Dalian Refrigeration Co., Ltd.
DALIAN REFRIGERATION COMPANY LIMITED
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2019
(NOT AUDITED)
1
Dalian Refrigeration Co., Ltd.
BALANCE SHEET
Prepared by Dalian Refrigeration Co., Ltd. June 30, 2019 Unit: RMB Yuan
30-June-2019 31-Dec-2018
Items
Consolidation Parent Company Consolidation Parent Company
Current assets:
Monetary funds 231,766,622.54 100,588,572.36 343,026,485.11 186,976,185.10
Transaction financial assets
Financial assets which are measured by fair value and
which changes are recorded in current profit and loss
Derivative financial assets
Notes receivable 154,749,147.97 64,944,562.37 171,292,044.56 63,673,648.65
Accounts receivable 1,242,102,434.51 532,504,574.39 1,107,546,588.30 418,715,646.60
Accounts in advance 169,837,285.13 55,733,450.97 158,405,300.50 69,577,538.44
Other receivables 92,269,545.78 61,650,745.69 48,508,755.15 14,003,269.34
Interest receivables 318,886.12 318,886.12
Dividend receivable 56,591,452.20 56,591,452.20 33,450.00
Inventories 506,818,620.94 225,906,253.16 450,195,300.53 194,747,632.08
Assets held for sale
Non-current asset due within one year
Other current assets 10,919,417.09 502,579.11 18,266,589.12 8,056,055.09
Total current assets 2,408,463,073.96 1,041,830,738.05 2,297,241,063.27 955,749,975.30
Non-current assets:
Finance asset held available for sales 382,186,729.99 380,771,587.49
Held-to-maturity investment
Long-term account receivable
Long-term equity investment 1,628,330,214.50 2,211,259,839.98 1,619,693,570.97 2,201,953,842.42
Other non-current financial assets 301,270,305.39 299,855,162.89
Investment property 97,846,891.45 109,001,565.44 100,338,241.99 111,421,702.70
Fixed assets 926,981,106.12 703,919,706.11 953,298,058.11 725,516,578.53
Construction in progress 49,722,435.06 24,914,982.62 19,796,212.82 18,010,457.61
Productive biological asset
Oil and gas asset
Intangible assets 143,985,088.16 68,783,428.55 147,018,592.71 70,049,323.57
Expense on Research and Development
Goodwill 1,750,799.49 1,750,799.49
Long-term expenses to be apportioned 12,068,633.37 10,498,387.92 12,873,428.19 11,244,777.00
Deferred income tax asset 36,887,124.74 4,372,833.57 34,082,754.72 4,303,943.48
Other non-current asset
Total non-current asset 3,198,842,598.28 3,432,605,907.08 3,271,038,388.99 3,523,272,212.80
Total assets 5,607,305,672.24 4,474,436,645.13 5,568,279,452.26 4,479,022,188.10
Current liabilities:
Short-term loans 289,000,000.00 249,000,000.00 250,000,000.00 250,000,000.00
Financial liabilities which are measured by fair value
and which changes are recorded in current profit and
loss
Derivative financial liabilities
Transaction financial liabilities
2
Dalian Refrigeration Co., Ltd.
Notes payable 308,942,433.94 180,422,498.75 273,401,536.58 114,845,621.59
Accounts payable 917,599,819.45 297,925,638.95 859,489,558.61 297,954,195.20
Accounts received in advance 138,163,912.46 39,450,916.74 122,151,101.00 29,579,144.85
Wage payable 11,033,473.25 450,461.45 31,856,136.59 7,376,290.42
Taxes payable 20,355,341.17 13,558,523.93 13,608,212.32 3,399,150.12
Other accounts payable 78,521,779.11 48,137,952.52 63,313,958.43 30,439,931.10
Interest payable 297,917.07 297,917.07 1,369,527.78 1,369,527.78
Dividend payable 42,693,781.35 42,693,781.35 533,156.00 533,156.00
Liabilities held for sale
Non-current liabilities due within one year 1,472,720.00 2,999,574.93
Other current liabilities
Total current liabilities 1,765,089,479.38 828,945,992.34 1,616,820,078.46 733,594,333.28
Non-current liabilities:
Long-term loans 160,000,000.0 160,000,000.00 160,000,000.00 160,000,000.00
Bonds payable 25,000,034.00 25,000,034.00 176,000,000.00 176,000,000.00
Preferred stock
Perpetual bond
Long-term account payable 17,574,885.46 1,532,949.94
Long-term wage payable
Special payable
Anticipation liabilities
Deferred income 100,384,815.79 58,325,994.98 103,542,093.79 60,907,828.40
Deferred income tax liabilities 41,009,166.63 41,009,166.63 51,954,442.22 51,954,442.22
Other non-current liabilities
Total non-current liabilities 343,968,901.88 284,335,195.61 493,029,485.95 448,862,270.62
Total liabilities 2,109,058,381.26 1,113,281,187.95 2,109,849,564.41 1,182,456,603.90
Shareholders’ equity
Share capital 843,212,507.00 843,212,507.00 855,434,087.00 855,434,087.00
Other equity instruments
Preferred stock
Perpetual bond
Capital public reserve 726,768,468.00 771,270,562.83 760,365,342.00 804,867,436.83
Less:Treasury stock 21,026,106.00 21,026,106.00
Other comprehensive income 2,501,459.77 1,539,359.10 296,909,965.55 295,947,864.88
Special preparation
Surplus public reserve 753,519,177.11 753,519,177.11 721,091,040.02 721,091,040.02
Generic risk reserve
Retained profit 1,093,052,951.09 991,613,851.14 764,859,288.45 640,251,261.47
Total owner’s equity attributable to parent company 3,419,054,562.97 3,361,155,457.18 3,377,633,617.02 3,296,565,584.20
Minority interests 79,192,728.01 80,796,270.83
Total owner’s equity 3,498,247,290.98 3,361,155,457.18 3,458,429,887.85 3,296,565,584.20
Total liabilities and shareholder’s equity 5,607,305,672.24 4,474,436,645.13 5,568,279,452.26 4,479,022,188.10
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua
3
Dalian Refrigeration Co., Ltd.
INCOME STATEMENT
Prepared by Dalian Refrigeration Co., Ltd. January-June, 2019 Unit: RMB Yuan
January-June, 2019 January-June 2018
Items
Consolidation Parent Company Consolidation Parent Company
I. Total sales 1,075,729,240.57 325,356,273.32 1,029,078,536.79 303,046,735.19
II. Total operating cost 1,101,546,628.92 328,308,008.76 1,028,009,367.58 321,430,557.24
Including: Operating cost 919,759,979.86 276,893,396.82 852,843,875.27 260,733,552.03
Taxes and associate charges 8,730,283.87 4,773,987.02 8,733,921.73 4,555,858.93
Selling and distribution expenses 53,096,818.62 5,371,238.79 48,662,813.11 281,553.90
Administrative expenses 85,942,095.21 24,161,373.15 81,515,156.00 38,446,055.18
R&D expenses 28,549,864.17 13,071,247.34 27,614,336.67 12,006,561.51
Financial expense 5,467,587.19 4,036,765.64 8,639,264.80 5,406,975.69
Including:interest expense 5,542,418.26 3,772,180.01 8,884,281.55 6,670,364.53
interest income 572,223.80 211,170.87 2,069,056.36 1,711,676.17
Add:Other income 2,035,436.84 109,637.40
Gain/(loss) from investment 117,127,421.73 120,796,775.76 66,613,044.44 73,950,865.14
Including: income from investment on 72,239,478.13 72,908,832.16 55,473,486.44 56,407,982.41
affiliated enterprise and jointly enterprise
Gain/(loss) from change in fair value 40,461,125.59 40,461,125.59
Assets impairment loss (loss as “-“) -16,863,134.42 -3,112,743.25 -8,083,861.40 4,287,358.03
Gain/(loss) from asset disposal 1,242,799.31 582,050.16 230,812.06 248,128.41
III. Operating profit 118,186,260.70 142,704,225.48 59,938,801.71 60,102,529.53
Add: non-business income 2,472,365.13 200.07 2,176,863.94 251,000.07
Less: non-business expense 121,643.51 75,126.57 153,590.70 80,000.00
IV. Total profit 120,536,982.32 142,629,298.98 61,962,074.95 60,273,529.60
Less: Income tax 13,766,605.84 11,086,452.65 3,440,444.25 572,108.49
V. Net profit 106,770,376.48 131,542,846.33 58,521,630.70 59,701,421.11
(I) Net profit from continuous operation 106,770,376.48 131,542,846.33 58,521,630.70 59,701,421.11
(II)Net profit from discontinuing operation
Net profit attributable to parent company 108,373,919.30 131,542,846.33 59,017,542.28 59,701,421.11
Minority shareholders’ gains and losses -1,603,542.82 -495,911.58
VI. After-tax net amount of other comprehensive
-87,068,749.65 -87,068,749.65
incomes
After-tax net amount of other comprehensive -87,068,749.65 -87,068,749.65
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 invests 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
reclassified into gains and losses
1. Enjoyable shares in other comprehensive
incomes in invests that will be reclassified into gains
and losses under the equity method
2. Changes in the fair value of other debt
investments
3. Gains and losses on fair value changes of -87,068,749.65 -87,068,749.65
available-for-sale financial assets
4. The amount of financial assets reclassified
4
Dalian Refrigeration Co., Ltd.
into other comprehensive income
5. Held-to-maturity investments are reclassified
as saleable financial asset gains and losses
6.Others
After-tax net amount of other comprehensive
incomes attributable to minority shareholders
VII Total comprehensive income 106,770,376.48 131,542,846.33 -28,547,118.95 -27,367,328.54
Total comprehensive income attributable to parent
108,373,919.30 131,542,846.33 -28,051,207.37 -27,367,328.54
company
Total comprehensive income attributable to
-1,603,542.82 -495,911.58
minority shareholders
VIII. Earnings per share
(I) basic earnings per share 0.127 0.069
(II) diluted earnings per share 0.127 0.069
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua
5
Dalian Refrigeration Co., Ltd.
CASH FLOW STATEMENT
Prepared by Dalian Refrigeration Co., Ltd. January -June, 2019 Unit: RMB Yuan
January -June, 2019 January -June, 2018
Items
Consolidation Parent Company Consolidation Parent Company
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing
618,147,609.49 227,740,556.29 632,708,032.41 213,979,631.33
labor services
Write-back of tax received 8,019,673.18 8,304,625.28
Other cash received concerning operating activities 17,779,038.66 4,348,684.15 18,524,029.58 4,274,956.26
Subtotal of cash inflow arising from operating activities 643,946,321.33 232,089,240.44 659,536,687.27 218,254,587.59
Cash paid for purchasing commodities and receiving labor
426,426,299.23 159,249,772.95 459,421,142.63 221,317,190.65
service
Cash paid to/for staff and workers 188,059,306.43 66,691,776.09 189,833,832.63 70,455,961.47
Taxes paid 43,807,228.95 14,147,587.37 53,229,514.92 4,952,102.76
Other cash paid concerning operating activities 63,429,524.60 13,181,849.87 72,380,954.26 10,875,163.82
Subtotal of cash outflow arising from operating activities 721,722,359.21 253,270,986.28 774,865,444.44 307,600,418.70
Net cash flows arising from operating activities -77,776,037.88 -21,181,745.84 -115,328,757.17 -89,345,831.11
II. Cash flows arising from investing activities:
Cash received from recovering investment
Cash received from investment income 11,365,084.60 11,331,634.60 20,779,048.00 20,745,598.00
Net cash received from disposal of fixed, intangible and
1,691,731.61 810,000.00 4,093,774.11
other long-term assets
Net cash received from disposal of subsidiaries and other
units
Other cash received concerning investing activities 76,000,000.00 76,000,000.00
Subtotal of cash inflow from investing activities 13,056,816.21 12,141,634.60 100,872,822.11 96,745,598.00
Cash paid for purchasing fixed, intangible and other
27,160,372.19 23,937,190.63 104,301,920.61 95,865,456.22
long-term assets
Cash paid for investment 4,327,733.43
Net cash paid for achievement of subsidiaries and other
business units
Other cash paid concerning investing activities
Subtotal of cash outflow from investing activities 27,160,372.19 23,937,190.63 108,629,654.04 95,865,456.22
Net cash flows arising from investing activities -14,103,555.98 -11,795,556.03 -7,756,831.93 880,141.78
III. Cash flows arising from financing activities
Cash received from absorbing investment
Including: Cash received from absorbing minority
shareholders' equity investment by subsidiaries
Cash received from loans 340,210,100.00 249,000,000.00 313,004,000.00 300,000,000.00
Cash received from issuing bonds
Other cash received concerning financing activities 38,323,050.64 30,116,287.80
Subtotal of cash inflow from financing activities 378,533,150.64 249,000,000.00 343,120,287.80 300,000,000.00
Cash paid for settling debts 303,180,583.85 250,000,000.00 249,904,100.00 230,000,000.00
Cash paid for dividend and profit distributing or interest
6,158,656.56 4,843,793.50 9,236,961.88 7,049,450.06
paying
Including: dividends or profit paid by subsidiaries to
minority shareholders
Other cash paid concerning financing activities 67,866,365.93 47,566,389.36 21,119,640.70 3,446,078.94
Subtotal of cash outflow from financing activities 377,205,606.34 302,410,182.86 280,260,702.58 240,495,529.00
Net cash flows arising from financing activities 1,327,544.30 -53,410,182.86 62,859,585.22 59,504,471.00
IV. Influence on cash due to fluctuation in exchange rate 266,799.33 -128.01 -1,035,797.29 -310.29
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Dalian Refrigeration Co., Ltd.
V. Net increase of cash and cash equivalents -90,285,250.23 -86,387,612.74 -61,261,801.17 -28,961,528.62
Add: Balance of cash and cash equivalents at the period
304,703,434.47 186,976,185.10 364,693,406.31 234,655,092.14
-begin
VI. Balance of cash and cash equivalents at the period–end 214,418,184.24 100,588,572.36 303,431,605.14 205,693,563.52
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua
7
Dalian Refrigeration Co., Ltd.
CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’ EQUITY
Prepared by Dalian Refrigeration Company Limited 2019.01-06 Unit: RMB Yuan
2019.01-06
Owners’ equity attributable to parent company
Items Lessen: Other Retained Total of
Special Minority equity
share capital Capital suplus treasury comprehensi Surplus reserve profits owners’ equity
preparation
stock ve income
I. balance at the end of last 855,434,087.00 760,365,342.00 21,026,106.00 296,909,965.55 721,091,040.02 764,859,288.45 80,796,270.83 3,458,429,887.85
year
1. Change of accounting
-294,408,505.78 294,408,505.78
policy
2. Correction of errors in
previous period
II. Balance at the beginning of
855,434,087.00 760,365,342.00 21,026,106.00 2,501,459.77 721,091,040.02 1,059,267,794.23 80,796,270.83 3,458,429,887.85
this year
III. Increase/ decrease of
amount in this year (“-” -12,221,580.00 -33,596,874.00 -21,026,106.00 32,428,137.09 33,785,156.86 -1,603,542.82 39,817,403.13
means decrease)
(I) Total comprehensive
108,373,919.30 -1,603,542.82 106,770,376.48
incomes
(II) Capital increased and -12,221,580.00 -33,596,874.00 -21,026,106.00 -24,792,348.00
reduced by owners
1. Common shares increased
-12,221,580.00 -33,596,874.00 24,792,348.00 -70,610,802.00
by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in -45,818,454.00 45,818,454.00
owners’ equity
4. Other
(III) Profit distribution 32,428,137.09 -74,588,762.44 -42,160,625.35
1. Withdrawing surplus
32,428,137.09 -32,428,137.09 -
public reserve
2. Distribution to all owners
-42,160,625.35 -42,160,625.35
(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 1,025,336.49 1,025,336.49
2. Used in the period -1,025,336.49 -1,025,336.49
(VI) Other
IV. Balance at the end of this
843,212,507.00 726,768,468.00 2,501,459.77 753,519,177.11 1,093,052,951.09 79,192,728.01 3,498,247,290.98
period
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua
8
Dalian Refrigeration Co., Ltd.
2018.01-06
Owners’ equity attributable to parent company
Items Other Retained Minority Total of owners’
Lessen: Special Surplus equity equity
share capital Capital suplus comprehensive profits
treasury stock reserve reserve
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
3. Merger of enterprises under
the same control.
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
reduced by owners
1. Common shares increased
by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in 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. Withdrawing general risk
preparation.
