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大 冷B:2017年半年度报告(英文版)(更新后)2017-09-16  

						            Dalian Refrigeration Co., Ltd. 2017 Semiannual Report




Dalian Refrigeration Co., Ltd.
   2017 Semiannual Report




        August, 2017




                                                                1
                            Dalian Refrigeration Co., Ltd. 2017 Semiannual Report



 Section 1     Important Notice, Table of Contents, and

                          Definitions


The directors and the Board of Directors, the supervisors and the
Supervisory Board, and Senior staff members of Dalian
Refrigeration Co., Ltd. (hereinafter referred to as the Company)
hereby confirm that there are not any important omissions,
fictitious statements or serious misleading carried in this report,
and shall take all responsibilities, individual and/or joint, for the
reality, accuracy and completeness of the whole contents.

All directors have attended this Board meeting of the Company.

There is no significant risk having adverse influence on attainment
of the Company's future development strategy and business
targets.The paragraph "Discussion and Analysis of the Business
situation" in Section 4 of this Annual Report describes major risks
the Company may be confronted with, the risk of the market
promotion for new product. See the related sections for the
countermeasures to be taken by the Company.

The company plans to distribute no cash dividends, no bonus
shares and convert no reserve fund into capital stock.

Chairman of the Board of Directors of the Company Mr. Ji Zhijian,
Financial Majordomo Mr. Ma Yun, and the head of Accounting
Department Mrs. Mao Chunhua hereby confirm that the financial
report of the semi-annual report is true and complete.

This report is written respectively in Chinese and in English. In the
event of any discrepancy between the two above-mentioned
versions, the Chinese version shall prevail.




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                                              Dalian Refrigeration Co., Ltd. 2017 Semiannual Report




                                        CONTENTS


2017 Semiannual Report..............................................................................1
Section 1 Important Notice, Table of Contents, and Definitions.................2
Section 2 About the Company ………………………………………….... 5
Section 3 Tthe Company's business profile……..........................................7
Section 4 Discussion and Analysis of the Business situation.......................8
Section 5 Important Issues..........................................................................12
Section 6 Change in Share Capital and Shareholders' Information............15
Section 7 Information on Preferred Stock..................................................17
Section 8 Information on the Company’s Directors, Supervisors, Senior
Management...............................................................................................18
Section 9 Financial Report.........................................................................19
Section 10 Contents of Reference Documents...........................................97




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                                          Dalian Refrigeration Co., Ltd. 2017 Semiannual Report



                                       Definitions
        Defined item                                                   Meaning
Reporting period             Stands for From Jan. 1, 2017 to Jun. 30, 2017
The Company, this Company Stands for Dalian Refrigeration Co., Ltd.
                                        Wuhan New World Refrigeration Industries Co., Ltd., one of the
Wuxin Refrigeration          Stands for subsidiary of the Company where the Company holds 100% of its
                                        shares.
                                        Dalian Bingshan Group Engineering Co., Ltd , one of the
Bingshan         Engineering
                             Stands for subsidiary of the Company where the Company holds 100% of its
Company
                                        shares.
                                        Bingshan technical service (dalian) Co., Ltd.one of the subsidiary of
Bingshan service Company     Stands for
                                        the Company where the Company holds 100% of its shares.
                                        Dalian Bingshan Engineering & Trading Co., Ltd. one of the
                                        subsidiary of this Company, where the controlling shareholder of the
Bingshan Engineering &
                             Stands for Company holds 76% of its shares before,one of the subsidiary of the
Trading
                                        Company where the Company holds 100% of its shares since April
                                        2017.
                                        Changzhou Jingxue Freezing Equipment Co., Ltd. Now renamed as
                                        Jiangsu JingXue Insulation Technology Co., Ltd. one of the mutual
Jiangsu Jingxue              Stands for
                                        shareholding companies with this Company, where the Company
                                        holds 29.212% of its shares
                                        Panasonic Compressor (Dalian) Co., Ltd., one of the mutual
Panasonic Compressor         Stands for shareholding companies of the Company, where the Company holds
                                        40% of its shares.
                                        Panasonic Cold-Chain (Dalian) Co., Ltd., one of the mutual
Panasonic Cold-Chain         Stands for shareholding companies of the Company, where the Company holds
                                        40% of its shares.
                                        Dalian Fuji-Bingshan Vending Machine Co., Ltd., one of the mutual
Dalian Fuji-Bingshan         Stands for shareholding companies of this Company, where the Company holds
                                        49% of its shares.
                                        Keihin Grand-Ocean Cooling & Heating Industry (Dalian) Co., Ltd.,
Keihin Grand-Ocean           Stands for one of the mutual shareholding companies with this Company, where
                                        the Company holds 20% of its shares.
                                        Dalian Bingshan Metal Technology Co., Ltd.,one of the mutual
                                        shareholding companies of the Company ,the Company holds 49%
Bingshan Metal Technology Stands for
                                        of its shares since April 2017, where the controlling shareholder of
                                        the Company holds 49% of its shares before.
                                        Dalian Bingshan Wisdom Park Co., Ltd , one of the mutual
Bingshan Wisdom Park         Stands for shareholding companies with this Company, where the Company
                                        indirect holds 19.6% of its shares.




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                                           Dalian Refrigeration Co., Ltd. 2017 Semiannual Report



                        Section 2         About the Company


I.   Company information

Short form of the stock                                         DALENG GUFEN; DALENG-B
Stock code                                                      000530; 200530
Listed stock exchange                                           Shenzhen Stock Exchange
Legal name in Chinese                                           大连冷冻机股份有限公司
Short form of legal name                                        大冷股份
Legal English name                                              Dalian Refrigeration Co., Ltd.
Abbreviation of legal English name                              DRC
Legal representative                                            Ji Zhijian

II. Contact persons and information

                   Secretary of the Board of Directors         Authorized representative for securities affairs
Name         Song Wenbao                                      Du Yu
             DALENG GUFEN Securities﹠Legal Affairs           DALENG GUFEN Securities﹠Legal
Address      No.106, Liaohe East Road, Dalian Economic and    AffairsNo.106, Liaohe East Road, Dalian
             Technological Development Zone                   Economic and Technological Development Zone
Tel.         0411-87968130                                    0411-87968822
Fax          0411-87968125                                    0411-87968125
E-mail       000530@bingshan.com                              000530@bingshan.com


III. Other situations

1. Contact of company
If the registered address, office address and zip code, website, email box of the company had any
change in the report period
√ □ Applicable □ Not applicable
                                            DALENG GUFEN Securities﹠Legal Affairs No.106, Liaohe East
Registered address
                                            Road, Dalian Economic and Technological Development Zone
Postcode of the Registered address          116630
                                            DALENG GUFEN Securities﹠Legal Affairs No.106, Liaohe East
Office address
                                            Road, Dalian Economic and Technological Development Zone
Postcode of the Office address              116630
Internet web site of the Company            www.daleng.cn
E-mail of the Company                       000530@bingshan.com
Date of disclosure                          March 25,2017
Query indexes                               http://www.cninfo.com.cn
2. Information disclosure and place of preparation
If the information disclosure and the place of preparation had any change in the report period
□ Applicable √ Not applicable
The name of newspaper for information disclosure selected by the company, the address of the
website designated by China Securities Regulatory Commission for carrying semi-annual report, the
place where the semi-annual report of the Company is prepared had no change in the report period.
Refer to the Annual Report for 2016 for details.

IV. Main accounting data and financial indicators

Did the Company retroactively adjust or restate the accounting data of previous years due to change
in the accounting policy and correction of accounting mistakes?
                                                                                                 5
                                                                   Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

                  √ Yes □ No
                                                                                                                  Increase/decrease compared
                                                                                      2016.1-6
                        item                        2017.1-6                                                        with previous year (%)
                                                                        Before adjustment    After adjustment          After adjustment
Operating revenue                               1,002,378,717.50           779,919,864.03        830,873,999.65                           20.64%

Net profit attributable to shareholders of
                                                     98,260,163.09          67,487,286.84         70,632,718.91                           39.11%
listed companies
Net profit belonging to the shareholders of
listed companies after the deduction of              69,960,863.49          61,910,458.03         65,055,890.10                           7.54%

non-recurring profit and loss
Net cash flow from operating activities             -148,577,541.90         -43,212,032.40       -51,268,538.89                      -189.80%

Basic earning per share                                         0.115               0.120                0.089                            29.21%

Diluted earnings per share                                      0.115               0.120                0.089                            29.21%

Weighted average return on net asset yield                     2.95%                2.52%                2.64% Increase 0.31 percentage points


                                                                                                                  Increase/decrease compared
                                                At the end of                    At the end of 2016
                                                                                                                  with previous year(%)
                                                    2017.6.30

                                                                        Before adjustment    After adjustment          After adjustment
Total assets                                    5,372,939,781.32          4,983,511,574.26    5,095,986,440.32                            5.43%

Owner's equity attributable to shareholders
                                                3,309,730,421.64         3,247,797,768.92     3,301,087,748.86                            0.26%
of listed companies

                  V.1.Difference of accounting data between as per Chinese accounting standards
                  and as per International Accounting Standards
                  □ Applicable √ Not applicable
                  2. Difference of accounting data between as per Chinese accounting standards and
                  as per Foreign Accounting Standards
                  The difference of accounting data between as per Chinese Accounting Standards and as per
                  International Accounting Standards was 0.

                  VI.     Non-recurring profits and losses and their amounts

                                                     item                                                            Amount
               Disposal gains and losses of non-current asset                                                             127,853.00
               Tax returned/reduced by chance                                                                               1,115.75
               Government subsidies included in current profit or loss                                      5,521,986.23
               Earnings from the Company get subsidiaries, associated companies and joint
               venture investment cost less than get investment should enjoy the invested entity           27,467,019.93
               produced by the fair value of the identifiable net assets yield
               Other non-operating revenue or expense                                                         279,299.90
               Influence on income tax                                                                      5,079,406.26
               Influence on minority shareholders                                                              18,568.95
               Total                                                                                       28,299,299.60
                  During the reporting period,the Company sold 1.5 million shares of guotai junan, the income from
                  investment is 27,467,019.93 yuan.




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                                                        Dalian Refrigeration Co., Ltd. 2017 Semiannual Report


                        Section 3 The Company's Business profile
    I. The Company’s Main business during the reporting period
    The Company, as the largest industrial refrigeration equipment production enterprise in China, is
    committed to developing the business of industrial refrigeration, food freezing and cold storage,
    central and commercial air-conditioning, refrigeration components and engineering service, have
    covered the key areas of the refrigeration industrial chain and forged the most complete cold and hot
    industrial chain in China.
    II. Major changes in main assets
    1. Major changes in main assets

  Main assets                                                    Explain for major changes

                Significantly increased compared to the same period, mainly due to the increase in fixed assets changing from new
 Fixed assets
                factory buildings
Construction in Significantly decreased compared to the same period, mainly due to the increase in fixed assets changing from the new
  progress      factory investment.
                Significantly decreased compared to the same period, mainly due to the increase in foreign investment of the company
Monetary funds
                during the reporting period, and the the investment in raised funds after non-public offering of shares in the same period.
    2. The main overseas assets
    □ Applicable √ Not applicable
    III. Analysis of core competence
    Boasting the most complete cooling and heating product chain in the industry, the Company can
    offer to customers the service of package projects from design, manufacture, installation to
    maintenance to well meet the customized demand of customers.
    Having the mature and perfect marketing network and after-sale service network, the Company can
    offer to customers in more regions the more rapid and considerate high-quality service.
    Taking refrigeration and air-conditioning as its main business, the Company effectively combines
    the independent R&D and the joint ventures and cooperation, interacts positively between the
    integration of internal resources and business model innovation, and has formed a unique
    development pattern appropriate to itself and the industry.
    In the reporting period, the Company's core competence above-mentioned was improved further.




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                                            Dalian Refrigeration Co., Ltd. 2017 Semiannual Report



             Section4 Management discussion and analysis


I. Summary

In the first half of 2017, the Company focused on "activating, integrating and promoting",
maintained strategic strength, activated endogenous power, integrated system resources, brought
together competencies, promoted operational quality and efficiency, and strived to achieve key
business targets. In the first half of 2017, the Company achieved operating income of 1,002.38
million Yuan, with a year-on-year growth of 20.64%; achieved a total profit of 104.9 million Yuan,
with a year-on-year growth of 36.95%.

During the reporting period, the Company succeeded in completing the overall removal and
reconstruction, the intelligent, environmental, efficient and safe new plant was put into use. On May
7, 2017, the Company's new plant – Bingshan Double D Port Industrial Park officially opened. On
June 26, 2017, Premier Li Keqiang went to the Company's new factory for field research and gave
positive evaluation.

During the reporting period, the Company's subsidiary Wuxin Refrigeration basically completed the
nationwide regional distribution for the demonstration of its new products, the income of new
products increased by more than 50% on a year-on-year basis, the strategic transformation results
are obvious. Based on the successful launch of China's first set of natural gas pipeline pressure
energy for generating electricity and cold energy recovery system, multiple application projects in
many places were proceeding orderly by technology marketing and government marketing.

During the reporting period, the Company's subsidiary Bingshan Engineering Company continued
to deepen the market segmentation, and the orders in cold chain logistics, fishing industry, beer
dairy products, fine chemicals and other fields achieved great growth. Signed natural gas distributed
energy sources electromechanical general contract with Jiangsu Runchang, the total contract amount
was about 160 million Yuan. And signed the first high-end indoor snow field project with
Guangzhou Wanda, snow and ice business achieved a new breakthrough.

During the reporting period, the Company’s subsidiary Bingshan Service Company flexibly used
Bingshan internet of things cloud platform, actively expanded new service business fields, and
signed the first machine room hosting contract with Tianjin Ershang which initiated the machine
room hosting of large-scale ammonia system in the refrigeration industry, the maintenance income
had a year-on-year growth of more than 50%.

During the reporting period, the horizontal scroll compressor for rail transit air conditioning newly
developed by the Company's related Company Panasonic Compressor has been well expanded in
subway, light rail and other fields. It also achieved new results in the expansion of overseas market,
the income in European market increased by about 50% on a year-on-year basis. Impact by the
state’s policies of reorganizing the electric bus market and cutting down the subsidies, the sales
volume of horizontal scroll compressor for electric bus sharply reduced, coupled with the rapid rise
in the price of bulk raw materials, the net profit greatly declined on a year-on-year basis.

During the reporting period, the Company's related Company, Panasonic Cold Chain, conformed to
the new trend of consumption and actively expanded and subdivided the blue ocean market. The
convenience store business, new developed SF and Beijing 7-11 and other customers, and the
income achieved a year-on-year growth of 28%. Biomedical care, medical ultra-low temperature
refrigerator, blood refrigerator, incubator and other new products in the hospitals, blood stations,
and scientific research and other fields have achieved application breakthroughs, and the income
achieved a year-on-year growth of more than 50%.

During the reporting period, the Company's related Company Fushi Bingshan fully realized the
intelligent upgrading of products, and the product diversification has taken a solid step. In addition
                                                                                                    8
                                                         Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

       to beverage machine, the large food machine, coffee machine, liquor machine, box lunch machine
       and other new models have completed development and began mass production. The world-leading
       intelligent manufacturing new plant for vending machine has been constructed and put into
       operation; the production capacity has been doubled and can better respond to the rapid growth of
       unmanned vending machine.

       During the reporting period, based on the overall positioning of cold and hot industrial investment
       platform, the Company increased the capital operation, and implemented the first batch of
       acquisition to high-quality assets of controlling shareholders. The acquisition has been completed by
       the end of April 2017, and the Company currently holds 100% stake in BSET and 49% stake in
       Bingshan Metal Technology.

       During the reporting period, the Company has rented out both land and housing of old factory to
       Bingshan Wisdom Park Company for its construction and development. Bingshan Wisdom Park
       shall center on the intelligent science and technology, focus on breaking through the internet of
       things, big data applications, wisdom recuperation, wisdom education and other fields, strive to
       build Bingshan industrial ecosphere, and create new engine for business growth.

       II. Analysis of main business

       Main financial data variations as compared to the same period of last year
                                                                               Monetary unit: RMB Yuan
                                                                          Increase or decrease
                                                       Same period of
                                     Report period                       from the same period          Reason for variation
                                                         last year
                                                                              of last year
Operating revenue                   1,002,378,717.50    830,873,999.65                  20.64%
Operating cost                        817,281,905.05    668,264,784.49                  22.30%
Selling and distribution expenses      43,854,411.28     42,351,876.57                   3.55%
Administrative expenses               109,566,823.88    108,150,791.47                   1.31%
                                                                                                 The exchange gains of the
                                                                                                 company’s            subsidiary
Financial expenses                     2,994,727.94       1,531,833.61                95.50% Bingshan         Engineering      &
                                                                                                 Trading in the same period of
                                                                                                 last year is larger
Income tax                             6,161,546.29       5,537,970.33                11.26%
                                                                                                 The cash paid for purchasing
Net cash flow coming from
                                    -148,577,541.90     -51,268,538.89              -189.80% commodities and receiving
operating activities
                                                                                             labor service increased
Net cash flow coming from                                                                    Cash paid for investment
                                    -207,575,313.90     -41,156,797.85              -404.35%
investment activities                                                                        increased
                                                                                             the raised funds 560 million
Net cash flow coming from
                                     108,033,298.11     771,474,292.38               -86.00% after non-public offering of
fund-raising activities
                                                                                                 shares in the same period.
Net increase in cash and cash
                                    -248,795,325.48     679,769,831.26              -136.60%
equivalents

       The profit constitutions or profit sources of the company had an important change in the report
       period
       □ Applicable √ Not applicable
       The profit constitutions or profit sources of the company had no important change in the report
       period.
       Main business structure




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                                                                    Dalian Refrigeration Co., Ltd. 2017 Semiannual Report


                                                                                                          Monetary unit: RMB yuan
                                                                                   Increase/decrease of Increase/decrease Increase/decrease of
                                                                                    operating revenues of operating costs gross profit from the
                           Operating revenue   Operating costs       Gross profit
                                                                                  from the same period from the same        same period of last
                                                                                        of last year    period of last year       year
By industry
Refrigeration        and                                                                                                   Decrease1.39 perce
                              987,663,610.92    810,698,503.30           17.92%                  19.99%             22.07%
air-conditioning                                                                                                                   ntage points
                                                                                                                           Increase 8.35 perce
Others                         14,715,106.58         6,583,401.75        55.26%                  89.16%             59.41%
                                                                                                                                   ntage points
By product
Refrigeration        and
                                                                                                                             Decrease1.39 perce
air-conditioning              987,663,610.92    810,698,503.30           17.92%                  19.99%             22.07%
                                                                                                                                   ntage points
equipment
                                                                                                                             Increase 8.35 perce
Others                         14,715,106.58         6,583,401.75        55.26%                  89.16%             59.41%
                                                                                                                                     ntage points
By region
                                                                                                                           Decrease1.10percent
Northeast China               787,815,543.06    638,069,794.27           19.01%                  10.65%             12.17%
                                                                                                                                    age points
                                                                                                                                Decrease12.73
East China                     33,257,952.38        30,168,028.13         9.29%                525.27%             627.37%
                                                                                                                             percentage points
                                                                                                                                 Increase 2.56
Central China                  88,132,066.23        71,445,667.04        18.93%                  91.88%             86.00%
                                                                                                                             percentage points
                                                                                                                                 Increase 0.78
Overseas                       93,173,155.83        77,598,415.61        16.72%                  37.73%             36.45%
                                                                                                                             percentage points

             III. Analysis of the non-main business
             □ Applicable √ Not applicable
             IV. Analysis of assets & liabilities
             1. Remarkable change in assets
                                                                                                          Monetary unit: RMB yuan
                                        30-6-2017                               30-6-16
                                                     Proportion
                                                                                        Proportion to       Proportion increase/decrease
                                   Amount            to the total       Amount
                                                                                       the total assets
                                                        assets
   Monetary funds                  469,049,698.39          8.73%      921,341,559.47          19.12%         Decrease 10.39 percentage points
   Accounts receivable             903,229,293.38         16.81%      800,671,319.79          16.62%           Increase 0.19percentage points
   Inventories                     413,011,874.26          7.69%      293,140,904.67           6.08%          Increase 1.61 percentage points
   Investment property              88,435,542.39          1.65%       24,191,921.50           0.50%          Increase 1.15 percentage points
   Long-term equity
                                 1,507,902,442.59        28.06% 1,216,177,395.25              25.24%           Increase2.82 percentage points
   investment
   Fixed assets                    742,865,721.32        13.83%       431,589,357.99            8.96%           Increase4.87percentage points
   Construction in
                                   107,488,807.06         2.00%       179,319,154.71            3.72%         Decrease 1.72percentage points
   progress
   Short-term loans                215,319,700.00         4.01%       162,600,000.00            3.37%         Increase 0.64 percentage points
   Long-term loans                 160,000,000.00         2.98%       160,000,000.00            3.32%         Decrease 0.34 percentage points
             2. assets & liabilities which are measured by fair value
             √ Applicable □ Not applicable
             Finance asset held available for sales in fair value Changes in fair value included in the rights and
             interests of the cumulative of the current period is 531,653,458.05 yuan,the final number is
             555,798,336.45 yuan.
             V. Analysis of investments
             1. External equity investments
             (1) External investments

                                                           External investments
    Investment in the report period (yuan)          Investment in the same period of last year (yuan)              Amount of variation
                   1,507,902,442.59                                     1,216,177,395.25                                  23.99%
             2.The significant equity investment during the reporting period
             √ Applicable □ Not applicable
             During the reporting period ,49 percent equity of Bingshan Metal Technology held by Bingshan
             Group was transferred to the Company. The details see the announcement on China Securities, HK
                                                                                                                                   10
                                                                        Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

             Commercial Daily and Cninfo website on February 16,2017

             3 The significant non-equity investment during the reporting period
             □Applicable √Not applicable
             4.The financial asset investment
             (1) the securities investment
             □Applicable √Not applicable
             (2) Derivative investment
             □Applicable √Not applicable
             During the reporting period, the Company does not exist derivative investment.
             5. The use of funds raised
             √ Applicable □Not applicable
             During the reporting period, the use of funds raised of the Company please see< the special report
             of 2017 semi-annual use and deposit of funds raised>which published on http//www.cninfo.com.cn
             on August 26,2017.
             VI. The material assets and equity sale

             1. The material assets sale
             □Applicable √Not applicable

             2. The material equity sale
             □Applicable √Not applicable

             VII. Analysis of major subsidiary companies and mutual shareholding companies
             √ Applicable □ Not applicable
                                                                                                                 Operating       Operating
                                                             registered     total assets          net                              Profit          Net profit
    Company name         Type       The main business                                                             income
                                                               capital        ( yuan)        assets( yuan)                                          ( yuan)
                                                                                                                  ( yuan)        (yuan)
                     participating                         JPY 4,000
    Fuji Bingshan                  Vending Machine                          462,114,429.55    363,486,181.90    281,314,832.40 42,126,232.55       35,811,680.85
                     company                               million
    Panasonic        participating Refrigeration and       JPY 6,200
                                                                           1,868,938,586.80 1,165,876,208.10    740,643,397.50 59,793,229.44       50,867,695.06
    Compressor       company       air-conditioning        million
             Subsidiary companies obtained or disposed in the reporting period
             √Applicable □ Not applicable
                                  the way of obtained or disposed
            Name                Subsidiary companies in the reporting                      The impact on overall production and performance
                                              period
                                                           Through this equity integration, the company will have independent export
Dalian Bingshan Engineering Business combination under the sales channels, further increase the overseas market sales and service system
& Trading Co., Ltd          same control                   construction, and combine the commercialization with professionalization to
                                                           achieve the sustainable development of international market.
             VIII. The structured corporate bodies which the Company controlled
             □Applicable √Not applicable
             IX.Estimation of the business performance for Jan.-Sept., 2017
             Estimation notice that the accumulated net profit from the beginning of year to the end of the next
             reporting period may be turned into loss or significantly change compared with the same period of
             the last year, and explanation of the cause
             □ Applicable √ Inapplicable
             X. Main risks the company faces and response measures
             Risk of slightly high accounts receivable.
             Response measures: place extra emphasis on controlling increment and reducing stock, further
             strengthen the management of accounts receivable. Control the amount of new accounts receivable
             by full payment for picking up goods, reducing or canceling quality guarantee deposit, and taking
             bank credit tool as a guarantee, etc. Establish special creditor's rights management agencies, develop
             special solutions, and strengthen the debt-cleaning for accounts receivable with a long period.




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                                                             Dalian Refrigeration Co., Ltd. 2017 Semiannual Report


                                            Section 5 Important Issues
              I. Shareholders’ general meeting convened in the reporting period

              1. Shareholders’ general meeting within this reporting period
                                                                        The proportion of
Session number of meeting                     The type of the meeting                         date      Disclosing date Disclosing index
                                                                        participate investors
      st
The 1 Extraordinary Shareholders’ General extraordinary Shareholders’                       March                     http://www.cnin
                                                                                      30.31%            March 8,2017
Meeting of 2017                            general meeting                                    7,2017                    fo.com.cn
2016                                       Annual        Shareholders’                       May                       http://www.cnin
                                                                                      30.75%            May 20,2017
Annual Shareholders’ General Meeting      General Meeting                                    19,2017                   fo.com.cn
              II. Profit distribution and dividend payment
              □ Applicable √ Not applicable
              III. Commitments of the Company or its shareholders holding 5% or higher of the shares in
              the reporting period or carried to the reporting period
              □ Applicable √ Not applicable
              IV. Engagement and dismissal of the accounting firm
              □ Applicable √ Not applicable
              V. Explain to the “non standard audit report” of this reporting period
              from the board of directors, board of supervisors of the Company
              □Applicable √Not applicable
              VI. Explain to the “non standard audit report” last year from the board of
              directors of the Company
              □Applicable √Not applicable
              VII.Bankruptcy restructuring related matters
              □ Applicable √ Not applicable
              There were no bankruptcy restructuring related matters to the Company in the reporting period.
              VIII. Major lawsuit issues
              □ Applicable √ Not applicable
              The Company had no major lawsuit issues in the reporting period.
              IX. Punishment and rectification
              □ Applicable √ Not applicable
              X. the credibility of companies and its controlling shareholder, actual controller
              □ Applicable √ Not applicable
              XI. The implementation and effect of equity incentive
              √Applicable □ Not applicable
              The 2015 restricted stock incentive plan has been implemented and completed granting the
              restricted stock on March 2015. The 2016 restricted stock incentive plan has been implemented and
              completed granting the restricted stock on September 2016. 12, 884 thousand shares restricted stock
              has been granted to the118 incentive objects. The details see the series announcement on China
              Securities, HK Commercial Daily and Cninfo website.
              XII. Important associated transactions
              1. Important associated transactions
              In the reporting period, the total amount of normal associated transactions between the Company
              and associated parties was 287,790 thousand yuan, accounting for32.70% of the budgeted amount
              for the year 2017. This included 124,380 thousand yuan, accounting for 31.10% of the budgeted
              amount for the year 2017, for purchasing supporting products for package projects from associated
              parties, and 163,410 thousand yuan, accounting for34.04% of the budgeted amount for the year
              2017, from selling supporting parts and components to associated parties.
              2. Associated transactions related to purchases or sales of assets
              The 12th meeting of the 7th Board of Directors of the company and the 1st extraordinary general
              meeting of 2017 examined and approved the company to accept the transfer of 76% equity stake of
              Dalian Bingshan Engineering and Trading Co., Ltd. held by Bingshan Group, and accept the
              transfer of 49% equity stake of Dalian Bingshan Metal Technology Co., Ltd. held by Bingshan
              Group, above-mentioned transactions have been completed in the reporting period.
              3. Important associated transactions with joint external investments
              □ Applicable √ Not applicable
                                                                                                                       12
                                            Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

4.Current associated rights of credit and liabilities
□ Applicable √ Not applicable
5. Other associated transactions
□ Applicable √ Not applicable
XIII.Non-operation capital occupation by holding shareholders and their related
parties in the listed company
The company had no capital occupation by the holding shareholders and their related parties in the
listed company within this reporting period.
XIV. Major contract and its performance
1. Hosting, contracting and leasing status
(1) the hosting status
□ Applicable √ Not applicable
(2)the contracting status
□ Applicable √ Not applicable
(3) the leasing status
√ Applicable □ Not applicable
The company signed rental contract with MHI Bingshan Refrigeration (Dalian) Co.,Ltd., and rent #
6 workshop building located on No. 106 Liaohe East Rd, Dalian Economic and Technology
Development Zone to MHI Bingshan Refrigeration (Dalian) Co., Ltd. The rental area is 15,259.04
square meters, and the rental term till 16th July, 2029. The annual rent fee is RMB 4.2 million after
considering the time value of money.
On June 22, 2017, the company has signed a land and house lease contract with Dalian Bingshan
Wisdom Park Co., Ltd to rent out the whole land and house of the company’s old plant locating at
No. 888, Southwest Road, Shahekou District, Dalian to Dalian Bingshan Wisdom Park Co., Ltd.,
with rental land area of 167,165.61 square meters and housing area of 105,652.43 square meters, the
lease term is from April 1, 2017 to December 31, 2036. The total rent for the previous three years is
RMB 20.34 million, of which the rent in 2017 is RMB 4.62 million, the rent in 2018 is RMB 7.86
million, and the rent in 2019 is RMB 7.86 million. From January 2020, the two parties will
negotiate and determine the rent of the next three years according to the local market changes.
2. Guaranteeing status
√ Applicable □ Not applicable
Resolution of 2nd meeting of 7th session of the Board of directors agreed to provide guarantee to
Dalian Bingshan Group Co., Ltd. for obtaining Development Fund of National Development Bank.
Total amount of the loan was RMB120 million with interest rate 1.2%, and the loan period was 10
years. The fund can only be used for cold chain green intelligent equipment and the development of
service industry. When Dalian Bingshan Group Co., Ltd. receives the fund, it will transfer all the
fund to the Company with the same conditions. The above guarantee to Dalian Bingshan Group Co.,
Ltd. is to the Company itself actually.
3.Other important contracts
□ Applicable √ Not applicable
XV Social responsibilities
1. Performance of precise poverty alleviation social responsibility
(1) Overview of the Semiannual targeted poverty alleviation
In the first half of 2017, the company joined hands with the controlling shareholders and continued
to implement the targeted poverty alleviation to the targeted poverty alleviation unit – Songlin
Village, Guangmingshan Town, Zhuanghe City. The main measures and practices are as follows:
First is to attach great importance, the company has made the overall planning for poverty
alleviation in early 2017, aiming to give prominence to the key points and earmark funds for
specified purposes only.
Second is to make field research and solve the living difficulties. In order to better understand the
situation of poverty alleviation, the company has organized the responsible person in grass-roots
units to Songlin Village for visiting and condoling, getting to know its production and development
situation so as to shoot the arrow at the target and offer practical aids.
(2) Follow-up targeted poverty alleviation plan
In the second half of 2017, the company will continue to promote the targeted poverty alleviation
work, combine with the government's policy on poverty alleviation, and solve the site, road and
traffic problems in poverty alleviation and the reemployment of surplus labors.


