Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Dalian Refrigeration Co., Ltd.
2018 Semiannual Report
August, 2018
1
Dalian Refrigeration Co., Ltd. 2018 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
Semiannual Report describes major risks the Company may be confronted
with, the risk of Increasing market competition and high level of trade
receivables. 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.
2
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
CONTENTS
Section 1 Important Notice, Table of Contents, and Definitions ................................................................................2
Section 2 About the Company ....................................................................................................................................5
Section 3 Summary of Main Accounting Data and Financial Indicators....................................................................7
Section 4 Business discussion and analysis.................................................................................................................................. 8
Section 5 Important Issues........................................................................................................................................ 14
Section 6 Change in Share Capital and Shareholders' Information ..........................................................................18
Section 7 Information on Preferred Stock ................................................................................................................21
Section 8 Information on the Company’s Directors, Supervisors, and Senior Managers .........................................22
Section 9 Information on Corporate Bonds ..............................................................................................................23
Section 10 Financial Report .....................................................................................................................................24
Section 11 Contents of Reference Documents .......................................................................................................131
3
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Definitions
Defined item Stands for Meaning
Reporting period Stands for From Jan. 1, 2018 to Jun. 30, 2018
The Company, this Company Stands for Dalian Refrigeration Co., Ltd.
Wuhan New World Refrigeration Industries Co., Ltd., one of the
Wuxin Refrigeration Stands for subsidiaries of the Company where the Company holds 100% of its
shares.
Bingshan Engineering Dalian Bingshan Group Engineering Co., Ltd，one of the subsidiaries
Stands for
Company of the Company where the Company holds 100% of its shares.
Bingshan Technology Service (Dalian) Co., Ltd. one of the
Bingshan Service Company Stands for subsidiaries of the Company where the Company holds 100% of its
shares.
Panasonic Appliances Compressor (Dalian) Co., Ltd. one of the
Panasonic Compressor Stands for mutual shareholding companies of the Company, where the
Company holds 40% of its shares.
Panasonic Appliances Cold-Chain (Dalian) Co., Ltd. one of the
Panasonic Cold-Chain Stands for mutual shareholding companies of the Company, where the
Company holds 40% of its shares.
Panasonic Refrigerating System (Dalian) Co., Ltd., one of the mutual
Panasonic Refrigerating
Stands for shareholding companies of the Company, where the Company holds
System
20% of its shares
Dalian Fuji-Bingshan Vending Machine Co., Ltd., one of the mutual
Fuji-Bingshan Stands for shareholding companies of this Company, where the Company holds
49% of its shares.
Dalian Kelvin Technology Financial Leasing Co., Ltd，an indirect
Kelvin Stands for
joint venture company
Dalian Bingshan Hua Hui Da Financial Leasing Co., Ltd，an indirect
Bingshan Hua Hui Da Stands for
joint venture company
Dalian Bingshan Wisdom Park Co., Ltd，an indirect joint venture
Bingshan Wisdom Stands for
company
4
Dalian Refrigeration Co., Ltd. 2018 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
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 2017 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?
□ Applicable √ Not applicable
5
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Increase/decrease compared with the same
2018.1-6 2017.1-6
period of last year
Operating revenue 1,029,078,536.79 1,002,378,717.50 2.66%
Net profit attributable to shareholders of listed companies 59,017,542.28 98,260,163.09 -39.94%
Net profit belonging to the shareholders of listed
companies after the deduction of non-recurring profit and 57,185,177.31 69,960,863.49 -18.26%
loss
Net cash flow from operating activities -115,328,757.17 -148,577,541.90 28.83%
Basic earnings per share 0.069 0.115 -40.00%
Diluted earnings per share 0.069 0.115 -40.00%
Weighted average return on net asset yield 1.67% 2.95% Decrease 1.28 percentage points
2018.6.30 2017.12.31 Increase/decrease compared with 2017.12.31
Total assets 5,577,520,750.60 5,619,621,500.67 -0.75%
Owner's equity attributable to shareholders of listed
3,346,184,485.59 3,416,531,064.91 -2.06%
companies
The Net profit attributable to shareholders of listed companies Significantly decreased with the same period last
year, mainly because the intensified market competition and the tight budget during the reporting period led to a
significant decrease in the income from complete sets of projects, and the increase in bank borrowings led to a
significant increase in financial expenses, and also the Company sold 1.5 million shares of Guotai Junan stock in
the same period last year and obtained investment income of about RMB 27,460 thousand Yuan.
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 230,812.06
Government subsidies included in current profit or loss 800,600.00
Earnings from the Company get subsidiaries, associated companies and joint
venture investment cost less than get investment should enjoy the invested entity 1,068,246.27
produced by the fair value of the identifiable net assets yield
Other non-operating revenue or expense 154,426.97
Influence on income tax 383,065.12
Influence on minority shareholders 38,655.21
Total 1,832,364.97
6
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Section 3 The Company's Business profile
I. The Company’s Main business during the reporting period
The Company is committed to developing industrial refrigeration and heating business field, commercial
refrigeration and refrigeration business field, air-conditioning and environment business field, core parts business
field, engineering and service business field, 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 decreased on a year-on-year basis, mainly because of the interest income of bank financial
Interest receivables
products that have been accrued at the beginning of the period.
Significantly increased on a year-on-year basis, mainly due to the increase in unexpired dividends
Dividend receivable
receivable.
Significantly decreased on a year-on-year basis, mainly because the Company took back the financial
Other current assets
products purchased at the beginning of the period after the expiration
2. The main overseas assets
□ Applicable √ Not applicable
III. Analysis of core competence
The Company closely focuses on main business of cold and heat; independent R&D and joint venture partnerships
are cooperate with each other effectively; capital resources integration and business model innovation are in a
positive interaction; the community of business and interest are being created in two ways; the develop mode with
Bingshan characteristic are formed.
The Company has the most integrated cold-heat industrial chain for offering kinds of comprehensive solution
services, including design, manufacture, installation and maintenance etc., and can satisfy individual requirements
preferably.
The Company possesses a mature and solid marketing networks and after-sale service network on/off-line, and
can offer high quality and high value-added services more initiative and faster for clients from around the city.
After overall relocation reform, the new factory of intelligence, environment protection, high efficiency and safety
are put into used, which produces a strong comparative advantage for creating higher value to the customers.
While move forward with transformation and upgrading for former business, the Company will implement the
cultivation for new business, thus the sustainable healthy development will come more and more feasible.
Core-competency of the Company further promoted in the reporting period.
7
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Section 4 Business discussion and analysis
I. Summary
In the first half of 2018, the Company adhered to the theme of “Committing to Innovation, Focusing on
Transformation, and Sharing”, insisted on developing industry-leading new products and technologies that meet
market demand, innovated and developed new markets, and cultivated market segments, took the development
and utilization of energy, especially the secondary energy, as the continuous development point of transformation
and upgrading strategy. By leveraging the dual-creation platform, we made concerted efforts, assumed and shared
together, and endeavored to achieve the key business indicators. In the first half of 2018, the Company achieved
operating income of 1,029,078 thousand Yuan, with a year-on-year growth of 2.66%; achieved a total profit of
61,712 thousand Yuan, with a year-on-year decrease of 41.17%, mainly due to the reduction in the total project
income because of intensified market competition and tight financial position, and the increase in financial costs
because of increase in bank loans during the reporting period, and the Company sold 1,500,000 shares of Guotai
Junan stock and gained about 27,460 thousand yuan of investment income during the same period of last year.
During the reporting period, the Company’s subsidiary Wuxin Refrigeration accelerated the strategic
transformation, the natural gas pipeline network pressure energy generation and cold energy recovery system,
mine return air waste heat direct utilization system and other landmark new products realized commercial use in
multiple projects in many places. Among the enterprises funded by the Company, Wuxin Refrigeration took the
lead in launching the pilot project of dual-creation incentives to further stimulate the internal motivation of
strategic transformation.
During the reporting period, the Company’s subsidiary Bingshan Engineering Company continued to deepen the
hot and cold market segment by virtue of its high value-added deep enthalpy energy solutions. Bingshan
Engineering Company achieved new breakthroughs in the ice and snow industry and won the bid for the toboggan
run simulation test section project in the Olympic Winter Games, and was awarded the Grade A Qualification for
the general contracting of electromechanical engineering.
During the reporting period, Bingshan Service Company, the Company’s subsidiary, quickly expanded its
producer services by virtue of the first service model in the industry, and its operating income increased by
approximately 30% on a year-on-year basis. Bingshan Service Company united high quality customers through
the generator room hosting and related services, established strategic cooperation with Mengniu Dairy,
Anheuser-Busch InBev, and others, and signed an agreement about accessory repair and group-buying. With the
support of Liaoning Provincial Government, the 4S service model of ammonia-related refrigeration enterprises
began to be promoted to cities in the province except Dalian. Bingshan sharing service platform was built orderly,
and began to provide services for Bingshan-funded enterprises such as Fuji Bingshan, Spindle, and so on..
Bingshan Service Company won the A rating certificate of refrigeration and air conditioning for China equipment
maintenance and installation enterprise competence.
During the reporting period, Panasonic Compressor, the Company’s associated company, actively promoted the
transformation and focused on developing high-margin customers and markets. The sales volume of horizontal
scroll compressors for electric buses has recovered significantly. The horizontal scroll compressor for rail transit
air conditioning has achieved good results in the expansion in subway, light rail and other fields. The sales volume
8
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
of dedicated compressor for refrigeration increased significantly on a year-on-year basis. The horizontal DC
inverter fully enclosed electric scroll compressor was selected into the “2018 Energy Conservation and
Environmental Protection Product Catalogue of Chinese Association of Refrigeration”.
During the reporting period, Panasonic Cold Chain, an associated company of the Company, conformed to the
new trend of consumption and further expanded and subdivided the blue ocean market. For the convenience store
business, it made effective cooperation with key customers such as Hema Fresh, Jingdong, OurHours, Lawson,
and so on, and the income achieved a year-on-year growth of about 30%. For commercial kitchen business,
Panasonic Cold Chain won the bid for the Great Hall of the People project. And it was awarded the First Batch of
Green Factories in Liaoning Province.
During the reporting period, Panasonic Refrigeration System, the Company’s associated company, successfully
applied the CO2 refrigeration compressor to the cold chain system of Beijing CFS Market, which realized the first
commercial use of the CO2 transcritical piston refrigeration compressor unit in the domestic supermarket retail
field. It also won the bid for Jingdong Beijing Daxing Pharmaceutical Storage Project and Wuhan Cold Storage
Project, and the total contract amount is over 60 million Yuan.
During the reporting period, the Company’s associated company, Fuji Bingshan, further promoted the
development of product intelligence, modularization, and diversification, and newly added platform machine
product line based on the six product lines of beverage machine, food machine, liquor machine, dairy machine,
coffee machine, and lunch box machine so as to quickly respond to the demand of new retail platform, actively
deployed in the international market, and has covered Hong Kong, Macao and Taiwan regions, Australia, and
Southeast Asian countries. It is the first in the industry to introduce R1234yf new refrigerant production line,
leading the industry safety and green environmental development trend.
During the reporting period, the Company actively promoted the cultivation and incubation of new businesses
while the original business was undergoing transformation and upgrading. Kelvin, an indirect joint venture
company, focused on the unmanned retail field, strengthened the unmanned retail smart terminals and Internet
platforms, and strived to open up the online and offline consumption scenarios; Bingshan Huahuida, the
Company’s indirect joint venture, effectively expanded the financial leasing business around high-quality
customers in Bingshan cold and hot business, boosted the sales of all investment enterprises in Bingshan, speeded
up the withdrawal of funds and improved the cash flow of business activities; Bingshan Wisdom Company, the
Company’s indirect joint venture company, cooperated in the comprehensive utilization of the old factory area
and has achieved remarkable results in the investment promotion at present, and the remoulding work is
proceeding orderly.
II. Analysis of main business
See the related content “Section 4 Business situation discussion and analysis” the “Summary”
Main financial data variations as compared to the same period of last year
9
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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 1,029,078,536.79 1,002,378,717.50 2.66%
Operating cost 852,843,875.27 817,281,905.05 4.35%
Selling and distribution expenses 48,662,813.11 43,854,411.28 10.96%
Administrative expenses 109,129,492.67 109,566,823.88 -0.40%
Financial expenses 8,639,264.80 2,994,727.94 188.48% interest expense increased
Income tax 3,440,444.25 6,161,546.29 -44.16% the taxable income decreased
R&D expenses 44,250,377.08 45,107,042.29 -1.90%
Net cash flow coming from
-115,328,757.17 -148,577,541.90 22.38%
operating activities
the large amount of cash paid for
Net cash flow coming from
-7,756,831.93 -207,575,313.90 78.74% investment in the same period last
investment activities
year.
the cash paid by the Company and
Net cash flow coming from its subsidiaries for repayment of
62,859,585.22 108,033,298.11 -41.81%
fund-raising activities loans increased in the current
period.
Net increase in cash and cash The net cash flows arising from
-61,261,801.17 -248,795,325.48 75.38%
equivalents investing activities increased
Main business structure
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 Decrease1.24 perce
1,010,172,413.37 841,675,852.36 16.68% 2.28% 3.82%
air-conditioning ntage points
Decrease 14.33 per
Others 18,906,123.42 11,168,022.91 40.93% 28.48% 69.64%
centage points
By product
Refrigeration and
Decrease1.24 perce
air-conditioning 1,010,172,413.37 841,675,852.36 16.68% 2.28% 3.82%
ntage points
equipment
Decrease 14.33 per
Others 18,906,123.42 11,168,022.91 40.93% 28.48% 69.64%
centage points
By region
Decrease1.96 perce
Northeast China 887,032,638.68 737,965,920.61 16.81% 0.69% 3.12%
ntage points
Increase 3.78 perce
Central China 112,878,374.08 87,239,666.74 22.71% 28.08% 22.11%
ntage point
Decrease4.05
East China 29,167,524.03 27,638,287.92 5.24% -12.30% -8.39%
percentage points
10
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
III. Analysis of the non-main business
□ Applicable √ Not applicable
IV. Analysis of assets & liabilities
1. Remarkable change in assets
Monetary unit: RMB yuan
30-6-2018 30-6-2017
Proportion
Proportion to Proportion increase/decrease.
Amount to the total Amount
the total assets
assets
Monetary funds 320,888,697.16 5.75% 469,049,698.39 8.73% Decrease 2.98 percentage points
Accounts receivable 1,128,713,203.97 20.24% 903,229,293.38 16.81% Increase 3.43 percentage points
Inventories 426,838,934.51 7.65% 413,011,874.26 7.69% Decrease 0.04 percentage points
Investment property 102,852,288.67 1.84% 88,435,542.39 1.65% Increase 0.19 percentage points
Long-term equity
1,547,271,618.09 27.74% 1,507,902,442.59 28.06% Decrease 0.32 percentage points
investment
Fixed assets 870,473,528.21 15.61% 742,865,721.32 13.83% Increase 1.78 percentage points
Construction in
99,096,551.25 1.78% 107,488,807.06 2.00% Decrease 0.22 percentage points
progress
Short-term loans 410,000,000.00 7.35% 215,319,700.00 4.01% Increase 3.34 percentage points
Long-term loans 160,000,000.00 2.87% 160,000,000.00 2.98% Decrease 0.11 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 373,763,285.55 yuan，the final number is 399,437,712.30 yuan.
V. Analysis of investments
1.The overall situation
√ Applicable □ Not applicable
Investment in the report period (yuan) Investment in the same period of last year (yuan) Amount of variation
1,547,271,618.09 1,507,902,442.59 2.61%
2.The significant equity investment during the reporting period
□ Applicable √ Not applicable
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
Changes
in the
Accumulative
Initial Accounting profit and
Stock Stock Book value at change of fair Current sale Report period Book value in the Accounting Source
investment measureme loss of the
code abbreviation the beginning value credited to amount profit and loss ending subjects of funds
cost nt model fair value
equity
in this
period
fair value Financial
Own
601211 Guotai Jun’an 27,098,895.00 measureme 501,871,535.40 0.00 373,763,285.55 0 10,839,558.00 399,437,712.30 assets available
funds
nt for sale
total 27,098,895.00 -- 501,871,535.40 0.00 373,763,285.55 0 10,839,558.00 399,437,712.30 -- --
11
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
(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 2018
semi-annual use and deposit of funds raised>which published on http//www.cninfo.com.cn on August 25,2018.
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 Net profit
Company name Type The main business income profit
capital ( yuan) assets( yuan) ( yuan)
( yuan) ( yuan)
mutual
Panasonic Refrigeration and JPY 6,200
shareholding 1,813,736,277.69 1,164,525,948.65 770,577,003.95 70,476,375.73 59,081,945.59
Compressor air-conditioning million
company
mutual
Full function JPY 4,000
Fuji Bingshan shareholding 656,038,553.62 391,648,150.62 239,919,017.35 34,306,597.29 29,478,738.29
vending machine million
company
Pipe system
connectors,
high-speed rail
Dalian Bingshan mutual
connectors, USD 18.0645
Metal Technology shareholding 377,550,355.10 322,830,602.20 227,720,485.87 34,187,261.27 29,265,580.71
hydraulic valve million
Co., Ltd company
bodies,
automotive engine
parts, etc.
Subsidiary companies obtained or disposed in the reporting period
□Applicable √Not applicable
VIII. The structured corporate bodies which the Company controlled
□Applicable √Not applicable
IX.Estimation of the business performance for Jan.-Sept., 2018
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
(1)Increasing market competition risk
Countermeasures: focus on refrigeration and heating industries, deeply plough market segmentation and seek for
12
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
business blue sea; improve intelligent manufacturing and service-based manufacturing in an orderly manner;
accelerate transformation and upgrading of the existing business; accelerate cultivation of new businesses; create
the iceberg cause and common interest.
(2)Risk of high level of trade receivables
Countermeasures: effective inventory management and intensified management on trade receivables; enhance
quality of contract through intensified customer credit assessment and contract appraisal; effective control of
increase in trade receivables by reduction of guarantee deposits, taking bank credit instruments as guarantee
deposits and finance leasing; improve contract execution through stricter review on goods delivery, intensified
control on project construction and post-sale service; prepare special composition solutions through professional
creditor’s right management institutions and accelerate settlement of trade receivables with relatively long aging.
13
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Section 5 Important Issues
I. Shareholders’ general meeting convened in the reporting period
The proportion of
Session number of meeting The type of the meeting date Disclosing date Disclosing index
participate investors
Annual Shareholders’ General May http://www.cnin
2017 Annual Shareholders’ General Meeting 30.78% May19,2018
Meeting 18,2018 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
The controlling shareholder of the Company and the Company don’t exist situation such as unfulfilled the court’s
effective judgments or failed to pay duly a large amount of debt during the reporting period.
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,following first batch of unlock on April 22, 2016, second batch of unlock on May 23, 2017 ,third
batch of unlock on May 15,2018. 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 was286,280 thousand yuan, accounting for 32.53% of the budgeted amount for the year 2018. This
included 100,360 thousand yuan, accounting for 31.36% of the budgeted amount for the year 2018, for purchasing
supporting products for package projects from associated parties, and 185,920 thousand yuan, accounting for
33.20% of the budgeted amount for the year 2018, from selling supporting parts and components to associated
parties.
2. Associated transactions related to purchases or sales of assets
□ Applicable √ Not applicable
3. Important associated transactions with joint external investments
□ Applicable √ Not applicable
4.Current associated rights of credit and liabilities
□ Applicable √ Not applicable
14
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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 an agreement with Dalian Bingshan Group Co., Ltd. to lease 576 square meters of office
space in the office building to Dalian Bingshan Group Co., Ltd., and the lease term is from April 1, 2017 to March
31, 2019, and the rent for 2018 is 144,000.00 Yuan.
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 for 2018 is RMB 4.2 million Yuan.
The Company signed rental contract with Dalian Bingshan Wisdom Park Co., Ltd., and 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 annual rent fee for
2018 is RMB 7.86 million Yuan.
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 has transferred 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. Trust management
√Applicable □ Not applicable
On August 25, 2017, the Company held the 15th meeting of the 7th board of directors which deliberated and
approved the Report on the use of Temporary Idle Raised Funds to Purchase Principal-Protected Bank Financial
Products”, and agreed to use temporary idle raised funds with a quota of not more than RMB 80 million for cash
management so as to purchase principal-protected bank financial products in good time, and the funds may be
used in a rolling manner within the above-mentioned quota, and the period of use shall not exceed one year from
the date of consideration and approval by the board of directors.
As of June 30, 2018, the Company’s bank financial products purchased with idle raised funds of 76 million Yuan
15
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
have been taken back at maturity.
4.Other important contracts
□Applicable √Not applicable
XV. Social responsibilities
√Applicable □ Not applicable
1、Major environmental issues
The listed company and its subsidiaries whether belong to heavy pollution industry formulated by the state
environmental protection department
√Yes □ No
Pollutant
Number of Distribution of discharge Total Total Excessiv
Enterprise or Main pollutant Way of Emission
discharge the discharge standard discharg approved e
subsidiary and features discharge concentration
outlet outlet implemente e emissions emission
d
Dalian Refrigeration Unified 167 DB21 1.76 Not over
COD sequence 1 6 tons
Co., Ltd. discharged ㎎/L tons standard
1627-2008
Dalian Refrigeration Ammonia Unified DB21 0.22 Not over
sequence 1 28.8 ㎎/L 0.9 tons
Co., Ltd. nitrogen discharged tons standard
1627-2008
Dalian Refrigeration Unified 10.6 GB9078-19 1.60 Not over
Dust sequence 1 6.8 tons
Co., Ltd. discharged mg/m 3
tons standard
96
Panasonic Compressor Unified DB21 1.19 Not over
COD sequence 1 22 ㎎/L 2.8 tons
(Dalian) Co., Ltd. discharged tons standard
1627-2008
Panasonic Compressor Ammonia Unified DB21 0.007 Not over
sequence 1 0.125 ㎎/L 0.5 tons
(Dalian) Co., Ltd. nitrogen discharged tons standard
1627-2008
Panasonic Compressor Unified DB21 0.005 Not over
petroleum sequence 1 0.99 ㎎/L 0.2 tons
(Dalian) Co., Ltd. discharged tons standard
1627-2008
Assembly
workshop ：
Assembly
Panasonic Compressor 2.03 mg/m3； GB16297-1 0.04 Not over
Mixed dust sequence 2 workshop、Shell 1.3tons
(Dalian) Co., Ltd. Shell tons standard
workshop 996
workshop ：
1.66 mg/m3
16
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
2、Fulfillment of social responsibilities for targeted poverty alleviation
In the first half of 2018, the Company joined hands with the controlling shareholder and continued to carry
through the fixed-point poverty alleviation at Songlin Village, Guangmingshan Town, Zhuanghe City. In the first
half of the year, in order to improve the cultural life of the villagers, the Company funded and prepared to build
the Songlin Village Cultural Square which has begun to take shape, and the Company will continue to pay
attention to the construction and use, and implement the poverty alleviation work.
