BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020
(NOT AUDITED)
1
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
BALANCE SHEET
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. June 30 , 2020 Unit: RMB Yuan
30-June-2020 31-Dec-2019
Items
Consolidation Parent Company Consolidation Parent Company
Current assets:
Monetary funds 278,156,476.16 133,769,634.48 332,119,146.22 175,586,251.46
Financial assets which are measured by fair value and
which changes are recorded in current profit and loss
Derivative financial assets
Transaction financial assets
Notes receivable 60,975,736.49 2,518,410.28 119,947,326.41 12,692,689.97
Accounts receivable 1,103,804,469.19 509,511,590.91 1,030,342,541.88 526,554,114.61
Accounts paid in advance 154,500,443.00 45,366,088.98 142,786,528.57 44,560,934.56
Other receivables 87,733,054.65 57,405,718.74 38,731,228.57 5,981,993.82
Interest receivables 348,833.33 348,833.33 583,833.33 583,833.33
Dividend receivable 42,152,903.12 50,338,786.40 33,450.00 -
Inventories 608,821,170.24 242,105,637.81 539,497,213.39 212,558,464.52
Contract assets 94,445,717.61 72,977,228.68
Assets held for sale
Non-current asset due within one year
Other current assets 11,714,155.30 245,006.96 14,172,130.45 32,843.40
Total current assets 2,400,151,222.64 1,063,899,316.84 2,217,596,115.49 977,967,292.34
Non-current assets:
Finance asset held available for sales
Held-to-maturity investment
Long-term account receivable
Long-term equity investment 1,628,442,791.08 2,311,152,962.49 1,662,181,009.14 2,244,411,383.88
Other non-current financial assets 284,146,396.67 282,731,254.17 303,469,706.51 302,054,564.01
Investment property 93,684,345.08 104,088,789.56 96,200,507.24 106,536,035.96
Fixed assets 957,684,403.68 748,876,456.86 992,435,172.94 776,349,872.24
Construction in progress 36,965,756.73 27,408,270.75 36,285,056.80 27,212,183.40
Engineering material
Disposal of fixed asset
Productive biological asset
Oil and gas asset
Intangible assets 139,166,688.92 67,174,298.87 141,540,378.10 68,221,989.91
Expense on Research and Development
Goodwill 1,750,799.49 1,750,799.49
Long-term expenses to be apportioned 10,459,043.73 9,005,609.76 11,646,845.47 9,751,998.84
Deferred income tax asset 60,062,877.38 13,228,425.96 62,397,665.08 13,858,811.66
Other non-current asset
Total non-current asset 3,212,363,102.76 3,563,666,068.42 3,307,907,140.77 3,548,396,839.90
Total assets 5,612,514,325.40 4,627,565,385.26 5,525,503,256.26 4,526,364,132.24
Current liabilities:
Short-term loans 382,693,600.00 366,093,600.00 355,252,000.00 308,082,000.00
Financial liabilities which are measured by fair value
2
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
and which changes are recorded in current profit and
loss
Derivative financial liabilities
Transaction financial liabilities
Notes payable 264,006,309.11 204,646,261.20 305,468,505.38 189,540,652.01
Accounts payable 940,681,481.86 321,427,663.26 814,331,684.02 293,479,043.69
Accounts received in advance 160,571,622.53 47,114,426.48
Contract liabilities 201,589,646.20 49,838,218.15
Wage payable 10,356,555.86 92,529.75 31,701,317.58 8,702,907.01
Taxes payable 8,930,118.03 6,394,749.72 8,184,018.69 5,156,115.24
Other accounts payable 61,043,778.19 36,375,922.22 55,921,060.69 18,817,980.14
Interest payable 5,180,733.92 5,180,733.92 6,396,385.83 6,386,700.29
Dividend payable 28,304,531.21 25,829,531.21 533,156.00 533,156.00
Liabilities held for sale
Non-current liabilities due within one year 10,276,677.27 14,174,643.42
Other current liabilities
Total current liabilities 1,879,578,166.52 984,868,944.30 1,745,604,852.31 870,893,124.57
Non-current liabilities:
Long-term loans 160,000,000.00 160,000,000.00 160,000,000.00 160,000,000.00
Bonds payable 25,000,034.00 25,000,034.00 25,000,034.00 25,000,034.00
Preferred stock
Perpetual bond
Long-term account payable 397,771.84 397,771.84
Long-term wage payable
Special Payable
Anticipation liabilities
Deferred income 107,775,664.96 64,380,164.96 99,157,538.52 55,744,166.29
Deferred income tax liabilities 38,316,709.52 38,316,709.52 41,215,205.99 41,215,205.99
Other non-current liabilities
Total non-current liabilities 331,490,180.32 287,696,908.48 325,770,550.35 281,959,406.28
Total liabilities 2,211,068,346.84 1,272,565,852.78 2,071,375,402.66 1,152,852,530.85
Shareholders’ equity
Share capital 843,212,507.00 843,212,507.00 843,212,507.00 843,212,507.00
Other equity instruments
Preferred stock
Perpetual bond
Capital public reserve 726,768,468.00 771,270,562.83 726,768,468.00 771,270,562.83
Less: Treasury stock
Other comprehensive income 2,501,459.77 1,539,359.10 2,501,459.77 1,539,359.10
Special preparation
Surplus public reserve 799,133,083.37 799,133,083.37 768,723,812.53 768,723,812.53
Generic risk reserve
Retained profit 959,048,791.02 939,844,020.18 1,038,358,782.59 988,765,359.93
Total owner’s equity attributable to parent company 3,330,664,309.16 3,354,999,532.48 3,379,565,029.89 3,373,511,601.39
Minority interests 70,781,669.40 74,562,823.71
Total owner’s equity 3,401,445,978.56 3,354,999,532.48 3,454,127,853.60 3,373,511,601.39
Total liabilities and shareholder’s equity 5,612,514,325.40 4,627,565,385.26 5,525,503,256.26 4,526,364,132.24
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization:Wang Jinxiu
3
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
INCOME STATEMENT
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. January-June, 2020 Unit: RMB Yuan
January-June, 2020 January-June, 2019
Items
Consolidation Parent Company Consolidation Parent Company
I. Total sales 873,403,414.46 421,537,668.16 1,075,729,240.57 325,356,273.32
II. Total operating cost 897,088,858.88 426,353,131.09 1,101,546,628.92 341,379,256.10
Including: Operating cost 748,075,096.12 359,831,813.22 919,759,979.86 276,893,396.82
Taxes and associate charges 8,020,491.83 4,653,637.89 8,730,283.87 4,773,987.02
Selling and distribution expenses 35,446,794.72 11,354,625.22 53,096,818.62 5,371,238.79
Administrative expenses 70,770,126.86 28,433,528.41 85,942,095.21 37,232,620.49
R&D expenses 24,715,021.28 14,305,119.21 28,549,864.17 13,071,247.34
Financial expense 10,061,328.07 7,774,407.14 5,467,587.19 4,036,765.64
Including: interest expense 9,635,047.81 7,801,791.24 5,542,418.26 3,772,180.01
interest income 719,172.42 538,148.04 572,223.80 211,170.87
Add:Other income 6,507,868.29 442,124.83 2,035,436.84
Gain/(loss) from investment 22,943,077.11 31,608,757.06 117,127,421.73 120,796,775.76
Including: income from investment on 72,239,478.13 72,908,832.16
16,816,173.99 17,295,970.66
affiliated enterprise and jointly enterprise
Exchange gains
Gain/(loss) from change in fair value (loss as “-“) -19,323,309.84 -19,323,309.84 40,461,125.59 40,461,125.59
Credit impairment loss (loss as “-“) -14,041,906.01 -3,350,941.44
Assets impairment loss (loss as “-“) -16,863,134.42 -3,112,743.25
Gain/(loss) from asset disposal (loss as “-“) 10,788.53 1,242,799.31 582,050.16
III. Operating profit -27,588,926.34 4,561,167.68 118,186,260.70 142,704,225.48
Add: non-business income 1,280,059.12 2,472,365.13 200.07
Less: non-business expense 93,891.78 44,972.15 121,643.51 75,126.57
IV. Total profit -26,402,759.00 4,516,195.53 120,536,982.32 142,629,298.98
Less: Income tax -1,492,259.17 -2,268,110.77 13,766,605.84 11,086,452.65
V. Net profit -24,910,499.83 6,784,306.30 106,770,376.48 131,542,846.33
(I) Net profit from continuous operation -24,910,499.83 6,784,306.30 106,770,376.48 131,542,846.33
(II)Net profit from discontinuing operation
Net profit attributable to parent company -23,604,345.52 6,784,306.30 108,373,919.30 131,542,846.33
Minority shareholders’ gains and losses -1,306,154.31 -1,603,542.82
VI. After-tax net amount of other comprehensive
incomes
After-tax net amount of other comprehensive 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
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. Gains and losses on fair value changes of
available-for-sale financial assets
4
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
3. Gains and losses on reclassifying held-to-maturity
investments into available-for-sale financial assets
4. Effective hedging gains and losses on cash flows
5. Foreign-currency financial statement translation
difference
6.Others
……
After-tax net amount of other comprehensive incomes
attributable to minority shareholders
VII Total comprehensive income -24,910,499.83 6,784,306.30 106,770,376.48 131,542,846.33
Total comprehensive income attributable to parent
-23,604,345.52 6,784,306.30 108,373,919.30 131,542,846.33
company
Total comprehensive income attributable to minority
-1,306,154.31 -1,603,542.82
shareholders
VIII. Earnings per share
(I) basic earnings per share -0.028 0.127
(II) diluted earnings per share -0.028 0.127
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: :Wang Jinxiu
5
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
CASH FLOW STATEMENT
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. January -June, 2020 Unit: RMB Yuan
January -June, 2020 January -June, 2019
Items
Consolidation Parent Company Consolidation Parent Company
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing
604,104,617.20 348,200,949.78 618,147,609.49 227,740,556.29
labor services
Write-back of tax received 13,929,886.75 8,601,797.19 8,019,673.18
Other cash received concerning operating activities 32,877,448.75 14,383,755.85 17,779,038.66 4,348,684.15
Subtotal of cash inflow arising from operating activities 650,911,952.70 371,186,502.82 643,946,321.33 232,089,240.44
Cash paid for purchasing commodities and receiving
476,548,876.58 289,314,215.08 426,426,299.23 159,249,772.95
labor service
Cash paid to/for staff and workers 158,669,594.81 51,668,871.50 188,059,306.43 66,691,776.09
Taxes paid 31,669,562.21 14,614,702.80 43,807,228.95 14,147,587.37
Other cash paid concerning operating activities 62,374,607.85 17,567,587.34 63,429,524.60 13,181,849.87
Subtotal of cash outflow arising from operating activities 729,262,641.45 373,165,376.72 721,722,359.21 253,270,986.28
Net cash flows arising from operating activities -78,350,688.75 -1,978,873.90 -77,776,037.88 -21,181,745.84
II. Cash flows arising from investing activities:
Cash received from recovering investment
Cash received from investment income 14,561,842.05 14,528,392.05 11,365,084.60 11,331,634.60
Net cash received from disposal of fixed, intangible and
414,448.00 1,691,731.61 810,000.00
other long-term assets
Net cash received from disposal of subsidiaries and other
units
Other cash received concerning investing activities
Subtotal of cash inflow from investing activities 14,976,290.05 14,528,392.05 13,056,816.21 12,141,634.60
Cash paid for purchasing fixed, intangible and other
5,676,192.55 3,370,306.88 27,160,372.19 23,937,190.63
long-term assets
Cash paid for investment 100,000,000.00
Net cash paid for achievement of subsidiaries and other
business units
Other cash paid concerning investing activities
Subtotal of cash outflow from investing activities 5,676,192.55 103,370,306.88 27,160,372.19 23,937,190.63
Net cash flows arising from investing activities 9,300,097.50 -88,841,914.83 -14,103,555.98 -11,795,556.03
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 276,601,600.00 266,011,600.00 340,210,100.00 249,000,000.00
Cash received from issuing bonds
Other cash received concerning financing activities 36,847,200.56 38,323,050.64
Subtotal of cash inflow from financing activities 313,448,800.56 266,011,600.00 378,533,150.64 249,000,000.00
Cash paid for settling debts 254,287,177.09 208,000,000.00 303,180,583.85 250,000,000.00
Cash paid for dividend and profit distributing or interest
10,670,866.72 9,007,757.61 6,158,656.56 4,843,793.50
paying
Including: dividends or profit paid by subsidiaries to
minority shareholders
Other cash paid concerning financing activities 12,119,804.65 67,866,365.93 47,566,389.36
Subtotal of cash outflow from financing activities 277,077,848.46 217,007,757.61 377,205,606.34 302,410,182.86
Net cash flows arising from financing activities 36,370,952.10 49,003,842.39 1,327,544.30 -53,410,182.86
IV. Influence on cash due to fluctuation in exchange rate 42,272.21 329.36 266,799.33 -128.01
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
V. Net increase of cash and cash equivalents -32,637,366.94 -41,816,616.98 -90,285,250.23 -86,387,612.74
Add: Balance of cash and cash equivalents at the period
301,527,354.56 175,586,251.46 304,703,434.47 186,976,185.10
-begin
VI. Balance of cash and cash equivalents at the
268,889,987.62 133,769,634.48 214,418,184.24 100,588,572.36
period–end
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Wang Jinxiu
7
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’ EQUITY
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd 2020.01-06 Unit: RMB Yuan
2020.01-06
Owners’ equity attributable to parent company
Items
Total of
Lessen: Other Special Retained Minority
Capital Surplus owners’
share capital treasury comprehens preparatio profits equity
suplus reserve equity
stock ive income n
I. balance at the end of last 843,212,507.00 726,768,468.00 2,501,459.77 768,723,812.53 1,038,358,782.59 74,562,823.71 3,454,127,853.60
year
1. Change of accounting
policy
2. Correction o f errors in
previous period
II. Balance at the beginning of 843,212,507.00 726,768,468.00 2,501,459.77 768,723,812.53 1,038,358,782.59 74,562,823.71 3,454,127,853.60
this year
III. Increase/ decrease of
amount in this year (“ -” 30,409,270.84 -79,309,991.57 -3,781,154.31 -52,681,875.04
means decrease)
(I) Total co mprehensive
-23,604,345.52 -1,306,154.31 -24,910,499.83
incomes
(II) Capital increased and
reduced by owners
1. Co mmon shares increased
by shareholders
2. Capital increased by
holders of other equity
instruments
3. A mounts of share-based
payments recognized in
owners’ equity
4. Other
(III) Profit distribution 30,409,270.84 -55,705,646.05 -2,475,000.00 -27,771,375.21
1. Withdrawing surplus 30,409,270.84 -30,409,270.84 -
public reserve
2. Distribution to all owners -25,296,375.21 -2,475,000.00 -27,771,375.21
(shareholders)
3. Others
(IV) Internal carrying
forward of owners’ equity
1. New increase of share
capital fro m 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 1,127,227.68 1,127,227.68
2. Used in the period -1,127,227.68 -1,127,227.68
(VI) Other
IV. Balance at the end of this 843,212,507.00 726,768,468.00 2,501,459.77 799,133,083.37 959,048,791.02 70,781,669.40 3,401,445,978.56
period
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization:Wang Jinxiu
8
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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 o f 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 co mprehensive 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. Co mmon 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. A mounts 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 fro m 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 Organ ization:Wang Jinxiu
9
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
STATEMENT OF CHANGES IN OWNERS’ EQUITY
Prepared by Dalian Refrigeration Company Limited 2020.01-06 Unit: RMB Yuan
2020.01-06
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 843,212,507.00 771,270,562.83 1,539,359.10 768,723,812.53 988,765,359.93 3,373,511,601.39
year
1. Change of accounting
policy
2. Correction o f errors in
previous period
II. Balance at the beginning of 843,212,507.00 771,270,562.83 1,539,359.10 768,723,812.53 988,765,359.93 3,373,511,601.39
this year
III. Increase/ decrease of
amount in this year (“ -” 30,409,270.84 -48,921,339.75 -18,512,068.91
means decrease)
(I) Total co mprehensive 6,784,306.30 6,784,306.30
incomes
(II) Capital increased and
reduced by owners
1. Co mmon shares increased
by shareholders
2. Capital increased by
holders of other equity
instruments
3. A mounts of share-based
payments recognized in
owners’ equity
4. Other
(III) Profit distribution 30,409,270.84 -55,705,646.05 -25,296,375.21
1. Withdrawing surplus 30,409,270.84 -30,409,270.84 -
public reserve
2. Distribution to all owners -25,296,375.21 -25,296,375.21
(shareholders)
3. Others
(IV) Internal carrying
forward of owners’ equity
1. New increase of share
capital fro m 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 1,127,227.68 1,127,227.68
2. Used in the period -1,127,227.68 -1,127,227.68
(VI) Other
IV. Balance at the end of this 843,212,507.00 771,270,562.83 1,539,359.10 799,133,083.37 939,844,020.18 3,354,999,532.48
period
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization:Wang Jinxiu
10
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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 o f 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 co mprehensive 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. Co mmon 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. A mounts 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 fro m 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:Wang Jinxiu
11
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Notes to Financial Statements
I. General Information
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd (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 March12 th , 2015.
The general meeting for 2015 fiscal year held on 21st April 2016 approved the profit distr ibution
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 P lan’ approved on the
3rdprovisional general meeting held on 13th September 2016, the 9th meeting of the 7th generation
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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
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 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.
On December 20th, 2019, the Company held the 7th meeting of the 8th Board of Directors and
approved to change the Company’s name from Dalian Refrigeration Company Limited to
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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 Liaohe East RD, Dalian Economic&Technology Development Zone(‘DDZ’),
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 is in industrial manufacturing sector, mainly engaged in industrial refrigeration,
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
refrigerated and frozen food storage, and manufacture and installation of central air-conditioning
and refrigeration equipment. The scope of business includes research and development, design,
manufacture, sale, lease, installation and repair of refrigeration and heat equipment, accessories,
spare parts, and energy-saving and environmental protection products; Technical services,
technical consultation, technical promotion; Design, construction, installation repair and
maintenance of complete sets of refrigeration and air conditioning projects, mechanical and
electrical installation projects, steel structure projects, anti-corrosion and heat preservation works;
Rental of premises; Transport of ordinary goods; Property management; Low temperature storage;
Import and export of goods and technologies. (With the exception of projects subject to approval
according to law, independently carry out business activities according to law with the business
license).