                                                                                                  13
                                    Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

2.The listed company and its subsidiaries whether belong to heavy pollution industry
formulated by the state environmental protection department
□ Applicable √ Not applicable
XVI. Other important matters
□ Applicable √ Not applicable

XVII. Other important matters of subsidiary company
□ Applicable √ Not applicable




                                                                                       14
                                                        Dalian Refrigeration Co., Ltd. 2017 Semiannual Report


               Section 6 Change in Share Capital and Shareholders'

                                                    Information

      I. Change in share capital
      1. Change in share capital
                                                            Shares                                      Shares
                                                       (before change)                           (after change)
                     items                                                     Changes
                                                    number       proportion                    number              proportion
I. Non-circulating share capital with restricted
trade conditions                                    82,340,713       13.46%    -55,246,643       27,094,070             3.16%
Executive lock stock                                   154,117         031%     +2,507,853        2,661,970             0.31%
Restricted stock after starting                     58,645,096        9.59%    -58,645,096                0                 0
Equity incentive restricted stock                   23,541,500        2.85%      +881,600        24,432,100             2.85%
II. Circulating share capital                      529,435,845       86.54%   +299,957,266      829,393,111            96.84%
1. Domestically listed
ordinary shares                                    356,935,845       58.34%   +230,957,266     587,893,111             68.64%
2. Domestically listed foreign shares              172,500,000       28.20%    +69,000,000     241,500,000             28.20%
III. Total shares                                  611,776,558        100%     244,710,623     856,487,181              100%

      2. The reason for the Change in share capital
      On March 16, 2017, Yu Fuchun, the chairman of the Board of Supervisors of the company, left
      office, the company's shares held by him should be locked within six months after his resignation;
      on May 23, 2017, the company's restricted stock incentive phase II of 2015 was unlocked; in June
      2017, the company implemented the 2016 annual equity apportion, which increased 4 shares by
      every 10 shares of capital reserve; on June 20, the company relieved the restrictions on non-public
      offering of shares. During the reporting period, the above matters caused changes in the company’s
      total number of shares and the share structure.
      3. The approval of the Change in share capital
      The company's 2016 annual profit distribution plans was approved by 2016 Shareholders’ General
      Meeting.
      4. transfer of ownership of the Change in share capital
      □ Applicable √ Not applicable
      5. the influence of change in share capital on the a recent year and recent issue for basic earnings
      per share ,diluted earnings per share and net assets per share.
      (1)The basic per share of 2016 is 0.31yuan; According to the latest equity is adjusted for 0.22 yuan;
      (2)The diluted per share of 2016 is 0.31 yuan; According to the latest equity is adjusted for 0.22
      yuan;
      (3)The net assets per share of 2016 is 5.30yuan; According to the latest equity is adjusted for 3.79
      yuan
      (4)The basic per share of the first quarter of 2017 is 0.05yuan; According to the latest equity is
      adjusted for 0.036 yuan;
      (5)The diluted per share of the first quarter of 2017 is 0.05yuan; According to the latest equity is
      adjusted for 0.036yuan;
      (6)The net assets per share of the first quarter of 2017 is 5.35 yuan; According to the latest equity is
      adjusted for3.82yuan.
      II. Securities issuance and listing
      □ Applicable √ Not applicable
      III. Number of shareholders and their shareholding




                                                                                                              15
                                                                  Dalian Refrigeration Co., Ltd. 2017 Semiannual Report


Total number of shareholders in the reporting period                                                                                               41,442
                                                           Shareholding of top ten shareholders
                                                                                                                   Number of         Number of pledged
                Name                                   Nature                    Proportion     Total number     shares with sale     shares or shares
                                                                                                                   restriction            frozen
Dalian Bingshan Group Co., Ltd.      Domestic non-state-owned legal person            19.96%       170,916,934                   0                       0
Sanyo Electric Co., Ltd.             Overseas legal person                             8.58%        73,503,150                   0                       0
Zheshang Juchao industry grow
                                     Others                                            2.56%        21,896,286                   0                       0
hybrid securities investment fund
Zheshang Juchao New thinking
                                     Others                                            1.58%        13,503,638                   0                       0
hybrid securities investment fund
National Social Security Funds 104
                                     Others                                            1.31%        11,199,297                   0                       0
Portfolio
Industrial Securities Golden Kylin
No. 2 Collective Asset Management    Others                                            1.07%         9,163,753                   0                       0
Plan
National Social Security Funds 503
                                     Others                                            0.96%         8,210,314                   0                       0
Portfolio
Caitong Capital Kunze No. 2
                                     Others                                            0.96%         8,210,313                   0                       0
Securities vInestment Fund
Shenzhen B & D Capital Fengnian
                                     Others                                            0.96%         8,210,313                   0                       0
Jinjia No. 1 Fund
Lin Zhenming                         Overseas natural person                           0.73%         6,230,000                   0                       0
                                              Shareholding of top ten shareholders without sale restriction
                                                                                  Number of shares without
                                    Name                                                                                   Type of shares
                                                                                       sale restriction
Dalian Bingshan Group Co., Ltd.                                                                  170,916,934     RMB denominated ordinary shares
Sanyo Electric Co., Ltd.                                                                           73,503,150    Domestically listed foreign shares
Zheshang Juchao industry grow hybrid securities investment fund                                    21,896,286    RMB denominated ordinary shares
Zheshang Juchao New thinking hybrid securities investment fund                                     13,503,638    RMB denominated ordinary shares
National Social Security Funds 104 Portfolio                                                       11,199,297    RMB denominated ordinary shares
Industrial Securities Golden Kylin No. 2 Collective Asset Management Plan                           9,163,753    RMB denominated ordinary shares
National Social Security Funds 503 Portfolio                                                        8,210,314    RMB denominated ordinary shares
Caitong Capital Kunze No. 2 Securities vInestment Fund                                              8,210,313    RMB denominated ordinary shares
Shenzhen B & D Capital Fengnian Jinjia No. 1 Fund                                                   8,210,313    RMB denominated ordinary shares
Lin Zhenming                                                                                        6,230,000    Domestically listed foreign shares
                                                                                Dalian Bingshan Group Co., Ltd. had the association relationship
Notes to the associated relationship and uniform actions of the above           with Sanyo Electric Co., Ltd. among the above shareholders. Sanyo
                                                                                Electric Co., Ltd. holds 26.6% of Dalian Bingshan Group Co., Ltd.'s
shareholders
                                                                                equity.


               If the company shareholders had any agreed repurchase transaction in the report period
               □ Yes √ No

               III. Variation in controlling shareholders or actual controllers
               Variation in controlling shareholders in the report period
               □ Applicable √ Not applicable
               There were no changes in the controlling shareholder in the reporting period.

               Variation in actual controllers in the report period
               □ Applicable √ Not applicable




                                                                                                                                     16
                                            Dalian Refrigeration Co., Ltd. 2017 Semiannual Report


                Section 7 Information on Preferred Stock
□ Applicable √ Not applicable
In the reporting period, the Company didn’t own preferred stock.




                                                                                               17
                                                           Dalian Refrigeration Co., Ltd. 2017 Semiannual Report


                 Section 8 Information on the Company’s Directors,

                      Supervisors, and Senior Management officers


      I. Changes in shareholding by directors, supervisors and senior managers

      √Applicable □ Not applicable
                                                                                    Increase on holding     Decrease in     Shares held at
                                                              Shares held at
                                         Office-holding                               of shares in this  holding of shares   the end of
     Name                Position                           beginning of period
                                              state                                        period          in this period      period
                                                                 (shares)
                                                                                          (shares)             (share)        (shares)
Ji Zhijian          Chairman                Incumbent                 1,413,450                  565,380                  0     1,978,830
Xu Junrao           Director                Incumbent                   925,249                  370,100                  0     1,295,349
Liu Kai             Vice Chairman           Incumbent                   989,400                  395,760                        1,385,160
Ding Jie            Director, GM            Incumbent                   725,000                  290,000                  0     1,015,000
Fan Yuekun          DGM                     Incumbent                   500,000                  200,000                          700,000
                    Chief Financial
Ma Yun                                      Incumbent                   500,000                200,000                   0        700,000
                    Officer
Song Wenbao         Board secretary         Incumbent                   424,200                169,680                   0        593,880
                    Chairman of Board
Yu Fuchun                                 Leaving office                  15,211                  6,084                  0         21,295
                    of Supervisors
Wang Zhiqiang       DGM                   Leaving office                515,349                206,140                   0        721,489
     Total                    --                --                    6,007,859                                          0      8,411,003
      Changes in shareholding by directors, supervisors and senior managers within the period is due to
      the implementation of the company's transfer the capital reserve to increase capital stock of 2016

      II. Resignation, dismissal and election, engagement of company directors,
      supervisors, senior management officers
         Name                      Position assumed                Type              Date                       Reason
 Yu Fuchun              Supervisor                            Leaving the post Mar.14,2017 Resign from the Company
 Kijima Tadatoshi       Director                              Leaving the post Feb.6,2017     Resign from the Company due to retirement
 Wang Zhiqiang          DGM                                   Leaving the post Jun.29,2017 Resign from the Company
 Mao Chunhua            Chairman of Board of Supervisors      Be employed         Mar.20,2017 Be employed
 Cao Lili               Worker Supervisor                     Be employed         Mar.13,2017 Be employed

 Takagi Toshiyuki       Director                              Be employed         Mar.8,2017 Be employed




                                                                                                                          18
                                                                  Dalian Refrigeration Co., Ltd. 2017 Semiannual Report


                                              Section 9 Financial report


         I. The Company's semiannual financial report has not been audited.
         II. Accounting statement
                                                       BALANCE SHEET
               Prepared by Dalian Refrigeration Co., Ltd.                       June 30, 2017                    Unit: RMB Yuan
                                                                          30-June-2017                                  31-Dec-2016
                          Assets
                                                                Consolidation        Parent Company         Consolidation        Parent Company
Current assets:
Monetary funds                                                    469,049,698.39        332,267,178.95        715,215,638.54          496,417,106.54
Financial assets which are measured by fair value and
which changes are recorded in current profit and loss
Derivative financial assets
Notes receivable                                                  134,782,598.58         60,811,908.85        126,408,249.59           90,509,540.07
Accounts receivable                                               903,229,293.38        146,161,403.30        807,109,959.54          117,575,405.74
Accounts in advance                                               136,203,278.69         80,925,475.30        108,033,313.10           96,269,883.15
Interest receivables                                                                                              723,955.56             723,955.56
Dividend receivable                                                38,800,000.00         38,800,000.00              39,025.00
Other receivables                                                  63,715,968.69           6,014,786.24        57,257,456.57            4,368,505.07
Inventories                                                       413,011,874.26        172,918,505.26        349,538,424.06          151,230,744.47
Assets held for sale
Non-current asset due within one year
Other current assets                                               21,770,677.86         13,826,495.20         43,254,044.92           30,563,139.06
                    Total current assets                        2,180,563,389.85        851,725,753.10 2,207,580,066.88               987,658,279.66
Non-current assets:
Finance asset held available for sales                            569,709,995.04        568,394,852.54        545,565,116.64          544,249,974.14
Held-to-maturity investment
Long-term account receivable
Long-term equity investment                                     1,507,902,442.59 1,985,253,706.97 1,292,912,901.49 1,713,412,501.09
Investment property                                                88,435,542.39         88,435,542.39         28,605,652.94           28,605,652.94
Fixed assets                                                      742,865,721.32        503,193,466.85        511,008,545.87          274,262,264.28
Construction in progress                                          107,488,807.06        101,144,912.42        321,646,676.78          320,329,247.78
Engineering material
Disposal of fixed asset
Productive biological asset
Oil and gas asset
Intangible assets                                                 138,524,025.75         72,911,635.80        154,714,212.52           88,113,279.88
Expense on Research and Development
Goodwill                                                             1,750,799.49                               1,750,799.49
Long-term expenses to be apportioned                                 5,790,104.14          4,938,060.17         4,448,719.77            3,658,276.80
Deferred income tax asset                                          29,908,953.69           6,406,297.52        27,753,747.94            6,751,619.50
Other non-current asset
                  Total non-current asset                       3,192,376,391.47 3,330,678,474.66 2,888,406,373.44 2,979,382,816.41
                        Total assets                            5,372,939,781.32 4,182,404,227.76 5,095,986,440.32 3,967,041,096.07
         Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua




                                                                                                                                         19
                                                                   Dalian Refrigeration Co., Ltd. 2017 Semiannual Report



                                            BALANCE SHEET (CONTINUED)
      Prepared by Dalian Refrigeration Co., Ltd.                            June 30, 2017                   Unit: RMB Yuan
                                                                            30-June-2017                                 31-Dec-2016
          Liabilities and shareholders’ equity
                                                                 Consolidation        Parent Company         Consolidation        Parent Company
Current liabilities:
Short-term loans                                                   215,319,700.00        160,000,000.00         45,000,000.00
Derivative financial liabilities
Notes payable                                                      181,421,206.76         78,225,093.74        194,562,734.79           85,834,371.87
Accounts payable                                                   881,939,767.63        250,428,330.64        857,725,428.48          340,987,669.38
Accounts received in advance                                       143,969,111.21         38,241,742.21        150,098,892.29           74,949,113.25
Wage payable                                                        27,193,989.51           1,453,268.58        50,256,392.86            9,796,460.53
Taxes payable                                                       16,608,505.28           1,869,666.68        18,405,089.48            1,234,137.19
Interest payable
Dividend payable                                                        863,516.60            533,156.00           863,516.60             533,156.00
Other accounts payable                                             198,334,369.48        165,568,837.96        115,320,734.80           74,954,775.74
Liabilities held for sale
Non-current liabilities due within one year
Other current liabilities
                   Total current liabilities                     1,665,650,166.47        696,320,095.81 1,432,232,789.30               588,289,683.96
Non-current liabilities:
Long-term loans                                                    160,000,000.00        160,000,000.00        160,000,000.00          160,000,000.00
Bonds payable
Long-term account payable
Long-term wage payable
Special accounts payable
Projected liabilities
Deferred income                                                     83,073,834.77         39,070,834.77         57,396,619.00           12,836,619.00
Deferred income tax liabilities                                     79,518,586.46         79,518,586.46         75,683,681.95           75,683,681.95
Other non-current liabilities
                Total non-current liabilities                      322,592,421.23        278,589,421.23        293,080,300.95          248,520,300.95
                        Total liabilities                        1,988,242,587.70        974,909,517.04 1,725,313,090.25               836,809,984.91
Shareholders’ equity
Share capital                                                      856,487,181.00        856,487,181.00        611,776,558.00          611,776,558.00
Other equity instruments
Capital public reserve                                             758,068,857.25        797,647,244.54 1,052,686,774.25 1,036,115,161.54
Specialized reserve                                                 67,615,856.00         67,615,856.00         67,615,856.00           67,615,856.00
Other comprehensive income                                         453,106,783.01        452,144,682.34        431,639,323.52          430,413,556.77
Special preparation
Surplus public reserve                                             649,787,077.21        649,787,077.21        620,578,847.52          620,578,847.52
Retained profit                                                    659,896,379.17        519,044,381.63        652,022,101.57          498,962,843.33
Translation of foreign currency capital
 Total owner’s equity attributable to parent company            3,309,730,421.64 3,207,494,710.72 3,301,087,748.86 3,130,231,111.16
Minority interests                                                  74,966,771.98                               69,585,601.21
                    Total owner’s equity                        3,384,697,193.62 3,207,494,710.72 3,370,673,350.07 3,130,231,111.16
        Total liabilities and shareholder’s equity              5,372,939,781.32 4,182,404,227.76 5,095,986,440.32 3,967,041,096.07
          Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua




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                                                            Dalian Refrigeration Co., Ltd. 2017 Semiannual Report


                                                  INCOME STATEMENT
           Prepared by Dalian Refrigeration Co., Ltd.                 January-June, 2017          Unit: RMB Yuan
                                                             January-June, 2017                       January-June, 2016
                       Items
                                                      Consolidation      Parent Company        Consolidation     Parent Company
I. Total sales                                        1,002,378,717.50      349,829,026.25      830,873,999.65     320,569,072.88
Including: Operating income                           1,002,378,717.50      349,829,026.25      830,873,999.65     320,569,072.88
II. Total operating cost                               992,114,223.92       349,824,353.81      837,666,113.26     326,095,453.00
Including: Operating cost                              817,281,905.05       295,995,983.48      668,264,784.49     268,472,467.44
Taxes and associate charges                              8,177,166.95         3,703,168.02        6,357,716.42         989,231.06
Selling and distribution expenses                       43,854,411.28             674,115.60     42,351,876.57        1,157,365.43
Administrative expenses                                109,566,823.88        52,988,925.98      108,150,791.47       54,874,915.91
Financial expense                                        2,994,727.94         1,050,468.36        1,531,833.61         180,568.43
Impairment loss                                         10,239,188.82        -4,588,307.63       11,009,110.70         420,904.73
Add: Gain/(loss) from change in fair value
Gain/(loss) from investment                             87,875,295.69       105,942,061.06       75,949,019.25       76,688,140.71
Including: income form investment on affiliated
                                                        48,681,040.63        49,382,705.41       59,987,593.85       60,980,888.19
enterprise and jointly enterprise
III. Operating profit                                   98,139,789.27       105,946,733.50       69,156,905.64       71,161,760.59
Add: non-business income                                 6,830,966.75         4,866,012.27        7,728,227.93        6,541,575.73
Including: profit from non-current asset disposal          143,329.77              78,112.29         64,284.56             18,634.56
Less: non-business expense                                  67,875.87                               284,024.49             65,248.12
Including: loss from non-current asset disposal             15,476.77                               189,436.67              5,248.12
IV. Total profit                                       104,902,880.15       110,812,745.77       76,601,109.08       77,638,088.20
Less: Income tax                                         6,161,546.29          345,321.98         5,537,970.33         989,657.21
V. Net profit                                           98,741,333.86       110,467,423.79       71,063,138.75       76,648,430.99
Net profit attributable to parent company               98,260,163.09       110,467,423.79       70,632,718.91       76,648,430.99
Minority shareholders’ gains and losses                   481,170.77                               430,419.84
VI. After-tax net amount of other comprehensive
                                                        21,467,459.49        21,731,125.57     -156,318,611.18     -156,318,611.18
incomes
After-tax net amount of other comprehensive
                                                        21,467,459.49        21,731,125.57     -156,318,611.18     -156,318,611.18
incomes attributable to owners of the Company
(I) Other comprehensive incomes that will not be
reclassified into gains and losses
1. Changes in net liabilities or assets with a
defined benefit plan upon re-measurement
2. Enjoyable shares in other comprehensive
incomes in investees that cannot be reclassified
into gains and losses under the equity method
     ……
(II) Other comprehensive incomes that will be
                                                        21,467,459.49        21,731,125.57     -156,318,611.18     -156,318,611.18
reclassified into gains and losses
1. Enjoyable shares in other comprehensive
incomes in investees that will be reclassified into       -263,666.08
gains and losses under the equity method
2. Gains and losses on fair value changes of
                                                        21,731,125.57        21,731,125.57     -156,318,611.18     -156,318,611.18
available-for-sale financial assets
3. Gains and losses on reclassifying
held-to-maturity investments into
available-for-sale financial assets
4. Effective hedging gains and losses on cash
flows
5. Foreign-currency financial statement
translation difference
6. Other
                                                                                                                       21
                                                                    Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

   ……
After-tax net amount of other comprehensive
incomes attributable to minority shareholders
VII Total comprehensive income                                120,208,793.35           132,198,549.36           -85,255,472.43         -79,670,180.19
Total comprehensive income attributable to
                                                              119,727,622.58           132,198,549.36           -85,685,892.27         -79,670,180.19
parent company
Total comprehensive income attributable to
                                                                   481,170.77                                        430,419.84
minority shareholders
VIII. Earnings per share
(I) basic earnings per share                                              0.115                                            0.089
(II) diluted earnings per share                                           0.115                                            0.089
          Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua




                                                                                                                                          22
                                                         Dalian Refrigeration Co., Ltd. 2017 Semiannual Report



                                            CASH FLOW STATEMENT

            Prepared by Dalian Refrigeration Co., Ltd.              January -June, 2017          Unit: RMB Yuan
                                                        January -June, 2017                       January -June, 2016
                     Items
                                                Consolidation       Parent Company        Consolidation      Parent Company
I. Cash flows arising from operating
activities:
Cash received from selling commodities
                                                 723,102,679.71        261,996,773.84     646,904,092.73        259,220,476.51
and providing labor services
Write-back of tax received                         8,747,344.02               1,115.75      8,501,285.87
Other cash received concerning operating
                                                  47,641,383.74         33,440,766.76      22,163,876.94         15,102,431.77
activities
    Subtotal of cash inflow arising from
                                                 779,491,407.47        295,438,656.35     677,569,255.54        274,322,908.28
             operating activities
Cash paid for purchasing commodities and
                                                 631,160,168.61        281,659,408.50     443,227,516.70        195,922,929.14
receiving labor service
Cash paid to/for staff and workers               177,808,786.10         70,029,214.82     166,852,204.03         67,168,303.41
Taxes paid                                        40,531,325.05           4,393,809.59     48,505,792.69           6,772,361.54
Other cash paid concerning operating
                                                  78,568,669.61         10,122,365.06      70,252,281.01         23,317,407.77
activities
     Subtotal of cash outflow arising from
                                                 928,068,949.37        366,204,797.97     728,837,794.43        293,181,001.86
   operating activities
     Net cash flows arising from operating
                                                -148,577,541.90         -70,766,141.62     -51,268,538.89        -18,858,093.58
                   activities
II. Cash flows arising from investing
activities:
Cash received from recovering investment           1,500,000.00           1,500,000.00                              145,827.12
Cash received from investment income              44,490,765.66         54,451,740.66      47,177,286.07         47,132,686.07
Net cash received from disposal of fixed,
                                                     200,520.00                                89,140.00                43,000.00
intangible and other long-term assets
Net cash received from disposal of
subsidiaries and other units
Other cash received concerning investing
activities
     Subtotal of cash inflow from investing
                                                  46,191,285.66         55,951,740.66      47,266,426.07         47,321,513.19
                  activities
Cash paid for purchasing fixed, intangible
                                                  77,106,599.56         70,648,520.68      81,871,897.67         74,864,341.64
and other long-term assets
Cash paid for investment                         176,660,000.00        176,660,000.00       6,551,326.25         13,135,728.15
Net cash received from payment of
subsidiaries and other business units
Other cash paid concerning investing
activities
     Subtotal of cash outflow from
                                                 253,766,599.56        247,308,520.68      88,423,223.92         88,000,069.79
             investing activities
    Net cash flows arising from investing
                                                -207,575,313.90       -191,356,780.02      -41,156,797.85        -40,678,556.60
                  activities
III. Cash flows arising from financing
activities
Cash received from absorbing investment            4,900,000.00                           561,931,354.34        561,931,354.34
Including: Cash received from absorbing
minority shareholders' equity investment by        4,900,000.00
subsidiaries
Cash received from loans                         221,269,700.00        160,000,000.00     291,400,000.00        240,000,000.00
Other cash received concerning financing
                                                  21,576,815.56                  0.00      20,710,827.68            720,332.73
activities
     Subtotal of cash inflow from financing
                                                 247,746,515.56        160,000,000.00     874,042,182.02        802,651,687.07
              activities
Cash paid for settling debts                      52,010,000.00                            52,600,000.00
Cash    paid   for    dividend   and   profit     63,497,016.56         62,191,592.93      39,846,628.47         36,997,965.58
                                                                                                                    23
                                                                   Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

distributing or interest paying
Including: dividends or profit paid by
subsidiaries to minority shareholders
Other cash paid concerning financing
                                                          24,206,200.89                                     10,121,261.17                3,430,000.00
activities
      Subtotal of cash outflow from
                                                         139,713,217.45             62,191,592.93          102,567,889.64               40,427,965.58
           financing activities
    Net cash flows arising from financing
                                                         108,033,298.11             97,808,407.07          771,474,292.38              762,223,721.49
                   activities
IV. Influence on cash due to fluctuation in
                                                             -675,767.79                164,586.98              720,875.62                 -24,068.33
exchange rate
V. Net increase of cash and cash
                                                        -248,795,325.48           -164,149,927.59          679,769,831.26              702,663,002.98
equivalents
Add: Balance of cash and cash equivalents
                                                         691,238,822.98            495,217,106.54          255,381,841.47              147,439,134.15
at the period -begin
VI. Balance of cash and cash equivalents at
                                                         442,443,497.50            331,067,178.95          935,151,672.73              850,102,137.13
the period–end
          Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua




                                                                                                                                          24
                                                                                     Dalian Refrigeration Co., Ltd. 2017 Semiannual Report


                         CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’
                                           EQUITY
                   Prepared by Dalian Refrigeration Company Limited                                               2017.01-06                 Unit: RMB Yuan
                                                                                                         2017.01-06
                                                                Owners’ equity attributable to parent company
             Items                                                 Lessen:           Other                                              Retained                               Total of
                                                                                                  Special                                                Minority equity
                                     share capital Capital suplus treasury comprehensi                      Surplus reserve              profits                             owners’ equity
                                                                                                preparation
                                                                     stock        ve income
I. balance at the end of last
                                      611,776,558.00 1,052,686,774.25   67,615,856.00 431,639,323.52                   620,578,847.52   652,022,101.57       69,585,601.21 3,370,673,350.07
year
1. Change of accounting
policy
2. Correction of errors in
previous period
II. Balance at the beginning of
                                      611,776,558.00 1,052,686,774.25   67,615,856.00 431,639,323.52                   620,578,847.52   652,022,101.57       69,585,601.21 3,370,673,350.07
this year
III. Increase/ decrease of
amount in this year (“-”           244,710,623.00   -294,617,917.00                  21,467,459.49                    29,208,229.69     7,874,277.60        5,381,170.77      14,023,843.55
means decrease)
(I)     Total     comprehensive
                                                                                       21,467,459.49                                     98,260,163.09         481,170.77      120,208,793.35
incomes
(II) Capital increased and
                                                       -49,907,294.00                                                                                         4,900,000.00     -45,007,294.00
reduced by owners
  1. Common shares increased
                                                       -56,150,000.00                                                                                         4,900,000.00     -51,250,000.00
by shareholders
  2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments        recognized      in                       6,242,706.00                                                                                                            6,242,706.00
owners’ equity
  4. Other
  (III) Profit distribution                                                                                             29,208,229.69   -90,385,885.49                         -61,177,655.80
  1. Withdrawing surplus
                                                                                                                        29,208,229.69   -29,208,229.69
public reserve
  2. Distribution to all owners
                                                                                                                                        -61,177,655.80                         -61,177,655.80
(shareholders)
  3. Others
  (IV)      Internal      carrying
                                     244,710,623.00   -244,710,623.00
forward of owners’ equity
  1. New increase of share
                                     244,710,623.00   -244,710,623.00
capital from capital reserves
  2. Convert surplus reserves
to share capital
  3. Surplus reserves make up
losses
  4. Others
(V) Specific reserve
1. Withdrawn for the period                                                                            1,008,404.87                                                              1,008,404.87
2. Used in the period                                                                                  -1,008,404.87                                                            -1,008,404.87
(VI) Other
  IV. Balance at the end of this
                                     856,487,181.00   758,068,857.25    67,615,856.00 453,106,783.01                   649,787,077.21   659,896,379.17       74,966,771.98 3,384,697,193.62
period
                   Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua




                                                                                                                                                                    25
                                                                                    Dalian Refrigeration Co., Ltd. 2017 Semiannual Report



                                                                                                     2016.01-12
                                                               Owners’ equity attributable to parent company
             Items                                                                    Other                                                Retained         Minority       Total of owners’
                                                                    Lessen:                          Special                Surplus                          equity             equity
                                    share capital Capital suplus                 comprehensive                                              profits
                                                                 treasury stock                    preparation              reserve
                                                                                     income
I. balance at the end of last
                                     360,164,975.00   630,264,991.95    39,503,800.00   589,988,118.05                    580,769,740.16   525,925,066.25 66,257,548.71      2,713,866,640.12
year
1. Change of accounting
policy
2. Correction of errors in
previous period
3.Business          combination
                                                       30,000,000.00                                                                        19,688,488.45                       49,688,488.45
under the same control
II. Balance at the beginning
                                     360,164,975.00   660,264,991.95    39,503,800.00   589,988,118.05                    580,769,740.16   545,613,554.70 66,257,548.71      2,763,555,128.57
of this year
III. Increase/ decrease of
amount in this year (“-”           251,611,583.00   392,421,782.30    28,112,056.00   -158,348,794.53                    39,809,107.36   106,408,546.87   3,328,052.50       607,118,221.50
means decrease)
(I) Total comprehensive
                                                                                        -158,348,794.53                                    182,234,151.73   3,297,165.48        27,182,522.68
incomes
(II) Capital increased and
                                      71,529,096.00   572,504,269.30    28,112,056.00                                                                       1,108,887.02       617,030,196.32
reduced by owners
  1.      Common           shares
                                      71,529,096.00   560,231,963.55    28,112,056.00                                                                       1,108,887.02       604,757,890.57
increased by shareholders
  2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in                                 12,227,168.00                                                                                                            12,227,168.00
owners’ equity
  4. Other                                                 45,137.75                                                                                                                45,137.75
  (III) Profit distribution                                                                                                39,809,107.36   -75,825,604.86 -1,078,000.00        -37,094,497.50
  1. Withdrawing surplus
                                                                                                                           39,809,107.36   -39,809,107.36
public reserve
  2. Distribution to all owners
                                                                                                                                           -36,016,497.50 -1,078,000.00        -37,094,497.50
(shareholders)
 3. Others
 (IV)     Internal    carrying
                                     180,082,487.00   -180,082,487.00
forward of owners’ equity
 1. New increase of share
                                     180,082,487.00   -180,082,487.00
capital from capital reserves
 2. Convert surplus reserves
to share capital
 3. Surplus reserves make up
losses
 4. Others
(V) Specific reserve
1. Withdrawn for the period                                                                               1,982,950.50                                                           1,982,950.50
2. Used in the period                                                                                     -1,982,950.50                                                         -1,982,950.50
(VI) Other
  IV. Balance at the end of
                                     611,776,558.00 1,052,686,774.25    67,615,856.00   431,639,323.52                    620,578,847.52   652,022,101.57 69,585,601.21      3,370,673,350.07
this period
                     Legal Representative: Ji Zhijian Chief Financial Official:Ma Yun Person in Charge of Accounting Organization: Mao Chunhua




