Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021
(NOT AUDITED)
1
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
BALANCE SHEET
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. June 30 , 2021 Unit: RMB Yuan
30-June-2021 31-Dec-2020
Items
Consolidation Parent Company Consolidation Parent Company
Current assets:
Monetary funds 312,814,043.49 189,640,632.51 373,445,731.67 208,325,740.71
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 164,790,467.37 56,215,372.62 139,121,037.78 42,858,563.72
Accounts receivable 879,930,798.08 397,083,855.20 817,011,955.75 408,625,925.91
Receivables financing 67,877,483.26 9,778,000.00 61,737,282.56 5,752,810.30
Accounts paid in advance 252,035,577.19 86,256,149.64 154,481,509.35 62,620,914.33
Other receivables 38,404,665.67 15,025,382.07 67,527,176.86 41,183,397.14
Interest receivables 681,304.44 681,304.44 46,879.68 46,879.68
Dividend receivable 8,456,762.03 8,430,838.28 25,923.75 0.00
Inventories 857,546,805.51 301,061,601.22 731,658,797.98 255,635,206.96
Contract assets 93,128,010.70 35,427,393.71 91,430,011.60 38,366,253.50
Assets held for sale
Non-current asset due within one year 38,952,641.30 16,412,400.84 42,003,576.60 19,488,435.75
Other current assets 16,217,621.86 297,622.89 23,214,091.44 27,637.13
Total current assets 2,721,698,114.43 1,107,198,410.70 2,501,631,171.59 1,082,884,885.45
Non-current assets:
Finance asset held available for sales
Held-to-maturity investment
Long-term account receivable 65,846,409.09 45,968,318.60 65,867,973.25 45,964,783.15
Long-term equity investment 1,606,295,377.43 2,290,503,422.05 1,597,241,363.62 2,280,377,981.04
Other Non-current financial assets 234,169,195.71 232,854,053.21 239,304,098.83 237,888,956.33
Investment property 123,235,378.12 98,281,633.64 126,288,477.92 100,762,366.02
Fixed assets 842,597,806.71 696,077,930.09 891,147,058.82 721,701,015.39
Construction in progress 39,010,357.07 12,870,695.77 34,254,599.42 9,160,965.22
Right of use assets 22,430,952.90
Engineering material
Disposal of fixed asset
Productive biological asset
Oil and gas asset
Intangible assets 143,862,195.55 75,232,020.06 145,442,721.24 76,619,078.55
Expense on Research and Development
Goodwill 1,750,799.49 - 1,750,799.49 -
Long-term expenses to be apportioned 8,874,332.48 7,512,831.60 9,660,538.07 8,259,220.68
Deferred income tax asset 68,124,898.77 14,228,195.97 68,979,526.11 13,940,130.98
Other non-current asset
Total non-current asset 3,156,197,703.32 3,473,529,100.99 3,179,937,156.77 3,494,674,497.36
Total assets 5,877,895,817.75 4,580,727,511.69 5,681,568,328.36 4,577,559,382.81
Current liabilities:
2
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Short-term loans 239,530,000.00 227,000,000.00 282,971,600.00 276,011,600.00
Financial liabilities which are measured by fair value
and which changes are recorded in current profit and
loss
Derivative financial liabilities
Transaction financial liabilities
Notes payable 313,465,695.40 199,707,563.63 295,151,372.38 202,747,834.50
Accounts payable 962,290,305.38 346,513,395.55 767,267,232.43 254,630,956.73
Accounts received in advance
Contract liabilities 369,202,216.43 70,862,201.49 295,100,657.10 67,468,174.27
Wage payable 10,432,902.16 115,864.45 31,125,808.94 11,187,502.65
Taxes payable 8,404,850.51 4,501,921.31 9,714,194.25 4,244,948.37
Other accounts payable 48,896,456.62 18,671,065.14 43,017,466.38 17,179,194.67
Interest payable 1,481,750.50 1,481,750.50 1,839,166.81 1,839,166.81
Dividend payable 8,965,281.07 8,965,281.07 533,156.00 533,156.00
Liabilities held for sale
Non-current liabilities due within one year 42,509,456.33 25,000,034.00 37,157,126.41 25,000,034.00
Other current liabilities 171,761,627.86 58,319,969.61 152,173,946.30 50,815,558.18
Total current liabilities 2,166,493,510.69 950,692,015.18 1,913,679,404.19 909,285,803.37
Non-current liabilities:
Long-term loans 150,000,000.00 150,000,000.00 160,000,000.00 160,000,000.00
Bonds payable
Preferred stock
Perpetual bond
Lease liabilities 10,971,589.76
Long-term account payable 8,682,041.09 - 14,622,463.75 -
Long-term wage payable
Special Payable
Anticipation liabilities 420,512.50 7,592,239.01
Deferred income 102,329,269.37 62,564,767.37 104,457,568.86 64,121,068.86
Deferred income tax liabilities 31,255,129.37 31,255,129.37 32,010,364.83 32,010,364.83
Other non-current liabilities
Total non-current liabilities 303,658,542.09 243,819,896.74 318,682,636.45 256,131,433.69
Total liabilities 2,470,152,052.78 1,194,511,911.92 2,232,362,040.64 1,165,417,237.06
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 710,644,497.71 755,146,592.54 726,768,468.00 771,270,562.83
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 818,311,159.24 818,311,159.24 805,525,775.33 805,525,775.33
Generic risk reserve
Retained profit 961,799,858.98 968,005,981.89 997,601,577.97 990,593,941.49
Total owner’s equity attributable to parent company 3,336,469,482.70 3,386,215,599.77 3,375,609,788.07 3,412,142,145.75
3
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Minority interests 71,274,282.27 - 73,596,499.65 -
Total owner’s equity 3,407,743,764.97 3,386,215,599.77 3,449,206,287.72 3,412,142,145.75
Total liabilities and shareholder’s equity 5,877,895,817.75 4,580,727,511.69 5,681,568,328.36 4,577,559,382.81
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
4
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
INCOME STATEMENT
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. January-June, 2021 Unit: RMB Yuan
January-June, 2021 January-June, 2020
Items
Consolidation Parent Company Consolidation Parent Company
I. Total sales 1,094,285,620.97 406,481,436.30 873,403,414.46 421,537,668.16
II. Total operating cost 1,125,502,134.17 430,343,974.93 897,088,858.88 426,353,131.09
Including: Operating cost 950,404,769.26 350,403,193.45 748,075,096.12 359,831,813.22
Taxes and associate charges 9,681,522.15 6,384,124.77 8,020,491.83 4,653,637.89
Selling and distribution expenses 56,710,524.65 21,863,336.01 35,446,794.72 11,354,625.22
Administrative expenses 71,726,497.78 33,484,241.78 70,770,126.86 28,433,528.41
R&D expenses 30,738,151.60 13,801,193.69 24,715,021.28 14,305,119.21
Financial expense 6,240,668.73 4,407,885.23 10,061,328.07 7,774,407.14
Including: interest expense 8,685,937.28 6,705,229.51 9,635,047.81 7,801,791.24
interest income 3,144,366.44 3,042,414.46 719,172.42 538,148.04
Add: Other income 914,454.99 - 6,507,868.29 442,124.83
Gain/(loss) from investment 28,211,757.61 29,386,783.07 22,943,077.11 31,608,757.06
Including: income from investment on
21,085,751.39 22,157,178.59 16,816,173.99 17,295,970.66
affiliated enterprise and jointly enterprise
Gain/(loss) from change in fair value (loss as “-“) -5,034,903.12 -5,034,903.12 -19,323,309.84 -19,323,309.84
Credit impairment loss (loss as “-“) -7,635,425.72 -2,126,150.18 -14,041,906.01 -3,350,941.44
Assets impairment loss (loss as “-“) -1,016,603.72 -403,392.99
Gain/(loss) from asset disposal (loss as “-“) 8,393.93 -399.28 10,788.53
III. Operating profit -15,768,839.23 -2,040,601.13 -27,588,926.34 4,561,167.68
Add: non-business income 1,939,098.38 48.54 1,280,059.12
Less: non-business expense 561,689.05 373,198.48 93,891.78 44,972.15
IV. Total profit -14,391,429.90 -2,413,751.07 -26,402,759.00 4,516,195.53
Less: Income tax 2,514,997.49 -1,043,300.45 -1,492,259.17 -2,268,110.77
V. Net profit -16,906,427.39 -1,370,450.62 -24,910,499.83 6,784,306.30
(I) Net profit from continuous operation -16,906,427.39 -1,370,450.62 -24,910,499.83 6,784,306.30
(II)Net profit from discontinuing operation
Net profit attributable to parent company -14,584,210.01 -1,370,450.62 -23,604,345.52 6,784,306.30
Minority shareholders’ gains and losses -2,322,217.38 - -1,306,154.31
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
3. Gains and losses on reclassifying held-to-maturity
investments into available-for-sale financial assets
5
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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 -16,906,427.39 -1,370,450.62 -24,910,499.83 6,784,306.30
Total comprehensive income attributable to parent
-14,584,210.01 -1,370,450.62 -23,604,345.52 6,784,306.30
company
Total comprehensive income attributable to minority
shareholders -2,322,217.38 - -1,306,154.31
VIII. Earnings per share
(I) basic earnings per share -0.017 - -0.028
(II) diluted earnings per share -0.017 - -0.028
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
6
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
CASH FLOW STATEMENT
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. January -June, 2021 Unit: RMB Yuan
January -June, 2021 January -June, 2020
Items
Consolidation Parent Company Consolidation Parent Company
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing
labor services 829,930,587.89 363,144,362.91 604,104,617.20 348,200,949.78
Write-back of tax received 13,785,959.06 - 13,929,886.75 8,601,797.19
Other cash received concerning operating activities 43,810,533.99 10,124,431.16 32,877,448.75 14,383,755.85
Subtotal of cash inflow arising from operating activities 887,527,080.94 373,268,794.07 650,911,952.70 371,186,502.82
Cash paid for purchasing commodities and receiving
611,357,308.87 250,713,151.99 476,548,876.58 289,314,215.08
labor service
Cash paid to/for staff and workers 180,167,491.49 57,127,778.83 158,669,594.81 51,668,871.50
Taxes paid 39,272,409.35 21,117,335.18 31,669,562.21 14,614,702.80
Other cash paid concerning operating activities 85,617,707.51 24,604,890.78 62,374,607.85 17,567,587.34
Subtotal of cash outflow arising from operating activities 916,414,917.22 353,563,156.78 729,262,641.45 373,165,376.72
Net cash flows arising from operating activities -28,887,836.28 19,705,637.29 -78,350,688.75 -1,978,873.90
II. Cash flows arising from investing activities:
Cash received from recovering investment 3,262.34
Cash received from investment income 40,106,533.49 40,106,533.49 14,561,842.05 14,528,392.05
Net cash received from disposal of fixed, intangible and
79,228.00 5,000.00 414,448.00
other long-term assets
Net cash received from disposal of subsidiaries and other
units 36,263,700.00 36,263,700.00
Other cash received concerning investing activities
Subtotal of cash inflow from investing activities 76,452,723.83 76,375,233.49 14,976,290.05 14,528,392.05
Cash paid for purchasing fixed, intangible and other
4,948,265.12 3,291,284.99 5,676,192.55 3,370,306.88
long-term assets
Cash paid for investment 45,400,000.00 45,400,000.00 100,000,000.00
Net cash paid for achievement of subsidiaries and other
business units
Other cash paid concerning investing activities
Subtotal of cash outflow from investing activities 50,348,265.12 48,691,284.99 5,676,192.55 103,370,306.88
Net cash flows arising from investing activities 26,104,458.71 27,683,948.50 9,300,097.50 -88,841,914.83
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 235,180,000.00 207,000,000.00 276,601,600.00 266,011,600.00
Cash received from issuing bonds
Other cash received concerning financing activities 60,343,934.67 23,123,472.43 36,847,200.56
Subtotal of cash inflow from financing activities 295,523,934.67 230,123,472.43 313,448,800.56 266,011,600.00
Cash paid for settling debts 284,622,721.99 266,011,600.00 254,287,177.09 208,000,000.00
Cash paid for dividend and profit distributing or interest
8,511,930.03 7,062,645.82 10,670,866.72 9,007,757.61
paying
Including: dividends or profit paid by subsidiaries to
minority shareholders
Other cash paid concerning financing activities 60,312,645.22 22,103,989.52 12,119,804.65
Subtotal of cash outflow from financing activities 353,447,297.24 295,178,235.34 277,077,848.46 217,007,757.61
Net cash flows arising from financing activities -57,923,362.57 -65,054,762.91 36,370,952.10 49,003,842.39
IV. Influence on cash due to fluctuation in exchange rate 116,967.67 -448.17 42,272.21 329.36
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
V. Net increase of cash and cash equivalents -60,589,772.47 -17,665,625.29 -32,637,366.94 -41,816,616.98
Add: Balance of cash and cash equivalents at the period
314,978,460.49 185,202,268.28 301,527,354.56 175,586,251.46
-begin
VI. Balance of cash and cash equivalents at the
254,388,688.02 167,536,642.99 268,889,987.62 133,769,634.48
period–end
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
8
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’ EQUITY
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd 2021.01-06 Unit: RMB Yuan
2021.01-06
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 2,501,459.77 805,525,775.33 997,601,577.97 73,596,499.65 3,449,206,287.72
year
1. Change of accounting
policy
2. Correction of errors in
previous period
II. Balance at the beginning of
843,212,507.00 726,768,468.00 2,501,459.77 805,525,775.33 997,601,577.97 73,596,499.65 3,449,206,287.72
this year
III. Increase/ decrease of
amount in this year (“-” -16,123,970.29 12,785,383.91 -35,801,718.99 -2,322,217.38 -41,462,522.75
means decrease)
(I) Total comprehensive
-14,584,210.01 -2,322,217.38 -16,906,427.39
incomes
(II) Capital increased and
reduced by owners
1. Common shares increased
by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in
owners’ equity
4. Other
(III) Profit distribution 12,785,383.91 -21,217,508.98 - -8,432,125.07
1. Withdrawing surplus
12,785,383.91 -12,785,383.91 -
public reserve
2. Distribution to all owners
-8,432,125.07 -8,432,125.07
(shareholders)
3. Others
(IV) Internal carrying
forward of owners’ equity
1. New increase of share
capital from capital reserves
2. Convert surplus reserves
to share capital
3. Surplus reserves make up
losses
4. Others
(V) Specific reserve
1. Withdrawn for the period 1,201,021.67 1,201,021.67
2. Used in the period -1,201,021.67 -1,201,021.67
(VI) Other -16,123,970.29 -16,123,970.29
IV. Balance at the end of this
843,212,507.00 710,644,497.71 2,501,459.77 818,311,159.24 961,799,858.98 71,274,282.27 3,407,743,764.97
period
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
9
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
2020.01-06
Owners’ equity attributable to parent company
Items Total of
Lessen: Other Retained Minority
Capital Special Surplus owners’
share capital treasury comprehens profits equity
suplus preparation reserve equity
stock ive income
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 of 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 comprehensive
-23,604,345.52 -1,306,154.31 -24,910,499.83
incomes