3. Distribution to all owners
-42,771,704.35 -1,140,000.00 -43,911,704.35
(shareholders)
4. 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
9
Dalian Refrigeration Co., Ltd.
STATEMENT OF CHANGES IN OWNERS’ EQUITY
Prepared by Dalian Refrigeration Company Limited 2019.01-06 Unit: RMB Yuan
2019.01-06
Owners’ equity attributable to parent company
Items Other Lessen: Other Total of owners’
Capital Special Surplus Retained equity
share capital equity treasury comprehensive
suplus preparation reserve profits
instrument stock income
I. balance at the end of last
855,434,087.00 804,867,436.83 21,026,106.00 295,947,864.88 721,091,040.02 640,251,261.47 3,296,565,584.20
year
1. Change of accounting
-294,408,505.78 294,408,505.78
policy
2. Correction of errors in
previous period
II. Balance at the beginning of
855,434,087.00 804,867,436.83 21,026,106.00 1,539,359.10 721,091,040.02 934,659,767.25 3,296,565,584.20
this year
III. Increase/ decrease of
amount in this year (“-” -12,221,580.00 -33,596,874.00 -21,026,106.00 32,428,137.09 56,954,083.89 64,589,872.98
means decrease)
(I) Total comprehensive
131,542,846.33 131,542,846.33
incomes
(II) Capital increased and -12,221,580.00 -33,596,874.00 -21,026,106.00 -24,792,348.00
reduced by owners
1. Common shares increased
-12,221,580.00 -33,596,874.00 24,792,348.00 -70,610,802.00
by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in -45,818,454.00 45,818,454.00
owners’ equity
4. Other
(III) Profit distribution 32,428,137.09 -74,588,762.44 -42,160,625.35
1. Withdrawing surplus
32,428,137.09 -32,428,137.09
public reserve
2. Distribution to all owners
-42,160,625.35 -42,160,625.35
(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 1,025,336.49 1,025,336.49
2. Used in the period -1,025,336.49 -1,025,336.49
(VI) Other
IV. Balance at the end of this 843,212,507.00 771,270,562.83 1,539,359.10 753,519,177.11 991,613,851.14 3,361,155,457.18
period
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Mao Chunhua
10
Dalian Refrigeration Co., Ltd.
2018.01-06
Owners’ equity attributable to parent company
Items Lessen: Other Total of owners’
Other equity Special Surplus Retained equity
share capital Capital suplus treasury comprehensive
instrument preparation reserve profits
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
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Dalian Refrigeration Co., Ltd.
I. 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 9 th 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
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Dalian Refrigeration Co., Ltd.
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.
On December 10,2018, the Company held the 25th meeting of the seventh board of directors
which reviewed and approved the Proposal on terminating the implementation of 2016 Restricted
Stock Incentive Plan of the Company and logouting the restricted stock.
On January 17,2019, the Company held the first extraordinary shareholders’ meeting of 2019
which reviewed and approved the Proposal on terminating the implementation of 2016 Restricted
Stock Incentive Plan of the Company and logouting the restricted stock. On March 4,2019, the
Company has completed the capital reduction process, and the registered capital of the Company
was changed from 855,434,087 Yuan to 843,212,507 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
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Dalian Refrigeration Co., Ltd.
trade and material supply and marketing.
This reporting period, entities within the consolidation scope has no change comparing to last year
II. 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”.
（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.
III. Significant Accounting Policies and Accounting Estimates
1, March 2017, the Ministry of Finance, respectively, revised and issued the accounting standards for
enterprises No. 22 - recognition and measurement of financial instruments, the accounting standards
for enterprises No. 23 - transfer of financial assets, the accounting standards for enterprises No. 24 -
hedging accounting, the accounting standards for enterprises No. 37 - presentation of financial
instruments such as the four related financial instruments accounting standards (hereinafter generally
referred to as the "rule of financial instruments), in domestic and at the same time, listed companies
and listed overseas and adopted international financial reporting standards accounting standards to
prepare its financial report or enterprises, effective as of January 1, 2018; Other domestic listed
enterprises shall take effect from January 1, 2019. In accordance with the above requirements, the
Company will implement the above four accounting standards from January 1, 2019.
2.On April 30, 2019, the Ministry of Finance issued the notice on revising and issuing the 2019
annual general enterprise financial statement format (financial accounting [2019] No. 6), which
revised the general enterprise financial statement format.
The Company has prepared financial statements according to the requirements of the new financial
statement format. If the items of presentation of financial statements are changed, the Company has
adjusted the comparison data during the comparable period according to the relevant provisions of
the accounting standards for enterprises No. 30 - presentation of financial statements.
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.
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Dalian Refrigeration Co., Ltd.
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.
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
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Dalian Refrigeration Co., Ltd.
interest” and “total comprehensive income attributed to minority interest” title.
If a subsidiary is acquired under common control, its operation results and cash flow shall be
consolidated since the beginning of the consolidation period. When preparing the comparative
consolidated financial statements, adjustments shall be made to relevant items of comparative
figures as regarded that reporting entity established through consolidation has been always there
since the point when the ultimate controlling party starts to have the control.
If a business consolidation under common control is finally achieved in stages, consolidation
accounting method shall be disclosed additionally for the period in which the control is obtained.
For example, if a business consolidation under common control is finally achieved in stages, when
preparing the consolidated financial statements, adjustments shall be made for the current
consolidation status as if consolidation has always been there since the point when the ultimate
controlling party starts to control. In preparation of comparative figures, asset and liability of the
acquiree shall be consolidated into the Group’s comparative financial statements, but to the extent
no earlier than the point when the Group and acquiree are both under ultimate control and relevant
items under equity in comparative financial statements shall be adjusted for net asset increased in
combination. To avoid the duplicated computation of net asset of acquiree, for long-term equity
investment held by the Group before the consolidation, relevant profit and loss, other
comprehensive income and movement in other net asset, recognized for the period between the
combination date and later date when original shareholding is obtained and when the Group and
the acquiree are under common control of same ultimate controlling party, shall be respectively
used for writing down the opening balance of retained earnings of comparative financial
statements and profit and loss for the current period.
If a subsidiary is acquired not under common control, its operation results and cash flow shall be
consolidated since the beginning of the consolidation period. In preparation of the consolidated
financial statements, adjustments shall be made to subsidiary’s financial statements based on the
fair value of its all identifiable assets, liability or contingent liability on the acquisition date.
If a business consolidation under non-common control is finally achieved in stages, consolidation
accounting method shall be disclosed additionally for the period in which the control is obtained.
For example, if a business consolidation not under common control is finally achieved in stages,
when preparing the consolidated financial statements, the acquirer shall remeasure its previously
held equity interest in the acquiree at its acquisition-date fair value and recognize the resulting
gain or loss as investment income for the current period. Other comprehensive income, under
equity method accounting rising from the interest held in acquiree in relation to the period before
the acquisition, and changes in the value of its other equity other than net profit or loss, other
comprehensive income and profit appropriation shall be transferred to investment gain or loss
for the period in which the acquisition incurs, excluding the other comprehensive income from
the 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
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Dalian Refrigeration Co., Ltd.
disposals price and respective disposed value of share of net assets in the subsidiary since the
acquisition date or combination date, shall be adjusted for capital surplus or share premium, no
enough capital surplus, then adjusted for retained earnings.
When the Group partially disposes of the long –term equity investment in subsidiary and lose the
control over it, in preparation of consolidated financial statements, remaining share of interest in
the subsidiary shall be remeasured on the date of losing control. Sum of the share disposal
consideration and fair value of remaining portion of shareholding minus the share of the net assets
in the subsidiary held based on the previous shareholding percentage since the acquisition date or
combination date, the balance of above is recognized as investment gain/loss for the period and
goodwill shall be written off accordingly. Other comprehensive income relevant to share
investment in subsidiary shall be transferred to investment gain /loss for the period on the date of
losing control.
When the Group partially disposes of the long –term equity investment in subsidiary and lose the
control over it by stages, if all disposing transactions are bundled, each individual transaction shall
be seen as a transaction of disposal of a subsidiary by losing control. The difference between the
disposal price and the share of the net assets in the subsidiary held before the date of losing
control, shall be recognize as other comprehensive income until the date of losing control where it
is transferred into investment gain/ loss for the current period.
7. Joint arrangement classification and joint operation accounting
The Group’s joint arrangement includes joint operation and joint venture. For joint operation, the
Group as a joint operator shall recognize its own assets and its share of any assets held jointly, its
liabilities and its share of any liabilities incurred jointly, its revenue from the sale of its share of
the output arising from the joint operation, its share of the revenue from the sale of the output by
the joint operation; and its expenses, including its share of any expenses incurred jointly. When an
entity enters into a transaction with a joint operation in which it is a joint operator, such as a sale
or contribution of assets, it is conducting the transaction with the other parties to the joint
operation and, as such, the joint operator shall recognize gains and losses resulting from such a
transaction only to the extent of the other parties’ interests in the joint operation.
8. Cash and cash equivalent
The cash listed on the cash flow statements of the Group refers to cash on hand and bank deposit.
The cash equivalents refer to short-term (normally with original maturities of three months or less)
and liquid investments which are readily convertible to known amounts of cash and subject to an
insignificant risk of changes in value.
9. Translation of foreign currency
(1) Foreign currency transaction
Foreign currency transactions are translated at the spot exchange rate issued by People’s Bank of
China (“PBOC”) on the 1st day of the month when the transactions incurred. Monetary assets and
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Dalian Refrigeration Co., Ltd.
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 is recognized when the Company becomes a party to a financial
instrument contract.
(1) financial assets
1) classification, confirmation basis and measurement method of financial assets
According to the business model of financial assets and the contractual cash flow characteristics
of financial assets, the Company classifies financial assets as financial assets measured at
amortized cost, financial assets measured at fair value and its changes included in other
comprehensive income, and financial assets measured at fair value and its changes included in
current profit and loss.
The Company classifies the financial assets that meet the following conditions as financial assets
measured by amortized cost: (1) the business model of managing the financial assets is to collect
contract cash flow as the target. (2) the contractual terms of the financial asset provide that the
cash flow generated on a given date is only the payment of the principal and the interest based on
the outstanding principal amount. Such financial assets shall be initially measured according to
their fair value, and relevant transaction expenses shall be included in the initial recognized
amount; To carry on the follow-up measurement with the amortized cost. Unless it is designated
as a hedged item, the difference between the initial amount and the amount due shall be amortized
according to the effective interest rate method, and the amortization, impairment, exchange gains
or losses, as well as the profits or losses arising from the termination of recognition, shall be
recorded into the current profits and losses.
The Company classifies the financial assets that meet the following conditions at the same time as
financial assets that are measured at fair value and whose changes are included into other
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Dalian Refrigeration Co., Ltd.
comprehensive income: the contractual terms of the financial asset provide that the cash flow
generated on a given date is only the payment of the principal and the interest based on the
outstanding principal amount. Such financial assets shall be initially measured according to their
fair value, and relevant transaction costs shall be included in the initial recognized amount. In
addition to the designated hedged item, other gains or losses of such financial assets, other than
credit impairment losses or gains, exchange gains or losses and interest on such financial assets
calculated according to the actual interest rate method, shall be counted into other comprehensive
income; When the recognition of financial assets is terminated, the accumulated gains or losses
previously recorded in other comprehensive income shall be transferred out of other
comprehensive income and recorded into current profits and losses.
In addition to financial assets measured at amortized cost and financial assets measured at fair
value and whose changes are included in other comprehensive income, the Company classifies
financial assets measured at fair value and whose changes are included in current profits and
losses. Such financial assets are initially measured in accordance with their fair value, and relevant
transaction costs are directly recorded into current profits and losses. Gains or losses of such
financial assets shall be recorded into current profits and losses.
Where the contingent consideration recognized by the Company in the business combination not
under the same control constitutes financial assets, such financial assets are classified as financial
assets measured at fair value and whose changes are recorded into current profits and losses.
2) confirmation basis and measurement method of financial asset transfer
The contractual right to receive the cash flow of the financial asset terminates; (1) the financial
assets have been transferred, and the Company on the ownership of financial assets almost all the
risks and rewards transferred to the transferee; (2) the financial assets have been transferred,
although the Company has not transferred nor retained the ownership of financial assets almost all
the risks and rewards, but gave up the control of the financial assets.
If the enterprise has neither transferred nor retained nearly all the risks and rewards of the
ownership of the financial asset, nor has given up its control over the financial asset, the relevant
financial asset shall be recognized according to the extent of its continued involvement in the
transferred financial asset, and the relevant liabilities shall be recognized accordingly.
Where the overall transfer of financial assets meets the conditions for termination of recognition,
the difference between the book value of the transferred financial assets and the sum of the
consideration received for the transfer and the accumulated amount of changes in fair value
originally recorded in other comprehensive income shall be recorded into current profits and
losses.
The transfer of a financial asset part meet the recognition criteria of termination, will be the entire
book value of the transferred financial asset, between the parts and not terminate qualification
recognition has been stopped, apportion them according to their relative fair value, and will be
received by transfer of value and share to terminate identified previously included in the other part
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Dalian Refrigeration Co., Ltd.
of the sum of the changes in fair value of the accumulative amount of comprehensive income, and
apportion the carrying amount of the balance into the profits and losses of the current period.
3) test method and accounting treatment method of impairment of financial assets
The Company takes into account all reasonable and justified information, including
forward-looking information, to estimate the expected credit losses of financial assets measured at
amortized cost and financial assets measured at fair value and whose changes are included in other
comprehensive income in a single or combined manner. The measurement of expected credit
losses depends on whether the credit risk of financial assets increases significantly after the initial
recognition. If the credit risk of the financial instrument has increased significantly since the initial
confirmation, the Company shall measure the loss provision according to the amount equivalent to
the expected credit loss of the financial instrument during the whole duration; If the credit risk of
the financial instrument does not increase significantly since the initial confirmation, the Company
shall measure the loss provision according to the amount equivalent to the expected credit loss of
the financial instrument in the next 12 months. An increase or refunded amount of the loss
provision thus incurred is recorded as an impairment loss or gain in the current profit or loss. In
addition to the financial assets measured by fair value and whose changes are recorded into the
current profits and losses, the Company shall check the carrying value of other financial assets on
the balance sheet date. If there is objective evidence that a certain financial asset has an
impairment, the Company shall make an impairment provision.
(2) financial liabilities
1) classification, confirmation basis and measurement method of financial liabilities
The Company's financial liabilities are classified as financial liabilities and other financial
liabilities measured at fair value and whose changes are recorded into current profits and losses at
the initial recognition.
Financial liabilities measured at fair value and whose changes are included in current profit and
loss include trading financial liabilities and financial liabilities designated as measured at fair
value and whose changes are included in current profit and loss when initially recognized.
According to the subsequent measurement of fair value, the profit or loss generated by the change
of fair value and the dividend and interest expenditure related to the financial liability are recorded
into the current profit and loss.
Other financial liabilities shall be measured in accordance with the amortized cost using the real
interest rate method.
2) conditions for the termination of recognition of financial liabilities
When the present obligation of a financial liability has been discharged in whole or in part, the
recognition of the discharged part of such financial liability or obligation shall be terminated. If an
agreement is signed between the Company and its creditors to replace the existing financial
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Dalian Refrigeration Co., Ltd.
liabilities by assuming the new financial liabilities, and the contract terms of the new financial
liabilities are substantially different from those of the existing financial liabilities, the existing
financial liabilities shall be terminated and the new financial liabilities shall be recognized at the
same time. If the Company substantially modifies all or part of the contract terms of the existing
financial liabilities, it shall terminate the recognition of the existing financial liabilities or part
thereof and at the same time recognize the financial liabilities after the modified terms as a new
financial liability. The difference between the book value of the part recognized after termination
and the consideration paid shall be recorded in current profits and losses.
(3) the method to determine the fair value of financial assets and financial liabilities
The financial assets and liabilities measured by fair value of the Company have financial assets or
liabilities in active market, and the fair value is determined by the quotation of active market; The
fair value of financial assets or liabilities without active market is determined by valuation
technique. At the time of valuation, the Company adopts valuation techniques that are applicable
in the current situation and are supported by sufficient available data and other information. The
input value used in the fair value measurement is divided into three levels. The input value of the
first level is the unadjusted quotation of the same asset or liability that can be obtained on the
measurement date in the active market. The input value of the second level is the directly or
indirectly observable input value of related assets or liabilities except the input value of the first
level. The input value of the third level is the unobservable input value of the related asset or
liability. The level of the fair value measurement results is determined by the lowest level of the
input values that are of great significance to the fair value measurement as a whole.