                                                                                                                                                                     26
                                                                                       Dalian Refrigeration Co., Ltd. 2017 Semiannual Report


                                     STATEMENT OF CHANGES IN OWNERS’ EQUITY
                   Prepared by Dalian Refrigeration Company Limited                                               2017.01-06               Unit: RMB Yuan
                                                                                                      2017.01-06
                                                                           Owners’ equity attributable to parent company
             Items                                         Other                     Lessen:           Other                                                           Total of owners’
                                                                        Capital                                       Special           Surplus        Retained             equity
                                     share capital        equity                     treasury     comprehensive
                                                                        suplus                                      preparation         reserve         profits
                                                        instrument                     stock          income
I. balance at the end of last
                                       611,776,558.00                1,036,115,161.54 67,615,856.00   430,413,556.77                   620,578,847.52 498,962,843.33     3,130,231,111.16
year
1. Change of accounting
policy
2. Correction of errors in
previous period
II. Balance at the beginning of
                                       611,776,558.00                1,036,115,161.54 67,615,856.00   430,413,556.77                   620,578,847.52 498,962,843.33     3,130,231,111.16
this year
III. Increase/ decrease of
amount in this year (“-”             244,710,623.00                -238,467,917.00                   21,731,125.57                    29,208,229.69 20,081,538.30         77,263,599.56
means decrease)
(I)     Total     comprehensive
                                                                                                       21,731,125.57                                 110,467,423.79        132,198,549.36
incomes
(II) Capital increased and
                                                                        6,242,706.00                                                                                         6,242,706.00
reduced by owners
  1. Common shares increased
by shareholders
  2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments        recognized      in                                      6,242,706.00                                                                                         6,242,706.00
owners’ equity
  4. Other
  (III) Profit distribution                                                                                                             29,208,229.69 -90,385,885.49       -61,177,655.80
  1. Withdrawing surplus
                                                                                                                                        29,208,229.69 -29,208,229.69
public reserve
  2. Distribution to all owners
                                                                                                                                                      -61,177,655.80       -61,177,655.80
(shareholders)
  3. Others
  (IV)      Internal      carrying
                                       244,710,623.00                -244,710,623.00
forward of owners’ equity
  1. New increase of share
                                       244,710,623.00                -244,710,623.00
capital from capital reserves
  2. Convert surplus reserves
to share capital
  3. Surplus reserves make up
losses
  4. Others
(V) Specific reserve
1. Withdrawn for the period                                                                                            1,008,404.87                                          1,008,404.87
2. Used in the period                                                                                                  -1,008,404.87                                        -1,008,404.87
(VI) Other
  IV. Balance at the end of this
                                       856,487,181.00                 797,647,244.54 67,615,856.00    452,144,682.34                   649,787,077.21 519,044,381.63     3,207,494,710.72
period
                   Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua




                                                                                                                                                                 27
                                                                                     Dalian Refrigeration Co., Ltd. 2017 Semiannual Report



                                                                                                    2016.01-12
                                                                        Owners’ equity attributable to parent company
             Items                                         Other                  Lessen:           Other                                                             Total of owners’
                                                                                                                   Special             Surplus        Retained             equity
                                     share capital        equity Capital suplus treasury       comprehensive
                                                                                                                 preparation           reserve         profits
                                                        instrument                 stock           income
I. balance at the end of last
                                       360,164,975.00               640,764,783.03 39,503,800.00    588,759,190.43                    580,769,740.16 428,747,299.72     2,559,702,188.34
year
1. Change of accounting
policy
2. Correction of errors in
previous period
II. Balance at the beginning of
                                       360,164,975.00               640,764,783.03 39,503,800.00    588,759,190.43                    580,769,740.16 428,747,299.72     2,559,702,188.34
this year
III. Increase/ decrease of
amount in this year (“-”             251,611,583.00               395,350,378.51 28,112,056.00    -158,345,633.66                    39,809,107.36 70,215,543.61        570,528,922.82
means decrease)
(I)     Total     comprehensive
                                                                                                    -158,345,633.66                                 146,041,148.47        -12,304,485.19
incomes
(II) Capital increased and
                                        71,529,096.00               575,432,865.51 28,112,056.00                                                                          618,849,905.51
reduced by owners
  1. Common shares increased
                                        71,529,096.00               563,160,559.76 28,112,056.00                                                                          606,577,599.76
by shareholders
  2. Capital increased by
holders of other equity
instruments
  3. Amounts of share-based
payments        recognized      in                                   12,227,168.00                                                                                         12,227,168.00
owners’ equity
  4. Other                                                               45,137.75                                                                                             45,137.75
  (III) Profit distribution                                                                                                            39,809,107.36 -75,825,604.86       -36,016,497.50
  1. Withdrawing surplus
                                                                                                                                       39,809,107.36 -39,809,107.36
public reserve
  2. Distribution to all owners
                                                                                                                                                     -36,016,497.50       -36,016,497.50
(shareholders)
  3. Others
  (IV)      Internal      carrying
                                       180,082,487.00              -180,082,487.00
forward of owners’ equity
  1. New increase of share
                                       180,082,487.00              -180,082,487.00
capital from capital reserves
  2. Convert surplus reserves
to share capital
  3. Surplus reserves make up
losses
  4. Others
(V) Specific reserve
1. Withdrawn for the period                                                                                           1,982,950.50                                          1,982,950.50
2. Used in the period                                                                                                 -1,982,950.50                                        -1,982,950.50
(VI) Other
  IV. Balance at the end of this
                                       611,776,558.00              1,036,115,161.54 67,615,856.00   430,413,556.77                    620,578,847.52 498,962,843.33     3,130,231,111.16
period
                   Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua


                   III. Notes to the accounting statement
                     (All amounts in RMB Yuan unless otherwise stated)
                   1. General information
                   Dalian Refrigeration Company Limited (the “Company”) was reorganized and reformed from main
                   part of former Dalian Refrigeration Factory. On December 8, 1993, the company went to the public
                   as a listed company at Shenzhen Stock Exchange Market. On March 20, 1998, the company
                   successfully went to the public at B share market and listed at Shenzhen Stock Exchange Market.
                   The general meeting for 2016 fiscal year held on19st May 2017 approved the profit distribution
                   policy for the year of 2016, which agrees the profit distribution is based on the total 611,776,558
                   number of shares as share capital, paid out cash dividend of 1Yuan for every 10 shares (before tax)
                   and share dividend of 4 common shares for every 10 shares through capital reserve.
                   The address of the Company’s registered office as same as head office is No.106, Liaohe East Road,
                   Dalian Economic and Technological Development Zone, China. The parent company of the
                   Company is Dalian Bingshan Group Co., Ltd., and there is no ultimate controller regulated by the
                   relev The company falls into industrial manufacturing sector, mainly engaged in industrial
                                                                                                                                                                28
                                             Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

refrigeration, refrigerated and frozen food storage, and manufacture and installation of central
air-conditioning and refrigeration equipment. The scope of business includes refrigeration
equipment, valve, fixings refrigeration equipment, supported products processing and system design
of air-conditioning. The company also offers technical consultation, technical services, commercial
trade and material supply and marketing.ant law, regulations and rules.

2. The scope of consolidation
There are 15 entities included in the current consolidated financial statements, including:
                                                                      Proportion of      Proportion of
            Names of subsidiaries                Types      Level
                                                                    shareholding(%)    votes(%)

Dalian Bingshan Group Engineering             Subsidiary      1
Co., Ltd.                                                                 100                 100
Dalian Bingshan Group Sales Co., Ltd.         Subsidiary      1
                                                                          100                 100
Dalian      Bingshan     Air-conditioning     Subsidiary      1
Equipment Co., Ltd.                                                       70                  70
Dalian Bingshan Guardian Automation           Subsidiary      1
Co., Ltd.                                                                 100                 100
Dalian Bingshan Ryosetsu Quick Freezing       Subsidiary      1
Equipment Co., Ltd.                                                       100                 100
Wuhan New World Refrigeration                 Subsidiary      1
Industrial Co., Ltd.                                                      100                 100
Bingshan Technology Service (Dalian)        Subsidiary      1
Co.,Ltd.                                                                  100                 100
Dalian Universe Thermal Technology Co.,       Subsidiary      1
Ltd.                                                                      55                  55
Dalian Xinminghua Electrical Technology       Subsidiary      1
Co., Ltd                                                                  100                 100
Dalian Bingshan Engineering & Trading         Subsidiary      1           51                  51
Co., Ltd.
Chengdu        Bingshan     Refrigeration     Sub-subsi       2           100                 100
Engineering Co., Ltd.                         diary
Wuhan New World Air-conditioning              Sub-subsi       2           100                 100
Refrigeration Engineering Co., Ltd            diary
Dalian Bingshan -P&A Recreation               Sub-subsi       2           51                  51
Development Engineering Co., Ltd              diary
Ningbo      Bingshan     Air-conditioning     Sub-subsi       2           51                  51
Refrigeration Engineering Co., Ltd            diary
Shanghai Bingshan Technology Service          Sub-subsi       2           51                  51
Co., Ltd                                      diary

This year, there are 2 more entities were included in the scope of consolidation, Dalian
Bingshan Engineering & Trading Co., Ltd.and Chengdu Bingshan Refrigeration
Engineering Co., Ltd.
On February 15, 2017, the company’ board of directors decided to accept the transfer of 76% equity
stake of Dalian Bingshan Engineering and Trading Co., Ltd., the company’s former associated
company, after the acceptance of this transfer, Dalian Bingshan Engineering and Trading Co., Ltd\.
became a wholly-owned subsidiary of the company. As of June 30, 2017, the above equity
transaction has been completed. Therefore, the company held 100% equity stake of Dalian Bingshan
Engineering and Trading Co., Ltd. when establishing the consolidated statements of current period.
As Dalian Bingshan Engineering and Trading Co., Ltd. is also a subsidiary of the parent company
Dalian Bingshan Group Co., Ltd., the company has merged the subsidiary Dalian Bingshan
Engineering and Trading Co., Ltd. by the same control in current period, when establishing the
consolidated balance sheet, adjusted the beginning data of relevant projects of consolidated balance
sheet, and also adjusted the comparable data of the corresponding period when establishing the
income statements and cash flow statements.
                                                                                                         29
                                              Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

The Board of Directors of the company’s subsidiary Dalian Bingshan Group Engineering Co., Ltd.
decided Dalian Bingshan Group Engineering Co., Ltd. and Chengdu New World Refrigeration
Equipment Engineering Co., Ltd. jointly invest and build a joint venture Chengdu Bingshan
Refrigeration Engineering Co., Ltd., Dalian Bingshan Group Engineering Co., Ltd. invested RMB
5.1 million in cash, holding 51% stake. As of June 30, 2017, Chengdu Bingshan Refrigeration
Engineering Co., Ltd. has officially started operating.
For the specific information of entity change in the consolidation scope, see the notes of VII. The
Change of Scope of Consolidation and VIII. The Equity in Other Entities.

IV Financial Statements Preparation Basis

1. Basic of preparation of financial statements

(1) Preparing basis

The Company’s financial statements are prepared on the basis of going concern assumption,
according to the actual occurred transactions and events and in accordance with ‘Accounting
Standards for Business Enterprises’ and relevant regulations, and also based on the note IV
“Significant Accounting Policies, Accounting Estimates”.

(2) Going concern

The company has the capacity to continually operate within 12 months at least since the end of
report period, and hasn‘t the major issues impacting on the sustainable operation ability.

V. Significant Accounting Policies and Accounting Estimates

   1. Declaration for compliance with accounting standards for business enterprises

   The financial statements are prepared by the Group according to the requirements of Accounting
   Standard for Business Enterprise, and reflect the relative information for the financial position,
   operating performance, cash flow of the Group truly and fully.
2. Accounting period
The Group adopts the Gregorian calendar year as accounting period, i.e. from Jan 1 to Dec 31.
3.Operating cycle
Normal operating cycle refers to the duration starting from purchasing the assets for manufactuing
up to cash or cash equivelant realisation. The group sets twelve months for one operating cycle
and as the liquidity criterion for assets and liability.
4. Funcitonal currency
The Group adopts RMB as functional currency.
5. Accounting for business combination under same control and not under same control
As an acquirer, the assets and liabilities that The Group obtained in a business combination under
the same control should be measured on the basis of their carrying amount in the consolidated
financial statements on the combining date. As for the balance between the carrying amount of the
net assets obtained by the combining party and the carrying amount of the consideration paid by it,
the capital surplus shall be adjusted. If the capital surplus is not sufficient to be offset, the retained
earnings shall be adjusted.
For a business combination not under same control, the asset, liability and contingent liability
obtained from the acquirer shall be measured at the fair value on the acquisition date. The
combination cost shall be the fair value, on the acquisition date, of the assets paid, the liabilities
incurred or assumed and equity securities issued by the acquirer in exchange for the control of the
acquire, and sum of all direct expenses(if the combination is achieved in stages, the combination
                                                                                                       30
                                              Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

cost shall be the sum of individual transaction). The difference when combination cost exceeds
proportionate share of the fair value of identifiable net assets of acquiree should be recognized as
goodwill. If the combination cost is less than proportionate share of the fair value of identifiable net
assets of acquiree, firstly, fair value of identifiable asset, liability or contingent liability shall be
reviewed, and so the fair value of non-monetary assets or equity instruments issued in the
combination consideration , after review, still the combination cost is less than proportionate share
of the fair value of identifiable net assets of acquire, the difference should be recognized as
non-operating income.
6. Method of preparation of consolidated financial statements
All subsidiaries controlled by the Group and structured entities are within the consolidation scope.
If subsidiaries adopt different accounting policy or have different accounting period from the parent
company, appropriated adjustments shall be made in accordance with the Group policy in
preparation of the consolidated financial statements.
All significant intragroup transactions, outstanding balances and unrealized profit shall be
eliminated in full when preparing the consolidated financial statements. Portion of the subsidiary’s
equity not belonging to the parent, profit, loss for the current period, portion of other comprehensive
income and total comprehensive belonging to minority interest, shall be presented separately in
the consolidated financial statements under “minority interest of equity”, ”minority interest of profit
and loss”, “other comprehensive income attributed to minority interest” and “total comprehensive
income attributed to minority interest” title.
If a subsidiary is acquired under common control, its operation results and cash flow shall be
consolidated since the beginning of the consolidation period. When preparing the comparative
consolidated financial statements, adjustments shall be made to relevant items of comparative
figures as regarded that reporting entity established through consolidation has been always there
since the point when the ultimate controlling party starts to have the control.
If a business consolidation under common control is finally achieved in stages, consolidation
accounting method shall be disclosed additionally for the period in which the control is obtained.
For example, if a business consolidation under common control is finally achieved in stages, when
preparing the consolidated financial statements, adjustments shall be made for the current
consolidation status as if consolidation has always been there since the point when the ultimate
controlling party starts to control. In preparation of comparative figures, asset and liability of the
acquiree shall be consolidated into the Group’s comparative financial statements, but to the extent
no earlier than the point when the Group and acquiree are both under ultimate control and relevant
items under equity in comparative financial statements shall be adjusted for net asset increased in
combination. To avoid the duplicated computation of net asset of acquiree, for long-term equity
investment held by the Group before the consolidation, relevant profit and loss, other
comprehensive income and movement in other net asset, recognized for the period between the
combination date and later date when original shareholding is obtained and when the Group and the
acquiree are under common control of same ultimate controlling party, shall be respectively used for
writing down the opening balance of retained earnings of comparative financial statements and
profit and loss for the current period.
If a subsidiary is acquired not under common control, its operation results and cash flow shall be
consolidated since the beginning of the consolidation period. In preparation of the consolidated
financial statements, adjustments shall be made to subsidiary’s financial statements based on the fair
value of its all identifiable assets, liability or contingent liability on the acquisition date.
If a business consolidation under non-common control is finally achieved in stages, consolidation
accounting method shall be disclosed additionally for the period in which the control is obtained.
For example, if a business consolidation not under common control is finally achieved in stages,
when preparing the consolidated financial statements, the acquirer shall remeasure its previously
held equity interest in the acquiree at its acquisition-date fair value and recognize the resulting gain
or loss as investment income for the current period. Other comprehensive income, under equity
method accounting rising from the interest held in acquiree in relation to the period before the
acquisition, and changes in the value of its other equity other than net profit or loss, other
comprehensive income and profit appropriation shall be transferred to investment gain or loss for
the    period in which the acquisition incurs, excluding the other comprehensive income from the
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                                               Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

movement on the remeasurement of ne asset or liability of defined benefit plan.
When the Group partially disposes of the long –term equity investment in subsidiary without losing
the control over it, in the consolidated financial statements, the difference, between disposals price
and respective disposed value of share of net assets in the subsidiary since the acquisition date or
combination date, shall be adjusted for capital surplus or share premium, no enough capital surplus,
then adjusted for retained earnings.
When the Group partially disposes of the long –term equity investment in subsidiary and lose the
control over it, in preparation of consolidated financial statements, remaining share of interest in the
subsidiary shall be remeasured on the date of losing control. Sum of the share disposal consideration
and fair value of remaining portion of shareholding minus the share of the net assets in the
subsidiary held based on the previous shareholding percentage since the acquisition date or
combination date,      the balance of above is recognized as investment gain/loss for the period and
goodwill shall be written off accordingly. Other comprehensive income relevant to share investment
in subsidiary shall be transferred to investment gain /loss for the period on the date of losing control.
When the Group partially disposes of the long –term equity investment in subsidiary and lose the
control over it by stages, if all disposing transactions are bundled, each individual transaction shall
be seen as a transaction of disposal of a subsidiary by losing control. The difference between the
disposal price and the share of the net assets in the subsidiary held before the date of losing
control, shall be recognize as other comprehensive income until the date of losing control where it is
transferred into investment gain/ loss for the current period.
7. Joint arrangement classification and joint operation accounting
The Group’s joint arrangement includes joint operation and joint venture. For joint operation, the
Group as a joint operator shall recognize its own assets and its share of any assets held jointly, its
liabilities and its share of any liabilities incurred jointly, its revenue from the sale of its share of the
output arising from the joint operation, its share of the revenue from the sale of the output by the
joint operation; and its expenses, including its share of any expenses incurred jointly. When an
entity enters into a transaction with a joint operation in which it is a joint operator, such as a sale or
contribution of assets, it is conducting the transaction with the other parties to the joint operation
and, as such, the joint operator shall recognize gains and losses resulting from such a transaction
only to the extent of the other parties’ interests in the joint operation.
8. Cash and cash equivalent
The cash listed on the cash flow statements of the Group refers to cash on hand and bank deposit.
The cash equivalents refer to short-term (normally with original maturities of three months or less)
and liquid investments which are readily convertible to known amounts of cash and subject to an
insignificant risk of changes in value.
9. Translation of foreign currency
(1) Foreign currency transaction
Foreign currency transactions are translated at the spot exchange rate issued by People’s Bank of
China (“PBOC”) on the 1st day of the month when the transactions incurred. Monetary assets and
liabilities in foreign currencies are translated into RMB at the exchange rate prevailing at the
balance sheet day. Exchange differences arising from the settlement of monetary items are charged
as in profit or loss for the period. Exchange differences of specific borrowings related to the
acquisition or construction of a fixed asset should be capitalized as occurred, before the relevant
fixed asset being acquired or constructed is ready for its intended uses.
(2) Translation of foreign currency financial statements
The asset and liability items in the foreign currency balance sheet should be translated at a spot
exchange rate at the balance sheet date. Among the ower’s equity items except “undistributed
profit”, others should be translated at the spot exchange rate when they are incurred. The income
and expense should be translated at spot exchange rate when the transaction incurs. Translation
difference of foreign currency financial statements should be presented separately under the other
comprehensive income title. Foreign currency cash flows are translated at the spot exchange rate on
the day when the cash flows incur. The amounts resulted from change of exchange rate are
presented separately in the cash flow statement.
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                                             Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

10. Financial assets and financial liabilities
A financial asset or liability shall be recognised when the entity becomes a party to the contractual
provisions of a financial instrument.
(1) Financial assets
1)Classification, recognition and measurement
The Group classifies its financial assets in the following categories: at fair value through profit or
loss, loans and receivables, held-to-maturity financial assets and available-for-sale. The
classification depends on the purpose for which the financial assets were acquired. Management
determines the classification of its financial assets at initial recognition.
Financial assets at fair value through profit and loss include trading financial assets and those
financial assets initially designated as fair value through profit and loss. When meeting one of the
following conditions, the company shall classify the assets into trading financial asset: it is
acquired principally for the purpose of selling in the near term and is part of a portfolio of identified
financial instruments that are managed together and for which there is evidence of a recent actual
pattern of short-term profit-taking; it is a derivative(except for a derivative that is a designated and
effective hedging instrument or a financial guarantee contract, or linked to the investments in equity
instruments that do not have a quoted price in an active market,no fair value can be reliably
measured and must be settled by delivery of such an equity instrument. When meeting one of the
following conditions, the financial assets can be classified as the assets initially designated as fair
value through profit and loss: it eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise from measuring assets or liabilities or recognising the
gains and losses on them on different bases; or the financial instrument portfolio is managed and
its performance is evaluated and provided internally on that basis to the entity’s key management
personnel on a fair value basis, in accordance with a documented risk management or investment
strategy; or it is a hybrid instrument embedded by one or more instruments except for a embedded
derivate that does not significantly modify the cash flows or it is clear that separation of the
embedded derivative(s) is prohibited; it is a hybrid instrument that is required to be separated but
unable to be measured separately either at acquisition or at the end of a subsequent financial
reporting period. They are measured at fair value subsequently. Change on fair value shall be
recognized in the profit and loss. Interest or cash dividends received during the period in which such
financial assets are held, are recognised as ‘Investment income’. On disposal, the difference
between fair value of disposal and initial recorded amount are recognised as ‘Gain or loss on
Investment’ and adjust the gain or loss from changes in fair value accordingly.
Receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. Receivables are subsequently measured at amortised cost using the
effective interest method.The amortisation, impairment and any gain or loss from derecognition
shall be recognized in the profit and loss for the current year.
Available-for-sale financial assets are non-derivative financial assets that are either designated in
this category or not classified as financial assets of any other class at initial recognition. This
category includes the derivative financial assets that linked to the investments in equity instruments
without a quoted price in an active market, no fair value can be reliably measured and must be
settled by delivery of such an equity instrument, and shall be measured at cost subsequently. Others
have a quoted price in an active market or fair value can be measured reliably although no quoted
price available, they shall be measured at fair value. Any change on fair value shall be recognized in
other comprehensive income and subsequently be measured at fair value. Except impairment loss
and exchange gain or loss arising from foreign currency monetary financial assets, changes in fair
value of available-for-sale financial assets are directly recorded in shareholders’ equity until such
financial assets is derecognized and the accumulated fair value adjustments previously recorded in
equity are charged to profit or loss for the period. Interests for the period in which the assets are
held as investment in debt instrument is calculated using the effective interest method and is
charged to profit or loss for the period as ‘Investment income’. Cash dividends declared by the
investee company relating to available-for-sale equity instruments are charged to profit or loss for
the period as ‘Investment income’. Equity instruments that a quoted price is not applicable in an
active market and no fair value can be reliably measured, shall be measured at cost.
 2)Recognition and measurement of transfer of financial assets
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                                              Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

A financial asset is derecognised when any one of the following conditions is satisfied: i) the rights
to receive cash flows from the asset expire, ii) the financial asset has been transferred and the entity
transfers substantially all risks and rewards relating to the financial assets to the transferee, iii) the
financial asset has been transferred to the transferee, the entity has given up its control of the
financial asset although the entity neither transfers nor retains all risks and rewards of the financial
asset.
Where an entity neither transfers nor retains substantially all risks and rewards of financial asset and
does not give up the control over such financial asset, then the entity recognises such financial asset
to the extent of its continuous involvement and recognises the corresponding liabilities.
In the case where the financial asset as a whole qualifies for the derecognition conditions, the
difference between the carrying value of transferred financial asset and the sum of the consideration
received for transfer and the accumulated amount of changes in fair value that was previously
recorded under other comprehensive income is charged into profit or loss for the period.
In the case where only part of the financial asset qualifies for derecognition, the carrying amount of
financial asset being transferred is allocated between the portions that to be derecognised and the
portion that continued to be recognised according to their relative fair value. The difference between
the amount of consideration received for the transfer and the accumulated amount of changes in fair
value that was previously recorded in other comprehensive income of the part qualifies for
derecognition and the above-mentioned allocated carrying amount is charged to profit or loss for
the period.
3) Impairment of financial assets
The Group assesses the carrying amount of financial assets other than financial assets at fair value
through profit or loss at each balance sheet date. If there is objective evidence that the financial
asset is impaired, the Group shall determine the amount of any impairment loss accounts.
The specific impairment provision methods of financial assets were as follows:
1) Provision for impairment of available-for-sale financial assets:
On balance sheet date, the Company executes individually inspection on each available-for-sale
financial statement, if the fair value of the equity instruments which is invested on the balance sheet
date is lower than its initial investment cost for more than 50% (including 50%) or lower than its
initial investment cost for the duration time for more than 1 year (including 1 year), which indicates
that it had occurred impairment; if the fair value of the equity instruments which invests on the
balance sheet date is lower than its initial investment cost for more than 20% (including 20%) but
not reaches at 50%, the Company will comprehensively considerate the other relevant factors such
as the price volatility etc. and will judge the equity investment whether had occurred impairment.
The aforesaid "cost" recognized in line with the initial investment cost of available for sale financial
instrument deducting principal recovered, amount amortized and the impairment losses recorded
into profits or losses. “fair value" recognized through the closing price of Securities Exchange at
period end unless the investment of available for sale equity instrument was in the restricted stock
trade period. For investment of available for sale equity instrument was in the restricted stock trade
period, recognized in line with the closing price of Securities Exchange at period end deducting the
risk of market player cannot sell the equity instrument, thus, require compensation.
If objective evidence shows that impairment for available-for-sale financial assets will occur,the
cumulative loss arising from the decline in fair value that had been recognized directly in equity is
removed from equity and recognized as impairment loss, although the financial assets are not
derecognized. The accumulative losses that are transferred out shall be the balance obtained from
the initially obtained costs of the financial asset after deducting the principals taken back and
amortised amount, the current fair value and the impairment losses originally recorded into the
profits and losses account.
For an available for sale debt instrument, if there is objective evidence that the value of the financial
asset recovered and the recovery can be related objectively to an event occurring after the
impairment was recognized, the previously recognized impairment loss is reversed and the amount
of reversal is recognized in income statement. For an available for sale equity instrument, if there is
objective evidence that the value recovered and the recovery can be objectively related to an event
occurring after the impairment loss recognized, the previously recognized impairment loss is
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                                              Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

reversed and directly recognized in equity. However, the impairment losses incurred to an equity
instrument investment for which there is no quoted price in the active market and whose fair value
cannot be reliably measured, or incurred to a derivative financial asset which is linked to the equity
instrument and which shall be settled throguh the equity instrument, can not be reversed.
2) Provision for impairment of held-to-maturity financial assets
If there is objective evidence that the value of a financial asset carried at amortized cost has
impaired, the amount of loss is measured at the difference between the asset’s carrying amount and
the present value of estimated future cash flows. If there is objective evidence that the value of the
financial asset recovered and the recovery can be related objectively to an event occurring after the
impairment was recognized, the previously recognized impairment loss is reversed and the amount
of reversal is recognized in income statement, but to the extent where the reversed amount can not
exceed the amortised cost on the reversing day if no impaiment provided before.
 (2) Financial liabilities
Classification, basis for recognition and measurement
Financial liabilities of an entity are classified at initial recognition as “financial liabilities at fair
value through profit or loss” and “other financial liabilities” on initial recognition
Financial liabilities at fair value through profit or loss include financial liabilities held for trading
and those designated as fair value through profit or loss on initial recognition(relevant basis for
classification shall be disclosed by reference to financial assets) They are subsequently measured at
fair value. The net gain or loss arising from changes in fair value, dividends and interest paid related
to such financial liabilities are recorded in profit or loss for the period in which they are incurred.
Other financial liability is measured at amortized cost by adopting the effective rate method.
Financial liability derecognition
A financial liability is derecognized when the underlying present obligations or part of it are
discharged. Existing financial liability shall be derecognized and new financial liability shall be
recognized when the entity sign the agreement with creditor to undertake the new financial liability
in replacement of existing financial liability, and the terms of agreement are different in substance.
Any significant amendment to the agreement as a whole or part o it is made, then the existing
liabilities or part of it shall be derecognized and financial liability after terms amendment shall be
recognized as a new financial liability. The difference between the carrying amount of the financial
liability derecognized and the consideration paid is recognized in profit or loss for the period.
Fair value measurement of financial asset and financial liability
If there is an acitve market for the financial assets and liability measured at fair value, the fair value
is measured at the quoted price in the active market; originally obtained or derived financial assets
or liability is measured at market trade price. If no active market exists for the financial asset or
liability, applicable valuation techniques is used for fair value measurement. When valuating, the
price in the most advantageous market shall be used for fair value measurement and applicable
valuation techniques which enough data is available for and supported by other information shall be
adopted, and the group chooses the input with same characters of asset or liability as considered by
market participant and try to give priority in use of observable input. Unobservable input shall be
used when observable input can not be obtained or it is infeasible to be obtained.
11. Provision for bad debts of receivables
The Group shall review the carrying amount of receivables fully at the balance sheet date. The
Group shall calculate the full provision for bad debts for the following receivables: debtor has been
log-out, bankruptcy, minus net asset, significant poor cash flow and significant nature disaster leads
to discontinue production and the debtors could not pay for the debts within the foreseeable time .
Other solid evidences indicates that the receivables cound not be paid or be of a slim chance.
The allowance method is applied to the potential loss of bad debt. The Group should make the
impairment test individually or grouply and accure the bad debt provisions which shall be
recorded into current profit or loss at the end of the period. If there is defined evidence for the
receivables not to or not likely to be received, which shall be recognized as the loss of bad debt and
write off the accrued bad debts provisions after going through the approval procedure of the Group.
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                                                  Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