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 V
“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
The Ministry of Finance issued on July 5, 2017 about revision issued by the accounting standards
for enterprises no. 14 - revenue income guidelines (hereinafter generally referred to as the
"income guidelines"), in domestic and at the same time, listed companies and listed overseas and
adopted international financial reporting standards or companies prepare financial statements on
the accounting standard for business enterprises, effective as of January 1, 2018; Other domestic
listed enterprises shall enter into force as of January 1, 2020; Non-listed enterprises that
implement the accounting standards for Business Enterprises shall enter into force as of January 1,
2021. In accordance with the above requirements, the Company will implement the relevant
guidelines as of January 1, 2020.
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 financia l position,
operating performance, cash flow of the Group truly and fully.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
2. Accounting period
The Group adopts the Gregorian calendar year as accounting period from Jan 1 to Dec 31.
3. Operating cycle
Normal operating cycle refers to the duration starting from purchasing the assets for
manufacturing up to cash or cash equivalent realization. The group sets twelve months for one
operating cycle and as the liquidity criterion for assets and liability.
4. Functional currency
The Group adopts RMB as functional currency.
5. Accounting for business combination under same control and not under same control
As an acquirer, the assets and liabilities that The Group obtained in a business combination under
the same control should be measured on the basis of their carrying amount in the consolidated
financial statements on the combining date. As for the balance between the carrying amount of the
net assets obtained by the combining party and the carrying amount of the consideration paid by it,
the capital surplus shall be adjusted. If the capital surplus is not sufficient to be offset, the retained
earnings shall be adjusted.
For a business combination not under same control, the asset, liability and contingent liability
obtained from the acquirer shall be measured at the fair value on the acquisition date. The
combination cost shall be the fair value, on the acquisition date, of the assets paid, the liabilities
incurred or assumed and equity securities issued by the acquirer in exchange for the control of the
acquire, and sum of all direct expenses(if the combination is achieved in stages, the combination
cost shall be the sum of individual transaction). The difference when combination cost exceeds
proportionate share of the fair value of identifiable net assets of acquire should be recognized as
goodwill. If the combination cost is less than proportionate share of the fair value of identifiable
net assets of acquiree, firstly, fair value of identifiable asset, liability or contingent liability shall
be reviewed, and so the fair value of non-monetary assets or equity instruments issued in the
combination consideration , after review, still the combination cost is less than proportionate
share of the fair value of identifiable net assets of acquire, the difference should be recognized as
non-operating income.
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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
comprehensive income and total comprehensive belonging to minority interest, shall be
presented separately in the consolidated financial statements under “minority interest of
equity”, ”minority interest of profit and loss”, “other comprehensive income attributed to minority
interest” and “total comprehensive income attributed to minority interest” title.
If a subsidiary is acquired under common control, its operation results and cash flow shall be
consolidated since the beginning of the consolidation period. When preparing the comparative
consolidated financial statements, adjustments shall be made to relevant items of comparative
figures as regarded that reporting entity established through consolidation has been always there
since the point when the ultimate controlling party starts to have the control.
If a business consolidation under common control is finally achieved in stages, consolidation
accounting method shall be disclosed additionally for the period in which the control is obtained.
For example, if a business consolidation under common control is finally achieved in stages, when
preparing the consolidated financial statements, adjustments shall be made for the current
consolidation status as if consolidation has always been there since the point when the ultimate
controlling party starts to control. In preparation of comparative figures, asset and liability of the
acquiree shall be consolidated into the Group’s comparative financial statements, but to the extent
no earlier than the point when the Group and acquiree are both under u ltimate 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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
the movement on the remeasurement of ne asset or liability of defined benefit plan.
When the Group partially disposes of the long –term equity investment in subsidiary without
losing the control over it, in the consolidated financial statements, the difference, between
disposals price and respective disposed value of share of net assets in the subsidiary since the
acquisition date or combination date, shall be adjusted for capital surplus or share premium, no
enough capital surplus, then adjusted for retained earnings.
When the Group partially disposes of the long –term equity investment in subsidiary and lose the
control over it, in preparation of consolidated financial statements, remaining share of interest in
the subsidiary shall be remeasured on the date of losing control. Sum of the share disposal
consideration and fair value of remaining portion of shareholding minus the share of the net assets
in the subsidiary held based on the previous shareholding percentage since the acquisition date or
combination date, the balance of above is recognized as investment gain/loss for the period and
goodwill shall be written off accordingly. Other comprehensive income relevant to share
investment in subsidiary shall be transferred to investment gain /loss for the period on the date of
losing control.
When the Group partially disposes of the long –term equity investment in subsidiary and lose the
control over it by stages, if all disposing transactions are bundled, each individual transaction shall
be seen as a transaction of disposal of a subsidiary by losing control. The difference between the
disposal price and the share of the net assets in the subsidiary held before the date of losing
control, shall be recognize as other comprehensive income until the date of losing control where it
is transferred into investment gain/ loss for the current period.
7. Joint arrangement classification and joint operation accounting
The Group’s joint arrangement includes joint operation and joint venture. For joint operation, the
Group as a joint operator shall recognize its own assets and its share of any assets held jointly, its
liabilities and its share of any liabilities incurred jointly, its revenue from the sa le 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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
(1) Foreign currency transaction
Foreign currency transactions are translated at the spot exchange rate issued by People’s Bank of
China (“PBOC”) on the 1st day of the month when the transactions incurred. Monetary assets and
liabilities in foreign currencies are translated into RMB at the exchange rate prevailing at the
balance sheet day. Exchange differences arising from the settlement of monetary items are charged
as in profit or loss for the period. Exchange differences of specific borrowings related to the
acquisition or construction of a fixed asset should be capitalized as occurred, before the relevant
fixed asset being acquired or constructed is ready for its intended uses.
(2) Translation of foreign currency financial statements
The asset and liability items in the foreign currency balance sheet should be translated at a spot
exchange rate at the balance sheet date. Among the owner’s equity items except “undistributed
profit”, others should be translated at the spot exchange rate when they are incurred. The income
and expense should be translated at spot exchange rate when the transaction incurs. Translation
difference of foreign currency financial statements should be presented separately under the other
comprehensive income title. Foreign currency cash flows are translated at the spot exchange rate
on the day when the cash flows incur. The amounts resulted from change of exchange rate are
presented separately in the cash flow statement.
10. Financial assets and financial liabilities
The company shall recognize a financial asset or a financial liability when the company becomes
party to the contractual provisions of the instrument.
(1) Financial assets
1) Classification, recognition and measurement
The company shall classify financial assets as measured at amortized cost, fair value through other
comprehensive income or fair value through profit or loss on the basis of both the company’s
business model for managing the financial assets and the contractual cash flow characteristics of
the financial asset.
A financial asset shall be measured at amortized cost if both of the following conditions are met:
①the financial asset is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows;②the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding. At initial recognition, the company shall measure the financial asset at its fair
value and take any transaction costs that are directly attributable to the financial asset into a ccount.
After initial recognition, the company shall measure the financial asset at amortized cost. A gain or
loss on a financial asset that is measured at amortized cost and is not a hedged item shall be
recognized in profit or loss when the financial asset is derecognized, impaired, involved in foreign
exchange or amortized for any difference arising between the initial recognized amount and due
amount by applying effective interest method.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
A financial asset shall be measured at fair value through other comprehensive income if both of
the following conditions are met: ①the financial asset is held within a business model whose
objective is achieved by both collecting contractual cash flows and selling financial assets and
②the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding. At initial
recognition, the company shall measure this financial asset at its fair value and take any
transaction costs that are directly attributable to the financial asset into account. A gain or loss on a
financial asset that is measured at fair value through other comprehensive income and is not a
hedged item shall be recognized in other comprehensive income apart from a gain or loss on credit
loss, foreign exchange and interest of the financial asset calculated by effective interest method.
Accumulated gain or loss previously in the other comprehensive income shall be out of it and
accounted in the profit or loss account when the financial asset is derecognized.
The company recognized interest revenue based on effective interest method. Interest revenue
shall be calculated by applying the effective interest rate to the gross carrying amount of a
financial asset, except for: ①purchased or originated credit-impaired financial assets. For those
financial assets, the company shall apply the credit-adjusted effective interest rate to the amortized
cost of the financial asset from initial recognition. ②financial assets that are not purchased or
originated credit-impaired financial assets but subsequently have become credit-impaired financial
assets. For those financial assets, the company shall apply the effective interest rate to the
amortized cost of the financial asset in subsequent reporting periods.
The company designates an investment as fair value measured through other comprehensive
income if an equity instrument held is not for trading. Once the decision is made, it is an
irrevocable election. At initial recognition, the company shall measure the equity instrument
investment not for trading at its fair value and take any transaction costs that are directly
attributable to the financial asset into account. Any other gain or loss (including foreign exchange
gain or loss) shall be accounted in other comprehensive income and shall not be subsequently
transferred to profit or loss, unless the dividend received is accounted in profit or loss( excluding
the recovered investment cost). Accumulated gain or loss previous ly in the other comprehensive
income shall be out of it and into retained earnings when the financial asset is derecognized.
Apart from classified as the amortized cost financial assets and as fair value through other
comprehensive income financial assets, a financial asset is classified as fair value through profit or
loss. At initial recognition, the company shall measure this financial asset at its fair value and take
any transaction costs that are directly attributable to the financial asset into account.
A financial asset shall be classified as fair value through profit or loss if it is recognized contingent
consideration through business combination, which is not under same control situation.
2) Recognition and measurement of transfer of financial assets
A financial asset is derecognized when any one of the following conditions is satisfied: ①the
rights to receive cash flows from the asset is terminated, ②the financial asset has been
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
transferred and the company transfers substantially all risks and rewards relating to the financial
assets to the transferee, ③the financial asset has been transferred to the transferee, the company
has given up its control of the financial asset although the company neither transfers nor retains all
risks and rewards of the financial asset.
In the case where the financial asset as a whole qualifies for the derecognition conditions, the
difference between the carrying value of transferred financial asset and the sum of the
consideration received for transfer and the accumulated amount of changes in fair value in respect
of the amount of partial derecognition (the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding) , that was previously recorded under other comprehensive income is
transferred into profit or loss for the period.
In the case where only part of the financial asset qualifies for derecognition, the carrying amount
of financial asset being transferred is allocated between the portions that to be derecognised and
the portion that continued to be recognised according to their relative fair value. The difference
between the amount of consideration received for the transfer and the accumulated amount of
changes in fair value that was previously recorded in other comprehensive income for the asset
partially qualified for derecognition (the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding) and the above-mentioned allocated carrying amount is charged to profit or
loss for the period.
(2) Financial liabilities
1) Classification, basis for recognition and measurement
Financial liabilities of the company are classified at initial recognition as “financial liabilities at
fair value through profit or loss” and “other financial liabilities” on initial recognition.
Financial liabilities at fair value through profit or loss include financial liabilities held for trading
and those designated as fair value through profit or loss on initial recognition. They are
subsequently measured at fair value. The net gain or loss arising from changes in fair value,
dividends and interest paid related to such financial liabilities are recorded in profit or loss for the
period in which they are incurred.
Other financial liabilities shall be subsequently measured at amortized cost by applying effective
interest method. The company shall classify a financial liability as a liability measured at
amortized cost except the followings: ①financial liability measured at fair value through profit or
loss including tradable financial liability (derivative instrument of financial liability included) and
designated as financial liability measured at fair value through profit or loss ② financial assets
transfers that do not qualify for derecognition or financial liability is formed from continuing
involvement in transferred assets ③ financial guarantee contract not in the above category of
①or ② and loan commitment which is not in the category ① at the below the market loan rate.
The company shall account the financial liability as it measured at fair value through profit or loss
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
if the financial liability is formed by contingent consideration recognized by the buyer through
business combination that is not under common control.
2) Financial liability derecognition
A financial liability is derecognized when the underlying present obligations or part of it are
discharged. Existing financial liability shall be derecognized and new financial liability shall be
recognized when the company signs the agreement with creditor to undertake the new financial
liability in replacement of existing financial liability, and the terms of agreement are different in
substance. Any significant amendment to the agreement as a whole or part o it is made, then the
existing liabilities or part of it shall be derecognized and financial liability after terms amendment
shall be recognized as a new financial liability. The difference between the carrying amount of the
financial liability derecognized and the consideration paid is recognized in profit or loss for the
period.
(3) Fair value measurement of financial asset and financial liability
The company uses the price in the primary market for financial assets and liability fair value
measurement, if no primary market exists, the price in the most advantageous market shall be used
for fair value measurement and applicable valuation techniques w hich enough data is available for
and supported by other information shall be adopted. Input for fair value measurement has 3 levels:
level 1 input is the unadjusted quoted price for identical asset or liability available at the active
market on the measurement date; level 2 input is the directly or indirectly observable input for
relevant asset or liability apart from level 1 input; level 3 input is the unobservable input for
relevant asset or liability.
(4) Financial asset and financial liability offset
Financial asset and financial liability shall be presented in the balance sheet separately and cannot
be offset, unless the following conditions are all met: ①the company has the legal right to
recognized offset amount and the right is enforceable. ②the company plans to receive or a legal
obligation to pay cash at net amount.
(5) Distinguishment between financial liability and equity instrument and accounting
financial liability and equity instrument shall be distinguished in accordance with the following
standards: ① if the company cannot unconditionally avoid paying cash or financial asset to fulfil a
contractual obligation, the contractual obligation is qualified or financial liability. For certain
financial instrument, although there are no clear terms and conditions to include obligation of
paying cash or other financial liability, contractual obligation may indirectly be formed through
other terms and conditions. ② the company’s own equity instrument shall also be considered
whether it is the substitute of cash, financial asset or it is the remaining equity, after the issuer
deducts liability, enjoyed by the equity holder , if it must or can be used to settle a financial asset.
If the former, the instrument is a financial liability of the issuer, otherwise it is an equity
instrument of the issuer. In certain circumstances, financial instrument contract is classified as
financial liability, if financial instrument contract specifies the company must or can use its own
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
equity to settle the financial instrument, the contractual amount of right or obligation equals to that
of the numbers of own equity instrument available or to be paid multiplied by fair value when
settling, nevertheless the amount is fixed, or varied partially or fully based on the its own equity’s
market price(such as interest rate, certain commodity’s or financial instrument’s price variance).
When classifying a financial instrument (or its component) in the consolidated statements, the
company takes all terms and conditions agreed by the group member and instrument holder into
consideration. If the group due to the instrument, as a whole, bears settlement obligation by
paying cash, other financial asset or other means resulted in financial liability, the instrument shall
be classified as financial liability.
If a financial instrument or its component is financial liability, any gain or loss, interest, dividend,
and any gain or loss from buy back or refinancing shall be accounted in profit or loss.
If a financial instrument or its component is an equity instrument, when it was issued(including
refinancing), bought back, sold or withdrawn, any change shall be regarded as equity change and
no fair value change shall be recognized.
(6) Financial asset impairment
Based on expected credit loss, a financial asset measured at amortized cost, a debt instrument
investment measured at FVTOCI and a contractual asset shall all be subject to impairment
accounting and be recognized for impairment loss allowance if any impairment.
Expected credit loss is the weighted average of credit losses with the respective risks of a default
occurring as the weights. A credit loss herein is referred to as the present value, at original
effective rate, of the difference between the contractual cash flows that are due to the company
under the contract; and the cash flows that the company expects to receive, that's the present value
of the total cash shortage. A financial asset shall be the present value, at credit adjusted effective
rate, if it is a purchased or originated credit -impaired asset.
The company adopts simplified approach for trade receivables, contract assets that do not contain
a significant financing component, and shall always measure the loss allowance at an amount
equal to lifetime expected credit losses.
Impairment requirements is to assess whether credit risk has been significantly increased since
initial recognition at each reporting date, if there have been significant increases in credit risk, the
company shall measure the loss allowance for a financial instrument at an amount equal to the
lifetime expected credit losses, at the reporting date, if the credit risk on a financial instrument has
not increased significantly since initial recognition, the company shall measure the loss allowance
for that financial instrument at an amount equal to 12month expected credit losses.
When assessing expected credit losses, the company considers all reasonable and supportable
information, including that which is forward-looking.
The company shall measure expected credit losses of a financial instrument in a way that reflects:
an unbiased and probabilityweighted amount that is determined by evaluating a range of possible
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
outcomes; The time value of money; and reasonable and supportable information that is available
without undue cost or effort at the reporting date about past events, current conditions and
forecasts of future economic conditions.
The company directly lowers the book value of the financial asset when contractual cash flow
cannot be fully or partially recollected within rational expectation any longer.
The company also assesses the expected credit loss of financial asset measured at amortized cost
based on aging portfolio, other than pastdue credit loss assessment based on individual item.
11. Notes receivable
（1） Recognition of provision for impairment
On the basis of expected credit loss, the company always measures the loss allowance at an
amount equal to lifetime expected credit losses for notes receivables which do not contain a
significant financing component and are generated in accordance with Revenue Standard- No 14
of Accounting Standard for Business Enterprise.
(2) Expected credit loss risk portfolio assessment method based on portfolio
The company separately assesses the credit risk of financial assets which have significantly
different the credit risk, such as receivable with dispute or involved in litigation and arbitration;
There are clear signs indicating the debtor is unlikely to fulfill the repayment obligations of the
receivables, etc.
Apart from the financial asset to be assessed for credit risk separately, the company divides the
financial assets into different group based on common characteristics of risk and assesses the risk
based on the portfolio.
Based on the acceptor credit risk of notes receivable as the common risk characteristics, it is
divided into different categories and determined for expected credit loss accounting estimate
policy.
Portfolio category Expected credit loss accounting estimate policy
Bank acceptance note portfolio Lower credit risk assessed by the management
Commercial acceptance note Same as receivables and provided for excepted credit loss
portfolio allowance
Referring to the experience of historical credit losses, the company prepares a table comparing the
aging of notes receivable with the fixed reserve rate to calculate the expected credit losses on this
basis.
