英文财务报表附注(Notes).doc

ＸＸＸＸ Corp., Ltd.
Notes To The Financial Statements For
The Year Ended 31 December 2015 　　　 (All amounts in 1000 RMB unless otherwise stated)
1. General Information
XXXXCorp., Ltd。 （“the Company”) is a limited liability company incorporated in XX city of the People’s Republic of China in The Company has an approved operating period of XXXX years. The registered capital is RMB 100,000，000.
The parent company of the Company is Qingdao Haier Investment and Development Co. Ltd.。
The approved scope of business of the Company and its subsidiaries (together “the Group”) includes： Processing with supply material, compensation trading； Import and export product； Household appliances manufacturing, sales， warehousing, agent.
Business License for Enterprise Legal Person is 370212801357.
Registered address is No。1 Haier Road, Haier Industrial Park， Qingdao city, Shandong Province， China.
Legal Representative is Mianmian Yang.
Governing structure and organizing structure： Practice the system of the director—general responsibility under the leadership of the board of directors （BOD).
These financial statements were authorised for issue by the Company’s responsible persons on XX XX 2015。
2. Basis of Preparation
The financial statement was prepared on the basis of sustainable operation. According to the actual transactions and items， it was prepared in accordance with the enterprises accounting standards issued by Ministry部门（财政部）
of Finance based on the following significant accounting policy and accounting estimate。
3. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the year ended 31 December 2015 are in compliance with the Accounting Standards for Business Enterprises, and truly and completely present the financial position of the Consolidated and the Company as of 31 December 2015 and of their financial performance， cash flows and other information for the year then ended.
4. Summary of Significant Accounting Policies and Accounting Estimates
(1) Accounting year
The Company’s accounting year starts on 1 January and ends on 31 December.
(2) Recording currency
The recording currency is Renminbi （RMB）。
(3) Foreign currency translation
(a) Foreign currency transactions
Foreign currency transactions are translated into RMB using the exchange rates prevailing at the dates of the transactions。
At the balance sheet date， monetary items denominated in foreign currencies are translated into RMB using the spot exchange rates on the balance sheet date. Exchange differences arising from these translations are recognised in profit or loss for the current period, except for those attributable to foreign currency borrowings that have been taken out specifically for the acquisition or construction of qualifying assets， which are capitalised as part of the cost of those assets. Non—monetary items denominated in foreign currencies that are measured at historical costs are translated at the balance sheet date using the spot exchange rates at the date of the transactions。 The effect of exchange rate changes on cash is presented separately in the cash flow statement。
(b) Translation of foreign currency financial statements
The asset and liability items in the balance sheets for overseas operations are translated at the spot exchange rates on the balance sheet date. Among the owners’ equity items, the items other than “undistributed profits” are translated at the spot exchange rates of the transaction dates。 The income and expense items in the income statements of overseas operations are translated at the spot exchange rates of the transaction dates. The differences arising from the above translation are presented separately in the owners’ equity. The cash flows of overseas operations are translated at the spot exchange rates on the dates of the cash flows. The effect of exchange rate changes on cash is presented separately in the cash flow statement.
(4) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand， deposits that can be readily drawn on demand， and short—term and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value。
(5) Financial assets
Financial assets are classified into the following categories at initial recognition： financial assets at fair value through profit or loss， receivables， available-for-sale financial assets and held-to-maturity investments. The classification of financial assets depends on the Group’s intention and ability to hold the financial assets。
(a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for the purpose of selling in the short term。 They are presented as financial assets held for trading on the balance sheet。
(b) Receivables
Receivables, including accounts receivable and other receivables， are non—derivative financial assets with fixed or determinable payments that are not quoted in an active market （Note 4 (6)）.
(c) Available—for—sale financial assets
Available-for—sale financial assets are non-derivative financial assets that are either designated in this category or not classified in any of the other categories at initial recognition。 Available—for—sale financial assets are included in other current assets on the balance sheet if management intends to dispose of them within 12 months after the balance sheet date。
(d) Held—to-maturity investments
Held-to-maturity investments are non—derivative financial assets with fixed maturity and fixed or determinable payments that management has the positive intention and ability to hold to maturity。 Held—to-maturity investments with maturities over 12 months when the investments were made but are due within 12 months at the balance sheet date are included in the current portion of non-current assets; held-to maturity investments with maturities no more than 12 months when the investments were made are included in other current assets。
(e) Recognition and measurement
Financial assets are recognised at fair value on the balance sheet when the Group becomes a party to the contractual provisions of the financial instrument. In the case of financial assets at fair value through profit or loss， the related transaction costs incurred at the time of acquisition are recognised in profit or loss for the current period。 For other financial assets， transaction costs that are attributable to the acquisition of the financial assets are included in their initially recognised amounts. Financial assets are derecognised when the contractual rights to receive the cash flows from the financial assets have expired， or all substantial risks and rewards of ownership of the financial assets have been transferred。
Financial assets at fair value through profit or loss and available-for—sale financial assets are subsequently measured at fair value. Investments in equity instruments are measured at cost when they do not have a quoted market price in an active market and whose fair value cannot be reliably measured。 Receivables and held-to-maturity investments are measured at amortised cost using the effective interest method.