In the second half of 2018, the Company will innovate the support measures and continue to promote accurate
poverty alleviation planning.
The first is to make thorough investigation and survey on Songlin Village, on the basis of building a cultural
square, combine with the actual situation of the region, promote industrial poverty alleviation.
The second is to continue to strengthen education and poverty alleviation so as to let more children from poor
families have the chance to attend school.
XVI. Other important matters
□ Applicable √ Not applicable
XVII. Other important matters of subsidiary company
□ Applicable √ Not applicable
17
Dalian Refrigeration Co., Ltd. 2018 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
21,545,455 2.52% -5,229,001 16,316,454 1.91%
trade conditions
Executive lock stock 2,351,175 0.28% +1,743,699 4,094,874 0.48%
Equity incentive restricted stock 19,194,280 2.24% -6,972,700 12,221,580 1.43%
II. Circulating share capital 834,941,726 97.48% +4,175,907 839,117,633 98.09%
1. Domestically listed ordinary shares 593,441,726 69.28% +4,175,907 597,617,633 69.86%
2. Domestically listed foreign shares 241,500,000 28.20% 0 241,500,000 28.23%
III. Total shares 856,487,181 100%- -1,053,094 855,434,087 100%
The reason for the Change in share capital
On February 12, 2018, the repurchase and cancellation of part restricted stock of the Company’s 2016 restricted
stock incentive plan was completed; on April 2, 2018, Liu Kai, the former vice president of the Company,
resigned; on May 15, 2018, the third batch of the Company’s 2015 restricted stock incentive plan was unlocked;
on May 30, 2018, the repurchase and cancellation of part restricted stock of the Company’s 2015 restricted stock
incentive plan was completed. The things mentioned above in the report have caused the change of the total
amount of shares and the structure of stock.
Approval of changes in shares
√Applicable □ Not applicable
the repurchase and cancellation of part restricted stock of the Company’s 2016 restricted stock incentive plan was
approved by the 17th meeting of 7th Board of Directors of the Company and the 3rd Extraordinary general meeting
of 2017; the repurchase and cancellation of part restricted stock of the Company’s 2015 restricted stock incentive
plan was approved by the 21th meeting of 7th Board of Directors of the Company.
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 earnings per share of 2017 is 0.23 yuan; According to the latest equity is adjusted for 0.23yuan;
(2)The diluted earnings per share of 2017 is 0.23 yuan; According to the latest equity is adjusted for 0.23 yuan;
(3)The net assets per share of 2017 is3.99 yuan; According to the latest equity is adjusted for3.99 yuan.
(4)The basic earnings per share of the first quarter of 2018 is 0.03yuan; According to the latest equity is adjusted
for 0.03 yuan;
(5)The diluted earnings per share of the first quarter of 2018 is 0.03yuan; According to the latest equity is adjusted
for 0.03 yuan;
(6)The net assets per share of the first quarter of 2018 is 3.98 yuan; According to the latest equity is adjusted
for3.99 yuan.
2. The restricted shares changes
√Applicable □ Not applicable
For details, please see the Chinese version of 2018 Semiannual Report.
18
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
II. Securities issuance and listing
1. Securities issuance in the report period
□ Applicable √ Not applicable
III. Shareholders and actual controller
1. Number of shareholders and their shareholding
Total number of shareholders in the reporting period 49,814
Shareholding of top ten shareholders
Number of Number of
shares with pledged
Name Nature Proportion Total number
sale shares or
restriction shares frozen
Domestic non-state-owned
Dalian Bingshan Group Co., Ltd. 19.98% 170,916,934 0 0
legal person
Sanyo Electric Co., Ltd. Overseas legal person 8.59% 73,503,150 0 0
Lin Zhenming Overseas natural person 0.74% 6,349,740 0 0
Haitong securities co. LTD State-owned legal person 0.70% 6,000,000 0 0
JOHCM INTERNATIONAL
Overseas legal person 0.64% 5,432,942 0 0
SMALL CAP EQUITY FUND
Sun Huiming Domestic natural person 0.51% 4,384,079 0 0
Wu An Domestic natural person 0.51% 4,359,900 0 0
Caitong Capital Kunze No. 2 Securities
Others 0.48% 4,114,534 0 0
Investment Fund
National Social Security Funds 104
Others 0.48% 4,105,157 0 0
Portfolio
BOCI SECURITIES LIMITED Overseas legal person 0.41% 3,471,602 0 0
Shareholding of top ten shareholders without sale restriction
Name Number of shares without sale restriction Type of shares
Dalian Bingshan Group Co., Ltd. 170,916,934 RMB denominated ordinary shares
Sanyo Electric Co., Ltd. 73,503,150 Domestically listed foreign shares
Lin Zhenming 6,349,740 Domestically listed foreign shares
Haitong securities co. LTD 6,000,000 RMB denominated ordinary shares
JOHCM INTERNATIONAL
5,432,942 Domestically listed foreign shares
SMALL CAP EQUITY FUND
Sun Huiming 4,384,079 Domestically listed foreign shares
Wu An 4,359,900 Domestically listed foreign shares
Caitong Capital Kunze No. 2 Securities
4,114,534 RMB denominated ordinary shares
vInestment Fund
National Social Security Funds 104
4,105,157 RMB denominated ordinary shares
Portfolio
BOCI SECURITIES LIMITED 3,471,602 Domestically listed foreign shares
19
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Dalian Bingshan Group Co., Ltd. had the association relationship with Sanyo
Notes to the associated relationship and
Electric Co., Ltd. among the above shareholders. Sanyo Electric Co., Ltd. holds
uniform actions of the above shareholders
26.6% of Dalian Bingshan Group Co., Ltd.'s equity.
If the company shareholders had any agreed repurchase transaction in the report period
□ Yes √ No
IV. 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
20
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Section 7 Information on Preferred Stock
□ Applicable √ Not applicable
In the reporting period, the Company didn’t own preferred stock.
21
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Section 8 Information on the Company’s Directors, Supervisors,
and Senior Managers
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) (shares) (shares)
Ji Zhijian Chairman Incumbent 1,528,830 0 0 1,528,830
Ding Jie Vice Chairman,GM Incumbent 1,015,000 0 0 1,015,000
Xu Junrao Director Incumbent 1,030,349 0 35,000 995,349
Fan Yuekun Director DGM Incumbent 700,000 0 0 700,000
Takagi Toshiyuki Director Incumbent 0 0 0 0
Shin Kudo Director Incumbent 0 0 0 0
Independent
Dai Dashuang Incumbent 0 0 0 0
director
Independent
Liu Jiwei Incumbent 0 0 0 0
director
Independent
Wang Yan Incumbent 0 0 0 0
director
Mao Chunhua Supervisor Incumbent 0 0 0 0
Dai Yuling Supervisor Incumbent 0 0 0 0
Cao Lili Supervisor Incumbent 0 0 0 0
Chief Financial
Ma Yun Incumbent 700,000 0 175,000 525,000
Officer
Song Wenbao Board secretary Incumbent 593,880 0 0 593,880
Former
Liu Kai Leaving 1,385,160 0 300,000 1,085,160
vice-chairman
Total -- -- 6,953,219 0 510,000 6,443,219
II. Changes of directors, supervisors, senior managers of the Company
Name Position held Type Date Reason
Liu Kai Vice Chairman Leaving office Apr.2, 2018 Resign from the Company due to job changes
Ding Jie Vice Chairman Be employed Apr.20, 2018 Be employed
Fan Yuekun Director Be employed May 18, 2018 Be employed
22
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Section 9 Corporate Bonds
The Company’s non-public issuance of exchangeable corporate bonds was listed at the Shanghai Stock
Exchange on August 6, 2018. Until June 30, 2018., the Company did not use bonds to raise funds. As of
August 1, 2018, according to the using plan disclosed in the prospectus, the raised funds of the
Company’s non-public issuance of exchangeable corporate bonds have been used to repay bank loans.
23
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Section 10 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, 2018 Unit: RMB Yuan
30-June-2018 31-Dec-2017
Assets
Consolidation Parent Company Consolidation Parent Company
Current assets:
Monetary funds 320,888,697.16 205,693,563.52 394,809,694.11 234,655,092.14
Financial assets which are measured by fair value and
which changes are recorded in current profit and loss
Derivative financial assets
Notes receivable 178,591,684.70 73,051,621.48 172,818,176.20 57,455,446.82
Accounts receivable 1,128,713,203.97 374,625,218.70 1,036,255,895.79 356,557,956.93
Accounts in advance 154,678,440.57 60,530,488.53 140,808,375.21 33,125,666.30
Interest receivables 950,000.00 950,000.00 1,871,783.33 1,871,783.33
Dividend receivable 60,369,200.00 63,029,200.00 33,450.00
Other receivables 42,312,803.34 3,415,107.70 52,049,009.83 2,822,798.03
Inventories 426,838,934.51 180,427,893.87 352,279,664.64 149,549,915.80
Assets held for sale
Non-current asset due within one year
Other current assets 32,336,384.81 24,817,232.58 114,907,269.33 102,402,409.84
Total current assets 2,345,679,349.06 986,540,326.38 2,265,833,318.44 938,441,069.19
Non-current assets:
Finance asset held available for sales 413,449,370.89 412,034,228.39 515,783,193.99 514,468,051.49
Held-to-maturity investment
Long-term account receivable
Long-term equity investment 1,547,271,618.09 2,029,957,174.09 1,568,255,738.12 2,044,438,551.88
Investment property 102,852,288.67 113,864,536.10 103,861,275.27 114,812,363.92
Fixed assets 870,473,528.21 640,034,868.11 890,874,647.40 658,637,271.68
Construction in progress 99,096,551.25 97,248,717.94 82,999,382.90 80,314,961.09
Engineering material
Disposal of fixed asset
Productive biological asset
Oil and gas asset
Intangible assets 149,687,755.65 70,385,052.18 143,918,516.87 71,715,598.15
Expense on Research and Development
Goodwill 1,750,799.49 1,750,799.49
Long-term expenses to be apportioned 13,709,669.51 11,991,166.08 14,431,131.01 12,737,555.16
Deferred income tax asset 33,549,819.78 5,243,052.44 31,913,497.18 5,815,160.93
Other non-current asset
Total non-current asset 3,231,841,401.54 3,380,758,795.33 3,353,788,182.23 3,502,939,514.30
Total assets 5,577,520,750.60 4,367,299,121.71 5,619,621,500.67 4,441,380,583.49
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua
24
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
BALANCE SHEET (CONTINUED)
Prepared by Dalian Refrigeration Co., Ltd. June 30, 2018 Unit: RMB Yuan
30-June-2018 31-Dec-2017
Liabilities and shareholders’ equity
Consolidation Parent Company Consolidation Parent Company
Current liabilities:
Short-term loans 410,000,000.00 330,000,000.00 349,801,300.00 260,000,000.00
Derivative financial liabilities
Notes payable 235,976,696.89 118,614,231.94 260,443,167.67 119,034,784.44
Accounts payable 940,170,813.99 349,073,142.16 889,964,317.63 385,076,569.09
Accounts received in advance 110,572,372.72 11,524,248.47 147,172,195.05 61,450,463.91
Wage payable 21,546,377.42 1,485,433.91 46,751,562.36 11,445,665.15
Taxes payable 8,389,168.60 1,200,105.95 29,992,558.62 1,274,710.89
Interest payable 379,085.53 379,085.53
Dividend payable 44,775,220.95 43,304,860.35 863,516.60 533,156.00
Other accounts payable 60,550,664.56 27,396,702.61 67,674,829.07 30,346,173.96
Liabilities held for sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 1,831,981,315.13 882,598,725.39 1,793,042,532.53 869,540,608.97
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 97,362,083.39 54,473,081.39 100,336,504.07 56,890,504.07
Deferred income tax liabilities 56,064,492.86 56,064,492.86 71,429,566.31 71,429,566.31
Other non-current liabilities
Total non-current liabilities 313,426,576.25 270,537,574.25 331,766,070.38 288,320,070.38
Total liabilities 2,145,407,891.38 1,153,136,299.64 2,124,808,602.91 1,157,860,679.35
Shareholders’ equity
Share capital 855,434,087.00 855,434,087.00 856,487,181.00 856,487,181.00
Other equity instruments
Capital public reserve 757,087,861.76 801,589,956.59 757,532,081.34 802,034,176.17
Less:Treasury stock 21,026,106.00 21,026,106.00 23,305,370.40 23,305,370.40
Other comprehensive income 320,200,252.46 319,238,151.79 407,269,002.11 406,306,901.44
Special preparation
Surplus public reserve 704,876,971.48 704,876,971.48 668,150,375.30 668,150,375.30
Retained profit 729,611,418.89 554,049,761.21 750,397,795.56 573,846,640.63
Translation of foreign currency capital
Total owner’s equity attributable to parent company 3,346,184,485.59 3,214,162,822.07 3,416,531,064.91 3,283,519,904.14
Minority interests 85,928,373.63 78,281,832.85
Total owner’s equity 3,432,112,859.22 3,214,162,822.07 3,494,812,897.76 3,283,519,904.14
Total liabilities and shareholder’s equity 5,577,520,750.60 4,367,299,121.71 5,619,621,500.67 4,441,380,583.49
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua
25
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
INCOME STATEMENT
Prepared by Dalian Refrigeration Co., Ltd. January-June, 2018 Unit: RMB Yuan
January-June, 2018 January-June, 2017
Items
Consolidation Parent Company Consolidation Parent Company
I. Total sales 1,029,078,536.79 303,046,735.19 1,002,378,717.50 349,829,026.25
Including: Operating income 1,029,078,536.79 303,046,735.19 1,002,378,717.50 349,829,026.25
II. Total operating cost 1,036,093,228.98 317,143,199.21 992,114,223.92 349,824,353.81
Including: Operating cost 852,843,875.27 260,733,552.03 817,281,905.05 295,995,983.48
Taxes and associate charges 8,733,921.73 4,555,858.93 8,177,166.95 3,703,168.02
Selling and distribution expenses 48,662,813.11 281,553.90 43,854,411.28 674,115.60
Administrative expenses 109,129,492.67 50,452,616.69 109,566,823.88 52,988,925.98
Financial expense 8,639,264.80 5,406,975.69 2,994,727.94 1,050,468.36
Impairment loss 8,083,861.40 -4,287,358.03 10,239,188.82 -4,588,307.63
Add: Gain/(loss) from change in fair value
Gain/(loss) from investment 66,613,044.44 73,950,865.14 87,875,295.69 105,942,061.06
Including: income from investment on
55,473,486.44 56,407,982.41 48,681,040.63 49,382,705.41
affiliated enterprise and jointly enterprise
Gain/(loss) from asset disposal 230,812.06 248,128.41 127,853.00 78,112.29
Other income 109,637.40
III. Operating profit 59,938,801.71 60,102,529.53 98,267,642.27 106,024,845.79
Add: non-business income 2,176,863.94 251,000.07 6,687,636.98 4,787,899.98
Less: non-business expense 153,590.70 80,000.00 52,399.10
IV. Total profit 61,962,074.95 60,273,529.60 104,902,880.15 110,812,745.77
Less: Income tax 3,440,444.25 572,108.49 6,161,546.29 345,321.98
V. Net profit 58,521,630.70 59,701,421.11 98,741,333.86 110,467,423.79
(I) Classification by continuous operation
1. Net profit from continuous operation 58,521,630.70 59,701,421.11 98,741,333.86 110,467,423.79
2. Net profit from discontinuing operation
(II)Classification by ownership
1.Net profit attributable to parent company 59,017,542.28 59,701,421.11 98,260,163.09 110,467,423.79
2.Minority shareholders’ gains and losses -495,911.58 481,170.77
VI. After-tax net amount of other comprehensive
-87,068,749.65 -87,068,749.65 21,467,459.49 21,731,125.57
incomes
After-tax net amount of other comprehensive
-87,068,749.65 -87,068,749.65 21,467,459.49 21,731,125.57
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
-87,068,749.65 -87,068,749.65 21,467,459.49 21,731,125.57
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
-87,068,749.65 -87,068,749.65 21,731,125.57 21,731,125.57
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
26
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
5. Foreign-currency financial statement
translation difference
6. Other
After-tax net amount of other comprehensive
incomes attributable to minority shareholders
VII Total comprehensive income -28,547,118.95 -27,367,328.54 120,208,793.35 132,198,549.36
Total comprehensive income attributable to
-28,051,207.37 -27,367,328.54 119,727,622.58 132,198,549.36
parent company
Total comprehensive income attributable to
-495,911.58 481,170.77
minority shareholders
VIII. Earnings per share
(I) basic earnings per share 0.069 0.115
(II) diluted earnings per share 0.069 0.115
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua
27
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
CASH FLOW STATEMENT
Prepared by Dalian Refrigeration Co., Ltd. January -June, 2018 Unit: RMB Yuan
January -June, 2018 January -June, 2017
Items
Consolidation Parent Company Consolidation Parent Company
I. Cash flows arising from operating
activities:
Cash received from selling commodities
632,708,032.41 213,979,631.33 723,102,679.71 261,996,773.84
and providing labor services
Write-back of tax received 8,304,625.28 8,747,344.02 1,115.75
Other cash received concerning operating
18,524,029.58 4,274,956.26 47,641,383.74 33,440,766.76
activities
Subtotal of cash inflow arising from
659,536,687.27 218,254,587.59 779,491,407.47 295,438,656.35
operating activities
Cash paid for purchasing commodities and
459,421,142.63 221,317,190.65 631,160,168.61 281,659,408.50
receiving labor service
Cash paid to/for staff and workers 189,833,832.63 70,455,961.47 177,808,786.10 70,029,214.82
Taxes paid 53,229,514.92 4,952,102.76 40,531,325.05 4,393,809.59
Other cash paid concerning operating
72,380,954.26 10,875,163.82 78,568,669.61 10,122,365.06
activities
Subtotal of cash outflow arising from
774,865,444.44 307,600,418.70 928,068,949.37 366,204,797.97
operating activities
Net cash flows arising from operating
-115,328,757.17 -89,345,831.11 -148,577,541.90 -70,766,141.62
activities
II. Cash flows arising from investing
activities:
Cash received from recovering investment 1,500,000.00 1,500,000.00
Cash received from investment income 20,779,048.00 20,745,598.00 44,490,765.66 54,451,740.66
Net cash received from disposal of fixed,
4,093,774.11 200,520.00
intangible and other long-term assets
Net cash received from disposal of
subsidiaries and other units
Other cash received concerning investing
76,000,000.00 76,000,000.00
activities
Subtotal of cash inflow from investing
100,872,822.11 96,745,598.00 46,191,285.66 55,951,740.66
activities
Cash paid for purchasing fixed, intangible
104,301,920.61 95,865,456.22 77,106,599.56 70,648,520.68
and other long-term assets
Cash paid for investment 4,327,733.43 176,660,000.00 176,660,000.00
Net cash received from payment of
subsidiaries and other business units
Other cash paid concerning investing
activities
Subtotal of cash outflow from
108,629,654.04 95,865,456.22 253,766,599.56 247,308,520.68
investing activities
Net cash flows arising from investing
-7,756,831.93 880,141.78 -207,575,313.90 -191,356,780.02
activities
III. Cash flows arising from financing
activities
Cash received from absorbing investment 4,900,000.00
Including: Cash received from absorbing
minority shareholders' equity investment by 4,900,000.00
subsidiaries
Cash received from loans 313,004,000.00 300,000,000.00 221,269,700.00 160,000,000.00
Other cash received concerning financing
30,116,287.80 21,576,815.56
activities
Subtotal of cash inflow from financing
343,120,287.80 300,000,000.00 247,746,515.56 160,000,000.00
activities
Cash paid for settling debts 249,904,100.00 230,000,000.00 52,010,000.00
Cash paid for dividend and profit
9,236,961.88 7,049,450.06 63,497,016.56 62,191,592.93
distributing or interest paying
Including: dividends or profit paid by
subsidiaries to minority shareholders
28
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Other cash paid concerning financing
21,119,640.70 3,446,078.94 24,206,200.89
activities
Subtotal of cash outflow from
280,260,702.58 240,495,529.00 139,713,217.45 62,191,592.93
financing activities
Net cash flows arising from financing
62,859,585.22 59,504,471.00 108,033,298.11 97,808,407.07
activities
IV. Influence on cash due to fluctuation in
-1,035,797.29 -310.29 -675,767.79 164,586.98
exchange rate
V. Net increase of cash and cash
-61,261,801.17 -28,961,528.62 -248,795,325.48 -164,149,927.59
equivalents
Add: Balance of cash and cash equivalents
364,693,406.31 234,655,092.14 691,238,822.98 495,217,106.54
at the period -begin
VI. Balance of cash and cash equivalents at
303,431,605.14 205,693,563.52 442,443,497.50 331,067,178.95
the period–end
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua
29
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’ EQUITY
Prepared by Dalian Refrigeration Company Limited 2018.01-06 Unit: RMB Yuan
2018.01-06
Owners’ equity attributable to parent company
Items Lessen: Other Retained Total of
Capital Special Minority equity
share capital treasury comprehensi Surplus reserve profits owners’ equity
surplus preparation
stock ve income
I. balance at the end of last
856,487,181.00 757,532,081.34 23,305,370.40 407,269,002.11 668,150,375.30 750,397,795.56 78,281,832.85 3,494,812,897.76
year
1. Change of accounting
policy
2. Correction of errors in
previous period
II. Balance at the beginning of
856,487,181.00 757,532,081.34 23,305,370.40 407,269,002.11 668,150,375.30 750,397,795.56 78,281,832.85 3,494,812,897.76
this year
III. Increase/ decrease of
amount in this year (“-” -1,053,094.00 -444,219.58 -2,279,264.40 -87,068,749.65 36,726,596.18 -20,786,376.67 7,646,540.78 -62,700,038.54
means decrease)
(I) Total comprehensive
-87,068,749.65 59,017,542.28 -495,911.58 -28,547,118.95
incomes
(II) Capital increased and
-1,053,094.00 -444,219.58 -2,279,264.40 9,282,452.36 10,064,403.18
reduced by owners
1. Common shares increased
-1,053,094.00 -2,392,984.94 -2,279,264.40 9,282,452.36 8,115,637.82
by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in 1,948,765.36 1,948,765.36
owners’ equity
4. Other
(III) Profit distribution 36,726,596.18 -79,803,918.95 -1,140,000.00 -44,217,322.77
1. Withdrawing surplus
36,726,596.18 -36,726,596.18
public reserve
2. Distribution to all owners
-42,771,704.35 -1,140,000.00 -43,911,704.35
(shareholders)
3. Others -305,618.42 -305,618.42
(IV) Internal carrying
forward of owners’ equity
1. New increase of share
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 1,066,759.88 1,066,759.88
2. Used in the period -1,066,759.88 -1,066,759.88
(VI) Other
IV. Balance at the end of this
855,434,087.00 757,087,861.76 21,026,106.00 320,200,252.46 704,876,971.48 729,611,418.89 85,928,373.63 3,432,112,859.22
period
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua
30
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
2017.01-12
Owners’ equity attributable to parent company
Items Other Retained Minority Total of owners’
Capital Lessen: Special Surplus equity equity
share capital comprehensive profits
surplus treasury stock reserve reserve
income
I. balance at the end of last
611,776,558.00 1,046,321,716.85 67,615,856.00 431,639,323.52 620,578,847.52 658,387,158.97 69,585,601.21 3,370,673,350.07
year
1. Change of accounting
policy
2. Correction of errors in
previous period
3. Merger of enterprises under
the same control.
