1、Qingdao Haier Co., Ltd. 2015 Annual Report 1 / 239 Stock Code: 600690 Short Name: Qingdao Haier Qingdao Haier Co., Ltd. 2015 Annual Report Stock Code: 600690 Qingdao Haier Co., Ltd. 2015 Annual Report 2 / 239 Important Notice I. The Board, the supervisory committee and directors, supervisors and sen
2、ior management of the Company hereby assure that the content set out in the annual report is true, accurate and complete, and free from any false content, misleading statement or material omission, and are individually and collectively responsible for the content set out therein. II. Information of
3、Directors absent from Meeting Position of director absent from meeting Name of director absent from meeting Reason for the absence of director from meeting Name of proxy Director Peng Jianfeng Personal affair Wu Changqi Independent Director Chen Yongzheng Personal affair Wu Cheng III. Shandong Hexin
4、 Certified Public Accountants (special general partnership) has issued a standard and unqualified audited report for the Company. IV. Liang Haishan (legal representative of the Company), Gong Wei (chief accountant) and Yin Wenjun (person in charge of accounting department or director of accounting d
5、epartment) 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 and proposal o
6、f capitalizing capital reserves for the reporting period examined and reviewed by the Board: to declare a cash dividend of RMB2.12 per 10 shares (tax inclusive) based on the total number of shares as at the registration date in respect of future proposal for profit distribution. VI. Disclaimer in re
7、spect of forward-looking statements Forward-looking statements such as future plans, development strategies as set out in this report do not constitute our substantial commitment to investors. Investors are advised to pay attention to investment risks. VII. Is there any fund occupation by controllin
8、g shareholders and their related parties for non-operational purposes? No VIII. Is there any provision of external guarantee in violation of prescribed decision-making procedures? No IX. Important Risk Warnings For the contents of risk which the Company may be subject to, please refer to the relevan
9、t information set out in the section of Management Discussion and Analysis in this report. Qingdao Haier Co., Ltd. 2015 Annual Report 3 / 239 Chairman: Liang Haishan Qingdao Haier Co., Ltd. 28 April 2016 Qingdao Haier Co., Ltd. 2015 Annual Report 4 / 239 Contents SECTION I DEFINITIONS . 5 SECTION II
10、 GENERAL INFORMATION OF THE COMPANY AND FINANCIAL INDICATORS 7 SECTION III SUMMARY OF THE COMPANYS BUSINESS . 13 SECTION IV Management Discussion and Analysis . 21 SECTION V SIGNIFICANT EVENTS . 47 SECTION VI CHANGES IN SHARE CAPITAL OF ORDINARY SHARES AND INFORMATION ABOUT SHAREHOLDERS . 75 SECTION
11、 VII THE RELEVANT INFORMATION OF PREFERRED SHARES . 87 SECTION VIII DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES . 88 SECTION IX CORPORATE GOVERNANCE . 101 SECTION X RELEVANT INFORMATION ON CORPORATE BONDS . 110 SECTION XI FINANCIAL REPORT . 111 SECTION II DOCUMENTS AVAILABLE FOR INSPECTI
12、ON . 239 Qingdao Haier Co., Ltd. 2015 Annual Report 5 / 239 SECTION I DEFINITIONS I. Definitions Unless otherwise stated in context, the following terms should have the following meanings in this report: Definition of frequently used terms CSRC China Securities Regulatory Commission MOFCOM Ministry
13、of Commerce of the PRC SSE Shanghai Stock Exchange CSDCCL China Securities Depository and Clearing Corporation Limited Shanghai Branch (the CSDCCL) The Company, Qingdao Haier Qingdao Haier Co., Ltd. Four Major Securities Newspapers China Securities Journal, Shanghai Securities News, Securities Times
14、, Securities Daily KKR (GROUP) KKR & Co. L.P. and its subsidiary, KKR & Co. L.P., is a limited partnership incorporated and existed in accordance with the laws of the state of Delaware, USA. KKR & Co. L.P. is listed on the New York Stock Exchange (short name and stock code: KKR) KKR, KKR (Luxembourg
15、) KKR Home Investment S.r.l., a wholly owned subsidiary of KKR China Growth Fund L.P., is a project company incorporated in Luxembourg in accordance with international practices for the sole purpose of strategic investment in the Company Haier Electrics, 1169 Haier Electronics Group Co., Ltd. (a com
16、pany listed in Hong Kong, stock code: 01169.HK) FPA Fisher & Paykel Appliances Holdings Limited (Chinese Name:裴雪派克) 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 produ
17、cts including ventilator, gas stove, oven, dishwasher, microwave oven, freezer, washing machine, clothes dryer and etc. Business scope covers over 50 countries/areas of the world. In 2012, it became a wholly owned subsidiary of Haier Group. In order to perform the undertaking of Haier Group in respe
18、ct of eliminating horizontal competition, the Company entered into the Trust Agreement on Fisher & Paykel Appliances Holdings Limited between Haier Group Corporation and Qingdao Haier Co., Ltd. on 25 May 2015, whereby Haier Group entrusted its assets held in Fisher & Paykel Appliances Holdings Limit
19、ed to the Company for operation and management. DCS high-end kitchen electronic brand under FPA CMM China Market Monitor Co., Ltd., established in 1994, has been focusing on research on retail sales in Chinese consumption market for a long term and is the nationally recognized market research instit
20、ute in terms of appliance Qingdao Haier Co., Ltd. 2015 Annual Report 6 / 239 area. Euromonitor Euromonitor, established in 1972, is the leading strategic market information supplier and owns over 40-years experience in respect of publishing market report, commercial reference data and on-line databa
21、se. Data and analysis offered by it involve the whole world and cover thousands of product/service kinds. Qingdao Haier Co., Ltd. 2015 Annual Report 7 / 239 SECTION II GENERAL INFORMATION OF THE COMPANY AND FINANCIAL INDICATORS I. Information of the Company Chinese name 青岛海尔股份有限公司 Chinese short name
22、 青岛海尔 English name QINGDAO HAIER CO., LTD. English short name HAIER Legal representative Liang Haishan II. Contact Person and Contact Information Secretary of the Board Representative of securities affairs Name Ming Guozhen Liu Tao Address Department of Securities of Qingdao Haier Co., Ltd. Haier In
23、formation Industrial Park, No.1 Haier Road, Qingdao City Department of Securities of Qingdao Haier Co., Ltd. Haier Information Industrial Park, No.1 Haier Road, Qingdao City Tel 0532-88931670 0532-88931670 Fax 0532-88931689 0532-88931689 Email finance finance III. General Information Place of incorp
24、oration Haier Industrial Park, Laoshan District, Qingdao City Zip code of place of incorporation 266101 Place of office Haier Information Industrial Park, Laoshan District, Qingdao City Zip code of place of office 266101 Website Email 9999 IV. Place for Disclosure and Deposit of Information Designat
25、ed newspaper for information disclosure Shanghai Securities News, Securities Times, China Securities Journal, Securities Daily Website for publishing of annual report as designated by the CSRC Deposit place of annual report Department of Securities of Qingdao Haier Co., Ltd. Haier Information Indust
26、rial Park, No.1 Haier Road, Qingdao City V. Summarized Information of Shares of the Company Summarized information of shares of the Company Type of Shares Stock Exchange Short name Stock Code Short name before change A shares Shanghai Stock Exchange Qingdao Haier 600690 / VI. Other Related Informati
27、on Accounting firm engaged by the Company (domestic) Name Shandong Hexin Certified Public Accountants (special general partnership) Qingdao Haier Co., Ltd. 2015 Annual Report 8 / 239 Place of office 26 27 Floor, Century Building, No.39 Donghai Road West, Qingdao City Name of signing accountant Zhao
28、Bo, Wang Lin Sponsor responsible for continuing supervision during the reporting period Name China International Capital Corporation Limited Place of office 27 and 28 Floor, China World Towers 2, No.1 Jianguomenwai Avenue, Chaoyang District, Beijing Name of signing representative of sponsor Sun Lei,
29、 Chen Jingjing (note) Period of continuing supervision 17 July 2014 -31 December 2015 Note: On 24 October 2015, the Company issued the Announcement on Replacing Representative of Sponsor Responsible for Continuing Supervision on Non-Public Issuance of A Shares in 2013 from Qingdao Haier Co., Ltd., t
30、he Company received the Report on Job Change of Representative of Sponsor Liu Shulin and Replacement of Representative of Sponsor Responsible for Continuing Supervision on Non-Public Issuance of A Shares in 2013 of Qingdao Haier Co., Ltd. delivered by China International Capital Corporation Limited
31、(CICC), the sponsor of the Company, whereby the original representative of sponsor Mr. Liu Shulin ceased to be the representative of sponsor responsible for continuing supervision on non-public issuance of A shares in 2013 due to his job change. In order to assure the operation of continuing supervi
32、sion, CICC decided to designate the representative of sponsor Ms. Chen Jingjing to replace Mr. Liu Shulin to perform continuing supervision. Qingdao Haier Co., Ltd. 2015 Annual Report 9 / 239 VII. Major accounting data and financial indicators of the Company for the recent three years (I) Major acco
33、unting data Unit and Currency: RMB Major accounting data 2015 2014 Increase/decrease for the period compared with the corresponding period of last year (%) 2013 After adjustment Before adjustment Operating revenue 89,748,320,410.91 96,929,763,894.36 88,775,444,479.11 -7.41 86,605,646,350.15 Net prof
34、its attributable to shareholders of listed companies 4,300,760,542.82 5,337,541,039.32 4,991,557,360.87 -19.42 4,174,017,416.61 Net profits after deduction of non-recurring profit or loss attributable to shareholders of listed companies 3,674,952,510.15 4,324,036,509.60 4,324,036,509.60 -15.01 3,759
35、,087,361.58 Net cash flows from operating activities 5,579,600,612.93 6,769,361,298.35 7,006,580,362.98 -17.58 6,511,435,468.47 As at the end of 2015 As at the end of 2014 Increase/decrease as at the end of the period compared with the corresponding period of last year (%) As at the end of 2013 Afte
36、r adjustment Before adjustment Net assets attributable to shareholders of listed companies 22,693,976,160.95 24,608,468,130.41 21,840,024,641.14 -7.78 14,494,163,523.45 Total assets 75,960,672,801.38 82,348,719,644.44 75,006,457,051.45 -7.76 61,092,788,947.70 Total share capital as at the end of the
37、 period 6,123,154,268.00 3,045,935,134.00 3,045,935,134.00 101.03 2,720,835,940.00 (II) Major financial indicators Major financial indicators 2015 2014 Increase/decrease for the period compared with the corresponding period of last year (%) 2013 After adjustment Before adjustment Qingdao Haier Co.,
38、Ltd. 2015 Annual Report 10 / 239 Basic earnings per share (RMB per share) 0.705 0.933 1.740 -24.44 1.534 Diluted earnings per share (RMB per share) 0.705 0.932 1.738 -24.36 1.532 Basic earnings per share after deducting non-recurring profit or loss (RMB per share) 0.603 0.754 1.508 -20.03 1.382 Weig
39、hted average return on net assets (%) 16.22 29.34 27.58 Decreased by 13.12 pct. pt. 32.88 Weighted average return on net assets after deducting non-recurring profit or loss (%) 13.86 23.89 23.89 Decreased by 10.03 pct. pt. 29.62 Explanation of the major accounting data and financial indicators of th
40、e Company as at the end of the reporting period for the previous three years During the reporting period, the Company completed acquisition of overseas white goods assets of Haier Group, which resulted in the merger of enterprises under the same control. In accordance with the accounting standards f
41、or business enterprise, the Company restated respective financial data of 2014. Zhangqiu Haier Electrical Engineering Co., Ltd. and Haier Medical and Laboratory Products Co., Ltd. were not included in the consolidated statements of the Company for the period, and the adjustment to business model for
42、 equipment products affected revenue of the Company. The revenue of the Company for the reporting period would decrease by about 4.5% as compared to the corresponding period of last year when excluding above factors. Qingdao Haier Co., Ltd. 2015 Annual Report 11 / 239 . Differences of accounting dat
43、a under domestic and overseas accounting standards （）Differences of net profit and net asset attributable to shareholders of listed company in financial report disclosed simultaneously according to international accounting standards and according to accounting standards generally accepted in the PRC
44、 Applicable Not Applicable () Differences of net profit and net asset attributable to shareholders of listed company in financial report disclosed simultaneously according to overseas accounting standards and according to accounting standards generally accepted in the PRC Applicable Not Applicable I
45、X. Major financial data of 2015 in quarters Unit and Currency: RMB The first Quarter (January-March) The Second Quarter (April-June) The Third Quarter (July-September) The Fourth Quarter (October-December) Operating revenue 24,241,302,156.92 23,044,558,239.03 23,632,762,187.91 18,829,697,827.05 Net
46、profits attributable to shareholders of listed companies 1,082,457,346.59 1,649,550,850.32 857,206,581.52 711,545,764.39 Net profits after deduction of non-recurring profit or loss attributable to shareholders of listed companies 939,292,861.15 1,570,396,549.42 642,186,945.81 523,076,153.77 Net cash
47、 flows from operating activities 1,765,299,717.34 80,454,058.21 -641,305,603.84 4,375,152,441.22 Explanation of difference between quarterly data and disclosed regular reporting data Applicable Not Applicable During the reporting period, the Company completed the acquisition of overseas white goods
48、assets from Haier Group, which resulted in the merger of enterprises under the same control. Under the relevant requirements of Accounting Standards for Business Enterprises, the Company restated the financial data for each quarter. X. Non-recurring Profit or Loss Items and Amount Applicable Not App
49、licable Unit and Currency: RMB Non-recurring profit or loss items Amount of 2015 Losses and profits from disposal of non-current assets 13,327,370.03 Government grants included in current profit or loss, except that 95,078,644.93 Qingdao Haier Co., Ltd. 2015 Annual Report 12 / 239 closely related to
50、 the normal operating business, complied with requirements of the national policies, continued to be granted with the amount and quantity determined under certain standards Current net profit and loss of subsidiaries occurred as a result of merger of enterprises under the same control from the begin
51、ning of the period up to the date of merger 223,063,608.99 Other non-operating net income and expenses other than the aforementioned items 205,936,250.61 Gain from disposal of long-term equity investment 338,388,556.06 Gain from disposal of financial assets available for sale 54,535,164.73 Profit of
52、 remaining equity occurred from re-measurement at fair value after loss of control 49,201,148.46 Amount of minority shareholders equity effect -257,738,419.70 Amount of income tax effect -95,984,291.44 Total 625,808,032.67 XI. Items Measured through Fair Value Unit and Currency: RMB Name of item Ope
53、ning balance Closing balance Change for the current period Amount of current profit affected Forward foreign currency contract 103,626,200.86 14,362,482.92 -89,263,717.94 -40,519,146.53 Available-for-sale financial assets 1,394,842,730.44 1,453,993,243.39 59,150,512.95 96,453,929.29 Total 1,498,468,
54、931.30 1,468,355,726.31 -30,113,204.99 55,934,782.76 Qingdao Haier Co., Ltd. 2015 Annual Report 13 / 239 SECTION III SUMMARY OF THE COMPANYS BUSINESS I. Explanation of Major Business, Operating Mode and Information of Industry Where the Company Engaged in during the Reporting Period (I) Major Busine
55、ss of the Company The Company mainly engages in research, development, production and sales of white home appliances with product portfolios covering refrigerators/freezers, washing machines, air-conditioners, water heaters, kitchen appliances products, small home appliances, U-home smart home busin
56、ess, etc., which enable the Company to offer integrated solutions for smart homes to our consumers. Channel integration service business includes logistics, after sale, home appliances and other products distribution business. Since its establishment, the Company has been always upholding the concep
57、t of taking the user as right and ourselves as wrong. Through continuing strategic transformation and constant creation and innovation, the Company has become the leading white home appliances company of the world. According to the retail sales statistics on the large home appliances for the year 20
58、15 published by Euromonitor, an internationally recognized market research institute, in 2015, sales of Haiers large home appliances represented a global market share of 9.8%, ranked first in the world for the seventh time. Meanwhile, global sales of Haiers refrigerators, washing machines, wine cell
59、ars and freezers continued to rank first in the world. For domestic market, the Companys products of refrigerator, freezer, washing machine and water heater captured the largest market shares while products of home air conditioner ranked the third. For overseas markets, the Company remained committe
60、d to brand creation strategy, promoted multi-brands operation, improved operation capacity through localization of R&D, manufacture and Global market shares represented by the Companys products Chinese market shares represented by the Companys products Percentage of Haier white goods Percentage of H
61、aier refrigerators Percentage of Haier washing machines Percentage of Haier freezers Percentage of Haier wine cellars Source: Euromonitor, data on retail volume shares of 2015 Percentage of refrigerators Percentage of freezers Percentage of washing machines Percentage of water heaters Percentage of
62、air conditioners Source: China Market Monitor (CMM), data on retail volume shares of 2015 Qingdao Haier Co., Ltd. 2015 Annual Report 14 / 239 marketing and also actively seized development opportunities and acquired white appliances assets of original Sanyo Asia Pacific, managed FPA, integrated GE h
63、ome appliance business to enhance competitiveness in the global market. Facing to the opportunities and challenges brought by the Internet era, the Company built an external U+ Smart Life platform and an internal smart connected factory ecosystem platform, and explored and practiced the transformati
64、on to the platform-type enterprise providing smart life integrated solutions. U+ Smart Life platform established of scene business ecosystem and built diversified profit model by exploration and practice of business model of Internet appliance + application + service + platform, while smart-connecte
65、d factory focused on providing the best customized experience in overall procedure of users need, innovation, experience, pre-sale, smart manufacture, iteration, independently researched and developed the leading smart-connected factory cloud platform of COSMO in the world, integrated fragmented nee
66、ds under the Internet era with as interactive window, implemented large-scale customization to meet individual need of users. () Industry Situation Description 1. Global white appliances markets: global economy went through profound adjustment, industry growth suffered pressure in 2015 and regional
67、differentiation was obvious. In 2015, affected by profound adjustment of global economy, weak recovery, substantial fluctuation in financial and commodity market, geopolitical risks, the whole global white appliances market showed a decline trend. According to the statistics offered by Euromonitor,
68、global retail sales of refrigerators, washing machines and home air conditioners in 2015 respectively recorded a year-on-year decline by 2%, 4% and 3%. For major areas, Europe, Latin America and Central & Eastern Africa markets showed negative growth. Only America market maintained relatively rapid
69、growth, in which, retail sales of refrigerators, washing machines and home air conditioners respectively recorded a year-on-year increase by 5%, 4% and 2%. Asia Pacific market overall maintained stable, and retail sales of refrigerators, washing machines recorded a slight year-on-year increase by 2%
70、 and 1% respectively, while retail sales of home air conditioners recorded a year-on-year decline by 3%. 2. Domestic white appliances market: affected by higher penetration rate, slow economic growth and sluggish real estate market, white appliances sector in 2015 experienced weak growth. (1) After
71、over 30 years of rapid development, domestic white home appliances showed a higher penetration rate, updating needs became dominant, the industry went into a stage of stable growth, and the driving factor for industry growth changed from sales increase to structural improvement with consumption upgr
72、ade. Since the macro economy entered into phase of new norm, affected by factors including slow economic growth and sluggish real estate market in 2015, the industry showed a weak growth. For subsectors, Air conditioner market experienced an extremely depressed demand due to reasons including relati
73、vely cool summer. According to the data released by CMM, in 2015, industry-wide retail sales and retail volume of air-conditioners decreased by 4.8% and 1.1% respectively Qingdao Haier Co., Ltd. 2015 Annual Report 15 / 239 compared with the corresponding period of last year. For output from factorie
74、s, according to the China Industry Online data, in 2015, volume in domestic market decreased by 10.39% compared with the corresponding period of last year. A number of reasons, such as the increasing industry-wide channel inventory compared with 2014, sluggish demand and price competition, all subst
75、antially weakened dealers willingness to restock. Industry-wide retail sales of refrigerators and washing machines respectively recorded slight decline and slight growth. Benefiting from improved average price as result of structural upgrade of products, retail sales of refrigerators and washing mac
76、hines achieved better retail sales than retail volume. According to the data released by CMM, in 2015, industry-wide retail sales and retail volume of refrigerators decreased by 1.2% and 4.9% compared with the corresponding period of last year, while the retail sales and retail volume of washing mac
77、hines increased by 4.0% and 0.6% compared with the corresponding period of last year. Given that the industry went through short-term weakness, to most extent, growth is driven largely by seizing market shares, which led to increasingly tense competition, especially in mid-end and low-end markets wh
78、ere the products were highly commoditized, air conditioners sector, in particular experienced several price wars as a results of inventory building up. (2) Domestic product mix upgraded significantly, mid-end and high-end products maintained rapid growth. Increased percentage of update demand, life
79、concept change brought by the emerging middle class, increasing attention on quality, design, function, brand, all drove the improvement of product mix with strong potential of long-term industrial upgrading. For example, in 2015, multi-door refrigerator was gaining popularity and the industry-wide
80、retail sales of multi-door refrigerators topped to a percentage of 27.1%, representing a year-on-year increase of 8.4 pct. pt. In washing machine industry, front-loading and high-capacity type trend was obvious and the industry-wide retail sales of front-loading washing machines topped to a percenta
81、ge of 41.8%, representing a year-on-year increase of 5.1 pct. pt. High-capacity inverter washing machines maintained rapid growth. In air conditioner industry, artistic, high-efficiency and intelligent (WIFI) type trend was obvious, such as the retail sales of artistic air conditioners topped to a p
82、ercentage of 40.3%, representing a year-on-year increase of 14 pct. pt. For the water heater sector, gas water heaters showed a relatively favorable growth with a year-on-year increase of 13.4%. (3) Rapid development of Internet technology led to industrial transformation and upgrading and reestabli
83、shment of business mode. The rapid development and application of the mobile Internet, IOT, big data, cloud platform technologies deeply changed peoples living and consumption habit, and also would reestablish the operating mode and profit mode of white appliance sector, and forced the corporate str
84、ategy, operation and structure to go through transformation and upgrading. In respect of products, in 2015, white appliances became more intelligent. Appliance companies strengthened the intelligence of products. More and more Internet companies provided intelligent hardware. Cross sector cooperatio
85、n became popular, and smart home appliance industry was accelerated on base of resources integration. With the improvement of smart home appliance industry, Qingdao Haier Co., Ltd. 2015 Annual Report 16 / 239 profit mode was expected to transform from simple hardware sales income mode to hardware +c
86、ontent +service diversified income mode, injecting new energy into the industrial development. For channels, e-commerce marks the rise of multi-channel strategy, where e-commerce channel maintained rapid growth and O2O transformation was actively promoted offline to keep up with the new era. For sup
87、ply chain, Made in China 2025 plan would deeply promote the extensive integration of information and industrialization, accelerate the industry-wide transformation of smart manufacture, advance home appliance to transform from large-scale manufacture to large-scale customization and personalized C2B
88、 custom pattern to raise added value of products. Industry Outlook: In 2016, domestic white appliance industry still faces relatively high challenge, white appliances market maintains a strong potential in structural upgrading in the middle and long term. In 2016, the whole economy of China is going
89、 into new growth stage and structural adjustment period, factors including high market inventory and weak demand brings challenges for the growth of white appliance industry, while recovered sales and declined inventory in real estate market are expected to reduce some adverse factors and promote th
90、e industry to go back to normal status. In the medium and long term, domestic white appliances market still maintains relatively large space in industrial upgrading. Domestic white appliances market keeps large potential in structural upgrading compared with developed countries. Under the promotion
91、of factors including consumption concept change and resident income improvement, high-end oriented product trend remains unchanged and the average price and added value of products are accordingly increased. New business mode is expected to be established due to rapid development of smart home and i
92、ncrease of maturity of relevant industry chain, bringing new growth space for the industry. Resident consumption focus transforms from material to spirit, which will accelerate the release of individual and diversified demand for products. Individual customization will raise the added value of singl
93、e product. Large-scale customization era may come and promote the improvement of industrial value. As integration in the industry is accelerated, and enterprises which lack innovation and hold highly homogenized products will be eliminated. Technologic innovation will become a core and competitive f
94、actor. Positive leading companies obtain more shares, which will improve their influence and power and right in the industry. Competitiveness of Chinese leading white appliance companies in global market continues to improve, bringing room for the development in overseas. After over 30 years of deve
95、lopment, on the base of large Chinese market, competitiveness of Chinese leading white appliance companies in global market continues to improve. Excellent companies further improves their competitiveness and industrial position through internal productiveness construction and external merger, which
96、 does good Qingdao Haier Co., Ltd. 2015 Annual Report 17 / 239 to the global resources integration and market expansion and helps to bring room for the development of Chinese enterprises in foreign market. II. Explanation on significant change on major assets of the Company during the reporting peri
97、od During the reporting period, the Company completed its acquisition of overseas white appliance assets in Haier Group. As of 31 December 2015, the overseas assets of the Company were RMB 8,059,495,169.77, representing 10.61% of the total assets. III. Analysis on core competitiveness during the rep
98、orting period Since the foundation of the Company in 1984, it always adhered to the principle of driving the sustainable and healthy development with innovation system centered on the needs of users, and it has successfully turned itself from a debt-burdened collective small factory which was on the
99、 verge of shutdown into one of the largest home appliances manufacturers in the world. The Company is committed to realizing sustainable development across different cycles through continued innovations on development strategy and operating mode, brand, research and development, products, constructi
100、on of foreign and domestic market to achieve competitiveness adaptive to ever-changing conditions. (I) Brand competitiveness: According to the data published by Euromonitor, Haier has been ranked first among global large home appliances brands for 7 years, refrigerators, washing machines, wine cella
101、rs, freezers continue to be ranked the first in the world. In response to the personalization and diversification of users needs, Haier persists in promoting multi-brands operating strategy and building a multi-level system of brands. In domestic market, the Company mainly operates Haier, Casarte an
102、d Leader brands, in which, Casarte has become the first choice among high-end home appliance brands for 3 successive years. In markets of different overseas areas, the Company promotes dual-brands operating strategy to comprehensively cover markets of different levels. Currently, Haier has expanded
103、its brand popularity in overseas markets to over 60%, while in Pakistan and Nigeria, Haier popularity tops at 99% and 95% respectively. Haiers core competitiveness lies in the global presence of its brand, and the recognition of consumers. Leveraging on these advantages, Haier is able to maintain it
104、s leading position amidst ever-changing industry landscape as it faces competition from various brands home and abroad and the emergence of e-commerce. (II) R&D competitiveness: Stick to the open innovative strategy of The world is my R&D department, focus on consumers needs to promote innovation, r
105、eform conventional R&D to iteration R&D, meanwhile, establish open innovation platform with integration of on-line and off-line modes to support such transformation, so as to realize zero distance interaction among global users, innovators as well as creative resources and support to produce revolut
106、ionary solutions. On-line open innovation platform, HOPE, could realize matching between innovation sources and resources in the course of innovation transformation and continuously produce cross sector and revolutionary creative results. It has become a leading domestic open innovation platform. Cu
107、rrently, this platform could connect Qingdao Haier Co., Ltd. 2015 Annual Report 18 / 239 3,200,000 leading resources of the world with 370,000 registered resources and on average produce over 6,000 innovative ideas every year. R&D matching period has been shortened to six weeks from previous eight w
108、eeks. the Company has built five top R&D centers in the world, which are located in Qingdao, Kyoto & Kumagaya, Nuremburg, Evansville, New Zealand Auckland & Dunedin, established global open innovation resources network and realized off-line interaction and products transformation and iteration. The
109、Company constantly keeps its technology, products and innovation ability advanced and competitive and it has accumulatively obtained 90 international design awards and 14 national science and technology awards. In addition, the Company led the establishment of the first work team for international s
110、tandards of refrigerator, which was first such team in domestic refrigerator area. Patents application which represents the Companys innovation ability maintains leading position in the home appliance industry. (III)Product competitiveness: The Company adheres to the product-oriented strategy and ad
111、apts to the trend of the era, and promotes the transition from selling products to providing integrated smart home appliance solutions to consumers. The Company has developed comprehensive product lines, covering refrigerators, freezers, washing machines, air-conditioners, water heaters, kitchen ele
112、ctrical appliances, small home appliances, U-home smart home business, etc., which enable it to offer integrated solutions for smart homes to consumers. The Company has continuously launched innovative products to lead the development of the industry with the consumers complaints and new pain points
113、 of needs in mind. These products include Haier Tianzhun air-conditioners, Haier self-cleaning air-conditioners, Haier maglev central air-conditioners, Haier clean-free washing machines, Casarte Gemini washing machines, Casarte Yunzhen refrigerators and Casarte Legend water heaters, etc. The core of
114、 its products competitiveness lies in the precise targeting of the pain point of consumers against the backdrop of the trend towards high-end, customized and diversified products. Over the years, the Company ranked the first in terms of market shares in refrigerator, freezer, washing machine and wat
115、er heater business, and the Company ranked the third in the industry in terms of the market share of air-conditioning products. (IV)Network competitiveness: establishment of diversified channel system: maintain long-term favourable strategic cooperation with channels including Gome, Suning and regio
116、nal home appliance chain stores. In respect of its own channels, Haier has established more than 8,000 county-level stores, and more than 30,000 stores within town and country-level network. The logistic system across the nation guarantees the distribution to counties within 24 hours and to towns wi
117、thin 48 hours, thus achieving distribution on demand and one-stop service of distribution and installation. The network comprising of more than 20,000 service providers is always available for service, which enable the Company to offer comprehensive, timely and care-free services. In respect of e-co
118、mmerce channel with rapid development, the Company maintains favorable cooperation with e-commerce platforms including Tmall and JD, and advances business development through individual and different products layout. Qingdao Haier Co., Ltd. 2015 Annual Report 19 / 239 (V) Supply chain competitivenes
119、s: The Company owns advanced manufacture capability and process technologies to provide consumers with high-quality home appliance products. Facing with challenges bring by Internet era, the Company initiatively promotes large-scale customization transformation to satisfy consumers increasing person
120、al and customized needs for products.Initiatively launch a platform that delivers connected customization experience for user community, namely Creative Convergence ( which provides users with information channels and solutions through various modes including module customization, crowd-sourcing cus
121、tomization and special customization. Set up seven connected factories and establish connecting factory system to realize direct delivery of orders from users to factory and direct delivery of products from factory to users. Establish an open platform called Haidayuan that delivers connected experie
122、nce for module suppliers. Through such platform, suppliers are transformed from retailers to module suppliers, who participate in design and provide module-oriented solutions to meet individual needs and create best user experience. (VI) Overseas market competitiveness: Stick to own brand developmen
123、t strategy and develop competitive advantages based on localization, low cost and high-quality service via a localization mode of integrated design, manufacture and marketing. Localized supply chain system includes nine overseas factories covering Europe, America, Asia, Middle East and Africa; Conti
124、nuously improved brand awareness and reputation: According to survey data provided by Millward Brown, a world-renowned brand information consulting company, Haier brand awareness in overseas market has exceeded 60%. In Europe, America, Japan, Korea and other developed countries, while Haier brand aw
125、areness is improving stably year by year, the design, quality and innovative elements of Haier refrigerator and washing machine are well known and recognized by local users. Channel layout appropriate for different regional characters: Our products are sold to over 100 countries, the overseas sales
126、network covers over 43,000 entities. In developed markets, such as Europe and America, Haier brand has successfully been introduced to top 10 retail chains while significant effort has been put into expanding home appliance franchised stores in developing countries. In view of channel transformation
127、 opportunities brought by rapid development of e-commerce in Internet era, Haier actively promotes the synchronous development of conventional off-line channels and on-line e-commerce channels. (VII) Cultural competitiveness: Credibility culture based on quality and service is the core driver of Hai
128、ers growth, and is also the essential reason of constant success of Haier. Leveraging on credibility culture of user-oriented and persistent honesty, Haier has turned itself from a small collective factory which was on the verge of shutdown into one of the largest white goods manufacturers in the wo
129、rld, while keeping leading position in world-wide innovation in Internet era. Haier upholds the concept of always take the users as right and ourselves as wrong. This concept stimulates the spirit of innovation, revolution and entrepreneurship of Haier and motivates it to follow the times and contin
130、uously improve and challenge itself, so as to always seize development opportunities. The win-win model of combining individual and goal is the assurance of sustainable operation of Haier. In Qingdao Haier Co., Ltd. 2015 Annual Report 20 / 239 exploring the individual-goal combination 2.0, Co-create
131、 and Win-win ecosystem, Haier endeavors to build win-win ecosystem based on user value interaction in new stage of e-commerce era to make every employee his/her own CEO and realize their own value while creating value for users, so as to achieve win-win situation which is critical to parties in syst
132、em. Qingdao Haier Co., Ltd. 2015 Annual Report 21 / 239 SECTION IV Management Discussion and Analysis I. Management Discussion and Analysis There are no successful enterprises but only the enterprises of the time. Flexible adjustment of strategic orientation based on the change of time is essential
133、for long-term sustainable development. At present, the Company is operating at the network strategic stage and endeavoring to transform into a real Internet enterprise, overturn the self-contained and closed system of traditional enterprises to become a node in the network interconnection, interconn
134、ect and exchange various resources, and build the win-win ecosystem in the post e-commerce time based on the user value interaction, so as to provide smart home appliance solution for consumers and realize win-win appreciation for all parties concerned. In 2015, the Company carried out transformatio
135、n of platformisation, maker culture among the staff and user personalization; thus the Company was no longer the self-closed system but comprehensively integrated into the Internet, made access to global high-quality resources without boundary to share interests and risks with related parties and jo
136、intly create the win-win Internet platform. Staff became the makers for entrepreneurship and innovation as well as partners growing up with the enterprise rather than those being led. A large number of consumers and users became the prosumers who participated in the whole process of production and i
137、nnovation rather than passive commodity purchasers. In 2015, the Companys principle operating activities were as follows: The Company constantly made strategic investment in the construction of U+ Smart Life platform and its industrial ecological cycle, connecting factories and customized platform o
138、f Creative Convergence, exploration of business development mode in the era of Internet to expand the business growth space; In the domestic market, the Company pushed forward the rapid development of product leading strategy and brand Casarte, accelerated the product, brand and channel layout in th
139、e mid-end and high-end markets with great growth potential, and grasped the industrial development trend; in order to enhance the retail competitiveness of market terminal, the Company positively adjusted the operating mechanism to improve the consumer confidence, reputation among users and organiza
140、tional efficiency; the Company steadily propelled the overseas market development, adhered to its own brand strategy, and promoted the localization operating mode integrated with R&D, manufacturing and sales; it took the opportunity to initiate the integration of GE home appliance business, improved
141、 and upgraded the global market layout. In 2015, the Company recorded revenue of RMB89.7 billion, representing a decrease of 7.41% as compared to the corresponding period of last year (revenue of the Company was affected by the fact that Zhangqiu Haier Electrical Engineering Co., Ltd. and Qingdao Ha
142、ier Special Electrical Appliance Co., Ltd. were excluded from consolidated statements during the reporting period and the distribution mode of partial equipment components business was adjusted; if excluding the above influencing factors, the Companys revenue in the whole year was decreased by aroun
143、d 4.50% year-on-year. During the reporting period, revenue was affected to some extent by constant industrial downturn and positive Qingdao Haier Co., Ltd. 2015 Annual Report 22 / 239 adjustment made by the Company. On a quarterly basis, driven by the gradual reflection of adjustment effect, revenue
144、 growth in Q4 improved as compared to the last quarter and revenue for the single quarter increased by 1.3%. If the Company strengthened its market terminal competitiveness and gained growth through launching the cost-effective Jin Chu air-cooling refrigerators while the Companys refrigerator busine
145、ss maintained its leading position in the mid-end and high-end market for the fourth quarter of 2015, the domestic revenue for the fourth quarter would gain double-digit growth as compared with the same period of last year. The gross profit margin increased by 0.35 pct. pt. to 27.96% compared with t
146、he corresponding period of last year. During the reporting period, the sales expense increased by 4.15% compared with the corresponding period of last year. An increase in sales expense was attributable to the Companys consolidated construction of high-end brand Casarte and channels, and increased i
147、nvestment in market user interaction based on the change of market competitive environment. According to data released by the third statistical institution CMM, the market share of refrigerators and washing machines of the Company in 2015 were continuously improved. Specifically, the share of retail
148、 sales of refrigerators was 27.4%, increased by 1.4 pct. pt. year-on-year; the share of retail sales of washing machines was 26.5%, increased by 0.33 pct. pt. year-on-year; and the share of retail sales of air conditioners was 12.01%, slightly decreased by 0.30 pct. pt. year-on-year and basically ma
149、intained stable. II. Principle operating conditions during the reporting period The principle operating activities during the reporting period were as follows: 1. Enhancing R&D and setting up standards: Depending on the global leading R&D system, the Company maintained investment in R&D, possessed l
150、eading industrial technologies and standards, supported the upgrading of product structure, and continuously led the industrial development. Refrigerator business: The Company made breakthrough and innovation through the main technologies of intelligence, health, energy conservation and frostless fe
151、ature, led the ultimate freshness and spatial art, and defined the manufacturing standard for high-end refrigerators. In the first quarter of 2015, the Company launched the worlds first refrigerator with air-suspending oil-free power refrigerating system to create the new energy-saving and spatial u
152、tilization solution in the industry and provides the experience of cell-level freshness under zero temperature difference. Compared with common frequency-converter refrigerators, such refrigerator saved more than 30% energy, and the effective volume was increased 10-20L. With the unique calculus sma
153、rt control technology, the temperature fluctuation scope was controlled within 0.05 to approach the constant temperature state, so as to preserve food under accurate, stable and constant refrigeration with constant temperature. Promoting upgrade of industrial standard. In the first quarter of 2015,
154、the Company launched the worlds first refrigerator with separate storage for dry and wet items, and led to formulate the standards Qingdao Haier Co., Ltd. 2015 Annual Report 23 / 239 of frostless refrigerator with separate storage for dry and wet items. The plant fiber characteristics of HCS transpa
155、rent and wet film initiated by technology of separate storage for dry and wet items maintained the relative humidity of high wet zone at 90-95% for a long term without drops of water, so as to preserve fruits and vegetables against decomposition. In the valuable food dry zone, the relative humidity
156、was maintained at around 45% stably through change of saturated air pressure, to satisfy the users demand for dry food storage. In March 2015, the standards for frostless and separate storage for dry and wet items which were formulated under the leadership of Haier Refrigerators were released in Bei
157、jing. In December 2015, the international refrigerator preservation standards which were formulated under the leadership of Haier Refrigerators were officially established under the witness of international authoritative standard institutions such as IEC, VDE, UL, and BVQI and industrial experts, an
158、d the Company became the first Chinese home appliance enterprise which led to nominate and formulate international standards and successfully set up the project. In the fourth quarter of 2015, the application of technology of separate storage for dry and wet items on refrigerators was awarded the fi
159、rst scientific and technological progress prize by Home Appliance Association, and was identified as international pioneered technology by the expert team in the science and technology achievement appraisal of the Ministry of Light Industry. Haier refrigerator was respectively granted 2015 Germany I
160、F Design Award, Germany Plus X 2015 Most Innovative Brand Award and other authoritative international awards depending on its excellent innovative design and product quality. In the Chinese Smart Home Conference and Wisenjoy Annual Awards Ceremony for 2015 organized by CHEARI, the first launched Int
161、ernet refrigerator Xinchu was awarded the Best Smart Refrigerator of China in 2015. Meanwhile, Haier Xinchu refrigerator and Casarte Dingji Yunzhen refrigerator was also awarded Annual Best Refrigerator, and Haier became the unique enterprise obtaining 3 prizes in the industry. Home air-conditioner
162、business: Based on the users demand, the Company gradually attached attention from energy conservation, refrigeration and heating, noise and other basic performance to health and comfort, and the smart and personalized customization became the key factors that affected the purchase. Haier initiated
163、the comfortable and smart air-conditioner research in the industry and originally created 8 core technologies that filled in the gap of the industry, including air jet technology, PMV human thermal comfort technology and smart control technology based on 3 major innovative concepts of comfort, energ
164、y saving, and smart to drive the technical progress of air-conditioning industry. The Company also brought ultimate smart air-conditioning experience to users based on smart air-conditioning hardware through APP software operation and introduction of third-party service related to air. On 8 January
165、2016, in the National Awards for Science and Technology, Haier Refrigerators was granted the National Science and Technology Progress Award depending on the project of air-conditioner comfortable and smart control technology research and industrialization, and became the unique awarded enterprise in
166、 the home appliance industry this time. In 2015, Haier captured higher market share in the smart air-conditioner industry. According to the statistics of Qingdao Haier Co., Ltd. 2015 Annual Report 24 / 239 national home appliance website, Haier smart air-conditioner captured market share of 70.31% a
167、s of December 2015. Under the industrial environment of high inventory and fierce price war in 2015, the Company insisted on leading technology to create differential consumption experience and differential core competitiveness and focused on the launch of efficient, healthy and smart new products:
168、(1) the Company launched new products with self-cleaning and air purification function in the healthy sub-sectors: The new Jinbo wall-mounted air conditioner launched in 2015 firstly adopted self-cleaning function of patented cold expansion technology, patented condensation technology, patented sapp
169、hire coating and patented antibiosis technology to effectively remove the dirt accumulated on the heat exchanger of air-conditioner for a long term and prevent the secondary pollution of interior air; The new Dizun packaged air conditioner adopted air purification integrated design, realized real-ti
170、me monitoring of air condition, positively recorded the use habit and positively started up the purification function through Haier smart cloud service. Air purification and regulating function could be used independently or jointly, and the purification ability card value reached 397.8m3/h. Such pr
171、oduct also was equipped with the gesture control switch, self-cleaning and low-frequency noise function, and its properties and technology kept ahead of similar products in the industry. (2) For comfortable air-conditioning field, the Company created the unique fourth generation air-conditioner in t
172、he industry, Tianzun packaged air-conditioner, which settled the air-conditioner disease that has disturbed the industry and users over a hundred years through innovative application of healthy and constant air technology; in 2015, to satisfy users comfortable demand for bedroom-used air-conditioner
173、, the Company launched Tianbo air-conditioner with healthy and constant air function used for bedroom. Its innovative design was granted Germany IF Design Award and Appliance Prize. Central air-conditioner business: Based on energy conservation and intelligence, the Company realized maglev leading i
174、teration and released innovative MX wireless multi-split machines through sharing resources. The Companys key technology and industrialization of large-scale energy-saving and environmental maglev centrifugal central air-conditioners were awarded the First Prize of Shandong Scientific and Technologi
175、cal Progress in 2015. In the energy-saving field, maglev continuously led and iterated. The Company launched the industrys first large-volume and full falling-film maglev air-conditioner. With the highest IPLV of 13.18 in the industry, it became the most energy-saving product in the central air-cond
176、itioning industry. With the largest cooling capacity of single machine, it effectively expanded the service field of maglev air-conditioners. The Company cooperated with the National Energy Conservation Center to release the white paper on the development of maglev, which caused the industrial imita
177、tion. To resolve consumers complaint about large occupying area and high energy consumption of common central air-conditioners, it launched Y-shaped module machine, which saved half occupying area and the EER reached 3.39, which is the highest level among similar products in the industry. Qingdao Ha
178、ier Co., Ltd. 2015 Annual Report 25 / 239 Regarding intelligence, the new generation of MX wireless multi-split machine was released, which promote the multi-split machine to transmit from cabled era to wireless era. Meanwhile, the innovative business development mode - Haier central air-conditionin
179、g cloud service was upgraded to 2.0 generation, realized central air-conditioning networking and set up the first big data platform of the industry, to provide real-time monitoring, fault early warming, smart maintenance, energy-saving report, and other value-added services for users and realized re
180、al-time interaction with the third-party resources. Thanks to the continuous product innovation, the Companys central air-conditioner business grew 5% compared with 10% decline of the industry, which was 15 pct. pt. higher than the industry. Washing machine business: In order to meet consumers upgra
181、ding demand for health, clothes care and separate washing, the Company made breakthrough in the key technology of washing machines with reference to global first-class technical resources and launched washing-free smart ball solution and solution of washing clothes in different zones to push forward
182、 the industrial development. In the test on international first-class washing machine brands conducted by STIWA, a Germany authoritative commodity test institution, Haier washing machine gained the highest scores in the indicators of energy consumption, water consumption and noise test, and its serv
183、ice life had reached the international first-class brand level. In 2015, the Companys roller washing machines captured higher domestic market share than Germany brands and ranked top in the industry, which had broken the market pattern of foreign brands leading the roller washing machine industry. T
184、he Company researched and developed the first double-cylinder partition washing machine in the world, which was called Casarte Gemini Ella washing machine. As the first double-layer partition washing machine in the world, Casarte Gemini Ella split-cylinder washing machine could wash clothes in the u
185、pper and lower cylinders separately; the upper layer had 12 professional washing modes designed for infants clothes, silky underwear and other small clothes and softly cared for the luxurious fabrics; the lower layer had 18 procedures for cleaning of daily cotton and linen clothes and large clothes.
186、 Such product had excellent performance on energy conservation and noise reduction, and realized 45DB low noise and 60% energy conservation. For the fashionable aspect, Casarte Gemini Ella washing machine had obtained two IF design awards, and became the first product that obtained two IF awards in
187、the industrial record. The product also obtained the Product Innovation Award in IFA. After this product was launched in the market, the Companys market share of roller washing machine priced more than RMB10,000 increased more than 10 pct. pt. year-on-year, and the share exceeded 50%; The Company up
188、graded the crystal roller washing machine product platform, and developed the roller washing machine with the largest inner cylinder diameter of global standard dimension, which was called crystal generation II. Its ultra-thin design and large volume resolved the problem of insufficient space for pl
189、acing roller washing machine. After such product was successfully launched in the market, Haier roller washing machine continuously maintained its leading position among products of the high-end price. The Qingdao Haier Co., Ltd. 2015 Annual Report 26 / 239 launch of clean-free washing machine incre
190、ased the share of Haier pulsator washing machine priced more than RMB3,000 from 25.3% to 52.6%, which also increased the market share at such price from the original 10% to 21% in the industry. The Company created smart washing. In order to meet the demand for washing clothes, the Company, based on
191、users demand and U+ platform, conducted research and integrated all washing related fields from clothes, washing machine and washing supplies, such as cloth materials, stain, water quality, laundry detergent and users laundry habit to realize the development from washing machine to clothes washing.
192、Haier Washing Machine cooperated with P&G, Unilever and other global wash supplies leading brands in the research and development of the special laundry detergent. It developed campus laundry APP to conduct remote reservation, setting, regulation and payment for the required laundry service through
193、a mobile APP, and established the comprehensive application system integrated with Internet of Things technology and Internet to provide opportunities for college students to start up business on the platform. Water heater business: For the purpose of safety, health, intelligence and energy conserva
194、tion, the Company continuously sustained technical advantage in electric water heater field, accelerated the development of gas water heater business, and arranged for new growth from heat pump. For electric water heaters featuring safe, healthy and intelligence, the Company successfully researched
195、and developed the first product with the washing in clean water technology in the industry, which may effectively remove more than 90% residual chlorine and sediment and impurity with diameter larger than 0.12 MM to meet users demand for healthy bath. With scientific and technological elements, the
196、Company developed the Bluetooth music water heater with the singing and calling function, voice water heater with voice interaction control, heat storage and water purification all-in-one machine for kitchen, and a series of high-end differential products. The newly researched water volume customize
197、d technology was identified to reach international leading level. For gas water heaters, the Company launched high air-resisting technology for users living in high floor and having the problem of using hot water in the heavy wind weather. The Company researched and developed smart home technology t
198、o customize water temperature and water flow according to users demand for hot water, and also customize demand for hot water in different scenarios; it researched and developed double safety technology as the first company that may apply double-air safety monitoring technology in the heating stove
199、industry; it launched two offline major series products: T1S series with high wind load resistance (windforce 10) and Smart Home E2S series. The self-developed NOCO technology and smart gas control system were identified to reach the international leading level. NOCO technology was granted the Light
200、 Industry Scientific and Technological Progress Award, and smart gas control system technology was granted Qingdao Scientific and Technological Progress Award. For heat pump products, to resolve users Qingdao Haier Co., Ltd. 2015 Annual Report 27 / 239 limited space for use of the product, the Compa
201、ny developed the integrated wall-mounted product. It was the first time to increase the energy efficiency of wall-mounted heat pump to more than 3.4 in the industry to enable it to become the real heat pump water heater. The self-developed CO2 trans-critical circulation ventilation control technolog
202、y was identified to reach the international leading level and awarded the Third Prize for Home Appliance Scientific and Technological Progress. Smart bathroom product was launched to create smart bath life for users, which led the industrial trend after being displayed in the home expo, and abstract
203、ed several real estate enterprises to engage in cross-border resource cooperation. Kitchen appliance business: Fast upgrading through product research and development to gain better feedback from market. Smoke exhauster: The Company developed self-cleaning smoke exhauster star products for better cl
204、eaning of kitchen, promoted Casarte Nebula and Yundian smoke exhausters, Haier MINI deep cavity/WIFI deep cavity/ C390 movable side-draught products and other mid-end and high-end products to drive the growth of market share. For stove, the Company vigorously promoted mid-end and high-end products w
205、ith low-to-high prices. It launched smart anti-dry stove to enhance the safety of kitchen. In the first month of the release of new product, the product ranked No. 1 in the CMM new product ranking list. For oven, the Company launched Lechu oven, steamer and microwave oven, leading the industry with
206、3D heating, high temperature steaming and evenly hearing technologies. The Company launched Casarte high-temperature self-cleaning oven to realize product leadership, and launched air fryer and other new products. For disinfection cabinet, in 2015, Haier was the first company to launch smart disinfe
207、ction cabinet series products featured remote control, process monitoring and smart remind. In the meantime, the Company conducted joint development with leading resources to launch the even light wave disinfection cabinet and realize 360 sterilization without dead band. 2. Leading and making high-e
208、nd arrangement: In the high-end home appliance market with continuous growth potential, the Company fully, continuously and rapidly improved competitiveness and led revolution of high-end lifestyle. Casarte brand home appliance revenue increased by 27% year-on-year. Surrounding Casarte brand connota
209、tion of technology, delicacy and art, the Company enhanced the target users recognition of Casarte brand through resource focus and accurate marketing communication: Became the first sponsor brand in home and kitchen appliance industry through strategic cooperation with The 12 Front of ZJTV, and imp
210、roved brand reputation and popularity through Casarte family run, tennis challenge match of Business School. According to Nilson Report, in 2015, Casarte brand popularity was increased by 41% and 33% in the first-tier and second-tier cities, respectively. The brand popularity reached 58%, and brand
211、reputation reached 95%. The users satisfaction to the product was at the highest level in the industry. Qingdao Haier Co., Ltd. 2015 Annual Report 28 / 239 The Company propelled Casarte store construction for user experience to lead the revolution of high-end lifestyle: In 2015, the Company set up 1
212、,440 stores, including 153 large-scale experience stores and the entire network fully covered the primary and secondary markets; it provided the differential products to satisfy users demand, established professional smart manufacturing factory, and set up quality and service system to satisfy high-
213、end users demand. The Company launched Casarte Yunzhen refrigerator, Casarte Ella washing machine, Casarte Legend and Linglong Legend gas water heater and other innovative products. The share of Casarte refrigerators increased from 3.7% to 5.1%, of which multi-door refrigerator priced more than RMB2
214、0,000 accounted for 27.7% as industrial leader; the share of Casarte washing machines increased from 2.3% to 4.8%, of which roller washing machines pried more than RMB10,000 accounted for 57.3%, ranking No. 1 in the industry; the share of Casarte wine cabinets accounted for 40%, ranking No. 1 in the
215、 industry; the share of Casarte ice bar accounted for 62%, ranking No. 1 in the industry; Casarte Legend and Linglong Legend and other high-end gas water heaters achieved good sales with significant increase. The sales of high-end products priced more than RMB3,600, with an increase of up to 55%. 3.
216、 Optimizing mechanism in the domestic market: The Company deepened offline channel cooperation mode, improved marketing terminal competitiveness, and accelerated the development of e-commerce channels. Offline channel construction: innovative mode of cooperation and improvement of business developme
217、nt: (1) The Company made intensive and innovative cooperation with Gome, Suning and other KA channels in the aspects of smart retail construction, secondary market expansion, and big data information sharing, differentiated product customization, co-marketing and Haier brand festival to maintain and
218、 improve the advantage in share. (2) Self-channel: At the end of 2015, the Company held New Year Great Event marketing activity across the country to stimulate terminal retail and improve distributors confidence. It optimized and integrated internal organizational system and operating mechanism to r
219、ealize uniform team objective and resource focus, and improve operating efficiency. (3) Comprehensive store channel: The Company established V90 consumer club for core consumers and established special model customized platform; it deeply integrated consumer resources and conducted a complete set of
220、 marketing and innovative activities to improve the retail performance. In response to industrial trend, the Company accelerated the construction of emerging channels, such as e-commercial channel to gain rapid development. In 2015, the revenue from e-commerce channel increased by nearly 50%. In Tma
221、ll November 11 activity held in 2015, the Companys retail sales reached RMB1.17 billion, which ranked top among major appliance brands. (1) Channel construction: the Company newly established official flagship stores for refrigerator, washing machine and air-conditioner in Tmall; it entered into 300
222、 stations of Egou service, promoted Haier cloud store to realize O2O transformation of self-channel, and established 500 flagship stores. (2) Operation: The Company set up excellent sales-oriented consumer service team, and improved the shopping experience through unifying standard and regulation an
223、d optimizing process; Delivery: The Company forced Qingdao Haier Co., Ltd. 2015 Annual Report 29 / 239 product distribution in the principle of salary paid by users, improved comprehensive after-sale service, and improved ultimate experience and gained reputation; Technology: Through data direct con
224、nection and establishment of sales data model, the Company realized data precipitation and protected efficient operation. 4. Building brand in the global market. Based on the global brand strategy in the local market, the Company improved the localized operation integrated with regional market, R&D
225、and manufacturing; the Company acquired GE home appliance business to expand its global layout. Affected by the constantly sluggish global home appliance market, in 2015, sales revenue in the overseas market amounted to RMB18.65 billion, representing a slight decrease of 0.2% as compared with the co
226、rresponding period of last year. The Company implemented Haier and Fisher & Paykel dual-brand strategy in the Australian market. Both parties made win-win cooperation in several aspects, such as R&D, manufacturing and marketing, to intensively realize localization and internationalization. In 2015,
227、the market share of Crystal roller washing machines was improved from 0 to 22% after it was launched, and became the first brand among local washing machines. The Company positively promoted Haier and AQUA dual-brand strategy in Japanese and Southeast Asian markets. In the Japanese market, the share
228、s of refrigerator and washing machine of the Company have been ranked No. 3 and No. 4 respectively. For the market share of washing machine below 6kg, the total shares of Haier and AQUA reached more than 30% and ranked No. 1 in the market. The Company promoted Haier and DCS by Fisher & Paykel dual-b
229、rand strategy in American market. Haier home appliance has successfully entered into top ten main chain sales channels in the US. Haier home air-conditioners ranked No. 2 in the American market with 20% market share, of which mobile air-conditioner and window air-conditioner respectively ranked No.
230、1 and No. 2 with 26% and Qingdao Haier Co., Ltd. 2015 Annual Report 30 / 239 16% market share. DCS Dishdrawer was positioned as high-end kitchen ware and has obtained good market performance. The Company positively responded to the national development strategy of One Belt and One Road. In the Europ
231、ean market, the Company invested in the establishment of refrigerator factory in Russia, and adopted the operation mode integrated with local design, manufacturing and sale. In Pune, India, the Company established an industrial zone covering an area of 160,000 square meters to accelerate the distrib
232、ution in the markets of India and South Asia. During the reporting period, the Company started to acquire GE home appliance. As the second largest white appliance company in the US, GE home appliance has strong brand influence and higher market share in American market. According to the statistics p
233、ublished by Euromonitor, in 2015, GE home appliance ranked No. 2 among American home appliance brands with nearly 20% market share. It was seen from product segmentation that, kitchen appliance, refrigerating product and dish-washing machine of GE home appliance were deeply recognized and trusted by
234、 consumers; the market share of kitchen appliances ranked No. 1 in the US; refrigerators and dish-washing machines ranked No. 2 in the US; and washing machine ranked No. 4 in the US. This acquisition would help the Company enter and expand American market, and provide the full series of brands for l
235、ow, mid-end and high-end consumers. Meanwhile, the Company improved its three-in-one layout in the Latin American market through holding minority interests in Mabe, constantly promoted and optimized the global strategic layout of the Company to further consolidate the leading position of the Company
236、 in global home appliance industry. After the completion of this acquisition, both parties would complement each others advantages in sales, production, R&D, procurement and supply chain, realize revenue synergies through network complementation, sub-sector expansion, new product development and imp
237、rovement of bargaining ability, and realize cost synergies through advantage in procurement scale, improvement of quality and productivity, to lay a solid foundation for becoming the global leader of home appliance industry in eastern and western hemispheres. Meanwhile, this acquisition would also c
238、reate more abundant and superior products and services for global consumers. 5. Making transformation to embrace the future U+ platform to expand the base and to live a smart life. The Company accelerated the transition of white goods towards Internet appliance, promoted U+ APP of Haier and improved
239、 the coverage of hardware and interaction. The Company deeply built the basic capacities of U+ platform to support the implementation of the seven smart ecological cycles such as food, air, washing and other ecological cycle, shifted from the pattern of simple sales of hardware to the pattern of Int
240、ernet appliance + interaction + service + platform to give community users the best experiences. 2.1 million smart white goods of Haier were sold in 2015, an increase of 169% compared to last year. Since U+ APP of Haier was officially launched in April 2015, the number of users exceeded 10 million w
241、ith the number of active users surpassing 1 million. Qingdao Haier Co., Ltd. 2015 Annual Report 31 / 239 U+ cloud platform has achieved interconnectivity by Apple Homekit, Allseen, Google Brillo/Weave, Huawei hilink and other protocols and the variety of accessible intelligent hardware exceeded 120.