Gains or losses arising from change in the fair value of financial assets at fair value through profit or loss are recognised in profit or loss。 Interests and cash dividends received during the period in which such financial assets are held， as well as the gains or losses arising from disposal of these assets are recognised in profit or loss for the current period.
Gains or losses arising from change in fair value of available-for—sale financial assets are recognised directly in equity, except for impairment losses and foreign exchange gains and losses arising from translation of monetary financial assets。 When such financial assets are derecognised, the cumulative gains or losses previously recognised directly into equity are recycled into profit or loss for the current period。 Interests on available-for-sale investments in debt instruments calculated using the effective interest method during the period in which such investments are held and cash dividends declared by the investee on available-for—sale investments in equity instruments are recognised as investment income， which is recognised in profit or loss for the period.
(f) Impairment of financial assets
The Group assesses the carrying amounts of financial assets other than those at fair value through profit or loss at each balance sheet date。 If there is objective evidence that a financial asset is impaired， an impairment loss is provided for.
When an impairment loss on a financial asset carried at amortised cost has occurred, the amount of loss is provided for at the difference between the asset's carrying amount and the present value of its estimated future cash flows (excluding future credit losses that have not been incurred）. If there is objective evidence that the value of the financial asset recovered and the recovery is related objectively to an event occurring after the impairment was recognised， the previously recognised impairment loss is reversed and the amount of reversal is recognised in profit or loss.
If there is objective evidence that an impairment loss on available-for-sale financial assets incurred， the cumulative losses arising from the decline in fair value that had been recognised directly in equity are transferred out from equity and into impairment loss. For an investment in debt instrument classified as available—for—sale on which impairment losses have been recognised， if， in a subsequent period, its fair value increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss， the previously recognised impairment loss is reversed into profit or loss for the current period. For an investment in an equity instrument classified as available-for—sale on which impairment losses have been recognised, the increase in its fair value in a subsequent period is recognised directly in equity.
If an impairment loss incurred on an investment in an equity instrument not quoted in an active market and whose fair value cannot be reliably measured, the amount of loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. The impairment loss is not allowed to be reversed when the value is recovered in a subsequent period。
(6) Receivables
Receivables comprise accounts receivable and other receivables. Accounts receivable arising from sale of goods or rendering of services are initially recognised at fair value of the contractual payments from the buyers or service recipients.
(a) The recognition standard and calculation method of provision for the bad debt of single significant amount：
On balance sheet date, the account receivable s with the ending balance greater than RMB 10，000,000 are classified as the receivables with single significant amount and they should be performed devalue test one by one。 If there is objective proof that shows devaluation has been occurred, the depreciation loss should be defined and bad debt provision should be calculated according to the difference between the lower present value of future cash flows and the higher book value of the items.
If the depreciation does not occur in the single test, one more tests need to be performed according to different credit asset portfolios with the characteristic of similar credit risks.
(b) For the receivables without a single significant amount, however having definite proofs of its weak collectability, the impairment loss should be defined and provision for bad debt should be calculated. The re-collectable amount of the receivables can be defined by the actual financial status and cash flow of the debt units.
(c) For the receivables without a single significant amount or with a single large amount which do not depreciate after single tests the proportion of the calculation of provision for bad debts for different portfolios during the report period should be defined by the current condition on the basis of the actual loss probability of the recivables porfolios with same ages.
The basis for portfolios definition is listed as followed:
Porfolio 1 the receivables from relevant parties
Porfolio 2 the receivables of rent insurance and maintenance reserve
Porfolio 3 the other receivables apart from the above listed
The calculation method for bad debt provision according the portfolios is listed as followed：
Porfolio 1 not calculate
Porfolio 2 not calculate
Porfolio 3 aging—analysis-method
Adopted by aging—analysis-method in the company the proportion for the bad debt allowance is listed as followed:
Aging
Percentage of account receivables (％)
Percentage of other receivables（%）
Within 6 months
0
0
6 — 12 months (including 6 months）
10
10
12 — 18 months （including 12 months)
30
30
18- 24 months （including 18 months)
50
50
Morethan24months (including 24 months)
100
100
(d) For other receivables （including the notes receivable， advance panyment， interest receivable， lont-term receivables） the provision for bad debt is calculated according to the difference of amount between the lower present value of future cash flow and the book value.
(e) For the receivables from the government or relevant parties are not calculated the provision for bad debt。
(7) Inventories
The inventories in the company includes low-value durables（ including the mmanufacuring facility and instruments, office furniture, IT equipment etc.), low-value consumables (including machine offerings, Air material consumption， clothing， auto parts etc。) air materials etc。
The inventories in the company keep accounting according to the real cost。 The use and delivering of inventories adopt the real cost method。
The low—value consumables are amortized according to the one-time amortization method. The low—value durables amortized according to the five-five amortization method.
The Group adopts the perpetual inventory system。
(8) Long—term equity investments
Long—term equity investments comprise the Company’s long—term equity investments in its subsidiaries, the Group's long—term equity investments in its joint ventures and associates， as well as the long-term equity investments where the Group does not have control， joint control or significant influence over the investees and which are not quoted in an active market and whose fair value cannot be reliably measured.
(a) Subsidiaries
Subsidiaries are the investees over which the Com