Aging Provision ratio
Within 1 year 6.79%
1 year-2 years 15.34%
2 yeasr-3 years 29.07%
3 years－4 years 46.81%
4 years－5years 72.92%
Over 5 years 100.00%
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
The Company prepares the comparison table between receivables aging and expected credit loss
rate within lifetime and work out the expected credit loss by reference to historical credit loss
experience in combination with current situation and future forecast of economy condition.
The company shall measure expected credit losses of a financial instrument in a way that reflects:
an unbiased and probabilityweighted amount that is determined by evaluating a range of possible
outcomes; The time value of money; and reasonable and supportable information that is available
without undue cost or effort at the reporting date about past events, current conditions and
forecasts of future economic conditions.
The company prepares the comparison table between receivables aging and fixed provision rate
and work out the expected credit loss by reference to historical credit loss experience.
On the balance sheet date, expected credit loss of receivable shall be calculated. If the expected
credit loss is larger than the book value of the provision of receivable impairment, the difference
shall be recognized as receivable impairment loss, debit to “credit impairment loss”, credit to
“provision for bad debt”. Alternatively, the difference is recognized as impairment gain and
reversed journal entry shall be made.
Actually incurred credit loss shall be debit to “provision for bad debt”, credit to “notes receivable”,
based on the approved amount to be written off as it is assured as uncollectible receivable. If the
amount to be written off is bigger than the provision for impairment loss, the difference is debit to
“credit impairment loss”.
12. Accounts receivable
(1) Recognition of provision for impairment
On the basis of expected credit loss, the company always measures the loss allowance at an
amount equal to lifetime expected credit losses for trade receivables which do not contain a
significant financing component and are generated in accordance with Revenue Standard- No 14
of Accounting Standard for Business Enterprise. For trade receivables which do contain a
significant financing component, the company chooses as its accounting policy to measure the
loss allowance at an amount equal to lifetime expected credit loss es.
(2) Expected credit loss risk portfolio assessment method based on portfolio
The company separately assesses the credit risk of financial assets which have significantly
different the credit risk, such as receivable with dispute or involved in litigat ion and arbitration;
There are clear signs indicating the debtor is unlikely to fulfill the repayment obligations of the
receivables, etc.
Apart from the financial asset to be assessed for credit risk separately, the company divides the
financial assets into different group based on common characteristics of risk and assesses the risk
based on the portfolio.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Apart from the trade receivables and other receivables to be assessed for credit risk separately,
based on the counterparty as the common risk characteristics, it is divided into different categories
and determined for expected credit loss accounting estimate policy.
Portfolio category Expected credit loss accounting estimate policy
Related parties portfolio within the
Lower credit risk assessed by the management
consolidation
Other related parties and non-related
Provided for excepted credit loss allowance
parties portfolio
Referring to the experience of historical credit losses, the company prepares a table comparing the
aging of accounts receivable with the fixed reserve rate to calculate the expected credit losses on
this basis.
Aging Provision ratio
Within 1 year 6.79%
1 year-2 years 15.34%
2 yeasr-3 years 29.07%
3 years－4 years 46.81%
4 years－5years 72.92%
Over 5 years 100.00%
On the balance sheet date, expected credit loss of receivable shall be calculated. If the expected
credit loss is larger than the book value of the provision of receivable impairment, the difference
shall be recognized as receivable impairment loss, debit to “credit impairment loss”, credit to
“provision for bad debt”. Alternatively, the difference is recognized as impairment gain and
reversed journal entry shall be made.
Actually incurred credit loss shall be debit to “provision for bad debt”, credit to
“receivable”,based on the approved amount to be written off as it is assured as uncollectible
receivable. If the amount to be written off is bigger than the provision for impairment loss, the
difference is debit to “credit impairment loss”
13.Other receivable
(1) Recognition of provision for impairment
On the basis of expected credit loss, the company always measures the loss allowance at an
amount equal to lifetime expected credit losses for trade receivables which do not contain a
significant financing component and are generated in accordance with Revenue Standard- No 14
of Accounting Standard for Business Enterprise. For trade receivables which do contain a
significant financing component, the company chooses as its accounting policy to measure the
loss allowance at an amount equal to lifetime expected credit losses.
(2) Expected credit loss risk portfolio assessment method based on portfolio
The company separately assesses the credit risk of financial assets which have significantly
different the credit risk, such as receivable with dispute or involved in litigation and arbitration;
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
There are clear signs indicating the debtor is unlikely to fulfill the repayment obligations of the
receivables, etc.
Apart from the financial asset to be assessed for credit risk separate ly, the company divides the
financial assets into different group based on common characteristics of risk and assesses the risk
based on the portfolio.
Apart from the trade receivables and other receivables to be assessed for credit risk separately,
based on the counterparty as the common risk characteristics, it is divided into different categories
and determined for expected credit loss accounting estimate policy.
Portfolio category Expected credit loss accounting estimate policy
Related parties portfolio within the
Lower credit risk assessed by the management
consolidation
Other related parties and non-related Same as receivables and provided for excepted credit loss
parties portfolio allowance
Referring to the experience of historical credit losses, the company prepares a table comparing the
aging of other receivable with the fixed reserve rate to calculate the expected credit losses on
this basis.
Aging Provision ratio
Within 1 year 3.35%
1 year-2 years 7.49%
2 yeasr-3 years 22.71%
3 years－4 years 43.35%
4 years－5years 66.59%
Over 5 years 100.00%
The company prepares the comparison table between receivables aging and expected credit loss
rate within lifetime and work out the expected credit loss by reference to historical credit loss
experience in combination with current situation and future forecast of economy condition.
The company shall measure expected credit losses of a financial instrument in a way that reflects:
an unbiased and probabilityweighted amount that is determined by evaluating a range of possible
outcomes; The time value of money; and reasonable and supportable information that is available
without undue cost or effort at the reporting date about past events, current conditions and
forecasts of future economic conditions.
The company prepares the comparison table between receivables aging and fixed provision rate
and work out the expected credit loss by reference to historical credit loss experience.
On the balance sheet date, expected credit loss of receivable shall be calculated. If the expected
credit loss is larger than the book value of the provision of receivable impairment, the difference
shall be recognized as receivable impairment loss, debit to “credit impairment loss”, credit to
“provision for bad debt”. Alternatively, the difference is recognized as impairment gain and
reversed journal entry shall be made.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Actually incurred credit loss shall be debit to “provision for bad debt”, credit to “notes receivable”,
“receivable”, “other receivable” based on the approved amount to be written off as it is assured as
uncollectible receivable. If the amount to be written off is bigger than the provision for
impairment loss, the difference is debit to “credit impairment loss”
14. Inventories
Inventories are materials purchasing, raw material, variance of cost materials, low-valuable
consumable, materials processed on commission, working-in-progress, semi-finished goods,
variance of semi-finished goods, and finished goods, engineering construction etc.
The inventories are processed on perpetual inventory system, and are measured at their actual
cost on acquisition. Weighted average cost method is taken for measuring the inventory
dispatched or used. Low value consumables and packaging materials is recognized in the income
statement by one-off method.
After yearend thorough inventory check, at the balance sheet date inventory impairment should be
provided or adjusted according to inventory category. For the finished goods, raw material held
for sale etc which shall be sold directly, the net realizable value should be confirmed at the
estimated selling price less estimated selling expenses and related tax and expenses. The raw
material held for production, its realizable value should be confirmed at the estimated selling price
of finished goods less estimated cost of completion, estimated selling expenses and related tax.
The net realizable value of inventories held for execution of sale contracts or labor contracts shall
be calculated based on the contract price. If the quantities of inventories in the Group are more
than quantities if inventories subscribed in the sales contracts, the net realizable value of the
excessive part of the inventories should be calculated based on the general selling price. When the
impairment indicators disappear, impairment provision shall be reversed and
15. Contract assets
Contract assets are the rights of the Company to receive consideration for the goods it has
transferred to the customer, and such rights are subject to factors other than the passage of time. If
the Company sells two clearly distinguishable goods to a customer and is entitled to receive
payment for the delivery of one of the goods, but the payment is contingent on the delivery of the
other goods, the Company regards the right to receive payment as a contract asset.
The method for determining the expected credit loss of the contract assets shall refer to the
description of notes receivable and accounts receivable in notes 11 and 12 above.
Accounting method: the Company calculates the expected credit loss of the contract assets on the
balance sheet date. If the expected credit loss is greater than the carrying amount of the current
contract assets impairment provision, the Company will recognize the difference as an impairment
loss and debit "credit impairment loss" and credit "Contract assets impairment provision". On the
contrary, the Company recognizes the difference as impairment gain and makes opposite
accounting records.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
If the Company actually suffers a credit loss and determines that the relevant contract assets
cannot be recalled, and the write-off is approved, the Company shall debit "impairment provisions
of contract assets" and credit "contract assets" according to the approved amount of write-off. If
the amount of write-off is greater than the allowance for loss accrued, the difference shall be
debited as "credit impairment loss".
16. Contract Cost
(1) The method for determining the amount of assets related to the contract cost
The Company's assets related to contract cost include contract performance cost and contract
acquisition cost.
Contract performance cost, that is, the cost of the Company to the contract, do not belong to other
accounting standards for enterprises the scope of the specification, and satisfy the followin g
conditions at the same time, as the performance contract cost recognized as an asset: the cost and
a current or expected is directly related to the contract, including direct materials, direct labor,
manufacturing cost (or similar fee), specific cost borne by the customer and only other cost arisin g
from this contract; this cost increases the Company's future resources for performance obligations;
the cost is expected to be recovered.
Contract acquisition cost, that is, the incremental cost incurred by the Company to acquire the
contract is expected to be recovered, shall be recognized as an asset as the contract acquisition
cost; if the amortization period of the asset does not exceed one year, it shall be recorded into the
current profit and loss at the time of occurrence. Incremental cost is cost (such as sales
commissions, etc.) that the Company would not incur without obtaining a contract. Expenses
incurred by the Company for the acquisition of the contract, in addition to the incremental cost
expected to be recovered (such as travel expenses incurred whether the contract is acquired or not,
etc.), shall be recorded into the current profit and loss when incurred, except those clearly borne
by the customer.
(2) Amortization of assets related to contract cost
The assets related to the contract cost of the Company shall be amortized on the same basis as the
commodity income recognition related to the assets and shall be recorded into the current profit
and loss.
(3) Impairment of assets related to the contract cost
When determining the impairment loss of assets related to the contract cost, the Company shall
first determine the impairment loss of other assets related to the contract recognized in accordance
with accounting standards for other relevant enterprises. If the carrying value is higher than the
residual consideration expected to be obtained by the Company due to the transfer of the
commodity related to the asset and the estimated cost to be incurred for the transfer of the
commodity, the excess part shall be set aside for impairment loss and recognized as an asset
impairment loss.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
If the foregoing difference is higher than the carrying amount of the asset, the carrying amount of
the asset shall be converted back to the original provision for impairment of the asset and recorded
into the current profit and loss. However, the carrying amount of the asset after conversion shall
not exceed the carrying amount of the asset under the circumstance of no provision for
impairment of the asset.
17. 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 grou p) 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
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 recogn ized in the income statement for
the period. Any impairment from the period when the assets are not classified as held for sale can
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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 disposa l 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 follow ing 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.
18. Long-term equity investment
Long term equity investments are the investment in subsidiary, in associated company and in joint
venture.
Joint control is the contractual agreement sharing of control over an economic activity by all
participants or participants’ combination and decisions or policies relating to the operating activity
of the entity require the unanimous consent of the parties sharing the control.
Significant influence exists when the entity directly or indirectly owned 20% or more but less than
50% shares with voting rights in the investee company. If holding less than 20% voting rights, the
entity shall also take other facts or circumstances into accounts when judging any significant
influences. Factors and circumstances include: representation on the board of directors or
equivalent governing body of the investee, participation in financial or operating activities
policy-making processes, material transactions between the investor and the investee, interchange
of managerial personnel or provision of essential technical information.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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
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.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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
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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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.
19. 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%
20. 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:
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.
Finance lease shall be recognized when one of the conditions are met, (1) the ownership of the
asset belongs to the company when the lease term is due , (2) the company has the option to buy
the asset and buy price is far lower than the fair value when exercising the option. (3) lease term is
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
most of the asset life (4) no significant difference between the present value of minimum lease
premium and fair value on the lease commencement date.
On commencement date, leased asset shall be recognized at the lower of fair value and the PV of
minimum lease payment, long term payable shall be recognized at the minimum lease payment
and the difference is unrecognized financing expense.
The depreciation policy of the leased fixed assets shall be consistent with that of the self-owned
fixed assets. If the ownership of asset can be reliably acquired by the lease term due date, leased
asset shall be depreciated through the expected service life, otherwise, it shall be depreciated
within the lower of the lease term and expected service life of the asset.
21. 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.
22. 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.
23. Intangible assets
The intangible assets of the Group refer to land use right and software. For acquired intangible
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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.
24. 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.
25. Long-term deferred expenses
Long-term deferred expenses of the Group refer to leasing expenses, redecoration expense and
others. The expenses should be amortized evenly over the beneficial period. If the deferred
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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.
26. Contract liabilities
Contract liabilities reflect the Company's obligation to transfer the goods to the customer on
consideration received or receivable from the customer. Where the customer has paid the contract
consideration or the Company has obtained the right to receive the contract consideration
unconditionally before the transfer of the goods to the customer, the liability of the contract shall be
recognized in accordance with the amount received or receivable at the earlier point between the
actual payment made by the customer and the due payment.
27. 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.
36
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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.
28. Contingent liabilities
When the Company has transactions such as commitment to externals, discounting the trade
acceptance, unsettled litigation or arbitration which meets the following criterion, provision
should be recognized: It is the Company's present obligation; carrying out the obligation will
probably cause the Company's economic benefit outflow; the obligation can be reliably measured.
Provision is originally measured on the best estimate of outflow for paying off the present
obligations, and to consider the risk, uncertainty, time value of monetary relevant to contingent
items. If the time value of monetary is significant, the best estimate will be determined by
discounted cash outflow in the future. At each balance sheet date, the book value of provision is
reviewed and adjustment will be made on the book value if there is any change, in order to reflect
the current best estimate.
When compensation from the 3rd party is expected for full or partial contingent liability
settlement, the compensation shall be recognized as an asset separately and measured at no more
than the book value of contingent liability.
29. 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.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
30.Revenue
The revenue of the Company is mainly from sales of complete sets of equipment, engineering
installation.
The Company has performed the performance obligations in the contract, that is, when the
customer obtains the control right of the relevant goods or services, the revenue is recognized.
If the contract contains two or more performance obligations, the Company shall, at the beginning
of the contract, allocate the transaction price to each individual performance obligation according
to the relative proportion of the individual selling price of the commodities or services committed
by each individual performance obligation, and measure the income according to the transaction
price allocated to each individual performance obligation.
The transaction price is the amount of consideration to which the Company is expected to be
entitled as a result of the transfer of goods or services to the customer, excluding payments
received on behalf of third parties. The trading price recognized by the Company shall not exceed
the amount of accumulated recognized revenue that is highly unlikely to be materially reversed
when the relevant uncertainties are eliminated. Refunds to customers are expected to be excluded
from the transaction price as liabilities. Where there is a significant financing element in the
contract, the Company shall determine the transaction price based on the amount payable by the
assumed customer in cash upon acquisition of control over the goods or services. The difference
between the transaction price and the contract consideration shall be amortized over the term of
the contract using the effective interest rate method. On the commencement date of the contract,
the Company expects that the interval between the customer's acquisition of control of the goods
or services and the customer's payment shall not exceed one year, regardless of the significant
financing element existing in the contract.
If one of the following conditions is met, the Company shall perform its performance obligations
within a certain period of time; otherwise, the performance obligation shall be performed at a
certain point:
(1) When the customer performs the performance of the Company, it will obtain and consume the
economic benefits brought by the performance of the Company.
(2) The customer can control the commodities under construction during the performance of the
Company.
(3) The commodities produced by the Company during the performance of the contract shall have
irreplaceable uses, and the Company shall have the right to receive payment for the accumulated
performance part which has been completed so far during the entire contract period.
For the performance obligations performed within a certain period of time, the Company shall
recognize the income according to the performance progress within that period. If the performance
schedule cannot be reasonably determined and the Company is expected to be compensated for
the costs incurred, the revenue shall be recognized according to the amount of the cost incurred
38
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
until the performance schedule can be reasonably determined.
For performance obligations performed at a certain point, the Company recognizes revenue at the
point when the customer acquires control over the relevant goods or services. In determining
whether the customer has acquired control over the goods or services, the Company considers the
following indications:
(1). The Company shall have the right to receive the present payment for the goods or services.
(2) The Company has transferred the legal ownership of the goods to the customer.
(3) The Company has transferred the physical goods to the customer.
(4) The Company has transferred to the customer the major risks and rewards in the ownership of
the goods.
(5) The customer has accepted the goods or services, etc.
The Company determines whether it is the principal responsible person or the agent at the time of
the transaction based on whether it has control over the commodity before transferring it to the
customer. If the Company is able to control the commodity before transferring the commodity to
the customer, the Company shall be the main person responsible and shall recognize the income
according to the total amount received or the consideration; otherwise, the Company shall
recognize the income according to the amount of the commission or handling charge to be entitled
to be collected, which shall be the net amount after the total amount of consideration received or
receivable is deducted from the price paid to other relevant parties, or determined according to the
proportion of the established commission amount. The circumstances under which the Company
judges that it can control the goods before transferring them to the customer include:
(1) The Company shall transfer the control right of commodities or other assets to the customer
after the third party obtains the control right.
(2) The Company can lead a third party to provide services to customers on behalf of the
Company.
(3) After the Company acquires the control of the commodity by a third party, it transfers the
commodity to the customer by integrating it with other products into a group of outputs by
providing significant services.
In the specific determination of the ownership of a commodity prior to its transfer to a customer, it
is not limited to the legal form of the contract, but takes into account all relevant facts and
circumstances, including:
(1) The Company undertakes the main responsibility of transferring the goods to the customers.
(2) The Company shall bear the inventory risk of the goods before or after the transfer of the
goods.
(3) The Company shall have the right to determine the prices of the commodities to be traded.
39
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
(4) Other relevant facts and circumstances.
