Stock Code: 000530; 200530 Short Form of the Stock: Daleng Gufen; Daleng B; No: 2016-023 Dalian Refrigeration Co., Ltd. 2015 Annual Report Summary §1 Important Notes This summary is extracted from the original of the annual report. For more information, the investors are recommended to refer to the original. Note to the “Non-standardized Opinion” □Applicable √Inapplicable The profit distribution proposal √Applicable □Inapplicable Transfer the capital reserve to increase capital stock √Applicable □Inapplicable The profit distribution proposal reviewed and adopted at this Board meeting of the Company is: based on the total share capital of the Company of 360,164,975 shares, pay to all shareholders the cash dividend of 1 yuan (inclusive the tax) and transfer to all shareholders the capital reserve to increase capital stock, 5 shares for every 10 shares. Company Profile Short form of the stock DALENG GUFEN; DALENG-B Stock code 000530; 200530 Listed stock exchange Shenzhen Stock Exchange Authorized representative in charge Contact persons Secretary of the Board of Directors of securities affairs Name Song Wenbao Song Wenbao (proxy) DALENG GUFEN Securities and DALENG GUFEN Securities and Contact address Legal Affairs Department, No. 888, Legal Affairs Department, No. 888, Xinan Road, Shahekou District, Dalian Xinan Road, Shahekou District, Dalian Telephone 0411-86538130 0411-86538130 Fax 0411-86654530 0411-86654530 E-mail 000530@bingshan.com 000530@bingshan.com §2 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. 1 §3 Summary of Accounting Data and Financial Indexes 3.1 Main accounting data (Unit: RMB Yuan) 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? □Applicable √Inapplicable Increase/decrease compared 2015 2014 2013 with previous year Operating revenue 1,607,518,439.61 1,425,715,596.96 12.75% 1,535,706,911.25 Net profit attributable to shareholders of 129,947,307.39 115,439,722.39 12.57% 153,006,057.13 listed companies Net profit attributable to the shareholders of listed companies after 126,122,809.25 105,435,245.61 19.62% 121,207,821.52 the deduction of non-recurring profit and loss Net cash flow from operating activities -50,568,474.38 28,495,772.47 -277.46% 7,630,456.44 Basic earning per share 0.36 0.33 9.09% 0.44 Diluted earnings per share 0.36 0.33 9.09% 0.44 Weighted average return on net asset 6.38% 5.98% Increase 0.4percentage point 8.27% yield Increase/decrease compared At the end of At the end of 2015 At the end of 2014 with previous year 2013 Total assets 4,082,499,864.42 3,053,930,248.25 33.68% 2,967,390,234.89 Owner's equity attributable to 2,647,609,091.41 1,967,027,256.13 34.60% 1,907,018,190.46 shareholders of listed companies 3.2 The quarter main financial indicators (Unit: RMB Yuan) The first quarter The second quarter The third quarter The fourth quarter Operating revenue 393,941,332.13 317,799,010.00 484,517,139.92 411,260,957.56 Net profit attributable to shareholders of listed 22,435,890.92 43,041,885.07 33,950,019.32 31,166,513.94 companies Net profit attributable to the shareholders of listed 22,373,319.52 41,507,008.99 33,885,912.04 28,356,568.70 companies after the deduction of non-recurring profit and loss Net cash flow from operating -128,634,794.42 -1,955,126.95 -34,878,030.37 115,832,707.36 activities 2 §4 Share Capital and Shareholders' Information 4.1 Statement of shares held by the top ten shareholders Total number of shareholders Total number of shareholders as of the 5th trading 31,566 31,058 in the reporting period day before disclosure of the annual report Shareholding of top ten shareholders Number of Number of pledged Proport Total shares with Name Nature shares or ion number sale shares restriction frozen Domestic non-state-owned Dalian Bingshan Group Co., Ltd. 21.34% 76,855,683 19,213,921 0 legal person Sanyo Electric Co., Ltd. Overseas legal person 9.72% 35,001,500 0 0 National Social Security Fund 107 Portfolio Others 3.04% 10,946,061 0 0 Lion flexible configuration hybrid securities Others 1.39% 5,000,000 0 0 investment fund Vanguard harmony growth hybrid securities in Others 1.11% 3,988,558 0 0 vestment fund China industry selected hybrid securities Others 1.07% 3,862,484 0 0 investment fund Lin Zhenming Overseas natural person 0.75% 2,700,000 0 0 Upthrow morgan manufacturing excellence equity Others 0.68% 2,464,869 0 0 investment funds Sun Huiming Domestic natural person 0.68% 2,458,966 0 0 Jiang Youchang Domestic natural person 0.67% 2,417,328 0 0 Dalian Bingshan Group Co., Ltd. had the association Notes to the associated relationship and uniform actions of the relationship with Sanyo Electric Co., Ltd. among the above above shareholders shareholders. Sanyo Electric Co., Ltd. holds 26.6% of Dalian Bingshan Group Co., Ltd.'s equity. 