     (1) Individually significant amounts of accounts receivable accrued bad debt provision as per
     portfolio
     Judgment basis or amount standards of individually significant amounts        Top    5    of   account
     receivables at year end
     The accruing method of the receivables with individually significant amounts The      bad    debt
     provisions shall be accrued based on the difference between current value of future cash flow and
     the carrying amounts.
     (2) Accounts receivable accrued bad debt provision by credit risk portfolio
     The basis of portfolio
     Inter-company        Accounts receivable due from subsidiaries included in consolidated scope
     Accounting aging Other than accounts receivable due from subsidiaries included in consolidated
     scope and individual receivable with significant amount without impariment, use the accounting
     aging of the receivables


     The basis of bad debt provision
     Inter-company        Individual identified method
     Accounting aging Age analysis method
     1) The percentage of provision for bad debts based on the age of receivables as followings:
Accounting aging       Accrual percentage of the receivables (%)       Accrual percentage of other receivables (%)
    Within 1 year                                                  5                                             5
        1-2 years                                             10                                               10
        2-3 years                                             30                                               30
       3-4 years                                              50                                               50
        4-5 years                                             80                                               80
     Over 5 years                                            100                                               100
     2) The other methods is applied to accrualing of bad debts provision
     Related partiesNo bad debt provision is needed, unless the related party is unable to pay back
     Risk-free No bad debt provision is needed
     (3) Individually insignificant amount accounts receivable but accrued bad debt provision as per
     portfolio
     Accrual reason       The individual amount is not significant, but the accrued bad debt provision on
     the basis of portfolio can not reflect its risk characteristic
     Accrual method       The bad debt provisions should be accrued based on the difference between
     current value of future cash flow and the carrying amount.
     12. Inventories
     Inventories are materials purchasing, raw material, variance of cost materials, low-valuable
     consumable, materials processed on commission,working-in-progress, semi-finished goods,
     variance of semi-finished goods ,and finished goods, engineering construction etc.
     The inventories are processed on perpetual inventory system, and are measured at their actual cost
     on acquistion. Weighted average cost method is taken for measuring the inventory dispatched or
     used. Low value consumables and packaging materials is recognized in the income statement by
     one-off method.
     After year end thorough inventory check, at the balance sheet date inventory impairment should be
     provided or adjusted according to invenotry category. For the finished goods, raw material held for
     sale etc which shall be sold directly, the net realizable value should be confirmed at the estimated
                                                                                                          36
                                             Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

selling price less estimated selling expenses and related tax and expenses. The raw material held for
production, its realizable value should be confirmed at the estimated selling price of finished goods
less estimated cost of completion, estimated selling expenses and related tax. The net realizable
value of inventories held for execution of sale contracts or labor contracts shall be calculated based
on the contract price. If the quantities of inventories in the Group are more than quantities if
inventories subscribed in the sales contracts, the net realizable value of the excessive part of the
inventories should be calculated based on the general selling price. When the impariment indicators
disappear, impairment provision shall be reversed and
13. Long-term equity investment
Long term equity investments are the investment in subsidiary, in associated company and in joint
venture.
Joint control is the contractual agreement sharing of control over an economic activity by all
participants or participants’ combination and decisions or policies relating to the operating activity
of the entity require the unanimous consent of the parties sharing the control.
Significant influence exists when the entity directly or indirectly owned 20% or more but less than
50% shares with voting rights in the investee company.If holding less than 20% voting rights, the
entity shall also take other facts or circumstances into accounts when judging any significant
influences. Factors and circumstances include: representation on the board of directors or equivalent
governing body ofthe investee, participation in financial or operating activities policy-making
processes,material transactions between the investor and the investee, interchange of managerial
personnel or provision of essential technical information.
When control exists over an investee, the investee is a subsidiary of an entity. The initial investment
cost for long-term equity investment acquired through business combination under common control,
is the carrying amount presented in the consolidated financial statements of the share of net assets at
the combination date in the acquired company. If the carrying amount of net assets at the
combination date in the acquired company is negative, investment shall be recognized at zero.
If the equity of investee under common control is acquired by stages and business combination
incursin the end, an entity shall disclose the accounting method for long-term equity investment in
the parent financial statement as a supplemental. For example, if the equity of investee under
common control is acquired by stages and business combination incursin the end, and it’s a bundled
transaction, the entity shall regard all transactions as a one for accounting. If it’s not a bundled
transaction, the carrying amount presented in the consolidated financial statements of the share of
net assets at the combination date in the acquired company since acquisition is determined as for the
initial cost of long-term equity investment. The difference between the cost initially recognized and
carrying amount of long-term equity investment prior to the business combination plus the newly
paid consideration for further share acquired, and capital reserve shall be adjusted accordingly. If no
enough capital reserve is available for adjustment, retain earnings shall be adjusted.
If long-term equity investment is acquired through business combination not under common control,
initial investment cost shall be the combination cost.
If the equity of investee not under common control is acquired by stages and business combination
incursin the end, an entity shall disclose the accounting method for long-term equity investment in
the parent financial statement as a supplemental. If the equity investment of investee not under
common control is acquired by stages and business combination incursin the end, and it’s a bundled
transaction, the entity shall regard all transactions as a one for accounting. If it’s not a bundled
transaction, the carrying amount of the equity investment held previously plus newly increased
investment cost are taken as the initial investment cost under cost model. If equity investment is
held under equity method before the acquisition date, other comprehensive income under equity
method previously shall not be adjusted accordingly. When disposing of the investment, the entity
shall adopt the same basis as the investee directly disposing of related assets or liability for
accounting treatment. Equity held prior to acquisition date as available for sale financial assets
under fair value model, accumulated change on fair value previously recorded in other
comprehensive shall be transferred into investment gain/loss for the period.
Apart from the long-term equity investments acquired through business combination mentioned
above, the cost of investment for the long-term equity investments acquired by cash payment is the
amount of cash paid. For long-term equity investment acquired by issuing equity instruments, the
                                                                                                    37
                                                  Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

  cost of investment is the fair value of the equity instrument issued. For long-term equity investment
  injected to the entity by the investor, the investment cost is the consideration as specified in the
  relevant contract or agreement.
  The Group adopts cost method to account for investment in subsidiary and equity method for
  investment in joint venture and affiliate.
  Long-term equity investment subsequently measured under cost model shall increase the carrying
  amount of investment by adjusting the fair value of additional investment and relevant transaction
  expenses. Cash dividend or profit declared by investee shall be recognized as investment gain/loss
  for the period based on the proportion share in the investee.
  Long-term equity investment subsequently measured under equity method shall be adjusted for its
  carrying amount according to the share of equity increase or decrease in the investee. The entity
  shall recognize its share of the investee’s net profits or losses based on the fair value of the
  investee’s individual identifiable assets at the acquisition date, after making appropriate adjustments
  thereto in conformity with the accounting policies and accounting period, and offsetting the
  unrealized profit or loss from internal transactions entered into between the entity and its associates
  and joint ventures according to the shareholding attributable to the entity and accounted for as
  investment income and loss based on such basis.
  On disposal of a long-term equity investment, the difference between the carrying value and the
  consideration actually received is recognised as investment income for the period. For long-term
  investments accounted for under equity method, the movements of shareholder’s equity, other than
  the net profit or loss, of the investee company, previously recorded in the shareholder’s equity of the
  Company are recycled to investment income for the period on disposal.
  Where the entity has no longer joint control or significant influence in the investee company as a
  result of partially disposal of the investment, the remaining investment will be changed to be
  accounted for as available for sale financial assets, and the difference between the fair value of
  remaining investment at the date of losing joint control or significant influence and its carrying
  amount shall be recognized in the profit or loss for the year. Other comprehensive income
  recognized from previous equity investment under equity model shall be accounted for on the same
  basis as the investee directly disposing of related assets or liability when stopping using under
  equity model.
  Where the entity has no longer control over the investee company as a result of partially disposal of
  the investment, the remaining investment will be changed to be accounted for using equity method
  providing remaining joint control or significant influence over the investee company. The difference
  between carrying amount of disposed investment and consideration received actually shall be
  recognised in the profit and loss for the period as investment gain or loss, and investment shall be
  adjusted accordingly as if it was accounted for under equity model since acquisition. Where the
  entity has on longer joint control or significant influence in the investee as a result of disposal, the
  investment shall be changed to be accounted for as available for sale financial assets, and difference
  between the carrying amount and disposal consideration shall be recognized in profit and loss for
  the period, and the difference between the fair value of remaining investment at the date of losing
  control and its carrying amount shall be recognized in the profit or loss for the year as investment
  gain or loss.
  If the entity loses its control through partially disposal of investment by stages and it’s not a bundled
  transaction, the entity shall account for all transactions separately. If it’s a bundled transaction, the
  entity shall regard all transactions as one disposal of subsidiary by losing control, but the difference
  between disposal consideration and carrying amount of the equity investment disposed prior to
  losing control, which arises from each individual transaction shall be recognized as other
  comprehensive income until being transferred into profit and loss for the period by the time of
  losing control.
  14. Investment property
      The investment property includes property and building and measured at cost model
      Category               Useful life(years)     Estimated net residual value rate Annual depreciation rate
Housing and Buildings               40                            3%                          2.43%

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                                            Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

15. Fixed assets
Recognition criteria of fixed assets: defined as the tangible assets which are held for the purpose of
producing goods, rendering services, leasing or for operation & management, and have more than
one year of useful life.
Fixed assets shall be recognized when the economic benefit probably flows into the Group and its
cost can be measured reliably. Fixed assets include: building, machinery, transportation equipment,
electronic equipment and others.
All fixed assets shall be depreciated unless the fixed assets had been fully depreciated and are still
being used and land is separately measuered. Straight-line depreciation method is adopted by the
Group. Estimated net residual value rate, useful life, depreciation rate as follows:
                        Useful life (years)    Estimated net residual value Annual depreciation rate
       Category
                                                            rate
Housing and
                                20-40                  3%、5%、10%                   2.25-4.85%
Buildings
Machinery equipment             10-22                  3%、5%、10%                    4.09-9.7%
Transportation
                                 4-15                  3%、5%、10%                    6-24.25%
equipment
Electronic equipment               5                   3%、5%、10%                    18-19.4%
Others equipment                10-15                  3%、5%、10%                      6-9.7%
The Group should review the estimated useful life, estimated net residual value and depreciation
method at the end of each year. If any change has occurred, it shall be regarded as a change in the
accounting estimates.
16. Construction in progress
The criteria and time spot of constructions in progress’s being transferred to fixed assets:
Constructions in progress are carried down to fixed assets on their actual costs when completing and
achieving estimated usable status. The fixed assets that have been completed and reached estimated
usable status but have not yet been through completion and settlement procedures are charged to an
account according to their estimate values; adjustment will be conducted upon confirmation of their
actual values. The Group should withdraw depreciation in the next month after completion.
17. Borrowing costs
The borrowing cost includes the interest expenses of the borrowing, amortization of underflow or
overflow from borrowings, additional expenses and the foreign exchange profit and loss because of
foreign currency borrowings. The borrowing costs incurred which can be directly attribute to the
fixed assets, investments properties, inventories requesting over 1 year purchasing or manufacturing
so to come into the expected condition of use or available for sale shall start to be capitalized when
expenditure for the assets is being occurred, borrowing cost has occurred, necessary construction for
bringing the assets into expected condition for use is in progress. The borrowing costs shall stop to
be capitalized when the assets come into the expected condition of use or available for sale. The
borrowing costs subsequently incurred should be recorded into profit and loss when occurred. The
borrowing costs should temporarily stop being capitalized when there is an unusual stoppage of
over consecutive 3 months during the purchase or produce of the capitalized assets, until the
purchase or produce of the asset restart.
The borrowing costs of special borrowings, deducting the interest revenue of unused borrowings
kept in the bank or the investment income from transient investment should be capitalized. The
capitalized amount of common borrowings should be calculated as follows: average assets
expenditure of the accumulated assets expenditure excess the special borrowing, multiplied by the
capital rate. The capital rate is the weighted average rate of the common borrowings.
18. Intangible assets
The intangible assets of the Group refer to land use right and software. For acquired intangible
assets, the actual cost are measured at actual price paid and relevant other expenses. The cost
invested into intangible assets by investors shall be determined according to the stated value in the
investment contract or agreement, except for those of unfair value in the contract or agreement.

                                                                                                   39
                                              Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

Land use right shall be amortized evenly within the amortization period since the remised date.ERP
system softwareand other intangible assets are amortized over the shortest of their estimated useful
life, contractual beneficial period and useful life specified in the law. Amortization charge is
included in the cost of assets or expenses, as appropriate, for the period according to the usage of
the assets. At the end of the year, for definite life of intangible assets, their estimated useful life and
amortization method shall be assessed. Any change shall be treated as change on accounting
estimate.
19. Impairment of non-current assets
The Group assesses at each balance sheet date whether there is any indication that long-term equity
investments, investment property, fixed assets, construction in progress and intangible assets with
definite useful life may be impaired. If there is any indication that an asset may be impaired, the
asset will be tested for impairment. Goodwill arising in a business combination and intangible
asset with infinite useful life are tested for impairment annually no matter there is any indication of
impairment or not.
Estimate of recoverable amount is the higher of its fair value less costs to sell and the present value
of the future cash flows expected to be derived from the asset.
If the recoverable amount of an asset is less than its carrying amount, the carrying amount shall be
impaired and the difference is recognised as an impairment loss and charged to profit or loss for the
period. Once an impairment loss on the assets is recognised, it is not reversed in a subsequent
period.
After assets impairment loss is recognized, depreciation and amortisation of the impaired asset shall
be adjusted in the following period so that the adjusted carrying amount(less expected residual value)
can be depreciated and amortised systematically within the remaining life.
When assessing goodwill for impairment, the carrying amount of goodwill shall be allocated evenly
to the assets group or assets portfolio. When testing the assets group or assets portfolio including
goodwill, if there is any indication of impairment , ignoring the goodwill and testing the assets
group or assets portfolio alone so to work out the recoverable amount and comparing to its carrying
amount and recognize the impairment loss. After that, testing the assets group or assets portfolio
with goodwill together, comparing the carrying amount of the assets group or assets
portfolio(including goodwill allocation) with recoverable amount , goodwill impairment shall be
recognized when the recoverable amount is lower than its carrying amount.


20. Long-term deferred expenses
Long-term deferred expenses of the Group refer to leasing expenses, redecoration expense and
others. The expenses should be amortized evenly over the beneficial period. If the deferred expense
cannot take benefit for the future accounting period, the unamortized balance of the deferred
expenses should be transferred into the current profit or loss. Leasing expenses will be amortized
within 10 years and 30years; redecoration expense and others will be amortized within 3 years.
21. Employee benefits
Employee’s benefit comprises short-term benefit, post-employment benefit, termination benefit and
other long-term employee’s benefit.
Short-term benefit includes salary, bonus, allowance, welfare, social insurance, housing funds,
labour union expense, staff training expense, during the period in which the service rendered by the
employees, the actually incurred short term employee benefits shall be recognized as liability and
shall be recognized in P&L or related cost of assets based on benefit objective allocated from the
service rendered by employees.
Post-employment benefits include the basic pension scheme and unemployment insurance etc.
Based on the risk and obligation borne by the Group, post-employment benefits are classified into
defined contribution plan and defined benefit plan. For defined contribution plan, liability shall be
recognized based on the contributed amount made by the Group to separate entity at the balance
sheet date in exchange of employee service for the period and it shall be recorded into current profit
and loss account or relevant cost of assets in accordance with beneficial objective.

                                                                                                        40
                                             Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

Termination benefits are employee’s benefit payable as a result of either an entity’s decision to
terminate an employee’s employment before the contract due date or an employee’s decision to
accept voluntary redundancy in exchange for those benefits. An entity shall recognize the
termination benefits as a liability and an expense at the earlier date when the entity cannot unilateral
withdraw the termination benefits due to employment termination plan or due to redundancy
suggestion, or when the entity can recognize the restructuring cost or expense arising from paying
termination benefits.
Other long-term employee’s benefit refers to all other employee benefits other than short-term
benefit, post-employment benefit and termination benefit.
If other long-term employee’s benefit is qualified as defined contribution plan, contribution made
shall be recognized as liabilities accordingly for the period in which the service are rendered by the
employee and recognized in the profit or loss for the current period or relevant cost of assets. Except
other long-term employee’s benefit mentioned above, obligation arising from defined benefit plan
shall be recognized in the profit or loss for the current period or relevant cost of assets in accordance
with the period when the service are rendered by the employee.
22. Contingent liabilities
When the company has transactions such as commitment to externals, discounting the trade
acceptance, unsettled litigation or arbitration which meets the following criterion, provision should
be recognized: It is the Company's present obligation; carrying out the obligation will probably
cause the Company's economic benefit outflow; the obligation can be reliably measured.
Provision is originally measured on the best estimate of outflow for paying off the present
obligations, and to consider the risk, uncertainty, time value of monetary relevant to contingent
items. If the time value of monetary is significant, the best estimate will be determined by
discounted cash outflow in the future. At each balance sheet date, the book value of provision is
reviewed and adjustment will be made on the book value if there is any change, in order to reflect
the current best estimate.
When compensation from the 3rd party is expected for full or partial contingent liability settlement,
the compensation shall be recognized as an asset separately and measured at no more than the book
value of contingent liability.
23. Share based payment
An equity-settled share-based payment in exchange for the employee’s services is measured at the
fair value at the date when the equity instruments are granted to the employee. Such fair value
during the vesting period of service or before the prescribed exercisable conditions are achieved is
recognised as relevant cost or expense on a straight-line during the vesting period based on the best
estimated quantity of exercisable equity instruments, accordingly increase capital reserve.
A cash-settled share-based payment is measured at the fair value at the date at which the Group
incurred liabilities that are determined based on the price of the shares or other equity instruments.
If it is immediately vested, the fair value of the liabilities at the date of grant is recognised as
relevant cost or expense, and corresponding liabilities. If it is exercisable only when the vesting
period of service is expired or the prescribed conditions are achieve, the fair value of liabilities
undertaken by the Group are re-measured at each balance sheet date based on the best estimate of
exercisable situation.
The fair value of the liabilities is re-measured at each balance sheet date. Any changes are
recognised in the profit or loss for the year.
If the granted equity instruments are cancelled within the vesting period, the equity instrument shall
be treated as accelerated vesting and the balance linked to the remaining vesting period shall be
recognized in the profit or loss account, accordingly be recognized in the capital reserve. If
employees or other parties can choose but fail to satisfy non-vesting conditions during the vesting
period, the Company sees this as cancellation of granted equity instruments.
24. Principle of recognition of revenue
The revenue of the Group is mainly from selling goods, providing labour services and abalienating
the right of use assets and construction contracts. Recognition standards for revenue are as below:

                                                                                                      41
                                             Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

The revenue from selling goods: Company has transferred all the significant risks and rewards of
the ownership of the goods to the buyers, and retains neither continuing managerial involvement to
the degree usually associated with ownership nor effective control over the goods sold. The relative
sale proceeds have been reliably measured, respective economic benefit probably inflow to the
company, and the incurred or incurring cost can be reliably measured, and then the revenue can be
recognized.
In the reporting period, revenue recognition point and principle: goods is dispatched from
warehouse, client has no dispute on the quantity and quality of the goods, client collected or
authorized the agent to collect the good and sales amount is confirmed, have collected or expected
to collect the payment, cost of goods can be reliably measured, risk and reward is transferred so the
revenue is recognized.
Complete sets of engineering projects, if selling products and building installation part can be
separated and can be measured separately, selling products will be treated as sales of products.
Selling products and building installation will not be able to be distinguished, or can be
distinguished but can't be separately measured, selling products and building installation will be all
treated as building installation.
Income from abalienating the right of use assets is recognized when satisfying requirements related
economic benefit flows in very possibly, income can be measured reliably.
 Amount of interest income is calculated according to the time and actual interest rate of the
monetary capital used by other party.
Income of using fee is calculated upon the charge period and calculation provided by the related
contract or agreement.
The service revenue should be recognized when the outcome of the services can be estimated
reliably.
The outcome of the services can be estimated reliably means the following conditions must be
satisfied at the same time:
Amount can be measured reliably
Relevant economic benefit probably flow into the company
The stage of completion of the service can be estimated reliably
Cost incurred or expect to incur in the transaction can be measured reliably
Total service income shall be recognized according to the price agreed in the contract or agreement
which has been settled or to be settled unless the price is not fair. Service revenue for the current
period shall be recognized based on the figure worked out on the total income multiply by the
percentage of completion of the service after deducting the service revenue recognized in the prior
period at the balance sheet and accordingly recognized the cost based on the figure worked out on
the total cost multiply by the percentage of completion of the service after deducting the service cost
recognized in the prior period.
At the balance sheet date, if outcome of the service can not be estimated reliably, the treatment shall
apply respectively
Costs incurred may be probably recovered, revenue is recognized only to the extent of costs
incurred that are expected to be recoverable, and costs shall be recognized as an expense in the
period in which they are incurred
Costs incurred are not probable of being recovered, then these cost incurred are recognized as an
expense immediately, no revenue shall be recognized.
In the case that selling goods and rendering service are both included in the agreements or contracts,
when selling products and rendering service part can be separated and can be measured separately,
selling products will be treated as sales of products. Selling products and rendering service will not
be able to be distinguished, or can be distinguished but can't be separately measured; selling
products and rendering service will be all treated as rendering service.
Revenue from construction contract

                                                                                                    42
                                              Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

When the result of the construction contract is able to be evaluated reliably at the balance sheet date,
the income and cost of the contract are recognized on completion percentage basis.
The result of the fixed price of construction contract can be estimated reliably means the following
conditions must be satisfied at the same time:
Amount can be measured reliably
Relevant economic benefit probably flow into the company
Cost actually incurred can be well distinguished and measured reliably
The stage of completion and the cost expected to incur for the completion of the contract can be
estimated reliably
The result of the cost plus of construction contract can be estimated reliably means the following
conditions must be satisfied at the same time:
Relevant economic benefit probably flow into the company
Cost actually incurred can be well distinguished and measured reliably
Total construction contract income shall be recognized according to the price agreed in the contract
or agreement which has been settled or to be settled unless the price is not fair. Construction
contract income for the current period shall be recognized based on the figure worked out on the
total contracted income multiply by the percentage of completion of the construction after deducting
the revenue recognized in the prior period at the balance sheet and accordingly recognized the cost
based on the figure worked out on the total expected cost multiply by the percentage of completion
of the construction after deducting the construction e cost recognized in the prior period.
Construction contract income is recognized to the extend where the change of the contract, claim for
compensation and bonus can bring the income and can be measured reliably.
If the result of the construction contract is not able to be evaluated reliably, the treatment shall apply
respectively
If contract cost may be recovered, the income is recognized at the cost actually recovered, and the
cost of the contract is recognized as contract expenses of the current period when it is occurred.
If contract cost may not be recovered, the cost of the contract shall be recognized as contract
expenses when incurred, and no contract revenue shall be recognized.
 In case the expected total cost is greater than the total income, the expected loss will be recognized
as expense of the current period immediately.
.25. Government grants
A government grant is a monetary asset or non-monetary asset granted by government without
consideration. It shall be recognized when the company complies with the conditions attaching to
the grant and when the company is able to receive the grant.
Where a government grant is in the form of a transfer of monetary asset, it is measured at the
amount received. Where a government grant is made on the basis of fixed amount or conclusive
evidence indicates relevant conditions for financial support are met and expect to probably receive
the fund, it is measured at the amount receivable. Where a government grant is in the form of a
transfer of non-monetary asset, it is measured at fair value. If fair value cannot be determined
reliably, it is measured at a nominal amount of RMB1 Yuan.
Assets-related government grants are recognized as deferred income, and evenly amortized to profit
or loss over the useful life of the related asset. Income-related government grants that is a
compensation for related expenses or losses to be incurred in subsequent periods are recognized as
deferred income and credited to the relevant period when the related expense are incurred.
Government grants relating to compensation for related expenses or losses already incurred are
charged directly to the profit or loss for the period.
26. Deferred tax assets and deferred tax liabilities
The deferred income tax assets or the deferred income tax liabilities should be recognized according
to the differences (temporary difference) between the carrying amount of the assets or liabilities and
its tax base. Deferred tax assets shall be respectively recognised for deductible tax losses that can be
                                                                                                       43
                                               Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

carried forward in accordance with tax law requirements for deduction of taxable income in
subsequent years. No deferred tax liabilities shall be recognized forany temporary difference arising
from goodwill initially recognition. No deferred tax assets or liabilities shall be recognized for any
difference arising from assets or liabilities initial recognition on non-business combination with no
effect on either accounting profit or taxable profit (or deductible tax loss). At the balance sheet date,
deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply
to the period when the asset is realised or liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be
available to offset the deductible temporary difference, deductible loss and tax reduction.
27.Lease
The leases of the Group refer to operating lease.
The rents paid for operating leases shall be recorded into the relevant asset costs or the profits and
losses for the current period by using the straight-line method over each period of the lease
term.Rents received, if the Group as a leaser shall be recognised as income under straight line
method.
28.Other significant accounting policy and estimate
Safety production cost
The company accrued the safety production cost in accordance with state regulation and recognized
in the cost of product or profit or loss for the current period as well as “special reserve’. When using
the accrued safety production cost, if it is expense, special reserve shall be offset directly and any
excessive proportion shall be directly recorded into profit and loss account; if it is related to asset,
“construction in progress” account shall be used for collecting expense and then fixe asset will be
recognized when the safety project is completed and reach the condition available for use.
Meanwhile, special reserve shall be offset based on the cost of fixed asset and depreciation shall be
recognized at the same amount. No depreciation shall be made any longer in the following period.
29.Changes in Accounting Policies, Accounting Estimates
Change in significant accounting policies None
Changes in accounting estimate        None

VI.Taxation

 1. The main applicable tax and rate to the Group as follows:

 Tax                                                Tax base                            Tax rate

 Value-added tax (VAT)           Sales revenue or Purchase                       17%,13%,11%,6%,5%

 Business tax                    Revenue from property lease, examination fee,           3%,5%

                                 surcharge

 City construction tax           Value-added tax payables, business tax                   7%

 Education surcharge             Value-added tax payables, business tax                   3%

 Local education surcharge       Value-added tax payables, business tax                2%, 1.5%

 Enterprise income tax(EIT)      Current period taxable profit                         15%,25%

                                 70% of cost of own property or revenue from
 Real estate tax                                                                      1.2% or 12%
                                 leasing property

 Land use tax                    Land using right area                           RMB 6 per square meter


        Notes for tax entities with different EIT rate
 (1)The parent company’s income tax was measured at 15%.

                                                                                                          44
                                                   Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

(2)Income tax of subsidiaries and associates
Taxation on profit of subsidiaries and associates is calculated at the applicable rates in accordance
with the relevant tax regulations. Certain subsidiaries and associates enjoy preferential income tax
policies with approvals from tax authorities. The applicable income tax rates of major subsidiaries
and associates are as follows:

Tax entities                                                                          EIT rate

The Company                                                                             15%

Dalian Bingshan Group Engineering      Co., Ltd.                                        15%

Dalian Bingshan Group Sales     Co., Ltd.                                               25%

Dalian Bingshan Air-conditioning Equipment Co., Ltd.                                    25%

Dalian Bingshan Guardian Automation Co., Ltd.                                           15%

Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd.                             25%

Wuhan New World Refrigeration Industrial Co., Ltd.                                      15%

Bingshan Technology Service (Dalian) Co.,Ltd.                                         25%

Dalian Bingshan Engineering & Trading Co., Ltd.                                         25%

Dalian Universe Thermal Technology Co., Ltd.                                            25%

Dalian New Meica Electronics Technology Co., Ltd                                        25%

The company obtained the qualification of high and new technology enterprises on 29th September,
2014 approved by Dalian Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax
Bureau and Local tax Bureau. The Certificate No is GF201421200004, and the validity duration is
three years. According to the tax law, the company can be granted for the preferential tax policy of
enterprise income tax rate of 15% in three years.
The company’s subsidiary, Dalian Bingshan JiaDe Automation Co., Ltd. obtained the qualification
of high and new technology enterprises on 21st September, 2015 approved by Dalian Science
Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax Bureau. The
Certificate No is GR201521200115, and the validity duration is three years. According to the tax
law, the company can be granted for the preferential tax policy of enterprise income tax rate of 15%
in three years.
The company’s subsidiary, Wuhan New World Refrigeration Industrial Co., Ltd obtained the
qualification of high and new technology enterprises on 28th October, 2015 approved by Hubei
Science Technology Bureau, Hubei Finance Bureau, Hubei State Tax Bureau and Hubei Local tax
Bureau. The Certificate No is GR201542000772, and the validity duration is three years. According
to the tax law, the company can be granted for the preferential tax policy of enterprise income tax
rate of 15% in three years

VII. Notes to the consolidated financial statements
1. Monetary fund

                  Items                                30-06-2017                    31-12-2016
               Cash on hand                                         49,426.13                     83,511.72
               Cash in bank                                  442,394,071.37                691,155,311.26

          Other monetary fund                                 26,606,200.89                   23,976,815.56
                  Total                                      469,049,698.39                715,215,638.54




                                                                                                        45
                                                                  Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

          The restrained amount of monetary fund is shown as below.

                                         Items                                      30-06-2017                   31-12-2016
          Deposit for bank acceptances                                                 16,879,359.54                 18,512,681.41

          Deposit for letter of credit
          Deposit for letter of guarantee                                                 7,326,841.35                   3,064,134.15

          Deposit for Migrant workers                                                     2,400,000.00                   2,400,000.00

                                         Total                                           26,606,200.89                  23,976,815.56


          The reason of the ending balance of Monetary fund decreased 34.42% compared with the beginning
          balance was the raise fund from issuing of A-shares privately .
          2. Notes receivable
          (1) Classification

                               Items                                  30-06-2017                           31-12-2016
          Bank acceptance                                                     56,952,756.05                             38,332,233.37
          Trade acceptance                                                    77,829,842.53                             88,076,016.22
                               Total                                         134,782,598.58                            126,408,249.59

          (2) pledged notes receivable at the end of the reporting period.
                       Items                                                      Pledged    notes
           Bank acceptance                                                                                         13,147,517.83
           Total                                                                                                   13,147,517.83

          (3) The notes receivable endorsed but not matured at the end of the reporting period.