The Company's right to receive consideration for the goods or services it has transferred to the
customer (and such right is subject to factors other than the passage of time) is shown as a contract
asset, and the impairment of the contract asset is calculated on the basis of the expected credit loss.
The Company has the right to collect the consideration unconditionally from the customer as an
account receivable. The obligation of the Company to transfer the goods or services to the
customer upon receipt of the consideration receivable by the customer is shown as a contract
liability.
31. Government grants
A government grant shall be recognized when the Company complies with the conditions
attaching to the grant and when the Company is able to receive the grant.
Assets-related government grant is the government fund obtained by the Company for the
purpose of long-term assets purchase and construction or establishment in the other forms.
Income-related grants are the grant given by the government apart from the assets-related grants.
If no grant objective indicated clearly in the government documents, the Company shall judge it
according to the principle mentioned above.
Where a government grant is in the form of a transfer of monetary asset, it is measured at the
amount received. Where a government grant is made on the basis of fixed amount or conclusive
evidence indicates relevant conditions for financial support are met and expect to probably
receive the fund, it is measured at the amount receivable. Where a government grant is in the
form of a transfer of non-monetary asset, it is measured at fair value. If fair value cannot be
determined reliably, it is measured at a nominal amount of RMB1 Yuan.
Assets-related government grants are recognized as deferred income ore directly offsetting the
book value of the asset, and Assets-related government grants recognized as deferred income
shall be evenly amortized to profit or loss over the useful life of the related asset.
Any assets are sold, transferred, disposed off or impaired earlier than their useful life expired
date, the remaining balance of deferred income which hasn’t been allocated shall be carried
forward to the income statement when the assets are disposed off.
Income-related government grants that is a compensation for related expenses or losses to be
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:
40
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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.
32. Deferred tax assets and deferred tax liabilities
The deferred income tax assets or the deferred income tax liabilities should be recognized
according to the differences (temporary difference) between the carrying amount of the assets or
liabilities and its tax base. Deferred tax assets shall be respectively recognized for deductible tax
losses that can be carried forward in accordance with tax law requirements for deduction of
taxable income in subsequent years. No deferred tax liabilities shall be recognized for any
temporary difference arising from goodwill initially recognition. No deferred tax assets or
liabilities shall be recognized for any difference arising from assets or liabilities initial recognition
on non-business combination with no effect on either accounting profit or taxable profit (or
deductible tax loss). At the balance sheet date, deferred tax assets and deferred tax liabilities are
measured at the tax rates that are expected to apply to the period when the asset is realized or
liability is settled.
Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be
available to offset the deductible temporary difference, deductible loss and tax reduction.
33.Lease
The Company’s leasing business includes operating lease and financing lease.
As an operating lease lessee and lesser, the lease premium shall be recognized in the cost of asset
based on straight line method within the period or directly to income statement.
As a financing lease lessee, the lower of the fair value of leased assets and the present value of the
minimum lease payments is recognized as the leased asset, the minimum lease payments are
recognized as the long-term payables, and the difference is recognized as unrecognized finance
expense at the inception of the lease. The company shall adopt the effective interest method to
amortize and record as the financial costs during the assets lease term.
34. 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
41
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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 rela tive tax from the estimated selling
price. When actual selling price or cost differs from the previous estimates, management will
make adjustment on NRV. Therefore, the results based on the present experience may differ from
the actual results, which caused the adjustment on the carrying amount of inventory in the book.
Provision for inventory impairment may vary with the above reasons. Any adjustment on
provision for inventory impairment will affect the income statement.
（3） Provision of goodwill impairment
Each year, goodwill shall be assessed for any impairment. Recoverable amount of assets group
or asset portfolio including goodwill shall be the present value of future cash flow, which needs
estimates for calculation.
If management adjust the gross profit margin adopted by the present value of future cash flow
calculation of assets group or asset portfolio, adjusted gross profit margin is lower than the margin
applied, the impairment is required.
If management adjust the discounting rate before tax applied by the present value of future cash
flow calculation of assets group or asset portfolio, adjusted discounting rate before tax is higher
than the rate applied, the impairment is required.
If actual profit margin or discounting rate before tax is higher or lo wer 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
42
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
applied, the impairment is required.
If management adjust the discounting rate before tax applied by the present value of future cash
flow calculation of assets group or asset portfolio, adjusted discounting rate before tax is higher
than the rate applied, the impairment is required.
If actual profit margin or discounting rate before tax is higher or lower than management’s
estimate, any impairment recognized before can not be reversed.
（5） Recognition of deferred tax assets
Estimate on deferred tax assets needs making estimation of taxable income and applied tax rate in
the following years in future. Whether deferred tax asset can be realized depends on the enough
probable taxable profit obtained in future. Tax rate change in future and the timing of temporary
difference reverse may also affect the income tax expense(income)and the balance of deferred tax.
Any change of estimate described here will cause the deferred tax adjustment.
（6） Useful life span of fixed assets and intangible assets
At least every year end, the management shall review the useful life of FA and intangible assets.
Expected useful life is based on the management’s experience on the same class of assets, with
reference to the estimate applied in the industry in conjunction with expected technology
development. When previous estimate significantly changed, depreciation and amortization in the
future shall be adjusted accordingly.
35. Changes in Accounting Policies, Accounting Estimates
The Ministry of Finance issued on July 5, 2017 about revision issued by the accounting standards
for enterprises no. 14 - revenue income guidelines (hereinafter generally referred to as the
"income guidelines"), in domestic and at the same time, listed companies and listed overseas and
adopted international financial reporting standards or companies prepare financial statements on
the accounting standard for business enterprises, effective as of January 1, 2018; Other domestic
listed enterprises shall enter into force as of January 1, 2020; Non-listed enterprises that
implement the accounting standards for Business Enterprises shall enter into force as of January 1,
2021. In accordance with the above requirements, the Company will implement the relevant
guidelines as of January 1, 2020.
New Income Standards for the First Implementation Relevant to Financial Statements at the
Beginning of the Year
Consolidated balance sheet
Item 31-Dec-2019 1-Jan-2020 The amount of
adjustment
Notes receivable
Accounts receivable 1,030,342,541.88 1,008,380,111.23 -21,962,430.65
Contract assets 21,962,430.65 +21,962,430.65
Deferred income tax assets
Accounts received in advance 160,571,622.53 -160,571,622.53
43
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Contract liabilities 160,571,622.53 +160,571,622.53
Balance sheet of parent company
Item 31-Dec-2019 1-Jan-2020 The amount of
adjustment
Notes receivable
Accounts receivable 526,554,114.61 525,838,172.89 -715,941.72
Contract assets 715,941.72 +715,941.72
Deferred income tax assets
Accounts received in advance 47,114,426.48 -47,114,426.48
Contract liabilities 47,114,426.48 +47,114,426.48
Changes in accounting estimate
None
IV. Taxation
1. The main applicable tax and rate to the Group as follows:
Tax Tax base Tax rate
Value-added tax Sales revenue or Purchase 6%、9%、10%、13%、16%
(VAT)
City construction Value-added tax payables 7%
tax
Education surcharge Value-added tax payables 3%
Local education Value-added tax payables 2%
surcharge
Enterprise income Current period taxable profit 15% or 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
Bingshan Refrigeration & Heat Transfer Technologies Co.,Ltd 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%
44
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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
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
45
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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 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 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
The following disclosure date on this financial statement without special indication, “opening”
refers to January 1, 2020; “closing” refers to June 30, 2020; “current period” refers to the period
from January 1, 2020 to June 30, 2020; and “last period” refers to the period from January 1, 2019
to June 30, 2019; with the currency unit RMB.
1. Cash and cash in bank
Item Closing Balance Opening Balance
Cash on hand 106,840.56 92,096.63
Cash in bank 268,783,147.06 301,435,257.93
Other cash and cash equivalents 9,266,488.54 30,591,791.66
Total 278,156,476.16 332,119,146.22
Note: Other cash and cash equivalents is restricted, including deposit for bank acceptance notes of
6,636,005.82 Yuan,deposit to creditor of 69,000.00 Yuan,guarantee deposit of 2,561,482.72 Yuan, total of
9,266,488.54 Yuan.
2. Notes receivable
(1) Category of notes receivable
Items Closing Balance Opening Balance
Bank acceptance notes 59,963,498.75 71,184,057.96
Commercial acceptance notes 1,012,237.74 48,763,268.45
Total 60,975,736.49 119,947,326.41
Categories according to bad debts provision
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debts
61,049,474.22 100.00% 73,737.73 0.12% 60,975,736.49
provision based on
46
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
group
Including: bank
59,963,498.75 98.34% 59,963,498.75
acceptance notes
Trade acceptance
1,085,975.47 1.69% 73,737.73 6.79% 1,012,237.74
notes
Total 61,049,474.22 100.00% 73,737.73 0.12% 60,975,736.49
(Continued)
Opening balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debts
provision based on 123,500,123.97 100.00% 3,552,797.56 2.88% 119,947,326.41
group
Including: bank
71,184,057.96 57.64% 71,184,057.96
acceptance notes
Trade acceptance
52,316,066.01 42.36% 3,552,797.56 6.79% 48,763,268.45
notes
Total 123,500,123.97 100.00% 3,552,797.56 2.88% 119,947,326.41
Categories based on group
Closing Balance
Items
Booking balance Provision Provision（%）
Trade acceptance notes 1,085,975.47 73,737.73 6.79
Total 1,085,975.47 73,737.73 6.79
(2) Provision for bad debts for the current period:
Opening Change during the year Closing
Category
balance Accrued Collected/reversed Written-off Balance
Trade
acceptance 3,552,797.56 438,988.01 3,918,047.84 73,737.73
notes
Total 3,552,797.56 438,988.01 3,918,047.84 73,737.73
(3) Notes receivable endorsed or discounted but not mature at the end of year:
Item Closing amount no more Closing amount still
recognized recognized
Bank acceptance notes 197,699,977.38
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Item Closing amount no more Closing amount still
recognized recognized
Total 197,699,977.38
3. Accounts receivable
(1) Category of accounts receivable
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Accounts
receivable with
significant
50,985,562.10 3.66% 15,614,746.06 30.63% 35,370,816.04
individual amount
and separate bad
debt provision
Accounts
receivable with bad
1,340,314,231.72 96.34% 271,880,578.57 20.28% 1,068,433,653.15
debt provision
based on the group
Including: aging as
characteristics of 1,340,314,231.72 96.34% 271,880,578.57 20.28% 1,068,433,653.15
credit risk
Total 1,391,299,793.82 100.00% 287,495,324.63 20.66% 1,103,804,469.19
Opening balance
Items Booking balance Provision
Booking value
Amount % Amount %
Accounts
receivable with
significant
51,480,562.10 3.97% 12,628,091.85 27.05% 38,852,470.25
individual amount
and separate bad
debt provision
Accounts
receivable with bad
1,244,625,041.06 96.03% 275,097,400.08 22.10% 969,527,640.98
debt provision
based on the group
Including: aging as 1,244,625,041.06 96.03% 275,097,400.08 22.10% 969,527,640.98
48
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
characteristics of
credit risk
Total 1,296,105,603.16 100.00% 287,725,491.93 22.20% 1,008,380,111.23
Accounts receivable with significant individual amount and separate bad debt provision :
Closing Balance
Items Reasons for
Booking balance Provision % the provision
Accounts receivable with significant
Difficulty in
individual amount and separate bad debt 50,985,562.10 15,614,746.06 30.63
recouped
provision
Total 50,985,562.10 15,614,746.06 -- --
Accounts receivable with bad debt provision based on the group :
Closing Balance
Items
Booking balance Provision %
within 1 year 700,318,861.85 47,551,650.72 6.79%
1-2 years 286,565,692.33 43,959,177.20 15.34%
2-3 years 185,647,956.24 53,967,860.88 29.07%
3-4 years 54,975,136.64 25,733,861.46 46.81%
4-5 years 44,824,801.87 32,686,245.52 72.92%
more than 5 years 67,981,782.79 67,981,782.79 100.00%
Total 1,340,314,231.72 271,880,578.57 --
Accounts receivable with the bad debt provisions under accounting aging analysis method
Aging Closing Balance
Within1 year 700,318,861.85
11to 2 years 286,565,692.33
22 to 3 years 185,647,956.24
More than 3 years 218,767,283.40
3 to 4 years 54,975,136.64
4 to 5 years 95,810,363.97
More than 5 years 67,981,782.79
Total 1,391,299,793.82
2) Bad debt provision accrued and written-off (withdraw)
Opening Change during the period Closing
Category
balance Accrued Collected/reversed Written-off Balance
Bad debt
287,725,491.93 10,086,373.98 10,000.00 10,326,541.28 287,495,324.63
provision
Total 287,725,491.93 10,086,373.98 10,000.00 10,326,541.28 287,495,324.63
3) Accounts receivable written off in current period
Item Written off amount
Receivable actually written off 10,326,541.28
49
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
The amount of account receivable written off in the current period is RMB 10,326,541.28, and the
bad debt provision has been withdrawn RMB 9,375,298.26, and the amount affecting the profit in
2020 is RMB 951,243.02.
4) The top five significant accounts receivable categorized by debtors
Closing % of the Closing Balance
Company
Balance total AR of Provision
Zhejiang Wankai New Materials Co.,Ltd 50,985,562.10 3.64% 15,614,746.06
Xinyi Yuanda construction and Installation
32,748,744.00 2.35% 17,167,304.59
Engineering Co., Ltd.
Panasonic Appliances Cold-Chain (Dalian) Co., Ltd. 31,658,836.68 2.28% 2,149,635.01
Shenzhen Zhaofude Tourism development 24,749,430.13 1.78% 7,194,659.34
Xiangyang Tongjitang Logistic 23,150,000.00 1.66% 3,551,210.00
Total 163,292,572.91 11.71%
4. Accounts paid in advance
(1) Aging of accounts paid in advance
Closing Balance Opening Balance
Items
Amount Percentage Amount Percentage
Within 1 year 116,719,429.98 75.55% 112,706,836.54 78.93%
1 to 2 years 10,014,184.30 6.48% 17,090,076.33 11.97%
2 to 3 years 20,656,290.68 13.37% 4,786,466.74 3.35%
Over 3 years 7,110,538.04 4.60% 8,203,148.96 5.75%
Total 154,500,443.00 142,786,528.57
Significant prepayment over 1 year
Closing Unsettled Reasons
Company Aging
Balance
Dalian Hengtong Refrigeration Equipment 5,720,000.00 1-2 years
Contract is not fully implemented
engineering Co., Ltd 2-3 years
Shanghai POMA Automation Equipment Co.,ltd 4-5 years Contract is not fully implemented
4,272,900.00
Dalian Shengda Construction Engineering Co. LTD 1-2 years Contract is not fully implemented
2,875,228.35
Yunnan Xinneng Technology Co., Ltd 1-2 years Contract is not fully implemented
2,020,380.50
Dalian Jingdian Steel Work Co., Ltd 2-3years Contract is not fully implemented
1,313,924.02
Total 16,202,432.87 — —
(2) The top five significant accounts paid in advance categorized by debtors
50
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
% of the total
Closing
Company Aging advances to
Balance
suppliers
Dalian Shentong Electric Co., Ltd. 9,508,361.15 Within 1 year 6.15
DalianHeng Tong refrigeration Equipment Egineering 1-2 years; 2-3
5,720,000.00 3.70
Co. LTD years
Shanghai POMA Automation Equipment Co.,ltd 4,272,900.00 4-5 years 2.77
Anhui Songze Energy Co. LTD 4,000,000.00 Within 1 year 2.59
Yunnan Xinneng Technology Co., Ltd 2,716,733.26 Within 1 year 1.76
Total 26,217,994.41 16.97
5. Other receivables
Items Closing Balance Opening Balance
Interest receivable 348,833.33 583,833.33
Dividend receivable 42,152,903.12 33,450.00
Other receivable 45,231,318.20 38,113,945.24
Total 87,733,054.65 38,731,228.57
(1) Interest receivable
Items Closing Balance Opening Balance
Interest on Term deposits 348,833.33 583,833.33
Total 348,833.33 583,833.33
(2). Dividends receivable
Company Closing Opening Balance
Balance
Wuhan Steel and Electricity Co., Ltd. 33,450.00
Panasonic Appliances Compressor (Dalian) Co. , Ltd. 36,026,000.00
Guotai Junan Securities Co., Ltd. 6,126,903.12
Total 42,152,903.12 33,450.00
(3). Other receivables
1) Other receivables categorized by nature
Nature Closing Balance Opening Balance
Guarantee deposits 33,539,619.85 23,419,558.44
Petty cash 7,568,194.23 8,132,205.01
Receivables and Payables 10,532,968.99 13,757,372.35
Others 1,603,962.41 225,649.71
Total 53,244,745.48 45,534,785.51
2) Provision for bad debts
51
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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, 2020 7,420,840.27 7,420,840.27
The balance of January 1, 2020 in
—— —— —— ——
the current period
Provision for bad debts 592,587.01 592,587.01
Balance on June 30, 2020 8,013,427.28 8,013,427.28
Other receivables accrued the bad debt provisions under accounting aging analysis method
Aging Closing Balance
Within 1 year 31,604,557.17
1-2 years 8,547,197.14
2-3 years 4,600,092.98
Over 3 years 8,492,898.19
3-4 years 4,579,901.18
4-5 years 1,881,400.00
Over 5 years 2,031,597.01
Total 53,244,745.48
3) Provision for bad debt
Opening Change during the year Closing
Category
balance Accrued Collected/reversed Written-off Balance
Bad debt
7,420,840.27 592,587.01 8,013,427.28
provision
Total 7,420,840.27 592,587.01 8,013,427.28
4) Other receivables from the top 5 debtors
% of
Closing Closing Balance
Name Category Aging the total
Balance of Provision
OR
State Taxation Administration Dalian Export tax
5,408,818.28 Within 1 year 10.16 181,195.41
Shahekou District Bureau refund
Agriculture Bureau of Moyu County Deposit 2,049,000.00 2-3 years 3.85 465,327.90
Huangmei Kanghong Ecological Agriculture
Deposit 2,279,000.00 1-2 years 4.28 170,697.10
Development Co., Ltd.