242、 The Company completed the construction of basic structure of cloud platform and uploaded 100 million pieces of equipment data messages every day based on which the abilities such as big data analysis and interactive processing of artificial intelligence were formed to promote the optimization of pr
243、oducts and the improvement of user experience. Over 120 third-party resources were introduced into the resources of the ecological cycle. Strategic and business cooperation were made with Microsoft, Huawei, Meizu and other enterprises by hardware, software and service interface. More than 100,000 ma
244、kers were gathered and over 800 entrepreneurship and innovation programmes were formed by maker competition. Investment and resources of the ecological cycle were put into over 50 programmes around O2O services, artificial intelligence, sensor, big data and other areas. The income of the ecological
245、cycle surpassed 600% as compared to last year. Bases on U+ platform, the Company actively pushed forward the construction of food, air, washing, water and other ecological cycle and explored the transformation of the business model from simple sales of hardware to the pattern of Internet application
246、 + application + service + platform. The Company launched a brand new Internet refrigerator Haier Xinchu refrigerator in October 2015. The refrigerator brought people new experience of control by its 10.1-inch TFT touch screen and body sensor module. And its exclusive functions such as food DIY, foo
247、d material management, video entertainment and farm to table and the gather of Suning, DouguoRecipe, IQiyi, QingtingFM and many other resource suppliers brought people new experience of smart kitchen. Xinchu refrigerator became new entry of social contact because of its more convenient services and
248、safer products. Many resource suppliers could interact with consumers by Xinchu refrigerator that became the entry of electronic commerce, media and O2O community service of thousands of households. Qingdao Haier Co., Ltd. 2015 Annual Report 32 / 239 6. Making transformation to embrace the future -
249、interconnected factories led the industry and customized products grew quickly. The ecological system of interconnected industries was built and transformation was made from mass manufacturing to mass customization to meet consumers personalized demands and to upgrade the industry. The Company was t
250、he first to push forward the intelligence transformation of supply chains in the industry and established nearly 70 unmanned lines with nearly 2,000 robots in the whole-machine factories. The system of interconnected factories was preliminarily established and 7 interconnected factories were built i
251、ncluding five whole-machine factories: Shenyang Refrigerator, Foshan Roller Washing Machine, Zhengzhou Air-Conditioner, Jiaozhou Air Conditioner and Qingdao Water Heater, and two modular factories: Qingdao Mould and Qingdao FPA Electrical Machine that achieved seamless process, visualization and tra
252、nsparency. The interconnected factories of the Company were chosen as the comprehensive demonstration project of smart manufacturing pilot of the Ministry of Industry and Information Technology in 2015; it was the only enterprise in the white goods industry. The interconnected factories were the fir
253、st to be selected as standard special projects of smart manufacturing of the Ministry of Industry and Information Technology in 2015 and participated in the formulation of standards of Chinas smart manufacturing system. The Company launched its first user community experience platform of interaction
254、 and customization of the industry - Creative Convergence ( in 2015. The platform provided users with over 100 customized products and solutions by module customization, Creative Convergence customization, exclusive customization and other modes. The 1.0 version of the APP was released online and la
255、unched at Appliance World Expo in March 2015. It was officially launched in PC and mobile phone M station in the fourth quarter of 2015. After the launch, its monthly average flow increased obviously from about 2,000 in October to 350,000 in December. While the functions of the platform were upgrade
256、d and extensive products were provided, the user flow and customized orders synchronously increased, and the orders of customized products reached 150,000 in 2015. By using open community mode, Creative Convergence created a platform for face-to-face communication among users, designers and supplier
257、s and transformed the product demands and ideas of users into product programs. From the demand end to the manufacturing end, Creative Convergence of Haier created customized experience of visualization in the whole process based on the interconnected factories system to realize interconnection betw
258、een users and interconnected factories. Users were turned from simple demanders into idea initiators, design participants and decision makers, participating in the whole process of product customization and releasing their potential creativity by the unique and new experience. Qingdao Haier Co., Ltd
259、. 2015 Annual Report 33 / 239 0.94.39.913.3115Q115Q215Q315Q416Q17. Logistics and fast growth: the Company expanded the logistics of the industries such as household appliance, furniture and cold chain and constantly improved the distribution capacity of storage, artery and last mile to support the f
260、ast growth of business. Goodaymart Logistics efficiently completed most of large home appliance orders in T depending on its quick distribution and installation capacities. Its delivery timeliness hit record high to greatly improve the E-commerce user experience and push forward the rapid growth of
261、E-commerce logistics. Based on the great development of home appliance and e-commerce logistics business, the Company vigorously expanded the e-commerce logistics business of other large-format products including furniture, bathroom fixture and fitness equipment. The basic capacities were reinforced
262、 to constantly secure the leading position of logistics business of large-format products. Six warehouse constructions were newly built and put into use in 2015 and 21 warehouse constructions were accumulatively finished. The third and fourth tier markets continuously sank. HUB layout was quickly ex
263、tended to further raise the speed of distribution from the third and fourth tier markets to villages and households. Goodaymart Logistics kept its leading position in the platform at the third-level DC deep Internet layout of large-format products logistics. The fusion of acquired resources: Seamles
264、s connection capacity of distribution service from artery to districts and last mile distribution was improved and the network of regular bus nationwide was built to provide one-stop direct user service of the dry warehouse distribution. The upgrading of platform network and core abilities led to th
265、e upgrading of solutions of large-format products logistics. The change of new business model at the user demand end was taken into full account and integrated SCM solution of the whole process was first proposed and put into practice. Qingdao Haier Co., Ltd. 2015 Annual Report 34 / 239 8. Keeping p
266、romises. Capital market commitments were fulfilled. The Company acquired the overseas assets of Haier Group and minority interests held in Mitsubishi and Carrier Joint Venture in cash to promote global development and increase shareholder value. The Announcement of Qingdao Haier Co., Ltd. on the Acq
267、uisition of Shares of Haier Singapore Investment Holding Pte Ltd. and Connected Transactions and related matters were passed at the 2014 Annual General Meeting of the Company held on 10 June, 2015. After the transactions were completed, the system of combination of the research and development of ov
268、erseas white goods, manufacturing and sale of Haier Group in main countries and regions of the world such as Asia, Europe, America and Africa would be incorporated into the system of the listed company. It would help the Company to further integrate global resources of research and development, manu
269、facturing and sale and to create a global brand by its resources to become a global leader of the appliance industry with influence of first-class brand and comprehensive service strength. The Announcement of Qingdao Haier Co., Ltd. on the Acquisition of Equity in Sino-foreign Joint Venture Held by
270、Haier Group Corporation and Connected Transaction was passed at the 28th meeting of the 8th session of the Board of Directors of the Company held on 22 December, 2015 to acquire 49% of the equity of Qingdao Haier Carrier Refrigeration Equipment Co., Ltd. and 45% of the equity of Mitsubishi Heavy Ind
271、ustries Haier (Qingdao) Air-conditioners Co., Limited. The acquisition further enriched the product lines of the Company, strengthened the coordination of the R&D technology system of the Company, and provided a platform for the ongoing deep cooperation between the Company and the worlds leading hou
272、sehold appliance manufacturing companies. The acquisition was made in cash, which was helpful for improving profitability and capital utilization efficiency of the Company. Since 2011 listed companies have accumulatively used RMB9.7 billion to acquire high quality appliance assets of Haier Group in
273、cash to establish listed flagship company, to fulfill capital commitments and to increase shareholder value. (I) Analysis of principal business Table of movement analysis on the related items in income statement and cash flow statement Unit and Currency: RMB Items Current period Corresponding period
274、 of last year Change (%) Operating revenue 89,748,320,410.91 96,929,763,894.36 -7.41 Operating cost 64,658,463,207.53 70,170,401,158.93 -7.86 Sales expense 13,101,282,436.95 12,579,781,619.54 4.15 Administrative expenses 6,549,193,839.44 6,813,114,797.83 -3.87 Financial expenses -498,120,405.83 -256
275、,648,580.46 -94.09 Net cash flows generating from operating activities 5,579,600,612.93 6,769,361,298.35 -17.58 Qingdao Haier Co., Ltd. 2015 Annual Report 35 / 239 Net cash flows generating from investing activities -10,273,403,690.47 -3,639,278,256.98 -182.29 Net cash flows generating from financin
276、g activities -1,895,610,696.23 7,153,737,060.71 -126.50 Research and development expense 2,461,440,962 2,331,312,280.00 5.58 Loss of impairment on assets 318,011,645.05 223,184,511.75 42.49 Interests of changes on fair value -90,223,059.50 112,363,366.12 -180.30 Non-operating income 618,457,263.82 3
277、78,335,366.09 63.47 Income tax expense 1,052,769,417.97 1,527,486,745.62 -31.08 Other comprehensive income, net of tax 73,297,094.11 511,746,848.93 -85.68 Effect of change of exchange rate on cash and cash equivalent 151,920,567.09 -137,950,662.95 210.13 Presentation of significant changes: 1) Loss
278、in assets impairment increased by 42.49% compared with the corresponding period of last year, which was mainly attributable to the increase of loss from price drop in inventory; 2) Income from change in fair value decreased by 180.30% compared with the corresponding period of last year, which was ma
279、inly attributable to the change in fair value of derivative financial instruments such as future exchange; 3) Non-business income increased by 63.47% compared with the corresponding period of last year, which was mainly attributable to the increase of government subsidies of the current period; 4) I
280、ncome tax expense decreased by 31.08% compared with the corresponding period of last year, which was mainly attributable to the decrease of pretax profit; 5) Other comprehensive income, net of tax decreased by 85.68% compared with the corresponding period of last year, which was mainly attributable
281、to the decrease of income from change in fair value of available-for-sale financial assets compared with the corresponding period of last year; 6) The influence of fluctuation in exchange rate on cash and cash equivalents increased by 210.13% compared with the corresponding period of last year, whic
282、h was mainly attributable to influence of fluctuation in exchange rate. (1). Operating activities by industries, products and regions Unit: RMB0000 Principle operating activities by products Product Operating revenue Operating cost Gross profit margin (%) Operating revenue increased/decreased when c
283、ompared with last year (%) Operating cost increased/decreased when compared with last year (%) Gross profit margin increased/decreased when compared with last year (%) Air-conditioners 1,625,089 1,166,236 28.24 -20.62 -16.47 Decreased by 3.56 pct. pt. Qingdao Haier Co., Ltd. 2015 Annual Report 36 /
284、239 Refrigerators 2,758,853 1,861,059 32.54 -2.40 -2.58 Increased by 0.13 pct. pt. Kitchenware and sanitary ware 662,060 373,080 43.65 1.87 1.22 Increased by 0.36 pct. pt. Washing machines 1,746,985 1,147,257 34.33 1.22 0.63 Increased by 0.38 pct. pt. Equipment components 181,804 157,667 13.28 -58.1
285、8 -61.02 Increased by 6.33 pct. pt. Channel integrated services business and others 1,942,099 1,748,079 9.99 0.33 -1.17 Increased by 1.37 pct. pt. Principle operating activities by regions Region Operating revenue Operating cost Gross profit margin (%) Revenue increased/decreased when compared with
286、last year (%) Operating cost increased/decreased when compared with last year (%) Gross profit margin increased/decreased when compared with last year (%) Domestic market 7,051,844 4,910,852 30.36 -9.01 -9.16 Increased by 0.11 pct. pt. International market 1,865,046 1,542,526 17.29 -0.24 -2.51 Incre
287、ased by 1.92 pct. pt. (2). Analysis of production and sales Unit: 10k units / set Main products Production Sales volume Inventory Production increased/decreased when compared with last year (%) Sales volume increased/decreased when compared with last year (%) Inventory increased/decreased when compa
288、red with last year (%) Home appliance 4550, 10k units / set 5517, 10k units / set 477, 10k units / set -1.57 -0.75 1.32 (3). Cost analysis table Unit: RMB0000 Industry Sub-industry Component of cost Current amount Proportion over total cost for Correspon ding period of Proportio n over total cost Ch
289、anges in current amount Remarks Qingdao Haier Co., Ltd. 2015 Annual Report 37 / 239 the current period (%) last year for correspon ding period of last year (%) over the same period of last year (%) Household electric appliance industry Raw materials 4,040,052 88.84 4,321,500 89.75 -6.51 Labor 148,58
290、7 3.27 147,239 3.06 0.92 Depreciation 54,300 1.19 35,585 0.74 52.59 Energy 39,694 0.87 36,908 0.77 7.55 Others 264,999 5.83 273,984 5.69 -3.28 1. Expense (1) Financial expenses decreased by 94.09% as compared with the corresponding period of last year, which was mainly attributable to increase of in
291、terest income in the current period. 2. R&D expenditure Table of R&D expenditure Unit: RMB R&D expenditure for the period 2,344,436,742 Capitalised R&D expenditure for the period 117,004,220 Total R&D expenditure 2,461,440,962 Percentage of total R&D expenditure over operating revenue (%) 2.7 Number
292、 of R&D staffs in the Company 10,097 Number of R&D staffs over the total number in the Company (%) 15.8 Proportion of capitalization of R&D expenditure (%) 4.8 The direction of R&D investment of the Company: 1.User demands and research of core technology were focused on. The medium and long term tec
293、hnology and product competitiveness of the whole category industry were improved to keep the leading position of products; 2. Online open innovative platform was established and upgraded where all kinds of global innovation resources were gathered including universities, R&D institutions, top 500 co
294、mpanies, Internet enterprises, top innovation institutions, experts and geeks in the sub-sectors; 3. Innovation ability of five R&D centers was improved. Haier set up R&D centers in China, America, Asia, Europe and Australia. Each center was an open platform attracting resources and user interaction
295、 and thus an innovation resource network worldwide was formed. 3. Cash flows (1) Net cash flows from investing activities decreased by 182.29% compared with the corresponding period of last year, which was mainly attributable to the performance of capital commitment, the acquisition of overseas home
296、 appliance assets of Haier Group, the increase of payment Qingdao Haier Co., Ltd. 2015 Annual Report 38 / 239 in cash for investment activities including investment in Sinopec Marketing Co., Ltd. and the acquisition of Fujian Shengfeng Logistics Group Co. Ltd; (2) Net cash flows from financing activ
297、ities decreased by 126.50% compared with the corresponding period of last year, which was mainly attributable to the investment of Alibaba in Haier Electronics Group Co. Ltd, the Companys holding subsidiary; (3) The influence of fluctuation in exchange rate on cash and cash equivalents increased by
298、210.13% compared with the corresponding period of last year, which was mainly attributable to the influence of exchange rate fluctuation. （II） Explanation of non-operating business leading to significant changes in profit Applicable Not Applicable （III） Analysis of assets and liabilities Unit: RMB N
299、ame of project At the end of current period Percentage of the amount at the end of current period over total assets (%) At the end of previous period Percentage of the amount at the end of previous period over total assets (%) Change in the amount at the end of current period over that at the end of
300、 previous period (%) Financial assets at fair value and change of which included in the current profit or loss 22,069,897.04 0.03 103,668,887.71 0.13 -78.71 Prepayments 556,872,003.39 0.73 836,083,992.96 1.02 -33.40 Dividends receivables 85,826,158.26 0.11 54,524,472.84 0.07 57.41 Other current asse
301、ts 1,451,065,197.30 1.91 791,018,741.65 0.96 83.44 Available-for-sale financial assets 2,837,318,201.20 3.74 1,430,621,348.35 1.74 98.33 Long-term equity investments 4,958,908,333.93 6.53 3,582,596,477.92 4.35 38.42 Investment properties 3,449,331.95 0.00 30,582,852.72 0.04 -88.72 Disposals of fixed
302、 assets 74,096,355.04 0.10 31,624,205.58 0.04 134.30 Intangible assets 1,453,470,715.09 1.91 1,008,290,734.35 1.22 44.15 Goodwill 392,484,932.55 0.52 74,530,241.86 0.09 426.61 Financial liabilities at fair value and change of which included in the current profit or loss 7,707,414.12 0.01 42,686.85 0
303、.00 17,955.71 Tax payable 909,937,816.09 1.20 1,531,384,978.58 1.86 -40.58 Interests payable 15,081,416.34 0.02 7,921,318.87 0.01 90.39 Non-current 72,898,028.33 0.10 Qingdao Haier Co., Ltd. 2015 Annual Report 39 / 239 liabilities due within one year Long-term borrowing 297,241,293.20 0.39 Debenture
304、s payable 1,107,734,516.43 1.46 1,800,700,630.05 2.19 -38.48 Long-term Payables 59,916,852.02 0.08 Long-term payables for staffs remuneration 33,209,406.02 0.04 24,531,136.34 0.03 35.38 Deferred income 264,120,554.33 0.35 135,707,501.91 0.16 94.62 Share capital 6,123,154,268.00 8.06 3,045,935,134.00
305、 3.70 101.03 Capital reserve 83,383,194.51 0.11 5,978,787,439.45 7.26 -98.61 Treasury stock 77,604,544.70 0.10 47,160,730.00 0.06 64.55 Minority interests 9,708,285,895.93 12.78 7,314,528,029.80 8.88 32.73 Explanation of changes: 1) Financial assets measured at fair value and changes of which includ
306、ed in current profit and loss decreased by 78.71% from the beginning of the period, which was mainly attributable to the influence of change in fair value of derivative financial instruments such as future exchange; 2) Prepaid amount decreased by 33.40% from the beginning of the period, which was ma
307、inly attributable to the decrease of prepayment to supplier; 3) Dividend receivable increased by 57.41% from the beginning of the period, which was mainly attributable to the increase of the declaration of unpaid dividend by participating companies. 4) Other current assets increased by 83.44% from t
308、he beginning of the period, which was mainly due to the increase of taxes to be deducted at the end of the period; 5) Available-for-sale financial assets increased by 98.33% from the beginning of the period, which was mainly due to the increase of investment such as the investment of China Petrochem
309、ical Marketing Co. Ltd; 6) Long-term equity investments increased by 38.42% from the beginning of the period, which was mainly due to the increase of investment in many associated companies including Haier Tongchuang Investment Partnership (Limited Partnership) and the increase of profits of associa
310、ted companies using equity method; 7) Investment properties decreased by 88.72% from the beginning of the period, which was mainly due to the turn of some investment properties into disposals of fixed assets; 8) Disposals of fixed assets increased by 134.30% from the beginning of the period, which w
311、as mainly due to the turn of some investment properties into disposals of fixed assets; 9) Intangible assets increased by 44.15% from the beginning of the period, which was mainly due to the increase of land use right acquired in the period; 10) Goodwill increased by 426.61% from the beginning of th
312、e end, which was mainly due to the acquisition of the subsidiary of the Company, Fujian Shengfeng Logistics Group Co., Ltd under different controlling parties; 11) Financial liability measured at fair value and changes of which included in current profit and loss increased by 17955.71% from the begi
313、nning of the period, which was mainly due to the influence of change in fair value of derivative financial instruments such as future exchange; Qingdao Haier Co., Ltd. 2015 Annual Report 40 / 239 12) Taxes payable decreased by 40.58% from the beginning of the period, which was mainly due to the decr
314、ease of value added tax payable at the end of the period; 13) Interests payable increased by 90.39% from the beginning of the period, which was mainly due to the increase of unpaid loan interest; 14) Non-current liabilities due within one year increased by 100% from the beginning of the period, whic
315、h was mainly due to the increase of payments due within one year because of the acquisition of equity interests of minority interests; 15) Long-term borrowings increased by 100% from the beginning of the period, which was mainly due to the increase of long-term borrowings of subsidiaries; 16) Debent
316、ures payable decreased by 38.48% from the beginning of the period, which was mainly due to the turn of some convertible bonds issued by subsidiaries into equities; 17) Long-term payable increased by 100% from the beginning of the period, which was mainly due to the fund investment of China Developme
317、nt Bank in subsidiaries; 18) Long-term employee benefits payable increased by 35.38% from the beginning of the period, which was mainly due to the increase of long-term termination benefits of some overseas subsidiaries; 19) Deferred income increased by 94.62% from the beginning of the period, which
318、 was mainly due to the increase of government grant programs related to assets; 20) Share capitals increased by101.03% from the beginning of the period, which was mainly due to the conversion of capital reserve into the increase in share capital; 21) Capital reserve decreased by 98.61% from the begi
319、nning of the period, which was mainly due to the conversion of capital reserve into the increase in share capital and the elimination of share premium by enterprise combinations under common control; 22) Treasury stock increased by 64.55% from the beginning of the period, which was mainly due to the
320、 repurchase of stock of the Company from the open market; 23) Minority interest increased by 32.73% from the beginning of the period, which was mainly due to the increase in profit or loss attributable to minority shareholders. Qingdao Haier Co., Ltd. 2015 Annual Report 41 / 239 （IV） Analysis on Inv
321、estment 1. Overall analysis on external equity investment During the reporting period, the external equity investment of the Company amounted to RMB6,130.26 million. Name of company invested Principle operating activities Percentage of the equity interest of the company invested (%) Remark Amount of
322、 investment (RMB0000 ) Amounted invested (RMB0000) Haier Singapore Investment Holding Pte Ltd. Investment Holding 100 For more details, please refer to the Announcement of Qingdao Haier Co., Ltd. on the Acquisition of Shares of Haier Singapore Investment Holding Pte. Ltd and Connected Transactions (
323、No.: L 2015-014) published on four major securities newspapers and the Shanghai Stock Exchange website on 26 May 2015 and other related announcements published on the same day. 487,370 487,370 Shenzhen MTC Co., Ltd. Electronic product manufacturing, etc. 1.61 For more details, please refer to the Su
324、ggestive Announcement of Qingdao Haier Co., Ltd. on the Subscription of Non-public Offering of Shares by Shenzhen MTC Co., Ltd. (No.: L 2015-023) and Suggestive Announcement of Qingdao Haier Co., Ltd. on the Adjustment to the Plan of Non-public Offering of Shares by Shenzhen MTC Co., Ltd. (No.: L 20
325、15-036) published on four major securities newspapers and the Shanghai Stock Exchange website on June 19 and 19 August 2015 respectively. 37,078 0 Mitsubishi Heavy Industries Haier (Qingdao) Air-conditioners Company Limited (Referred to as Mitsubishi Heavy Industries) Manufacturing of air conditione
326、r and its parts and components, etc. 45 For more details, please refer to the Announcement of Qingdao Haier Co., Ltd. on the Acquisition of Equity in Sino-foreign Joint Venture Held by Haier Group Corporation and Connected Transaction (L 2015-062) published on four major securities newspapers and th
327、e Shanghai Stock Exchange website on 23 December 2015. 54,334 0 Qingdao Haier Carrier Refrigeration Equipment Co., Ltd. (Referred to as Carrier Equipment) Design, manufacturing and installation of units 49 34,244 0 Notes: (1) Relevant motions on the acquisition of all shares of Haier Singapore Inves
328、tment Holding Pte. Ltd held by Haier (Hong Kong) Investment Co., Ltd. were considered and approved at Board of Qingdao Haier Co., Ltd. 2015 Annual Report 42 / 239 Directors and general meeting of stockholders on 26 May 2015 and 10 June 2015. According to the meeting resolutions, the total considerat
329、ion paid by the Company to Haier (Hong Kong) Investment Co. Ltd for the equity interest transfer will be RMB4.8737 billion. The transfer has been finished up to as at the end of the reporting period. (2) On 18 June 2015, general manager office meeting of the Company considered and approved the parti
330、cipation in acquiring 30 million non-public offering of shares by Shenzhen MTC Co., Ltd with self-owned funds of RMB370.78 million as a consideration. The acquisition has not been finished up to the end of the reporting period. (3) Relevant motions of the acquisition of minority shares of Mitsubishi
331、 Heavy Industries Haier (Qingdao) Air-conditioners Co., Limited and Qingdao Haier Carrier Refrigeration Equipment Co., Ltd. were considered and approved at Board of Directors and general meeting of stockholders on 22 December 2015 and 7 January 2016. According to the meeting resolutions, the total c
332、onsideration paid by the Company to Haier Group for the equity interest transfer was RMB841.492 million. The transfer has not been finished as of the end of the reporting period. (1) Significant equity investment See 1. Overall analysis on external equity investment for the equity investment of the
333、Company during the reporting period. (2) Significant non-equity investment None (3) Financial assets measured at fair value Financial assets measured at fair value Initial cost of investment Sources of funds Purchase / sale during the reporting period Investment income during the reporting period Ch
334、anges in fair value during the reporting period Bank of Communications (601328) 1,803,769.50 Own funds 367,808.04 -490,410.72 BAILIAN (600827) 154,770.00 Own funds -787.76 Eastsoft (300183) 18,713,562.84 Own funds 2,368,508.58 Bank of Qingdao (003866) 890,308,859.84 Own funds 96,086,121.25 38,434,44
335、8.50 Others 1,041,212.42 Own funds 121,165.41 8,415.70 Derivative financial instruments 49,201,148.46 -90,223,059.50 Total 912,022,174.60 121,165.41 145,655,077.75 -49,902,885.20 （V） Material Assets and Equity Disposal During the reporting period, to improve the cost competitiveness of special steel
336、 plate of the Company and promote the strategy transformation from mass manufacturing to mass customization, the Qingdao Haier Co., Ltd. 2015 Annual Report 43 / 239 Company and its wholly-owned subsidiary Haier Shareholdings (Hong Kong) Limited (hereinafter referred to as Haier Hong Kong) signed agr
337、eement with Qingdao Hebei Iron & Steel New Material Technology Co. Ltd (hereinafter referred to as Hebei Iron & Steel Technology), a subsidiary of Hebei Iron & Steel Group Co. Ltd (hereinafter referred to as Hebei Iron & Steel Group) on 29 September 2015 to transfer 70% of the equity of Qingdao Spec
338、ial Steel and 70% of the equity of Hefei Special Steel jointly held by the Company and Haier Hong Kong to Hebei Iron & Steel Technology (the foregoing transaction collectively referred to as the Transaction). The amount of the Transaction was RMB490 million. After the completion of the Transaction,
339、the Company still held 30% of the equity of Qingdao Special Steel and Hefei Special Steel. For details, please refer to Suggestive Announcement of Qingdao Haier Co. Ltd. on the Transfer of Controlling Equities in Subsidiaries (L 2015-045) disclosed on 1 October 2015. (VI) Analysis on Major Controlli
340、ng Companies Unit and Currency: RMB Name of company Scope of business Registered capital (RMB0000) Total assets Net assets Net profit Haier Electronics Group Co., Ltd. Production and sale of home appliances 0 3,006,424 1,564,730 282,129 Qingdao Haier Air Conditioner Gen Corp., Ltd Air conditioner ma
341、nufacturing 21835.5 351,592 319,388 40,796 Qingdao Haier Special Refrigerator Co., Ltd. The refrigerator manufacturing USD20.00 million 113,162 67,932 25,588 Chong Qing Haier Air-Conditioner Co., Ltd Air conditioner manufacturing 13000 197,843 155,996 23,481 Hefei Haier Refrigerator Co., Ltd. The re
342、frigerator manufacturing 4900 150,193 97,776 20,732 Qingdao Haier Air-Conditioner Electronics Co., Ltd. Air conditioner manufacturing USD11.96 million 336,678 254,817 20,539 Note: The financial data of Haier Electronics Group Co., Ltd. is determined in accordance with the accounting standards genera
343、lly accepted in the PRC and the accounting policies of the Company. (VII) Information on the Main Structure Controlled by the Company Nil III. Discussion and Analysis on the Future Development of the Company （I） Development Strategy of the Company The Companys transformation strategic direction: the
344、 Company will transform from the traditional enterprise manufacturing home appliance products to the platform incubating maker to the whole society, which will commit to become the Internet enterprise, thus it will overturn the closed system that traditional enterprises establish for themselves into
345、 the node in network interconnection, and Qingdao Haier Co., Ltd. 2015 Annual Report 44 / 239 then the Company will achieve the connectivity of various resources, create the co-creation and win-win ecological cycle based on users value interaction in the post-electric business time, thus it will pro
346、vide intelligent household solutions for consumers, so as to achieve the win-win and value increase of all the parties. In 2016, the Company will continue to promote the transformation and implementation of Internet enterprises, according to the development topic of new state of interconnection and
347、interworking, new platform of co-creation and win-win, the Company deeply will promote the change, focus on U+ Smart Life platform and interconnected factory and personalized customization platform, so as to establish the co-creation and win-win platform of business experience in intelligent life sc
348、ene. Then the Company will construct the interconnected factory ecological system, achieve the seamless, transparency and visualization of users experience, thus it will promote the implementation and development of new mode; the Company will continue to implement product leading strategy, promote s
349、tructure upgrading, and depend on the advantages in technology, scale and cost to extend the market share; the Company will promote to form the operation system and mechanism construction in domestic market with focusing users praise and improving consumers value as the guidance, so as to enhance ma
350、rket efficiency and respond ability; the Company will focus on creating local competitiveness in overseas market, and promote the unified listing of global leading product platform; it will promote to integrate with GEs home appliance products, thus it will smoothly complete project delivery and bus
351、iness cooperation. （II） Operation Plan The Company will insist on product leading, fully depend on the leading technology, the Company design advantage in the world, then it will continue to increase the high-end market share, and keep on promoting the business development of Casarte; the Company wi
352、ll actively master the upgrading trend of industry, enrich the product category layout of T-type multi-door refrigerator, roller washing machine and other products with rapid growth rate; as for middle and low end market. The Company will depend on the advantages of technology and scale to enhance c
353、ost competitiveness and market competitiveness; then it will keep and enlarge the scale advantage and share advantage in the industry. Domestic market: according to users experience improvement and consumers value addition, the Company will change the operation system and mechanism, through strength
354、ening market terminal staff training, upgrading the on-site standard and display, promoting precision market and many other methods to improve the market competitiveness in first-line. The Company will keep the industry position of KA and other traditional advantage pipelines; then it will enrich th
355、e product layout of electricity pipelines and improve the competitiveness in comprehensive shop and boutique; in its own pipeline: the Company will insist on the concept of honesty forever of Haier, serving consumers and satisfying the users, thus the Company will promote the upgrading and reaching
356、standard work of service provider, strengthen the service ability on county and town of service provider; the Company will comprehensively promote and launch the E-Store3.0 system, Qingdao Haier Co., Ltd. 2015 Annual Report 45 / 239 through the informationization means to put pressure on the termina
357、l retail transformation; Haiers mobile terminal e-commerce platform Shunguang will achieve integration to construct the first home appliance mobile terminal E-commerce platform in China. Overseas market: the Company will focus on creating local team with competitiveness, promote the implementation o
358、f localization mechanism by connecting the sales force with their orders; it will strengthen the global planning of differentiation products and resources, implement the unified listing of global leading refrigerator and washing machine product platforms, and then the Company will enhance the termin
359、al market image. The Company will smoothly achieve the delivery and business cooperation with the home appliance business of GE, and then it will fully release the potential of cooperation. U+ Smart Life platform implementation of U+ Smart Life 2.0 strategy focusing on scenario business. The Company
360、 will strengthen the construction five platforms including united cloud platform, Haier U+ APP user interaction, U+ Smart Life brain, and source open platform: then it will achieve the infinite loop of the four dimensions including entrance, scenario, community and data; the Company will focus on th
361、e three key duties to enhance users experience, and then it will optimize the diversified business model: it will use Internet appliance ecology to bring the full implementation of new business model from selling product to selling service / content; it will use the new service mode the first smart
362、life personalized customization platform (to provide home appliances management, electronic warranty card, whole scene visual service process for users) brought by Haier U+ APP 2.0, thus it will make the whole process service and smart interaction platform; U+ Smart Life brain will bring the ability
363、 of new smart interaction for the home appliances to initiatively understand the requirement of users and initiatively provide service. In the aspect of interconnected factory system establishment and personalized customization: (1) the Company will continue to promote updating and reforming of inte
364、rconnected factory; it will launch interconnected factory COSMO (Cloud of Smart Manufacturing Operation) platform to achieve the zero distance interaction between users and interconnected factory and enable users to participate in the whole process of customization; the Company will establish Haier
365、Industrial Smart Research Institute, accumulate the Companys interconnected factory modes, standards and methodologies, and upgrade the industrial smart cloud service platform and provide the overall solutions. (2) Personalized customization: it will conduct technology and structure upgrade, big dat
366、a platform access and virtual reality access, apply big data analysis, and implement the accurate marketing based on the user attributes of each channel / entrance, enhance order conversion rate; it will continue to improve platform experience, deeply satisfy all kinds of customization demands; pay
367、attention to the establishment of users platform experience and interaction of community fans, so as to create zero distance and zero cost communication mechanism among users, interconnected factories and designers and build the win-win customized ecological cycle. Logistics business: based on the g
368、reat development of Goodaymart Logistics in home appliances logistics field, it will greatly expand the delivery of non-home appliances category. By applying the established national delivery network, especially the last mile service network, Goodaymart Logistics Qingdao Haier Co., Ltd. 2015 Annual
369、Report 46 / 239 will set up market dominating position in furniture, sanitary ware, fitness equipment, electric vehicle and other large items, and make great effort to develop cold chain logistics industry. （III） Funds Required for Maintaining Current Business and Completing Project under Constructi
370、on In 2016, the Companys funds will be used for the normal production and operation of the Company, the construction of smart interconnected factories and U+ platform, small entrepreneurial incubation and acquisition of GE home appliance assets. The required funds will be implemented upon review by
371、decision-making organization in accordance with the Companys strategies and operations. The Company will establish the capital structure with multi-channel and multi-level to fully utilize the financial leverage and its own funds to rationally allocate the resources. （IV） Potential risks 1. Risk of
372、sluggish market demand due to slowdown in growth of macro economy. As white home appliance products fall into the category of consumer electronic products, the income level and expectation on future income growth will have an effect on the purchase of white goods. In the event of slowdown in the gro
373、wth of the macro economy resulting in the decrease in the purchasing power of consumers, growth of the industry will be adversely affected. In addition, uncertainties on the property market will have some negative effect on market demand, which will in turn have some indirect demand for home applian
374、ce products. 2. Price war risk caused by intensifying industry competition. In a long term, the market concentration of white home appliance industry continues to rise, but in short-term, due to the imbalance between supply and demand caused by high capacity generated from industry expansion and dec
375、reasing of industry demand in recent years, the industry inventory amount rises, under the background of product homogeneity, price war will become the means to drive the promotion of share in the short term. 3. The smart trend of white home appliance will fuzzy the boundaries of industries and inte
376、nsify industry competition; Internet companies will enter into the field of smart home appliance, which will intensify the industry competition and overturn the current profit model of the industry. 4. Risk of rise in price of raw materials. Bulk raw materials such as copper, aluminum, steel plate,
377、and oil-related plastic particles and foam materials account for a large proportion in the costs of white goods production. The surge in the price of bulk raw material will increase the cost pressure, and therefore have negative effect on the performance of enterprises. IV. Explanation of failure to
378、 disclose in accordance with the standards and reasons due to not applicable to rules and regulations or special reasons Applicable Not Applicable Qingdao Haier Co., Ltd. 2015 Annual Report 47 / 239 SECTION V SIGNIFICANT EVENTS I. Proposal for Profit Distribution or Capital Reserve Conversion of Ord
379、inary Shares （I） The development, implementation or adjustment of the cash dividend policies The Companys 2014 profit distribution plan was passed on the 2014 Annual General Meeting of the Company held in June 2015: based on the share capital of 3,046,125,134 shares at the time of distributing, dist
380、ribute RMB4.92 (tax inclusive) for every 10 shares and convert to 10 shares to all shareholders, with a total amount of dividend before tax of RMB1,498,693,565.93 and the total share capital after the implementation of 6,092,250,268 shares. The plan has been implemented and completed in July 2015. D
381、etails are set out in the Announcement of Qingdao Haier Co., Ltd. on the Implementation of Profit Distribution and Capital Reserve Conversion for 2014 (L 2015-025) published by the Company on the four major securities newspapers and the website of Shanghai Stock Exchange on 10 July 2015. The Company
382、 has always applied the continuous and stable profit distribution policy. During the reporting period, the Company strictly followed the requirements set out in the Articles of Association and the newly formulated Shareholder Return Plan for the Next Three Years (2015 -2017). During the formulation
383、of the profit distribution plan, the Company took full account of return for investors, the long-term interests of the Company, overall interests of all shareholders and sustainable development of the Company, and provided investors with the opportunity to share in the growth of value, so that inves
384、tors could form the expectation of a stable return. The procedures and mechanisms for decision-making such as Articles of Association and planning system of return of shareholders were complete and in compliance with laws and regulations. The process was open and transparent, the standard and ratio
385、of dividends was clear. Responsibilities of independent directors were clear during the policy-making process, and independent directors were given the opportunities to play their roles. Minority shareholders were also given the opportunity to fully express their views and demands, and the legitimat
386、e interests of minority shareholders were adequately protected. The dividend distribution plan of 2015 of the Company: on the basis of the total share capital as at the date of profit distribution , distribute cash dividend of RMB2.12 per 10 shares (tax inclusive) with expected cash dividend of RMB1
387、,292,697,714.12. The remaining reserved profits were carried forward to the next year. The amount of this distribution accounts for 30% of the net profit attributable to parent company of the Company in 2015. All dividend of bonus scheme is paid in cash. （II） Plans or Proposals for Profit Distributi
388、on and Plans or Proposals for Capital Reserve Conversion into the Increase in Share Capital of the Company in the Recent Three Years (Including the Reporting Period) Unit and Currency: RMB Year of distribution Number of bonus share for Amount of dividend Number of shares converted Amount of cash div
389、idend (tax inclusive) Net profits attributable to shareholders of Percentage of the net profit Qingdao Haier Co., Ltd. 2015 Annual Report 48 / 239 every 10 shares (share) for every 10 shares (RMB) (tax inclusive) for every 10 shares (share) listed companies in the consolidated financial statement du
390、ring the year of distribution attributable to the shareholders of the listed companies in the consolidated financial statement (%) 2015 0 2.12 0 1,340,094,420.82 4,300,760,542.82 31.16 2014 0 4.92 10 1,498,693,565.93 4,991,557,360.87 30.02 2013 0 4.60 0 1,251,584,532.40 4,168,152,892.92 30.03 （III）
391、Share Repurchase by Cash and Included in Cash Dividend Unit and Currency: RMB Amount of cash dividends Percentage (%) 2015 47,396,706.70 3.54 （IV） The Company made profits and the profits for distribution to the ordinary shareholders of the parent company was positive during the reporting period, bu
392、t 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 Qingdao Haier Co., Ltd. 2015 Annual Report 49 / 239 II. Performance on Undertakings Applicable Not ap
393、plicable （I） Undertakings made by companies, shareholders, actual controlling shareholders, purchasers, directors, supervisors, senior management or other related parties during or lasted to the reporting period Background Type Covenanter Content Time and term Whether it has a deadline for performan
394、ce Whether it is performed in a timely and strict way Undertaking related to material asset reorganization Eliminate land property defect Haier Group Corporation During the period from September 2006 to May 2007, the Company issued shares to Haier Group Corporation (Haier Group) to purchase the cont
395、rolling equity in its four subsidiaries, namely Qingdao Haier Air-Conditioner Electronics Co., Ltd., Hefei Haier Air-conditioning Co., Limited, Wuhan Haier Electronics Co., Ltd., Guizhou Haier Electronics Co., Ltd. With regard to the land and property required in the operation of Qingdao Haier Air-C
396、onditioner Electronics Co., Ltd., Hefei Haier Air-conditioning Co., Limited, Wuhan Haier Electronics Co., Ltd. (the Covenantees), Haier Group made an undertaking (the 2006 Undertaking). According to the content of 2006 Undertaking and current condition of each Covenantee, Haier Group will constantly
397、 assure that Covenantees will lease the land and property owned by Haier 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. 27 September 2006, long term YES YES Undertaking related to refinancing Elimi
398、nate land Haier Group Haier Group Corporation undertakes that it will assure Qingdao Haier and its subsidiaries of the constant, stable and unobstructed 24 December 2013, long term YES YES Qingdao Haier Co., Ltd. 2015 Annual Report 50 / 239 property defect Corporation use of the leased property. In
399、the event that Qingdao Haier or any of its subsidiaries suffers any economic loss due to the fact that leased property has no relevant ownership certificate, Haier Group Corporation will make compensation to impaired party in a timely and sufficient way and take all reasonable and practicable measur
400、es to support the impaired party to recover to normal operation before the occurrence of loss. Upon the expiration of relevant leasing period, Haier Group Corporation will grant or take practicable measures to assure Qingdao Haier and its subsidiaries of priority to continue to lease the property at
401、 a price not higher than the rent in comparable market at that time. Haier Group Corporation will assure Qingdao Haier and its subsidiaries of the constant, stable, free and unobstructed use of self-built property and land of the Group. In the event that Qingdao Haier or any of its subsidiaries fail
402、s to continue to use self-built property according to its own will or in original way due to the fact that self-built property has no relevant ownership certificate, Haier Group Corporation will take all reasonable and practicable measures to eliminate obstruction and impact, or will support Qingdao
403、 Haier or its affected subsidiary to obtain alternative property as soon as possible, provided that 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 Haie
404、r Co., Ltd. on the Formation, Current Situation of the Defective Property, the Influence on Operation of Issuer Caused by Uncertainty of Ownership, Solution for the Defect and Guarantee Measures (L 2014-005) published by the Company on the four major securities newspapers and the website of Shanghai
405、 Stock Exchange on 29 March 2014. Undertaking related to refinancing Eliminate land property defect Qingdao Haier Co., Ltd. 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
406、, so as 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 Haier Co., Ltd. on the Formation, 24 December 2013, five years YES YES Qingdao Haier Co., Ltd. 2015 Annual Report 51 / 239 Curre
407、nt Situation of the Defective Property, the Influence on Operation of Issuer Caused by Uncertainty of Ownership, Solution for the Defect and Guarantee Measures (L 2014-005) published by the Company on the four major securities newspapers and the website of Shanghai Stock Exchange on 29 March 2014. U
408、ndertaking related to the Share Option Incentive Scheme Other Qingdao Haier Co., Ltd. With regard to the Share Option Incentive Scheme launched by the Company, the Company has undertaken not to provide loan or any other kind of financial support to incentive object in exercising option under the Sha
409、re Option Incentive Scheme or purchase of restricted shares, including providing guarantee for its loan. 11 April 2014, long term YES YES Other undertakings Asset injection Haier Group Corporation Inject the assets of Fisher&Paykel to the Company or dispose such assets through other ways which accor
410、d with the requirements of the domestic supervision before June 2020. For more details, please refer to the Announcement of Qingdao Haier Co., Ltd. on the Changes of Funding Commitment (L 2015-015) published on the four major securities newspapers and the website of Shanghai Stock Exchange on 26 May
411、 2015. May 2015-June 2020 YES YES Other undertakings Asset injection Haier Group Corporation Inject the assets of Haier Photoelectric to the Company or dispose such assets through other ways which accord with the requirements of the domestic supervision before June 2020. For more details, please ref
412、er to the Announcement of Qingdao Haier Co., Ltd. on the Changes of Funding Commitment of Haier Group Corporation (L 2015-063) published on the four major securities newspapers and the website of Shanghai Stock Exchange on 23 December 2015. December 2015-June 2020 YES YES Other undertakings Profit f
413、orecast and compensation Haier Group Corporation In December 2015 and January 2016, the meeting of the Board of Directors and general meeting of the Company considered and approved the matters in relation to the acquisition of minority interest of Mitsubishi Heavy Industries Haier and Carrier Refrig
414、eration Equipment held by Haier Group. The Company signed the Profit Compensation Agreement with Haier Group to forecast the profits achieved by the aforementioned two companies in 2015 - 2018. If the profits are not reached during the commitment period, the difference part will be made up to the Co
415、mpany by Haier Group in cash. For more details, please refer to December 2015- December 2018 YES YES Qingdao Haier Co., Ltd. 2015 Annual Report 52 / 239 the Announcement of Qingdao Haier Co., Ltd. on the Acquisition of Equity in Sino-foreign Joint Venture Held by Haier Group Corporation and Connecte
416、d Transaction (L 2015-062) published on the four major securities newspapers and the website of Shanghai Stock Exchange on 23 December, 2015 Other Undertakings (note) Asset injection Haier Group Corporation In January 2011, the Company received the Letter on Further Supporting Qingdao Haier to Devel
417、op and Solve Horizontal Competition Problem and Reduce Connected Transactions from the controlling shareholder Haier Group Corporation (Haier Group), whereby Haier Group undertook to make Qingdao Haier as its electronics business integration platform in order to further accelerate Qingdao Haier to c
418、onstantly and soundly grow to the leading electronics enterprise of the world. Since 2011, Haier Group planned to support Qingdao Haier to solve horizontal competition problem, reduce connected transactions, enlarge and strengthen its business by various methods including assets injection and equity
419、 restructuring within five years. For details, please refer to the Announcement of Qingdao Haier on the Further Support of Development of Qingdao Haier, Solutions of Horizontal Competition and Decrease of Connected transactions by Controlling Shareholder (L2011-001) published by the Company on the f
420、our major securities newspapers and the website of Shanghai Stock Exchange on 8 January 2011 and the Announcement of Qingdao Haier Co., Ltd. on the Content of Undertaking in respect of Solving Horizontal Competition Problem, Status of Performed Matters, Performance Plan on Matters Not Yet Completed
421、and Performance Guarantee Measures (L 2014-003), the Announcement of Qingdao Haier Co., Ltd. on Decision-making Procedure and Information Disclosure of Major Connected Transaction in the Reporting Period and Measures on Reducing Connected Transactions (L 2014-004) published on 29 March 2014. 7 Janua
422、ry 2011, five years YES YES Eliminate horizontal competition YES YES Solve connected transaction problem YES YES Qingdao Haier Co., Ltd. 2015 Annual Report 53 / 239 Note: As of 7 January 2016, Haier Group Corporation has implemented the commitments on further Supporting Qingdao Haier Development to
423、Resolve Horizontal Competition and Reduce Connected Transactions in five years made in January 2011. The remaining parts that were not implemented have been extended after the deliberation of the shareholders meeting. The contents of commitments and its implementing are as follows: Content I of the
424、commitment: to inject the assets, businesses and related equity of the white goods of Haier Group and to comprehensively resolve the problem of horizontal competition (1) To acquire the assets of oversea white goods: on 25 May 2015, the 22th meeting of the 8th session of the Board of Directors of th
425、e Company considered and passed the motion to acquire the entire shares of Haier Singapore Investment Holding Pte Ltd held by the subsidy of Haier Group at a consideration of RMB4.874 billion. After the completion of this acquisition, except for the related assets of Fisher&Paykel (since it was stil
426、l in the integration period and its financial performance did not reach the expectation of the Company), the Company will obtain and possess other overseas white goods assets of Haier Group. Besides, the Group has presented commitment to the Fisher&Paykel assets that it will inject the assets of Fis
427、her&Paykel to the Company or dispose such assets through other ways which accord with the requirements of the domestic supervision before June 2020 and authorize the assets to the Company for management. For more details, please refer to the Announcement of Qingdao Haier Co., Ltd. on the Acquisition
428、 of Shares of Haier Singapore Investment Holding Pte. Ltd and Connected Transactions (L 2015-014) and Announcement of Qingdao Haier Co., Ltd. on the Changes of Funding Commitment (L 2015-015) announced on 26 May 2015 and Announcement of Qingdao Haier Co., Ltd. on the Resolutions Passed at the AGM fo
429、r 2015 (L 2015-021) announced on 11 June 2015 as well as other related announcements. Until the end of the reporting period, this event has been approved by the shareholders meeting of the Company and the competent supervision authority. (2) To acquire the minority interests of Mitsubishi and Carrie
430、r: on 22 December 2015, the 28th meeting of the 8th session of the Board of Directors of the Company considered and passed the motion to acquire 49% equity of Qingdao Haier Carrier Refrigeration Equipment Co., Ltd. and 45% equity of Mitsubishi Heavy Industries (Qingdao) Haier Air Conditioner Co., Lt
431、d. held by Haier Group at a consideration of RMB841 million. For more details, please refer to the Announcement of Qingdao Haier Co., Ltd. on the Acquisition of Equity in Sino-foreign Joint Venture Held by Haier Group Corporation and Connected Transaction (L 2015-062) announced on 23 December 2015 a
432、nd Announcement of Qingdao Haier Co., Ltd. on the Resolutions Passed at the First EGM in 2016 (L 2016-002) announced on 8 January 2016 as well as related announcements. Until now, this event has been approved by passed the shareholders meeting. The procedure of the change of equity is still under tr
433、ansacting. Qingdao Haier Co., Ltd. 2015 Annual Report 54 / 239 Above all, the related contents under this commitment have been fulfilled. Content II of commitment: to inject upstream assets and businesses of household appliance, to decrease connected transactions and to promote the integrated develo
434、pment of the upstream and downstream industries of Qingdao Haier (1) To acquire the upstream assets and businesses of mould: in June 2011, the 13th meeting of 7th session of the Board of Directors had considered and passed the motion to acquire the equity of ten companies including Qingdao Haier Mou
435、ld Co., Ltd. Held by Haier Group Corporation and its subsidies at a consideration of RMB1.88 billion. For more details, please refer to the Announcement of Qingdao Haier Co., Ltd. on the Assigning of Equity in Ten Companies Including Qingdao Haier Mould Co., Ltd. Held by Haier Group Corporation and
436、Its Subsidies and Connected Transaction (L2011-021) announced on 17 June 2011 and related announcements. (2) To increase the autonomous procurement and to alter the exports into autonomous exports: the Company established autonomous sourcing platforms including Qingdao Haidarui Procurement Service C
437、o., Ltd. and Qingdao Haidayuan Procurement Service Co., Ltd. respectively in 2009 and 2012 to constantly increase the autonomous procurement. Until the end of 2015, both companies had decreased RMB127.3 billion of connected transactions related to procurement for the Company. In 2015, connected tran
438、saction related to procurement amounted to RMB27.6 billion and the proportion of connected transactions related to procurement accounted for 32.8% of similar transactions. In 2015, the acquisition of overseas white goods assets was completed. The export business of the Company was implemented by the
439、 trading company under the abovementioned white goods assets and the connected transactions related to sale decreased constantly: in 2015, the connected transactions related to sale amounted to RMB7.56 billion and the proportion of connected transactions related to sale further decreased to 8.4% of
440、similar transactions. Above all, the proportion of connected transactions in similar transactions has been optimized greatly. Above all, the related contents under this commitment have been fulfilled. Content III of the commitment: to inject other household appliance related assets and to promote Qi
441、ngdao Haier to be bigger and stronger The changes of the color TV assets injection of the Company: On 22 December 2015, the 28th meeting of the 8th session of Board of Directors considered and passed the Bill of Qingdao Haier Co., Ltd. on the Commitment of Agreeing Haier Group Corporation to Change
442、Its Partial Assets Injection. Since the entity of Haier Group to undertake the color TV business - Qingdao Haier Photoelectric Co., Ltd. and its subsidies (hereinafter referred to as Haier Photoelectric) were still Qingdao Haier Co., Ltd. 2015 Annual Report 55 / 239 in the transforming and integrati
443、ng period and its financial performance did not reach the expectation of the Company. Therefore, the Company proposes to agree: (1) Haier Group will put off to inject the related assets of Haier Photoelectric; (2) Haier Group promises that it will inject the related assets of Haier Photoelectric to
444、the Company or dispose such assets through other ways which accord with the requirements of the domestic supervision by June 2020. This event has been considered and passed by the first EGM of the Company in 2016. For more details, please refer to the Announcement of Qingdao Haier Co., Ltd. on the C
445、hanges of Funding Commitment of Haier Group Corporation (L 2015-063) and Notice of Qingdao Haier Co., Ltd. on the Resolutions Passed at the First EGM in 2016 (L 2016-002) as well as the related contents. Above all, the related contents under this commitment have been changed upon necessary approval.
446、 Content IV of commitment: when Haier Group acquires and invests new household appliance businesses, Qingdao Haier has the priority to choose During the commitment period, Haier Group acquired the washing machine, refrigerator and other household appliance business of Japan Sanyo Electric Co., Ltd.
447、(hereinafter called as Sanyo Electric) in such areas as Japan and Indonesia and the equity of Fisher & Paykel (Fisher & Paykel Appliance Holding Co., Ltd., hereinafter called as FPA) in New Zealand. However, the Company gave up the priority to the acquisition mentioned above through the deliberation
448、 of the Board of Directors based on the necessary investigation and research into the abovementioned acquisition conducted by the Company due to the unstable overseas economy and related force majeure factors, the target assets and businesses requiring integration and uncertain performance during th
449、e integrating period as well as the strategic plan of the Company on integrating the overseas assets of Haier Group in the future and other related factors. On 25 May 2015, the Company considered and passed the motion to acquire the entire shares of Haier Singapore Investment Holding Pte. Ltd held b
450、y the subsidy of Haier Group at a consideration of RMB4.874 billion. This acquisition target included the related assets of Sanyo Electric. Because FPA was still in the integration period and its financial performance did not reach the expectation of the Company, the Company has presented commitment
451、 to FPA that it would inject the related assets to the Company or dispose such assets through other ways which accord with the requirements of the domestic supervision before June 2020 and authorized the assets to the Company for management. Above all, the related contents under this commitment have
452、 been fulfilled. Qingdao Haier Co., Ltd. 2015 Annual Report 56 / 239 （II） There exist earnings forecasts in the Companys assets or programs. The reporting period is still in the period of predictive profit. So the Company made explanations for achieving the predictive profit and its reasons on the a
453、ssets and programs. In December 2015 and January 2016, the meeting of the Board of Directors/ shareholders meeting of the Company considered and passed the related bills to acquire 45% equity of Mitsubishi Heavy Industries Haier (Qingdao) Air Conditioner Co., Ltd. (hereinafter referred to as Mitsubi
454、shi Heavy Industries Haier) and 49% equity of Qingdao Haier Carrier Refrigeration Equipment Co., Ltd. (hereinafter referred to as Haier Carrier) held by Haier Group. According to the Profit Compensation Agreement signed between the Company and Haier Group, the corresponding predictive profits from 2
455、015 to 2018 of Mitsubishi Heavy Industries Haier are RMB90.6612 million, RMB92.8607 million, RMB100.6592 million and RMB108.6862 million, respectively and the corresponding predictive profits from 2015 to 2018 of Haier Carrier are RMB76.047 million, RMB76.0472 million, RMB76.7156 million, and RMB76.
456、984 million respectively. If the net profit after audit in any year of the target companies during the commitment period is lower than the predictive net profit, the differential part will be compensated by Haier Group in the way of cash (For more details, please refer to the Announcement of Qingdao
457、 Haier Co., Ltd. on the Acquisition of Equity in Sino-foreign Joint Venture Held by Haier Group Corporation and Connected Transaction (L 2015-062) published on the four major securities newspapers and the website of Shanghai Stock Exchange on 23 December 2015). According to the Special Verification
458、Report on the Completion of the Predictive Profit Hexin Zhuan Zi (2016) No. 020008 and Hexin Zhuan Zi (2016) No. 020009 and Special Statement of Qingdao Haier Co., Ltd on the Completion of the Predictive Profit in 2015 issued by Shandong Hexin Accountants LLP (Special General Partnership), the actua
459、l net profit of Mitsubishi Heavy Industries Haier in 2015 was RMB97.7839 million and that of Haier Carrier was RMB87.0247 million. The actual amount of net profit of the target equity companies in 2015 exceeded the predictive profit. III. Misappropriation and repayment plan of funds during the repor
460、ting period Applicable Not Applicable IV. Explanation of the Board of Directors on the non-standard audit report issued by the CPA （I） Explanation of the Board of Directors and Board of Supervisors on the non-standard audit report issued by the CPA Applicable Not Applicable （II） Analysis of the Boar
461、d of Directors on the reasons of change of accounting policies, accounting estimates or accounting methods and effects Applicable Not Applicable Qingdao Haier Co., Ltd. 2015 Annual Report 57 / 239 （III） Analysis of the Board of Directors on the reasons of correction of important previous errors and
462、effects ApplicableNot Applicable V. Appointment and Dismissal of Accounting Firm Unit and Currency: RMB0000 Current appointment Name of domestic accounting firm Shandong Hexin Accountants LLP (Special General Partnership) Remuneration of domestic accounting firm 400 Audit period of domestic accounti
463、ng firm 3 Name Remuneration Internal control audit accounting firm Shandong Hexin Accountants LLP (Special General Partnership) 110 Sponsor China International Capital Corporation Limited 0 Relevant Information on Remuneration Paid to Sponsor In July 2014, the Company completed introduction of strat
464、egic investor KKR by privately placing of shares. According to relevant agreement between the Company and the Sponsor, namely China International Capital Corporation Limited (CICC), the Company paid RMB62,346,900 of underwriting and sponsor expense to CICC. For details, please refer to the Capital V
465、erification Report of Qingdao Haier Co., Ltd. (Hexin Yan Zi (2014) No. 000016) disclosed on 22 July 2014 and other announcements disclosed on the same date. In 2015, the Companys project still in the period under continuous supervision, thus the sponsor has to perform its responsibility of continuou
466、s supervision. Information on Appointment and Dismissal of Accounting Firm Applicable Not Applicable Shandong Hexin Accountants LLP (Special General Partnership) owns audit qualification in business related to securities and futures. Its service team is equipped with sufficient experience and capabi
467、lity with several years of audit service offered to the Company. The firm sticks to the independent audit principle in conducting its business, and the financial report given by it could accurately, truly and objectively reflect the financial position and operation results of the Company, also could
468、 meet the requirements in annual financial and internal control audit work of the Company. In order to ensure the financial and internal control audit work of the Company for the year of 2015 to be conducted in a smooth and continuous way, in accordance with the Motion on Appointment of Accounting F
469、irm from Qingdao Haier Co., Ltd. considered and approved at the 2014 AGM of the Company, the Company appointed Shandong Hexin Accountants LLP (Special General Partnership) as our audit agency for the financial report and internal control report for the year of 2015, at an equal Qingdao Haier Co., Lt
470、d. 2015 Annual Report 58 / 239 service fee as last year. The Company agreed to pay to Shandong Hexin Accountants LLP (Special General Partnership) RMB5.10 million of audit expense (RMB4 million for financial report and RMB1.10 million for internal control report) for last year. During the reporting
471、period, the Company acquired overseas companies and other projects and Shandong Hexin provided audit for the target companies; therefore, the Company paid audit expenses of the project according to agreements. VI. Risk of suspension of listing （I） Reasons of suspension of listing and measures adopte
472、d by the Company to eliminate the suspension of listing Not Applicable VII. Matters relating to bankruptcy and restructuring ApplicableNot Applicable VIII. Material litigation and arbitration matters Applicable Not Applicable Qingdao Haier Co., Ltd. 2015 Annual Report 59 / 239 IX. Penalties to the L
473、isted Company and its Directors, Supervisors, Senior Management, Controlling Shareholders, Ultimate Controller, Acquirer and the Issue of Rectification Applicable Not Applicable X. Explanation of the integrity status of the Company and its controlling shareholders and actual controllers during the r
474、eporting period During the reporting period, the Company and its controlling shareholders and actual controllers failed to perform the effective judgment of the court and failed to pay the relatively large amount of debt overdue. XI. The Companys equity incentive plan, employee shareholding plan or
475、other employee incentive measures and its Influence Applicable Not Applicable （I） Matters disclosed in temporary announcement and without any subsequent progress or change Summarized Explanations Index for details Reserved Equity Granting under Phase IV Share Option Incentive Scheme: in February 201
476、5, the Company introduced the reserved equity granting under Phase IV Share Option Incentive Scheme to grant 650,000 share options to 7 participants and grant 190,000 restricted shares to 3 participants. For details, please refer to the Qingdao Haier Co., Ltd.s Announcement of Relevant Matters in Re
477、lation to the Grant of the Reserved Share Options and Restricted Share of the Phase IV Share Option Incentive Scheme published on 27 February 2015, the Announcement of Qingdao Haier Co., Ltd. on the Completion of Registration of Reserved Restricted Shares Granted under the Phase IV Share Option Ince
478、ntive Scheme published on 9 April and related announcements. The First Exercise/Unlocking of Initial Granting of Equity under Phase IV Share Option Incentive Scheme: in July 2015, the Board For details, please refer to the Announcement of Qingdao Haier Co., Ltd. on the Exercise and Unlocking Arrange
479、ment of the First Exercise and Unlocking Period of the Equity Qingdao Haier Co., Ltd. 2015 Annual Report 60 / 239 of Directors of the Company considered and adopted the first exercise/unlocking of initial granting of equity under Phase IV Share Option Incentive Scheme, with the first exercise of 30.