II. Balance at the beginning of
611,776,558.00 1,046,321,716.85 67,615,856.00 431,639,323.52 620,578,847.52 658,387,158.97 69,585,601.21 3,370,673,350.07
this year
III. Increase/ decrease of
amount in this year (“-” 244,710,623.00 -288,789,635.51 -44,310,485.60 -24,370,321.41 47,571,527.78 92,010,636.59 8,696,231.64 124,139,547.69
means decrease)
(I) Total comprehensive
-24,370,321.41 200,759,820.17 3,796,231.64 180,185,730.40
incomes
(II) Capital increased and
-44,079,012.51 -44,310,485.60 4,900,000.00 5,131,473.09
reduced by owners
1. Common shares increased
-56,150,000.00 -44,310,485.60 4,900,000.00 -6,939,514.40
by shareholders
2. Capital increased by
holders of other equity -
instruments
3. Amounts of share-based
payments recognized in 12,070,987.49 12,070,987.49
owners’ equity
4. Other -
(III) Profit distribution 47,571,527.78 -108,749,183.58 -61,177,655.80
1. Withdrawing surplus
47,571,527.78 -47,571,527.78
public reserve
2. Withdrawing general risk
preparation.
3. Distribution to all owners
-61,177,655.80 -61,177,655.80
(shareholders)
4. 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 2,016,809.74 2,016,809.74
2. Used in the period -2,016,809.74 -2,016,809.74
(VI) Other
IV. Balance at the end of this
856,487,181.00 757,532,081.34 23,305,370.40 407,269,002.11 668,150,375.30 750,397,795.56 78,281,832.85 3,494,812,897.76
period
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua
31
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
STATEMENT OF CHANGES IN OWNERS’ EQUITY
Prepared by Dalian Refrigeration Company Limited 2018.01-06 Unit: RMB Yuan
2018.01-06
Owners’ equity attributable to parent company
Items Other Lessen: Other Total of owners’
Capital Special Surplus Retained equity
share capital equity treasury comprehensive
surplus preparation reserve profits
instrument stock income
I. balance at the end of last
856,487,181.00 802,034,176.17 23,305,370.40 406,306,901.44 668,150,375.30 573,846,640.63 3,283,519,904.14
year
1. Change of accounting
policy
2. Correction of errors in
previous period
II. Balance at the beginning of
856,487,181.00 802,034,176.17 23,305,370.40 406,306,901.44 668,150,375.30 573,846,640.63 3,283,519,904.14
this year
III. Increase/ decrease of
amount in this year (“-” -1,053,094.00 -444,219.58 -2,279,264.40 -87,068,749.65 36,726,596.18 -19,796,879.42 -69,357,082.07
means decrease)
(I) Total comprehensive
-87,068,749.65 59,701,421.11 -27,367,328.54
incomes
(II) Capital increased and
-1,053,094.00 -444,219.58 -2,279,264.40 781,950.82
reduced by owners
1. Common shares increased
-1,053,094.00 -2,392,984.94 -2,279,264.40 -1,166,814.54
by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in 1,948,765.36 1,948,765.36
owners’ equity
4. Other
(III) Profit distribution 36,726,596.18 -79,498,300.53 -42,771,704.35
1. Withdrawing surplus
36,726,596.18 -36,726,596.18
public reserve
2. Distribution to all owners
-42,771,704.35 -42,771,704.35
(shareholders)
3. Others
(IV) Internal carrying
forward of owners’ equity
1. New increase of share
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 1,066,759.88 1,066,759.88
2. Used in the period -1,066,759.88 -1,066,759.88
(VI) Other
IV. Balance at the end of this
855,434,087.00 801,589,956.59 21,026,106.00 319,238,151.79 704,876,971.48 554,049,761.21 3,214,162,822.07
period
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua
32
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
2017.01-12
Owners’ equity attributable to parent company
Items Lessen: Other Total of owners’
Other equity Capital Special Surplus Retained equity
share capital treasury comprehensive
instrument surplus preparation reserve profits
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 -234,080,985.37 -44,310,485.60 -24,106,655.33 47,571,527.78 74,883,797.30 153,288,792.98
means decrease)
(I) Total comprehensive
-24,106,655.33 183,632,980.88 159,526,325.55
incomes
(II) Capital increased and
10,629,637.63 -44,310,485.60 54,940,123.23
reduced by owners
1. Common shares increased
-1,441,349.86 -44,310,485.60 42,869,135.74
by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in 12,070,987.49 12,070,987.49
owners’ equity
4. Other
(III) Profit distribution 47,571,527.78 -108,749,183.58 -61,177,655.80
1. Withdrawing surplus
47,571,527.78 -47,571,527.78
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 2,016,809.74 2,016,809.74
2. Used in the period -2,016,809.74 -2,016,809.74
(VI) Other
IV. Balance at the end of this
856,487,181.00 802,034,176.17 23,305,370.40 406,306,901.44 668,150,375.30 573,846,640.63 3,283,519,904.14
period
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua
33
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
III. 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 with total share capital of RMB350,014,975Yuan.
According to the 13th meeting of the 6th generation of board, extraordinary general meeting for
2015 fiscal year and ' Restricted share incentive plan (draft)' , the Company planned to introduce
A ordinary shares to incentive objectives, which was 10,150,000 number of shares would be
granted to 41 share incentive objectives at granted price of RMB5.56Yuan per share. Up to March
12th ,2015, the Company received new added share capital of RMB10,150,000Yuan and the share
capital had been verified by DaHua Certified Public Accountants, and had been issued the capital
verification report Dahuayanzi [2015]000086 on March12th , 2015.
The general meeting for 2015 fiscal year held on 21st April 2016 approved the profit distribution
policy for the year of 2015, which agrees the profit distribution based on the total 360,164,975
number of shares as share capital, paid share dividend of 5 common shares for every 10 shares
through capital reserve. The policy stated above was fully implemented on 5th May 2016, and the
registered capital was altered to 540,247,462.00Yuan.
The 17thmeeting of the 6th generation of board was held on 4th June 2015 and the 2nd interim
shareholders’ meeting was held on 24th June 2015, meeting deliberated and passed the proposal
of non-public offering of ‘A shares’. China’s Securities Regulatory Commission issued SFC
license [2015]3137 on 30th December, 2015, approving that new non-public offering cannot
exceeded 38,821,954 number of shares. The company implemented the post meeting procedures
for China’s Securities Regulatory Commission, which is regarding adjustment of bottom price and
the number of the shares issued after the implementation of profit distribution policy of 2015 in
May, 2016, and accordingly revised the upper limit of non-public offering of share to58,645,096
number of new ‘A shares’. The company issued the non-public offering of 58,645,096 number of
‘A shares’ to 7 investors, and as a result, the total number of shares of the company is changed to
598,892,558 shares, and the par value is 1yuan per share and the total share capital is
598,892,558.00Yuan. The share capital stated above has been verified by DaHua Certified Public
Accountants, and has been issued the capital verification report Dahuayanzi [2016]000457 on 31st
May 2016.
According to the ‘Restricted Share Incentive Plan(draft) of Dalian Refrigeration Company
Limited for the year of 2016’ and the ‘Proposal regarding the shareholders’ meeting authorized the
board of directors to implement the Restricted Share Incentive Plan’ approved on the
3rdprovisional general meeting held on 13th September 2016, the 9th meeting of the 7th generation
of board deliberated and passed the ‘Proposal about granting the restricted shares to incentive
targets’ on September 20th, 2016 and set 20th September 2016 as share granted date, and granted
12,884,000 number of restricted shares to 188 incentive targets at granted price of 5.62Yuan per
34
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
share. By 22ndNovember, 2016, the company has actually received the newly subscribed
registered share capital of 12,884,000Yuan subscribed by incentive targets. The share capital
stated above has been verified by DaHua Certified Public Accountants, and has been issued the
capital verification report Dahuayanzi [2016]001138 on 23rdNovember, 2016.
On May 20th, 2017, the general meeting for 2016 fiscal year was held and profit appropriation
scheme for 2016 FY was approved, which was every 10 shares will be increased by 4 shares
through capital reserve based on the total 611,776,558 number of shares. After the profit
appropriation scheme, the registered capital was changed to RMB856,478,181.00Yuan.
On December 18, 2017, the Company held the third extraordinary shareholders’ meeting of 2017
which reviewed and approved the Proposal on Repurchasing and Cancelling Part Restricted
Stocks of the 2016 Restricted Stock Incentive Plan”. On March 8, 2018, after the completion of
repurchase and cancellation, the Company implemented the corresponding capital reduction
procedures according to law, and the registered capital of the Company was changed from
856,487,181 Yuan to 855,908,981 Yuan.
On May 4, 2018, the Company held the 21st meeting of the seventh board of directors which
reviewed and approved the Proposal on Repurchasing and Cancelling Party Restricted Stocks of
the 2015 Restricted Stock Incentive Plan. On June 29, 2018, after the completion of repurchase
and cancellation, the Company implemented the corresponding capital reduction procedures
according to law, and the registered capital of the Company was changed from 855,908,981 Yuan
to 855,434,087 Yuan.
The old address of the Company’s registered office as same as head office is No.888 Xinan Road,
Shahekou District, Dalian, China. In 2017, the Company relocated to new factory and changed its
address to No.16 East of Liao River RD, DDA, Dalian China as same as HQ’s address. The parent
company of the Company is Dalian Bingshan Group Co., Ltd., and there is no ultimate controller
regulated by the relevant law, regulations and rules.
The company falls into industrial manufacturing sector, mainly engaged in industrial 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.
IV. Financial Statements Preparation Basis
（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”.
35
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
（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 from Jan 1 to Dec 31.
3. Operating cycle
Normal operating cycle refers to the duration starting from purchasing the assets for
manufacturing up to cash or cash equivalent realization. The group sets twelve months for one
operating cycle and as the liquidity criterion for assets and liability.
4. Functional 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
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 acquire 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.
36
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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 intergroup 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
37
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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 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
38
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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 owner’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.
10. Financial assets and financial liabilities
A financial asset or liability shall be recognized 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
39
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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 recognized
as ‘Investment income’. On disposal, the difference between fair value of disposal and initial
recorded amount are recognized 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 amortized cost using the
effective interest method. The amortization, 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
40
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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
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 recognizes such
financial asset to the extent of its continuous involvement and recognizes 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 derecognized and
the portion that continued to be recognized 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
41
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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
amortized 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 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 through 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 amortized cost on the reversing day if no impairment provided before.
42
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
(2) Financial liabilities
1) 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.
2) 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.
3) Fair value measurement of financial asset and financial liability
If there is an active 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
inputcan 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
43
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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 could 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 group and accrue 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.
(1) Individually significant amounts of accounts receivable accrued bad debt provision as per
portfolio
Judgment basis or amount standards of Top 5 of account receivables at year end
individually significant amounts
The accruing method of the receivables The bad debt provisions shall be accrued based on
with individually significant amounts 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
Accounts receivable due from subsidiaries
Inter-company
included in consolidated scope
Other than accounts receivable due from
subsidiaries included in consolidated scope and
Accounting aging individual receivable with significant amount
without impairment, use the accounting aging of
the receivables
The basis of bad debt provision
Inter-company Individual identified method
Accounting aging Age analysis method
The percentage of provision for bad debts based on the age of receivables as followings:
Accounting aging Accrual percentage of the Accrual percentage of
receivables (%) 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
(3) Individually insignificant amount accounts receivable but accrued bad debt provision as per
portfolio
44
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
The individual amount is not significant, but the accrued bad debt provision
Accrual reason
on the basis of portfolio can not reflect its risk characteristic
The bad debt provisions should be accrued based on the difference between
Accrual method
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 acquisition. 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 yearend thorough inventory check, at the balance sheet date inventory impairment should be
provided or adjusted according to inventory 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 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
impairment indicators disappear, impairment provision shall be reversed and
13. Held for sale
（1） Any non-current assets or disposal group shall be classified as held for sale if the following
criteria are met: ⑴ according to the similar transactions for selling such assets or disposal group
in practice, the assets must be available for immediate sale under current condition. ⑵The sale is
highly probable with decision made on a probable selling proposal and the firm purchase
commitment has been obtained, the sale is expected to be completed within one year. Certain
regulations request that approvals must be given by relevant authority or supervision regulator
before the assets can be sold. Prior to the assets initially classified as held for sale or disposal
group, the carrying amounts of the asset(or all the assets and liabilities in the disposal group) shall
be measured in accordance with applicable accounting standards. The Company shall recognize an
impairment loss and account it in to income statement for the current period, for any initial or
subsequent write- down of the asset(or disposal group) to its fair value less costs to sell if the
carrying amount is higher than its fair value less costs to sell. In the meantime, provision for assets
impairment shall be made.
（2） The company acquires a non-current asset(or disposal group) exclusively with a view to its
45
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
subsequent resale, it shall be classified as held for sale at the acquisition date only if the condition
of “expected sale can be completed within one year” can be met and also other conditions of
classified as held for sale can highly probably be met within a short period following the
acquisition(usually with three months). When measuring a newly acquired asset(or disposal group)
meeting the criteria to be classified as held for sale, it shall be measured at the lower of its
carrying amount had it not been so classified and fair value less costs to sell. Except the
non-current assets or disposal group acquired as part of a business combination, the difference
between its fair value less costs to sale and initial carrying amount is recognized in the income
statement.
（3） The Company that loss of control of a subsidiary due to a sale plan of its investment shall
classify its subsidiary planned for sale as a whole as held for sale in the single financial statement
of the parent only if the investment in subsidiary meets the criteria of held for sale, regardless of
whether the Company will retain a proportion of equity interest in its former subsidiary after sale,
and classify all assets and liabilities of the subsidiary as held for sale in the consolidated financial
statements
（4） The Company shall recognize a gain for any subsequent increase in fair value less costs to
sell of an asset and shall reverse the impairment to the extent that previously recognized when
being classified as held for sale, the revisable amount is recognized in the income statement for
the period. Any impairment from the period when the assets are not classified as held for sale can
not be reversed.
（5） The impairment loss recognised for a disposal group shall reduce the carrying amount of
goodwill of disposal group first, and then reduce the carrying amount of the non-current assets
based on its proportion on the book.
The Company shall recognize a gain for any subsequent increase in fair value less costs to sell of a
disposal group and shall reverse the impairment to the extent that previously recognized when
being classified as held for sale, in accordance with applicable measuring standards, the revisable
amount is recognized in the income statement for the period. Any impairment from the period
when the assets are not classified as held for sale and reduced goodwill can not be reversed.
For any subsequently reversed amount, after the impairment loss is recognized for held for sale
disposal group, the Company shall increase the carrying amount of disposal group based on the
proportion of carrying amount of non-current assets excluding goodwill.
（6） Non-current assets classified as held for sale or disposal group shall not be depreciated or
amortized, interest and other expenses attributable to the liabilities of a disposal group classified
as held for sale shall continue to be recognized.
（7） When held for sale assets or disposal group can not meet the criteria for held for sale
classification so that they are not recognized as held for sale or non-current asset will be removed
from disposal group, they shall be measured at the lower of the following amounts: ⑴carrying
amount of assets prior to it classified as held for sale, which is the amount after depreciation,
46
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
amortization or impairment adjustment as it had not been classified as held for sale ;
⑵recoverable amount.
When the Company derecognizes the held for sale assets or disposal group, the remaining
unrecognized gain or loss shall be accounted in the income statement.
14. 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 of the 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
incurs in 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 incurs in 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.
47
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
If the equity of investee not under common control is acquired by stages and business
combination incursion 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 incursion 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 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 recognized 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
48
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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 recognized 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.
15. Investment property
The investment property includes property and building and measured at cost model
Useful life Estimated net
Category Annual depreciation rate
(years) residual value rate
Housing and Buildings 40 3% 2.43%
16. 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.
49
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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 measured. Straight-line depreciation method is adopted by the
Group. Estimated net residual value rate, useful life, depreciation rate as follows:
Useful life Estimated net Annual
No Category
(years) residual value rate depreciation rate
1 Housing and Buildings 20-40 3%,5%,10% 2.25-4.85%
2 Machinery equipment 10-22 3%,5%,10% 4.09-9.7%
3 Transportation equipment 4-15 3%,5%,10% 6-24.25%
4 Electronic equipment 5 3%,5%,10% 18-19.4%
5 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.
17. 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.
18. 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.
50
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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.
19. 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.
Land use right shall be amortized evenly within the amortization period since the remised
date.ERP system software and 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.
20. Impairment of long-term 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
51
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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.
21. 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.
22. 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.
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.
52
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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.
23. 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.
24. 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.
53
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
25. Principle of recognition of revenue
The revenue of the Group is mainly from selling goods, providing labor services and abalienating
the right of use assets and construction contracts. Recognition standards for revenue are as below:
（1） 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.
（2） Income from a alienating the right of use assets is recognized when satisfying
requirements related economic benefit flows in very possibly, income can be measured reliably.
1) Amount of interest income is calculated according to the time and actual interest rate of the
monetary capital used by other party.
2) Income of using fee is calculated upon the charge period and calculation provided by the
related contract or agreement.
（3） 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:
1) Amount can be measured reliably
2) Relevant economic benefit probably flow into the company
3) The stage of completion of the service can be estimated reliably
4) 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
54
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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
1) 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
2) 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.
（4） Revenue from construction contract
1) 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:
① Amount can be measured reliably
② Relevant economic benefit probably flow into the company
③ Cost actually incurred can be well distinguished and measured reliably
④ 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:
① Relevant economic benefit probably flow into the company
② 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
55
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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.
2) If the result of the construction contract is not able to be evaluated reliably, the treatment
shall apply respectively
① If contract cost maybe 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.
② 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.
3) 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.
.26. Government grants
A government grant shall be recognized when the company complies with the conditions
attaching to the grant and when the company is able to receive the grant.
Assets-related government grant is the government fund obtained by the company for the
purpose of long-term assets purchase and construction or establishment in the other forms.
Income-related grants are the grant given by the government apart from the assets-related grants.
If no grant objective indicated clearly in the government documents, the company shall judge it
according to the principle mentioned above.
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 ore directly offsetting the
book value of the asset, and Assets-related government grants recognized as deferred income
shall be evenly amortized to profit or loss over the useful life of the related asset.
Any assets are sold, transferred, disposed off or impaired earlier than their useful life expired
date, the remaining balance of deferred income which hasn’t been allocated shall be carried
forward to the income statement when the assets are disposed off.
Income-related government grants that is a compensation for related expenses or losses to be
56
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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.
Government grants related to daily business, shall be recognized as other income in accordance
with business nature, otherwise, shall be recognized as non-operating expenses.
If any government grant already recognized needs to be returned to the government, the
accounting shall be differed according to the following circumstances:
1) originally recognized as offsetting of related assets' book value, assets book value shall be
adjusted
2) if any deferred income, book value of deferred income shall be offset, excessive portion
shall be accounted into income statement
3) Other situation, it shall be accounted into income statement directly.
27. 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 recognized for deductible tax
losses that can be carried forward in accordance with tax law requirements for deduction of
taxable income in subsequent years. No deferred tax liabilities shall be recognized for any
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 realized or
liability is settled.
Deferred tax assets are recognized 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.
28.Lease
The Company’s leasing business is operating lease.
As a leasee, the lease premium shall be recognized in the cost of asset based on straight line
method within the the period or directly to income statement.
29. Other significant accounting policies, accounting Estimates
When preparing the financial statements, the management needs to use accounting estimate and
assumption, which will have effect on the application of accounting policy and amount of asset,
liability, income and expense. The actual circumstance maybe differs from the estimates. The
management needs to continuously assess the key assumption involved by estimate and the
judgment on uncertainty. Effect on the accounting estimate shall be recognized during the period
57
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
when estimate is changed and in future.
The following accounting estimate and key assumption will trigger the significant risk of
significant adjustment on the book value of asset and liability during the period of future.
（1） Impairment of receivable
Receivable is measured at amortized cost at the balance sheet date and assessed for any
impairment indicator and the acutely amount of impairment. Objective evidence for impairment
includes judgmental data of indicating significant decline of future cash flow of individual or
group of receivable, indicating significant negative financial performance of debtors. Had
receivable is recovered with certain proof, and in fact, it is relevant to the the matters subsequent
to the the loss recognition, the impairment recognized before shall be reversed.