(II) Capital increased and
reduced by owners
1. Common shares increased
by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in
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 from capital reserves
2. Convert surplus reserves
to share capital
3. Surplus reserves make up
losses
4. Others
(V) Specific reserve
1. Withdrawn for the period 1,127,227.68 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: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
10
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
STATEMENT OF CHANGES IN OWNERS’ EQUITY
Prepared by Dalian Refrigeration Company Limited 2021.01-06 Unit: RMB Yuan
2021.01-06
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 1,539,359.10 805,525,775.33 990,593,941.49 3,412,142,145.75
year
1. Change of accounting
policy
2. Correction of errors in
previous period
II. Balance at the beginning of
843,212,507.00 771,270,562.83 1,539,359.10 805,525,775.33 990,593,941.49 3,412,142,145.75
this year
III. Increase/ decrease of
amount in this year (“-” -16,123,970.29 12,785,383.91 -22,587,959.60 -25,926,545.98
means decrease)
(I) Total comprehensive
-1,370,450.62 -1,370,450.62
incomes
(II) Capital increased and
reduced by owners
1. Common shares increased
by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in
owners’ equity
4. Other
(III) Profit distribution 12,785,383.91 -21,217,508.98 -8,432,125.07
1. Withdrawing surplus
12,785,383.91 -12,785,383.91 -
public reserve
2. Distribution to all owners
-8,432,125.07 -8,432,125.07
(shareholders)
3. Others
(IV) Internal carrying
forward of owners’ equity
1. New increase of share
capital from capital reserves
2. Convert surplus reserves
to share capital
3. Surplus reserves make up
losses
4. Others
(V) Specific reserve
1. Withdrawn for the period 1,201,021.67 1,201,021.67
2. Used in the period -1,201,021.67 -1,201,021.67
(VI) Other -16,123,970.29 -16,123,970.29
IV. Balance at the end of this
843,212,507.00 755,146,592.54 1,539,359.10 818,311,159.24 968,005,981.89 3,386,215,599.77
period
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
11
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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 of 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 comprehensive
6,784,306.30 6,784,306.30
incomes
(II) Capital increased and
reduced by owners
1. Common shares increased
by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in
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 from capital reserves
2. Convert surplus reserves
to share capital
3. Surplus reserves make up
losses
4. Others
(V) Specific reserve
1. Withdrawn for the period 1,127,227.68 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: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
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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 March12th , 2015.
The general meeting for 2015 fiscal year held on 21st April 2016 approved the profit distribution
policy for the year of 2015, which agrees the profit distribution based on the total 360,164,975
number of shares as share capital, paid share dividend of 5 common shares for every 10 shares
through capital reserve. The policy stated above was fully implemented on 5th May 2016, and the
registered capital was altered to 540,247,462.00Yuan.
The 17thmeeting of the 6th generation of board was held on 4th June 2015 and the 2nd interim
shareholders’ meeting was held on 24th June 2015, meeting deliberated and passed the proposal
of non-public offering of ‘A shares’. China’s Securities Regulatory Commission issued SFC
license [2015]3137 on 30th December, 2015, approving that new non-public offering cannot
exceeded 38,821,954 number of shares. The company implemented the post meeting procedures
for China’s Securities Regulatory Commission, which is regarding adjustment of bottom price and
the number of the shares issued after the implementation of profit distribution policy of 2015 in
May, 2016, and accordingly revised the upper limit of non-public offering of share to58,645,096
number of new ‘A shares’. The company issued the non-public offering of 58,645,096 number of
‘A shares’ to 7 investors, and as a result, the total number of shares of the company is changed to
598,892,558 shares, and the par value is 1yuan per share and the total share capital is
598,892,558.00Yuan. The share capital stated above has been verified by DaHua Certified Public
Accountants, and has been issued the capital verification report Dahuayanzi [2016]000457 on 31st
May 2016.
According to the ‘Restricted Share Incentive Plan(draft) of Dalian Refrigeration Company
Limited for the year of 2016’ and the ‘Proposal regarding the shareholders’ meeting authorized the
board of directors to implement the Restricted Share Incentive Plan’ approved on the
3rdprovisional general meeting held on 13th September 2016, the 9th meeting of the 7th generation
of board deliberated and passed the ‘Proposal about granting the restricted shares to incentive
targets’ on September 20th, 2016 and set 20th September 2016 as share granted date, and granted
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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,
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,
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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 on December 7, 2018, issued on revision issued by the accounting
standards for enterprises no. 21 - leases the notification (finance and accounting) [2018] no. 35, in
domestic and at the same time, listed companies and listed overseas and adopted international
financial reporting standards or enterprises, enterprise accounting standards to prepare its financial
statements shall be implemented as of January 1, 2019; Other enterprises implementing the
accounting standards for Business Enterprises shall come into force on January 1, 2021. In
accordance with the above requirements, the Company will implement the relevant guidelines
from January 1, 2021.
1. Declaration for compliance with accounting standards for business enterprises
The financial statements are prepared by the Group according to the requirements of Accounting
Standard for Business Enterprise, and reflect the relative information for the financial position,
operating performance, cash flow of the Group truly and fully.
2. Accounting period
The Group adopts the Gregorian calendar year as accounting period from Jan 1 to Dec 31.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
3. Operating cycle
Normal operating cycle refers to the duration starting from purchasing the assets for
manufacturing up to cash or cash equivalent realization. The group sets twelve months for one
operating cycle and as the liquidity criterion for assets and liability.
4. Functional currency
The Group adopts RMB as functional currency.
5. Accounting for business combination under same control and not under same control
As an acquirer, the assets and liabilities that The Group obtained in a business combination under
the same control should be measured on the basis of their carrying amount in the consolidated
financial statements on the combining date. As for the balance between the carrying amount of the
net assets obtained by the combining party and the carrying amount of the consideration paid by it,
the capital surplus shall be adjusted. If the capital surplus is not sufficient to be offset, the retained
earnings shall be adjusted.
For a business combination not under same control, the asset, liability and contingent liability
obtained from the acquirer shall be measured at the fair value on the acquisition date. The
combination cost shall be the fair value, on the acquisition date, of the assets paid, the liabilities
incurred or assumed and equity securities issued by the acquirer in exchange for the control of the
acquire, and sum of all direct expenses(if the combination is achieved in stages, the combination
cost shall be the sum of individual transaction). The difference when combination cost exceeds
proportionate share of the fair value of identifiable net assets of acquire should be recognized as
goodwill. If the combination cost is less than proportionate share of the fair value of identifiable
net assets of acquiree, firstly, fair value of identifiable asset, liability or contingent liability shall
be reviewed, and so the fair value of non-monetary assets or equity instruments issued in the
combination consideration , after review, still the combination cost is less than proportionate
share of the fair value of identifiable net assets of acquire, the difference should be recognized as
non-operating income.
6. Method of preparation of consolidated financial statements
All subsidiaries controlled by the Group and structured entities are within the consolidation scope.
If subsidiaries adopt different accounting policy or have different accounting period from the
parent company, appropriated adjustments shall be made in accordance with the Group policy in
preparation of the consolidated financial statements.
All significant intergroup transactions, outstanding balances and unrealized profit shall be
eliminated in full when preparing the consolidated financial statements. Portion of the subsidiary’s
equity not belonging to the parent, profit, loss for the current period, portion of other
comprehensive income and total comprehensive belonging to minority interest, shall be
presented separately in the consolidated financial statements under “minority interest of
equity”, ”minority interest of profit and loss”, “other comprehensive income attributed to minority
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
interest” and “total comprehensive income attributed to minority interest” title.
If a subsidiary is acquired under common control, its operation results and cash flow shall be
consolidated since the beginning of the consolidation period. When preparing the comparative
consolidated financial statements, adjustments shall be made to relevant items of comparative
figures as regarded that reporting entity established through consolidation has been always there
since the point when the ultimate controlling party starts to have the control.
If a business consolidation under common control is finally achieved in stages, consolidation
accounting method shall be disclosed additionally for the period in which the control is obtained.
For example, if a business consolidation under common control is finally achieved in stages, when
preparing the consolidated financial statements, adjustments shall be made for the current
consolidation status as if consolidation has always been there since the point when the ultimate
controlling party starts to control. In preparation of comparative figures, asset and liability of the
acquiree shall be consolidated into the Group’s comparative financial statements, but to the extent
no earlier than the point when the Group and acquiree are both under ultimate control and relevant
items under equity in comparative financial statements shall be adjusted for net asset increased in
combination. To avoid the duplicated computation of net asset of acquiree, for long-term equity
investment held by the Group before the consolidation, relevant profit and loss, other
comprehensive income and movement in other net asset, recognized for the period between the
combination date and later date when original shareholding is obtained and when the Group and
the acquiree are under common control of same ultimate controlling party, shall be respectively
used for writing down the opening balance of retained earnings of comparative financial
statements and profit and loss for the current period.
If a subsidiary is acquired not under common control, its operation results and cash flow shall be
consolidated since the beginning of the consolidation period. In preparation of the consolidated
financial statements, adjustments shall be made to subsidiary’s financial statements based on the
fair value of its all identifiable assets, liability or contingent liability on the acquisition date.
If a business consolidation under non-common control is finally achieved in stages, consolidation
accounting method shall be disclosed additionally for the period in which the control is obtained.
For example, if a business consolidation not under common control is finally achieved in stages,
when preparing the consolidated financial statements, the acquirer shall remeasure its previously
held equity interest in the acquiree at its acquisition-date fair value and recognize the resulting
gain or loss as investment income for the current period. Other comprehensive income, under
equity method accounting rising from the interest held in acquiree in relation to the period before
the acquisition, and changes in the value of its other equity other than net profit or loss, other
comprehensive income and profit appropriation shall be transferred to investment gain or loss
for the period in which the acquisition incurs, excluding the other comprehensive income from
the movement on the remeasurement of ne asset or liability of defined benefit plan.
When the Group partially disposes of the long –term equity investment in subsidiary without
losing the control over it, in the consolidated financial statements, the difference, between
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
disposals price and respective disposed value of share of net assets in the subsidiary since the
acquisition date or combination date, shall be adjusted for capital surplus or share premium, no
enough capital surplus, then adjusted for retained earnings.
When the Group partially disposes of the long –term equity investment in subsidiary and lose the
control over it, in preparation of consolidated financial statements, remaining share of interest in
the subsidiary shall be remeasured on the date of losing control. Sum of the share disposal
consideration and fair value of remaining portion of shareholding minus the share of the net assets
in the subsidiary held based on the previous shareholding percentage since the acquisition date or
combination date, the balance of above is recognized as investment gain/loss for the period and
goodwill shall be written off accordingly. Other comprehensive income relevant to share
investment in subsidiary shall be transferred to investment gain /loss for the period on the date of
losing control.