3 4.2 Particulars about controlling shareholders and actual controller of the Company Commission of Dalian Municipality Government State-owned Assets Supervision and Administration Dalian State-owned Assets Management Co., Ltd. Dalian Equipment Manufacture Investment Dalan Zhonghuida Refrigeration Sanyo Electric Co., Ltd. Yida Group Co., Ltd. Dayang Co., Ltd. Technology Co., Ltd. Co., Ltd. 100% 100% 22.2% 4.4% 13.3% 13.3% 20.2% 26.6% Dalian Bingshan Group Co., Ltd. 21.34% Dalian Refrigeration Co., Ltd. §5 Discussion and analysis of the management 5.1 Business review for 2015 In 2015, despite of various challenges, the Company held confidence to accelerate integration of capital resources, speed up business model innovation and optimize industry chain under the operating policy of “leading innovation and creating value” pursuant to its middle-term development plan with supports from the effective implementation of the first batch of restricted share option scheme, striving to enhance operation management quality, realize operation target and promote transformation and upgrade. In 2015, the Company realized operating income of RMB 1,607.52 million, representing 97.43% of the annual plan of RMB 1,650 million and a year-on-year increase of 12.75%. The Company realized total profit of RMB 135.95 million, representing 90.63% of the annual plan of RMB150 million and a year-on-year increase of 9.65%. The Company realized net profit attributable to shareholders of listed companies of RMB 129.95 million, with a year-on-year increase of 12.57%. During the reporting period, the Company mainly focused on food freezing and refrigeration, engineer trading and services sectors to actively respond to market changes, aiming to deliver best value for customers. The Company succeeded in execution of CO2 cascade refrigeration system-Beida Huangtaihua Project, which provided sample project for the Company to further expand CO2 market. Riding on this project, it was able to improve the comprehensive solution and 4 special solutions with respect to full-auto logistic refrigerator, safety improvement of ammonia system and pre-refrigeration in manufacturing places, enabling the Company to establish effective connect with market demands and industry requirements. During the reporting period, the Company accelerated integration of capital resources based on expectation on growth and yield. It acquired 49% equity interests of Wuxin Refrigeration, making the latter to become its wholly owned subsidiary instead of a holding subsidiary. Through this acquisition, it was expected to implement integrated operation and deliver differential products. Besides, it acquired 30% equity interests of Sanyang Gaoxiao, making the latter to become its holding subsidiary instead of an associate calculated under equity method. Through this acquisition where it introduced private capital and innovative technology, the Company strengthened its capability of heat exchange during the cooling and heating industry chain. Furthermore, it improved efficiency through resources integration after it facilitated absorption and combination of Bingshan Lingshe (a holding subsidiary) and Bingshan Metal Processing (a wholly-owned subsidiary). It also expanded cold plate business through acquisition of 29.212% equity interests of Jingxue Refrigeration, which enabled the Company to optimize industry layout and strengthen industry synergism. During the reporting period, the Company continued to improve sales platform, construct service platform and accelerate business model innovation. The sale platform Dalian Bingshan Group Sales Company Limited actively innovated marketing model, emphasized comprehensive solution to satisfy higher requirements from market and customers, and substantially enhanced its market influence and competitiveness. The service platform Bingshan Technology Service (Dalian) Company has been put into official operation, recording enhancement of service quality, expansion of service market, initial effects of service network construction, substantial increase of accessories income and maintenance income, which remarked new service model for cooling and heating industry and represented the switch of the Company from a refrigerator equipment supplier to refrigeration service supplier. During the reporting period, the Company realized successful implementation of information construction projects including PDM and ERP projects, which enabled it to achieve orderly improvement of refined management. Construction of new smart plant is being promoted as scheduled. During the reporting period, the Company actively facilitated construction of the virtual technology R&D platform under cooperation between the parent company and Wuxin Refrigeration Company, and implemented its plan to jointly develop new products. Design of pre-cooling equipments based on production bases and recycling facilities have been completed and are available for commerce. Wuxin Refrigeration Company succeeded to generate power by expansion of natural gas and to realize commercialization of cooling energy recycle machine sets, realizing recycle of pressure energy from natural gas grid which filled the relevant blank in domestic market. During the reporting period, its subsidiary Bingshan Jiade continued to develop and upgrade Bingshan IOT Cloud management platform and energy management system, aiming to become the technology leader through construction of technological entry barrier. The FSO series refrigeration fan energy saving controller as jointly designed and manufactured by Bingshan Jiade can help the company to greatly improve its ability of saving refrigeration energy. 