（2） Provision of inventory impairment
Inventory is periodically evaluated at the net realizable value and any cost higher than NRV shall
be recognized as inventory impairment loss. When evaluating the NRV, net realizable value is
determined by deducting the expected selling expense and relative tax from the estimated selling
price. When actual selling price or cost differs from the previous estimates, management will
make adjustment on NRV. Therefore, the results based on the present experience may differ from
the actual results, which caused the adjustment on the carrying amount of inventory in the book.
Provision for inventory impairment may vary with the above reasons. Any adjustment on
provision for inventory impairment will affect the income statement.
（3） Provision of goodwill impairment
Each year, goodwill shall be assessed for any impairment. Recoverable amount of assets group
or asset portfolio including goodwill shall be the present value of future cash flow, which needs
estimates for calculation.
If management adjust the gross profit margin adopted by the present value of future cash flow
calculation of assets group or asset portfolio, adjusted gross profit margin is lower than the margin
applied, the impairment is required.
If management adjust the discounting rate before tax applied by the present value of future cash
flow calculation of assets group or asset portfolio, adjusted discounting rate before tax is higher
than the rate applied, the impairment is required.
If actual profit margin or discounting rate before tax is higher or lower than management’s
estimate, any impairment recognized before can not be reversed.
（4） Provision of fixed asset impairment
At the balance sheet date, the management shall implement impairment test on buildings, plant
and machinery etc which has any impairment indicator. The recoverable amount of FA is the
higher of PV of future cash flow and net value of fair value after disposal cost, the calculation
needs accounting estimate.
58
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
If management adjust the gross profit margin adopted by the present value of future cash flow
calculation of assets group or asset portfolio, adjusted gross profit margin is lower than the margin
applied, the impairment is required.
If management adjust the discounting rate before tax applied by the present value of future cash
flow calculation of assets group or asset portfolio, adjusted discounting rate before tax is higher
than the rate applied, the impairment is required.
If actual profit margin or discounting rate before tax is higher or lower than management’s
estimate, any impairment recognized before can not be reversed.
（5） Recognition of deferred tax assets
Estimate on deferred tax assets needs making estimation of taxable income and applied tax rate in
the following years in future. Whether deferred tax asset can be realized depends on the enough
probable taxable profit obtained in future. Tax rate change in future and the timing of temporary
difference reverse may also affect the income tax expense(income)and the balance of deferred tax.
Any change of estimate described here will cause the deferred tax adjustment.
（6） Useful life span of fixed assets and intangible assets
At least every year end, the management shall review the useful life of FA and intangible assets.
Expected useful life is based on the management’s experience on the same class of assets, with
reference to the estimate applied in the industry in conjunction with expected technology
development. When previous estimate significantly changed, depreciation and amortization in the
future shall be adjusted accordingly.
30. Changes in Accounting Policies, Accounting Estimates
(1) Change in significant accounting policies
None
(2) 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%
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%
Enterprise income Current period taxable profit 15%,25%
59
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
tax(EIT)
70% of cost of own property or revenue
Real estate tax 1.2% or 12%
from leasing property
Land use tax Land using right area Fixed amount per
square meter
Other tax According to the
relevant provisions of
the state and local
Notes for tax entities with different EIT rate
Tax entities EIT rate
Dalian Refrigeration Company 15%
Dalian Bingshan Group Engineering Co., Ltd. 25%
Dalian Bingshan Group Sales Co., Ltd. 25%
Dalian Bingshan Air-conditioning Equipment Co., Ltd. 15%
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. 15%
Dalian Universe Thermal Technology Co., Ltd. 15%
Dalian New Meica Electronics Technology Co., Ltd 15%
2. Tax preference
The Company obtained the qualification of high and new technology enterprises on 29th November,
2017 approved by Dalian Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax
Bureau and Local tax Bureau.The Certificate No is GR201721200306, 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 Guardian 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
60
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
The company’s subsidiary, Dalian New Meica Electrical Technology Co., Ltd obtained the
qualification of high and new technology enterprises on 29th November, 2017 approved by Dalian
Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax
Bureau. The Certificate No is GR2201721200301, 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 Universe Thermal Technology Co., Ltd.. obtained the
qualification of high and new technology enterprises on 29th November, 2017 approved by Dalian
Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax
Bureau. The Certificate No is GR2201721200108, 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, Bingshan Technology Service （Dalian） Co.,Ltd.. obtained the
qualification of high and new technology enterprises on 29th November, 2017 approved by Dalian
Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax
Bureau. The Certificate No is GR2201721200155, 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 Air-conditioning Equipment Co., Ltd. obtained the
qualification of high and new technology enterprises on 29th November, 2017 approved by Dalian
Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax Bureau.
The Certificate No is GR2201721200279, 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 Consolidated Financial Statements
The following disclosure date on this financial statement without special indication, “opening”
refers to January 1, 2018; “closing” refers to June 30, 2018; “current period” refers to the period
from January 1, 2018to June 30, 2018; and “last period” refers to the period from January 1, 2017
to June 30, 2017; with the currency unit RMB.
1. Cash and cash in bank
Item Closing Balance Opening Balance
Cash on hand 77,578.47 62,880.11
Cash in bank 303,354,026.67 364,630,526.20
Other cash and cash equivalents 17,457,092.02 30,116,287.80
Total 320,888,697.16 394,809,694.11
Note: Other cash and cash equivalents is restricted, including deposit for bank acceptance notes of
8,299,706.54 Yuan, guarantee deposit of 8,157,385.48Yuan, migrant deposit of 1,000,000.00Yuan,
61
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
total of 17,457,092.02Yuan.
2. Notes receivable
(1) Category of notes receivable
Items Closing Balance Opening Balance
Bank acceptance notes 85,235,359.48 59,496,684.07
Commercial acceptance notes 93,356,325.22 113,321,492.13
Total 178,591,684.70 172,818,176.20
(2) Pledged notes receivable up to June 30, 2018.
Items Closing pledged amount
Bank acceptance notes 4,642,147.93
Commercial acceptance notes
Total 4,642,147.93
(2) Notes receivable endorsed or discounted but not mature at the end of the reporting period.
Item Closing amount no more Closing amount still
recognized recognized
Bank acceptance notes 247,765,841.22
Commercial acceptance
notes
Total 247,765,841.22
3. Accounts receivable
(1) Category of accounts receivable
Closing Balance
Items Booking balance Provision
Booking balance
Amount % Amount %
Accounts
receivable with
significant
individual amount
and separate bad
debt provision
Accounts
receivable with bad
debt provision
1,301,637,979.10 100.00 172,924,775.13 13.29 1,128,713,203.97
based on the
characters of credit
risk portfolio
62
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Accounts
receivable with
insignificant
individual amount
and separate bad
debt provision
Total 1,301,637,979.10 100.00 172,924,775.13 13.29 1,128,713,203.97
(Continued)
Opening balance
Items Booking balance Provision Booking
Amount % Amount % balance
Accounts
receivable with
significant
individual amount
and separate bad
debt provision
Accounts
receivable with bad
debt provision
1,208,205,492.85 100.00 171,949,597.06 14.23 1,036,255,895.79
based on the
characters of credit
risk portfolio
Accounts
receivable with
insignificant
individual amount
and separate bad
debt provision
Total 1,208,205,492.85 100.00 171,949,597.06 14.23 1,036,255,895.79
1) Accounts receivable with the bad debt provisions under accounting aging analysis method
Closing Balance
Aging Accounts Provision for Drawing proportion
receivable bad debts (%)
Within1 year 925,751,809.75 46,287,590.48 5.00
1 to 2 years 178,383,784.64 17,838,378.46 10.00
2 to 3 years 95,681,449.94 28,704,434.98 30.00
3 to 4 years 32,894,791.27 16,447,395.63 50.00
63
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Closing Balance
Aging Accounts Provision for Drawing proportion
receivable bad debts (%)
4 to 5years 26,395,839.59 21,116,671.67 80.00
Over 5 years 42,530,303.91 42,530,303.91 100.00
Total 1,301,637,979.10 172,924,775.13 —
2) Bad debt provision accrued and written-off (withdraw)
The bad debt provision has been accrued at the amount of 8,045,698.53Yuan during the report
period. Bad debt reversal or withdrawn incurred at the amount of 0.00Yuan in the report period.
3) Accounts receivable written off in current period
Item Written off amount
Receivable actually written off 7,196,152.96
(2) The top five significant accounts receivable categorized by debtors
Closing
Closing % of the
Company Aging Balance of
Balance total AR
Provision
Within 1 year,
Guangzhou Fuli Estate Co.,Ltd 40,944,261.21 3.15 2,572,213.06
1-2 years
Xinyi Yuanda construction and
Within 1 year,
Installation Engineering Co., 32,748,744.00 2.52 2,256,374.40
1-2 years
Ltd.
Yanbian Hong Yun investment
23,470,875.05 Within 1 year 1.80 1,173,543.75
Co., Ltd.
Guangzhou wanda cultural
tourism city investment Co., 23,085,251.78 Within 1 year 1.77 1,154,262.59
Ltd.
Panasonic Appliances
21,822,714.66 Within 1 year 1.68 1,091,135.73
Cold-Chain (Dalian) Co., Ltd.
Total 142,071,846.70 10.91 8,247,529.54
4. Advances to suppliers
(1) Aging of advances to suppliers
Closing Balance Opening Balance
Items
Amount Percentage (%) Amount Percentage (%)
Within 1 year 126,655,392.88 81.88 96,449,107.72 68.50
1 to 2 years 25,211,269.38 16.30 43,020,607.78 30.55
2 to 3 years 1,491,048.70 0.96 871,279.01 0.62
Over 3 years 1,320,729.61 0.86 467,380.70 0.33
Total 154,678,440.57 100.00 140,808,375.21 100.00
64
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Significant prepayment over 1 year
Closing Unsettled Reasons
Company Aging
Balance
Contract is not
Dalian HOLLEY Coating Equipment Co., Ltd. 12,000,000 1-2 years
fully implemented
Contract is not
Shanghai POMA Automation Equipment Co.,ltd 6,125,000 1-2 years
fully implemented
Total 18,125,000 — —
(2) The top five significant advances to suppliers categorized by debtors
% of the total
Company Closing Balance Aging advances to
suppliers
Dalian HOLLEY Coating
12,000,000.00 1-2 years 7.76
Equipment Co., Ltd.
Mitsubishi Heavy Industries
Air-conditioners(Shanghai) 9,236,000.00 Within 1 year 5.97
Co.,Ltd
Dalian Ganghe Trading Co., Within 1 year,
8,444,300.00 5.46
Ltd.
Shanghai POMA Automation
6,125,000.00 1-2 years 3.96
Equipment Co.,ltd
BAC (Dalian) Co., Ltd. 3,528,703.20 Within 1 year 2.28
Total 39,334,003.20 25.43
5. Interest receivable
(1) Interest receivable
Items Closing Balance Opening Balance
Interest on Term deposits 950,000.00 921,783.33
Bank financial product 950,000.00
Total 950,000.00 1,871,783.33
The closing balance of interest receivable decreased 49.25% comparing with the opening balance,
mainly because of the interest income of bank financial products that have been accrued at the beginning
of the period.
6. Dividends receivable
(1) Dividends receivable
Company Closing Balance Opening Balance
Wuhan Steel and Electricity Co., Ltd. 33,450.00
Panasonic Appliances Air-conditioning and
1,500,000.00
Refrigeration (Dalian) Co. , Ltd.
65
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Company Closing Balance Opening Balance
Panasonic Appliances Compressor (Dalian) Co. , Ltd. 47,826,800.00
Keinin-Grand Ocean Thermal Technology (Dalian)
5,200,000.00
Co., Ltd
Jiangsu JingXue Insulation Technology Co.,Ltd 5,842,400.00
Total 60,369,200.00 33,450.00
7. Other receivables
(1) The categories of other receivable
Closing Balance
Items
Booking balance Provision Booking
Amount % Amount % balance
Other receivables
with significant
individual amount - - - - -
and separate bad debt
provision
Other receivables
identified bad debt
provision based on 49,509,411.30 100.00 7,196,607.96 14.54 42,312,803.34
the characters of
credit risk portfolio
Other receivables
with significant
individual amount
and separate bad debt
provision
Total 49,509,411.30 100.00 7,196,607.96 14.54 42,312,803.34
(Continued)
Opening Balance
Items Booking balance Provision Booking
Amount % Amount % balance
Other receivables
with significant
individual amount - - - - -
and separate bad
debt provision
Other receivables 59,207,829.92 100.00 7,158,820.09 12.09 52,049,009.83
66
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
identified bad debt
provision based on
the characters of
credit risk portfolio
Other receivables
with significant
individual amount
and separate bad
debt provision
Total 59,207,829.92 100.00 7,158,820.09 12.09 52,049,009.83
1) Other receivables accrued the bad debt provisions under accounting aging analysis method
Closing Balance
Aging Provision for Drawing proportion
Other receivables
bad debts (%)
Within 1 year 25,653,477.81 1,282,673.89 5.00
1-2 years 15,813,991.84 1,581,399.18 10.00
2-3 years 4,655,954.18 1,396,786.26 30.00
3-4 years 588,747.82 294,373.91 50.00
4-5 years 779,324.67 623,459.74 80.00
Over 5 years 2,017,914.98 2,017,914.98 100.00
Total 49,509,411.30 7,196,607.96 —
(2)In the current period, RMB38,162.87 Yuan were accrued provision for bad debts
(3) Other receivables written off in current period
Item Written-off Amount
Other receivables written off 2,000.00
(3) Other receivables categorized by nature
Nature Closing Balance Opening Balance
Guarantee deposits 26,757,096.90 43,339,402.91
Petty cash 12,165,054.10 7,879,896.91
Accounts payable 7,925,905.81 5,520,797.71
Others 2,661,354.49 2,467,732.39
Total 49,509,411.30 59,207,829.92
(5)Other receivables from the top 5 debtors
67
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
% of
Closing
Closing the
Name Category Aging Balance of
Balance total
Provision
OR
Chengdu Silver low
Cold Chain Logistics Deposit 3,800,000.00 1-2 years 7.68 380,000.00
Co.,Ltd
Dalian Delta HK& 2-3 years,4-5
Deposit 2,730,000.00 5.51 969,000.00
China Gas Co.,Ltd years
National Tax office Exporting tax
1,839,570.22 Within 1year 3.72 91,978.51
of Dalian refund
Jiangsu Dafenggang
Bonded Logistics
Deposit 1,782,980.00 Within 1year 3.60 89,149.00
Center Management
Co., Ltd.
Zhoushan City
Construction Industry Deposit 1,200,000.00 Within 1year 2.42 60,000.00
Authority
Total 11,352,550.22 22.93 1,590,127.51
8. Inventories
(1) Categories of inventories
Closing Balance
Item
Book value Provision for decline Net book value
Raw materials 108,510,499.27 1,050,202.77 107,460,296.50
Working in progress 69,139,142.18 69,139,142.18
Finished goods 171,478,223.11 158,460.00 171,319,763.11
Low-value
165,178.29 165,178.29
consumable
Self-manufactured
38,737,334.70 38,737,334.70
semi-finished products
Constructing projects 34,910,196.63 34,910,196.63
Materials on
consignment for 5,107,023.10 5,107,023.10
further processing
Total 428,047,597.28 1,208,662.77 426,838,934.51
(Continue)
Opening Balance
Item
Book value Provision for decline Net book value
Raw materials 93,097,749.58 1,120,202.77 91,977,546.81
Working in progress 57,136,761.54 57,136,761.54
Finished goods 138,840,644.36 358,460.00 138,482,184.36
Low-value consumable 141,351.31 141,351.31
Self-manufactured
32,879,154.10 32,879,154.10
semi-finished products
68
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Opening Balance
Item
Book value Provision for decline Net book value
Constructing projects 27,778,087.73 27,778,087.73
Materials on
consignment for further 3,884,578.79 3,884,578.79
processing
Total 353,758,327.41 1,478,662.77 352,279,664.64
(2) Provision for decline in the value of inventories
Increase Decrease
Opening Closing
Item Reverse/ Others
Balance Accrual Other Balance
Written- off transferred
Raw materials 1,120,202.77 70,000.00 1,050,202.77
Finished goods 358,460.00 200,000.00 158,460.00
Total 1,478,662.77 270,000.00 1,208,662.77
(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 Sold within the year
9. Other current assets
Item Closing Balance Opening Balance
Prepaid income tax presented
438,014.60 1,247,766.25
at net amount after offsetting
VAT to be deducted 31,374,181.20 37,613,420.40
Bank financial product 76,000,000.00
Prepaid expenses 524,189.01 46,082.68
Total 32,336,384.81 114,907,269.33
The closing balance of the other current assets decreased 71.86% comparing with the opening
balance, mainly because the Company took back the financial products purchased at the beginning of
the period after the expiration.
10. Available-for-sale financial assets
(1) Available-for-sale financial assets
Item Closing Balance Opening Balance
Booking Carrying Booking Carrying
Provision Provision
balance amount balance amount
Available-f
or-sale
debt
69
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Item Closing Balance Opening Balance
Booking Carrying Booking Carrying
Provision Provision
balance amount balance amount
instruments
Available-f
or-sale
418,516,445.05 5,067,074.16 413,449,370.89 520,850,268.15 5,067,074.16 515,783,193.99
equity
instruments
Measured
as fair
400,862,180.55 1,424,468.25 399,437,712.30 503,296,003.65 1,424,468.25 501,871,535.40
value
method
Measured
as cost 17,654,264.50 3,642,605.91 14,011,658.59 17,554,264.50 3,642,605.91 13,911,658.59
method
Total 418,516,445.05 5,067,074.16 413,449,370.89 520,850,268.15 5,067,074.16 515,783,193.99
(2) Available-for-sale financial assets measured at fair value method
Items Equity instruments available for sale Total
Cost 27,098,895.00 27,098,895.00
Fair value 399,437,712.30 399,437,712.30
FV accumulated change recognized in other 373,763,285.55 373,763,285.55
comprehensive income
Provision for impairment 1,424,468.25 1,424,468.25
(3) Available-for-sale financial assets measured at cost method
Proportion of Book Value
Investee shareholding in
Opening Closing
the investee(%) Increase Decrease
Balance Balance
Zibo traction motor co., ltd. 0.76 849,000.00 849,000.00
Liaoning Mike group Limited
3.57 1,020,000.00 1,020,000.00
by Share Ltd
Guotai Junan investment
0.22 3,057,316.00 3,057,316.00
management Co., Ltd.
Cold King container
17.80 11,207,806.00 11,207,806.00
temperature control Co., Ltd.
Liaoning enterprises
4.20 105,000.00 105,000.00
Industrial Co., Ltd.
70
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Proportion of Book Value
Investee shareholding in
Opening Closing
the investee(%) Increase Decrease
Balance Balance
Wuhan steel electric Co., Ltd. 5.60 1,315,142.50 1,315,142.50
Dlian Guolian Energy
10.00 100,000.00 100,000.00
Development Co., Ltd.
Total 17,554,264.50 100,000.00 17,654,264.50
(Continue)
Provision for impairment
Cash
Investee
Opening Closing dividend
Increase Decrease
Balance Balance
Zibo traction motor co., ltd. 849,000.00 849,000.00
Liaoning Mike group Limited
300,000.00
by Share Ltd
Guotai Junan investment
2,688,605.91 2,688,605.91
management company
Cold King container
temperature control Co., Ltd.
Liaoning enterprises Industrial
105,000.00 105,000.00
Co., Ltd.
Wuhan steel electric Limited 33,450.00
Dlian Guolian Energy
Development Co., Ltd.
Total 3,642,605.91 3,642,605.91 333,450.00
(4)Provision for available-for-sale financial assets impairment
Debt
Equity instruments instruments
Category Others Total
available for sale available for
sale
Beginning balance 5,067,074.16 5,067,074.16
Increased during current
year
71
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Debt
Equity instruments instruments
Category Others Total
available for sale available for
sale
Including: transfer from
other comprehensive
income
Decreased during current
year
Including: transfer from
fair value rising
Ending balance 5,067,074.16 5,067,074.16
(5) Other explanatory on available-for-sale financial assets
Guotai Junan Securities Co., Ltd. was listed on Shanghai Stock Exchange on 26th June 2015, and
until 30 June, 2018, the Company held 27,098,895 shares of Guotai Junan Securities Co., Ltd which
was measured at fair value at the year end. The Company received cash dividend RMB
10,839,558.00Yuan.
72
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
11.Long-term equity investments
Increase/Decrease
Gains and
Provision for
Beginning losses Adjustment Change Cash bonus Provision for
Investee impairment Ending balance
balance recognized of other of or profits impairment
Increased Decreased of the Others
under the comprehensi other announced to
current
equity ve income equity issue
period
method
Associates
Panasonic Appliances
Air-conditioning and
161,817,616.82 -4,686,758.68 3,000,000.00 154,130,858.14
Refrigeration
(Dalian) Co., Ltd.
Dalian Honjo
9,113,011.88 650,448.37 912,160.20 8,851,300.05
Chemical Co., Ltd.
Panasonic Appliances
Cold-Chain (Dalian) 227,050,807.57 1,292,358.19 6,000,000.00 222,343,165.76
Co., Ltd.
Keihin-Grand Ocean
Thermal Technology 57,604,812.32 4,812,548.80 5,200,000.00 57,217,361.12
(Dalian) Co., Ltd.
Panasonic Appliances
Compressor (Dalian) 490,004,241.55 21,742,315.65 47,826,800.00 463,919,757.20
Co., Ltd.
MHI Bingshan
Refrigeration 13,359,504.81 -506,256.97 12,853,247.84
(Dalian) Co.,Ltd.
Beijing Huashang
Bingshan
Refrigeration and 1,431,141.16 -30,242.56 1,400,898.60
Air-conditioning
Machinery Co., Ltd.
Dalian Fuji Bingshan
Vending Machine 179,841,223.64 11,137,492.91 190,978,716.55
Co., Ltd.