Dalian Huali 1,650,000.00 3.10 715,275.00
Coating Equipment Co., Ltd Deposit 3-4 years
Dalian Delta HK& China Gas Co.,Ltd Deposit 1,100,000.00 Within 1 year 2.07 36,850.00
Total 12,486,818.28 23.45 1,569,345.41
6. Inventories
(1) Categories of inventories
52
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Closing Balance
Item
Book value Provision for decline Net book value
Raw materials 112,475,735.09 1,089,032.88 111,386,702.21
Working in progress 104,046,721.36 104,046,721.36
Finished goods 258,332,640.04 50,000.00 258,282,640.04
Low-value consumable 150,998.50 150,998.50
Self-manufactured
34,848,590.82 0.00 34,848,590.82
semi-finished products
Materials on consignment
914,331.28 914,331.28
for further processing
Completed constructing
100,391,186.03 1,200,000.00 99,191,186.03
projects not settled
Total 611,160,203.12 2,339,032.88 608,821,170.24
(Continue)
Opening Balance
Item
Book value Provision for decline Net book value
Raw materials 99,955,218.42 1,089,032.88 98,866,185.54
Working in progress 101,259,171.98 101,259,171.98
Finished goods 225,850,272.78 50,000.00 225,800,272.78
Low-value consumable 137,722.99 137,722.99
Self-manufactured
26,595,183.32 0.00 26,595,183.32
semi-finished products
Materials on
consignment for further 2,505,829.92 2,505,829.92
processing
Completed constructing
85,532,846.86 1,200,000.00 84,332,846.86
projects not settled
Total 541,836,246.27 2,339,032.88 539,497,213.39
(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 1,089,032.88 1,089,032.88
Finished goods 50,000.00 50,000.00
Completed constructing
1,200,000.00 1,200,000.00
projects not settled
Total 2,339,032.88 2,339,032.88
(3) Accrual for provision for decline in the value of inventories
Basis for net realizable
Item Reasons for reverse/write-off
value recognition
Raw materials Lower of cost and NRV
53
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Finished goods Lower of cost and NRV
Completed constructing projects unsettled Lower of cost and NRV
7. Contract assets
Closing Balance Opening Balance
Item Provision for Net book Provision for Net book
Book value Book value
decline value decline value
Contract assets 102,887,603.42 8,441,885.81 94,445,717.61 23,562,311.61 1,599,880.96 21,962,430.65
Total 102,887,603.42 8,441,885.81 94,445,717.61 23,562,311.61 1,599,880.96 21,962,430.65
The amount and reasons for significant changes in the book value of the contract assets during the
current period:
Item Changes in the amount reason
Contract assets 72,483,286.96 Newly signed contract
Total 72,483,286.96 ——
Provision for bad debt
Item Accrued Collected/reversed Written-off reason
Provision for impairment of contract assets 6,842,004.85
Total 6,842,004.85 --
8. Other current assets
Item Closing Balance Opening Balance
Prepaid expenses 599,467.91 119,323.70
Prepaid income tax presented
739,817.03 926,962.16
at net amount after offsetting
VAT to be deducted 10,374,870.36 13,114,701.01
Prepaid turnover tax 11,143.58
Total 11,714,155.30 14,172,130.45
54
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
9.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
177,390,883.01 -7,151,886.71 3,400,000.00 166,838,996.30
and Refrigeration (Dalian) Co., Ltd.
Dalian Honjo Chemical Co., Ltd. 8,535,439.50 202,736.66 8,738,176.16
Panasonic Appliances Cold-Chain
267,179,066.77 -5,126,459.68 262,052,607.09
(Dalian) Co., Ltd.
Keihin-Grand Ocean Thermal
61,090,955.30 83,797.06 8,600,000.00 52,574,752.36
Technology (Dalian) Co., Ltd.
Panasonic Appliances Compressor
471,693,615.32 11,156,432.40 36,026,000.00 446,824,047.72
(Dalian) Co., Ltd.
MHI Bingshan Refrigeration (Dalian)
13,892,866.25 52,472.24 13,945,338.49
Co.,Ltd.
Beijing Huashang Bingshan
Refrigeration and Air-conditioning 1,537,672.84 -40,708.15 1,496,964.69
Machinery Co., Ltd.
Dalian Fuji Bingshan Vending Machine
193,109,792.45 -2,512,123.83 190,597,668.62
Co., Ltd.
Jiangsu JingXue Insulation Technology
185,385,615.80 5,010,588.30 190,396,204.10
Co.,Ltd
Dalian Fuji Bingshan Vending Machine
12,614,480.80 -1,069,983.28 11,544,497.52
Sales Co., Ltd
Wuhan Sikafu Power Control
5,266,277.34 -479,796.67 4,786,480.67
Equipment Co., Ltd
Panasonic Appliances Refrigerating
33,975,371.41 2,290,230.84 2,528,392.05 33,737,210.20
System (Dalian) Co., Ltd.
Dalian Bingshan Metal Technology
172,730,683.19 13,479,968.92 186,210,652.11
Co.,Ltd
Dalian Bingshan Group Management
57,778,289.16 920,905.89 58,699,195.05
and Consulting Co.,ltd
Total 1,662,181,009.14 16,816,173.99 50,554,392.05 1,628,442,791.08
55
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
10. Other non-current financial assets
Item Closing Balance Opening Balance
Measured as fair value method 284,146,396.67 303,469,706.51
Measured as cost method
Total 284,146,396.67 303,469,706.51
11. Investment property
Property&
Item Land-use-rights Total
Building
I. Initial Cost
1. Opening Balance 194,717,932.54 24,391,511.82 219,109,444.36
2. Increase
(1) Outsourcing
(2) Transferred from
Construction in progress
3. Decrease
(1) Disposal
(2)Transferred to other
4. Closing Balance 194,717,932.54 24,391,511.82 219,109,444.36
II. Accumulated Depreciation
1. Opening Balance 112,054,714.34 10,854,222.78 122,908,937.12
2. Increase 2,272,247.04 243,915.12 2,516,162.16
(1)Provision or amortization 2,272,247.04 243,915.12 2,516,162.16
(2) Transferred from
Construction in progress
3. Decrease
(1) Disposal
(2) Transferred to other
4. Closing Balance 114,326,961.38 11,098,137.90 125,425,099.28
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
1. Closing book value 80,390,971.16 13,293,373.92 93,684,345.08
2. Opening book value 82,663,218.20 13,537,289.04 96,200,507.24
56
Bingshan Refrigeration & Heat Transfer Technologies 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 2020 is RMB 4.0
million Yuan.
In 2019, The annual rent fee for 2020 is RMB 4.0 million Yuan. The Company signed rental contract with Dalian Bingshan
Wisdom Park Co., Ltd., and rent out the whole land and house of the Company’s old plant locating at No. 888, Southwest Road,
Shahekou District, Dalian to Dalian Bingshan Wisdom Park Co., Ltd., with rental land area of 167,165.61 square meters and housing
area of 105,652.43 square meters. The lease term is from April 1, 2017 to December 31, 2036. The annual rent fee for 2020 is RMB
8.646 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.
12. Fixed assets
Items Closing Book Value Opening Book Value
Fixed asset 957,684,403.68 992,435,172.94
Fixed asset clearance
Total 957,684,403.68 992,435,172.94
(1) Fixed assets detail
Property& Machinery Transportation Other
Item Equipment Total
buildings Equipment Equipment
I. Initial Cost
1. Opening Balance 719,373,101.53 745,999,413.09 16,020,380.97 68,985,144.10 1,550,378,039.69
2. Increase 54,455.45 7,019,358.99 1,258,849.55 803,331.45 9,135,995.44
(1) Purchase 54,455.45 6,968,916.51 1,258,849.55 803,331.45 9,085,552.96
(2) Transferred
from
50,442.48 50,442.48
construction-in-pro
gress
(3) Acquired from
business
combination
3. Decrease 12,538,935.87 2,149,231.20 2,645,924.52 17,334,091.59
(1) Disposal 12,538,935.87 2,149,231.20 2,645,924.52 17,334,091.59
(2) Transferred to
other
57
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Property& Machinery Transportation Other
Item Equipment Total
buildings Equipment Equipment
4. Closing Balance 719,427,556.98 740,479,836.21 15,129,999.32 67,142,551.03 1,542,179,943.54
II. Accumulated
Depreciation
1. Opening Balance 99,448,302.37 396,894,395.44 11,794,584.34 49,288,265.10 557,425,547.25
2. Increase 8,817,596.81 24,271,080.85 529,003.13 2,739,353.00 36,357,033.79
(1)Accrued 8,817,596.81 24,271,080.85 529,003.13 2,739,353.00 36,357,033.79
(2) Acquired from
business
combination
3. Decrease 0.00 6,229,153.66 1,664,925.95 1,910,281.07 9,804,360.68
(1) Disposal 0.00 6,229,153.66 1,664,925.95 1,910,281.07 9,804,360.68
(2) Transferred to
other
4. Closing Balance 108,265,899.18 414,936,322.63 10,658,661.52 50,117,337.03 583,978,220.36
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
611,161,657.80 325,026,194.08 4,471,337.80 17,025,214.00 957,684,403.68
value
2. Opening book
619,924,799.16 348,587,698.15 4,225,796.63 19,696,879.00 992,435,172.94
value
(2)The situation of fixed assets leased through finance lease
Item Initial Cost Accumulated Depreciation Impairment Reserve Book Value
Machinery
Equipment
2,527,482.76 469,126.14 2,058,356.62
13. Construction-in-progress
(1) Construction in progress details
Closing Balance Opening Balance
Item
Book Balance Provision Book Value Book Balance Provision Book Value
Buildings
14,866,010.00 14,866,010.00 14,866,010.00 14,866,010.00
reconstruction
Improvement 1,058,255.11 1,058,255.11 502,148.95 502,148.95
58
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Closing Balance Opening Balance
Item
Book Balance Provision Book Value Book Balance Provision Book Value
of machinery
Construction of
intelligent 12,203,165.20 12,203,165.20 12,161,571.62 12,161,571.62
software
Financing lease
8,838,326.42 8,838,326.42 8,755,326.23 8,755,326.23
item
Total 36,965,756.73 36,965,756.73 36,285,056.80 36,285,056.80
(2) Change in the significant construction in progress
Decrease
Closing
Name Opening Balance Increase Transfer to Other
Balance
fixed assets decrease
Improvement of 502,148.95 556,106.16 1,058,255.11
machinery
Construction of 12,161,571.62 401,612.39 360,018.81 12,203,165.20
intelligent software
Financing lease item 8,755,326.23 83,000.19 8,838,326.42
Total 21,419,046.80 1,040,718.74 360,018.81 22,099,746.73
(Continued)
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
Improvement of Self
3,490,428.31 30.32% 30.32%
machinery financing
Construction of
Self
intelligent 15,040,000.00 81.14% 81.14%
financing
software
Financing lease Self
15,020,000.00 58.85% 58.85%
item financing
Total 33,550,428.31 — —
14. 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 17,630,188.82 5,000,000.00 19,101,108.42 194,621,494.04
2. Increase 360,018.81 360,018.81
(1) Purchase 360,018.81 360,018.81
(2) Acquired from business
combination
59
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Land use Patent Non Patent
Item Others Total
right technology technology
(3)Transferred from
construction-in-progress
3. Decrease
(1) Disposal
4. Closing Balance 152,890,196.80 17,630,188.82 5,000,000.00 19,461,127.23 194,981,512.85
II.Accumulated
amortisation
1. Opening Balance 35,069,090.32 4,437,851.45 2,000,004.00 11,574,170.17 53,081,115.94
2. Increase 990,551.49 561,698.10 250,000.00 931,458.40 2,733,707.99
(1)Accrued 990,551.49 561,698.10 250,000.00 931,458.40 2,733,707.99
3. Decrease
(1) Disposal
4. Closing Balance 36,059,641.81 4,999,549.55 2,250,004.00 12,505,628.57 55,814,823.93
III. Impairment Reserve
1. Opening Balance
2. Increase
(1)Accrued
3. Decrease
(1) Disposal
4. Closing Balance
IV. Book Value
1. Closing book value 116,830,554.99 12,630,639.27 2,749,996.00 6,955,498.66 139,166,688.92
2. Opening book value 117,821,106.48 13,192,337.37 2,999,996.00 7,526,938.25 141,540,378.10
15. 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 Group
310,451.57 310,451.57
Engineering Co., Ltd.
Total 1,750,799.49 1,750,799.49
(2) Goodwill impairment provision
In the year 2015, the book value of equity investment of Dalian Niweisi Len gNuan Technology Co.,
60
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Ltd exceeds the fair value of the proportion of the acquired company’s identifiable net asset. The
difference between the book value of equity investment of 48, 287,589.78 Yuan and the identifiable
net asset’s fair value of Dalian Sanyo High-efficient Refrigeration System Co., Ltd of 46,847,241.86
Yuan on the acquisition date of July 31st 2015 is recognized as goodwill of 1,440,347.92 Yuan on
the group consolidated financial report at the end of the year.
In the year 2016, Dalian Bingshan Group Construction Co., Ltd purchases shares of Dalian Bingshan
Baoan Leisure Industry Co., Ltd and gains control. The transferred price is based on the net asset of
Dalian BingshanBaoan Leisure Industry Co., Ltd on June 30 th , 2016. Negotiated with Dalian
Bingshan Baoan Leisure Industry Co., Ltd’s shareholder Baoan 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 BingshanBaoan Leisure Industry Company’s identifiable
net asset is 5,049,096.85 Yuan on the purchasing day, therefore, goodwill is 310,451.57Yuan on the
purchasing date. Dalian Bingshan Group Construction Co., Ltd absorbed Dalian Bingshan Baoan
Leisure Industry Co., Ltd in 2019.
The book value of goodwill from business combination of Dalian Niweisi LengNuan Technology Co.,
Ltd and Dalian Bingshan Group 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.
16. Long-term repayments
Opening Other Closing
Item Increase Amortization
Balance Decrease Balance
Employee’s dormitory use right 2,012,170.38 69,239.16 1,942,931.22
Renovation and rebuilding 1,175,049.06 405,529.42 769,519.64
Lease 531,450.00 53,145.00 478,305.00
Membership fee for Golf 440,000.00 8,250.00 431,750.00
Technology entrance fee of cold 840,206.25 186,712.50 653,493.75
and heat machinery
Greenland of new factory 6,616,523.14 446,057.76 6,170,465.38
Service fee from Technology 31,446.64 18,867.90 12,578.74
center
Total 11,646,845.47 1,187,801.74 10,459,043.73
17. 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
2,856,352.38 260,452.84 2,856,352.38 560,452.86
impairment of assets
61
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Unrealized profit from 14,598,643.89 2,189,796.58 14,598,643.87 2,189,796.58
internal transaction
Provision for credit 290,189,157.73 57,612,627.96 300,299,010.72 59,647,415.64
impairment
Total 307,644,154.00 60,062,877.38 317,754,006.97 62,397,665.08
(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 255,444,730.13 38,316,709.52 274,768,039.93 41,215,205.99
financial assets
Total 255,444,730.13 38,316,709.52 274,768,039.93 41,215,205.99
(3) Unrecognized deferred tax assets details
Item Closing Balance Opening Balance
Deductible temporary difference 59,426,067.14 11,851,149.26
Deductible loss 69,961,611.48 97,241,944.12
Total 129,387,678.62 109,093,093.38
(4) Unrecognized deductible loss of deferred tax assets expired years
Year Closing Balance Opening Balance Notes
2020 3,240,819.97
2021
2022 716,158.09 716,158.09
2023 52,903,288.00 16,927,871.66
2024 16,342,165.39 76,357,094.40
2025
Total 69,961,611.48 97,241,944.12
18. Short-term loan
(1) Category of short term loan
Loan category Closing Balance Opening Balance
Mortgage loan 16,600,000.00 47,170,000.00
Credit loan 366,093,600.00 308,082,000.00
Total 382,693,600.00 355,252,000.00
19. Notes payable
Notes category Closing Balance Opening Balance
Commercial acceptance notes 22,985,825.00 13,153,582.80
Bank acceptance notes 241,020,484.11 292,314,922.58
Total 264,006,309.11 305,468,505.38
62
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
20. Accounts payable
(1) Accounts payable
Item Closing Balance Opening Balance
Material payments 664,967,195.37 536,857,742.20
Project payments 256,212,791.53 207,388,636.82
Equipment payments 19,164,984.65 67,053,415.79
Others 336,510.31 3,031,889.21
Total 940,681,481.86 814,331,684.02
(2) Accounts payable with age over 1 year
Closing Reason of unpaid or not
Name of company
Balance carried forward
Project is uncompleted
Panasonic Refrigerating System (Dalian) Co., Ltd. 13,774,637.70
contract is not finished
Project is uncompleted
Heilongjiang Longleng Technology Co., Ltd 9,413,290.00
contract is not finished
Project is uncompleted
Wuhan KaiXing Economic Development Co., Ltd 6,845,648.14
contract is not finished
Project is uncompleted
Binzhou Shanfu Refrigeration Co.,Ltd 6,566,526.22
contract is not finished
Total 36,600,102.06
21. Contract Liabilities
Item Closing Balance Opening Balance
Accounts received in advance 201,589,646.20 160,571,622.53
Total 201,589,646.20 160,571,622.53
22. Employee’s payable
(1) Category of employee’s payable
Item Opening Increase Decrease Closing
Balance Balance
Short-term employee’s
31,701,317.58 133,143,875.44 153,347,067.55 10,304,848.64
payable
Post-employment benefit
4,709,599.79 4,657,892.57 51,707.22
–defined contribution plan
Termination benefits 206,650.00 206,650.00
Total 31,701,317.58 138,060,125.23 158,211,610.12 10,356,555.86
(2) Short-term employee’s payables
Item Opening Increase Decrease Closing
Balance Balance
Salaries, bonus, 26,129,186.34 108,836,058.57 129,222,948.73 5,806,996.28
63
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Item Opening Increase Decrease Closing
Balance Balance
allowance, and
subsidy
Welfare 4,142,390.78 4,959,663.22 4,464,050.23 3,258,602.73
Social insurance 6,701,840.32 6,687,262.77 136,001.66
Include: Medica l
5,798,067.25 5,671,023.70 127,043.55
insurance
On-duty
injury 197,631.88 197,631.88 9,440.65
insurance
Maternity
875,891.12 875,891.12
insurance
Housing funds 162,229.36 10,703,749.17 10,991,711.73 -125,733.20
Labor union and
1,267,511.10 1,942,564.16 1,981,094.09 1,228,981.17
training expenses
Total 31,701,317.58 133,143,875.44 153,347,067.55 10,304,848.64
(3) Defined contribution plan
Item Opening Increase Decrease Closing
Balance Balance
Pension 3,558,913.37 3,508,880.97 50,032.40
Unemployment insurance 34,398.23 32,723.41 1,674.82
Company annuity plan 1,116,288.19 1,116,288.19
Total 4,709,599.79 4,657,892.57 51,707.22
23. Tax payable
Item Closing Balance Opening Balance
Value-added tax 4,431,168.46 2,486,893.96
Enterprise income tax 1,099,836.96 2,246,427.46
Individual income tax 90,640.38 244,461.02
City maintenance and construction tax 110,760.05 60,130.79
Real estate tax 1,897,782.33 1,853,410.62
Land use tax 1,100,471.22 1,094,760.28
Stamp duty 119,887.82 153,970.35
Education surcharge 79,114.30 42,950.57
Green tax 456.51 573.64
Safeguard fund for disables 440.00
Total 8,930,118.03 8,184,018.69
24. Other accounts payable
64
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Item Closing Balance Opening Balance
Interest payable 5,180,733.92 6,396,385.83
Dividend payable 28,304,531.21 533,156.00
Other accounts payable 27,558,513.06 48,991,518.86
Total 61,043,778.19 55,921,060.69
. (1) Interest payable
Item Closing Balance Opening Balance
Interest on long term loan 5,018,233.79 6,260,969.04
Interest on corporate bond 162,500.13 135,416.79
Total 5,180,733.92 6,396,385.83
(2). Dividend payable
Item Closing Balance Opening Balance
Ordinary share dividend 28,304,531.21 533,156.00
Total 28,304,531.21 533,156.00
（3）Other accounts payable
Other payables categorized by payments nature
Payments nature Closing Balance Opening Balance
Loan from non-financial institutes
Cash pledge and security deposit 9,850,863.02 9,620,594.19
Apply for reimbursement and unpaid 7,442,222.80 21,211,414.23
Funds about related parties 0.00 5,900,000.00
Receipts under custody 946,865.97 6,980,440.67
Others 9,318,561.27 5,279,069.77
Total 27,558,513.06 48,991,518.86
25. Non-current liabilities due within one year
Item Closing Balance Opening Balance
Long-term accounts payable with one year 10,276,677.27 14,174,643.42
Total 10,276,677.27 14,174,643.42
26. 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
65
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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.