5 During the reporting period, challenged by the reduced demands from traditional air conditioner operators, its associated company Panasonic Compressor actively turned to develop freon system based refrigeration market, targeting for continuous increase of sales of scroll horizontal compressors used by electric buses. R32 scroll compressor was honored as an innovative product in the PRC refrigeration exhibition, which will take the advantage in new coolant switch. Half-closed single compound two stage frequency conversion screw compressor unit has successfully passed certification as scientific achievement, the overall technology of which was leading in international market. During the reporting period, its associated company Panasonic Refrigeration Link fully implemented value-oriented marketing, transferring from market leader to market creator. It launched comprehensive solutions including intelligent convenience shop and intelligent fresh delivery which filled market blanks. Besides, it developed CO2 subcritical parallel refrigeration unit and completed upgrade and reform of CO2 refrigeration systems in certain Metro shops. Through construction of flexible PULL production, it realized flexible production in small quantity with various units, which obviously shortened the production cycle. During the reporting period, its associated company Panasonic Refrigeration adequately adjusted marketing strategy to divide brominating and lithiation markets in detail, and realized high temperature water double effects and low temperature water single effect parallel refrigeration process for the first time. In relation to VRF market, the company actively developed agents and mini stores to expand selling channels. For the first time also, P-AIMS system was used to monitor energy utilization by air conditioner system, saving more than 10% of energy. During the reporting period, its associated company Dalian Fushi Bingshan innovated operating system, pursuant to which, it established sales companies and developed beverage operators such as Nongfu Spring and Coca Cola. Under the policy of intelligence, module, diversification and environment-friendly, the Company achieved rapid growth with sales volume of over 23,000 units and substantial increase of selling income and net profit, through innovation of touch screen machines, goods combination, payment methods and post-sale service Wechat platform. In addition, it also passed high-tech enterprise certification in Dalian, accomplishing monitor review on quality, environment and occupation health & safety system. During the reporting period, its associated company Keihin Grand-Ocean obtained the qualification of level A supplier for Faw-Volkswagen, which laid firm foundation for it to obtain projects from Volkswagen. Implementation of ERP system assisted the company to improve tracing quality of products. 5.2 Major change or adjustment in the Company's main business in the reporting period □Applicable √Inapplicable 5.3 Main business structure √Applicable □ Inapplicable Increase/decrea Increase/decreas Gross se of operating e of operating Increase/decrease of Product name Operating revenue Operating profit revenues on a profit on a gross profit on a profit year-on-year year-on-year year-on-year basis basis basis Refrigeration and Decrease 5.90 air-conditioning 1,590,994,011.67 291,467,877.55 18.32% 13.17% -14.40% equipment percentage points 6 5.4 Is there a need to pay particular attention to the operation of seasonal or cyclical features? □Applicable √Inapplicable 5.5 Major change in the Company's business revenue, business cost, or net profit attributable to shareholders of listed companies in the reporting period □Applicable √Inapplicable 5.6 Face suspension of listing and termination of the listing □Applicable √Inapplicable §6 Matters related to financial report 6.1 Change in accounting policies, accounting estimates and accounting methods compared with the financial statements of the previous year □Applicable √Inapplicable 6.2 Correction of major accounting mistakes in the reporting period, which should be retroactively restated □Applicable √Inapplicable 6.3 Explanation on change of consolidation scope in the report period compared with the latest annual report √Applicable □Inapplicable During the reporting period, the Company acquired 30% equity interests of Sanyo High-efficient held by Sanyo Electric Co., Ltd., making the latter to become its holding subsidiary instead of an associate calculated under equity method. Sanyo High-efficient was then included in the consolidation scope. During the reporting period, Bingshan Technical Service (Dalian) Co., Ltd. (“Bingshan Service”), theshusidiary of the Company, put into operation officially, and was then included in the consolidation scope. 6.4 Explanation of the Board of Directors to the “Non-standardized Opinion” □Applicable √Inapplicable Board of Directors of Dalian Refrigeration Co., Ltd. March 30, 2016 7