Jiangsu JingXue
Insulation 166,092,058.74 4,565,836.59 5,842,400.00 164,815,495.33
Technology Co.,Ltd
73
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Increase/Decrease
Gains and
Provision for
Beginning losses Adjustment Change Cash bonus Provision for
Investee impairment Ending balance
balance recognized of other of or profits impairment
Increased Decreased of the Others
under the comprehensi other announced to
current
equity ve income equity issue
period
method
Dalian Fuji Bingshan
Vending Machine 12,042,441.30 3,183,741.25 15,226,182.55
Sales Co., Ltd
Wuhan Lanning
Energy Science Co., 6,086,785.99 4,500,000.00 -518,539.72 -10,068,246.27
Ltd.
Wuhan Sikafu Power
Control Equipment 5,227,052.33 -415,956.25 4,811,096.08
Co., Ltd
Panasonic
Refrigeration System 27,824,664.42 1,509,718.68 2,108,000.00 27,226,383.10
(Dalian) Co., Ltd
Dalian Bingshan
Metal Technology 163,116,631.47 13,623,127.82 176,739,759.29
Co.,Ltd
Dalian Bingshan
Group Management
47,643,744.12 -886,347.64 46,757,396.48
and Consulting
Co.,ltd
Total 1,568,255,738.12 4,500,000.00 55,473,486.44 70,889,360.20 -10,068,246.27 1,547,271,618.09
The board of directors of the Company’s subsidiary Wuxin Refrigeration decided to acquire 27.27% equity of Wuhan Lanning Energy Technology Co., Ltd., an original associated Company
of Wuxin Refrigeration. After the transfer, Wuhan Lanning Energy Technology Co., Ltd. became a subsidiary of Wuxin Refrigeration. As of June 30, 2018, the above equity transaction has
been completed.
74
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
12. Investment property
(1) Investment property measured as cost method
Property&
Item Land-use-rights Total
Building
I. Initial Cost
1. Opening Balance 192,739,104.84 24,391,511.82 217,130,616.66
2. Increase 2,121,995.27 2,121,995.27
(1) Outsourcing
(2) Transferred from
Construction in 2,121,995.27 2,121,995.27
progress
3. Decrease
(1) Disposal
(2)Transferred to other
4. Closing Balance 194,861,100.11 24,391,511.82 219,252,611.93
II. Accumulated
Depreciation
1. Opening Balance 103,390,779.09 9,878,562.30 113,269,341.39
2. Increase 2,887,066.75 243,915.12 3,130,981.87
(1)Provision or
2,251,330.67 243,915.12 2,495,245.79
amortization
(2) Transferred from
Construction in 635,736.08 635,736.08
progress
3. Decrease
(1) Disposal
(2) Transferred to other
4. Closing Balance 106,277,845.84 10,122,477.42 116,400,323.26
III. Impairment
Reserve
1. Opening Balance
2. Increase
(1)Provision or
amortization
3. Decrease
(1) Disposal
(2) Transferred to other
4. Closing Balance
IV. Book Value 75
1. Closing book value 88,583,254.27 14,269,034.40 102,852,288.67
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Note: On 31st July,2014, the company signed supplemental rental contract with MHI Bingshan Refrigeration (Dalian)
Co.,Ltd., and rent out # 6 building of workshop 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 metres, and
annual rent is RMB 4.2 million with the expiry date on 16th July, 2029.
The 13th meeting of the 7th generation board was held on April 22, 2017, and approved to rent out the old plant and land
located in No888, South West RD, Shahekou Districit, Dalian to Dalian Bingshan Wisdom Park Co,, Ltd. The lease
premium is 7.86 million Yuan for year 2018 and contract is from April 1st, 2017 to December 31, 2036.
On June 1st, 2017, the Company’s subsidiary, Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd., signed the
leasing contract with Dalian Jingxue Energy Saving Technology Co. Ltd. and rented out # 7 building of workshop located
on No.92, Tieshan West Rd, DDA, Dalian. The rental area is 3653.76 square metres, and annual rent is RMB 840 thousand
Yuan with the contracted date between June 1st, 2017 and May 31st,2022. Dalian Bingshan Ryosetsu Quick Freezing
Equipment Co., Ltd. also rented out Room 201, # 4 building located on No.92, Tieshan West Rd, DDA, Dalian to Dalian
Jingxue Energy Saving Technology Co., Ltd. The rental area is 25 square metres, and annual lease premium is RMB 15
thousand Yuan with the contracted date between June 1st, 2017 and May 31st, 2022.
(2) Investment property without owner’s certificates
Items Book value Reasons
# 6 building of workshop on No. 106 Liaohe East Rd, Dalian
27,507,228.14 Deed is in the progress
Economic and Technology Development Zone
#7 plant of Dalian Bingshan Ryosetsu 4,629,156.74 Deed is in the progress
13. Fixed assets
(1) Fixed assets detail
Transporta
Property& Machinery Other
Item tion Equipment Total
buildings Equipment
Equipment
I. Initial Cost
1. Opening
593,149,871.12 655,338,106.93 19,678,537.43 66,346,865.13 1,334,513,380.61
Balance
2. Increase 360,360.36 12,140,809.72 429,548.81 628,429.22 13,559,148.11
(1) Purchase 360,360.36 6,021,887.05 147,407.69 570,998.19 7,100,653.29
(2) Transferred
from
6,118,922.67 6,118,922.67
construction-in-pr
ogress
(3) Acquired from
business 282,141.12 57,431.03 339,572.15
combination
3. Decrease 2,121,995.27 5,222,056.27 776,440.20 125,845.30 8,246,337.04
76
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Transporta
Property& Machinery Other
Item tion Equipment Total
buildings Equipment
Equipment
(1) Disposal 5,222,056.27 776,440.20 125,845.30 6,124,341.77
(2) Transferred to
2,121,995.27 2,121,995.27
other
4. Closing
591,388,236.21 662,256,860.38 19,331,646.04 66,849,449.05 1,339,817,767.57
Balance
II. Accumulated
Depreciation
1. Opening
64,073,553.49 328,334,086.43 12,874,279.49 37,839,494.30 443,121,413.71
Balance
2. Increase 8,260,951.41 16,850,584.70 917,204.45 3,269,297.58 29,298,038.14
(1)Accrued 8,260,951.41 16,850,584.70 872,532.15 3,251,183.02 29,235,251.28
(2) Acquired from
business 44,672.30 18,114.56 62,786.86
combination
3. Decrease 635,736.08 2,171,519.71 661,402.01 115,450.08 3,584,107.88
(1) Disposal 2,171,519.71 661,402.01 115,450.08 2,948,371.80
(2) Transferred to
635,736.08 635,736.08
other
4. Closing
71,698,768.82 343,013,151.42 13,130,081.93 40,993,341.80 468,835,343.97
Balance
III. Impairment
Reserve
1. Opening
517,319.50 517,319.50
Balance
2. Increase
(1)Accrued
3. Decrease
(1) Disposal
4. Closing
517,319.50 517,319.50
Balance
IV. Book Value
1. Closing book
519,689,467.39 318,726,389.46 6,201,564.11 25,856,107.25 870,473,528.21
value
2. Opening book
529,076,317.63 326,486,701.00 6,804,257.94 28,507,370.83 890,874,647.40
value
(2) Fixed assets as pending certificate of ownership
77
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Item Book value Reason for Pending
Office,Lianhe #1 plant,
#2plant,Jiacu plant and 261,209,487.71 Deed is in the progress
dormitory
Newly built plant 46,720,133.52 Deed is in the progress
Functional Lab plant 16,606,422.17 Deed is in the progress
Land is pledged and deed can
Lianhe #3 plant 41,600,775.11
not be granted
Total 366,136,818.51
14. Construction-in-progress
(1) Construction in progress details
Closing Balance Opening Balance
Item
Book Balance Provision Book Value Book Balance Provision Book Value
Buildings
18,343,028.40 18,343,028.40 16,348,332.17 16,348,332.17
reconstruction
Improvement
4,827,106.48 4,827,106.48 1,633,725.79 1,633,725.79
of machinery
Self-heating
circulation
equipment 75,926,416.37 75,926,416.37 65,017,324.94 65,017,324.94
from mine air
return
Total 99,096,551.25 99,096,551.25 82,999,382.90 82,999,382.90
(2) Change in the significant construction in progress
Decrease
Opening Closing
Name Increase Transfer to Other
Balance Balance
fixed assets decrease
Buildings
16,348,332.17 1,994,696.23 18,343,028.40
reconstruction
Improvement
1,633,725.79 9,312,303.36 6,118,922.67 4,827,106.48
of machinery
Self-heating
circulation
equipment 65,017,324.94 10,909,091.43 75,926,416.37
from mine air
return
Total 82,999,382.90 22,216,091.02 6,118,922.67 99,096,551.25
(Continued)
78
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Progress Including:
Percent of Interest
of Accumulated Accumulated
investment capitalizatio Source of
Name Budget construction capitalized capitalized
against n funds
interest interest of the
budget(%) rate(%)
year
Buildings
Self
reconstructi 337,527,099.00 95.75 95.16
on financing
Improveme
Self
nt of 182,020,000.00 94.23 97.13
machinery financing
Self-heating
circulation
Self
equipment 110,000,000.00 69.02 59.11
from mine financing
air return
Total 629,547,099.00 95.75 — —
15. Intangible assets
(1) Intangible assets list
Land use
Item Knowhow Others Total
right
I. Initial Cost
1. Opening Balance 152,890,196.80 11,800,000.00 16,774,618.38 181,464,815.18
2. Increase 6,000,000.00 5,006,837.61 11,006,837.61
(1) Purchase
(2) Acquired from business
6,000,000.00 5,006,837.61 11,006,837.61
combination
3. Decrease
(1) Disposal
(2) Transferred to other
4. Closing Balance 152,890,196.80 17,800,000.00 21,781,455.99 192,471,652.79
II.Accumulated
amortisation
1. Opening Balance 28,878,884.36 294,999.99 8,372,413.96 37,546,298.31
2. Increase 1,547,549.49 1,818,235.74 1,871,813.60 5,237,598.83
(1)Accrued 1,547,549.49 840,685.74 893,004.04 3,281,239.27
(2) Acquired from business
977,550.00 978,809.56 1,956,359.56
combination
3. Decrease
(1) Disposal
(2) Transferred to other
4. Closing Balance 30,426,433.85 2,113,235.73 10,244,227.56 42,783,897.14
79
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Land use
Item Knowhow Others Total
right
III. Impairment Reserve
1. Opening Balance
2. Increase
(1)Accrued
(2) Others
3. Decrease
(1) Disposal
(2) Transferred to other
4. Closing Balance
IV. Book Value
1. Closing book value 122,463,762.95 15,686,764.27 11,537,228.43 149,687,755.65
2. Opening book value 124,011,312.44 11,505,000.01 8,402,204.42 143,918,516.87
16. Goodwill
(1) Original cost of goodwill
Increased during Decreased during
current year current year
Opening Closing
Name Enterprise
Balance Balance
s merger Other Disposal Other
increase
Dalian Universe Thermal
1,440,347.92 1,440,347.92
Technology Co., Ltd.
Dalian Bingshan-P&A
Recreation Development 310,451.57 310,451.57
Engineering Co., Ltd.
Total 1,750,799.49 1,750,799.49
(2) Goodwill impairment provision
Goodwill calculation method:
In the year 2015, the book value of equity investment of Dalian Universe Thermal 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 Bingshan-P&A Recreation Development
Engineering Co., Ltd. and gains control. The transferred price is based on the net asset of Dalian
Bingshan-P&A Recreation Development Engineering Co., Ltd. on June 30th 2016. Negotiated with
Dalian Bingshan-P&A Recreation Development Engineering Co., Ltd.’s shareholder P&A Water
80
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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 Bingshan-P&A Recreation
Development Engineering Co., Ltd’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 Universe Thermal Technology Co.,
Ltd. and Dalian Bingshan-P&A Recreation Development Engineering 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 repayments
Opening Other Closing
Item Increase Amortization
Balance Decrease Balance
Employee’s
2,289,127.02 69,239.16 2,219,887.86
dormitory use right
Renovation and
882,132.14 22,522.50 859,609.64
rebuilding
Lease 744,030.00 53,145.00 690,885.00
Membership fee for
473,000.00 8,250.00 464,750.00
Golf
Technology
entrance fee of cold 1,587,056.25 186,712.50 1,400,343.75
and heat machinery
Greenland of new
8,400,754.18 446,057.76 7,954,696.42
factory
Warranty extension 55,031.42 106,918.24 42,452.82 119,496.84
Total 14,431,131.01 106,918.24 828,379.74 13,709,669.51
18. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets without offsetting
Item Closing Balance Opening Balance
Deductible Deferred tax Deductible Deferred tax
temporary difference assets temporary difference assets
Provision for
impairment of 142,342,909.61 28,747,631.45 139,387,243.38 27,485,104.23
assets
Unrealized profit
from internal 15,641,404.17 2,346,210.63 15,641,404.17 2,346,210.63
transaction
Share option
16,373,184.67 2,455,977.70 13,881,215.49 2,082,182.32
Incentiveexpense
Total 174,357,498.45 33,549,819.78 168,909,863.04 31,913,497.18
(2) Deferred tax liabilities without offsetting
Item Closing Balance Opening Balance
81
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Taxable Deferred tax Taxable Deferred tax
temporary liabilities temporary liabilities
difference difference
Fair value change of the
available-for-sale 373,763,285.55 56,064,492.86 476,197,108.65 71,429,566.31
financial assets
Total 373,763,285.55 56,064,492.86 476,197,108.65 71,429,566.31
(3) Unrecognized deferred tax assets details
Item Closing Balance Opening Balance
Deductible temporary difference 44,571,529.91 45,359,761.94
Deductible loss 35,989,501.25 6,173,430.97
Total 80,561,031.16 51,533,192.91
(4) Unrecognized deductible loss of deferred tax assets expired years
Year Closing Balance Opening Balance Notes
2019
2020 3,240,819.97 3,240,819.97
2021 1,735,813.20 1,735,813.20
2022 7,923,851.29
2023 23,089,016.79
Total 35,989,501.25 4,976,633.17
19. Short-term loan
(1) Category of short term loan
Loan category Closing Balance Opening Balance
Credit loan 410,000,000.00 349,801,300.00
Total 410,000,000.00 349,801,300.00
Note: The Company borrowed 330 million Yuan from bank and Wuhan New World
Refrigeration Industrial Co., Ltd., a subsidiary of The Company borrowed RMB80 million from
Dalian Bingshan Croup Co., Ltd.
20. Notes payable
Notes category Closing Balance Opening Balance
Commercial acceptance notes 192,226,938.25 221,572,037.67
Bank acceptance notes 43,749,758.64 38,871,130.00
Total 235,976,696.89 260,443,167.67
At the end of the reporting period , there is no unpaid notes payable which is due.
21. Accounts payable
(1) Accounts payable
82
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Item Closing Balance Opening Balance
Material payments 733,222,259.19 593,418,202.00
Project payments 153,614,375.81 244,492,384.60
Equipment payments 52,845,201.32 48,813,078.50
Others 488,977.67 3,240,652.53
Total 940,170,813.99 889,964,317.63
(2) Accounts payable with age over 1 year
Reason of unpaid or not carried
Name of company Closing Balance
forward
Project is uncompleted contract is
Panasonic Cold Chain (Dalian) 13,045,170.70
not finished
Project is uncompleted contract is
Dalian Yida Construction Company 9,639,904.38
not finished
Heilongjiang Longleng Technology Project is uncompleted contract is
9,413,290.00
Co., Ltd not finished
Total 32,098,365.08
22. Received in advance
(1) Received in advance
Item Closing Balance Opening Balance
Advanced on sales 110,572,372.72 147,172,195.05
Total 110,572,372.72 147,172,195.05
(2) Accounts received in advance aged over 1 year
Company Closing Balance Reason
Unsettled contract payments on
Dandong Port 5,000,000.00 sets projects
Total 5,000,000.00
23. Employee’s payable
(1) Category of employee’s payable
Item Opening Increase Decrease Closing
Balance Balance
Short-term
46,740,296.95 147,411,217.34 172,614,624.21 21,536,890.08
employee’s payable
Post-employment
benefit –defined 11,265.41 19,215,407.71 19,217,185.78 9,487.34
contribution plan
Other welfare due
within 1 year
Total 46,751,562.36 166,626,625.05 191,831,809.99 21,546,377.42
83
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
(2) Short-term employee’s payables
Item Opening Increase Decrease Closing
Balance Balance
Salaries, bonus,
allowance, and 35,683,852.35 116,523,392.33 140,605,157.97 11,602,086.71
subsidy
Welfare 8,456,835.18 4,965,109.28 6,123,481.55 7,298,462.91
Social insurance 5,684.41 9,768,483.12 9,769,653.11 4,514.42
Include: Medical
4,977.21 7,624,674.55 7,625,759.18 3,892.58
insurance
Supplemental
insurance
On-duty
injury 295.07 1,128,348.60 1,128,385.67 258.00
insurance
Maternity
412.13 1,015,459.97 1,015,508.26 363.84
insurance
Housing funds 1,539,229.07 13,988,355.12 14,076,270.60 1,451,313.59
Labor union and
1,054,695.94 2,139,477.49 2,013,660.98 1,180,512.45
training expenses
Short-term leave
with pay
Short term profit
share plan
Others 26,400.00 26,400.00
Total 46,740,296.95 147,411,217.34 172,614,624.21 21,536,890.08
(3) Defined contribution plan
Item Opening Increase Decrease Closing
Balance Balance
Pension 10,924.64 18,630,781.10 18,632,515.85 9,189.89
Unemployment insurance 340.77 584,626.61 584,669.93 297.45
Total 11,265.41 19,215,407.71 19,217,185.78 9,487.34
The Company joins the pension and unemployment plan in accordance with the state regulation, and
therefore, the Company makes monthly contribution and bears no any other obligation other than the
monthly contribution. Accordingly the contribution will be recorded in the profit and loss or the cost
of assets when incurs.
The ending balance of wages payable decreased 53.91% over that of period-begin, mainly because the
year-end bonus for year of 2017are paid in the report Period.
84
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
(4) Other explanatory of the employee’s payable
There was no amount delay paid at the end of the current period.
24. Tax payable
Item Closing Balance Opening Balance
Value-added tax 4,043,935.08 12,550,353.23
Enterprise income tax 1,855,778.32 13,418,675.14
Individual income tax 485,527.04 628,015.54
City maintenance and construction tax 288,478.31 907,478.69
Real estate tax 849,538.38 882,771.72
Land use tax 553,224.98 553,224.98
Education surcharge 200,504.00 613,577.67
Green tax 657.99
Safeguard fund for disables 440.00 480.00
Stamp duty 111,084.50 437,981.65
Total 8,389,168.60 29,992,558.62
The closing balance of the other current assets decreased 72.03% comparing with the opening
balance , mainly because the tax payment at the beginning of the period was paid.
25. Interest payable
Item Closing Balance Opening Balance
Interest on short term loan 379,085.53
Total 379,085.53
26. Dividend payable
Item Closing Balance Opening Balance
Ordinary share dividend 44,775,220.95 863,516.60
Total 44,775,220.95 863,516.60
The Company’s dividend payable at the end of the period increased 5085.22%compared with the
beginning of the period, mainly because the dividend payable did not reach the payment period.
27.Other accounts payable
(1) Other payables categorized by payments nature
Payments nature Closing Balance Opening Balance
Restricted share buy back 21,026,106.00 21,026,106.00
Loan from non-financial institutes 5,640,000.00 6,320,000.00
Cash pledge and security deposit 9,510,789.65 10,842,115.56
Apply for reimbursement and unpaid 11,509,236.66 13,699,458.65
Cash from related parties 670,000.00 934,995.17
Receipts under custody 10,228,545.65 12,572,889.29
Others 1,965,986.60 2,279,264.40
85
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Payments nature Closing Balance Opening Balance
Total 60,550,664.56 67,674,829.07
(2) Significant other payables with age over 1 year
Reason of unpaid or not
Name of company Closing Balance
carried forward
Not reach the return condition
Restricted share buy back 21,026,106.00 of contract
Total 21,026,106.00
28.Long-term loan
(1) Category of long-term loan
Category Closing Balance Opening Balance
Guarantee loan 160,000,000.00 160,000,000.00
Total 160,000,000.00 160,000,000.00
CDB development 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 0.16billion Yuan with 10year’s expiration at 1.2% rate.
Once the fund arrived, Bingshan Group gave 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, but it is for the company itself in fact.
29. Deferred income
(1) Category of deferred income
Item Opening Increase Decrease Closing Formation
Balance Balance Basis
Asset
100,336,504.07 0.00 2,974,420.68 97,362,083.39
related
Revenue
related
Total 100,336,504.07 0.00 2,974,420.68 97,362,083.39 —
(2) Government subsidy project
86
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Related
Opening Offset cost or Other Closing with
Government
Increase
subsidy item Balance expense Change Balance asset/
equity
Subsidy fund for
Asset
highly effective heat
2,600,952.00 275,836.02 2,325,115.98
pump and related related
system
Contribution to Asset
subsidiary company 43,446,000.00 556,998.00 42,889,002.00
related
relocation
Application of
NH3 and CO2
instead of R22 Asset
15,932,227.94 709,421.76 15,222,806.18
screw refrigerating related
machine combined
condensing unit
Compressor IC Asset
4,166,451.67 155,239.62 4,011,212.05
system related
Ultrasonic Asset
intelligent defrost 4,000,000.00 4,000,000.00
related
technology
Eco Compressor Asset
30,190,872.46 1,276,925.28 28,913,947.18
project related
Total 100,336,504.07 2,974,420.68 97,362,083.39
Asset related grant shall be offset the cost or expense within the asset’s useful life; income
related grant shall be booked into other income or offset cost or expense if it is relevant to daily
activity, otherwise it shall be booked into non-operating expense.
30.Share capital
Increase/decrease（+、-）
New Transfer
Opening Closing
Item share Share from Subtotal
balance others balance
issued dividend capital
reserve
Total
856,487,181.00 -1,053,094.00 -1,053,094.00 855,434,087.00
shares
On December 18, 2017, the Company held the third extraordinary shareholders’ meeting of 2017 which
reviewed and approved the Proposal on Repurchasing and Cancelling Part Restricted Stocks of the 2016
Restricted Stock Incentive Plan”. On March 8, 2018, after the completion of repurchase and cancellation,
87
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
the Company implemented the corresponding capital reduction procedures according to law, and the
registered capital of the Company was changed from 856,487,181 Yuan to 855,908,981 Yuan. On May 4,
2018, the Company held the 21st meeting of the seventh board of directors which reviewed and approved
the Proposal on Repurchasing and Cancelling Party Restricted Stocks of the 2015 Restricted Stock
Incentive Plan. On June 29, 2018, after the completion of repurchase and cancellation, the Company
implemented the corresponding capital reduction procedures according to law, and the registered capital
of the Company was changed from 855,908,981 Yuan to 855,434,087 Yuan.