When the Group partially disposes of the long –term equity investment in subsidiary and lose the
control over it by stages, if all disposing transactions are bundled, each individual transaction shall
be seen as a transaction of disposal of a subsidiary by losing control. The difference between the
disposal price and the share of the net assets in the subsidiary held before the date of losing
control, shall be recognize as other comprehensive income until the date of losing control where it
is transferred into investment gain/ loss for the current period.
7. Joint arrangement classification and joint operation accounting
The Group’s joint arrangement includes joint operation and joint venture. For joint operation, the
Group as a joint operator shall recognize its own assets and its share of any assets held jointly, its
liabilities and its share of any liabilities incurred jointly, its revenue from the sale of its share of
the output arising from the joint operation, its share of the revenue from the sale of the output by
the joint operation; and its expenses, including its share of any expenses incurred jointly. When an
entity enters into a transaction with a joint operation in which it is a joint operator, such as a sale
or contribution of assets, it is conducting the transaction with the other parties to the joint
operation and, as such, the joint operator shall recognize gains and losses resulting from such a
transaction only to the extent of the other parties’ interests in the joint operation.
8. Cash and cash equivalent
The cash listed on the cash flow statements of the Group refers to cash on hand and bank deposit.
The cash equivalents refer to short-term (normally with original maturities of three months or less)
and liquid investments which are readily convertible to known amounts of cash and subject to an
insignificant risk of changes in value.
9. Translation of foreign currency
(1) Foreign currency transaction
Foreign currency transactions are translated at the spot exchange rate issued by People’s Bank of
China (“PBOC”) on the 1st day of the month when the transactions incurred. Monetary assets and
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
liabilities in foreign currencies are translated into RMB at the exchange rate prevailing at the
balance sheet day. Exchange differences arising from the settlement of monetary items are charged
as in profit or loss for the period. Exchange differences of specific borrowings related to the
acquisition or construction of a fixed asset should be capitalized as occurred, before the relevant
fixed asset being acquired or constructed is ready for its intended uses.
(2) Translation of foreign currency financial statements
The asset and liability items in the foreign currency balance sheet should be translated at a spot
exchange rate at the balance sheet date. Among the owner’s equity items except “undistributed
profit”, others should be translated at the spot exchange rate when they are incurred. The income
and expense should be translated at spot exchange rate when the transaction incurs. Translation
difference of foreign currency financial statements should be presented separately under the other
comprehensive income title. Foreign currency cash flows are translated at the spot exchange rate
on the day when the cash flows incur. The amounts resulted from change of exchange rate are
presented separately in the cash flow statement.
10. Financial assets and financial liabilities
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 account.
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.
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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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 previously 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
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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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
if the financial liability is formed by contingent consideration recognized by the buyer through
business combination that is not under common control.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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 which 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
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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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
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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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.
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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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 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;
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.
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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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.
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. Receivables financing
In the process of managing enterprise liquidity, the Company carries out endorsement transfer or
discount of most of the notes receivable before maturity, and terminates the confirmation of the
discounted or endorsed notes receivable based on the fact that the Company has transferred almost
all the risks and rewards of the relevant notes receivable to the relevant counterparty. The
company's business model of managing notes receivable is aimed at both collecting the contract
cash flow and selling the financial asset, so it is classified as the financial asset measured at fair
value and its changes are included in other comprehensive income, and listed in the receivables
financing.
14.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;
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 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.
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”,
“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”
15. 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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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
16. 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.
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".
17. 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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
accounting standards for enterprises the scope of the specification, and satisfy the following
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 arising
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.
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.
18. Long-term receivables
(1) Confirmation method of impairment provisio
On the basis of expected credit losses, the Company will always measure its loss provision in
accordance with the amount equivalent to the expected credit losses in the entire duration for
long-term receivables formed by transactions regulated by the Accounting Standards for
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Enterprises No. 14 - Income Standards that do not contain significant financing components.
Measurement of expected credit losses. Expected credit loss refers to the weighted average of the
credit loss of a financial instrument weighted by the risk of default. The credit loss herein refers to
the difference between all contractual cash flows receivable under the contract and all cash flows
expected to be received by the Company discounted at the original effective interest rate, i.e. the
present value of all cash shortfalls.
(2) A portfolio method to evaluate expected credit risk on the basis of portfolio
The Company evaluates the credit risk of financial assets with significantly different credit risks,
such as: long-term receivables that have disputes with the other party or involve litigation or
arbitration; Other receivables where there is a clear indication that the debtor is likely to be unable
to meet its obligations, etc.
Except for financial assets for which credit risk is assessed individually, the Company divides
financial assets into different groups based on common risk characteristics and evaluates credit
risk on a portfolio basis.
In addition to long-term receivables with single credit risk assessment, it is divided into different
combinations based on the relationship between long-term receivables transaction objects as the
common risk characteristics, and the expected credit loss accounting estimation policy is
determined:
Accounting policy for expected credit loss of portfolio classification
The related party portfolio management within the scope of the merger evaluates that such
projects have low credit risk
Other related parties and combinations of non-related parties shall draw impairment provisions in
accordance with the expected loss rate
With reference to historical credit loss experience and combined with the current situation and
forecast of future economic conditions, the company prepares a comparison table between the age
of long-term receivables and the expected credit loss rate of the entire duration to calculate the
expected credit loss.
The Company's method of measuring expected credit losses on financial instruments reflects
factors such as: an unbiased probability weighted average amount determined by evaluating a
range of possible outcomes; Time value of money; Reasonable and evidence-based information
about past events, current conditions, and projections of future economic conditions that are
available at no unnecessary additional cost or effort at the balance sheet date.
The Company calculates the expected credit loss of long-term receivables on the balance sheet
date. If the expected credit loss is greater than the carrying amount of the current impairment
provision for long-term receivables, the Company recognizes the difference as the impairment
loss for long-term receivables, debits the "credit impairment loss" and credits the "bad debt
provision". Instead, the company recognizes the difference as an impairment gain and makes the
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
opposite accounting record.
If the company decides that the related long-term receivables cannot be collected due to the actual
credit loss and is approved to cancel, the "bad debt reserve" and the "long-term receivables" shall
be debited and credited according to the approved amount of write-off. If the write-off amount is
greater than the loss provision already drawn, the difference will be debited to "credit impairment
loss" on a regular basis.
19. Long-term equity investment
Long term equity investments are the investment in subsidiary, in associated company and in joint
venture.
Joint control is the contractual agreement sharing of control over an economic activity by all
participants or participants’ combination and decisions or policies relating to the operating activity
of the entity require the unanimous consent of the parties sharing the control.
Significant influence exists when the entity directly or indirectly owned 20% or more but less than
50% shares with voting rights in the investee company. If holding less than 20% voting rights, the
entity shall also take other facts or circumstances into accounts when judging any significant
influences. Factors and circumstances include: representation on the board of directors or
equivalent governing body of the investee, participation in financial or operating activities
policy-making processes, material transactions between the investor and the investee, interchange
of managerial personnel or provision of essential technical information.
When control exists over an investee, the investee is a subsidiary of an entity. The initial
investment cost for long-term equity investment acquired through business combination under
common control, is the carrying amount presented in the consolidated financial statements of the
share of net assets at the combination date in the acquired company. If the carrying amount of net
assets at the combination date in the acquired company is negative, investment shall be recognized
at zero.
If the equity of investee under common control is acquired by stages and business combination
incurs in the end, an entity shall disclose the accounting method for long-term equity investment
in the parent financial statement as a supplemental. For example, if the equity of investee under
common control is acquired by stages and business combination incurs in the end, and it’s a
bundled transaction, the entity shall regard all transactions as a one for accounting. If it’s not a
bundled transaction, the carrying amount presented in the consolidated financial statements of the
share of net assets at the combination date in the acquired company since acquisition is
determined as for the initial cost of long-term equity investment. The difference between the cost
initially recognized and carrying amount of long-term equity investment prior to the business
combination plus the newly paid consideration for further share acquired, and capital reserve shall
be adjusted accordingly. If no enough capital reserve is available for adjustment, retain earnings
shall be adjusted.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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.
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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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
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.
20. 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%
21. Fixed assets
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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
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.
22. 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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
confirmation of their actual values. The Group should withdraw depreciation in the next month
after completion.
23. 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.
24. Right of use assets
The right to use assets refers to the right of the Company as the lessee to use the leased assets
during the lease term.
(1) Initial measurement
On the commencement date of the lease term, the Company shall make an initial measurement of
the right to use assets at the cost. The cost includes the following four items: (1) The initial
measurement amount of lease liabilities; (2) The amount of the lease payment paid on or before
the commencement date of the lease term, if there is a lease incentive, will be deducted from the
amount of the lease incentive already enjoyed; (3) The initial direct costs incurred, namely the
incremental costs incurred to achieve the lease; (4) The cost expected to be incurred for the
demolition and removal of the leased asset, the restoration of the leased asset site or the restoration
of the leased asset to the state agreed in the lease terms, except those incurred for the production
of inventory.
(2) Follow-up measurement
After the commencement of the lease term, the Company shall adopt the cost model to carry out
subsequent measurement of the right to use assets, that is, to measure the right to use assets at the
cost minus accumulated depreciation and accumulated impairment losses. If the Company
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
re-measures the lease liabilities in accordance with the relevant provisions of the lease standards,
the book value of the right to use assets shall be adjusted accordingly.
Depreciation of usufruct assets
From the commencement date of the lease term, the Company shall make depreciation of the
usufruct. The usuary-use asset is usually depreciated in the month in which the lease begins (if the
enterprise chooses to depreciate in the month in which the lease begins, it needs to be depreciated
according to the specific situation described). The amount of depreciation deducted shall,
according to the use of the usufruct, be included in the cost of the relevant asset or the current
profit and loss.
When determining the depreciation method of the right to use assets, the Company shall make a
decision based on the expected consumption mode of the economic benefits related to the right to
use assets, and shall calculate and deduct the depreciation of the right to use assets by the straight
line method.
In determining the depreciable life of the use-right assets, the Company shall follow the following
principles: Where the ownership of the leased assets is reasonably determined at the end of the
lease term, depreciation shall be accrued during the remaining service life of the leased assets;
Where it is not reasonably certain that ownership of the leased asset will be acquired at the end of
the lease term, depreciation shall be accrued within the shorter period of the lease term or the
remaining useful life of the leased asset.
Impairment of the right to use assets
In case of impairment of the right to use assets, the Company shall carry out subsequent
depreciation according to the book value of the right to use assets after deducting the impairment
loss.
25. Intangible assets
The intangible assets of the Group refer to land use right and software. For acquired intangible
assets, the actual cost are measured at actual price paid and relevant other expenses. The cost
invested into intangible assets by investors shall be determined according to the stated value in the
investment contract or agreement, except for those of unfair value in the contract or agreement.
Land use right shall be amortized evenly within the amortization period since the remised
date.ERP system software and other intangible assets are amortized over the shortest of their
estimated useful life, contractual beneficial period and useful life specified in the law.
Amortization charge is included in the cost of assets or expenses, as appropriate, for the period
according to the usage of the assets. At the end of the year, for definite life of intangible assets,
their estimated useful life and amortization method shall be assessed. Any change shall be treated
as change on accounting estimate.
26. Impairment of long-term assets
The Group assesses at each balance sheet date whether there is any indication that long-term
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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.
27. Long-term deferred expenses
Long-term deferred expenses of the Group refer to leasing expenses, redecoration expense and
others. The expenses should be amortized evenly over the beneficial period. If the deferred
expense cannot take benefit for the future accounting period, the unamortized balance of the
deferred expenses should be transferred into the current profit or loss. Leasing expenses will be
amortized within 10 years and 30years; redecoration expense and others will be amortized
within 3 years.
28. 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.
29. Employee benefits
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Employee’s benefit comprises short-term benefit, post-employment benefit, termination benefit
and other long-term employee’s benefit.
Short-term benefit includes salary, bonus, allowance, welfare, social insurance, housing funds,
labour union expense, staff training expense, during the period in which the service rendered by
the employees, the actually incurred short term employee benefits shall be recognized as liability
and shall be recognized in P&L or related cost of assets based on benefit objective allocated from
the service rendered by employees.
Post-employment benefits include the basic pension scheme and unemployment insurance etc.
Based on the risk and obligation borne by the Group, post-employment benefits are classified into
defined contribution plan and defined benefit plan. For defined contribution plan, liability shall be
recognized based on the contributed amount made by the Group to separate entity at the balance
sheet date in exchange of employee service for the period and it shall be recorded into current
profit and loss account or relevant cost of assets in accordance with beneficial objective.
Termination benefits are employee’s benefit payable as a result of either an entity’s decision to
terminate an employee’s employment before the contract due date or an employee’s decision to
accept voluntary redundancy in exchange for those benefits. An entity shall recognize the
termination benefits as a liability and an expense at the earlier date when the entity cannot
unilateral withdraw the termination benefits due to employment termination plan or due to
redundancy suggestion, or when the entity can recognize the restructuring cost or expense arising
from paying termination benefits.
Other long-term employee’s benefit refers to all other employee benefits other than short-term
benefit, post-employment benefit and termination benefit.