                       Items                         The derecognization amount                  Not derecognization amount

          Bank acceptance                                              194,498,651.07

          Trade acceptance
                       Total                                           194,498,651.07


          3. Accounts receivable
          (1) Classification

                                                                                    30-06-2017

               Categories                                  Balance                      Provision for doubtful debts
                                                                                                                              Book value
                                                  Amount             Proportion          Amount           Proportion

Bad debt provided on group basis            1,058,487,500.01            100.00%     155,258,206.63             14.67%        903,229,293.38

                 Total                      1,058,487,500.01            100.00%     155,258,206.63             14.67%        903,229,293.38

          Continued:

                                                                                    31-12-2016

                Categories                                 Balance                      Provision for doubtful debts
                                                                                                                              Book value
                                                  Amount             Proportion          Amount           Proportion

  Bad debt provided on group
                                                 958,174,419.26         100.00%     151,064,459.72             15.77%        807,109,959.54
  basis



                                                                                                                                  46
                                                             Dalian Refrigeration Co., Ltd. 2017 Semiannual Report


              Total                         958,174,419.26           100.00%        151,064,459.72              15.77%      807,109,959.54


      Accounts receivable which bad debt provisions are provided on age basis in the group

                                                                          30-06-2017
       Account       ages
                                           Amount                    Provision for bad debts                 Proportion rates
        Within 1 year                          662,887,730.79                     33,144,386.53                                 5.00%
         1 to 2 years                          220,610,699.98                     22,061,070.00                             10.00%
         2 to 3 years                           71,771,723.09                     21,531,516.93                             30.00%
         3 to 4 years                           40,488,812.22                     20,244,406.11                             50.00%
         4 to 5 years                           22,258,534.36                     17,806,827.49                             80.00%
        Over 5 years                            40,469,999.57                     40,469,999.57                            100.00%
            Total                             1,058,487,500.01                 155,258,206.63

      (2) Provision for bad debts accrued, regain or switch back in the period

      In the current period, RMB 8,150,291.78were accrued provision for bad debts

      (3) In the current period, RMB3,956,544.87 were receivable being written-off
      (4) Top 5 on amount of accounts receivable

                             Companies                                        Amount           Proportion (%)         Provision for bad debts

Panasonic Cold-Chain (Dalian) Co. , Ltd.                                 55,909,764.67               5.28                 2,795,488.23
Xin Yi Yuan Da Construction installation engineering Co., Ltd.           38,167,774.72               3.61                 2,251,777.47
Beijing Huashang Bingshan Refrigeration Equipment Co., Ltd.              35,645,856.35               3.37                 1,846,092.82
Yi Du(Shen Yang) cold-chain logistics development Co., Ltd.              34,315,636.60               3.24                 1,715,781.83
Anheuser-busch inbev beer (China) investment Co., Ltd.
                                                                         18,102,240.01               1.71                  905,112.00

                                Total                                    182,141,272.35              17.21                9,514,252.35

      4. Advances to suppliers
      (1) The aging of advances to suppliers

                                                   30-06-2017                                            31-12-2016
         Account      ages
                                          Amount                 Proportion                 Amount                     Proportion
      Within 1 year                      124,609,893.58                  91.49%              91,708,963.35                        84.89%

      1 to 2 years                         9,215,028.81                  6.77%               15,856,969.05                        14.68%

      2 to 3 years                         1,910,975.60                  1.40%                    467,380.70                       0.43%

      Over 3 years                          467,380.70                   0.34%

              Total                       68,420,154.43             --                      108,033,313.10                  --

      (2)Top 5 on amount of advances to suppliers
                                                                                                             % of the total advances to
                             Companies                                   Amount               Ages
                                                                                                                     suppliers
Shenyang Debao Hongtai Agricultural Development Co., Ltd.            13,206,355.64        Within 1 year                  9.70

Dalian Hua Li coating equipment Co. , Ltd.                           12,000,000.00       Within 1 year                   8.81

                                                                                                                                    47
                                                              Dalian Refrigeration Co., Ltd. 2017 Semiannual Report


 Ao LItong Crane (Liao Ning) Co., Ltd.                                9,600,000.00     Within 1 year               7.05

 Shenyang Debao Jia Hong Agricultural Technology Co., Ltd.            6,395,198.00     Within 1 year               4.69

 Shanghai industrial automation equipment Co., Ltd.                   6,125,000.00      Within 1 year              4.50

                            Total                                    47,326,553.64                                34.75

      5. Interest receivable

         (1) Interest receivable

      Items                                                       Closing Balance                       Opening Balance

      Interest on Term Deposits                                                       0.00                          723,955.56

      Total                                                                           0.00                          723,955.56


      6. Dividends receivable

                             Names                                         30-06-2017                       31-12-2016

      Wu Han steel electric ) Co. , Ltd.                                                                            39,025.00

      Panasonic Compressor (Dalian) Co. , Ltd.                                  38,000,000.00

      Panasonic Refrigeration      (Dalian) Co. , Ltd.                               800,000.00

                              Total                                             38,800,000.00                       39,025.00
      The ending balance of dividend receivable increased 99323.45% compared with the period-begin,
      mainly due to the undue dividend receivable increased.

      7. Other accounts receivable
      (1) Classification

                                                                            30-06-2017

              Items                                 Balance                   Provision for doubtful debts
                                                                                                                  Book value
                                           Amount             Proportion       Amount             Proportion

Bad debt provided on group basis       73,453,183.67             100.00%     9,737,214.98               13.26%   63,715,968.69

              Total                    73,453,183.67             100.00%     9,737,214.98               13.26%   63,715,968.69

      Continued:
                                                                            31-12-2016

              Items                                 Balance                   Provision for doubtful debts
                                                                                                                  Book value
                                        Amount            Proportion           Amount             Proportion

Bad debt provided on group basis      64,905,774.51              100.00%     7,648,317.94               11.78%   57,257,456.57

              Total                   64,905,774.51              100.00%     7,648,317.94               11.78%   57,257,456.57

      There is no major single amount and bad debt provision provided individually.

      Other accounts receivable which bad debt provisions are provided on age basis in the group:



                                                                                                                               48
                                                                 Dalian Refrigeration Co., Ltd. 2017 Semiannual Report




                                                                                 30-06-2017
              Account       ages
                                                Amount                    Provision for bad debts                    Proportion rates
           Within 1year                               50,710,555.19                        2,535,527.75                            5.00%
           1 to 2 years                               12,411,446.22                        1,241,144.62                           10.00%
           2 to 3 years                                2,893,148.67                          867,944.60                           30.00%
           3 to 4 years                                4,232,918.39                        2,116,459.20                           50.00%
           4 to 5 years                                1,144,881.94                          915,905.55                           80.00%
           Over 5 years                                2,060,233.26                        2,060,233.26                          100.00%
                    Total                             73,453,183.67                        9,737,214.98

           (2) Provision for bad debts accrued, regain or switch back in the period

           The bad debt provision has been accrued at the amount of 2,088,897.04 Yuan during the report
           period

           (3) There was no write-off of other accounts receivable during the current year

           (4) The nature of other accounts receivable

                             Items                                30-06-2017                                    31-12-2016

           Guarantee deposits                                                46,417,396.58                                   34,372,184.48

           Petty cash                                                        17,116,449.09                                    9,061,619.39

           To or fro accounts                                                    8,924,032.46                                16,038,288.24

           Others                                                                 995,305.54                                  5,433,682.40

                             Total                                           73,453,183.67                                   64,905,774.51


           (5) Top 5 on amount of other accounts receivable
                    Companies                  Contents           Amount                   Ages              Proportion        Provision for bad debts
Shenyang Debao Hongtai Agricultural
                                      Performance bonds          12,000,000.00        Less than 1 year           16.34%                        600,000.00
Development Co., Ltd.
Shenyang Debao Jia Hong Agricultural
                                     Performance bonds           10,000,000.00        Less than 1 year           13.61%                        500,000.00
Technology Co., Ltd.
                                     Debtor transferred to be
Nanjing Yurun Food Co., Ltd.                                      3,261,654.23            3-4years                   4.44%                    1,630,827.12
                                     collected
                                                                                    Less than 1 year,2-3
Dalian Delta HK& China Gas Co., Ltd.       deposit                2,730,000.00
                                                                                           years
                                                                                                                     3.72%                     211,500.00

Jinzhou Dalian New District Building en                                            1-2years,2-3years,3-4ye
ergy efficiency management office          deposit                1,586,623.95
                                                                                             ars
                                                                                                                     2.16%                     215,838.58

                 Total                                           29,578,278.18                                   40.27%                       3,158,165.70


           8. Inventories
           (1) Costs

                                                        30-06-2017                                                       31-12-2016
                Items                                   Provision for                                                   Provision for
                                     Book balance      impairment of       Book value             Book balance         impairment of         Book value
                                                         inventories                                                     inventories

    Raw materials                    131,956,143.02       990,009.06     130,966,133.96              94,663,862.81       1,070,944.56        93,592,918.25

    Work-in-progress                  87,001,304.70                        87,001,304.70             88,255,287.69                           88,255,287.69

                                                                                                                                        49
                                                              Dalian Refrigeration Co., Ltd. 2017 Semiannual Report


Finished goods              113,514,766.93             320,000.00        113,194,766.93          92,718,030.69          320,000.00          92,398,030.69
Materials            on
consignment for further           4,583,972.92                             4,583,972.92           2,353,515.43                               2,353,515.43
processing
Low-value
                                   170,206.24                                   170,206.24          209,949.86                                209,949.86
consumptions
Self-manufactured
                             35,801,069.44                                35,801,069.44          31,999,705.01                              31,999,705.01
semi-finished products
Constructing projects        41,294,420.07                                41,294,420.07          40,729,017.13                              40,729,017.13

         Total              414,321,883.32           1,310,009.06        413,011,874.26         350,929,368.62         1,390,944.56      349,538,424.06


       (2) Provision for impairment of inventories
                                                    Current year addition                    Current year   disposal
        Items                     31-12-2016                                                                                          30-06-2017
                                                     Provision         Others        Reversal         Written-off       Others

 Raw materials                    1,070,944.56                                        80,935.50                                        990,009.06

 Finished goods                    320,000.00                                                                                          320,000.00

             Total                1,390,944.56                                        80,935.50                                       1,310,009.06

      The Company carried out impairment test for the inventory at period-end, accrued inventory falling
      price reserves in the Period.

         (3) Accrual for provision for decline in the value of inventories

                                                   Basis for net realizable value
      Item                                                                                        Reasons for reverse/write-off
                                                            recognition

     Raw materials                                    Lower of cost and NRV                             Sold within the year

     Finished goods                                   Lower of cost and NRV



      9. Other current assets

                          Items                                        30-06-2017                                31-12-2016

      Enterprise income tax prepaid                                                   3,092.45                                 734,482.13

      the pending VAT input tax                                                  21,350,545.27                              42,164,041.41

      Prepaid expenses                                                              417,040.14                                 355,521.38

                          Total                                                  21,770,677.86                              43,254,044.92
      The closing balance of the Company’s other current assets has reduced by 49.67% compared with the opening
      balance, mainly due to the pending VAT input tax has been transferred to accounts payable taxes from this account in
      current period.


      10.Available for sale financial assets

                                                     30-06-2017                                                     31-12-2016
              Items                                  Provision for                                                Provision for
                              Book balance                                Book value          Book balance                             Book value
                                                      impairment                                                   impairment
      Equity instruments
                                  574,777,069.20        5,067,074.16       569,709,995.04       550,711,039.12         5,145,922.48     545,565,116.64
      available for sale
      Measured by fair
                                  557,222,804.70        1,424,468.25       555,798,336.45       533,156,774.62         1,503,316.57     531,653,458.05
      value
      Measured by cost             17,554,264.50        3,642,605.91        13,911,658.59        17,554,264.50         3,642,605.91      13,911,658.59


                                                                                                                                       50
                                                                       Dalian Refrigeration Co., Ltd. 2017 Semiannual Report


                                                             30-06-2017                                                    31-12-2016
                   Items                                   Provision for                                                  Provision for
                                     Book balance                                Book value          Book balance                                Book value
                                                            impairment                                                     impairment
                   Total              574,777,069.20            5,067,074.16     569,709,995.04       550,711,039.12          5,145,922.48       545,565,116.64


              (1) Available-for-sale financial assets measured at fair value method

                                                                                    Equity t instruments       Debt instruments
                                         Items                                                                                                  Total
                                                                                         available for sale    available for sale

           Cost of Equity instrument/ amortized cost of debt instrument                      27,098,895.00                                    27,098,895.00

           The total amount of fair value change in other
                                                                                            530,123,909.70                                   530,123,909.70
           comprehensive income

           Fair value                                                                       557,222,804.70                                   557,222,804.70

           Provision for impairment                                                            1,424,468.25                                    1,424,468.25


              (2) Available-for-sale financial assets measured at cost method

                                                                                Book balance
                Names                                                     Increased            Decreased
                                                 Beginning                                                         Ending
                                                                        during current       during current                              Shareholding(%)
                                                  balance                                                          balance
                                                                            period               period
Zibo Traction Motor Co., Ltd.                           849,000.00                                                      849,000.00                         0.76%

Liaoning Mike Group Co., Ltd.                          1,020,000.00                                                    1,020,000.00                        3.57%

Guotai Junan Investment Management                     3,057,316.00                                                    3,057,316.00                        0.22%
Co., Ltd.
Thermo King Container Temperature                   11,207,806.00                                                   11,207,806.00                         17.80%
Control (Suzhou) Co., Ltd.
Liaoning Enterprises United Industry                    105,000.00                                                      105,000.00                         4.20%
Company
Wuhan Steel and Electric Co., Ltd.                     1,315,142.50                                                    1,315,142.50                        0.06%

                 Total                             17,554,264.50                                                    17,554,264.50



           Continued:
                                                                                  Provision for impairment
                                                                                                      Decreased                               Cash dividends
                     Names                                                        Increased                                                     during the
                                                             Beginning                                 during               Ending
                                                                                during current                                                current period
                                                              balance                                  current              balance
                                                                                    period
                                                                                                       period
Zibo Traction Motor Co., Ltd.                                     849,000.00                                                    849,000.00

Liaoning Mike Group Co., Ltd.                                                                                                                           310,000.00


Guotai Junan Investment Management Co., Ltd.                     2,688,605.91                                                 2,688,605.91


Thermo King Container Temperature Control
(Suzhou) Co., Ltd.
Liaoning Enterprises United Industry Company                      105,000.00                                                    105,000.00




                     Total                                       3,642,605.91                                                 3,642,605.91              310,000.00




           On 26 June 2015, Guotai Junan Securities Co., Ltd. (“Guotai Junan” for short) listed on Shanghai Stock Exchange,
           stock code 601211; as for the 27,098,895 shares of Guotai Junan, the Company measured the shares on fair
                                                                                                                                                51
                                                      Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

      value.The company received cash dividend11,153,569.05 yuan within the period.

      (3) Change of value of the equity instruments available for sale measured by cost within the
             period.
                                                  Equity instruments       Debt instruments
                  Categories                                                                    others     Total
                                                   available for sale      available for sale
The impairment at the beginning of current year            5,145,922.48                                  5,145,922.48
Decreased during current year                                 78,848.32                                     78,848.32
The impairment at the end of the year                      5,067,074.16                                  5,067,074.16




                                                                                                             52
                                                                                                                           Dalian Refrigeration Co., Ltd. 2017 Semiannual Report




   11. Long-term equity investments

                                                                                                  Increase/Decrease
                                                                                                                                                                                        Provision
                                    Beginning                                  Gains and losses   Adjustment                Cash bonus or      Provision for                               for
               Name                                                                                             Changes                                               Ending balance
                                     balance                                   recognized         of      other             profits           impairment of                             impairme
                                                      Increased      Decreased                                  of other                                     Others
                                                                               under the equity   comprehensiv              announced  to       the current                                 nt
                                                                                                                equity
                                                                               method             e income                  issue                 period
I Associates
Panasonic          Refrigeration
                                   157,425,641.15                                 -5,926,187.84                                1,600,000.00                            149,899,453.31
(Dalian) Co., Ltd.
Dalian Honjo Chemical Co.,
                                     9,642,351.34                                    437,965.38                                1,441,499.53                              8,638,817.19
Ltd.
Panasonic Cold-Chain (Dalian)
                                   217,687,237.26                                  3,593,423.52                                4,800,000.00                            216,480,660.78
Co., Ltd.
Keinin-Grand Ocean Thermal
Technology       (Dalian) Co.,      52,952,413.79                                  7,216,616.73                                                                         60,169,030.52
Ltd.
Panasonic Compressor (Dalian)
                                   484,003,393.99                                 18,719,311.78                               38,000,000.00                            464,722,705.77
Co., Ltd.
Dalian      Bingshan      Metal
                                                    172,950,000.00                 4,019,745.35                                                                        176,969,745.35
Technology Co., Ltd.
Dalian      Bingshan      Group
Management Consulting Co.,                           39,200,000.00                  -390,808.03                                                                         38,809,191.97
Ltd.
MHI Bingshan Refrigeration
                                    13,018,792.05                                 -1,201,596.65                                                                         11,817,195.40
(Dalian) Co.,Ltd.
Beijing Huashang Bingshan
Refrigeration               and
                                      769,463.27                                    -241,707.36                                                                            527,755.91
Air-conditioning     Machinery
Co., Ltd.
Dalian Fuji Bingshan Vending
                                   160,787,194.81                                 17,547,723.62                                                                        178,334,918.43
Machine Co., Ltd.
Jiangsu JingXue Insulation
                                   151,527,707.42                                  3,878,101.09                                                                        155,405,808.51
Technology Co.,Ltd
Dalian Fuji Bingshan Vending
                                     9,410,006.56                                    661,471.84                                                                         10,071,478.40
Machine Sales Co., Ltd.




                                                                                                                                                                                   53
                                                                                                                          Dalian Refrigeration Co., Ltd. 2017 Semiannual Report




                                                                                                 Increase/Decrease
                                                                                                                                                                                        Provision
                                   Beginning                                  Gains and losses   Adjustment                Cash bonus or      Provision for                                for
           Name                                                                                                Changes                                               Ending balance
                                    balance                                   recognized         of      other             profits           impairment of                              impairme
                                                     Increased      Decreased                                  of other                                     Others
                                                                              under the equity   comprehensiv              announced  to       the current                                  nt
                                                                                                               equity
                                                                              method             e income                  issue                 period
Wuhan Lan Ning Energy
                                   6,132,033.33                                     211,819.69                                                                          6,343,853.02
Technology Co., Ltd.
Wuhan Skaff Power Control
                                   6,156,369.01                                    -913,484.47                                                                          5,242,884.54
Equipment Co., Ltd
Panasonic cold machine system
                                  23,400,297.51                                   1,068,645.98                                                                         24,468,943.49
(Dalian) co., LTD
          subtotal              1,292,912,901.49   212,150,000.00                48,681,040.63                               45,841,499.53                           1,507,902,442.59

            Total               1,292,912,901.49   212,150,000.00                48,681,040.63                               45,841,499.53                           1,507,902,442.59


        1.The resolution of the 11th meeting of the 7th Board of Directors of the company agreed the company and Dalian Bingshan Group Co., Ltd. to jointly invest in
  the construction of the joint venture Dalian Bingshan Group Management Consulting Co., Ltd., the company invested RMB 49 million in cash, holding 49% stake. As
  of June 30, 2017, the company actually invested RMB 39.2 million in cash, holding 49% stake, Dalian Bingshan Group Management Consulting Co., Ltd. has
  officially started operating.

       2.The resolution of the 12th meeting of the 7th Board of Directors of the company agreed the company to accept the transfer of 49% stake of Dalian Bingshan Metal
  Technology Co., Ltd. (“Bingshan Metal Technology”) held by Dalian Bingshan Group Co., Ltd. The price of this equity stake assigning was based on the assessed value
  of net assets of Bingshan Metal Technology issued by the third-party evaluation agency by taking December 31, 2016 as the base date, the price was determined to be
  RMB 172,950,000 after negotiated by both parties. As of June 30, 2017, the above equity transaction has been completed and the company hold 49% equity stake of
  Bingshan Metal Technology.




                                                                                                                                                                                  54
                                             Dalian Refrigeration Co., Ltd. 2017 Semiannual Report


12. Investment property

(1)Investment property details
                                                                             Construction
                    Items                   Buildings      Land-use-rights                      Total
                                                                              in progress
1. Original value
(1)Beginning balance                       30,031,254.35                                     30,031,254.35
(2)Current year addition                  144,777,219.55    24,391,511.82                   169,168,731.37
     Outsourcing
     Transferred from Inventories\Fixed
   asset-original cost\Construction  in
   progress
     Enterprise merger increase

     Shareholders invest
     Transferred from other               144,777,219.55    24,391,511.82                   169,168,731.37
(3)Current year disposal
     disposal
     Transferred to other
(4)Ending balance                         174,808,473.90    24,391,511.82                   199,199,985.72
2.Accumulated depreciation
(1)Beginning balance                        1,425,601.41                                      1,425,601.41
(2)Current year addition                   99,704,194.74     9,634,647.18                   109,338,841.92
   provision or amortization                1,046,304.82       121,957.56                     1,168,262.38
   Enterprise merger increase
   Transferred from other                  98,657,889.92     9,512,689.62                   108,170,579.54
(3)Current year disposal
   disposal
   Transferred to other
(4)Ending balance
3..Provision for impairment
(1)Beginning balance
(2)Current year addition
   provision or amortization
   Enterprise merger increase
   Transferred from other
(3)Current year disposal
   disposal
   Transferred to other
(4)Ending balance                         101,129,796.15     9,634,647.18                   110,764,443.33
4.Book value
(1)Ending book value                       73,678,677.75    14,756,864.64                    88,435,542.39




                                                                                                        55
                                                    Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

                                                                                     Construction
                     Items                         Buildings      Land-use-rights                          Total
                                                                                      in progress
(2)Beginning book value                           28,605,652.94                                         28,605,652.94

(2) Investment property without owner’s certificates

                                 Items                                 Book value                Reasons
# 6 workshop building on No. 106 Liaohe East Rd, Dalian
                                                                        28,239,511.34 Final accounts uncompleted
Economic and Technology Development Zone
                                 Total                                  28,239,511.34

(3) Explanation of investment property
The company signed rental contract with MHI Bingshan Refrigeration (Dalian) Co.,Ltd., and rent #
6 workshop building located on No. 106 Liaohe East Rd, Dalian Economic and Technology
Development Zone to MHI Bingshan Refrigeration (Dalian) Co., Ltd. The rental area is 15,259.04
square meters, and the rent term till 16th July, 2029. The annual rent fee is RMB 4.2 million after
considering the time value of money.
On June 22, 2017, the company has signed a land and house lease contract with Dalian Bingshan
Wisdom Park Co., Ltd. to rent out the whole land and house of the company’s old plant locating at
No. 888, Southwest Road, Shahekou District, Dalian City to Dalian Bingshan Wisdom Park Co.,
Ltd., with rental land area of 167,165.61 square meters and housing area of 105,652.43 square
meters, the lease term is from April 1, 2017 to December 31, 2036. The total rent for the previous
three years is RMB 20.34 million, of which the rent in 2017 is RMB 4.62 million, the rent in 2018 is
RMB 7.86 million, and the rent in 2019 is RMB 7.86 million. From January 2020, the two parties
will negotiate and determine the rent of the next three years according to the local market changes.
The closing balance of the company's investment real estate increased by 209.15% compared with
the opening balance, mainly due to the transferred-in leased fixed assets and intangible assets in the
current period.

13. Fixed assets

(1) Fixed assets details
                                                                                           Other
             Items                 Buildings          Machinery         Vehicles                               Total
                                                                                         equipments
1. Original value
(1)Beginning balance             451,766,766.84     515,351,153.65   23,073,454.57      48,512,512.27     1,038,703,887.33
(2)Current year addition         263,825,468.53      33,795,270.38    1,053,512.86        862,590.72        299,536,842.49
  Purchased                                           1,761,538.22    1,053,512.86        708,121.09          3,523,172.17
  Transferred          from
                                 263,825,468.53      32,033,732.16                        154,469.63        296,013,670.32
  Construction in progress
  Enterprises merger
  Shareholders investment
  Leased in from financing
  Other transferred in
(3)Current year reduction        144,777,219.55      10,206,010.56    2,338,456.00        759,471.26        158,081,157.37
  Disposal                                           10,206,010.56    2,338,456.00        759,471.26         13,303,937.82
  Leased       out        from
  financing
  Other transferred out          144,777,219.55                                                             144,777,219.55
(4)Ending balance                570,815,015.82     538,940,413.47   21,788,511.43      48,615,631.73     1,180,159,572.45
2.Accumulated depreciation




                                                                                                                   56
                                                      Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

                                                                                          Other
              Items                    Buildings       Machinery         Vehicles                                Total
                                                                                        equipments
(1)Beginning balance                 155,865,048.40   320,193,873.95   14,385,210.12   36,696,181.24      527,140,313.71
(2)Current year addition               5,422,525.25    12,989,084.75     899,090.56     1,368,881.01       20,679,581.57
   Provision                           5,422,525.25    12,989,084.75     899,090.56     1,368,881.01       20,679,581.57
   Enterprises           merger
   increased
   Other transferred in
(3)Current year disposal              98,657,889.92     9,834,024.33    1,903,661.01      685,496.64      111,081,071.90
   Disposal                                             9,834,024.33    1,903,661.01      685,496.64       12,423,181.98
   Leased        out          from
   financing
  Other transferred out               98,657,889.92                                                        98,657,889.92
  (4)Ending balance                   62,629,683.73   323,348,934.37   13,380,639.67   37,379,565.61      436,738,823.38
3..Provision for impairment
(1)Beginning balance                                     555,027.75                                              555,027.75
(2)Current year addition
   Withdrew
   Enterprises           merger
   increase
   Other transferred in
(3)Current year disposal
   Disposal
   Leased        out          from
   financing
  Other transferred out
(4)Ending balance                                        555,027.75                                              555,027.75
4.Net Book value
(1)Ending book value                 508,185,332.09   215,036,451.35    8,407,871.76   11,236,066.12      742,865,721.32
(2)Beginning book value              295,901,718.44   194,602,251.95    8,688,244.45   11,816,331.03      511,008,545.87

(2)There were no idle fixed assets during the current period.
(3) Fixed assets without owner’s certificates

                      Items                            Book value                            Reasons
  Buildings                                                   106,604,362.94        Final accounts uncompleted

                      Total                                   106,604,362.94
(4) Wuhan New World Refrigeration Industrial Co., Ltd. borrowed RMB45,000,000 from bank and
mortgaged with its buildings, machinery and land-use-rights . Please refer to the note V.18.
The closing balance of the company's fixed assets increased by 45.37% compared with the opening
balance, mainly due to the construction of some new plants in the current period shifting from the
construction in progress to the fixed assets.
14. Project in construction
(1) Details




                                                                                                                   57
                                                                Dalian Refrigeration Co., Ltd. 2017 Semiannual Report



                                                                               Transferred    Other
                                                             Increased                                                                     Percenta
                                                                                into fixed  decrease
                                      Balance of               during                                   Balance of            Sources of    ge of
  Items              Budget                                                   assets during d during
                                      31-12-2016              current                                   30-06-2017              funds      complet
                                                                                 current     current
                                                               period                                                                        ion
                                                                                  period     period
                                                                                                                              Internally
Buildings                                                                                                                                    95.15%
                     351,685,931.96     250,913,095.82        46,929,387.56     263,825,468.53              34,017,014.85     generated
renovation
                                                                                                                                funds
                                                                                                                              Internally
Machinery            128,974,211.93      70,072,395.96        34,861,151.10      32,033,732.16              72,899,814.90     generated      87.68%

                                                                                                                                funds
                                                                                                                              Internally
Other                  1,104,701.13        661,185.00            65,261.94         154,469.63                 571,977.31      generated      65.76%
Equipments
                                                                                                                                funds
  Total              481,764,845.02     321,646,676.78        81,855,800.60     296,013,670.32             107,488,807.06


    (2) There was no provision for impairment needed withdrawn.
    (3) Construction in process decreased 66.58% over that of last Period, mainly due to the
    construction of some new plants in the current period shifting from the construction in progress to
    the fixed assets.

    15. Intangible assets
    (1) Intangible assets details

                      Items                       Land-use-rights             Non-Patents         Others                    Total
    1. Original value

    (1)Beginning balance                           183,963,902.62               515,224.41       15,180,450.31       199,659,577.34

    (2)Current year addition
        Purchase                                                                                  1,486,182.97          1,486,182.97
        Internal          research        and
                                                                                                  1,486,182.97          1,486,182.97
    development
          Enterprises merger increase
          Shareholders invest
          Other transferred in
    (3)Current year disposal                         24,391,511.82                                 625,000.00         25,016,511.82
          Disposal                                                                                 625,000.00               625,000.00
          Other transferred out                      24,391,511.82                                                    24,391,511.82

    (4)Ending balance                              159,572,390.80               515,224.41       16,041,633.28       176,129,248.49

    2. Amortization
    (1)Beginning balance                             37,791,708.77              515,224.41        6,638,431.64        44,945,364.82

    (2)Current year addition                             1,702,920.02                              720,442.52           2,423,362.54

          Provision                                      1,702,920.02                              720,442.52           2,423,362.54

          Enterprises merger increase
          Other transferred in
    (3)Current year disposal                             9,512,689.62                              250,815.00           9,763,504.62
          Disposal                                                                                 250,815.00               250,815.00




                                                                                                                                    58
                                                         Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

                     Items                    Land-use-rights      Non-Patents             Others                Total
          Other transferred out                  9,512,689.62                                                 9,512,689.62
     (4)Ending balance                          29,981,939.17          515,224.41         7,108,059.16       37,605,222.74
     3..Provision for impairment
     (1)Beginning balance
     (2)Current year addition
       Withdraw
       Enterprises merger increase
       Other transferred in
     (3)Current year disposal
       Disposal
       Other transferred out
     (4)Ending balance
     4.Net book value
     (1)Ending book value                     129,590,451.63                              8,933,574.12      138,524,025.75
     (2)Beginning book value                  146,172,193.85                              8,542,018.67      154,714,212.52

     (2) There were no intangible assets increased by internal research and development.
     16. Goodwill
     (1) The original value of the book
                                                                Increased during         Decreased during
              Items                        31-12-2016                                                              30-06-2017
                                                                 current period           current period
Dalian Universe Thermal Technology
                                              1,440,347.92                                                           1,440,347.92
              Co., Ltd.
 Dalian Bingshan Security Leisure
                                                310,451.57                                                               310,451.57
  Industrial Engineering Co., Ltd
               Total                          1,750,799.49                                                           1,750,799.49

     (2) Preparation for the impairment of Goodwill

     In the year 2015, the book value of equity investment of Dalian Niweisi LengNuan Technology Co., Ltd exceeds the
     fair value of the proportion of the acquired company’s identifiable net asset. The difference between the book value
     of equity investment of 48, 287,589.78 Yuan and the identifiable net asset’s fair value of Dalian Sanyo High-efficient
     Refrigeration System Co., Ltd of 46,847,241.86 Yuan on the acquisition date of July 31st 2015 is recognized as
     goodwill of 1,440,347.92 Yuan on the group consolidated financial report at the end of the year.