(4) the offset of financial assets and financial liabilities
The financial assets and financial liabilities of the Company shall be shown separately in the
balance sheet and shall not be set off against each other. (1) the Company has the legal right to
offset the recognized amount, and such legal right is currently enforceable; (2) the Company plans
to make net settlement or realize the financial assets and pay off the financial liabilities at the
same time.
11. Accounts receivable
The Group shall review the carrying amount of receivables fully at the balance sheet date. The
Group shall calculate the full provision for bad debts for the following receivables: debtor has
been log-out, bankruptcy, minus net asset, significant poor cash flow and significant nature
disaster leads to discontinue production and the debtors could not pay for the debts within the
foreseeable time. Other solid evidences indicates that the receivables 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
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Dalian Refrigeration Co., Ltd.
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 bad debt provisions shall be accrued based on
The accruing method of the receivables
the difference between current value of future cash
with individually significant amounts
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
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
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Dalian Refrigeration Co., Ltd.
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
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
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Dalian Refrigeration Co., Ltd.
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,
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
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Dalian Refrigeration Co., Ltd.
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.
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
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Dalian Refrigeration Co., Ltd.
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
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
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Dalian Refrigeration Co., Ltd.
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.
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:
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Dalian Refrigeration Co., Ltd.
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.
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
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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
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
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Dalian Refrigeration Co., Ltd.
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.
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
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Dalian Refrigeration Co., Ltd.
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.
25. Principle of recognition of revenue
The revenue of the Group is mainly from selling goods, providing labor services and alienating
the right of use assets and construction contracts. Recognition standards for revenue are as below:
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
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Dalian Refrigeration Co., Ltd.
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.
The service revenue should be recognized when the outcome of the services can be estimated
reliably.
The outcome of the services can be estimated reliably means the following conditions must be
satisfied at the same time:
Amount can be measured reliably
Relevant economic benefit probably flow into the Company
The stage of completion of the service can be estimated reliably
Cost incurred or expect to incur in the transaction can be measured reliably
Total service income shall be recognized according to the price agreed in the contract or
agreement which has been settled or to be settled unless the price is not fair. Service revenue for
the current period shall be recognized based on the figure worked out on the total income multiply
by the percentage of completion of the service after deducting the service revenue recognized in
the prior period at the balance sheet and accordingly recognized the cost based on the figure
worked out on the total cost multiply by the percentage of completion of the service after
deducting the service cost recognized in the prior period.
At the balance sheet date, if outcome of the service cannot be estimated reliably, the treatment
shall apply respectively
Costs incurred may be probably recovered, revenue is recognized only to the extent of costs
incurred that are expected to be recoverable, and costs shall be recognized as an expense in the
period in which they are incurred
Costs incurred are not probable of being recovered, then these cost incurred are recognized as an
expense immediately, no revenue shall be recognized.
In the case that selling goods and rendering service are both included in the agreements or
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Dalian Refrigeration Co., Ltd.
contracts, when selling products and rendering service part can be separated and can be measured
separately, selling products will be treated as sales of products. Selling products and rendering
service will not be able to be distinguished, or can be distinguished but can't be separately
measured; selling products and rendering service will be all treated as rendering service.
Revenue from construction contract
When the result of the construction contract is able to be evaluated reliably at the balance sheet
date, the income and cost of the contract are recognized on completion percentage basis.
The result of the fixed price of construction contract can be estimated reliably means the following
conditions must be satisfied at the same time:
Amount can be measured reliably
Relevant economic benefit probably flow into the Company
Cost actually incurred can be well distinguished and measured reliably
The stage of completion and the cost expected to incur for the completion of the contract can be
estimated reliably
The result of the cost plus of construction contract can be estimated reliably means the following
conditions must be satisfied at the same time:
Relevant economic benefit probably flow into the Company
Cost actually incurred can be well distinguished and measured reliably
Construction contract income for the current period shall be recognized based on the figure
worked out on the total contracted income multiply by the percentage of completion of the
construction after deducting the revenue recognized in the prior period at the balance sheet date
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 cost
recognized in the prior period. Construction contract income is recognized to the extend where the
change of the contract, claim for compensation and bonus can bring the income and can be
measured reliably.
If the result of the construction contract is not able to be evaluated reliably, the treatment shall
apply respectively
If contract cost 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.
If contract cost may not be recovered, the cost of the contract shall be recognized as contract
expenses when incurred, and no contract revenue shall be recognized.
In case the expected total cost is greater than the total income, the expected loss will be
recognized as expense of the current period immediately.
.26 Government grants
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Dalian Refrigeration Co., Ltd.
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
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
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Dalian Refrigeration Co., Ltd.
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
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
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Dalian Refrigeration Co., Ltd.
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.
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
36
Dalian Refrigeration Co., Ltd.
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
1) March 2017, the Ministry of Finance, respectively, revised and issued the accounting
standards for enterprises No. 22 - recognition and measurement of financial instruments, the
accounting standards for enterprises No. 23 - transfer of financial assets, the accounting
standards for enterprises No. 24 - hedging accounting, the accounting standards for
enterprises No. 37 - presentation of financial instruments such as the four related financial
instruments accounting standards (hereinafter generally referred to as the "rule of financial
instruments), in domestic and at the same time, listed companies and listed overseas and
adopted international financial reporting standards accounting standards to prepare its
financial report or enterprises, effective as of January 1, 2018; Other domestic listed
enterprises shall take effect from January 1, 2019. In accordance with the above requirements,
the Company will implement the above four accounting standards from January 1, 2019.
2) On April 30, 2019, the Ministry of Finance issued the notice on revising and issuing the
2019 annual general enterprise financial statement format (financial accounting [2019] No. 6),
which revised the general enterprise financial statement format.
The Company has prepared financial statements according to the requirements of the new
financial statement format. If the items of presentation of financial statements are changed,
the Company has adjusted the comparison data during the comparable period according to the
relevant provisions of the accounting standards for enterprises No. 30 - presentation of
financial statements.
(2) Changes in accounting estimate
None
( 3) New Financial Instruments Standards, New Income Standards and New Leasing Standards
for the First Implementation Relevant to Financial Statements at the Beginning of the Year
Before adjustment After adjustment
Consolidated Balance Sheet 31-Dec-2018 Consolidated Balance Sheet 1-Jan-2019
Finance asset held available for sales 382,186,729.99 Other non-current financial assets 382,186,729.99
Other comprehensive income 296,909,965.55 Other comprehensive income 2,501,459.77
Retained profit 764,859,288.45 Retained profit 1,059,267,794.23
Balance sheet of parent company 31-Dec-2018 Balance sheet of parent company 1-Jan-2019
Finance asset held available for sales 380,771,587.49 Othe non-current financial assets 380,771,587.49
Other comprehensive income 295,947,864.88 Other comprehensive income 1,539,359.10
Retained profit 640,251,261.47 Retained profit 934,659,767.25
According to the new financial instrument criteria, the original item of " Finance asset held available
37
Dalian Refrigeration Co., Ltd.
for sales " is adjusted to "other non-current financial assets"; Adjust the amount of other
comprehensive income 294,408,505.78 yuan, and adjust the amount of retained profit
294,408,505.78 yuan.
IV. 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%,16%
City construction tax Value-added tax payables, business 7%
tax
Education surcharge Value-added tax payables, business 3%
tax
Local education surcharge Value-added tax payables, 2%
business tax
Enterprise income Current period taxable profit 15%,25%
tax(EIT)
70% of cost of own property or
Real estate tax 1.2% or 12%
revenue 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 Bingshan Engineering&Trading Co.,Ltd 25%
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 29 th 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
38
Dalian Refrigeration Co., Ltd.
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 GR201721200279, and the validity duration is three years. According
to the tax law, it 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 16th November, 2018 approved by Dalian
Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax
Bureau.The Certificate No is GR20181200562, and the validity duration is three years. According
to the tax law, it 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 15th November, 2018 approved by Hubei
Science Technology Bureau, Hubei Finance Bureau, Hubei State Tax Bureau and Hubei Local tax
Bureau. The Certificate No is GR201842000605, and the validity duration is three years. According
to the tax law, it 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 29 th 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, it 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 29 th 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,it can be granted for the preferential tax policy of enterprise income tax
rate of 15% in three years.
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, it can be granted for the preferential tax policy of enterprise income tax
rate of 15% in three years.
V. Notes to Consolidated Financial Statements
39
Dalian Refrigeration Co., Ltd.
The following disclosure date on this financial statement without special indication, “opening”
refers to January 1, 2019; “closing” refers to June 30, 2019; “current period” refers to the period
from January 1, 2019 to June 30, 2019; and “last period” refers to the period from January 1, 2018
to June 30, 2018; with the currency unit RMB.
1. Cash and cash in bank
Item Closing Balance Opening Balance
Cash on hand 78,153.94 74,387.33
Cash in bank 214,340,030.30 304,629,047.14
Other cash and cash equivalents 17,348,438.30 38,323,050.64
Total 231,766,622.54 343,026,485.11
Note: Other cash and cash equivalents is restricted, including deposit for bank acceptance notes of
7,711,128.35 Yuan, guarantee deposit of 8,637,309.95Yuan, migrant deposit of 1,000,000.00Yuan,
total of 17,348,438.30 Yuan. The closing balance of cash and cash in bank decreased 32.43%
comparing with the opening balance, mainly due to the influence of net cash flows arising from
operating activities.
2. Notes receivable
(1) Category of notes receivable
Items Closing Balance Opening Balance
Bank acceptance notes 73,910,827.42 50,386,649.84
Commercial acceptance notes 80,838,320.55 120,905,394.72
Total 154,749,147.97 171,292,044.56
(2) Pledged notes receivable up to June 30, 2019.
Items Closing pledged amount
Bank acceptance notes 29,013,709.30
Commercial acceptance notes
Total 29,013,709.30
(3) 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 200,253,748.07
Commercial acceptance notes
Total 200,253,748.07
3. Accounts receivable
(1) Category of accounts receivable
Items Closing Balance
40
Dalian Refrigeration Co., Ltd.
Booking balance Provision
Booking balance
Amount % Amount %
Accounts
receivable with
significant
individual amount
and separate bad
debt provision
Accounts
receivable with bad
debt provision
1,444,801,399.21 100.00% 202,698,964.70 14.03% 1,242,102,434.51
based on the
characters of credit
risk portfolio
Accounts
receivable with
insignificant
individual amount
and separate bad
debt provision
Total 1,444,801,399.21 100.00% 202,698,964.70 14.03% 1,242,102,434.51
(Continued)
Opening 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
1,301,174,006.57 100.00% 193,627,418.27 14.88% 1,107,546,588.30
based on the
characters of credit
risk portfolio
Accounts
receivable with
41
Dalian Refrigeration Co., Ltd.
insignificant
individual amount
and separate bad
debt provision
Total 1,301,174,006.57 100.00% 193,627,418.27 14.88% 1,107,546,588.30
Closing Balance
Items
Booking balance Provision %
Expected credit losses within 1 year 775,309,916.81 38,765,495.84 5.00%
Expect credit losses of 1-2 years 460,205,744.74 46,020,574.48 10.00%
Expect credit losses of 2-3 years 87,846,886.11 26,354,065.84 30.00%
Expect credit losses of 3-4 years 50,008,726.43 25,004,363.22 50.00%
Expect credit losses of 4-5 years 24,378,299.00 19,502,639.20 80.00%
Expect credit losses more than 5 years 47,051,826.12 47,051,826.12 100.00%
Total 1,444,801,399.21 202,698,964.70 --
1) Accounts receivable with the bad debt provisions under accounting aging analysis method
Aging Closing Balance
Within1 year 775,309,916.81
11to 2 years 460,205,744.74
22 to 3 years 87,846,886.11
More than 3 years 121,438,851.55
3 to 4 years 50,008,726.43
4 to 5 years 24,378,299.00
More than 5 years 47,051,826.12
Total 1,444,801,399.21
2) Bad debt provision accrued and written-off (withdraw)
The bad debt provision has been accrued at the amount of 14,624,073.10Yuan during the report
period. Bad debt reversal or withdrawn incurred at the amount of 265,626.99 Yuan in the report
period.
3) Accounts receivable written off in current period
Item Written off amount
Receivable actually written off 5,818,153.66
(2) The top five significant accounts receivable categorized by debtors
42
Dalian Refrigeration Co., Ltd.
Closing
Closing % of the
Company Aging Balance of
Balance total AR
Provision
Xinyi Yuanda construction and 1-2 years;2-3
32,748,744.00 2.27 5,750,623.20
Installation Engineering Co., Ltd. years
Ningxia Wangwa Coal 29,847,967.00 Within 1 year 2.07 1,492,398.35
Shenzhen Zhaofude Tourism
24,749,430.13 Within 1 year 1.71 1,237,471.51
development
Xiangyang Tongjitang Logistic 24,300,000.00 Within 1 year 1.68 1,215,000.00
Dalian Thermal Power Co., ltd 22,320,000.00 Within 1 year 1.54 1,116,000.00
Total 133,966,141.13 9.27 10,811,493.06
4. Advances to suppliers
(1) Aging of advances to suppliers
Closing Balance Opening Balance
Items
Amount Percentage Amount Percentage
Within 1 year 121,778,186.62 71.70% 107,871,448.52 68.10%
1 to 2 years 26,886,437.49 15.83% 33,233,538.29 20.98%
2 to 3 years 18,508,823.51 10.90% 16,117,708.59 10.17%
Over 3 years 2,663,837.51 1.57% 1,182,605.10 0.75%
Total 169,837,285.13 158,405,300.50
Significant prepayment over 1 year
Closing Unsettled Reasons
Company Aging
Balance
Contract is not
Dalian HOLLEY Coating Equipment Co., Ltd. 12,000,000 2-3 years
fully implemented
Contract is not
Dalian Ganghe Trading Co.,Ltd 8,444,300.00 1-2 years
fully implemented
Mitsubishi Heavy Industries Air Conditioning Contract is not
5,220,700.00 1-2 years
Systems (Shanghai) co. LTD fully implemented
Contract is not
Shanghai POMA Automation Equipment Co.,ltd 4,272,900.00 2-3 years
fully implemented
Nanjing Bingshan Electromechanical equipment Contract is not
1,688,545.20 1-2 years
Co., Ltd. fully implemented
Total 31,626,445.20 — —
(2) The top five significant advances to suppliers categorized by debtors
43
Dalian Refrigeration Co., Ltd.
% of the total
Closing
Company Aging advances to
Balance
suppliers
Dalian HOLLEY Coating Equipment Co., Ltd. 12,000,000.00 2-3 years 7.07
Dalian Ganghe Trading Co., Ltd. 8,444,300.00 1-2 years 4.97
Nanjing Bingshan Electromechanical equipment Within 1
6,264,103.80 3.69
Co., Ltd. year；1-2 years
DalianHeng Tong refrigeration Equipment
5,550,000.00 Within 1 year 3.27
Egineering Co. LTD
Mitsubishi Heavy Industries Air-conditioners(Sha
nghai) 5,220,700.00 1-2 years 3.07
Co.,Ltd
Total 37,479,103.80 22.07
5. Other receivables
Items Closing Balance Opening Balance
Interest receivable 318,886.12
Dividend receivable 56,591,452.20 33,450.00
Other receivable 35,678,093.58 48,156,419.03
Total 92,269,545.78 48,508,755.15
(1) Interest receivable
Items Closing Balance Opening Balance
Interest on Term deposits 318,886.12
Bank financial product
Total 318,886.12
The closing balance of interest receivable decreased 100% comparing with the opening balance, mainly
because of the Company received the interest accrued at the beginning of a term deposit.
(2). Dividends receivable
Company Closing Opening Balance
Balance
Wuhan Steel and Electricity Co., Ltd. 33,450.00
Panasonic Appliances Air-conditioning and Refrigerating
4,000,000.00
(Dalian) Co., Ltd
Panasonic Appliances Compressor (Dalian) Co. , Ltd. 45,350,000.00
Jiangsu JingXue Insulation Technology Co.,Ltd 2,921,200.00
Guotai Junan Securities Co., Ltd. 4,320,252.20
Total 56,591,452.20 33,450.00
The closing balance of dividends receivable inecreased 169,082.22% comparing with the opening
balance, mainly because of increased unexpired dividends receivable.
44
Dalian Refrigeration Co., Ltd.