If other long-term employee’s benefit is qualified as defined contribution plan, contribution made
shall be recognized as liabilities accordingly for the period in which the service are rendered by
the employee and recognized in the profit or loss for the current period or relevant cost of assets.
Except other long-term employee’s benefit mentioned above, obligation arising from defined
benefit plan shall be recognized in the profit or loss for the current period or relevant cost of assets
in accordance with the period when the service are rendered by the employee.
30. Lease liability
(1) Initial measurement
The company shall initially measure the liabilities of the lease according to the present value of
the outstanding lease payments on the commencement date of the lease term.
1) Lease payment
The lease payment amount refers to the amount paid by the Company to the Lessor in connection
with the right to use the leased assets during the lease term, including: (1) Fixed payment amount
and substantial fixed payment amount, less the amount related to the lease incentive where there is a
lease incentive; (ii) variable lease payments dependent on indices or ratios, which are determined at
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
the initial measurement on the basis of the indices or ratios on the commencement date of the lease;
(3) The exercise price of the purchase option when the Company reasonably determines that the
purchase option will be exercised; (4) The term of the lease reflects the amount of money to be paid
for the termination of the lease option when the Company will exercise it; (5) The amount expected
to be paid based on the residual value of the guarantee provided by the Company.
2) Discount rate
When calculating the present value of the lease payments, the Company shall use the interest rate
embedded in the lease as the discount rate, which is the interest rate at which the sum of the present
value of the lease receipts and the present value of the unsecured residual value of the lessor is equal
to the sum of the fair value of the leased asset and the initial direct expenses of the Lessor. If the
company is unable to determine the inherent interest rate of the lease, the incremental borrowing rate
shall be used as the discount rate. Such incremental borrowing rate shall mean the interest rate
payable by the Company during a similar period under similar mortgage conditions in order to
acquire assets with a value similar to that of the usuable-use assets under similar economic
circumstances. The interest rate is related to: (1) the company's own situation, i.e., the company's
solvency and credit standing; ② The term of the "loan", i.e. the lease term; (3) The amount of
"borrowed" funds, that is, the amount of lease liabilities; (4) "collateral conditions", that is, the
nature and quality of the underlying assets; (5) Economic environment, including the jurisdiction
where the lessee is located, the valuation currency, the signing time of the contract, etc. The
company's bank loan interest rate/related lease contract interest rate/the company's latest similar
asset mortgage interest rate/the interest rate of bonds issued by the enterprise in the same period......
Based on the above adjustment factors to obtain the incremental borrowing rate.
(2) Follow-up measurement
On the commencement date of the lease term, the Company shall carry out subsequent
measurement of the lease liabilities according to the following principles: (1) Increase the carrying
amount of the lease liabilities when recognizing the interest of the lease liabilities; (2) Reduce the
carrying amount of lease liabilities when paying the lease payment; (3) When the lease payment
changes due to revaluation or lease change, the book value of the lease liability shall be measured
again.
The Company shall calculate the interest expense of the lease liability in each period of the lease
term at a fixed periodic interest rate and record it into the current profit and loss, except for those
that should be capitalized. The periodic interest rate refers to the discount rate used by the Company
for the initial measurement of lease liabilities, or the revised discount rate used by the Company for
the remeasurement of lease liabilities due to changes in lease payments or changes in lease.
(3) Re-measurement
After the commencement of the lease term, in the event of any of the following circumstances, the
Company shall re-measure the lease liabilities according to the present value of the lease payments
after the change and adjust the book value of the usufruct accordingly. If the book value of the right
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
to use assets has been reduced to zero, but the lease liabilities still need to be further reduced, the
company shall record the remaining amount into the profits and losses of the current period. (1)
Changes in the substantial fixed payment amount (in this case, the original discount rate is used to
discount); (2) The estimated amount payable of the residual value changes (in this case, the original
discount rate is used to discount); (3) Any change in the index or rate used to determine the lease
payment (in which case the revised discount rate is used); (4) The evaluation result of the call option
changes (in this case, the revised discount rate is used to discount); (5) Changes in the assessment
result or actual exercise of the lease option to renew or terminate the lease option (in which case, the
revised discount rate is used to discount the option).
31. 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.
32. 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.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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.
33. 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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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
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:
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
(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.
(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.
34. 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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
with business nature, otherwise, shall be recognized as non-operating expenses.
If any government grant already recognized needs to be returned to the government, the
accounting shall be differed according to the following circumstances:
1) originally recognized as offsetting of related assets' book value, assets book value shall be
adjusted
2) if any deferred income, book value of deferred income shall be offset, excessive portion
shall be accounted into income statement
3) Other situation, it shall be accounted into income statement directly.
35. 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.
36. Lease
(1) Accounting treatment of operating leases
(1) Identification of lease
A lease is a contract whereby the lessor assigns the right to the use of an asset to the lessee for a
certain period of time in exchange for consideration. On the commencement date of the contract,
the Company evaluates whether the contract is a lease or includes a lease. A contract is a lease or
includes a lease if a party assigns the right to control the use of one or more identified assets for a
certain period of time in exchange for consideration. To determine whether the contract
relinquishes the right to control the use of the identified assets for a given period, the Company
assesses whether the client under the contract is entitled to receive virtually all the economic
benefits arising from the use of the identified assets during the use period and is entitled to
dominate the use of the identified assets during the use period.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
If the contract contains multiple separate leases at the same time, the company will divide the
contract and make accounting treatment for each separate lease. If the contract contains both
leasing and non-leasing parts, the company shall split the leasing and non-leasing parts for
accounting treatment.
(2) The Company acts as the lessee
On the commencement date of the lease term, the Company shall recognize the right to use assets
and liabilities of the lease. The recognition and measurement of right to use assets and lease
liabilities are shown in "27. Right to use Assets" and "33. Lease liabilities ".
2) Lease change
Lease change refers to the change of lease scope, lease consideration and lease term beyond the
terms of the original contract, including the increase or termination of the right to use one or more
leased assets, the extension or shortening of the lease term stipulated in the contract, etc. The
effective date of the lease change means the date on which the parties agree on the lease change.
If the lease changes and the following conditions are met at the same time, the Company will treat
the lease change as a separate lease for accounting: (1) The lease change expands the lease scope
or the lease term by increasing the right to use one or more leased assets; (2) The increased
consideration shall be equivalent to the amount of the individual price for the extended portion of
the lease scope or the extended lease term adjusted for the circumstances of the contract.
If the change of lease is not accounted for as a separate lease, the Company shall, on the effective
date of the change of lease, apportion the consideration of the contract after the change in
accordance with relevant provisions of the lease standards and redefine the lease period after the
change; The revised discount rate is used to discount the changed lease payment amount to
re-measure the lease liabilities. When calculating the present value of the lease payment after the
change, the Company shall use the lease embedded interest rate during the remaining lease period
as the discount rate; If it is not possible to determine the leasehold interest rate for the remaining
lease term, the Company shall use the lessee's incremental borrowing rate on the effective date of
the lease change as the discount rate. With respect to the impact of the above adjustment of lease
liabilities, the Company will make accounting treatment according to the following circumstances:
(1) If the change of lease results in the reduction of the scope of lease or the shortening of lease
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
term, the lessee shall reduce the book value of the right to use assets and record the profits or
losses related to partial or complete termination of lease into the current profit and loss. (2) If the
lease liabilities are remeasured due to other lease changes, the lessee shall adjust the book value of
the right to use assets accordingly.
3) Short-term leases and leases of low-value assets
For short-term leases with a lease term of no more than 12 months and low-value asset leases with
a lower value when each leased asset is a new asset, the Company chooses not to recognize the
right to use assets and lease liabilities. The Company will include the lease payments for
short-term leases and leases of low-value assets into the cost of the relevant assets or current
profits and losses during each period of the lease term in accordance with the straight-line method
or other systematically reasonable method.
(3) Our company is the lessor
On the basis that this Contract is or includes a lease as assessed in (1), the Company, as the lessor,
on the commencement date of the lease, divides the lease into a finance lease and an operating
lease.
If a lease substantially transfers almost all of the risks and rewards associated with ownership of
the leased asset, the lessor classifies the lease as a finance lease and any lease other than finance
lease as an operating lease.
The Company generally classifies a lease as a finance lease if it has one or more of the following
conditions: (1) At the end of the lease term, the ownership of the leased asset passes to the lessee;
(2) The lessee has the option to purchase the leased asset, and the purchase price entered into is
sufficiently low compared with the fair value of the leased asset at the time the option is expected
to be exercised, so that it can be reasonably determined on the commencement date that the lessee
will exercise the option; (3) Although the ownership of the asset is not transferred, the lease period
accounts for most of the service life of the leased asset (no less than 75% of the service life of the
leased asset); (4) On the lease commencement date, the present value of the lease receipts is
almost equivalent to the fair value of the leased asset (not less than 90% of the fair value of the
leased asset). ; ⑤ The leased assets are special in nature, and only the lessee can use them if
there is no major transformation. The Company may also classify a lease as a finance lease if it
has one or more of the following signs: (1) If the lessee cancels the lease, the lessee shall bear the
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
loss caused to the lessor by the cancellation; (2) the profit or loss generated by the fluctuation of
the fair value of the residual asset belongs to the lessee; (3) The lessee has the ability to continue
the lease at a rent far below the market level until the next period.
2) Accounting treatment of operating lease
Disposal of rent
During each period of the lease term, the Company will use the straight-line method/other
systematic and reasonable methods to recognize lease receipts from operating leases as rental
income.
Incentives offered
If the rent-free period is provided, the Company shall allocate the total rent by the straight line
method/other reasonable method throughout the lease period without deducting the rent-free
period, and shall recognize the rental income during the rent-free period. If the Company bears
certain expenses of the Lessee, such expenses shall be deducted from the total rental income and
distributed according to the balance of the rental income after deduction.
Initial direct cost
The initial direct expenses incurred by the Company in connection with the operating lease shall
be capitalized to the cost of the underlying assets under lease and shall be booked into the current
profits and losses in stages during the lease term on the same recognition basis as the rental
income.
Depreciation
For the fixed assets in the operating leased assets, the Company shall adopt the depreciation policy
for similar assets. Other operating leased assets shall be amortized in a systematic and reasonable
manner.
Variable lease payments
The variable lease payments obtained by the Company in connection with the operating lease and
not included in the lease receipts shall be recorded into the current profit and loss when actually
incurred.
Changes in operating leases
If an operating lease changes, the Company will treat it as a new lease as of the effective date of
the change, and the amount received in advance or receivable for the lease related to the lease
before the change is regarded as the amount received for the new lease.
(2) Accounting treatment of finance lease
Initial measurement
On the commencement date of the lease term, the Company shall recognize the finance lease
receivable and terminate the recognition of the finance lease assets. In the initial measurement of
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
the finance lease receivables, the Group shall take the net lease investment as the recorded value
of the finance lease receivables.
The net lease investment is the sum of the present value of the unsecured residual value and the
lease receipts not yet received at the commencement of the lease period, discounted at the interest
rate contained in the lease. Lease revenue refers to the amount of money that the lessor should
collect from the lessee for the assignment of the right to use the leased assets during the lease term,
including: (1) the fixed amount and substantial fixed amount payable by the lessee; If there is a
lease incentive, the amount related to the lease incentive will be deducted; (ii) variable lease
payments dependent on indices or ratios, which are initially measured according to the indices or
ratios on the commencement date of the lease; (3) the exercise price of the option to buy, provided
that it is reasonably determined that the lessee will exercise the option; (4) the amount to be paid
by the lessee to exercise the termination option, provided that the lease term reflects that the lessee
will exercise the termination option; (5) Guarantee residual value provided to the lessor by the
lessee, the party related to the lessee and an independent third party who has the economic ability
to perform the guarantee obligation.
Subsequent measurement
The Company calculates and recognizes the interest income for each period of the lease term at a
fixed periodic interest rate. The periodic interest rate, it is to point to determine the net investment
in the lease use contains the discount rate (if relet, sublet's interest rate implicit in the lease cannot
be determined, using the original leasing of the discount rate (adjustments according to the initial
direct costs related to sublease)), or change in the financing lease is not as a separate lease
accounting treatment, and meet if changes to take effect on the lease beginning date, The lease
will be classified as a financial lease at the revised discount rate determined in accordance with
the relevant provisions.
Accounting treatment of lease changes
If the finance lease changes and meets the following conditions at the same time, the Company
will treat the change as a separate lease for accounting: (1) The change expands the scope of lease
by increasing the right to use one or more leased assets; (2) The increased consideration shall be
equivalent to the amount of the individual price of the expanded lease area adjusted for the
circumstances of the contract.
If the change of financing lease is not as a single lease accounting treatment, and meet if changes
to take effect on the lease beginning date, the lease will be classified as an operating lease terms,
the group since the day of the effect of the change of it as a new lease accounting treatment, and
prior to the effect of the change of the net investment in the lease as the book value of the leased
asset.
