.09 1,249,039.97
VI.Short-termcompensated
leave 233,150,647.10 282,603,440.62 269,208,976.89 246,545,110.83
VII.Others 279,071,057.80 2,824,370,145.21 2,775,738,261.17 327,702,941.84
Total 2,477,228,146.12 20,931,781,705.29 20,430,379,570.90 2,978,630,280.51
（3） Defined contribution plan:√Applicable □Not Applicable
Unit and Currency: RMB
Items Openingbalance Increaseforthe Decreaseforthe Closingbalance
currentperiod currentperiod
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0222 2019AnnualReportofHaierSmartHomeCo.,Ltd.
1.Basicpensioninsurance 25,824,577.94 1,554,901,145.01 1,554,184,887.00 26,540,835.95
2.Unemploymentinsurance 292,043.93 28,852,437.86 28,876,101.71 268,380.08
3.Enterpriseannuitypayment 188,910.89 23,164,178.57 23,082,320.04 270,769.42
Total 26,305,532.76 1,606,917,761.44 1,606,143,308.75 27,079,985.45
（4）Termination benefits
Items Closingbalance Openingbalance
Terminationcompensation 9,818,188.41 14,228,664.47
Total 9,818,188.41 14,228,664.47
33. Taxes payable
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
Value-addedtax 606,034,986.30 444,632,639.90
Corporateincometax 1,278,004,157.85 1,187,320,453.29
Individualincometax 12,703,998.50 79,292,028.99
Citymaintenanceandconstructiontax 57,716,819.31 2,600,755.51
Educationsurcharge 5,473,294.35 3,919,326.90
Theelectricalandelectronicproducts
wastetreatmentfund 102,288,068.00 67,359,180.79
Othertaxes 54,835,056.73 61,175,101.44
Total 2,117,056,381.04 1,846,299,486.82
34. Other payables
Presented as
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
Interest payable 49,395,752.93 104,522,208.28
Dividends payable 145,851,115.28 168,425,466.85
Other payables 14,961,145,653.61 12,497,210,549.37
Total 15,156,392,521.82 12,770,158,224.50
（1）Interest payable:
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0223 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Items Closingbalance Openingbalance
Interestonlong-termborrowings 22,160,847.23 57,626,542.89
Interestonshort-termborrowings 27,234,905.70 46,895,665.39
Total 49,395,752.93 104,522,208.28
（2）Dividends payable:
Nameofunit Closingbalance Openingbalance
BraveLion(HK)limited 122,756,874.10 122,756,874.10
Others 23,094,241.18 45,668,592.75
Total 145,851,115.28 168,425,466.85
（3）Other payables:
Items Closingbalance Openingbalance
Otherpayables 14,961,145,653.61 12,497,210,549.37
Total 14,961,145,653.61 12,497,210,549.37
The closing balance mainly included the incurred but unpaid costs.
35. Liabilities held-for-sale
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
Liabilities of Shanghai Guangfulai Co.,
Ltd.(上海广富来有限公司)_ 32,362,267.88
Total 32,362,267.88
36.Non-current liabilities due within one year
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
Long-termborrowingsduewithinoneyear 4,730,070,447.82 3,015,060,105.58
Leaseliabilitiesduewithinoneyear 594,930,209.58
Estimatedliabilitiesduewithinoneyear 1,992,138,260.62 1,640,146,634.40
Total 7,317,138,918.02 4,655,206,739.98
37. Other current liabilities
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0224 2019AnnualReportofHaierSmartHomeCo.,Ltd.
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
Payablerefund 486,038,304.57 402,932,170.91
Taxamounttobewrittenoff 6,284,243.87 22,023,598.68
Others 1,743,159.10 2,161,962.30
Total 494,065,707.54 427,117,731.89
38. Long-term borrowings
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
Borrowings-securedbymortgage 12,663,597.65 23,574,659.91
Borrowings-securedbyguarantor 2,343,619,509.01 9,213,273,265.96
Borrowings-unsecured 8,877,523,705.58 90,511,272.46
Borrowings-securedbyguarantorand
mortgage 2,042,646,123.32 6,214,107,126.89
Total 13,276,452,935.56 15,541,466,325.22
Other explanations, including interest rate range:
√Applicable □Not Applicable
Interest rate on long-term borrowings – secured by guarantor is the one as provided in the agreementplus LIBOR.
Interest rate on domestic long-term borrowings – unsecured is the benchmark rate published by thePeople’s Bank of China.
Interest rate on offshore long-term borrowings – unsecured is the one as provided in the agreementplus LIBOR.
Interest rate on long-term borrowings – secured by mortgage is the one as provided in the agreementplus LIBOR.
39. Bonds payable
On 21 November 2017, Harvest International Company, the Company’s wholly-owned subsidiary,issued a 5-year HK$8 billion exchangeable corporate bond, coupon rate is zero and rate of return is 1%.
On 18 December 2018, the Company issued an RMB 3 billion convertible corporate bond. Theconvertible bond issued has a maturity of 6 years. The coupon rate is 0.2% in the first year, 0.5% in thesecond year, and 1.0% in the third year, 1.5% in the fourth year, 1.8% in the fifth year, and 2.0% in the
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0225 2019AnnualReportofHaierSmartHomeCo.,Ltd.
sixth year.
The bond was divided into liabilities and equities on initial recognition:
Items Exchangeablebondissuedin Convertiblebondsissuedin
2017 2018
Initialrecognition: 6,731,131,007.13 2,980,024,754.50
Including：
Equities oftheexchangeablebond 431,424,524.07 473,061,264.64
Liabilitiesoftheexchangeablebond 6,299,706,483.06 2,506,963,489.86
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalabce
Exchangeablecorporatebonds 7,004,585,761.43 6,681,366,239.84
issuedin2017
Convertiblecorporatebonds 2,510,530,062.86
issuedin2018
Total 7,004,585,761.43 9,191,896,302.70
Changes in the liability portion of corporate bonds in the current period:
Increa Accrued Less:bond Shares Redempt
se in bond interest Exchan converted ionin
Items Opening curren interest paidfor gerate in the the Closing
balance t forthe thecurrent impact current current balance
period current period period period
period
Exchangea
ble bond 6,681,366,239. 170,643,368. 152,576,1 7,004,585,761.
84 66issuedin 52.93 43
2017
Exchangea
ble bond 2,510,530,062. 104,059,924. 2,605,447,74 9,142,243.5
issued in 86 80 4.16 0
2018
Total 9,191,896,30720. 274,703,29436. 152,55726.9,132,605,4474,.71469,142,243.50 7,004,585,76413.
40. Lease liabilities
Items Closingbalance Openingbalance
Leaseliabilities 2,575,201,976.93
Less:duewithinoneyear 594,930,209.58
Total 1,980,271,767.35
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41. Long-term payables
Items Closingbalance Openingbalance
InvestmentfromCDBdevelopmentfund 93,000,000.00 93,000,000.00
Others 49,342,718.45 13,763,243.99
Total 142,342,718.45 106,763,243.99
According to the Investment Contract of China Development Fund executed by the Company and itssubsidiaries including Qingdao Haier Refrigerator Co., Ltd., Qingdao Haier Air Conditioner Gen Corp.,Ltd., Qingdao Haier (Jiaozhou) Air-conditioning Co., Limited together with China Development FundCo. Ltd. in 2015 and 2016, China Development Fund Co. Ltd. invested RMB 20 million in QingdaoHaier Refrigerator Co., Ltd., and RMB 73 million in Qingdao Haier (Jiaozhou) Air-conditioning Co.,Limited. China Development Fund Co. Ltd. earns 1.2% of the annual profits by means of dividends orrepurchase at a premium. The Company and its subsidiaries will repurchase the investments above in2020 to 2027.
42. Long-term employee benefits payable
√Applicable □Not Applicable
(1) Long-term employee benefits payable
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
I.Post-employmentbenefits: net liabilityof
definedbenefitplan 577,613,222.26 456,055,879.38
II.Terminationbenefits 324,191,428.30 230,752,405.39
III.Otherlong-termbenefits
IV.Provision for work-related injury
compensation 220,545,586.80 248,166,450.72
Total 1,122,350,237.36 934,974,735.49
（2）Defined benefit plan
Some subsidiaries of the Company have participated in several defined benefit plans, in whicheligible employees are entitled to the retirement benefits as planned.
These plans are exposed to interest rate risks, changes in life expectancy of the beneficiary andother risks.
The actuarial valuation of the assets and the present value of defined benefit obligations under suchplans are determined by using the Projected Unit Credit (PUC) method.
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0227 2019AnnualReportofHaierSmartHomeCo.,Ltd.
① The defined benefit plan of Haier Asia Co., Ltd., a subsidiary of the Company
Actuarial assumptions used to defined benefit plans
Items Rate
Discount rate 0.50%
Expected rate of return 2.00%
Present value of defined benefit obligations
Items Amount
Ⅰ. Opening balance 324,545,002.06
II. Defined benefit cost recognized in current profit or loss 10,911,836.54
1. Current service cost 9,256,866.73
2. Past service cost
3. Settlement gains (loss indicated in ‘－’)
4. Interest cost 1,654,969.81
III. Defined benefit cost recognized in other comprehensive income -810,043.57
1. Actuarial loss (gain indicated in ‘－’) -810,043.57
IV. Other changes 117,799.76
1. The consideration paid at the time of settlement
2. Benefit paid -11,324,991.52
3. Exchange differences 11,442,791.28
V. Closing balance 334,764,594.79
Fair value of plan assets
Items Amount
Ⅰ.Openingbalance 326,403,548.13
II.Definedbenefitcostrecognizedincurrentprofitorloss 6,467,103.23
1.Interestincome 6,467,103.23
III.Definedbenefitcostrecognizedinothercomprehensiveincome 16,685,608.79
1.Returnonplanassets(exceptthoseincludedinnetinterests) 16,685,608.79
2. Changes in impact of asset cap (except those included in net
interests)
IV.Otherchanges 19,169,068.52
1.Employercontributions 15,844,104.03
2.Benefitpaid -8,661,365.23
3.Exchangedifferences 11,986,329.72
V.Closingbalance 368,725,328.67
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0228 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Neither the Company’s ordinary shares or bonds, nor the properties occupied by the Company areincluded in the plan assets.
Net liability (net asset) of defined benefit plan
Items Amount
Ⅰ. Opening balance -1,858,546.07
II. Defined benefit cost recognized in current profit or loss 4,444,733.31
III. Defined benefit cost recognized in other comprehensive income -17,495,652.36
IV. Other changes -19,051,268.76
V. Closing balance -33,960,733.88
The average term for the defined benefit obligation is 12.29 years at the balance sheet date.
②The defined benefit plan of Roper Corporation, a subsidiary of the Company
Roper Corporation, a subsidiary of the Company, has provided post-employment defined benefitplan of health care benefits to eligible employees.
Actuarial assumptions used in defined benefit plans
Items Rate
Discount rate 3.27%
Present value of defined benefit obligations
Items Amount
Ⅰ.Openingbalance 118,346,193.16
II.Businesscombinationnotundercommoncontrol
III.Definedbenefitcostrecognizedincurrentprofitorloss 7,716,462.39
1.Currentservicecost 5,468,388.48
2.Pastservicecost
3.Settlementgains(lossindicatedin‘－’)
4.Interestcost 2,248,073.91
IV.Definedbenefitcostrecognizedinothercomprehensiveincomes 17,710,854.84
1.Actuarialloss(gainindicatedin‘－’) 17,710,854.84
V.Otherchanges -5,166,490.02
1.Theconsiderationpaidatthetimeofsettlement
2.Benefitpaid -7,336,037.78
3.Exchangedifferences 2,169,547.76
VI.Closingbalance 138,607,020.37
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0229 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Net liability (net asset) of defined benefit plan
Items Amount
Ⅰ. Opening balance 118,346,193.16
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 7,716,462.39
IV. Defined benefit cost recognized in other comprehensive incomes 17,710,854.84
V. Other changes -5,166,490.02
VI. Closing balance 138,607,020.37
The average term for the defined benefit obligation is 10.48 years at the balance sheet date.
③The defined benefit plan of Haier U.S. Appliance Solutions, Inc., a subsidiary of the
Company.
Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company, has provided post-retirement
defined benefit plan of health care benefits for the eligible employees.
Actuarial assumptions used in defined benefit plans
Items Rate
Discountrate 3.06%
Present value of defined benefit obligations
Items Amount
Ⅰ. Opening balance 326,812,839.04
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 9,770,629.88
1. Current service cost
2. Past service cost
3. Settlement gains (loss indicated in ‘－’)
4. Interest cost 9,770,629.88
IV. Defined benefit cost recognized in other comprehensive incomes -1,862,059.88
1. Actuarial loss (gain indicated in ‘－’) -1,862,059.88
V. Other changes -24,684,542.64
1. The consideration paid at the time of settlement
2. Benefit paid -29,797,968.63
3. Exchange differences 5,113,425.99
VI. Closing balance 310,036,866.40
Net liability (net asset) of defined benefit plan
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0230 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Items Amount
Ⅰ. Opening balance 326,812,839.04
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 9,770,629.88
IV. Defined benefit cost recognized in other comprehensive incomes -1,862,059.88
V. Other changes -24,684,542.64
VI. Closing balance 310,036,866.40
④The defined benefit plan of Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company.
Haier U.S. Appliance Solutions, Inc., a subsidiary of the Company, has provided defined benefit
plan of pension for the eligible employees.
Actuarial assumptions used in defined benefit plans
Items Rate
Discountrate 2.96%
Present value of defined benefit obligations
Items Amount
Ⅰ. Opening balance 284,892,248.72
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 10,352,886.72
1. Current service cost
2. Past service cost
3. Settlement gains (loss indicated in ‘－’)
4. Interest cost 10,352,886.72
IV. Defined benefit cost recognized in other comprehensive incomes 11,761,508.14
1. Actuarial loss (gain indicated in ‘－’) 11,761,508.14
V. Other changes -49,531,432.86
1. The consideration paid at the time of settlement
2. Benefits paid out -53,834,549.18
3. Exchange differences 4,303,116.32
VI. Closing balance 257,475,210.72
Fair value of plan assets
Items Amount
Ⅰ. Opening balance 201,739,810.80
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0231 2019AnnualReportofHaierSmartHomeCo.,Ltd.
II. Defined benefit cost recognized in current profit or loss
1. Interest income
III. Defined benefit cost recognized in other comprehensive incomes 7,857,265.95
1. Return on plan assets (except those included in net interests) 7,857,265.95
2. Changes in impact of asset cap (except those included in net
interests)
IV. Other changes -24,674,304.18
1. Employer contributions 26,081,740.20
2. Benefits paid out -53,834,549.18
3. Exchange differences 3,078,504.80
V. Closing balance 184,922,772.57
Net liability (net asset) of defined benefit plan
Items Amount
Ⅰ. Opening balance 83,152,437.92
II. Business combination not under common control
III. Defined benefit cost recognized in current profit or loss 10,352,886.72
IV. Defined benefit cost recognized in other comprehensive income 3,904,242.19
V. Other changes -24,857,128.68
Ⅵ.Closing balance 72,552,438.15
（3）Provision for work-related injury compensation
Haier U.S. Appliance Solutions, Inc. made a provision for the occupational injury claims filed bythe injured due to production accidents starting from 1 January 1991. The provision was calculated byBeechercarlson Insurance Services, LLC., based on actuarial method. The discount rate used in theactuary is 3.72%.
Items Amount
Ⅰ. Opening balance 248,166,450.72
II. Business combination not under common control
Ⅲ. Compensation recognized in current profit and loss 88,336,691.42
Ⅳ. Actual compensation paid -78,439,355.15
V. Other changes -37,518,200.19
Ⅵ.Closing balance 220,545,586.80
Classification of the balance of defined benefit plan
Items Closingbalance Openingbalance
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0232 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Short-termsalary 84,527,455.18 89,343,078.64
Long-termsalary 577,613,222.26 456,055,879.38
Total 662,140,677.44 545,398,958.02
43. Estimated liabilities
√Applicable □Not Applicable
Unit and Currency: RMB
Items Openingbalance Closingbalance
Activelitigation 17,830,624.07 19,619,840.35
Others 191,659.99 192,441,718.48
Projectionofthreeguaranteesandinstallationfees 1,188,593,257.89 1,186,816,187.50
Total 1,206,615,541.95 1,398,877,746.33
Projection of significant assumption and estimation relating to three guarantees and installation fees:the Company projected three guarantees and installation fees rate reasonably based on previous actualexpense on three guarantees and installation fees as well as sales data. The company projected threeguarantees and installation fees that are likely to be incurred going forward according to therequirements of three guarantees and installation policies of the Company as well as the actual salesdata.
44. Deferred income
√Applicable □Not Applicable
Unit and Currency: RMB
Items Openingbalance Increaseforthe Decreaseforthe Closingbalance
current period currentperiod
Government grants 643,551,987.30 203,322,115.82 141,601,486.02 705,272,617.10
Total 643,551,987.30 203,322,115.82 141,601,486.02 705,272,617.10
45. Other non-current liabilities
√Applicable □Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
Obligation of repurchasing the minority 54,598,203.27 1,792,322,337.19
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0233 2019AnnualReportofHaierSmartHomeCo.,Ltd.
equity rights
Contingent consideration 5,705,307.28
Others 15,473,286.76 25,839,049.46
Total 70,071,490.03 1,823,866,693.93
46. Share capital
Category Openingbalance Increaseforthe Decreaseforthe Closingbalance
current period currentperiod
I.Restrictedshares
1.State-ownedshares
2. Shares held by domestic
non-state-owned legal
entities
3. Shares held by domestic
individuals
4. Shares held by offshore
non-state-owned legal
entities
Ⅱ.Non-restrictedshares 6,368,416,700 211,149,927 6,579,566,627
1.OrdinarysharesinRMB 6,097,402,727 211,149,927 6,308,552,654
2. Domestic listed foreign
Shares
3. Offshore listed foreign
Shares 271,013,973 271,013,973
4.Others
Ⅲ.Totalshares 6,368,416,700 211,149,927 6,579,566,627
47. Other equity instruments
Items Openingbalance Increaseforthe Decreaseforthe Closingbalance
current period currentperiod
Equity portion of
exchangeable bond 431,424,524.07 431,424,524.07
Equity portion of convertible
bond 473,061,264.64 473,061,264.64
Total 904,485,788.71 473,061,264.64 431,424,524.07
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0234 2019AnnualReportofHaierSmartHomeCo.,Ltd.
48. Capital reserve
√Applicable □Not Applicable
Unit and Currency: RMB
Items Openingbalance Increaseforthe Decreaseforthe Closingbalance
current period currentperiod
Capital premium
(Sharepremium) 1,602,447,419.64 3,230,127,891.51 1,196,402,517.09 3,636,172,794.06
Other capital
reserve 849,219,638.01 42,199,128.76 91,700,715.36 799,718,051.41
Total 2,451,667,057.65 3,272,327,020.27 1,288,103,232.45 4,435,890,845.47
The main reasons for the change in share premium: ①the Company converted part of convertiblebonds to shares in the current period, increasing the capital reserve of RMB 2,867,359,081.80; ②capitalreserve increased RMB 22,539,602.81 due to the Company’s adjustments to the expenses from issuanceof D shares in the current period；③acquisition of minority shareholding from subsidiaries in the currentperiod and non-proportional capital injection in subsidiaries in the current period, increasing the sharepremium of RMB 340,229,206.90; reducing the share premium of RMB 1,196,402,517.09.
The main reasons for the change in other capital reserve: Changes on option expenses and otherowner’s equity of the investee accounted for using equity method, which results from proportionatemovement of other capital reserve by the Company.