(3). Other receivables
1) Other receivables categorized by nature
Nature Closing Balance Opening Balance
Guarantee deposits 25,896,196.37 30,393,406.84
Petty cash 12,967,030.15 9,674,473.91
Receivables and Payables 5,779,181.14 13,564,390.30
Others 891,374.64 2,140,775.38
Total 45,533,782.30 55,773,046.43
2) Provision for bad debts
The first phase The second phase The third phase
Provision for bad debts Expected Credit Loss Expected Credit Loss for Total
Expected credit losses in the
for the duration (No the duration (Credit
next 12 months
Credit Devaluation) impairment has occurred)
Balance on January 1, 2019 7,616,627.40 7,616,627.40
The balance of January 1, 2019 in
—— —— —— ——
the current period
Provision for bad debts 2,239,061.32 2,239,061.32
Balance on June 30, 2019 9,855,688.72 9,855,688.72
Other receivables accrued the bad debt provisions under accounting aging analysis method
Aging Closing Balance
Within 1 year 15,734,330.16
1-2 years 14,145,493.27
2-3 years 8,194,626.44
3-4 years 4,294,128.71
4-5 years 581,165.60
Over 5 years 2,584,038.12
Total 45,533,782.30
3)In the current period, RMB 2,239,061.32 Yuan were accrued provision for bad debts
4) Other receivables from the top 5 debtors
% of
Closing Closing Balance
Name Category Aging the total
Balance of Provision
OR
3-4 years,
Dalian Delta HK& China Gas Co.,Ltd Deposit 2,730,000.00 6.00 1,515,000.00
over 5 years
Huangmei Kanghong Ecological Agriculture
Deposit Within 1 year 5.01 113,950.00
2,279,000.00
Development Co., Ltd.
Chengdu Silver low Cold Chain Logistics Co.,Ltd Deposit 2,000,000.00 1-2 years 4.39 200,000.00
Dongying Huatai Fine Chemical Co., Ltd. Deposit 1,150,000.00 1-2 years 2.53 115,000.00
Jiangsu Fuqiang New Materials Co., Ltd. Deposit 1,100,000.00 1-2 years 2.42 110,000.00
Total 9,259,000.00 20.33 2,053,950.00
45
Dalian Refrigeration Co., Ltd.
6. Inventories
(1) Categories of inventories
Closing Balance
Item
Book value Provision for decline Net book value
Raw materials 109,783,390.30 1,095,201.13 108,688,189.17
Working in progress 76,248,742.02 76,248,742.02
Finished goods 214,331,919.10 88,460.00 214,243,459.10
Low-value consumable 122,818.97 122,818.97
Self-manufactured
33,174,590.07 33,174,590.07
semi-finished products
Constructing projects 71,991,159.97 71,991,159.97
Materials on consignment
2,349,661.64 2,349,661.64
for further processing
Total 508,002,282.07 1,183,661.13 506,818,620.94
(Continue)
Opening Balance
Item
Book value Provision for decline Net book value
Raw materials 93,238,803.85 1,095,201.13 92,143,602.72
Working in progress 87,240,651.75 87,240,651.75
Finished goods 188,490,721.70 88,460.00 188,402,261.70
Low-value consumable 143,386.78 143,386.78
Self-manufactured
24,660,370.80 24,660,370.80
semi-finished products
Constructing projects 52,606,275.99 52,606,275.99
Materials on
consignment for further 4,998,750.79 4,998,750.79
processing
Total 451,378,961.66 1,183,661.13 450,195,300.53
(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 1,095,201.13 1,095,201.13
Finished goods 88,460.00 88,460.00
Total 1,183,661.13 1,183,661.13
(3) Accrual for provision for decline in the value of inventories
Item Basis for net realizable value recognition Reasons for reverse/write-off
Raw materials Lower of cost and NRV not applicable
Finished goods Lower of cost and NRV not applicable
46
Dalian Refrigeration Co., Ltd.
7. Other current assets
Item Closing Balance Opening Balance
Prepaid income tax presented at net amount after offsetting 665,685.54 664,806.52
VAT to be deducted 9,299,109.96 16,769,344.48
Prepaid turnover tax 3,020.15
Prepaid expenses 954,621.59 829,417.97
Total 10,919,417.09 18,266,589.12
The closing balance of the other current assets decreased 40.22% comparing with the opening
balance, mainly because the VAT to be deducted decreased.
47
Dalian Refrigeration Co., Ltd.
8.Long-term equity investments
Increase/Decrease
Gains and
Adjustmen
Beginning losses Cash bonus Provision for Provision for
Investee t of other Change Ending balance
balance recognized or profits impairment of impairment
Increased Decreased comprehen of other Others
under the announced to the current
sive equity
equity issue period
income
method
Associates
Panasonic Appliances
Air-conditioning and Refrigeration 175,290,858.38 288,044.47 8,000,000.00 167,578,902.85
(Dalian) Co., Ltd.
Dalian Honjo Chemical Co., Ltd. 8,832,597.83 381,197.74 647,634.60 8,566,160.97
Panasonic Appliances Cold-Chain
232,222,620.76 28,183,517.55 4,400,000.00 256,006,138.31
(Dalian) Co., Ltd.
Keihin-Grand Ocean Thermal
61,750,687.77 2,485,379.54 64,236,067.31
Technology (Dalian) Co., Ltd.
Panasonic Appliances Compressor
483,899,674.59 15,117,996.66 45,350,000.00 453,667,671.25
(Dalian) Co., Ltd.
MHI Bingshan Refrigeration
13,783,339.36 -519,054.84 13,264,284.52
(Dalian) Co.,Ltd.
Beijing Huashang Bingshan
Refrigeration and Air-conditioning 1,268,139.59 -16,693.65 1,251,445.94
Machinery Co., Ltd.
Dalian Fuji Bingshan Vending
188,257,460.75 989,770.27 189,247,231.02
Machine Co., Ltd.
Jiangsu JingXue Insulation
174,966,773.04 9,607,307.14 2,921,200.00 181,652,880.18
Technology Co.,Ltd
Dalian Fuji Bingshan Vending
13,774,267.89 -352,953.45 13,421,314.44
Machine Sales Co., Ltd
Wuhan Sikafu Power Control
5,236,380.63 -669,354.03 4,567,026.60
Equipment Co., Ltd
Panasonic Appliances
Refrigerating System (Dalian) Co., 30,721,588.82 2,397,347.27 2,284,000.00 30,834,936.09
Ltd.
Dalian Bingshan Metal Technology
172,593,561.16 15,097,772.32 187,691,333.48
Co.,Ltd
48
Dalian Refrigeration Co., Ltd.
Increase/Decrease
Gains and
Adjustmen
Beginning losses Cash bonus Provision for Provision for
Investee t of other Change Ending balance
balance recognized or profits impairment of impairment
Increased Decreased comprehen of other Others
under the announced to the current
sive equity
equity issue period
income
method
Dalian Bingshan Group
Management and Consulting 57,095,620.40 -750,798.86 56,344,821.54
Co.,ltd
Total 1,619,693,570.97 72,239,478.13 63,602,834.60 1,628,330,214.50
9. Other non-current financial assets
Item Closing Balance Opening Balance
Measured as fair value method 288,278,646.80 369,195,071.40
Measured as cost method 12,991,658.59 12,991,658.59
Total 301,270,305.39 382,186,729.99
Guotai Junan Securities Co., Ltd. was listed on Shanghai Stock Exchange on 26 th June 2015, and until 30 June, 2019, the Company held 15,710,008.00 shares of Guotai Junan Securities
Co., Ltd which was measured at fair value at the year end.
49
Dalian Refrigeration Co., Ltd.
10. Investment property
(1) Investment property measured as cost method
Property&
Item Land-use-rights Total
Building
I. Initial Cost
1. Opening Balance 194,871,100.11 24,391,511.82 219,262,611.93
2. Increase
(1) Outsourcing
(2) Transferred from
Construction in
progress
3. Decrease
(1) Disposal
(2)Transferred to other
4. Closing Balance 194,871,100.11 24,391,511.82 219,262,611.93
II. Accumulated
Depreciation
1. Opening Balance 108,557,977.40 10,366,392.54 118,924,369.94
2. Increase 2,247,435.42 243,915.12 2,491,350.54
(1)Provision or
2,247,435.42 243,915.12 2,491,350.54
amortization
(2) Transferred from
Construction in
progress
3. Decrease
(1) Disposal
(2) Transferred to other
4. Closing Balance 110,805,412.82 10,610,307.66 121,415,720.48
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 50
1. Closing book value 84,065,687.29 13,781,204.16 97,846,891.45
2. Opening book value 86,313,122.71 14,025,119.28 100,338,241.99
Dalian Refrigeration Co., Ltd.
Note: 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. In 2019, a revised agreement was signed to collect rent of 4 million
yuan per year. In 2019, the rent was deducted by 875,000 yuan at one time because some projects were not used.
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 2019 is RMB 7.86 million Yuan.
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
26,774,944.94 Deed is in the progress
Economic and Technology Development Zone
11. Fixed assets
(1) Fixed assets detail
Property& Machinery Transportation Other
Item Equipment Total
buildings Equipment Equipment
I. Initial Cost
1. Opening Balance 695,840,453.24 667,643,224.77 17,198,309.87 68,018,270.10 1,448,700,257.98
2. Increase 6,584,215.73 189,465.52 554,937.29 7,328,618.54
(1) Purchase 648,029.46 189,465.52 554,937.29 1,392,432.27
(2) Transferred
from
5,936,186.27 5,936,186.27
construction-in-pro
gress
(3) Acquired from
business
combination
3. Decrease 1,502,347.67 973,435.24 284,450.00 20,651.12 2,780,884.03
(1) Disposal 1,502,347.67 973,435.24 284,450.00 20,651.12 2,780,884.03
(2) Transferred to
51
Dalian Refrigeration Co., Ltd.
Property& Machinery Transportation Other
Item Equipment Total
buildings Equipment Equipment
other
4. Closing Balance 694,338,105.57 673,254,005.26 17,103,325.39 68,552,556.27 1,453,247,992.49
II. Accumulated
Depreciation
1. Opening Balance 83,641,711.79 355,594,550.13 11,924,275.65 43,724,342.80 494,884,880.37
2. Increase 8,421,087.00 21,368,549.85 670,113.29 2,584,212.52 33,043,962.66
(1)Accrued 8,421,087.00 21,368,549.85 670,113.29 2,584,212.52 33,043,962.66
(2) Acquired from
business
combination
3. Decrease 1,022,458.07 881,103.72 256,005.00 19,709.37 2,179,276.16
(1) Disposal 1,022,458.07 881,103.72 256,005.00 19,709.37 2,179,276.16
(2) Transferred to
other
4. Closing Balance 91,040,340.72 376,081,996.26 12,338,383.94 46,288,845.95 525,749,566.87
III. Impairment
Reserve
1. Opening Balance 517,319.50 517,319.50
2. Increase
(1)Accrued
3. Decrease
(1) Disposal
4. Closing Balance 517,319.50 517,319.50
IV. Book Value
1. Closing book
603,297,764.85 296,654,689.50 4,764,941.45 22,263,710.32 926,981,106.12
value
2. Opening book
612,198,741.45 311,531,355.14 5,274,034.22 24,293,927.30 953,298,058.11
value
(2)The situation of fixed assets leased through finance lease
Item Initial Cost Accumulated Depreciation Impairment Reserve Book Value
Machinery
2,527,482.76 135,528.90 2,391,953.86
Equipment
(3) Fixed assets as pending certificate of ownership
Item Book value Reason for Pending
Office,Lianhe #1 plant, #2plant,Jiacu
255,665,851.60 Deed is in the progress
plant and dormitory
52
Dalian Refrigeration Co., Ltd.
Item Book value Reason for Pending
Newly built plant 45,231,801.84 Deed is in the progress
Functional Lab plant 15,636,045.77 Deed is in the progress
Land is pledged and deed can not be
Lianhe #3 plant 39,583,406.59
granted
Total 356,117,105.80
12. Construction-in-progress
(1) Construction in progress details
Closing Balance Opening Balance
Item
Book Balance Provision Book Value Book Balance Provision Book Value
Buildings
16,277,242.75 16,277,242.75 14,866,010.00 14,866,010.00
reconstruction
Improvement
7,218,750.87 7,218,750.87 3,342,959.00 3,342,959.00
of machinery
Construction of
intelligent 2,064,452.50 2,064,452.50 1,587,243.82 1,587,243.82
software
Self-heating
circulation
equipment 24,161,988.94 24,161,988.94
from mine air
return
Total 49,722,435.06 49,722,435.06 19,796,212.82 19,796,212.82
(2) Change in the significant construction in progress
Decrease
Closing
Name Opening Balance Increase Transfer to Other
Balance
fixed assets decrease
Buildings reconstruction 14,866,010.00 1,411,232.75 16,277,242.75
Improvement of
3,342,959.00 9,811,978.14 5,936,186.27 7,218,750.87
machinery
Construction of
1,587,243.82 599,850.19 122,641.51 2,064,452.50
intelligent software
Self-heating circulation
equipment from mine air 24,161,988.94 24,161,988.94
return
Total 19,796,212.82 35,985,050.02 5,936,186.27 122,641.51 49,722,435.06
(Continued)
53
Dalian Refrigeration Co., Ltd.
Progress Accumul Including:
Percent of Interest
of ated Accumulated
investment capitalizatio Source of
Name Budget constructio capitaliz capitalized
against n funds
n ed interest of the
budget rate(%)
interest year
Buildings Self
357,527,099.00 95.62% 95.62%
reconstruction financing
Improvement of Self
198,572,929.00 93.43% 93.43%
machinery financing
Construction of
Self
intelligent 5,360,000.00 40.80% 40.80%
financing
software
Self-heating
circulation Self
27,000,000.00 82.10% 82.10%
equipment from financing
mine air return
Total 588,460,028.00 — —
The ending balance of the company's construction projects increased by 151.17% compared with the
beginning balance, mainly due to the increase of equipment renovation investment in the current period.
Other amounts reduced in the current period of the project under construction shall be transferred into
other intangible assets.
13. Intangible assets
(1) Intangible assets list
Land use Patent Non Patent
Item Others Total
right technology technology
I. Initial Cost
1. Opening Balance 152,890,196.80 17,800,000.00 5,000,000.00 17,904,833.66 193,595,030.46
2. Increase 281,513.75 281,513.75
(1) Purchase 158,872.24 158,872.24
(2) Acquired from business
combination
(3)Transferred from
122,641.51 122,641.51
construction-in-progress
3. Decrease 84,905.59 84,905.59
(1) Disposal 84,905.59 84,905.59
(2) Transferred to other
4. Closing Balance 152,890,196.80 17,715,094.41 5,000,000.00 18,186,347.41 193,791,638.62
II.Accumulated
amortisation
1. Opening Balance 31,973,987.34 2,907,657.95 1,500,004.00 10,194,788.46 46,576,437.75
2. Increase 1,547,549.49 729,719.40 250,002.00 702,841.82 3,230,112.71
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Dalian Refrigeration Co., Ltd.
Land use Patent Non Patent
Item Others Total
right technology technology
(1)Accrued 1,547,549.49 729,719.40 250,002.00 702,841.82 3,230,112.71
(2) Acquired from business
combination
3. Decrease
(1) Disposal
(2) Transferred to other
4. Closing Balance 33,521,536.83 3,637,377.35 1,750,006.00 10,897,630.28 49,806,550.46
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 119,368,659.97 14,077,717.06 3,249,994.00 7,288,717.13 143,985,088.16
2. Opening book value 120,916,209.46 14,892,342.05 3,499,996.00 7,710,045.20 147,018,592.71
14. 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
55
Dalian Refrigeration Co., Ltd.
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
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.
15. Long-term repayments
Opening Other Closing
Item Increase Amortization
Balance Decrease Balance
Employee’s dormitory use right 2,150,648.70 69,239.16 2,081,409.54
Renovation and rebuilding 837,087.14 22,522.50 814,564.64
Lease 637,740.00 53,145.00 584,595.00
Membership fee for Golf 456,500.00 8,250.00 448,250.00
Technology entrance fee of cold
1,213,631.25 186,712.50 1,026,918.75
and heat machinery
Greenland of new factory 7,508,638.66 446,057.76 7,062,580.90
Service fee from Technology
69,182.44 18,867.90 50,314.54
center
Total 12,873,428.19 804,794.82 12,068,633.37
16. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets without offsetting
Item Closing Balance Opening Balance
Deductible Deferred tax Deductible temporary Deferred tax
temporary assets difference assets
difference
Provision for
174,744,531.58 34,540,914.11 158,842,386.89 31,736,544.09
impairment of assets
Unrealized profit from
15,641,404.17 2,346,210.63 15,641,404.20 2,346,210.63
internal transaction
Total 190,385,935.75 36,887,124.74 174,483,791.09 34,082,754.72
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Dalian Refrigeration Co., Ltd.