37. 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,
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
liability, income and expense. The actual circumstance maybe differs from the estimates. The
management needs to continuously assess the key assumption involved by estimate and the
judgment on uncertainty. Effect on the accounting estimate shall be recognized during the period
when estimate is changed and in future.
The following accounting estimate and key assumption will trigger the significant risk of
significant adjustment on the book value of asset and liability during the period of future.
（1） Impairment of receivable
Receivable is measured at amortized cost at the balance sheet date and assessed for any
impairment indicator and the acutely amount of impairment. Objective evidence for impairment
includes judgmental data of indicating significant decline of future cash flow of individual or
group of receivable, indicating significant negative financial performance of debtors. Had
receivable is recovered with certain proof, and in fact, it is relevant to the the matters subsequent
to the the loss recognition, the impairment recognized before shall be reversed.
（2） Provision of inventory impairment
Inventory is periodically evaluated at the net realizable value and any cost higher than NRV shall
be recognized as inventory impairment loss. When evaluating the NRV, net realizable value is
determined by deducting the expected selling expense and relative tax from the estimated selling
price. When actual selling price or cost differs from the previous estimates, management will
make adjustment on NRV. Therefore, the results based on the present experience may differ from
the actual results, which caused the adjustment on the carrying amount of inventory in the book.
Provision for inventory impairment may vary with the above reasons. Any adjustment on
provision for inventory impairment will affect the income statement.
（3） Provision of goodwill impairment
Each year, goodwill shall be assessed for any impairment. Recoverable amount of assets group
or asset portfolio including goodwill shall be the present value of future cash flow, which needs
estimates for calculation.
If management adjust the gross profit margin adopted by the present value of future cash flow
calculation of assets group or asset portfolio, adjusted gross profit margin is lower than the margin
applied, the impairment is required.
If management adjust the discounting rate before tax applied by the present value of future cash
flow calculation of assets group or asset portfolio, adjusted discounting rate before tax is higher
than the rate applied, the impairment is required.
If actual profit margin or discounting rate before tax is higher or lower than management’s
estimate, any impairment recognized before can not be reversed.
（4） Provision of fixed asset impairment
At the balance sheet date, the management shall implement impairment test on buildings, plant
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
and machinery etc which has any impairment indicator. The recoverable amount of FA is the
higher of PV of future cash flow and net value of fair value after disposal cost, the calculation
needs accounting estimate.
If management adjust the gross profit margin adopted by the present value of future cash flow
calculation of assets group or asset portfolio, adjusted gross profit margin is lower than the margin
applied, the impairment is required.
If management adjust the discounting rate before tax applied by the present value of future cash
flow calculation of assets group or asset portfolio, adjusted discounting rate before tax is higher
than the rate applied, the impairment is required.
If actual profit margin or discounting rate before tax is higher or lower than management’s
estimate, any impairment recognized before can not be reversed.
（5） Recognition of deferred tax assets
Estimate on deferred tax assets needs making estimation of taxable income and applied tax rate in
the following years in future. Whether deferred tax asset can be realized depends on the enough
probable taxable profit obtained in future. Tax rate change in future and the timing of temporary
difference reverse may also affect the income tax expense(income)and the balance of deferred tax.
Any change of estimate described here will cause the deferred tax adjustment.
（6） Useful life span of fixed assets and intangible assets
At least every year end, the management shall review the useful life of FA and intangible assets.
Expected useful life is based on the management’s experience on the same class of assets, with
reference to the estimate applied in the industry in conjunction with expected technology
development. When previous estimate significantly changed, depreciation and amortization in the
future shall be adjusted accordingly.
38. Changes in Accounting Policies, Accounting Estimates
The Ministry of Finance issued the notice on the revision and issuance of the Accounting Standards
for Business Enterprises No. 21 -- Lease on December 7, 2018 (No. 35 of the Department of
Accounting and Accounting [2018]), which will be implemented from January 1, 2021. Within a
certain period, the lessor assigns the right to use the assets to the lessee in order to obtain the
contract of consideration. On the commencement date of the contract, the Company evaluates
whether the contract is a lease or includes a lease. A contract is a lease or includes a lease if a party
assigns the right to control the use of one or more identified assets for a certain period of time in
exchange for consideration. To determine whether the contract relinquishes the right to control the
use of the identified assets for a given period, the Company assesses whether the client under the
contract is entitled to receive virtually all the economic benefits arising from the use of the identified
assets during the use period and is entitled to dominate the use of the identified assets during the use
period. For short-term leases with a lease term of no more than 12 months and low-value asset leases
50
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
with a lower value when each leased asset is a new asset, the Company chooses not to recognize the
right to use assets and lease liabilities. The Company will include the lease payments for short-term
leases and leases of low-value assets into the cost of the relevant assets or current profits and losses
during each period of the lease term in accordance with the straight-line method or other
systematically reasonable method. The impact of the implementation of the new leasing criteria on
the relevant items of the balance sheet at the beginning of the current period is as follows:
Consolidated balance sheet
Item 31-Dec-2020 1-Jan-2021 The amount of
adjustment
Fixed assets 891,147,058.82 867,177,638.62 -23,969,420.20
Right of use assets 23,969,420.20 +23,969,420.20
Long-term payables 14,622,463.75 -14,622,463.75
Lease liabilities 14,622,463.75 +14,622,463.75
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%
51
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Dalian Bingshan Air-conditioning Equipment Co., Ltd. 15%
Dalian Bingshan Guardian Automation Co., Ltd. 15%
Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd. 25%
Wuhan New World Refrigeration Industrial Co., Ltd. 15%
Bingshan Technology Service （Dalian） Co.,Ltd. 15%
Dalian Bingshan Engineering&Trading Co.,Ltd 25%
Dalian Universe Thermal Technology Co., Ltd. 15%
Dalian New Meica Electronics Technology Co., Ltd 15%
2. Tax preference
The company obtained the qualification of high and new technology enterprises on 3rd December,
2020 approved by Dalian Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax
Bureau and Local tax Bureau. The Certificate No. is GR202021200646, 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 3rd December, 2020 approved by Dalian
Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax
Bureau. The Certificate No. is GR202021200672, and the validity duration is three years.
According to the tax law, the company can be granted for the preferential tax policy of enterprise
income tax rate of 15% in three years.
The company’s subsidiary, Dalian Bingshan JiaDe Automation Co., Ltd. obtained the qualification
of high and new technology enterprises on 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, the company can be granted for the preferential tax policy of enterprise income tax rate of 15%
in three years.
The company’s subsidiary, Wuhan New World Refrigeration Industrial Co., Ltd obtained the
qualification of high and new technology enterprises on 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, the company can be granted for the preferential tax policy of enterprise
income tax rate of 15% in three years.
The company’s subsidiary, Bingshan Technical Service （Dalian） Co., Ltd. obtained the
qualification of high and new technology enterprises on 3rd December, 2020 approved by Dalian
Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax
Bureau. The Certificate No. is GR202021200540, 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.
52
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
The company’s subsidiary, Dalian Niweisi LengNuan Techonoligy Co., Ltd. obtained the
qualification of high and new technology enterprises on 3rd December, 2020 approved by Dalian
Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax
Bureau. The Certificate No. is GR202021200570, 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 Xinminghua Electrical Technology Co., Ltd obtained the
qualification of high and new technology enterprises on 3rd December, 2020 approved by Dalian
Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax
Bureau. The Certificate No. is GR202021200699, 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.
V. Notes to Consolidated Financial Statements
The following disclosure date on this financial statement without special indication, “opening”
refers to January 1, 2021; “closing” refers to June 30, 2021; “current period” refers to the period
from January 1, 2021 to June 30, 2021; and “last period” refers to the period from January 1, 2020
to June 30, 2020; with the currency unit RMB.
1. Cash and cash in bank
Item Closing Balance Opening Balance
Cash on hand 46,859.50 154,668.54
Cash in bank 253,557,290.68 316,921,397.57
Other cash and cash equivalents 59,209,893.31 56,369,665.56
Total 312,814,043.49 373,445,731.67
Note: Other cash and cash equivalents is restricted, including deposit for bank acceptance notes of
47,176,283.06 Yuan, deposit to creditor of 6,240,408.57 Yuan, guarantee deposit of 1,000,000.00 Yuan,,
The bank account was frozen4,008,663.84 yuan due to the lawsuit, total of58,425,355.47Yuan.
2. Notes receivable
(1) Category of notes receivable
Items Closing Balance Opening Balance
Bank acceptance notes 149,782,112.94 109,424,884.35
Commercial acceptance notes 15,008,354.43 29,696,153.43
Total 164,790,467.37 139,121,037.78
Categories according to bad debts provision
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
53
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debts
provision based on 165,923,599.74 100.00% 1,133,132.37 0.68% 164,790,467.37
group
Including: bank
149,782,112.94 90.27% 149,782,112.94
acceptance notes
Trade acceptance
16,141,486.80 9.73% 1,133,132.37 7.02% 15,008,354.43
notes
Total 165,923,599.74 100.00% 1,133,132.37 0.68% 164,790,467.37
(Continued)
Opening balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debts
provision based on 141,363,100.56 100.00% 2,242,062.78 1.59% 139,121,037.78
group
Including: bank
109,424,884.35 77.41% 109,424,884.35
acceptance notes
Trade acceptance
31,938,216.21 22.59% 2,242,062.78 7.02% 29,696,153.43
notes
Total 141,363,100.56 100.00% 2,242,062.78 1.59% 139,121,037.78
(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 notes 2,242,062.78 1,108,930.41 1,133,132.37
Total 2,242,062.78 1,108,930.41 1,133,132.37
(3)Notes receivable pledged by the company at the end of the period
Items Closing pledged amount
Bank acceptance notes 21,890,716.83
Total 21,890,716.83
(4) 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 58,216,241.07
Trade acceptance notes 1,563,000.00
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Item Closing amount no more Closing amount still
recognized recognized
Total 59,779,241.07
3. Accounts receivable
(1) Category of accounts receivable
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Accounts
receivable with
significant
9,727,521.14 0.83% 219,197.46 2.25% 9,508,323.68
individual amount
and separate bad
debt provision
Accounts
receivable with bad
1,156,631,348.02 99.17% 286,208,873.62 24.75% 870,422,474.40
debt provision
based on the group
Including: aging as
characteristics of 1,156,631,348.02 99.17% 286,208,873.62 24.75% 870,422,474.40
credit risk
Total 1,166,358,869.16 100.00% 286,428,071.08 24.56% 879,930,798.08
Opening balance
Items Booking balance Provision
Booking value
Amount % Amount %
Accounts
receivable with
significant
9,375,092.34 0.85% 262,313.88 2.80% 9,112,778.46
individual amount
and separate bad
debt provision
Accounts
receivable with bad
1,089,352,275.04 99.15% 281,453,097.75 25.84% 807,899,177.29
debt provision
based on the group
Including: aging as 1,089,352,275.04 99.15% 281,453,097.75 25.84% 807,899,177.29
55
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
characteristics of
credit risk
Total 1,098,727,367.38 100.00% 281,715,411.63 25.64% 817,011,955.75
Accounts receivable with significant individual amount and separate bad debt provision:
Closing Balance
Items
Booking balance Provision % Reasons for the provision
Changsha Runyi Urban and rural
Development and Construction Co., 90,000.00 328.85 0.37%
LTD
Wuhan BOE Optoelectronic Technology Both parties shall
4,539,400.70 88,878.28 1.96%
Co., LTD implement the agreement
Chengdu BOE Optoelectronic on time, and the expected
3,078,990.00 73,449.61 2.39%
Technology Co., LTD credit risk will be
Mianyang BOE Optoelectronic significantly reduced
1,403,517.44 34,752.40 2.48%
Technology Co., LTD
Boe (Hebei) Mobile Display Technology
615,613.00 21,788.32 3.54%
Co., LTD
Total 9,727,521.14 219,197.46 -- --
Accounts receivable with bad debt provision based on the group:
Closing Balance
Items
Booking balance Provision %
within 1 year 578,546,182.15 40,613,971.51 7.02%
1-2 years 168,760,467.84 28,250,502.32 16.74%
2-3 years 141,873,656.22 43,739,648.22 30.83%
3-4 years 162,871,209.59 80,344,367.69 49.33%
4-5 years 40,644,338.77 29,324,890.43 72.15%
more than 5 years 63,935,474.09 63,935,474.09 100.00%
Total 1,156,631,348.02 286,208,873.62 --
Accounts receivable with the bad debt provisions under accounting aging analysis method
Aging Closing Balance
Within1 year 578,546,182.15
11to 2 years 168,760,467.84
22 to 3 years 151,601,177.36
More than 3 years 267,451,041.81
3 to 4 years 162,871,209.59
4 to 5 years 40,644,338.77
More than 5 years 63,935,493.45
Total 1,166,358,869.16
2) Bad debt provision accrued and written-off (withdraw)
Opening Change during the period Closing
Category
balance Accrued Collected/reversed Written-off Others Balance
Bad debt
281,715,411.63 14,796,226.65 276,589.05 6,794,738.07 3,565,418.18 286,428,071.08
provision
Total 281,715,411.63 14,796,226.65 276,589.05 6,794,738.07 3,565,418.18 286,428,071.08
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
3) Accounts receivable written off in current period
Item Written off amount
Receivable actually written off 6,794,738.07
4) The top five significant accounts receivable categorized by debtors
Closing % of the Closing Balance
Company
Balance total AR of Provision
Panasonic Appliances Cold-Chain (Dalian) Co., Ltd. 44,027,208.91 2.94 3,090,710.07
Xinyi Yuanda construction and Installation
32,748,744.00 2.19 25,281,907.38
Engineering Co., Ltd.