480、904 million shares in total, and unlocking of 4.8808 million shares. Granted for the First Time under the Phase IV Share Option Incentive Scheme published on July 18, 2015, the Announcement of Qingdao Haier Co., Ltd. on the Share Option Incentive Exercise Result and New Shares Listing under the Phas
481、e IV Share Option Incentive Scheme published on July 30 and related announcements. （II） Share incentives not disclosed in temporary announcements or with subsequent progress Share Option Incentive Applicable Not Applicable Phase IV Share Option Incentive Scheme of Qingdao Haier Incentive method: Sto
482、ck Option Resources of target shares: shares issued to Participants Unit: Shares Exercise Number of options granted Number of options exercised Explanation The first exercise period of the equity granted initially under the Phase IV Share Option Incentive Scheme: 20 June 2015 to 19 June 2016 17,071,
483、600 30,904,000 An aggregate of 42.679 million share options were granted initially and 40% or 17.0716 million shares can be exercised in the first exercise period. Because the Company implemented the profit distribution plan for 2014 in May 2015 (distribute 10 shares per 10 shares and declare a cash
484、 dividend of RMB4.92), the number of share options granted was adjusted to 85.358 million shares, and the number of shares to be exercised in the first exercise period was adjusted to 34.1432 million shares. Because some incentive targets were not eligible and the exercise was cancelled, as well as
485、part of the incentive targets suspended the exercise, the actual number of shares exercised was 30.904 million. The second exercise period of the equity granted initially under the Phase IV Share Option Incentive Scheme: 20 June 2016 to 19 June 2017 25,607,400 0 This exercise has not yet entered the
486、 exercise period. An aggregate of 42.679 million share options were granted initially, and 60% or 25.6074 million shares can be exercised in the second exercise period. The first exercise period of the equity reserved under the Phase IV Share Option Incentive Scheme: 26 February 2016 to 25 February
487、2017 260,000 0 This exercise has not yet entered the exercise period. An aggregate of 650,000 share options were granted by the reserved equity and 40% or 260,000 shares can be exercised in the first exercise period. Qingdao Haier Co., Ltd. 2015 Annual Report 61 / 239 The second exercise period of t
488、he equity reserved under the Phase IV Share Option Incentive Scheme: 26 February 2017 to 25 February2018 390,000 0 This exercise has not yet entered the exercise period. An aggregate of 650,000 share options were granted by the reserved equity and 60% or 390,000 shares can be exercised in the second
489、 exercise period. Change of share capital as a result of the exercise of rights by Participants During the reporting period, the Companys equity granted initially under the Phase IV Share Option Incentive Scheme was exercised for the first time and an aggregate of 30.904 million shares of stock opti
490、ons were exercised. After this exercise, the share capital of the Company was changed from 6,092,250,268 shares (after the implementation of the 2014 annual dividend distribution program, the Companys share capital was changed from 3,046,125,134 shares to 6,092,250,268 shares) to 6,123,154,268 share
491、s. For more details, please refer to the Announcement of Qingdao Haier Co., Ltd. on the Share Option Incentive Exercise Result and New Shares Listing under the Phase IV Share Option Incentive Scheme disclosed by the Company on 30 July 2015. Measurement methods of the fair value of the equity instrum
492、ent On each balance sheet date within the vesting period, the services obtained in the current period shall be included in cost or expenses and capital reserve, based on the best estimate of the number of vested equity instruments, at the fair value of the equity instruments on the date of the grant
493、. Model, parameters and selective standards applied in the valuation technique Adopting the B-S model to determine the fair value of the equity instrument by valuation technique with following parameters: (1) exercise price of share option; (2) duration of share option; (3) price of Target Shares on
494、 the granting date; (4) interest free of risk; (5) dividend yield of the Target Shares; (6) expected fluctuation rate of share price. Apportion period and result for fair value of equity instrument As of 31 December 2015, the accumulated amount of the equity-settled share-based payment in the implem
495、entation of Phase I-IV Share Option Incentive Scheme - Restricted Stocks of the Company which affected the share capital was RMB307.36 million. Phase IV Share Option Incentive Scheme of Qingdao Haier Incentive method: Restricted Stocks Resources of target shares: shares issued to Participants Unit:
496、Shares Unlock Number of shares granted Number of shares unlocked Explanation The first unlocking period of the equity granted initially under the Phase IV Share Option Incentive Scheme: 20 June 2015 to 19 June 2016 2,440,400 4,880,800 An aggregate of 6.101 million restricted shares were granted init
497、ially and 40% or 2.4404 million shares can be unlocked in the first unlocking period. Because the Company implemented the profit distribution plan for 2014 in May 2015 (distribute 10 shares per 10 shares and declare a cash dividend of RMB4.92), so the number of restricted shares granted was adjusted
498、 to 12.2 million shares, and Qingdao Haier Co., Ltd. 2015 Annual Report 62 / 239 the number of shares to be unlocked in the first unlocking period was adjusted to 4.8808 million shares. The actual number of shares unlocked was 4.8808 million shares. The second unlocking period of the equity granted
499、initially under the Phase IV Share Option Incentive Scheme: 20 June 2016 to 19 June 2017 3,660,600 0 This unlocking has not yet entered the unlocking period. An aggregate of 6.101 million restricted shares were granted initially, and 60% or 3.6606 million shares can be unlocked in the second unlocki
500、ng period. The first unlocking period of the equity reserved under the Phase IV Share Option Incentive Scheme: 26 February 2016 to 25 February 2017 76,000 0 This unlocking has not yet entered the unlocking period. An aggregate of 190,000 restricted shares were granted by the reserved equity and 40%
501、or 76,000 shares can be unlocked in the first unlocking period. The first unlocking period of the equity reserved under the Phase IV Share Option Incentive Scheme: 26 February 2017 to 25 February 2018 114,000 0 This unlocking has not yet entered the unlocking period. An aggregate of 190,000 restrict
502、ed shares were granted by the reserved equity and 40% or 114,000 shares can be unlocked in the second unlocking period. Change of share capital as a result of the exercise of rights by Participants 1. During the reporting period, with regard to the Companys equity granted by the reserved portion und
503、er the Phase IV Share Option Incentive Scheme, an aggregate of 650,000 share options were granted and 190,000 restricted shares were granted. After the registration and transfer of the aforementioned restricted shares, the share capital of the Company was changed from 3,045,935,134 shares to 3,046,1
504、25,134 shares. For more details, please refer to the Announcement of Qingdao Haier Co., Ltd. on the Completion of Registration of Reserved Restricted Shares Granted under the Phase IV Share Option Incentive Scheme disclosed by the Company on 9 April 2015 and related announcement. 2. After the first
505、unlocking of restricted shares granted initially under the Phase IV Share Option Incentive Scheme, an aggregate of 4.8808 million shares were unlocked. The number of limited tradable shares and tradable shares of the Company increased or decreased respectively, but the total share capital of the Com
506、pany did not change. Measurement methods of the fair value of the equity instrument On each balance sheet date within the vesting period, the services obtained in the current period shall be included in cost or expenses and capital reserve, based on the best estimate of the number of vested equity i
507、nstruments, at the fair value of the equity instruments on the date of the grant. Model, parameters and selective standards applied in the valuation technique Adopting the B-S model to determine the fair value of the equity instrument by valuation technique with following parameters: (1) exercise pr
508、ice of share option; (2) duration of share option; (3) price of Target Shares on the granting date; (4) interest free of risk; (5) dividend yield of the Target Shares; (6) expected fluctuation rate of share price. Apportion period and result for fair value of equity instrument As of 31 December 2015
509、, the accumulated amount of the equity-settled share-based payment in the implementation of Phase I-IV Share Option Incentive Scheme - Restricted Stocks of the Company which affected the share capital was RMB12 million. Qingdao Haier Co., Ltd. 2015 Annual Report 63 / 239 Employee shareholding plan A
510、pplicable Not Applicable Other incentives Applicable Not Applicable XII. Major Connected Transactions Applicable Not Applicable （I） Connected Transaction Related to Daily Operation 1. Matter disclosed in temporary announcement and with subsequent progress or change The Company made estimation on the
511、 daily connected transaction matters of the Company for the year of 2015 at the 22th meeting of the 8th session of Board Meeting held on 25 May 2015, and relevant motions were considered and approved at 2014 AGM on 10 June 2015. For details, please refer to the Announcement of Qingdao Haier Co., Ltd
512、. regarding the Anticipation on the Renewal of Daily Connected Transactions Agreement and Daily Connected Transactions for 2015 and relevant announcement on the resolutions of the Board disclosed on 26 May 2015 and the announcement on the resolutions passed at 2014 AGM disclosed by the Company on 11
513、 June 2015. For the actual implementation of the connected transaction of 2015, please see note XII Connected Parties and Connected Transactions under section XI - Financial Report set out in this report. 2. Matter not disclosed in temporary announcement Applicable Not Applicable （II） Connected Tran
514、sactions Related to Asset or Equity Acquisition and Disposal 1. Matters disclosed in temporary announcement and without any subsequent progress or change Summarized Explanations Index for details Qingdao Haier Co., Ltd. 2015 Annual Report 64 / 239 Acquisition of overseas white goods assets of the Gr
515、oup: Relevant motions on the acquisition of all shares of Haier Singapore Investment Holding Pte. Ltd held by the subsidiary of Haier Group at a price of RMB4.874 billion in cash were considered and approved at the Board of Directors and general meeting of stockholders in May and June 2015. Upon com
516、pletion of the acquisition, in addition to assets related to Fisher & Paykel (because it is still in the consolidation and its financial performance has not reached the expectation of the Company), the Company will acquire and own other overseas white goods assets of Haier Group. For more details, p
517、lease refer to the Announcement of Qingdao Haier Co., Ltd. on the Acquisition of Shares of Haier Singapore Investment Holding Pte. Ltd and Connected Transactions (L 2015-014), Announcement of Qingdao Haier Co., Ltd. on the Changes of Funding Commitment of Haier Group Corporation (L 2015-015) disclos
518、ed on 26 May 2015, Announcement of Qingdao Haier Co., Ltd. on the Resolutions Passed at the AGM for 2015 (L 2015-021) disclosed on 11 June 2015 and other related announcements. Acquisition of minority interests of Mitsubishi and Carrier: Relevant motions on the acquisition of 49% shares held by Haie
519、r Group in Qingdao Haier Carrier Refrigeration Equipment Co., Ltd. and 45% shares in Mitsubishi Heavy Industries Haier (Qingdao) Air-conditioners Company Limited at a price of RMB841 million were considered and approved at the Board of Directors and general meeting of stockholders in December 2015 a
520、nd January 2016. For more details, please refer to the Announcement of Qingdao Haier Co., Ltd. on the Acquisition of Equity in Sino-foreign Joint Venture Held by Haier Group Corporation and Connected Transaction (L 2015-062) disclosed on 23 December 2015, Announcement of Qingdao Haier Co., Ltd. on t
521、he Resolutions Passed at the First EGM in 2016 (L 2016-002) disclosed on 8 January 2016 and other related announcements. 2. Matter not disclosed in temporary announcement Applicable Not Applicable 3. If performance agreement is involved, the performance achieved during the reporting period shall dis
522、closed For more details of performance agreement on acquisition of minority interests of Mitsubishi and Carrier, please refer to the relevant statements in (II) There exists earnings forecasts in the Companys assets or programs. The reporting period is still in the period of predictive profit. So th
523、e Company made explanations for achieving the predictive profit and its reasons on the assets and programs. in Section V. Significant Events. Qingdao Haier Co., Ltd. 2015 Annual Report 65 / 239 XIII. Major Contracts and Status of Performance （I） Custody, undertaking and leasing Applicable Not Applic
524、able 1. Custody (1) According to the 2011 Haier Groups commitment to further support the development of Qingdao Haier and resolve intra-industry competition to reduce connected transactions, Haier Group should strive to resolve the problems of intra-industry competition with the Company within five
525、years. However, based on the current market and financial factors of FPA, Haier Group cannot transfer the assets under custody to the Company before the completion of the aforementioned commitment. In order to resolve the problems of intra-industry competition between Haier Group and the Company, Ha
526、ier Group intends to entrust the Company with the management and operation of assets under custody and will pay RMB1 million custodian fees to the Company each year during the period of custody. (2) According to the 2011 Haier Groups commitment to further support the development of Qingdao Haier and
527、 resolve intra-industry competition to reduce connected transactions, since the entity engaged in undertaking the TV business of Haier Group - Qingdao Haier Photoelectric Co., Ltd. and its subsidiaries are still in the transition and consolidation period and the financial performance has not reached
528、 the expectations of the Company, Haier Group cannot complete the transfer before the completion of the preceding commitment period. Haier Group intends to entrust the Company with the management and operation of assets under custody and will pay RMB1 million custodian fees to the Company each year
529、during the period of custody. 2. Undertaking Applicable Not Applicable 3. Leasing Applicable Not Applicable Qingdao Haier Co., Ltd. 2015 Annual Report 66 / 239 （II） Guarantee Applicable Not Applicable Unit and Currency: RMB0000 External guarantees of the Company (excluding guarantees for subsidiarie
530、s) Guarantor Relationship between the guarantor and the listed company Secured party Amount of guarantee Date of occurrence of the guarantee (date of signing agreement) Starting date of guarantee Expiration date of guarantee Type of guarantee Whether the guarantee has been fulfilled Whether the guar
531、antee is overdue Overdue amount of the guarantee Whether there is a counter-guarantee Whether related party guarantee or not Connected relation Total amount of guarantee occurred during the report period (excluding guarantees for subsidiaries) 0 Total balance of guarantee at the end of the reporting
532、 period (A) (excluding guarantees for subsidiaries) 0 Guarantees provided by the Company and its subsidiaries for subsidiaries Total amount of guarantees for subsidiaries occurred during the reporting period 4,764 Total balance of guarantees for subsidiaries at the end of the reporting period (B) 4,
533、764 Total amount of guarantees provided by the Company (including guarantees for subsidiaries) Total guarantee(A + B) 4,764 Qingdao Haier Co., Ltd. 2015 Annual Report 67 / 239 Ratio of total amount of guarantees to net assets of the Company (%) 0.21 Among which: Amount of guarantees for shareholders
534、, actual controllers and their related parties (C) 0 Amount of debt guarantees provided directly or indirectly for the secured party with asset-liability ratio exceeding 70% (D) 0 The amount of total amount of guarantee in excess of 50% of net assets (E) 0 Total amount of the above three guarantees
535、(C + D + E) 0 Explanation of possibly bearing related discharge duty for premature guarantees Not applicable Explanation of guarantee status During the reporting period, external guarantees provided by the Company were all for subsidiaries. For more details of consideration, please refer to the Anno
536、uncement of Qingdao Haier Co., Ltd. on the Security Provided by Subsidiary Special Refrigerator for the Company (L 2015-065) and the Announcement of Qingdao Haier Co., Ltd. on the Security Provided by Subsidiary Zhengzhou Air-Conditioner for Subsidiary Air-Conditioner Corporation (L 2015-066) disclo
537、sed on 23 December 2015. Qingdao Haier Co., Ltd. 2015 Annual Report 68 / 239 （III） Entrusted others to manage cash assets 1. Entrusted wealth management Applicable Not Applicable Unit and Currency: RMB Trustee Type of entrusted wealth management product Amount of entrusted wealth management Commence
538、ment date of entrusted wealth management Expiration date of entrusted wealth management Determination of return Actual amount of principal received Actual gains Through legal proceedings or not Provision for impairment loss Connected transaction or not Involved in litigation or not Connected relatio
539、n Mitsubishi Tokyo UFJ Bank (China) Co., Ltd Structured deposit 242,400,000 2014/4/6 2015/4/8 Fixed rate of return 4.18% 242,400,000 10,132,320.00 Yes 0 No No Mitsubishi Tokyo UFJ Bank (China) Co., Ltd Structured deposit 250,000,000 2015/4/24 2016/4/25 Fixed rate of return 4.1% 0 7,048,630.14 Yes 0
540、No No Total / 492,400,000 / / / 242,400,000 17,180,950.14 / 0 / / / Accumulated past due unrecovered principal and income (RMB) 0 Explanation of entrusted wealth management None Qingdao Haier Co., Ltd. 2015 Annual Report 69 / 239 2. Entrusted loans Applicable Not Applicable Unit and Currency: RMB Na
541、me of borrower Amount of entrusted loan Loan term Loan interest rate Use of the loan Collateral or guarantor Overdue or not Connected transaction or not Whether extension or not Involved in litigation or not Connected relation Investment gains and losses Qingdao JSH Network Technology Co. Ltd. 10 mi
542、llion 1 year 5.60% Daily operation None No Yes No No Wholly owned subsidiary of the parent company 15 million 1 year 4.85% Daily operation None No Yes No No 2 million 1 year 4.60% Daily operation None No Yes No No Qingdao Haier Co., Ltd. 2015 Annual Report 70 / 239 3. Other investment wealth managem
543、ent and derivatives investment Applicable Not Applicable XIV. Other Major Events Applicable Not applicable During the Reporting Period, the Company disclosed the following information and all the information will be disclosed on SSE (): Name of Announcement Name of Newspaper and Page Date Qingdao Ha
544、ier Co., Ltd.s Announcement of Relevant Matters in Relation to the Grant of the Reserved Share Options and Restricted Share of the Phase IV Share Option Incentive Scheme (L 2015-001) Securities Times page B030, Shanghai Securities News page B8, China Securities Journal page B017, Securities Daily pa
545、ge C14 27 February 2015 Announcement of Qingdao Haier Co., Ltd. on the Resolution of the 11th Meeting of the Eighth Session of the Board of Supervisors (L 2015-002) Securities Times page B030, Shanghai Securities News page B8, China Securities Journal page B017, Securities Daily page C14 27 February
546、 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Shareholdings Increase by Persons Acting in Concert to the Beneficial Controller (L 2015-003) Securities Times page B51, Shanghai Securities News page B32, China Securities Journal page B030, page Securities Daily C25 4 March 2015 Announcem
547、ent of Qingdao Haier Co., Ltd. regarding the Release of the 2014 Annual Results by the Holding Subsidiary Haier Electronics Group Co., Ltd. (L 2015-004) Securities Times page B44, Shanghai Securities News page 340, China Securities Journal page A29, Securities Daily page D16 27 March 2015 Announceme
548、nt of Qingdao Haier Co., Ltd. on the Resolutions Passed at the 20th Meeting of the 8th Session of the Board of Directors (L 2015-005) Securities Times page B099, Shanghai Securities News page 580, China Securities Journal page B466, Securities Daily page D85 31 March 2015 Announcement of Qingdao Hai
549、er Co., Ltd. on the Resolutions Passed at the 12th Meeting of the 8th Session of the Board of Supervisors (L 2015-006) Securities Times page B099, Shanghai Securities News page 580, China Securities Journal page B466, Securities Daily page D85 31 March 2015 Announcement of Qingdao Haier Co., Ltd. on
550、 the Appointment of the Accounting Firm (L 2015-007) Securities Times page B099, Shanghai Securities News page 580, China Securities Journal page B466, Securities Daily page D85 31 March 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Anticipation on the Renewal of Daily Connected Transac
551、tions Agreement and Daily Connected Transactions for 2015 (L 2015-008) Securities Times B099 page, Shanghai Securities News page 580, China Securities Journal page B466, Securities Daily page D85 31 March 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Modification on the Articles of the
552、Company (L 2015-009) Securities Times page B099, Shanghai Securities News page 580, China Securities Journal page B466, Securities Daily page D85 31 March 2015 Notice on 2015 AGM of Qingdao Haier Co., Ltd. (L 2015-010) Securities Times page B099, Shanghai Securities News page 580, China Securities J
553、ournal page B466, Securities Daily page D85 31 March 2015 Announcement of Qingdao Haier Co., Ltd. on the Completion of Registration of Reserved Restricted Shares Granted under the Phase IV Share Option Incentive Scheme (L 2015-011) Securities Times page B042, Shanghai Securities News page B32, China
554、 Securities Journal page B032, Securities Daily page D41 9 April 2015 The First Quarter Report for 2015 of Qingdao Haier Co., Ltd. Securities Times page B050, Shanghai Securities News page 140, China Securities Journal page B069, Securities Daily page C76 30 April 2015 Announcement of Qingdao Haier
555、Co., Ltd. on the Resolutions Passed at the 20th Meeting of the 8th Session of the Board of Directors (L 2015-012) Securities Times page B62/63, Shanghai Securities News page B25/26, China Securities Journal page B65, Securities Daily page D38/39 26 May 2015 Qingdao Haier Co., Ltd. 2015 Annual Report
556、 71 / 239 Announcement of Qingdao Haier Co., Ltd. on the Resolutions Passed at the 14th Meeting of the 8th Session of the Board of Directors (L 2015-013) Securities Times page B62/63, Shanghai Securities News page B25/26, China Securities Journal page B65, Securities Daily page D38/39 26 May 2015 An
557、nouncement of Qingdao Haier Co., Ltd. on the Acquisition of Shares of Haier Singapore Investment Holding Pte. Ltd and Connected Transactions (L 2015-014) Securities Times page B62/63, Shanghai Securities News page B25/26, China Securities Journal page B65, Securities Daily page D38/39 26 May 2015 An
558、nouncement of Qingdao Haier Co., Ltd. on the Changes of Funding Commitment (L 2015-015) Securities Times page B62/63, Shanghai Securities News page B25/26, China Securities Journal page B65, Securities Daily page D38/39 26 May 2015 Announcement of Qingdao Haier Co., Ltd. on the Entrusted Management
559、of Fisher&Paykel Appliances Holdings Limited and Connected Transaction (L 2015-016) Securities Times page B62/63, Shanghai Securities News page B25/26, China Securities Journal page B65, Securities Daily page D38/39 26 May 2015 Announcement of Qingdao Haier Co., Ltd. on the Capital Increase to Haier
560、 (Hong Kong) Co., Ltd. (L 2015-017) Securities Times page B62/63, Shanghai Securities News page B25/26, China Securities Journal page B65, Securities Daily page D38/39 26 May 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Anticipation on the Renewal of Daily Connected Transactions Agreem
561、ent and Anticipated Daily Connected Transactions for 2015 (L 2015-018) Securities Times page B62/63, Shanghai Securities News page B25/26, China Securities Journal page B65, Securities Daily page D38/39 26 May 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Election of Independent Directo
562、rs (L 2015-019) Securities Times page B62/63, Shanghai Securities News page B25/26, China Securities Journal page B65, Securities Daily page D38/39 26 May 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Correction and Supplementation of the AGM for 2014 (L 2015-020) Securities Times page
563、B62/63, Shanghai Securities News page B25/26, China Securities Journal page B65, Securities Daily page D38/39 26 May 2015 Announcement of Qingdao Haier Co., Ltd. on the Resolutions Passed at the AGM for 2014 (L 2015-021) Securities Times page A012, Shanghai Securities News page B33, China Securities
564、 Journal page B031, Securities Daily page B3 11 June 2015 Announcement of Qingdao Haier Co., Ltd. on the Resolutions Passed at the 23th Meeting of the 8th Session of the Board of Directors (L 2015-022) Securities Times page A012, Shanghai Securities News page B33, China Securities Journal page B031,
565、 Securities Daily page B3 11 June 2015 Suggestive Announcement of Qingdao Haier Co., Ltd. on the Subscription of Non-public Offering of Shares by Shenzhen MTC Co., Ltd. (L 2015-023) Securities Times page B46, Shanghai Securities News page B112, China Securities Journal page B018, Securities Daily pa
566、ge D14 19 June 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Implementation Result of Shareholdings Increase by Persons Acting in Concert to the Beneficial Controller (L 2015-024) Securities Times page B67, Shanghai Securities News page 40, China Securities Journal page B022, Securities
567、 Daily page C8 27 June 2015 Announcement of Qingdao Haier Co., Ltd. on the Implementation of Profit Distribution and Capitalization of Capital Reserves for 2014 (L 2015-025) Securities Times page B034, Shanghai Securities News page 37, China Securities Journal page B012, Securities Daily page D40 10
568、 July 2015 Announcement of Qingdao Haier Co., Ltd. on the Resolutions Passed at the 24th Meeting of the 8th Session of the Board of Directors (L 2015-026) Securities Times page B079, Shanghai Securities News page 33, China Securities Journal page B017, Securities Daily page C22 18 July 2015 Announce
569、ment of Qingdao Haier Co., Ltd. on the Resolutions Passed at the 15th Meeting of the 8th Session of the Board of Supervisors (L 2015-027) Securities Times page B079, Shanghai Securities News page 33, China Securities Journal page B017, Securities Daily page C22 18 July 2015 Announcement of Qingdao H
570、aier Co., Ltd. on the Adjustment of the Number of Equity Interests and Price under the Phase IV Share Option Incentive Scheme (L 2015-028) Securities Times page B079, Shanghai Securities News page 33, China Securities Journal page B017, Securities Daily page C22 18 July 2015 Qingdao Haier Co., Ltd.
571、2015 Annual Report 72 / 239 Announcement of Qingdao Haier Co., Ltd. on the Exercise and Unlocking Arrangement of the First Exercise and Unlocking Period of the Equity Granted for the First Time under the Phase IV Share Option Incentive Scheme (L 2015-029) Securities Times page B079, Shanghai Securit
572、ies News page 33, China Securities Journal page B017, Securities Daily page C22 18 July 2015 Announcement of Qingdao Haier Co., Ltd. on the Restricted Stock Unlocking and Listing under the Phase IV Share Option Incentive Scheme (L 2015-030) Securities Times page B079, Shanghai Securities News page 3
573、3, China Securities Journal page B017, Securities Daily page C22 18 July 2015 Announcement of Qingdao Haier Co., Ltd. on the Share Option Incentive Exercise Result and New Shares Listing under the Phase IV Share Option Incentive Scheme (L 2015-031) Securities Times page B019, Shanghai Securities New
574、s page 36, China Securities Journal page B029, Securities Daily page B2 30 July 2015 Announcement of Qingdao Haier Co., Ltd. on the Resolutions Passed at the 25th Meeting of the 8th Session of the Board of Directors (L 2015-032) Securities Times page B18, Shanghai Securities News page 33, China Secu
575、rities Journal page B030, Securities Daily page C26 8 August 2015 Plan of Qingdao Haier Co., Ltd. on the Repurchase of Shares by Centralized Bidding (L 2015-033) Securities Times page B18, Shanghai Securities News page 33, China Securities Journal page B030, Securities Daily page C26 8 August 2015 A
576、nnouncement of Qingdao Haier Co., Ltd. regarding the Modification on the Articles of the Company (L 2015-034) Securities Times page B18, Shanghai Securities News page 33, China Securities Journal page B030, Securities Daily page C26 8 August 2015 Notice of Qingdao Haier Co., Ltd. on the First EGM in
577、 2015 (L 2015-035) Securities Times page B18, Shanghai Securities News page 33, China Securities Journal page B030, Securities Daily page C26 8 August 2015 Suggestive Announcement of Qingdao Haier Co., Ltd. on the Adjustment to the Plan of Non-public Offering of Shares by Shenzhen MTC Co., Ltd. (L 2
578、015-036) Securities Times page B2, Shanghai Securities News page 76, China Securities Journal page A14, Securities Daily page C28 19 August 2015 Announcement of Qingdao Haier Co., Ltd. on the Top 10 Shareholders of Unlimited Sales Conditions (L 2015-037) Securities Times page B15, Shanghai Securitie
579、s News page 53, China Securities Journal page B020, Securities Daily page C42 20 August 2015 Notice of Qingdao Haier Co., Ltd. on the Resolutions Passed at the First EGM in 2015 (L 2015-038) Securities Times page B096, Shanghai Securities News page 92, China Securities Journal page B032, Securities
580、Daily page D62 25 August 2015 Announcement of Qingdao Haier Co., Ltd. on the Notice to the Creditor regarding Repurchase of Company Shares by Centralized Bidding (L 2015-039) Securities Times page B096, Shanghai Securities News page 92, China Securities Journal page B032, Securities Daily page D62 2
581、5 August 2015 Suggestive Announcement of Qingdao Haier Co., Ltd. on the Circulation of 2015 Interim Result by the Subsidiary Haier Electronics Group Co., Ltd. (L 2015-040) Securities Times page B096, Shanghai Securities News page 92, China Securities Journal page B032, Securities Daily page D62 25 A
582、ugust 2015 Report of Qingdao Haier Co., Ltd. on the Repurchase of Shares by Centralized Bidding (L 2015-041) Securities Times page B008, Shanghai Securities News page 33, China Securities Journal page B064, Securities Daily page C15 12 September 2015 Announcement of Qingdao Haier Co., Ltd. on the Im
583、plementation of Repurchase of Shares for the First Time (L 2015-042) Securities Times page B4, Shanghai Securities News page B72, China Securities Journal page B030, Securities Daily page D25 15 September 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Online Investor Reception Day in 201
584、5 (L 2015-043) Securities Times page B023, Shanghai Securities News page B41, China Securities Journal page B035, Securities Daily page D14 17 September 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Signing of License Agreement with Disney (L 2015-044) Securities Times page B023, Shangh
585、ai Securities News page B41, China Securities Journal page B035, Securities Daily page D14 17 September 2015 Suggestive Announcement of Qingdao Haier Co., Ltd. on the Transfer of Controlling Equities in Subsidiaries (L 2015-045) Securities Times page B39, Shanghai Securities News page 32, China Secu
586、rities Journal page B023, Securities Daily page C4 8 October 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Progress of Repurchase of Shares (L 2015-046) Securities Times page B59, Shanghai Securities News page 72, China Securities Journal page B034, Securities Daily page C25 10 October
587、2015 Qingdao Haier Co., Ltd. 2015 Annual Report 73 / 239 Announcement of Qingdao Haier Co., Ltd. regarding the Suspension due to Major Issues (L 2015-047) Securities Times page B39, Shanghai Securities News page 48, China Securities Journal page B030, Securities Daily page C28 17 October 2015 Announ
588、cement of Qingdao Haier Co., Ltd. regarding the Continuous Suspension due to Major Issues (L 2015-048) Securities Times page B003, Shanghai Securities News page 56, China Securities Journal page B275, Securities Daily page C35 24 October 2015 Announcement of Qingdao Haier Co., Ltd. on Replacing of t
589、he Sponsor Representative for Continued Supervision regarding 2013 Non-public Offering of A Shares (L 2015-049) Securities Times page B003, Shanghai Securities News page 56, China Securities Journal page B275, Securities Daily page C35 24 October 2015 Announcement of Qingdao Haier Co., Ltd. regardin
590、g the Suspension due to Major Assets Restructuring (L 2015-050) Securities Times page B217, Shanghai Securities News page 184, China Securities Journal page B210, Securities Daily page C85 31 October 2015 The Third Quarter Report for 2015 of Qingdao Haier Co., Ltd. Securities Times page B217, Shangh
591、ai Securities News page 184, China Securities Journal page B210, Securities Daily page D5 31 October 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Progress of Repurchase of Shares (L 2015-051) Securities Times page B059, Shanghai Securities News page B24, China Securities Journal page A
592、10, Securities Daily page D6 4 November 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Progress of Major Assets Restructuring (L 2015-052) Securities Times page B27, Shanghai Securities News page 64, China Securities Journal page B021, Securities Daily page C21 7 November 2015 Announceme
593、nt of Qingdao Haier Co., Ltd. regarding the Progress of Major Assets Restructuring (L 2015-053) Securities Times page B038, Shanghai Securities News page 57, China Securities Journal page B013, Securities Daily page C5 14 November 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Progress o
594、f Major Assets Restructuring (L 2015-054) Securities Times page B042, Shanghai Securities News page 41, China Securities Journal page B010, Securities Daily page B4 21 November 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Progress of Major Assets Restructuring (L 2015-055) Securities T
595、imes page B034, Shanghai Securities News page 64, China Securities Journal page B010, Securities Daily page C12 28 November 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Continuous Suspension due to Major Assets Restructuring (L 2015-056) Securities Times page B047, Shanghai Securities
596、News page B33, China Securities Journal page B026, Securities Daily page D22 2 December 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Progress of Repurchase of Shares (L 2015-057) Securities Times page B047, Shanghai Securities News page B33, China Securities Journal page B026, Securiti
597、es Daily page D22 2 December 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Progress of Major Assets Restructuring (L 2015-058) Securities Times page B051, Shanghai Securities News page B108, China Securities Journal page B015, Securities Daily page C26 9 December 2015 Announcement of Qi
598、ngdao Haier Co., Ltd. regarding the Progress of Major Assets Restructuring (L 2015-059) Securities Times page B042, Shanghai Securities News page B88, China Securities Journal page B007, Securities Daily page C35 16 December 2015 Announcement of Qingdao Haier Co., Ltd. on the Resolutions Passed at t
599、he 28th Meeting of the 8th Session of the Board of Directors (L 2015-060) Securities Times page B083, Shanghai Securities News page B25, China Securities Journal page B058, Securities Daily page C33/C34 23 December 2015 Announcement of Qingdao Haier Co., Ltd. on the Resolutions Passed at the 18th Me
600、eting of the 8th Session of the Board of Supervisors (L 2015-061) Securities Times page B083, Shanghai Securities News page B25, China Securities Journal page B058, Securities Daily page C33/C34 23 December 2015 Announcement of Qingdao Haier Co., Ltd. on the Acquisition of Equity in Sino-foreign Joi
601、nt Venture Held by Haier Group Corporation and Connected Transaction (L 2015-062) Securities Times page B083, Shanghai Securities News page B25, China Securities Journal page B058, Securities Daily page C33/C34 23 December 2015 Announcement of Qingdao Haier Co., Ltd. on the Changes of Funding Commit
602、ment of Haier Group Corporation (L 2015-063) Securities Times page B083, Shanghai Securities News page B25, China Securities Journal page B058, Securities Daily page C33/C34 23 December 2015 Qingdao Haier Co., Ltd. 2015 Annual Report 74 / 239 Announcement of Qingdao Haier Co., Ltd. on the Entrusted
603、Management of Qingdao Haier Photoelectric Co., Ltd. (L 2015-064) Securities Times page B083, Shanghai Securities News page B25, China Securities Journal page B058, Securities Daily page C33/C34 23 December 2015 Announcement of Qingdao Haier Co., Ltd. on the Security Provided by Subsidiary Special Re
604、frigerator for the Company (L 2015-065) Securities Times page B083, Shanghai Securities News page B25, China Securities Journal page B058, Securities Daily page C33/C34 23 December 2015 Announcement of Qingdao Haier Co., Ltd. on the Security Provided by Subsidiary Zhengzhou Air-Conditioner for Subsi
605、diary Air-Conditioner Corporation (L 2015-066) Securities Times page B083, Shanghai Securities News page B25, China Securities Journal page B058, Securities Daily page C33/C34 23 December 2015 Notice of Qingdao Haier Co., Ltd. on the First EGM in 2016 (L 2015-067) Securities Times page B083, Shangha
606、i Securities News page B25, China Securities Journal page B058, Securities Daily page C33/C34 23 December 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Progress of Major Assets Restructuring (L 2015-068) Securities Times page B083, Shanghai Securities News page B25, China Securities Jou
607、rnal page B058, Securities Daily page C33/C34 23 December 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Progress of Major Assets Restructuring (L 2015-069) Securities Times page B097, Shanghai Securities News page 52, China Securities Journal page B044, Securities Daily page C27 30 Dece
608、mber 2015 Announcement of Qingdao Haier Co., Ltd. regarding the Continuous Suspension due to Major Assets Restructuring (L 2015-070) Securities Times page B051, Shanghai Securities News page 116, China Securities Journal page B055, Securities Daily page D33 31 December 2015 XV. Proactive Performance
609、 of Social Responsibilities （I） Performance of social responsibilities Details are set out in the Social Responsibility Report of Qingdao Haier Co., Ltd. for 2015 disclosed on the same date with this report. XVI. Convertible corporation bonds Applicable Not Applicable Qingdao Haier Co., Ltd. 2015 An
610、nual Report 75 / 239 SECTION VI CHANGES IN SHARE CAPITAL OF ORDINARY SHARES AND INFORMATION ABOUT SHAREHOLDERS I. CHANGES IN SHARE CAPITAL OF ORDINARY SHARES （I） Table of Changes in Ordinary Shares 1. Table of Changes in Ordinary Shares Unit: share Prior to the change Increase and decrease of the ch
611、ange (,) Subsequent to the change Number Percentage (%) New shares issued Bonus shares Shares converted from reserves Others Sub-total Number Percentage (%) I. Shares subject to selling restrictions 309,093,994 10.148 190,000 309,283,994 -4,880,800 304,593,194 613,687,188 10.022 1. State-owned share
612、s 2. State-owned legal person shares 3. Other domestic shares 6,101,000 0.200 190,000 6,291,000 -4,880,800 1,600,200 7,701,200 0.126 Including: shares held by domestic non- state-owned legal person Shares held by domestic natural person 6,101,000 0.200 190,000 6,291,000 -4,880,800 1,600,200 7,701,20
613、0 0.126 4. Foreign shares 302,992,994 9.947 302,992,994 302,992,994 605,985,988 9.897 Including: shares held by foreign legal person 302,992,994 9.947 302,992,994 302,992,994 605,985,988 9.897 Shares held by foreign natural person II. Tradable shares not subject to selling restrictions 2,736,841,140
614、 89.852 30,904,000 2,736,841,140 4,880,800 2,772,625,940 5,509,467,080 89.978 1. RMB ordinary shares 2,736,841,140 89.852 30,904,000 2,736,841,140 4,880,800 2,772,625,940 5,509,467,080 89.978 2. Domestic listed foreign shares 3. Overseas listed foreign shares 4. Others III. Total ordinary shares 3,0
615、45,935,134 100.000 31,094,000 3,046,125,134 0 3,077,219,134 6,123,154,268 100.000 Qingdao Haier Co., Ltd. 2015 Annual Report 76 / 239 2. Statement on the changes in ordinary shares (1) Restricted shares granted by the reserved portion under the Phase IV Share Option Incentive Scheme: on 26 February
616、2015, the 19th meeting of the 8th session of the Board of Directors considered and adopted the Motion on Granting of Share Options and Restricted Share in the Reserved Portion of the Phase IV Share Option Incentive Scheme to Incentive Targets to determine 26 February 2015 as the date of granting of
617、share options and restricted share in the reserved portion of the Phase IV Share Option Incentive Scheme, and grant 650,000 share options to 7 incentive targets and 190,000 restricted shares to 3 incentive targets. On 18 March 2015, Shandong Hexin Accountants LLP (Special General Partnership) issued
618、 the Hexin Yan Zi (2015) No. 000012 Verification Report. On 8 April 2015, the Company has completed the granting and registration of above 190,000 shares of restricted stocks and the total share capital of the Company was changed from 3,045,935,134 shares to 3,046,125,134 shares. For more details, p
619、lease refer to the Announcement of Qingdao Haier Co., Ltd. on the Completion of Registration of Reserved Restricted Shares Granted under the Phase IV Share Option Incentive Scheme (L 2015-011) published on the website of the Shanghai Stock Exchange on 9 April 2015. (2) Implementation of 2014 annual
620、profit distribution plan: in June 2015, the Companys 2014 Annual General Meeting adopted the Companys plan of 2014 annual profit distribution and capitalization of capital reserves: on the basis of 3,046,125,134 shares, the Company will declare cash dividend of RMB4.92 (including taxes) for every 10
621、 shares and increase 10 shares for every 10 shares by way of capitalization of capital reserves. In July 2015, the Company implemented the profit distribution plan and the total share capital of the Company was changed from 3,046,125,134 shares to 6,092,250,268 shares. The increased shares will be t
622、raded in the market on 17 July 2015. For more details of the implementation of profit distribution plan, please refer to the Announcement of Qingdao Haier Co., Ltd. on the Implementation of Profit Distribution and Capitalization of Capital Reserves for 2014 (L 2015-025) published in four securities
623、journals and the Shanghai Stock Exchange website () on 10 July 2015. (3) Listing of restricted shares under the Share Option Incentive Scheme: in July 2015, the 24th meeting of the 8th session of the Board of Directors considered and adopted the Motion on the Exercise/ Unlocking Arrangement for Equi
624、ty Initially Granted under Phase IV Share Option Incentive Scheme during the First Exercise/ Unlocking Period. According to the arrangement, an aggregate of 4.8808 million shares of restricted stocks initially granted under Phase IV Share Option Incentive Scheme will be unlocked during the first unl
625、ocking period and the listing date of the unlock shares is 23 July 2015. This unlocking had an impact on the number of tradable shares in the share capital structure and the total number of 6,092,250,268 shares of the Company remained unchanged. For details of the listing of restricted shares, pleas
626、e refer to the Announcement of Qingdao Haier Co., Ltd. on the Restricted Stock Unlocking and Listing under the Phase IV Share Qingdao Haier Co., Ltd. 2015 Annual Report 77 / 239 Option Incentive Scheme (L 2015-030) published in the four major securities newspapers and the Shanghai Stock Exchange web
627、site () on 18 July 2015. (4) Listing of exercised shares under the Share Option Incentive Scheme: in July 2015, the 24th meeting of the 8th session of the Board of Directors considered and adopted the Motion on the Exercise/ Unlocking Arrangement for Equity Initially Granted under Phase IV Share Opt
628、ion Incentive Scheme during the First Exercise/ Unlocking Period. According to the arrangement, an aggregate of 31.04 million share options initially granted under Phase IV Share Option Incentive Scheme will be exercised during the first exercise period. According to the results of the exercise, 30.
629、904 million shares were actually exercised; the total share capital of the Company changed from 6,092,250,268 shares to 6,123,154,268 shares, and the listing date of the exercised shares is 5 August 2015. For details of the results of the share option incentive exercise, please refer to the Announce
630、ment of Qingdao Haier Co., Ltd. on the Share Option Incentive Exercise Result and New Shares Listing under the Phase IV Share Option Incentive Scheme (L 2015-031) published in the four major securities newspapers and the Shanghai Stock Exchange website () on 30 July 2015. 3. Other contents which the
631、 Company deems necessary to disclose or securities regulatory institution requires to disclose In February 2016, the Company canceled 18,050,341 shares repurchased by way of concentrated bidding. Therefore, up to know, the share capital of the Company has changed to 6,105,103,927 shares. （II） Change
632、s in shares subject to selling restrictions Applicable Not Applicable Unit: share Name of shareholder Number of shares subject to selling restrictions at the beginning of the year Number of shares released from selling restrictions in the year Number of new shares subject to selling restrictions in
633、the year Number of shares subject to selling restrictions at the end of the year Reasons for selling restrictions Date of release from selling restrictions KKR HOME INVESTMENT S.A R.L. 302,992,994 302,992,994 605,985,988 Strategic investment 17 July 2017 Natural person shareholders (target for the f
634、irst grant and retained part of the fourth share option incentive of the Company) 2,440,400 4,880,800 2,440,400 0 Share Option Incentive Shares subject to restrictions 23 July 2015 3,660,600 0 3,660,600 7,321,200 20 June 2016 0 152,000 152,000 26 February 2016 0 228,000 228,000 26 February 2017 Tota
635、l 309,093,994 4,880,800 309,473,994 613,687,188 / / Notes: Qingdao Haier Co., Ltd. 2015 Annual Report 78 / 239 (1) Because the Company implemented the profit distribution plan for 2014 (distribute 10 shares per 10 shares and declare a cash dividend of RMB4.92), the number of non-tradable shares of t
636、he Company increased to 618,187,988 shares from 309,093,994 shares in the beginning of the year. For details of implementation of the profit distribution plan, please refer to the Announcement of Qingdao Haier Co., Ltd. on the Implementation of Profit Distribution and Conversion of Provident Funds t
637、o Share Capital for 2014 (L 2015-025) published in the four major securities newspapers and the Shanghai Stock Exchange website () on 10 July 2015. (2) Since the conditions of the first unlocking of restricted stocks initially granted under Phase IV Share Option Incentive Scheme were fulfilled, the
638、Company handled the unlocking and listing procedures for a total of 4.8808 million shares (there were 2.4404 million shares actually at the beginning of the year; because the Company implemented 2014 annual profit distribution plan, the number of shares was adjusted to 4.8808 million shares) of rest
639、ricted stocks in July 2015. For details, please refer to the Announcement of Qingdao Haier Co., Ltd. on the Restricted Stock Unlocking and Listing under the Phase IV Share Option Incentive Scheme (L 2015-030) published in the four major securities newspapers and the Shanghai Stock Exchange website (
640、) on 18 July 2015. II. ISSUE AND LISTING OF SECURITIES （I） Issuance of securities as of the reporting period Unit: 0000 shares Currency: RMB Type of shares and its derivative securities Date of issue Issue price (or interest s rate) Issue number Date of listing Number of shares under listing approva
641、l Date of termination Ordinary shares RMB ordinary shares- exercise of share option under the Share Option Incentive Scheme 2013-01-10 5.07 718.44 2013-01-18 718.44 2013-01-11 10.94 359.76 2013-01-18 359.76 2013-12-06 4.70 971.04 2013-12-13 971.04 2013-12-06 10.57 361.8 2013-12-13 361.8 2013-12-06 1
642、0.82 1,159.8 2013-12-13 1,159.8 RMB ordinary shares- grant of restricted shares under the Share Option Incentive Scheme 2014-07-07 7.73 244.04 2015-06-20 488.08 2014-07-07 7.73 366.06 2016-06-20 / Non Public Issuance of RMB ordinary shares 2014-07-17 10.83 30,299.3 2017-07-17 / RMB ordinary shares-
643、exercise of share option and grant of restricted shares under the Share Option Incentive Scheme 2014-11-25 10.11 477.92 2014-12-02 477.92 2014-11-25 10.36 1,122.6 2014-12-02 1,122.6 2015-04-08 10.06 19 2015-8-5 / 2015-07-28 8.07 3,090.4 2015-8-5 3,090.4 Qingdao Haier Co., Ltd. 2015 Annual Report 79
644、/ 239 Details of issuance of securities as of the reporting period (please specify separately for bonds with different interest rates within the duration): (1) In December 2012, the conditions for the third exercise period of Phase I Share Option Incentive Scheme and first exercise period of Phase I
645、I Share Option Incentive Scheme of the Company have been fulfilled. On 10 and 11 January 2013, the Company directionally issued additional 7,184,400 and 3,597,600 RMB ordinary shares to determined and qualified participates of Phase I and Phase II Share Option Incentive Scheme respectively at a pric
646、e of RMB5.07 per share and RMB10.94 per share, respectively. The aggregate 10,782,000 shares above mentioned were listed on 18 January 2013. For details, please refer to Announcement on the Exercise Arrangement for the Third Exercise period of Phase I Share Option Incentive Scheme by the Board of Qi
647、ngdao Haier Co., Ltd. (L 2012-030), Announcement on the Exercise Arrangement for the First Exercise period of Phase II Share Option Incentive Scheme by the Board of Qingdao Haier Co., Ltd. (L 2012-031) and Announcement on the Results of the Third Exercise period of Phase I Share Option Incentive Sch
648、eme and the First Exercise period of the Phase II Share Option Incentive Scheme by Qingdao Haier Co., Ltd. and Listing of New Shares (L 2013-001) published by the Company on the four major securities newspapers and the website of Shanghai Stock Exchange () on 25 December 2012 and 15 January 2013, re
649、spectively. (2) In November 2013, the conditions for the fourth exercise period of Phase I Share Option Incentive Scheme, the second exercise period of Phase II Share Option Incentive Scheme and the first exercise period of Phase III Share Option Incentive Scheme of the Company have been fulfilled.
650、On 6 December 2013, the Company directionally issued additional 9,710,400, 3,618,000 and 11,598,000 RMB ordinary shares to determined and qualified participates of Phase I, Phase II and Phase III Share Option Incentive Scheme, respectively at a price of RMB4.70 per share, RMB10.57 per share and RMB1
651、0.82 per share. The aggregate 24,926,400 shares above mentioned were listed on 13 December 2013. For details, please refer to Announcement on the Exercise Arrangement for the Fourth Exercise period of Phase I Share Option Incentive Scheme by the Board of Qingdao Haier Co., Ltd. (L 2013-034), Announc
652、ement on the Exercise Arrangement for the Second Exercise period of Phase II Share Option Incentive Scheme by the Board of Qingdao Haier Co., Ltd. (L 2013-035) and Announcement on the Exercise Arrangement for the First Exercise period of Phase III Share Option Incentive Scheme by the Board of Qingda
653、o Haier Co., Ltd. (L 2013-036) and the Announcement on the Exercise Result for the share Option Incentive Scheme and the Listing of Additional shares of Qingdao Haier Co., Ltd. (L 2013-039) published by the Company on the four major securities newspapers and the website of Shanghai Stock Exchange ()
654、 on 21 November 2013 and 10 December 2013, respectively. (3) In April 2014, the Company introduced Phase IV Share Option Incentive Scheme. The Scheme involves 54,560,000 options, of which, 49,110,000 options (including 42,879,000 share options and 6,231,000 restricted shares) were granted under the
655、first grant and 5,450,000 options (including 4,761,000 share options and 689,000 restricted shares) were reserved shares. After no objection filing Qingdao Haier Co., Ltd. 2015 Annual Report 80 / 239 with the CSRC and the approval of the Scheme at a general meeting of the Company, the Board determin
656、ed the date of the First Grant was 20 June 2014 and 48,780,000 options (including 42,679,000 share options at the exercise price of RMB16.63 per share; and 6,101,000 restricted shares at the grant price of RMB7.73 per share) were granted to scheme participants (adjusted after one participant left th
657、e Company) under the first grant. The registration of transfer of the abovementioned restricted shares was completed on 7 July 2014. For details, please refer to the Announcement of Completion of Registration of Restricted Shares Granted under the Phase IV Share Option Incentive Scheme of Qingdao Ha
658、ier Co., Ltd. (L 2014-038) published by the Company on the four major securities newspapers and the website of Shanghai Stock Exchange () on 8 July 2014. (4) In September 2013, the Company induced a proposal on the introduction of the strategic investor through non-public issue, proposing to issue n
659、ot more than 305 million additional A shares to KKR (Luxembourg) with proceeds of not more than RMB3.447 billion. After obtaining approval of the proposal from the general meeting of the Company, Ministry of Commerce and CSRC, the Board of the Company conducted relevant share transfer procedures in
660、July 2014 and determined 302,992,994 shares to be issued at the issue price of RMB10.83 per share. The listing of the relevant share will be effective on 17 July 2017. For details, please refer to Announcement on Results of Non-public Issuance of Shares and Change in Share Capital of Qingdao Haier C
661、o., Ltd. (L 2014-041) published by the Company on the four major securities newspapers and the website of Shanghai Stock Exchange () on 22 July 2014. (5) In November 2014, the conditions for the third exercise period of Phase II Share Option Incentive Scheme and the second exercise period of Phase I
662、II Share Option Incentive Scheme of the Company have been fulfilled. On 25 November 2014, the Company directionally issued additional 4,779,200 and 11,226,000 RMB ordinary shares to determined and qualified participates of Phase II and Phase III Shares Option Incentive Scheme at a price of RMB10.11
663、per share and RMB10.36 per share. The listing of the aggregate 16,005,200 shares was effective on 2 December 2014. For the details, please refer to the Announcement on the Exercise Arrangement for the Third Exercise period of Phase II Share Option Incentive Scheme by the Board of Qingdao Haier Co.,
664、Ltd. (L 2014-064), the Announcement on the Exercise Arrangement for the Second Exercise period of Phase III Share Option Incentive Scheme by the Board of Qingdao Haier Co., Ltd. (L 2014-065) and the Announcement on the Exercise Result for the Share Option Incentive Scheme and the Listing of Addition
665、al Shares of Qingdao Haier Co., Ltd. (L 2014-067) published by the Company on the four major securities newspapers and the website of Shanghai Stock Exchange () on 12 November 2014 and 27 November 2014, respectively. (6) In February 2015, in the Companys equity granted by the reserved portion under
666、the Phase IV Share Option Incentive Scheme, an aggregate of 650,000 share options were granted, with the exercise price of RMB20.44/share; and 190,000 restricted shares were granted, with the granting price of RMB10.06/share. The Board of Directors considered that the granting/authorizing date was d
667、etermined on 26 February 2015. Registration and transfer issues of the said restricted stocks have been completed Qingdao Haier Co., Ltd. 2015 Annual Report 81 / 239 on 8 April 2015. For details, please refer to the Announcement of Qingdao Haier Co., Ltd. on the Completion of Registration of Reserve
668、d Restricted Shares Granted under the Phase IV Share Option Incentive Scheme (L 2015-011) published in the four major securities newspapers and the Shanghai Stock Exchange website () on 9 April 2015. (7) In July 2015, the conditions of the first exercise/unlocking of equity initially granted under P
669、hase IV Share Option Incentive Scheme were fulfilled. The Company determined the first exercise of equity initially granted under Phase IV Share Option Incentive Scheme on 28 July 2015 and assessed the qualified incentive object to make private placement of RMB ordinary shares of 30.904 million shar
670、es at a price of RMB8.07/share. The above shares were listed on 5 August 2015. For details, please refer to the Announcement of Qingdao Haier Co., Ltd. on the Share Option Incentive Exercise Result and New Shares Listing under the Phase IV Share Option Incentive Scheme (L 2015-031) published in the
671、four major securities newspapers and the Shanghai Stock Exchange website () on July 30, 2015. （II） Changes in total number of shares and shareholding structure and changes in the assets and liabilities structure of the Company 1) On 8 April 2015, the Company granted restricted shares involved under
672、Phase IV Share Option Incentive Scheme, and the total number of shares of the Company changed from 3,045,935,134 shares to 3,046,125,134 shares; 2) On 17 July 2015, with the implementation of the annual bonus plan of the Company in 2014 (10 shares for every 10 shares and with a dividend of RMB4.92),
673、 the total number of shares of the Company changed from 3,046,125,134 shares to 6,092,250,268 shares; 3) On 5 August 2015, the first exercise of Phase IV Share Option Incentive Scheme of the Company was completed, and the total number of shares of the Company changed from 6,092,250,268 shares to 6,1
674、23,154,268 shares; In summary, during the reporting period, the capital of the Company changed from 3,045,935,134 shares at the beginning of the period to 6,123,154,268 shares at the end of the period. III. Shareholder and the ultimate controller （I） Total number of shareholders Total number of ordi
675、nary shareholders up to the end of the reporting period 213,207 Total number of ordinary shareholders as at the end of the last month prior to the disclosure day of the annual report 214,152 （II） Table of shareholdings of top ten shareholders, top ten circulation shareholders (or the shareholders no
676、t subject to selling restrictions) up to the end of the reporting period Unit: share Shareholdings of top ten shareholders Name of shareholder (full name) Increasing/ decreasing during the reporting Number of shares held at the end of the period Percentage (%) Number of shares held subject Status of
677、 shares pledged or frozen Nature of shareholder Qingdao Haier Co., Ltd. 2015 Annual Report 82 / 239 period to selling restrictions Status Number Haier Electric Appliances International Co., Ltd. 1,258,684,824 20.56 Nil Domestic non- state-owned legal person Haier Group Corporation 1,072,610,764 17.5
678、2 Nil Domestic non-state-owned legal person KKR HOME INVESTMENT S.A R.L. 605,985,988 9.90 605,985,988 Nil Foreign legal person Hong Kong Securities Clearing Co., Ltd. 340,928,012 5.57 Unknown Unknown China Securities Finance Corporation Limited 173,837,311 2.84 Unknown Unknown Qingdao Haier Venture
679、& Investment Information Co., Ltd. 160,597,760 2.62 Nil Domestic non-state-owned legal person Central Huijin Asset Management Ltd. 69,539,900 1.14 Unknown Unknown China Life Insurance Company Limited dividend personal dividend 005L FH002 Hu 54,910,696 0.90 Unknown Unknown Industrial & Commercial Ban
680、k of China Limited China Southern Consumption Vitality Flexible Allocation Hybrid Initiated Securities Investment Fund 37,864,701 0.62 Unknown Unknown Qingdao Haier Co., Ltd. 2015 Annual Report 83 / 239 China Life Insurance Company Limitedtraditionalgeneral insurance products 005LCT001 Hu 36,136,934
681、 0.59 Unknown Unknown Shareholdings of top ten shareholders not subject to selling restrictions Name of shareholder Number of shares held subject to no selling restrictions Class and number of shares Class Number Haier Electric Appliances International Co., Ltd. 1,258,684,824 RMB ordinary shares Hai
682、er Group Corporation 1,072,610,764 RMB ordinary shares Hong Kong Securities Clearing Co., Ltd. 340,928,012 RMB ordinary shares China Securities Finance Corporation Limited 173,837,311 RMB ordinary shares Qingdao Haier Venture & Investment Information Co., Ltd. 160,597,760 RMB ordinary shares Central
683、 Huijin Asset Management Ltd. 69,539,900 RMB ordinary shares China Life Insurance Company Limiteddividendpersonal dividend005LFH002 Hu 54,910,696 RMB ordinary shares Industrial & Commercial Bank of China Limited China Southern Consumption Vitality Flexible Allocation Hybrid Initiated Securities Inve
684、stment Fund 37,864,701 RMB ordinary shares China Life Insurance Company Limitedtraditionalgeneral insurance products005LCT001 Hu 36,136,934 RMB ordinary shares National social security fund, Portfolio 104 36,000,000 RMB ordinary shares Connections or parties acting in concert among the aforesaid sha
685、reholders (1) Haier Electric Appliances International Co., Ltd. is a holding subsidiary of Haier Group Corporation. Haier Group Corporation holds 51.20% of its equity. Qingdao Haier Venture & Investment Information Co., Ltd. is a party acting in concert with Haier Group Corporation; (2) Both the gen
686、eral insurance products and personal dividend of China Life are managed by China Life; (3) The Company is not aware of the existence of any connections of other shareholders. Explanation of preferential shareholders with restoration of voting rights and their shareholdings Nil Number of shares held
687、by top ten shareholders subject to selling restrictions and the selling restrictions Unit: share No. Name of shareholder subject to selling restrictions Number of shares held Listing status of shares subject to selling restrictions Selling restrictioQingdao Haier Co., Ltd. 2015 Annual Report 84 / 23
688、9 subject to selling restrictions Eligible listing time Number of additional shares to be listed ns 1 KKR HOME INVESTMENT S.A R.L. 605,985,988 17 July 2017 0 A lock-up period of three years 2 Objects of the firstly granted and reserved portion of the Phase IV Share Option Incentive Scheme 7,321,200
689、20 June 2016 0 Unlock depending on the performance and evaluation results of the Company 3 152,000 26 February 2016 0 4 228,000 26 February 2017 0 Connections or parties acting in concert among the aforesaid shareholders None （III） Strategic investors or general legal persons who became the top ten
690、shareholders due to placing of new shares Name of strategic investor or general legal person Starting date of agreed share-holding Expiration date of agreed shareholding KKR HOME INVESTMENT S.A R.L. 17 July 2014 17 July 2017 Statement of the terms of the agreed share-holding of the strategic investo
691、rs or ordinary legal persons involved in placing new shares According to the Share Purchase Agreement entered into between the Company and KKR in 2013, the shares of the Company subscribed by it shall not be transferred within 36 months after the date of issuance. The summary of the agreement sets o
692、ut in the announcement regarding the Private Issuance of A-share of Qingdao Haier Co., Ltd. ( (L 2013-023) of the Company dated 8 October 2013. IV. Controlling shareholder and the ultimate controller （I） Status of controlling shareholder 1 Legal person Name Haier Electric Appliances International Co
693、., Ltd The person in charge of the Company or legal representative Zhang Ruimin Establishment date 1988-06-30 Principal operations Manufacturing of freezer, electromagnetic stove, house electrical fan, hairdryer, freezing machine, gas fire, air cleaner, dishwasher, electric heater, electric cooker,
694、water dispenser, vacuum cleaner, kitchen ventilator, gas stove and oven focal; the export of the products produced by the Company, the import and export of technology and equipment for the Companys own use and the import business of raw materials for production. Qingdao Haier Co., Ltd. 2015 Annual R
695、eport 85 / 239 2 The ownership and controlling relationship between the Company and its controlling shareholder （II） Status of the ultimate controller 1 Legal person Name Haier Group Corporation The person in charge of the Company or legal representative Zhang Ruimin Establishment date 1980-03-24 Pr
696、incipal operations Manufacturing of home appliances, digital products, communication equipment, electronic computers and accessories, ordinary machineries, kitchen utensils and industrial use robots; domestic commercial wholesale distribution and retail sale (excluding those operated exclusively by
697、the State, which are dangerous and limited by the State); the import and export business (please refer to Foreign Trade Enterprise Validation Certificate for details). 2 Framework of ownership and controlling relationship between the Company and the ultimate controllers （III） Other information about
698、 the controlling shareholder and the ultimate controllers Haier Group Corporation was registered as a joint venture in industrial and commercial registration. Pursuant to a statement issued by Qingdao State-Owned Assets Administration Office on 1 June 2002, Haier Group Corporation is a collectively-
699、owned enterprise. Haier Electric Appliances International Co., Ltd. Qingdao Haier Co., Ltd. Haier Group Corporation Haier Electric Appliances International Co., Ltd. Qingdao Haier Co., Ltd. Qingdao Haier Venture & Investment Information Co., Ltd Acting in concert Qingdao Haier Kitchen Facilities Co.