49. Other comprehensive income
Amounts forthecurrentperiod
Item Opening Amount Less: Attributable Attributable Closing
s balance before incometax totheparent tominority Others balance
current expenses company shareholders
income tax aftertax aftertax
a -66,156,965.02 114,408,934.62 -11,763,456.99 83,635,935.11 19,009,542.52 17,478,970.09
b 39,349,747.72 -50,680,983.58 14,257,780.69 -36,169,378.90 -253,823.99 3,180,368.82
c 754,824,347.90 525,775,557.44 510,494,831.67 15,280,725.77 1,265,319,17597.
d -25,555,254.57 -15,727,336.84 2,556,446.88 -3,089,425.78 -10,081,464.18 -28,644,680.35
e 70,170,471.32 -12,356,776.21 2,806,566.11 -9,515,689.79 -34,520.31 60,654,781.53
Total 772,632,347.35 561,419,395.43 7,857,336.69 545,356,272.31 23,920,459.81 1,317,988,61696.
Notes:
(1) Item a, b, and c are other comprehensive income that will be reclassified to profit or loss, the details are as
follows:Item a represents other comprehensive income classified to profit and loss under the equity method.Item b represents cash flow hedge reserves (the effective part of the cash flow hedge profit and loss).
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0235 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Item c represents exchange differences from translation of foreign currency financial statements.
(2) Item d and e are other comprehensive income that cannot be reclassified into profit or loss. Details are asfollows:
Item d represents the change in fair value of investments in other equity instruments.
Item e represents changes arising from remeasurement of net liabilities or assets of defined benefit plans.50. Surplus reserve
√Applicable □Not Applicable
Unit and Currency: RMB
Items Openingbalance Increaseforthe Decreaseforthe Closingbalance
currentperiod currentperiod
Statutory surplus
reserve 2,240,644,515.51 367,026,088.36 2,607,670,603.87
Discretionary
surplus reserve 26,042,290.48 26,042,290.48
Reserve fund 11,322,880.64 11,322,880.64
Enterprise
expansion fund 10,291,630.47 10,291,630.47
Others
Total 2,288,301,317.10 367,026,088.36 2,655,327,405.46
Pursuant to Company Law of the People’s Republic of China and Articles of Association, theCompany is required to appropriate the statutory surplus reserve at 10% of its net profit.
51. Undistributed profits
√Applicable □Not Applicable
Items Amounts
Undistributed profits at the end of previous year 26,859,741,163.95
Adjustment due to business combination under common control 97,501,518.66
Undistributed profits at the beginning of the year 26,957,242,682.61
Add: net profit attributable to owners of the parent company 8,206,247,105.96
Other transfer in -45,645,291.97
Adjustment due to implementation of enterprise accounting standard -47,362,103.25
Profit available for appropriation for the year 35,070,482,393.35
Less: appropriation of statutory surplus reserve 367,026,088.36
Appropriation of staff incentive and welfare fund
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0236 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Dividend payable for ordinary shares 2,235,334,560.73
Undistributed profits at the end of period 32,468,121,744.26
52. Operating income and operating cost
(1) Operating income
Items Amountforthecurrentperiod Amountforthepreviousperiod
Primarybusiness 199,470,697,570.75 183,286,154,021.37
OtherBusiness 1,291,285,685.82 822,327,937.90
Total 200,761,983,256.57 184,108,481,959.27
(2) Primary business income and primary business cost by product category
Categories Amountforthecurrentperiod Amountforthepreviousperiod
Primary business Primarybusiness Primarybusiness Primarybusiness
income cost income cost
Airconditioner 29,128,360,847.20 20,034,773,426.88 31,772,519,759.44 21,695,248,357.25
Refrigerator 58,437,548,582.46 39,576,846,618.02 54,339,167,693.16 37,841,043,547.32
Kitchenappliance 29,508,925,597.30 20,323,125,202.75 24,950,529,063.08 17,222,856,837.31
Waterappliance 9,623,997,584.95 5,211,758,293.50 9,098,972,704.47 4,935,239,352.51
Washingmachine 44,714,295,068.12 30,082,538,105.52 36,268,485,954.44 23,967,326,298.29
Equipment
product and
integrated channel 28,057,569,890.72 25,180,488,578.94 26,856,478,846.78 24,615,530,049.65
services
Total 199,470,697,570.75 140,409,530,225.61 183,286,154,021.37 130,277,244,442.33
53. Taxes and surcharge
√Applicable □Not Applicable
Unit and Currency: RMB
Items Amountforthecurrentperiod Amountfortheprevious
period
Citymaintenanceandconstructiontax 291,146,530.21 299,636,077.94
Educationsurcharge 177,513,807.70 205,304,971.68
Propertytax 57,458,858.13 74,789,844.32
Landusetax 101,817,438.06 112,099,149.93
Stampduty 121,945,873.71 131,753,308.22
Others 52,162,532.07 44,503,779.57
Total 802,045,039.88 868,087,131.66
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0237 2019AnnualReportofHaierSmartHomeCo.,Ltd.
54. Selling expenses
√Applicable □Not Applicable
Unit and Currency: RMB
Items Amountforthecurrentperiod Amountfortheprevious
period
Sellingexpenses 33,682,126,291.31 28,923,144,934.04
Total 33,682,126,291.31 28,923,144,934.04
The Company’s selling expenses are mainly salary expenses, transportation and storage fees, advertising andpromotion fees, and after-sales expenses.
55. Administrative expenses
√Applicable □Not Applicable
Unit and Currency: RMB
Items Amountforthecurrentperiod Amountfortheprevious
period
Administrativeexpenses 10,113,263,329.25 8,405,151,809.85
Total 10,113,263,329.25 8,405,151,809.85
The Company’s administrative expenses are mainly salary expenses, office fees, depreciation and amortization ofassets fees, etc.
56. R&D expenses
√Applicable □Not Applicable
Unit and Currency: RMB
Items Amountforthecurrentperiod Amountfortheprevious
period
R&Dexpenses 6,266,936,518.17 5,104,647,278.53
Total 6,266,936,518.17 5,104,647,278.53
The Company’s R&D expenses are mainly salary expenses, research and development equipment expenses,inspection and testing fees.
57. Financial expenses
Items Amountforthecurrentperiod Amountfortheprevious
period
Interestexpense 1,747,107,740.65 1,465,865,741.36
Less:interestincome 550,224,661.04 484,742,562.68
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0238 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Less:cashdiscount 162,248,119.74 170,820,924.61
Exchangegainsandlosses -272,402,809.68 -17,784,066.55
Others 130,785,408.67 139,073,454.96
Total 893,017,558.86 931,591,642.48
Interest expenditure in lease liabilities in the current period is RMB 125,139,190.24.58. Other income
Amountforthecurrent Amountfortheprevious Relatedtoassets/
Items period period revenue
Governmentgrants 1,209,403,624.81 873,868,769.14 Relatedtorevenue
Governmentgrants 72,809,404.72 58,392,290.38 Relatedtoassets
Total 1,282,213,029.53 932,261,059.52
59. Investment income (losses are represented by ‘-’)
Items Amountforthecurrentperiod Amountfortheprevious
period
Long-term equity investments income
calculatedbytheequitymethod 1,409,211,965.00 1,325,588,165.74
Investment income from disposal of long-term
equityinvestments 3,823,762,154.68 259,839,279.75
Investment income from disposal of other
equityinstrumentinvestments 2,536,466.62 206,586.42
Investment income from other equity
instrumentinvestmentsduringholdingperiod 39,133,293.28 105,245,136.33
Incomefromwealthmanagementproducts 168,169,628.59 103,868,032.82
Investment income from disposal of financial
assets measured at fair value with changes 36,725,976.17 129,824,011.48
includedincurrentprofitandloss
Total 5,479,539,484.34 1,924,571,212.54
60. Gains on changes in fair value (losses are represented by ‘-’)
Items Amountforthecurrentperiod Amountfortheprevious
period
Change in fair value of forward foreign
exchange trading contracts 72,176,324.08 -151,334,742.90
Changes in fair value of wealth management
products 19,675,848.00 8,697,646.20
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0239 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Others -15,135,204.55 -2,554,626.79
Total 76,716,967.53 -145,191,723.49
61. Credit impairment loss
√Applicable □Not Applicable
Unit and Currency: RMB
Items Amountforthecurrentperiod Amountforthepreviousperiod
Impairmentlossesoncontractassets -3,654,196.27
Bad debts losses on accounts receivable -131,659,422.73 -99,632,377.38
Impairment losses on bills receivable -15,056,696.60
Total -150,370,315.60 -99,632,377.38
62. Impairment loss on assets (losses are represented by ‘-’)
Items Amountforthecurrentperiod Amountforthepreviousperiod
Impairmentlossesoninventory -576,400,805.50 -555,735,594.59
Impairment losses on other current assets -218,016,000.43 -168,488,659.35
Impairment losses on fixed assets -1,328,135.45 -8,740,858.30
Impairment losses on intangible assets
Impairment losses on construction in
progress -9,619,271.50 -23,104,150.01
Impairment losses on long-term equity
investment -55,214,487.73 -6,445,101.57
Total -860,578,700.61 -762,514,363.82
63. Gains on disposal of assets (losses are represented by ‘-’)
Items Amountforthecurrentperiod Amountfortheprevious
period
Gainsondisposalofnon-currentassets 501,274,953.38 366,499,751.21
Less:lossesondisposalofnon-currentassets 15,547,325.37 98,747,317.01
Total 485,727,628.01 267,752,434.20
64. Non-operating income
Items Amountforthecurrentperiod Amountfortheprevious
period
Gains on disposal of non-current assets 638,713.73 816,958.25
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0240 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Quality claims and fines 278,824,898.94 355,961,563.89
Others 111,507,936.07 123,018,274.61
Total 390,971,548.74 479,796,796.75
65. Non-operating expenses
Items Amountforthecurrentperiod Amountfortheprevious
period
Lossesondisposalofnon-currentassets 89,405,090.32 54,178,221.66
Others 120,401,550.50 182,142,071.76
Total 209,806,640.82 236,320,293.42
66. Income tax expenses
(1) Statement of income tax expenses
√Applicable □Not Applicable
Unit and Currency: RMB
Items Amountforthecurrentperiod Amountforthepreviousperiod
Current incometaxexpense 1,708,340,696.65 1,568,256,118.41
Deferredincometaxexpense 587,875,584.21 313,586,934.15
Total 2,296,216,280.86 1,881,843,052.56
(2) Reconciliation between accounting profit and income tax expenses
√Applicable □Not Applicable
Unit and Currency: RMB
Items Amount
Totalprofit 14,630,608,797.96
Incometaxexpensecalculatedpursuantto
statutory/applicable taxrate(s) 3,657,652,199.49
Impact fromdifferenttaxratesapplicabletosubsidiaries -865,824,754.94
Impact fromadjustmenttoincometaxinpriorperiods -261,092,921.04
Impact fromnon-taxableincome -376,022,237.79
Impact fromnon-deductiblecost,expenseandloss 127,655,871.63
Impactfromdeductibleprovisionaldifferencesor
deductiblelossesofunrecognizeddeferredtaxassets 13,848,123.51
fromthisperiod
Income taxexpense 2,296,216,280.86
Other explanations:
□Applicable √Not Applicable
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0241 2019AnnualReportofHaierSmartHomeCo.,Ltd.
67. Other comprehensive income
√Applicable □Not Applicable
Please refer to Note VII.49 for details68. Cash received from other operating activities
Items Amount
Deposits and securities 152,758,721.32
Government grants 1,132,443,779.89
Non-operating income excluding government grants 189,272,236.82
Interest income 487,927,913.74
Payment for collection and payment transfer 162,500,402.61
Others 9,167,544.89
Total 2,134,070,599.27
69. Cash paid to other operating activities
Items Amount
Cash paid on selling expenses 13,602,405,217.00
Cash paid on administrative and R&D expenses 6,045,972,512.21
Cash paid on financial expenses 91,648,773.63
Non-operating expenses 40,584,413.95
Deposits and securities 72,513,950.34
Others 22,990,121.16
Total 19,876,114,988.29
70. Other cash received from investing activities
Items Amount
Net cash received from acquisition of subsidiaries 4,628,544.73
Total 4,628,544.73
71. Other cash paid to investing activities
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0242 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Items Amount
Net cash paid to disposal of subsidiaries 951,463,168.22
Others 259,392.53
Total 951,722,560.75
72. Other cash received from financing activities
Items Amount
Others 2,751,630.60
Total 2,751,630.60
73. Other cash paid to financing activities
Items Amount
Payment of public issuance fee 8,547,229.30
Share repurchase 65,901,807.36
Acquisition of minority shareholding 723,436,676.46
Lease payment 892,757,440.57
Others 2,395,602.46
Total 1,693,038,756.15
74. Supplementary information of cash flow
Netprofitadjustedtocashflowof Amountforthecurrentperiod Amountforthepreviousperiod
operating activities
1.Netprofit 12,334,392,517.10 9,899,651,980.10
Add:impairmentprovisionforassets 1,010,949,016.21 862,146,741.20
Depreciationoffixedassets 3,766,641,387.29 2,560,302,067.47
Amortizationofintangibleassets 786,513,629.57 555,797,458.00
Amortizationoflong-termprepaidexpenses 110,134,513.81 40,540,358.80
Lossesondisposaloffixedassets,intangible
assets and other long-term assets (‘-’ -396,961,251.42 -214,439,336.05
represents‘gains’)
Loss and gains on change of fair value (‘-’
represents‘gains’) -76,716,967.53 145,191,723.49
Financialexpenses(‘-’represents‘gains’) 1,474,704,930.97 1,375,994,530.95
Lossoninvestments(‘-’represents‘gains’) -5,479,539,484.34 -1,922,576,743.62
Decreaseindeferredtaxassets(‘-’represents 631,902,444.76 42,303,181.71
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0243 2019AnnualReportofHaierSmartHomeCo.,Ltd.
‘increase’)
Increase of deferred tax liabilities (‘-’
represents‘decrease’) -44,026,860.55 271,283,752.45
Decrease in inventories (‘-’ represents
‘increase’) -3,949,038,184.52 -676,571,288.53
Decrease of operational account receivables
(‘-’represents‘increase’) -908,459,449.72 2,056,031,787.77
Increaseof operational account payables (‘-’
represents‘decrease’) 5,705,533,226.59 4,296,694,514.79
Others 116,601,474.51 -149,568,247.33
Net cash flow generated from operational
activities 15,082,630,942.73 19,142,782,481.20
2．Significant investment and financing
activities not involving cash inflows and
outflows:
Capitaltransferredfromdebts 2,605,447,744.16
Convertible corporate bonds due within one
year
Fixedassetsunderfinancelease
3．Netchangesofcashandcashequivalents:
Cashbalanceattheendoftheperiod 34,962,947,399.85 36,560,925,755.10
Less: cash balance at the beginning of the
period 36,560,925,755.10 35,292,343,292.53
Add: cash equivalents balance at the end of
theperiod
Less: cash equivalents balance at the
beginningoftheperiod
Netincreaseofcashandcashequivalents -1,597,978,355.25 1,268,582,462.57
75. Cash and cash equivalents
Items Closingbalance Openingbalance
I.Cash 34,962,947,399.85 36,560,925,755.10
Including:Cashonhand 7,556,892.38 1,380,614.79
Bankdepositsalwaysavailableforpayment 34,502,656,877.99 36,041,217,337.30
Other monetary funds always available for
payment 452,733,629.48 518,327,803.01
II.Cashequivalents -
Including: bond investments due within
threemonths -
III. Closing balance of cash and cash
equivalents 34,962,947,399.85 36,560,925,755.10
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0244 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Including: restricted cash and cash
equivalents the used by the parent or
subsidiariesoftheGroup
76. Monetary items in foreign currency
ClosingBalance OpeningBalance
Items Balancein Exchange Balancein Exchange
foreigncurrency rate BalanceinRMB foreigncurrency rate BalanceinRMB
Monetary funds
USD 730,666,614.19 6.9762 5,097,276,433.90 1,068,031,791.21 6.8632 7,330,115,789.42
EUR 151,676,201.42 7.8155 1,185,425,352.21 48,497,251.17 7.8473 380,572,479.12
JPY 3,356,863,028.27 0.064086 215,127,924.03 2,269,981,380.74 0.061887 140,482,337.71
HKD 745,289,079.40 0.8958 667,629,957.33 626,595,586.45 0.8762 549,023,052.85
Others 2,043,389,309.90 1,381,212,756.03
Subtotal 9,208,848,977.37 9,781,406,415.13
Accounts receivables
USD 269,987,662.70 6.9762 1,883,487,932.50 344,469,847.01 6.8632 2,364,165,453.98
EUR 325,463,066.35 7.8155 2,543,656,595.07 56,772,642.74 7.8473 445,511,959.37
JPY 3,829,608,370.79 0.064086 245,424,282.05 4,349,404,743.03 0.061887 269,171,611.33
Others 2,931,185,158.50 2,186,781,156.28
Subtotal 7,603,753,968.12 5,265,630,180.96
Short-term borrowings
USD 521,126,042.56 6.9762 3,635,479,498.10 492,713,050.43 6.8632 3,381,588,207.73
EUR 320,772,912.41 7.8155 2,507,000,696.91 9,554,106.32 7.8473 74,973,938.51
JPY 6,656,569,078.27 0.064086 426,592,885.95 3,084,656,064.62 0.0619 190,940,210.40
Others 66,592,438.54 30,737,573.90
Subtotal 6,635,665,519.50 3,678,239,930.54
Accounts payables
USD 1,219,489,898.22 6.9762 8,507,405,427.96 807,248,013.94 6.8632 5,540,304,569.25
EUR 421,042,022.97 7.8155 3,290,653,930.56 11,066,031.53 7.8473 86,838,469.23
JPY 5,988,441,245.39 0.064086 383,775,245.65 3,127,541,332.15 0.0619 193,594,808.46
NZD 147,674,519.27 4.6973 693,671,519.36
Others 1,735,111,878.01 1,546,898,716.82
Subtotal 14,610,618,001.45 7,367,636,563.76
Non-current liabilities due in one year
USD 692,201,069.75 6.9762 4,828,933,102.79 409,319,900.19 6.8632 2,809,244,338.98
244 / 308
0245 2019AnnualReportofHaierSmartHomeCo.,Ltd.
EUR 104,804,376.00 7.8155 819,098,600.63
JPY 1,923,050,313.62 0.064086 123,240,602.40
RUB 183,707,445.72 0.112600 20,685,458.39 2,087,381,000.00 0.0986 205,815,766.60
Others 278,535,431.52
Subtotal 6,070,493,195.73 3,015,060,105.58
Long-term borrowings
USD 876,451,371.56 6.9762 6,114,300,058.28 2,208,809,964.66 6.8632 15,159,504,549.54
EUR 712,443,399.37 7.8155 5,568,101,387.80
RUB 500,000,010.04 0.112600 56,300,001.13
NZD 319,915,612.92 4.6973 1,502,739,608.57
JPY 4,327,558,051.70 0.0619 267,875,843.40
Others 22,348,282.12 72,878,712.37
Subtotal 13,263,789,337.09 15,500,259,105.22
VIII. Changes of consolidation scope
1. Business combination not under common control
√Applicable □Not Applicable
（1）Business consolidation not under common control occurring in the current period
√Applicable □Not Applicable
Unit and Currency: RMB
Inter Equit Recogniti Acquiree’s Acquiree’snet
Name Timeof Equity est y Equity on revenuefrom profitfrom
of equity acquisition acqui acqui acquisit basisof acquisition acquisitiondate
acquiree acquisiti cost red sition ion acquisiti datetothe totheendof
on (%) meth date on endofthe theperiod
od dates period
EUR Sharehold
Candy January 467,211,4 100 Acqui January ing EUR EUR
S.p.A 2019 98.32 sition 2019 transferre 1,365,407,949.00 -15,773,523.4
d
Shanghai
Firs Sharehold
Internati March 25,950,868.35 51 Acqui March ing 101,475,377.35 1,577,204.07
onal 2019 sition 2019 transferre
Logistics d
Co.,Ltd.