Qingcheng County Zhongyi Energy Co., LTD 26,600,000.00 1.78 4,452,840.00
Shenzhen Zhaofude Tourism development 21,028,740.12 1.41 10,187,313.50
Guangzhou Wanda Cultural Tourism City
17,050,390.97 1.14 8,410,957.87
Investment Co. LTD
Total 141,455,084.00 9.46% --
4. Receivables financing
Items Closing Balance Opening Balance
Notes receivable 67,877,483.26 61,737,282.56
Total 67,877,483.26 61,737,282.56
5. Accounts paid in advance
(1) Aging of accounts paid in advance
Closing Balance Opening Balance
Items
Amount Percentage Amount Percentage
Within 1 year 194,928,034.98 77.34% 111,133,100.83 71.93%
1 to 2 years 16,242,227.23 6.44% 24,880,404.77 16.11%
2 to 3 years 28,109,526.05 11.15% 9,313,439.77 6.03%
Over 3 years 12,755,788.93 5.06% 9,154,563.98 5.93%
Total 252,035,577.19 154,481,509.35
Significant prepayment over 1 year
Closing Unsettled Reasons
Company Aging
Balance
Dalian Hengtong Refrigeration Equipment 5,720,000.00 1-2 years 2-3
Contract is not fully implemented
engineering Co., Ltd years
Shanghai POMA Automation Equipment Co.,ltd 4,272,900.00 4-5 years Contract is not fully implemented
3,965,236.72 Within 1 year
Dalian Jingdian Steel Work Co., Ltd 1-2 years Contract is not fully implemented
2-3 years
2,554,677.66 1-2 years 2-3
Yunnan Xinneng Technology Co., Ltd years 3-4 Contract is not fully implemented
57
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
years
Anhui Songze Energy Co., LTD 2,080,000.00 1-2 years Contract is not fully implemented
Total 18,592,814.38 — —
(2) The top five significant accounts paid in advance categorized by debtors
% of the total
Closing
Company Aging advances to
Balance
suppliers
Dalian Shentong Electric Co., LTD 23,847,653.84 Within 1 year 9.46
Shenyang Baosteel Northeast Trading Co. LTD 13,339,547.30 Within 1 yea 5.29
Heilongjiang Dadong Hei Tudi Agriculture Co. LTD 7,620,000.00 Within 1 yea 3.02
DalianHeng Tong refrigeration Equipment Egineering Co. 1-2 years; 2-3
5,720,000.00 2.27
LTD. years
Hangzhou Zhonghong New Energy Technology Co., LTD 5,703,000.00 Within 1 yea 2.26
Total 59,430,201.14 22.31
6. Other receivables
Items Closing Balance Opening Balance
Interest receivable 681,304.44 46,879.68
Dividend receivable 8,456,762.03 25,923.75
Other receivable 29,266,599.20 67,454,373.43
Total 38,404,665.67 67,527,176.86
(1) Interest receivable
Items Closing Balance Opening Balance
Interest on Term deposits 681,304.44 46,879.68
Total 681,304.44 46,879.68
(2). Dividends receivable
Company Closing Opening Balance
Balance
Wuhan Steel and Electricity Co., Ltd. 25,923.75 25,923.75
Panasonic Refrigeration (Dalian) Co. , Ltd. 640,000.00
Guotai Junan Securities Co., Ltd. 7,229,604.48
Dalian Benzhuang Chemical Co., LTD 561,233.80
Total 8,456,762.03 25,923.75
(3). Other receivables
1) Other receivables categorized by nature
Nature Closing Balance Opening Balance
Guarantee deposits 23,899,345.45 26,232,362.26
58
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Nature Closing Balance Opening Balance
Petty cash 8,579,158.19 5,325,764.44
Receivables and Payables 3,841,762.27 47,714,138.78
Others 3,897,351.30 1,619,770.46
Total 40,217,617.21 80,892,035.94
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, 2021 13,437,662.51 13,437,662.51
The balance of January 1, 2021 in
the current period
—— —— —— ——
Provision for bad debts 2,435,152.34 2,435,152.34
Balance on June 30, 2021 11,002,510.17 11,002,510.17
Other receivables accrued the bad debt provisions under accounting aging analysis method
Aging Closing Balance
Within 1 year 21,757,036.61
1-2 years 4,198,274.97
2-3 years 4,621,545.82
Over 3 years 9,640,759.81
3-4 years 2,301,017.10
4-5 years 3,111,136.00
Over 5 years 4,228,606.71
Total 40,217,617.21
3) Provision for bad debt
Opening Change during the year Closing
Category
balance Accrued Collected/reversed Written-off Balance
Bad debt
13,437,662.51 2,435,152.34 11,002,510.17
provision
Total 13,437,662.51 2,435,152.34 11,002,510.17
4) Other receivables from the top 5 debtors
% of
Closing Closing Balance
Name Category Aging the total
Balance of Provision
OR
Dalian Huali
Deposit 1,650,000.00 4-5 yreas 4.10 1,170,015.00
Coating Equipment Co., Ltd
Akto Animal Husbandry and Veterinary
Deposit 1,482,608.60 Within 1 year 3.69 1,385,646.00
Office
Agriculture Bureau of Moyu County Deposit 1,135,440.00 1-2 years 2.82 145,449.86
Panasonic Refrigerating System Deposit 1,121,009.34 Within 1 year 2.79 73,314.01
Dalian Delta HK& China Gas Co.,Ltd Deposit 1,100,000.00 Over 5 years 2.74 1,100,000.00
59
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
% of
Closing Closing Balance
Name Category Aging the total
Balance of Provision
OR
Dalian Huali
Deposit 1,650,000.00 4-5 yreas 4.10 1,170,015.00
Coating Equipment Co., Ltd
Akto Animal Husbandry and Veterinary
Deposit 1,482,608.60 Within 1 year 3.69 1,385,646.00
Office
Agriculture Bureau of Moyu County Deposit 1,135,440.00 1-2 years 2.82 145,449.86
Panasonic Refrigerating System Deposit 1,121,009.34 Within 1 year 2.79 73,314.01
Dalian Delta HK& China Gas Co.,Ltd Deposit 1,100,000.00 Over 5 years 2.74 1,100,000.00
Total 6,489,057.94 3,874,424.87
7. Inventories
(1) Categories of inventories
Closing Balance
Item
Book value Provision for decline Net book value
Raw materials 140,197,852.41 1,064,716.71 139,133,135.70
Working in progress 171,969,418.12 1,929,842.21 170,039,575.91
Finished goods 268,053,054.43 2,528,193.70 265,524,860.73
Contract performance cost 238,205,853.06 238,205,853.06
goods shipped in transit
A house acquired as
20,206,542.00 5,203,103.50 15,003,438.50
payment for a debt
Low-value consumable 220,801.08 220,801.08
Self-manufactured
29,124,301.61 29,124,301.61
semi-finished products
Materials on consignment
294,838.92 294,838.92
for further processing
Total 868,272,661.63 10,725,856.12 857,546,805.51
(Continue)
Opening Balance
Item
Book value Provision for decline Net book value
Raw materials 103,332,663.42 1,064,716.71 102,267,946.71
Working in progress 117,243,035.94 1,929,842.21 115,313,193.73
Finished goods 244,721,287.34 2,528,193.70 242,193,093.64
Contract performance
193,840,972.71 193,840,972.71
cost
goods shipped in transit 33,573,632.23 33,573,632.23
House acquired as
20,206,542.00 5,203,103.50 15,003,438.50
payment for a debt
Low-value consumable 171,759.42 171,759.42
Self-manufactured
28,814,287.69 28,814,287.69
semi-finished products
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Opening Balance
Item
Book value Provision for decline Net book value
Materials on
consignment for further 480,473.35 480,473.35
processing
Total 742,384,654.10 10,725,856.12 731,658,797.98
(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 1,064,716.71 1,064,716.71
Working in progress 1,929,842.21 1,929,842.21
Finished goods 2,528,193.70 2,528,193.70
House acquired as payment
5,203,103.50 5,203,103.50
for a debt
Total 10,725,856.12 10,725,856.12
(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
Finished goods Lower of cost and NRV
Contract performance cost Lower of cost and NRV
8. Contract assets
Closing Balance Opening Balance
Item Provision for Net book Provision for Net book
Book value Book value
decline value decline value
Unexpired
106,880,308.92 13,752,298.22 93,128,010.70 104,165,706.10 12,735,694.50 91,430,011.60
warranty money
Total 106,880,308.92 13,752,298.22 93,128,010.70 104,165,706.10 12,735,694.50 91,430,011.60
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
Quality retention
2,714,602.82 Completion of contract performance obligations
money
Total 2,714,602.82 ——
Provision for bad debt
Item Accrued Collected/reversed Written-off reason
Unexpired warranty money 1,016,603.72
Total 1,016,603.72 --
9. Non-current assets maturing within one year
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Item Closing Balance Opening Balance
Long-term receivables due within one year 38,952,641.30 42,003,576.60
Total 38,952,641.30 42,003,576.60
10. Other current assets
Item Closing Balance Opening Balance
Prepaid income tax presented
138,536.54 390,518.40
at net amount after offsetting
VAT to be deducted 15,676,930.73 22,375,761.22
Prepaid turnover tax 1,876.94
Prepaid expenses 402,154.59 445,934.88
Total 16,217,621.86 23,214,091.44
11. Long term receivable
(1) Details
Item Closing Balance
Carrying
Provision Book value
amount
Lease premium
---Unrealized financing income
Goods sold by installments 71,728,641.00 5,882,231.91 65,846,409.09
---Unrealized financing income
Services rendered by installments
Total 71,728,641.00 5,882,231.91 65,846,409.09
Item Opening Balance
Carrying
Provision Book value
amount
Lease premium
---Unrealized financing income
71,750,205.16 5,882,231.91 65,867,973.25
Goods sold by installments
---Unrealized financing income 4,129,869.98
Services rendered by installments
Total 71,750,205.16 5,882,231.91 65,867,973.25
(2) Provision for bad debt
1st stage 2nd stage 3rd stage
bad debt Expected credit loss Expected credit loss
Expected credit Total
provision within the whole within the whole
loss within 12
period (no period (impairment
months
impairment) incurred)
Opening
— — — —
balance
Opening
5,882,231.91 5,882,231.91
balance during
62
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
1st stage 2nd stage 3rd stage
bad debt Expected credit loss Expected credit loss
Expected credit Total
provision within the whole within the whole
loss within 12
period (no period (impairment
months
impairment) incurred)
the year
--transfer to the
2nd stage
--transfer to the
3rd stage
--reverse to the
2nd stage
----reverse to
the 1st stage
Accrued
Reverse
Cancelation
Written off
Other
movement
Closing
5,882,231.91 5,882,231.91
balance
63
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
12.Long-term equity investments
Increase/Decrease
Gains and Provision
Adjustmen
Beginning losses Cash bonus for Provision for
Investee t of other Change of Ending balance
balance recognized or profits impairment impairment
Increased Decreased comprehen other Others
under the announced of the
sive equity
equity to issue current
income
method period
Panasonic Appliances Refrigerating
172,549,678.96 -14,304,960.25 1,280,000.00 156,964,718.71
System (Dalian) Co., Ltd.
Panasonic Appliances Cold-Chain
274,533,413.30 661,139.89 2,797,849.22 272,396,703.97
(Dalian) Co., Ltd.
Panasonic Appliances Compressor
465,818,897.98 22,044,812.17 32,773,200.00 455,090,510.15
(Dalian) Co., Ltd.
Dalian Honjo Chemical Co., Ltd. 8,746,197.03 355,303.63 561,233.80 8,540,266.86
Songzhi Ocean Thermal Technology
55,934,955.38 3,041,137.66 58,976,093.04
(Dalian) Co., Ltd.
Beijing Huashang Bingshan
Refrigeration and Air-conditioning 2,121,951.69 -37,039.35 2,084,912.34
Machinery Co., Ltd.
Dalian Fuji Bingshan Vending Machine
184,454,138.22 -9,141,058.73 175,313,079.49
Co., Ltd.
MHI Bingshan Refrigeration (Dalian)
14,891,119.67 1,697,477.05 16,588,596.72
Co.,Ltd.