700、, Ltd Qingdao Haier Co., Ltd. 2015 Annual Report 86 / 239 V. Other corporation shareholders holding more than 10% of the Companys shares Unit and Currency: RMB Name of corporation shareholder The person in charge of the Company or legal representative Date of incorporation Organization code Register
701、ed capital Principle operations and management activities KKR Home Investment S. r.l. William J. Janetschek and other person 3 September 2013 / US$18,000 Investment and investment management business Note KKR Home Investment S.r.l. is a project company incorporated in Luxembourg under the internatio
702、nal practice exclusively for strategic investment in the Company, and a wholly-owned subsidiary of KKR China Growth Fund L.P. VI. EXPLANATION OF RESTRICTION ON REDUCED SHAREHOLDING Applicable Not Applicable Qingdao Haier Co., Ltd. 2015 Annual Report 87 / 239 SECTION VII THE RELEVANT INFORMATION OF P
703、REFERRED SHARES Applicable Not Applicable Qingdao Haier Co., Ltd. 2015 Annual Report 88 / 239 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 an
704、d senior management during the reporting period Applicable Not applicable Unit: share Name Position (note) Gender Age Appointment date End date of appointment Shareholdings at the beginning of the year Shareholdings at the end of the year Increase/ decrease in shares for the year Reason for increase
705、/ decrease Total remuneration received from the Company during the reporting period (RMB0000) (before tax) Whether receive remuneration from the Companys related party Liang Haishan President，general manager male 50 2013-04-19 2016-04-19 5,489,920 12,779,840 7,289,920 Option exercise under Phase IV
706、Share Option Incentive Scheme and implement of bonus scheme of the Company 167 No Tan Li Xia Vice president female 46 2013-04-19 2016-04-19 2,571,680 6,203,360 3,631,680 No receipt of remuneration from the Company Yes Wang Xiaonan Director female 53 2013-04-19 2016-04-19 148,000 473,600 325,600 Yes
707、Peng Jianfeng Director male 55 2013-04-19 2016-04-19 20 No Qingdao Haier Co., Ltd. 2015 Annual Report 89 / 239 Wu Changqi Director male 61 2013-04-19 2016-04-19 20 No Zhou Hongbo Director male 54 2013-04-19 2016-04-19 20 No Liu Haifeng David Director male 46 2013-09-29 2016-04-19 0 No Liu Feng Indep
708、endent director male 50 2013-04-19 2016-06-09 14.2 No Wu Cheng Independent director male 76 2013-04-19 2016-04-19 20 No Dai Deming Independent director male 54 2015-06-10 2016-04-19 7.5 No Shi Tiantao Independent director male 54 2014-05-20 2016-04-19 20 No Timothy Yung Cheng Chen Independent direct
709、or male 60 2014-09-29 2016-04-19 20 No Wang Peihua Chairman of the supervisory committee male 59 2013-04-19 2016-04-19 No receipt of remuneration from the Company Yes Ming Guoqing Supervisor male 56 2013-04-19 2016-04-19 Yes Wang Yuqing Supervisor female 41 2013-04-19 2016-04-19 13.8 No Gong Wei Chi
710、ef financial officer, vice general manager male 43 2013-04-19 2016-04-19 700,000 1,568,000 868,000 Option exercise under Phase IV Share Option Incentive Scheme and 55 No Qingdao Haier Co., Ltd. 2015 Annual Report 90 / 239 implementation of bonus scheme of the Company Ming Guozhen Secretary to the bo
711、ard of directors, vice general manager female 52 2013-04-19 2016-04-19 670,000 1,006,000 336,000 implementation of bonus scheme of the Company and reduction in the secondary market 55 No Total / / / / / 9,579,600 22,030,800 12,451,200 / 432.5 / Name work experience Liang Haishan Male, born in 1966,
712、is a senior engineer. He has served as director of enterprise management office of Qingdao Refrigerator General Factory, head of the quality department of Qingdao Haier Refrigerator Co., Ltd., director of personnel department of certification center of Haier Group Corporation, general manager and pa
713、rty secretary of Qingdao Haier Air Conditioner Gen Corp., Ltd, head and party secretary of Haier logistics department, senior vice president of Haier Group, executive vice president of Haier Group. He is Vice President of Haier Group and the chairman and general manager of 8th session of the Board o
714、f Qingdao Haier Co., Ltd. and was awarded Shandong Province Outstanding Contribution Leader of Light Industry of the Eleventh Five-year Plan and Senior Expert of Qingdao in 2011; National May 1st Labor Medal, Outstanding Leadership Award of the National Light Industry Enterprise Information, Top 10
715、Leaders in China Strategic Emerging Industries in 2012; Prize of Technology Advancement for China Household Appliances, First Prize Award of Science and Technology Progress of China National Light Industry Council in 2013. Tan Li Xia Female, born in 1970, has served as assistant director and general
716、 manager assistant of Haier Air Conditioning Electronics Import and Export Company, the head, deputy director, director of department of overseas market development of Haier Group, and head of department of financial management of Haier Qingdao Haier Co., Ltd. 2015 Annual Report 91 / 239 Group; curr
717、ently serves as the vice executive president of Haier Group, chief financial officer of the Group, the vice president of the 8th session of the Board of Qingdao Haier Co., Ltd. In recent years, she was awarded various titles, such as Model Worker of Shandong Province, Outstanding Entrepreneur of the
718、 State, March 8 Red-Banner Holders of the State , PRC CFO of the Year, China Top Ten Women in Economic Area, China Top Ten Brand Female and so on. Wang Xiaonan Female, born in 1963, has served as the director of human resources of Orica China region, director of human resources of Orica North Asia r
719、egion. Currently is the vice president of Haier Group, director of the 8th session of the Board of Qingdao Haier Co., Ltd. She has abundant theoretical knowledge and practical experiences in human resources management and human capital strategic management such as corporate restructuring, acquisitio
720、n, M&A. She has been awarded the Annual Character Awards for the First Humanism China of the China Human Resource Development Association, HR Team Innovation Award, HR Team Innovation Awards and Ten Best Practices Awards for China HR Management, Best Organizational Reform of the Year and Best HR Tea
721、m of the Year for the near three years. Peng Jianfeng Male, born in 1961, professor and tutor of doctorate students of School of Labor and Human Resources of Renmin University of China, president of China Stone Management Consulting Group, vice chairman of China Human Resource Development Associatio
722、n, vice director of Management Consulting Committee of China Enterprise Confederation, director of the 8th session of the Board of Qingdao Haier Co., Ltd. He once was the deputy dean of School of Labor and Human Resources of Renmin University of China. Wu Changqi Male, born in 1955, professor and tu
723、tor of doctorate students of department of Strategic Management of Guanghua School of Management of Peking University. He graduated from Shandong University in 1982 with a bachelor degree in economics. He graduated from Katholieke Universiteit Leuven in Belgium in 1990, with a MBA degree and a docto
724、rate degree in applied economics successively. He was an assistant professor and associate professor of Department of Economics of School of Business and Management of The Hong Kong University of Science and Technology, professor and director of Department of Strategic Management of Guanghua School
725、of Management of Peking University, deputy dean of Guanghua School of Management, Peking University, Director of EMBA degree programme center and so on. Currently he is the president of the National Hi-Tech Industrial Development Zone Strategy Research Institute of Peking University and president of
726、 The Guanghua Leadership Institute (in collaboration with CISCO), director of the 8th session of the Board of Qingdao Haier Co., Ltd. Zhou Hongbo Male, born in 1962, general manager of UbiLink, member of the board of directors of Beijing Hanbang Technology Co., Ltd., member of SandHillAngels in Amer
727、ica, partner of venture capital funds in WingPlus, America; he was once the general manager of Beiqi iFoton Co., Ltd. , chief software specialist of Tsinghua Tongfang, senior engineer / manager of research and development of IBM / BEA and other companies in the United States, postdoctoral researcher
728、 Qingdao Haier Co., Ltd. 2015 Annual Report 92 / 239 of Oak Ridge National Laboratory of America etc.; member of Committee of Experts of IOT and System Integration of The Chinese Institute of Electronics and so on; distinguished expert of Beijing and other municipal government; part-time professor o
729、f Beijing Jiaotong University, University of Electronic Science and Technology of China, Beihang University and other colleges; member of experts and advisors of many domestic and foreign consultation bodies; one of the nine global IOT experts interviewed by the internationally renowned magazine Eco
730、nomist. He is currently a director of the 8th session of the Board of Qingdao Haier Co., Ltd. Liu Haifeng David Male, born in 1970, KKR global partner, co-head of KKR Asian Private Equity Investment and president of Greater China Region, and member of KKRs Asian Private Equity Investment Committee,
731、Asia Portfolio Management Committee and China Growth Fund Investment Committee. He once served as the managing director of Morgan Stanley and co-head of the Direct Investment Department of Morgan Stanley Asia. In years of direct investment career, he achieved an excellent long-term investment perfor
732、mance, he was responsible for and led a number of successful and pioneering direct investment projects in the Greater China region, such as: China Mengniu Dairy, Ping An Insurance, Qingdao Haier, Belle International, Far East Horizon, Nanfu Battery, China Modern Dairy, United Envirotech Ltd., China
733、Cord Blood Corporation, Yongle Household Appliances, Hengan International, Shanshui Cement, Rundong Auto, Sunner Development, 58 Home, Tarena Technology and Guangdong Feed. He graduated from Columbia University, and achieved the highest honor of science degree in Department of Electronic Engineering
734、; he is a member of Tau Beta Pi (National Engineering Honor Society of America) , and he has won the Edwin Howard Armstrong Award as the most outstanding electronic engineering student of Columbia University. Liu Feng (Retired upon the expiry of term of office) Male, born in 1966, he was the profess
735、or of College of Management of Sun Yat-sen University, director of Modern Accountancy and Finance Research Center of Sun Yat-sen University, and currently is the professor of Accounting School of Xiamen University, and independent director of the 8th session of Board of Qingdao Haier Co., Ltd. Wu Ch
736、eng Male, born in 1940, expert in informationization and automation, academician of Chinese Academy of Engineering. He graduated from Tsinghua University in 1962 and got a postgraduate degree of Tsinghua University in 1966. He is a professor and doctoral supervisor of department of Automation of Tsi
737、nghua University, head of National CIMS Engineering Research Center, independent director of Kingdee (International) Software Group Co., Ltd., and independent director of the 8th session of the Board of Qingdao Haier Co., Ltd. Dai Deming Male, born in 1962. He is a professor and doctoral supervisor
738、of the accounting department of School of Business at Renmin University of China. He also concurrently holds other positions such as a vice-chairman of Accounting Society of China, and a vice-chairman of Beijing Society of Qingdao Haier Co., Ltd. 2015 Annual Report 93 / 239 Auditing. He served as an
739、 independent director for CSR Corporation Limited and other companies. Shi Tiantao Male, born in 1962. He currently serves as a professor and doctoral supervisor of the School of Law at Tsinghua University as well as director of Finance & Law Research Center under the School of Law at Tsinghua Unive
740、rsity. He also serves on the 8th Session of the Board of Directors of Qingdao Haier as an independent director. Meanwhile, he concurrently holds other positions such as a vice president of the Chinese Research Association of Securities Law, an arbitrator of CIETAC, a specially-designated supervisor
741、of the Supreme Peoples Court and a member of the Case Guidance Committee. He was a deputy dean of the School of Law at Tsinghua University. Timothy Yung Cheng Chen Male, born in 1956, holds an American citizenship. He is the president of Telstra International Group and the general manager of the Gro
742、up. He holds a MBA degree of University of Chicago, and a masters degree in Computer Science and Mathematics of The Ohio State University. He once served as the president of Motorola Inc. and Microsoft (China) Co., Ltd. in China and executive vice president of the headquarters, and he served in the
743、AT & T Bell Laboratory of the United States for nine years. Wang Peihua Male, born in 1957, senior political analyst, he has served as the deputy secretary of Party Committee of Haier Group Air-Conditioner Head Office, Washing Machine Head Office, and Haier Group Freezer & Heater Head Office, chairm
744、an of the labor union of Haier Group Technology and Equipment Head Office, etc. He is the head of the Organizational Department of Haier Group, the president of the 8th session of the Board of Supervisors of Qingdao Haier Co., Ltd. Ming Guoqing Male, born in 1960, senior political analyst, has serve
745、d as deputy secretary of Discipline Inspection Committee of Qingdao Refrigerator General Factory, party branch secretary and assistant manager of Qingdao Haier Transportation Company, deputy director of organization section of Qingdao Haier Co., Ltd., head of the comprehensive department, deputy sec
746、retary of party committee and secretary of discipline inspection committee of Haier Refrigerator Products Head Office, chairman of the labor union of Qingdao Haier Co., Ltd. He is the chairman of the labor union of Haier Group, and the supervisor of the 8th session of the board of supervisors of Qin
747、gdao Haier Co., Ltd. Wang Yuqing Female, born in 1975, has served as the worker supervisor of the Board of Supervisors of Qingdao Haier Co., Ltd. and the office secretary of Qingdao Haier Co., Ltd. She is a supervisor of the 8th session of the board of supervisors of Qingdao Haier Co., Ltd., and hea
748、d of the general manager office of Qingdao Haier Co., Ltd. Qingdao Haier Co., Ltd. 2015 Annual Report 94 / 239 Gong Wei Male, born in 1973, has served as the financial manager of Qingdao Haier Co., Ltd., senior financial manager and senior financial analyst of Haier Group, chief financial officer of
749、 Haier Washing Machine Head Office, chief financial officer of Haier Air-Conditioner Head Office, chief financial officer of White Goods Group, he is the vice general manager and chief financial officer of Qingdao Haier Co., Ltd. He was granted the honorary titles such as Outstanding Youth in Post o
750、f 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 appraised by New Money Magazine in 2011. Ming Guozhen Female, born in 1964, senior economist, was the lecturer of the investment depar
751、tment of China Institute of Finance, deputy head of the Teaching and Research section of Investment Economy Department, a clerk of treasury department of Everbright International Investment Consultancy Company, deputy director and director of general manager office, general manager of business manag
752、ement department and general manager of personnel department, assistant to the general manager of the Company, executive vice president of Everbright International Investment Consultancy Company; she was the office director of analysts professional committee of the Securities Association of China, v
753、ice director of Qualification Management Department of the Association, vice director of Practice Standards Committee of the Association. She is currently the vice general manager and secretary to the Board of Directors of Qingdao Haier Co., Ltd. (II) Incentive share option granted to directors, sup
754、ervisors and senior management during the reporting period Applicable Not applicable Unit: share Name Position Number of restricted shares held at the beginning of the year Number of share options newly granted during the reporting period Shares exercisable during the reporting period Shares exercis
755、ed by the share option during the reporting period Exercising price of share options (RMB) Number of share options held at the end of the period Market price at the end of the reporting period (RMB) Liang Haishan President, general manager 4,500,000 0 1,800,000 1,800,000 8.07 2,700,000 9.92 Tan Li X
756、ia Vice president 2,650,000 0 1,060,000 1,060,000 8.07 1,590,000 9.92 Wang Xiaonan Director 444,000 0 177,600 177,600 8.07 266,400 9.92 Qingdao Haier Co., Ltd. 2015 Annual Report 95 / 239 Gong Wei Chief financial officer, vice general manager 420,000 0 168,000 168,000 8.07 252,000 9.92 Ming Guozhen
757、Secretary to the board of directors, vice general manager 340,000 0 136,000 0 8.07 340,000 9.92 Total / 8,354,000 0 3,341,600 3,205,600 / 5,148,400 / Unit: share Name Position Number of restricted shares held at the beginning of the year Number of restricted shares newly granted during the reporting
758、 period Granting price of restricted shares (RMB) Unlocked shares Locked shares Number of restricted shares held at the end of the period Market price at the end of the reporting period (RMB) Liang Haishan President, general manager 4,500,000 0 3.62 1,800,000 2,700,000 2,700,000 9.92 Tan Li Xia Vice
759、 President 2,650,000 0 3.62 1,060,000 1,590,000 1,590,000 9.92 Wang Xiaonan Director 296,000 0 3.62 118,400 177,600 177,600 9.92 Gong Wei Chief financial officer, vice general manager 280,000 0 3.62 112,000 168,000 168,000 9.92 Ming Guozhen Secretary to the board of directors, vice general manager 2
760、20,000 0 3.62 88,000 132,000 132,000 9.92 Total / 7,946,000 0 / 3,178,400 4,767,600 4,767,600 / Note: During the Reporting Period, the 2014 Annual Profit Distribution Plan was implemented. The Company distributed a cash dividend of RMB4.92 (inclusive of tax) for every 10 shares and made a bonus issu
761、e by way of capitalizing its capital reserve on the basis of 10 shares for every 10shares on the basis of 3,046,125,134 shares. Pursuant to which, the Company convened a Board meeting to adjust the number of share options and restricted shares and their exercising price/grant price. The numbers pres
762、ented in the above table have been adjusted. Qingdao Haier Co., Ltd. 2015 Annual Report 96 / 239 II. 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 Posit
763、ion Appointment date End date of appointment Liang Haishan Haier Electric Appliances International Co., Ltd. Director November 1997 Tan Li Xia Haier Electric Appliances International Co., Ltd. Director Tan Li Xia Qingdao Haier Venture & Investment Information Co., Ltd. Supervisor March 2009 Tan Li X
764、ia Haier Group Corporation Senior vice president, chief financial officer December 2007 Wang Xiaonan Haier Group Corporation Vice president Wang Peihua Haier Group Corporation Head of Organizational Department Ming Guoqing Haier Group Corporation Chairman of the Labor Union Liu Haifeng David KKR Inv
765、estment Company in Asia Global partners February 2006 Positions in shareholders entities Nil (II) Positions held in other entities Applicable Not Applicable Name Company Positions Appointment date End date of appointment Liang Haishan Haier Group Electric Appliance Industry Co., Ltd. Executive direc
766、tor Liang Haishan Qingdao Haier Photoelectronic Co., Ltd. Executive director Liang Haishan Fisher & paykel Appliances Holdings Limited Director Ming Guozhen Qingdao Overseas Chinese Industrial Director July 2008 Qingdao Haier Co., Ltd. 2015 Annual Report 97 / 239 Joint Stock Co., Ltd. Tan Li Xia Hai
767、er Group Finance Co., Ltd. Supervisor Tan Li Xia Qingdao Haier Investment and Development Co., Ltd. Supervisor Tan Li Xia Haier Group Electric Appliance Industry Co., Ltd. Director Tan Li Xia Fisher & paykel Appliances Holdings Limited Director Tan Li Xia Bank of Qingdao Director 10 April 2012 Wu Ch
768、eng Tsinghua University Professor Wu Changqi Peking University Professor Wu Changqi Huaxia Bank Co., Ltd. Supervisor 12 May 2015 11 May 2018 Wu Changqi Beijing Electronic Zone Investment and Development Co., Ltd. Independent director 28 December 2012 27 December 2018 Wu Changqi Tianjin Keyvia Electr
769、ic Co., Ltd. Independent director 1 December 2011 30 November 2017 Peng Jianfeng Renmin University of China Professor Peng Jianfeng Beijing China Stone Management Consulting Group President Peng Jianfeng Chinese Universe Publishing and Media Co., Ltd. Independent director 5 December 2010 4 December
770、2016 Zhou Hongbo Beijing Hanbang Technology Co., Ltd. Director November 2014 November 2017 Timothy Yung Cheng Chen Asia Pacific Telecom Co., Ltd. General manager January 2016 Timothy Yung Cheng Chen China Communication Media Group Co., Ltd. Director Shi Tiantao Tsinghua University Professor 2000 Liu
771、 Haifeng David Far East Horizon Limited Non-executive director October 2009 Liu Haifeng David China International Capital Corporation Limited Non-executive director February 2015 Liu Haifeng David United Envirotech Ltd. Non-executive director October 2011 Liu Haifeng David China Rundong Auto Group L
772、imited Non-executive director January 2014 Dai Deming Shanxi Taigang Stainless Steel Co., Ltd. Independent director August 2011 Dai Deming Beijing Xinwei Telecom Technology Group Co., Ltd. Independent director September 2014 Dai Deming Beijing Capital Development Co., Ltd. Independent director Septe
773、mber 2015 Qingdao Haier Co., Ltd. 2015 Annual Report 98 / 239 Dai Deming China Zheshang Bank Co., Ltd. Independent Non-executive director March 2016 Positions in other units Nil III. Remuneration of Directors, Supervisors and Senior Management Decision-making procedures of the remuneration of direct
774、ors, supervisors and senior management The procedures for decision- making of remuneration of directors , supervisors and senior management of the Company are establishing platform, clearing standards, communication and consultation, and making objective decision. The Remuneration Committee of the C
775、ompany formulate remuneration standards, adjust principles and assess the principles of realizing, then propose them to the board of directors fo r approval, thus form a system platform, then to determine the actual remuneration of that year according to the examination results of the bet aginst cyc
776、le and the annual exammination results. Determination basis of the remuneration of directors, supervisors and senior management The management personnel salary system of the Company in 2015 is linked to the strategic income statement, of which the tool is the two-dimensional lattice model. The two-d
777、imensional lattice could reflect the strategic undertaking and upgrade and development of staffs vertically, and the market competitiveness horizontally. The highest allowance of outside directors of the 8th session of the board of directors of the Company is RMB200,000 (before tax) in total per yea
778、r, including the fixed allowances of RMB150,000 per year, the highest performance allowance is RMB50,000 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 effectivenes
779、s of the proposals and recommendations to the board of directors, the participation of the meetings of the Board, 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 necessary for per
780、forming their duties pursuant to the Articles of Association shall be fully reimbursed. Remuneration payables of directors, supervisors and senior management Paid as required. Total actual remuneration of all the directors, supervisors and senior management at the end of the reporting period 4.325 m
781、illion IV. Changes in Directors, Supervisors and Senior Management of the Company Name Position Change Reason for change Liu Feng Independent director Resigned Expiry of terms of appointment Dai Deming Independent director Elected Take over directors at expiry Qingdao Haier Co., Ltd. 2015 Annual Rep
782、ort 99 / 239 V. Punishment by the Securities Supervisory Institute for the near three years Applicable Not applicable Qingdao Haier Co., Ltd. 2015 Annual Report 100 / 239 . Staff of the Parent Company and Principal Subsidiaries (I) Staff information Number of staff of the parent company 2,286 Number
783、 of staff of principle subsidiaries 61,516 Total number of staff 63,802 Number of employees whose retirement expenses are borne by the parent company and the principle subsidiaries 0 Professional structure Professional Class Number Manufacturing staff 38,987 Marketing staff 12,883 Technical staff 10
784、,097 Financial staff 874 Administrative staff 961 Total 63,802 Educational structure Educational Class Number Bachelor education and above 12,899 College education 16,030 Vocational education and below 34,873 Total 63,802 Note: During the Reporting Period, the Company acquired Haier (Singapore) Inve
785、stment Holding Pte. Ltd. and other companies, and the number of employees of such companies was added to the headcount of the Company. (II) Remuneration policies The Company conducted the system of individual paid separately and entirety paid in advanced, which originates from the strategic balance
786、sheet of Haier, it includes the evaluation of the creation of user resources, operation ability of autonomous management entity, budget implementation, continuous optimization, the incentive system guide the behavior of employees, it exactly includes three aspects as below: create and share: I creat
787、e my users, I share my appreciation, which lead to innovation; three first-rates: first-rate consumer (user resources), first-rate people, first-rate remuneration; three highs: high efficiency, high appreciation and high remuneration. (III) Personnel training Please also refer to relevant content se
788、t out in Qingdao Haier Corporate Social Responsibility Report in 2015 published on the same date as this announcement. Qingdao Haier Co., Ltd. 2015 Annual Report 101 / 239 SECTION IX CORPORATE GOVERNANCE I. EXPLANATION OF CORPORATE GOVERNANCE During the reporting period, the Company strictly complie
789、d with the requirements under the Company Law, the Securities Law, Code on Corporate Governance for Listed Companies and the requirements of the relevant laws and regulations, to improve its corporate governance structure, regulate its operation, improve its information disclosure system, strengthen
790、 the communication with investors and elevate the standard of the Companys corporate governance. In respect of corporate governance structure, the general meeting, the Board and the management standardized its operation to practically guarantee the legal interests of the Company and its shareholders
791、; all Directors duly discharged their duties in a diligent way; each committee of the Board of the Company performed their work according to their respective detailed working rules to ensure that the Board operate in a more effective and scientific way; independent Directors fulfilled their duties i
792、ndependently and issued independent opinion on major matters in order to effectively protect the interests of the Company as a whole and the lawful rights and interests of medium and small investors. In respect of information disclosure, the Company strictly executed the registration and management
793、system for insiders, achieved the management of inside information on significant events and eliminating the act of using the Companys inside information for stocks trading by insider. Meanwhile, the Company reinforced the accountability of people who are responsible for annual report disclosure and
794、 enhanced the quality and transparency of information disclosure in annual reports. The Company has placed a lot of emphasis on information disclosure and disclosed relevant information on a true, accurate, complete and timely basis strictly in accordance with the requirements of laws and regulation
795、s to ensure all shareholders have equal access to such information. In respect of the management of investor relation, in accordance with guideline of the Management System for Investor Relation, the Company integrated business and financial resources by the office of board secretary and realized po
796、sitive and all-around access to investors in a multi-layer and diversified format through introduction reference, result announcement conference and online forum. Meanwhile, the Company replied investors on a timely basis by ways of interview, e-mail, phone, fax and the website () and enhanced inter
797、action with investors, so as to respect and protect the interests of various investors, with the aim of achieving harmonious and mutual success with the Company, staff and investors. The corporate governance structure of the Company is sound and there is no difference between the corporate governanc
798、e structure and the requirement of relevant documents from CSRC. 1) Shareholders and shareholders general meeting: The Company could ensure that all shareholders, especially the minority shareholders enjoy equal treatment and are able to fully exercise their rights; during the reporting period, the
799、Company convened and held two shareholders general meetings in compliance with the requirements of the Articles of Association and Rules Governing Shareholders General Meeting of the Company. Attendance of Qingdao Haier Co., Ltd. 2015 Annual Report 102 / 239 Shareholders at the meeting is relatively
800、 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 proced
801、ures, which could guarantee the power and rights of minority shareholders. 2) Relationship between controlling shareholders and the listed companies: The controlling shareholders acted normatively and did not interfere with the Companys management decisions and operations, directly or indirectly. Th
802、e Company and the controlling shareholders are independent of each other in terms of their staff, assets, finance, organization and business. Their respective board of directors, the supervisory committee and internal administrative departments are all independent of each other. The specific require
803、ments for regulating connected transactions and fund flow are set out in the Articles of Association, Fair Decision-Making System for Connected Transactions and the Administrative System for Regulation of Fund Flow between the Company and Related Parties, Risk Control System for Connected Transactio
804、n with Haier Group Finance Co., Ltd., and Proposal for Emergency Response System for Risk of Deposits with Haier Group Finance Co., Ltd., which guaranteed the interests of investors. The daily connected transactions are subject to the consideration and approval at the annual general meeting and set
805、specialized execution procedure. The basis of pricing and reasonability of operation agreement shall be supervised and reviewed by special departments, so as to regulate the connected transactions and protect the interests of minority shareholders and non-related shareholders. During the reporting p
806、eriod, the Group strictly performed its undertaking in respect of promotion of solution of business competition and reduction of connected transactions of listed companies, by which the Company completed the acquisition of overseas assets and the acquisition of minority shareholdings in Mitsubishi a
807、nd Carrier, and further enhanced self-procurement capability and scope of the self-procurement companies Qingdao Haidarui Procurement Service Co., Ltd. and Qingdao Haidayuan Procurement Service Co., Ltd. and strengthened the procurement capability of the Company, which further reduced connected tran
808、sactions. The revenue of the above two companies amounted to RMB11.3 billion and RMB22.4 billion respectively in 2015. 3) Directors and the Board: During the reporting period, the 8th session of the Board of the Company operated in accordance with rules and continued to perform their duties under th
809、e Articles of Association and relevant laws and regulations better and practically implement relevant decisions at the shareholders general meeting. The number and composition of the members of the Board complied with relevant laws and regulations; the re-election of one independent director and the
810、 election procedures are strictly in accordance with the laws and regulations and rules and regulations of the Company; the Directors attended the board meeting and shareholders general meeting with diligent and responsible attitude and protected the interests of the Company. In accordance with the
811、requirements in the Code of Corporate Governance for Listed Companies, the Company has 8 external Directors, of which four are independent Directors, representing approximately three quarters of the total number of the Directors (11 in total) of the Qingdao Haier Co., Ltd. 2015 Annual Report 103 / 2
812、39 Company. Each of the independent Directors of the Company respectively acted as member of the nomination committee, remuneration and appraisal committee and audit committee of the Board and practically carried out their duties. During the reporting period, all Directors and independent Directors
813、performed their duties earnestly strictly in compliance with the Articles of Association, the Rules of Procedure for the Board of Directors, the System for Independent Directors and relevant requirements under laws and regulations and each committees of the Board operated normatively according to it
814、s own work rules. During the reporting period, the Board of the Company considered and approved the following matters: promoting the exercising/unlocking of share options, acquisition of the Groups overseas assets, acquisition of minority interests, and periodical reports, so as to encourage the Com
815、pany to further consolidate its resources to better implement the networking and globalize development strategy. The Company made amendments to the Rules of Procedure of Shareholders General Meeting of the Company, the Implementing Rules for the Audit Committee under the Board of Directors of the Co
816、mpany and the Investment Management System of the Company in accordance with the relevant requirements of the CSRC and the SSE. 4) Supervisors and the Supervisory Committee: During the reporting period, the 8th session of the Supervisory Committee operated in accordance with rules and continued to p
817、ractically perform their duties under the Articles of Association and relevant laws and regulations. The number and composition of the members of the Supervisory Committee complied with requirements under laws and regulations. During the reporting period, the Supervisors of the Company performed the
818、ir duties earnestly and adhered to the principle of being responsible to the Company and all shareholders to supervise legality and compliance on finance matters of the Company and performance of duty by the Companys Directors, managers of the Company and other senior management strictly in accordan
819、ce with requirements under the Articles of Association , the Rules of Procedure for the Supervisory Committee and relevant laws and regulations. 5) Performance evaluation and incentive and disciplinary mechanism: In accordance with the Articles of Association, the Board shall appoint or remove the g
820、eneral manager and the secretary of the Board; the Board shall appoint or remove the deputy general manager and other senior management (including the chief financial officer) of the Company based on the nomination by the general manager and determine their remunerations and rewards and penalties. T
821、he human resource department of the Company shall make routine appraisal and evaluation on the performance of Directors, supervisors and senior management and Remuneration and Appraisal Committee shall make inspection and evaluation on their performance to determine their remunerations at the end of
822、 the year. During the reporting period, the Company adopted the equity completion grant for the reserved portion of Phase IV of the Share Incentive Scheme and the first exercise/unlocking work of the interest of the first grant portion has been completed successfully, which further perfected the inc
823、entive and disciplinary mechanism and mechanism of the shareholders shares benefits and risks with the Qingdao Haier Co., Ltd. 2015 Annual Report 104 / 239 management of the Company, so as to enhance the competitiveness and promote the sustainable and sound development of the Company. 6）Stakeholders
824、: The Company was able to fully respect and protect the lawful rights and interests of banks, other creditors, employees, consumers and other stakeholders. Meanwhile, the Company actively took part in public welfare undertaking in such place where it operates, placed a lot of emphasis on environment
825、 protection, performed its social duties earnestly and worked together with these stakeholders actively with good communication to promote the sustainable and sound development of the Company. For details, please refer to relevant information in 2015 Social Responsibility Report of Qingdao Haier Co.
826、, 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 strictly in accordance with relevant laws and regulations including the Article
827、s of Association, Administrative Measure for Information Disclosure and requirements in the Information Disclosure Management System of the Company, Work Rules and Procedures Regarding the Annual Report and the Management System for Investor Relation, proactively communicated with regulatory authori
828、ties and investors and designated newspapers including Shanghai Securities News, China Securities Journal, Securities Times and Securities Daily for information disclosure to ensure that all shareholders access to such information equally. The Company authorized the secretary to the Board to in char
829、ge of information disclosure, reception of visits by shareholders and handling of shareholders enquiries. Meanwhile, the Company broadened the communication channel for investors to know relevant information of the Company through telephone conference calls after periodical reporting and occasionall
830、y holding on-site and online forums; the Company could disclose the particulars about the substantial shareholders and ultimate controller and changes in shareholding of the Company on a timely basis in accordance with relevant requirements. With respect to the significant connected transactions, th
831、e Company performed necessary approval procedures and disclosed relevant information strictly in compliance with the Articles of Association and Fair Decision-Making System for Connected Transactions to protect the interests of investors. During the reporting period, the Company further perfected th
832、e confidentiality procedure for information disclosure strictly in complied with the Registration System of Insiders, the Responsibility System for Major Errors in Information Disclosure in Annual Reports and the Management System of External Information Users to ensure the fair and equity of inform
833、ation disclosure. 8) Implementation of corporate governance campaign in 2015: During the reporting period, the Company continued to carry out works relating to solution of business competition and reduction of connected transactions. In 2015, trading volume of connected transactions regarding procur
834、ement amounted to RMB27.6 billion, which accounted for 32.8% of the similar transactions, representing a decrease of 3.8 pct. pt. as compared to the same period of the previous year. Trading volume of connected transactions regarding sales amounted to RMB7.56 billion, Qingdao Haier Co., Ltd. 2015 An
835、nual Report 105 / 239 which accounted for 8.4% of the similar transactions, representing a decrease of 3.6 pct. pt. as compared to the same period of the previous year. The optimization of the connected transactions has been effective. The Company will continue to increase investment in independent
836、purchase and promote the continuous optimization of connected transactions. Leveraging on the further implementation of governance campaign and enhancing the establishment of fundamental systems, the Company further improved the corporate governance structure and improved the corporate governance. T
837、he Company carried out various activities to strengthen the consciousness of learning and further strengthened the consciousness on regulating governance in listed companies among Directors, Supervisors and senior management of the listed companies with organizational training to improve the ability
838、 to regulate governance and continuously improve and perfect corporate governance of the Company, thus to protect the minority interests and to guarantee and promote the healthy, stable and sustainable development of the Company. II. Introduction to the Shareholders General Meeting Meeting Date Inde
839、x for details of websites designated for publishing resolutions Date of disclosure 2014 Annual General Meeting 10 June 2015 For details, please refer to the Announcement on Resolutions Passed at the 2014 Annual General Meeting of Qingdao Haier Co., Ltd. (L2015-021) published by the Company on the we
840、bsite of Shanghai Stock Exchange () and the four major securities newspapers 11 June 2015 2015 First Extraordinary General Meeting 24 August 2015 For details, please refer to the Announcement on Resolutions Passed at the 2015 First Extraordinary General Meeting of Qingdao Haier Co., Ltd. (L2015-038)
841、 published by the Company on the website of Shanghai Stock Exchange () and the four major securities newspapers 25 August 2015 Explanation of Shareholders general meetings (1) The 2014 Annual General Meeting of the Company (the 2014 AGM) was held by way of on-site voting and network voting by poll a
842、t Room A108, Haier University, Haier Information Park, No.1 Haier Road, Qingdao, the PRC at the afternoon on 10 June 2015. The Companys share capital in aggregate amounted to 3,046,125,134 shares. There were 271 shareholders of the Company in attendance either in person or by proxy at the 2014 AGM,
843、holding a total of 1,961,943,063 shares, representing 64.40% of the total number of shares of the Company with voting rights. The Directors, Supervisors and senior management of the Company as well as the lawyers engaged by the Company also attended the 2014 AGM. The 2014 AGM was convened by the Boa
844、rd of the Company. Mr. Liang Haishan, Chairman of the Board, presided over the 2014 AGM. The Company had 11 Directors, of whom 4 Directors attended the 2014 AGM (Director Wu Changqi, Liu Haifeng David, Zhou Hongbo, Qingdao Haier Co., Ltd. 2015 Annual Report 106 / 239 Peng Jianfeng, Wu Cheng, Shi Tia
845、ntao, Timothy Yung Cheng Chen was unable to attend the 2014 AGM due to personal engagement); the Company had 3 Supervisors, all of whom attended the 2014 AGM. The secretary to the Board of the Company attended the 2014 AGM and other members of senior management of the Company were invited to attend
846、the 2014 AGM as non-voting participants. (2) The 2015 First Extraordinary General Meeting of the Company (the 2015 First EGM) was held by way of on-site voting and network voting by poll at Room A108, Haier University, Haier Information Park, No.1 Haier Road, Qingdao, the PRC at afternoon on 24 Augu
847、st 2015. The Companys share capital in aggregate amounted to 6,123,154,268 shares. Attendance of shareholders and proxies at the 2015 First EGM is as follows: there were 77 shareholders of the Company in attendance either in person or by proxy at the 2015 First EGM, holding a total of 3,336,244,008
848、shares, representing 54.48% of the total number of shares of the Company with voting rights. The Directors, Supervisors and senior management of the Company as well as the lawyers engaged by the Company also attended the 2015First EGM. The 2015 First EGM was convened by the Board of the Company. Mr.
849、 Liang Haishan, Chairman of the Board, presided over the 2015 First EGM. The Company had 11 Directors, of whom 4 Directors attended the 2015 First EGM (Director Wang Xiaonan, Wu Changqi, Zhou Hongbo, Wu Cheng, Shi Tiantao, Timothy Yung Cheng Chen, Liu Haifeng David was unable to attend the 2015 Firs
850、t EGM due to personal engagement); the Company had 3 Supervisors, all of whom attended the 2015 First EGM. The secretary to the Board of the Company attended the 2015 First EGM and other members of senior management of the Company were invited to attend the 2015 First EGM. III. Performance of Duties
851、 by Directors (I) Attendance of Board meetings and general meetings by Directors Name of Direct or Whether an Independent Director or not Attendance of Board meetings Attendance of general meetings Required attendances of Board meetings Attendance in person Attendances by way of communication Attend
852、ance by proxy Absence Absence from two consecutive meetings in person or not Attendances at general meetings Liang Haishan No 10 10 4 0 0 No 2 Tan Li Xia No 10 10 4 0 0 No 2 Wang Xiaonan No 10 10 5 0 0 No 1 Peng Jianfeng No 10 9 9 1 0 No 1 Wu Changqi No 10 10 9 0 0 No 0 Zhou Hongbo No 10 10 8 0 0 No
853、 0 Liu No 10 9 9 1 0 No 0 Qingdao Haier Co., Ltd. 2015 Annual Report 107 / 239 Haifeng David LIU Feng Yes 4 4 3 0 0 No 1 Dai Deming Yes 6 6 5 0 0 No 1 WU Cheng Yes 10 10 9 0 0 No 0 Shi Tiantao Yes 10 10 9 0 0 No 0 Timothy Yung Cheng Chen Yes 10 9 9 1 0 No 0 Number of Board meetings held in the year
854、10 Of which: Number of on-site meetings 0 Number of meetings held by way of communication 4 Number of meetings held both on site and by way of communication 6 (II) Independent Directors objection to the relevant matters of the Company Nil IV. Major Opinions and Suggestions of the Special Committees
855、of the Board in Performing their Duties during the Reporting Period (1) Audit Committee: during the reporting period, the Company convened 8 meetings of the Audit Committee to consider the annual report audit-related work for three times, namely, pre-audit, mid-audit and post audit and made relevant
856、 arrangement. The Audit Committee believed that the 2014 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 Companys assets and liabilities for the year ended 31 D
857、ecember 2014 and operating results and cash flow for the year 2014. There was no significant unresolved disagreement between accounting and auditing. There was no material risk affecting the Companys operation. The Company operated prudently and would be able to continue as a going concern. Other me
858、etings considered the annual budget of connected transactions, internal control self-assessment reports, profit distribution plan, appointment of accounting firm, acquisition of assets overseas White Goods of the Group, acquisition of minority shareholders interest from Mitsubishi/Carrier, and the f
859、irst quarterly report, the semi-annual report and the third quarterly report of 2015. 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 3 meetings of the
860、Remuneration and Appraisal Committee to consider the grant of interest of the reserved portion of the Phase IV Share Incentive, the first exercise/unlocking of the first grant portion and the annual remuneration package of Directors, supervisors and senior management. The Qingdao Haier Co., Ltd. 201
861、5 Annual Report 108 / 239 Remuneration and Appraisal Committee agreed the above resolutions and submitted the same to the Board for consideration. (3) Nomination Committee: during the reporting period, the Company convened 2 meetings of the Nomination Committee to summarize the annual performance of
862、 duties by Directors, supervisors and senior management and consider resolution to re-elect independent directors. The Nomination Committee agreed the above resolutions. (4) Strategy Committee: during the reporting period, the Company convened 3 meetings of the Strategy Committee to consider the pla
863、n for return of shareholders in the next three years, acquisition of assets of overseas White Goods of the Group, trusted management assets and acquisition of minority shareholdings from Mitsubishi/Carrier. The Strategy Committee agreed the above resolutions and submitted the same to the Board for c
864、onsideration. V. Supervisory Committees Explanation on Risks about the Company During the reporting period, the Supervisory Committee had no disagreement on any supervisory matters. VI. Statements of the Company on Inability to Maintain the Independence or the Ability of Independent Operations betwe
865、en the Company and the Controlling Shareholders with respect to Business, Personnel, Assets, Organization and Finance Corresponding solutions, working progress and subsequent working plans of the Company in case of horizontal competition In recent years, the Company made constant efforts in optimizi
866、ng connected transactions: In 2015, the Company further reduced the number of connected transactions by acquiring overseas White Goods assets and setting up an independent platform for exports and sales. In 2015, the trading amount of connected transactions regarding procurement amounted to RMB27.6
867、billion, which accounted for 32.8% of similar transactions, representing a year-on-year decrease of 3.8 pct. pt.; the trading amount of connected transactions regarding sales amounted to RMB7.6 billion, which accounted for 8.4% of similar transactions, representing a year-on-year decrease of 3.6 pct
868、. pt. . The optimization of connected transactions was obvious. So far, the Company continued to promote work in respect of reducing connected transactions and solving horizontal competition according to relevant commitment set out in the Announcement of Qingdao Haier on the further support of devel
869、opment of Qingdao Haier, solutions of horizontal competition and decrease of connected transactions by controlling shareholder (L2011-001). Qingdao Haier Co., Ltd. 2015 Annual Report 109 / 239 VII. Establishment and Implementation of Appraisal and Incentive Mechanism for Senior Management during the
870、 Reporting Period In 2015, the Company adopted an overall compensation system connecting sales force with their orders and remuneration and tied to the strategic income statement for the compensation system of the management. This system was based on the strategic income statement and used Vertical
871、and Horizontal Two-dimensional Lattice Model, in which the vertical dimension reflected the strategy support and minor self-evolvement and upgrading, while the horizontal dimension reflected the competitiveness of market. The competitiveness of compensation was determined by such elements as support
872、 for strategy, competitiveness of market target and minor self-evolvement and upgrading. The senior management receives annual appraisal, which was the key factor to performance bonus and development. On one hand, the Companys overall compensation system of connecting sales force with their orders a
873、nd remuneration diversified the way of salary distribution of the management, and made the compensation mechanism for management more flexible on the other hand, which drove the innovation of management. Meanwhile, the Companys salary incentive system was further improved, the incentive and restrict
874、ion mechanism was strengthened and a mechanism that shares interests and risks with shareholders and management was formulated by implementing incentive tools such as Share Option Incentive Scheme. . Whether to disclose the self-assessment report on internal control Applicable Not applicable For det
875、ails, please refer to the 2015 Internal Control Assessment Report of Qingdao Haier Co., Ltd disclosed on the same date of this report. Explanations on Material Defects Found in Internal Control during the Reporting Period Applicable Not applicable . Relevant Explanations on the Audit Report of Inter
876、nal Control The Companys auditor Shandong Hexin Accountants LLP has audited the efficiency of internal control relating to the financial report of the Company, and has issued its standard unqualified auditors report for the Companys internal control (Hexin Shen Zi (2016) No.000366). For further deta
877、ils of the Audit Report of Internal Control of Qingdao Haier Co., Ltd., please refer to relevant announcements published on the website of the Shanghai Stock Exchange () on 29 April 2016. Whether to disclose the audit report on internal control: Yes Qingdao Haier Co., Ltd. 2015 Annual Report 110 / 2
878、39 SECTION X RELEVANT INFORMATION ON CORPORATE BONDS Applicable Not applicable Qingdao Haier Co., Ltd. 2015 Annual Report 111 / 239 SECTION XI FINANCIAL REPORT I. Auditors Report Applicable Not applicable Auditors Report Hexin Shen Zi (2016) No. 000366 To Shareholders of Qingdao Haier Co., Ltd.: The
879、 Company have audited the accompanying financial statements of Qingdao Haier Co., Ltd. (hereinafter referred to as Haier Company), which comprise the consolidated and parent company balance sheets as at 31 December 2015, and the consolidated and parent company income statements for the year of 2015,
880、 the consolidated and parent company cash flow statements, the consolidated and parent company statements of changes in shareholders equity and the notes to the financial statements. I. Managements Responsibility for the Financial Statements Management of Haier Company is responsible for the prepara
881、tion and fair presentation of these financial statements. This responsibility includes: (1) preparing these financial statements in accordance with the requirements of Accounting Standards for Business Enterprises, and presenting fairly; (2) designing, implementing and maintaining the internal contr
882、ol necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. II. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. The Company conducted our audit in accorda
883、nce with China Standards on Auditing. Those standards require the Company to comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain au
884、dit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the audito
885、r considers internal control relevant to the entitys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness o
886、f accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. The Company believes that the audit evidence it has obtained is sufficient and appropriate to provide a basis for our audit opinion. Qingdao Haier Co., Ltd. 2015 Annual Report 112 /
887、 239 III. Opinion In our opinion, the accompanying financial statements of Haier Company present fairly, in all material respects, the consolidated and parent companys financial position of Haier Company as at 31 December 2015, and consolidated and parent companys operating results and consolidated
888、and parent companys cash flows for the year of 2015 in accordance with the requirements of Accounting Standards for Business Enterprises. Shandong Hexin Accountants LLP China Certified Public Accountant: Zhao Bo Jinan, the PRC China Certified Public Accountant: Wang Lin 28 April 2016 Qingdao Haier C
889、o., Ltd. 2015 Annual Report 113 / 239 II. Financial Statements Consolidated Balance Sheet 31 December 2015 Prepared by: Qingdao Haier Co., Ltd. Unit and Currency: RMB Items Notes Closing balance Opening balance Current Assets: Monetary Capital VII. 1 24,714,814,951.97 31,225,415,815.88 Clearing sett
890、lement funds Placements with banks Financial assets measured at fair value and changes of which included in current profit and loss VII.2 22,069,897.04 103,668,887.71 Derivative financial assets Bills receivables VII. 3 12,673,651,612.86 16,474,120,740.17 Trade receivables VII.4 6,141,390,930.87 6,7
891、36,377,962.77 Prepayments VII.5 556,872,003.39 836,083,992.96 Premiums receivable Reinsurance accounts receivables Reinsurance contract reserves receivable Interests receivables VII.6 183,731,216.46 178,522,845.11 Dividends receivables 85,826,158.26 54,524,472.84 Other receivables VII.7 478,574,109.
892、77 604,590,457.24 Financial assets purchased under resale agreements Inventories VII.8 8,559,244,039.09 9,021,640,940.91 Assets classified as held for sale Non-current assets due within one year Other current assets VII.9 1,451,065,197.30 791,018,741.65 Total current assets 54,867,240,117.01 66,025,
893、964,857.24 Non-current assets: Loans and advances granted Available-for-sale financial assets VII.10 2,837,318,201.20 1,430,621,348.35 Held-to-maturity investments Long-term receivables Long-term equity investments VII.11 4,958,908,333.93 3,582,596,477.92 Investment properties VII.12 3,449,331.95 30
894、,582,852.72 Fixed assets VII.13 8,420,548,468.52 7,372,658,455.93 Construction in progress VII.14 1,391,471,823.07 1,341,216,468.78 Construction materials Disposals of fixed assets VII.15 74,096,355.04 31,624,205.58 Biological assets for production Fuel assets Intangible assets VII.16 1,453,470,715.
895、09 1,008,290,734.35 Development expenses VII.17 78,064,195.82 68,341,844.86 Goodwill VII.18 392,484,932.55 74,530,241.86 Qingdao Haier Co., Ltd. 2015 Annual Report 114 / 239 Long-term deferred expenditures VII.19 113,053,145.87 106,330,304.35 Deferred income tax assets VII.20 971,483,089.80 919,731,
896、174.63 Other non-current assets VII.21 399,084,091.53 356,230,677.87 Total non-current assets 21,093,432,684.37 16,322,754,787.20 Total assets 75,960,672,801.38 82,348,719,644.44 Current liabilities: Short-term borrowings VII.22 1,873,108,241.50 2,291,941,025.91 Borrowings from central bank Absorbin
897、g deposit and deposit in inter-bank market Placements from banks Financial liabilities measured at fair value and changes of which included in current profit and loss VII.23 7,707,414.12 42,686.85 Derivative financial liabilities Bills payable VII.24 11,596,885,346.06 14,243,037,672.77 Trade payable
898、s VII.25 14,713,516,620.92 15,312,971,646.36 Payments received in advance VII.26 3,170,457,870.50 4,336,427,690.63 Disposal of repurchased financial assets Handling charges and commissions payable Staff remuneration payable VII.27 1,233,544,265.57 1,128,162,573.11 Taxes payable VII.28 909,937,816.09
899、 1,531,384,978.58 Interests payable VII.29 15,081,416.34 7,921,318.87 Dividends payable VII.30 133,382,009.73 147,312,376.11 Other payables VII.31 6,056,795,354.04 7,083,921,880.47 Reinsurance accounts payable Deposits for insurance contracts Consumer deposits for trading in securities Amounts due t
900、o issuer for securities underwriting Liabilities classified as held for sale Non-current liabilities due within one year VII.32 72,898,028.33 Other current liabilities Total current liabilities 39,783,314,383.20 46,083,123,849.66 Non-current liabilities: Long-term borrowings VII.33 297,241,293.20 De
901、bentures payable VII.34 1,107,734,516.43 1,800,700,630.05 Including: preference shares Perpetual bonds Long-term payable VII.35 59,916,852.02 Long-term employee benefits payable VII.36 33,209,406.02 24,531,136.34 Special payable Estimated liabilities VII.37 1,899,543,637.19 2,251,547,010.98 Deferred
902、 income VII.38 264,120,554.33 135,707,501.91 Deferred income tax liabilities VII.20 113,330,102.11 130,113,355.29 Other non-current liabilities Total non-current liabilities 3,775,096,361.30 4,342,599,634.57 Total liabilities 43,558,410,744.50 50,425,723,484.23 Qingdao Haier Co., Ltd. 2015 Annual Re
903、port 115 / 239 Owners equity Share capital VII.39 6,123,154,268.00 3,045,935,134.00 Other equity instruments Including: preference shares Perpetual bonds Capital reserve VII.40 83,383,194.51 5,978,787,439.45 Less: Treasury stock VII.41 77,604,544.70 47,160,730.00 Other comprehensive income VII.42 63
904、3,183,460.03 577,613,439.63 Special reserve Surplus reserve VII.43 2,026,085,301.23 2,024,105,532.62 General risk provisions Undistributed profits VII.44 13,905,774,481.88 13,029,187,314.71 Total equity attributable to owners of the parent company 22,693,976,160.95 24,608,468,130.41 Minority interes
905、ts 9,708,285,895.93 7,314,528,029.80 Total owners equity 32,402,262,056.88 31,922,996,160.21 Total liabilities and owners equities 75,960,672,801.38 82,348,719,644.44 Legal representative: Liang Haishan Chief accountant: Gong Wei Person in charge of accounting department: Yin Wenjun (尹文峻) Balance Sh
906、eet of the Parent Company 31 December 2015 Prepared by: Qingdao Haier Co., Ltd. Unit and Currency: RMB Items Notes Closing balance Opening balance Current Assets: Monetary Capital 562,827,007.96 2,574,988,196.28 Financial assets measured at fair value and changes of which included in current profit
907、and loss Derivative financial assets Notes receivables 199,998,373.14 233,249,781.27 Trade receivables XVII.1 208,603,253.46 418,826,810.97 Prepayments 12,540,384.04 18,947,243.80 Interests receivables 19,480,111.12 Dividends receivables 230,081,082.42 1,041,461,029.41 Other receivables XVII.2 61,34
908、4,421.55 948,024.95 Inventories 57,403,412.46 37,191,061.86 Assets classified as held for sale Non-current assets due within one year Other current assets Total current assets 1,332,797,935.03 4,345,092,259.66 Non-current assets: Available-for-sale financial assets 522,942,584.08 509,283,509.72 Held
909、-to-maturity investments Long-term receivables Long-term equity investments XVII.3 14,141,733,112.49 8,597,830,164.76 Qingdao Haier Co., Ltd. 2015 Annual Report 116 / 239 Investment properties Fixed assets 127,222,054.64 136,611,658.02 Construction in progress 17,551,808.87 3,445,371.41 Construction
910、 materials Disposals of fixed assets Biological assets for production Fuel assets Intangible assets 7,679,047.68 8,351,664.99 Development expenses Goodwill Long-term deferred expenditures Deferred income tax assets 9,952,751.78 7,475,901.26 Other non-current assets Total non-current assets 14,827,08
911、1,359.54 9,262,998,270.16 Total assets 16,159,879,294.57 13,608,090,529.82 Current liabilities: Short-term borrowings Financial liabilities measured at fair value and changes of which included in current profit and loss Derivative financial liabilities Bills payable Trade payables 792,433,118.67 183
912、,884,607.65 Payments received in advance 1,599,348.89 Staff remuneration payable 35,094,333.55 27,049,426.39 Taxes payable 29,967,928.75 50,814,082.00 Interests payable Dividends payable Other payables 2,597,200,912.54 1,370,247,395.86 Liabilities classified as held for sale Non-current liabilities
913、due within one year Other current liabilities Total current liabilities 3,456,295,642.40 1,631,995,511.90 Non-current liabilities: Long-term borrowings Debentures payable Including: preference shares Perpetual bonds Long-term payable 20,000,000.00 Long-term employee benefits payable Special payables
914、 Estimated liabilities Deferred income 17,700,000.00 Deferred income tax liabilities 3,325,062.74 4,198,218.27 Other non-current liabilities Total non-current liabilities 41,025,062.74 4,198,218.27 Total liabilities 3,497,320,705.14 1,636,193,730.17 Owners equity： Share capital 6,123,154,268.00 3,04
915、5,935,134.00 Other equity instruments Including: preference shares Qingdao Haier Co., Ltd. 2015 Annual Report 117 / 239 Perpetual bonds Capital reserve 2,229,511,649.19 5,045,616,941.16 Less: Treasury stock 77,604,544.70 47,160,730.00 Other comprehensive income 18,842,022.25 7,231,809.03 Special res
916、erve Surplus reserve 1,332,647,187.44 1,138,128,545.32 Undistributed profits 3,036,008,007.25 2,782,145,100.14 Total owners equity 12,662,558,589.43 11,971,896,799.65 Total liabilities and owners equities 16,159,879,294.57 13,608,090,529.82 Legal representative: Liang Haishan Chief accountant: Gong
917、Wei Person in charge of accounting department: Yin Wenjun (尹文峻) Consolidated Income Statement January-December 2015 Unit and Currency: RMB Items Notes Current amount Prior amount . Total operating revenue 89,748,320,410.91 96,929,763,894.36 Including: operating revenue VII.45 89,748,320,410.91 96,92
918、9,763,894.36 Interest income Insurance premiums earned Fee and commission income . Total cost of operations 84,526,081,762.99 89,934,380,570.26 Including: operating cost VII.45 64,658,463,207.53 70,170,401,158.93 Interest expenses Fee and commission expenses Insurance withdrawal payment Net payment
919、from indemnity Net provisions for insurance contract Insurance policy dividend paid Reinsurance cost Business taxes and surcharge VII.46 397,251,039.85 404,547,062.67 Selling expenses VII.47 13,101,282,436.95 12,579,781,619.54 Administrative expenses VII.48 6,549,193,839.44 6,813,114,797.83 Financia
920、l expenses VII.49 -498,120,405.83 -256,648,580.46 Loss in assets impairment VII.50 318,011,645.05 223,184,511.75 Add: income from change in fair value (losses are represented by -) VII.51 -90,223,059.50 112,363,366.12 Investment income (losses are represented by -) VII.52 1,320,302,216.61 1,192,580,
921、008.87 Including: investment income of associates and joint ventures Exchange gain (losses are represented by -) . Operating profit (losses are represented by -) 6,452,317,805.03 8,300,326,699.09 Add: non-operating income VII.53 618,457,263.82 378,335,366.09 Including: gain from disposal of non-curr
922、ent assets Qingdao Haier Co., Ltd. 2015 Annual Report 118 / 239 Less: non-operating expenses VII.54 95,916,162.05 102,273,976.56 Including: Loss from disposal of non-current assets . Total profit (total losses are represented by -) 6,974,858,906.80 8,576,388,088.62 Less: income tax expense VII.55 1,
923、052,769,417.97 1,527,486,745.62 . Net profit (net losses are represented by -) 5,922,089,488.83 7,048,901,343.00 Net profit attributable to owners of the parent company 4,300,760,542.82 5,337,541,039.32 Profit or loss attributable to minority shareholders 1,621,328,946.01 1,711,360,303.68 VI. Other
924、comprehensive income, net of tax VII.56 73,297,094.11 511,746,848.93 Other comprehensive income attributable to owners of the parent company, net of tax 55,715,670.67 412,138,693.29 (I) Other comprehensive income that will not be reclassified subsequently to profit or loss -6,265,217.22 22,971,042.6
925、2 1. Changes in net liabilities or net assets arising from re-measurement of defined benefit plans -6,265,217.22 22,971,042.62 2. Share of other comprehensive income of investees that cannot be reclassified to profit or loss under equity method (II) Other comprehensive income to be reclassified subs
926、equently to profit or loss 61,980,887.89 389,167,650.67 1. Share of other comprehensive income of investees that will be reclassified subsequently to profit or loss under equity method 39,584,241.91 40,068,730.03 2. Gain or loss from change in fair value of available-for-sale financial assets 33,989
927、,723.80 322,632,665.08 3. Gain or loss arising from reclassification from held-to-maturity investments to available-for-sale financial assets 4. Effective portion of gain or loss arising from cash flow hedging instruments 5. Exchange differences on translation of financial statements denominated in
928、foreign currencies -11,593,077.82 26,466,255.56 6. Other Other comprehensive income attributable to minority shareholders, net of tax 17,581,423.44 99,608,155.64 . Total comprehensive income 5,995,386,582.94 7,560,648,191.93 Total comprehensive income attributable to the shareholders of parent compa
929、ny 4,356,476,213.49 5,749,679,732.61 Total comprehensive income attributable to the minority shareholders 1,638,910,369.45 1,810,968,459.32 . Earnings per share: (I) Basic earnings per share (RMB/share) XVIII.1 0.705 0.933 (II) Diluted earnings per share (RMB/share) XVIII.1 0.705 0.932 Qingdao Haier
930、 Co., Ltd. 2015 Annual Report 119 / 239 For the business combination under common control effected in the current period, the net profit recognized by the merged party before the combination was RMB223,063,608.99, and the net profit recognized by the merged party in the previous period was nil. Lega
931、l representative: Liang Haishan Chief accountant: Gong Wei Person in charge of accounting department: Yin Wenjun (尹文峻) Income Statement of the Parent Company January-December 2015 Unit and Currency: RMB Items Notes Current amount Prior amount . Operating revenue XVII.4 2,573,182,435.31 2,192,966,394
932、.66 Less: Operation cost XVII.4 1,926,771,620.58 1,624,174,850.41 Business taxes and surcharge 12,977,177.74 7,363,098.35 Selling expenses 145,447,543.14 93,645,130.26 Administrative expenses 363,775,327.41 364,227,286.05 Financial expenses -84,722,654.35 -33,860,962.14 Loss in assets impairment -4,
933、996,712.21 9,261,395.48 Add: income from change in fair value (losses are represented by -) Investment income (losses are represented by -) XVII.5 1,695,629,598.98 648,275,569.64 Including: investment income of associates and joint ventures . Operating profit (losses are represented by -) 1,909,559,
934、731.98 776,431,165.89 Add: non-operating income 66,879,624.47 47,160,881.21 Including: gain from disposal of non-current assets Less: non-operating expenses 3,549,905.23 862,828.21 Including: Loss from disposal of non-current assets . Total Profit (losses are represented by -) 1,972,889,451.22 822,7
935、29,218.89 Less: income tax expense 27,703,030.06 89,016,122.71 . Net Profit (net losses are represented by -) 1,945,186,421.16 733,713,096.18 V. Other comprehensive income, net of tax 11,610,213.22 5,212,175.21 (I) Other comprehensive income will not be reclassified subsequently to profit or loss 1.