（2）Combination cost and goodwill
245 / 308
0246 2019AnnualReportofHaierSmartHomeCo.,Ltd.
ShanghaiFirs
Items CANDYS.p.A（EUR） InternationalLogistics
Co.,Ltd.
------Cash 467,211,498.32 20,000,000.00
------Contingentconsideration 5,950,868.35
Totalcombinationcost 467,211,498.32 25,950,868.35
Less: fair value of identifiable net
assetsacquired 207,211,500.32 4,865,433.94
Goodwill 259,999,998.00 21,085,434.41
（3）Acquiree’s identifiable assets and liabilities at acquisition date
CandyS.p.A
Items
Fair value(EUR) BookValue(EUR)
Monetaryfunds 124,315,613.00 124,315,613.00
Accountsreceivable 167,835,082.00 167,835,082.00
Otherreceivables 79,933,406.00 79,933,406.00
Inventories 249,471,277.00 249,471,277.00
Long-termequityinvestments 4,716,766.00 4,716,766.00
Fixedassets 181,718,451.87 140,988,930.00
Constructioninprogress 7,379,785.00 7,379,785.00
Intangibleassets 228,158,310.53 48,423,547.00
Goodwill 6,094,796.00
Deferredincometaxassets 33,253,774.00 33,253,774.00
Othernon-currentassets 10,427,618.00 10,427,618.00
Accountspayable -386,867,873.00 -386,867,873.00
Taxespayable -18,425,859.00 -18,425,859.00
Otherpayables -89,711,804.00 -89,711,804.00
Contractliabilities -1,779,450.00 -1,779,450.00
Bankborrowings -267,753,271.00 -267,753,271.00
Long-termpayables -16,232,217.00 -16,232,217.00
Deferredincometaxliabilities -83,159,393.78 -22,692,115.00
Othernon-currentliabilities -12,750,413.30 -12,750,413.30
Netassets 210,529,802.32 56,627,591.70
Less：Minorityequityinterests -3,318,302.00 -3,318,302.00
Netassetsobtained 207,211,500.32 53,309,289.70
Items ShanghaiFirsInternationalLogisticsCo.,Ltd.
246 / 308
0247 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Fair value BookValue
Monetaryfunds 4,628,544.73 4,628,544.73
Accountsreceivable 58,534,640.84 58,534,640.84
Billsreceivable 1,868,857.04 1,868,857.04
Otherreceivables 9,655,435.06 9,655,435.06
Prepayments 4,207,402.80 4,207,402.80
Fixedassets 1,856,760.06 1,856,760.06
Intangibleassets 2,346,858.39 2,346,858.39
Othercurrentassets 2,989,330.42 2,989,330.42
Short-termborrowings -15,026,666.63 -15,026,666.63
Accountspayable -15,269,603.51 -15,269,603.51
Taxespayable -67,637.73 -67,637.73
Payablesforstaff’sremuneration -1,551,221.84 -1,551,221.84
Expectedrefundliabilities–shortterm -1,540,316.20 -1,540,316.20
Otherpayables -38,495,776.20 -38,495,776.20
Contractliabilities -2,810,706.25 -2,810,706.25
Othercurrentliabilities -1,785,834.44 -1,785,834.44
Netassets 9,540,066.54 9,540,066.54
Less：Minorityequityinterests 4,674,632.60 4,674,632.60
Netassetsobtained 9,540,066.54 9,540,066.54
2. Business combination under common control
√Applicable □Not Applicable
（1）Business consolidation under common control occurring in the current period
% ofinterest Basisfor
acquiredfrom recognitionas Acquisiti Recognitionbasisof
Nameofacquiree business business ondate acquisitiondates
combination combinationunder
common control
Rights and obligations
Haier Energy Power Controlled by Haier related to target
Company（海尔能源动力公 100.00% Group before and December shareholding have
司） after the transaction 2019 been transferred to the
Company
Qingdao Penghai Software Controlled by Haier Rights and obligations
Co., Ltd.（青岛鹏海软件有 60.01% Group before and December related to target
限公司） after the transaction 2019 shareholding have
been transferred to the
247 / 308
0248 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Company
Controlled by Haier Rights and obligations
Qingdao HSW Water related to target
Appliance Co., Ltd.(青岛海 51.00% Group before and July 2019 shareholding have
施水设备有限公司) after the been transferred to the
combination Company
Qingdao RRS Health Controlled by Haier Rights and obligations
Industry Development Co., Group before and September related to target
100.00% shareholding haveLtd.（青岛日日顺健康产业 after the 2019
发展有限公司） combination been transferred to the
Company
(Continued)
Incomeofthe Netprofitofthe Netprofitof
acquireefromthe acquireefromthe Incomeofthe theacquiree
Nameofacquiree beginningofthe beginningofthe acquireeduring duringthe
current consolidation currentconsolidation thecomparison comparison
period tothe periodtothe period period
consolidation date consolidationdate
Haier Energy Power Company
（海尔能源动力公司） 2,145,366,527.27 28,408,895.99 960,550,566.28 21,319,300.11
Qingdao Penghai Software Co.,
Ltd.（青岛鹏海软件有限公司） 53,937,834.68 -637,588.98 48,272,473.02 269,456.54
Qingdao HSW WaterAppliance
Co., Ltd.(青岛海施水设备有限 555,339,560.27 59,632,695.06 1,030,732,895.20 107,441,598.99
公司)
Qingdao RRS Health Industry
Development Co., Ltd.（青岛日 71,172.92 21,763.45
日顺健康产业发展有限公司）
（2）Combination cost
Combination cost ------Cash ------Equity
Haier EnergyPower Company（海尔能源动力公
司） 10,952,820.00 375,540,417.00
Qingdao Penghai Software Co., Ltd.（青岛鹏海
软件有限公司） 13,764,733.74
Qingdao HSWWaterApplianceCo., Ltd.(青岛海
施水设备有限公司) 1,073,523,786.00
Qingdao RRS Health Industry Development Co.,
Ltd.（青岛日日顺健康产业发展有限公司） 34,000,000.00
（3）Assets and book value of liabilities of acquirees at the acquisition date
248 / 308
0249 2019AnnualReportofHaierSmartHomeCo.,Ltd.
HaierEnergy PowerCompany（海尔能源动力公司）
Items
Acquisitiondate Attheendofthepreviousperiod
Monetaryfunds 232,991,873.09 198,236,920.21
Accountsreceivable 204,290,938.20 165,244,805.51
Othercurrentassets 8,939,377.48 6,275,566.78
Long-termequityinvestments 31,744,965.01 30,236,343.95
Fixedassets 72,726,222.28 71,590,500.86
Constructioninprogress 823,632.76 155,855.86
Right-of-useasset 7,872,891.10
Intangibleassets 22,500,248.79 1,116,154.70
Long-termprepaidexpenses 133,918.92 333,286.59
Deferredincometaxassets 1,089,044.63 613,047.45
Othernon-currentassets 5,000,000.00 5,000,000.00
Less:Accountspayable -306,879,746.78 -247,660,771.27
Lease liabilities -5,853,684.09
Netassets 275,379,681.39 231,141,710.64
Less：Minorityequityinterests -8,712,060.00 -8,525,998.71
Netassetsobtained 266,667,621.39 222,615,711.93
(Continued)
Qingdao PenghaiSoftwareCo.,Ltd.（青岛鹏海软件有限公司）
Items Acquisitiondate Attheendofthepreviousperiod
Monetaryfunds 14,118,590.14 14,577,418.33
Accountsreceivable 9,153,105.73 6,626,920.13
Inventories 1,753,294.87 6,728,189.70
Othercurrentassets 393,790.77
Long-termequityinvestments 5,332,640.10
Fixedassets 41,145.86 80,978.11
Constructioninprogress 2,215,336.02
Intangibleassets 53,041.66
Long-termprepaidexpenses 192,251.44 415,854.08
Less:Accountspayable -17,775,931.03 -16,500,589.13
Short-term borrowings -1,080,000.00
Deferred income -3,000,000.00
Netassets 11,344,223.90 11,981,812.88
Less：Minorityequityinterests -4,536,555.14 -4,791,526.97
249 / 308
0250 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Netassetsobtained 6,807,668.76 7,190,285.91
(Continued)
Qingdao HSWWaterApplianceCo.,Ltd.(青岛海施水设备有限公司)
Items
Acquisitiondate Attheendofthepreviousperiod
Monetaryfunds 590,482,485.31 674,880,628.00
Accountsreceivable 146,130,180.06 163,200,236.59
Inventories 32,822,791.71 27,054,260.10
Othercurrentassets 17,115,267.62 9719654.998
Financialassetsheldfortrading 112,753,343.84
Fixedassets 1,837,503.78 1,775,179.43
Constructioninprogress 3,092,660.27
Intangibleassets 33,820,632.52 35,902,739.85
Deferredincometaxassets 4,068,633.12 5,865,306.00
Goodwill 83,174,470.00 83,174,470.00
Less:Accountspayable -553,566,644.96 -554,475,065.34
Taxes payable -707,540.96 -4,700,680.72
Payables forstaff’s
remuneration -8,419,330.56 -11,785,210.88
Other currentliabilities -22,637,806.31 -23,220,521.87
Netassets 439,966,645.44 407,390,996.16
Less：Minorityequityinterests -215,583,656.27 -199,621,588.12
Netassetsobtained 224,382,989.17 207,769,408.04
(Continued)
Qingdao RRS HealthIndustry DevelopmentCo.,Ltd（.青岛日日顺健
Items 康产业发展有限公司）
Acquisitiondate Attheendofthepreviousperiod
Monetaryfunds 24,741,203.38 26,866,137.10
Accountsreceivable 5,359,225.00 3,168,812.50
Othercurrentassets 607.99 485.66
Less:Accountspayable -8,100.00 -7,500.00
Taxes payable -6,171.81
Netassets 30,092,936.37 30,021,763.45
Less：Minorityequityinterests
Netassetsobtained 30,092,936.37 30,021,763.45
250 / 308
0251 2019AnnualReportofHaierSmartHomeCo.,Ltd.
3. Disposal of subsidiary
When single disposal of the investment in a subsidiary lead to the loss of control:
CixiYunlianBailingLogistics QingdaoHaier
Items Co.,Ltd. GoodaymartLogisticCo.,
Ltd.
Equitydisposalprice 1,000,000.00 6,450,442,686.39
Proportionofequitydisposal 51% 9.38%
Methodofequitydisposal Disposal Disposal
Timeofloss-of-control January2019 July2019
Basisfordeterminationthetimeofloss-of-control Transfer Regulatoryapproval
Differencebetweenconsiderationanditsshareofnet
assets of the subsidiary as respect to the disposal in -3,515,418.58 3,827,277,573.26
theconsolidatedlevel
4. Disclosure of discontinued operation
The disposal of Qingdao Haier Goodaymart Logistic Co., Ltd. by the Company’s subsidiary in the
current period constitutes discontinued operation. The relevant financial information is disclosed as
follows:
（1）Profit or loss from discontinued operation
①Net profit from discontinued operation (net losses are represented by ‘-’)
Items Forthecurrentperiod Thecorrespondingperiodofthe
previous year
Operatingincome 4,907,810,524.82 10,144,305,216.56
Less:costandothers 4,710,367,482.14 9,688,228,315.31
Totalprofit 197,443,042.68 456,076,901.25
Less:incometaxexpense 46,936,990.15 88,810,623.74
Netprofit 150,506,052.53 367,266,277.51
②Profit or loss from disposal of discontinued operation
Items Forthecurrentperiod Thecorrespondingperiodofthe
previous year
Total profit or loss from disposal
ofdiscontinuedoperation 3,827,277,573.26 -
Less:incometaxexpense 664,918,329.45 -
Netprofitorlossfromdisposalof
discontinuedoperation 3,162,359,243.81 -
（2）Cash flow from discontinued operation
251 / 308
0252 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Items Forthecurrentperiod Thecorrespondingperiodofthe
previous year
Cashflowofoperatingactivities -160,498,574.34 182,479,576.60
Cashflowofinvestingactivities 19,567,060.81 -1,726,012,100.47
Cashflowoffinancingactivities -283,463,745.83 406,868,319.55
（3）Net profit from discontinued operation
Items Forthecurrentperiod Thecorrespondingperiod
ofthepreviousyear
Net profit from discontinued operation (net
lossesarerepresentedby‘-’) 3,312,865,296.34 367,266,277.51
Netprofitattributableto
shareholdersoftheParentCompany 1,491,299,457.32 92,880,683.65
Net profit attributable to minority
shareholders 1,821,565,839.02 274,385,593.86
Changes of consolidation scope due to other reasons
5. Changes of consolidation scope due to other reasons
√Applicable □Not Applicable
（1）Qingdao Haier Intelligent Electronics Co., Ltd., a subsidiary of the Company, established asubsidiary Qingdao Haiduv Health Technology Co., Ltd. for the period with a total shareholding of 70%at the end of the period.
（2）Qingdao Haier Technology Investment Co., Ltd., a subsidiary of the Company established asubsidiary Qingdao Jijia Cloud Intelligent Technology Co., Ltd. for the period with a total shareholdingof 80% at the end of the period.
（3）Haier Digital Technology (Qingdao) Co., Ltd（. 海尔数字科技（青岛）有限公司）, a subsidiaryof the Company, established a wholly-owned subsidiary Haier Digital Technology (Guangzhou) Co., Ltd.（海尔数字科技（广州）有限公司）for the period.
（4）Haier Digital Technology (Qingdao) Co., Ltd（. 海尔数字科技（青岛）有限公司）, a subsidiaryof the Company, established a wholly-owned subsidiary Xiong’an Haier Digital Technology Co., Ltd.（雄安海尔数字科技有限公司）for the period.
（5）Chongqing Haier Electronics Sales Co., Ltd., a subsidiary of the Company, established awholly-owned subsidiary Qingdao Haimeihui Management Consulting Co., Ltd.（青岛海美汇管理咨询有限公司） for the period.
（6）Qingdao Yunshang Yuyi IOT Technology Co., Ltd.（青岛云裳羽衣物联科技有限公司）, asubsidiary of the Company, established a wholly-owned subsidiary Wuxi Yunshang Internet of ClothingTechnology Co., Ltd.（无锡云裳衣联网科技有限公司）for the period.
252 / 308
0253 2019AnnualReportofHaierSmartHomeCo.,Ltd.
（7）Qingdao Haier Intelligent Technology Development Co., Ltd., a subsidiary of the Company,established a wholly-owned subsidiary Qingdao Guochuang Intelligent Household Appliance ResearchInstitute Co., Ltd.（青岛国创智能家电研究院有限公司） for the period.
（8）Qingdao Haier Moulds Co., Ltd., a subsidiary of the Company, established a subsidiaryShenyang Haichen Zhilian Technology Co., Ltd.（沈阳海辰智联科技有限公司） for the period with atotal shareholding of 60% at the end of the period.
（9）Qingdao Yunshang Yuyi IOT Technology Co., Ltd.（青岛云裳羽衣物联科技有限公司）, asubsidiary of the Company established a subsidiary Hangzhou Gandao Intelligent Technology Co., Ltd.（杭州甘道智能科技有限公司） for the period with a total shareholding of 60% at the end of theperiod.
253 / 308
0254 2019AnnualReportofHaierSmartHomeCo.,Ltd.
IX. Interests in other entities
1. Interests in subsidiaries
(1) Composition of the Group
Place Shareholding Proporti
Principal of Natureof onofthe
Nameofsubsidiary placeof registrati business Direct Indirect voting Method
business on rights
Group
company,which
mainlyengage
ininvestment Business
Mainland holding,the combinat
Haier Electronics ofChina production and ion
GroupCo.,Ltd. andHong Bermuda sale of 14.00% 31.87% 57.87% under
Kong washing common
machines and control
waterheaters,
distribution
serviceand
logisticsservice
Group
TheUS company,which
WonderGlobal(BVI) andother British mainlyengagein Establish
InvestmentLimited overseas Virgin homeappliances 100.00% 100.00% ment
areas Islands production and
distribution
business
Group Business
Singapore company,which combinat
Haier Singapore andother mainlyengagein ion
Investment Holding overseas Singapore homeappliances 100.00% 100.00% under
Co.,Ltd. areas production and common
distribution control
business
Group Business
company,which combinat
HaierNewZealand New New mainlyengaged ion
InvestmentHolding Zealand Zealand in the 100.00% 100.00% under
CompanyLimited production and common
distribution of control
homeappliances
0255 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Group Business
company,which combinat
mainlyengaged ion
CandyS.p.A Europe Italy in the 100.00% 100.00% not
production and under
distribution of common
homeappliances control
Business
Qingdao Haier Air Qingdao Qingdao Manufacture combinat
Conditioner Gen High-tech High-tech andsale of 100.00% 100.00% ion
Corp.,Ltd. Zone Zone household under
air-conditioners common
control
Huichuan Huichuan Business
District, District, Manufacture combinat
GuizhouHaier Zunyi Zunyi andsaleof 59.00% 59.00% ion
ElectronicsCo.,Ltd.. City, City, refrigerator under
Guizhou Guizhou common
Province Province control
Business
Hefei Haier Hefei Hefei Manufacture combinat
Air-conditioning Co., Haier Haier andsale of 100.00% 100.00% ion
Limited Industrial Industrial air-conditioners under
Park Park common
control
Business
Wuhan Wuhan Manufacture combinat
Wuhan Haier Haier Haier andsale of 60.00% 60.00% ion
ElectronicsCo.,Ltd. Industrial Industrial air-conditioners under
Park Park common
control
Business
Qingdao Haier Qingdao Qingdao Manufacture combinat
Air-Conditioner Developm Developm andsale of 100.00% 100.00% ion
ElectronicsCo.,Ltd. entZone entZone air-conditioners under
common
control
Business
QingdaoHaier Qingdao Qingdao Manufacturing combinat
InformationPlastic High-tech High-tech ofplastic 100.00% 100.00% ion
Development Co., Zone Zone products under
Ltd. common
control
0256 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Business
Dalian Haier Dalian Dalian Manufacture combinat
PrecisionProductsCo., Export Export andsale of 90.00% 90.00% ion
Ltd. Expressin Expressin preciseplastics under
gZone gZone common
control
Hefei Hefei Business
Economic Economic combinat
Hefei Haier Plastic & & Manufacture ion
Co.,Ltd. Technolo Technolo andsaleofplastic 94.12% 5.88% 100.00% under
gical gical parts common
Developm Developm control
ent Area entArea
Business
Qingdao Qingdao R&D and combinat
QingdaoHaierMoulds High-tech High-tech manufacture of 75.00% 25.00% 100.00% ion
Co.,Ltd. Zone Zone precise mold under
andproduct common
control
Manufacture of Business
Qingdao Meier Qingdao Qingdao plastic powder, combinat
PlasticPowderCo., Developm Developm plastic sheet 40.00% 60.00% 100.00% ion
Ltd. entZone entZone and under
high-performance common
coatings control
Plastic Business
Chongqing Haier Jiangbei Jiangbei products,sheet combinat
PrecisionPlasticCo., District, District, metal work, 90.00% 10.00% 100.00% ion
Ltd. Chongqin Chongqin electronics and under
g City gCity hardware common
control
Manufacture Business
Chongqing Haier Jiangbei Jiangbei andsale of combinat
Intelligent District, District, electronicsand 90.00% 10.00% 100.00% ion
Electronics Co.,Ltd. Chongqin Chongqin automaticcontrol under
g City gCity system common
equipment control
Business
Qingdao Qingdao R&D, combinat
Qingdao Haier High-tech High-tech manufactureand 100.00% 100.00% ion
Robot Co.,Ltd. Zone Zone saleofrobot under
common
control
0257 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Qingdao Qingdao Manufacture
QingdaoHaier High-tech High-tech andproduction 100.00% 100.00% Establish
RefrigeratorCo.,Ltd. Zone Zone offluorine-free ment
refrigerators
QingdaoHaier Pingdu Pingdu
Refrigerator Developm Developm Manufacture of Establish
(International)Co., ent ent refrigerators 100.00% 100.00% ment
Ltd. Zone, Zone,
Qingdao Qingdao
Qingdao Household Research and
Appliance Qingdao Qingdao development of
Technology and High-tech High-tech home 100.00% 100.00% Establish
Equipment Research Zone Zone appliancesmold ment
Institute andtechnological
equipment
Research,
Qingdao Haier Qingdao Qingdao development
Whole SetHome High-tech High-tech andsales of 98.33% 98.33% Establish
Appliance Service Zone Zone health-related ment
Co.,Ltd. smallhome
appliance
Qingdao Haier Qingdao Qingdao Design, R&D
IntelligentElectronics High-tech High-tech ofelectronics 100.00% 100.00% Establish
Co.,Ltd. Zone Zone andautomatic ment
controlsystem
Qingdao Haier Qingdao Qingdao Manufacture
SpecialRefrigerator Developm Developm andsales of 100.00% 100.00% Establish
Co.,Ltd. entZone entZone fluorine-free ment
refrigerators
Qingdao Qingdao Manufactureof
Qingdao Haier Developm Developm dishwashing 100.00% 100.00% Establish
DishwasherCo.,Ltd. entZone entZone machineandgas ment
stove
Research,
manufacture
Qingdao Haier Qingdao Qingdao andsales of Establish
SpecialFreezerCo., Developm Developm freezer and 96.06% 96.06% ment
Ltd. entZone entZone other
refrigeration
products
Dalian Haier Dalian Dalian Air conditioner Establish
Air-conditioningCo., Export Export processing and 90.00% 90.00% ment
Ltd. Expressin Expressin manufacturing
0258 2019AnnualReportofHaierSmartHomeCo.,Ltd.