27. Bonds payable
(1)Bonds payable
Item Closing Balance Opening Balance
Exchangeable corporate bonds 25,000,034.00 25,000,034.00
Total 25,000,034.00 25,000,034.00
(2)The changes of bond
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 25,000,034.00 0.00 25,000,034.00
bonds
Total -- -- -- 176,000,000.00 25,000,034.00 0.00 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 29, 2021.
The total number of shares exchanged by the holders of "18 Da Leng EB" till Dec. 31, 2019 is
8,388,887.00 shares, and the exchange price is 18 yuan per share
28. Long term accounts payable
Item Closing Balance Opening Balance
Long term accounts payable 397,771.84 397,771.84
Total 397,771.84 397,771.84
(1) Category by nature
Item Closing Balance Opening Balance
Financial lease 397,771.84 397,771.84
29. Deferred income
(1) Category of deferred income
66
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Item Opening Increase Decrease Closing Formation
Balance Balance Basis
Government subsidy 99,154,666.29 11,295,411.67 2,674,413.00 107,775,664.96
Sale-leaseback contract 2,872.23 2,872.23
Total 99,157,538.52 11,295,411.67 2,677,285.23 107,775,664.96 —
(2) Government subsidy project
Opening Recorded Related with
Offset cost Closing
Government subsidy item Balance Increase into other asset/
or expense Balance
income equity
Subsidy fund for highly Asset
effective heat pump and 1,497,604.00 275,836.02 1,221,767.98
related
related system
Asset
Relocation compensation 41,218,000.00 41,218,000.00
related
Application of NH3 and CO2
Asset
instead of R22 screw 14,477,971.01 787,005.30 13,690,965.71
refrigerating machine related
combined condensing unit
Asset
Compressor IC system 4,279,196.37 187,229.64 4,091,966.73
related
Asset
Ultrasonic intelligent defrost
4,010,844.42 15,000.00 132,416.76 3,863,427.66
technology related
Asset
Eco Compressor project 25,083,171.79 1,276,925.28 23,806,246.51
related
Asset
R290 replacement of R22
4,877,498.70 8,129,164.50 13,006,663.20
large industrial screw unit related
R290 replacement of R22 Asset
industrial double stage screw 1,780,380.00 2,967,300.00 4,747,680.00
related
unit
Model innovation solution Asset
based on industrial Internet 1,930,000.00 1,930,000.00
related
platform
Income
Product standardization pilot 7,547.17 7,547.17
project related
Quick pre-cooling red water Asset
circulation cooling device 191,400.00 191,400.00
related
for poultry slaughtering
Total 99,154,666.29 11,295,411.67 15,000.00 2,674,413.00 107,775,664.96
67
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Asset related grant shall be offset the cost or expense within the asset’s useful life; income related grant
shall be booked into other income or offset cost or expense if it is relevant to daily activity, otherwise it shall
be booked into non-operating expense.
30. Share capital
Increase/decrease（+、-）
New
Opening Transfer Closing
Item share Share Subtotal
balance from capital others balance
issued dividend
reserve
Total
843,212,507.00 843,212,507.00
shares
31. Capital reserves
Items Opening Increase Decrease Closing Balance
Balance
Share premium 659,622,044.20 659,622,044.20
Other capital reserves 67,146,423.80 67,146,423.80
Total 726,768,468.00 726,768,468.00
68
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
32. Other comprehensive income
2020.1-6
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
income tax loss in other income tax minority
company
comprehensive income shareholder
I.Later can’t reclassified into profit
and loss of other comprehensive
income
II. Later reclassified into profit and loss
of other comprehensive income
2,501,459.77 2,501,459.77
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
69
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
33. Special Reserve
Opening Closing
Items Increase Decrease
Balance Balance
Safety production cost 1,127,227.68 1,127,227.68
Total 1,127,227.68 1,127,227.68
34. Surplus reserves
Item Opening Closing
Increase Decrease
Balance Balance
Statutory surplus reserve 349,664,058.11 349,664,058.11
Discretionary surplus reserve 419,059,754.42 30,409,270.84 449,469,025.26
Total 768,723,812.53 30,409,270.84 799,133,083.37
The Company made profit distribution within the reporting period. According to the 2019 annual meeting,
20% of net profit in the 2019 fiscal annual report is provided for discretionary surplus reserve of
30,409,270.84 Yuan.
35. Undistributed profits
Item 2020-06-30 2019-06-30
Closing balance of 2019 1,038,358,782.59 764,859,288.45
Add: Adjustments to the opening balance of
294,408,505.78
undistributed profits
Opening balance of 2020 1,038,358,782.59 1,059,267,794.23
Add: net profit attributable to shareholders of
-23,604,345.52 108,373,919.30
parent company in the year
Less: Provision for statutory surplus reserves 0.00
Provision for any surplus reserves 30,409,270.84 32,428,137.09
Dividends payable for common shares 25,296,375.21 42,160,625.35
Closing balance of the current period 959,048,791.02 1,093,052,951.09
36. Operating revenue and cost
Items 2020.01-06 2019.01-06
Sales revenue Cost of sales Sales revenue Cost of sales
Revenue from
857,035,486.66 732,433,950.29 1,052,236,172.60 903,291,760.46
principle operation
Revenue from
16,367,927.80 15,641,145.83 23,493,067.97 16,468,219.40
other operation
Total 873,403,414.46 748,075,096.12 1,075,729,240.57 919,759,979.86
37. Operating taxes and surcharges
70
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Items 2020.01-06 2019.01-06
City construction tax 822,185.02 1,253,720.56
Education surcharge 589,369.05 884,724.11
Property tax 3,835,774.27 3,758,045.42
Land use tax 2,189,549.16 2,185,948.32
Vehicle and vessel tax 11,571.44 10,907.04
Stamp duty 563,772.21 633,223.16
Environmental Protection Tax 8,270.68 3,606.49
Levee fee 108.77
Total 8,020,491.83 8,730,283.87
38. Selling expenses
Items 2020.01-06 2019.01-06
Official business expense 2,994,176.07 3,988,847.51
Employee benefit 18,899,327.99 21,396,465.27
Depreciation expense 110,392.35 155,303.69
Transportation expense 5,215,850.58 12,587,418.44
Business entertaining expense 2,356,885.18 4,881,843.49
Travel expense 3,742,450.00 5,066,994.70
Maintenance and repair expense 1,890,493.88 3,484,274.34
Advertisement and bids expense 806,949.46 980,196.85
Other expense -569,730.79 555,474.33
Total 35,446,794.72 53,096,818.62
39. Administrative expenses
Items 2020.01-06 2019.01-06
Official expense 5,862,390.02 7,892,079.60
Employee benefit 44,701,524.40 52,352,461.45
Depreciation expense 5,681,960.08 6,251,109.67
Business entertaining expense 793,831.00 2,081,570.86
Travel expense 1,161,310.14 4,064,689.71
Maintenance and repair expense 3,332,999.96 2,309,890.96
Advertisement expense 100,998.04 408,712.91
Insurance expense 407,320.27 533,710.46
Long-term assets amortization 3,319,148.39 3,801,155.48
Design consultant and test service expense 3,623,329.62 2,237,748.01
Safety production cost 1,127,227.68 1,031,715.77
Other expense 658,087.26 2,977,250.33
Total 70,770,126.86 85,942,095.21
40. R&D expenses
71
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Items 2020.01-06 2019.01-06
Employee benefit 21,428,261.05 21,344,115.07
Depreciation and amortization expense 2,110,399.66 2,405,920.60
Raw material 478,225.01 3,770,083.72
Entrust external R&D investment 6,283.00 132,075.47
Other expense 691,852.56 897,669.31
Total 24,715,021.28 28,549,864.17
41. Financial expenses
Items 2020.01-06 2019.01-06
Interest expenses 17,434,559.05 5,542,418.26
Less: Interest income 1,421,000.67 572,223.80
Add: Exchange loss -553,243.45 -570,799.89
Others expenditure 2,375,420.28 1,068,192.62
Total 10,061,328.07 5,467,587.19
42. Other income
Items 2020.01-06 2019.01-06
VAT refund 53,838.84
Grant given by the government for relocation 556,998.00
Government subsidy 6,507,868.29 1,424,600.00
Total 6,507,868.29 2,035,436.84
43. Investment income
Items 2020.01-06 2019.01-06
Long-term equity investment gain under equity method 16,816,173.99 72,239,478.13
Gain from holding of other non-current financial assets 6,126,903.12 4,320,252.20
Gain from disposal other non-current financial assets 40,567,691.40
Total 22,943,077.11 117,127,421.73
44. Fair value change income
Items 2020.01-06 2019.01-06
Other non-current financial assets -19,323,309.84 40,461,125.59
Total -19,323,309.84 40,461,125.59
45. Credit impairment losses (loss listed as“-“)
72
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Items 2020.01-06 2019.01-06
Bad debt loss on notes receivable 3,479,059.83
Bad debt loss on receivable -10,086,373.98
Bad debt loss on other receivable -592,587.01
Bad debt loss on contract assets -6,842,004.85
Total -14,041,906.01
46. Assets impairment losses
Items 2020.01-06 2019.01-06
Loss of bad debts -16,863,134.42
Provision for inventory impairment
Total -16,863,134.42
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.
47. Gain on assets disposal
Item 2020.01-06 2019.01-06
Gains on disposal of non-current assets 10,788.53 1,242,799.31
Including: Gain on non-current assets
disposal income not classified as held 10,788.53 1,242,799.31
for sale
Including: gain on fixed assets disposal 10,788.53 1,242,799.31
Total 10,788.53 1,242,799.31
48. Non-operating income
Amounts recognized into
Item 2020.01-06 2019.01-06 non-recurring profit or loss
for the year
Debt restructuring gains 162,560.00 1,999,241.94 162,560.00
Government grant 337,400.00
Penalty and fine income 216,492.50 135,723.19 216,492.50
Others 987,052.84 987,052.84
Total 1,280,059.12 2,472,365.13 1,280,059.12
49. Non-operating expenses
Amounts recognized into
Item 2020.01-06 2019.01-06
non-recurring profit or loss for the year
Outward donation 60,000.00
Quality Claim 48,522.19 46,516.94 48,522.19
73
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Non-current assets scrap loss 44,972.15 15,126.57 44,972.15
Total 93,891.78 121,643.51 93,891.78
50. Income tax expenses
(1) Income tax expenses
Items 2020.01-06 2019.01-06
Current income tax expenses 1,427,499.91 16,570,975.86
Deferred income tax expenses -2,919,759.08 -2,804,370.02
Total -1,492,259.17 13,766,605.84
(2) Adjustment process of accounting profit and income tax expense
Items 2020.01-06
Total profits -26,402,759.00
Current income tax expense accounted by tax and relevant -3,960,413.85
regulations
Influence of different tax rate suitable to subsidiary 414,712.69
Influence of income tax before adjustment -641,993.37
Influence of non taxable income -542,965.09
Influence of not deductable costs, expenses and losses 3,826,755.46
Influence of deductible temporary difference or deductible losses of -588,355.00
deferred income tax assets derecognized in reporting period.
Income tax expenses -1,492,259.17
51. Other comprehensive income
Refer to the note VII.32 other comprehensive income for details.
52. Notes to cash flow statement
(1) Cash receipt/payment of other operating/investing/financing activities
1) Other cash received relating to operating activities
Items 2020.01-06 2019.01-06
Government grants 12,168,371.56 1,762,000.00
Received travel expense refund 1,063,272.24 2,190,560.23
Deposit given back 14,765,375.21 11,938,968.66
Interest income 314,336.56 859,925.57
Others 4,566,093.18 1,027,584.20
Total 32,877,448.75 17,779,038.66
2) Other cash paid relating to operating activities
Items 2020.01-06 2019.01-06
Business travel borrowing 8,230,047.29 5,490,477.40
Deposit paid 17,663,991.76 8,675,281.20
74
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Expenditure 34,127,531.31 47,585,026.48
Bank handling charges 1,769,898.93 965,122.59
Others 583,138.56 713,616.93
Total 62,374,607.85 63,429,524.60
3) Others cash received relating to financing activities
Items 2020.01-06 2019.01-06
Collection of guarantee money 32,960,611.49 38,323,050.64
Sale leaseback and financial lease 3,886,589.07
Total 36,847,200.56 38,323,050.64
4) Others cash played relating to financing activities
Items 2020.01-06 2019.01-06
Payment of guarantee money 9,266,488.54 17,348,438.30
Sale& lease back and financial lease 2,853,316.11 2,815,038.27
Repurchase the restricted stock 47,566,389.36
Note financing is due and is paid 136,500.00
Total 12,119,804.65 67,866,365.93
53. Supplementary information of consolidated cash flow statement
Items 2020.01-06 2019.01-06
1. Adjusting net profit into cash flows of operating —— ——
activities:
Net profit -24,910,499.83 106,770,376.48
Add: Provision for impairment of assets 15,147,375.91 16,863,134.42
Depreciation of fixed assets, Amortization of mineral
34,750,769.26 33,043,962.66
resources, and biological assets
Amortization of intangible assets 2,373,689.18 3,230,112.71
Amortization of long-term deferred expenses 2,175,118.39 804,794.82
Losses on disposal of fixed assets, intangible assets, and
-55,668.73 -1,242,799.31
long-term assets (income listed with”-”)
Losses on write-off of fixed assets (income listed with”-”) 45,369.59 15,126.57
Change of fair value profit or loss 19,323,309.84 -40,461,125.59
Financial expense (income listed with”-”) 9,635,047.81 5,275,618.93
Investment loss (income listed with”-”) -22,943,077.11 -117,127,421.73
Decrease of deferred tax assets(increase listed
2,334,787.70 -2,804,370.02
with”-”)
Increase of deferred tax liabilities(decrease
-2,898,496.47 0.00
listed with”-”)
Decrease of inventories (increase listed with”-”) -69,323,956.85 -56,623,320.41
75
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Decrease of operating receivables (increase listed
-147,581,069.09 -109,300,254.90
with”-”)
Increase of operating payables (decrease listed
103,576,611.65 83,780,127.49
with”-”)
Others 0.00
Net cash flows arising from operating activities -78,350,688.75 -77,776,037.88
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 268,889,987.62 214,418,184.24
Less: Opening balance of cash 301,527,354.56 304,703,434.47
Net increase of cash and cash equivalent -32,637,366.94 -90,285,250.23
(1) Cash and cash equivalents
Items 2020.6.30 2020.1.1
Cash 268,889,987.62 301,527,354.56
Including: Cash on hand 106,840.56 92,096.63
Bank deposit used for paying at any moment 265,568,493.02 301,435,257.93
Other monetary fund for paying at any moment
Deposit fund in central bank available for payment
Cash equivalent
Including: bonds investment with maturity in 3 months
Closing balance of cash and cash equivalents 268,889,987.62 301,527,354.56
54. The assets with the ownership or use right restricted
Items 2020.6.30 Reasons
Monetary fund 9,266,488.54 Guarantee money
Notes Receivable 19,345,284.19 Pledge
Fixed assets 127,229,833.57 Mortgage Loan
Dalian Universe Thermal Technology Co., Ltd.and Dalian Bingshan Engineering&Trading Co.,Ltd. pledged
the bank acceptance note to bank as guarantee for issuing the commercial acceptance note.
Wuhan New World Refrigeration Industrial Co., Ltd signed the “maximum pledge contract” with Ever bright
Bank of China Wuhan branch. Property was pledged and Wuhan New World Refrigeration Industrial Co.,
Ltd was granted for credit.