(2) Deferred tax liabilities without offsetting
Item Closing Balance Opening Balance
Taxable temporary Deferred tax Taxable temporary Deferred tax
difference liabilities difference liabilities
Changes in the fair value
of other non-current 273,394,443.96 41,009,166.63 346,362,948.00 51,954,442.22
financial assets
Total 273,394,443.96 41,009,166.63 346,362,948.00 51,954,442.22
(3) Unrecognized deferred tax assets details
Item Closing Balance Opening Balance
Deductible temporary difference 44,578,176.63 47,316,245.31
Deductible loss 19,918,227.26 50,277,991.93
Total 64,496,403.89 97,594,237.24
(4) Unrecognized deductible loss of deferred tax assets expired years
Year Closing Balance Opening Balance Notes
2020 3,240,819.97 3,240,819.97
2021 31,012,868.08
2022
2023 16,677,407.29 16,024,303.88
2024
Total 19,918,227.26 50,277,991.93
17. Short-term loan
(1) Category of short term loan
Loan category Closing Balance Opening Balance
Mortgage loan 40,000,000.00
Credit loan 249,000,000.00 250,000,000.00
Total 289,000,000.00 250,000,000.00
18. Notes payable
Notes category Closing Balance Opening Balance
Commercial acceptance notes 31,174,188.00 36,839,166.88
Bank acceptance notes 277,768,245.94 236,562,369.70
Total 308,942,433.94 273,401,536.58
At the end of the reporting period , there is no unpaid notes payable which is due.
19. Accounts payable
(1) Accounts payable
57
Dalian Refrigeration Co., Ltd.
Item Closing Balance Opening Balance
Material payments 707,294,582.04 610,777,680.58
Project payments 147,191,096.08 192,942,733.62
Equipment payments 60,212,279.08 51,953,768.99
Others 2,901,862.25 3,815,375.42
Total 917,599,819.45 859,489,558.61
(2) Accounts payable with age over 1 year
Closing Reason of unpaid or not
Name of company
Balance carried forward
Project is uncompleted
Heilongjiang Longleng Technology Co., Ltd 9,413,290.00
contract is not finished
Project is uncompleted
Xi 'an qitong new energy equipment Co., Ltd 7,724,134.58
contract is not finished
Li xing kai (Beijing) energy system technology Project is uncompleted
6,136,305.82
Co., Ltd contract is not finished
Project is uncompleted
Wuhan KaiXing Economic Development Co., Ltd 5,083,946.00
contract is not finished
Project is uncompleted
Total 28,357,676.40
contract is not finished
20. Received in advance
(1) Received in advance
Item Closing Balance Opening Balance
Advanced on sales 138,163,912.46 122,151,101.00
Total 138,163,912.46 122,151,101.00
(2) Accounts received in advance aged over 1 year
Company Closing Balance Reason
Dandong Port 5,000,000.00 Unsettled contract payments on sets projects
Total 5,000,000.00
21. Employee’s payable
(1) Category of employee’s payable
Item Opening Increase Decrease Closing
Balance Balance
Short-term employee’s
31,856,136.59 147,992,890.23 168,815,553.57 11,033,473.25
payable
Post-employment benefit
19,506,233.60 19,506,233.60
–defined contribution plan
Termination benefits 179,243.55 179,243.55
Total 31,856,136.59 167,678,367.38 188,501,030.72 11,033,473.25
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Dalian Refrigeration Co., Ltd.
(2) Short-term employee’s payables
Item Opening Increase Decrease Closing
Balance Balance
Salaries, bonus,
allowance, and 24,216,112.24 116,852,447.36 135,454,972.22 5,613,587.38
subsidy
Welfare 4,769,883.17 3,905,452.82 4,617,290.04 4,058,045.95
Social insurance 10,337,267.36 10,337,267.36
Include: Medical
8,071,230.09 8,071,230.09
insurance
Supplemental
insurance
On-duty
injury 1,197,824.72 1,197,824.72
insurance
Maternity
1,068,212.55 1,068,212.55
insurance
Housing funds 1,727,088.11 14,398,423.83 16,066,304.48 59,207.46
Labor union and
1,143,053.07 2,057,158.75 1,897,579.36 1,302,632.46
training expenses
Short-term leave
with pay
Short term profit
share plan
Others 442,140.11 442,140.11
Total 31,856,136.59 147,992,890.23 168,815,553.57 11,033,473.25
(3) Defined contribution plan
Item Opening Increase Decrease Closing
Balance Balance
Pension 18,875,207.33 18,875,207.33
Unemployment insurance 631,026.27 631,026.27
Total 19,506,233.60 19,506,233.60
The ending balance of wages payable decreased 65.36% over that of period-begin, mainly because the
year-end bonus for year of 2018 are paid in the report Period.
22. Tax payable
Item Closing Balance Opening Balance
Value-added tax 794,883.34 5,008,187.41
Enterprise income tax 16,161,706.52 4,011,845.57
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Dalian Refrigeration Co., Ltd.
Individual income tax 178,778.50 2,477,602.40
City maintenance and construction tax 116,664.70 308,110.57
Real estate tax 1,824,336.57 887,197.28
Land use tax 1,094,760.28 553,224.98
Education surcharge 81,743.71 210,076.03
Green tax 574.22 557.18
Safeguard fund for disables 440.00 460.00
Stamp duty 101,453.33 150,950.90
Total 20,355,341.17 13,608,212.32
The closing balance of tax payable increased 49.58% comparing with the opening balance , mainly
because the enterprise income tax payable by the Company increased during the current period.
23. Other accounts payable
Item Closing Balance Opening Balance
Interest payable 297,917.07 1,369,527.78
Dividend payable 42,693,781.35 533,156.00
Other accounts payable 35,530,080.69 61,411,274.65
Total 78,521,779.11 63,313,958.43
. (1) Interest payable
Item Closing Balance Opening Balance
Interest on corporate bond 297,917.07 985,111.11
Interest on short term loan 384,416.67
Total 297,917.07 1,369,527.78
The Closing Balance of interest payable by the Company decreased 78.25% comparing with the
Opening Balance, mainly due to the Company pays interest on short term loan due at the current
period.
(2). Dividend payable
Item Closing Balance Opening Balance
Ordinary share dividend 42,693,781.35 533,156.00
Total 42,693,781.35 533,156.00
The Company’s dividend payable at the end of the period increased 7907.75%compared with the
beginning of the period, mainly because the dividend payable did not reach the payment period.
（3）Other accounts payable
Other payables categorized by payments nature
Payments nature Closing Balance Opening Balance
Restricted share buy back 21,026,106.00
Loan from non-financial institutes 8,080,000.00 6,100,000.00
Cash pledge and security deposit 10,027,524.67 9,487,599.86
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Dalian Refrigeration Co., Ltd.
Payments nature Closing Balance Opening Balance
Apply for reimbursement and unpaid 12,143,588.83 15,032,744.10
Receipts under custody 1,528,790.49 4,362,549.92
Others 3,750,176.70 5,402,274.77
Total 35,530,080.69 61,411,274.65
The Company’s Other accounts payable at the end of the period decreased 42.14% compared
with the beginning of the period, mainly in accordance with the proposal on terminating the
implementation of the 2016 Restrictive Stock Incentive Plan and repurchase and cancellation of
Relevant Restrictive Stocks, which was deliberated and approved by the 1st Extraordinary
Shareholders’ General Meeting of 2019, the Company has fulfilled the corresponding capital
reduction procedures according to law, and has reduced the obligation of the Restrictive Stock
Repurchase.
24. Non-current liabilities due within one year
Item Closing Balance Opening Balance
Long-term accounts payable with one year 1,472,720.00 2,999,574.93
Total 1,472,720.00 2,999,574.93
The Long-term accounts payable with one year are financial leases payable. The closing
balance decreased 50.90% compared with the beginning of the period. The main reason is that the
Company pays the matured financial leases.
25.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 0.16 billion 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.
26. Bonds payable
(1)Bonds payable
Item Closing Balance Opening Balance
Exchangeable corporate bonds 25,000,034.00 176,000,000.00
Total 25,000,034.00 176,000,000.00
(2) The changes of bond
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Dalian Refrigeration Co., Ltd.
Bond Opening Issued Interest at Closing
Bond name Par value Issue date Issue Amount Repay
term balance this year par value balance
Exchangeable
corporate 176,000,000.00 2018.7.30 3 years 176,000,000.00 176,000,000.00 0.00 297,917.07 150,999,966.00 25,000,034.00
bonds
Total -- -- -- 176,000,000.00 176,000,000.00 0.00 297,917.07 150,999,966.00 25,000,034.00
(3) other notes:
Approved by the Shanghai Stock Exchange “Letter of No-Objection to the Non-public Issuance
of Convertible Corporate Bonds of Dalian Refrigeration Co., Ltd.” ([2018] No. 125), the
company non-publicly issued 1.76 million number of convertible corporate bonds on July 30,
2018, at a par value of 100Yuan, and raised a total of 176 million Yuan. The bond is based on
simple annual interest rate with a fixed interest rate of 1.3%. It is repayable once a year and pays
interest once a year. The relevant issuance costs are RMB 1,496,000.00.
The term of the bond swap is from the first trading day after the 6 months of issuance of the
convertible corporate bonds to the maturity date of the convertible corporate bonds, which is
from January 30, 2019 to July 2021. 29th. If the due date is on a statutory
On the principal payment date of this bond, the company will pay all convertible bonds to
investors at the price of 108% of the par value of the convertible bonds (excluding the last
annual interest).
The closing balance decreased 85.80%compared with the beginning of the period. The main
reason is that the Company pays the matured financial leases.
The total number of shares exchanged by the holders of "18 Da Leng EB" in this period is
8,388,887.00 shares, and the exchange price is 18 yuan per share.
27. Long term accounts payable
Item Closing Balance Opening Balance
Long term accounts payable 17,574,885.46 1,532,949.94
Total 17,574,885.46 1,532,949.94
(1) Category by nature
Item Closing Balance Opening Balance
Financial lease 856,524.11 856,524.11
Sale and leaseback 676,425.83 676,425.83
Supply Chain Financing 16,041,935.52
The Long term accounts payable increased 1,046.47% in the current period compared with the
previous period, mainly because of Wuxin Refrigeration, a subsidiary of the company, signed a
commercial factoring contract.
28. Deferred income
(1) Category of deferred income
62
Dalian Refrigeration Co., Ltd.
Item Opening Increase Decrease Closing Formation
Balance Balance Basis
Government subsidy 103,532,328.40 3,153,831.42 100,378,496.98
Sale-leaseback contract 9,765.39 3,446.58 6,318.81
Total 103,542,093.79 3,157,278.00 100,384,815.79 —
(2) Government subsidy project
Related
Opening Recorded into Offset cost Closing with
Government
Increase
subsidy item Balance other income or expense Balance asset/
equity
Subsidy fund for
Asset
highly effective heat
2,049,280.00 275,839.98 1,773,440.02
pump and related related
system
Asset
Relocation 556,998.00
42,332,000.00 41,775,002.00
compensation related
Application of NH3
and CO2 instead of
Asset
R22 screw
15,896,814.28 709,421.76 15,187,392.52
refrigerating related
machine combined
condensing unit
Compressor IC Asset
4,653,655.59 187,229.64 4,466,425.95
system related
Ultrasonic Asset
intelligent defrost 4,305,677.93 147,416.76 4,158,261.17
related
technology
Eco Compressor Asset
27,637,021.90 1,276,925.28 26,360,096.62
project related
R290 replacement
of R22 large Asset
4,877,498.70 4,877,498.70
industrial screw related
unit
R290 replacement
of R22 industrial Asset
1,780,380.00 1,780,380.00
double stage screw related
unit
Total 103,532,328.40 556,998.00 2,596,833.42 100,378,496.98
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
63
Dalian Refrigeration Co., Ltd.
activity, otherwise it shall be booked into non-operating expense.
29.Share capital
Increase/decrease（+、-）
New Transfer
Opening Share Closing
Item share from Subtotal
balance dividen others balance
issued capital
d
reserve
Total
855,434,087.00 -12,221,580.00 -12,221,580.00 843,212,507.00
shares
On January 17,2019, the Company held the first extraordinary shareholders’ meeting of 2019 which
reviewed and approved the Proposal on terminating the implementation of 2016 Restricted Stock
Incentive Plan of the Company and log outing the restricted stock. On March 4,2019, the Company has
completed the capital reduction process, and the registered capital of the Company was changed from
855,4348,087 Yuan to 843,212,507 Yuan.
30.Capital reserves
Items Opening Increase Decrease Closing Balance
Balance
Share premium 693,218,918.20 33,596,874.00 659,622,044.20
Other capital reserves 67,146,423.80 67,146,423.80
Total 760,365,342.00 33,596,874.00 726,768,468.00
On January 17,2019, the Company held the first extraordinary shareholders’ meeting of 2019 which
reviewed and approved the Proposal on terminating the implementation of 2016 Restricted Stock
Incentive Plan of the Company and log outing the restricted stock. On March 4,2019, the Company has
completed the capital reduction process, the Share premium decreased.
31. Treasury Share
Opening Balance Increase Decrease Closing
Items
Balance
Share incentive buy-back 21,026,106.00 21,026,106.00 0.00
Total 21,026,106.00 21,026,106.00 0.00
On January 17,2019, the Company held the first extraordinary shareholders’ meeting of 2019 which
reviewed and approved the Proposal on terminating the implementation of 2016 Restricted Stock
Incentive Plan of the Company and log outing the restricted stock. On March 4,2019, the Company
has completed the capital reduction process, the Treasury Share decreased.
64
Dalian Refrigeration Co., Ltd.
32. Other comprehensive income
2019.1-6
Opening Less：Previously After-tax Closing
Items Amount for the After-tax attribute
Balance recognized in profit or Less： attribute to Balance
period before to the parent
loss in other income tax minority
income tax company
comprehensive income shareholder
I.Later can’t reclassified into profit
and loss of other comprehensive
income
II. Later reclassified into profit and loss
2,501,459.77 2,501,459.77
of other comprehensive income
Proportional other comprehensive
income of investee which is reclassified
2,501,459.77 2,501,459.77
into income statement under equity
method
Other comprehensive income total 2,501,459.77 2,501,459.77
65
Dalian Refrigeration Co., Ltd.
33. Special Reserve
Opening Closing
Items Increase Decrease
Balance Balance
Safety production cost 1,025,336.49 1,025,336.49
Total 1,025,336.49 1,025,336.49
34.Surplus reserves
Item Opening Closing
Increase Decrease
Balance Balance
Statutory surplus reserve 334,459,422.69 334,459,422.69
Discretionary surplus reserve 386,631,617.33 32,428,137.09 419,059,754.42
Total 721,091,040.02 32,428,137.09 753,519,177.11
The company made profit distribution within the reporting period. According to the 2018 annual
meeting, 20% of net profit in the 2018 fiscal annual report is provided for discretionary surplus
reserve of 32,428,137.09 Yuan.
35. Undistributed profits
Item 2019-06-30 2018-06-30
Closing balance of 2018 764,859,288.45 750,397,795.56
Add: Adjustments to the opening balance of
294,408,505.78
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 2019 1,059,267,794.23 750,397,795.56
Add: net profit attributable to shareholders of
108,373,919.30 59,017,542.28
parent company in the year
Less: Provision for statutory surplus reserves 32,428,137.09 36,726,596.18
Provision for any surplus reserves
Provision of general risk
Dividends payable for common shares 42,160,625.35 42,771,704.35
Share dividends
Staff award fund 305,618.42
Closing balance of the current period 1,093,052,951.09 729,611,418.89
66
Dalian Refrigeration Co., Ltd.
Due to the change of accounting policy, the undistributed profit at the beginning of the
impact period was 294,408,505.78 yuan.