gZone gZone
Dalian Dalian Refrigerator
DalianHaier Export Export processing and 90.00% 90.00% Establish
RefrigeratorCo.,Ltd. Expressin Expressin manufacturing ment
gZone gZone
Development,
Qingdao Haier Qingdao Qingdao assembling and
ElectronicPlasticCo., Developm Developm sales of 80.00% 80.00% Establish
Ltd. entZone entZone plastics, ment
electronics and
products
Wuhan Wuhan
Economic Economic
& & Research,
Technolo Technolo manufactureand
Wuhan Haier gical gical salesoffreezer Establish
Freezer Co.,Ltd. Developm Developm andother 95.00% 5.00% 100.00% ment
ent Zone entZone refrigeration
High-tech High-tech products
Industrial Industrial
Park Park
Develop,
Qingdao Haidarui Qingdao Qingdao purchaseand Establish
Procurement Service High-tech High-tech sell electrical 98.00% 2.00% 100.00% ment
Co.,Ltd. Zone Zone products and
components
Development
andapplication
Qingdao Haier ofhome
IntelligentHome Qingdao Qingdao appliances, Establish
ApplianceTechnology High-tech High-tech communication, 98.91% 1.09% 100.00% ment
Co.,Ltd. Zone Zone electronics and
network
engineering
technology
Chongqing Haier Jiangbei Jiangbei Manufacture
Air-conditioningCo., District, District, andsales of 76.92% 23.08% 100.00% Establish
Ltd. Chongqin Chongqin airconditioners ment
g City gCity
Qingdao Haier Qianwang Qianwang Development
PrecisionProductsCo., angRoad, angRoad, andmanufacture 70.00% 70.00% Establish
Ltd. Jiaonan Jiaonan ofprecise ment
City City plastic,metal
0259 2019AnnualReportofHaierSmartHomeCo.,Ltd.
plate, moldand
electronic
products for
home
appliances
Qingdao Haier Air Jiaonan Jiaonan Manufacture of
Conditioning City, City, home 100.00% 100.00% Establish
EquipmentCo.,Ltd. Qingdao Qingdao appliances and ment
electronics
Dalian Free Trade Dalian Dalian
ZoneHaier Export Export Domestictrade 100.00% 100.00% Establish
Air-conditioning Expressin Expressin ment
TradingCo.,Ltd. gZone gZone
Dalian Free Trade Dalian Dalian
ZoneHaier Export Export Domestictrade 100.00% 100.00% Establish
Refrigerator Trading Expressin Expressin ment
Co.,Ltd. gZone gZone
Qingdao Ding Xin Qingdao Qingdao Manufacturing
Electronics Developm Developm andsalesof 100.00% 100.00% Establish
TechnologyCo.,Ltd. entZone entZone electronic ment
components
Chongqing Haier Jiangbei Jiangbei
ElectronicsSalesCo., District, District, Salesofhome 95.00% 5.00% 100.00% Establish
Ltd. Chongqin Chongqin appliances ment
g City gCity
Chongqing Haier Jiangbei Jiangbei Processingand
Refrigeration District, District, manufacturingof 84.95% 15.05% 100.00% Establish
ApplianceCo.,Ltd. Chongqin Chongqin refrigerator ment
g City gCity
Hefei Hefei Processing and
Hefei Haier Haier Haier manufacturing 100.00% 100.00% Establish
RefrigeratorCo.,Ltd. Industrial Industrial ofrefrigerator ment
Park Park
Wuhan Haier Wuhan Wuhan
Energy andPower Haier Haier Energyservice 75.00% 75.00% Establish
Co.,Ltd. Industrial Industrial ment
Park Park
Qingdao Haier Qingdao Qingdao Air-conditioning Establish
HVACEngineering Developm Developm engineer 100.00% 100.00% ment
Co.,Ltd. entZone entZone
Chongqing Jiangbei Jiangbei Sales of home Establish
GoodaymartElectric District, District, appliances and 51.00% 51.00% ment
Appliance SaleCo., Chongqin Chongqin electronics
0260 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Ltd. gCity gCity
Qingdao Haier Jiaozhou Jiaozhou Manufacture
(Jiaozhou) City, City, andsale of 100.00% 100.00% Establish
Air-conditioning Co., Qingdao Qingdao air-conditioners ment
Limited
Manufacture
Qingdao Haier Jiaozhou Jiaozhou andsales of Establish
ComponentCo.,Ltd. City, City, plastic and 100.00% 100.00% ment
Qingdao Qingdao precise sheet
metalproducts
HaierShareholdings Hong Hong Investment 100.00% 100.00% Establish
(HongKong)Limited Kong Kong ment
Harvest International Cayman Cayman Investment 100.00% 100.00% Establish
Company Islands Islands ment
Shenbei Shenbei
Shenyang Haier New New Manufacture Establish
RefrigeratorCo.,Ltd. Area, Area, andsalesof 100.00% 100.00% ment
Shenyang Shenyang refrigerator
City City
Sanshui Sanshui Manufacture
Foshan Haier District, District, andsalesof 100.00% 100.00% Establish
Freezer Co.,Ltd. Foshan Foshan freezer ment
City City
Zhengzho Zhengzho
u u
Economic Economic
Zhengzhou Haier and and Manufacture Establish
Air-conditioningCo., Technolo Technolo andsales of 100.00% 100.00% ment
Ltd. gical gical airconditioner
Developm Developm
ent ent
Zone Zone
Develop,
Qingdao Haidayuan Qingdao Qingdao purchaseand Establish
Procurement Service Developm Developm sell electrical 100.00% 100.00% ment
Co.,Ltd. entZone entZone products and
components
Qingdao Haier Qingdao Qingdao Development
IntelligentTechnology High-tech High-tech andresearch of 100.00% 100.00% Establish
DevelopmentCo.,Ltd. Zone Zone homeappliance ment
products
QingdaoHairiHi-Tech Qingdao Qingdao Design, Business
ModelCo.,Ltd. High-tech High-tech manufacture 100.00% 100.00% combinat
0261 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Zone Zone andsales of ion
productmodel under
andmould common
control
Business
Qingdao Hai Gao Qingdao Qingdao Industrial combinat
Designand High-tech High-tech designand 75.00% 75.00% ion
ManufactureCo.,Ltd. Zone Zone prototype under
production common
control
Business
Beijing Haier Development, combinat
GuangkeDigital Beijing Beijing promotion and 55.00% 55.00% ion
Technology Co.,Ltd. transfer of under
technology common
control
Shanghai Haier Wholesaleand Establish
MedicalTechnology Shanghai Shanghai retailofmedical 100.00% 100.00% ment
Co.,Ltd. facility
Development Business
andsales of combinat
Qingdao Haier Qingdao Qingdao softwareand 100.00% 100.00% ion
TechnologyCo.,Ltd. information under
product common
control
Qingdao Haier Entrepreneurship Establish
TechnologyInvestment Qingdao Qingdao investment and 100.00% 100.00% ment
Co.,Ltd. consulting
Qingdao Casarte Development,
SmartLiving Qingdao Qingdao productionand 100.00% 100.00% Establish
AppliancesCo.,Ltd. sales of ment
appliances
Qingdao Sales of home
Haichuangyuan Qingdao Qingdao appliances and 100.00% 100.00% Establish
AppliancesSalesCo., digitalproducts ment
Ltd.
Sales of home
Haier Overseas appliances, Establish
ElectricApplianceCo., Qingdao Qingdao international 100.00% 100.00% ment
Ltd. freight
forwarding
Haier Group Dalian Dalian Sales of home 100.00% 100.00% Business
(Dalian)Electrical appliances, combinat
0262 2019AnnualReportofHaierSmartHomeCo.,Ltd.
AppliancesIndustry international ion
Co.,Ltd. freight under
forwarding common
control
Production and
Qingdao Haier sales of air Establish
Central Air Qingdao Qingdao conditioners 100.00% 100.00% ment
ConditioningCo.,Ltd. andrefrigeration
equipment
Beijing Haier Yun Technology
KitchenTechnology Beijing Beijing development 95.77% 95.77% Establish
Co.,Ltd. promotion ment
andtransfer
Chongqing Haier
HomeAppliance Hefei Hefei Sales of home 100.00% 100.00% Establish
Sale Hefei Co., appliances ment
Ltd.
Beijing Haier Radioand Establish
ZhongyouNetmedia Beijing Beijing television 51.00% 51.00% ment
Co.,Ltd. program
Qingdao Weixi Intelligent Establish
SmartTechnologyCo., Qingdao Qingdao sanitaryware 71.43% 71.43% ment
Ltd.
Haier U+smart Software Establish
IntelligentTechnology Beijing Beijing development 100.00% 100.00% ment
(Beijing) Co.,Ltd.
Qingdao Haier Industrial
IndustryIntelligence Qingdao Qingdao intelligence 100.00% 100.00% Establish
ResearchInstituteCo., technology ment
Ltd.
Sales, research
Haier (Shanghai) Shanghai Shanghai anddevelopment 100.00% 100.00% Establish
ElectronicsCo.,Ltd. ofhome ment
appliances
ShanghaiHaier Business
ZhongzhiFang management Establish
Chuang Ke Shanghai Shanghai consulting, 100.00% 100.00% ment
ManagementCo.,Ltd. chuangke
management
HaierCOSMOIOT Industrial
EcosystemTechnology Qingdao Qingdao investment, 78.05% 9.58% 87.63% Establish
Co.,Ltd. roboticsand ment
automationR&D,
0263 2019AnnualReportofHaierSmartHomeCo.,Ltd.
etc.
Internetofthings,
Maniiq(Qingdao) robotand
IntelligentEquipment Qingdao Qingdao automation 100.00% 100.00% Establish
Co.,Ltd. researchand ment
development,
design,etc.
Technology
HaierDigital development Establish
Technology Shanghai Shanghai promotes, 100.00% 100.00% ment
(Shanghai)Co.,Ltd. transfer,material
sales,etc.
QingdaoHaierSmart Productionand
KitchenApplianceCo., Qingdao Qingdao salesofkitchen 100.00% 100.00% Establish
Ltd. smarthome ment
appliances
GEAppliance Salesofhome Establish
(Shanghai) Shanghai Shanghai appliances 100.00% 100.00% ment
Co.,Ltd.
Develop,
QingdaoHaoPinHai purchaseand Establish
RuiInformation Qingdao Qingdao salesofelectrical 100.00% 100.00% ment
TechnologyCo.,Ltd. productsand
components
Business
Fisher&Paykelp Manufacturingof combinat
Roduction Machinery New New automationand 100.00% 100.00% ion
Limited Zealand Zealand customization under
specialequipment common
control
Maniiq (Singapore) Investment Establish
Intelligent Equipment Singapore Singapore management 100.00% 100.00% ment
Co.,Ltd.
Maniiq(HK) Hong Hong Investment Establish
IntelligentEquipment Kong Kong management 100.00% 100.00% ment
Co.,Ltd.
QingdaoHaierSpecial Productionand Establish
Refrigerating Qingdao Qingdao salesofhome 100.00% 100.00% ment
ApplianceCo.,Ltd. appliances
BeijingZeroMicro Promotionof Establish
TechnologyCo.,Ltd. Beijing Beijing technological 55.00% 55.00% ment
development
LaiyangHaierSmart Laiyang Laiyang Productionand 100.00% 100.00% Establish
0264 2019AnnualReportofHaierSmartHomeCo.,Ltd.
KitchenApplianceCo., salesofhome ment
Ltd. appliances
Aituling(Shanghai) Promotionof Establish
Information Shanghai Shanghai technological 72.22% 72.22% ment
TechnologyCo.,Ltd. development
QingdaoBlueWhale Industrial Establish
TechnologyCo.,Ltd. Qingdao Qingdao intelligence 67.00% 67.00% ment
technology
QingdaoHailian Industrial Establish
Rongchuang Qingdao Qingdao intelligence 100.00% 100.00% ment
TechnologyCo.,Ltd. technology
HefeiHaierAir Productionand Establish
Conditioning Hefei Hefei salesofhome 100.00% 100.00% ment
ElectronicsCo.,Ltd. appliances
TaizhouHaierMedical Promotionof Establish
TechnologyCo.,Ltd. Taizhou Taizhou medicalresearch 100.00% 100.00% ment
anddevelopment
Haier(Shanghai)
HomeAppliance Researchand Establish
Researchand Shanghai Shanghai developmentof 100.00% 100.00% ment
DevelopmentCenter homeappliances
Co.,Ltd.
Development,
researchand
Haier(Shenzhen)R&D Shenzhen Shenzhen technicalservices 100.00% 100.00% Establish
Co.,Ltd. ofhouseholdand ment
commercial
electrical
Manufacturingof
GuangzhouHaierAir Guangdon Guangdon refrigerationand Establish
ConditionerCo.,Ltd. g g airconditioning 100.00% 100.00% ment
equipment
QingdaoHaierInstitute VentureCapital Establish
ofInvestment Qingdao Qingdao business 70.00% 70.00% ment
ManagementCo.,Ltd.
TianjinHaiyunChuang Researchand Establish
DigitalTechnology Tianjin Tianjin developmentof 100.00% 100.00% ment
Co.,Ltd. digitaltechnology
HaierDigital Researchand Establish
Technology(Qindao) Qingdao Qingdao developmentof 100.00% 100.00% ment
Co.,Ltd. digitaltechnology
HaierDigital Nanjing Nanjing Researchand 100.00% 100.00% Establish
Technology(Nanjing) developmentof ment
0265 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Co.,Ltd. digitaltechnology
HaierDigital Researchand Establish
Technology(Wuxi) Wuxi Wuxi developmentof 100.00% 100.00% ment
Co.,Ltd. digitaltechnology
HaierDigital Researchand Establish
Technology(Xi’an) Xi’an Xi’an developmentof 100.00% 100.00% ment
Co.,Ltd. digitaltechnology
FicotengIntelligent Intelligentdevice Establish
Technology(Qingdao) Qingdao Qingdao integratedservice 100.00% 100.00% ment
Co.,Ltd.
IoTtechnology
researchand
development,
salesofhome
QingdaoYunshang appliances,digital Establish
YuyiIOTTechnology Qingdao Qingdao productsand 70.00% 70.00% ment
Co.,Ltd. accessories,
clothingshoes
andhats,textiles,
dailynecessities,
andfurniture
Haiyu(Shanghai) Rentalof
IntelligentTechnology Shanghai Shanghai apartments, 70.00% 70.00% Establish
Co.,Ltd. intelligent ment
equipment,etc.
Developmentand
TianjinHaierZhikong Tianjin Tianjin manufacturingof 100.00% 100.00% Establish
ElectronicsCo.,Ltd. automaticcontrol ment
system
Developmentand
HefeiHaierIntelligent Hefei Hefei manufacturingof 100.00% 100.00% Establish
ElectronicsCo.,Ltd. automaticcontrol ment
system
QingdaoHaizhi Asset
Investment Qingdao Qingdao management, 100.00% 100.00% Establish
ManagementCo.,Ltd. equity ment
investment.
QingdaoHaiduv Designand Establish
HealthTechnology Qingdao Qingdao developmentof 70.00% 70.00% ment
Co.,Ltd. homeappliance
QingdaoJijiaCloud R&Dandsalesof Establish
IntelligentTechnology Qingdao Qingdao lighting 80.00% 80.00% ment
Co.,Ltd. appliances
0266 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Qingdao Qingdao Information Business
QingdaoPenghai transmission, combinat
Software Co., Ltd.（青 softwareand ion
岛鹏海软件有限公 information 60.01% 60.01% under
司） technology common
services control
Qingdao Qingdao Business
combinat
QingdaoHaierEnergy Water,electricity, ion
&PowerCo.,Ltd. steamheatsupply 100.00% 100.00% under
common
control
Haier Digital Establish
Technology Scientific ment
(Guangzhou) Co., Ltd. Guangzho Guangzho researchand 100.00% 100.00%
（海尔数字科技（广 u u technicalservice
州）有限公司）
Xiong’an Haier Digital Establish
Technology Co., Ltd. Scientific ment
（雄安海尔数字科技 Hebei Hebei researchand 100.00% 100.00%
有限公司） technicalservice
Qingdao Haopin Qingdao Qingdao Establish
Haizhi Information Information ment
Technology Co., Ltd. technology
consulting 100.00% 100.00%
（青岛好品海智信息
技术有限公司） services
Qingdao Haimeihui Qingdao Qingdao Establish
Management ment
Consulting Co., Ltd. Leasingand
businessservices 100.00% 100.00%
（青岛海美汇管理咨
询有限公司）
Wuxi Yunshang Establish
Internet of Clothing InternetofThings ment
Technology Co., Ltd. Wuxi Wuxi technologyR& 100.00% 100.00%
（无锡云裳衣联网科 D
技有限公司）
Qingdao Guochuang Qingdao Qingdao Establish
Intelligent Household ment
Appliance Research Scientific
Institute Co., Ltd.（青 researchand 100.00% 100.00%
岛国创智能家电研究 technicalservice
院有限公司）
0267 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Shenyang Haichen Shenyang Shenyang Establish
Zhilian Technology Wholesaleand ment
Co.,Ltd.（沈阳海辰智 60.00% 60.00%retail
联科技有限公司）
Hangzhou Gandao Establish
Intelligent Technology Technology ment
Co., Ltd.（杭州甘道智 Hangzhou Hangzhou development, 60.00% 60.00%
能科技有限公司） service
Microenterprises such
as QingdaoHaiHeng Allover Allover Salesofhome Establish
Feng Electrical the the appliances ment
Appliances Sale& country country
Service Co.,Ltd.