936、 Changes in net liabilities or net assets arising from re-measurement of defined benefit plans 2. Share of other comprehensive income of investees that cannot be reclassified to profit or loss under equity method (II) Other comprehensive income to be reclassified subsequently to profit or loss 11,61
937、0,213.22 5,212,175.21 1. Share of other comprehensive income of investees that will be reclassified Qingdao Haier Co., Ltd. 2015 Annual Report 120 / 239 subsequently to profit or loss under equity method 2. Gain or loss from change in fair value of available-for-sale financial assets 11,610,213.22 5
938、,212,175.21 3. Gain or loss arising from reclassification from held-to-maturity investments to available-for-sale financial assets 4. Effective portion of gain or loss arising from cash flow hedging instruments 5. Exchange differences on translation of financial statements denominated in foreign cur
939、rencies 6. Other VI. Total comprehensive income 1,956,796,634.38 738,925,271.39 VII. Earnings per share: (I) Basic earnings per share (RMB/ share) (II) Diluted earnings per share (RMB/share) Legal representative: Liang Haishan Chief accountant: Gong Wei Person in charge of accounting department: Yin
940、 Wenjun (尹文峻) Consolidated Cash Flow Statement January-December 2015 Unit and Currency: RMB Items Notes Current amount Prior amount . Cash flows from operating activities： Cash received from the sale of goods and rendering of services 110,869,088,852.15 102,934,215,503.17 Net increase in consumer an
941、d interbank deposits Net increase in borrowing from PBOC Net cash increase in borrowing from other financial institutes Cash received from premiums under original insurance contract Net cash received from reinsurance business Net increase in deposits of policy holders and investment Net increase fro
942、m the disposal of financial assets measured at fair value and changes of which included in current profit and loss Qingdao Haier Co., Ltd. 2015 Annual Report 121 / 239 Cash paid for interest, bank charges and commissions Net increase in cash borrowed Net increase in cash received from repurchase ope
943、ration Refunds of taxes 612,217,878.12 374,918,483.82 Cash received from other related operating activities VII.57 985,008,101.39 758,897,048.75 Sub-total of cash inflows from operating activities 112,466,314,831.66 104,068,031,035.74 Cash paid on purchase of goods and services 81,161,991,549.29 73,
944、667,726,571.88 Net increase in loans and advances Net increase in deposits in PBOC and interbank Cash paid for compensation payments under original insurance contract Cash paid for interest, bank charges and commissions Cash paid for insurance policy dividend Cash paid to and on behalf of employees
945、7,864,497,365.88 7,522,736,415.84 Cash paid for all types of taxes 7,272,435,363.68 6,271,581,316.51 Cash paid to other operation related activities VII.58 10,587,789,939.88 9,836,625,433.16 Sub-total of cash outflows from operating activities 106,886,714,218.73 97,298,669,737.39 Net cash flows from
946、 operating activities VII.63 5,579,600,612.93 6,769,361,298.35 . Cash flows from investing activities: Cash received from disposal of investments 1,053,008,693.06 11,578,295.58 Cash received from return on investments 108,134,781.31 70,236,329.50 Net cash received from the disposal of fixed assets,
947、intangible assets and other long term assets 11,208,475.16 98,915,961.08 Net cash received from disposal of subsidiaries and other operating entities 498,099,921.65 404,649,672.19 Cash received from other investment related activities VII.59 10,972,523.38 43,084,247.15 Sub-total of cash inflows from
948、 investing activities 1,681,424,394.56 628,464,505.50 Cash paid on purchase of fixed assets, intangible assets and other long term assets 2,491,741,022.92 2,269,936,328.78 Cash paid for investments 3,709,219,060.70 1,864,948,812.60 Net increase in secured loans Net cash paid on acquisition of subsid
949、iaries and other operating entities 5,672,266,259.21 Cash paid on other investment related activities VII.60 81,601,742.20 132,857,621.10 Qingdao Haier Co., Ltd. 2015 Annual Report 122 / 239 Sub-total of cash outflows from investing activities 11,954,828,085.03 4,267,742,762.48 Net cash flows from i
950、nvesting activities -10,273,403,690.47 -3,639,278,256.98 . Cash flows from financing activities: Cash received from investment 342,479,145.89 7,110,116,929.58 Including: cash received by subsidiaries from minority shareholders investment Cash received from borrowings 6,603,489,224.90 6,697,670,732.7
951、3 Cash received from issuing bonds Cash received from other financing related activities VII.61 17,063,242.50 Sub-total of cash inflows from financing activities 6,963,031,613.29 13,807,787,662.31 Cash paid on repayment of borrowings 6,939,990,302.96 5,074,669,053.08 Cash paid on distribution of div
952、idends, profits, or interest expenses 1,764,209,204.58 1,490,783,422.99 Including: dividend, profit paid to minority shareholders by subsidiaries Cash paid on other financing activities VII.62 154,442,801.98 88,598,125.53 Sub-total of cash outflows from financing activities 8,858,642,309.52 6,654,05
953、0,601.60 Net cash flows from financing activities -1,895,610,696.23 7,153,737,060.71 . Effect of fluctuations in exchange rates on cash and cash equivalents 151,920,567.09 -137,950,662.95 . Net increase in cash and cash equivalents -6,437,493,206.68 10,145,869,439.13 Add: balance of cash and cash eq
954、uivalents at the beginning of the period VII.64 31,120,319,710.77 20,974,450,271.64 . Balance of cash and cash equivalents at the end of the period VII.64 24,682,826,504.09 31,120,319,710.77 Legal representative: Liang Haishan Chief accountant: Gong Wei Person in charge of accounting department: Yin
955、 Wenjun (尹文峻) Cash Flow Statement of the Parent Company January-December 2015 Unit and Currency: RMB Items Notes Current amount Prior amount . Cash flows from operating activities： Cash received from the sale of goods and rendering of services 2,217,575,422.31 1,531,868,775.27 Qingdao Haier Co., Ltd
956、. 2015 Annual Report 123 / 239 Refunds of taxes 42,146,929.16 9,618,928.65 Cash received from other related operating activities 74,003,814.39 60,881,420.48 Sub-total of cash inflows from operating activities 2,333,726,165.86 1,602,369,124.40 Cash paid on purchase of goods and services 909,137,414.2
957、0 749,469,031.82 Cash paid to and on behalf of employees 272,442,543.99 240,702,656.68 Cash paid for all types of taxes 161,291,640.06 68,998,341.67 Cash paid to other operation related activities 215,727,364.29 163,752,431.09 Sub-total of cash outflows from operating activities 1,558,598,962.54 1,2
958、22,922,461.26 Net cash flows from operating activities 775,127,203.32 379,446,663.14 . Cash flows from investing activities: Cash received from disposal of investments 315,000,000.00 730,101,800.00 Cash received from return on investments 1,996,893,804.09 133,380,745.79 Net cash received from the di
959、sposal of fixed assets, intangible assets and other long term assets Net cash received from disposal of subsidiaries and other operating entities Cash received from other investment related activities 2,889,970,671.77 Sub-total of cash inflows from investing activities 5,201,864,475.86 863,482,545.7
960、9 Cash paid on purchase of fixed assets, intangible assets and other long term assets 30,576,458.90 15,690,271.41 Cash paid for investments 6,685,765,290.81 1,656,892,514.09 Net cash paid on acquisition of subsidiaries and other operating entities Cash paid on other investment related activities Sub
961、-total of cash outflows from investing activities 6,716,341,749.71 1,672,582,785.50 Net cash flows from investing activities -1,514,477,273.85 -809,100,239.71 . Cash flows from financing activities: Cash received from investment 251,306,680.00 3,426,507,421.81 Cash received from borrowings Cash rece
962、ived from other financing related activities Sub-total of cash inflows from financing activities 251,306,680.00 3,426,507,421.81 Cash paid on repayment of borrowings Qingdao Haier Co., Ltd. 2015 Annual Report 124 / 239 Cash paid on distribution of dividends, profits, or interest expenses 1,483,786,3
963、10.61 1,251,584,532.40 Cash paid on other financing activities 47,397,554.88 - Sub-total of cash outflows from financing activities 1,531,183,865.49 1,251,584,532.40 Net cash flows from financing activities -1,279,877,185.49 2,174,922,889.41 . Effect of fluctuations in exchange rates on cash and cas
964、h equivalents 7,066,067.70 -1,690,872.78 . Net increase in cash and cash equivalents -2,012,161,188.32 1,743,578,440.06 Add: balance of cash and cash equivalents at the beginning of the period 2,574,988,196.28 831,409,756.22 . Balance of cash and cash equivalents at the end of the period 562,827,007
965、.96 2,574,988,196.28 Legal representative: Liang Haishan Chief accountant: Gong Wei Person in charge of accounting department: Yin Wenjun (尹文峻) Qingdao Haier Co., Ltd. 2015 Annual Report 125 / 239 Consolidated Statement of Changes in Equity January-December 2015 Unit and Currency: RMB Items Current
966、period Equity attributable to owners of the parent company Minority interests Total owners equity Share capital Other equity instruments Capital reserve Less: Treasury stock Other comprehensive income Special reserve Surplus reserve General risk provisions Undistributed profits Preference share Perp
967、etual bonds Others . Closing balance for the previous year 3,045,935,134.00 3,582,932,123.87 47,160,730.00 378,701,521.23 2,024,105,532.62 12,855,511,059.42 7,279,942,332.91 29,119,966,974.05 Add: changes in accounting policies Correction of previous errors The consolidation of enterprises under com
968、mon control 2,493,270,671.16 101,496,562.82 173,676,255.29 34,585,696.89 2,803,029,186.16 Others -97,415,355.58 97,415,355.58 . Opening balance for the current year 3,045,935,134.00 5,978,787,439.45 47,160,730.00 577,613,439.63 2,024,105,532.62 13,029,187,314.71 7,314,528,029.80 31,922,996,160.21 .
969、Increase/decrease and change of amount for the current period (decrease is represented by -) 3,077,219,134.00 -5,895,404,244.94 30,443,814.70 55,570,020.40 1,979,768.61 876,587,167.17 2,393,757,866.13 479,265,896.67 (I) Total comprehensive 55,715,670.67 4,300,760,542.82 1,638,910,369.45 5,995,386,58
970、2.94 Qingdao Haier Co., Ltd. 2015 Annual Report 126 / 239 income (II) Capital injection and reduction by owners 31,094,000.00 -2,849,424,761.21 30,443,814.70 -192,538,873.51 -1,732,849,861.60 979,763,087.99 -3,794,400,223.03 1. Ordinary shares invested by shareholders 31,094,000.00 220,212,680.00 -1
971、6,952,892.00 995,974,570.73 1,264,234,142.73 2. Capital injected by holders of other equity instruments - - - 3. Amount of shares payment credited to owners equity 2,490,000.00 2,490,000.00 4Others -3,072,127,441.21 47,396,706.70 -192,538,873.51 -1,732,849,861.60 -16,211,482.74 -5,061,124,365.76 (II
972、I) Profit distribution 194,518,642.12 -1,691,323,514.05 -224,915,591.31 -1,721,720,463.24 1. Appropriation to surplus reserves 194,518,642.12 -194,518,642.12 2Provisions for general risks 3Distribution to owners (or shareholders) -1,496,804,871.93 -224,915,591.31 -1,721,720,463.24 4Others (IV) Inter
973、nal transfer of owners equity 3,046,125,134.00 -3,046,125,134.00 1. Transfer of capital reserves into capital (or share capital) 3,046,125,134.00 -3,046,125,134.00 2. Transfer of surplus reserves into capital (or share capital) 3. Surplus reserves used for remedying loss 4Others (V) Special reserve
974、1. Appropriated for the current period 2. Utilized for the current period (VI) Others 145,650.27 -145,650.27 . Closing 6,123,154 83,383,1977,604,54633,183,4 2,026,085, 13,905,779,708,285,89532,402,262,05Qingdao Haier Co., Ltd. 2015 Annual Report 127 / 239 balance for the current period ,268.00 4.51
975、4.70 60.03 301.23 4,481.88 .93 6.88 Items Previous period Equity attributable to owners of the parent company Minority interests Total owners equity Share capital Other equity instruments Capital reserve Less: Treasury stock Other comprehensive income Special reserve Surplus reserve General risk pro
976、visions Undistributed profits Preference share Perpetual bonds Others . Closing balance for the previous year 2,720,835,940.00 614,930,304.56 18,753,515.32 1,952,899,233.79 9,186,744,529.78 5,536,698,221.13 20,030,861,744.58 Add: changes in accounting policies Correction of previous errors The conso
977、lidation of enterprises under common control 2,000,514.75 49,305,875.44 -172,307,423.16 23,966,739.86 -97,034,293.11 Others .Opening balance for the current year 2,720,835,940.00 616,930,819.31 68,059,390.76 1,952,899,233.79 9,014,437,106.62 5,560,664,960.99 19,933,827,451.47 .Increase/decrease and
978、change of amount for the current period (decrease is represented by -) 325,099,194.00 5,361,856,620.14 47,160,730.00 509,554,048.87 71,206,298.83 4,014,750,208.09 1,753,863,068.81 11,989,168,708.74 (I) Total comprehensive income 412,138,693.29 5,337,541,039.32 1,810,968,459.32 7,560,648,191.93 (II)
979、Capital injection and reduction by owners 325,099,194.00 5,459,271,975.72 47,160,730.00 102,058,106.02 5,839,268,545.74 1. Ordinary shares invested by shareholders 325,099,194.00 6,140,866,417.15 47,160,730.00 1,240,812,022.25 7,659,616,903.40 2. Capital injected by holders of other equity instrumen
980、ts 3. Amount of shares payment credited to owners equity 85,420,000.00 85,420,000.00 4Others -767,014,441.43 -1,138,753,916.23 -1,905,768,357.66 (III) Profit distribution 71,206,298.83 -1,322,790,831.23 -159,163,496.53 -1,410,748,028.93 1. Appropriation to surplus reserves 71,206,298.83 -71,206,298.
981、83 2Provisions for general risks 3Distribution to owners (or shareholders) -1,251,584,532.40 -159,163,496.53 -1,410,748,028.93 Qingdao Haier Co., Ltd. 2015 Annual Report 128 / 239 4Others (IV) Internal transfer of owners equity 1. Transfer of capital reserves into capital (or share capital) 2. Trans
982、fer of surplus reserves into capital (or share capital) 3. Surplus reserves used for remedying loss 4Others (V) Special reserve 1. Appropriated for the current period 2. Utilized for the current period (VI) Others -97,415,355.58 97,415,355.58 . Closing balance for the current period 3,045,935,134.00
983、 5,978,787,439.45 47,160,730.00 577,613,439.63 2,024,105,532.62 13,029,187,314.71 7,314,528,029.80 31,922,996,160.21 Legal representative: Liang Haishan Chief accountant: Gong Wei Person in charge of accounting department: Yi Wenjun (尹文峻) Statement of Changes in Equity of the Parent Company January-
984、December 2015 Unit and Currency: RMB Items Current period Share capital Other equity instruments Capital reserve Less: Treasury stock Other comprehensive income Special reserve Surplus reserve Undistributed profits Total owners equity Preference share Perpetual bon ds Others . Closing balance for th
985、e previous year 3,045,935,134.00 5,045,611,870.14 47,160,730.00 7,231,809.03 1,131,458,371.35 2,722,113,534.38 11,905,189,988.90 Add: changes in accounting policies 5,071.02 6,670,173.97 60,031,565.76 66,706,810.75 Correction of previous errors Others . Opening balance for the current year 3,045,935
986、,134.00 5,045,616,941.16 47,160,730.00 7,231,809.03 1,138,128,545.32 2,782,145,100.14 11,971,896,799.65 . Increase/decrease and change of amount for the current period (decrease is represented by -) 3,077,219,134.00 -2,816,105,291.97 30,443,814.70 11,610,213.22 194,518,642.12 253,862,907.11 690,661,
987、789.78 (I) Total 11,610,213.2 1,945,186,421,956,796,63Qingdao Haier Co., Ltd. 2015 Annual Report 129 / 239 Comprehensive income - 2 1.16 4.38 (II) Capital injection and reduction by owners 31,094,000.00 230,019,842.03 30,443,814.70 230,670,027.33 1. Ordinary shares invested by shareholders 31,094,00
988、0.00 220,212,680.00 -16,952,892.00 268,259,572.00 2. Capital injected by holders of other equity instruments 3. Amount of shares payment credited to owners equity 2,490,000.00 2,490,000.00 4Others 7,317,162.03 47,396,706.70 -40,079,544.67 (III) Profit distribution 194,518,642.12 -1,691,323,514.05 -1
989、,496,804,871.93 1. Appropriation to surplus reserves 194,518,642.12 -194,518,642.12 - 2 Distribution to owners (or shareholders) -1,496,804,871.93 -1,496,804,871.93 3Others (IV) Internal transfer of owners equity 3,046,125,134.00 -3,046,125,134.00 1. Transfer of capital reserves into capital (or sha
990、re capital) 3,046,125,134.00 -3,046,125,134.00 2. Transfer of surplus reserves into capital (or share capital) 3. Surplus reserves used for remedying loss 4Others (V) Special reserve 1. Appropriated for the current period 2. Utilized for the current period (VI) Others . Closing balance for the curre
991、nt period 6,123,154,268.00 2,229,511,649.19 77,604,544.70 18,842,022.25 1,332,647,187.44 3,036,008,007.25 12,662,558,589.43 Items Previous period Share capital Other equity instruments Capital reserve Less: Treasury stock Other comprehensive income Special reserve Surplus reserve Undistributed profi
992、ts Total owners equity Preference share Perpetual bonds Others . Closing balance for the previous year 2,720,835,940.00 2,573,058,953.46 2,019,633.82 1,054,853,524.14 3,284,254,441.82 9,635,022,493.24 Add: changes in accounting policies 531,483.14 8,577,931.14 90,459,184.58 99,568,598.86 Correction
993、of previous errors Qingdao Haier Co., Ltd. 2015 Annual Report 130 / 239 Others .Opening balance for the current year 2,720,835,940.00 2,573,590,436.60 2,019,633.82 1,063,431,455.28 3,374,713,626.40 9,734,591,092.10 .Increase/decrease and change of amount for the current period (decrease is represent
994、ed by -) 325,099,194.00 2,472,026,504.56 47,160,730.00 5,212,175.21 74,697,090.04 -592,568,526.26 2,237,305,707.55 (I) Total comprehensive income - 5,212,175.21 733,713,096.18 738,925,271.39 (II) Capital injection and reduction by owners 325,099,194.00 2,472,026,504.56 47,160,730.00 2,749,964,968.56
995、 1. Ordinary shares invested by shareholders 325,099,194.00 3,101,389,359.89 47,160,730.00 3,379,327,823.89 2. Capital injected by holders of other equity instruments 3. Amount of shares payment credited to owners equity 85,420,000.00 85,420,000.00 4Others -714,782,855.33 -714,782,855.33 (III) Profi
996、t distribution 74,697,090.04 -1,326,281,622.44 -1,251,584,532.40 1. Appropriation to surplus reserves 74,697,090.04 -74,697,090.04 - 2 Distribution to owners (or shareholders) -1,251,584,532.40 -1,251,584,532.40 3Others (IV) Internal transfer of owners equity 1. Transfer of capital reserves into cap
997、ital (or share capital) 2. Transfer of surplus reserves into capital (or share capital) 3. Surplus reserves used for remedying loss 4Others (V) Special reserve 1. Appropriated for the current period 2. Utilized for the current period (VI) Others . Closing balance for the current period 3,045,935,134
998、.00 5,045,616,941.16 47,160,730.00 7,231,809.03 1,138,128,545.32 2,782,145,100.14 11,971,896,799.65 Legal representative: Liang Haishan Chief accountant: Gong Wei Person in charge of accounting department: Yin Wenjun (尹文峻) Qingdao Haier Co., Ltd. 2015 Annual Report 131 / 239 III. General Information
999、 of the Company 1. Overview of the Company The predecessor of Qingdao Haier Co., Ltd. (herein after referred to as the Company) was Qingdao Refrigerator Factory, which was established in 1984. As permitted to offering by Peoples Bank of China, Qingdao Branch on 16 December 1989, approved by Qing Ti
1000、Gai 1989 No.3 on 24 March 1989, based on the reconstruction of the original Qingdao Refrigerator Factory, a limited company was set up by directional fund raised of RMB150 million. In March and September 1993, as approved by the document of Qing Gu Ling Zi 1993 No. 2 and No. 9 issued by the pilot le
1001、ading team of Qingdao joint stock company, the Company was converted from a directional offering company to a public subscription company, and issued additional 50.00 million shares to the public and listed and traded on SSE in November 1993. The Companys registered office is located at the Haier In
1002、dustrial Park of Laoshan District, Qingdao, Shandong Province, and the head office is located at the Haier Industrial Park of Laoshan District, Qingdao, Shandong Province. The Company is mainly engaged in manufacturing and trading as well as R&D of refrigerator, air-conditioner, freezer, washing mac
1003、hine, water heater, dishwashers, gas stove and relevant products and commercial circulation business. The Companys ultimate holding company is Haier Group Corporation. These financial statements have been approved for publication by the Board of the Company on 28 April 2016. 2. Scope of consolidated
1004、 financial statements For details of principal subsidiaries included in the consolidation scope during the year, please refer to note VII. 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 acc
1005、ording to the transactions and matters actually occurred, in accordance with the Accounting Standards for Enterprises Basic Standards published by the Ministry of Finance, specific accounting standards, and guidance on application of accounting standards for enterprises, interpretations to accountin
1006、g standards Qingdao Haier Co., Ltd. 2015 Annual Report 132 / 239 for enterprises and other relevant requirements (hereinafter collectively referred to as the Accounting Standards for Enterprises) which issued subsequently, and in combination with the disclosure provisions of the Rules for the Inform
1007、ation 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. Going concern The Company has ability to continue as a going conce
1008、rn for at least 12 months since the end of the reporting period and there is no significant events affecting its ability to continue as a going concern. V. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES According to the characteristics of its production and operation, the Company formulate
1009、d a series of specific accounting policies and accounting estimates, including the provisions for impairment for accounts receivable (Note III.11); the measurement of inventories (Note III.12); the depreciation and amortization of the investment properties (Note III.14); the depreciation of fixed as
1010、sets (Note III.15), the amortization of intangible assets (Note III.18), the criterion for determining of long-term assets impairment (Note III.19); and the date of revenue recognition (Note III.24), etc. 1. Statement of compliance with enterprise accounting standards The financial statements prepar
1011、ed by the Company meet the requirements of the enterprise accounting standards; exactly and completely reflected relevant information of the financial condition as of 31 December 2015, operation result and cash flow of the Company in 2015. 2. Accounting period The accounting year of the Company is f
1012、rom 1 January each year to 31 December of the same year in western calendar. 3. Operating cycle The Company takes 12 months as an operation cycle, which is also the classification basis for the liquidity of its assets and liabilities. 4. Functional currency Renminbi is the functional currency of the
1013、 Company. Qingdao Haier Co., Ltd. 2015 Annual Report 133 / 239 5. Accounting treatments of enterprise combinations involving entities under common control and entities not under common control An enterprise combination is a transaction or event that brings together two or more separate entities into
1014、 one reporting entity. Enterprise combinations are classified into enterprise combinations under common control and enterprise combinations not under common control. (1) Enterprise combinations under common control An enterprise combination under common control is an enterprise combination in which
1015、all of the combining entities are ultimately controlled by the same party or parties both before and after the combination, and that control is not transitory. For enterprise combination under common control, the party that obtains the control of the other parties on the combination date is the acqu
1016、iring party, and other parties involving in the enterprise combination are the parties being acquired. The combination date is the date on which the acquiring party effectively obtains the control of the party being acquired. In case the consideration for long-term equity investments formed in enter
1017、prise combination under common control is paid by ways of cash, transfer of non-cash assets or assumption of debts, the Company will regard the share of carrying amounts of the net assets in the final controllers consolidated financial statements obtained as the initial investment cost of long-term
1018、equity investments as at the date of combination. For carrying value of net assets of the acquiree is negative as at the date of combination, investment cost of long-term equity investment is calculated as zero. In case the acquiree is controlled by the ultimate controller by the enterprise combinat
1019、ion under non-common control before combination, the initial investment cost of the long-term equity investment 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 c
1020、ost of the long-term equity investment and the cash paid, the non-cash assets transferred and the carrying value of liability assumed; in case the balance of the capital reserve (capital premium or share premium) is insufficient for the elimination, then any excess shall be adjusted against retained
1021、 earnings. In case the consideration for the combination is paid by issuance of 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 aggregate nominal value of shar
1022、es issued shall be adjusted to capital reserve (capital premium or share premium), in case Qingdao Haier Co., Ltd. 2015 Annual Report 134 / 239 the capital reserve (capital premium or share premium) is insufficient for the elimination, then any excess shall be adjusted against retained earnings. Int
1023、ermediary fees (such as audit, legal services and valuation consultancy) and other relevant management fees incurred in the enterprises combination by the acquirer are credited in profit or loss in the period when they occurred. Trading expenses in direct relation to the issuance of equity instrumen
1024、t as the consideration for the combination is written down to the capital reserve (capital premium or share premium), where the capital reserve (capital premium or share premium) is insufficient, retained earnings should be adjusted. Trading expenses in direct relation to the issuance of debt instru
1025、ment as the consideration for the combination is included in the initial recognition amount of the debt instrument. For enterprise combination under common control finally realized through several transactions, in case of a package transaction, all the transactions are accounted as one transaction t
1026、hat has acquired the control; in case of no package transaction, the capital reserve (assets premium or share premium) is adjusted by the difference between the initial investment cost and the carrying value of the original long-term equity investment and the book value of the new payment considerat
1027、ion for further acquisition of shares with the share of acquirers owners equity on the date of combination in case calculated on the proportion of shareholding on the date of combination as its initial investment cost; where the capital reserve (assets premium or share premium) is insufficient, the
1028、retained earnings are adjusted. In the consolidated financial statements, the equity investment held by the combining party before the date of acquiring control of the combined parties, and the profit and loss, the other comprehensive income and changes in the other owners equity recognized during t
1029、he period between the later of the date of acquisition and the date when the combining and the combined parties are under the common control of the same party and the date of combination, are written down to the retained earnings or current profit or loss at the end of the comparative reporting peri
1030、od, respectively. (2) Enterprise combinations involving entities not under common control An enterprise combination not under common control is an enterprise combination in which all of the combining entities are not ultimately controlled by the same party or parties both before and after the combin
1031、ation. For enterprise combination not under common control, the party that obtains the control of the other parties at the combination date is the acquirer; other parties involving in the enterprise Qingdao Haier Co., Ltd. 2015 Annual Report 135 / 239 combination are the acquirees. The combination d
1032、ate is the date on which the acquirer effectively obtains control of the acquirees. In enterprise combination involving entities not under common control, the cost of combination shall be the sum of the assets paid, obligations incurred or assumed and the fair value of the equity securities issued b
1033、y the acquirer for obtaining control of the acquiree at the date of acquisition. Intermediary fees (such as audit, legal services and valuation consultancy) and other relevant management fees incurred by the acquirer for the purpose of enterprise combination are credited in profit or loss in the per
1034、iod when they occurred. Transaction fees for the equity instruments or debt instruments issued by the acquirer as combination consideration is included in the initial recognition amount of such equity instruments or debt instruments. Contingent consideration involved shall be recorded as the combina
1035、tion cost based on its fair value on the acquisition date. Should any new or further evidence arises 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 enterprise combination shall be amende
1036、d accordingly. The cost of combination and identifiable net assets obtained by the acquirer in an enterprise combination are measured at fair value on the acquisition date. Where the cost of the combination exceeds the acquirers interest in the fair value of the acquirees identifiable net assets, th
1037、e difference is recognized as goodwill; where the cost of combination is lower than the acquirers interest in the fair value of the acquirees identifiable net assets, the difference is initially recognized in profit or loss for the current year after a review of computation for the identifiable asse
1038、ts, liabilities or fair value of the liabilities and combination cost, and where the combination cost is still lower than the fair value of the identifiable net assets of the acquiree obtained during the course of combination, then the difference is recorded in the current profit and loss. In enterp
1039、rise combination involving entities not under common control that is realized in phases through multiple exchange transactions, in the parents financial statements, the sum of the book value of the equity investment of the acquiree held before the date of acquisition and the cost of new investment o
1040、n the date of acquisition are recognized as the initial investment cost of such investment. In consolidated financial statement, the equity of the acquiree held before the date of acquisition is re-measured at the fair value on the date of acquisition, and the difference between the fair value and b
1041、ook value is included in current investment income; where the equity of the acquiree held before the Qingdao Haier Co., Ltd. 2015 Annual Report 136 / 239 date of acquisition involves the other comprehensive income, such equity and relevant other comprehensive income are transferred to current invest
1042、ment income on the date of acquisition, other than the other comprehensive income that cannot be reclassified into the current profit or loss. The fair value on the acquisition date of equity interest in the acquiree prior to the acquisition date and the fair value of the considerations paid for the
1043、 acquisition of the new equity on the acquisition date are regarded as the combination costs of the Company, comparing with aquirers share of the fair value on the acquisition date of the acquirees net identifiable assets on the proportion of the shareholding on the acquisition date to confirm the g
1044、oodwill that required to be recognized on the acquisition date or the amount that shall be included in the current consolidated profit or loss. 6. Preparation method of consolidated financial statements (1) Scope of consolidated financial statements The Company incorporated all of its subsidiaries (
1045、including the separate entities controlled by the Company) into the scope of consolidation financial statements, including the enterprises under the Companys control, divisible part in the investees and structured entities. (2) To unify the accounting policies, date of balance sheets and accounting
1046、periods of the parent company and 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 with the Companys accounting policies and accounting periods. (3) Offs
1047、et matters in the consolidated financial statements The consolidated financial statements shall be prepared on the basis of the balance sheets of the parent company and subsidiaries, which offset the internal transactions incurred between the parent company and subsidiaries and among subsidiaries. T
1048、he owners equity of the subsidiaries not attributable to the parent company shall be presented as minority equity under the owners equity item in the consolidated balance sheet. (4)Accounting treatment of subsidiaries acquired from combination For subsidiaries acquired from enterprise combination un
1049、der common control, the assets, liabilities, operating results and cash flows of the subsidiaries are included in the consolidated financial statements from the beginning of the period in which the combination took place, as if the combination has taken since the ultimate controller began its contro
1050、l. When preparing the consolidated financial statements, for the subsidiaries acquired from enterprise combination under non-common control, separate financial Qingdao Haier Co., Ltd. 2015 Annual Report 137 / 239 statement will be adjusted on the basis of their fair values of the identifiable net as
1051、sets on the date of acquisition. 7. Classification of joint arrangement and joint operations A joint arrangement refers to an arrangement jointly controlled by two or more parties. In accordance with the Companys rights and obligations under a joint arrangement, the Company classifies joint arrangem
1052、ents into: joint operations and joint ventures. Joint operations refer to a joint arrangement during which the Company is entitled to relevant assets and obligations of this arrangement. The Company recognizes the following items in relation to its interest in a joint operation, and accounts the sam
1053、e in accordance with relevant accounting standards for business enterprises: recognize the assets held solely by the Company, and recognize assets held jointly by the Company in appropriation to the share of the Company; recognize the obligations assumed solely by the Company, and recognize obligati
1054、ons assumed jointly by the Company in appropriation to the share of the Company; recognize revenue from disposal of joint operations of the Company; recognize revenue from disposal of joint operations in appropriation to the share of the Company; recognize fees solely occurred by the Company and rec
1055、ognize 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 do not constitute a business, the same below) from joint operations, the Company shall only recognize the part of profit or
1056、lost from this transaction attributable to other parties of joint operations before these assets are sold to a third party. In case of an impairment loss incurred on these assets which meets the requirements as set out in Accounting Standards for Business Enterprises No. 8 Asset Impairment, the Comp
1057、any shall full recognize the amount of this loss in relation to its investment in or sale of assets to joint operations, or recognize the loss according to the Companys share of commitment in relation to the its purchase of assets from joint operations. Joint ventures refer to a joint arrangement du
1058、ring which the Company only is entitled to net assets of this arrangement. Investment in joint venture is accounted for using the equity method according to the accounting policies referred to under 13 Long-term equity investment of this Note III. Qingdao Haier Co., Ltd. 2015 Annual Report 138 / 239
1059、 8. Recognition standard for cash and cash equivalents Cash recognized in the cash flow statements represents the cash on hand and deposits available for payment of the Company at any time. Cash equivalents recognized in the cash flow statements refer to short-term, highly liquid investments held by
1060、 the Company that are readily convertible to known amounts of cash and which are subject to an insignificant risk on change in value. 9. Foreign currency businesses and translation of foreign currency statements (1) Foreign currency transactions If foreign currency transactions occur, they are trans
1061、lated into the amount of functional currency by applying the spot exchange rate at the transaction date. Monetary items denominated in foreign currencies are translated into functional currencies at the rates of exchange ruling at the balance sheet date. All foreign exchange difference are credited
1062、into the current profit or loss, except those arising from the funds denominated in foreign currency specially borrowed for the establishment of the qualifying assets are treated based on the principal of capitalization of borrowing costs; those arising from the other changes in the balance other th
1063、an 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 spot exchange rate prevailing on the date when transaction occurred and
1064、 its functional currency shall remain unchanged. Non-monetary items denominated in foreign currencies that are measured at fair value are translated using the foreign exchange rate at the date the fair value is determined; the exchange differences between the translated and original amounts of funct
1065、ional currencies are recognized 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 information If the functional currencies used as the bookkeeping base currency by the subsidiaries, join
1066、t ventures 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 accounting and prepare the Qingdao Haier Co., Ltd. 2015 Annual Report 139 / 239 consolidated financial statem
1067、ents. The assets and liabilities of the balance sheet are translated using the spot exchange rate at the balance sheet date; all items except for undistributed profits of the owners equity are translated at the spot exchange rate on the transaction date. The revenue and expenses in the income statem
1068、ent are translated using the approximate rate of the spot exchange rate on the transaction date. Differences arising from the translation of foreign currency financial statements are presented as the other comprehensive income in the owners equity of the balance sheet. Foreign currency cash flows ar
1069、e translated using the approximate rate of the spot exchange rate on the transaction date. The impact of exchange rate changes on cash amount is reflected separately in the cash flow. When disposing overseas operations, the translation difference related to the overseas operation shall be transferre
1070、d together or as the percentage of disposing the overseas operation to profit or loss for the current period of disposal. 10. Financial instruments (1) Classification, recognition and measurement of financial instruments A financial asset or a financial liability is recognized when the Company becom
1071、es a contractual party of a financial instrument. Financial assets and financial liabilities are measured at fair value upon initial recognition. Related transaction costs are recorded directly in current profit or loss for financial assets and financial liabilities at fair value through profit or l
1072、oss, or included in the amount recognized initially for other financial assets and financial liabilities. Determination of the fair value of financial assets and financial liabilities: Fair value refers to the price receivable from the exchange of an asset or payable for the settlement of a liabilit
1073、y in a fair transaction between knowledgeable and willing counterparties. The fair value of financial instruments where there is an active market is determined based on the quoted price in such market, which refers to the price regularly available from exchanges, brokers, trade associations and pric
1074、ing service agencies that represents the price adopted in an arms length transaction actually occurred in the market. For financial instruments where there is no active market, the fair value is determined using valuation techniques. Such techniques include reference to prices used in recent market
1075、transactions between knowledgeable and willing counterparties, reference to the current fair value of another instrument which is Qingdao Haier Co., Ltd. 2015 Annual Report 140 / 239 substantially the same, discounted cash flow analysis and option pricing models or other valuation models. The effect
1076、ive interest method is a method of calculating the amortized cost of a financial asset and of allocating interest income or expense over each period based on the effective interest of a financial asset or a financial liability (including a group of financial assets or financial liabilities). The eff
1077、ective interest rate is the rate that discounts future cash flows from the financial asset or financial liability over its expected life or (where appropriate) a shorter period to the carrying amount of the financial asset or financial liability. In calculating the effective interest rate, the Compa
1078、ny will estimate the future cash flows (excluding future credit losses) by taking into account all contract terms relating to the financial assets or financial liabilities whilst considering various fees, transaction costs and discounts or premiums which are part of the effective interest rate paid
1079、or received between the parties to the financial assets or financial liabilities contracts. Financial assets are classified into financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables, and available-for-sale financial assets upon initial recognitio
1080、n. Classification of financial asset other than loans and receivables is based on the purpose and capability of financial asset held by the Company and its subsidiaries. The financial liabilities are, on initial recognition, classified into financial liabilities at fair value through profit or loss
1081、and other financial liabilities. Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated as at fair value through profit or loss. All financial assets at fair value through profit or loss of the Company are financial assets held
1082、 for trading. Financial assets may be classified as financial assets held for trading if one of the following conditions is met: (1) The financial asset is acquired principally for the purpose of sale or repurchase in the near term; (2) The financial asset is part of a portfolio of identified financ
1083、ial instruments that are managed together and for which there is objective evidence of a recent pattern of short-term profit-taking; (3) The financial asset is a derivative, excluding the derivatives designated as effective hedging instruments, the derivatives classified as financial guarantee contr
1084、act, and the derivatives linked to an equity instrument investment, which has no quoted price in an active market nor a reliably measured fair value, and required to be settled through delivery of that equity instrument. A financial asset may be designated as at fair value through profit or loss upo
1085、n initial recognition only when one of the following conditions is satisfied: (1) Such designation Qingdao Haier Co., Ltd. 2015 Annual Report 141 / 239 eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise result from measuring assets or recognizing the
1086、gains or losses on them on different bases; (2) The financial asset forms part of a group of financial assets or a group of financial assets and financial liabilities, which is managed and its performance is evaluated on a fair value basis, in accordance with the Companys documented risk management
1087、or investment strategy, and information about the grouping is reported to key management personnel on that basis; (3) Pursuant to Accounting Standards for Enterprises No. 22 Recognition and Measurement of Financial Instruments, the financial asset is designated as combination instrument of financial
1088、 assets measured at fair value through current profit or loss and related to embedded derivatives. A financial asset at fair value through profit or loss, except for those falling under cash flow hedging, is subsequently measured at fair value. Any gains or losses arising from changes in the fair va
1089、lue are recognized in profit or loss of changes in the fair value. Interests or cash dividends received during the period in which such assets are held, are recognized as investment income; on disposal, the differences between the consideration received and initial recognized amount are recognized a
1090、s investment income and the gain or loss from changes in fair value shall be adjusted accordingly. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in active market. Financial assets, including bills receivable, accounts receivable, ot
1091、her receivables and long-term receivables are classified as loans and receivables by the Company. Loans and receivables are subsequently measured at amortized cost using the effective interest method. Gain or loss on derecognition, impairment or amortization is recognized through profit or loss for
1092、the current period. Available-for-sale financial assets include non-derivative financial assets designated as available-for-sale at initial recognition, and the financial assets other than financial assets at fair value through profit or loss, loans and receivables, and held-to-maturity investments.
1093、 Available-for-sale financial assets are subsequently measured at fair value, the gains or losses arising from changes in fair value, except for impairment losses and exchange difference related to monetary financial assets and amortized cost which are recognized in profit or loss, are recognized in
1094、 other comprehensive income and reclassified to profit or loss when the financial assets are derecognized. Interests calculated in the effective interest method during the holdings of available-for-sale financial assets and cash dividends declared by investees are recognized in investment incomes. O
1095、n disposal, the differences between the consideration received and the carrying amount of assets after deducting the accumulated fair value Qingdao Haier Co., Ltd. 2015 Annual Report 142 / 239 adjustments previously recorded in capital reserves are recorded as investment income. However, an equity i
1096、nstrument investment which has no quoted price in an active market nor a reliably measured fair value, and a derivative financial asset (or derivative financial liability) linked to such equity instrument and required to be settled through delivery of that equity instrument are measured at cost. Der
1097、ivative financial instruments include forward foreign exchange contracts and interest rate swap contracts, etc. Derivative financial instruments are initially recognized at fair value at the execution date of relevant contracts, and subsequently measured at fair value. Expect for the derivative fina
1098、ncial instruments designated as hedging instruments with a highly effective hedging, of which the profit or loss arising from the changes in fair value will be included in the corresponding profit or loss depending on the nature of hedging relations and the accounting requirements of hedging tools,
1099、the changes in the fair value of all other derivative financial instruments will be included in the current profit or loss. Equity instruments refer to the contracts proving the ownership of the remaining equities in the assets of the Company upon the deduction of all the liabilities. The considerat
1100、ion received from the issue of the equity instruments increases the shareholders equity upon the deduction of the transaction costs. The allocations made by the Company to the holders of equity instruments (excluding stock dividends) decrease shareholders equity. The Company does not recognize the c
1101、hange in the fair value of equity instruments. (2) Recognition and measurement of transfers of financial asset Financial asset that satisfied any of the following criteria shall be derecognized: (1) the contract right to recover the cash flows of the financial asset has terminated; (2) the financial
1102、 asset, along with substantially all the risk and return arising from the ownership of the financial asset, has been transferred to the transferee; and (3) the financial asset has been transferred to the transferee, and the Company has given up the control on such financial asset, though it does not
1103、 assign or maintain substantially all the risk and return arising from the ownership of the financial asset. When the Company does not either assign or maintain substantially all the risk and rewards of ownership of the financial asset and does not give up the control on such financial asset, to the
1104、 extent of its continuous involvement in the financial asset, the Company recognizes it as a related financial asset and recognizes the relevant liability accordingly. The extent of the continuous involvement is the extent to which the Company exposes to changes in the value of such financial assets
1105、. Qingdao Haier Co., Ltd. 2015 Annual Report 143 / 239 On derecognition of a financial asset, the difference between the following amounts is recognized in profit or loss for the current period: the carrying amount and the sum of the consideration received and any accumulated gain or loss that had b
1106、een recognized directly in equity. If a part of the financial assets qualifies for derecognition, the carrying amount of the financial asset is allocated between the part that continues to be recognized and the part that qualifies for derecognition, based on the fair values of the respective parts.
1107、The difference between the following amounts is recognized in profit or loss for the period: the carrying amount of the part that qualifies for derecognition and the sum of the consideration received and any accumulated gain or loss that had been recognized directly in equity. Financial assets and f
1108、inancial liabilities are offset and the net amount is reported in the balance sheet if there is currently an enforceable legal right to offset the recognized financial assets and financial liabilities and there is an intention to settle on a net basis, or to realize the assets and settle the liabili
1109、ties simultaneously. Otherwise, financial assets and financial liabilities are presented separately in the balance sheet without being offset. (3) Classification, recognition and measurement of financial liabilities The Company classifies financial liabilities and equity instruments according to the
1110、 substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. Financial liabilities are classified as financial liabilities at fair value through profit or loss and other financial liabilities at initial recognition. Financial liabilit
1111、ies at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated as at fair value through profit or loss. Financial liabilities may be classified as financial liabilities held for trading if one of the following conditions is met: (1) The f
1112、inancial liability is acquired principally for the purpose of sale or repurchase in the near term; (2) The financial liability is part of a portfolio of identified financial instruments that are managed together and for which there is objective evidence of a recent pattern of short-term profit-takin
1113、g; or (3) The financial liability is a derivative, excluding the derivatives designated as effective hedging instruments, the derivatives classified as financial guarantee contract, and the derivatives linked to an equity instrument investment, which has no quoted price in an active market nor a rel
1114、iably measured fair value, and required to be settled through delivery of that equity instrument. A financial liability may be designated as at fair value through profit or loss upon initial recognition only when one of the following conditions is satisfied: (1) Such designation eliminates or signif
1115、icantly Qingdao Haier Co., Ltd. 2015 Annual Report 144 / 239 reduces a measurement or recognition inconsistency that would otherwise result from measuring liabilities or recognizing the gains or losses on them on different bases; (2) The financial liability forms part of a group of financial liabili
1116、ties or a group of financial liabilities and financial liabilities, which is managed and its performance is evaluated on a fair value basis, in accordance with the Companys documented risk management or investment strategy, and information about the grouping is reported to key management personnel o
1117、n that basis; or (3) Pursuant to Accounting Standards for Enterprises No. 22 Recognition and Measurement of Financial Instruments, the financial liability is designated as combination instrument of financial liabilities measured at fair value through current profit or loss and related to embedded de
1118、rivatives. Financial liabilities at fair value through profit or loss are subsequently measured at fair value. The gain or loss arising from changes in fair value and dividend and interest incomes arising from such financial liabilities are recognized in profit or loss for the current period. Dereco
1119、gnition of financial liabilities: A financial liability shall be derecognized or partly derecognized when the current obligation is discharged or partly discharged. When the Company (debtor) and the creditor have signed a contract which uses a new financial liability to replace the existing financia
1120、l liability, and the contract terms of the new financial liability are substantially different with the existing financial liability, the existing financial liability shall be derecognized, and the new financial liability shall be recognized at the same time. If a financial liability is fully or par
1121、tially derecognized, the difference between the book value of derecognized portion and the consideration paid (including non-cash assets transferred out or new financial liability assumed) is recognized in profit or loss. (4) Impairment of financial assets The carrying values of all financial assets
1122、 except financial assets at fair value through profit or loss should be tested for impairment. If impairment is demonstrated by objective evidences, the provision of impairment should be prepared according to the impairment test. Objective evidences for recognition of impairment of financial asset i
1123、nclude the following observable matters: The issuer or debtor is experiencing significant financial difficulties; The debtor breaches the contractual terms, including default or delinquency in interest or principal payments; The Company, based on economic or legal or other factors, waive the debts;
1124、Qingdao Haier Co., Ltd. 2015 Annual Report 145 / 239 It is highly probable that the debtor will enter bankruptcy or other financial reorganization; The issuer is experiencing significant financial difficulties that the corresponding financial instruments could not be traded in an active market; When
1125、 it is unable to determine whether cash flows of a specific instrument in a group of financial assets decrease, but the cash flows since initial recognition of that group of financial assets would be measurable and decrease, or the ability to repay by the debtors in that group of financial asset det
1126、eriorate, or the unemployment rate of the country or region in which the debtors situate increases, or the price of the underlying collateral decreases significantly in its region, or the industry of the debtors is diminishing; There are significant adverse changes in the technology, market, economy
1127、 or legal environments in issuance place of the equity instrument so that the investor could not recover its investment costs; There is significant or other than temporary decrease in fair value of equity instrument; Other objective evidences show that the financial asset is impaired. The Company sh
1128、all carry out independent impairment test for financial assets of significant single amounts. With regard to the financial assets with insignificant single amounts, an independent impairment test shall be included in a combination of financial assets with similar credit risk characteristics so as to
1129、 carry out an impairment test. In the event, upon independent test, the financial asset (including those financial assets with significant single amounts and those with insignificant amounts) has not been impaired, it shall be included in a combination of financial assets with similar characteristic
1130、s so as to conduct another impairment test. Financial assets that have conducted independent test as impairment loss shall not be included in a combination of financial assets with similar risk characteristics so as to conduct another impairment test. When held-to-maturity investments, loans and acc
1131、ounts receivables have been impaired, the book value of the financial assets shall be written down to the current value of estimated future cash flow discounted at the original effective interest rate, and the write-down amount is recorded as impairment loss and written into profit or loss of the cu
1132、rrent period. When a financial asset based on amortized cost is impaired, if there are objective evidences showing the value of this financial asset is recovered and it is objectively related to the matters happened after the impairment loss recognition, the impairment loss recognized shall be rever
1133、sed. However, the reversal shall not result in a carrying amount of the financial asset that exceeds the amortized cost that would have been if the impairment had not been recognized at Qingdao Haier Co., Ltd. 2015 Annual Report 146 / 239 the date when the impairment is reversed. If an available-for
1134、-sale financial asset is impaired, the cumulative loss arising from decline in fair value that had been recognized directly in other comprehensive income is reclassified to profit or loss. The cumulative loss reclassified is the difference between its acquisition cost (net of any principal repayment
1135、 and amortization) and its current fair value, less any impairment loss previously recognized in profit or loss. If there are objective evidences that the value of that financial asset is recovered and it can be objectively related to an event occurred after the impairment loss recognition, the impa
1136、irment loss recognized shall be reversed, impairment losses recognized for equity instruments classified as available-for-sale are reversed through other comprehensive income, while impairment losses recognized for debt instruments classified as available-for-sale are reversed through current profit
1137、 or loss. If theres objective evidence that an investment in equity instrument which has no quoted price in an active market nor a reliably measured fair value or a derivative financial asset which is linked to that equity instrument and required to be settled through delivery of that equity instrum
1138、ent is impaired, the carrying amount shall be written down to the present value discounted at the market rate of return on future cash flows of the similar financial assets, and the write-down amount shall be recognized as impairment loss in profit or loss. Such impairment loss once recognized shall
1139、 no longer be reversed. For investments in equity instruments, the specific quantitative criteria for the Company to determine serious or not temporary decrease in their fair value are set out below: Specific quantitative criterion on serious decrease in their fair value Decrease in closing fair val
1140、ue relative to the cost has reached or exceeded 50%. Specific quantitative criterion on not temporary decrease in their fair value Fall for 12 consecutive months. 11. Receivables Receivables of the Company include trade receivables and other receivables. Recognition and provision of bad debts of rec
1141、eivables: (1) Individually significant receivables for which separate bad-debt provision is made Individually significant receivables represent the receivables accounting for above 5% of the closing balance. The Company conducted a separate impairment test for receivables that are individually Qingd
1142、ao Haier Co., Ltd. 2015 Annual Report 147 / 239 significant on the balance sheet date and made provision for its bad debts based on the difference between the present value of its estimated future cash flows and its carrying amount. (2) Individually insignificant receivables for which separate bad-d
1143、ebt provision is made Individual impairment test is made where there is concrete evidence indicates that there is obvious difference in recoverability, and bad debts provision is made based on the difference between the present value of its estimated future cash flows and its carrying amount. (3) Tr
1144、ade receivables for which collective bad debt provision is made Receivables that are individually tested not impairment, is classified by similar credit risks into several portfolio and then recognize the impairment loss and make bad debts provision on the 5% of the balance of the receivables on the
1145、 balance sheet date. 12. Inventories (1) Classification of inventories: Inventories refer to the finished goods or commodities held for sale in daily activities, goods in progress in the production process, consumed materials and supplies in the production process or providing services of the Compan
1146、y, which mainly include raw materials, revolving materials, entrusted processed materials, wrappage, low-cost consumables, goods in progress, self-made semi-finished goods, finished goods (merchandise inventory) and engineering construction etc. (2) Cost of inventories transferred out Inventories fr
1147、om the Company are calculated by 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 materials for sale) that c
1148、an be sold directly is determined using the estimated saleable price of such inventory deducted by the cost of sales and relevant taxation. The net realizable value of materials in inventory that are held for production is determined using the estimated saleable price of the finished product deducte
1149、d by the cost to completion, estimated cost of sales and relevant taxation. The net realizable value of inventory held for performance of sales contract or labor service contract is determined based on the contractual price; in case the amount of inventory held by the enterprise exceeds the contract
1150、ual amount, the net realizable value of the Qingdao Haier Co., Ltd. 2015 Annual Report 148 / 239 excess portion of inventory is calculated using the normal saleable price. Provision for impairment of inventories is made for individual inventory. For items of inventories that is produced and marketed
1151、 in the same geographical area and with the same or similar end uses or purposes, which cannot be practicable evaluated separately from other items, cost and net realizable value of inventories may be determined on an aggregate basis. For large quantity and low value items of inventories, cost and n
1152、et realizable value of inventories may be determined on types of inventories. Provision for impairment of inventories is made and recognized as current profit or loss when the cost is higher than the net realizable value on the balance sheet date. If the factors that give rise to the provision in pr
1153、ior years are not in effect in current year, provision would be reversed within the impaired cost, and recognized in the current profit or loss. (4) Inventory system The Company adopts perpetual inventory system. (5) Amortization of low-value consumables and packaging Low-value consumables and packa
1154、ges of the Company are amortized by one-time write-off. 13. Long-term equity investments Long-term equity investments in this section refer to equity investments held by the Company that give it control, joint control or significant influence over the investee. Long-term equity investments where the
1155、 Company does not exercise control, joint control or significant influence over the investee are accounted for as available-for-sale financial assets. (1) Recognition of initial cost of investment For long-term equity investment obtained from business consolidation under common control, the initial
1156、cost is measured at the combining partys share of the carrying amount of the equity of the combined party; for a long-term equity investment obtained from business consolidation under non-common control, the initial cost is the consolidation cost at the date of acquisition; For the long-term equity
1157、investment acquired in a manner other than enterprise combination: the initial investment cost of the long-term equity investment acquired by payment in cash shall be the total purchase price; the initial investment cost of the long-term equity investment acquired by issuing equity securities shall
1158、be the fair value of the equity securities issued；For long-term equity investment acquired Qingdao Haier Co., Ltd. 2015 Annual Report 149 / 239 by debt restructuring, the initial investment cost shall be recognized in accordance with the requirements under Accounting Standards for Enterprises No. 12
1159、 - Debt Restructuring. For long-term equity investment acquired by the exchange of non-monetary assets, the initial investment cost shall be recognized in accordance with relevant requirements under the Rules. (2) Subsequent measurement and profit or loss recognition Cost method Where the investor h
1160、as a control over the investee, long-term equity investments are measured using cost method. For long-term equity investments using cost method, unless increasing or reducing the investment, the carrying value is unchanged. The Companys share of the profit distributions or cash dividends declared by
1161、 the investee are recognized as investment income. Equity method Investors long-term equity investments in associates and joint ventures are measured using equity method. Where part of the equity investments of an investor in its associates are held indirectly through venture investment institutions
1162、, common fund, trust companies or other similar entities including investment linked insurance funds, such part of equity investments indirectly held by the investor shall be measured at fair value through profit or loss according to relevant requirements of Accounting Standards for Business Enterpr
1163、ises No.22Recognition and measurement of Financial Instruments regardless whether the above entities have significant influence on such part of equity investments, while the remaining part shall be measured using equity method. Under the equity method, where the initial investment cost of a long-ter
1164、m equity investment exceeds the Companys share of the fair value of the investees 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 Companys share of the fair value of the investees identifiabl
1165、e 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 Company recognizes the investment income and ot
1166、her comprehensive incomes according to its share of net profit or loss of the investee, and the carrying amount of the long-term equity investments shall be adjusted accordingly; the carrying amount of the investment is reduced by the Companys share of the profit distribution or cash dividends decla
1167、red by an investee; for changes in owners equity of the investee other than those arising from Qingdao Haier Co., Ltd. 2015 Annual Report 150 / 239 its net profit or loss, other comprehensive income and profit distribution, the carrying amount of the long-term equity investment shall be adjusted and
1168、 recognized to capital reserve. When recognizing attributable share of the net profits and losses of the investee, the net profits of the investee shall be recognized after adjustment on the ground of the fair value of all identifiable assets of the investee when it obtains the investment. If the ac
1169、counting policies and accounting periods adopted by the investee are different from those adopted by the Company, an adjustment shall be made to the financial statements of the investee in accordance with the accounting policies and accounting periods of the Company and recognize the investment inco
1170、mes and other comprehensive incomes. The Companys share of net losses of the investee shall be recognized to the extent that the carrying amount of the long-term equity investment together with any long-term interests that in substance form part of the investors net investment in the investee are re
1171、duced to zero. If the Company has to assume additional obligations, the estimated obligation assumed shall be provided for and charged to the profit or loss as investment loss for the period. Where the investee is making profits in subsequent periods, the Company shall resume recognizing its share o
1172、f profits after setting off against the share of unrecognized losses. (3) Change of the accounting methods for long-term equity investments Change of measurement at fair value to accounting under equity method: where the equity investment held have no control, joint control or significant impact on
1173、the investee and that are accounted according to the financial instrument recognition and measurement criteria can carry out common control or place significant impact due to addition of investment which resulted in the increase of shareholding, the investee shall plus the fair value of the equity i
1174、nvestment originally held determined in accordance with the Standards for Recognition and Measurement of Financial Instruments and the fair value of the consideration payable for new investment as the initial investment cost accounted under equity method when change the equity method. Change of meas
1175、urement at fair value or accounting under equity method to cost method: the equity investment of the investee held by the investor with no control, joint control or significant impact and accounted according to the financial instrument recognition and measurement criteria, or the long-term equity in
1176、vestment in associates or joint venture originally held that can control the investee due to addition of investment, shall be accounted in accordance with the long-term equity investment formed by combination of enterprises. Change of accounting under equity method to measurement at fair value: the
1177、long-term equity investment originally held with common control or significant impact on the investee that cannot conduct common control or significant impact on the investee due to the decrease of shareholding as a result of factors Qingdao Haier Co., Ltd. 2015 Annual Report 151 / 239 such as parti
1178、al disposal, shall be accounted in accordance with Standards for Recognition and Measurement of Financial Instruments, and the difference between the fair value on the date when the common control or significant impact is lost and the book value is included in current profit or loss. Change of cost
1179、method to equity method: where control on the investee change to significant impact or common control with other investors due to factors such as disposal of investment, the long-term equity investment cost that ceased to be recognized shall first be carried forward on the proportion of the investme
1180、nt disposed. Then comparing the cost of the remaining long-term equity investment with the attributable fair value of the identifiable net assets of the investee at the original investment calculated on proportion of the remaining shareholding, where the former larger than the later, it belongs to t
1181、he goodwill as showed in deciding the investment price and will not adjust the carrying amount of the long-term equity investment; where the former less than the later, the retained earnings will be adjusted along with the adjustment of the long-term equity investment. (4) Basis of conclusion for co
1182、mmon control and significant influence over the investee Joint control over an investee refers to activities which have a significant influence on return of an arrangement could be decided only by mutual consent of the investing parties sharing the control, which includes the sales and purchase of g
1183、oods or services, management of financial assets, acquisition and disposal of assets, research and development activities and financing activities, etc. Significant influence on the investee refers to significant influence over the investee exists when holding more than 20% but less than 50% of the
1184、shares with voting rights or even if the holding is below 20%, there is still significant influence if any of the following conditions satisfied: there is representative in the board of directors or similar governing body of the investee; participating in investees policy setting process; assign man
1185、agement to investee; the investee relies on the technology or technical information of the investee; 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 the long-term equity inv
1186、estments. When there is impairment indicator, the recoverable amount is determined through impairment test and impairment is provided based on the difference between the recoverable amount and the carrying value. Impairment loss is not reversed once provided. The recoverable amount is the higher of
1187、net fair value of long-term equity investments on disposal and the present value of estimated future cash flows. (6) Disposal of long-term equity investments For disposal of long-term equity investment, the difference between the considerations received and the Qingdao Haier Co., Ltd. 2015 Annual Re
1188、port 152 / 239 carrying amount of the disposed investment is recognized in profit or loss. For long-term equity investment accounted for using the equity method, the part recognized in other comprehensive income is accounted on pro rata basis upon disposal in the same way as the relevant assets or l
1189、iabilities are disposed of directly by the investee. 14. Investment properties (1). If measured by cost: 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 subsequent measureme
1190、nt. Investment properties are depreciated or amortized in accordance with the accounting policies for the fixed assets or intangible assets of the Company. When the investment properties are for self-use, relevant investment properties will be converted into fixed assets or intangible assets on the
1191、date of conversion. 15. Fixed assets (1). Recognition criteria Fixed assets are tangible assets that are held for production of goods, provision of services, leasing or administrative purposes, and have useful life more than one fiscal year, which are recognized when the following conditions are met
1192、: economic benefits in relation to the fixed assets are very likely to flow into the enterprise; the cost of the fixed assets can be measured reliably. (2). Depreciation method The fixed assets of the Company can be divided into: buildings and constructions, production equipment, transportation equi
1193、pment and office equipment, etc. The straight-line method is used to measure depreciation. The useful lives and the expected net residual value of fixed assets are determined according to the nature and usage of various fixed assets. At the end of each year, the useful lives and depreciation method
1194、of fixed assets are reviewed, and adjusted if there is variance with original policies; The Company have made provisions for all of the fixed assets except for the fixed assets with full provision and used continuously. Category Depreciation lives (years) Estimated rate of residual value (%) Annual
1195、depreciation rate (%) Houses and buildings 20-40 years 5% 2.38-4.75% Machinery equipment 10-20 years 5% 4.75-9.50% Vehicles 5-10 years 5% 9.50%-19.00% Office equipment and others 3-8 years 5% 11.88%-31.67% Qingdao Haier Co., Ltd. 2015 Annual Report 153 / 239 (3). Test method and provision for impair
1196、ment of fixed assets At the balance sheet date, the Company reviews whether there is impairment indicator for the fixed assets. When there is an impairment indicator, the recoverable amount is estimated and impairment is provided based on the difference between the carrying value and the recoverable
1197、 amount once the impairment of an asset is recognized, it will not be reversed in the subsequent accounting period. 16. Construction in progress (1) Construction in progress is measured at actual cost. Actual cost comprises construction costs, installation costs, borrowing cost that are eligible for
1198、 capitalization and other necessary cost incurred to bring the fixed assets ready for their intended use. (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 is completed and ready
1199、 for its intended use, which shall satisfy one of the following conditions: The construction of the fixed assets (including installation) has been completed or substantially completed; The fixed asset has been used for trial operation and it is evidenced that the asset can operate ordinarily or prod
1200、uce steadily qualified products; or the result of trial operation proves that it can operate normally; Further expenditure incurred for construction is very minimal or remote; The constructed fixed asset reaches or almost reaches the design or the requirements of contract, or complies with the desig
1201、n 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 whether there is any sign of impairment and an impairment test is needed to recognize the recoverable am
1202、ount when there are signs that construction in progress may impair. The impairment loss should be the lower of the carrying value and recoverable amount and impairment loss cannot be reversed in the following accounting period if it has been accounted. The recoverable amount should base on the highe
1203、r value between fair value less disposal expense and present value of estimated cash flow in the future. Qingdao Haier Co., Ltd. 2015 Annual Report 154 / 239 17. Borrowing costs (1) Recognition principles for borrowing cost capitalization: Borrowing costs include interests incurred by the Company in
1204、 connection with the borrowings, amortization of discount or premium plus auxiliary expenses, and foreign exchange translation differences from foreign currency borrowings. Borrowing cost incurred by the Company arising from special borrowings or general borrowing for fixed assets, properties for de
1205、velopment and investment or inventories that require more than one year (including one year) to purchase or construct, shall be capitalized and credited into relevant assets cost; other borrowing costs are expensed and charged to current profit or loss when incurred. (2) Computation of capitalized a
1206、mount of borrowing costs Capitalization period refers to the period from the commencement to the cessation of capitalization of borrowing costs, excluding the periods in which capitalization of borrowing costs is suspended. Capitalization interruption period: Capitalization of borrowing costs is sus
1207、pended during periods in which the acquisition or construction of a qualifying asset is interrupted abnormally and the interruption lasts for more than 3 months. Computation of capitalized amount of borrowing costs: Specific borrowings will be recorded based on the actual interest expense incurred i
1208、n the period of special borrowings less the interest income from unutilized borrowings placed at banks or investment gain from temporary investment; For normal borrowings used, the interest amount that should be capitalized on normal borrowings is calculated based on the weighted average of expenses
1209、 of the aggregate asset exceeding the expenses of the portion of special borrowings multiplied by the capitalization ratio of the normal borrowings utilized. Capitalization ratio is calculated based on weighted average interest rate of normal borrowings; For borrowings with discount or premium, the
1210、discount or premium was amortized over the term of the borrowings to adjust the interest in every period using the effective interest rates. 18. Intangible assets Intangible assets are the identifiable non-monetary assets which have no physical shape and are possessed or controlled by the Company. Q
1211、ingdao Haier Co., Ltd. 2015 Annual Report 155 / 239 (1). Measurement method, useful life and impairment test (1) Measurement of intangible assets Intangible assets are initially recognized at costs. The actual costs of purchased intangible assets include the consideration and relevant expenses paid.