36. Operating revenue and cost
Items 2019.01-06 2018.01-06
Sales revenue Cost of sales Sales revenue Cost of sales
Revenue from
1,052,236,172.60 903,291,760.46 1,010,172,413.37 841,675,852.36
principle operation
Revenue from
23,493,067.97 16,468,219.40 18,906,123.42 11,168,022.91
other operation
Total 1,075,729,240.57 919,759,979.86 1,029,078,536.79 852,843,875.27
37.Operating taxes and surcharges
Items 2019.01-06 2018.01-06
City construction tax 1,253,720.56 1,103,174.98
Education surcharge 884,724.11 775,163.60
Property tax 3,758,045.42 3,749,949.14
Land use tax 2,185,948.32 2,450,463.10
Vehicle and vessel tax 10,907.04 11,988.44
Stamp duty 633,223.16 641,528.66
Levee fee 108.77
Environmental Protection Tax 3,606.49 1,653.81
Total 8,730,283.87 8,733,921.73
38.Selling expenses
Items 2019.01-06 2018.01-06
Official business expense 3,988,847.51 4,539,930.14
Employee benefit 21,396,465.27 18,276,891.66
Depreciation expense 155,303.69 156,761.63
Transportation expense 12,587,418.44 12,038,705.09
Business entertaining expense 4,881,843.49 4,036,343.06
Travel expense 5,066,994.70 5,624,151.75
Maintenance and repair expense 3,484,274.34 2,196,454.74
Advertisement and bids expense 980,196.85 1,138,461.50
Other expense 555,474.33 655,113.54
Total 53,096,818.62 48,662,813.11
39.Administrative expenses
Items 2019.01-06 2018.01-06
Official expense 7,892,079.60 8,232,927.98
67
Dalian Refrigeration Co., Ltd.
Items 2019.01-06 2018.01-06
Employee benefit 52,352,461.45 53,578,916.78
Depreciation expense 6,251,109.67 5,755,436.73
Business entertaining expense 2,081,570.86 1,782,386.28
Travel expense 4,064,689.71 3,109,980.56
Maintenance and repair expense 2,309,890.96 1,922,753.65
Advertisement expense 408,712.91 459,235.50
Insurance expense 533,710.46 532,158.46
Long-term assets amortization 3,801,155.48 3,106,842.37
Design consultant and test service expense 2,237,748.01 404,122.61
Safety production cost 1,031,715.77 1,254,520.04
Other expense 2,977,250.33 1,375,875.04
Total 85,942,095.21 81,515,156.00
40. R&D expenses
Items 2019.01-06 2018.01-06
Employee benefit 21,344,115.07 21,662,725.31
Depreciation and amortization expense 2,405,920.60 2,768,900.70
Raw material 3,770,083.72 1,415,864.91
Entrust external R&D investment 132,075.47 963,679.24
Other expense 897,669.31 803,166.51
Total 28,549,864.17 27,614,336.67
41.Financial expenses
Items 2019.01-06 2018.01-06
Interest expenses 5,542,418.26 8,884,281.55
Less: Interest income 572,223.80 2,069,056.36
Add: Exchange loss -570,799.89 643,842.13
Add: Others expenditure 1,068,192.62 1,180,197.48
Total 5,467,587.19 8,639,264.80
The financial expenses decreased 36.71% in the current period compared with the previous
period, mainly because of the interest expense decreased.
42. Other income
Items 2019.01-06 2018.01-06
VAT refund 53,838.84 109,637.40
Grant given by the government for relocation 556,998.00
Government subsidy 1,424,600.00
Total 2,035,436.84 109,637.40
68
Dalian Refrigeration Co., Ltd.
43. Investment income
Items 2019.01-06 2018.01-06
Long-term equity investment gain under equity method 72,239,478.13 55,473,486.44
Gain from disposing long-term equity investment
Gain from holding of other non-current financial assets 4,320,252.20 11,139,558.00
Gain from disposal other non-current financial assets 40,567,691.40
Total 117,127,421.73 66,613,044.44
The Investment income increased 75.83% in the current period compared with the previous
period, mainly because of the Impact of Stock Exchange of "18 Da Leng EB" holders in the
current period.
44. Fair value change income
Items 2019.01-06 2018.01-06
Other non-current financial assets 40,461,125.59
Total 40,461,125.59
The Fair value change income increased 100% in the current period compared with the
previous period, mainly because of the Company implements the financial instrument
standards in the current period.
45. Assets impairment losses
Items 2019.01-06 2018.01-06
Loss of bad debts -16,863,134.42 -8,083,861.40
Provision for inventory impairment
Total -16,863,134.42 -8,083,861.40
The Assets impairment losses increased 108.60% in the current period compared with the
previous period, mainly because of the increase in provision for bad debts against
receivables in the current period.
46.Gain on assets disposal
Item 2019.01-06 2018.01-06
Gains on disposal of non-current assets 1,242,799.31 230,812.06
Gain on non-current assets disposal
1,242,799.31 230,812.06
income not classified as held for sale
Including: gain on fixed assets disposal 1,242,799.31 230,812.06
69
Dalian Refrigeration Co., Ltd.
Total 1,242,799.31 230,812.06
47.Non-operating income
（1） Non-operating income list
Amounts recognized into
Item 2019.01-06 2018.01-06 non-recurring profit or loss
for the year
Debt restructuring gains 1,999,241.94 1,999,241.94
Government grant 337,400.00 850,600.00 337,400.00
Penalty and fine income 135,723.19 258,017.67 135,723.19
Others 1,068,246.27
Total 2,472,365.13 2,176,863.94 2,472,365.13
（2） Government grant details
Items 2019.01-06 2018.01-06 Explanations
Fostering fund in 2018 337,400.00 Related to gain
Fostering fund in 2017 300,600.00 Related to gain
Subsidy of Economic support policy 50,000.00 Related to gain
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
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, was recognized as
non-operating income.
48. Non-operating expenses
Amounts recognized into
Item 2019.01-06 2018.01-06
non-recurring profit or loss for the year
Outward donation 60,000.00 60,000.00 60,000.00
Quality Claim 46,516.94 93,590.70 46,516.94
Non-current assets scrap loss 15,126.57 15,126.57
Total 121,643.51 153,590.70 121,643.51
49.Income tax expenses
(1) Income tax expenses
70
Dalian Refrigeration Co., Ltd.
Items 2019.01-06 2018.01-06
Current income tax expenses 16,570,975.86 4,709,435.95
Deferred income tax expenses -2,804,370.02 -1,268,991.70
Total 13,766,605.84 3,440,444.25
(2) Adjustment process of accounting profit and income tax expense
Items 2019.01-06
Total profits 120,536,982.32
Current income tax expense accounted by tax and relevant
regulations 18,080,547.35
Influence of different tax rate suitable to subsidiary 1,977,530.38
Influence of income tax before adjustment -636,465.94
Influence of non taxable income -2,713,531.73
Influence of not deductable costs, expenses and losses 1,696,591.16
Influence of deductable losses of deferred income tax assets
derecognized used in previous period -4,638,065.38
Influence of deductible temporary difference or deductible losses of
deferred income tax assets derecognized in reporting period.
Income tax expenses 13,766,605.84
The Company’s current income tax expenses increased 300.14% compared with the previous period,
mainly due to the Influence of the increase of taxable income in the current period.
50. Other comprehensive income
Refer to the note VII.33 other comprehensive income for details.
51.Notes to cash flow statement
(1) Cash receipt/payment of other operating/investing/financing activities
1) Other cash received relating to operating activities
Items 2019.01-06 2018.01-06
Government grants 1,762,000.00 950,600.00
Received travel expense refund 2,190,560.23 1,362,432.77
Deposit given back 11,938,968.66 12,317,606.04
Interest income 859,925.57 2,999,084.48
Others 1,027,584.20 894,306.29
Total 17,779,038.66 18,524,029.58
2) Other cash paid relating to operating activities
Items 2019.01-06 2018.01-06
Business travel borrowing 5,490,477.40 6,452,619.29
71
Dalian Refrigeration Co., Ltd.
Deposit paid 8,675,281.20 19,525,966.58
Expenditure 47,585,026.48 43,456,472.12
Payments to relate party 960,032.83
Bank handling charges 965,122.59 1,013,522.20
Others 713,616.93 972,341.24
Total 63,429,524.60 72,380,954.26
3) Others cash received relating to investing activities
Items 2019.01-06 2018.01-06
Redemption of Bank Financial Products 76,000,000.00
Total 76,000,000.00
4) Others cash received relating to financing activities
Items 2019.01-06 2018.01-06
Collection of guarantee money 38,323,050.64 30,116,287.80
Refund fractional dividend
Interests on discount of bill acceptance
Total 38,323,050.64 30,116,287.80
5) Others cash played relating to financing activities
Items 2019.01-06 2018.01-06
Interests on discount of bill acceptance 136,500.00 216,469.74
Payment of guarantee money 17,348,438.30 17,457,092.02
Sale& leaseback and financial lease 2,815,038.27
Repurchase the restricted stock 47,566,389.36 3,446,078.94
Note financing is due and is paid
Total 67,866,365.93 21,119,640.70
52.Supplementary information of consolidated cash flow statement
Items 2019.01-06 2018.01-06
1. Adjusting net profit into cash flows of operating —— ——
activities:
Net profit 106,770,376.48 58,521,630.70
Add: Provision for impairment of assets 16,863,134.42 8,083,861.40
Depreciation of fixed assets, Amortization of mineral
33,043,962.66 31,496,581.95
resources, and biological assets
Amortization of intangible assets 3,230,112.71 3,281,239.27
Amortization of long-term deferred expenses 804,794.82 828,379.74
72
Dalian Refrigeration Co., Ltd.
Losses on disposal of fixed assets, intangible assets, and
-1,242,799.31 -230,812.06
long-term assets (income listed with”-”)
Losses on write-off of fixed assets (income listed with”-”) 15,126.57
Change of fair value profit or loss -40,461,125.59
Financial expense (income listed with”-”) 5,275,618.93 9,920,078.84
Investment loss (income listed with”-”) -117,127,421.73 -66,613,044.44
Decrease of deferred tax assets(increase listed
-2,804,370.02 -1,636,322.60
with”-”)
Increase of deferred tax liabilities(decrease
listed with”-”)
Decrease of inventories (increase listed with”-”) -56,623,320.41 -74,289,269.87
Decrease of operating receivables (increase listed
-109,300,254.90 -109,284,490.94
with”-”)
Increase of operating payables (decrease listed
83,780,127.49 22,644,645.48
with”-”)
Others 1,948,765.36
Net cash flows arising from operating activities -77,776,037.88 -115,328,757.17
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 214,418,184.24 303,431,605.14
Less: Opening balance of cash 304,703,434.47 364,693,406.31
Add: Closing balance of cash equivalent
Less: Opening balance of cash equivalent
Net increase of cash and cash equivalent -90,285,250.23 -61,261,801.17
(2) Cash and cash equivalents
Items 2019.6.30 2018.12.31
Cash 214,418,184.24 304,703,434.47
Including: Cash on hand 78,153.94 74,387.33
Bank deposit used for paying at any moment 214,340,030.30 304,629,047.14
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
73
Dalian Refrigeration Co., Ltd.
Closing balance of cash and cash equivalents 214,418,184.24 304,703,434.47
Cash and cash equivalents restricted in the parent
company or subsidiary
53.The assets with the ownership or use right restricted
Items 2019.6.30 Reasons
Monetary fund 17,348,438.30 Guarantee money
Notes Receivable 29,013,709.30 Pledge
Fixed assets 64,583,406.59 Mortgage Loan
Intangible assets 49,252,120.00 Mortgage Loan
Total 160,197,674.19
Dalian Universe Thermal Technology Co., Ltd.and Dalian Bingshan Engineering&Trading
Co.,Ltd. pledged the bank acceptance note to ICBC Dalian Economic and Technological
Development Zone 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 100 million Yuan.
54.Monetary category of foreign currency
(1) Monetary category of foreign currency
Item Closing Balance Exchange Closing Balance
(foreign currency) Rate (RMB)
Cash — — 9,747,221.34
Including：USD 1,290,279.90 6.8747 8,870,287.22
Euro 4,509.23 7.8170 35,248.65
GBP 5,185.09 8.7113 45,168.87
JPY 12,481,456.00 0.0638 796,516.60
Accounts receivable — — 48,074,582.44
Including: USD 6,081,736.57 6.8747 41,810,114.40
GBP 136,790.86 8.7113 1,191,626.22
JPY 79,491,692.00 0.0638 5,072,841.82
Accounts payable — — 4,646,351.59
Including: USD 364,005.37 6.8747 2,502,427.72
JPY 41,946.28 8.7113 365,406.63
GBP 27,869,456.56 0.0638 1,778,517.24
55.Government Grants
74
Dalian Refrigeration Co., Ltd.
Amount
recognized in
Category Amount Disclosure
current profit and
loss
VAT refund 53,838.84 Other Income 53,838.84
Relocation compensation 556,998.00 Other Income 556,998.00
Special funds for processing trade
from Economic Development Bureau 1,409,600.00 Other Income 1,409,600.00
of JinPu new district
Special fund subsidy for the
construction of manufacturing 15,000.00 Other Income 15,000.00
innovation center
Non-operating
Fostering fund in 2018 337,400.00 337,400.00
income
Total 2,372,836.84 - 2,372,836.84
VI. Change of Consolidation Scope
□Applicable √Not applicable
VII. 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
Dalian Dalian Manufacturing 70 Establish
Equipment Co., Ltd.
Dalian Bingshan Guardian
Dalian Dalian Manufacturing 100 Establish
Automation Co., Ltd.
Dalian Bingshan Ryosetsu Quick
Dalian Dalian Manufacturing 100 Establish
Freezing Equipment Co., Ltd.
Wuhan New World Refrigeration
Wuhan Wuhan Manufacturing 100 Acquisition
Industrial Co., Ltd.
Bingshan Technical Service
Dalian Dalian Services 100 Establish
（Dalian） Co.,Ltd.
Dalian New Meica Electronics Dalian Dalian Electronic 100 Acquisition
75
Dalian Refrigeration Co., Ltd.
Name of subsidiaries Main Registered Business nature Shareholding (%) Obtaining
business address method
Technology Co., Ltd address
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 Refrigeration Wuhan Wuhan Installation 100 Establish
Engineering Co., Ltd
Wuhan Lanning Energy Trading
Wuhan Wuhan 54.55 Acquisition
Technology Co., Ltd.
Ningbo Bingshan
Air-conditioning Refrigeration Ningbo Ningbo Installation 51.00 Establish
Engineering Co., Ltd
Dalian Bingshan -P&A
Recreation Development Dalian Dalian Installation 100.00 Acquisition
Engineering Co., Ltd
Chengdu Bingshan Refrigeration
Chengdu Chengdu Services 51.00 Establish
Engineering 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
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
76
Dalian Refrigeration Co., Ltd.
Shareholding (%)
Main
Name of joint ventures or Registered Business Accounting
business
affiliated companies address nature methods
address
Direct Indirect
Panasonic Appliances Equity
Dalian Dalian Manufacturing 40
Compressor (Dalian) Co., Ltd. method
Dalian Bingshan Metal Equity
Dalian Dalian Manufacturing 49
Technology Co., Ltd. method
Panasonic Appliances Equity
Dalian Dalian Manufacturing 40
Cold-Chain (Dalian) 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
30-06-2019/2019.01-06
Panasonic Panasonic
Dalian Bingshan
Items Appliances Appliances
Metal Technology
Compressor (Dalian) Cold-Chain (Dalian)
Co., Ltd.
Co., Ltd. Co., Ltd.
Current assets 348,869,737.30 1,350,509,101.63 1,343,635,261.96
Including: Cash and
cash equivalents
Non-current assets 47,594,104.91 315,945,480.08 245,220,954.76
Total assets 396,463,842.21 1,666,454,581.71 1,588,856,216.72
Current liabilities 52,605,535.67 528,998,866.63 952,340,955.51
Non-current liabilities 1,474,641.02
77
Dalian Refrigeration Co., Ltd.
30-06-2019/2019.01-06
Panasonic Panasonic
Dalian Bingshan
Items Appliances Appliances
Metal Technology
Compressor (Dalian) Cold-Chain (Dalian)
Co., Ltd.
Co., Ltd. Co., Ltd.
Total liabilities 52,605,535.67 528,998,866.63 953,815,596.53
Minority interests
Equity to the parent
343,858,306.54 1,137,455,715.08 635,040,620.19
company
Proportions of net assets
according to the
168,490,570.20 454,982,286.03 254,016,248.08
shareholding
percentage
Adjusting events
—Goodwill 19,269,770.94 4,440,630.90
—Unrealized profits of
insider trading
--Others -69,007.66 -1,314,614.78 -2,450,740.67
Book value of equity
investment of affiliated 187,691,333.48 453,667,671.25 256,006,138.31
companies
Operating income 202,961,647.33 620,287,402.33 741,540,108.17
Financial expense
Income tax expense
Net profit 28,166,390.78 41,081,512.65 76,585,645.51
Total comprehensive
28,166,390.78 41,081,512.65 76,585,645.51
income
Continued：
31-12-2018/2018.01-06
Dalian Bingshan Panasonic Dalian Fuji
Items
Metal Technology Compressor Bingshan Vending
Co., Ltd. (Dalian) Co., Ltd Machine Co., Ltd.