     In the year 2016, the company purchases shares of Dalian Security Leisure Industry Co., Ltd and gains control. The
     transferred price is based on the net asset of Dalian Security Leisure Industry Co., Ltd on June 30th 2016. Negotiated
     with Dalian Security Leisure Industry Co., Ltd’s shareholder Security Water Project (China) Limited Company, the
     transfer price is the combination cost on the purchasing date which is 5,359,548.42 Yuan, the fair value of proportion
     of Dalian Security Leisure Industry Company’s identifiable net asset is 5,049,096.85 Yuan on the purchasing day,
     therefore, goodwill is 310,451.57Yuan on the purchasing date.

     The book value of goodwill from business combination of Dalian Niweisi LengNuan Technology Co., Ltd and
     Dalian Security Leisure Industry Co., Ltd which are not under same control shall be allocated into the relevant asset
     group using the reasonable method since acquisition date and taken impairment test on relevant asset group where
     the goodwill is included. The obvious impairment indication of the goodwill hasn’t been found. Thus no goodwill
     impairment provision has been made.

     17. Long-term deferred expenses


                                                                                                                           59
                                                      Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

                                                            Increased           Amortized
                                                                                                      Other
               Items                    31-12-2016        during current       during current                      30-06-2017
                                                                                                     decrease
                                                              period               period

Employee’s dormitory use right        2,427,605.34                                 69,239.16                      2,358,366.18

Renovation and rebuilding                681,294.43            94,339.62           396,089.84                       379,544.21

royalty                                                     1,867,125.00            93,356.25                      1,773,768.75

House Rental                             850,320.00                                 53,145.00                       797,175.00

The Membership fee                       489,500.00                                     8,250.00                    481,250.00

               Total                   4,448,719.77         1,961,464.62           620,080.25                      5,790,104.14

The closing balance of the company's long-term unamortized expenses increased by 30.15%
compared with the opening balance, mainly due to the newly increased unamortized royalties in the
current period.

18. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets had not been off-set

                                                  30-06-2017                                       31-12-2016
               Items                     Deductible                                     Deductible
                                         temporary         Deferred tax assets          temporary         Deferred tax assets
                                         difference                                     difference
Provision for assets impairment          126,080,465.79         26,407,039.59           124,545,784.82           25,188,239.74

Equity incentive expenses                 23,346,094.00           3,501,914.10           17,103,388.00             2,565,508.20

               Total                     149,426,559.79         29,908,953.69           141,649,172.82           27,753,747.94

(2) Deferred liabilities tax assets had not been off-set

                                                  30-06-2017                                       31-12-2016
               Items                  Taxable temporary       Deferred tax        Taxable temporary             Deferred tax
                                         differences           liabilities           differences                 liabilities
Changes in fair value of
                                         530,123,909.70         79,518,586.46           504,557,879.67           75,683,681.95
available for sale financial assets
               Total                     530,123,909.70         79,518,586.46           504,557,879.67           75,683,681.95



(3) Shown to offset the net after the deferred income tax assets and liabilities

                            Items                                          30-06-2017                     31-12-2016
Deferred liabilities tax assets                                                29,908,953.69                     27,753,747.94

Deferred income tax liabilities                                                79,518,586.46                     75,683,681.95


(4) Unconfirmed deferred income tax assets report

                            Items                                          30-06-2017                     31-12-2016
Deductable temporary difference                                                48,871,511.03                     44,617,762.47



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                                           Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

                           Items                            30-06-2017               31-12-2016

Deductable losses                                               48,935,108.44                48,249,177.63

Total                                                           97,806,619.47                92,866,940.10


(5) Deductible losses of unrecognized deferred income tax assets will due the following years
                  Items               30-06-2017            31-12-2016                Notes
2018                                      2,044,154.14          2,044,154.14
2019                                      1,843,026.73          1,843,026.73
2020                                     11,863,347.41         11,863,347.41
2021                                     31,570,033.14         32,498,649.35
2022                                      1,614,547.02
                  Total                  48,935,108.44         48,249,177.63            --

19. Short-term loans

              Terms of loans               30-06-2017                           31-12-2016

Mortgage loan                                       45,000,000.00                            45,000,000.00

Credit loan                                        170,319,700.00

                  Total                            215,319,700.00                            45,000,000.00

(1) Wuhan New World Refrigeration Industrial Co., Ltd. borrowed short-term loan RMB45,000,000
from bank and mortgaged with its buildings, machinery and land-use-rights. (2)Short-term loans
increased 378.49% over that of last Period, refers to investment for the Credit loan.
20. Notes payable

                 Items                     30-06-2017                           31-12-2016

Trade acceptance notes                              13,413,061.15                              7,834,155.50

Bank acceptance notes                              168,008,145.61                        186,728,579.29

                 Total                             181,421,206.76                        194,562,734.79

21. Accounts payable

                  Items                     30-06-2017                          31-12-2016

Payable for materials                               770,312,387.48                      654,656,986.02

Payable for projects                                106,332,889.74                      199,503,352.11

Payable for equipments                                5,294,490.41                           3,565,090.35

                  Total                             881,939,767.63                      857,725,428.48

    (2) Accounts payable with age over 1 year




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                                                                 Dalian Refrigeration Co., Ltd. 2017 Semiannual Report



                          Name of company                            Closing Balance           Reason of unpaid or not carried forward
                                                                                             Project is uncompleted contract is not
Wuhan Kaixing Development Co., LTD                                      10,940,816.75
                                                                                             finished
                                                                                             Project is uncompleted contract is not
Heilongjiang Longleng Technology Co., LTD                                   9,413,290.00
                                                                                             finished
                                                                                             Project is uncompleted contract is not
Binzhou Shanfu Refrigeration Engineering Co., LTD                           6,566,526.22
                                                                                             finished
                                                                                             Project is      uncompleted       contract    is   not
Wuhan Zhongwei explosive control system Co.,Ltd                             5,791,095.00
                                                                                             finished
                                                                                             Project is      uncompleted       contract    is   not
BAC(Dalian)Co.,Ltd                                                        5,250,040.00
                                                                                             finished
                                                                                             Project is      uncompleted       contract    is   not
Total                                                                   37,961,767.97        finished

        22. Accounts received in advance
        (1) Details

                             Items                                30-06-2017                                 31-12-2016
        Advances on sales                                                   143,969,111.21                                150,098,892.29

                             Total                                          143,969,111.21                                150,098,892.29

        (2) Accounts received in advance aged over 1 year

                                     Items                             30-06-2017                                 Reasons
  Jiangsu Ruixiang Chemical Co., Ltd.                                   2,023,581.40         Unsettled contract payments on sets projects

                                     Total                              2,023,581.40


        23.Payroll payable
    (1) Details
                                                                      Increased during        Decreased during
                          Items                   31-12-2016                                                                30-06-2017
                                                                       current period          current period
        Short-term salary                          50,256,392.86        142,125,397.17              165,187,800.52           27,193,989.51
        Departure      welfare-defined
                                                                            18,822,599.61            18,822,599.61
        contribution plans
        Termination benefits                                                   41,091.97                 41,091.97
                          Total                    50,256,392.86        160,989,088.75              184,051,492.10           27,193,989.51

        (2)Short-term salary
                                                                                 Increased during       Decreased during
                                  Items                        31-12-2016                                                       30-06-2017
                                                                                  current period         current period
        1.Wages and salaries, bonuses, allowances and
                                                               33,496,485.39       112,058,251.53         133,214,933.87        12,339,803.05
        subsidies

        2.Staff welfare                                        14,173,682.87          4,769,939.82           6,411,289.76       12,532,332.93


        3.Social insurance                                                            8,963,398.63           8,963,398.63


        Including: ①Medical insurance                                               7,069,743.07           7,069,743.07


                    ② Work-related injury insurance                                   985,144.14             985,144.14


                   ③Materiel insurance                                                908,511.42             908,511.42




                                                                                                                                           62
                                                        Dalian Refrigeration Co., Ltd. 2017 Semiannual Report


          ④Housing subsidies


4. Housing funds                                       1,575,760.60        14,340,461.54         14,415,946.26        1,500,275.88


5.Labor union fund and employee education fee          1,010,464.00         1,993,345.65          2,182,232.00          821,577.65


6. Non-currency welfare


                       Total                          50,256,392.86       142,125,397.17        165,187,800.52      27,193,989.51

(3) Defined contribution plans
                                                             Increased during       Decreased during
                   Items                 31-12-2016                                                              30-06-2017
                                                              current period         current period
      Basic retirement pension                                  17,198,807.22              17,198,807.22
      Unemployment
                                                                      574,821.01             574,821.01
      insurance
      Enterprise annuity                                          1,048,971.38              1,048,971.38
                   Total                                        18,822,599.61              18,822,599.61

The company took part in the government’s basic retirement pension and unemployment insurance
according to the related legislation, and paid the insurance expenses every month and recorded as
expenses or costs of assets. There was no other obligation of payment.
There was no amount delay paid at the end of the current year.The ending balance of wages payable
decreased 45.89% over that of period-begin, mainly because the year-end bonus for year of 2016 are
paid in the Period.

24. Taxes payable

                               Items                                     30-06-2017                        31-12-2016
Value-added tax                                                              6,358,777.78                          7,478,219.16

Business tax
Enterprise income tax                                                        6,589,699.75                          7,007,154.72

Individual income tax                                                         578,359.76                             494,374.71

City maintenance and construction tax                                         485,819.98                             520,432.62

Property tax                                                                  893,491.20                             542,956.99

Land use tax                                                                  553,224.98                             553,224.98

Education surtax                                                              337,439.59                             371,260.24

Local education surtax
Water project fund/River route maintenance fee                                      323.58                         1,131,727.59

Safeguard fund for disables                                                         460.00                                580.00

Non-resident enterprise income tax                                            707,030.62

Stamp duty                                                                    103,878.04                             305,158.47

                               Total                                       16,608,505.28                          18,405,089.48

25. Dividend payable

      Name of investors                    30-06-2017                    31-12-2016                         Reasons

Ordinary share dividend                         863,516.60                         863,516.60




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                                                          Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

                Total                                863,516.60                       863,516.60

  26. Other accounts payable
  (1) Details

                           Items                                30-06-2017                          31-12-2016
  Obligation of restricted shares buy-back                            67,615,856.00                             67,615,856.00
  Loan from non-financial institutes                                   5,640,000.00                              6,700,000.00
  Cash pledge and security deposit                                     9,455,099.21                              8,601,269.21
  Apply for reimbursement and unpaid                                  14,250,164.16                             17,087,595.92
  Cash from related parties                                           92,261,255.10                                791,951.65
  Receipts under custody                                               8,738,214.01                             12,237,893.26
  Others                                                                 373,781.00                              2,286,168.76
                           Total                                    198,334,369.48                             115,320,734.80


  (2) Major amount aging over 1 year
           Name of investors                    30-06-2017                                Unpaid reason

Restricted share buy back                       16,930,200.00     Not reach the return condition of contract

                 Total                          16,930,200.00
  The closing balance of the company’s other payables increased by 71.99% compared with the
  opening balance, mainly because the equity transferred money that the company should pay to the
  related parties in the current period has not reached the payment period.
  27. Long-term loans
  (1)Details
                           Items                                      30-06-2017                       31-12-2016
    Guarantee       loan                                                       160,000,000.00
    Total                                                                      160,000,000.00

        Guokaifazhan fund give support to the company’s intelligent and green equipment of cold
  chain and service industry base project and provide special fund to the company’s holding
  shareholder, Bingshan Group. The fund is 0.16 billion Yuan with 10year’s expiration at 1.2% rate.
  Once the fund arrives, Bingshan Group will give it to the company at the same rate of 1.2% in lump
  sum. The above fund needed to be warranted by the company. The guarantee seems to be given
  for the holding shareholder in the form, but it is for the company itself in nature.
  28.Deferred revenue
                                                       Increased
                                                                         Decreased during
           Items                   31-12-2016        during current                                30-06-2017         Reasons
                                                                          current period
                                                         period
 Associated with assets            52,906,670.77      31,000,000.00             832,836.00         83,073,834.77
 Associated with earnings           4,489,948.23                              4,489,948.23
            Total                  57,396,619.00      31,000,000.00           5,322,784.23         83,073,834.77         --

  Subsidy from government




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                                                            Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

                                                                   Converted to
                                                 Increased
                                                                   non-business         Other
         Liabilities           31-12-2016      during current                                        30-06-2017          Notes
                                                                 incomes during        decrease
                                                   period
                                                                   current period
     Subsidy fund for                                                                                                  Associated
     highly effective
                                3,152,624.00                           275,836.00                    2,876,788.00        with the
     heat pump and
     related system                                                                                                         asset
     Contribution      to                                                                                              Associated
     subsidiary
                               44,560,000.00                           557,000.00                   44,003,000.00        with the
     company
     relocation                                                                                                             asset
     Environmental
     saving      energy
     efficient                                                                                                         Associated
     refrigeration
                                                 31,000,000.00                                      31,000,000.00        with the
     compressor
     technology                                                                                                             asset
     industrialization
     project
     Application       of
     NH3 and CO2
     instead of R22                                                                                                    Associated
     screw
                                5,194,046.77                                                         5,194,046.77        with the
     refrigerating
     machine                                                                                                                asset
     combined
     condensing unit
     Application       of
     NH3 and CO2
     instead of R22
     screw                                                                                                             Associated
                                4,489,948.23                          4,489,948.23
     refrigerating                                                                                                    with earning
     machine
     combined
     condensing uni
            Total              57,396,619.00     31,000,000.00        5,322,784.23                  83,073,834.77

      The closing balance of the Deferred revenue increased by 44.74% compared with the opening
      balance, mainly because the Subsidy from government increased.

      29.Share capitals

                                                               Shares                                                    Shares
                                                          (before change)                                         (after change)
                       items                                                              Changes
                                                        number       proportion                                 number             proportion
I. Non-circulating share capital with restricted
trade conditions                                       82,340,713         13.46%          -55,246,643            27,094,070             3.16%
Executive lock stock                                      154,117          0.02%           +2,507,853             2,661,970             0.31%
Restricted stock after starting                        58,645,096          9.59%          -58,645,096                     0                 0
Equity incentive restricted stock                      23,541,500          3.85%            +890,600             24,432,100             2.85%
II. Circulating share capital                         529,435,845         86.54%         +299,957,266           829,393,111            96.84%
1. Domestically listed
ordinary shares                                       356,935,845         58.34%         +230,957,266           587,893,111            68.64%
2. Domestically listed foreign shares                 172,500,000         28.20%          +69,000,000           241,500,000            28.20%
III. Total shares                                     611,776,558          100%           244,710,623           856,487,181             100%



      30 .Capital surpluses
                                                       Increased during current      Decreased during current
              Items                 31-12-2016                                                                       30-06-2017
                                                                period                       period



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                                                     Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

Capital premium             968,436,962.45                                                 300,860,623.00       667,576,339.45
Other          capital
                             84,249,811.80                   6,242,706.00                                        90,492,517.80
surplus
       Total              1,052,686,774.25                   6,242,706.00                  300,860,623.00       758,068,857.25
Share premium decreased because the company 2016 annual equity apportion, which increased 4
shares by every 10 shares of capital reserve RMB 244,710,623.00,refer to note VI.29 share capital
for details, others is the adjustment of Business combination under the same control.
Other capital reserve is the expense for share incentive plan.
31.Treasury stock
                                                      Increased during          Decreased during
             Items               31-12-2016                                                               30-06-2017
                                                       current period            current period
 Implementation of equity
                                 67,615,856.00                                                            67,615,856.00
 incentive to buy back
 Total                           67,615,856.00                                                            67,615,856.00

The company implements restricted share incentive plan and recognizes buy-back obligation as liability.
At the year end, treasure stock is recognized based on the numbers of restricted share in the vesting
period and buy back price agreed in the share incentive plan.

32. Other comprehensive income

                                                                      2017.01-06
                                              Amount for                                 After-tax
          Items            31-12-2016          the period            Less:income        attribute to             30-06-2016
                                                                *                                          **
                                             before income               tax             the     parent
                                                   tax                                   company
I.Later          can’t
reclassified       into
profit and loss of
other
comprehensive
income
II. Later reclassified
into profit and loss
of other                   431,639,323.52      45,079,646.64           23,612,187.15      21,467,459.49           453,106,783.01
comprehensive
income
1. Later reclassified
into profit and loss of
other comprehensive
income of long term          2,765,125.85                                   263,666.08      -263,666.08             2,501,459.77
investments
accounting by equity
method
2. Changes in fair
value recognized in
gains and losses of        428,874,197.67      45,079,646.64           23,348,521.07      21,731,125.57           450,605,323.24
the available-for-sale
financial assets
3. Foreign currency
translation
differences          of
financial statements
          Total            431,639,323.52      45,079,646.64           23,612,187.15      21,467,459.49           453,106,783.01

*Less:Previously recognized in profit or loss in other comprehensive income
**After-tax attribute to minority shareholder

33. Special reserve




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                                                                           Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

                                                                                       Increased            Decreased
                                  Items                          31-12-2016          during current       during current         30-06-2017
                                                                                          year                 year
                 Safety production expenses                                             1,008,404.87         1,008,404.87
                                  Total                                                 1,008,404.87         1,008,404.87



                 34. Surplus reserves
                                                                                    Increased during        Decreased during
                                Items                         31-12-2016                                                             30-06-2017
                                                                                     current period          current period

                 Statutory surplus reserves                   299,882,056.06                                                       299,882,056.06

                 Discretionary surplus      reserve           320,696,791.46             29,208,229.69                             349,905,021.15

                                Total                         620,578,847.52             29,208,229.69                             649,787,077.21

                 The increase of the surplus reserves were because the other reserved capital RMB29.208
                 million-yuan was withdrawn on the basis of 20% of the company’s net profit of 2016 according to
                 the resolution of the General Meeting of Shareholders of year 2016.
                 35. Retained earnings

                                                Items                                                  30-06-2017                30-06-2016

Retained earnings at the end of prior year                                                            652,022,101.57                525,925,066.25

Add: Changes in accounting policies                                                                                                   19,688,488.45

At beginning of the year after retrospective adjustment                                               652,022,101.57                545,613,554.70

Add: Net profit of the current period                                                                  98,260,163.09                  70,632,718.91

Less: Appropriation of statutory surplus reserves                                                      29,208,229.69                  25,204,992.51

Appropriation of    discretionary surplus reserve

Appropriation of employee’s welfare and bonus fund in foreign invested company

Cash dividends

Dividends payable for common shares                                                                    61,177,655.80                  36,016,497.50

Retained earnings at the end of the current period                                                    659,896,379.17                555,024,783.60

                 36. Total operating income and operating cost
                 (1) Total operating income and cost

                                                                 2017-01-06                                         2016-01-06
                         Items
                                                        Income                   Cost                   Income                     Cost
                 Key business                       987,663,610.92             810,698,503.30          823,094,880.95            664,134,841.00
                 Other business                         14,715,106.58            6,583,401.75            7,779,118.70              4,129,943.49
                         Total                    1,002,378,717.50             817,281,905.05          830,873,999.65            668,264,784.49

                 37. Taxes and surcharges

                                        Items                                     2017.01-06                            2016.01-06
                 Business tax                                                                                                    1,586,176.90




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                                              Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

City maintenance and construction tax                    1,351,623.47                  2,750,214.17
Education surtax                                           935,946.75                  1,956,366.97
Dike maintenance fee                                          356.44
Property tax                                             2,730,790.28
Land use tax                                             2,450,463.10
Stamp duty                                                 694,759.27
Vehicle and vessel tax                                      13,227.64
Others                                                                                       64,958.38
                    Total                                8,177,166.95                  6,357,716.42

38. Selling and distribution expenses

                         Items                       2017.01-06                 2016.01-06
Handle official business expenses                           5,090,769.03                8,471,788.53
Salaries and subsidies                                     14,995,121.09               12,327,952.20
Depreciation expenses                                         171,586.90                 209,599.16
Transportations expenses                                    8,587,934.72                5,813,487.27
Entertainment expenses                                      3,460,760.50                2,191,836.31
Traveling expenses                                          5,842,912.55                9,026,118.33
Maintenance and repair expenses                             4,104,855.06                3,160,120.03
Advertisement and bids expenses                               974,753.15                 479,824.80
Others                                                        625,718.28                 671,149.94
                         Total                             43,854,411.28               42,351,876.57

39. Administrative expenses

                         Items                       2017.01-06                 2016.01-06
Handle official business expenses                           8,006,866.58                7,146,899.08
Salaries and subsidies                                     65,086,729.83               60,828,792.46
Depreciation expenses                                       4,057,494.71                4,619,430.91
Transportations expenses                                            0.00                 149,474.47
Entertainment expenses                                      1,596,655.13                1,618,368.71
Traveling expenses                                          4,429,526.62                5,052,846.07
Maintenance and repair expenses                             3,083,226.59                2,436,829.51
Advertisement expenses                                        270,057.65                     97,363.40
Other taxes and fees                                          165,543.62                6,302,663.17
Insurance expenses                                            520,621.31                 529,161.15
Research and development expenses                          13,622,171.89               12,447,488.02
Amortization of long term assets                            2,446,577.27                2,460,670.57
Design consultant and test service expenses                 3,321,476.03                2,599,058.70
Safety production fees                                      1,613,203.82                1,218,456.35
Others                                                      1,346,672.83                 643,288.90
                         Total                            109,566,823.88              108,150,791.47

40. Financial expenses

                         Items                       2017.01-06                 2016.01-06
Interest expenses                                           3,373,803.53                3,530,211.72
Less:Interest   income                                      1,290,291.01                1,491,672.49




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                                                    Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

Losses on exchange(Less: Gain on exchange)                                -164,598.81                     -1,344,743.50
Other expenses                                                           1,075,814.23                       838,037.88
                          Total                                          2,994,727.94                      1,531,833.61
The company's current financial expenses increased by 95.50% compared with the previous period,
mainly due to the increase in exchange losses in the current period.

41. Impairment losses
                                    Items                                          2017.01-06           2016.01-06
Provision for bad debts                                                              10,239,188.82       11,009,110.70
Provision for obsolete inventories
Provision for the impairment of available-for-sale financial assets
Provision for the impairment of held to maturity investments
Provision for the impairment of long-term equity investments
Provision for the impairment of investing property
Provision for the impairment of fixed assets
Provision for the impairment of construction materials
Provision for the impairment of construction in progress
Provision for the impairment of bearer biological assets
Provision for the impairment of oil assets
Provision for the impairment of intangible assets
Provision for the impairment of goodwill
Provision for the impairment of other assets
                                  Total                                              10,239,188.82        11,009,110.70

The Company's asset impairment loss in current period has an increase over the previous period,
mainly due to an increase in provision for bad debts of receivables in current period.
42. Gain/ (loss) from investment
(1) Details

                            Items                                     2017.01-06                     2016.01-06
Calculated by equity method                                               48,681,040.63                   59,987,593.85
Calculated by cost method
Gain from disposal long-term equity investment                               263,666.08
Gain from holding of financial assets available for sale                  11,463,569.05                   15,961,425.40
Gain from disposal financial assets available for sale                    27,467,019.93
                            Total                                         87,875,295.69                   75,949,019.25

43. Non-business incomes
(1)Details
                                                                                     The     amount     recorded    in
                  Items                      2017.01-06          2016.01-06          non-recurring gains and losses of
                                                                                     current period
Gain on the disposal of non-current
                                               143,329.77               64,284.56                           143,329.77
assets
Penalty and fine income                        329,371.34              188,975.90                           329,371.34
Subsidy fund from government
Deferred income
Government grants                             6,355,937.98            7,459,757.74                         5,523,101.98
Debts need not paid
Others                                            2,327.66              14,409.73                                 2,327.66



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                                                             Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

                      Total                        6,830,966.75          7,728,227.93                              5,998,130.75

      (2) Subsidy fund from government

                           Items                                    2017.01-06        2016.01-06          Explanations
Small and medium enterprises international market
development funds                                                     300,000.00                         Related to gain
Allowance for exporting from new &high technology zone
of Dalian                                                              22,000.00                         Related to gain
Dalian science and technology bureau                                   20,000.00                         Related to gain
Subsidy of   economic support policy                                   52,000.00          30,000.00      Related to gain
R22 replacement subsidy                                              4,489,948.23     5,533,711.00       Related to gain
Taxes refund                                                             1,115.75     1,063,210.74       Related to gain
subsidy of a new type of wall material for the west lake
                                                                      305,038.00                         Related to gain
district
Stabilization subsidy                                                 333,000.00                         Related to gain
Subsidy fund for highly effective heat pump and related
                                                                      275,836.00         275,836.00      Related to Asset
system
Contribution to subsidiary company relocation                         557,000.00         557,000.00      Related to Asset
                             Total                                   6,355,937.98     7,459,757.74

    44. Non-business expenses
                                                                                                The amount recorded in
                       Items                         2017.01-06          2016.01-06         non-recurring gains and losses of
                                                                                                     current period
    Loss on the disposal of non-current assets           15,476.77         189,436.67                                15,476.77

    Fines and penalties                                                          50.00

    Outward donation                                     10,000.00          60,000.00                                10,000.00

    Others                                               42,399.10          34,537.82                                42,399.10

                       Total                             67,875.87         284,024.49                                67,875.87
    The non-operation expenditure decreased76.10% over that of last period, mainly due to the decrease
    in losses of the Company's non-current assets disposal in current period.
    45. Income tax expenses
    (1) Details:

                     Items                                     2017.01-06                             2016.01-06
    Current income tax expense                                           8,316,752.04                          6,987,420.74
    Deferred income tax expense                                         -2,155,205.75                         -1,449,450.41
                    Total                                                6,161,546.29                          5,537,970.33

    (2) Adjustment process of accounting profit and income tax expense

                                         Items                                                        2017.01-06
    Total profits                                                                                             104,902,880.15
    Current income tax expense accounted by tax and relevant
                                                                                                               15,735,432.02
    regulations
    Influence of different tax rate suitable to subsidiary                                                         3,289,822.49
    Influence of income tax before adjustment                                                                      -227,549.47
    Influence of non taxable income                                                                           -13,076,044.64
    Influence of not deductable costs, expenses and losses                                                         -516,760.09
    Influence of deductable losses of deferred income tax assets



                                                                                                                            70
                                                    Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

                                     Items                                                2017.01-06
derecognized used in previous period
Influence of deductible temporary difference or deductible losses
                                                                                                        956,645.98
of deferred income tax assets derecognized in reporting period.
                              Income tax expenses                                                      6,161,546.29


46.Other comprehensive income

Refer to the note VI.32 other comprehensive income for details.
47. Relevant information about cash flow statement
(1) Other cash received relating to operating activities

                            Items                                   2017.01-06              2016.01-06
Government grants                                                       32,111,189.00            6,221,088.91
Received travel expense receivable                                       1,184,760.87            1,414,024.35
Deposit received                                                         9,873,997.27            5,013,079.16
Received amount paid on behalf of related companies                        142,350.94            1,060,540.84
interest   income                                                        2,035,021.82              918,887.36
Others                                                                   2,294,063.84            7,536,256.32
                            Total                                       47,641,383.74           22,163,876.94

(2) Other cash paid relating to operating activities

                    Items                               2017.01-06                        2016.01-06

Borrowing of travel expense                                         6,984,829.71                 5,315,059.64

Deposit paid                                                    13,346,261.60                   16,553,871.66

Expenditure                                                     55,759,234.64                   44,419,343.39

Bank handling charges                                               1,075,814.23                   838,037.88

Others                                                              1,402,529.43                 3,125,968.44

                    Total                                       78,568,669.61                   70,252,281.01

(3)    Cash receipts related to other financing activities


                     Items                                2017.01-06                        2016.01-06
Guarantee money took back                                           21,576,815.56                 20,665,689.93

The dividend of odd lots                                                                                 45,137.75
                     Total                                          21,576,815.56                 20,710,827.68

(4) Other cash paid relating to financing activities

                     Items                                    2017.01-06                     2016.01-06
Interests on discount of bill acceptance
Guarantee money paid                                                      24,206,200.89         10,121,261.17
                     Total                                                24,206,200.89         10,121,261.17

48. Complementary information for consolidated cash flow statement
(1) The relationship between the net profit and the net cash flows from operating activities



                                                                                                                71
                                                       Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

                                       Items                                        2017.01-06        2016.01-06
1. Reconciliation from the net profit to the cash flows from operating
activities
Net profit                                                                          98,741,333.86     71,063,138.75
Add: Provisions for assets impairment                                               10,239,188.82     11,009,110.70
     Depreciation of fixed assets                                                   21,725,886.39     20,111,817.57
     Amortization of intangible assets                                                2,545,320.10     2,481,329.09
     Amortization of long-term deferred expenses                                       620,080.25        773,999.86
     Losses on disposal of fixed assets, intangible assets and other long-term
                                                                                      -143,329.77        -64,284.56
assets
     Losses on scrapping of fixed assets                                                15,476.77        189,436.67
     Losses on variation of fair value
     Finance expenses                                                                 4,049,571.32     2,809,336.10
     Investment losses                                                              -87,875,295.69   -75,949,019.25
     Decrease in deferred tax assets                                                 -2,155,205.75     -1,451,002.74
     Increase in deferred tax liabilities
     Decrease in inventory                                                          -63,392,514.70   -15,688,451.44
     Decrease in operating receivables                                              74,646,238.82     12,219,096.24
     Increase in operating payables                                                -213,836,998.32   -83,039,729.88
     Others                                                                           6,242,706.00     4,266,684.00
                   Net cash flows from operating activities                        -148,577,541.90   -51,268,538.89
2. Investing and financing activities that do not involve cash receipts and
payments
     Conversion of debt into capital
     Convertible bonds to be expired within one year
     Fixed assets under finance lease
3. Net increase in cash and cash equivalents
     Cash at the end of the period                                                 691,238,822.98    255,381,841.47
     Less: Cash at the beginning of the period
     Plus: Cash equivalents at the end of the period
     Less: Cash equivalents at the beginning of the period
     Net increase in cash and cash equivalents                                     -248,795,325.48   679,769,831.26