1212、 For intangible asset contributed by investors, the price contained in the investment agreement or mutually agreed is the actual cost of the intangible asset. If the price contained in the investment agreement or mutually agreed is not a fair value, the fair value of the intangible asset is regarded
1213、 as the actual cost. The cost of a self-developed intangible asset is the total expenditure incurred in brings the asset to its intended use. Subsequent measurement of intangible assets of the Company: Intangible assets with finite useful lives are amortized on a straight-line basis over the useful
1214、lives of the intangible assets; at the end of each year, the useful lives and amortization policy are reviewed, and adjusted if there is any variance with original policies; Intangible assets with indefinite useful lives are not amortized and the useful lives are reviewed at each year end date. If t
1215、here 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 infinite useful life The useful life of an intangible asset is indefinite if the per
1216、iod of the future economic benefits generated by the intangible asset could not be reasonably determined, or the useful life could not be reasonably ascertained. Criterion of determining intangible assets with infinite useful lives: For intangible assets derived from contractual rights or other lega
1217、l rights and there are no explicit years of use stipulated in the contract or laws and regulations; Useful life still could 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
1218、 lives are reviewed. The assessment is performed by the departments that use the intangible assets, using the down-to-top approach, to determine if there are changes to the indefinite useful lives. (3) Methods for impairment test and provision for impairment of intangible assets At the balance sheet
1219、 date, the Company reviews the intangible assets to check whether there is a sign of impairment and an impairment test is needed to recognize the recoverable amount when there are signs that intangible assets may impair. The impairment loss should be the lower of the carrying value and recoverable Q
1220、ingdao Haier Co., Ltd. 2015 Annual Report 156 / 239 amount and provision for impairment loss cannot be reversed in the following accounting periods if it has been accounted for. The recoverable amount should be based on the higher value between fair value less disposal expense and present value of e
1221、stimated cash flow in the future. (2). Basis for research and development phases for internal research and development project and basis for capitalization of expenditure incurred in development stage As for an internal research and development project, expenditure incurred in the research phase is
1222、recognized in profit or loss in the period as incurred. Expenses incurred in the development stage are recognized as intangible assets if all of the following conditions are met: the technical feasibility of completing the intangible asset so that it will be available for use or for sale; the intent
1223、ion to complete the intangible asset for use or for sale; how the intangible asset will generate economic benefits including there is evidence that the products produced using the intangible asset has a market or the intangible asset itself has a market; if the intangible asset is for internal use,
1224、there is evidence that there exists usage for the intangible asset; the availability of adequate technical, financial and other resources to complete the development and the ability to use or sell the intangible asset; the expenditures attributable to the development of the intangible asset could be
1225、 reliably measured. Basis for distinguishing research phase and development phase of an internal research and development project: research stage is the activities carried out for the planned investigation and search of new technology and knowledge, which has the characteristics of planning and expl
1226、oration; before commercial production or other uses, the application of new technologies and new knowledge obtained from the research phase in a plan or design to produce new or improved materials, equipment and products is regarded as development phase, which has the characteristics of very probabl
1227、e pinpointing and forming results. 19. Impairment of long-term assets 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 there is any indication that an ass
1228、et may be impaired at the balance date. If the result of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount, a provision for impairment and an impairment loss are recognized for the amount by which the assets carrying amount Qingdao Haier Co., Ltd
1229、. 2015 Annual Report 157 / 239 exceeds its recoverable amount. The recoverable amount is the higher of an assets fair value less costs to sell and the present value of the future cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognized on the indi
1230、vidual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generate independent cash inflows. Goodwill is
1231、tested for impairment at least at each year end. In terms of impairment test of the goodwill, the carrying amount of the goodwill, arising from enterprise combination, shall be allocated to the related asset groups in accordance with a reasonable basis on acquisition date, or to the related asset gr
1232、oup portfolios if it is difficult to be allocated to the related asset groups. When the carrying amount of the goodwill is allocated to the related assets or asset groups, it shall be allocated in the proportion of the fair value of each asset group or asset group portfolio against the total fair va
1233、lue of related assets or asset groups. If it is difficult to measure the fair value reliably, it shall be allocated in the proportion of the carrying amount of each asset group or asset group portfolio against the total carrying amount of related assets or asset groups. When there is an indication t
1234、hat the asset and asset group are prone to impair, the Company shall firstly test for impairment for asset and asset group excluding goodwill and calculate the recoverable amount and recognize the impairment loss accordingly by comparing with its carrying amount. The Company shall then test for impa
1235、irment for asset or the asset group including goodwill and compare the asset or asset groups recoverable amount with its carrying amount (including the carrying amount of allocated goodwill). Provision for impairment of assets shall be recognized when the recoverable amount of the asset or the asset
1236、 group is lower than its carrying amount. Once the impairment loss of such assets is recognized, it is not be reversed in any subsequent accounting period. 20. Long-term prepayments Long-term prepayments are expenditures which have incurred but shall be amortized over the current period and subseque
1237、nt periods of more than one year (excluding one year). They are amortized evenly over the benefit period. 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. Qingdao Haier Co.,
1238、 Ltd. 2015 Annual Report 158 / 239 21. Estimated liabilities (1) Criterion for determining of estimated liability If an obligation in relation to contingencies such as external guarantees, discounting of commercial acceptance bills, pending litigation or arbitration and product quality assurance is
1239、the present obligation of the Company and the performance of such obligation is likely to lead to the outflow of economic benefits and its amount can be reliably measured, such obligation shall be recognized as estimated liability. (2) Measurement of estimated liability The best estimate of the expe
1240、nditure from current obligation is initially recorded as accrued liability. When the necessary expenditures falls within a range and the probability of each result in the range are identical, the best estimate is the median of the range; if there are severable items involved, every possible result a
1241、nd relevant probability are taken into account for the best estimation. At the balance sheet date, the carrying value of provision is reviewed. If there is objective evidence that the carrying value could not reflect the current best estimate, the carrying value is adjusted to the best estimated val
1242、ue. 22. Share-based payments For equity-settled share-based payment transaction in return for services from employees, it shall be measured at the fair value of equity instruments granted to the employees. For the payment of such fair value that may only be exercised if services are fulfilled in the
1243、 current period or the specified performance is achieved, the fair value shall, based on the best estimate of the number of exercisable instruments, be recognized in relevant costs or expenses in straight-line method with the increase in the capital reserve accordingly. The cash-settled share-based
1244、payment shall be measured at the fair value of liability assumed by the Company, which is calculated and determined based on the shares or other equity instruments. For the cash-settled share-based payment that may be exercised immediately after the grant, the fair value of the liability assumed by
1245、the Company shall, on the date of the grant, be recognized in relevant costs or expenses and the liabilities shall be increased accordingly. For cash-settled share-based payment during vesting period, on each balance sheet date within the vesting period, the services acquired in the current period s
1246、hall, based on the best estimate of the number of exercisable instruments, be recognized in relevant costs or expenses and the Qingdao Haier Co., Ltd. 2015 Annual Report 159 / 239 corresponding liabilities at the fair value of the liability assumed by the Company, and the liabilities shall be adjust
1247、ed correspondingly. At each reporting date and the settlement date prior to the settlement of liabilities, the fair value of the liability is re-measured through profit or loss. When there is changes in the Companys share-based payment plans, if the modification increases the fair value of the equit
1248、y instruments granted, corresponding recognition of service increase in accordance with the increase in the fair value of the equity instruments; if the modification increases the number of equity instruments granted, the increase in fair value of the equity instruments is recognized as a correspond
1249、ing increase in service achieved. Increase in the fair value of equity instruments refer to the difference between the fair values of the modified date. If the Company modifies the exercisable conditions in such manner conductive to the employees, including the shortening of the vesting period, chan
1250、ge or cancellation of the performance conditions (rather than market conditions), the Company shall consider the modified exercisable conditions upon the disposal of exercisable conditions. If the modification reduces the total fair value of shares paid or the Company uses other methods not conducti
1251、ve to employees share-based payment plans to modify the terms and conditions of service, it will continue to be accounted for in the accounting treatment, as if the change had not occurred, unless the Company cancelled some or all of the equity instruments granted. During the vesting period, if the
1252、cancelled equity instruments granted by the Company to cancel the equity instruments granted amount treated as accelerated vesting of the remaining period should be recognized immediately in profit or loss, while recognizing the capital reserve. Employees or other parties can choose to meet non-vest
1253、ing conditions but are not met in the vesting period, the Company will treat it as canceled equity instruments granted. 23. Remuneration of employees Remuneration of employees are all forms of compensation and other relevant expenditure given by the Company in exchange for services rendered by emplo
1254、yees, including short-term remuneration, post-employment benefits, termination benefits and other long-term benefits. Qingdao Haier Co., Ltd. 2015 Annual Report 160 / 239 (1).accounting methods of Short-term compensation Short-term remuneration include short-term salaries, bonus, allowance, subsidie
1255、s, staffs welfare, 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 sharing plans, etc. During the accounting period when employees render services, short-term benefit
1256、s payable that actually incurred shall be recognized as liabilities and credited into the current profit and loss or relevant assets cost on an accrual basis for the benefit objects. (2) Accounting methods of welfare after leaving office Post-employment benefits mainly includes the basic pension ins
1257、urance, supplementary pension, etc., In accordance with the risks and obligations undertaken by the Company, the post-employment benefits is classified as defined contribution plans and defined benefit pension plans. Defined contribution plans: the Company shall recognize the sinking fund paid to in
1258、dividual entity on balance sheet date as a liability in exchange of services from the employee in accounting period, and credited into current profits or losses or related assets costs in accordance with the benefit objects. Defined benefit plans: the cost of providing benefits is determined using t
1259、he 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 co
1260、st, past-service cost and settlement gain or loss. Current period service cost means the increase of the present value of defined benefit obligation resulted from the current period service offered by employee. Past-service cost means the increase or decrease of the present value of defined benefit
1261、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
1262、to charge the employee benefits into assets cost, the Company charges (1) and (2) above into current profit or loss, and recognized (3) above as other comprehensive income without transferring to profit or loss in subsequent accounting periods. (3) Accounting treatment of welfare post cancellation o
1263、f labor relationship Termination benefits: the indemnity proposal provided by the Company for employees for the purpose of terminating labor relation with the employees before the expiry of the labor contract or Qingdao Haier Co., Ltd. 2015 Annual Report 161 / 239 encouraging employees to accept dow
1264、nsizing voluntarily, when the following conditions are met, recognize and at the same time credited into the current profit or loss the accrued liabilities arising from the indemnity as a result of terminating labor relation with the employees: the Company has made a formal plan for termination of e
1265、mployment relationship or has made an offer for voluntary redundancy which will be implemented immediately; and the Company could not unilaterally withdraw from the termination plan or the redundancy offer. Early retirement benefits will adopt same principles as the termination benefit. The Company
1266、will credit the salaries and social benefits intend to pay for these early retirees during the periods from the date of early retirement to the normal retirement date to profit or loss of the current period when recognition conditions for accrued liabilities are met. 24. Revenue (1) Sale of goods Re
1267、venue from the sale of goods shall be recognized at the amount received or receivable from buyers based on contractual or agreed prices, only when all of the following conditions are satisfied: the significant risks and rewards of ownership of the goods have been passed to the buyer; the Company ret
1268、ains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the enterprise; the associated costs incurred or
1269、 to be incurred can be measured reliably. Recognition process of the Companys sales revenue: Business personnel submit sales application in the business system according to the consumers orders; financial personnel review the remaining credit of the consumers or whether the payment for goods is made
1270、 in advance according to the sales application, and notify the warehouse to handle the delivery formalities if the delivery conditions are met. The Financial Department confirms that the major risks of property in the goods and rewards have been transferred to the buyers upon the receipt of waybill
1271、with the consumers signature, and then issue sales invoices to confirm the sales revenue. (2) Provision of labor services At the balance sheet date, when the outcome of a transaction involving the rendering of services can be estimated reliably, revenue from provision of services shall be recognized
1272、 using the percentage of completion method. The Company confirms the completion progress in accordance with the ratio of actual cost accounting for the total estimated cost. At the balance sheet date, when the outcome of the Qingdao Haier Co., Ltd. 2015 Annual Report 162 / 239 transaction involving
1273、the rendering of services cannot be estimated reliably, it shall be dealt with in the following ways: if the cost of services incurred is expected to be compensated, the revenue from the rendering of services is recognized to the extent of actual cost incurred to date, and the relevant cost is trans
1274、ferred to cost of service in profit or loss; if the cost of services incurred is not expected to be compensated, the cost incurred should be included in current profit or loss, and no revenue from the rendering of services may be recognized. (3) Assignment of asset use rights Revenue from usage fee
1275、arising from assignment of intangible assets (such as trademark rights, patent rights, franchise rights, software and copyright, etc.) and the use right of other assets will be recognized in accordance with the time and method for charge as required under relevant contract or agreement and at the sa
1276、me time satisfy the conditions that the economic benefit in connection with transaction could flow into the Company and the amount of revenue could be reliably measured. (4) Construction contracts Where the outcome of a construction contract can be estimated reliably at the balance sheet date, reven
1277、ues and expenses associated are recognized using the percentage of completion method. The term percentage of completion method means a method by which the contractor recognizes its revenues and costs in the light of the schedule of the contracted project. The Company ascertained the completion sched
1278、ule of a contract project according to the proportion of the completed total contract cost against the expected total contract cost. 25.Government grants (1)Types of government grants Government grants refer to the monetary assets or non-monetary assets obtained by the Company from the government fo
1279、r free, not including the investment made by the government as an owner. The government grants are mainly divided into asset-related government grants and revenue-related government grants. Qingdao Haier Co., Ltd. 2015 Annual Report 163 / 239 a) Basis of determining and accounting of asset-related g
1280、overnment grant Asset-related government grants shall be recognized as deferred income in profit or loss for the current period on an even basis over the useful life of the asset；Government grants measured at nominal amount shall be recorded directly in profit and loss for the current period. b) Bas
1281、is of determining and accounting of income-related government grant Revenue-related government grants shall be treated as follows: those used to compensate relevant expenses or losses to be incurred by the enterprise in subsequent periods are recognized as deferred income and recorded in profit or l
1282、oss for the current period when such expenses are recognized; those used to compensate relevant expenses or losses that have been incurred by the enterprise are recorded directly in profit or loss for the current period. (2). Basis for determination of asset-related government grant and revenue-rela
1283、ted government grant If the government grant received by the Company is used for construction or other project that forms 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 as revenue-related gover
1284、nment grant. Government grant received without clear objective shall be classified as asset-related government grant or revenue-related government grant by: Government grant subject to a certain project shall be separated according to the proportion of expenditure budget and capitalization budget, a
1285、nd the proportion shall be reviewed and modified if necessary on the balance sheet date; Government grant shall be categorized as related to income if its usage is just subject to general statement but specific project in relevant document. (3) Amortization method and determination of amortization p
1286、eriod of deferred revenue related to government grants Asset-related government grant received by the Company is recognized as deferred revenue and is evenly amortized to profit or loss over the estimated useful life of the relevant asset starting from the date the asset is available for use. Qingda
1287、o Haier Co., Ltd. 2015 Annual Report 164 / 239 (4)Recognition of government grants Government grant receivable is recognized at the end of period when there is clear evidence that the conditions set out in the financial subsidy policies and regulation are fulfilled and the receipt of such financial
1288、subsidy is assured. Other government grants not fulfilling the above requirements are recognized upon actual receipt of such subsidies. 26. Deferred income tax assets / deferred income tax liabilities Deferred income tax assets and deferred income tax liabilities of the Company are recognized: (1) B
1289、ased on the difference between the carrying amount and the tax base amount of an asset or a liability (items not recognized as assets and liabilities but their tax base is ascertained by the current tax laws and regulation, the tax base is the difference), deferred income tax asset or deferred incom
1290、e tax liability is calculated using the applicable tax rate prevailing at the expected time of recovering the relevant asset or discharging the relevant liability. (2) Deferred income tax asset is recognized to the extent that there is enough future profit for the utilization of the deductible tempo
1291、rary difference. At the balance sheet date, if there is sufficient evidence that there would be enough future benefit for the utilization of the deductible temporary difference, the deferred income tax asset not previously recognized is recognized in current period. If there is no sufficient evidenc
1292、e that there would be enough future taxable income for the deduction of the deferred income tax asset, the carrying value of the deferred income tax asset is reduced. (3) Deferred income tax liability is recognized for taxable temporary difference arising from investments in subsidiaries and associa
1293、ted companies, unless the Company could control the reversal of the temporary differences and the temporary differences would not be reversed in the foreseeable future. For deductible temporary differences arising from investments in subsidiaries and associated companies, deferred income tax asset i
1294、s recognized if the temporary difference will be reversed in foreseeable future and there will be sufficient future taxable profit to utilize the deductible temporary difference. (4) No deferred income tax liability is recognized for a temporary difference arising from the initial recognition of goo
1295、dwill. No deferred income tax asset or deferred income tax liability is recognized for the temporary differences resulting from the initial recognition of assets or liabilities due to a transaction other than a business combination, which affects neither accounting profit nor taxable profit (or dedu
1296、ctible loss). Qingdao Haier Co., Ltd. 2015 Annual Report 165 / 239 27. Lease (1)Accounting treatment of Operating lease Rental payments for asset rented are amortized on a straight-line basis over the lease term (including rent-free periods), and credited into the current expenses. Initial direct co
1297、sts that are attributable to leasing transactions paid by the Company are credited to current expense. When the lesser bears the lease related expenses which should be undertaken by the Company, the Company shall deduct this part of expense from the rent and amortize the net amount over the lease te
1298、rm and credited to current expense. Rental income received from assets rented out is amortized on a straight-line basis over the lease term (including rent-free periods), and recognized as lease income. Initial direct costs involving leasing transactions paid by the Company are credited into current
1299、 expenses, in case the amount is significant, it will be capitalized, and are credited into current revenue on the same basis as rental income recognized over the lease term. When the Company bears the lease related expenses which should be undertaken by the lessee, the Company shall deduct this par
1300、t of expense from the total rent income, and amortize the rental payment over the lease term. (2)Accounting treatment of Finance lease When the Company is a lessee, the leased asset is recorded at the amounts equal to the lower of the fair value of the leased asset and the present value of the minim
1301、um lease payments on the lease beginning date and the long-term payables is recorded at the amounts of the minimum lease payments. The difference between the recorded amount of the leased asset and the minimum lease payments is accounted for as unrecognized finance charge. The unrecognized finance c
1302、harge is amortized using the effective interest method over the period of the lease and accounted in finance charge. Initial direct costs incurred by the Company are credited in value of leased assets. When the Company is a lessor, the difference between sum of the lease receivables and unguaranteed
1303、 residual value its and present value is accounted for as unrealized finance income and is recognized as rental income over the period of the lease. Initial direct costs attributable to lease transaction incurred by the Company shall be accounted in the initial measurement of finance lease receivabl
1304、es and reduced the amount of recognized revenue during period of the lease. 28. Other significant accounting policies and accounting estimations (1) Share repurchases When the Company purchases its own shares to decrease its registered capital or reward its staff, it shall be included in treasury st
1305、ock against the amount actually paid. When Company awards the purchased shares to its staff under the equity-settled share-based payment agreement, it shall be included in capital reserve (equity premium) against the difference Qingdao Haier Co., Ltd. 2015 Annual Report 166 / 239 between the book ba
1306、lance of awarded treasury stock and the staff-paid cash and capital reserve recognized upon the granting of equity instruments. When cancelling the treasury stock, the share capital shall be cancelled against the total face value of the cancelled treasury stock; the treasury stock shall be eliminate
1307、d against the book balance of the cancelled treasury stock; the capital reserve (equity premium) shall be eliminated against the difference; if the equity premium is insufficient for elimination, the retained earnings shall be adjusted accordingly. (2) Explanations on significant accounting estimate
1308、s Judgments, estimates and assumptions shall be made to financial statements items, which could not be measured accurately, due to the inherent uncertainties of operating activities, while applying accounting policy. Management bases its judgments, estimates and assumptions on historical experience
1309、and other various factors, these judgments will influence the amount of revenues, expenses, assets and liabilities presented in financial reports and the disclosure of contingent liabilities on the balance sheet date. However, these uncertainties may have a difference from the current estimates of t
1310、he management, and thus cause a material adjustment to the carrying amounts of assets and liabilities. The judgments, estimates and assumptions mentioned above shall be reviewed on a going concern basis. If the revisions to accounting estimates only influence the current period, relevant adjustment
1311、due to the effect shall be recognized in the current period; otherwise, in the current and future period. On the balance sheet date, the significant fields involving judgments, estimates and assumptions about financial report items are listed as follows: Estimated liability Provision for product qua
1312、lity guarantee, estimated onerous contracts, and delay delivery penalties shall be recognized in terms of contract, current knowledge and historical experience. If the contingent event has formed a practical obligation which probably results in outflow of economic benefits from the Company, an estim
1313、ated liability shall be recognized on the basis of the best estimate of the expenditures to settle relevant practical obligation. Recognition and measurement of the estimated liability significantly rely on the managements judgments in consideration of the assessment of relevant risks, uncertainties
1314、, time value of money and other factors related to the contingent events. Among them, the Company will undertake estimated liabilities with respect to the after-sales services provided for the return, maintenance and installation of goods. When estimating liabilities, the Company has considered the
1315、maintenance information in recent years, but the previous maintenance experiences may fail to reflect the future circumstances. Any increase or decrease in this provision is likely to affect the profits and losses of the next year. Provision for bad debts The allowance method is adopted for bad debt
1316、s according to accounting policies of trade receivables. Impairment losses for receivables are assessed on the basis of recoverability, as a result of judgments and estimates of the management. The difference between actual outcome and the previously estimated outcome will influence the carrying val
1317、ue of receivables and accrual or reversal of provision for bad debts during the period accounting estimates are changed. Qingdao Haier Co., Ltd. 2015 Annual Report 167 / 239 Provision of write-down of inventories Inventories are measured by lower of historical cost or net realizable value method acc
1318、ording to the accounting policies of inventories; for obsolete and unsalable inventories or whose historical costs are higher than the net realizable, provision for write-down of inventories shall be incurred. The carrying value of inventory shall be written down to the net realizable value on the b
1319、asis of the salability of inventories and the net realizable value. Inventory write-down shall be incurred in consideration of solid evidence and the purpose of holding inventories and the effect of subsequent events and etc. The difference between the actual outcome and the previously estimated out
1320、come will influence the carrying value of inventories and accrual or reversal of provision for write-down of inventories during the period accounting estimates are changed. Fair value of financial instruments For financial instruments where there is no active market, the Company will determine the f
1321、air value through a variety of valuation methods. Such valuation methods include discounted cash flow analysis. In the valuation, the Company shall estimate the future cash flow, credit risk, market volatility and correlation, and select the appropriate discount rate. Such related assumptions are un
1322、certain, and their changes may affect the fair value of financial instruments. Impairment of available-for-sale financial assets The determination of whether impairment loss shall be recognized in income statement for available-for-sale financial asset is significantly depends on the judgments and a
1323、ssumptions of the management. While making judgments and assumptions, it shall be take into consideration that how much the fair value of the investment is lower than the cost, the financial position and short-term business projection, including industry conditions, technological innovation, the cre
1324、dit ratings, probability of violation and counterparts risks. Provision for long-term assets impairment On the balance sheet date, the Company shall judge whether there is any possible indication of impairment against non-current assets other than financial assets. The intangible assets with indefin
1325、ite useful life must be tested for impairment on an annual basis as well as when there is any indication of impairment. Other non-current assets other than financial assets shall be tested for impairment when there is an indication showing that the carrying value is not recoverable. Impairment occur
1326、s while the carrying value of an asset or asset group is higher than the recoverable value, which is the higher of its fair value deducted disposal expenses and the present value of expected future cash flow. The fair value deducted by disposal expenditure is determined in consideration that sale ag
1327、reement regarding analogous asset, and approachable market price and relevant dispose expenditures. Significant judgments regarding the production amount, sales price, relevant operating costs of the assets (or assets group) and the discount rate used to calculate the present value shall be made, wh
1328、ile determining the present value of future cash flows. Recoverable amount shall be estimated by using all accessible relevant information, including production amount, sales price, and relevant operating costs predictions made based on reasonable and supportive assumptions. The Company shall test f
1329、or goodwill impairment at least every Qingdao Haier Co., Ltd. 2015 Annual Report 168 / 239 year. This requires the Company to estimate the present value of future cash flows for such assets or asset groups allocated with goodwill. When estimating the present value of future cash flows, the Company s
1330、hall not only estimate the future cash flows generated by such assets or asset groups, and select the appropriate discount rate to determine the present value of such future cash flows. Depreciation and amortization Investment properties, fixed assets and intangible assets are depreciated and amorti
1331、zed by a straight-line approach over their estimated useful life by taking the residual value into consideration. Useful life shall be periodically reviewed to determine the depreciation and amortization expenses for each reporting period and be determined on the basis of historical experience regar
1332、ding analogous assets and the expected technological innovation. Significant changes to previous accounting estimates will result in adjustments against depreciation and amortization expenses in the future periods. Deferred tax assets Deferred tax asset is recognized for all the uncompensated tax lo
1333、sses to the extent of the amount of deductible taxable income. In order to determine the amount of deferred tax assets, the management needs to predict the timing and the amount of taxable profits in the future by taking into account the influence of tax planning. Income tax There are many transacti
1334、ons and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. Whether some items are non-deductible shall be approved by relevant tax authorities. Where the final tax outcome of these matters is different from the carrying amount, such
1335、differences will impact the current and deferred tax. Returned profits from sales The Company and its subsidiaries adopt the policy of returned profits from sales for all consumers. According to the relevant conventions in the sales agreement, the review of specific transactions, the market situatio
1336、n, the pipeline inventory levels and the historical experiences, the Company and its subsidiaries estimate and make returned profits from sales on a regular basis pursuant to the completion of agreed assessment indexes. Provisions of returned profits from sales involve the judgment and estimates of
1337、the management. In case of any significant changes in the previous estimates, the balance above will have an impact on the returned profits from sales during the period when significant changes occur. 29. Changes in significant accounting policies and accounting estimates (1) Changes in significant
1338、accounting policies Applicable Not Applicable (2) Changes in accounting estimates Applicable Not Applicable Qingdao Haier Co., Ltd. 2015 Annual Report 169 / 239 VI. Taxation 1. Main tax types and tax rates Tax type Basis of taxation Tax rate Value-added tax Taxable revenue of goods sales and taxable
1339、 labor services revenue 6%, 11%, 17% Business tax Business tax amount payable 3%, 5% Urban maintenance and construction tax Turnover tax amount payable 7% EIT Income tax amount payable Statuary tax rate are as follows (Local) education surcharges Turnover tax amount payable 1%, 2%, 3% Rate of income
1340、 tax of the Company and subsidiaries are as follows: Applicable Not Applicable 2. Preferential tax Companies enjoying preferential tax and preferential tax rate: Name of company Tax rate Preferential tax Qingdao Haier Co., Ltd. 15% entitled to the preferential taxation policies as a hi-tech enterpri
1341、se Qingdao Haier Refrigerator Co., Ltd. 15% entitled to the preferential taxation policies as a hi-tech enterprise Qingdao Haier Intelligent Electronics Co., Ltd. 15% entitled to the preferential taxation policies as a hi-tech enterprise Qingdao Haier Special Refrigerator Co., Ltd. 15% entitled to t
1342、he 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 Qingdao Haier Dishwasher Co., Ltd. 15% entitled to the preferential taxation policies as a hi-tech enterprise Qingdao Hai
1343、er Special Freezer Co., Ltd. 15% entitled to the preferential taxation policies as a hi-tech enterprise Qingdao Haier Intelligent Home Appliance Technology Co., Ltd 15% entitled to the preferential taxation policies as a hi-tech enterprise Wuhan Haier Electronics Co., Ltd. 15% entitled to the prefer
1344、ential taxation policies as a hi-tech enterprise 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., Lt
1345、d. 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 Chongqing Haier Air-conditioning Co., Ltd. 15% entitled to the preferential taxation policies under the
1346、Western Development initiative of the PRC Chongqing Haier Refrigeration Appliance Co., Ltd. 15% entitled to the preferential taxation policies under the Western Development initiative of the PRC Guizhou Haier Electronics Co., Ltd. 15% entitled to the preferential taxation policies under the Western
1347、Development initiative of the PRC Qingdao Haier Co., Ltd. 2015 Annual Report 170 / 239 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
1348、 hi-tech enterprise Qingdao Haier Special Steel Plate Research and Development 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 Chongqing Haier Precisi
1349、on Plastic Co., Ltd. 15% entitled to the preferential taxation policies under the Western Development initiative of the PRC Chongqing Haier Intelligent Electronics Co., Ltd. 15% entitled to the preferential taxation policies under the Western Development initiative of the PRC Qingdao Haigao Design &
1350、 Manufacture Co., Ltd. 15% entitled to the preferential taxation policies as a hi-tech enterprise Qingdao Haier Technology Co., Ltd. 15% entitled to the preferential taxation policies as a hi-tech enterprise Qingdao Hairi High Technology Molding Co., Ltd. 15% entitled to the preferential taxation po
1351、licies as a hi-tech enterprise Qingdao Haier (Jiaozhou) Air-Conditioner Co., Ltd. 15% entitled to the preferential taxation policies as a hi-tech enterprise Beijing Haier Guangke Digital Technology Co., Ltd. 15% entitled to the preferential taxation policies as a hi-tech enterprise He Fei Haier Wash
1352、ing 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 taxatio
1353、n 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 Appliance 15% entitled to the preferential taxation policies as a hi-tech enterprise Qingdao Economy and Technology
1354、Development Zone Haier Water Heater Co., Ltd. Ltd. 15% entitled to the preferential taxation policies as a hi-tech enterprise Wu Han Haier Water Heater Co., Ltd. 15% entitled to the preferential taxation policies as a hi-tech enterprise Chongqing Goodaymart Electronics Sales Co., Ltd. 15% entitled t
1355、o the preferential taxation policies under the Western Development initiative of the PRC Chongqing Haier Home Appliance Sale Co., Ltd. and some branches in western region 15% entitled to the preferential taxation policies under the Western Development initiative of the PRC Chongqing Goodaymart Elect
1356、ronics Sales Co., Ltd. and some of branch companies 15% entitled to the preferential taxation policies under the Western Development initiative of the PRC Chongqing Haier washing machine Co., Ltd. 15% entitled to the preferential taxation policies under the Western Development initiative of the PRC
1357、Chongqing Haier Water Heater Co., Ltd. 15% entitled to the preferential taxation policies under the Western Development initiative of the PRC Chongqing Haier Drum Washing Machine Co., Ltd 15% entitled to the preferential taxation policies under the Western Development initiative of the PRC Qingdao H
1358、aier Co., Ltd. 2015 Annual Report 171 / 239 3. Others VII. Explanatory Notes for Items in Consolidated Financial Statements Unless otherwise specified, the following closing balance means the amount as at 31 December 2015; opening balance means the amount as at 31 December 2014; current period means
1359、 the amount incurred from 1 January to 31 December 2015, while the previous period means the amount incurred from 1 January to 31 December 2014. 1. Monetary funds Unit and Currency: RMB Items Closing balance Opening balance Treasury cash 448,890.79 667,833.83 Bank deposit 24,622,416,375.45 31,118,67
1360、9,107.93 Other monetary funds 91,949,685.73 106,068,874.12 Total 24,714,814,951.97 31,225,415,815.88 Among which: total of overseas amounts 1,000,735,432.46 2,418,099,379.53 Other explanatory An amount of RMB11,141,062,633.53 of the monetary fund was deposited in Haier Group Finance Co., Ltd. on 31
1361、December 2015, the balance of which including a fixed term deposit of RMB4,520,300,000.00. The investment fund in the closing balance of other monetary fund was RMB53,487,981.75, the payment of the third party platform was RMB6,473,256.10 and the amount securing bill payable was RMB31,988,447.88. 2.
1362、 Financial asset designated to be measured by fair value and change of which is recorded in current profit and loss Applicable Not Applicable Items Closing balance Opening balance Forward foreign exchange sale and purchase agreement 22,069,897.04 103,668,887.71 Total 22,069,897.04 103,668,887.71 3.
1363、Bills receivable (1) Categories of bills receivable Applicable Not Applicable Unit and Currency: RMB Items Closing balance Opening balance Bank acceptance notes 2,030,726,556.43 3,935,944,898.33 Commercial acceptance bill 10,642,925,056.43 12,538,175,841.84 Total 12,673,651,612.86 16,474,120,740.17
1364、(2)The pledged bills receivable of the Company at the end of the period was RMB 7,943,296,324.49. Qingdao Haier Co., Ltd. 2015 Annual Report 172 / 239 4. Trade receivables (1)Trade receivables disclosed by categories: Items Closing balance Opening balance Book balance Provision for bad debts Book ba
1365、lance Provision for bad debts Trade receivables that are individually significant and are subjected to provision for bad debts on individual basis Trade receivables that are subjected to provision for bad debts on portfolio basis 6,464,622,032.50 323,231,101.63 7,090,924,171.34 354,546,208.57 Trade
1366、receivables that are individually insignificant but are subjected to provision for bad debts on individual basis 124,613,269.46 124,613,269.46 65,754,801.54 65,754,801.54 Total 6,589,235,301.96 447,844,371.09 7,156,678,972.88 420,301,010.11 (2)Trade receivables of which provision for bad debts is ma
1367、de according to aging analysis within the group: Applicable Not Applicable Aging Closing balance Opening balance Book balance Provision for bad debts Book balance Provision for bad debts Within 1 year 6,240,233,823.59 312,011,691.20 6,906,704,119.89 345,335,205.98 1-2 years 177,154,723.15 8,857,736.
1368、15 133,485,982.27 6,674,299.12 2-3 years 10,733,254.50 536,662.72 36,401,544.69 1,820,077.24 Over 3 years 36,500,231.26 1,825,011.56 14,332,524.49 716,626.23 Total 6,464,622,032.50 323,231,101.63 7,090,924,171.34 354,546,208.57 (3)The total amount of the top 5 in the trade receivables at the end of
1369、the period was RMB1,472,299,078.60, accounting for 22.34% of the book balance of the trade receivables, and the amount of provision for bad debts was RMB73,614,953.93. (4) Provisions for bad debts made, collected or reversed in the current period: Provisions for bad debts in the amount of RMB 55,170
1370、,989.48 were made in the current period. (5) Accounts receivable written off in the current period The bad debts written off in the current period amounted to RMB6,075,120.17, and there was no significant accounts receivable written off in the current period. 5. Prepayments (1) Aging of prepayments:
1371、 Unit and Currency: RMB Aging Closing balance Opening balance Qingdao Haier Co., Ltd. 2015 Annual Report 173 / 239 Amount Proportion (%) Amount Proportion (%) Within 1 year 304,860,675.09 54.74 689,547,822.13 82.47 1-2 years 84,576,029.21 15.19 92,381,704.21 11.05 2-3 years 111,635,498.60 20.05 27,1
1372、82,650.43 3.25 Over 3 years 55,799,800.49 10.02 26,971,816.19 3.23 Total 556,872,003.39 100 836,083,992.96 100 (2)The total amount of the top 5 in the prepayments at the end of the period was RMB126,201,327.86, accounting for 22.66% of the book balance of the prepayments. 6. Interest receivables App
1373、licable Not Applicable Aging Closing balance Opening balance Book balance Proportion Book balance Proportion Within 1 year 183,731,216.46 100.00% 178,522,845.11 100.00% Total 183,731,216.46 100.00% 178,522,845.11 100.00% 7. Other receivables (1) Other receivables disclosed by categories: Items Closi
1374、ng balance Opening balance Book balance Provision for bad debts Book balance Provision for bad debts Individual significant other receivables of which provision for bad debts is made on an individual basis Other receivables of which provision for bad debts is made on a group basis 503,762,220.81 25,
1375、188,111.04 636,411,007.62 31,820,550.38 Individual insignificant other receivables of which provision for bad debts is made on an individual basis 16,989,358.60 16,989,358.60 8,320,297.85 8,320,297.85 Total 520,751,579.41 42,177,469.64 644,731,305.47 40,140,848.23 (2) Other receivables of which prov
1376、ision for bad debts is made on portfolio basis: Aging Closing balance Opening balance Carrying Balance Provision for bad debts Carrying Balance Provision for bad debts Within one year 271,943,281.93 13,597,164.11 595,714,702.41 29,785,735.12 1-2 years 200,229,224.55 10,011,461.22 29,734,745.57 1,486
1377、,737.28 Qingdao Haier Co., Ltd. 2015 Annual Report 174 / 239 2-3 years 16,878,863.68 843,943.18 4,655,121.58 232,756.08 Over 3 years 14,710,850.65 735,542.53 6,306,438.06 315,321.90 Total 503,762,220.81 25,188,111.04 636,411,007.62 31,820,550.38 (3)At the end of the period, total amount of top five
1378、other receivables was RMB104,217,012.04, representing 20.01% of the book balance of other receivables, and the amount of provision for bad debts was RMB5,210,850.60. (4) Bad-debt provisions made, collected or reversed in the current period: Provisions for bad debts in the amount of RMB6,928,631.57 w
1379、ere made in the current period. (5) There was no other receivable written off in the current period. (6) Other receivables mainly include the deposit, the quality retention money, staff borrowing, tax refunds, and advance money for another, etc. 8. Inventories (1) Details of inventories: Items Closi
1380、ng balance Opening balance Book balance Impairment Provision Book balance Impairment Provision Raw materials 1,319,167,777.77 27,740,567.60 1,949,737,346.72 45,422,279.17 Work in progress 100,862,950.68 78,710,967.65 Engineering construction 183,826,364.76 170,319,071.95 Finished goods 7,265,453,539
1381、.26 282,326,025.78 7,001,755,604.31 133,459,770.55 Total 8,869,310,632.47 310,066,593.38 9,200,522,990.63 178,882,049.72 (2) Impairment provision of inventories: Items Opening balance Increase for the current period Decrease for the period Closing balance Reversal Write-off Total Raw materials 45,42
1382、2,279.17 3,827,521.08 9,445,223.60 12,064,009.05 21,509,232.65 27,740,567.60 Finished goods 133,459,770.55 256,499,729.47 107,633,474.24 107,633,474.24 282,326,025.78 Total 178,882,049.72 260,327,250.55 9,445,223.60 119,697,483.29 129,142,706.89 310,066,593.38 （3）Engineering construction Items Total
1383、 of actual contract costs Accumulatively recognized gross profit The settled price Closing balance Opening balance Closing balance Opening balance Closing balance Opening balance Qingdao Haier Co., Ltd. 2015 Annual Report 175 / 239 Engineering construction 730,332,518.99 593,043,713.33 154,760,775.1
1384、3 114,811,872.59 701,266,929.36 537,536,513.97 9. Other current assets Unit and Currency: RMB Items Closing balance Opening balance Bank Treasury deposit 250,000,000.00 242,400,000.00 Deductible VAT 962,096,326.52 409,584,923.23 Others 238,968,870.78 139,033,818.42 Total 1,451,065,197.30 791,018,741
1385、.65 10. Available-for-sale financial assets Applicable Not Applicable (1) Explanation of available-for-sale financial assets: Items Closing balance Opening balance Carrying Balance Provision for impairment Book value Carrying Balance Provision for impairment Book value Available-for-sale equity inst
1386、rument: 2,840,543,201.20 3,225,000.00 2,837,318,201.20 1,437,781,907.98 7,160,559.63 1,430,621,348.35 At fair value 1,453,993,243.39 1,453,993,243.39 1,394,842,730.44 1,394,842,730.44 At cost 1,386,549,957.81 3,225,000.00 1,383,324,957.81 42,939,177.54 7,160,559.63 35,778,617.91 Total 2,840,543,201.
1387、20 3,225,000.00 2,837,318,201.20 1,437,781,907.98 7,160,559.63 1,430,621,348.35 (2) Available-for-sale financial assets at fair value at the end of the period: Categories of available-for-sale financial assets Available-for-sale equity instrument Cost of equity instrument 912,022,174.60 Fair value 1
1388、,453,993,243.39 Accumulated fair value changes credited into other comprehensive income 459,664,677.19 Allowance for impairment amounts (3)Available-for-sale financial assets at cost at the end of the period: Book value Opening Balance Increase for the period Decrease for the period Closing Balance
1389、(1) Book value Haier Home Integration Limited 2,500,000.00 2,500,000.00 Qingdao Hai Yong Cheng Certification Services Co., Ltd. 100,000.00 100,000.00 Haier Innovative Technology Service co., Ltd. 25,000.00 25,000.00 Beijing Jia Wei Yi Jia Technology Co., Ltd. 300,000.00 300,000.00 Qingdao Haier Gold
1390、 Plastic Products Co., Ltd. 900,000.00 900,000.00 Pioneer Energy (Jiangsu) Co., Ltd. 20,000,000.00 20,000,000.00 Shanghai Haier Integrated Circuit Co., 15,511,100.74 15,511,100.74 Qingdao Haier Co., Ltd. 2015 Annual Report 176 / 239 Ltd. GK Shanghai Design Inc. 297,961.20 297,961.20 Wuhan Huaxin Hi-
1391、tech Co., Ltd. 200,000.00 200,000.00 Wuhan Household Appliances Group Co., Ltd. 1,000,000.00 1,000,000.00 Qingdao Haier Facility Management Co., Ltd. 2,000,000.00 2,000,000.00 Shenzhen Holdings Donghai Investment Co., Ltd. 1,500,000.00 1,500,000.00 Shenzhen Holdings Donghai Phase I Fund (limited par
1392、tnership) 7,500,000.00 7,500,000.00 Beijing Xiaobei Technology Co., Ltd. 1,828,125.00 1,828,125.00 China Petrochemical Marketing Co., Ltd. 1,290,489,366.41 1,290,489,366.41 Shanghai Grand Logistics Co., Ltd. 61,200,000.00 61,200,000.00 Others 105,115.60 4,750.00 360.40 109,505.20 Total 42,939,177.54
1393、 1,362,522,241.41 18,911,461.14 1,386,549,957.81 (2) Provision for impairment Haier Home Integration Limited Qingdao Hai Yong Cheng Certification Services Co., Ltd. Haier Innovative Technology Service co., Ltd. 25,000.00 25,000.00 Beijing Jia Wei Yi Jia Technology Co., Ltd. Qingdao Haier Gold Plasti
1394、c Products Co., Ltd. Pioneer Energy (Jiangsu) Co., Ltd. Shanghai Haier Integrated Circuit Co., Ltd 3,960,559.63 3,960,559.63 GK Shanghai Design Inc. Wuhan Huaxin Hi-tech Co., Ltd. 200,000.00 200,000.00 Wuhan Household Appliances Group Co., Ltd. 1,000,000.00 1,000,000.00 Qingdao Haier Facility Manage
1395、ment Co., Ltd. 2,000,000.00 2,000,000.00 Shenzhen Holdings Donghai Investment Co., Ltd. Shenzhen Holdings Donghai Phase I Fund (limited partnership) Beijing Xiaobei Technology Co., Ltd. China Petrochemical Marketing Co., Ltd. Shanghai Grand Logistics Co., Ltd. Others Total 7,160,559.63 25,000.00 3,9
1396、60,559.63 3,225,000.00 (3) Book value Haier Home Integration Limited 2,500,000.00 Qingdao Hai Yong Cheng Certification Services Co., Ltd. 100,000.00 100,000.00 Haier Innovative Technology Service co., Ltd. 25,000.00 Beijing Jia Wei Yi Jia Technology Co., Ltd. 300,000.00 300,000.00 Qingdao Haier Gold
1397、 Plastic Products Co., Ltd. 900,000.00 Pioneer Energy (Jiangsu) Co., Ltd. 20,000,000.00 20,000,000.00 Qingdao Haier Co., Ltd. 2015 Annual Report 177 / 239 Shanghai Haier Integrated Circuit Co., Ltd. 11,550,541.11 GK Shanghai Design Inc. 297,961.20 297,961.20 Wuhan Huaxin Hi-tech Co., Ltd.（ Wuhan Hou
1398、sehold Appliances Group Co., Ltd. Qingdao Haier Facility Management Co., Ltd. Shenzhen Holdings Donghai Investment Co., Ltd. 1,500,000.00 Shenzhen Holdings Donghai Phase I Fund (limited partnership) 7,500,000.00 Beijing Xiaobei Technology Co., Ltd. 1,828,125.00 China Petrochemical Marketing Co., Ltd
1399、. 1,290,489,366.41 Shanghai Grand Logistics Co., Ltd. 61,200,000.00 Others 105,115.60 109,505.20 Total 35,778,617.91 1,383,324,957.81 (4) Movement in impairment of available-for-sale financial assets during the reporting period: Items Provision for impairment of available-for-sale equity instrument
1400、Provision balance at the beginning of the period 7,160,559.63 Provision made in the year 25,000.00 Decreased in the year 3,960,559.63 Allowance for impairment amounts at the end of the period 3,225,000.00 11. Long-term equity investments Applicable Not Applicable Investees Opening balance Increase/d
1401、ecrease during the period Investments increased Investment income recognized under equity method Adjustment in other comprehensive income Other changes in equity Declaration of cash dividends or profits Associates: Haier Group Finance Co., Ltd. 2,933,846,942.59 639,782,002.34 31,143,808.65 Haier Med
1402、ical and Laboratory Products Co., Ltd. 270,141,291.60 13,366,494.73 Wolong Electric Zhangqiu Haier Motor Co., Ltd. 110,995,187.75 8,972,996.78 Qingdao Haier Software Investment Co., Ltd. 16,323,729.58 710,142.88 Qingdao Haier SAIF Smart Home Industry Investment Center (limited partnership) 202,000,0
1403、00.00 -1,733,167.23 Qingdao Haier Special Steel Plate Research and Development Co., Ltd. 95,964,009.69 -756,895.83 Hefei Haier Special Steel Plate Research and Development 114,176,814.54 -176,814.54 Qingdao Haier Co., Ltd. 2015 Annual Report 178 / 239 Co., Ltd. Beijing Mr. Hi Network Technology Comp
1404、any Limited 3,750,000.00 -1,143,116.72 Haier Tongchuang Investment Partnership (limited partnership) 160,000,000.00 12,400.00 Qingdao HSW Water Appliance Co., Ltd. 72,728.10 3,633,891.90 35,731,064.81 Qingdao Roca Water Appliance Co., Ltd. 7,350,000.00 5,950,791.62 China Shengfeng Microfinance limit
1405、ed in Jinan District of Fuzhou City 71,754,558.28 6,843,637.31 Fujian ATL-Shengfeng Logistics Co., Ltd. 12,573,271.17 397,264.64 -340,000.00 Shenzhen Storm Leader Technology Co., Ltd. 21,173,548.79 -5,005,041.75 Konan Electronic Co., Ltd. 23,986,803.71 6,989,998.02 927,434.50 HPZ Limited 63,525,998.