31.Capital reserves
Items Opening Increase Decrease Closing Balance
Balance
Share premium 676,326,831.54 2,773,227.66 673,553,603.88
Other capital reserves 81,205,249.80 2,329,008.08 83,534,257.88
Total 757,532,081.34 2,329,008.08 2,773,227.66 757,087,861.76
On December 18, 2017, the Company held the third extraordinary shareholders’ meeting of 2017
which reviewed and approved the Proposal on Repurchasing and Canceling Part Restricted Stocks of
the 2016 Restricted Stock Incentive Plan”On May 4, 2018, the Company held the 21st meeting of the
seventh board of directors which reviewed and approved the Proposal on Repurchasing and Canceling
Party Restricted Stocks of the 2015 Restricted Stock Incentive Plan.On June 29, 2018, after the
completion of repurchase and cancellation, the Company implemented the corresponding capital
reduction procedures according to law， the share premium decreased 2,773,227.66 yuan。
（2）Other capital reserve is the expense for share incentive plan amortization.
32. Treasury Share
Opening Balance Increase Decrease Closing
Items
Balance
Share incentive buy-back 23,305,370.40 2,279,264.40 21,026,106.00
Total 23,305,370.40 2,279,264.40 21,026,106.00
The company implements restricted share incentive plan in 2016 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.
88
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
33. Other comprehensive income
2018.1-6
Opening Less：Previously Closing
Items After-tax
Balance Amount for the recognized in profit After-tax attribute Balance
Less：income attribute to
period before or loss in other to the parent
income tax tax minority
comprehensive company
shareholder
income
I.Later can’t reclassified into
profit and loss of other
comprehensive income
II. Later reclassified into profit and
407,269,002.11 -102,433,823.10 -15,365,073.45 -87,068,749.65 320,200,252.46
loss of other comprehensive income
Proportional other comprehensive
income of investee which is
2,501,459.77 2,501,459.77
reclassified into income statement
under equity method
Changes in fair value recognized in
gains and losses of the 404,767,542.34 -102,433,823.10 -15,365,073.45 -87,068,749.65 317,698,792.69
available-for-sale financial assets
Other comprehensive income
407,269,002.11 -102,433,823.10 -15,365,073.45 -87,068,749.65 320,200,252.46
total
89
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
34. Special Reserve
Opening Closing
Items Increase Decrease
Balance Balance
Safety production cost 1,066,759.88 1,066,759.88
Total 1,066,759.88 1,066,759.88
35.Surplus reserves
Item Opening Closing
Increase Decrease
Balance Balance
Statutory surplus reserve 318,245,354.15 318,245,354.15
Discretionary surplus reserve 349,905,021.15 36,726,596.18 386,631,617.33
Total 668,150,375.30 36,726,596.18 704,876,971.48
The company made profit distribution within the reporting period. According to the 2017 annual
meeting, 20% of net profit in the 2017 fiscal annual report is provided for discretionary surplus
reserve of 36,726,596.18 Yuan.
36. Undistributed profits
Item 2018-06-30 2017-06-30
Closing balance of 2017 750,397,795.56 658,387,158.97
Add: Adjustments to the opening balance of
undistributed profits
Including: additional retrospective adjustments
according to the new accounting standards
Change on accounting policy
Correction of prior period significant errors
Change on combination scope under same
control
Other factors
Opening balance of 2018 750,397,795.56 658,387,158.97
Add: net profit attributable to shareholders of
59,017,542.28 98,260,163.09
parent company in the year
Less: Provision for statutory surplus reserves
Provision for any surplus reserves 36,726,596.18 29,208,229.69
Provision of general risk
Dividends payable for common shares 42,771,704.35 61,177,655.80
Share dividends
Staff award fund 305,618.42
Closing balance of the current period 729,611,418.89 659,896,379.17
90
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
37.Operating revenue and cost
Items 2018.01-06 2017.01-06
Sales revenue Cost of sales Sales revenue Cost of sales
Revenue from
1,010,172,413.37 841,675,852.36 987,663,610.92 810,698,503.30
principle operation
Revenue from
18,906,123.42 11,168,022.91 14,715,106.58 6,583,401.75
other operation
Total 1,029,078,536.79 852,843,875.27 1,002,378,717.50 817,281,905.05
38.Operating taxes and surcharges
Items 2018.01-06 2017.01-06
City construction tax 1,103,174.98 1,351,623.47
Education surcharge 775,163.60 935,946.75
Property tax 3,749,949.14 2,730,790.28
Land use tax 2,450,463.10 2,450,463.10
Vehicle and vessel tax 11,988.44 13,227.64
Stamp duty 641,528.66 694,759.27
Others 1,653.81 356.44
Total 8,733,921.73 8,177,166.95
39.Selling expenses
Items 2018.01-06 2017.01-06
Official business expense 4,539,930.14 5,090,769.03
Employee benefit 18,276,891.66 14,995,121.09
Depreciation expense 156,761.63 171,586.90
Transportation expense 12,038,705.09 8,587,934.72
Business entertaining expense 4,036,343.06 3,460,760.50
Travel expense 5,624,151.75 5,842,912.55
Maintenance and repair expense 2,196,454.74 4,104,855.06
Advertisement and bids expense 1,138,461.50 974,753.15
Other expense 655,113.54 625,718.28
Total 48,662,813.11 43,854,411.28
40.Administrative expenses
Items 2018.01-06 2017.01-06
Official expense 8,232,927.98 8,006,866.58
Employee benefit 68,744,729.82 65,086,729.83
Depreciation expense 5,755,436.73 4,057,494.71
Transportation expense
91
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Items 2018.01-06 2017.01-06
Business entertaining expense 1,782,386.28 1,596,655.13
Travel expense 3,109,980.56 4,429,526.62
Maintenance and repair expense 1,922,753.65 3,083,226.59
Advertisement expense 459,235.50 270,057.65
Other taxes and fee 165,543.62
Insurance expense 532,158.46 520,621.31
Technology development expense 12,448,523.63 13,622,171.89
Long-term assets amortization 3,106,842.37 2,446,577.27
Design consultant and test service expense 404,122.61 3,321,476.03
Safety production cost 1,254,520.04 1,613,203.82
Other expense 1,375,875.04 1,346,672.83
Total 109,129,492.67 109,566,823.88
41.Financial expenses
Items 2018.01-06 2017.01-06
Interest expenses 8,884,281.55 3,373,803.53
Less: Interest income 2,069,056.36 1,290,291.01
Add: Exchange loss 643,842.13 -164,598.81
Add: Others expenditure 1,180,197.48 1,075,814.23
Total 8,639,264.80 2,994,727.94
The financial expenses increased 188.48% in the current period compared with the
previous period,mainly because of the interest expense increased.
42.Assets impairment losses
Items 2018.01-06 2017.01-06
Loss of bad debts 8,083,861.40 10,239,188.82
Provision for inventory impairment
Total 8,083,861.40 10,239,188.82
43.Investment income
Items 2018.01-06 2017.01-06
Long-term equity investment gain under
equity method 55,473,486.44 48,681,040.63
Gain from disposing long-term equity
investment 263,666.08
Gain from holding of financial assets
available for sale 11,139,558.00 11,463,569.05
Gain from disposal financial assets available
for sale 27,467,019.93
Total 66,613,044.44 87,875,295.69
92
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
44.Gain on assets disposal
Item 2018.01-06 2017.01-06
Gains on disposal of non-current assets 230,812.06 127,853.00
Gain on non-current assets disposal
230,812.06 127,853.00
income not classified as held for sale
Including: gain on fixed assets disposal 230,812.06 127,853.00
Total 230,812.06 127,853.00
45.Other income
Items 2018.01-06 2017.01-06
VAT refund 109,637.40
Grant given by the government for
relocation
Total 109,637.40
46.Non-operating income
（1） Non-operating income list
Amounts recognized into
Item 2018.01-06 2017.01-06 non-recurring profit or loss
for the year
Government grant 850,600.00 6,355,937.98 850,600.00
Penalty and fine income 258,017.67 329,371.34 258,017.67
Others 1,068,246.27 2,327.66 1,068,246.27
Total 2,176,863.94 6,687,636.98 2,176,863.94
（2） Government grant details
Items 2018.01-06 2017.01-06 Explanations
Small and medium enterprises international market
300,600.00 300,000.00 Related to gain
development funds
Allowance for exporting from new &high technology zone
22,000.00 Related to gain
of Dalian
Dalian science and technology bureau 20,000.00 Related to gain
Subsidy of economic support policy 50,000.00 52,000.00 Related to gain
R22 replacement subsidy 4,489,948.23 Related to gain
Taxes refund 1,115.75 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 Related to Asset
system
Contribution to subsidiary company relocation 557,000.00 Related to Asset
new high-tech enterprise 300,000.00 Related to gain
Patent subsidy 150,000.00 Related to gain
Postdoctoral workstation 50,000.00 Related to gain
Total 850,600.00 6,355,937.98
93
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
（3） Non-operating income statement
The Company’s non-operating income decreased in the current period compared with the
previous period, mainly due to the year-on-year decrease in government subsidies. Other project
was that the Company purchased the shareholding equity of Wuhan Lanning Energy Technology
Co., Ltd. in the current period, and the amount of the merger cost less than the fair value of the
identifiable net assets acquired on the purchase date, which was 1,068,246.27 Yuan, was
recognized as non-operating income.
47. Non-operating expenses
Amounts recognized into
Item 2018.01-06 2017.01-06
non-recurring profit or loss for the year
Outward donation 60,000.00 10,000.00 60,000.00
Others 93,590.70 42,399.10 93,590.70
Total 153,590.70 52,399.10 153,590.70
The Non-operating expenses increased 193.12%in the current period compared with the
previous period, mainly because of the Outward donation increased.
48.Income tax expenses
(1) Income tax expenses
Items 2018.01-06 2017.01-06
Current income tax expenses 4,709,435.95 8,316,752.04
Deferred income tax expenses -1,268,991.70 -2,155,205.75
Total 3,440,444.25 6,161,546.29
(2) Adjustment process of accounting profit and income tax expense
Items 2018.01-06
Total profits 61,962,074.95
Current income tax expense accounted by tax and relevant
9,294,311.24
regulations
Influence of different tax rate suitable to subsidiary 4,964,129.93
Influence of income tax before adjustment -2,084,780.31
Influence of non taxable income -9,851,782.27
Influence of not deductable costs, expenses and losses 384,671.07
Influence of deductable losses of deferred income tax assets
0.00
derecognized used in previous period
Influence of deductible temporary difference or deductible
losses of deferred income tax assets derecognized in reporting 733,894.59
period.
Income tax expenses 3,440,444.25
The Company’s current income tax expenses decreased compared with the previous period, mainly
due to the year-on-year decrease in the taxable income in the current period.
94
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
49. Other comprehensive income
Refer to the note VII.33 other comprehensive income for details.
50.Notes to cash flow statement
(1) Cash receipt/payment of other operating/investing/financing activities
1) Other cash received relating to operating activities
Items 2018.01-06 2017.01-06
Government grants 950,600.00 32,111,189.00
Received travel expense refund 1,362,432.77 1,184,760.87
Deposit given back 12,317,606.04 9,873,997.27
Receivable from relate party 142,350.94
Interest income 2,999,084.48 2,035,021.82
Others 894,306.29 2,294,063.84
Total 18,524,029.58 47,641,383.74
2) Other cash paid relating to operating activities
Items 2018.01-06 2017.01-06
Business travel borrowing 6,452,619.29 6,984,829.71
Deposit paid 19,525,966.58 13,346,261.60
Expenditure 43,456,472.12 55,759,234.64
Payments to relate party 960,032.83
Bank handling charges 1,013,522.20 1,075,814.23
Others 972,341.24 1,402,529.43
Total 72,380,954.26 78,568,669.61
3) Others cash received relating to investing activities
Items 2018.01-06 2017.01-06
Bank financial product 76,000,000.00
Total 76,000,000.00
4) Others cash received relating to financing activities
Items 2018.01-06 2017.01-06
Collection of guarantee money 30,116,287.80 21,576,815.56
Refund fractional dividend
Interests on discount of bill acceptance
Total 30,116,287.80 21,576,815.56
5) Others cash played relating to financing activities
Items 2018.01-06 2017.01-06
95
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Repurchase the restricted stock 3,446,078.94
Interests on discount of bill acceptance 216,469.74
Payment of guarantee money 17,457,092.02 24,206,200.89
Total 21,119,640.70 24,206,200.89
51.Supplementary information of consolidated cash flow statement
Items 2018.01-06 2017.01-06
1. Adjusting net profit into cash flows of operating —— ——
activities:
Net profit 58,521,630.70 98,741,333.86
Add: Provision for impairment of assets 8,083,861.40 10,239,188.82
Depreciation of fixed assets, Amortization of mineral
31,496,581.95 21,725,886.39
resources, and biological assets
Amortization of intangible assets 3,281,239.27 2,545,320.10
Amortization of long-term deferred expenses 828,379.74 620,080.25
Losses on disposal of fixed assets, intangible assets, and
-230,812.06 -143,329.77
long-term assets (income listed with”-”)
Losses on write-off of fixed assets (income listed with”-”) 15,476.77
Change of fair value profit or loss
Financial expense (income listed with”-”) 9,920,078.84 4,049,571.32
Investment loss (income listed with”-”) -66,613,044.44 -87,875,295.69
Decrease of deferred tax assets(increase listed
-1,636,322.60 -2,155,205.75
with”-”)
Increase of deferred tax liabilities(decrease
listed with”-”)
Decrease of inventories (increase listed with”-”) -74,289,269.87 -63,392,514.70
Decrease of operating receivables (increase listed
-109,284,490.94 -95,353,761.18
with”-”)
Increase of operating payables (decrease listed
22,644,645.48 -43,836,998.32
with”-”)
Others 1,948,765.36 6,242,706.00
Net cash flows arising from operating activities -115,328,757.17 -148,577,541.90
2. Significant investment and financing activities
unrelated to cash income and expenses
Liabilities transferred to capital
Convertible bonds within 1 year
Financing leased fixed assets
3. Net increase (decrease) of cash and cash equivalent
Closing balance of cash 303,431,605.14 442,443,497.50
96
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Less: Opening balance of cash 364,693,406.31 691,238,822.98
Add: Closing balance of cash equivalent
Less: Opening balance of cash equivalent
Net increase of cash and cash equivalent -61,261,801.17 -248,795,325.48
(2) Net cash paid for acquiring subsidiaries
Items 2018.01-06
Payment of Net cash and cash equivalent under the business merger during the year 4,500,000.00
Including：Wuhan Lanning Energy Technology Co., Ltd. 4,500,000.00
Net cash paid for acquiring subsidiaries 4,227,733.43
(3) Cash and cash equivalents
Items 2018.6.30 2017.12.31
Cash 303,431,605.14 364,693,406.31
Including: Cash on hand 77,578.47 62,880.11
Bank deposit used for paying at any moment 303,354,026.67 364,630,526.20
Other monetary fund for paying at any moment
Deposit fund in central bank available for payment
Cash equivalent
Including: bonds investment with maturity in 3 months
Closing balance of cash and cash equivalents 303,431,605.14 364,693,406.31
Cash and cash equivalents restricted in the parent
company or subsidiary
52.The assets with the ownership or use right restricted
Items 2018.6.30 Reasons
Monetary fund 17,457,092.02 Guarantee money
Notes Receivable 4,642,147.93 Pledge
Fixed assets 70,714,499.92 Mortgage Loan
Intangible assets 50,565,512.00 Mortgage Loan
Total 143,379,251.87
Dalian Universe Thermal Technology Co., Ltd. pledged the bank acceptance note to Bank o f
China Dalian Gangxi Branch as guarantee for issuing the commercial acceptance note.
Wuhan New World Refrigeration Industrial Co., Ltd signed the “maximum pledge contract”
with GuangdaBank of China Wuhan branch. Property and land were pledged and Wuhan New
World Refrigeration Industrial Co., Ltd was granted for credit of 70 million Yuan.
53.Monetary category of foreign currency
97
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
(1) Monetary category of foreign currency
Item Closing Balance Exchange Closing Balance
(foreign currency) Rate (RMB)
Cash — — 11,951,803.51
Including：USD 1,494,918.05 6.6166 9,891,274.77
Euro 3,752.54 7.6515 28,712.56
GBP 23,364.99 8.6551 202,226.32
JPY 30,536,934.00 0.0599 1,829,589.86
Accounts receivable — — 31,932,326.19
Including: USD 4,682,141.50 6.6166 30,979,857.45
GBP 110,047.11 8.6551 952,468.74
Accounts payable — — 6,651,947.66
Including: USD 690,203.10 6.6166 4,566,797.83
JPY 34,802,380.60 0.0599 2,085,149.83
GBP 36,399.28 8.6551 315,039.41
VIII. Change of Consolidation Scope
1. Consolidation not under the same control
Basis for
Percentage
Basis for combination date
（%）of Combination
Name of the acquiree combination under recognition
shareholding date
same control
acquired
Ultimately under Actually obtain
same control the control
Wuhan Lanning Energy before and after
Technology Co., Ltd. 27.27% 2018.2.28
acquisition and the
control is not
temporary
Acquiree’s income from Acquiree’s net profit
Name of the acquiree acquisition date to Closing from acquisition date to
Balance Closing Balance
Wuhan Lanning Energy
5,492,433.86 -694,892.48
Technology Co., Ltd.
Note:The Company purchased the equity of Wuhan Lanning Energy Technology Co., Ltd. and
achieved control in the current period. The equity transfer price was based on the net assets of
Wuhan Lanning Energy Technology Co., Ltd. on February 28, 2018, after negotiating with the
shareholders of Wuhan Lanning Energy Technology Co., Ltd., it’s determined to take the merger
98
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
price of 10,068,246.27 Yuan as the consideration paying on the purchase date, the Company shared
the fair value of the identifiable net assets of Wuhan Lanning Energy Technology Co., Ltd. on the
purchase date, which was 11,136,492.55 Yuan. Therefore, the merger cost on the purchase date was
less than the amount of the fair value of the identifiable net assets acquired, which was 1,068,246.27
Yuan.
Cost of combination
Item Bingshan International
Trading Company
cash 10,068,246.27
Total of combination cost 10,068,246.27
assets and liability of acquire on acquisition date
Items Wuhan Lanning Energy Technology Co., Ltd.
Fair Value of Book Value of
Acquisition date Acquisition date
Assets: 28,295,063.02 28,295,063.02
Monetary fund 272,266.57 272,266.57
Receivables 7,789,222.50 7,789,222.50
Inventory 7,923,588.27 7,923,588.27
Fixed assets 274,070.17 274,070.17
Intangible assets 8,887,324.13 8,887,324.13
Liability: 7,876,118.12 7,876,118.12
Payables 5,917,680.91 5,917,680.91
Net assets 20,418,944.90 20,418,944.90
Acquired net assets 20,418,944.90 20,418,944.90
IX. Interest in other entity
1. Equity of subsidiaries
(1) Organization structure of group company
Main Shareholding (%)
Registered Obtaining
Name of subsidiaries business Business nature
address Direct Indirect method
address
Dalian Bingshan Group
Dalian Dalian Installation 100 Establish
Engineering Co., Ltd.
Dalian Bingshan Group Sales
Dalian Dalian Trading 100 Establish
Co., Ltd.
Dalian Bingshan
Air-conditioning Equipment Dalian Dalian Manufacturing 70 Establish
Co., Ltd.
Dalian Bingshan Guardian Dalian Dalian Manufacturing 100 Establish
99
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Name of subsidiaries Main Registered Business nature Shareholding (%) Obtaining
business address method
Automation Co., Ltd.
Dalian Bingshan Ryosetsu
Quick Freezing Equipment Dalian Dalian Manufacturing 100 Establish
Co., Ltd.
Wuhan New World
Refrigeration Industrial Co., Wuhan Wuhan Manufacturing 100 Acquisition
Ltd.
Bingshan Technical Service
Dalian Dalian Services 100 Establish
（Dalian） Co.,Ltd.
Dalian New Meica
Electronics Technology Co., Dalian Dalian Electronic 100 Acquisition
Ltd
Dalian Universe Thermal
Dalian Dalian Manufacturing 55 Acquisition
Technology Co., Ltd.
Dalian Bingshan Engineering
Dalian Dalian Service 100 Acquisition
& Trading Co., Ltd.
Wuhan New World
Air-conditioning Installation
Wuhan Wuhan 100 Establish
Refrigeration Engineering
Co., Ltd
Ningbo Bingshan
Air-conditioning
Ningbo Ningbo Installation 51 Establish
Refrigeration Engineering
Co., Ltd
Dalian Bingshan -P&A
Recreation Development Dalian Dalian Installation 100 Acquisition
Engineering Co., Ltd
Shanghai Bingshan Technical
Shanghai Shanghai Services 51 Establish
Service Co., Ltd
Chengdu Bingshan
Refrigeration Engineering Chengdu Chengdu Services 51 Establish
Co., Ltd.
Wuhan Lanning Energy
Wuhan Wuhan Services 54.54 Acquisition
Technology Co., Ltd.
1) All the proportion of shareholding in subsidiaries were the same with voting right
2) The company held over 50% voting right in subsidiaries and could control these
subsidiaries with over 50% voting right
100
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
3) Change on the shareholding of the subsidiaries is explained in the Note II.change on the
combination scope
(2) There is no significant non-wholly-owned Subsidiary
2. Equity in joint venture arrangement or associated enterprise
(1) The important of joint ventures or affiliated companies
Shareholding (%)
Main
Name of joint ventures or Registered Business Accounting
business
affiliated companies address nature methods
address
Direct Indirect
Dalian Bingshan Metal Dalian Dalian Manufacturing Equity
49
Technology Co., Ltd. method
Panasonic Compressor Equity
Dalian Dalian Manufacturing 40
(Dalian) Co., Ltd method
Dalian Fuji Bingshan Equity
Dalian Dalian Manufacturing 49
Vending Machine Co., Ltd. method
The company assumes the affiliated as significant party either when the investment income from
investee presents 10% of the parent’s net profit or the proportion of shareholding of the investee’s net
asset represents 10% of the parent’s shareholder equity.