Reasons for including subsidiaries which the Company has 50% or less of the equity into the scopeof consolidated financial statements:
At the end of the reporting period, the Company had substantial control over the finance andoperation of Haier Electronics Group Co., Ltd., and small companies like Qingdao Hai Heng FengElectrical Appliances Sale & Service Co., Ltd, which were included into the scope of consolidatedfinancial statements.
Reason for the ratio of voting rights higher than the ratio of shareholding of Haier ElectronicsGroup Co., Ltd.: on 10 July 2015, HCH (HK) Investment Management Co., Limited (hereinafterreferred to as ‘HCH’) signed a Shareholder Voting Right Entrustment Agreement with the Company.HCH entrusted the Company to exercise the underlying shareholder voting rights of 336,600,000 sharesof Haier Electronics Group Co., Ltd. Both parties agreed that HCH will not revoke the entrustment andauthorization to the Company unless the Company issues a written notice of revoking trustee to HCH.
(2) Material non-wholly owned subsidiaries
Shareholding of Profitorloss Distributedividends Balanceofminority
Name ofassociates minority attributableto tominority shareholders’
shareholders minorityshareholders shareholdersinthe equityattheendof
in thecurrentperiod currentperiod theperiod
Haier Electronics Group Co.,
Ltd. 54.13% 4,079,009,887.16 547,686,383.15 16,109,313,923.63
Guizhou Haier Electronics
Co.,Ltd. 41.00% 12,714,502.23 10,660,000.00 112,122,562.30
Wuhan Haier Electronics
Co.,Ltd. 40.00% 25,240,212.45 8,000,000.00 265,183,244.33
0268 2019AnnualReportofHaierSmartHomeCo.,Ltd.
（3）Summarized financial information in respect of material non-wholly owned subsidiaries
Closingbalance
Name of
subsidiary Currentassets Non-current Totalassets Current Non-current Total
assets liabilities liabilities liabilities
Haier
Electronics 35,532,721,320. 14,246,629,453. 49,779,350,773. 19,005,798,243. 1,368,203,239 20,374,001,48
Group Co., 45 30 75 85 .83 3.68
Ltd.
Guizhou
Haier 185,452,784.6
Electronics 395,985,056.11 62,937,392.59 458,922,448.70 177,929,542.31 7,523,242.30 1
Co.,Ltd..
Wuhan Haier
Electronics 968,026,486.23 159,403,524.03 1,127,430,010.62 464,471,899.44 464,471,899.44
Co.,Ltd.
(Continued)
Openingbalance
Name of
subsidiary Currentassets Non-current Totalassets Current Non-current Total
assets liabilities liabilities liabilities
Haier
Electronics 21,670,427,22
Group Co., 37,285,916,287.75 10,570,207,407.75 47,856,123,695.50 19,178,901,750.12 2,491,525,471.89 2.01
Ltd.
Guizhou
Haier 303,956,533.0
Electronics 522,694,157.33 49,721,058.77 572,415,216.10 302,856,533.06 1,100,000.00 6
Co.,Ltd..
Wuhan Haier
Electronics 941,594,837.71 149,527,217.84 1,091,122,055.55 471,264,475.86 471,264,475.86
Co.,Ltd.
Amountforthecurrentperiod
Nameofsubsidiary Total Cashflowfrom
Operatingrevenue Netprofit comprehensive operatingactivities
income
HaierElectronicsGroupCo.,Ltd. 80,163,616,510.79 7,393,576,960.88 7,449,383,123.24 4,776,998,171.71
Guizhou Haier Electronics Co.,
Ltd.. 1,408,675,861.26 31,010,981.05 31,010,981.05 168,289,320.95
Wuhan Haier Electronics Co.,
Ltd. 1,996,073,968.98 63,100,531.13 63,100,531.13 254,103,821.03
(Continued)
0269 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Amount forthepreviousperiod
Nameofsubsidiary Total Cashflowfrom
Operatingrevenue Netprofit comprehensive operatingactivities
income
HaierElectronicsGroupCo.,Ltd. 85,376,423,035.20 4,097,569,326.80 4,323,139,015.38 4,406,448,804.72
Guizhou Haier Electronics Co.,
Ltd.. 1,205,308,014.04 29,067,991.87 29,067,991.87 -63,792,645.00
WuhanHaierElectronicsCo.,Ltd. 2,250,957,874.26 62,155,769.83 62,155,769.83 -85,652,495.51
2. Transactions leading to the change of shareholding in subsidiaries but not losing the control
√Applicable □Not Applicable
(1). Description of changes in the share of owners’ equity in subsidiaries
√Applicable □Not Applicable
The Company purchased the equity interest of a subsidiary, Haier Electronics Group Co., Ltd. froma secondary market, and its minority shareholders’ exercise for the current period or reduced capital,which leads to changes in the Company’s shareholding ratio. Capital contribution not proportional to theoriginal shareholding results in changes of shareholding ratio in the subsidiary. The Company and thesubsidiary of the Company acquired minority shareholding, which results in changes in the Company’sshareholding ratio; Capital contribution by minority shareholders of the subsidiary of the Company leadsto changes in the Company’s shareholding ratio.
(2).Impact of the transactions on non-controlling interest and the equity attributable toshareholders of the Company:
Items HaierElectronicsGroupCo.,Ltd. Others
TotalConsiderationforacquisition/disposal 485,705,569.46 685,874,018.94
Less:shareofnetassetsofsubsidiariesinrespect
totheshareholdingproportionacquired/disposed -407,376,870.31 1,003,215,503.65
Difference -893,082,439.77 317,341,484.71
Including:capitalreserveadjustment -893,082,439.77 317,341,484.71
3. Interests in joint ventures and associates
√Applicable □Not Applicable
（1）Associates
Principal Placeof Accounting
Name ofjointventure placeof registrati Natureof Sharehol treatment
business on business ding of
investment
Wolong Electric (Jinan) Motor Co., Ltd. Jinan Jinan Motor 30.00% Equity
Manufacturing method
0270 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Qingdao Hegang New Material Technology
Co., Ltd.（青岛河钢新材料科技股份有限公 Qingdao Qingdao Steelplate 25.65% Equity
司） manufacturing method
Qingdao Haier SAIF Smart Home Industry Qingdao Qingdao VentureCapital 63.13% Equity
Investment Center(LimitedPartnership) method
Mitsubishi HeavyIndustries Haier (Qingdao) Manufacturing Equity
Air-conditioners Co.,Ltd. Qingdao Qingdao ofhome 45.00% method
appliances
Qingdao Haier Carrier Refrigeration Manufacturing Equity
Equipment Co.,Ltd. Qingdao Qingdao ofhome 49.00% method
appliances
Haier GroupFinanceCo.,Ltd. Qingdao Qingdao Financial 42.00% Equity
services method
Qingdao HaierSoftwareInvestmentCo.,Ltd. Qingdao Qingdao Software 25.00% Equity
development method
Beijing Mr. Hi Network Technology Beijing Beijing Technology 29.03% Equity
Company Limited development method
Hefei FeierSmartTechnologyCo.,Ltd. Hefei Hefei Technology 40.00% Equity
development method
Bank ofQingdaoCo.,Ltd. Qingdao Qingdao Commercial 8.65% Equity
Bank method
Beijing XiaobeiTechnologyCo.,Ltd. Beijing Beijing Salesofhome 42.75% Equity
appliances method
Qingdao HaierMultimediaCo.,Ltd. Qingdao Qingdao R&Dandsales 20.20% Equity
oftelevision method
Technical
Beijing ASUTechCo.Ltd Beijing Beijing serviceimport 42.61% Equity
andexport method
business
Shenzhen GenyuanEnvironmentalProtection Shenzhen Shenzhen Technical
TechnologyCo.,Ltd.（深圳根元环保科技有 advisory 18.77% Equity
限公司） services method
Qingdao Haimu Investment Management Investment Equity
Co., Ltd.（青岛海慕投资管理有限公司） Qingdao Qingdao management 49.00% method
Qingdao Haimu Smart Home Investment Qingdao Qingdao Investment 24.00% Equity
Partnership (LimitedPartnership) management method
Shandong Haibida Big Data Co., Ltd.（山东 Zibo Zibo Bigdata 40.00% Equity
海必达大数据有限公司） resourceservice method
Qingdao Xinaohaizhi EnergyCo.,Ltd.（青岛 Qingdao Qingdao Production and 49.00% Equity
新奥海智能源有限公司） salesofenergy method
Qingdao Zhongzaihaina Environmental Qingdao Qingdao Resaleofused 20.00% Equity
Services Co., Ltd.（青岛中再海纳环境服务 materials method
0271 2019AnnualReportofHaierSmartHomeCo.,Ltd.
有限公司）
Guangzhou Heying Investment Partnership Guangzhou Guangzho Investment 50.00% Equity
(Limited Partnership) u method
Qingdao Java Cloud Network Technology Qingdao Qingdao Homeonline 24.93% Equity
Co., Ltd. service method
Bingji (Shanghai) Corporate Management Investment Equity
Co., Ltd.(冰戟（上海）企业管理有限公司) Shanghai Shanghai management 45.00% method
Youjin (Shanghai) Corporate Management Shanghai Shanghai Investment 45.00% Equity
Co., Ltd.(优瑾（上海）企业管理有限公司) management method
RRS (Shanghai) Investment Co., Ltd.（日日 Shanghai Shanghai Investment 45.00% Equity
顺（上海）投资有限公司） management method
Water Equity
Haier BestWaterTechnologyCo.,Ltd.（倍世 equipment method
海尔饮水科技有限公司） Qingdao Qingdao technology 49.00%
development
service
Konan ElectronicCo.,Ltd. Japan Japan Motor 50.00% Equity
Manufacturing method
Manufacturing Equity
HPZ LIMITED Nigeria Nigeria ofhome 25.01% method
appliances
Manufacturing Equity
HNR Company(Private)Limited Pakistan Pakistan ofhome 31.72% method
appliances
Meiling Candy Washing Machine Co., Ltd. Manufacturing Equity
（美菱卡迪洗衣机有限公司） Hefei Hefei ofhome 40% method
appliances
Manufacturing Equity
Controladora MabeS.A.deC.V. Mexico Mexico ofhome 48.41% method
appliances
Middle East Air conditioning Company, SaudiArabia Saudi Salesofhome 49.00% Equity
Limited Arabia appliances method
(2) The major financial information of important associates
①The basic profile of important associates
a. Haier Group Finance Co., Ltd. (hereinafter referred to as ‘Finance company’) was established byHaier Group Corporation and its three affiliates. Registration place and principal place of business:No.178-2 Haier Road, Laoshan District, Qingdao City. The Company’s subsidiaries hold an aggregate of42.00% equity interest in Finance Company.
b. General Electric Company has participated in the capital contribution to the establishment ofControladora Mabe S.A.de C.V. (hereinafter referred to as ‘MABE’). In June 2016, a subsidiary of the
0272 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Company acquired 48.41% of equity interests in MABE held by General Electric Company. The
registered address and principal place of business of MABE is Mexico. The subsidiaries of the Company
hold approximately 48.41% of equity interests in MABE in total.
c. Bank of Qingdao Co., Ltd. (hereinafter referred to as ‘Qingdao Bank’), one of the first citycommercial banks in China, was established in November 1996. The registered place and principal placeof business of Qingdao Bank is No.68 Hong Kong Middle Road, Shinan District, Qingdao, ShandongProvince. The Company and its subsidiaries hold approximately 8.65% of equity interests in QingdaoBank in total at the end of the period.
②Financial information of important associates:
Finance company
Items Closingbalance/Amountforthe Openingbalance/Amountfor
currentperiod thepreviousperiod
Currentassets 61,570,216,228.62 59,524,840,580.99
Non-currentassets 5,905,904,013.65 6,772,155,247.83
Totalassets 67,476,120,242.27 66,296,995,828.82
Currentliabilities 52,896,669,320.65 51,568,658,834.34
Non-currentliabilities 268,470,616.43 1,857,007,615.76
Totalliabilities 53,165,139,937.08 53,425,666,450.10
Minorityequityinterests
Equity attributable to shareholders of the
parentcompany 14,310,980,305.19 12,871,329,378.72
Including:shareofnetassetscalculated
pershareholdingpercentage 6,010,611,728.26 5,405,958,339.07
Operatingrevenue 2,540,718,904.25 2,564,135,945.96
Netprofit 1,719,606,817.98 1,643,680,363.91
Othercomprehensiveincome 20,044,108.65 77,917,520.22
Totalcomprehensiveincome 1,739,650,926.63 1,721,597,884.13
Dividend received from associates for
theyear 126,000,000.00 210,000,000.00
(Continued)
MABE
Items Closingbalance/Amountforthe Openingbalance/Amountfor
currentperiod thepreviousperiod
Currentassets 6,554,356,162.20 6,401,986,096.80
Non-currentassets 11,976,635,517.00 10,722,377,360.00
Totalassets 18,530,991,679.20 17,124,363,456.80
Currentliabilities 8,493,118,880.40 8,729,901,178.40
Non-currentliabilities 5,735,182,853.40 4,762,051,909.60
0273 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Total liabilities 14,228,301,733.80 13,491,953,088.00
Minority equity interests
Equity attributable to shareholders of the
parent company 4,302,689,945.40 3,632,410,368.80
Including: share of net assets calculated
per shareholding percentage 2,083,138,731.69 1,758,624,215.23
Operating revenue 22,678,063,972.00 20,407,164,879.93
Net profit 730,090,236.00 299,739,661.91
Other comprehensive income 89,711,280.60 62,998,185.36
Total comprehensive income 819,801,516.60 362,737,847.27
Dividend received from associates for
the year 66,718,276.58
(Continued)
BOQ
Items Closingbalance/Amountforthe Openingbalance/Amountfor
currentperiod thepreviousperiod
Currentassets 238,853,193,000.00 181,349,759,000.00
Non-currentassets 134,768,957,000.00 136,308,743,000.00
Totalassets 373,622,150,000.00 317,658,502,000.00
Currentliabilities 264,534,891,000.00 223,355,408,000.00
Non-currentliabilities 78,609,341,000.00 66,806,370,000.00
Totalliabilities 343,144,232,000.00 290,161,778,000.00
Minorityinterests 562,458,000.00 511,751,000.00
Equity attributable to shareholders of the
parentcompany 29,915,460,000.00 26,984,973,000.00
Including:shareofnetassetscalculated
pershareholdingpercentage 2,586,957,693.97 2,592,829,635.67
Operatingrevenue 9,616,315,000.00 7,371,953,000.00
Netprofit 2,335,522,000.00 2,043,389,000.00
Othercomprehensiveincome 105,037,000.00 1,016,364,000.00
Totalcomprehensiveincome 2,440,559,000.00 3,059,753,000.00
Dividend received from associates for
theyear 77,995,640.00 77,995,640.00
(3). Summarized financial information of insignificant associates and joint ventures
√Applicable □Not Applicable
Unit and Currency: RMB
Closing Opening
balance/Amountforthe balance/Amountfor
0274 2019AnnualReportofHaierSmartHomeCo.,Ltd.
currentperiod thepreviousperiod
Associates
WolongElectric(Jinan)MotorCo.,Ltd. 123,555,578.44 123,281,802.39
Qingdao Hegang New Material TechnologyCo., Ltd.（青岛
河钢新材料科技股份有限公司） 280,063,773.80 262,284,357.65
Qingdao Haier SAIF Smart Home Industry Investment
Center(LimitedPartnership) 434,540,103.12 362,380,221.29
MitsubishiHeavyIndustriesHaier(Qingdao)AirConditioner
Co.,Ltd. 643,056,436.86 622,643,614.66
QingdaoHaierCarrierRefrigerationEquipmentCo.,Ltd. 395,933,487.26 332,723,126.50
QingdaoHaierMultimediaCo.,Ltd. 432,386,801.26 555,084,616.71
QingdaoHaierSoftwareInvestmentCo.,Ltd. 19,636,136.75 18,193,519.15
HefeiFeierSmartTechnologyCo.,Ltd. 758,188.30
Qingdao Xinaohaizhi Energy Co., Ltd.（青岛新奥海智能源
有限公司） 25,966,044.95 25,075,683.85
Qingdao ZhongzaihainaEnvironmentalServicesCo., Ltd（.青
岛中再海纳环境服务有限公司） 2,261,258.70 2,192,958.60
Shandong HaibidaBigDataCo.,Ltd.（山东海必达大数据有
限公司） 5,332,640.10
BeijingMr.HiNetworkTechnologyCompanyLimited 3,757,759.75 3,757,759.75
BeijingXiaobeiTechnologyCo.,Ltd. 2,687,341.82 2,687,341.82
BeijingASUTechCo.,Ltd. 5,862,115.78 30,062,027.79
Shenzhen Genyuan Environmental Protection Technology
Co.,Ltd. 6,914,487.73 7,849,992.00
QingdaoHaimuInvestmentManagementCo.,Ltd. 2,198,276.46 2,078,341.37
Qingdao Haimu Smart Home Investment Partnership
(LimitedPartnership) 48,046,197.64 48,001,070.25
Guangzhou Heying Investment Partnership (Limited
Partnership) 219,198,634.81 176,064,809.68
QingdaoHomeWowCloudNetworkTechnologyCo.,Ltd. 3,168,859.99 1,216,581.32
BeijingCangxiaoweiSupplyChainManagementCo.,Ltd. 791,316.97
Bingji (Shanghai)Corporate ManagementCo., Ltd.(冰戟（上
海）企业管理有限公司) 894,539,765.00
Youjin (Shanghai)Corporate ManagementCo., Ltd.(优瑾（上
海）企业管理有限公司) 1,625,617,754.55
RRS (Shanghai)InvestmentCo.,Ltd.（日日顺（上海）投资
有限公司） 2,954,850,462.82
Haier Best WaterTechnologyCo., Ltd.（倍世海尔饮水科技 21,725,345.26
0275 2019AnnualReportofHaierSmartHomeCo.,Ltd.
有限公司）
Meiling Candy Washing Machine Co., Ltd（. 美菱卡迪洗衣机
有限公司） 23,222,136.38
Konan Electronic Co., Ltd. 71,196,748.97 74,799,791.29
HNR Company (Private) Limited 104,557,145.65 91,076,038.80
HPZ LIMITED 78,149,551.49 88,800,332.55
MiddleEast Air conditioning Company, Limited 19,002,595.66 18,208,123.96
Total book value of investment 8,448,185,629.30 2,849,253,428.35
Total amount of the following items calculated based on
shareholding percentage
--Net profit 180,891,658.30 343,024,634.11
--Other comprehensive income 53,473,733.11 22,221,841.23
--Total comprehensive income 234,365,391.41 365,246,475.34
X. Segment report
(1) Determining basis and accounting policy of reporting segment
√Applicable □Not Applicable
The Company is principally engaged in manufacture and sales of home appliances and relevantservices business, manufacture of upstream home appliances parts, distribution of products of third-party,logistics and after-sale business. The Company has three business segments: (1) China smart homebusiness segment; (2) Overseas home appliance and smart home business segment; (3) Other businesssegments. The management of the Company assesses operating performance of each segment andallocates resources according to the division. Sales between segments were mainly based on marketprice.
(1) China smart home business segment consists of:
①Internet of Food solutions: mainly engages in production and sales of refrigerator/freezers and
kitchen appliances.
②Internet of Clothing solutions: mainly engages in production and sales of washing machine
products.
③Air energy solutions: mainly engages in production and sales of air conditioners.
④Whole house water solutions: mainly engages in production and sales of water home appliances
such as water heaters and water purification products.(2) Overseas home appliance and smart home business segment mainly includes overseas businesssegments such as GEA, FPA, Candy and so on.
0276 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(3) Other business segments: mainly include channel industrial Internet of Things, equipment
components, small home appliance business and others.