1406、33 8,996,878.31 819,877.49 HNR Company (Private) Limited 83,881,638.11 5,563,919.72 6,704,244.06 Hefei Huadong Packaging Co., Ltd. 25,302,522.69 3,319,345.04 -9,298,600.00 Total 3,582,596,477.92 634,222,567.01 695,724,727.22 39,595,364.70 35,731,064.81 -9,638,600.00 continued table Investees Increas
1407、e/decrease during the period Closing balance Closing balance of provision for impairment Others The disposal of the investment Associates: Haier Group Finance Co., Ltd. 3,604,772,753.58 Haier Medical and Laboratory Products Co., Ltd. 283,507,786.33 Wolong Electric Zhangqiu Haier Motor Co., Ltd. 119,
1408、968,184.53 Qingdao Haier Software Investment Co., Ltd. 17,033,872.46 Qingdao Haier SAIF Smart Home Industry Investment Center (limited partnership) 200,266,832.77 Qingdao Haier Special Steel Plate Research and Development Co., Ltd. 95,207,113.86 Hefei Haier Special Steel Plate Research and Developme
1409、nt Co., Ltd. 114,000,000.00 Beijing Mr. Hi Network Technology Company Limited 2,606,883.28 Haier Tongchuang Investment Partnership (limited partnership) 160,012,400.00 Qingdao HSW Water Appliance Co., Ltd. 39,437,684.81 Qingdao Roca Water Appliance Co., Ltd. 13,300,791.62 China Shengfeng Microfinanc
1410、e limited in Jinan District of Fuzhou City 78,598,195.59 Fujian ATL-Shengfeng Logistics Co., Ltd. 12,630,535.81 Shenzhen Storm Leader Technology Co., Ltd. 16,168,507.04 Konan Electronic Co., Ltd. 31,904,236.23 HPZ Limited 73,342,754.13 HNR Company (Private) Limited 96,149,801.89 Hefei Huadong Packag
1411、ing Co., Ltd. -19,323,267.73 Total -19,323,267.73 4,958,908,333.93 Qingdao Haier Co., Ltd. 2015 Annual Report 179 / 239 12. Investment properties Applicable Not Applicable (1) Increase and decrease of investment property under cost model for the year are set out as follows: Items Opening balance Inc
1412、rease for the period Decrease for the period Closing balance (1) Total original costs for the investment property 38,358,419.50 26,642,367.85 11,716,051.65 House, buildings and land 38,358,419.50 26,642,367.85 11,716,051.65 (2) Total accumulated amortization for the investment property 7,775,566.78
1413、491,152.92 8,266,719.70 House, buildings and land 7,775,566.78 491,152.92 8,266,719.70 (3) Total accumulated provision for Impairment for the investment property House, buildings and land (4) Total book value for the investment property 30,582,852.72 3,449,331.95 House, buildings and land 30,582,852
1414、.72 3,449,331.95 (2) Depreciated and amortized amount for the period was RMB491,152.92 . (3) No provision for impairment was made as the recoverable amount of investment property was not less than the book value of the Company at the end of the period. 13. Fixed assets Category of fixed assets Openi
1415、ng balance Increase for the period Decrease for the period Translation reserve Closing balance (1) Book value Buildings and structures 5,120,446,831.45 1,033,121,701.52 201,037,110.32 4,259,788.41 5,956,791,211.06 Production equipment 7,536,506,221.09 937,547,313.95 1,061,706,872.49 -5,259,349.45 7,
1416、407,087,313.10 Transportation equipment 191,092,533.02 157,709,139.21 56,052,984.57 -8,043,936.48 284,704,751.18 Office equipment 206,280,613.02 56,220,171.29 21,297,514.41 666,142.13 241,869,412.03 Others 488,398,727.08 212,351,348.37 58,407,097.69 852,245.64 643,195,223.40 Total 13,542,724,925.66
1417、2,396,949,674.34 1,398,501,579.48 -7,525,109.75 14,533,647,910.77 (2) Accumulated depreciation Buildings and structures 1,664,767,447.23 258,652,344.89 152,314,939.34 784,983.34 1,771,889,836.12 Production equipment 4,006,404,253.05 553,586,576.00 744,269,842.02 -4,677,328.97 3,811,043,658.06 Transp
1418、ortation equipment 100,030,493.42 68,072,847.74 45,924,981.85 -14,433,352.76 107,745,006.55 Office equipment 141,880,028.11 16,072,084.68 19,746,417.65 62,405.36 138,268,100.50 Qingdao Haier Co., Ltd. 2015 Annual Report 180 / 239 Others 230,529,801.79 57,597,328.36 43,098,851.34 -461,616.34 244,566,
1419、662.47 Total 6,143,612,023.60 953,981,181.67 1,005,355,032.20 -18,724,909.37 6,073,513,263.70 (3) Net book value Buildings and structures 3,455,679,384.22 4,184,901,374.94 Production equipment 3,530,101,968.04 3,596,043,655.04 Transportation equipment 91,062,039.60 176,959,744.63 Office equipment 64
1420、,400,584.91 103,601,311.53 Others 257,868,925.29 398,628,560.93 Total 7,399,112,902.06 8,460,134,647.07 (4) Provision for impairment Buildings and structures 5,380,416.50 22,075,540.32 696,032.18 28,151,989.00 Production equipment 18,752,377.76 9,645,477.94 58,978.05 9,165,877.87 Transportation equi
1421、pment 87,260.54 -89.02 87,171.52 Office equipment 2,078,906.22 135,361.12 82,109.95 2,025,655.05 Others 155,485.11 155,485.11 Total 26,454,446.13 22,075,540.32 9,780,839.06 837,031.16 39,586,178.55 (5) Book value Buildings and structures 3,450,298,967.72 4,156,749,385.94 Production equipment 3,511,3
1422、49,590.28 3,586,877,777.17 Transportation equipment 90,974,779.06 176,872,573.11 Office equipment 62,321,678.69 101,575,656.48 Others 257,713,440.18 398,473,075.82 Total 7,372,658,455.93 8,420,548,468.52 (1) Total fixed asset transferred from construction-in-progress balance during the period amount
1423、ed to RMB2,164,973,212.42. (2) Haier Group Corporation, the parent company of the Company, issued an undertaking letter to the Company, committing that it will ensure the Company and its subsidiaries use the self-establish buildings and the Groups lands in a continuous, steady, free and undisturbed
1424、condition. If Haier Group Corporation suspended or terminated to fulfill its commitment and obligation as leading to any loss of the Company and its subsidiaries, Haier Group Corporation shall take responsibility for the loss. As for the legal defects of the Companys and its substantial subsidiaries
1425、 land and property, the Company committed since the application date of non-public issue, the Company will use all reasonable Qingdao Haier Co., Ltd. 2015 Annual Report 181 / 239 commercial endeavors to solve the real estate defects of the Company and its substantial subsidiaries within five years t
1426、o realize the legal compliance of the Companys and its substantial subsidiaries land and property. (3) The pledged fixed assets were RMB 55,137,400.00 at the end of the period. (4) The rental financial fixed assets: Items Category of fixed assets Closing balance (1) Book Amount Transportation equipm
1427、ent 32,621,686.22 (2) Accumulated depreciation Transportation equipment 4,405,293.46 (3) Net book value Transportation equipment 28,216,392.76 (4) Provision for impairment Transportation equipment (5) Book value Transportation equipment 28,216,392.76 14. Construction in progress Applicable Not Appli
1428、cable (1). Construction in progress Closing balance Opening balance Book balance Provision for impairment Book value Book balance Provision for impairment Book value (1) Balance of Construction in progress Projects Opening balance Increase for the period Transfer to fixed assets Other decrease Trans
1429、lation reserve Closing balance Percentage of completion Source of fund Chongqing Household Air Conditioner 15,555,553.98 33,920,933.09 27,690,378.49 21,786,108.58 95% Self-financing Hefei Refrigerator 64,184,363.31 66,805,609.94 76,430,053.13 54,559,920.12 94% Self-financing Qingdao Special Freezer
1430、34,903,404.89 56,184,778.71 38,169,281.31 52,918,902.29 90% Self-financing Jiaozhou Air-Conditioner 152,589,571.22 103,182,962.38 180,973,555.32 74,798,978.28 80% Self-financing Zhengzhou Air-Conditioner 68,227,489.21 492,396,704.14 535,928,440.60 24,695,752.75 95% Self-financing Shenyang Refrigerat
1431、or 114,751,804.95 42,685,334.00 58,255,995.45 99,181,143.50 94% Self-financing Qingdao Special Refrigerator 62,390,940.34 26,197,066.99 73,081,068.11 15,506,939.22 91% Self-financing Qingdao Haier Co., Ltd. 2015 Annual Report 182 / 239 Dalian Refrigerator 27,618,437.59 16,169,526.14 31,694,571.78 12
1432、,093,391.95 95% Self-financing Electrical Air-Conditioner 48,782,790.59 67,805,041.65 54,880,738.52 61,707,093.72 82% Self-financing Foshan Front-loading Washing Machine 39,231,081.66 35,056,193.62 74,106,463.31 180,811.97 93% Self-financing Qingdao Electric Water Heater 39,885,031.98 51,723,678.18
1433、62,371,291.56 29,237,418.60 64% Self-financing Qingdao Haier New Energy Electric Appliance 114,738,021.36 30,474,441.93 122,197,153.17 23,015,310.12 70% Self-financing Qingdao Front-loading Washing Machine 21,669,160.15 59,179,659.69 35,773,752.95 45,075,066.89 80% Self-financing Guiyang logistics 1
1434、8,123,581.41 46,875,140.76 64,998,722.17 end Self-financing Ningbo logistics 80,074,630.30 80,074,630.30 end Self-financing Nanchang logistics 130,500.00 62,976,142.78 63,106,642.78 end Self-financing Changchun logistics 373,310.00 52,349,013.09 52,722,323.09 end Self-financing Chongqing Water Heate
1435、r 5,222,370.22 60,871,917.11 13,394,295.05 52,699,992.28 91% Self-financing Japan projects 225,829,287.26 44,649,512.86 261,086,937.77 1,679,669.76 11,071,532.11 30% Self-financing Russian Project 60,550,817.60 60,550,817.60 95% Self-financing American Project 56,484,200.24 56,484,200.24 50% Self-fi
1436、nancing others 302,481,045.35 658,070,794.16 518,939,235.90 6,094,224.64 -512,254.46 435,006,124.51 Self-financing Total 1,356,687,745.47 2,204,684,099.36 2,164,973,212.42 6,094,224.64 1,167,415.30 1,391,471,823.07 (2) Provision for impairment of construction in progress Name of Projects Opening bal
1437、ance Increase for the period Transfer to fixed assets Other decrease Closing balance Japan projects 15,471,276.69 15,471,276.69 Total 15,471,276.69 15,471,276.69 There was no impairment of construction in progress, so no provision for impairment loss of construction in progress 15. Disposals of fixe
1438、d assets Items Closing balance Opening balance Reasons Qingdao Haier Co., Ltd. 2015 Annual Report 183 / 239 International Refrigerator Project 55,808,808.81 31,400,425.86 Demolition Qingdao Air Conditioning Project 17,825,030.67 Demolition Others 462,515.56 223,779.72 Disposed Total 74,096,355.04 31
1439、,624,205.58 16. Intangible assets Categories Opening balance Increase for the period Decrease for the period Translation reserve Closing balance (1) Book value at cost Technical expertise 3,200,000.00 3,200,000.00 Land use rights 980,974,049.78 369,177,636.68 1,195,402.36 97,173.93 1,349,053,458.03
1440、Management software 89,429,222.98 18,105,220.85 1,093,505.85 -610,561.05 105,830,376.93 Others 136,434,282.55 112,612,845.13 -199,162.04 248,847,965.64 Total 1,210,037,555.31 499,895,702.66 2,288,908.21 -712,549.16 1,706,931,800.60 (2) Accumulated amortization Technical expertise 2,640,000.00 320,00
1441、0.00 2,960,000.00 Land use rights 91,543,610.51 25,192,726.40 921,798.06 -1,949.49 115,812,589.36 Management software 50,150,532.01 13,420,850.49 992,760.69 -561,098.54 62,017,523.27 Others 57,412,678.44 15,457,415.08 -199,120.64 72,670,972.88 Total 201,746,820.96 54,390,991.97 1,914,558.75 -762,168
1442、.67 253,461,085.51 (3) Net book value Technical expertise 560,000.00 240,000.00 Land use rights 889,430,439.27 1,233,240,868.67 Management software 39,278,690.97 43,812,853.66 Others 79,021,604.11 176,176,992.76 Total 1,008,290,734.35 1,453,470,715.09 (4) Provision for impairment Technical expertise
1443、 Land use rights Management software Others Total (5) Book value Technical expertise 560,000.00 240,000.00 Land use rights 889,430,439.27 1,233,240,868.67 Management software 39,278,690.97 43,812,853.66 Others 79,021,604.11 176,176,992.76 Total 1,008,290,734.35 1,453,470,715.09 Qingdao Haier Co., Lt
1444、d. 2015 Annual Report 184 / 239 At the end of the period, the intangible assets arise from internal research and development accounting for 6.29% of the original value at the end of the period. 17. Development expenses Items Opening balance Increase for the period Decrease for the period Closing bal
1445、ance Charged to profit or loss in the period Recognized as an intangible asset U+ platform construction 68,341,844.86 128,055,741.00 11,051,521.00 107,281,869.04 78,064,195.82 Total 68,341,844.86 128,055,741.00 11,051,521.00 107,281,869.04 78,064,195.82 18. Goodwill Items Opening balance Increase fo
1446、r the period Decrease for the period Closing balance Furniture after-sales service business 6,123,000.00 6,123,000.00 Shanghai Boyol New Brothers Supply Chain Management Company Limited 68,407,241.86 68,407,241.86 Shengfeng Logistics Group Co., Ltd 317,954,690.69 317,954,690.69 Total 74,530,241.86 3
1447、17,954,690.69 392,484,932.55 (1) The Company additionally acquired RMB0.318 billion of goodwill of Shengfeng Logistics Group Co., Ltd. The subsidiaries of the Company paid cash and contingent considerations of RMB0.675 billion to acquire partial equity of Shengfeng Logistics Group Co., Ltd. In Janua
1448、ry 2015, the fair value of the equity interest was RMB0.357 billion, the difference between the cost of business combination and the share of fair value of identifiable assets acquired is recognized as goodwill. (2) The Company, by estimating the present value of future cash flows, calculates the re
1449、coverable amount of the asset groups. According to the cash flows in the next five years based on the financial budget approved by the management, the perpetual growth rate of cash flow in the next years is estimated to be 3% to 4%, not more than the long-term average growth rate of the asset group
1450、business. The discount rate is within the range of 13.25% to 15.00%. The management prepares the financial budget above based on the past performance and market development forecasts. Pursuant to the result of impairment test, no goodwill has been impaired by the end of the current period. Qingdao H
1451、aier Co., Ltd. 2015 Annual Report 185 / 239 19. Long-term deferred expenditures Items Opening balance Increase amount for the current period Amortization amount for the current period Other deductions Translation difference for foreign currency statement Closing balance Renovation fee 28,935,702.29
1452、28,984,375.36 23,231,430.60 34,688,647.05 Expenditure for reconstruction of leased plant 56,532,084.65 10,233,431.16 13,914,427.62 744,409.54 52,106,678.65 Others 20,862,517.41 14,840,376.38 7,549,267.00 2,143,620.17 247,813.55 26,257,820.17 Total 106,330,304.35 54,058,182.90 44,695,125.22 2,888,029
1453、.71 247,813.55 113,053,145.87 20. Deferred income tax assets/liabilities (1) The deferred income tax assets without consideration of the offsetting of balances Items Closing balance Opening balance Temporary differences Deferred income tax assets Temporary differences Deferred income tax assets Effe
1454、ct on deferred income tax of temporary differences formed by provision for assets impairment 842,899,612.66 125,466,005.57 688,410,190.51 98,641,656.52 Effect on deferred income tax of temporary differences formed by liabilities 3,317,632,626.10 703,437,008.26 3,261,152,605.38 702,069,768.52 Effect
1455、on deferred income tax of temporary differences formed by government subsidies 46,004,962.52 10,002,815.63 48,613,677.84 10,464,094.46 Effect on deferred income tax of temporary differences formed by internal unrealized profit due to consolidation 973,458,143.14 176,044,215.94 773,866,294.86 138,832
1456、,956.08 Total 5,179,995,344.42 1,014,950,045.40 4,772,042,768.59 950,008,475.58 (2) Deferred income tax liabilities without consideration of the offsetting of balances Items Closing balance Opening balance Changes of the fair vale 90,133,922.90 114,159,827.40 Purchase and dispose subsidiaries 33,059
1457、,596.88 28,687,449.46 The reserved foreign enterprise income tax 9,127,063.15 8,718,607.00 Depreciation of fixed assets and the difference of the tax laws 5,077,072.26 4,335,544.95 Others 19,399,402.52 4,489,227.43 Total 156,797,057.71 160,390,656.24 Qingdao Haier Co., Ltd. 2015 Annual Report 186 /
1458、239 (3) The deferred income tax assets and the deferred income tax liabilities offset at the end of the period amounted to RMB43,466,955.60. 21. Other non-current assets Unit and Currency: RMB Items Closing balance Opening balance Prepayments for equipment and land 316,752,155.61 312,617,960.08 Othe
1459、rs 82,331,935.92 43,612,717.79 Total 399,084,091.53 356,230,677.87 22. Short-term borrowings Applicable Not Applicable (1). The classification of short-term borrowings Unit and Currency: RMB Items Closing balance Opening balance Pledged borrowings 20,000,000.00 Mortgage loan 61,509,124.60 Guaranteed
1460、 borrowings 1,000,728,210.00 983,758,300.00 Unsecured borrowings 790,870,906.90 1,308,182,725.91 Total 1,873,108,241.50 2,291,941,025.91 23. Financial Liabilities designated to be measured by fair value and change of which is recorded in current profit or loss Applicable Not Applicable Unit and Curr
1461、ency: RMB Items Closing balance Opening balance Forward foreign exchange sale and purchase agreement 7,707,414.12 42,686.85 Total 7,707,414.12 42,686.85 24. Bills payable Applicable Not Applicable Unit and Currency: RMB Categories Closing balance Opening balance Commercially acceptance bill 1,425,84
1462、7,863.41 1,917,974,279.06 Bank acceptance bill 10,171,037,482.65 12,325,063,393.71 Total 11,596,885,346.06 14,243,037,672.77 25. Trade payables Items Closing balance Opening balance Trade payables 14,713,516,620.92 15,312,971,646.36 Total 14,713,516,620.92 15,312,971,646.36 Qingdao Haier Co., Ltd. 2
1463、015 Annual Report 187 / 239 The book balance at the end of the period was mainly the unpaid expenditures on material, equipment and labor. 26. Payments received in advance Items Closing balance Opening balance Payments received in advance 3,170,457,870.50 4,336,427,690.63 Total 3,170,457,870.50 4,33
1464、6,427,690.63 The book balance at the end of the period was mainly the payments received in advance. 27. Staff remuneration payables (1) Presentation of staff remuneration payables Items Opening balance Increase for the period Decrease for the period Closing balance Short-term emolument 1,078,052,302
1465、.02 7,415,479,096.67 7,300,763,156.37 1,192,768,242.32 Post-employment benefits-defined contribution plan 19,416,498.85 537,194,458.59 536,242,421.05 20,368,536.39 Termination benefits 30,693,772.24 5,250,435.03 15,536,720.41 20,407,486.86 Other welfare due within one year Total 1,128,162,573.11 7,9
1466、57,923,990.29 7,852,542,297.83 1,233,544,265.57 (2) Presentation of short-term remuneration Items Opening balance Increase for the period Decrease for the period Closing balance (1) Salaries, bonus, allowance and benefit 633,486,885.71 5,193,464,495.66 5,119,296,553.46 707,654,827.91 (2) Employee we
1467、lfare 320,717,645.94 148,548,501.60 163,699,041.48 305,567,106.06 (3) Social benefit 9,247,445.07 277,885,586.94 280,632,314.10 6,500,717.91 (4) Housing fund 2,938,717.80 216,594,418.76 212,830,051.90 6,703,084.66 (5) Labor union fee and education fee 7,983,654.28 52,089,713.39 57,346,138.87 2,727,2
1468、28.80 (6) Short-term compensated leave (7) Others 103,677,953.22 1,526,896,380.32 1,466,959,056.56 163,615,276.98 Total 1,078,052,302.02 7,415,479,096.67 7,300,763,156.37 1,192,768,242.32 (3) Presentation of defined contribution plan Items Opening balance Increase for the period Decrease for the per
1469、iod Closing balance Basic pension insurance 15,402,423.98 485,722,976.64 485,551,224.19 15,574,176.43 Unemployment insurance 433,600.38 27,934,821.24 27,867,442.95 500,978.67 Enterprise annuity payment 3,580,474.49 23,536,660.71 22,823,753.91 4,293,381.29 Total 19,416,498.85 537,194,458.59 536,242,4
1470、21.05 20,368,536.39 Qingdao Haier Co., Ltd. 2015 Annual Report 188 / 239 (4) Presentation of termination benefits Items Closing balance Opening balance Termination compensation 20,407,486.86 30,693,772.24 Total 20,407,486.86 30,693,772.24 28. Taxes payable Unit and Currency: RMB Items Closing balanc
1471、e Opening balance VAT 59,700,542.53 488,027,357.82 Business tax 5,888,947.72 6,516,054.50 Enterprise income tax 708,348,404.94 847,386,344.65 Individual income tax 16,635,460.95 14,557,491.42 Municipal maintenance tax 8,866,023.89 29,520,918.23 Education surcharge 3,363,149.08 12,787,612.68 The elec
1472、trical and electronic products waste treatment fund 55,378,377.00 63,455,219.50 Additional local taxes 51,756,909.98 69,133,979.78 Total 909,937,816.09 1,531,384,978.58 29. Interests payable Items Closing balance Opening balance Interest of long-term borrowings 1,131,479.67 Interest of short-term bo
1473、rrowings 6,199,909.01 7,921,318.87 Interest of corporate bond 7,750,027.66 Total 15,081,416.34 7,921,318.87 30. Dividends payable Name of Entity Closing balance Opening balance BRAVE LION (HK) LIMITED 115,230,923.73 132,644,847.17 Other minority shareholders 18,151,086.00 14,667,528.94 Total 133,382
1474、,009.73 147,312,376.11 31. Other payables Items Closing balance Opening balance Other payables 6,056,795,354.04 7,083,921,880.47 Total 6,056,795,354.04 7,083,921,880.47 The book balance at the end of the period mainly included the incurred but unpaid costs. 32. Non-current liabilities due within 1 y
1475、ear Applicable Not Applicable Unit and Currency: RMB Items Closing balance Opening balance Long-term borrowings due within one year 10,877,261.36 Qingdao Haier Co., Ltd. 2015 Annual Report 189 / 239 Predicative liabilities due within one year 62,020,766.97 Total 72,898,028.33 33. Long-term borrowing
1476、s Applicable Not Applicable Category of borrowings Closing balance Opening balance Credit borrowings 297,241,293.20 Total 297,241,293.20 The interest rate of the long-term bank borrowings is 1.37% plus Yen London inter-bank offered rate of 3 month. 34. Bonds payable Applicable Not Applicable On 24 A
1477、ugust 2011, Haier Electronics Group Co., Ltd., the Companys holding subsidiary, issued 100,000,000 convertible corporate bonds and 40,000,000 warrants, face value of which amounted to HK$1,067,000,000 (equivalent to RMB874,375,557). Annual coupon rate of which is 3%, payable semi-annually in arrears
1478、 on 30 June and 31 December of each year. As of 31 December 2015, all the bond holders have transferred their shares. On 20 March 2014, Haier Electronics Group Co., Ltd., the Companys holding subsidiary, issued HK$1,316,036,039 convertible corporate bonds (equivalent to RMB1,055,023,280), with an an
1479、nual coupon rate of 1.5%. The convertible corporate bonds will be expired on 20 March 2017. The bond holders may transfer shares after one year from the issue date to 7 days before the expiration at their option. On initial recognition, the convertible corporate bonds, issued by the Companys holding
1480、 subsidiary Haier Electronics Group Co., Ltd., was divided into liabilities and equities: Items Convertible bonds issued in 2011 Convertible bonds issued in 2014 Initial recognition: 874,375,557.00 1,055,023,279.62 Face values of the convertible bonds and issued warrants Including: Share option 59,6
1481、99,810.00 Equity of convertible bonds 149,249,526.00 54,838,289.02 Qingdao Haier Co., Ltd. 2015 Annual Report 190 / 239 Liabilities of convertible bonds 665,426,221.00 1,000,184,990.60 Change in liabilities of convertible bonds for the period: Items Opening balance Increase for the period Accrued bo
1482、nd interest Less: paid bond interest for the period The translation of the period Effect of exchange rate Closing balance Convertible bonds issued in 2011 776,318,964.06 20,850,450.69 7,750,027.94 789,445,397.59 26,010.78 Convertible bonds issued in 2014 1,024,381,665.99 34,201,853.01 49,150,997.43
1483、1,107,734,516.43 Total 1,800,700,630.05 55,052,303.70 7,750,027.94 789,445,397.59 49,177,008.21 1,107,734,516.43 35. Long-term payables Applicable Not Applicable Items Closing balance Opening balance CDB development fund investment fund 43,000,000.00 Vehicle financing lease 16,916,852.02 Total 59,91
1484、6,852.02 Under the Investment Contract of China Development Fund executed by the Company and its subsidiaries including Qingdao Haier Refrigerator Co., Ltd., Qingdao Haier Air Conditioner Gen Corp., Ltd., Qingdao Haier (Jiaozhou) Air-conditioning Co., Limited together with China Development Fund Co.
1485、 Ltd. in 2015, China Development Fund Co. Ltd. invested RMB 20 million in Qingdao Haier Refrigerator Co., Ltd., and RMB 23 million in Qingdao Haier (Jiaozhou) Air-conditioning Co., Limited. China Development Fund Co. Ltd. obtains 1.2% of the earnings every year in dividend or through call premium. F
1486、rom 2020 to 2027, the Company and its subsidiaries will repurchase the investments made by China Development Fund Co. Ltd. in two batches respectively. 36. Long-term staff remuneration payables Applicable Not Applicable (1) Presentation of long-term staff remuneration payables Items Closing balance
1487、Opening balance I. Post-employment benefits: net liability of defined benefit plan II. Termination benefits 33,209,406.02 24,531,136.34 III. Other long-term benefits Total 33,209,406.02 24,531,136.34 (2) Defined benefit plan Some subsidiaries of the Company have set defined benefit plan for the qual
1488、ified staff. In the plan, the employees are entitled to enjoy the retirement benefits agreed in such defined benefit plan. In the Qingdao Haier Co., Ltd. 2015 Annual Report 191 / 239 plan, payments are required to be made to an independent trustee, and the trustee is responsible to determine the inv
1489、estment strategies of the plan. The plan is exposed to interest rate risks, changes in life expectancy of the beneficiary and other risks. The recent actuarial evaluation of the assets and the present value of defined benefit obligations under such plans are determined by using the expected cumulati
1490、ve welfare unit method. Actuarial assumption used in the defined benefit plan Items percentage I. Discount rate 1.10% II. Expected rate of return 2.00% Present value of defined benefit obligations Items Amount I. Opening balance 275,770,839.30 II. Defined benefit cost in current profit or loss 12,46
1491、3,283.18 1. Current period service cost 9,423,103.14 2. Past service cost - 3. Settlement profit (loss indicated in ) 4. Interest expenses 3,040,180.04 III. Defined benefit cost in other comprehensive incomes 6,017,915.39 1. Actuarial loss (gain indicated in ) 6,017,915.39 IV. Other changes -8,032,8
1492、56.91 1. Consideration paid upon settlement 2. Prepaid benefits -21,964,992.54 3. Exchange difference 13,932,135.63 V. Closing balance 286,219,180.96 Fair value of plan assets Items Amount I. Opening balance 283,230,286.40 II. Defined benefit cost in current profit or loss 5,641,214.64 1. Interest i
1493、ncome 5,641,214.64 III. Defined benefit cost in other comprehensive incomes -247,301.83 1. Return on plan assets (except those included in net interests) -247,301.83 2. Changes in impact of asset cap (except those included in net interests) IV. Other changes 3,569,441.61 1. Payments made by the empl
1494、oyer 11,955,068.05 2. Prepaid benefits -21,964,992.54 3. Balance of exchange 13,579,366.10 Qingdao Haier Co., Ltd. 2015 Annual Report 192 / 239 V. Closing balance 292,193,640.82 Neither the Companys common stocks or bonds, nor the properties occupied by the Company are included in the plan assets. N
1495、et liability (net asset) of defined benefit plan Items Amount I. Opening balance -7,459,447.10 II. Defined benefit cost in current profit or loss 6,822,068.54 III. Defined benefit cost in other comprehensive incomes 6,265,217.22 IV. Other changes -11,602,298.52 V. Closing balance -5,974,459.86 It is
1496、 estimated that the payment of RMB40,964,000.00 will be made to the defined benefit obligation in the next 12 months. The average term for the defined benefit obligation is 14.70 years at the balance sheet date. 37. Estimated liabilities Items Closing balance Opening balance Estimated charges of thr
1497、ee guarantees and installations 1,841,853,237.19 1,913,448,778.76 Acquirement of equity interests of minority interests 43,500,000.00 319,372,857.14 Pending action 14,190,400.00 18,725,375.08 Total 1,899,543,637.19 2,251,547,010.98 Significant assumptions and estimates related to the estimated charg
1498、es of three guarantees and installations: The Company rationally estimates the rate of three guarantees and installations according to the previous actual expenditures and sales data on three guarantees and installations, and estimates the potential charges of three guarantees and installations base
1499、d on the policy of three guarantees and installations and the realized sales data. 38. Deferred income Applicable Not Applicable Unit and Currency: RMB Items Opening balance Increase for the period Decrease for the period Closing balance Reason Governmental subsidy 135,707,501.91 139,115,711.94 25,6
1500、53,688.07 249,169,525.78 Government subsidies related assets Leaseback 15,038,883.21 87,854.66 14,951,028.55 The differences on sales price and the book value of assets Qingdao Haier Co., Ltd. 2015 Annual Report 193 / 239 Total 135,707,501.91 154,154,595.15 25,741,542.73 264,120,554.33 / 39. Share c
1501、apital Class of shares Opening balance Increase for the period Decrease for the period Closing balance I. Restricted shares 309,093,994 309,473,994 4,880,800 613,687,188 1. State-owned shares 2. Shares held by domestic non-state-owned legal entities 3. Shares held by domestic natural persons 6,101,0
1502、00 6,481,000 4,880,800 7,701,200 4. Shares held by foreign non-state-owned legal entities 302,992,994 302,992,994 605,985,988 . Non-restricted shares 2,736,841,140 2,772,625,940 5,509,467,080 1. Ordinary shares in RMB 2,736,841,140 2,772,625,940 5,509,467,080 2. Domestic listed foreign shares 3. Ove
1503、rseas listed foreign shares 4. Others . Total shares 3,045,935,134 3,082,099,934 4,880,800 6,123,154,268 (1) On 18 March 2015, the Company granted restricted shares to 3 beneficiaries and acquired 190,000 RMB ordinary shares at the grant price of RMB10.06 per share by the beneficiaries, and the regi
1504、stered capital was increased by RMB190,000.00. The capital was increased by way of cash, and the increase has been verified by the Hexin Yan Zi (2015) No. 000012 Capital Verification Report issued by Shandong Hexin Accountants LLP (Special Ordinary Partnership). (2) The Companys 2014 profit distribu
1505、tion plan was passed at the 2014 Annual General Meeting of Qingdao Haier Co., Ltd. held on 10 June 2015: a cash dividend of RMB4.92 (inclusive of tax) for every 10 shares was distributed to all shareholders, and a bonus issue was made by way of capitalizing its capital reserve on the basis of 10 sha
1506、res for every 10 shares on the basis of 3,046,125,134 shares. On 15 July 2015, the Company has transferred capital reserves of RMB3,046,125,134.00 to share capital, and the increase has been verified by the Hexin Yan Zi (2015) No. 000048 Capital Verification Report issued by Shandong Hexin Accountan
1507、ts LLP (Special Ordinary Partnership). (3) The Proposal on Relevant Arrangements of the First Exercise/Unlocking of Rights Firstly Granted in Phase IV Share Option Incentive Scheme was passed at the 24th Meeting of the 8th Session Qingdao Haier Co., Ltd. 2015 Annual Report 194 / 239 of the Board of
1508、Directors held on 17 July 2015. According to the Proposal, the Company granted restricted shares to 422 beneficiaries and acquired 30,904,000.00 RMB ordinary shares at the grant price of RMB8.07 per share by the beneficiaries. The capital increase has been verified by the Hexin Yan Zi (2015) No. 000
1509、050 Capital Verification Report issued by Shandong Hexin Accountants LLP (Special Ordinary Partnership). 40. Capital reserve Items Opening balance Increase for the period Decrease for the period Closing balance Capital premium 5,861,864,244.94 424,771,671.27 6,286,635,916.21 Other capital reserve 11
1510、6,923,194.51 2,490,000.00 36,030,000.00 83,383,194.51 Total 5,978,787,439.45 427,261,671.27 6,322,665,916.21 83,383,194.51 (1) Movements in capital premium mainly due to: an increase of RMB168,528,991.27 in capital premium due to the changes in shareholding proportion held by the parent company as a
1511、 result of the additional capital contributed by minority shareholders of subsidiaries during the period; an increase of RMB256,242,680.00 in capital premium as a result of the first exercise of Phase IV Share Option Incentive Scheme; a decrease of RMB3,221,270,582.00 in capital premium as a result
1512、of common control combination during the period; a decrease of RMB3,046,125,134.00 in capital premium as a result of transfer of capital reserves into share capital during the period; a decrease of RMB19,240,200.21 in capital premium as a result of acquisition of minority interest of subsidiaries du
1513、ring the period. (2) Movements in other capital reserve mainly due to: an increase of RMB2,490,000.00 in other capital reserve as a result of share-based payment credited into shareholders equity during the period; a decrease of RMB36,030,000.00 in other capital reserve as a result of the first exer
1514、cise of Phase IV Share Option Incentive Scheme. 41. Treasury stock Applicable Not Applicable Unit and Currency: RMB Items Opening balance Increase for the period Decrease for the period Closing balance Restricted share certificates 47,160,730.00 1,911,400.00 18,864,292.00 30,207,838.00 Qingdao Haier
1515、 Co., Ltd. 2015 Annual Report 195 / 239 Share repurchase 47,396,706.70 47,396,706.70 Total 47,160,730.00 49,308,106.70 18,864,292.00 77,604,544.70 Other explanations, including the explanations on increases or decreases during the period and the reasons thereof: (1) Movements in restricted shares ma
1516、inly due to: an increase of RMB1,911,400.00 in restricted shares as a result of some restricted shares reserved in the first exercise of Phase IV Share Option Incentive Scheme during the period; a decrease of RMB18,864,292.00 in restricted shares as a result of the restricted shares involved in the
1517、first exercise of Phase IV Share Option Incentive Scheme unlocked during the period; (2) Movements in share repurchases mainly due to: an increase of RMB47,396,706.70 as a result of share repurchases during the period. 42. Other comprehensive income Items Opening balance Amounts incurred in the curr
1518、ent period Closing balance The pre-tax amount in the current period Less: income tax expense Attributable to the parent company, net of tax Attributable to minority shareholders, net of tax Others a 10,696,254.05 39,595,364.70 39,584,241.91 11,122.79 50,280,495.96 b 421,754,809.35 40,320,174.29 6,10
1519、6,343.18 33,989,723.80 224,107.31 -145,650.27 455,598,882.88 c 122,191,333.61 5,753,115.52 -11,593,077.82 17,346,193.34 110,598,255.79 d 22,971,042.62 -6,265,217.22 -6,265,217.22 16,705,825.40 Total 577,613,439.63 79,403,437.29 6,106,343.18 55,715,670.67 17,581,423.44 -145,650.27 633,183,460.03 Note
1520、s: (1) Item a, b and c are other comprehensive income that will be reclassified to profit or loss, including: a Share of other comprehensive income of investments accounted for using the equity method, which will be reclassified subsequently to profit or loss. b Change in fair value of financial ass
1521、ets available-for-sale. c Exchange differences from retranslation of foreign currency financial statements. (2) Item d represents changes arising from remeasurement of net liabilities/assets of defined benefit plans, which may not be subsequently reclassified to profit or loss. 43. Surplus reserve U
1522、nit and Currency: RMB Items Opening balance Increase for the period Decrease for the period Closing balance Statutory surplus reserve 1,976,448,731.03 194,518,642.12 192,538,873.51 1,978,428,499.64 Discretionary surplus reserve 26,042,290.48 26,042,290.48 Qingdao Haier Co., Ltd. 2015 Annual Report 1
1523、96 / 239 Reserve fund 11,322,880.64 11,322,880.64 Enterprise expansion fund 10,291,630.47 10,291,630.47 Others Total 2,024,105,532.62 194,518,642.12 192,538,873.51 2,026,085,301.23 Explanations on surplus reserves, including the explanations on increases or decreases during the period and the reason
1524、s thereof: Pursuant to Company Law of the Peoples Republic of China and articles of association, the Company is required to appropriate the statutory surplus reserve at 10% of its net profit. Decrease for the period is resulted from the write-down of retained earnings through enterprise combinations
1525、 under common control. 44. Undistributed profits Items Amount Undistributed profits at the end of last year 12,855,511,059.42 Add: correction of accounting errors Implementation of ASBE reclassification Adjustment on business combination under common control 173,676,255.29 Undistributed profits at t
1526、he beginning of the year 13,029,187,314.71 Add: net profit attributable to owners of the parent company 4,300,760,542.82 Profit available for appropriation for the year 17,329,947,857.53 Less: appropriation of statutory surplus reserve 194,518,642.12 Appropriation of staff incentive and welfare fund
1527、 Dividend payable for ordinary shares 1,496,804,871.93 Retained earnings after deduction of combined offsetting under common control 1,732,849,861.60 Undistributed profits at the end of the period 13,905,774,481.88 45. Operating income and Operating cost (1) Operating income Categories Current amoun
1528、t Prior amount Principal Business 89,168,902,490.15 96,201,548,720.34 Other Business 579,417,920.76 728,215,174.02 Total 89,748,320,410.91 96,929,763,894.36 (2) Income and cost of principle operations presented by product categories: Categories Current amount Prior amount Income of principal busines
1529、s Cost of principal business Income of principal business Cost of principal business Qingdao Haier Co., Ltd. 2015 Annual Report 197 / 239 Air conditioner 16,250,889,159.97 11,662,362,800.22 20,471,645,554.31 13,961,625,203.37 Refrigerator 27,588,532,137.07 18,610,588,978.98 28,266,621,414.28 19,104,
1530、177,471.13 Kitchenware and sanitary ware 6,620,603,698.64 3,730,801,944.40 6,499,294,676.18 3,685,681,952.34 Washing machine 17,469,847,901.81 11,472,567,714.01 17,259,524,173.06 11,400,672,884.91 Equipment product 1,818,035,269.39 1,576,671,700.64 4,347,020,056.55 4,045,004,617.33 Integrated channe
1531、l services and others 19,420,994,323.27 17,480,791,069.94 19,357,442,845.96 17,688,045,087.81 Total 89,168,902,490.15 64,533,784,208.19 96,201,548,720.34 69,885,207,216.89 46. Business taxes and surcharge Items Current amount Prior amount Tax base Business tax 21,692,903.23 17,686,137.75 Payable at
1532、5% , 3% of the taxable turnover City construction tax 249,968,408.97 261,859,781.12 Payable at 7% of the circulation tax Education surcharge 115,023,959.01 118,905,938.21 Payable at 3%, 2% and 1% of the circulation tax Others 10,565,768.64 6,095,205.59 Total 397,251,039.85 404,547,062.67 47. Expense
1533、s of sales Unit and Currency: RMB Items Current amount Prior amount Expenses of sales 13,101,282,436.95 12,579,781,619.54 Total 13,101,282,436.95 12,579,781,619.54 Other explanation: Selling expenses of the Company mainly include compensation, transportation and warehousing costs, advertising, sales
1534、 promotion and after-sale expenses and so on. 48. Management expenses Unit and Currency: RMB Items Current amount Prior amount Management expenses 6,549,193,839.44 6,813,114,797.83 Total 6,549,193,839.44 6,813,114,797.83 Other explanation: Administrative expenses of the Company mainly include compen
1535、sation, research and development costs, administrative expenses, taxes and rental payments. 49. Financial expenses Categories Current amount Prior amount Interest expenses 119,256,405.78 153,759,585.82 Less: interest income 524,652,061.70 550,990,928.09 Exchange gain or loss -146,355,539.67 61,428,9
1536、11.71 Others 53,630,789.76 79,153,850.10 Qingdao Haier Co., Ltd. 2015 Annual Report 198 / 239 Total -498,120,405.83 -256,648,580.46 50. Loss in assets impairment Categories Current amount Prior amount Bad debt loss 62,099,621.05 45,338,057.93 Loss from price drop in inventory 250,882,026.95 153,904,
1537、717.94 Impairment loss on fixed assets 5,004,997.05 6,453,775.26 Impairment loss on construction in progress 17,487,960.62 Impairment loss on assets available for sale 25,000.00 Total 318,011,645.05 223,184,511.75 51. Profit or loss of changes in fair value Items Current amount Prior amount Financia
1538、l instruments measured in fair value through current profit or loss - derivative financial instruments -90,223,059.50 112,363,366.12 Total -90,223,059.50 112,363,366.12 52. Investment Income Applicable Not Applicable Items Current amount Prior amount Long-term equity investments income calculated by
1539、 the equity method 695,724,727.22 646,307,155.00 Investment income from disposal of long-term equity investments 338,777,175.29 420,123,350.96 Investment income from financial assets available for sale during the holding period 121,454,252.17 19,679,408.23 Gain on remeasurement of remaining equity b
1540、y fair value upon loss of control 49,201,148.46 151,233,596.81 Investment income from disposal of financial assets available for sale 54,535,164.73 Investment income from disposal of financial assets at fair value through profit and its changes recognized in the current profit and loss 49,703,912.97
1541、 -52,278,306.13 Wealth management products return 10,905,835.77 7,514,804.00 Total 1,320,302,216.61 1,192,580,008.87 53. Non-operating income Items Current amount Prior amount Gain on disposal of non-current assets 50,992,727.10 79,784,116.53 Government grants 307,550,180.85 119,525,560.32 Qingdao H
1542、aier Co., Ltd. 2015 Annual Report 199 / 239 Others 259,914,355.87 179,025,689.24 Total 618,457,263.82 378,335,366.09 Government grants included in current profit or loss Applicable Not Applicable Unit and Currency: RMB Grant Items Current amount Prior amount Amortization of government grants related
1543、 to assets 24,873,688.07 15,686,241.90 Subsidies for profits 282,676,492.78 103,839,318.42 Total 307,550,180.85 119,525,560.32 54.Non-operating expenses Items Current amount Prior amount Loss on disposal of non-current asset 40,689,452.41 30,258,846.12 Charitable donation expenses 14,785,616.95 9,41
1544、5,000.00 Others 40,441,092.69 62,600,130.44 Total 95,916,162.05 102,273,976.56 55. Income tax expense (1)Table of income tax expense Unit and Currency: RMB Items Current amount Prior amount Current income expense 1,123,894,772.94 1,459,762,777.16 Deferred tax income -71,125,354.97 67,723,968.46 Tota
1545、l 1,052,769,417.97 1,527,486,745.62 (2) Adjustment process of accounting profit and income tax expenses Unit and Currency: RMB Items Current amount Total profit 6,974,858,906.80 Income tax expenses calculated at statutory/applicable tax rate 1,743,714,727.07 Impact from different tax rates applicabl
1546、e to subsidiaries -591,361,323.79 Impact from adjustment to income tax in prior periods -123,932,932.55 Effect from non-taxable income -127,889,968.81 Impact from non-deductible costs, fees and losses 55,762,067.59 Impact from utilization of deductible losses of unrecognized deferred income tax asse
1547、ts in prior periods Impact from deductible temporary differences or losses of unrecognized deferred income tax assets in the current period 102,383,851.62 Effect of write-off of deferred income taxes -15,455,331.34 Others 9,548,328.18 Income tax expenses 1,052,769,417.97 Qingdao Haier Co., Ltd. 2015
1548、 Annual Report 200 / 239 56. Other comprehensive income For details, please refer to item 42 of note VII. 57. Cash received from other operating related activities Unit and Currency: RMB Items Current amount Deposits and securities 51,048,407.70 Government grants 282,676,492.78 Non-operating income
1549、excluding government grants 125,231,972.76 Interest income 519,444,538.53 Others 6,606,689.62 Total 985,008,101.39 58. Cash paid to other operation related activities Unit and Currency: RMB Items Current amount Cash paid on operating expenses 6,843,398,032.30 Cash paid on management expenses 3,482,4
1550、72,539.26 Cash paid on financial expenses 49,228,152.40 Non-operating expenses 51,429,955.11 Others 161,261,260.81 Total 10,587,789,939.88 59. Cash received from other investment related activities Unit and Currency: RMB Items Current amount Government grants related to assets 10,972,523.38 Total 10
1551、,972,523.38 60. Cash paid on other investment related activities Unit and Currency: RMB Items Current amount Cash paid on disposal of subsidiaries 81,334,939.43 Others 266,802.77 Total 81,601,742.20 61. Cash received from other financing related activities Unit and Currency: RMB Items Current amount
1552、 Cash received from leaseback business 17,063,242.50 Total 17,063,242.50 62. Cash paid to other financing related activities Unit and Currency: RMB Items Current amount Cash paid on repurchasing shares 47,396,706.70 Cash paid on repurchasing stock option 75,990,821.27 Cash paid on financial lease 30
1553、,673,525.83 Others 381,748.18 Qingdao Haier Co., Ltd. 2015 Annual Report 201 / 239 Total 154,442,801.98 63. Explanation on net profit adjusted to cash flows of operating activities Unit and Currency: RMB Supplementary Information Current amount Prior amount 1Net profit adjusted to cash flows of oper
1554、ating activities Net profit 5,922,089,488.83 7,048,901,343.00 Plus: provisions for assets impairment 318,011,645.05 223,184,511.75 Depreciation of fixed assets, depreciation of oil and gas assets, depreciation of productive bio-assets 954,472,334.59 779,154,506.13 Amortization of intangible assets 5
1555、4,390,991.97 50,961,678.41 Amortization of long term expenses payable 44,695,125.22 29,638,858.21 Loss on disposal of fixed assets, intangible assets and other long term assets (represents gains) -10,303,274.69 -48,412,936.61 Loss on write-off of fixed assets (represents gains ) Loss on change of fa
1556、ir value (represents gains ) 90,223,059.50 -112,363,366.12 Financial expenses (represents increase ) 119,256,405.78 153,759,585.82 Loss on investments (represents gains ) -1,320,302,216.61 -1,192,580,008.87 Decrease of deferred income tax assets (represents gains ) -58,736,355.41 3,728,000.79 Increa
1557、se of deferred income tax liabilities (represents decrease ) -12,388,999.56 63,995,967.67 Decrease of inventories (represents gains ) 372,583,766.58 -943,420,407.08 Decrease of operational account receivables (represents gains ) 4,490,806,802.27 -1,561,278,073.97 Increase of operational account paya
1558、bles (represents decrease ) -5,183,054,157.18 2,010,844,166.64 Others -202,144,003.41 263,247,472.58 Net cash flows generated from operational activities 5,579,600,612.93 6,769,361,298.35 2. Significant investment and financing activities not involving cash inflows and outflows Capital transferred f
1559、rom debts 789,445,397.59 Convertible corporate bonds due within 1 year 776,318,964.06 Financial leased fixed assets 24,232,599.76 3. Changes of cash and cash equivalents: Cash balance at the end of the period 24,682,826,504.09 31,120,319,710.77 Less: cash balance at the beginning of the period 31,12
1560、0,319,710.77 20,974,450,271.64 Add: cash equivalents balance at the end of the period Qingdao Haier Co., Ltd. 2015 Annual Report 202 / 239 Less: cash equivalents balance at the beginning of the period Net increase of cash and cash equivalents -6,437,493,206.68 10,145,869,439.13 64. Cash and cash equ
1561、ivalents Items Closing balance Opening balance I. Cash 24,682,826,504.09 31,120,319,710.77 Including: cash on hand 448,890.79 667,833.83 Bank deposit available for payment at any time 24,622,416,375.45 31,118,679,107.93 Other cash fund available for payment at any time 59,961,237.85 972,769.01 II. C
1562、ash equivalents Including: bond investment due within three months . Closing balance of cash and cash equivalents 24,682,826,504.09 31,120,319,710.77 Including: restricted cash and equivalents used by the parent company or subsidiaries of the Group 65. Foreign Currency Items Items Closing balance Op
1563、ening balance Foreign currency balance Exchange rate RMB balance Foreign currency balance Exchange rate RMB balance Monetary capital Dollar 382,814,217.61 6.4936 2,485,842,403.49 584,183,095.23 6.1190 3,574,616,359.73 Euro 23,695,633.42 7.0952 168,125,258.25 41,752,731.40 7.4556 311,291,664.27 Yen 1
1564、,519,376,567.61 0.053875 81,856,412.58 3,577,239,388.37 0.051371 183,766,364.62 Others 593,664,319.50 480,513,197.43 Sub-total 3,329,488,393.82 4,550,187,586.05 Receivables Dollar 60,073,515.58 6.4936 390,093,380.78 32,173,707.03 6.1190 196,870,913.30 Euro 78,420,140.64 7.0952 556,406,581.87 71,043,
1565、423.47 7.4556 529,671,348.02 Yen 5,056,219,138.00 0.053875 272,403,806.06 8,044,496,625.72 0.051371 413,253,836.16 Others 1,459,452,977.77 1,577,781,202.59 Sub-total 2,678,356,746.48 2,717,577,300.07 Short-term borrowings Dollar 29,279,006.04 6.4936 190,126,153.60 34,923,222.99 6.1190 213,695,201.45
1566、 Euro 14,673,870.97 7.0952 104,114,049.31 17,781,421.68 7.4556 132,571,167.48 Yen 6,396,593,092.71 0.053875 344,616,452.87 17,029,608,144.67 0.051371 874,828,000.00 HK Dollars 1,194,471,484.84 0.8378 1,000,728,210.00 1,247,000,000.00 0.7889 983,758,300.00 Others 119,091,405.25 61,322,381.41 Sub-tota
1567、l 1,758,676,271.03 2,266,175,050.34 Payables Dollar 113,082,834.29 6.4936 734,314,692.73 142,790,224.82 6.1190 873,733,385.67 Qingdao Haier Co., Ltd. 2015 Annual Report 203 / 239 Euro 50,236,492.28 7.0952 356,437,960.06 105,791,736.53 7.4556 788,740,870.87 Yen 4,698,797,257.13 0.053875 253,147,702.2
1568、3 5,333,730,559.14 0.051371 273,999,072.55 Others 1,008,890,397.28 1,057,481,668.02 Sub-total 2,352,790,752.30 2,993,954,997.11 Long-term borrowings Dollar Euro Yen 5,517,239,780.97 0.053875 297,241,293.20 Others Sub-total 297,241,293.20 VIII. Changes of consolidation scope 1.The consolidation of en
1569、terprises under non-common control Applicable Not Applicable (1). The consolidation of enterprises under non-common control occurred in the period Applicable Not Applicable Unit and Currency: RMB Name of acquiree Date of equity acquisition Cost of equity acquisition Proportion of equity acquired (%)
1570、 Method of equity acquisition Date of purchase Recognition basis as at the date of purchase Income of acquiree from the date of acquisition to the end of the period Net profit of acquiree from the date of acquisition to the end of the period Shengfeng Logistics Group Co., Ltd 2015.1 675,144,595 58.0
1571、8 Outsourced 2015-01-01 The relevant rights and Obligations of target interest have transferred into the Company 1,418,342,315.09 16,178,900.16 (2). Combination costs and goodwill Applicable Not Applicable Unit and Currency: RMB Combination costs Shengfeng Logistics Group Co., Ltd - Cash 605,144,595
1572、.00 - Fair value of the non-cash asset - The fair value of issued or assumed debt - The fair value of issued equity securities - Fair value of contingent considerations 70,000,000.00 - The fair value of the shares held prior to the date of purchase -Others Total combination costs 675,144,595.00 Less
1573、: share of fair value of identifiable assets 357,189,904.31 Amount of goodwill /combination costs which is less than its share of the fair value of identifiable net assets acquired 317,954,690.69 Qingdao Haier Co., Ltd. 2015 Annual Report 204 / 239 (3) Identifiable assets and liabilities of the acqu
1574、iree as at the acquisition date Items Shengfeng Logistics Group Co., Ltd Fair value as at the date of acquisition Book value as at the date of acquisition Monetary Capital 27,357,283.97 27,357,283.97 Trading financial assets 71,687.17 71,687.17 Bills receivables 6,084,722.00 6,084,722.00 Trade recei
1575、vables 227,842,735.94 227,842,735.94 Other receivables 321,688,172.93 321,688,172.93 Prepayment 73,446,979.71 73,446,979.71 Inventories 1,206,280.62 1,206,280.62 Fixed assets 199,354,775.70 199,354,775.70 Construction in progress 11,518,221.48 10,391,738.48 Intangible assets 53,838,749.06 44,209,000
1576、.67 Long-term equity investment 84,327,829.45 84,327,829.45 Other long-term assets 33,080,318.61 33,080,318.61 Less: borrowings -160,400,000.00 -160,400,000.00 Trade payables -119,156,731.39 -119,156,731.39 Taxes payables -13,635,046.88 -13,635,046.88 Interests payables -258,527.64 -258,527.64 Other
1577、 payables -53,753,792.48 -53,753,792.48 Payroll payables -17,062,425.22 -17,062,425.22 Payment received in advance -1,944,121.19 -1,944,121.19 Other long-term debts -43,843,123.31 -41,154,065.46 Net assets 629,763,988.53 621,696,814.99 Less: minority interest 272,574,084.22 Net assets acquired 357,1
1578、89,904.31 2. The consolidation of enterprises under common control Applicable Not Applicable (1) Enterprise combination under common control occurred in the period Name of the combined party The proportion of equity interest acquired in business combination Base of transaction constituting business
1579、combination under common control Date of combination Base of combination date Qingdao Haier Technology Co., Ltd 100% Under common control of Haier Group Corporation before and after the transaction 31 December 2015 The relevant rights and obligations of target interest have transferred into the Comp
1580、any Haier Singapore Investment Holding Pte. Ltd 100% Under common control of Haier Group Corporation before and after the transaction 31 December 2015 The relevant rights and obligations of target interest have transferred into the Company Continued Qingdao Haier Co., Ltd. 2015 Annual Report 205 / 2
1581、39 Name of combined party Revenue of combined party from the beginning of the combined period to the date of combination Net profit of combined party from the beginning of the combined period to the date of combination Revenue of combined party in the comparison period Net profit of combined party i
1582、n the comparison period Qingdao Haier Technology Co., Ltd 29,678,337.93 9,420,101.15 34,470,710.63 -703,428.95 Haier Singapore Investment Holding Pte Ltd 12,664,648,640.95 223,861,382.94 11,343,182,086.06 347,675,454.56 (2) Combination costs Combination costs Qingdao Haier Technology Co., Ltd Haier
1583、Singapore Investment Holding Pte Ltd - Cash 9,500,000.00 4,873,700,000.00 (3) Assets and liabilities of the combined party Applicable Not Applicable Unit and Currency: RMB Qingdao Haier Technology Co., Ltd Haier Singapore Investment Holding Pte Ltd As at the combination date At the end of last perio
1584、d As at the combination date At the end of last period Assets: 24,027,026.52 11,363,453.80 7,618,655,750.87 7,285,203,936.83 Monetary capital 22,079,264.89 4,024,301.80 1,763,623,141.19 2,584,817,169.51 Accounts receivable 1,686,242.06 7,004,525.82 2,478,337,466.97 2,104,312,146.26 Inventories 1,666
1585、,319,312.42 1,490,182,775.29 Fixed assets 152,163.23 168,638.07 754,928,659.99 402,015,800.74 Intangible assets 91,148.61 161,092.82 42,643,589.34 35,742,000.55 Trading financial assets 22,015,240.31 103,668,887.71 Other current assets 387,378,681.29 186,453,623.96 Available-for-sale financial asset
1586、s 1,469,316.23 1,339,735.12 Long-term equity investment 201,396,792.25 23,986,803.71 Construction in progress 164,985,677.33 255,358,596.06 Other long-term assets 18,207.73 4,895.29 135,557,873.55 97,326,397.92 Liabilities: 7,209,864.49 3,966,392.92 4,833,770,663.30 4,470,256,479.12 Borrowings 1,057
1587、,138,548.02 1,283,267,211.48 Amount payables 1,535,176.80 3,510,743,568.12 2,872,288,681.59 Trading financial assets 2,082,640.05 7,707,414.12 42,686.85 Qingdao Haier Co., Ltd. 2015 Annual Report 206 / 239 Staff remuneration payable 1,915,123.66 2,148,253.86 67,178,224.44 63,954,326.38 Taxes payable
1588、 3,759,564.03 -264,500.99 20,787,463.33 77,143,159.56 Other long-term liabilities 170,215,445.27 173,560,413.26 Net assets 16,817,162.03 7,397,060.88 2,784,885,087.57 2,814,947,457.71 Less: minority interest 41,869,546.18 34,585,696.89 Net assets acquired 16,817,162.03 7,397,060.88 2,743,015,541.39
1589、2,780,361,760.82 3. Disposal of subsidiaries Single disposal of investments in subsidiaries representing loss of control: Name of subsidiaries Qingdao Haier Special Steel Plate Research and Development Co., Ltd. Hefei Haier Special Steel Plate Research and Development Co., Ltd. Shenzhen Leader Chuan
1590、g Zhi Jia Technology Company Limited Consideration for disposal of equity interest 224,000,000.00 266,000,000.00 260,500,000.00 Proportion of equity disposal 70.00% 70.00% 62.89% Method of equity disposal Transfer Transfer Transfer Date of loss-of-control 2015/11/30 2015/11/30 2015/10/31 Basis of de
1591、termination of date of loss-of-control The relevant rights and obligations of target interest have been transferred The relevant rights and obligations of target interest have been transferred The relevant rights and obligations of target interest have been transferred Difference between disposal co
1592、nsideration and its share of net assets of the subsidiary in the consolidated financial statements as respect to the disposal of investment 83,977.36 80,459,085.31 246,387,461.25 Proportion of remaining equity on the date of loss of control 30% 30% 22.11% Carrying amount of remaining equity on the d
1593、ate of loss of control 95,964,009.69 79,517,534.87 6,631,680.00 Fair value of remaining equity on the date of loss of control 95,964,009.69 114,176,814.54 21,173,548.79 Gain or loss from remeasurement of remaining equity at fair value (deduction of income tax effect) 29,460,387.72 10,906,401.59 Meth
1594、od and key assumptions of fair value of remaining equity on the date of loss of control Third party valuation report Third party valuation report Third party valuation report Amount transferred from other comprehensive income relating to equity investment of original subsidiary to profit and loss of
1595、 investment continued Name of subsidiaries Suzhou Haipeng E-commerce Co., Ltd. SHC International (HK) Ltd. Ocean Vast Enterprises Ltd. 9 Goodaymart joint ventures Consideration for disposal of equity interest 3,780,000.00 - HK$ 350,100 7,590,000.00 Proportion of equity disposal 70% 63% 51% 51% Metho
1596、d of equity disposal Transfer Transfer Transfer Transfer Qingdao Haier Co., Ltd. 2015 Annual Report 207 / 239 Date of loss-of-control 2015/5/31 2015/1/1 2015/1/1 2015/1/1 Basis of determination of date of loss-of-control The relevant rights and obligations of target interest have been transferred Th
1597、e relevant rights and obligations of target interest have been transferred The relevant rights and obligations of target interest have been transferred The relevant rights and obligations of target interest have been transferred Difference between disposal consideration and its share of net assets o
1598、f the subsidiary in the consolidated financial statements as respect to the disposal of investment 8,972,905.85 -284,160.60 -15,523,245.37 IX. Interests in other entities 1. Interests in subsidiaries Applicable Not Applicable (I) Composition of the Group Name of subsidiaries Principal place of busin
1599、ess Registration place Business nature Shareholding percentage Percentage of voting rights Acquisition method Direct Indirect Haier Electronics Group Co., Ltd. Mainland of China Bermuda Manufacture and sale of washing machines and water heaters, and integrated channel services business 14.06% 29.78%
1600、 55.89% common control combination Haier Singapore Investment Holding Pte Ltd Singapore Singapore Household appliances production distribution business 100.00% 100.00% common control combination Qingdao Haier Air Conditioner Gen Corp., Ltd Qingdao High-tech Zone Qingdao High-tech Zone Manufacture an
1601、d operation of household air-conditioners 99.95% 99.95% common control combination Guizhou Haier Electronics Co., Ltd. Huichuan District, Zunyi City, Guizhou Province Huichuan District, Zunyi City, Guizhou Province Manufacture and sale of refrigerator 59.00% 59.00% common control combination Hefei H
1602、aier Air-conditioning Co., Limited Hefei Haier Industrial Park Hefei Haier Industrial Park Manufacture and sale of air-conditioners 100.00% 100.00% common control combination Wuhan Haier Electronics Co., Ltd. Wuhan Haier Industrial Park Wuhan Haier Industrial Park Manufacture and sale of air-conditi
1603、oners 60.00% 60.00% common control combination Qingdao Haier Air-Conditioner Electronics Co., Ltd. Qingdao Development Zone Qingdao Development Zone Manufacture and sale of air-conditioners 100.00% 100.00% common control combination Qingdao Haier Information Plastic Qingdao High-tech Zone Qingdao Hi
1604、gh-tech Zone Manufacture of plastic products 100.00% 100.00% common control combinatQingdao Haier Co., Ltd. 2015 Annual Report 208 / 239 Development Co., Ltd. ion Dalian Haier Precision Products Co., Ltd. Dalian Export Expressing Zone Dalian Export Expressing Zone Manufacture and sale of precise pla
1605、stics 90.00% 90.00% common control combination Hefei Haier Plastic Co., Ltd. Hefei Economic & Technological Development Area Hefei Economic & Technological Development Area Manufacture and sale of plastic parts 94.12% 5.88% 100.00% common control combination Qingdao Haier Moulds Co., Ltd. Qingdao Hi
1606、gh-tech Zone Qingdao High-tech Zone Research and manufacture of precise mould and product 75.00% 25.00% 100.00% common control combination Qingdao Meier Plastic Powder Co., Ltd. Qingdao Development Zone Qingdao Development Zone Manufacture of plastic powder, plastic sheet and high performance coatin
1607、gs 40.00% 60.00% 100.00% common control combination Chongqing Haier Precision Plastic Co., Ltd. Jiangbei District, Chongqing City Jiangbei District, Chongqing City Plastic products, sheet metal work, electronics and hardware 90.00% 10.00% 100.00% common control combination Chongqing Haier Intelligen
1608、t Electronics Co., Ltd. Jiangbei District, Chongqing City Jiangbei District, Chongqing City Manufacture and sale of electronics and automatic control system equipment 90.00% 10.00% 100.00% common control combination Qingdao Haier Robot Co., Ltd. Qingdao High-tech Zone Qingdao High-tech Zone Research
1609、, development, manufacture and sale of robot and its application, dedicated device and automatic production line 50.00% 50.00% common control combination Qingdao Haier Refrigerator Co., Ltd. Qingdao High-tech Zone Qingdao High-tech Zone Manufacture and production of fluorine-free refrigerators 100.0
1610、0% 100.00% Establish Qingdao Haier Refrigerator (International) Co., Ltd. Pingdu Development Zone, Qingdao Pingdu Development Zone, Qingdao Manufacture and production of refrigerators 75.00% 75.00% Establish Qingdao Household Appliance Technology and Equipment Qingdao High-tech Zone Qingdao High-tec
1611、h Zone Research and development of home appliances mould and 100.00% 100.00% Establish Qingdao Haier Co., Ltd. 2015 Annual Report 209 / 239 Research Institute technological equipment Qingdao Haier Whole Set Home Appliance Service Co., Ltd. Qingdao High-tech Zone Qingdao High-tech Zone Research, deve
1612、lopment and sales of health series of small home appliance 98.33% 98.33% Establish Qingdao Haier Intelligent Electronics Co., Ltd. Qingdao High-tech Zone Qingdao High-tech Zone Design and development of electronics and automatic control system 97.36% 97.36% Establish Qingdao Haier Special Refrigerat
1613、or Co., Ltd. Qingdao Development Zone Qingdao Development Zone Manufacture and sales of fluorine-free refrigerators 100.00% 100.00% Establish Qingdao Haier Dishwasher Co., Ltd.) Qingdao Development Zone Qingdao Development Zone Manufacture and production of dish washing machine and gas stove 100.00%
1614、 100.00% Establish Qingdao Haier Special Freezer Co., Ltd. Qingdao Development Zone Qingdao Development Zone Research, manufacture and sales of freezer and other refrigeration products 96.06% 96.06% Establish Dalian Haier Air-conditioning Co., Ltd. Dalian Export Expressing Zone Dalian Export Express
1615、ing Zone Manufacture and production of air-conditioners 90.00% 90.00% Establish Dalian Haier Refrigerator Co., Ltd. Dalian Export Expressing Zone Dalian Export Expressing Zone Manufacture and production of refrigerators 90.00% 90.00% Establish Qingdao Haier Electronic Plastic Co., Ltd. Qingdao Devel
1616、opment Zone Qingdao Development Zone Development , assembling and sales of plastics, electronics and product 80.00% 80.00% Establish Wuhan Haier Freezer Co., Ltd. Wuhan Economic & Technological Development Zone High-tech Industrial Park Wuhan Economic & Technological Development Zone High-tech Indus
1617、trial Park Research, manufacture and sales of freezer and other refrigeration products 95.00% 5.00% 100.00% Establish Qingdao Haidarui Procurement Service Co., Ltd. Qingdao High-tech Zone Qingdao High-tech Zone Development , purchase and sales of electrical product and components 98.00% 2.00% 100.00
1618、% Establish Qingdao Haier Qingdao Qingdao Development 98.91% 1.09% 100.00% Establish Qingdao Haier Co., Ltd. 2015 Annual Report 210 / 239 Intelligent Home Appliance Technology Co., Ltd. High-tech Zone High-tech Zone and application of household appliances, communication, electronics and network engi
1619、neering technology Chongqing Haier Air-conditioning Co., Ltd. Jiangbei District, Chongqing City Jiangbei District, Chongqing City Manufacture and sales of air conditioners 76.92% 23.08% 100.00% Establish Qingdao Haier Precision Products Co., Ltd. Qianwangang Road, Jiaonan City Qianwangang Road, Jiao
1620、nan City Development and manufacture of precise plastic, metal plate, mould and electronic products for household appliances 70.00% 70.00% Establish Qingdao Haier Air Conditioning Equipment Co., Ltd. Jiaonan City, Qingdao Jiaonan City, Qingdao Manufacture of household appliances and electronics 70.0
1621、0% 70.00% Establish Dalian Free Trade Zone Haier Air-conditioning Trading Co., Ltd Dalian Export Expressing Zone Dalian Export Expressing Zone Domestic trade 100.00% 100.00% Establish Dalian Free Trade Zone Haier Refrigerator Trading Co., Ltd Dalian Export Expressing Zone Dalian Export Expressing Zo
1622、ne Domestic trade 100.00% 100.00% Establish Qingdao Ding Xin Electronics Technology Co., Ltd. Qingdao Development Zone Qingdao Development Zone Manufacture and sale of electronic Parts. 100.00% 100.00% Establish Chongqing Haier Electronics Sales Co., Ltd. Jiangbei District, Chongqing City Jiangbei D
1623、istrict, Chongqing City Household appliance sales 95.00% 5.00% 100.00% Establish Chongqing Haier Refrigeration Appliance Co., Ltd. Jiangbei District, Chongqing City Jiangbei District, Chongqing City Manufacture and production of refrigerator 84.95% 15.05% 100.00% Establish Hefei Haier Refrigerator C
1624、o., Ltd. Hefei Haier Industrial Park Hefei Haier Industrial Park Manufacture and production of refrigerator 100.00% 100.00% Establish Wuhan Haier Energy and Power Co., Ltd Wuhan Haier Industrial Park Wuhan Haier Industrial Park Energy service 75.00% 75.00% Establish Qingdao Haier HVAC Engineering Co
1625、., Ltd Qingdao Development Zone Qingdao Development Zone Air-conditioning 100.00% 100.00% Establish Chongqing Gooddaymart Electric Appliance Sale Jiangbei District, Chongqing City Jiangbei District, Chongqing City Sales of household appliances and 51.00% 51.00% Establish Qingdao Haier Co., Ltd. 2015
1626、 Annual Report 211 / 239 Co., Ltd electronics Qingdao Haier (Jiaozhou) Air-conditioning Co., Limited Jiaozhou City, Qingdao Jiaozhou City, Qingdao Manufacture and sale of air-conditioners 100.00% 100.00% Establish Qingdao Haier Component Co., Ltd Jiaozhou City, Qingdao Jiaozhou City, Qingdao Manufac
1627、ture and sales of plastic and precise sheet metal products 100.00% 100.00% Establish Haier Shareholdings (Hong Kong) Limited Hong Kong Hong Kong Investment 100.00% 100.00% Establish Shenyang Haier Refrigerator Co., Ltd. Shenbei New Area, Shenyang City Shenbei New Area, Shenyang City Manufacture and
1628、sales of refrigerator 100.00% 100.00% Establish Foshan Haier Freezer Co., Ltd. Shanshui District, Foshan City Shanshui District, Foshan City Manufacture and sales of freezer 100.00% 100.00% Establish Zhengzhou Haier Air-conditioning Co., Ltd. Zhengzhou Economic and Technological Development Zone Zhe
1629、ngzhou Economic and Technological Development Zone Manufacture and sales of air conditioner 100.00% 100.00% Establish Qingdao Haidayuan Procurement Service Co., Ltd. Qingdao Development Zone Qingdao Development Zone Development , purchase and sales of electrical product and components 100.00% 100.00
1630、% Establish Qingdao Haier Intelligent Technology Development Co., Ltd. Qingdao High-tech Zone Qingdao High-tech Zone Development and research of household appliances 100.00% 100.00% Establish Qingdao Hai Ri High-Tech Model Co., Ltd. Qingdao High-tech Zone Qingdao High-tech Zone Design, manufacture a
1631、nd sales of product model and mould 75.00% 75.00% common control combination Qingdao Hai Gao Design and Manufacture Co., Ltd. Qingdao High-tech Zone Qingdao High-tech Zone Industrial design and prototype production 75.00% 75.00% common control combination Beijing Haier Guangke Digital Technology Co.