Current assets 336,224,040.64 1,376,419,885.42 456,023,899.41
Including: Cash and cash
equivalents
Non-current assets 50,280,554.61 326,931,005.88 279,107,770.84
Total assets 386,504,595.25 1,703,350,891.30 735,131,670.25
Current liabilities 73,598,900.93 484,391,688.87 273,539,622.63
Non-current liabilities 140,000.00 75,980,400.55
Total liabilities 73,598,900.93 484,531,688.87 349,520,023.18
Minority interests
Equity to the parent
312,905,694.32 1,218,819,202.43 385,611,647.07
company
78
Dalian Refrigeration Co., Ltd.
31-12-2018/2018.01-06
Dalian Bingshan Panasonic Dalian Fuji
Items
Metal Technology Compressor Bingshan Vending
Co., Ltd. (Dalian) Co., Ltd Machine Co., Ltd.
Net assets calculated
according to the 153,323,790.22 487,527,680.97 188,949,707.05
shareholding proportions
Adjusting events
—Goodwill 19,269,770.94 226,689.30
—Unrealized profits of
insider trading
--Others -3,628,006.38 -918,935.60
Book value of equity
investment of affiliated 176,739,759.29 463,919,757.20 190,978,716.55
companies
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
Total comprehensive
29,265,580.71 59,081,945.59 29,478,738.29
income
（3） Summary financial information of insignificant affiliated companies
Items 30-06-2019/2019.01-06 31-12-2018/2018.01-06
Total book value of investment of
1,479,020,437.56 607,706,323.17
affiliated companies
The total of following items
according to the shareholding
proportions
Net profit 47,324,500.55 42,720,491.44
Other comprehensive income
Total comprehensive income 47,324,500.55 42,720,491.44
（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
VIII. Risk Related to Financial Instruments
The main financial instruments held by the group company are cash and cash in bank, accounts
79
Dalian Refrigeration Co., Ltd.
receivable, accounts payable, other non-current financial assets 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
contract .As at 30 June 2019, the company’s assets and liabilities dominated in foreign
currency are listed in RMB as following：
Items Closing Balance Opening balance
Monetary fund-USD 8,870,287.22 5,667,809.15
Monetary fund-EURO 35,248.65 29,231.51
Monetary fund- GBP 45,168.87 161,967.04
Monetary fund-JPY 796,516.60 2,567,812.86
Receivable- USD 41,810,114.40 38,855,616.42
Receivable - GBP 1,191,626.22 991,653.74
Receivable - JPY 5,072,841.82 4,984,342.22
Payables -USD 2,502,427.72 7,859,730.74
Payables - GBP 365,406.63 337,038.09
Payables -JPY 1,778,517.24 3,859,072.32
Dalian Refrigeration Company paid close attention to the effect on FX risk.
80
Dalian Refrigeration Co., Ltd.
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 financial department of the company continuously monitors the interest rates level, and the
management would make some adjustment to lower the interest rate risk according to the latest market
situation. Climbing interest rate will increase the cost of newly increased interest-bearing liability and
interest expense for unsettled interest-bearing liability at floating rate and have adverse effect on the
business performance.
The sensitive analysis：
As at 30 June 2019, base on the assumption of interest rate change of 50 BP, the Company’s net profit
will increase or decrease RMB 1,423.80 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 2019, the top five customers of receivable accounts balance is：133,966,141.13 Yuan.
(3) Liquidity risk
81
Dalian Refrigeration Co., Ltd.
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 2019, the credit limit still available is 391 million
Yuan and short term credit limit available is 391 million Yuan.
As at 30 June 2019, 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
Within 1 1-2 2-5 Over 5
Items Total
year years years years
Financial Assets
Cash and cash in bank 23,176.66 23,176.66
Notes receivable 15,474.91 15,474.91
Accounts receivable 124,210.24 124,210.24
Other Receivable 9,226.95 9,226.95
Other non-current financial assets 30,127.03 30,127.03
Financial Liabilities
Short-term loan 28,900.00 28,900.00
Notes Payable 30,894.24 30,894.24
Accounts payable 91,759.98 91,759.98
Other payable 7,852.18 7,852.18
Employee’s payable 1,103.35 1,103.35
Tax payable 2,035.53 2,035.53
Long-term loan 16,000.00 16,000.00
Bonds payable 2,500.00 2,500.00
IX. Disclosure of Fair Value
1. Amount and measurement level of the assets and liabilities measured at fair value at the year
end
Items Fair value at the year end
82
Dalian Refrigeration Co., Ltd.
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 288,278,646.80 288,278,646.80
(1) Investment by debt instruments
(2) Investment by equity instruments 288,278,646.80 288,278,646.80
(3) Others
2. Basis for Market price of first level measurement of fair value
Equity instrument portion of other non-current financial assets is measured at the unadjusted
closing quoted price on stock market on June 28, 2019.
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
X. Related Parties Relationship and Transactions
(I) Related parties relationship
1. Parent company and ultimate controller
1) Parent company and ultimate controller
83
Dalian Refrigeration Co., Ltd.
Parent Registered Business Registered Shareholding Voting
company address nature capital percentage power
(%) percentage
(%)
Dalian
Bingshan
Dalian Manufacture 158,580,000.00 20.27 20.27
Group Co.,
Ltd.
Dalian Bingshan Group Co., Ltd. is a sino –foreign joint venture located No.888 Xinan Road,
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 3 rd 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
Panasonic Appliances Cold-chain (Dalian) Co., Ltd Affiliated company of the Company
Panasonic Appliances Compressor (Dalian) Co., Ltd Affiliated company of the Company
Dalian Honjo Chemical Co., Ltd Affiliated company of the Company
Keinin-Grand Ocean Thermal Technology (Dalian)
Affiliated company of the Company
Co., Ltd
Beijing Huashang Bingshan Refrigeration and
Affiliated company of the Company
Air-conditioning Machinery Co., Ltd
Dalian Fuji Bingshan Vending Machine Co., Ltd Affiliated company of the Company
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. Affiliated company of the Company
Dalian Fuji Bingshan Vending Machine Sales Co., Ltd Affiliated company of the Company
84
Dalian Refrigeration Co., Ltd.
Names of the joint ventures or affiliated company Relationships with the Company
Jiangsu JingXue Insulation Technology Co.,Ltd Affiliated company of the Company
Panasonic Refrigerating System (Dalian) Co., Ltd. Affiliated company of the Company
Dalian Bingshan Metal Technology Co.,Ltd Affiliated company of the Company
Affiliated wholly owned subsidiary of the
Wuhan Sikafu Power Control Equipment Co., Ltd
Company
4. Other related parties
Name of related party Related party relationship
Dalian Bingshan Group Refrigeration Equipment Affiliated company of Dalian Bingshan
Co., Ltd Group
Affiliated company of Dalian Bingshan
Dalian Spindle Cooling Towers Co., Ltd
Group
Affiliated company of Dalian Bingshan
BAC Dalian Co., Ltd
Group
Dalian Part Technology Co.,LTd Subsidiary of Dalian Bingshan Group
Dalian Bingshan Group Mangement and Consulting
Subsidiary of Dalian Bingshan Group
Co.,Ltd
Dalian Fuji Bingshan Intelligent Control System Affiliated company of Subsidiary of Dalian
Co., Ltd. Bingshan Group
Affiliated company of Subsidiary of Dalian
Dalian Bingshan Huigu Development Co., Ltd.
Bingshan Group
Dalian Bingshan Group Huahuida Financial Affiliated company of Subsidiary of Dalian
Leasing Co., Ltd Bingshan 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 2019.1-6 2018.1-6
Dalian Part Technology Co.,LTd 3,741,590.18 4,465,731.71
Panasonic Appliances Air-conditioning and
36,142,649.15 15,480,374.25
Refrigeration (Dalian) Co., Ltd.
Panasonic Appliances Cold-chain (Dalian) Co., Ltd 23,174,161.33 33,172,331.36
Panasonic Appliances Compressor (Dalian) Co., Ltd 1,773,477.15 10,529.91
Panasonic Refrigerating System (Dalian) Co., Ltd. 10,227,269.49 9,125,437.07
Dalian Fuji Bingshan Vending Machine Co., Ltd 14,488.80
Purchases
Dalian Fuji Bingshan Vending Machine Sales Co., Ltd 0 456,410.26
of goods
Dalian Spindle Cooling Towers Co., Ltd 1,704,026.65 1,260,037.60
Dalian Honjo Chemical Co., Ltd. 0 74,102.56
BAC Dalian Co., Ltd 15,071,702.87 20,852,695.11
Dalian Bingshan Metal Technology Co., Ltd 43,155.87 196,551.73
Beijing Huashang Bingshan Refrigeration and
0
Air-conditioning Machinery Co., Ltd
Dalian Bingshan Group Refrigeration Equipment Co.,
12,608,423.94 11,153,346.84
Ltd
85
Dalian Refrigeration Co., Ltd.
Related party Content 2019.1-6 2018.1-6
Dalian Part Technology Co.,LTd 3,741,590.18 4,465,731.71
Panasonic Appliances Air-conditioning and
36,142,649.15 15,480,374.25
Refrigeration (Dalian) Co., Ltd. Purchases
of goods 23,174,161.33 33,172,331.36
Panasonic Appliances Cold-chain (Dalian) Co., Ltd
Panasonic Appliances Compressor (Dalian) Co., Ltd 1,773,477.15 10,529.91
Jiangsu JingXue Insulation Technology Co.,Ltd 16,909,130.64 4,117,598.28
Dalian Bingshan Wisdom Park Co., Ltd 342,045.83
Dalian Fuji Bingshan Intelligent Control System Co.,
0
Ltd.
Dalian Kelvins Technology Technology Co., Ltd 0
Total 121,752,121.90 100,365,146.68
2) Sales of goods/ labour services provision
Conte 2019.1-6 2018.1-6
Related party
nt
Dalian Part Technology Co.,LTd 2,424,649.57 1,026,891.85
Panasonic Appliances Air-conditioning and Refrigeration
48,139,165.51 42,299,738.16
(Dalian) Co., Ltd.
Panasonic Appliances Cold-chain (Dalian) Co., Ltd 73,431,383.81 81,412,904.44
Panasonic Appliances Compressor (Dalian) Co., Ltd 7,987,011.69 7,085,867.73
Panasonic Refrigerating System (Dalian) Co., Ltd. 15,372,612.19 12,374,757.92
Dalian Fuji Bingshan Vending Machine Co., Ltd 14,649,557.64 21,933,607.05
Dalian Fuji Bingshan Vending Machine Sales Co., Ltd 393,571.69 438,157.96
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. 1,785,687.98 2,748,243.46
Dalian Spindle Cooling Towers Co., Ltd Sales 146,937.92 113,024.88
Keinin-Grand Ocean Thermal Technology (Dalian) Co., Ltd. of 425,682.00 417,336.00
BAC Dalian Co., Ltd goods 11,715,950.10 325,633.66
Beijing Huashang Bingshan Refrigeration and Air-conditioning
32,657.62 5,175,496.30
Machinery Co., Ltd.
Dalian Bingshan Group Refrigeration Equipment Co., Ltd 3,803,139.47 2,917,141.96
Jiangsu JingXue Insulation Technology Co.,Ltd 70,553.57
Wuhan Sikafu Power Control Equipment Co., Ltd 258,666.59 68,969.06
Dalian Bingshan Group Huahuida Financial Leasing Co.,LTd 412,289.70 437,692.80
Dalian Bingshan Wisdom Park Co., Ltd 47,895.48 1,393,059.76
Dalian Fuji Bingshan Intelligent Control System Co., Ltd. 22,000.00
Total 181,119,412.53 180,168,522.99
3) Assets Lease
1) Assets rent out
86
Dalian Refrigeration Co., Ltd.
Category of 2019.-6-30 2018-6-30
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
Office 3,722,293.19 3,717,948.50
Company Wisdom Park Co., Ltd
The Panasonic compressor Employee
45,714.28
Company (Dalian) Co., Ltd dormitory
The Panasonic Refrigeration Employee
35,122.60
Company (Dalian) Co., Ltd. dormitory
Jiangsu JingXue
The
Insulation Technology Plant and office 493,160.97 423,031.46
Company
Co.,Ltd
Note: 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. In 2019, a revised agreement was signed to collect rent of 4 million yuan per year. In
2019, the rent was deducted by 875,000 yuan at one time because some projects were not used.
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 2019 is RMB 7.86 million Yuan.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.
4) 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
6.Balances with Related party
(1) Accounts receivable due from related parties
Item Related party Closing Balance Opening Balance
87
Dalian Refrigeration Co., Ltd.
Book Bad debt Book Bad debt
Balance Provision Balance Provision
Accounts BAC Dalian Co.,
2,837,960.17 141,898.01 2,289,340.93 114,467.05
receivable Ltd
Beijing Huashang
Bingshan
Accounts Refrigeration and
13,083,104.73 3,924,931.42 13,484,313.93 2,194,502.13
receivable Air-conditioning
Machinery Co.,
Ltd
Accounts Dalian Fuji
Bingshan Vending 13,894,359.19 694,717.96 6,255,865.97 312,793.30
receivable Machine Co., Ltd.
Accounts Dalian Spindle
Cooling Towers 103,903.38 5,195.17 67,486.00 3,374.30
receivable Co., Ltd
MHI Bingshan
Accounts
Refrigeration 1,835,577.52 91,778.88 2,301,963.32 115,098.17
receivable (Dalian) Co.,Ltd.
Panasonic
Accounts Refrigeration
11,858,693.32 592,934.67 4,933,468.75 246,673.44
receivable System (Dalian)
Co., Ltd.
Panasonic
Accounts Appliances Cold
10,552,500.47 527,625.02 20,911,809.84 1,045,590.49
receivable Chain (Dalian)
Co., Ltd
Panasonic
Accounts Appliances
827,544.01 41,377.20 1,556,496.87 77,824.84
receivable Compressor
(Dalian) Co., Ltd
Panasonic
Appliances
Accounts Air-conditioning
12,960,986.53 648,049.33 7,040,959.98 352,048.00
receivable and Refrigeration
(Dalian) Co.,
Ltd.
Wuhan Sikafu
Accounts Power Control
128,386.30 6,419.32 317,331.82 19,483.28
receivable Equipment Co.,
Ltd
Dalian Fuji
Bingshan
Accounts
Intelligent 280,000.00 14,000.00 280,000.00 14,000.00
receivable Control System
Co., Ltd.
Dalian Bingshan
Accounts Group Huahuida
1,935,465.61 96,773.28 1,935,465.61 96,773.28
receivable Financial Leasing
Co.,LTd
88
Dalian Refrigeration Co., Ltd.
Dalian Bingshan
Accounts
Wisdom Park Co., 4,630,000.00 231,500.00 700,000.00 35,000.00
receivable
Ltd
Wuhan Sikafu
Other Power Control
175,476.16 8,773.81 251,993.71 12,599.69
receivable Equipment Co.,
Ltd
Jiangsu JingXue
Insulation
Prepayment 907,192.54 60,214.80
Technology
Co.,Ltd
Panasonic
Appliances
Prepayment 80.00
Compressor
(Dalian) Co., Ltd
Panasonic
Appliances
Air-conditioning
Prepayment 530,350.00 5,052,007.00
and Refrigeration
(Dalian) Co.,
Ltd.
Dalian Bingshan
Group Huahuida
Prepayment 4,655,305.00 3,650,105.00
Financial Leasing
Co.,LTd
Dalian Spindle
Prepayment Cooling Towers 176,000.00
Co., Ltd
BAC Dalian Co.,
Prepayment 871,229.69
Ltd
Dalian Bingshan
Prepayment Wisdom Park Co., 187,886.00
Ltd
Notes BAC (Dalian)
Co., Ltd 4,102,951.12 441,001.03
receivable
Panasonic
Notes Refrigeration
System (Dalian) 4,518,622.68 4,210,388.96
receivable
Co., Ltd.
Panasonic
Notes Appliances Cold
Chain (Dalian) 32,086,738.26 50,565,030.10
receivable
Co., Ltd
Panasonic
Appliances
Notes Air-conditioning
and Refrigeration 12,936,367.63 11,686,954.09
receivable
(Dalian) Co.,
Ltd.
Notes MHI Bingshan
Refrigeration 589,860.00
receivable (Dalian) Co.,Ltd.
89
Dalian Refrigeration Co., Ltd.
Beijing Huashang
Bingshan
Notes Refrigeration and
Air-conditioning 4,102,373.40
receivable
Machinery Co.,
Ltd
(1) Accounts Payable due from Related Party
Item Related party Closing Balance Opening Balance
Accounts Payable BAC Dalian Co., Ltd 22,613,596.72 9,295,740.00
Dalian Bingshan Group Refrigeration
Accounts Payable 3,207,343.52 6,137,617.64
Equipment Co., Ltd.