1) The company has the same percentage of shareholding and voting right in joint-venture or
affiliated company.
2) The company doesn’t have affiliated company which has significant influence although being held
less than 20% voting rights.
3) The company doesn’t have joint venture or affiliated companies which have no significant
influence although being held 20% or more voting rights.
（2） The key financial information of affiliated companies
30-06-2018/2018.01-06
Dalian Bingshan Panasonic Dalian Fuji
Items
Metal Technology Compressor (Dalian) Bingshan Vending
Co., Ltd. Co., Ltd Machine Co., Ltd.
Current assets 324,974,504.89 1,500,641,807.60 656,038,553.62
Including: Cash and
101
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
30-06-2018/2018.01-06
Dalian Bingshan Panasonic Dalian Fuji
Items
Metal Technology Compressor (Dalian) Bingshan Vending
Co., Ltd. Co., Ltd Machine Co., Ltd.
cash equivalents
Non-current assets 52,575,850.21 313,094,470.09 281,000,925.32
Total assets 377,550,355.10 1,813,736,277.69 656,038,553.62
Current liabilities 54,719,752.90 649,210,329.04 179,452,137.02
Non-current liabilities 54,719,752.90 84,938,265.98
Total liabilities 54,719,752.90 649,210,329.04 264,390,403.00
Minority interests
Equity to the parent
322,830,602.20 1,164,525,948.65 391,648,150.62
company
Proportions of net assets
according to the
158,186,995.08 465,810,379.46 191,907,593.80
shareholding
percentage
Adjusting events
—Goodwill 19,269,770.94 226,689.30
—Unrealized profits of
insider trading
--Others -717,006.73 -1,890,622.26 -1,155,566.55
Book value of equity
investment of affiliated 176,739,759.29 463,919,757.20 190,978,716.55
companies
Fair value of equity
investment with public
offer
Operating income 227,720,485.87 770,577,003.95 239,919,017.35
Financial expense
Income tax expense
Net profit 29,265,580.71 59,081,945.59 29,478,738.29
Net profit of
discontinuing operation
Other comprehensive
income
Total comprehensive
29,265,580.71 59,081,945.59 29,478,738.29
income
The current dividends
received from joint
ventures
Continued：
31-12-2017/2017.01-06
Dalian Fuji Bingshan
Items Panasonic Compressor
Vending Machine Co.,
(Dalian) Co., Ltd
Ltd.
102
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
31-12-2017/2017.01-06
Dalian Fuji Bingshan
Items Panasonic Compressor
Vending Machine Co.,
(Dalian) Co., Ltd
Ltd.
Current assets 1,561,263,338.96 373,991,952.58
Including: Cash and cash
equivalents
Non-current assets 330,137,817.56 264,531,025.64
Total assets 1,891,401,156.52 638,522,978.22
Current liabilities 656,825,153.46 185,438,746.74
Non-current liabilities 86,523,957.30
Total liabilities 656,825,153.46 271,962,704.04
Minority interests
Equity to the parent company 1,234,576,003.06 366,560,274.18
Net assets calculated according
493,830,401.22 179,614,534.35
to the shareholding proportions
Adjusting events
—Goodwill 226,689.29
—Unrealized profits of insider
trading
--Others -3,826,159.67
Book value of equity
investment of affiliated 490,004,241.55 179,841,223.64
companies
Fair value of equity investment
with public offer
Operating income 740,643,397.50 281,314,832.40
Financial expense
Income tax expense
Net profit 50,867,695.06 35,811,680.85
Net profit of discontinuing
operation
Other comprehensive income
Total comprehensive income 50,867,695.06 35,811,680.85
The current dividends received
from joint ventures
（3） Summary financial information of insignificant affiliated companies
Items 30-06-2018/2018.01-06 31-12-2017/2017.01-06
Total book value of investment of
715,633,385.05 897,265,918.24
affiliated companies
The total of following items
according to the shareholding
proportions
Net profit 42,720,491.44 53,747,796.11
103
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Items 30-06-2018/2018.01-06 31-12-2017/2017.01-06
Other comprehensive income
Total comprehensive income 42,720,491.44 53,747,796.11
（4） Significant restrictions of the ability of affiliated companies transferring funds to the
company.
None
（5） Excessive loss of affiliated companies.
None
（6） Contingency related to joint venture or affiliated company need to be disclosed.
None
IX. Risk Related to 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.
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 maximizing the shareholders’ and other investors’ profits. Based
on these objectives, the basic risk management policy is to recognize and analyze 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
104
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
contract .As at 30 June 2018, the company’s assets and liabilities dominated in foreign
currency are listed in RMB as following：
Closing Balance
Items
USD JPY GBP EUR Total
Cash and cash in
1,954.72 410,894.00 98,556.32 511,405.04
bank
Accounts receivable 79,255.11 79,255.11
Subtotal 1,954.72 410,894.00 177,811.43 590,660.15
Accounts Payable 36,399.28 36,399.28
Subtotal 36,399.28 36,399.28
Items Closing Balance Opening balance
Monetary fund-USD 9,891,274.77 38,639,808.80
Monetary fund-JPY 1,829,589.86 33,114.00
Monetary fund-EURO 28,712.56 29,063.88
Monetary fund- GBP 202,226.32 1,920.54
Receivable- GBP 952,468.74 760,156.78
Receivable -USD 30,979,857.45 18,390,991.72
Short term borrowing-USD 9,801,300.00
Payables -USD 4,566,797.83 3,685,644.26
Payables -JPY 2,085,149.83 733,045.42
Payables - GBP 315,039.41 319,556.56
Payables - EURO
Payables -SF
Dalian Refrigeration Company paid close attention to the effect on FX risk.
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 Company borrowed short term loan RMB 330,000,000.00 and The subsidiary of
the Company Wuhan New World Refrigeration Industrial Co., Ltd. borrowed short term loan RMB
80,000,000.00 with fixed interest 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
105
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
interest expense for unsettled interest-bearing liability at floating rate and have adverse effect on the
business performance.
The sensitive analysis：
As at 30 June 2018, base on the assumption of interest rate change of 50 BP, the Company’s net profit
will increase or decrease RMB 92,630 thousand Yuan.
3) Price risk
Dalian Refrigeration Company sells steel products according to the market price, so there will be effect
on the price variance.
(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 this 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 assesses 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 2018, the top five customers of receivable accounts balance is：142,071,846.70 Yuan.
(3) Liquidity risk
Liquidity risk was referred to the risk of shortage of funds incurred when the enterprise fulfill the
obligation of settlement by cash or other financial assets. The way to manage the liquidity risk is to
ensure enough fund available to fulfill the liability by due date in prevention from unacceptable loss of
or reputation damage to the Company. The Company periodically analyze the liability structure and
expiry date and 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 funds.
The main fund comes from bank loan. By 30 June 2018, the credit limit still available is270 million Yuan
and short term credit limit available is270 million Yuan.
106
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
As at 30 June 2018, the Company’s financial assets and financial liabilities in line with non discount
cash flow of the contracts as following： Currency unity: 10 thousand Yuan
Closing balance
Over 5
Items Within 1 year 1-2 years 2-5 years Total
years
Financial Assets
Cash and cash in
32,088.87 32,088.87
bank
Notes receivable 17,859.17 17,859.17
Accounts receivable 112,871.32 112,871.32
Other Receivable 4,231.28 4,231.28
Available for sale
41,344.94 41,344.94
financial asset
Financial Liabilities
Short-term loan 41,000.00 41,000.00
Notes Payable 23,597.67 23,597.67
Accounts payable 94,017.08 94,017.08
Other payable 6,055.07 6,055.07
Employee’s payable 2,154.64 2,154.64
Tax payable 838.92 838.92
Dividend payable 4,477.52 4,477.52
Long-term loan 16,000.00 16,000.00
XI. Disclosure of Fair Value
1. Amount and measurement level of the assets and liabilities measured at fair value at the year
end
Fair value at the year end
Items First level Second level Third level
measurement of fair measurement of measurement Total
value fair value of fair value
Financial assets Continuously
measured at FV available for sale
Available for sale asset 399,437,712.30 399,437,712.30
(1) Investment by debt instruments
(2) Investment by equity instruments 399,437,712.30 399,437,712.30
(3) Others
2. Basis for Market price of first level measurement of fair value
107
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Equity instrument portion of the available for sale financial assets is measured at the
unadjusted closing quoted price on stock market on June 29, 2018.
3. For continuous and discontinuous 2nd level of FV, valuation technique adopted and key
parameter quantitive and qualitive information.
None.
4. For continuous and discontinuous 3rd level of FV, valuation technique adopted and key
parameter quantitive and qualitive information.
None..
5. For continuous 3rd level of FV, adjusted information of opening and closing balance and
sensitivity analysis of unobservable parameter.
None
6. Assets continuously measured at fair value have switched among different level during the
year.
None
7. Changes of valuation technique and reasons for changes
None
8. Assets and liability are disclosed at FV rather than measured at FV
None
XII. Related Parties Relationship and Transactions
(I) Related parties relationship
1. Parent company and ultimate controller
1) Parent company and ultimate controller
Parent Registered Business Registered Shareholding Voting
company address nature capital percentage power
(%) percentage
(%)
Dalian
Bingshan
Dalian Manufacture 158,580,000.00 19.98 19.98
Group Co.,
Ltd.
Dalian Bingshan Group Co., Ltd. is a sino –foreign joint venture located No.888 Xinan Road,
108
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Shahekou District, Dalian, China.The legal representative of Dalian Bingshan Group Co., Ltd. is
Mr.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 installment of refrigeration equipment, cooling
and freezing equipment, 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. Subsidiaries
Referring to the content in the Note IX. 1. (1) Organization structure of group company.
3. Affiliated company and joint venture
The information of the affiliated company and joint venture please refers to the note IX. 3 ‘The
significant affiliated company and joint venture’. The company had transactions with related
parties during the current period or last period, including:
Names of the joint ventures or affiliated company Relationships with the Company
Panasonic Appliances Air-conditioning and
Affiliated company of the Company
Refrigeration (Dalian) Co., Ltd
Affiliated
Panasonic Appliances Cold-chain (Dalian) Co., Ltd
Affiliated
Panasonic Appliances Compressor (Dalian) Co., Ltd
Affiliated
Dalian Honjo Chemical Co., Ltd
Keinin-Grand Ocean Thermal Technology (Dalian) Affiliated
Co., Ltd
Beijing Huashang Bingshan Refrigeration and Affiliated
Air-conditioning Machinery Co., Ltd
Affiliated
Dalian Fuji Bingshan Vending Machine Co., Ltd
Affiliated
MHI Bingshan Refrigeration (Dalian) Co.,Ltd.
Affiliated
Dalian Fuji Bingshan Vending Machine Sales Co., Ltd
Jiangsu JingXue Insulation Technology Co.,Ltd Affiliated
Affiliated
Panasonic Refrigerating System (Dalian) Co., Ltd.
Affiliated
Dalian Bingshan Metal Technology Co.,Ltd
Dalian Bingshan Group Mangement and Consulting Affiliated
Co.,Ltd
Affiliated wholly owned subsidiary of the
Wuhan LanNing energy technology co., Ltd
Company before,
Affiliated wholly owned subsidiary of the
Wuhan Sikafu Power Control Equipment Co., Ltd
Company
The board of directors of the Company’s subsidiary Wuxin Refrigeration decided to acquire 27.27%
109
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
equity of Wuhan Lanning Energy Technology Co., Ltd., an original associated Company of Wuxin
Refrigeration. After the transfer, Wuhan Lanning Energy Technology Co., Ltd. became a subsidiary
of Wuxin Refrigeration. As of June 30, 2018, the above equity transaction has been completed.
4. Other related parties
Name of related party Related party relationship
Dalian Bingshan Group Refrigeration Affiliated company of Dalian Bingshan
Equipment Co., Ltd Group
Dalian Part Technology Co.,LTd Subsidiary of Dalian Bingshan Group
Affiliated company of Dalian Bingshan
Dalian Spindle Cooling Towers Co., Ltd
Group
Affiliated company of Dalian Bingshan
BAC (Dalian) Co., Ltd
Group
5. Related Party transactions
1. Purchase of goods, offer and receive labour services etc inter-group transactions
1) Purchase of goods/receive labour services
Related party Content 2018.1-6 2017.1-6
Dalian Part Technology Co.,LTd 4,465,731.71 2,702,324.21
Panasonic Appliances Air-conditioning and
15,480,374.25 20,283,928.38
Refrigeration (Dalian) Co., Ltd.
Panasonic Appliances Cold-chain (Dalian) Co., Ltd 33,172,331.36 21,060,420.38
Panasonic Appliances Compressor (Dalian) Co., Ltd 10,529.91 1,772,307.69
Panasonic Refrigerating System (Dalian) Co., Ltd. 9,125,437.07 33,681,412.84
Dalian Fuji Bingshan Vending Machine Sales Co., Ltd Purchases 456,410.26 0
Dalian Spindle Cooling Towers Co., Ltd of goods 1,260,037.60 1,830,673.50
Dalian Honjo Chemical Co., Ltd. 74,102.56 0
BAC (Dalian) Co., Ltd 20,852,695.11 14,369,238.45
Dalian Bingshan Metal Technology Co., Ltd 196,551.73 106,572.72
Beijing Huashang Bingshan Refrigeration and
0 0
Air-conditioning Machinery Co., Ltd
Dalian Bingshan Group Refrigeration Equipment Co.,
11,153,346.84 6,161,340.61
Ltd
Jiangsu JingXue Insulation Technology Co.,Ltd 4,117,598.28 13,055,394.04
Wuhan LanNing energy technology co., Ltd 0 9,362,494.13
2) Sales of goods/ labour services provision
Related party Content 2018.1-6 2017.1-6
Dalian Part Technology Co.,LTd 1,026,891.85 870,526.88
Panasonic Appliances Air-conditioning and
42,299,738.16 49,668,501.13
Refrigeration (Dalian) Co., Ltd. Sales of
Panasonic Appliances Cold-chain (Dalian) Co., Ltd goods 81,412,904.44 70,986,986.56
Panasonic Appliances Compressor (Dalian) Co., Ltd 7,085,867.73 3,320,214.18
Panasonic Refrigerating System (Dalian) Co., Ltd. 12,374,757.92 4,853,342.63
110
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Dalian Fuji Bingshan Vending Machine Co., Ltd 21,933,607.05 11,115,873.41
Dalian Fuji Bingshan Vending Machine Sales Co.,
438,157.96 504,871.11
Ltd
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. 4,748,243.46 10,465,123.02
Dalian Spindle Cooling Towers Co., Ltd 113,024.88 149,135.10
Keinin-Grand Ocean Thermal Technology
417,336.00 383,202.00
(Dalian) Co., Ltd.
BAC (Dalian) Co., Ltd 325,633.66
Beijing Huashang Bingshan Refrigeration and
5,175,496.30 2,774,658.11
Air-conditioning Machinery Co., Ltd.
Dalian Bingshan Group Refrigeration Equipment
2,917,141.96 100,974.44
Co., Ltd
Jiangsu JingXue Insulation Technology Co.,Ltd 0 315,847.39
Wuhan LanNing energy technology co., Ltd 29,970.09 6,243,108.55
Wuhan Sikafu Power Control Equipment Co., Ltd 68,969.06 8,961.48
Dalian Bingshan Group Huahuida Financial Leasing
437,692.80 86,622.40
Co.,LTd
Dalian Bingshan Wisdom Park Co., Ltd 5,111,008.26 1,560,340.63
3) Assets Lease
1) Assets rent out
Category of 2018.-6-30 2017-6-30
Lessor Lessee
assets rent out Lease Income Lease Income
MHI Bingshan
The
Refrigeration (Dalian) Plant 2,000,000.00 2,000,000.00
Company
Co.,Ltd.
The Dalian Bingshan Land and
3,717,948.50 1,466,666.67
Company Wisdom Park Co., Ltd property
Note:The Company signed an agreement with Dalian Bingshan Group Co., Ltd. to lease 576 square
meters of office space in the office building to Dalian Bingshan Group Co., Ltd., and the lease term
is from April 1, 2017 to March 31, 2019, and the rent for 2018 is 144,000.00 Yuan.
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 ,the rent for 2018 is 4,200,000.00 Yuan
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
111
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
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 rent for 2018 is 7,860,000 Yuan
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) Funds borrow from /lent to related party
Name of the related party Amount Starting date Ending date Explanation
Project fund
Dalian Bingshan Group Co., Ltd. 160,000,000.00 2016.03.14 2026.03.13 investment
Working
Dalian Bingshan Group Co., Ltd. 60,000,000.00 2017.08.31 2018.08.30 capital
Working
Dalian Bingshan Group Co., Ltd. 5,820,000.00 2017.09.27 2018.09.25 capital
Working
Dalian Bingshan Group Co., Ltd. 14,180,000.00 2017.12.04 2018.11.30 capital
6.Balances with Related party
(1) Accounts receivable due from related parties
Closing Balance Opening Balance
Item Related party Book Bad debt Book Bad debt
Balance Provision Balance Provision
Accounts BAC (Dalian)
479,500.00 23,975.00 682,000.00 34,100.00
receivable Co., Ltd
Accounts Beijing Huashang
Bingshan
receivable Refrigeration and
12,715,799.58 635,789.98 8,913,856.35 524,792.82
Air-conditioning
Machinery Co.,
Ltd
Accounts Dalian Fuji
Bingshan Vending 16,435,882.60 821,794.13 5,296,495.78 264,824.79
receivable Machine Co., Ltd.
Accounts Dalian Spindle
Cooling Towers 110,309.10 5,515.46 19,500.00 975.00
receivable Co., Ltd
Accounts MHI Bingshan
Refrigeration 4,913,635.43 245,681.77 3,943,798.07 197,189.90
receivable (Dalian) Co.,Ltd.
Accounts Panasonic
Refrigeration
receivable 8,063,739.78 403,186.99 1,011,420.13 50,571.01
System (Dalian)
Co., Ltd.
Accounts Panasonic
Appliances Cold
receivable 21,822,714.66 1,091,135.73 31,120,658.05 1,579,384.35
Chain (Dalian)
Co., Ltd
112
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Accounts Panasonic
Appliances
receivable 2,916,261.70 145,813.09 93,510.28 4,675.51
Compressor
(Dalian) Co., Ltd
Accounts Panasonic
Appliances
receivable Air-conditioning
14,640,027.64 732,001.38 2,329,505.72 116,475.29
and Refrigeration
(Dalian) Co.,
Ltd.
Accounts Wuhan LanNing
Energy
receivable 7,376,782.55 368,839.13
Technology Co.,
Ltd
Accounts Wuhan Sikafu
Power Control
receivable 128,380.00 6,419.00 77,975.80 3,898.79
Equipment Co.,
Ltd
Accounts Dalian Bingshan
Group
receivable Refigeration
Equipment
Co.,Ltd
Accounts Keinin-Grand
Ocean Thermal
receivable Technology
(Dalian) Co., Ltd.
Accounts Dalian Bingshan
Pate Technology
receivable Co.,Ltd
Accounts Dalian Fuji
receivable Iceberg Vending
Machine Sales
Co., Ltd
Beijing Huashang
Bingshan
Other Refrigeration and
108,307.06 7,163.99
receivable Air-conditioning
Machinery Co.,
Ltd
Panasonic
Other Appliances Cold
89,016.00 4,450.80
receivable Chain (Dalian)
Co., Ltd
Wuhan LanNing
Other Energy
43,680.84 2,184.04
receivable Technology Co.,
Ltd
Wuhan Sikafu
Other Power Control
15,886.95 794.35 10,817.95 540.90
receivable Equipment Co.,
Ltd
113
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Dalian Spindle
Prepayment Cooling Towers 37,956.00
Co., Ltd
Jiangsu Jingxue
Freezing
Prepayment 339,166.50 782,768.00
Equipment Co.,
Ltd.
Panasonic
Refrigeration
Prepayment 323,172.40 2,373.00
System (Dalian)
Co., Ltd.
Panasonic
Appliances
Air-conditioning
Prepayment 363,007.00 460,620.00
and Refrigeration
(Dalian) Co.,
Ltd.
BAC (Dalian)
Prepayment 3,528,703.20
Co., Ltd
Panasonic
Appliances Cold
Prepayment
Chain (Dalian)
Co., Ltd
Notes Dalian Fuji
Bingshan Vending 1,182,028.15
receivable Machine Co., Ltd.
Notes Dalian Spindle
Cooling Towers 45,523.20 39,064.75
receivable Co., Ltd
Notes MHI Bingshan
Refrigeration 1,711,379.41
receivable (Dalian) Co.,Ltd.
Notes Panasonic
Refrigeration
receivable 4,185,620.46 53,989.08
System (Dalian)
Co., Ltd.
Notes Panasonic
Appliances Cold
receivable 52,823,350.44 54,495,058.38
Chain (Dalian)
Co., Ltd
Notes Panasonic
Appliances
receivable 1,182,680.29
Compressor
(Dalian) Co., Ltd
Notes Panasonic
Appliances
receivable Air-conditioning
694,341.94 14,031,393.19
and Refrigeration
(Dalian) Co.,
Ltd.
(1) Accounts Payable due from Related Party
Item Related party Closing Balance Opening Balance
114
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Accounts Payable BAC Dalian Co., Ltd 27,371,342.08 6,078,640.00
Dalian Bingshan Group
Accounts Payable 490,815.60 11,799,186.85
Refrigeration Equipment Co., Ltd.
Dalian Bingshan Metal
Accounts Payable 229,965.52 140,316.68
Technology Co., Ltd
Dalian Bingshan part Technology
Accounts Payable 1,891,872.08 5,124,646.22
Co.,Ltd
Dalian Fuji Bingshan Vending
Accounts Payable 983.82
Machine Co., Ltd.
Dalian Spindle Cooling Towers
Accounts Payable 8,276,530.40 7,544,866.00
Co., Ltd
Jiangsu Jingxue Efficient
Accounts Payable 15,965,679.12 14,043,679.12
Technology Co., Ltd.