1632、, Ltd. Beijing Beijing Development , promotion and transfer of technology 55.00% 55.00% common control combination Shanghai Haier Medical Technology Co., Ltd. Shanghai Shanghai Wholesale and retail of medical facility 100.00% 100.00% Establish Qingdao Haier Technology Co., Ltd. Qingdao Qingdao Devel
1633、opment and sales of software and information 100.00% 100.00% common control combination Qingdao Haier Co., Ltd. 2015 Annual Report 212 / 239 product Qingdao Haier Technology Investment Co., Ltd. Qingdao Qingdao Entrepreneurship investment and consulting 100.00% 100.00% Establish Qingdao Casarte Smar
1634、t Living Appliances Co., Ltd. Qingdao Qingdao Development, production and sales of appliances 100.00% 100.00% Establish Qingdao Haichuangyuan Appliances Sales Co., Ltd. Qingdao Qingdao Sales of household appliances and digital products 100.00% 100.00% Establish Beijing ASU Tech Co., Ltd. Beijing Bei
1635、jing Technical services, import and export business 100.00% 100.00% Establish Haiyike (Beijing) Tech Co., Ltd. Beijing Beijing Technical services, software development 100.00% 100.00% Establish Haier Overseas Electric Appliance Co., Ltd. Qingdao Qingdao Sales of household appliances, international f
1636、reight forwarding 100.00% 100.00% Establish Qingdao Haier Central Air-conditioner Co., Ltd. Qingdao Qingdao Production and sales of air conditioners and refrigeration equipment 100.00% 100.00% Establish Beijing Tongyuan Technology Co., Ltd. Beijing Beijing Technology development, promotion and trans
1637、fer 100.00% 100.00% Establish Small companies such as Qingdao Hai Heng Feng Electrical Appliances Sale & Service Co., Ltd All over the country All over the country Sales of household appliances Establish Reasons for including subsidiaries which the Company has 50% or less of the equity into the scop
1638、e of consolidated financial statements: At the end of the reporting period, the Company had substantial control over the finance and operating decision of small companies, such as Haier Electronics Group Co., Ltd., Qingdao Hai Heng Feng Electrical Appliances Sale & Service Co., Ltd, thus, they were
1639、included into the scope of consolidated financial statements. Qingdao Haier Co., Ltd. 2015 Annual Report 213 / 239 Reason for the ratio of voting rights higher than the ratio of shareholding of Haier Electronics Group Co., Ltd.: in 2014, Qingdao Haier Investment and Development Co., Ltd. (hereinafte
1640、r referred to as Investment and Development) signed a Shareholder Voting Right Entrustment Agreement with the Company. Investment and Development entrusted the Company to exercise the underlying shareholder voting rights of 336,600,000 shares of Haier Electronics Group Co., Ltd. Both parties agreed
1641、that Investment and Development will not revoke the entrustment and authorization to the Company unless the Company issues a written notice of revoking trustee to Investment and Development. (2) Significant non-wholly owned subsidiaries Unit and Currency: RMB Name of subsidiaries Percentage of share
1642、holding of minority shareholders (%) Profit or loss attributed to minority shareholders for the period Dividend declared to minority shareholders for the period Balance of minority interest at the end of the period Haier Electronics Group Co., Ltd. 56.16 1,589,954,949.08 200,573,175.94 9,173,408,636
1643、.09 Guizhou Haier Electronics Co., Ltd. 41.00 10,827,554.19 12,300,000.00 101,700,855.57 Wuhan Haier Electronics Co., Ltd. 40.00 30,554,666.63 8,000,000.00 192,742,430.20 Qingdao Haier Refrigerator (International) Co., Ltd. 25.00 -3,779,586.67 78,950,314.05 (3) Main financial information of signific
1644、ant non-wholly owned subsidiaries Name of subsidiaries Closing balance Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Haier Electronics Group Co., Ltd. 23,044,810,093.72 7,019,431,512.78 30,064,241,606.50 12,309,170,141.12 2,107,776,134.6
1645、4 14,416,946,275.76 Guizhou Haier Electronics Co., Ltd. 314,706,629.02 43,195,339.38 357,901,968.40 109,851,101.19 109,851,101.19 Wuhan Haier Electronics Co., Ltd. 549,813,441.00 138,467,728.19 688,281,169.19 206,425,093.69 206,425,093.69 Qingdao Haier Refrigerator 278,517,080.54 55,808,808.81 334,3
1646、25,889.35 18,524,633.17 18,524,633.17 Qingdao Haier Co., Ltd. 2015 Annual Report 214 / 239 (International) Co., Ltd. Continued Name of subsidiaries Opening balance Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Haier Electronics Group Co.
1647、, Ltd. 23,409,589,144.57 3,705,899,222.63 27,115,488,367.20 12,146,570,349.37 3,028,630,902.15 15,175,201,251.52 Guizhou Haier Electronics Co., Ltd. 338,553,939.22 54,889,192.16 393,443,131.38 141,800,932.93 141,800,932.93 Wuhan Haier Electronics Co., Ltd. 689,222,958.63 143,426,976.88 832,649,935.5
1648、1 407,180,526.59 407,180,526.59 Qingdao Haier Refrigerator (International) Co., Ltd. 279,107,969.13 58,042,793.71 337,150,762.84 6,231,159.98 6,231,159.98 Name of subsidiaries Current amount Operating income Net profit Comprehensive income Cash flows from operating activities Haier Electronics Group
1649、 Co., Ltd. 62,831,627,407.20 2,821,288,343.71 29,669,272.02 2,602,853,409.58 Guizhou Haier Electronics Co., Ltd. 1,071,734,860.12 26,408,668.76 26,016,651.42 Wuhan Haier Electronics Co., Ltd. 1,709,531,738.51 76,386,666.58 33,442,718.25 Qingdao Haier Refrigerator (International) Co., Ltd. -15,118,34
1650、6.68 23,547,247.02 Continued Name of subsidiaries Prior amount Operating income Net profit Comprehensive income Cash flows from operating activities Haier Electronics Group Co., Ltd. 67,146,203,802.89 2,512,707,253.07 -4,410,494.34 3,018,221,639.68 Guizhou Haier Electronics Co., Ltd. 1,306,368,920.5
1651、1 29,756,452.63 15,968,522.51 Wuhan Haier Electronics Co., Ltd. 2,588,103,169.17 76,132,973.02 23,109,264.39 Qingdao Haier Refrigerator (International) Co., Ltd. 194,357,325.75 -62,199,081.59 143,390,719.69 2. Transactions leading to the change of owners equity in subsidiaries but not losing the con
1652、trol Applicable Not applicable Qingdao Haier Co., Ltd. 2015 Annual Report 215 / 239 (1). Explanation to the change of owners equity in subsidiaries: During the period, shareholding proportion held by the Company changed as a result of the exercise of share options and additional capital contributed
1653、by minority shareholders of Haier Electronics Group Co., Ltd., Qingdao Haier Special Freezer Co., Ltd., and Haiyike (Beijing) Tech Co., Ltd., all of which are subsidiaries of the Company; shareholding proportion held by the Company also changed as a result of unilateral increase capital contribution
1654、 to Qingdao Haier Intelligent Appliances Technology Co., Ltd., and Haier Appliances (India) Co., Ltd. by the Company. (2). Impact of the transactions on the minority interest and the equity attributable to owners of the parent company: Items Haier Electronics Group Co., Ltd. Others Total of cost of
1655、acquisition/disposal consideration 249,239,125.42 Less: share of net assets of subsidiaries calculated with reference to the proportion of the share acquired/disposed 161,323,089.29 256,445,027.40 The difference -161,323,089.29 -7,205,901.98 Including: adjustment and increase to capital reserve 161,
1656、323,089.29 7,205,901.98 3. Interests in joint ventures and associates Applicable Not applicable (1). Interests in joint ventures and associates Unit and Currency: RMB Name of joint ventures or associates Principal place of business Registration place Business nature Shareholding percentage (%) Accou
1657、nting method for the investment of joint venture and associates Direct Indirect Haier Medical and Laboratory Products Co., Ltd. Qingdao Qingdao Medical freezer 27.37 Equity method Wolong Electric Zhangqiu Haier Motor Co., Ltd. Zhangqiu Zhangqiu Electric motor manufacture 30 Equity method Haier Group
1658、 Finance Co., Ltd. Qingdao Qingdao Financing 42 Equity method Qingdao Haier Software Investment Co., Ltd. Qingdao Qingdao Software development 25 Equity method Qingdao Haier Special Steel Plate Research and Development Co., Ltd. Qingdao Qingdao Manufacture of steel plate 30 Equity method Hefei Haier
1659、 Special Steel Plate Research and Development Co., Ltd. Hefei Hefei Manufacture of steel plate 30 Equity method Qingdao Haier SAIF Smart Home Industry Investment Center (limited partnership) Qingdao Qingdao Venture capital investment 63 Equity method Qingdao Haier Co., Ltd. 2015 Annual Report 216 /
1660、239 Haier Tongchuang Investment Partnership (limited partnership) Guangzhou Guangzhou Investment 50 Equity method Qingdao HSW Water Appliance Co., Ltd. Qingdao Qingdao Sales 25 Equity method Qingdao Roca Water Appliance Co., Ltd. Qingdao Qingdao Sales 49 Equity method China Shengfeng Microfinance li
1661、mited in Jinan District of Fuzhou City Fuzhou Fuzhou Microfinance 20 Equity method Fujian ATL-Shengfeng Logistics Co., Ltd. Fuzhou Fuzhou Logistics 40 Equity method Shenzhen Storm Leader Technology Co., Ltd. Shenzhen Shenzhen Sales 22 Equity method Konan Electronic Co., Ltd. Hunan Hunan Motor Manufa
1662、cturing 50 Equity method HPZ Limited Nigeria Nigeria Manufacture of household appliances 25.01 Equity method HNR Company (Private) Limited Pakistan Pakistan Manufacture of household appliances 31.72 Equity method Beijing Mr. Hi Network Technology Company Limited Beijing Beijing Technology developmen
1663、t 25 Equity method (2). Basic information and financial information of important associates Basic information of important associates: Haier Group Finance Co., Ltd. is established by Haier Group Corporation and its three affiliates. Registration place and principal place of business: Qingdao High-te
1664、ch Zone Haier Park. The Companys subsidiaries hold an aggregate of 42.00% equity interest in Haier Group Finance Co., Ltd. Financial information of major associates Items Closing balance / Current amount Opening balance/Prior amount Haier Group Finance Co., Ltd. Haier Group Finance Co., Ltd. Current
1665、 assets 56,908,243,695.90 62,826,102,544.12 Non-current assets 4,185,942,298.04 6,053,424,346.06 Total assets 61,094,185,993.94 68,879,526,890.18 Current liabilities 48,277,090,860.06 57,417,592,987.45 Non-current liabilities 4,234,302,863.48 4,476,584,039.45 Total liabilities 52,511,393,723.54 61,8
1666、94,177,026.90 Minority interests Equity interest attributable to 8,582,792,270.40 6,985,349,863.28 Qingdao Haier Co., Ltd. 2015 Annual Report 217 / 239 shareholders of the parent company Share of net assets calculated based on shareholding percentage 3,604,772,753.58 2,933,846,942.59 Operating incom
1667、e 2,720,546,605.87 2,395,047,078.12 Net profit 1,523,290,481.78 1,462,326,161.93 Other comprehensive income 74,151,925.35 110,295,772.41 Total comprehensive income 1,597,442,407.13 1,572,621,934.34 Dividend received from associates for the year (3). Summarized financial information of insignificant
1668、associates Investment to associates Closing balance / Current amount Opening balance/Prior amount Haier Medical and Laboratory Products Co., Ltd. 283,507,786.33 270,141,291.60 Wolong Electric Zhangqiu Haier Motor Co., Ltd. 119,968,184.53 110,995,187.75 Qingdao Haier Software Investment Co., Ltd. 17,
1669、033,872.46 16,323,729.58 Qingdao Haier SAIF Smart Home Industry Investment Center (limited partnership) 200,266,832.77 202,000,000.00 Qingdao Haier Special Steel Plate Research and Development Co., Ltd. 95,207,113.86 Hefei Haier Special Steel Plate Research and Development Co., Ltd. 114,000,000.00 B
1670、eijing Mr. Hi Network Technology Company Limited 2,606,883.28 Haier Tongchuang Investment Partnership (limited partnership) 160,012,400.00 Qingdao HSW Water Appliance Co., Ltd. 39,437,684.81 Qingdao Roca Water Appliance Co., Ltd. 13,300,791.62 China Shengfeng Microfinance limited in Jinan District o
1671、f Fuzhou City 78,598,195.59 Fujian ATL-Shengfeng Logistics Co., Ltd. 12,630,535.81 Shenzhen Storm Leader Technology Co., Ltd. 16,168,507.04 Konan Electronic Co., Ltd. 31,904,236.23 23,986,803.71 HPZ Limited 73,342,754.13 HNR Company (Private) Limited 96,149,801.89 Hefei Huadong Packaging Co., Ltd. 2
1672、5,302,522.69 Total book value of investment 1,354,135,580.35 648,749,535.33 Total amount of the following items calculated based on shareholding percentage -Net profit 55,942,724.88 32,130,166.99 -Other comprehensive income 8,451,556.05 -2,930,435.77 -Total comprehensive income 64,394,280.93 29,199,
1673、731.22 X. Segment Report Applicable Not applicable The Company principally engaged in manufacture and sales of household appliances and relevant services business, manufacture of upstream household appliances parts business and distribution of products of third-party, logistics and after-sale busine
1674、ss. The Company has 6 business segments, Qingdao Haier Co., Ltd. 2015 Annual Report 218 / 239 including refrigerator segment, air-conditioner segment, washing machine segment, kitchenware and sanitary ware segment, equipment components segment, integrated channel services segment and other segment.
1675、The management of the Company assesses operating performance of each segment and allocates resources according to the division. Sales between segments were mainly based on market price. Refrigerator segment mainly engaged in manufacture and sales of refrigerator and freezers products. Air-conditione
1676、r segment mainly engaged in manufacture and sales of household air conditioners and commercial air conditioners. Washing machine segment mainly engaged in manufacture and sales of washing machine products. Kitchenware and sanitary ware segment mainly engaged in manufacture and sales of water heater
1677、and kitchen appliances products. Equipment components segment mainly engaged in procurement, manufacture and sales of upstream matching accessories for household appliances, manufacture and sales of mould. Segment of integrated channel services and others mainly engaged in distribution business, log
1678、istics business, after-sale business, small home appliance business and others. The Companys 3rd and 4th tier markets channel business is treated as integrated channel services and assessed separately with other segments. Accordingly, operating profit from 3rd and 4th tier markets of refrigerator, a
1679、ir-conditioner, kitchenware and sanitary ware, washing machine business segment was not reflected in operating profit of each segment. As the centralized management under the headquarters or not being included in the assessment scope of segment management, the total assets of segment exclude monetar
1680、y capital, financial assets held for trading, dividends receivable, other current assets, available-for-sale financial assets, long-term equity investment, goodwill, deferred income tax assets; the total liabilities of segment exclude long-term and short-term borrowings, financial liabilities held f
1681、or trading, dividends payables, tax payable, bonds payable, deferred income tax liabilities; operating profit of segment exclude profit/loss in fair value and income from investment. (1) Information of segment information Segment information for the year of 2015 and as of 31 December 2015 Segment in
1682、formation Air-conditioner segment Refrigerator segment Kitchenware and sanitary ware segment Washing machine segment Segment revenue 16,623,263,912.64 25,353,653,900.06 5,788,906,482.77 15,740,751,019.45 Including: revenue from external consumers 6,341,544,098.49 10,081,565,549.44 1,071,717,018.93 4
1683、,897,345,078.20 Inter-segment revenue 10,281,719,814.15 15,272,088,350.62 4,717,189,463.84 10,843,405,941.25 Total segment operating cost 16,258,478,653.85 23,262,032,956.30 5,133,865,136.46 14,284,872,060.44 Qingdao Haier Co., Ltd. 2015 Annual Report 219 / 239 Segment operating profit 364,785,258.7
1684、9 2,091,620,943.76 655,041,346.31 1,455,878,959.01 Total segment assets 6,107,428,454.78 6,110,718,160.02 2,130,388,494.57 4,284,563,989.36 Total segment liabilities 3,997,986,679.58 6,217,133,445.17 1,541,249,731.32 2,255,451,123.87 Continued Segment information Equipment components segment Segment
1685、 of integrated channel services and others Inter-segment elimination Total Segment revenue 30,510,178,653.76 73,680,295,098.27 -77,749,534,982.29 89,947,514,084.66 Including: revenue from external consumers 2,100,221,913.89 65,455,120,425.71 89,947,514,084.66 Inter-segment revenue 28,409,956,739.87
1686、8,225,174,672.56 -77,749,534,982.29 Total segment cost 29,968,099,587.42 73,014,812,425.67 -77,396,079,057.15 84,526,081,762.99 Segment profit 542,079,066.34 665,482,672.60 -353,455,925.14 5,421,432,321.67 Total segment assets 14,782,886,743.90 22,179,686,713.16 -15,068,970,516.46 40,526,702,039.33
1687、Total segment liabilities 19,020,827,626.04 20,223,679,095.98 -14,140,358,350.64 39,115,969,351.32 Segment information for the year of 2014 and as of 31 December 2014 Segment information Air-conditioner segment Refrigerator segment Kitchenware and sanitary ware segment Washing machine segment Segmen
1688、t revenue 19,765,699,327.37 26,382,928,039.46 5,635,160,017.75 15,694,184,750.60 Including: revenue from external consumers 6,468,804,139.96 10,903,551,930.59 991,210,568.51 5,345,676,232.92 Inter-segment revenue 13,296,895,187.41 15,479,376,108.87 4,643,949,449.24 10,348,508,517.68 Total segment co
1689、st 18,975,141,221.03 24,323,833,747.22 5,026,020,068.83 14,257,949,190.46 Segment profit 790,558,106.34 2,059,094,292.24 609,139,948.92 1,436,235,560.14 Total segment assets 5,579,677,929.54 7,570,105,286.06 1,525,338,071.19 4,207,163,131.38 Total segment liabilities 3,898,364,094.73 6,760,589,840.8
1690、2 1,472,655,683.43 2,360,136,721.84 Continued Segment Equipment Segment of Inter-segment Total Qingdao Haier Co., Ltd. 2015 Annual Report 220 / 239 information components segment integrated channel services and others elimination Segment revenue 33,588,605,445.91 72,855,666,416.37 -76,992,480,103.10
1691、 96,929,763,894.36 Including: revenue from external consumers 4,722,654,407.97 68,497,866,614.41 96,929,763,894.36 Inter-segment revenue 28,865,951,037.94 4,357,799,801.96 -76,992,480,103.10 Total segment cost 32,847,795,174.41 71,297,684,265.42 -76,794,043,097.11 89,934,380,570.26 Segment profit 74
1692、0,810,271.50 1,557,982,150.95 -198,437,005.99 6,995,383,324.10 Total segment assets 18,073,539,645.32 14,322,347,023.41 -7,111,558,603.30 44,166,612,483.60 Total segment liabilities 23,098,480,393.55 12,953,797,746.35 -6,019,796,049.28 44,524,228,431.44 (2) Geographical information Other countries/r
1693、egions in this report refers to all other countries/regions (including Hong Kong and Macau Special Administration Region and Taiwan) other than the mainland China for the purpose of information disclosure. External transaction income For the year 2015 For the year 2014 Mainland China 71,297,057,103.
1694、80 78,233,675,569.40 Other countries/regions 18,650,456,980.86 18,696,088,324.96 Total 89,947,514,084.66 96,929,763,894.36 Continued Total non-current assets 31 December 2015 31 December 2014 Mainland China 10,899,308,703.78 9,582,602,315.11 Other countries/regions 1,033,929,423.11 732,673,229.33 To
1695、tal 11,933,238,126.89 10,315,275,544.44 The total non-current assets exclude: available-for-sale financial assets, long-term equity investment, goodwill, deferred income tax assets. XI. Disclosure of fair value Applicable Not applicable 1. Fair value of assets and liabilities at fair value at the en
1696、d of the period Items Fair value at the end of the period Level 1 Level 2 Total Recurring fair value measurement Qingdao Haier Co., Ltd. 2015 Annual Report 221 / 239 I. Financial asset designated to be measured by fair value and change of which is recorded in current profit and loss 22,069,897.04 22
1697、,069,897.04 II. Financial liability designated to be measured by fair value and change of which is recorded in current profit and loss 7,707,414.12 7,707,414.12 III. Available-for-sale financial assets 30,558,837.86 1,423,434,405.53 1,453,993,243.39 1. Basis for determination of level 1 fair value a
1698、t recurring and non-recurring fair measurement Unadjusted quoted prices of similar assets or liabilities in active markets as at the measurement date. 2. Qualitative and quantitative information about valuation technique and key parameters of level 2 fair value at recurring and non-recurring fair me
1699、asurement Inputs other than quoted prices included within level 1 that are observable for the assets or liabilities, either directly or indirectly. XII. Related parties and connected transactions According to Accounting Standards for Business Enterprises No. 36 Related Party Disclosures, parties are
1700、 considered to be related if one party has the ability to control or jointly control the other party 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.
1701、 According to Management Practices for Information Disclosure of Listed Companies (China Securities Regulatory Commission Order No. 40), in certain occasions, related legal person and natural person will be identified as related parties. 1. Information about the parent company of the Company and per
1702、sons acting in concert with the parent company Name of enterprise Types of entity Registered address Registered capital Legal representative Relationship with the Company Equity interest in the Company Voting share in the Company Haier Group Corporation Collectively-owned enterprise Qingdao High-tec
1703、h Zone Haier Park 311,180,000 Zhang Ruimin Parent company 17.52% 17.52% Haier Electric Appliances International Co., Ltd. Joint stock company Qingdao High-tech Zone Haier Park 631,930,635 Zhang Ruimin Persons acting in concert with the parent company 20.56% 20.56% Qingdao Haier Limited Qingdao Free
1704、30,000,000 Zhang Persons 2.62% 2.62% Qingdao Haier Co., Ltd. 2015 Annual Report 222 / 239 Venture & Investment Information Co., Ltd. liability company Trade Zone Ruimin acting in concert with the parent company Qingdao Haier Kitchen Facilities Co., Ltd Limited liability company Qingdao Economics and
1705、 Technology Developing Zone 105,000,000 Lu Xiaobin Persons acting in concert with the parent company 0.19% 0.19% 2. Information about subsidiaries of the Company Detailed information of subsidiaries is disclosed in item 1 of note IX. Interests in subsidiaries 3. Information about associates and join
1706、t ventures Information about the associates and joint ventures of the Company are set out in item 11 of note VII and item 3 of note IX. 4. Related companies without controlling relationship Name of enterprises Relationship with the Company FISHERPAYKEL APPLIANCES LIMITED Subsidiary of Haier Group FI
1707、SHER&PAYKEL AUSTRALIA PTY Subsidiary of Haier Group HAH(HK) Company Limited Subsidiary of Haier Group HAIER INFORMATION APPLIANCES S.R.L. Subsidiary of Haier Group HAIER INTERNATIONAL CO., LTD Subsidiary of Haier Group HAIER INTERNATIONAL(HK)LTD. Subsidiary of Haier Group Feima Electronic (Qingdao)
1708、Co., Ltd. Subsidiary of Haier Group Haier Group (Dalian) Electrical Appliances Industry Co., Ltd. Subsidiary of Haier Group Haier Group Finance Co., Ltd. Subsidiary of Haier Group Haier Group Electric Appliance Industry Co., Ltd Subsidiary of Haier Group Haier Group Technology Research and Developme
1709、nt Center Subsidiary of Haier Group Haier Energy Power Co., Ltd. Subsidiary of Haier Group Haier Brothers Animation Industry Co., Ltd. Subsidiary of Haier Group Hefei Haier Logistics Co., Limited Subsidiary of Haier Group Laiyang Haier Electrical Co. Ltd. Subsidiary of Haier Group Lizhu Haier Built
1710、Facilities (Qingdao) Co., Ltd. Subsidiary of Haier Group Qingdao Haier Fungchoi Exquisite Indian Express 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
1711、 Group Qingdao Haier International Trading Co., Ltd Subsidiary of Haier Group Qingdao Haier Household Integration Co., Ltd Subsidiary of Haier Group Qingdao Haier Co., Ltd. 2015 Annual Report 223 / 239 Qingdao Haier Parts Procurement Co., Ltd. Subsidiary of Haier Group Qingdao Haier Software Investm
1712、ent Co., Ltd. Subsidiary of Haier Group Haier Medical and Laboratory Products Co., Ltd. Subsidiary of Haier Group Qingdao Haier Special Plastic Development Co., Ltd. Subsidiary of Haier Group Qingdao Haier Logistics Consulting Co., Ltd. Subsidiary of Haier Group Qingdao Haier New Material Research a
1713、nd Development Co., Ltd. Subsidiary of Haier Group Qingdao Haiyongda Property Management Co., Ltd. Subsidiary of Haier Group Goodaymart Electronics Co., Ltd. Subsidiary of Haier Group Mitsubishi Heavy Industries Haier (Qingdao) Air-conditioners Co., Ltd. Subsidiary of Haier Group Xingyang Internatio
1714、nal Co., Ltd. Subsidiary of Haier Group BRAVE LION (HK) LIMITED Subsidiary of Haier Group Chongqing Haier Electrical Appliances Sales Co., Ltd. Subsidiary of Haier Group Chongqing Haier Logistics Co., Ltd. Subsidiary of Haier Group Konan Electronic Co., Ltd. Joint venture HNR Company (Private) Limit
1715、ed Joint venture Qingdao Haier Special Steel Plate Research and Development Co., Ltd. Joint venture Hefei Haier Special Steel Plate Research and Development Co., Ltd. Joint venture Wolong Electric Zhangqiu Haier Motor Co., Ltd. Joint venture 1. Information on related transaction (1). Connected trans
1716、actions regarding purchase and sale of goods and rendering and receipt of services Applicable Not applicable 1. Details about procurement of goods and services made by the Company from related parties are set out as follows: Related parties Current amount Prior amount Qingdao Haier Parts Procurement
1717、 Co., Ltd. 6,675,153,029.96 12,881,805,063.32 Chongqing Haier Electrical Appliances Sales Co., Ltd. 5,503,218,700.70 4,965,913,649.03 Chongqing Haier Logistics Co., Ltd. 1,628,537,521.70 2,414,391,500.84 Qingdao Haier International Trading Co., Ltd 960,755,418.06 1,292,105,147.38 Haier Group (Dalian
1718、) Electrical Appliances Industry Co., Ltd. 1,271,334,765.31 1,091,225,602.49 Haier Group Electrical Appliances Industry Co., Ltd. 4,199,545,118.50 3,083,247,568.19 Haier Energy Power Co., Ltd. 452,034,595.44 453,685,752.74 Qingdao Haier Household Integration Co., Ltd 156,111,132.01 6,663,186.20 Haie
1719、r Group Technology Research and 36,542,616.47 223,799,546.72 Qingdao Haier Co., Ltd. 2015 Annual Report 224 / 239 Development Center Qingdao Haier Special Plastic Development Co., Ltd. 607,921,553.32 523,127,531.98 Qingdao Haiyongda Property Management Co., Ltd. 169,008,958.41 193,198,934.77 Wolong
1720、Electric Zhangqiu Haier Motor Co., Ltd. 573,416,379.71 286,450,137.02 Hefei Haier Logistics Co., Limited 1,166,640,621.44 147,804,207.71 HAIER INTERNATIONAL CO., LTD 389,354,690.48 1,584,193,730.40 HAIER INFORMATION APPLIANCES S.R.L. 227,035,537.04 334,319,232.06 HAIER INTERNATIONAL(HK)LTD. 216,381,
1721、269.39 184,811,362.19 HNR Company (Private) Limited 1,004,079,518.17 903,062,781.53 Konan Electronic Co., Ltd. 216,902,186.20 92,733,415.93 Other related parties 2,162,156,392.11 2,043,988,872.48 Total 27,616,130,004.42 32,706,527,222.98 2. Details about selling goods to related parties by the Compa
1722、ny are set out as follows: Name of related parties Current amount Prior amount Haier Group Electric Appliance Industry Co., Ltd 2,958,400,103.88 5,616,759,920.69 Qingdao Haier Parts Procurement Co., Ltd. 76,087,939.66 2,131,489,369.07 Haier Group (Dalian) Electrical Appliances Industry Co., Ltd. 1,1
1723、28,406,336.11 1,301,911,526.72 Chongqing Haier Logistics Co., Ltd. 23,235,938.29 438,682,830.04 Qingdao Haier New Material Research and Development Co., Ltd. 476,339,702.18 406,578,922.37 Wolong Electric Zhangqiu Haier Motor Co., Ltd. 583,990,560.40 359,445,959.19 Qingdao Haier Special Plastic Devel
1724、opment Co., Ltd. 175,369,533.76 117,572,897.25 Qingdao Haier International Travel Agency Co., Ltd. 110,651,599.25 107,499,395.32 Qingdao Haier Tooling Development and Manufacturing Co., Ltd. 109,459,024.01 118,624,452.63 Qingdao Haier Co., Ltd. 2015 Annual Report 225 / 239 QINGDAO HAIER INTERNATIONA
1725、L TRADING CO., LTD. 487,308,824.30 127,698,599.08 HAIER INTERNATIONAL CO., LTD 37,525,630.99 129,914,421.73 HAH(HK) Company Limited 55,764,041.30 FISHER&PAYKEL AUSTRALIA PTY 316,305,245.47 Other related parties 1,081,121,611.73 725,950,476.01 Total 7,564,202,050.03 11,637,892,811.40 (2). Other conne
1726、cted transactions (1) One of the Companys subsidiaries entered into a loan contract with Haier Group Finance Co., Ltd. The borrowed amount as of 31 December 2015 was RMB1,048 million and the accrued interest and fees payable to Haier Group Finance Co., Ltd. in 2015was RMB34.22 million. (2) Informati
1727、on about the guarantor of the Companys ending guaranteed borrowing who is a related party: Borrower Borrowed amount Guarantor Haier Shareholdings (Hong Kong) Limited 1,000,728,210.00 Haier Group Corporation Total 1,000,728,210.00 (3) The accrued interest income from bank deposits with Haier Group Fi
1728、nance Co., Ltd. deposited by the Company and its subsidiaries in the full year of 2015 was RMB258.38 million. (4) Qingdao Haier Goodaymart Logistic Co., Ltd., a subsidiary of the Company and other companies provided logistics services to other related companies under Haier Group, the logistics incom
1729、e for the year of 2015 was RMB128.71 million, and that for the year of 2014 was RMB103.62 million. (5) Leasing Lessees Lessors Application of leased assets Lease expense recognized for the period Subsidiary of the Company Qingdao Haier Investment and Development Co., Ltd. and its subsidiaries Produc
1730、tion and operation 23,869,740.00 Subsidiary of the Company Other companies of Haier Group Production and operation 71,904,383.56 Total / / 95,774,123.56 2. Amounts due from/to related parties Applicable Not applicable Qingdao Haier Co., Ltd. 2015 Annual Report 226 / 239 Items and name of consumers E
1731、nding balance Beginning balance Bills receivables: Haier Group Electric Appliance Industry Co., Ltd 580,500,000.00 380,000,000.00 Wolong Electric Zhangqiu Haier Motor Co., Ltd. 79,410,269.85 Other related parties 1,792,043.36 Dividends receivables: Wolong Electric Zhangqiu Haier Motor Co., Ltd. 50,0
1732、00,000.00 50,000,000.00 Qingdao Haier Software Investment Co., Ltd. 4,524,472.84 4,524,472.84 Qingdao Haier Special Steel Plate Research and Development Co., Ltd. 6,301,362.54 Trade receivables: Items and name of consumers Carrying balance Provision for bad debts Carrying balance Provision for bad d
1733、ebts Haier Group Electric Appliance Industry Co., Ltd 174,630,258.08 8,731,512.90 1,474,306,101.96 73,715,305.10 Haier Group (Dalian) Electrical Appliances Industry Co., Ltd. 207,921,660.16 10,396,083.01 221,964,815.34 11,098,240.77 Qingdao Haier Parts Procurement Co., Ltd. 763,720.68 38,186.03 12,0
1734、75,463.81 603,773.19 Chongqing Haier Logistics Co., Ltd. 9,597.75 479.89 2,484,717.32 124,235.87 Wolong Electric Zhangqiu Haier Motor Co., Ltd. 110,510,547.68 5,525,527.38 137,780,626.24 6,889,031.31 Haier Medical and Laboratory Products Co., Ltd. 8,419,069.02 420,953.45 37,704,028.23 1,885,201.41 Q
1735、ingdao Haier International Travel Agency Co., Ltd. 123,890,004.37 6,194,500.22 89,417,323.67 4,470,866.18 Qingdao Haier New Material Research and Development Co., Ltd. 47,541,824.58 2,377,091.23 84,802,398.87 4,240,119.94 HAIER INTERNATIONAL CO., LTD 115,557,090.93 5,777,854.55 31,935,683.07 1,596,7
1736、84.15 Hefei Haier Special Steel Plate Research and Development Co., Ltd. 76,285,963.56 3,814,298.18 Qingdao Haier Special Steel Plate Research and Development Co., Ltd. 22,351,319.72 1,117,565.99 HNR Private Limited Company 32,073,631.86 1,603,681.59 Mitsubishi Heavy Industries Haier (Qingdao) Air-c
1737、onditioners Co., Ltd. 29,966,338.37 1,498,316.92 431,130.97 21,556.55 FISHERPAYKEL APPLIANCES LIMITED 158,810,441.99 7,940,522.10 Qingdao Haier International Trading Co., Ltd 85,283,740.22 4,264,187.01 29,134.60 1,456.73 Other related parties 165,146,632.71 8,257,331.64 156,025,187.61 7,801,259.38 P
1738、repayments: Qingdao Haier International Trading Co., Ltd 26,873,715.41 110,687,664.04 Goodaymart Electronics Co., Ltd. 12,538,028.12 25,682,607.70 Qingdao Haier Co., Ltd. 2015 Annual Report 227 / 239 Qingdao Haier Parts Procurement Co., Ltd. 16,879,474.20 7,028,547.95 Mitsubishi Heavy Industries Hai
1739、er (Qingdao) Air-conditioners Co., Ltd. 12,238,106.36 Other related parties 9,556,559.99 31,990,235.22 Interests receivables: Haier Group Finance Co., Ltd. 91,036,865.15 96,503,804.13 Other receivables: Items and name of consumers Book balance Provision for bad debts Book balance Provision for bad d
1740、ebts HAIER INTERNATIONAL CO., LTD 191,683,291.58 9,584,164.58 Goodaymart Electronics Co., Ltd. 6,025,082.15 301,254.11 Qingdao Haier Logistics Consulting Co., Ltd. 13,593,017.74 679,650.89 13,593,017.74 679,650.89 Other related parties 35,868,639.60 1,793,431.98 39,340,346.66 1,967,017.33 Bills paya
1741、ble: Laiyang Haier Electrical Co. Ltd. 29,649,819.07 Qingdao Haier Fungchoi Exquisite Indian Express Co., Ltd. 5,910,415.02 20,929,728.42 Other related parties 12,574,392.12 22,269,163.16 Trade payables: Qingdao Haier Parts Procurement Co., Ltd. 663,349,767.52 1,050,103,108.32 Hefei Haier Logistics
1742、Co., Limited 201,205,529.62 41,948,091.58 Haier Group (Dalian) Electrical Appliances Industry Co., Ltd. 533,547,117.67 538,844,269.75 Chongqing Haier Logistics Co., Ltd. 139,178,244.68 162,611,663.58 Chongqing Haier Electrical Appliances Sales Co., Ltd. 759,596,919.13 69,805,044.81 Goodaymart Electr
1743、onics Co., Ltd. 10,614,831.51 1,559,351.13 Qingdao Haier International Trading Co., Ltd 149,918,593.84 229,414,178.34 Qingdao Haier New Material Research and Development Co., Ltd. 817,525.38 1,328,676.53 Qingdao Haier Special Plastic Development Co., Ltd.) 74,845,920.73 52,202,976.39 Haier Group Ele
1744、ctric Appliance Industry Co., Ltd 187,995,713.20 593,288,327.64 HAIER INTERNATIONAL(HK)LTD. 20,541,494.39 97,844,763.62 HAIER INTERNATIONAL CO., LTD 22,060,139.07 288,756,788.20 HAIER INFORMATION APPLIANCESS.R.L. 102,725,606.14 108,982,353.26 Feima Electronic(Qingdao) Co., Ltd. 203,253,438.63 Lizhu
1745、Haier Built Facilities(Qingdao) Co., Ltd. 39,063,792.08 Qingdao Haier Co., Ltd. 2015 Annual Report 228 / 239 HNR Private Limited Company 83,188,898.42 69,132,247.62 Other related parties 387,875,450.85 252,662,924.21 Receipts in advance: Haier Group Electric Appliance Industry Co., Ltd 18,701,475.03
1746、 25,336,903.89 Qingdao Haier Parts Procurement Co., Ltd. 2,819,955.86 HAIER INTERNATIONAL CO., LTD 18,158.64 34,970,939.50 Other related parties 18,596,856.89 25,156,256.95 Other payable: Haier Brothers Animation Industry Co., Ltd. 393,253,947.83 397,445,354.81 Goodaymart Electronics Co., Ltd. 18,99
1747、0,955.78 14,990,955.78 Chongqing Haier Logistics Co., Ltd. 51,830,739.06 51,830,739.06 Haier Group Electric Appliance Industry Co., Ltd 27,962,633.21 148,340,987.33 Xingyang International Co., Ltd. 13,885,076.40 269,935,646.21 BRAVE LION (HK) LIMITED 825,681,434.10 Haier Group Corporation 137,294,65
1748、9.26 Other related parties 138,432,347.41 292,029,050.33 Interests payables: Haier Group Finance Co., Ltd. 5,697,476.64 7,152,237.84 Dividends payables: BRAVE LION (HK) LIMITED 115,230,923.73 132,644,847.17 Other related parties 17,051,346.99 6,413,171.90 Ending balance Feima Electronic(Qingdao) Co.
1749、, Ltd. Lizhu Haier Built Facilities(Qingdao) Co., Ltd. HNR Private Limited Company Haier Brothers Animation Industry Co., Ltd. Dividends payable Dividends payable 3. Others 1. Connected sales In 2015, following the acquisition of the overseas white household appliances assets, the Companys original
1750、overseas sales model, being exports through the Groups exporting platform, was changed. The trading company under the company holding overseas white household appliances assets was fully responsible for sales of export-oriented products. Meanwhile, the trading company was also Qingdao Haier Co., Ltd
1751、. 2015 Annual Report 229 / 239 responsible for the overseas sales of some of the Groups 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 produc
1752、ts 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. 2. Connected Procurements In addition to independent procurement platform, the Company entrusted Haier Group Corpor
1753、ation and its subsidiaries for procurements of part of raw materials and distribution of goods and materials. The Company, Haier Group Corporation and its subsidiaries purchase materials from agents. They purchase and distribute goods for production and non-production use according to the specific m
1754、aterial procurement target proposed by the Company. The price of materials purchased and delivered consist of the actual purchase price 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 tha
1755、n the price that the Company independently purchases from the market. Connected procurements among Haier Electronics Group Co., Ltd. (Haier Electronics), a holding subsidiary of the Company, Qingdao Haier Investment and Development Co., Ltd, Haier Group Corporation are carried out according to relev
1756、ant provisions of Materials Procurement Agreement and Production and Experimental Equipment Procurement Agreement entered into among parties. 3. Connected Transactions of Financial and Logistics Services The price of financial services provided by Haier Group Corporation and its subsidiaries such as
1757、 deposits/loans are determined by the principle that is not less favorable of market value fair. The Company is entitled to decide whether to keep cooperation relationship with Finance Company with the knowledge of the price prevailing on the market and in combination with their own interests. While
1758、 performing the agreement, the Company could also require other financial service institutions to provide related financial services basing on actual situation. Connected transactions of financial services among Haier Electronics, Haier Group Finance Co., Ltd., Qingdao Haier Investment and Developme
1759、nt Co., Ltd and Haier Group Corporation are carried out according to relevant provisions of Financial Service Agreement entered into among parties. In order to further standardize the logistics services provided by the related companies of Haier Group Corporation, the Company renewed the Logistics a
1760、nd Service Agreement with Qingdao Haier Investment and Development Co., Ltd and Haier Group Corporation, the Company entrusted the subsidiaries of Haier Group to provide energy and power, basic research and detection, equipment leasing, house rental and maintenance, landscaping and sanitation, gift
1761、purchasing, design, consultation, all kinds of booking and other services. Qingdao Haier Co., Ltd. 2015 Annual Report 230 / 239 In accordance with the Comprehensive Service Agreement, Promotion Agreement, Product Research and Development Agreement entered into among Haier Electronics, Qingdao Haier
1762、Investment and Development Co., Ltd and Haier Group Corporation, Haier Electronics entrusted subsidiaries of Haier Group to provide Haier Electronics with hydropower energy and related support; meeting, accommodation, ticket agent; integrated services such as product certification, software, food an
1763、d beverage agent, property decoration, house lease, finance and marketing, product research and development services. 4. Others In order to expend the sales businesses in the third and fourth-tier markets, Haier Electronics renewed the Products Procurement Agreement and Internal Sales Agreement with
1764、 Qingdao Haier Investment and Development Co., Ltd and Haier Group Corporation, according to which, while Haier Electronics purchases products from contract parties, the purchasing price shall be determined basing on the prices of which Haier Electronics purchases the same type of product in similar
1765、 transactions from independent third parties in the market, and are not less favorable than the terms and conditions provided by the independent third parties to Haier Electronics; while Haier Electronics sales products to contract parties for their own use or distributes products through sales netw
1766、ork, the selling price shall be determined basing on the prices of which Haier Electronics sells the same type of product in similar transactions to independent third parties in the market, and are not less favorable than the terms and conditions provided by Haier Electronics to independent third pa
1767、rties. The Company and its subsidiaries entered into a series of contracts, including the Framework Agreement Regarding the Procurement of Modular Products with Wolong Electric Zhangqiu Haier Motor Co., Ltd. and other companies (the vendors). Pursuant to which, the vendors agreed to supply modular p
1768、roducts to the Company at the most favorable price which is no higher than the price it offered to other clients. The Company and its subsidiaries entered into a series of contracts, including the Contract Arrangement Regarding the Procurement of Special Steel Plate Products with Qingdao Haier Speci
1769、al Steel Plate Research and Development Co., Ltd. and Hefei Haier Special Steel Plate Research and Development Co., Ltd. (the vendors). Under which, it is agreed that the vendors shall supply goods to the Company on terms which are not less favorable than terms offered by other suppliers. XIII. Shar
1770、e-based Payments Items Current period 1.Total equity instruments granted during the period 0.84 million shares 2.Total equity instruments exercised during the period 35.7848 million shares 3.Total equity instruments lapsed during the period 59.5632 million shares 4.Range of exercise price RMB8.07 pe
1771、r share, RMB10.06 per share 5.The remaining term of contract Nil Qingdao Haier Co., Ltd. 2015 Annual Report 231 / 239 6.Share option outstanding at the end of the period 0.1360 million shares 7.Total expense recognized for share-based payments RMB2.49 million 8.Total amount of employee services as a
1772、 result of the share-based payments RMB2.49 million 9.Total amount of other services as a result of the share-based payments Nil The Company adopted B-S model to determine the fair value of the equity instruments, parameters for the valuation method include: (1) exercise price of option; (2) duratio
1773、n of option; (3) the price of the underlying shares at the grant date; (4) risk-free interest rate; (5) dividend yield of the underlying shares; (6) expected volatility of share price. XIV. Commitment and contingencies 1. Critical commitment Applicable Not applicable 2. Contingencies Applicable Not
1774、applicable As of 31 December 2015, the Company has no material contingencies that need to be disclosed. 3. Events Subsequent to the Balance Sheet Date 1. According to the resolution of the 31th meeting of the 8th session of the Board of Directors of the Company held on 28 April 2016, the profit for
1775、the year is proposed to be distributed on the basis of the total number of shares on the registration date when the plan is implemented in the future, the Company will declare cash dividend of RMB2.12 (including taxes) for every 10 shares to all shareholders. 2. On 14 January 2016, the Company enter
1776、ed into an Equities and Assets Purchase Agreement with General Electric Company (hereinafter referred to as General Electric). Pursuant to which, the Company intended to acquire the household appliances business of General Electric and relevant assets for a consideration of US$5.4 billion by way of
1777、cash. The total consideration for this transaction shall be paid in cash with self-raised funds and funds obtained through a variety of financing methods including application for M&A loans. The amount of M&A loans used in this transaction did not exceed 60% of the transaction consideration. Please
1778、refer to the Report on the Acquisition of Major Assets by Qingdao Haier Co., Ltd. for further details. 3. The Company has no material events subsequent to the balance sheet date need to be disclosed. XV Financial Instruments Related Risks The Companys financial assets include notes receivables, rece
1779、ivables and etc., and the Companys financial liabilities include bills payable, payables, long- and short- term borrowings and etc. Please refer to relevant items in Note V for detailed descriptions of various financial instruments. Risks relating to these financial instruments and the risk manageme
1780、nt policies the Company adopts to mitigate these Qingdao Haier Co., Ltd. 2015 Annual Report 232 / 239 risks are summarized below. The Companys management manages and monitors these risk exposures in order to ensure these risks are well within their respective risk limits. 1. Credit risk The credit r
1781、isk the Company exposed to mainly comes from bank deposits, notes receivables, accounts receivables, interest receivables, other receivables and wealth management products in other current assets. (1) The Companys bank deposits and wealth management products are mainly deposited with Haier Group Fin
1782、ance Co., Ltd., national banks and other large and medium size listed banks. The interest receivables mainly refer to the accrued interest from time deposits placed with the aforesaid banks. The Group doesnt believe there is any significant credit risk due to defaults of its counterparties which wou
1783、ld cause any significant loss. (2) Accounts receivables and notes receivables: The Company only trades with recognized and creditworthy third parties. It is the Companys policy that all consumers who wish to trade on credit terms are subject to credit verification procedures. The payment terms shall
1784、 be determined on a reasonable basis. The Company monitors the balances of accounts receivables on an ongoing basis and maintains credit insurances for significant accounts receivables due from its credit clients, so as to ensure the Company will not expose to significant risk of bad debts. (3) The
1785、Companys other receivables mainly include export tax rebate receivable, recurrent loans and advances to its employees. The Company strengthened the management of these receivables and corresponding business activities based on their historical reasons of occurrence, and continue to monitor such rece
1786、ivables, so as to ensure the Companys significant risk of bad debts are controllable and to further reduce such risk. 2. Liquidity risk Liquidity risk is the risk that an enterprise may encounter deficiency of funds in meeting obligations associated with financial liabilities. In order to control li
1787、quidity risk, the Company integrates the utilization of various financing methods such as settlement with bills and bank loans, to strive for a sustainable and flexible financing. The Company has secured line of credit with a great number of commercial banks to satisfy its needs for working capital
1788、and capital expenditures. 3. Exchange rate risk The Companys principle operations are based in mainland China and are settled in RMB. However, the Companys overseas assets and liabilities denominated in foreign currencies as well as transactions settled in foreign currencies in the future still expo
1789、se the Company to fluctuations in exchange rates. The Companys finance department is responsible for monitoring the size of transactions in foreign Qingdao Haier Co., Ltd. 2015 Annual Report 233 / 239 currencies and assets and liabilities denominated in foreign currencies, so as to reduce its exposu
1790、re to fluctuations in exchange rates to the largest extent. The Company avoid its exposure to fluctuations in exchange rates by entering into forward foreign exchange contracts. 4. Interest rate risk The Company mainly faces interest rate risk from its long- and short- term bank loans and bonds paya
1791、bles which are interest-bearing. Financial liabilities with floating interest rates expose the Company to cash flow interest rate risk, while financial liabilities with fixed interest rates expose the Company to fair value interest rate risk. The Company determines the percentage of fixed-interest r
1792、ate and floating interest rate contracts in light of the prevailing market conditions. XVI. Other Important Events The Company has no other important events need to be disclosed. XVII. Notes to Main Items of Financial Statements of the Parent Company 1. Trade receivables (1) Disclosure of trade rece
1793、ivables by consumer categories is set out as follows: Items Closing balance Opening balance Carrying Balance Provision for bad debts Carrying Balance Provision for bad debts Individual significant trade receivables of which provision for bad debts is made on an individual basis Trade receivables of
1794、which provision for bad debts is made on a group basis 219,582,372.06 10,979,118.60 440,870,327.34 22,043,516.37 Individual insignificant trade receivables of which provision for bad debts is made on an individual basis Total 219,582,372.06 10,979,118.60 440,870,327.34 22,043,516.37 (2) Trade receiv
1795、ables of which provision for bad debts is made on a group basis: Aging Closing balance Opening balance Book balance Provision for bad debts Book balance Provision for bad debts Within one year 208,577,829.57 10,428,891.47 424,530,078.86 21,226,503.95 One to two 914,539.56 45,726.98 16,340,248.48 817
1796、,012.42 Qingdao Haier Co., Ltd. 2015 Annual Report 234 / 239 years More than two years 10,090,002.93 504,500.15 Total 219,582,372.06 10,979,118.60 440,870,327.34 22,043,516.37 (3) The total debt amount of the top 5 debtors in the ending trade receivables amounted to RMB218,490,054.10, representing 9
1797、9.50% of the book balance of the trade receivables. 2. Other receivables (1) Disclosure of other receivables by consumer categories is set out as follows: Items Closing balance Opening balance Book balance Provision for bad debts Book balance Provision for bad debts Individual significant other rece
1798、ivables of which provision for bad debts is made on an individual basis Other receivables of which provision for bad debts is made on a group basis 64,573,075.32 3,228,653.77 997,921.00 49,896.05 Individual insignificant other receivables of which provision for bad debts is made on an individual bas
1799、is Total 64,573,075.32 3,228,653.77 997,921.00 49,896.05 (2) Other receivables of which provision for bad debts is made on a group basis: Aging Closing balance Opening balance Book balance Provision for bad debts Book balance Provision for bad debts Within one year 64,573,075.32 3,228,653.77 997,921
1800、.00 49,896.05 Total 64,573,075.32 3,228,653.77 997,921.00 49,896.05 (3) The total debt amount of the top 5 debtors in the ending trade receivables amounted to RMB61,990,047.14, representing 96.00% of the book balance of the trade receivables. 3. Long-term equity investments Applicable Not applicable
1801、 (1) Details of long-term equity investments: Item Closing balance Opening balance Book balance Impairment provision Book balance Impairment provision Long-term equity investments Including: long-term equity investments to subsidiaries 13,506,982,541.50 7,100,000.00 8,012,639,498.46 7,100,000.00 Qin
1802、gdao Haier Co., Ltd. 2015 Annual Report 235 / 239 Long-term equity investments to associates 641,850,570.99 592,290,666.30 Total 14,148,833,112.49 7,100,000.00 8,604,930,164.76 7,100,000.00 (2) Long-term equity investments to subsidiaries Name of Investee Companies Opening balance Changes for the Pe
1803、riod Closing balance Impairment provision Closing balance I. Subsidiaries: Chongqing Haier Electronics Sales Co., Ltd. 9,500,000.00 9,500,000.00 Qingdao Haier Refrigerator Co., Ltd. 382,667,504.64 20,000,000.00 402,667,504.64 Qingdao Haier Special Refrigerator Co., Ltd. 329,832,047.28 329,832,047.28
1804、 Qingdao Haier Information Plastic Development Co., Ltd. 102,888,407.30 102,888,407.30 Dalian Haier Precision Products Co., Ltd. 41,836,159.33 41,836,159.33 Hefei Haier Plastic Co., Ltd. 42,660,583.21 42,660,583.21 Qingdao Haier Moulds Co., Ltd. 273,980,796.30 273,980,796.30 Qingdao Haier Intelligen
1805、t Electronics Co., Ltd. 271,380,000.00 271,380,000.00 Qingdao Household Appliance Technology and Equipment Research Institute 66,778,810.80 66,778,810.80 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 Chongqi
1806、ng Haier Intelligent Electronics Co., Ltd. 11,870,511.98 11,870,511.98 Qingdao Haier Electronic Plastic Co., Ltd. 48,000,000.00 48,000,000.00 Dalian Haier Refrigerator Co., Ltd. 99,000,000.00 99,000,000.00 Dalian Haier Air-conditioning Co., Ltd. 99,000,000.00 99,000,000.00 Guizhou Haier Electronics
1807、Co., Ltd. 96,904,371.71 96,904,371.71 Hefei Haier Air-conditioning Co., Limited 67,110,323.85 67,110,323.85 Qingdao Haier Refrigerator (International) Co., Ltd. 158,387,576.48 158,387,576.48 Qingdao Haier Robot Co., Ltd. 3,149,188.69 3,149,188.69 Qingdao Haier Air-Conditioner Electronics Co., Ltd. 8
1808、85,787,953.99 227,645,090.52 1,113,433,044.51 Qingdao Haier Air Conditioner Gen Corp., Ltd 218,245,822.50 218,245,822.50 Qingdao Haier Special Freezer Co., Ltd. 442,684,262.76 442,684,262.76 Qingdao Haier Dishwasher Co., Ltd. 156,192,042.82 50,402,250.00 206,594,292.82 Wuhan Haier Freezer Co., Ltd.
1809、47,310,000.00 47,310,000.00 Wuhan Haier Electronics Co., Ltd. 100,715,445.04 100,715,445.04 Chongqing Haier Air-conditioning Co., Ltd. 100,000,000.00 100,000,000.00 Qingdao Haier Co., Ltd. 2015 Annual Report 236 / 239 Hefei Haier Refrigerator Co., Ltd. 49,000,000.00 49,000,000.00 Qingdao Haier Whole
1810、 Set Home Appliance Service Co., Ltd. 118,000,000.00 118,000,000.00 Chongqing Haier Refrigeration Appliance Co., Ltd. 91,750,000.00 91,750,000.00 Haier Shareholdings (Hong Kong) Limited 2,081,316,920.00 5,000,000,000.00 7,081,316,920.00 Shenyang Haier Refrigerator Co., Ltd. 100,000,000.00 100,000,00
1811、0.00 Foshan Haier Freezer Co., Ltd. 100,000,000.00 100,000,000.00 Zhengzhou Haier Air-conditioning Co., 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
1812、.00 Haier Electronics Group Co., 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 Haier Intelligent Household Appliances Co., Ltd. 176,400,000.00 150,000,000.00 326,400,000.00 Qingdao Haier Special Steel Plate Resear
1813、ch and Development Co., Ltd. 70,549,422.43 -70,549,422.43 Hefei Haier Special Steel Plate Research And Development Co., Ltd. 69,972,037.08 -69,972,037.08 Qingdao Haier Technology Investment Co., Ltd. 120,000,000.00 120,000,000.00 Qingdao Casarte Smart Living Appliances Co., Ltd. 10,000,000.00 10,000
1814、,000.00 Qingdao Casarte Smart Living Appliances Co., Ltd. 40,000,000.00 40,000,000.00 Qingdao Haier Technology Co., Ltd. 16,817,162.03 16,817,162.03 Total 8,012,639,498.46 5,494,343,043.04 13,506,982,541.50 7,100,000.00 (4) Long-term equity investments to associates Name of investee companies Openin
1815、g balance Changes for the Period Closing balance Impairment provision at the end of the period Investment income recognized under the equity method Declare the distribution of cash dividends Others Haier Medical and Laboratory Products Co., Ltd. 142,192,892.50 21,910,767.42 164,103,659.92 Wolong Ele
1816、ctric Zhangqiu Haier Motor Co., Ltd. 87,709,990.04 12,754,879.07 100,464,869.11 Qingdao Haier Special Steel Plate Research and Development Co., Ltd. 93,262,112.05 1,945,001.81 95,207,113.86 Hefei Haier Special Steel Plate Research and Development Co., Ltd. 67,125,671.71 14,682,423.62 81,808,095.33 Q
1817、ingdao Haier SAIF 202,000,000.00 -1,733,167.23 200,266,832.77 Qingdao Haier Co., Ltd. 2015 Annual Report 237 / 239 Smart Home Industry Investment Center (limited partnership) Total 592,290,666.30 49,559,904.69 641,850,570.99 4. Operation Income and Operation Expense Unit and Currency: RMB Item Curre
1818、nt amount Prior amount Income Expense Income Expense Principal Business 2,563,999,764.21 1,923,914,958.87 2,165,891,389.21 1,611,051,693.59 Other Business 9,182,671.10 2,856,661.71 27,075,005.45 13,123,156.82 Total 2,573,182,435.31 1,926,771,620.58 2,192,966,394.66 1,624,174,850.41 5. Investment Inc
1819、ome Item Current amount Prior amount Long-term equity investments income calculated by the equity method 49,559,904.69 47,822,106.37 Investment income from disposal of long-term equity investments 174,478,540.49 508,370,366.00 Long-term equity investments income calculated by cost method 1,436,445,3
1820、51.14 91,739,754.15 Investment income from financial assets available for sale during the holding period 35,145,802.66 343,343.12 Total 1,695,629,598.98 648,275,569.64 XVIII. Supplementary Information 1. Breakdown of non-recurring profit or loss in the current period Unit and Currency: RMB Item Amou
1821、nt Gains or losses from disposal of non-current assets 13,327,370.03 Government grants credited to profit or loss in the period (exclusive of government grants which are closely related to the operations of the Company and received in fixed amount or quantity in accordance with the national unified
1822、standards) 95,078,644.93 Net gain or loss of subsidiaries from the beginning of the period to the consolidation date arising from the consolidation of enterprises under common control 223,063,608.99 Other non-operating income and expenses 205,936,250.61 Effect of income tax -95,984,291.44 Effect of
1823、minority interests -257,738,419.70 Total 625,808,032.67 1. Basic and diluted earnings per share Item Current amount Prior amount Weighted average Earnings per share (RMB) Weighted average Earnings per share (RMB) Qingdao Haier Co., Ltd. 2015 Annual Report 238 / 239 return on net assets Basic earning
1824、s per share Diluted earnings per share return on net assets Basic earnings per share Diluted earnings per share Net profit attributable to ordinary shareholders of parent company 16.22% 0.705 0.705 29.34% 0.933 0.932 Net profit attributable to ordinary shareholders of the parent company after deduct
1825、ion of non-recurring gain or loss 13.86% 0.603 0.603 23.89% 0.754 0.753 2. Difference on figures by domestic and foreign Accounting Standards Applicable Not applicable Qingdao Haier Co., Ltd. 2015 Annual Report 239 / 239 SECTION II DOCUMENTS AVAILABLE FOR INSPECTION Documents Available for Inspectio
1826、n (I) Financial statements with signatures and seals of the legal representative, chief accountant and person in charge of accounting department. (II) Original audit report with seals of accounting firm, signatures and seals of registered accountants. (III) Original of all documents and announcements of the Company which have been publicly disclosed on the newspaper designated by China Securities Regulatory Commission during the reporting period. Chairman: Liang Haishan Publish approved by the Board on 28 April 2016