As the centralized management under the headquarters or not being included in the assessmentscope of segment management, the total assets of segment exclude monetary funds, financial assets heldfor trading, derivative financial assets, dividends receivable, assets held for sale, other current assets,investments in other equity instruments, long-term receivables, long-term equity investment, goodwill,deferred tax assets; the total liabilities of segment exclude long-term and short-term borrowings,financial liabilities held for trading, derivative financial liabilities, dividends payables, tax payable,liabilities held for sale, bonds payable, deferred tax liabilities, other non-current liabilities; operatingprofit of segment exclude financial expenses, gains/(losses) on changes in fair value, gains oninvestment, gains on disposal of assets, non-VAT refundable upon imposition component of otherincome, non-operating income and expense and income tax.
（1）Information of reportable segments
Segment information for the period
Chinasmarthomebusiness
Airenergy Internetof Wholehouse
Segment InternetofFoodsolutions solutions clothing watersolutions
information solutions
Refrigerator/freezers Kitchen Air Washing Waterhome
appliances conditioners machine appliances
Segment
revenue 32,750,326,078.30 2,439,910,684.24 23,492,695,375.69 24,444,678,571.04 9,596,820,492.67
Including:
external 30,426,716,732.19 2,153,844,464.99 20,366,461,301.32 22,113,172,727.02 9,521,215,941.39
revenue
Inter-segment
revenue 2,323,609,346.11 286,066,219.25 3,126,234,074.37 2,331,505,844.02 75,604,551.28
Total segment
operatingcost 30,638,715,948.74 2,417,186,983.20 23,480,758,896.26 22,325,534,630.18 8,479,922,900.93
Segment
operating 2,111,610,129.56 22,723,701.04 11,936,479.43 2,119,143,940.86 1,116,897,591.74
profit
Total segment
assets 10,182,685,599.34 1,601,295,526.79 16,080,937,914.13 9,674,956,522.67 3,321,820,888.60
Total segment
liabilities 30,598,595,271.84 1,468,196,660.29 8,590,183,771.36 7,447,258,502.94 4,135,690,962.81
0277 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(Continued)
Overseashome
Segment applianceand Otherbusiness Inter-segment Total
information smarthome eliminations
business
Segmentrevenue 92,913,936,593.05 88,576,700,061.08 -73,453,084,599.50 200,761,983,256.57
Including:
externalrevenue 92,392,836,342.58 23,787,735,747.08 - 200,761,983,256.57
Inter-segment
revenue 521,100,250.47 64,788,964,314.00 -73,453,084,599.50 -
Totalsegment
operatingcost 89,758,855,043.71 88,359,287,313.74 -73,496,036,895.98 191,964,224,820.78
Segment
operatingprofit 3,155,081,549.34 217,412,747.34 42,952,296.48 8,797,758,435.79
Totalsegment
assets 45,754,466,477.11 48,931,878,145.26 -38,979,895,269.93 96,568,145,803.97
Totalsegment
liabilities 24,233,067,377.15 48,310,739,488.06 -39,098,430,484.39 85,685,301,550.06
Segment information for the corresponding period of last year
China smarthomebusiness
Internet of
Segment InternetofFoodsolutions Airenergy Clothing Wholehouse
informatio solutions solutions watersolutions
n
Refrigerator/freezer Kitchen Airconditioners Washing Waterhome
s appliances machine appliances
Segment 2,467,385,543.8 26,644,694,447.7 22,508,306,838.4 8,855,929,559.2
revenue 31,618,872,869.99 3 9 4 0
Including:
external 29,642,460,432.51 2,274,145,697.95 23,420,074,096.17 20,853,109,973.61 8,812,187,214.52
revenue
Inter-segmen
trevenue 1,976,412,437.48 193,239,846.24 3,224,620,351.08 1,655,196,865.28 43,742,344.95
Total
segment 2,444,820,362.6 25,502,931,385.4 20,537,035,519.0 7,826,548,213.0
operating 29,524,317,142.86 3 0 6 9
cost
Segment
operating 2,094,555,727.13 22,565,181.20 1,141,763,062.39 1,971,271,319.38 1,029,381,346.11
profit
Total 4,977,870,537.68 1,711,385,923.43 14,369,768,636.22 8,221,907,424.42 2,752,966,020.39
0278 2019AnnualReportofHaierSmartHomeCo.,Ltd.
segment
assets
Total
segment 23,184,725,560.95 1,314,431,145.69 7,379,641,491.01 5,592,378,286.22 3,316,856,450.17
liabilities
(Continued)
Overseashome
Segment applianceand Otherbusiness Inter-segment Total
information smarthome eliminations
business
Segmentrevenue 75,425,133,144.38 88,069,187,883.20 -71,481,028,327.56 184,108,481,959.27
Including:
externalrevenue 74,896,928,604.96 24,209,575,940.09 - 184,108,481,959.27
Inter-segment
revenue 528,204,539.42 63,859,611,943.11 -71,481,028,327.56 -
Totalsegment
operatingcost 72,347,701,707.95 87,613,861,152.44 -71,431,056,574.56 174,366,158,908.87
Segment
operatingprofit 3,077,431,436.43 455,326,730.76 -49,971,753.00 9,742,323,050.40
Totalsegment
assets 33,831,326,295.02 47,420,138,907.67 -29,693,450,492.74 83,591,913,252.54
Totalsegment
liabilities 16,366,452,912.55 45,967,024,081.00 -29,415,363,159.35 73,706,146,769.05
（2）Geographical information
‘Other countries/regions’ in this report refers to all other countries/regions (including Hong Kongand Macau Special Administration Region and Taiwan) other than the mainland China for the purposeof information disclosure.
External transaction revenue
Items Amountforthecurrentperiod Amountforthepreviousperiod
Mainland China 106,643,054,818.57 106,908,575,758.43
Other countries/regions 94,118,928,438.00 77,199,906,200.84
Among which:
America 57,921,805,254.95 52,808,964,340.83
Australia 5,351,975,416.93 5,059,554,142.64
South Asia 6,339,528,301.47 5,971,048,523.39
Europe 15,194,566,954.73 4,139,629,938.57
0279 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Southeast Asia 3,705,563,558.54 3,197,828,869.18
Middle East and Africa 1,117,998,276.01 968,609,176.61
Japan 3,248,939,012.25 2,957,892,839.19
Others 1,238,551,663.12 2,096,378,370.43
Total 200,761,983,256.57 184,108,481,959.27
Total non-current assets
Items Closingbalance Openingbalance
MainlandChina 14,257,835,282.97 15,396,373,909.72
Othercountries/regions 25,259,765,320.54 18,248,137,105.45
Total 39,517,600,603.51 33,644,511,015.17
Total non-current assets exclude: other equity instrument investments, long-term equity investments,goodwill, deferred tax assets, and other non-current financial assets.
XI. Disclosure of fair value
1. Assets and liabilities measured at fair value
The level to which the fair value measurement result belongs is determined by the lowest level towhich the input value is significant to the fair value measurement as a whole:
Level 1: Unadjusted quotes for the same asset or liability in an active market
Level 2: Inputs that are directly or indirectly observable for related assets or liabilities, except forLevel 1 inputs.
Level 3: Unobservable inputs of related assets or liabilities.
At the end of the period
Inputusedforfairvaluemeasurement
Items Quotesinanactive Important Important
market(Level1) observableinput unobservable Total
(Level 2) input(Level3)
Continuouslymeasured
atfairvalue
Financialassetsheldfor
trading 400,433.88 283,548,675.00 24,185,898.17 308,135,007.05
Including:Bankwealth
management 198,614,361.33 198,614,361.33
products
Forwardexchange
contract 84,934,313.67 84,934,313.67
0280 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Investmentin
equityinstruments 400,433.88 24,185,898.17 24,586,332.05
Derivativefinancial
assets 19,158,132.45 19,158,132.45
Including:Forward
exchangecontract 17,241,833.10 17,241,833.10
Forward
commoditycontract 1,916,299.35 1,916,299.35
Otherequityinstruments 19,467,066.04 1,376,492,812.88 1,395,959,878.92
Including:Equity
instruments
measuredatfair
valueandchanges
ofwhichincluded 19,467,066.04 1,376,492,812.88 1,395,959,878.92
inother
comprehensive
income
Othernon-current
financialassets 294,547,364.47 294,547,364.47
Including:Bankwealth
management 294,547,364.47 294,547,364.47
products
Othernon-currentassets 62,836,363.78 14,220,964.80 77,057,328.58
Including:Other
non-current 62,836,363.78 14,220,964.80 77,057,328.58
financialassets
Financialliabilitiesheld
fortrading 42,799,173.35 42,799,173.35
Including:Forward
exchangecontract 42,799,173.35 42,799,173.35
Derivativefinancial
liabilities 99,548,853.97 99,548,853.97
Including:Forward
exchangecontract 85,557,428.14 85,557,428.14
Interestrateswap
agreement 13,991,425.83 13,991,425.83
Othernon-current
liabilities - 54,598,203.27 54,598,203.27
Including:Obligationof
repurchasingthe
minorityequity 54,598,203.27 54,598,203.27
rights
At the beginning of the period
0281 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Inputusedforfairvaluemeasurement
Items Quotesinanactive Important Important
market(Level1) observableinput unobservable Total
(Level 2) input(Level3)
Continuouslymeasured
atfairvalue
Financialassetsheldfor
trading 519,213.09 1,756,325,976.41 18,803,198.26 1,775,648,387.76
Including:Bankwealth
managementproducts 1,567,648,908.00 1,567,648,908.00
Forwardforeignexchange
contract 188,677,068.41 188,677,068.41
Investmentinequity
instruments 519,213.09 18,803,198.26 19,322,411.35
Derivativefinancial
assets 96,723,164.37 96,723,164.37
Including:Forward
exchangecontract 39,494,394.98 39,494,394.98
Interestrateswap
agreement 57,228,769.39 57,228,769.39
Otherequityinstruments 17,420,711.90 1,382,895,748.44 1,400,316,460.34
Including:Equity
instruments
measuredatfair
valueandchanges
ofwhichincluded 17,420,711.90 1,382,895,748.44 1,400,316,460.34
inother
comprehensive
income
Othernon-current
financialassets 327,358,825.57 327,358,825.57
Including:Bankwealth
management 327,358,825.57 327,358,825.57
products
Othernon-current
assets 49,499,757.96 46,019,000.00 95,518,757.96
Including:Other
non-current 49,499,757.96 46,019,000.00 95,518,757.96
financialassets
Financialliabilitiesheld
fortrading 218,748,280.33 218,748,280.33
Including:Forward
foreignexchangecontract 211,934,956.99 211,934,956.99
0282 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Forwardforeign
exchangeoptions 6,813,323.34 6,813,323.34
Derivativefinancial
liabilities 35,603,754.54 35,603,754.54
Including:Forward
foreignexchange 24,384,482.19 24,384,482.19
contract
Forward
commoditycontract 11,219,272.35 11,219,272.35
Othernon-current
liabilities 1,587,403,337.19 210,624,307.28 1,798,027,644.47
Including:
Obligationofrepurchasing 1,587,403,337.19 204,919,000.00 1,792,322,337.19
theminorityequityrights
Contingent
consideration 5,705,307.28 5,705,307.28
For financial instruments traded in an active market, the Company determines its fair value basedon its quotes in an active market; for financial instruments not traded in an active market, the Companyuses valuation techniques to determine its fair value.
2. The basis for determining the fair value of the continual Level 2 fair value measurement items:
Items Fairvalueattheendofthe Valuationtechniques
period
Financialassetsheldfortrading
Including:Bankwealthmanagement
products 198,614,361.33 Discountedcashflow
Forwardexchangecontract 84,934,313.67 Bankquoteforsimilarproducts
Derivativefinancialassets
Including:Forwardexchangecontract 17,241,833.10 Bankquoteforsimilarproducts
Forwardcommoditycontract 1,916,299.35 Futuresexchangequotefor
similar products
Othernon-currentfinancialassets
Including:Bankwealthmanagement
products 294,547,364.47 Discountedcashflow
Othernon-currentassets
Including:Othernon-currentfinancial
assets 62,836,363.78 Discountedcashflowmodel
Financialliabilitiesheldfortrading
Including:Forwardexchangecontract 42,799,173.35 Bankquoteforsimilarproducts
0283 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Derivativefinancialliabilities
Including:Forwardexchangecontract 85,557,428.14 Bankquoteforsimilarproducts
Interestrateswapagreement 13,991,425.83 Bankquoteforsimilarproducts
3. Continual Level 3 fair value measurement major items, the valuation techniques adopted and
information of important parameters
Valuati Significant
Items Fairvalueatthe on unobserva Range Sensitivityoffairvaluetotheinput
end oftheperiod techniq bleinput
ue
Otherequity
instruments
Including: 1.Average 1.1%increase(decrease)inmultiple
SINOPEC P/E wouldresultinincrease(decrease)in
FuelOilSales Valuati multipleof 1.16.92-17. fairvaluebyRMB12,429,000.
Corporation 1,242,930,000 on peers 27 2.1%increase(decrease)inthe
Limited（中国 multipl 2.Discount 2.9%-11% risk-freeinterestratewouldresultin
石化销售股份 es forlackof decrease(increase)infairvalueby
有限公司） marketabilit RMB13,810,000.
y
4. Financial instruments not measured at fair value
Items Closingbookvalue Closingfairvalue
Bondspayable(exchangeablecorporate 7,004,585,761.43 7,087,065,405.00
bondsissuedin2017)
Financial assets and financial liabilities not measured at fair value include: monetary funds, billsreceivable, accounts receivable, other receivables, other current assets, long-term and short-termborrowings, bills payable, accounts payable, other payables, long-term payables, bonds payable, etc..Except for the difference between the book value and fair value of bonds payable disclosed above, thedifference between the book value and fair value of financial assets and financial liabilities not measuredat fair value at the end of the period is small.
XII. Related parties and related transactions
（Ⅰ）Explanation for basis of identifying related party
According to Accounting Standards for Business Enterprises No. 36 — Related Party Disclosures,parties are considered to be related if one party has the ability to control or jointly control the other party
0284 2019AnnualReportofHaierSmartHomeCo.,Ltd.
or exercise significant influence over the other party. Parties (two or more than two) are also considered
to be related if they are subject to common control, joint control or significant influence from other
party.
According to Management Practices for Information Disclosure of Listed Company (ChinaSecurities Regulatory Commission Order No. 40), related legal entity or individual will be identified asrelated parties in certain occasions.
（Ⅱ）Relationships between related parties
1. Information about the parent company and other companies holding shares of the Company
Typeof Legal Relations Interest Voting
Name enterpris Registered Registered represe hipswith inthe rightstothe
e place capital ntative the Company Company
Company
Collectiv Qingdao
Haier Group e High-tech Zhang Parent
Corporation ownershi ZoneHaier 311,180,000 Ruimin Company 16.30% 16.30%
p Park
company
Haier Qingdao Subsidiar
Electric Joint-stoc High-tech Zhang yof
Appliances k ZoneHaier 631,930,635 Ruimin Parent 19.13% 19.13%
International company Park Company
Co.,Ltd.
Qingdao Haier Company Parties
Venture & with Qingdao Zhou actingin
Investment limited FreeTrade 923,000,000 Yunjie concertof 2.62% 2.62%
Information liability Zone Parent
Co.,Ltd. Company
Qingdao
Haichuangzhi Limited Qingdao Parties
Management partnershi High-tech Zhang actingin
Consulting p ZoneHaier 1,053,3060,00 Ruimin concertof 1.11% 1.11%
Enterprise company Park Parent
(Limited Company
Partnership)
Company Parties
Haier with 10,000 actingin
International limited HongKong (HongKong / concertof 0.87% 0.87%
Co.,Limited liability Dollars) Parent
Company
2. Subsidiaries of the Company
The details of the subsidiaries of the Company are detailed in Note IX.1 the disclosure of interests in
0285 2019AnnualReportofHaierSmartHomeCo.,Ltd.
subsidiaries.
□Applicable √Not Applicable
3. Associates and joint ventures of the Company
The details of the associates and joint ventures of the Company are detailed in Note VII. 12 andNote IX. 3
□Applicable √Not Applicable
Other associates or joint ventures that have related party transactions with the Company for thecurrent period or have related party transactions with the Company for the previous period and haveformed balances are as follows
□Applicable √Not Applicable
Other explanations
□Applicable √Not Applicable
4. Other related parties
√Applicable □ Not Applicable
Relationshipbetweenother
Otherrelatedparties relatedpartiesandthe
Company
Qingdao Haier Parts Procurement Co., Ltd. Subsidiary of Haier Group
Chongqing Haier Electrical Appliances Sales Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Goodaymart Logistic Co., Ltd. Subsidiary of Haier Group
Qingdao Goodaymart Supply Chains Co., Ltd. Subsidiary of Haier Group
Hefei Haier Logistics Co., Limited Subsidiary of Haier Group
Chongqing Haier Logistics Co., Ltd. Subsidiary of Haier Group
Qingdao Haier International Trading Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Special Plastic Development Co., Ltd. Subsidiary of Haier Group
Qingdao Haiyongda Property Management Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Household Integration Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Tooling Development and Manufacturing Co., Ltd. Subsidiary of Haier Group
Qingdao Haier International Travel Agency Co., Ltd. Subsidiary of Haier Group
RRS Internet of Things Co., Ltd.（日日顺物联网有限公司） Subsidiary of Haier Group
Qingdao Haier Whole House Home Co., Ltd. Subsidiary of Haier Group
Chongqing Haier Property Management Co., Ltd. Subsidiary of Haier Group
Haier Group Electric Appliance Industry Co., Ltd. Subsidiary of Haier Group
0286 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Haier Finance Leasing (China) Co., Ltd. Subsidiary of Haier Group
Suzhou Hai Xin InfoTech Ltd Subsidiary of Haier Group
Haier International Co., Ltd. Subsidiary of Haier Group
Haier Group Finance Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Industry and City Innovation Group Co., Ltd. Subsidiary of Haier Group
Laiyang Haier Electrical Co. Ltd. Subsidiary of Haier Group
Dalian Haier International Trade Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Communications Co., Ltd. Subsidiary of Haier Group
Qingdao Haier Brothers Animation Industry Co., Ltd. Subsidiary of Haier Group
Shanghai Cotai Supply Chain Management Co., Ltd. Subsidiary of Haier Group
Xingyang International Co., Ltd.(星洋国际有限公司) Subsidiary of Haier Group
Brave Lion (HK) limited Subsidiary of Haier Group
Qingdao Haier New Materials R & D Co., Ltd. Associate of subsidiary of
Haier Group
Controladora Mabe S.A.de C.V. Associate
HNR Company (Private) Limited Associate
Hefei Hegang New Material Technology Co., Ltd. Subsidiary of associate
Wolong Electric (Jinan) Motor Co., Ltd. Associate
Qingdao HBIS Composite New Material Subsidiary of associate
Mitsubishi Heavy Industries Haier (Qingdao) Air Conditioner Co., Ltd. Associate
Qingdao Haier Software Investment Co., Ltd. Associate
5. Related transactions
(1) Related transactions for procurement and sales of goods, provision and acceptnce of laborservice
Procurement of goods / acceptance of labor service
√Applicable □ Not Applicable
Unit and Currency: RMB
Relatedparties Amountforthecurrent Amountfortheprevious
period period
ControladoraMabeS.A.deC.V. 11,619,586,690.71 9,113,096,659.92
QingdaoHaierPartsProcurementCo.,Ltd. 5,953,684,963.48 5,921,843,450.68
Chongqing Haier Electrical Appliances Sales 3,898,627,675.37 4,680,091,481.07
Co.,Ltd.
QingdaoHaierGoodaymartLogisticCo.,Ltd. 2,284,810,761.71
0287 2019AnnualReportofHaierSmartHomeCo.,Ltd.