Dalian Bingshan part Technology
Accounts Payable 825,234.01 1,551,409.98
Co.,Ltd
Dalian Fuji Bingshan Vending
Accounts Payable 62,674.56 134,547.35
Machine Co., Ltd.
Dalian Spindle Cooling Towers Co.,
Accounts Payable 4,374,436.70 2,562,898.70
Ltd
Jiangsu JingXue Insulation
Accounts Payable 15,871,568.38 13,774,809.38
Technology Co.,Ltd
Dalian Fuji Bingshan Intelligent
Accounts Payable 295,000.00 295,000.00
Control System Co., Ltd.
Dalian Fuji Bingshan Vending
Accounts Payable 414,000.00 414,000.00
Machine Sales Co., Ltd
Panasonic Refrigeration System
Accounts Payable 39,324,474.21 31,395,663.27
(Dalian) Co., Ltd.
Panasonic Appliances Cold Chain
Accounts Payable 214,435.02 3,861,712.32
(Dalian) Co., Ltd
Panasonic Appliances Compressor
Accounts Payable 1,696,000.00 1,696,000.00
(Dalian) Co., Ltd
Panasonic Appliances
Accounts Payable Air-conditioning and Refrigeration 19,721,310.94 6,409,209.89
(Dalian) Co., Ltd.
Dalian Bingshan Metal Technology
Accounts Payable 115,100.45 142,587.67
Co., Ltd
Other accounts Jiangsu JingXue Insulation
payable Technology Co.,Ltd 70,000.00
Other accounts MHI Bingshan Refrigeration
payable (Dalian) Co.,Ltd. 170,000.00
Other accounts Dalian BingshanWisdom Park
payable Co.,Ltd 500,000.00
Accounts
Panasonic Appliances Cold Chain
Received in 829,875.04
(Dalian) Co., Ltd
Advance
Accounts
Dalian BingshanWisdom Park
Received in 700,000.00
Co.,Ltd
Advance
90
Dalian Refrigeration Co., Ltd.
Accounts
Wuhan Sikafu Power Control
Received in 53,211.60
Equipment Co., Ltd
Advance
Accounts
Panasonic Refrigeration System
Received in 23,267.70
(Dalian) Co., Ltd.
Advance
Accounts
Keinin-Grand Ocean Thermal
Received in 59,596.18 59,596.18
Technology (Dalian) Co., Ltd
Advance
Notes Payable BAC Dalian Co., Ltd 24,920,000.00 30,200,000.00
Dalian Bingshan Group Refrigeration
Notes Payable 19,810,553.03 26,838,133.04
Equipment Co., Ltd.
Dalian Bingshan Pate Technology
Notes Payable 400,000.00 2,021,735.79
Co.,Ltd
Jiangsu JingXue Insulation
Notes Payable 3,709,868.20 411,909.94
Technology Co.,Ltd
Panasonic Appliances Cold Chain
Notes Payable 1,657,321.00
(Dalian) Co., Ltd
Dalian Spindle Cooling Towers Co.,
Notes Payable 6,256,661.88
Ltd
Panasonic Refrigeration System
Notes Payable 2,075,770.74 8,334,675.20
(Dalian) Co., Ltd.
(II) Related Party Commitment
None
XI. Share-Based Payment
1． General situation of share payment
□Applicable √Not applicable
2． Share payment settled by equity
□Applicable √Not applicable
3． Share Payments Settled in Cash
□Applicable √Not applicable
4. Modification and Termination of Share Payment
On December 10,2018, the Company held the 25th meeting of the seventh board of
directors which reviewed and approved the Proposal on terminating the implementation of 2016
Restricted Stock Incentive Plan of the Company and log outing the restricted stock.
On January 17,2019, the Company held the first extraordinary shareholders’ meeting of
2019 which reviewed and approved the Proposal on terminating the implementation of 2016
91
Dalian Refrigeration Co., Ltd.
Restricted Stock Incentive Plan of the Company and log outing the restricted stock. On March
4,2019, the Company has completed the capital reduction process, and the registered capital of
the Company was changed from 855,434,087 Yuan to 843,212,507 Yuan.
XII.
(1)Contingency
As at 30 June 2019, the Group does not have any other contingencies for disclosure.
(2)Commitment
As at 30 June 2019, the Group does not have any other significant commitments.
XIII. Events after the Balance Sheet Date
1. Significant events had not adjusted
Not applicable.
2. Information about profit distribution
Not applicable.
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.
XIV. 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
92
Dalian Refrigeration Co., Ltd.
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
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
30-06-2019/2019.01-06
Items Northeast Central East
Offset Total
China China China
1 Operating income 1,148,452,551.71 150,700,485.95 8,643,236.09 -232,067,033.18 1,075,729,240.57
2 Cost 1,162,556,073.51 161,719,250.40 9,338,338.19 -232,067,033.18 1,101,546,628.92
Impairment on assets
Depreciation and 31,233,798.77 5,809,671.04 35,400.38 37,078,870.19
amortization
3 Investment income from 69,432,604.16 -669,354.03 68,763,250.13
associates and joint venture
4 Operating profits(loss) 132,490,396.86 -11,680,193.88 -749,448.66 -3,000,000.00 117,060,754.32
5 Income tax 13,985,552.64 -207,384.95 -11,561.85 13,766,605.84
6 Net profit(loss) 118,504,844.22 -11,472,808.93 -737,886.81 -3,000,000.00 103,294,148.48
7 Total assets 6,068,196,486.67 671,738,576.32 14,227,645.28 -1,150,333,264.03 5,603,829,444.24
93
Dalian Refrigeration Co., Ltd.
30-06-2019/2019.01-06
Items Northeast Central East
Offset Total
China China China
8 Total liabilities 2,223,479,350.49 426,187,175.35 10,063,170.17 -550,671,314.75 2,109,058,381.26
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.
XV. 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
debt provision
Accounts
receivable with bad
debt provision
based on the
characters of credit
risk portfolio
Accounting age as
245,593,588.69 41.37% 61,159,532.65 24.90% 184,434,056.04
characters
Related party
within
348,070,518.35 58.63% 348,070,518.35
consolidation
scope
Accounts
receivable with
insignificant
individual amount
and separate bad
debt provision
Total 593,664,107.04 100.00% 61,159,532.65 532,504,574.39
(Continued)
Item Opening Balance
94
Dalian Refrigeration Co., Ltd.
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
the characters of
credit risk portfolio
Accounting age as
218,079,693.09 45.47% 60,923,442.32 27.94% 157,156,250.77
characters
Related party within
261,559,395.83 54.53% 261,559,395.83
consolidation scope
Accounts receivable
with insignificant
individual amount
and separate bad
debt provision
Total 479,639,088.92 100.00% 60,923,442.32 12.70% 418,715,646.60
Closing Balance
Items
Booking balance Provision %
Expected credit losses within 1 year 68,588,325.16 3,429,416.26 5.00%
Expect credit losses of 1-2 years 105,418,995.76 10,541,899.58 10.00%
Expect credit losses of 2-3 years 19,212,036.10 5,763,610.83 30.00%
Expect credit losses of 3-4 years 16,969,037.24 8,484,518.62 50.00%
Expect credit losses of 4-5 years 12,325,535.34 9,860,428.27 80.00%
Expect credit losses more than 5 years 23,079,659.09 23,079,659.09 100.00%
Total 245,593,588.69 61,159,532.65 --
(1)The bad debt provisions of accounts receivable in the portfolio is accrued under accounting
aging analysis method:
Aging Closing Balance
Within1 year 68,588,325.16
11to 2 years 105,418,995.76
22 to 3 years 19,212,036.10
More than 3 years 52,374,231.67
95
Dalian Refrigeration Co., Ltd.
3 to 4 years 16,969,037.24
4 to 5 years 12,325,535.34
More than 5 years 23,079,659.09
Total 245,593,588.69
(2) Bad debt provision accrued and reversed (withdraw)
The bad debt provision has been accrued in the amount of 2,889,548.29 Yuan.
(3) No accounts receivable written off in current period.
Item Written off amount
Receivable actually written off 2,851,184.95
(4) The top five significant accounts receivable categorized by debtors
Closing
Closing % of the
)Company Aging Balance of
Balance total AR
Provision
Xinyi Yuanda Construction
1-2
and Installation Engineering 32,748,744.00 5.52% 5,750,623.20
years,2-3years
Co., Ltd.
Ningxia Wangwa Coal 29,847,967.00 Within 1 year 5.03% 1,492,398.35
Dalian Thermal Power Co.,
22,320,000.00 Within 1 year 3.76% 1,116,000.00
ltd
SINOPEC International
21,970,846.97 Within 1 year 3.70% 1,098,542.35
Business Ningbo Co., Ltd.
Guangzhou Fuli Estate Within 1 year,
17,126,861.21 2.88% 856,343.06
Co.,Ltd 1-2 years
Total 124,014,419.18 20.89% 10,313,906.96
2. Other Receivables
Item Closing Balance Opening Balance
Interest receivable 318,886.12
Dividend receivable 56,591,452.20
Other receivable 5,059,293.49 13,684,383.22
Total 61,650,745.69 14,003,269.34
2.1 Interest receivable
(1) Interest receivable category
Item Closing Balance Opening Balance
Interest on term deposits 318,886.12
Interest on bank financial product
Total 318,886.12
1.2 Dividend receivable
96
Dalian Refrigeration Co., Ltd.
Item Closing Balance Opening Balance
Panasonic Refrigeration (Dalian) Co., Ltd. 4,000,000.00
Panasonic Compressor (Dalian) Co., Ltd 45,350,000.00
Jiangsu JingXue Insulation Technology Co.,Ltd 2,921,200.00
Guotai Junan Securities Co., Ltd. 4,320,252.20
Total 56,591,452.20
2.3 Other receivable
(1) Other receivables categorized by nature
Nature Closing Balance Opening Balance
Equity transfer fund 8,588,400.00
Petty cash 820,821.14 23,050.50
Guarantee deposits 6,070,527.71 6,681,152.00
Others 87,338.88 87,980.00
Total 6,978,687.73 15,380,582.50
(2) Provision for bad debts
The first phase The second phase The third phase
Provision for bad debts Expected Credit Loss Expected Credit Loss for Total
Expected credit losses in the
for the duration (No the duration (Credit
next 12 months
Credit Devaluation) impairment has occurred)
Balance on January 1, 2019 1,696,199.28 1,696,199.28
The balance of January 1, 2019 in
—— —— —— ——
the current period
Provision for bad debts 223,194.96 223,194.96
Balance on June 30, 2019 1,919,394.24 1,919,394.24
The bad debt provisions of other receivables in the portfolio is accrued under accounting
aging analysis method
Aging Closing Balance
Within1 year 2,747,372.73
11to 2 years 1,261,822.00
22 to 3 years 140,928.00
More than 3 years 2,828,565.00
3 to 4 years 2,430,000.00
4 to 5 years 0
More than 5 years 398,565.00
Total 6,978,687.73
(3) Bad debt provision accrued and reversed (withdraw) in the period.
The bad debt provision has been reversed by 223,194.96 Yuan.
(4) Other receivables from the top 5 debtors
97
Dalian Refrigeration Co., Ltd.
Closing
Closing % of the
Name Category Aging Balance of
Balance total OR
Provision
Dalian Delta HK
Security 3-4years，
China gas Co., 2,730,000.00 39.12 1,515,000.00
deposit over 5years
Ltd
Liaoning Jingwei
Engineering
Security
Management Co., 800,000.00 1-2 years 11.46 80,000.00
deposit
Ltd. Dalian
Branch
China petroleum Security Within 1
330,000.00 4.73 16,500.00
materials co. LTD deposit year
Baotou dongsheng
Security Within 1
technology co. 300,000.00 4.30 15,000.00
LTD
deposit year
Jiangxi Ganfeng Security Within 1
200,000.00 2.87 10,000.00
Lithium Co., Ltd. deposit year
Total 4,360,000.00 62.48 1,636,500.00
98
Dalian Refrigeration Co., Ltd.
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 587,496,652.08 587,496,652.08 587,496,652.08 587,496,652.08
Investment of affiliates and JV 1,623,763,187.90 1,623,763,187.90 1,614,457,190.34 1,614,457,190.34
Total 2,211,259,839.98 2,211,259,839.98 2,201,953,842.42 2,201,953,842.42
(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., Ltd 36,506,570.00 36,506,570.00
Dalian Bingshan Guardian Automation Co., Ltd. 6,872,117.80 6,872,117.80
Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd. 59,356,051.19 59,356,051.19
Dalian Universe Thermal Technology Co., Ltd. 48,287,589.78 48,287,589.78
Wuhan New World Refrigeration Industrial Co., Ltd 184,674,910.81 184,674,910.81
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 587,496,652.08 587,496,652.08
(3) Joint ventures& affiliated companies
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Dalian Refrigeration Co., Ltd.
Increase/Decrease
Gains and losses Adjustment of Provision for
Investee Beginning balance C ha ng e s 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 175,290,858.38 288,044.47 8,000,000.00 167,578,902.85
Refrigeration (Dalian) Co., Ltd.
Panasonic Appliances
232,222,620.76 28,183,517.55 4,400,000.00 256,006,138.31
Cold-chain (Dalian) Co., Ltd
Panasonic Appliances
483,899,674.59 15,117,996.66 45,350,000.00 453,667,671.25
Compressor (Dalian) Co., Ltd
Dalian Honjo Chemical Co.,
8,832,597.83 381,197.74 647,634.60 8,566,160.97
Ltd
Keinin-Grand Ocean Thermal
61,750,687.77 2,485,379.54 64,236,067.31
Technology (Dalian) Co., Ltd
Beijing Huashang Bingshan
Refrigeration and
1,268,139.59 -16,693.65 1,251,445.94
Air-conditioning Machinery
Co., Ltd
Dalian Fuji Bingshan Vending
188,257,460.75 989,770.27 189,247,231.02
Machine Co., Ltd
MHI Bingshan Refrigeration
13,783,339.36 -519,054.84 13,264,284.52
(Dalian) Co.,Ltd.
Dalian Fuji Bingshan Vending
13,774,267.89 -352,953.45 13,421,314.44
Machine Sales Co., Ltd
Jiangsu JingXue Insulation
174,966,773.04 9,607,307.14 2,921,200.00 181,652,880.18
Technology Co.,Ltd
Panasonic Refrigeration
30,721,588.82 2,397,347.27 2,284,000.00 30,834,936.09
System (Dalian) Co., Ltd.
Bingshan Metal Technical
172,593,561.16 15,097,772.32 187,691,333.48
Service （Dalian） Co.,Ltd.
Dalian Bingshan Group
Mangement and Consulting 57,095,620.40 -750,798.86 56,344,821.54
Company
Total 1,614,457,190.34 72,908,832.16 63,602,834.60 1,623,763,187.90
100
Dalian Refrigeration Co., Ltd.
4. Operating revenue and cost
Item 2019.01-06 2018.01-06
Revenue Cost Revenue Cost
Revenue from main operation 304,851,204.51 262,956,736.05 289,931,982.40 253,608,635.31
Revenue from other operation 20,505,068.81 13,936,660.77 13,114,752.79 7,124,916.72
Total 325,356,273.32 276,893,396.82 303,046,735.19 260,733,552.03
5. Investment income
Items 2019.01-06 2018.01-06
Income from long-term equity investments under cost method 3,000,000.00 6,403,324.73
Income from long-term equity investments under equity method 72,908,832.16 56,407,982.41
Income from holding of financial assets available for sale 4,320,252.20 11,139,558.00
Income from disposing available for sale financial investments 40,567,691.40
Income from disposing long-term share equity investments
Total 120,796,775.76 73,950,865.14
XVI. Supplementary Information to the Financial Statements
1. Non-operating profit or loss
item Amount
Disposal gains and losses of non-current asset 1,227,672.74
Government subsidies included in current profit or loss 1,815,838.84
Debt restructuring gains and losses 1,999,241.94
Income from changes in fair value during the period of holding financial assets
81,028,816.99
available for sale and income from disposal of financial assets available for sale
Other non-operating revenue or expense 29,206.25
Influence on income tax 12,949,627.58
Influence on minority shareholders 39,408.85
Total 73,111,740.33
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 3.16 0.127 0.127
Net profit after deducting non-recurring gains and losses
1.03 0.041 0.041
attributable to shareholders of parent company
Board of Directors of Dalian Refrigeration Co., Ltd.
24,August, 2019
101