(2) Cash and cash equivalents

                                     Items                                       2017.01-06          2016.01-06

1.Cash                                                                           442,443,497.50      691,238,822.98

     Including: cash on hand                                                          49,426.13           83,511.72

     Bank deposits that can be used for payment whenever necessary               442,394,071.37      935,068,161.01
    Other monetary capital that can be used for payment whenever
necessary
2.Cash equivalents

 Including: Bonds mature within        3 months

3.Balance of cash and cash equivalents at the end of the current period          442,443,497.50      691,238,822.98
 Including: Cash or cash equivalents which was restricted in use of the
Company and subsidiaries in the group




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                                             Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

49. The assets with the ownership or use right restricted

      Items             30-06-2017                                   Reasons
Monetary fund              26,606,200.89   Guarantee money
Notes Receivable           13,147,517.83   Pledge
Fixed assets               72,766,981.60   Mortgage Loan
Intangible assets          51,878,902.00   Mortgage Loan
      Total               164,399,602.32


50. Foreign currency monetary items
                             Ending balance of Original                        Ending balance of RMB
               Items                                         Exchange rate
                                     currency                                         equivalent
Monetary fund                                                                           19,765,862.99
Included: USD                               2,625,475.57              6.7744            17,786,021.70
          JPY                              30,719,929.00            0.060485             1,858,094.91
          EUR                                   3,752.54              7.7496                29,080.68
          GBP                                  10,512.99              8.8144                92,665.70
Accounts receivable                                                                        910,698.17

Included: GBP                                103,319.36               8.8144               910,698.17

Accounts payable                                                                           320,837.81

Included: GBP                                  36,399.28              8.8144               320,837.81



VIII. Changes of consolidation scope

This year, there are 2 more entities were included in the scope of consolidation, Dalian
Bingshan Engineering & Trading Co., Ltd.and Chengdu Bingshan Refrigeration
Engineering Co., Ltd.
On February 15, 2017, the company’ board of directors decided to accept the transfer of 76% equity
stake of Dalian Bingshan Engineering and Trading Co., Ltd., the company’s former associated
company, after the acceptance of this transfer, Dalian Bingshan Engineering and Trading Co., Ltd\.
became a wholly-owned subsidiary of the company. As of June 30, 2017, the above equity
transaction has been completed. Therefore, the company held 100% equity stake of Dalian Bingshan
Engineering and Trading Co., Ltd. when establishing the consolidated statements of current period.
As Dalian Bingshan Engineering and Trading Co., Ltd. is also a subsidiary of the parent company
Dalian Bingshan Group Co., Ltd., the company has merged the subsidiary Dalian Bingshan
Engineering and Trading Co., Ltd. by the same control in current period, when establishing the
consolidated balance sheet, adjusted the beginning data of relevant projects of consolidated balance
sheet, and also adjusted the comparable data of the corresponding period when establishing the
income statements and cash flow statements.
The Board of Directors of the company’s subsidiary Dalian Bingshan Group Engineering Co., Ltd.
decided Dalian Bingshan Group Engineering Co., Ltd. and Chengdu New World Refrigeration
Equipment Engineering Co., Ltd. jointly invest and build a joint venture Chengdu Bingshan
Refrigeration Engineering Co., Ltd., Dalian Bingshan Group Engineering Co., Ltd. invested RMB
5.1 million in cash, holding 51% stake. As of June 30, 2017, Chengdu Bingshan Refrigeration
Engineering Co., Ltd. has officially started operating.
For the specific information of entity change in the consolidation scope, see the notes of VII. The
Change of Scope of Consolidation and VIII. The Equity in Other Entities.
 IX. Equity in other entities


                                                                                                  73
                                                               Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

           1. Equity in subsidiary
           (1) The structure of the enterprise group
                                                                                                    Shareholding
                                                    Main
                                                                 Registered         Business            (%)                   Obtaining
              Name of subsidiaries                 business
                                                                  address            nature        Direc Indire                method
                                                   address
                                                                                                     t       ct
Dalian Bingshan Group Engineering Co., Ltd.           Dalian         Dalian        Installation        100                    Establish
Dalian Bingshan Group Sales Co., Ltd.                 Dalian         Dalian           Trading          100                    Establish
Dalian Bingshan Air-Conditioning Equipment
                                                      Dalian         Dalian     Manufacturing           70                    Establish
Co., Ltd.
Dalian Bingshan Guardian Automation Co.,
                                                      Dalian         Dalian     Manufacturing          100                    Establish
Ltd.
Dalian Bingshan Ryosetsu Quick Freezing
                                                      Dalian         Dalian     Manufacturing          100                    Establish
Equipment Co., Ltd.
Wuhan New World Refrigeration Industrial
                                                      Wuhan          Wuhan      Manufacturing          100                    Establish
Co., Ltd.
Bingshan Technical Service (Dalian ) Co., Ltd.        Dalian         Dalian           Services         100                    Establish
Dalian Xinminghua Electrical Technology
                                                      Dalian         Dalian        Electronic          100                     Merger
Co., Ltd
Dalian Universe Thermal Technology Co., Ltd           Dalian         Dalian     Manufacturing           55                     Merger
                                                                                                                               Business
Dalian Bingshan Engineering & Trading Co.,                                                                                   combination
                                                      Dalian         Dalian           Trading          100                     under the
Ltd.
                                                                                                                             same control
Chengdu Bingshan Refrigeration Engineering
                                                  Chengdu          Chengdu         Installation                       51      Establish
Co., Ltd.
Wuhan       New      World       Refrigeration
                                                      Wuhan          Wuhan         Installation                    100        Establish
Air-Conditioning Engineering l Co., Ltd.
Ningbo     Bingshan     Refrigeration      Air                                                                                Establish
                                                      Ningbo         Ningbo        Installation                       51
Conditioner Engineering Co., Ltd
Dalian Bingshan Security Leisure Industrial
                                                      Dalian         Dalian        Installation                    100         Merger
Engineering Co., Ltd

Shanghai Bingshan Technical Service Co., Ltd      Shanghai         Shanghai           Services                        51      Establish

           ①All the holding proportion in subsidiaries were the same with voting proportion;
           ②The company held over 50% voting proportion in subsidiaries;
           ③ The company could control these subsidiaries;
           (2) The company do not have Important Non-wholly-owned Subsidiary
           2. The transaction of the company with its owner’s equity share changed but still controlling
           the subsidiary None
           3. Equity in joint venture arrangement or associated enterprise
           (1)The important of joint ventures or affiliated companies

                                                           Main                                              Shareholding
                                                                         Registered         Business                               Accountin
     Name of joint ventures or affiliated companies       business                                                         Indir
                                                                          address            nature          Direct                g methods
                                                          address                                                           ect

    Affiliated companies:

                                                                                                                                     Equity
    Jiangsu Jingxue Freezing Equipment Co., Ltd.        Changzhou       Changzhou        Manufacturing       29.21
                                                                                                                                    method

    Dalian Fuji Bingshan Vending Machine Co.,                                                                                        Equity
                                                          Dalian          Dalian         Manufacturing        49
    Ltd.                                                                                                                            method



                                                                                                                                      74
                                                              Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

      Name of joint ventures or affiliated companies       Main        Registered        Business       Shareholding     Accountin
                                                          business      address           nature                         g methods
      Keinin-Grand Ocean Thermal Technology                                                                                Equity
                                                           Dalian        Dalian        Manufacturing     20
      (Dalian) Co., Ltd                                                                                                    method

           (2) The main financial information of affiliated companies

                                                                             30-06-2017/2017.01-06
                              Items                    Dalian Fuji Bingshan Vending       Panasonic Compressor (Dalian) Co.,
                                                             Machine Co., Ltd.                          Ltd
          Current assets                                              284,226,106.45                          1,528,671,190.72
          Non-current assets                                          177,888,323.10                            340,267,396.08
          Total assets                                                462,114,429.55                          1,868,938,586.80
          Current liabilities                                          91,173,704.99                            703,062,378.70
          Non-current liabilities                                       7,454,542.66
          Total liabilities                                            98,628,247.65                            703,062,378.70
          Minority interests
          Equity to the parent company                                363,486,181.90                          1,165,876,208.10
          Net assets calculated according to the
                                                                      178,108,229.13                            466,350,483.24
          shareholding proportions
          Goodwill
          Others                                                          226,689.30                             -1,627,777.47
          Adjusting events
          \
          —Unrealized profits of insider
          tradings
           —Employee’s welfare and bonus fund
           in foreign invested company
          Book value of equity investment of
          affiliated companies
          Fair value of equity investment with
                                                                      178,334,918.43                            464,722,705.77
          public offer
          Operating income                                            281,314,832.40                            740,643,397.50
          Net profit                                                   35,811,680.85                             50,867,695.06
          Net profit of discontinuing operation
          Other comprehensive income
          Total comprehensive income                                   35,811,680.85                             50,867,695.06
          The current dividends received from
          joint ventures

           Continued:
                                                                           31-12-2016/2016.01-06

                 Items                    Jiangsu JingXue      Dalian Fuji Bingshan       Keinin-Grand Ocean          Panasonic
                                             Insulation        Vending Machine Co.,       Thermal Technology       Compressor (Dalian)
                                         Technology Co.,Ltd            Ltd.                (Dalian) Co., Ltd           Co., Ltd
Current assets                               544,766,000.08           280,972,490.97           324,274,111.23          1,368,463,901.88
Non-current assets                           190,982,542.93           151,754,975.82            86,150,062.42           350,108,180.41
Total assets                                 735,748,543.01           432,727,466.79           410,424,173.65          1,718,572,082.29
Current liabilities                          349,389,866.24           101,199,564.85           145,662,104.80           495,843,809.25




                                                                                                                            75
                                                                  Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

                                                                               31-12-2016/2016.01-06

                    Items                    Jiangsu JingXue       Dalian Fuji Bingshan    Keinin-Grand Ocean         Panasonic
                                                Insulation         Vending Machine Co.,    Thermal Technology      Compressor (Dalian)
                                            Technology Co.,Ltd             Ltd.             (Dalian) Co., Ltd          Co., Ltd
Non-current liabilities                            3,963,050.80            3,853,400.89
Total liabilities                                353,352,917.04          105,052,965.74         145,662,104.80           495,843,809.25
Minority interests                                 432,553.72
Equity to the parent company                     381,963,072.25          327,674,501.05         264,762,068.85         1,222,728,273.04
Net assets calculated according to
                                                 111,579,052.67          160,560,505.51          52,952,413.79           489,091,309.22
the shareholding proportions
Goodwill                                          39,948,654.75
Others                                                                       226,689.30                                   -5,087,915.23
Adjusting events
—Unrealized profits of insider
tradings
 —Employee’s welfare and bonus
 fund in foreign invested company
Book value of equity investment of
                                                 151,527,707.42          160,787,194.81          52,952,413.79           484,003,393.99
affiliated companies
Fair value of equity investment with
                                                 177,659,054.68          285,818,272.42         396,083,571.29           835,196,599.56
public offer
Operating income                                  12,099,008.34           37,816,382.72          48,536,947.22            83,524,856.04
Net profit
Net    profit        of     discontinuing
operation
Other comprehensive income
Total comprehensive income                        12,099,008.34           37,816,382.72          48,536,947.22            83,524,856.04
The current dividends received
                                                   5,842,400.00                                  14,200,000.00
from joint ventures

             (4) Summary financial information of insignificant affiliated companies

                                 Items                            30-06-2017/2017.01-06           31-12-2016/2016.01-06
             Total book value of investment of
                                                                             864,844,818.39                      443,642,191.48
             affiliated companies
             The total of following items according to
                                                                                          --                                 --
             the shareholding proportions
                    Net profit                                                 53,747,796.11                      -6,506,223.17
                    Other comprehensive income
                    Total comprehensive income                                 53,747,796.11                      -6,506,223.17

              (5) No significant restrictions of the ability of joint venture or associated enterprise transfer funds
             to the company.
              (6)No excess loss of joint venture or associated enterprise.
              (7)No commitment related to joint venture or affiliated company needed disclose.
              (8)No Contingent liabilities related to joint venture or affiliated company needed disclose.
             X. The risk related financial instruments
             The main financial instruments held by the group company are cash and cash in bank, accounts
             receivable, accounts payable, available-for-sale financial asset and short term loan. The detailed
             explanation is referred to this notes No.VI. The related risks of these financial instruments and the
             risk management policy conducted to reduce these risks by the group company are introduced as
             below. The Group management conducts to manage and monitor these risks exposure and control
             these risks under certain risk level.



                                                                                                                            76
                                                Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

Objectives and policies of each risk management
The objectives of risk management conducted by the group company are to reach the balance
between risk and profit return by reducing the negative influence to operating performance to the
minimum level as well as maximising the shareholders’ and other investors’ profits. Based on
these objectives, the basic risk management policy is to recognize and analyse all sorts of risk that
the group company faced with, to set up the proper risk tolerance bottom line conducting risk
management, as well as to monitor these risks in a timely and effective manner, and to ensure these
risks under the limit level.

     (1) Market risk
        1) Exchange rate risk

Most of the company’s business is located in China, and settled with RMB. But the company
defined exchange rate risk of assets, liabilities dominated in foreign currency and future transaction
dominated in foreign currency (mainly including USD,JPY,HKD and GBP). The financial
department of the company monitors the company’s foreign currency transaction and the scale of
foreign assets and liabilities, and decreases exchange rate risk. During the current year the company
didn’t agree any forward foreign exchange contract or currency swap contract .As at 30 June 2017,
the company’s assets and liabilities dominated in foreign currency are listed in RMB as
following:
                                                         30-06-2017
      Items
                           USD            JPY              EUR            GBP               Total
Foreign currency
financial assets,
Monetary fund           17,786,021.70   1,858,094.91       29,080.68     92,665.70          19,765,862.99
accounts
                                                                        910,698.17            910,698.17
receivable
    Subtotal            17,786,021.70   1,858,094.91       29,080.68   1,003,363.87         20,676,561.16
Foreign currency
financial liability
Accounts payable                                                        320,837.81            320,837.81

    Subtotal                                                            320,837.81            320,837.81

The sensitive analysis:
As at June 30, 2017, because the company’s foreign currency assets or liabilities were small, the
change of foreign exchange rate had little impact to the company’s net profit or shareholders' equity.
2) Interest rate risk

      The interest risk of the Group incurred from bank loan, risk of a floating interest rate of
financial liabilities that lead to the company facing cash flow interest rate risk, financial liabilities
with a fixed interest rate lead to the company facing cash flow interest rate risk. The company
determined the proportion of fixed interest rate and floating interest rate according the current
market circumstance. The company and Dalian Bingshan Group Co.,Ltd borrowed long term loan
RMB 160,000,000.00 with fixed interest rate. The subsidiary of the company Wuhan New World
Refrigeration Industrial Co., Ltd. borrowed short term loan RMB 45,000,000.00 with fixed interest
rate. the subsidiaries of the Company Dalian Bingshan Engineering & Trading Co., Ltd has Short-term
loans 1.5 million USD, exchange RMB 10.3197 million, loan with fixed exchange rate and intrest
rate.

The financial department of the company continuously monitors the interest rates level, and the
management would make some adjustment to lower the interest rate risk according to the latest
market situation. Climbing interest rate will increase the cost of newly increased interest-bearing
liability and interest expense for unsettled interest-bearing liability at floating rate and have adverse
effect on the business performance.



                                                                                                      77
                                                Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

The sensitive analysis:
As at June 30, 2017, base on the assumption of interest rate change of 50 BP, the company’s net
profit will increase or decrease RMB 1,193.1thousand Yuan

        (2)Credit risk

The credit risk of the company comes from monetary fund, notes receivable, accounts receivable,
and other accounts receivable etc. The management made credit policies and monitored changes of
these credit exposure.
The company's working capital was in bank with higher credit rating, so there was no significant
credit risk, nor significant losses due to the default of other entity. Upper limit policy is adopted to
avoid any credit risk from financial institution.
The company made relevant policy to control credit risk exposure from receivable, other receivable
and notes receivable. The company assess the client’s credit background according to the client’s
financial performance, possibility of obtaining guarantee from the 3rd party, credit record and other
factors such as current market. The company will periodically monitor the credit situation of the
client and will take measures such as prompt letter, shorten credit period or cancel the credit to
ensure the overall credit risk within the controllable scope.
As at 30 June 2017, the top five customers of receivable accounts represent 17.21% of total
accounts receivable, and as at 31st December 2016 that was 19.15%.
Maximum risk exposure assumed by the company is the book value of each individual financial
assets (including derivative instruments) on the balance sheet. Except the financial guarantee stated
in the note XIII, there is no any other guarantee which can put the company into credit risk. The
maximum credit risk exposure coming from above financial guarantee has been disclosed in the
note IX on the balance sheet date.

2. Liquidity risk
Liquidity risk was referred to the risk of shortage of funds incurred when the enterprise perform the
obligation of settlement by cash or other financial assets.
The financial department of the company continued to monitors the short term or long term capital
needs to ensure maintain plenty of cash flow. And the same time they also monitor the condition of
bank loan agreements and obtain commitments from banks to provide plenty of fund.
As at June 30, 2017, the company’s financial assets and financial liabilities in line with non discount
cash flow of the contracts as following:
                                                        Closing balance
Items                          Within 1 year    1-2 years   2-5 years     Over 5 years        Total

Financial Assets

Cash and cash in bank          469,049,698.39                                                 469,049,698.39

Notes receivable               134,782,598.58                                                 134,782,598.58

Accounts receivable            903,229,293.38                                                 903,229,293.38

Other Receivable                63,715,968.69                                                  63,715,968.69

Available for sale financial
                                                                          569,709,995.04      569,709,995.04
asset

Financial Liabilities

Short-term loan                215,319,700.00                                                 215,319,700.00

Notes Payable                  181,421,206.76                                                 181,421,206.76

Accounts payable               881,939,767.63                                                 881,939,767.63

Other payable                  198,334,369.48                                                 198,334,369.48

Employee’s payable             27,193,989.51                                                  27,193,989.51




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                                                     Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

                                                                 Closing balance
Items                            Within 1 year           1-2 years   2-5 years     Over 5 years              Total

Long-term loan                   160,000,000.00                                                              160,000,000.00

Tax payable                          16,608,505.28                                                               16,608,505.28

Dividend payable                        863,516.60                                                                 863,516.60


        (Continued)
                                                                        Opening balance

Items                            Within 1 year           1-2 years     2-5 years      Over 5 years               Total

Financial Assets

Cash and cash in bank            715,215,638.54                                                              715,215,638.54

Notes receivable                 126,408,249.59                                                              126,408,249.59

Accounts receivable              807,109,959.54                                                              807,109,959.54

Other Receivable                     57,257,456.57                                                               57,257,456.57

Available for sale financial
                                                                                     545,565,116.64          545,565,116.64
asset

Financial Liabilities
                                     45,000,000.00                                                               45,000,000.00
Short-term loan
                                 194,562,734.79                                                              194,562,734.79
Notes Payable
                                 857,725,428.48                                                              857,725,428.48
Accounts payable
                                 115,320,734.80                                                              115,320,734.80
Other payable
                                     50,256,392.86                                                               50,256,392.86
Employee’s payable
                                 160,000,000.00                                                              160,000,000.00
Long-term loan
                                     18,405,089.48                                                               18,405,089.48
Tax payable
                                       863,516.60                                                                  863,516.60
Dividend payable

XI.Fair value
1.Items measured at fair value
As at 30 June,2017,some equity investments of available-for-sale financial assets were measured at
the fair value.
Fair value level can be classified according to the input value of the lowest level that is significant
to whole measurement of fair value:
First level: quote of same assets or liabilities in an active market (unadjusted).
Second level: directly (price) or indirectly (derive from price) use observable input value other than
market quote of assets or liabilities in the first level.
Third level: use any input value not based on observable market data in assets or liabilities
(unobservable input value).
2.Item measured at fair value at the end of current year

                                                               Fair value at the end of current year
                  Items
                                           First level          Second level       Third level           Total
Sub-total of available for sale
                                555,798,336.45                                                         555,798,336.45
financial assets
        Debt instrument investment



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                                                                Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

                                                                        Fair value at the end of current year
                           Items
                                                     First level        Second level        Third level           Total
                 Equity instrument investment     555,798,336.45                                                555,798,336.45
                 Other investment
                        Total assets              555,798,336.45                                                555,798,336.45


           3.Determined on the basis of continuous first level for fair value measurement according to the
           closed price of stock market as at 30 June,2017.
           4.The above fair value of the company did not changed in different levels.
           5.Financial assets and financial liabilities not measured at fair value mainly include: Cash and
           bank balances, notes receivable,accounts receivable, other receivables, short-term loans, notes
           payable, accounts payable, other payables, long-term payables, etc.The difference between the book
           value of financial assets and financial liabilities that are not measured at fair value and fair value is
           small.

           XII. Related Parties Relationships and Transactions
           1. Information of the company’s parent company

                                    Registered      Nature of           Registered           The parent         The parent
            Name of enterprise                                                               company's          company's
                                       address       business             capital           shareholding        voting right
           Dalian     Bingshan
                                       Dalian      Manufacture      158,580,000.00                  19.96%            19.96%
           Group Co., Ltd.

           (1) Information of the company’s parent company
           Dalian Bingshan Group Co., Ltd. is a sino –foreign joint venture located No.106, Liaohe East Road,
           Dalian Economic and Technological Development Zone The legal representive of Dalian Bingshan
           Group Co., Ltd. is Ji Zhijian, and the registered capital is RMB158.58 million. The registered
           business operation period is from 3rd July 1985 to 2nd July 2035. The business scope include
           research, development, manufacture, sales, service and instalment of refrigeration equipment,
           cooling and freezing equipement, different size of air-conditioners, petrochemical equipment,
           electronic and electronic- control products, home electronic appliance, environment protect
           equipment and etc. (unless the licenses needed)
             (2) There is no ultimate controller of the Company.
           2. The information of the subsidiaries please refers to IX.1 of this note.
           3. The information of the affiliated company and joint venture please refers to IX.3 of this
           note.
           The companies had related party transaction with the company during the current period or had
           transaction balance at the end of last period, including:

                  Names of the joint ventures or affiliated companies                         Relationships with the Company
Panasonic Refrigeration (Dalian) Co., Ltd                                                   Affiliated company of the Company
Panasonic Cold-chain (Dalian) Co., Ltd                                                      Affiliated company of the Company
Panasonic compressor (Dalian) Co., Ltd                                                      Affiliated company of the Company
Dalian Honjo Chemical Co., Ltd                                                              Affiliated company of the Company
Keinin-Grand Ocean Thermal Technology (Dalian) Co., Ltd                                     Affiliated company of the Company
Dalian Bingshan Metal Technology Co., Ltd.                                                  Affiliated company of the Company
Dalian Bingshan Group Management Consulting Co., Ltd.                                       Affiliated company of the Company




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                                                              Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

                  Names of the joint ventures or affiliated companies                           Relationships with the Company
Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd               Affiliated company of the Company
Dalian Fuji Bingshan Vending Machine Co., Ltd                                                 Affiliated company of the Company
MHI Bingshan Refrigeration (Dalian) Co., Ltd.                                                 Affiliated company of the Company
Dalian Fuji Bingshan Vending Machine Sales Co., Ltd                                           Affiliated company of the Company
Jiangsu JingXue Insulation Technology Co.,Ltd                                                 Affiliated company of the Company
Panasonic Cooling Machine system (Dalian) co., LTD                                            Affiliated company of the Company
                                                                                             Affiliated company of the Company’s
Wuhan Lanning Science and Technology Co., Ltd.
                                                                                                    wholly owned subsidiary
                                                                                             Affiliated company of the Company’s
Wuhan Skaff Technology Co., Ltd.
                                                                                                    wholly owned subsidiary
            4. Other type of the related parties

                              Names of the related parties                                    Relationships with the Company
            Dalian Bingshan Group Refrigeration Equipment Co., Ltd                   Affiliated company of Dalian Bingshan Group
            Dalian Third Refrigeration Equipment Factory                                    Subsidiary of Dalian Bingshan Group
                                                                                         Affiliated company of the Bingshan Group’s
            Dalian Bingshan Group Hua Hui Da Financial Leasing Co., Ltd.
                                                                                                         subsidiary
                                                                                         Affiliated company of the Bingshan Group’s
            Dalian Bingshan Wisdom Park Co., Ltd.
                                                                                                         subsidiary
            Dalian Spindle Cooling Towers Co., Ltd                                   Affiliated company of Dalian Bingshan Group
            BAC Dalian Co., Ltd                                                      Affiliated company of Dalian Bingshan Group

            5. The transactions between the Company and the related parties
            (1) The transactions between the Company and the related parties, whose balance sheet has been
            included in the consolidated statement and between the parties themselves have been offset.
            (2) Purchases of goods from related parties

                                                                            Details of
                     Names of the related parties                                                  2017.01-06         2016.01-06
                                                                           transaction
    Panasonic Refrigeration (Dalian) Co., Ltd.                          Purchases of goods         20,283,928.38      16,360,358.86
    Panasonic Cold-chain (Dalian) Co., Ltd.                             Purchases of goods         21,060,420.38      50,006,901.04
    Panasonic Compressor (Dalian) Co., Ltd.                             Purchases of goods          1,772,307.69        492,916.24
    Panasonic Cooling Machine system (Dalian) co., Ltd.                 Purchases of goods         33,681,412.84
    Dalian Fuji Bingshan Vending Machine Co., Ltd                       Purchases of goods                              252,850.67
    Dalian Spindle Cooling Towers Co., Ltd                              Purchases of goods          1,830,673.50       2,395,299.17
    BAC Dalian Co., Ltd                                                 Purchases of goods         14,369,238.45      14,214,924.03
    Dalian Bingshan Metal Technology Co., Ltd.                          Purchases of goods            106,572.72        135,866.73
    Beijing Huashang Bingshan Refrigeration and
                                                                        Purchases of goods                              735,876.07
    Air-conditioning Machinery Co., Ltd
    Dalian Bingshan Group Refrigeration Equipment Co., Ltd              Purchases of goods          6,161,340.61       3,841,789.36

    Jiangsu JingXue Insulation Technology Co.,Ltd                       Purchases of goods         13,055,394.04       4,760,451.36

    Wuhan Lanning Science and Technology Co., Ltd.                      Purchases of goods          9,362,494.13

    Dalian Third Refrigeration Equipment Factory                        Purchases of goods          2,702,324.21       2,110,864.07
    Total                                                                                        124,386,106.95       95,308,097.60

            Sales of goods to related parties


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                                                      Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

                                                                            Details of
                     Names of the related parties                          transaction           2017.01-06         2016.01-06

Panasonic Refrigeration (Dalian) Co., Ltd.                                Sales of goods        49,668,501.13       21,582,100.94

Panasonic Cold-chain (Dalian) Co., Ltd.                                   Sales of goods        70,986,986.56       69,912,571.09

Panasonic Compressor (Dalian) Co., Ltd.                                   Sales of goods         3,320,214.18        2,213,385.76

Panasonic Cooling Machine system (Dalian) co., Ltd.                       Sales of goods         4,853,342.63

Dalian Fuji Bingshan Vending Machine Co., Ltd                             Sales of goods         11,115,873.41      17,124,023.00

Dalian Fuji Bingshan Vending Machine Sales Co., Ltd                       Sales of goods           504,871.11

MHI Bingshan Refrigeration (Dalian) Co.,Ltd                               Sales of goods        10,465,123.02        4,310,615.52

Dalian Spindle Cooling Towers Co., Ltd                                    Sales of goods           149,135.10        1,767,403.68

Keinin-Grand Ocean Thermal Technology (Dalian) Co., Ltd                   Sales of goods           383,202.00           383,428.42

Dalian Bingshan Metal Technology Co., Ltd.                                Sales of goods                                 40,617.44

Beijing Huashang Bingshan Serial Refrigeration Equipment Co., Ltd         Sales of goods          2,774,658.11      24,132,951.49

Dalian Bingshan Group Refrigeration Equipment Co., Ltd                    Sales of goods           100,974.44           333,368.74

Jiangsu JingXue Insulation Technology Co.,Ltd                             Sales of goods           315,847.39           214,510.03

Wuhan Lanning Science and Technology Co., Ltd.                            Sales of goods         6,243,108.55

Wuhan Skaff Technology Co., Ltd.                                          Sales of goods             8,961.48

Dalian Bingshan Group Hua Hui Da Financial Leasing Co., Ltd.              Sales of goods            86,622.40

Dalian Bingshan Wisdom Park Co., Ltd                                      Sales of goods         1,560,340.63

Dalian Third Refrigeration Equipment Factory                              Sales of goods           870,526.88        1,271,146.60

                                  Total                                                        163,408,289.02     143,286,122.71

      (3) Leasing fee from related party
                                                                              Rental income of        Rental income of
                         Lessee                          Leasing assets        current period         previous period
   MHI Bingshan Refrigeration (Dalian) Co.,Ltd.            Workshops              2,000,000.00                2,100,000.00

   Dalian Bingshan Wisdom Park Co., Ltd                   Land Offices            1,466,666.67

      Leasing fee to related party
                                                                              Rental fees of           Rental fees of
                         Leaser                       Leasing assets          current period          previous period
       Dalian Bingshan Group Co., Ltd.                    Land

                         Total
      The company signed rental contract with MHI Bingshan Refrigeration (Dalian) Co.,Ltd., and rent #
      6 workshop building located on No. 106 Liaohe East Rd, Dalian Economic and Technology
      Development Zone to MHI Bingshan Refrigeration (Dalian) Co., Ltd. The rental area is 15,259.04
      square meters, and the rental term till 16th July, 2029. The annual rent fee is RMB 4.2 million after
      considering the time value of money.
      On June 22, 2017, the company has signed a land and house lease contract with Dalian Bingshan
      Wisdom Park Co., Ltd to rent out the whole land and house of the company’s old plant locating at
      No. 888, Southwest Road, Shahekou District, Dalian to Dalian Bingshan Wisdom Park Co., Ltd.,


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                                                          Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

       with rental land area of 167,165.61 square meters and housing area of 105,652.43 square meters, the
       lease term is from April 1, 2017 to December 31, 2036. The total rent for the previous three years is
       RMB 20.34 million, of which the rent in 2017 is RMB 4.62 million, the rent in 2018 is RMB 7.86
       million, and the rent in 2019 is RMB 7.86 million. From January 2020, the two parties will
       negotiate and determine the rent of the next three years according to the local market changes.
       The company signed an agreement with Dalian Bingshan Group Co., Ltd. to rent out the office with
       1,200 square meters in the office building to Dalian Bingshan Group Co., Ltd., the lease term is
       from April 1, 2017 to March 31, 2019, with annual rent of RMB 144,000.00.
       The company leased the land of Dalian Bingshan Group Co., Ltd., the lease term is from January 1,
       2015 to July 31, 2018, with annual rent of RMB 230,230.60.
         (4) Guarantee with related companies.
       The national development fund planned to support the company’s intelligent and green equipment
       of cold chain and service industry base project, and provide the special fund to the controlling
       shareholder of the company, Bingshan Group.
         (5) The borrowing of funds from related party

     Name of the related party            Amount             Starting date     Ending date               Explanation

Dalian Bingshan Group Co., Ltd.       160,000,000.00         2016.03.14         2026.03.13          Project fund investment

              Total                   160,000,000.00

         (6)Related party asset transfer and debt restructuring
       Not applicable.
       6. Amounts due from/to related parties
       (1) Accounts receivable

                                                                             30-06-2017                          31-12-2016
                 Names of the related parties
                                                                                     Provision for                       Provision for
                                                                     Amount           bad debts           Amount           bad debts

    Panasonic Refrigeration (Dalian) Co., Ltd.                      10,848,331.69         542,416.58    10,132,966.54         506,648.32

    Panasonic Cold-chain (Dalian) Co., Ltd.                         55,909,764.67     2,795,488.23      49,852,547.51    2,492,627.38

    Panasonic Compressor (Dalian) Co., Ltd.                            144,616.83            7,230.84     285,612.28           17,405.61

    Panasonic Cooling Machine system (Dalian) co., Ltd.              2,993,933.72         149,696.69      988,213.08           49,410.65

    Dalian Fuji Bingshan Vending Machine Co., Ltd.                   2,922,990.04         146,149.50     1,520,221.58          76,011.08

    Dalian Fuji Bingshan Vending Machine Sales Co.,
                                                                                                             4,452.90               222.65
    Ltd.