55. Monetary category of foreign currency
76
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
(1) Monetary category of foreign currency
Item Closing Balance Exchange Closing Balance
(foreign currency) Rate (RMB)
Cash — — 10,315,403.21
Including：USD 1,264,534.74 7.0795 8,962,273.69
GBP 18,152.31 8.7144 158,186.50
JPY 18,309,977.83 0.0658 1,204,943.02
Accounts receivable — — 45,614,023.00
Including: USD 6,173,806.55 7.0795 43,707,463.47
GBP 63,815.36 8.7144 556,122.57
JPY 20,521,015.00 0.0658 1,350,446.96
Accounts payable — — 8,980,047.26
Including: USD 911,800.72 7.0795 6,450,845.50
GBP 37,274.28 8.7144 324,822.99
JPY 33,497,124.47 0.0658 2,204,378.77
56. Government Grants
Amount
recognized in
Category Amount Disclosure
current profit and
loss
Dalian special fund subsidy for the
construction of manufacturing 15,000.00 Other Income 15,000.00
Innovation Center in 2017
Featured carrier of mass 5,900,000.00 5,900,000.00
entrepreneurship and innovation Other Income
R290 replacement of R22 large
11,096,464.50 Deferred Income
industrial screw unit
Steady post subsidies 136,538.60 Other Income 136,538.60
Total 17,148,003.10 - 6,051,538.60
57. Others
None
VI. 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.
77
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Name of subsidiaries Main Registered Business nature Shareholding (%) Obtaining
business address method
Dalian Bingshan Group Sales address
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
Technology Co., Ltd
Dalian Universe Thermal
Dalian Dalian Manufacturing 55 Acquisition
Technology Co., Ltd.
Dalian Bingshan Engineering &
Dalian Dalian Service 100 Acquisition
Trading Co., Ltd.
Wuhan New World
Air-conditioning 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
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) There is no change on the shareholding of the subsidiaries.
(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
78
Bingshan Refrigeration & Heat Transfer Technologies 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
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
30-06-2020/2020.01-06
Items Panasonic Appliances Dalian Bingshan Metal
Compressor (Dalian) Co., Ltd. Technology Co., Ltd.
Current assets 1,223,509,851.91 373,441,442.40
Non-current assets 306,353,358.57 43,583,860.17
Total assets 1,529,863,210.48 417,025,302.57
Current liabilities 410,377,576.67 78,301,526.66
Non-current liabilities
Total liabilities 410,377,576.67 78,301,526.66
Minority interests
Equity to the parent 1,119,485,633.81 338,723,775.91
company
Proportions of net assets
according to the
447,794,253.52 165,974,650.20
shareholding
percentage
Adjusting events
—Goodwill 19,269,770.94
—Unrealized profits of
79
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
30-06-2020/2020.01-06
Items Panasonic Appliances Dalian Bingshan Metal
Compressor (Dalian) Co., Ltd. Technology Co., Ltd.
insider trading
--Others -970,205.80 966,230.97
Book value of equity
investment of affiliated 446,824,047.72 186,210,652.11
companies
Fair value of equity
investment of affiliated
companies
Operating income 498,727,220.29 204,625,692.76
Net profit 30,316,392.38 25,242,882.57
Net profit from closing
Other comprehensive 30,316,392.38 25,242,882.57
income
Total comprehensive 30,316,392.38 25,242,882.57
income
Continued：
31-12-2019/2019.01-06
Panasonic Appliances
Items Dalian Bingshan Metal
Compressor (Dalian) Co., Ltd.
Technology Co., Ltd.
Current assets 1,273,294,847.52 337,202,163.28
Non-current assets 321,031,252.89 45,671,841.16
Total assets 1,594,326,100.41 382,874,004.44
Current liabilities 407,886,858.98 69,393,111.10
Non-current liabilities
Total liabilities 407,886,858.98 69,393,111.10
Minority interests
Equity to the parent 1,186,439,241.43 313,480,893.34
company
Net assets calculated
according to the 474,575,696.57 153,605,637.74
shareholding proportions
Adjusting events
—Goodwill 19,269,770.94
—Unrealized profits of
insider trading
--Others -2,882,081.25 144,725.49
Book value of equity
investment of affiliated 471,693,615.32 172,730,683.20
companies
Fair value of equity
investment of affiliated
companies
80
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
31-12-2019/2019.01-06
Panasonic Appliances
Items Dalian Bingshan Metal
Compressor (Dalian) Co., Ltd.
Technology Co., Ltd.
Operating income 620,287,402.33 202,961,647.33
Net profit 41,081,512.65 28,166,390.78
Net profit from closing
Other comprehensive 41,081,512.65 28,166,390.78
income
Total comprehensive 41,081,512.65 28,166,390.78
income
（3） Summary financial information of insignificant affiliated companies
Items 30-06-2020/2020.01-06 31-12-2019/2019.01-06
Total book value of investment of affiliated
733,355,484.16 607,706,323.17
companies
The total of following items according to the
shareholding proportions
Net profit 3,936,888.40 47,324,500.55
Other comprehensive income
Total comprehensive income 3,936,888.40 47,324,500.55
（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
XII. Risk Related to Financial Instruments
(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 2020, the company’s assets and liabilities
dominated in foreign currency are listed in RMB as following：
81
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Items Closing Balance Opening balance
Monetary fund-USD 8,962,273.69 16,719,234.66
Monetary fund-JPY 1,204,943.02 1,142,608.46
Monetary fund-EURO 29,112.74
Monetary fund- GBP 158,186.5 385,286.46
Receivable - GBP 556,122.57 1,281,698.98
Receivable- USD 43,707,463.47 43,923,973.48
Receivable - EURO 57,832.75
Receivable - JPY 1,350,446.96 1,833,735.72
Payables -USD 6,450,845.5 5,245,528.61
Payables -EURO 10,394.62
Payables - JPY 2,204,378.77 2,807,578.63
Payables -GBP 324,822.99 341,063.39
The Company paid close attention to the effect on FX risk.
2) Interest rate risk
The interest risk of the Group incurred from bank loan, risk of a floating interest rate of financial liabilities that lead
to the company facing cash flow interest rate risk, financial liabilities with a fixed interest rate lead to the company
facing cash flow interest rate risk. The company determined the proportion of fixed interest rate and floating interest
rate according the current market circumstance. The Company and Dalian Bingshan Group Co., Ltd. borrowed long
term loan RMB 160,000,000.00 with fixed interest rate.
The 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 2020, base on the assumption of interest rate change of 50 BP, the Company’s net profit will increase or
decrease RMB 1,352.9 thousand Yuan.
3) Price risk
As at 30 June 2020, there will be effect on the price variance for financial assets valued in fair value.
(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
82
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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 2020, the top five customers of receivable accounts balance is：163,292,572.91 Yuan.
(3) Liquidity risk
Liquidity risk was referred to the risk of shortage of funds incurred when the enterprise fulfill the obligation of
settlement by cash or other financial assets. The way to manage the liquidity risk is to ensure enough fund available
to fulfill the liability by due date in prevention from unacceptable loss of or reputation dama ge 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 2020, the credit limit still available is 398 million Yuan and short
term credit limit available is 398 million Yuan.
As at 30 June 2020, 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 27,815.65 27,815.65
Notes receivable 6,097.57 6,097.57
Accounts receivable 110,380.45 110,380.45
Other receivable 4,523.13 4,523.13
Other non-current financial assets 28,414.64 28,414.64
Contract asset 9,444.57 9,444.57
Financial Liabilities
Short-term loan 38,269.36 38,269.36
Notes Payable 26,400.63 26,400.63
Accounts payable 94,068.15 94,068.15
Other payable 2,755.85 2,755.85
83
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Closing balance
Within 1 1-2 2-5 Over 5
Items Total
year years years years
Employee’s payable 1,035.66 1,035.66
Tax payable 893.01 893.01
Long-term loan 16,000.00 16,000.00
Bonds payable 2,500.00 2,500.00
VIII. Disclosure of Fair Value
1. Amount and measurement level of the assets and liabilities measured at fair value at the year end
Fair value at the year end
Items First level Second level Third level
measurement of fair measurement of measurement Total
value fair value of fair value
Financial assets Continuously
measured at FV available for sale
Other non-current financial assets 271,154,738.08 12,991,658.59 284,146,396.67
(1) Investment by debt instruments
(2) Investment by equity instruments 271,154,738.08 12,991,658.59 284,146,396.67
(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 30, 2020.
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.
It was valued by cost price.
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
84
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
7. Changes of valuation technique and reasons for changes
None
8. Assets and liability are disclosed at FV rather than measured at FV
None
IX. Related Parties Relationship and Transactions
(I) Related parties relationship
1. Parent company and ultimate controller
1) Parent company and ultimate controller
Parent Registere Business Registered Shareholding Voting
company d address nature capital percentage power
(%) percentage
(%)
Dalian
Bingshan Group Dalian Manufacture 158,580,000.00 20.27 20.27
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 3rd July 1985 to 2nd
July 2035. The business scope include research, development, manufacture, sales, service and installment of
refrigeration equipment, cooling and freezing equipment, different size of air-conditioners, petrochemical
equipment, electronic and electronic- control products, home electronic appliance, environment protect
equipment and etc. (unless the licenses needed)
2. Subsidiaries
Referring to the content in the Note IX. 1. (1) Organization structure of group company.
3. Affiliated company and joint venture
The information of the affiliated company and joint venture please refers to the note IX. 3 ‘The significant
affiliated company and joint venture’. The company had transactions with related parties during the current
period or last period, including:
Names of the joint ventures or affiliated company Relationships with the Company
Panasonic Appliances Air-conditioning and
Affiliated company of the Company
Refrigeration (Dalian) Co., Ltd
Panasonic Appliances Cold-chain (Dalian) Co., Ltd Affiliated company of the Company
85
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Names of the joint ventures or affiliated company Relationships with 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
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
Affiliated company of Dalian
Dalian Bingshan Group Refrigeration Equipment Co., Ltd
Bingshan Group
Affiliated company of Dalian
Dalian Spindle Cooling Towers Co., Ltd
Bingshan Group
Affiliated company of Dalian
BAC Dalian Co., Ltd
Bingshan Group
Dalian Bingshan Part Technology Co., Ltd. Subsidiary of Dalian Bingshan Group
Dalian Bingshan Group Management and Consulting Co.,
Subsidiary of Dalian Bingshan Group
Ltd
Affiliated company of Subsidiary of
Dalian Fuji Bingshan Intelligent Control System Co., Ltd.
Dalian Bingshan Group
Affiliated company of Subsidiary of
Dalian Bingshan Wisdom Park Co., Ltd.
Dalian Bingshan Group
Dalian Bingshan Group Huahuida Financial Leasing Co., Affiliated company of Subsidiary of
Ltd Dalian 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 2020.1-6 2019.1-6
Dalian Bingshan Part Technology Co., Ltd. 1,386,362.74 3,741,590.18
Purchas
Panasonic Appliances Air-conditioning and Refrigeration (Dalian)
es of 12,544,723.07 36,142,649.15
Co., Ltd. goods
Panasonic Appliances Cold-chain (Dalian) Co., Ltd 19,945,469.77 23,174,161.33
86
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Panasonic Appliances Compressor (Dalian) Co., Ltd 1,079,512.31 1,773,477.15
Panasonic Refrigerating System (Dalian) Co., Ltd. 3,328,792.07 10,227,269.49
Dalian Fuji Bingshan Vending Machine Co., Ltd 367,523.31 14,488.80
Dalian Fuji Bingshan Vending Machine Sales Co., Ltd 0.00
Dalian Spindle Cooling Towers Co., Ltd 1,307,075.22 1,704,026.65
BAC Dalian Co., Ltd 16,350,334.91 15,071,702.87
Dalian Bingshan Metal Technology Co., Ltd 70,809.38 43,155.87
Beijing Huashang Bingshan Refrigeration and Air-conditioning
Machinery Co., Ltd
Dalian Bingshan Group Refrigeration Equipment Co., Ltd 12,654,852.80 12,909,130.64
Jiangsu JingXue Insulation Technology Co.,Ltd 7,480,038.96 16,629,233.61
Dalian Bingshan Wisdom Park Co., Ltd 64,991.82 342,045.83
Dalian Fuji Bingshan Intelligent Control System Co., Ltd.
Dalian Kelvins Technology Technology Co., Ltd 24,458.00
Total 76,604,944.36 121,772,931.57
2) Sales of goods/ labour services provision
Conte 2020.1-6 2019.1-6
Related party
nt
Dalian Bingshan Part Technology Co., Ltd. 697,339.29 2,424,649.57
Panasonic Appliances Air-conditioning and Refrigeration
24,550,377.53 48,139,165.51
(Dalian) Co., Ltd.
Panasonic Appliances Cold-chain (Dalian) Co., Ltd 61,605,326.43 73,431,383.81
Panasonic Appliances Compressor (Dalian) Co., Ltd 3,787,087.37 7,987,011.69
Panasonic Refrigerating System (Dalian) Co., Ltd. 8,265,834.12 15,372,612.19
Dalian Fuji Bingshan Vending Machine Co., Ltd 12,025,828.33 14,649,557.64
Dalian Fuji Bingshan Vending Machine Sales Co., Ltd 45,419.30 393,571.69
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. 5,017,942.62 3,785,687.98
Dalian Spindle Cooling Towers Co., Ltd 322,836.39 146,937.92
Keinin-Grand Ocean Thermal Technology (Dalian) Co., Ltd. 614,180.71 425,682.00
Sales
BAC Dalian Co., Ltd 16,935,526.04 11,715,950.10
of
Beijing Huashang Bingshan Refrigeration and Air-conditionin g
goods 32,657.62
Machinery Co., Ltd.
Dalian Bingshan Group Refrigeration Equipment Co., Ltd 983,506.99 3,803,139.47
Jiangsu JingXue Insulation Technology Co.,Ltd
Wuhan Sikafu Power Control Equipment Co., Ltd 491,777.00 258,666.59
Dalian Bingshan Group Mangement and Consulting Co.,Ltd
Dalian Bingshan Group Huahuida Financial Leasing Co.,LTd 145,152.00 412,289.70
Dalian Bingshan Wisdom Park Co., Ltd 4,750,730.48 3,770,188.67
Dalian Fuji Bingshan Intelligent Control System Co., Ltd. 80,619.45 22,000.00
Dalian Kelvins Technology Technology Co., Ltd
Alphavita Bio-scientific (Dalian) Co., Ltd. 394,317.76
Total 140,713,801.81 186,771,152.15
2. Assets Lease
87
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Assets rent out
Category of 2020-6-30 2019-6-30
Lessor Lessee
assets rent out Lease Income Lease Income
MHI Bingshan
The Company Refrigeration (Dalian) Plant 1,904,761.90 2,000,000.00
Co.,Ltd.
Dalian Bingshan
The Company Office 4,095,276.17 3,722,293.19
Wisdom Park Co., Ltd
Panasonic compressor Employee
The Company 45,714.28 45,714.28
(Dalian) Co., Ltd dormitory
Panasonic Refrigeration Employee
The Company 28,183.50 35,122.60
(Dalian) Co., Ltd. dormitory
Jiangsu JingXue
The Company Insulation Technology Plant and office 502,555.72 493,160.97
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 2020 is RMB 4 million Yuan.
The Company signed rental contract with Dalian Bingshan Wisdom Park Co., Ltd., and rent out the whole
land and house of the Company’s old plant locating at No. 888, Southwest Road, Shahekou District, Dalian
to Dalian Bingshan Wisdom Park Co., Ltd., with rental land area of 167,165.61 square meters and housing
area of 105,652.43 square meters. The lease term is from April 1, 2017 to December 31, 2036. The annual
rent fee for 2020 is RMB 8.646 million Yuan.
3) 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
88
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Closing Balance Opening Balance
Item Related party Book Bad debt Book Bad debt
Balance Provision Balance Provision
Accounts BAC Dalian Co.,
5,492,750.32 372,957.75 8,564,678.88 583,733.64
receivable Ltd
Beijing Huashang
Bingshan
Accounts Refrigeration and
7,334,855.23 498,036.67 6,717,761.21 1,638,415.37
receivable Air-conditioning
Machinery Co.,
Ltd
Accounts Dalian Fuji
Bingshan Vending 14,149,812.29 960,772.25 2,683,672.86 182,221.39
receivable Machine Co., Ltd.
Accounts Dalian Spindle
Cooling Towers 388,459.95 26,382.54 33,010.40 2,241.41
receivable Co., Ltd
Accounts MHI Bingshan
Refrigeration 3,259,468.62 221,317.92 1,437,917.14 97,634.57
receivable (Dalian) Co.,Ltd.
Panasonic
Accounts Refrigeration
7,351,697.59 499,180.27 6,491,662.21 441,319.35
receivable System (Dalian)
Co., Ltd.
Panasonic
Accounts Appliances Cold
39,805,809.91 2,702,814.49 16,875,971.95 1,153,468.33
receivable Chain (Dalian)
Co., Ltd
Panasonic
Accounts Appliances
70,037.32 4,755.53 296,902.58 20,159.69
receivable Compressor
(Dalian) Co., Ltd
Panasonic
Appliances
Accounts Air-conditioning
3,599,818.68 244,427.69 3,101,660.89 210,602.77
receivable and Refrigeration
(Dalian) Co.,
Ltd.
Wuhan Sikafu
Accounts Power Control
128,100.00 8,697.99 9,739.50 661.31
receivable Equipment Co.,
Ltd
Dalian Fuji
Bingshan
Accounts
Intelligent 73,500.00 4,990.65 100,251.50 6,807.08
receivable Control System
Co., Ltd.
Dalian Bingshan
Accounts Group Huahuida
311,170.61 21,128.48 1,935,465.61 296,900.42
receivable Financial Leasing
Co.,LTd
89
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Dalian Bingshan
Accounts
Wisdom Park Co., 5,023,000.00 341,061.70 920,000.00 62,468.00
receivable
Ltd
Dalian Bingshan
Group
Other
Refrigeration 50,000.00 1,675.00
receivable
Equipment Co.,
Ltd.
Jiangsu JingXue
Insulation
Prepayment 611,326.80 2,539,291.63
Technology
Co.,Ltd
Panasonic
Appliances
Air-conditioning
Prepayment 525,324.70 164,600.00
and Refrigeration
(Dalian) Co.,
Ltd.
Dalian Bingshan
Group
Prepayment Refrigeration 225,650.00 468,800.00
Equipment Co.,
Ltd.