HNRCompany(Private)Limited 1,956,294,467.87 1,840,370,751.33
HefeiHaierLogisticsCo.,Limited 1,942,921,087.20 1,582,350,911.61
ChongqingHaierLogisticsCo.,Ltd. 1,907,965,982.80 2,073,214,826.93
QingdaoHaierInternationalTradingCo.,Ltd. 1,175,534,219.93 1,226,021,106.66
HefeiHegang New Material TechnologyCo., 828,466,593.38 734,384,802.58
Ltd.
WolongElectric(Jinan)MotorCo.,Ltd. 730,664,069.32 661,075,508.16
Qingdao Haier Special Plastic Development 666,523,746.13 719,843,177.61
Co.,Ltd.
QingdaoHBISCompositeNewMaterial 634,888,355.57 626,568,343.81
MitsubishiHeavy Industries Haier (Qingdao) 71,591,312.97 85,390,255.89
AirConditionerCo.,Ltd.
Qingdao Haier Household Integration Co., 29,061,781.34 54,710,255.06
Ltd.
Qingdao Haier Tooling Development and 24,033,448.73 323,542,192.07
ManufacturingCo.,Ltd.
Qingdao Haiyongda Property Management 21,831,548.87 237,267,663.00
Co.,Ltd.
HaierInternationalCo.,Ltd 10,191,112.28 140,741,779.07
Otherrelated-party 2,204,900,570.82 2,213,169,437.98
Total 35,961,578,388.48 32,233,682,603.43
Sales of goods / provision of service
√Applicable □ Not Applicable
Unit and Currency: RMB
Relatedparties Amountforthecurrent Amountfortheprevious
period period
Qingdao Haier Special Plastic Development 594,580,472.70 679,607,921.20
Co.,Ltd.
QingdaoHaierInternationalTradingCo.,Ltd. 577,344,117.36 622,373,513.67
QingdaoHaierNewMaterialsR&DCo.,Ltd. 489,949,910.45 319,471,416.84
HNRCompany(Private)Limited 436,216,032.46 428,693,680.74
ControladoraMabeS.A.deC.V. 375,146,095.66 715,307,126.17
314,689,017.25 241,476,982.52
WolongElectric(Jinan)MotorCo.,Ltd.
Qingdao Haier International Travel Agency 303,939,917.85 117,712,848.11
Co.,Ltd.
0288 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Qingdao HBISCompositeNewMaterial 301,875,325.92 131,806,476.71
Hefei Hegang New Material Technology Co., 138,554,571.84 219,541,831.54
Ltd.
RRS Internetof Things Co., Ltd.（日日顺物联 34,719,443.14 4,604,208.50
网有限公司）
Chongqing Haier Electrical Appliances Sales 34,076,449.50 246,913,534.92
Co., Ltd.
Qingdao HaierWholeHouseHomeCo.,Ltd. 32,411,131.07 39,019,447.13
Chongqing Haier Property Management Co., 27,729,431.99 26,981,672.89
Ltd.
Qingdao Haier Tooling Development and 13,858,544.21 225,731,209.43
Manufacturing Co.,Ltd.
Other related-party 525,506,903.39 470,526,920.15
Total 4,200,597,364.79 4,489,768,790.52
Explanations to related transactions for procurement and sales of goods, provision and acceptence oflabor service.
□Applicable √Not Applicable
6. Receivable and payable due from related-party
Itemsandnameofdistributors ClosingBalance OpeningBalance
Bills receivable：
Qingdao HaierNewMaterialsR&DCo.,Ltd. 5,000,000.00 34,632,882.73
Other related-party 18,658,821.43 7,356,564.87
Dividend receivable：
Qingdao Haier Software Investment Co., Ltd. 4,524,472.84 4,524,472.84
Accounts receivable：
HNR Company (Private) Limited 420,113,418.64 280,435,010.88
Qingdao Haier International Travel Agency
Co., Ltd. 112,821,150.93 82,564,510.88
Haier Group Electric Appliance Industry Co.,
Ltd. 96,399,344.74 115,044,945.15
Controladora Mabe S. A. deC. V. 86,399,338.60 149,908,002.70
Haier Finance Leasing (China) Co., Ltd. 64,250,047.12 80,643,117.12
Qingdao Haier Parts Procurement Co., Ltd. 61,657,988.46 23,987,017.43
RRS Internet of Things Co., Ltd.（日日顺物联
网有限公司） 35,268,625.02 6,275,641.65
Qingdao Haier Special Plastic Development
Co., Ltd. 32,485,794.84 31,769,104.04
0289 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Qingdao Haier International Trading Co., Ltd. 31,247,321.37 17,054,686.23
Suzhou Hai Xin InfoTech Ltd 10,781,192.30 10,878,625.30
Qingdao Haier Household Integration Co., Ltd. 8,092,101.80 10,567,963.70
Haier International Co., Ltd. 2,808,260.59 21,866,762.90
Hefei Hegang New Material Technology Co.,
Ltd. 5,047,872.56 12,430,653.04
Chongqing Haier Property Management Co.,
Ltd. 6,328,857.33 11,445,371.17
Other related-party 368,107,531.73 231,768,853.79
Prepayments:
Qingdao Haier Parts Procurement Co., Ltd. 269,505,987.96 6,232,019.51
HNR Company (Private) Limited 66,648,390.11
Hefei Haier Logistics Co., Limited 45,776,811.08
Chongqing Haier Logistics Co., Ltd. 34,842,309.86
Haier Group Electric Appliance Industry Co.,
Ltd. 32,846,613.20 36,250,083.22
Qingdao Haier International Trading Co., Ltd. 23,318,702.14 52,377,466.40
Other related-party 53,362,863.82 36,146,173.00
Interest receivable:
Haier Group Finance Co., Ltd. 49,797,510.75 8,558,831.18
Other receivables：
Haier Group Co., Ltd 215,130,000.00
Haier Group Electric Appliance Industry Co.,
Ltd. 11,925,794.18 4,932,361.04
Qingdao Haier Industry and City Innovation
Group Co., Ltd. 88,640,000.00 69,280,000.00
Other related-party 143,955,967.27 81,410,902.63
Bills payable:
Laiyang Haier Electrical Co. Ltd. 39,208,909.70 60,572,756.31
Other related-party 28,684,896.03 11,747,585.16
Accounts payable：
Qingdao Haier Parts Procurement Co., Ltd. 1,968,841,996.69 1,709,722,192.99
Chongqing Haier Electrical Appliances Sales
Co., Ltd. 1,061,806,342.30 887,619,722.87
Qingdao Haier International Trading Co., Ltd. 314,990,780.41 206,304,134.91
Controladora Mabe S.A.deC.V. 230,300,308.48 448,791,729.31
Dalian Haier International Trade Co., Ltd. 156,594,556.64 85,369,608.45
Chongqing Haier Logistics Co., Ltd. 132,648,041.70 76,661,148.51
0290 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Hefei HaierLogisticsCo.,Limited 75,628,528.77 22,752,588.26
Qingdao Haier Special Plastic Development
Co., Ltd. 69,159,088.68 43,902,377.09
Hefei Hegang New Material Technology Co.,
Ltd. 43,160,933.30 50,571,741.10
Qingdao HBISCompositeNewMaterial 29,418,148.41 66,411,374.50
Laiyang HaierElectricalCo.Ltd. 16,287,220.50 14,480,111.50
Haier InternationalCo.,Ltd. 11,823,617.47 96,592,512.06
HNR Company(Private)Limited 8,582,434.46 83,263,372.49
Qingdao HaierCommunicationsCo.,Ltd. 6,218,363.69 48,474,102.93
Other related-party 151,131,771.70 171,881,760.78
Contract liabilities:
WolongElectric(Jinan)MotorCo.,Ltd. 15,580,146.24
Qingdao HaierNewMaterialsR&DCo.,Ltd. 6,373,064.84 625,448.16
Hefei Hegang New Material Technology Co.,
Ltd. 5,980,624.73
Other related-party 16,549,516.99 5,897,451.39
Other payables:
Qingdao HaierGoodaymartLogisticCo.,Ltd. 571,867,437.60
Qingdao Haier Brothers Animation Industry
Co., Ltd. 274,526,190.97 259,873,164.57
Qingdao GoodaymartSupplyChainsCo.,Ltd. 187,341,850.29
Shanghai Cotai Supply Chain Management
Co., Ltd. 103,450,224.91
Chongqing Haier Electrical Appliances Sales
Co., Ltd. 60,000,000.00
Qingdao HaierInternationalTradingCo.,Ltd. 47,981,351.46 75,803,387.90
Qingdao Haier Special Plastic Development
Co., Ltd. 43,054,748.09
Chongqing HaierLogisticsCo.,Ltd. 51,830,739.06
Xingyang International Co., Ltd.(星洋国际有
限公司) 13,885,076.40
Other related-party 215,584,489.94 106,421,756.70
Interest payable：
Haier Group Finance Co., Ltd. 11,288,860.64 5,911,859.39
Dividends payable：
Brave Lion (HK) limited 122,756,874.10 122,756,874.10
0291 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Other related-party 14,040,737.31 45,668,592.75
7. Others
√Applicable □ Not Applicable
（1）Certain of the Company’s subsidiaries entered into loan contracts with Haier Group FinanceCo., Ltd.. The loan balance as of 31 December 2019 was RMB 1.884 billion and the interest expensepayable by the Company to Haier Group Finance Co., Ltd. for the current period was RMB 63 million.
（2）Information of the guarantor (as a related party) of the Company’s guaranteed loan at the end ofthe period:
Borrower Loanamount Guarantor
HaierU.S.ApplianceSolutions,Inc. 6,325,892,346.26 HaierGroup
Corporation
HaierSingaporeInvestmentHoldingCo.,Ltd. 5,849,441,673.08 HaierGroup
Corporation
Total 12,175,334,019.34
（3）The interest income of deposits received by the Company and subsidiaries from Haier GroupFinance Co., Ltd. for the current period was RMB 94 million.
（4）Haier Electrical Appliances Rus Limited lend an amount of RMB 19 million to Haier RussianTrading Company LLC, a related-party.
（5）Qingdao Haier Goodaymart Logistic Co., Ltd., a subsidiary of the Company and othercompanies provided logistics services to other related companies within Haier Group, the logisticsincome for the current period was RMB 74 million.
（6）Leasing
Lessees Lessors Usesforleasedassets Leaseexpenserecognized
forthecurrentperiod
Subsidiaries of the QingdaoHaierInvestment
Company andDevelopmentCo.,Ltd. Productionandoperation 23,521,980.30
anditssubsidiaries
Subsidiaries of the OthercompaniesofHaier Productionandoperation 111,997,010.70
Company Group
Total 135,518,991.00
(IV)Pricing policy
1. Related-party sales
Following the acquisition of the overseas white home appliances assets, the Company’s originaloverseas sales model, being exports through the Group’s exporting platform, was changed. The trading
0292 2019AnnualReportofHaierSmartHomeCo.,Ltd.
company under the company holding overseas white home appliances assets was fully responsible for
sales of export-oriented products. Meanwhile, the trading company was also responsible for the overseas
sales of some of the Group’s products (such as brown goods). As such, the Company entered into a Sales
Framework Agreement with Haier Group Corporation. Under which, it was agreed that the Company
and Haier Group Corporation will sell products and provide sales-related services (including but not
limited to agency sales services, after-sales services and technical support) on a reciprocal basis for a
term of three years.
Sales among Haier Electronics Group Co., Ltd. (‘Haier Electronics’), a holding subsidiary of theCompany, Qingdao Haier Investment and Development Co., Ltd, Haier Group Corporation are carriedout according to relevant provisions of Goods Export Agreement, After-sales Service Agreement,Logistics Service Agreement entered into among parties.
2. Related-party Procurement
In addition to independent procurement platform, the Company entrusted Haier Group Corporationand its subsidiaries for procurements and delivery of part of raw materials, which is conducted accordingto the Purchase and Distribution Contract entered among the Company, Haier Group Corporation andother parties. The Company, Haier Group Corporation and its subsidiaries purchase materials fromagents. They purchase and distribute goods for production and non-production use according to thespecific material procurement target proposed by the Company. The price consists of the actual purchaseprice and the agency fee, of which the agency fee was calculated by 1.25% of the actual purchase price,while in principle the price of materials should not be higher than the price that the Companyindependently purchases from the market.
Related-party procurement among Haier Electronics, Qingdao Haier Investment and DevelopmentCo., Ltd, Haier Group Corporation are carried out according to relevant provisions of MaterialsProcurement Agreement and Production and Experimental Equipment Procurement Agreement enteredamong parties.
3. Related-party Transactions on Financial and Logistics Services
Some of the financial services such as deposit and loan service, discounting service and foreignexchange derivatives needed by the Company are provided by Haier Group Corporation, its subsidiariesand other companies. According to the Financial Service Agreement entered among the Company, HaierGroup Corporation and other parties, the price of financial services is determined by the principle of notless favorable than market value fair. The Company is entitled to decide whether to keep cooperationrelationship with them with the knowledge of the price prevailing in the market and in combination withits own interests. While performing the agreement, the Company could also require other financialservice institutions to provide related financial services basing on actual situation. In order to meet theCompany’s demands such as the avoidance of foreign exchange fluctuation risk, the Company may
0293 2019AnnualReportofHaierSmartHomeCo.,Ltd.
choose Haier Group Finance Co., Ltd. (hereinafter referred to as ‘Finance Company’) to provide some
foreign exchange derivative business after comparing with comparable companies. The Company will
uphold the safe and sound, appropriate and reasonable principle, under which all foreign exchange
capital business shall have a normal and reasonable business background to eliminate speculative
operation. At the same time, the Company has specified the examination and permission rights,
management positions and responsibilities at all levels for its foreign exchange capital business to
eradicate the risks of operation by persons and improved its response speed to risks on the premise that
the risks are effectively controlled.
Related-party transactions of financial services among Haier Electronics, Finance Company,Qingdao Haier Investment and Development Co., Ltd and Haier Group Corporation are carried outaccording to relevant provisions of Financial Service Agreement entered into among parties.
In order to further standardize the administrative services provided by the related companies ofHaier Group Corporation, the Company signed the Administrative Service Agreement with QingdaoHaier Investment and Development Co., Ltd and Haier Group Corporation, and entrusted thesubsidiaries of Haier Group to provide energy and power, detection, equipment leasing, house rental andmaintenance, landscaping and sanitation, gift purchasing, design, consultation, all kinds of booking andother services.
In accordance with the Comprehensive Service Agreement, Promotion Agreement, ProductResearch and Development Agreement entered into among Haier Electronics, Qingdao Haier Investmentand Development Co., Ltd and Haier Group Corporation, Haier Electronics entrusted subsidiaries ofHaier Group to support on: energy, meeting, accommodation, ticket, product certification, software,catering, property decoration, house lease, finance and marketing, product research and development.
4. Others
In order to expand the sales businesses in the third and fourth-tier markets, Haier Electronicsrenewed the Products Procurement Agreement and Internal Sales Agreement with Qingdao HaierInvestment and Development Co., Ltd and Haier Group Corporation, according to which, while HaierElectronics purchases products from contracted parties, the purchasing price shall be determined basingon the prices of which Haier Electronics purchases the same type of product in similar transactions fromindependent third parties in the market, and are not less favorable than the terms and conditions providedby the independent third parties to Haier Electronics; while Haier Electronics sales products to contractparties for their own use or distributes products through sales network, the selling price shall bedetermined basing on the prices of which Haier Electronics sells the same type of product in similartransactions to independent third parties in the market, and are not less favorable than the terms andconditions provided by Haier Electronics to independent third parties.
The Company and its subsidiaries entered into a series of contracts, including the FrameworkAgreement Regarding the Procurement of Modular Products with Wolong Electric (Jinan) Motor Co.,
0294 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Ltd. and other companies. Pursuant to which, they agreed to supply modular products to the Company at
the most favorable price which is no higher than the price it offered to other distributors.
The Company and its subsidiaries entered into a series of contracts, including the ContractArrangement Regarding the Procurement of Special Steel Plate Products with Qingdao Hegang NewMaterial Technology Co., Ltd.（青岛河钢新材料科技股份有限公司）. Under which, it is agreed thatthey shall supply goods to the Company on terms which are not less favorable than terms offered byother suppliers.
XIII. Share-based payments
1. Overall of share-base payments
□Applicable √Not ApplicableXIV. Commitments and Contingencies1. Significant commitments
□Applicable√ Not Applicable
2. Contingencies
(1) There are significant contingencies at the balance sheet date
□Applicable √Not Applicable(2) Even if the Company has no significant contingencies that need to be disclosed, it shouldalso give explanations:
√Applicable □ Not Applicable
As of 31 December 2019, the Company has no significant contingencies that need to be disclosed.XV. Events after the balance sheet date
1. According to the resolution of the 7th meeting of the 10th session of the Board of Directors ofthe Company held on 28 April 2020, the profit for the year is proposed to be distributed on the basis ofthe total number of shares on the registration date when the plan is implemented in the future, theCompany will declare cash dividend of RMB 3.75 (including taxes) for every 10 shares to allshareholders.
2. Since the outbreak of pneumonia epidemic caused by COVID-19 at home and abroad in early2020, the Company’s prevention and control of pneumonia epidemic is continuing globally and variousmeasures have been taken to mitigate the impact of the epidemic on the Company’s production andoperation. The epidemic has brought uncertainty to the production and operation and may affect the
0295 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Company’s operation and financial condition. The Company will continue to assess and actively respond
to the impact of the epidemic on its financial condition and operating results.
3. The Company has no other significant event after the balance sheet date that needs to bedisclosed.
XVI. Risks Related to Financial Instruments
√Applicable □ Not Applicable
The book value of various financial instruments on the balance sheet date is as follows:
Financial assets
Closingbalance
Financialassets Financialassets
measured atfair measuredatfair
Items valueandchangesof Measuredat valueandchanges
whichincludedin amortizedcost ofwhichincluded Total
currentprofitand inother
loss comprehensive
income
Monetaryfunds 36,178,815,683.25 36,178,815,683.25
Financialassetsheldfor
trading 308,135,007.05 308,135,007.05
Derivativefinancialassets 19,158,132.45 19,158,132.45
Billsreceivable 13,951,419,893.96 13,951,419,893.96
Accountsreceivable 11,015,871,060.09 11,015,871,060.09
Otherreceivables 2,163,517,802.50 2,163,517,802.50
Othercurrentassets 3,981,314,321.50 3,981,314,321.50
Long-termreceivables 307,588,203.00 307,588,203.00
Otherequityinstruments 1,395,959,878.92 1,395,959,878.92
Othernon-current
financialassets 294,547,364.47 294,547,364.47
Othernon-currentassets 77,057,328.58 77,057,328.58
Financial assets (Continued)
Opening balance
Financialassets Financialassets
Items measuredatfair Measuredat measuredatfair
valueandchangesof amortizedcost valueandchanges Total
whichincludedin ofwhichincluded
currentprofitand inother
0296 2019AnnualReportofHaierSmartHomeCo.,Ltd.
loss comprehensive
income
Monetaryfunds 38,370,916,510.92 38,370,916,510.92
Financialassetsheldfor
trading 1,775,648,387.76 1,775,648,387.76
Derivativefinancialassets 96,723,164.37 96,723,164.37
Billsreceivable 14,300,186,109.12 14,300,186,109.12
Accountsreceivable 10,533,499,026.83 10,533,499,026.83
Otherreceivables 1,656,056,557.69 1,656,056,557.69
Othercurrentassets 2,838,231,840.90 2,838,231,840.90
Long-termreceivables 245,791,343.37 245,791,343.37
Otherequityinstruments 1,400,316,460.34 1,400,316,460.34
Othernon-current
financialassets 327,358,825.57 327,358,825.57
Othernon-currentassets 95,518,757.96 95,518,757.96
Financial liabilities
Closing balance
Financial liabilities Financialliabilities
measured atfair Financial measuredatfair
Items valueandchangesof liabilities valueandchanges
whichincludedin measuredat ofwhichincluded Total
currentprofitand amortizedcost inother
loss comprehensive
income
Short-termborrowings 8,585,049,237.18 8,585,049,237.18
Financialliabilitiesheld
fortrading 42,799,173.35 42,799,173.35
Derivativefinancial
liabilities 99,548,853.97 99,548,853.97
Billspayable 19,308,538,776.92 19,308,538,776.92
Accountspayable 33,750,567,046.28 33,750,567,046.28
Otherpayables 15,156,392,521.82 15,156,392,521.82
Non-currentliabilitiesdue
withinoneyear 4,730,070,447.82 4,730,070,447.82
Long-termborrowings 13,276,452,935.56 13,276,452,935.56
Bondspayable 7,004,585,761.43 7,004,585,761.43
Long-termpayables 142,342,718.45 142,342,718.45
Othernon-current
liabilities 54,598,203.27 54,598,203.27
0297 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Financial liabilities (Continued)
Openingbalance
Financialliabilities Financial Financialliabilities
Items measuredatfairvalue liabilities measuredatfairvalue
andchangesofwhich measuredat andchangesofwhich Total
includedincurrent amortizedcost includedinother
profit andloss comprehensiveincome
Short-termborrowings 6,298,504,892.57 6,298,504,892.57
Financialliabilities
heldfortrading 218,748,280.33 218,748,280.33
Derivativefinancial
liabilities 35,603,754.54 35,603,754.54
Billspayable 20,038,016,339.86 20,038,016,339.68
Accountspayable 27,899,496,560.92 27,899,496,560.29
Otherpayables 12,770,158,224.05 12,770,158,224.50
Non-currentliabilities
duewithinoneyear 3,015,060,105.58 3,015,060,105.58
Long-termborrowings 15,541,466,325.22 15,541,466,325.22
Bondspayable 9,191,896,302.70 9,191,896,302.70
Long-termpayables 106,763,243.99 106,763,243.99
Othernon-current
liabilities 1,798,027,644.47 1,798,027,644.47
Details on each of the financial instruments of the Company are disclosed in Note V. Risks relatingto these financial instruments and the risk management policies to mitigate these risks are summarizedbelow. Management of the Company manages and monitors these risk exposures to ensure above risksare well under control.