Dalian Fuji Bingshan Vending Machine
43,546.35 -43,520.00 26.35
Sales Co., Ltd
Jiangsu JingXue Insulation Technology
203,208,828.97 3,558,478.80 -16,123,970.29 190,643,337.48
Co.,Ltd
Panasonic Appliances Refrigerating
37,420,055.26 1,840,988.29 3,895,484.27 35,365,559.28
System (Dalian) Co., Ltd.
Dalian Bingshan Metal Technology
173,158,546.15 11,535,446.10 184,693,992.25
Co.,Ltd
Dalian Bingshan Group Huahuida
45,400,000.00 948,973.33 46,348,973.33
Finance Leasing Co. LTD
64
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Increase/Decrease
Gains and Provision
Adjustmen
Beginning losses Cash bonus for Provision for
Investee t of other Change of Ending balance
balance recognized or profits impairment impairment
Increased Decreased comprehen other Others
under the announced of the
sive equity
equity to issue current
income
method period
Wuhan Sikafu Power Control
4,360,034.66 -1,071,427.20 3,288,607.46
Equipment Co., Ltd
Total 1,597,241,363.62 45,400,000.00 21,085,751.39 -16,123,970.29 41,307,767.29 1,606,295,377.43
65
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
13. Other non-current financial assets
Item Closing Balance Opening Balance
Measured as fair value method 234,169,195.71 239,304,098.83
Measured as cost method
Total 234,169,195.71 239,304,098.83
14. Investment property
Property&
Item Land-use-rights Total
Building
I. Initial Cost
1. Opening Balance 232,232,862.29 26,094,438.38 258,327,300.67
2. Increase
(1) Outsourcing
(2) Transferred from
Construction in progress
3. Decrease 1,638,372.22 1,638,372.22
(1) Disposal 1,638,372.22 1,638,372.22
(2)Transferred to other
4. Closing Balance 230,594,490.07 26,094,438.38 256,688,928.45
II. Accumulated Depreciation
1. Opening Balance 120,254,007.46 11,784,815.29 132,038,822.75
2. Increase 2,743,004.26 260,944.38 3,003,948.64
(1)Provision or amortization 2,743,004.26 260,944.38 3,003,948.64
(2) Transferred from
Construction in progress
3. Decrease 1,589,221.06 1,589,221.06
(1) Disposal 1,589,221.06 1,589,221.06
(2) Transferred to other
4. Closing Balance 121,407,790.66 12,045,759.67 133,453,550.33
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 109,186,699.41 14,048,678.71 123,235,378.12
2. Opening book value 111,978,854.83 14,309,623.09 126,288,477.92
66
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
15. Fixed assets
Items Closing Book Value Opening Book Value
Fixed asset 842,597,806.71 867,177,638.62
Fixed asset clearance
Total 842,597,806.71 867,177,638.62
(1) Fixed assets detail
Property& Machinery Transportation Other
Item Equipment Total
buildings Equipment Equipment
I. Initial Cost
1. Opening Balance 681,216,088.70 598,100,796.53 13,856,528.42 68,106,145.62 1,361,279,559.27
2. Increase 2,293,858.32 5,654,999.28 681,505.29 159,141.49 8,789,504.38
(1) Purchase 2,293,858.32 5,654,999.28 681,505.29 159,141.49 8,789,504.38
(2) Transferred
from
construction-in-pro
gress
(3) Acquired from
business
combination
3. Decrease 11,444,480.88 321,260.00 2,242,900.34 14,008,641.22
(1) Disposal 11,444,480.88 321,260.00 2,242,900.34 14,008,641.22
(2) Transferred to
other
4. Closing Balance 683,509,947.02 592,311,314.93 14,216,773.71 66,022,386.77 1,356,060,422.43
II. Accumulated
Depreciation
1. Opening Balance 112,737,387.24 319,158,435.03 9,550,618.82 52,138,160.06 493,584,601.15
2. Increase 10,046,913.70 21,317,845.53 398,503.61 2,615,656.60 34,378,919.44
(1)Accrued 10,046,913.70 21,317,845.53 398,503.61 2,615,656.60 34,378,919.44
(2) Acquired from
business
combination
3. Decrease 12,510,158.90 294,046.48 2,148,918.89 14,953,124.27
(1) Disposal 12,510,158.90 294,046.48 2,148,918.89 14,953,124.27
(2) Transferred to
other
4. Closing Balance 122,784,300.94 327,966,121.66 9,655,075.95 52,604,897.77 513,010,396.32
III. Impairment
Reserve
67
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Property& Machinery Transportation Other
Item Equipment Total
buildings Equipment Equipment
1. Opening Balance 517,319.50 517,319.50
2. Increase
(1)Accrued
3. Decrease
(1) Disposal 65,100.10 65,100.10
4. Closing Balance 452,219.40 452,219.40
IV. Book Value
1. Closing book
560,725,646.06 263,892,973.87 4,561,697.76 13,417,489.00 842,597,806.71
value
2. Opening book
568,478,701.46 278,425,042.00 4,305,909.60 15,967,985.56 867,177,638.62
value
16. Construction-in-progress
Item Closing book value Opening book value
Construction-in-progress 39,010,357.07 34,254,599.42
Construction materials
Total 39,010,357.07 34,254,599.42
(1) Construction in progress details
Closing Balance Opening Balance
Item
Book Balance Provision Book Value Book Balance Provision Book Value
Buildings
8,278,796.16 8,278,796.16 3,628,913.65 3,628,913.65
reconstruction
Improvement
4,123,818.02 4,123,818.02 3,724,069.06 3,724,069.06
of machinery
Construction of
intelligent 1,406,695.44 1,406,695.44 1,843,202.03 1,843,202.03
software
Technical
renovation
project of
pressure energy 16,036,382.26 16,036,382.26 15,893,749.49 15,893,749.49
in natural gas
pipeline
network
Financing lease
9,164,665.19 9,164,665.19 9,164,665.19 9,164,665.19
item
Total 39,010,357.07 39,010,357.07 34,254,599.42 34,254,599.42
(2) Change in the significant construction in progress
Name Opening Balance Increase Decrease Closing
68
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Transfer to Other Balance
fixed assets decrease
Buildings reconstruction 3,628,913.65 4,649,882.51 8,278,796.16
Improvement of
3,724,069.06 917,269.38 517,520.42 4,123,818.02
machinery
Construction of
1,843,202.03 436,506.59 1,406,695.44
intelligent software
Technical renovation
project of pressure
energy in natural gas 15,893,749.49 142,632.77 16,036,382.26
pipeline
network
Financing lease item 9,164,665.19 9,164,665.19
Total 34,254,599.42 5,709,784.66 517,520.42 436,506.59 39,010,357.07
(Continued)
Progress Accumul Including:
Percent of Interest
of ated Accumulated
investment capitalizat Source of
Name Budget constructio capitaliz capitalized
against ion funds
n ed interest of the
budget rate(%)
interest year
Buildings
10,100,000.00 81.97% 81.97% Self financing
reconstruction
Improvement of
4,700,000.00 87.79% 87.79% Self financing
machinery
Construction of
3,690,750.00 49.94% 49.94% Self financing
intelligent software
Technical
renovation project
of pressure energy
19,614,500.00 81.76% 81.76% Self financing
in natural gas
pipeline
network
Financing lease
15,020,000.00 61.02% 61.02% 837,440.00 146,555.64 Self financing
item
Total 53,125,250.00 81.97% 81.97% 837,440.00 146,555.64 —
17. Right of use assets
Name Machinery Equipment Total
1. Opening Balance 29,156,745.84 29,156,745.84
3. Decrease 65,311.89 65,311.89
（1）Transferred to other 65,311.89 65,311.89
4. Closing Balance 29,091,433.95 29,091,433.95
1. Opening Balance 5,187,325.64 5,187,325.64
2. Increase 1,473,155.41 1,473,155.41
（1）Accrued 1,473,155.41 1,473,155.41
4. Closing Balance 6,660,481.05 6,660,481.05
1. Closing book value 22,430,952.90 22,430,952.90
2. Opening book value 23,969,420.20 23,969,420.20
69
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
18. Intangible assets
(1) Intangible assets list
Land use Patent Non Patent
Item Others Total
right technology technology
I. Initial Cost
1. Opening Balance 151,187,271.54 18,219,985.58 5,000,000.00 30,035,315.89 204,442,573.01
2. Increase 1,776,527.23 1,776,527.23
(1) Purchase 1,776,527.23 1,776,527.23
(2) Acquired from business
combination
(3)Transferred from
construction-in-progress
3. Decrease 765,564.10 765,564.10
(1) Disposal 765,564.10 765,564.10
4. Closing Balance 151,187,271.54 18,219,985.58 5,000,000.00 31,046,279.02 205,453,536.14
II.Accumulated
amortisation
1. Opening Balance 37,721,432.33 6,038,799.65 2,500,004.00 12,739,615.79 58,999,851.77
2. Increase 1,540,404.37 800,474.10 250,002.00 765,522.45 3,356,402.92
(1)Accrued 1,540,404.37 800,474.10 250,002.00 765,522.45 3,356,402.92
3. Decrease 764,914.10 764,914.10
(1) Disposal 764,914.10 764,914.10
4. Closing Balance 39,261,836.70 6,839,273.75 2,750,006.00 12,740,224.14 61,591,340.59
III. Impairment Reserve
1. Opening Balance
2. Increase
(1)Accrued
3. Decrease
(1) Disposal
4. Closing Balance
IV. Book Value
1. Closing book value 111,925,434.84 11,380,711.83 2,249,994.00 18,306,054.88 143,862,195.55
2. Opening book value 114,975,297.19 11,591,389.17 2,499,996.00 16,376,038.88 145,442,721.24
19. Goodwill
(1) Original cost of goodwill
Opening Increased during Decreased during Closing
Name
Balance current year current year Balance
70
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Enterprise
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 LengNuan Technology Co.,
Ltd exceeds the fair value of the proportion of the acquired company’s identifiable net asset. The
difference between the book value of equity investment of 48, 287,589.78 Yuan and the identifiable
net asset’s fair value of Dalian Sanyo High-efficient Refrigeration System Co., Ltd of 46,847,241.86
Yuan on the acquisition date of July 31st 2015 is recognized as goodwill of 1,440,347.92 Yuan on
the group consolidated financial report at the end of the year.
In the year 2016, 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 30th , 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.