Panasonic Refrigeration System
Accounts Payable 20,799,972.61 20,582,489.66
(Dalian) Co., Ltd.
Panasonic Appliances Cold Chain
Accounts Payable 23,651,917.70 13,180,390.70
(Dalian) Co., Ltd
Panasonic Appliances Compressor
Accounts Payable 1,696,000.00 1,696,000.00
(Dalian) Co., Ltd
Panasonic Appliances
Air-conditioning and
Accounts Payable 353,500.00 644,319.10
Refrigeration (Dalian) Co.,
Ltd.
Wuhan LanNing Energy
Accounts Payable 7,725,855.00
technology Co., Ltd
Dalian Fuji Bingshan Vending
Accounts Payable 414,000.00
Machine Sales Co., Ltd
Other accounts MHI Bingshan Refrigeration
170,000.00
payable (Dalian) Co.,Ltd.
Other accounts Dalian BingshanWisdom Park
500,000.00
payable Co.,Ltd
Beijing Huashang Bingshan
Accounts
Refrigeration and
Received in 367,609.61 399,609.61
Air-conditioning Machinery Co.,
Advance
Ltd
Accounts
Dalian BingshanWisdom Park
Received in 1,100,000.00
Co.,Ltd
Advance
Accounts
Dalian Bingshan Group
Received in 241,778.00 50,000.00
Refrigeration Equipment Co., Ltd.
Advance
Accounts
Panasonic Refrigeration System
Received in 88,870.00 90,360.00
(Dalian) Co., Ltd.
Advance
Notes Payable BAC (Dalian) Co., Ltd 43,966,119.00 47,469,964.10
Dalian Bingshan Group
Notes Payable 13,634,215.00 7,812,262.79
Refrigeration Equipment Co., Ltd.
Dalian Bingshan Metal
Notes Payable 474,736.39
Technology Co., Ltd
Dalian Bingshan Pate Technology
Notes Payable 2,130,579.79 1,503,294.01
Co.,Ltd
Jiangsu Jingxue Efficient
Notes Payable 4,860,000.00 4,860,000.00
Technology Co., Ltd.
115
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Panasonic Appliances Cold Chain
Notes Payable 1,657,321.00 1,657,321.00
(Dalian) Co., Ltd
Wuhan LanNing Energy
Notes Payable 1,355,550.00
technology Co., Ltd
(II) Related Party Commitment
None
XIII. Share-Based Payment
1． General situation of share payment
Items Situation
Total equity instruments granted by the company during none
the period
Total equity instruments exercised by the company none
during the period
Total equity instruments invalid by the company during 226,140.00
the period
The scope of the exercise price of the share options 2016:5.62 Yuan per share，divide into 3
issued by the company at the year end and the period, remaining contract period are12,
remaining term of the contract 24 and 36 months.
The scope of the exercise price of other equity and the
remaining term of the contract at the year end
In accordance with “Restricted Share Incentive Plan (draft)’ in 2015 and the 21st meeting of the
7th board of directors, incentive objective 2 persons resigned, therefore, they are not entitled for
share incentive. These 2 persons were granted for 226,140 numbers of shares in total. In accordance
with “dividend distribution plan of 2015”, after transfer, sum of the unlocked restricted shares
granted to these 2 persons is 474,894. The Company bought them back and has written off the
account. Share buyback is planned to be settled by self financing and the sum of buy back price is
1,166,814.54 Yuan.
2． Share payment settled by equity
Items Situation
According to the fair value of restricted
Method for determining the fair value of the equity
stock on granted date (the fair value
instruments granted
changes after the grant date is uncertain)
The basis for determining the quantities of exercised Determined by the actual numbers of
equity instruments share exercised
The reasons for the significant difference between this
None
year’s estimation and last year’s estimation
The cumulative amount of capital reserve which includes 38,437,440.85
116
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
share payment settled by equity
Total cost of share payment recognized by equity
1,948,765.36
settlement this year
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 incent 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 incent 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) The Situation of Unlocking Restricted Shares in 2016
The 4th meeting of the 7th generation of board held on 13th April 2016 approved the ‘Proposal for
unlocking in restricted share options incentive plan for the first unlocking-in period’. There
were 41 incentive targets who satisfied the requirements of unlocking- in, and the number of the
restricted shares can apply unlocking in to have listed and circulated is 3,045,000 that account
representing 0.50% of the Company’s total shares at the year end.
The 4th meeting of the 7th generation of director board approved “proposal for the 2nd
unlocking period of restricted share incentive plan”. Objectives qualifying for the unlocking
117
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
conditions are 41 persons, based on the “Profit distribution scheme of 2015”, every 10 share
capital will granted for 5 new shares by transferring from capital reserve. After transferring to
share capital, 6,090,000 numbers of restricted shares will be applied to unlocking condition and
can be listed in the market, representing 0.71% if total of share capital.
The 17th meeting of the 7th generation of director board approved “proposal of 1st unlocking
period of restricted share incentive plan in 2016”. Objectives qualifying for the unlocking
conditions are 113 persons, based on the “Profit distribution scheme of 2016”, every 10 share
capital will granted for 4 new shares by transferring from capital reserve. After transferring to
share capital, 5,237,820 numbers of restricted shares will be applied to unlocking condition and
can be listed in the market, representing 0.61% if total of share capital.
4) The Situation of Unlocking Restricted Shares in 2015
The 21th meeting of the 7th generation of director board approved “proposal of 3rd unlocking
period of restricted share incentive plan in 2015”. Objectives qualifying for the unlocking
conditions are 39 persons, based on the “Profit distribution scheme of 2016 ”, every 10 share
capital will granted for 4 new shares by transferring from capital reserve. After transferring to
share capital, 5,919,606 numbers of restricted shares will be applied to unlocking condition
and can be listed in the market, representing 0.692 % if total of share capital.
XIV.
(1)Contingency
As at 30 June 2018, the Group does not have any other contingencies for disclosure.
(2)Commitment
As at 30 June 2018, the Group does not have any other significant commitments.
XV. Events after the Balance Sheet Date
1. Significant events had not adjusted
Impact on the
Reason
financial position
Items Content unable to be
and operating
estimated
results
Convertible company bond
Issuing bond 176,000,000.00
privately
2. Information about profit distribution
Not applicable.
118
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
3. Sales Return
There is no significant sales return after the balance sheet date.
4. Except the subsequent event disclosed above, the Company has no other significant
subsequent event.
XVI. Other Significant Events
1. Error correction and effect in previous period.
The Company has no adjustment of prior period accounting error this year.
2. Debt Restructuring
The Company has no events of debt restructuring this year.
3. Asset exchange
(1) The exchange of non-monetary assets
None
(2) The exchange of other assets
None
4. Annuity Plan
None
5. Operation Termination
None
6. Segment Information
The management of the Company divided the Company into 3 segments based on the
geographic area: Northeast China, Central China, and East China. The Northeast is the
Company’s general headquarters and the registered address. The Central is the subsidiary of the
Company, Wuhan New World Refrigeration Industrial Co., Ltd, Chengdu Bingshan. The East is
the subsidiaries of the Company, and they are Ningbo Bingshan Air-conditioning Refrigeration
Engineering Co., Ltd and Shanghai Bingshan Technical Service Co., Ltd.
(1) The basis and accounting policies of reporting segments
The internal organization structure, management requirements and internal report scheme are
the determination basis for the Company to set the operating segments. The segments
are those satisfied the following requirements.
1).The segment can generates revenue and incur expenses.
2).The management personnel can regularly evaluate the operation results of segments and
119
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
allocate resource ,assess its performance .
3).The financial situation, operation results, cash flow and other accounting information of
segments can be acquired.
The Company confirms the report segments based on the operating segments. The transfer price
among segments is set base on the market price. The assets and related expenses in common use
are allocated to different segments based on their proportion of revenue.
(2)The financial information of reporting segments
Amount unit ： Yuan
30-06-2018/2018.01-06
Items Northeast Central
East China Offset Total
China China
1 Operating income 1,267,165,590.57 171,211,112.64 30,842,735.58 440,140,902.00 1,029,078,536.79
2 Cost 1,215,434,491.41 168,374,982.48 31,874,487.92 446,544,226.73 969,139,735.08
Impairment on assets 6,494,705.60 2,141,524.84 -552,369.04 8,083,861.40
Depreciation and 29,013,999.97 6,511,078.77 81,122.22 35,606,200.96
amortization
3 Investment income from 56,407,982.41 -934,495.97 55,473,486.44
associates and joint venture
4 Operating profits(loss) 52,486,126.13 4,054,376.43 -981,752.34 -6,403,324.73 61,962,074.95
5 Income tax 2,745,926.04 657,039.08 37,479.13 3,440,444.25
6 Net profit(loss) 49,740,200.09 3,397,337.35 -1,019,231.47 -6,403,324.73 58,521,630.70
7 Total assets 5,860,010,699.02 589,308,027.49 32,906,003.40 904,703,979.31 5,577,520,750.60
8 Total liabilities 2,098,878,597.98 433,264,693.82 18,306,629.61 405,042,030.03 2,145,407,891.38
7. Other important transactions and matters affect the investor's decision
The company hasn’t had other important transactions and matters affect the investor's decision
in this period.
XVII. Notes to the Main Items of the Financial Statements of Parent Company
1. Accounts receivable
(1) Accounts receivable category
Closing Balance
Item Booking balance Provision Booking
Amount % Amount % balance
Accounts
receivable with
significant
individual amount
and separate bad
120
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Closing Balance
Item Booking balance Provision Booking
Amount % Amount % balance
debt provision
Accounts
receivable with bad
debt provision
221,255,086.63 51.96 51,216,941.99 23.15 170,038,144.64
based on the
characters of credit
risk portfolio
Accounting age as
characters
Related party
within
consolidation
scope
Accounts
receivable with
insignificant
204,587,074.06 48.04 204,587,074.06
individual amount
and separate bad
debt provision
Total 425,842,160.69 100.00 51,216,941.99 12.03 374,625,218.70
(Continued)
Opening Balance
Item Booking balance Provision Booking
Amount % Amount % balance
Accounts receivable
with significant
individual amount
and separate bad
debt provision
Accounts receivable
with bad debt
provision based on 230,841,994.64 55.68 57,996,249.38 25.12 172,845,745.26
the characters of
credit risk portfolio
Accounting age as
characters
Related party within
consolidation scope
Accounts receivable
183,712,211.67 44.32 183,712,211.67
with insignificant
121
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Opening Balance
Item Booking balance Provision Booking
Amount % Amount % balance
individual amount
and separate bad
debt provision
Total 414,554,206.31 100.00 57,996,249.38 13.99 356,557,956.93
1) The bad debt provisions of accounts receivable in the portfolio is accrued under
accounting aging analysis method:
Closing Balance
Aging Provision for bad Drawing Proportion
Accounts receivable
debts (%)
Within 1 year 133,035,277.12 6,651,763.86 5.00
1-2 years 25,378,433.14 2,537,843.31 10.00
2-3 years 17,557,075.64 5,267,122.69 30.00
3-4 years 12,714,364.85 6,357,182.43 50.00
4-5 years 10,834,530.88 8,667,624.70 80.00
Over 5 years 21,735,405.00 21,735,405.00 100.00
Total 221,255,086.63 51,216,941.99
(2) Bad debt provision accrued and reversed (withdraw)
The bad debt provision has been accrued in the amount of -4,760,639.65 Yuan.
(3) No accounts receivable written off in current period.
Item Written off amount
Receivable actually written off 2,018,667.74
(4) The top five significant accounts receivable categorized by debtors
Closing
% of the
Company Closing Balance Aging Balance of
total AR
Provision
Guangzhou Fuli Estate 9.61 2,572,213.06
40,944,261.21 Within 1 year
Co.,Ltd
Xinyi Yuanda 7.69 2,256,374.40
Construction and Within 1 year,
32,748,744.00
Installation 1-2 years
Engineering Co., Ltd.
Yangmei Fengxi 3.92 835,000.00
16,700,000.00 Within 1 year
Fertilizer
Dalian Mingdi 3.32 706,500.00
14,130,000.00 Within 1 year
TradingCo.,Ltd
122
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Closing
% of the
Company Closing Balance Aging Balance of
total AR
Provision
Beidahuang Taihua 1-2 2.31 2,798,065.38
Organic Food Co., Ltd. 9,844,000.00
years.2-3years
Total 114,367,005.21 26.86 9,168,152.84
2. Other Receivables
(1) The category of other receivables
Closing Balance
Items Booking balance Provision Booking
Amount % Amount % balance
Other receivables with
significant individual
- - - - -
amount and separate bad
debt provision
Other receivables with bad
debt provision based on the
4,670,871.42 100.00 1,255,763.72 26.88 3,415,107.70
characters of credit risk
portfolio
Other receivables with
insignificant individual
amount and separate bad
debt provision
Total 4,670,871.42 100.00 1,255,763.72 26.88 3,415,107.70
(Continued)
Opening Balance
Items Booking balance Provision Booking
Amount % Amount % balance
Other receivables with
significant individual
amount and separate
bad debt provision
Other receivables with
bad debt provision
3,605,280.13 100.00 782,482.10 21.70 2,822,798.03
based on the characters
of credit risk portfolio
Other receivables with 3,605,280.13 100.00 782,482.10 21.70 2,822,798.03
123
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
significant individual
amount and separate
bad debt provision
Total 3,605,280.13 100.00 782,482.10 21.70 2,822,798.03
1) The bad debt provisions of other receivables in the portfolio is accrued under accounting
aging analysis method
Closing Balance
Aging Provision for bad Drawing Proportion
Other receivables
debts (%)
Within 1 year 1,600,378.42 80,018.92 5.00
1-2 years 141,928.00 14,192.80 10.00
2-3 years 2,430,000.00 729,000.00 30.00
3-4 years 0 0 50.00
4-5 years 330,065.00 264,052.00 80.00
Over 5 years 168,500.00 168,500.00 100.00
Total 4,670,871.42 1,255,763.72 —
(2) Bad debt provision accrued and reversed (withdraw) in the period.
The bad debt provision has been reversed by 473,281.62Yuan.
(3) Other receivables categorized by nature
Nature Closing Balance Opening Balance
Petty cash 284,321.02 74,915.50
Guarantee deposits 4,219,165.00 3,501,260.43
Others 130,841.00 29,104.20
To or fro accounts 36,544.40
Total 4,670,871.42 3,605,280.13
(4) Other receivables from the top 5 debtors
Closing
Closing % of the
Name Category Aging Balance of
Balance total OR
Provision
Dalian Delta HK
Security 2-3years，
China gas Co., 2,730,000.00 58.45 969,000.00
deposit 4-5years
Ltd
A certain troop of
the Chinese Security Within 1
600,000.00 12.85 30,000.00
People’s deposit year
Liberation Army
Ningxia Ningdian Security Within 1
400,000.00 8.56 20,000.00
Logistics Co., Ltd. deposit year
124
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Closing
Closing % of the
Name Category Aging Balance of
Balance total OR
Provision
Security Within 1
Legal cost 130,841.00 2.80 6,542.05
deposit year
Fazheng Project
Management Security Within 1
100,000.00 2.14 5,000.00
Group Co., Ltd. deposit year
Jilin Branch
Total 3,960,841.00 1,030,542.05
125
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
3. Long-term equity investments
(1) Category of long-term equity investments
Closing Balance Opening Balance
Item
Closing Balance Provision Book Value Opening Balance Provision Book Value
Investment of subsidiaries 487,496,652.08 487,496,652.08 487,496,652.08 487,496,652.08
Investment of affiliates
1,542,460,522.01 1,542,460,522.01 1,556,941,899.80 1,556,941,899.80
and JV
Total 2,029,957,174.09 2,029,957,174.09 2,044,438,551.88 2,044,438,551.88
(2) Investments of subsidiaries
Subsidiaries names Opening Balance Increase Decrease Closing Balance
Dalian Bingshan Group Construction Co., Ltd 93,749,675.77 93,749,675.77
Dalian Bingshan Group Sales Co., Ltd 20,722,428.15 20,722,428.15
Dalian Bingshan Air-Conditioning Equipment Co.,
36,506,570.00 36,506,570.00
Ltd
Dalian Bingshan Guardian Automation Co., Ltd. 6,872,117.80 6,872,117.80
Dalian Bingshan Ryosetsu Quick Freezing Equipment
59,356,051.19 59,356,051.19
Co., Ltd.
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 Technical Service （Dalian） Co.,Ltd. 22,024,000.00 22,024,000.00
Dalian New Meica Electronics Co., Ltd. 43,766,243.72 43,766,243.72
Dalian Bingshan Engineering & Trading Co., Ltd. 71,537,064.86 71,537,064.86
Total 487,496,652.08 487,496,652.08
126
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
(3) Joint ventures& affiliated companies
Increase/Decrease
Gains and losses Adjustment of Provision for
Investee Beginning balance Changes Cash bonus or Provision for Ending balance impairment
recognized other
Increased Decreased of other profits impairment of the Others at year end
under the equity comprehensive
equity announced current period
method income
1. Affiliated companys
Panasonic Appliances
Air-conditioning and 161,817,616.82 -4,686,758.68 3,000,000.00 154,130,858.14
Refrigeration (Dalian) Co., Ltd.
Panasonic Appliances
227,050,807.57 1,292,358.19 6,000,000.00 222,343,165.76
Cold-chain (Dalian) Co., Ltd
Panasonic Appliances
490,004,241.55 21,742,315.65 47,826,800.00 463,919,757.20
Compressor (Dalian) Co., Ltd
Dalian Honjo Chemical Co.,
9,113,011.88 650,448.37 912,160.20 8,851,300.05
Ltd
Keinin-Grand Ocean Thermal
57,604,812.32 4,812,548.80 5,200,000.00 57,217,361.12
Technology (Dalian) Co., Ltd
Beijing Huashang Bingshan
Refrigeration and
1,431,141.16 -30,242.56 1,400,898.60
Air-conditioning Machinery
Co., Ltd
Dalian Fuji Bingshan Vending
179,841,223.64 11,137,492.91 190,978,716.55
Machine Co., Ltd
MHI Bingshan Refrigeration
13,359,504.81 -506,256.97 12,853,247.84
(Dalian) Co.,Ltd.
Dalian Fuji Bingshan Vending
12,042,441.30 3,183,741.25 15,226,182.55
Machine Sales Co., Ltd
Jiangsu JingXue Insulation
166,092,058.74 4,565,836.59 5,842,400.00 164,815,495.33
Technology Co.,Ltd
Panasonic Refrigeration
27,824,664.42 1,509,718.68 2,108,000.00 27,226,383.10
System (Dalian) Co., Ltd.
Bingshan Metal Technical
163,116,631.47 13,623,127.82 176,739,759.29
Service （Dalian） Co.,Ltd.
Dalian Bingshan Group
Mangement and Consulting 47,643,744.12 -886,347.64 46,757,396.48
Company
127
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Increase/Decrease
Gains and losses Adjustment of Provision for
Investee Beginning balance Changes Cash bonus or Provision for Ending balance impairment
recognized other
Increased Decreased of other profits impairment of the Others at year end
under the equity comprehensive
equity announced current period
method income
Total 1,556,941,899.80 56,407,982.41 70,889,360.20 1,542,460,522.01
128
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
4. Operating revenue and cost
Item 2018.01-06 2017.01-06
Revenue Cost Revenue Cost
Revenue from main
289,931,982.40 253,608,635.31 342,083,629.25 292,041,251.33
operation
Revenue from other
13,114,752.79 7,124,916.72 7,745,397.00 3,954,732.15
operation
Total 303,046,735.19 260,733,552.03 349,829,026.25 295,995,983.48
5. Investment income
Items 2018.01-06 2017.01-06
Income from long-term equity investments under cost
6,403,324.73 17,628,766.67
method
Income from long-term equity investments under equity
56,407,982.41 49,382,705.41
method
Income from holding of financial assets available for sale 11,139,558.00 11,463,569.05
Income from disposing available for sale financial
27,467,019.93
investments
Income from disposing long-term share equity investments
Total 73,950,865.14 105,942,061.06
XVIII. Supplementary Information to the Financial Statements
1. Non-operating profit or loss
Items Amount Notes
Gain or loss from disposal of non-current assets 230,812.06
Override, no formal approval or accidental tax refund ,deduction or
exemption
Government grants recorded into profit or loss during current period 800,600.00
Expenses for using funds from non financial institution recognized
in current profit/loss
Gains from acquisition of subsidiary or associates when initial cost
is less than the fair value of identifiable net asset of invested 1,068,246.27
company
Profits/loss from non monetary assets exchange
Profits/loss from investments or management of assets entrusted by
others
Assets impairment provision accrued due to force majeure, e.g.:
suffering natural disasters
Profit or loss from debts restructuring
129
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Expenses of enterprise restructuring
Gain/loss on excessive part from the transaction where the trading
price is obviously unfair.
Net gain/loss of subsidiary from combination under same control
between the beginning of year and consolidation date.
Gains/ loss from contingencies arising from the normal business of
the Company
Gain/loss from change of fair value by holding or disposing the
tradable financial asset and liabilities, and available for sale
financial assets, other than effective hedging in relation to the
company’s normal business
Reversal of impairment provision of accounts receivable separately
tested for impairment
The profits/loss from external entrusted fund
Investment property subsequently measured at fair value
The profits/gains from changes of fair value
Effects of gain/loss from one-off adjustments of gain/loss based on
laws and regulations of taxation and accounting.
non-operating revenue and expense besides the above items 154,426.97
Other profit or loss
Subtotal
Effect on income tax 383,065.12
Attributable to minority shareholders’ equity (after tax) 38,655.21
Total 1,832,364.97
2. Return on equity and earnings per share
Weighted Earnings per share
average (EPS)
Profit of report period return on Basic Diluted
net assets EPS EPS
(%)
Net profit attributable to shareholders of parent company 1.72 0.069 0.069
Net profit after deducting non-recurring gains and losses
1.67 0.067 0.067
attributable to shareholders of parent company
130
Dalian Refrigeration Co., Ltd. 2018 Semiannual Report
Section 11 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,Ms Du Yu
Tel: 0086-411-87968130
Fax: 0086-411-87968125
Dalian Refrigeration Company Limited
25, August, 2018
131