1. Credit risk
The credit risk the Company exposed to mainly arise from bank deposits, bills receivable, accountsreceivable, interest receivable, other receivable and wealth manegement products.
(1)The Company’s bank deposits and financial products are mainly deposited with Haier GroupFinance Co., Ltd., national banks and other large and medium sized listed banks. The interest receivablesmainly refer to the accrued interest from fixed deposits with them. The Group doesn’t believe there isany significant credit risk due to defaults of its counterparties which would cause significant loss.
(2)Accounts receivable and bills receivable: The Company only trades with approved and reputablethird parties. All distributors who are traded by credit are subject to credit assessment, and the paymentterms shall be determined on a reasonable basis. The Company monitors the balances of accounts
0298 2019AnnualReportofHaierSmartHomeCo.,Ltd.
receivable on an ongoing basis and purchase credit insurance for receivables of large-amount credit
customers in order to ensure the Company is free from material bad debts risks.
(3) Other receivables mainly include export tax refund, loans and advances to its employees. TheCompany strengthened the management of these receivables and corresponding business activities basedon historical data, and continued to monitor such receivables, so as to ensure that the Company’ssignificant risk of bad debts are controllable and to be reduced.
2. Liquidity risk
Liquidity risk is the risk that an enterprise may encounter deficiency of funds in fulfillingobligations associated with financial liabilities. The Company utilize various financing methods such asnotes and bank loans, to strive for a sustainable and flexible financing. It also has facilities with severalcommercial banks to satisfy its needs for working capital and capital expenditures.
3. Exchange rate risk
The Company’s businesses are based in mainland China, USA, Japan, Southeast Asia, South Asia,central and east Africa, Europe, and Australia, etc. and are settled in RMB , USD, and other currencies.
The Company’s overseas assets and liabilities denominated in foreign currencies as well astransactions settled in foreign currencies expose the Company to fluctuations in exchange rates. TheCompany’s finance department is responsible for monitoring the size of transactions in foreigncurrencies and assets and liabilities denominated in foreign currencies and enter into forward foreignexchange contracts to minimize the exposure.
4. Interest rate risk
The Company mainly faces interest rate risk from its long- and short- term bank loans and bondspayables which are interest-bearing. Financial liabilities with floating interest rates expose the Companyto cash flow interest rate risk, while financial liabilities with fixed interest rates expose the Company tofair value interest rate risk. The Group determines the percentage of fixed-interest rate and floatinginterest rate contracts in light of the prevailing market conditions.
XVII. Other Significant Events
1. The progress of privatisation of Haier Electronics Group Co., Ltd. (hereinafter referred to as‘Haier Electronics’) by the Company: On 12 December 2019, the Company announced the preliminarydiscussion on the implementation of H-share listing and privatization of Haier Electronics. Up to now,the Company has been continuing to explore the proposal on the Possible Privatisation, and has been inongoing consultations with the relevant regulators concerning the proposed transactions being exploredin that regard; and the Company has not furnished a definitive Possible Privatisation proposal to HaierElectronics, no agreement or other commitment has been made by the Company as to whether toproceed with the Possible Privatisation and the details and terms (including the exchange ratio and thetimetable) of the Possible Privatisation are yet to be finalised, and there is no certainty that the PossiblePrivatisation will proceed. For details, please refer to the Company’s monthly notice on updating theprogress of the aforesaid matter.
0299 2019AnnualReportofHaierSmartHomeCo.,Ltd.
2. The Company has no other significant events that need to be disclosed.XVIII. Notes to Main Items of Financial Statements of the Parent Company
1. Accounts receivable
Aging Closingbalance Openingbalance
Withinoneyear 1,175,031,729.66 205,461,418.79
1-2years 7,798,791.09 9,306,599.70
2-3years 8,649,467.83
Over3years
Accounts receivablebalance 1,182,830,520.75 223,417,486.32
Allowanceforbaddebts 596,039.26 795,468.89
Netreceivables 1,182,234,481.49 222,622,017.43
The total amount of the top 5 accounts receivable at the end of the period was RMB
1,179,134,741.81, accounting for 99.69% of book balance of the accounts receivable.□ Applicable √ Not Applicable
Changes in bad debt provision for accounts receivable in the current period：
Increaseforthecurrentperiod Decreaseforthecurrent
Opening period Closing
Items balance Other Write-off balance
Provision increase Reversal andother
movement
Allowance
for bad 795,468.89 199,429.63 596,039.26
debts
2. Other receivables
Presentation
√Applicable □ Not Applicable
Unit and Currency: RMB
Items Closingbalance Openingbalance
Interestreceivable 16,753,860.49 6,292,538.22
Dividendreceivable 3,836,055,151.41 1,912,418,382.82
Otherreceivables 2,032,943,893.84 164,056,245.54
Total 5,885,752,905.74 2,082,767,166.58
Interest receivable:
0300 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Aging Closingbalance Openingbalance
Within1year 16,753,860.49 6,292,538.22
Over1years
Total 16,753,860.49 6,292,538.22
Dividend receivable:
Aging Closingbalance Openingbalance
Within1year 3,836,055,151.41 1,912,418,382.82
Morethan1year
Total 3,836,055,151.41 1,912,418,382.82
Other receivables:
①The disclosure of other receivables by ageing is as follows:
Aging Closingbalance Openingbalance
Withinoneyear 2,033,022,986.42 164,319,278.07
Morethanoneyear
Other receivablesbalance 2,033,022,986.42 164,319,278.07
Allowanceforbaddebts 79,092.58 263,032.53
Netotherreceivables 2,032,943,893.84 164,056,245.54
② The total amount of the top 5 other receivables at the end of the period is RMB
1,220,495,115.74, accounting for 60.03% of book balance of other receivables.③ Changes in bad debt provision for other receivables in the current period：
Increaseforthe Decreaseforthecurrentperiod
Items Opening currentperiod Closing
balance Other Write-offandother balance
Provision increase Reversal movement
Allowance
forbad 263,032.53 183,939.95 79,092.58
debts
3. Long-term equity investment√Applicable □Not Applicable
（1）Details of long-term equity investments:
Closingbalance Openingbalance
Items
Bookbalance Provisionfor Bookbalance Provisionfor
0301 2019AnnualReportofHaierSmartHomeCo.,Ltd.
impairment impairment
Long-termequityinvestments
Including: long-termequity
investmentstosubsidiaries 32,396,253,033.48 7,100,000.00 30,675,167,530.39 7,100,000.00
Long-termequityinvestmentsto
associates 3,246,627,336.72 69,300,000.00 3,197,166,784.91 21,000,000.00
Total 35,642,880,370.20 76,400,000.00 33,872,334,315.30 28,100,000.00
（2）Long-term equity investments to subsidiaries
Increase / Impairment
Investee Openingbalance Decreasefor Closingbalance provisionsat
the period theendof
the period
I.Subsidiaries:
ChongqingHaierElectronicsSalesCo.,
Ltd. 9,500,000.00 9,500,000.00
Haier Group (Dalian) Electrical
AppliancesIndustryCo.,Ltd 34,735,489.79 34,735,489.79
QingdaoHaierRefrigeratorCo.,Ltd. 402,667,504.64 402,667,504.64
Qingdao Haier Special Refrigerator
Co.,Ltd. 329,832,047.28 329,832,047.28
Qingdao Haier Information Plastic
DevelopmentCo.,Ltd 102,888,407.30 102,888,407.30
Dalian Haier Precision Products Co.,
Ltd. 41,836,159.33 41,836,159.33
HefeiHaierPlasticCo.,Ltd. 42,660,583.21 42,660,583.21
QingdaoHaierTechnologyCo.,Ltd. 16,817,162.03 16,817,162.03
Qingdao Household Appliance
Technology and Equipment Research 66,778,810.80 66,778,810.80
Institute
Qingdao Meier Plastic Powder Co.,
Ltd. 24,327,257.77 24,327,257.77
Chongqing Haier Precision Plastic Co.,
Ltd. 47,811,283.24 47,811,283.24
Qingdao Haier Electronic Plastic Co.,
Ltd. 48,000,000.00 48,000,000.00
DalianHaierRefrigeratorCo.,Ltd. 99,000,000.00 99,000,000.00
DalianHaierAir-conditioningCo.,Ltd. 99,000,000.00 99,000,000.00
GuizhouHaierElectronicsCo.,Ltd. 96,904,371.71 96,904,371.71
Hefei Haier Air-conditioning Co.,
Limited 67,110,323.85 67,110,323.85
0302 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Qingdao Haier Refrigerator
(International) Co.,Ltd. 158,387,576.48 80,370,664.37 238,758,240.85
Qingdao Haier Air-Conditioner
Electronics Co.,Ltd. 1,113,433,044.51 1,113,433,044.51
Qingdao Haier Air Conditioner Gen
Corp., Ltd. 220,636,306.02 220,636,306.02
Qingdao Haier Special Freezer Co.,
Ltd. 442,684,262.76 442,684,262.76
Qingdao HaierDishwasherCo.,Ltd. 206,594,292.82 206,594,292.82
Wuhan HaierFreezerCo.,Ltd. 47,310,000.00 47,310,000.00
Wuhan HaierElectronicsCo.,Ltd. 100,715,445.04 100,715,445.04
Chongqing Haier Air-conditioningCo.,
Ltd. 100,000,000.00 100,000,000.00
Hefei HaierRefrigeratorCo.,Ltd. 49,000,000.00 49,000,000.00
Qingdao Haier Whole Set Home
Appliance ServiceCo.,Ltd. 118,000,000.00 118,000,000.00
Chongqing Haier Refrigeration
Appliance Co.,Ltd. 91,750,000.00 91,750,000.00
Haier ShanghaiZhongzhiFangChuang
Ke ManagementCo.,Ltd. 2,000,000.00 2,000,000.00
Haier COSMO IOT Ecosystem
Technology Co.,Ltd. 733,454,010.03 164,000,000.00 897,454,010.03
Qingdao Haier Special Refrigerating
Appliance Co.,Ltd. 100,000,000.00 100,000,000.00
Haier Shareholdings (Hong Kong)
Limited 23,624,546,787.52 1,451,864,838.72 25,076,411,626.24
Shenyang HaierRefrigeratorCo.,Ltd. 100,000,000.00 100,000,000.00
Foshan HaierFreezerCo.,Ltd. 100,000,000.00 100,000,000.00
Zhengzhou Haier Air-conditioningCo.,
Ltd. 100,000,000.00 100,000,000.00
Qingdao Haidayuan Procurement
Service Co.,Ltd. 20,000,000.00 20,000,000.00
Qingdao Haier Intelligent Technology
Development Co.,Ltd. 130,000,000.00 130,000,000.00
Qingdao Haier Technology Investment
Co., Ltd. 277,255,635.00 24,850,000.00 302,105,635.00
Qingdao Casarte Smart Living
Appliances Co.,Ltd. 10,000,000.00 10,000,000.00
Haier Overseas Electric Appliance Co.,
Ltd. 20,000,000.00 20,000,000.00
Haier (Shanghai)ElectronicsCo.,Ltd. 12,500,000.00 12,500,000.00
Haier U+smart Intelligent Technology 143,000,000.00 143,000,000.00
0303 2019AnnualReportofHaierSmartHomeCo.,Ltd.
(Beijing) Co.,Ltd.
Haier ElectronicsGroupCo.,Ltd. 669,830,769.26 669,830,769.26 7,100,000.00
Qingdao Haidarui Procurement Service
Co., Ltd. 107,800,000.00 107,800,000.00
Qingdao HaierIntelligentHousehold
Appliances Co.,Ltd. 326,400,000.00 326,400,000.00
Haier Overseas Electric Appliance Co.,
Ltd. (Logistics) 20,000,000.00 20,000,000.00
Total 30,675,167,530.39 1,721,085,503.09 32,396,253,033.48 7,100,000.00
(3）Long-term equity investments to associates
Increased/decreasedamountforthe
currentperiod Impairmen
Opening Increase/ Investment Closing tprovisions
Name ofinvestee Balance Decrease income balance attheend
for the recognized Others ofthe
current underequity period
period method
Wolong Electric
(Jinan) Motor Co., 115,124,133.84 10,823,630.34 -10,040,000.00 115,907,764.18
Ltd.
Qingdao Haier SAIF
Smart Home Industry
Investment Center 362,380,221.29 72,159,881.83 434,540,103.12
(Limited Partnership)
Bank of Qingdao Co.,
Ltd. 966,031,978.83 56,860,554.87 -59,048,298.88 963,844,234.82
Mitsubishi Heavy
Industries Haier
(Qingdao) 622,643,614.66 87,012,822.20 -66,600,000.00 643,056,436.86
Air-conditioners Co.,
Ltd.
Qingdao Haier
Carrier Refrigeration 332,723,126.50 63,210,360.76 395,933,487.26 21,000,000.00
Equipment Co., Ltd.
Qingdao Haier -119,877,634.7 48,300,000.0
multimedia Co., Ltd. 555,084,616.71 6 -2,820,180.70 432,386,801.25 0
Qingdao Hegang New
Material Technology
Co., Ltd.（青岛河钢 243,179,093.08 17,779,416.15 260,958,509.23
新材料科技股份有
限公司）
0304 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Total 3,197,166,784.91 187,969,031.39 -138,508,479.58 3,246,627,336.72 69,300,000.00
4. Operating revenue and operating cost√Applicable □Not Applicable
Unit and Currency: RMB
Amount forthecurrentperiod Amountforthepreviousperiod
Items
Revenue Cost Revenue Cost
PrimaryBusiness 6,466,328,591.49 5,016,605,810.47 3,199,683,163.90 2,200,981,641.65
Other Business 171,526,897.13 144,140,329.73 60,627,963.89 32,770,272.98
Total 6,637,855,488.62 5,160,746,140.20 3,260,311,127.79 2,233,751,914.63
5. Investment income√Applicable □Not Applicable
Unit and Currency: RMB
Items Amountforthecurrentperiod Amountfortheprevious
period
Investment income from long-term equity
investmentaccountedforusingcostmethod 3,314,994,904.38 2,027,080,177.86
Investment income from long-term equity
investmentsaccountedforusingequitymethod 187,969,031.39 381,316,748.83
Investment income generated from disposal of
long-termequityinvestment 241,239,800.75
Dividendincomefrominvestmentinotherequity
instrumentduringtheholdingperiod 255,422.40 243,162.12
Incomefromwealthmanagementproducts 33,645,544.43
Total 3,536,864,902.60 2,649,879,889.56
XIX. Approval of financial report
This financial report was approved by the board of directors of the Company for reporting on 28 April 2020.
XX. Supplementary Information
1. Basic earnings per share and diluted earnings per share
Items Amountforthecurrentperiod Amountforthepreviousperiod
0305 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Weighted Earningspershare Weighted Earningspershare
average (RMB) average (RMB)
returnon Basic Diluted returnonnet Basic Diluted
netassets earnings earnings assets earnings earnings
per share pershare pershare pershare
Net profit attributable to
ordinary shareholders of the 19.12% 1.286 1.212 20.88% 1.217 1.189
Company
Net profit attributable to
ordinary shareholders of the
Company after deduction of 13.43% 0.903 0.876 18.63% 1.074 1.046
non-recurringprofitorloss
2. Extraordinary profit or loss
Items Amountforthe Amountforthe
current period previousperiod
Net profit attributable to ordinary shareholders of the parent
Company 8,206,247,105.96 7,483,659,016.04
Less:Extraordinaryprofitorloss 2,441,082,405.21 882,153,416.25
Net profit attributable to ordinary shareholders of the parent
companyafterdeductionofextraordinaryprofitorloss 5,765,164,700.75 6,601,505,599.79
Details of extraordinary profit and loss for the current period
Extraordinary profitorlossItems Amountforthecurrentperiod
Profit or loss from disposal of non-current assets 396,961,251.42
Profit from disposal of long-term equity investments 635,595,988.34
Government grants included in current profit or loss, except that closely
related to the normal operating business, complied with requirements of the
national policies, continued to be granted with the amount and quantity 990,736,933.23
determined under certain standards
Gains from the costs of investment in the acquisition of subsidiaries,
associated companies and joint ventures being lower than the share of the fair 3,190,702,632.96
value of the investee’s identifiable net assets
Profit or loss from fair value changes of financial assets/liabilities held for
trading, as well as investment gains arising from disposal of financial 113,442,943.70
assets/liabilities held for trading and financial assets available-for-sale,
except the effective hedging related to the normal operations of the Company
Other non-operating income and expenses except the aforementioned items 269,931,284.51
Impact on minority interests -2,689,843,840.65
Impact on income tax -503,903,951.59
0306 2019AnnualReportofHaierSmartHomeCo.,Ltd.
Impact on profit from business combination under common control 37,459,163.29
Total 2,441,082,405.21
1. Difference on figures by domestic and foreign Accounting Standards
□Applicable √Not Applicable2. Others
□Applicable √Not Applicable
0307 2019AnnualReportofHaierSmartHomeCo.,Ltd.
SECTION XIII DOCUMENTS AVAILABLE FOR INSPECTIONDocuments Available for (I) Financial statements with signatures and seals of the legal representative,
Inspection chiefaccountantandpersoninchargeofaccountingdepartment.
Documents Available for (II) Original audit report with seals of accounting firm, signatures and seals
Inspection ofregisteredaccountants.
Documents Available for (III) Original of all documents and announcements of the Company which
Inspection have been publicly disclosed on the newspaper designated by China
Securities RegulatoryCommissionduringthereportingperiod.
Chairman of the Board: Liang Haishan,
Date of approval for publication by the Board: 28 April 2020
Revised information
□Applicable √Not Applicable
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