    MHI Bingshan Refrigeration (Dalian) Co., Ltd.                   10,125,773.32         506,288.67      215,889.22           10,794.46

    Dalian Spindle Cooling Towers Co., Ltd.                            174,488.10            8,724.41       46,659.20           2,332.96

    Keinin-Grand Ocean Thermal Technology (Dalian)
                                                                                                             6,117.31               305.87
    Co., Ltd
    Beijing Huashang Bingshan Refrigeration            and
                                                                    35,645,856.35     1,846,092.82      38,284,385.35    3,543,453.34
    Air-conditioning Machinery Co., Ltd.
    Dalian Bingshan Group Refrigeration Equipment Co.,
                                                                                                             3,461.40               173.07
    Ltd.

    Wuhan Lanning Science and Technology Co., Ltd.                   6,687,522.40         334,376.12    14,466,855.00         723,342.75




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                                                     Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

Wuhan Skaff Technology Co., Ltd.                                 226,045.93        11,302.30          655,561.00           32,778.05

Dalian Third Refrigeration Equipment Factory                       5,642.60          282.13             5,642.60                 564.26

Dalian Bingshan Wisdom Park Co., Ltd                         1,540,000.00          77,000.00

   (2) Notes receivable

                           Names of the related parties                              30-06-2017               31-12-2016

   Panasonic Refrigeration (Dalian) Co., Ltd                                               736,345.42           200,000.00

   Panasonic Cold Chain (Dalian) Co., Ltd                                            13,347,517.83            15,532,736.64

   Panasonic Cooling Machine system (Dalian) co., Ltd.                                     523,844.81               1,778.45

   MHI Bingshan Refrigeration (Dalian) Co., Ltd.                                        2,100,000.00          19,805,806.72

   Dalian Honjo Chemical Co.,Ltd.                                                       1,441,499.53

   Jiangsu JingXue Insulation Technology Co.,Ltd                                                               4,277,035.00

   Wuhan Lanning Science and Technology Co., Ltd.                                       1,000,000.00



   (3) Accounts paid in advance
                    Names of the related parties                          30-06-2017                      31-12-2016

   Panasonic Refrigeration (Dalian) Co., Ltd                                       353,675.00

   Panasonic Cold Chain (Dalian) Co., Ltd                                          782,000.00                      90,000.00

   Panasonic Compressor (Dalian) Co., Ltd                                                 324.00

   Panasonic Cooling Machine system (Dalian) co., Ltd.                             337,800.00

   Dalian Spindle Cooling Towers Co., Ltd.                                          26,800.00

   BAC Dalian Co., Ltd.                                                             70,500.00                   318,220.00

   Dalian Bingshan Group Refrigeration Equipment Co., Ltd.                         330,000.00

   Jiangsu JingXue Insulation Technology Co.,Ltd                                                                    5,469.00

    (4) Other accounts receivable

                                                             30-06-2017                               31-12-2016

            Name of the related party                                                                           Provision
                                                                    Provision for bad
                                                    Amount                                     Amount            for bad
                                                                          debts
                                                                                                                  debts
    Beijing Huashang Bingshan Refrigeration
                                                                                               34,972.74           1,748.64
    and Air-conditioning Machinery Co., Ltd.
    Wuhan Lanning Science and Technology
                                                     18,311.21                   915.56            3,814.37          190.72
    Co., Ltd.

    Wuhan Skaff Technology Co., Ltd.                341,439.18                17,071.96       320,000.00         16,000.00

    (5) Accounts payable

                     Names of the related parties                             30-06-2017                  31-12-2016
    Panasonic Refrigeration (Dalian) Co., Ltd.                                       15,380.00                     50,667.31



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                                                       Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

     Panasonic Cold-chain (Dalian) Co., Ltd.                                 28,029,781.70              28,245,301.70
     Panasonic Compressor (Dalian) Co., Ltd.                                  2,001,924.00               1,766,420.00
     Panasonic Cooling Machine system (Dalian) co., Ltd.                     26,171,116.81               3,680,482.86
     Dalian Spindle Cooling Towers Co., Ltd.                                  5,420,760.00               5,339,188.00
     BAC Dalian Co., Ltd.                                                    39,896,539.00              29,658,022.00
     Dalian Bingshan Metal Technology Co., Ltd.                                    795,855.70              798,283.30
     Dalian Bingshan Group Refrigeration Equipment Co., Ltd.                  5,877,440.52               9,520,335.93
     Jiangsu JingXue Insulation Technology Co.,Ltd                           13,410,090.17               8,505,375.05
     Wuhan Lanning Science and Technology Co., Ltd.                           4,228,397.20              15,300,000.00
     Dalian Third Refrigeration Equipment Factory                             1,751,349.60               2,022,156.94

     (6) Notes payable

                      Names of the related parties                       30-06-2017                   31-12-2016
     Panasonic Cold-chain (Dalian) Co., Ltd.                                                             3,939,286.50
     Panasonic Cooling Machine system (Dalian) co., Ltd.                      2,575,319.76
     BAC Dalian Co., Ltd.                                                    16,269,991.00              30,121,670.00
     Dalian Bingshan Group Refrigeration Equipment Co., Ltd.                  2,970,086.00               1,312,540.00
     Jiangsu JingXue Insulation Technology Co.,Ltd                                 361,932.00            4,903,405.00
     Wuhan Skaff Technology Co., Ltd.                                                                      620,000.00
     Dalian Third Refrigeration Equipment Factory                             2,000,000.00                 450,000.00

     (7) Accounts received in advance

                             Names of the related parties                               30-06-2017       31-12-2016

Panasonic Cold-chain (Dalian) Co., Ltd.                                                  428,961.00

Panasonic Cooling Machine system (Dalian) co., Ltd.                                                        171,000.00

MHI Bingshan Refrigeration (Dalian) Co., Ltd.                                                              450,000.00

Keinin-Grand Ocean Thermal Technology (Dalian) Co., Ltd                                  125,268.27

Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd.       2,992,689.61        459,609.61

    (8) Other accounts payable

                      Names of the related parties                       30-06-2017                   31-12-2016

     Dalian   Bingshan Group     Co., Ltd.                                   91,987,136.92                 294,956.06

     Panasonic Cold-chain (Dalian) Co., Ltd.                                                               216,570.00

     Panasonic Compressor (Dalian) Co., Ltd.                                         3,118.18                9,425.59

     MHI Bingshan Refrigeration (Dalian) Co., Ltd.                                 270,000.00              270,000.00

     Dalian Third Refrigeration Equipment Factory                                    1,000.00                1,000.00


   XIII Share-based payment

   1. Overall situation
    Total equity instrument awarded by the Company in the Period                                                   0
    Total equity instrument exercised in the Period                                                    6,090,000.00



                                                                                                                   85
                                                    Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

Total equity instrument that out of operation in the Period                                         0

                                                                         2015:5.56 Yuan per share,divide into

                                                                         3 period, remaining contract period
Range of the outstanding exercise price for stock option at period-end
and remaining period of the contract                                     are 36 months
                                                                         2016:5.62 Yuan per share,divide into
                                                                          3 period, remaining contract period
                                                                          are12, 24 and 36 months.
Range of the outstanding exercise price for other equity instrument at
period-end and remaining period of the contract

      1)   The Situation of Granted Restricted Share in 2015


According to the 13th meeting of the 6th generation of board, the 1st interim shareholders’ meeting
and the rules of ‘Restricted Share Incentive Plan (draft)’, the Company granted 10,150,000 numbers
of restricted shares to 41 incentive targets by offering incentive targets ‘A’ original shares. The
granted price is 5.56yuan per share, and the total capital raised is 56,434,000.00Yuan. The
Company’s incentive targets include the directors, middle and senior management personnel and
other key personnel supposed to be incented who held office when the ‘Share Incentive Plan’ was
announced, but excluding the supervisors, the independent directors, foreign directors and foreign
management personnel. The 15th meeting of board of 6th generation held on 4th March 2015
approved the ‘The Report Regarding Granting Incentive Targets Restricted Shares’, which agrees to
grant 10,150,000 numbers of restricted shares to 41 incentive targets, and set 4th March 2015 as
share granted date.


      2)   The Situation of Granted Restricted Share in 2016


According to the 9th meeting of 7th generation of directors, the 3rd interim shareholders’ meeting and
the rules of ‘Restricted Share Incentive Plan (draft)’, the Company granted 12,884,000 numbers of
restricted shares to 118 incentive targets by offering incentive targets ‘A’ original shares. The
granted price is 5.62yuan per share, and the total capital raised is 72,480,080.00Yuan. The
Company’s incentive targets include the directors, middle and senior management personnel and
other key personnel supposed to be incented who held office when the ‘Share Incentive Plan’ was
announced, but excluding the supervisors, the independent directors, foreign directors and foreign
management personnel. The 9th meeting of board of 7th generation held on 20th September 2016
approved the ‘The Report Regarding Granting Incentive Targets Restricted Shares’, which agrees to
grant 12,884,000 numbers of restricted shares to 118 incentive targets, and set 20th September 2016
as share granted date.

      3)     Unlock restricted stock in 2017

On May 12, 2017, the company held the 14th meeting of the 7th Board of Directors which considered
and approved the Proposal on Unlocking of the Restricted Stock Incentive Plan of the Second
Unlocking Period in 2015. The incentive objects conforming to the unlocking conditions this time


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                                                  Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

were 41 people, the amount of restricted stock that could apply for unlocking and be listed was
6,090,000 shares, accounting for 0.995% of the total share capital of the company at the end of the
period.

2. Share-based payment settled by equity
                                                          In line with the fair value of the restricted shares at
Determination method for the fair value of equity
                                                          grant date (not determining the fair value change after
instrument at grant date
                                                          grant date)
Determination basis for the number of exercising equity
                                                          Determined by actual exercising numbers
instrument
Reason of major difference between the estimation in
                                                          N/A
the Period and last period
The aggregate amount of share-based payment that
                                                          30,660,394.00
reckoned into capital reserve with equity settlement
Total expenses recognized by share-based payment that
                                                          6,242,706.00
settle by equity in the Period

XIV Commitments and Contingency
1. No major commitments to be disclosed till June 30, 2017.
2. No other contingency needed disclosed till June 30, 2017.

XV Events after the Balance Sheet Date

1. Significant events had not adjusted
(1) Issue shares
Not applicable.
(2) Information about profit distribution
Not applicable.
(3) Sales Return
Not applicable.
(4) Except the subsequent event disclosed                 above, the Company has no other significant
subsequent event
2. Significant sales return after balance sheet day
Not applicable.
3. There was no other post balance sheet significant events except above mentioned.

XVI. Other important things needed disclosed.
1. There was no corrections of prior period accounting errors during the current period.
2. There was no debt restructuring during the current period.
3. There was no assets exchange during the current period.
4. The Company didn’t design employer pension plan.
5. There was no discontinuing operation during the current period.
6. Segments information
(1) Standards and accounting policies of reporting segment
The company determines operating segment according to its organization structure, management
rules, inside reporting system. The operating segment should satisfy following conditions:
① The operating segment could generate income and incure expenses from normal operating


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                                            Dalian Refrigeration Co., Ltd. 2017 Semiannual Report

activities;
②The management could evaluate its operating effect, and then decide resources assignment and its
operating performance;
③The segment’s information of financial position and results of operations and cash flow could be
obtained.
The company determines reporting segment based on operating segments. The reporting segment
should satisfy one of the following conditions::
① The operating segment’s income should be over 10% of total income;
② The number of the operating segment’s profit(or loss) should be over 10% of the number of total
profit and the number of total losses.
The transfer prices between segments were decided according to the market prices. The expenses of
common assets used by segments and other common expenses should be divided among the
segments according to the income.
(2) Elements of determining reporting segment and types of reporting segments’ products and
services
The company determined three reporting segments according to the geographic area, including
Northeast China, Central China East China and overseas. The Northeast China segment included the
company’s head office and subsidiaries located in Dalian. The Central China segment included
subsidiary company Wuhan New World Refrigeration Industrial Co., Ltd. and Chengdu Bingshan
Refrigeration Engineering Co., Ltd.,The East China segment included subsidiary’s subsidiary
company Ningbo Bingshan Refrigeration Air Conditioner Engineering Co., Ltd and Shanghai
Bingshan Technology Service Co., Ltd,The overseas segment included subsidiary company Dalian
Bingshan Engineering & Trading Co., Ltd.。
(3) The financial information of reporting segments

                                                                    30-06-2016/2016.01-06
               Items           Northeast
                                            Central China     East China     Overseas       Offset            Total
                                China
1 Operating income             117,721.06       14,012.50        3,499.88    12,820.66      47,816.23        100,237.87
Including: Income from
                                78,781.55        8,813.21        3,325.80     9,317.31                       100,237.87
external transaction
    Income from internal
                                38,939.51        5,199.29          174.08     3,503.35      47,816.23
transaction
2 Selling expenses             109,420.12       14,849.86        3,531.51    12,227.87      49,605.47         90,423.89
Including: Investment income
from associates and joint        4,938.27          -70.17                                                      4,868.10
ventures
    Impairment on assets           747.64          145.29            -1.25      132.24                         1,023.92
   Depreciation and
                                 1,909.30          553.60            7.85        18.38                         2,489.13
amortization
3 Operating profits(loss)        8,824.97         -720.00          -26.51       622.59      -1,789.24         10,490.29
4 Income tax                       451.35             -0.45          2.42       162.83                          616.15
5 Net profit(loss)               8,373.63         -719.55          -28.96       459.77      -1,789.24          9,874.13
6 Total assets                 494,641.34       56,003.00        2,441.84    56,003.00      71,795.20        537,293.98
7 Total liabilities            133,109.45       43,879.90          969.41    43,879.90      23,014.40        198,824.26
8 Other significant non cash
                                25,231.92          140.81            2.02         1.91                        25,376.66
items
    Capital expenditure         25,231.92          140.81            2.02         1.91                        25,376.66

7. There was no significant event which would affect the decision of investor during the
current period.

XVII. Notes to the financial statements of the parent company
1. Accounts receivable


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           (1) Classified by accounts nature

                                                                                    30-06-2017

              Categories                            Balance                             Provision for doubtful debt
                                                                                                                                        Book value
                                          Amount              Proportion             Amount                      Proportion
      Major single amount and
      bad     debt     provision
      provided individually
      Bad debt provided on                 198,054,771.09           100.00%              51,893,367.79                   26.20%           146,161,403.30
      group basis
      Minor single amount but
      bad     debt     provision
      provided individually
                Total                      198,054,771.09           100.00%              51,893,367.79                   26.20%           146,161,403.30



           Continued:
                                                                                                 31-12-2016

                          Categories                                   Balance                   Provision for doubtful debt
                                                                                                                                         Book value
                                                              Amount             Proportion          Amount              Proportion
      Major single amount and bad debt provision
      provided individually

      Bad debt provided on group basis                        178,100,272.41        100.00%              60,524,866.67         33.98%     117,575,405.74


      Minor single amount but bad debt provision
      provided individually

                            Total                             178,100,272.41        100.00%              60,524,866.67         33.98%     117,575,405.74



           Accounts receivable which bad debt provisions are provided on age basis in the group.
                                                                                  30-06-2017
            Account       ages
                                              Amount                       Provision for bad debts                       Proportion rates
           Within 1 year                             88,771,127.60                        3,303,428.29                                       5.00%
           1 to 2 years                              29,620,133.26                        2,962,013.33                                      10.00%
           2 to 3 years                              34,813,010.15                       10,443,903.04                                      30.00%
           3 to 4 years                              16,221,938.59                        8,110,969.29                                      50.00%
           4 to 5 years                                7,777,538.27                       6,222,030.62                                      80.00%
           Over 5 years                              20,851,023.22                       20,851,023.22                                    100.00%
                 Total                              198,054,771.09                       51,893,367.79

           (2) Provision for bad debts accrued, regain or switch back in the period
           In the current period, RMB -4,674,954.01 provision for bad debts

           (3) In the current period, RMB 3,956,544.87 was written off in current period.
           (4) Accounts receivable top 5 on amount
                                                                                                                              Provision for bad
                           Companies                                           Amount           Proportion (%)
                                                                                                                                    debts
Xi Yi Yuan Da Construction and Installation Engineerring
                                                                        38,167,774.72                    19.27                  2,251,777.47
Co., Ltd.
Bei Dahuang Tai Hua Organic Food       Co., Ltd.                        9,844,000.00                      4.97                  2,953,200.00




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MHI Bingshan Refrigeration (Dalian) Co., Ltd.                       9,453,367.30            4.77                 472,668.37

Zhejiang Wan Kai New Material Co., Ltd                              7,800,000.00            3.94                 390,000.00

Dalian Jinyu New Energy Technology Development Co., Ltd             5,500,000.00            2.78                 5,500,000.00

                            Total                                   70,765,142.02           35.73                 11,567,645.84

           2. Other accounts receivable
           (1) Classified by account nature

                                                                               30-06-2017
                  Items                              Balance                    Provision for doubtful debt
                                                                                                                     Book value
                                            Amount         Proportion(%)           Amount           Proportion
    Major single amount and bad debt
    provision provided individually
    Bad debt provided on group basis      7,328,599.97             100.00%     1,313,813.73             17.93%       6,014,786.24
    Minor single amount but bad debt
    provision provided individually
                  Total                   7,328,599.97             100.00%     1,313,813.73             17.93%       6,014,786.24

           Continued:

                                                                                    31-12-2016

                    Items                                Balance                     Provision for doubtful debt
                                                                                                                         Book value
                                                Amount         Proportion(%)         Amount          Proportion(%)
    Major single amount and bad debt
    provision provided individually
    Bad debt provided on group basis        5,595,672.42            100.00%         1,227,167.35             21.93%      4,368,505.07
    Minor single amount but bad debt
    provision provided individually
                    Total                   5,595,672.42            100.00%         1,227,167.35             21.93%      4,368,505.07

           Other accounts receivable which bad debt provisions are provided on age basis in the group
                                                                          30-06-2017
             Account ages
                                           Amount                       Provision for bad debts             Proportion rates

           Within 1year                           4,264,820.40                          213,241.02                         5.00%

           1 to 2 years                           1,372,430.48                          137,243.05                        10.00%

           2 to 3 years                              497,850.99                         149,355.30                        30.00%

           3 to 4 years                              659,047.48                         329,523.74                        50.00%

           4 to 5 years                              250,000.00                         200,000.00                        80.00%

           Over 5 years                              284,450.62                         284,450.62                       100.00%

                 Total                            7,328,599.97                        1,313,813.73

           (2) Provision for bad debts accrued, regain or switch back in the period
           In the current period, RMB 86,646.38 was accrued provision for bad debts, and no amount was



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           switched back or regained.
           (3) The nature of other accounts receivable
                              Items                                30-06-2017                                31-12-2016
           Guarantee deposits                                                 6,652,139.57                             5,502,139.57
           Petty cash                                                            461,156.88                               80,892.85
           To or fro accounts                                                    180,323.52
           Prepayments over settlement periods
           Others                                                                 34,980.00                               12,640.00
                              Total                                           7,328,599.97                             5,595,672.42

           (5) Top 5 on amount of other accounts receivable
                                                                                                                              Ending
                                                                                                                            balance of
                Companies                          Nature               Amount                Age       Proportion(%)
                                                                                                                           provision for
                                                                                                                             bad debts
                                                                                        Less than 1
   Dalian Delta HK China gas co., ltd          Security deposit         2,730,000.00    year, 2 to 3              37.25          211,500.00
                                                                                            years
                                                                                        1 to 2 years,
 Dalian Jinzhou New district Funding
                                                                                            2 to 3
 agencies and institutions accounting          Security deposit         1,586,623.95                              21.65          215,838.59
                                                                                        years,3 to 4
 center
                                                                                            years
 Dalian      Municipal     Construction
 engineering        labor     insurance        Security deposit          500,000.00     3 to 4 years               6.82          250,000.00
 management center
 Dalian economic and technological
 development zone funding agencies             Security deposit          265,950.62    Over 5 years                3.63          265,950.62
 and institutions accounting center
 Shandong Noel food co., ltd                   Security deposit          200,000.00     4 to 5 years               2.73          160,000.00
                   Total                                                5,282,574.57                              72.08       1,103,289.21

           3. Long-term equity investments

                                                           30-06-2017                                            31-12-2016
               Nature                                       Provision
                                                                                                                 Provision for
                                        Book balance           for        Book value          Book balance                           Book value
                                                                                                                  impairment
                                                           impairment
Subsidiaries                             488,938,001.94                  488,938,001.94        432,788,001.94                       432,788,001.94
Joint   ventures&          affiliated
                                        1,496,315,705.03                1,496,315,705.03      1,280,624,499.15                    1,280,624,499.15
companies
               Total                    1,985,253,706.97                1,985,253,706.97      1,713,412,501.09                    1,713,412,501.09




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(1) Subsidiaries
                                                                                                                                    Provision for
                                                                                                   Decreased                                        Provision for
                                                              Beginning       Increased during                                     impairment of
                           Names                                                                 during current   Ending balance
                                                               balance         current period                                        the current
                                                                                                     period                                         impairment
                                                                                                                                       period
Dalian Bingshan Group Engineering Co., Ltd                    93,749,675.77                                        93,749,675.77

Dalian Bingshan Group Sales Company                           20,722,428.15                                        20,722,428.15

Dalian Bingshan Air-Conditioning Equipment Co., Ltd           36,506,570.00                                        36,506,570.00

Dalian Bingshan Guardian Automation    Co., Ltd                6,872,117.80                                         6,872,117.80

Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd    59,356,051.19                                        59,356,051.19

Dalian Universe Thermal Technology Co., Ltd                   48,287,589.78                                        48,287,589.78
Wuhan New World Refrigeration Industrial Co., Ltd             84,674,910.81                                        84,674,910.81
Bingshan Technology Service (Dalian) Co., Ltd.                22,024,000.00                                        22,024,000.00
Dalian   Xinminghua Electronics Co., Ltd.                     43,766,243.72                                        43,766,243.72
Dalian Bingshan Engineering & Trading Co., Ltd.               16,828,414.72      56,150,000.00                     72,978,414.72
                           Total                             432,788,001.94      56,150,000.00                    488,938,001.94




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      (2) Joint ventures& affiliated companies

                                                                                             Increase/Decrease
                                                                                                                                          Provision
                                                                              Gains and losses   Adjustment     Chang    Cash bonus or       for                                  Provision
                                  Beginning
           Names                                                   Decrease   recognized         of     other   es of    profits         impairment            Ending balance        for
                                   balance         Increased                                                                                          Others
                                                                      d       under the equity   comprehens     other    announced to       of the                               impairment
                                                                              method             ive income     equity   issue             current
                                                                                                                                           period
2. Affiliated companies
Panasonic        Refrigeration
                                 157,425,641.15                                 -5,926,187.84                             1,600,000.00                          149,899,453.31
(Dalian) Co., Ltd.
Panasonic          Cold-chain
                                 217,687,237.26                                  3,593,423.52                             4,800,000.00                          216,480,660.78
(Dalian) Co., Ltd
Panasonic         Compressor
                                 484,003,393.99                                 18,719,311.78                            38,000,000.00                          464,722,705.77
(Dalian) Co., Ltd
Dalian Honjo Chemical Co.,
                                   9,642,351.34                                    437,965.38                             1,441,499.53                            8,638,817.19
Ltd
Keinin-Grand            Ocean
Thermal           Technology      52,952,413.79                                  7,216,616.73                                                                    60,169,030.52
(Dalian) Co., Ltd
Dalian     Bingshan     Metal
                                                  172,950,000.00                 4,019,745.35                                                                   176,969,745.35
Technology Co., Ltd
Dalian Bingshan Group
Management         Consulting                      39,200,000.00                  -390,808.03                                                                    38,809,191.97
Co., Ltd.
Beijing Huashang Bingshan
Refrigeration             and
                                    769,463.27                                    -241,707.36                                                                       527,755.91
Air-conditioning Machinery
Co., Ltd
Dalian      Fuji    Bingshan
                                 160,787,194.81                                 17,547,723.62                                                                   178,334,918.43
Vending Machine Co., Ltd
MHI Bingshan Refrigeration
                                  13,018,792.05                                 -1,201,596.65                                                                    11,817,195.40
(Dalian) Co.,Ltd.
Dalian      Fuji    Bingshan
Vending Machine Sales Co.,         9,410,006.56                                    661,471.84                                                                    10,071,478.40
Ltd




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                                                                                           Increase/Decrease
                                                                                                                                        Provision
                                                                            Gains and losses   Adjustment     Chang    Cash bonus or       for                                   Provision
                               Beginning
         Names                                                   Decrease   recognized         of     other   es of    profits         impairment            Ending balance         for
                                balance          Increased                                                                                          Others
                                                                    d       under the equity   comprehens     other    announced to       of the                                impairment
                                                                            method             ive income     equity   issue             current
                                                                                                                                         period
Jiangsu JingXue Insulation
                              151,527,707.42                                   3,878,101.09                                                                   155,405,808.51
Technology Co.,Ltd
Panasonic cold machine
                               23,400,297.51                                   1,068,645.98                                                                    24,468,943.49
system (dalian) Co., Ltd
          Total              1,280,624,499.15   212,150,000.00                49,382,705.41                            45,841,499.53                         1,496,315,705.03




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4. Total operating income and operating cost
(1)Business income and cost

                                                             2017.01-06                                    2016.01-06
                 Items
                                                   Income                    Cost               Income                    Cost
Key business                                       342,083,629.25         292,041,251.33        315,122,914.65          265,496,038.46
Other business                                       7,745,397.00            3,954,732.15         5,446,158.23            2,976,428.98
                 Total                             349,829,026.25         295,995,983.48        320,569,072.88          268,472,467.44

5. Gain/ (loss) from investments
 Category
                                           Items                                                2017.01-06              2016.01-06

Long-term equity investment income accounted for by using the cost method                          17,628,766.67

Long-term equity investment income accounted for by using the equity method                        49,382,705.41         60,980,888.19

Gain on disposing long-term share equity investments                                                                       -254,172.88

Gain on holding of financial assets available for sale                                             11,463,569.05         15,961,425.40

Gain on disposing of financial assets available for sale                                           27,467,019.93

                                           Total                                                  105,942,061.06         76,688,140.71


XVIII. Other supplementary Information
1. Non-recurring profits and losses
                             Non-recurring gains and losses items                                   Amount                 Notes

1. Gain/loss from disposal of non-current assets                                                         127,853.00

2.Tax return or exemption exceeding authority or without formal authorization documents                    1,115.75

3.Governmental subsidy written into current gains and losses                                          5,521,986.23

4. Interest from non-financial enterprises written into current gains and losses

5.Gains/Losses on debt restructuring

6.Reversal of provision for impairment of long-term assets
7. Gain/loss from change of fair value of transactional asset and liabilities, and investment
gains from disposal of transactional financial assets and liabilities and sellable financial
assets, other than valid period value instruments related to the Company’s common                   27,467,019.93
businesses.

8.Other net income and expense from non-operation                                                        279,299.90

                                                                                                      5,079,406.26
Effect on income tax

                                                                                                          18,568.95
Attributable to minority shareholders’ equity (after tax)
                                             Total                                                   28,299,299.60




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2. Earnings per share

                                                                    The weighted                      EPS
                             Items
                                                                    average ROE        Basic EPS            Diluted EPS
Net profit attributable to the Company’s ordinary shareholders             2.95%             0.115                   0.115
Net profit attributable to the Company’s ordinary shareholders
after deducting non-recurring gains and losses
                                                                            2.10%             0.082                   0.082

3. The differences between domestic and international accounting standards
There were no significant differences between domestic and international accounting standards among the
Company’s financial statements of the current period.




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                              Section 10 Reference Documents

1.   The accounting statements bearing the signatures and seals of the legal representative, the financial
     majordomo and the accountants in charge.
2.   The original copies of all the Company's documents and the original copies of the bulletins published on the
newspapers designated by the China Securities Regulatory Commission in the report period.
3.   Time for reference: from Monday to Friday 8:00 - 11:30 (am)     1:00 - 4:30 (pm)
     Liaison persons: Mr. Song Wenbao,Miss Du Yu
     Tel: 0086-411-87968130
     Fax: 0086-411-87968125




                                             Board of Directors of Dalian Refrigeration Co., Ltd.
                                                             August 26, 2017




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