Panasonic
Refrigeration
Prepayment 627,451.00 341,601.00
System (Dalian)
Co., Ltd.
Panasonic
Appliances Cold
Prepayment 3,938.00 3,938.00
Chain (Dalian)
Co., Ltd
Dalian Spindle
Prepayment Cooling Towers 56,500.00
Co., Ltd
Dalian Bingshan
Prepayment Part Technology 2,800.00 2,800.00
Co., Ltd.
Notes BAC Dalian Co.,
8,401,389.26 11,317,936.09
receivable Ltd
Panasonic
Notes Refrigeration
1,207,293.52 4,692,378.47
receivable System (Dalian)
Co., Ltd.
Panasonic
Notes Appliances
641,874.30 1,859,495.23
receivable Compressor
(Dalian) Co., Ltd
Panasonic
Notes Appliances Cold
10,810,000.00 43,270,000.00 1,548,120.00
receivable Chain (Dalian)
Co., Ltd
Dalian Fuji
Notes
Bingshan Vending 355,486.76 12,607,409.17 856,043.08
receivable Machine Co., Ltd.
90
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Panasonic
Appliances
Notes Air-conditioning
18,494,998.52 450,703.89
receivable and Refrigeration
(Dalian) Co.,
Ltd.
Notes MHI Bingshan
Refrigeration 2,541,450.00 11,908.12 886,450.00 60,189.96
receivable (Dalian) Co.,Ltd.
Dalian Spindle
Notes
Cooling Towers 136,860.45
receivable Co., Ltd.
(2) Accounts Payable due from Related Party
Item Related party Closing Balance Opening Balance
Accounts Payable BAC Dalian Co., Ltd 23,167,547.00 6,536,883.20
Dalian Bingshan Group Refrigeration
Accounts Payable 10,291,983.37 4,904,782.83
Equipment Co., Ltd.
Dalian Bingshan Part Technology
Accounts Payable 682,968.81 2,033,644.49
Co., Ltd.
Dalian Fuji Bingshan Vending
Accounts Payable 415,301.34 60,519.99
Machine Co., Ltd.
Dalian Spindle Cooling Towers Co.,
Accounts Payable 3,470,669.00 2,235,874.00
Ltd.
Jiangsu JingXue Insulation
Accounts Payable 8,739,794.38 7,827,836.00
Technology Co.,Ltd
Dalian Fuji Bingshan Intelligent
Accounts Payable 132,284.48 132,284.48
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 26,322,849.32 22,882,950.32
(Dalian) Co., Ltd.
Panasonic Appliances Cold Chain
Accounts Payable 389,277.05
(Dalian) Co., Ltd
Panasonic Appliances Compressor
Accounts Payable 1,774,444.60 1,696,000.00
(Dalian) Co., Ltd
Panasonic Appliances
Accounts Payable Air-conditioning and Refrigeration 1,771,490.40 19,565,101.85
(Dalian) Co., Ltd.
Dalian Bingshan Metal Technology
Accounts Payable 80,014.61 66,651.05
Co., Ltd.
Other accounts
Dalian Bingshan Group Co., Ltd 5,900,000.00
payable
Other accounts Dalian BingshanWisdom Park Co.,
500,000.00
payable Ltd.
Other accounts MHI Bingshan Refrigeration
170,000.00 170,000.00
payable (Dalian) Co., Ltd.
Accounts
Dalian Spindle Cooling Towers Co.,
Received in 2,000,000.00 1,869,651.43
Ltd.
Advance
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Accounts
Dalian BingshanWisdom Park Co.,
Received in 500,000.00 700,000.00
Ltd.
Advance
Accounts
Panasonic Appliances Cold Chain
Received in 235,834.48 567,258.21
(Dalian) Co., Ltd
Advance
Accounts
Wuhan Sikafu Power Control
Received in 153,555.20 192,034.80
Equipment Co., Ltd.
Advance
Accounts
Panasonic Refrigeration System
Received in
(Dalian) Co., Ltd.
Advance
Accounts
Keinin-Grand Ocean Thermal
Received in
Technology (Dalian) Co., Ltd.
Advance
Accounts
Dalian Bingshan Group Refrigeration
Received in 405,000.00
Equipment Co., Ltd.
Advance
Notes Payable BAC Dalian Co., Ltd 21,304,454.00 21,758,609.00
Dalian Bingshan Group Refrigeration
Notes Payable 6,986,259.12 10,722,797.72
Equipment Co., Ltd.
Dalian Bingshan Metal Technology
Notes Payable 77,548.03
Co., Ltd.
Dalian Bingshan Pate Technology
Notes Payable 2,500,000.00 1,200,000.00
Co.,Ltd
Jiangsu JingXue Insulation
Notes Payable 627,084.00
Technology Co.,Ltd
Panasonic Appliances Cold Chain
Notes Payable 1,657,321.00 64,984.00
(Dalian) Co., Ltd
Dalian Spindle Cooling Towers Co.,
Notes Payable 969,602.80
Ltd
Panasonic Refrigeration System
Notes Payable 92,728.65
(Dalian) Co., Ltd.
(II) Related Party Commitment
None
X. 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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
4. Modification and Termination of Share Payment
□Applicable √Not applicable
XI. Events after the Balance Sheet Date
(1)Contingency
As at 30 June 2020, the Company does not have any other contingencies for disclosure.
(2)Commitment
As at 30 June 2020, the Company does not have any other significant commitments.
(3)Other event
Except the subsequent event disclosed above, the Company has no other significant subsequent event.
XII. Other Significant Events
1. Error correction and effect in previous period.
The Company has no adjustment of prior period accounting error this year.
2. Debt Restructuring
The Company has no events of debt restructuring this year.
3. Asset exchange
(1) The exchange of non-monetary assets
None
(2) The exchange of other assets
None
4. Annuity Plan
None
5. Operation Termination
None
6. Segment Information
The management of the Company divided the Company into 3 segments based on the geographic area:
Northeast China, Central China, and East China. The Northeast is the Company’s general headquarters and
the registered address. The Central is the subsidiary of the Company, Wuhan New World Refrigeration
Industrial Co., Ltd, Wuhan Lanning Energy Technology Co., Ltd, and Chengdu Bingshan Refrigeration
Engineering Co., Ltd. The East is the subsidiary of the Company, Ningbo Bingshan Air-conditioning
Refrigeration Engineering Co., Ltd.
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Bingshan Refrigeration & Heat Transfer Technologies 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
30-06-2020/2020.01-06
Items Northeast Central East
Offset Total
China China China
1 Operating income 1,071,216,691.12 111,618,986.85 6,207,964.38 -315,640,227.89 873,403,414.46
2 Cost 1,088,054,189.71 117,228,210.68 7,446,686.38 -315,640,227.89 897,088,858.88
3 Investment income from 17,295,970.66 -479,796.67 16,816,173.99
associates and joint venture
4 Operating profits(loss) -5,650,799.72 -11,589,109.88 -976,966.12 -8,185,883.28 -26,402,759.00
5 Income tax -1,369,839.24 -187,549.51 65,129.58 -1,492,259.17
6 Net profit(loss) -4,280,960.48 -11,401,560.37 -1,042,095.70 -8,185,883.28 -24,910,499.83
7 Total assets 6,147,995,276.91 87,700,536.25 14,227,645.28 -1,137,409,133.03 5,612,514,325.40
8 Total liabilities 2,246,648,187.20 395,140,368.46 10,063,170.17 -440,783,378.99 2,211,068,346.84
XIII. 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 50,985,562.10 8.66% 15,614,746.06 30.63% 35,370,816.04
individual amount
and separate bad
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Closing Balance
Item Booking balance Provision Booking
Amount % Amount % balance
debt provision
Accounts
receivable with bad
debt provision
based on the
characters of credit
risk portfolio
Accounting age as
296,912,703.73 50.41% 63,879,809.05 21.52% 233,032,894.68
characters
Related party
within
241,107,880.19 40.93% 241,107,880.19
consolidation
scope
Accounts
receivable with
insignificant
individual amount
and separate bad
debt provision
Total 589,006,146.02 100.00% 79,494,555.11 13.50% 509,511,590.91
(Continued)
Opening Balance
Item Booking balance Provision Booking
Amount % Amount % balance
Accounts receivable
with significant
individual amount 50,985,562.10 8.29% 12,133,091.84 23.80% 38,852,470.26
and separate bad
debt provision
Accounts receivable
with bad debt
provision based on
the characters of
credit risk portfolio
Accounting age as
266,070,550.78 43.21% 77,679,396.59 29.20% 188,391,154.19
characters
Related party within
298,594,548.44 48.50% 0.00% 298,594,548.44
consolidation scope
Accounts receivable
with insignificant
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Opening Balance
Item Booking balance Provision Booking
Amount % Amount % balance
individual amount
and separate bad
debt provision
Total 615,650,661.32 100.00% 89,812,488.43 14.59% 525,838,172.89
Closing Balance
Items
Booking balance Provision %
Expected credit losses within 1 year 171,059,966.21 11,614,971.70 6.79%
Expect credit losses of 1-2 years 47,523,394.62 7,290,088.73 15.34%
Expect credit losses of 2-3 years 32,787,860.19 9,531,430.96 29.07%
Expect credit losses of 3-4 years 14,339,773.14 6,712,447.81 46.81%
Expect credit losses of 4-5 years 9,124,223.47 6,653,383.75 72.92%
Expect credit losses more than 5 years 22,077,486.10 22,077,486.10 100.00%
Total 296,912,703.73 63,879,809.05 --
(1)The bad debt provisions of accounts receivable in the portfolio is accrued under accounting aging analysis
method:
Aging Closing Balance
Within1 year 409,167,846.39
1 to 2 years 40,440,142.12
2 to 3 years 34,871,112.69
More than 3 years 104,527,044.82
3 to 4 years 16,339,773.14
4 to 5 years 62,109,785.57
More than 5 years 26,077,486.11
Total 589,006,146.02
(2) Bad debt provision accrued and reversed (withdraw)
The bad debt provision has been accrued in the amount of 2,764,420.71 Yuan.
(3) No accounts receivable written off in current period.
Item Written off amount
Receivable actually written off 7,563,512.61
(4) The top five significant accounts receivable categorized by debtors
Closing
Closing % of the
Company Balance of
Balance total AR
Provision
Zhejiang Wankai New
50,985,562.10 8.66% 15,614,746.06
Material Co., Ltd.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Closing
Closing % of the
Company Balance of
Balance total AR
Provision
Xinyi Yuanda Construction
and Installation Engineering 32,748,744.00 8.56% 17,167,304.59
Co., Ltd.
SINOPEC International
21,269,111.33 3.61% 3,262,681.68
Business Ningbo Co., Ltd.
Ningxia Wangwa Coal 18,002,800.00 3.06% 2,761,629.52
Yangmei Fengxi Fertilizer
(Group) Co. LTD. Pinglu 16,700,000.00 2.84% 1,133,930.00
Branch
Total 139,706,217.43 26.73%
2. Other Receivables
Item Closing Balance Opening Balance
Interest receivable 348,833.33 583,833.33
Dividend receivable 50,338,786.40
Other receivable 6,718,099.01 5,398,160.49
Total 57,405,718.74 5,981,993.82
2.1 Interest receivable
(1) Interest receivable category
Item Closing Balance Opening Balance
Interest on term deposits 348,833.33 583,833.33
Interest on bank financial product
Total 348,833.33 583,833.33
1.2 Dividend receivable
Item Closing Balance Opening Balance
Guotai Junan Securities Co., Ltd. 6,126,903.12
Panasonic Compressor (Dalian) Co., Ltd 36,026,000.00
Dalian Bingshan Engineering & Trading Co., Ltd. 5,160,883.28
Dalian Universe Thermal Technology Co., Ltd. 3,025,000.00
Total 50,338,786.40
2.3 Other receivable
(1) Other receivables categorized by nature
Nature Closing Balance Opening Balance
Guarantee deposits 2,765,156.58 3,848,019.79
Petty cash 542,344.30 117,661.57
Equity transfer fund 5,601,660.31 2,774,045.87
Others 68,554.00
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Nature Closing Balance Opening Balance
Guarantee deposits 2,765,156.58 3,848,019.79
Petty cash 542,344.30 117,661.57
Equity transfer fund 5,601,660.31 2,774,045.87
Others 68,554.00
Total 8,909,161.19 6,808,281.23
(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, 2020 1,410,120.74 1,410,120.74
The balance of January 1, 2020 in
—— —— —— ——
the current period
Provision for bad debts 780,941.44 780,941.44
Balance on June 30, 2020 2,191,062.18 2,191,062.18
The bad debt provisions of other receivables in the portfolio is accrued under accounting aging analysis
method
Aging Closing Balance
Within 1 year 3,416,061.88
1 to 2 years 1,547,247.31
2 to 3 years 296,826.00
More than 3 years 3,649,026.00
3 to 4 years 2,450,461.00
4 to 5 years 1,100,000.00
More than 5 years 98,565.00
Total 8,909,161.19
(3) Bad debt provision accrued and reversed (withdraw) in the period.
The bad debt provision has been reversed by 780,941.44 Yuan.
(4) Other receivables from the top 5 debtors
Closing
Closing % of the
Name Category Aging Balance of
Balance total OR
Provision
Dalian Huali Coating Equity transfer
1,650,000.00 3-4 years 18.52% 188,572.50
Equipment Co., Ltd. fund
Dalian Delta HK China gas Security Within 1
1,100,000.00 12.35% 3,685.00
Co., Ltd. deposit year
China petroleum materials Security Within 1
1,000,000.00 11.22% 1,675.00
Tianjin Co. ,Ltd. deposit year
Dalian Changde Equity transfer
780,000.00 3-4 years 8.76% 16,906.50
Welding Co.,Ltd fund
Shandong Borun Security Within 1
300,000.00 3.37% 502.50
Co.,Ltd deposit year
Total 4,830,000.00 54.21% 211,341.50
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
3. Long-term equity investments
Category of long-term equity investments
Closing Balance Opening Balance
Item
Closing Balance Provision Book Value Opening Balance Provision Book Value
Investment of subsidiaries 687,496,652.08 687,496,652.08 587,496,652.08 587,496,652.08
Investment of affiliates and JV 1,623,656,310.41 1,623,656,310.41 1,656,914,731.80 1,656,914,731.80
Total 2,311,152,962.49 2,311,152,962.49 2,244,411,383.88 2,244,411,383.88
(1) Investments of subsidiaries
Subsidiaries names Opening Balance Increase Decrease Closing Balance
Dalian Bingshan Group Construction Co., Ltd 93,749,675.77 100,000,000.00 193,749,675.77
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 587,496,652.08 100,000,000.00 687,496,652.08
(2) Joint ventures& affiliated companies
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Increase/Decrease
Gains and losses Adjustment of Provision for
Investee Beginning balance Cha ng es 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 companies
Panasonic Appliances
Air-conditioning and 177,390,883.01 -7,151,886.71 3,400,000.00 166,838,996.30
Refrigeration (Dalian) Co., Ltd.
Panasonic Appliances
267,179,066.77 -5,126,459.68 262,052,607.09
Cold-chain (Dalian) Co., Ltd
Panasonic Appliances
471,693,615.32 11,156,432.40 36,026,000.00 446,824,047.72
Compressor (Dalian) Co., Ltd
Dalian Honjo Chemical Co.,
8,535,439.50 202,736.66 8,738,176.16
Ltd
Keinin-Grand Ocean Thermal
61,090,955.30 83,797.06 8,600,000.00 52,574,752.36
Technology (Dalian) Co., Ltd
Beijing Huashang Bingshan
Refrigeration and
1,537,672.84 -40,708.15 1,496,964.69
Air-conditioning Machinery
Co., Ltd
Dalian Fuji Bingshan Vending
193,109,792.45 -2,512,123.83 190,597,668.62
Machine Co., Ltd
MHI Bingshan Refrigeration
13,892,866.25 52,472.24 13,945,338.49
(Dalian) Co.,Ltd.
Dalian Fuji Bingshan Vending
12,614,480.80 -1,069,983.28 11,544,497.52
Machine Sales Co., Ltd
Jiangsu JingXue Insulation
185,385,615.80 5,010,588.30 190,396,204.10
Technology Co.,Ltd
Panasonic Refrigeration
33,975,371.41 2,290,230.84 2,528,392.05 33,737,210.20
System (Dalian) Co., Ltd.
Bingshan Metal Technical
172,730,683.19 13,479,968.92 186,210,652.11
Service （Dalian） Co.,Ltd.
Dalian Bingshan Group
Mangement and Consulting 57,778,289.16 920,905.89 58,699,195.05
Company
Total 1,656,914,731.80 17,295,970.66 50,554,392.05 1,623,656,310.41
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4. Operating revenue and cost
Item 2020.01-06 2019.01-06
Revenue Cost Revenue Cost
Revenue from main operation 401,973,100.61 346,387,083.54 304,851,204.51 262,956,736.05
Revenue from other operation 19,564,567.55 13,444,729.68 20,505,068.81 13,936,660.77
Total 421,537,668.16 359,831,813.22 325,356,273.32 276,893,396.82
5. Investment income
Items 2020.01-06 2019.01-06
Income from long-term equity investments under cost method 8,185,883.28 3,000,000.00
Income from long-term equity investments under equity method 17,295,970.66 72,908,832.16
Income from holding of other non-current financial assets 6,126,903.12 4,320,252.20
Income from disposing other non-current financial assets 40,567,691.40
Total 31,608,757.06 120,796,775.76
XIV. Approval of Financial Statements
The parent and consolidated financial statements of the Company were approved by the Board
of Directors of the Group on August 21, 2020.
XV. Supplementary Info rmation to the Financial Statements
1. Non-operating profit or loss
item Amount
Disposal gains and losses of non-current asset 10,788.53
Government subsidies included in current profit or loss 151,538.60
Income from changes in fair value during the period of holding financial assets -19,323,309.84
available for sale and income from disposal of financial assets available for sale
Other non-operating revenue or expense 1,186,167.34
Influence on income tax -2,681,482.01
Influence on minority shareholders 54,017.17
Total -15,347,350.53
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 -0.70 -0.028 -0.028
Net profit after deducting non-recurring gains and losses
-0.25 -0.01 -0.01
attributable to shareholders of parent company
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd
August 22, 2020
101