20. Long-term unamortized expense
Opening Other Closing
Item Increase Amortization
Balance Decrease Balance
Employee’s dormitory use right 1,873,692.06 69,517.83 1,804,174.23
Renovation and rebuilding 746,997.14 22,522.50 724,474.64
Lease 425,160.00 53,145.00 372,015.00
Membership fee for Golf 423,500.00 8,250.00 415,250.00
Technology entrance fee of cold
466,781.25 186,712.50 280,068.75
and heat machinery
Greenland of new factory 5,724,407.62 446,057.76 5,278,349.86
Total 9,660,538.07 786,205.59 8,874,332.48
71
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
21. 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
24,416,367.17 4,326,008.37 23,719,518.02 4,011,984.07
impairment of assets
Unrealized profit from
14,077,263.75 2,111,589.56 14,077,263.75 2,111,589.56
internal transaction
Deductible loss 3,581,714.08 895,428.52 3,581,714.09 895,428.52
Estimated debts 7,171,726.51 1,792,931.63
Provision for credit
300,363,081.60 60,791,872.32 298,515,515.22 60,167,592.33
impairment
Total 342,438,426.60 68,124,898.77 347,065,737.59 68,979,526.11
(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 208,367,529.13 31,255,129.37 213,402,432.24 32,010,364.83
financial assets
Total 208,367,529.13 31,255,129.37 213,402,432.24 32,010,364.83
(3) Deferred income tax assets or liabilities shown net of offset
The amount of deferred
Deferred tax assets and The ending balance of a The beginning balance of
tax assets and liabilities
Item liabilities at the end of deferred tax asset or a deferred tax asset or
offset at the beginning of
the balance liability after offset liability after offset
the period
Deferred tax assets 68,124,898.77 68,979,526.11
Deferred tax liabilities 31,255,129.37 32,010,364.83
(4) Unrecognized deferred tax assets details
Item Closing Balance Opening Balance
Deductible temporary difference 7,106,167.83 3,738,153.26
Deductible loss 111,303,027.15 107,036,874.97
Total 118,409,194.98 110,775,028.23
(5) Unrecognized deductible loss of deferred tax assets expired years
Year Closing Balance Opening Balance Notes
2021
2022 716,158.09 716,158.09
2023 13,581,030.35 16,458,262.38
2024 58,227,822.87 62,405,136.73
72
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Year Closing Balance Opening Balance Notes
2025 16,642,886.37 27,457,317.77
2026 22,135,129.47
Total 111,303,027.15 107,036,874.97
22. Short-term loan
(1) Category of short term loan
Loan category Closing Balance Opening Balance
Mortgage loan 12,530,000.00 6,960,000.00
Credit loan 227,000,000.00 276,011,600.00
Total 239,530,000.00 282,971,600.00
23. Notes payable
Notes category Closing Balance Opening Balance
Commercial acceptance notes 4,480,825.00 2,078,041.90
Bank acceptance notes 308,984,870.40 293,073,330.48
Total 313,465,695.40 295,151,372.38
24. Accounts payable
(1) Accounts payable
Item Closing Balance Opening Balance
Material payments 668,265,369.08 459,748,015.17
Project payments 212,918,071.12 227,092,621.70
Equipment payments 67,075,483.91 76,820,952.59
Others 14,031,381.27 3,605,642.97
Total 962,290,305.38 767,267,232.43
(2) Accounts payable with age over 1 year
Reason of unpaid or not
Name of company Closing Balance
carried forward
13,074,637.70 Project is uncompleted contract is
Panasonic Refrigerating System (Dalian) Co., Ltd. not finished
7,566,320.00 Project is uncompleted contract is
Wuhan United Liben Energy Technology Co., LTD not finished
5,727,520.00 Project is uncompleted contract is
Heilongjiang Longleng Technology Co., Ltd not finished
5,097,305.82 Project is uncompleted contract is
Lixingkai (Beijing) Energy System Technology Co.,Ltd not finished
4,878,499.00 Project is uncompleted contract is
Haoxing Nengtou(Beijing) Assets management Co.,Ltd not finished
Total 36,344,282.52
25. Contract Liabilities
Item Closing Balance Opening Balance
73
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Item Closing Balance Opening Balance
Received in advance due from
369,202,216.43 295,100,657.10
unrealized revenue
Total 369,202,216.43 295,100,657.10
Significant change on the book value
Item Change amount Change reason
According to the contract,
Advance payment 74,101,559.33 received the payment from the
client in advance
Total 74,101,559.33
26. Employee’s payable
(1) Category of employee’s payable
Item Opening Increase Decrease Closing
Balance Balance
Short-term employee’s
31,125,808.94 143,198,474.08 163,891,380.86 10,432,902.16
payable
Post-employment benefit
13,956,332.95 13,956,332.95
–defined contribution plan
Termination benefits 10,000.00 10,000.00
Total 31,125,808.94 157,164,807.03 177,857,713.81 10,432,902.16
(2) Short-term employee’s payables
Item Opening Balance Increase Decrease Closing Balance
Salaries, bonus,
allowance, and 26,526,326.00 112,997,581.71 132,588,948.10 6,934,959.61
subsidy
Welfare 3,080,018.99 7,144,168.71 8,199,315.51 2,024,872.19
Social insurance 16,445.29 9,684,764.08 9,701,209.37
Include: Medical
14,860.20 7,466,885.15 7,481,745.35
insurance
On-duty
injury 1,079,000.51 1,079,000.51
insurance
Maternity
1,585.09 1,025,367.39 1,025,367.39
insurance
Housing funds 9,664,970.90 9,664,970.90
Labor union and
1,503,018.66 2,232,000.37 2,261,948.67 1,473,070.36
training expenses
Others 1,474,988.31 1,474,988.31
Total 31,125,808.94 143,198,474.08 163,891,380.86 10,432,902.16
74
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
(3) Defined contribution plan
Item Opening Increase Decrease Closing
Balance Balance
Pension 13,495,124.66 13,495,124.66
Unemployment insurance 461,208.29 461,208.29
Total 13,956,332.95 13,956,332.95
27. Tax payable
Item Closing Balance Opening Balance
Value-added tax 3,083,677.49 2,830,255.88
Enterprise income tax 977,933.24 3,114,706.06
Individual income tax 560,027.55 216,213.81
City maintenance and construction tax 152,847.30 238,887.83
Real estate tax 2,110,594.79 1,899,793.53
Land use tax 1,225,125.20 1,094,760.28
Stamp duty 184,721.60 151,410.38
Education surcharge 109,678.57 167,925.89
Green tax 244.77 240.59
Total 8,404,850.51 9,714,194.25
28. Other accounts payable
Item Closing Balance Opening Balance
Interest payable 1,481,750.50 1,839,166.81
Dividend payable 8,965,281.07 533,156.00
Other accounts payable 38,449,425.05 40,645,143.57
Total 48,896,456.62 43,017,466.38
. (1) Interest payable
Item Closing Balance Opening Balance
Interest paid in installments Interest paid on
long-term loans when the principal is 1,160,000.06 1,703,750.01
repaid at maturity
Interest on corporate bond 321,750.44 135,416.80
Total 1,481,750.50 1,839,166.81
(2). Dividend payable
Item Closing Balance Opening Balance
Ordinary share dividend 8,965,281.07 533,156.00
Total 8,965,281.07 533,156.00
（3）Other accounts payable
Other payables categorized by payments nature
75
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Payments nature Closing Balance Opening Balance
Loan from non-financial institutes
Cash pledge and security deposit 17,414,381.19 8,518,729.05
Apply for reimbursement and unpaid 6,159,848.19 11,557,803.69
Funds about related parties 449,418.73
Receipts under custody 1,856,331.86 6,191,124.03
Others 12,569,445.08 14,377,486.80
Total 38,449,425.05 40,645,143.57
29. Non-current liabilities due within one year
Item Closing Balance Opening Balance
Bond payable due within one year 25,000,034.00 25,000,034.00
Long-term accounts payable with one year 17,509,422.33 12,157,092.41
Total 42,509,456.33 37,157,126.41
30. Other current liabilities
Item Closing balance Opening balance
Notes payable endorsed not derecognized 120,152,124.49 121,572,682.35
Output Vat to be carried forward 51,609,503.37 30,601,263.95
Total 171,761,627.86 152,173,946.30
31. Long-term loan
(1) Category of long-term loan
Category Closing Balance Opening Balance
Guarantee loan 150,000,000.00 160,000,000.00
Total 150,000,000.00 160,000,000.00
CDB development fund give support to the Company’s intelligent and green equipment of cold chain
and service industry base project and provide special fund to the Company’s holding shareholder, Bingshan
Group. The fund is 0.16 billion Yuan with 10year’s expiration at 1.2% rate. Once the fund arrived, Bingshan
Group gave it to the Company at the same rate of 1.2% in lump sum. The above fund needed to be warranted
by the Company. The guarantee seems to be given for the holding shareholder, but it is for the Company
itself in fact. The principal of 10 million yuan has been repaid in March 2021.
32. Lease liabilities
Item Closing Balance Opening Balance
Lease liabilities 10,971,589.76 14,622,463.75
Total 10,971,589.76 14,622,463.75
76
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
33. Long term accounts payable
Item Closing Balance Opening Balance
Long term accounts payable 8,682,041.09
Total 8,682,041.09
(1) Category by nature
Item Closing Balance Opening Balance
Financial lease 8,682,041.09
Total 8,682,041.09
34. Estimated debts
Nature Closing Balance Opening Balance Reason
Open litigation 420,512.50 7,592,239.01
Total 420,512.50 7,592,239.01
Shandong Meitian Energy Technology Co.,Ltd (hereinafter referred to as “Shandong Meitian”) sued
Wuhan New World Refrigeration Engineering Co., Ltd..(hereinafter referred to as “WuLeng Engineering”),
over a dispute on the technology service contract with the following claims: It ordered WuLeng Engineering
to pay RMB 1,650,000.00 for service rendered, and RMB 100,000.00 for economic loss(in total RMB
1,750,000.00), Wuhan New World Refrigeration Industry Co., Ltd. (hereinafter referred to as " Wuxin
Refrigeration ") shall jointly bear the liability for the above-mentioned arrears; The litigation costs shall be
borne by Wuleng Engineering and Wuxin Refrigeration. Wuleng Engineering proposed counterclaim: it
orders to terminate the "Project Cooperation Agreement"; Shandong Meitian returned the loan of RMB
350,000.00 and the interest of RMB 37,663.55. The litigation costs shall be borne by Shandong Meitian.
On December 13, 2020, the people's court of high and new technology industry development zone,
Taian of Shandong province, made the judgment of first verdict of Lu 0991 Minchu No. 954 (2020), that
Wuleng Engineering should pay a total of RMB 1.65million for service fee and economic loss. Economic
loss should be based on RMB 1.65million of service fee, plus interest which is worked out based on the
interbank offer rate in China market published by the National wide Interbank Offering Center until the date
of actual payment. Wuxin Refrigeration is jointly liable for the above amount. Other claims of Shandong
Meitian have been rejected; Rejected the counterclaim of Wuleng Engineering.
On December 21, 2020, Wuleng Engineering appealed to the Intermediate People's Court of Taian
Shandong Province during the appeal period after the first instance verdict, as of the date of this report, the
case is still pending.
35. Deferred income
(1) Category of deferred income
Item Opening Increase Decrease Closing Formation
Balance Balance Basis
Government subsidy 104,457,568.86 1,100,000.00 3,228,299.49 102,329,269.37
77
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Item Opening Increase Decrease Closing Formation
Balance Balance Basis
Total 104,457,568.86 1,100,000.00 3,228,299.49 102,329,269.37 —
(2) Government subsidy project
Recorded
Opening into Related with
Offset cost Closing
Government subsidy item Increase asset/
Balance Non-opera or expense Balance
equity
ting
income
Asset
Relocation compensation 40,104,000.00 556,998.00 39,547,002.00
related
Application of NH3 and CO2
Asset
instead of R22 screw
16,398,350.48 1,014,161.94 15,384,188.54
refrigerating machine related
combined condensing unit
Asset
Compressor IC system 3,907,129.99 184,384.86 3,722,745.13
related
Ultrasonic intelligent defrost Asset
3,716,010.90 15,000.00 132,416.76 3,568,594.14
technology related
Asset
Eco Compressor project 22,529,321.64 1,276,925.28 21,252,396.36
related
R290 replacement of R22 Asset
13,006,663.20 13,006,663.20
large industrial screw unit related
R290 replacement of R22 Asset
industrial double stage screw 4,747,680.00 4,747,680.00
related
unit
Income
New high-tech enterprise 100,000.00 100,000.00
related
Income
Evaluation of national
1,000,000.00 1,000,000.00
enterprise technology center related
Subsidy fund for highly Asset
effective heat pump and 48,412.65 48,412.65
related
related system
Total 104,457,568.86 1,100,000.00 571,998.00 2,656,301.49 102,329,269.37
36. Share capital
Item Opening Increase/decrease（+、-） Closing
78
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
balance New balance
Transfer
share Share Subtotal
from capital others
issued dividend
reserve
Total
843,212,507.00 843,212,507.00
shares
37. 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 16,123,970.29 51,022,453.51
Total 726,768,468.00 16,123,970.29 710,644,497.71
79
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
38. Other comprehensive income
2021.1-6
Opening Less：Previously After-tax Closing
Items Amount for the After-tax attribute
Balance recognized in profit or Less： attribute to Balance
period before to the parent
loss in other income tax minority
income tax company
comprehensive income shareholder
I.Later can’t reclassified into profit
and loss of other comprehensive
income
II. Later reclassified into profit and loss
2,501,459.77 2,501,459.77
of other comprehensive income
Proportional other comprehensive
income of investee which is reclassified
2,501,459.77 2,501,459.77
into income statement under equity
method
Other comprehensive income total 2,501,459.77 2,501,459.77
80
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
39. Special Reserve
Opening Closing
Items Increase Decrease
Balance Balance
Safety production cost 1,201,021.67 1,201,021.67
Total 1,201,021.67 1,201,021.67
40. Surplus reserves
Item Opening Closing
Increase Decrease
Balance Balance
Statutory surplus reserve 356,056,750.07 356,056,750.07
Discretionary surplus reserve 449,469,025.26 12,785,383.91 462,254,409.17
Total 805,525,775.33 12,785,383.91 818,311,159.24
The Company made profit distribution within the reporting period. According to the 2020 annual meeting, 20%
of net profit in the 2020 fiscal annual report is provided for discretionary surplus reserve of 12,785,383.91
Yuan.
41. Undistributed profits
Item 2021-06-30 2020-06-30
Closing balance of 2020 997,601,577.97 1,038,358,782.59
Add: Adjustments to the opening balance of
undistributed profits
Opening balance of 2021 997,601,577.97 1,038,358,782.59
Add: net profit attributable to shareholders of
-14,584,210.01 -23,604,345.52
parent company in the year
Less: Provision for statutory surplus reserves
Provision for any surplus reserves 12,785,383.91 30,409,270.84
Dividends payable for common shares 8,432,125.07 25,296,375.21
Closing balance of the current period 961,799,858.98 959,048,791.02
42. Operating revenue and cost
Items 2021.01-06 2020.01-06
Sales revenue Cost of sales Sales revenue Cost of sales
Revenue from
1,069,601,775.40 939,531,941.76 857,035,486.66 732,433,950.29
principle operation
Revenue from
24,683,845.57 10,872,827.50 16,367,927.80 15,641,145.83
other operation
Total 1,094,285,620.97 950,404,769.26 873,403,414.46 748,075,096.12
(1) Main revenue from contract details
Items Division 1
81
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
Classified at products type 1,069,601,775.40
Manufacture products 675,316,303.74
Project installation 386,022,799.34
Other products and service 8,262,672.32
Classified at geography location 1,069,601,775.40
domestic 1,011,538,820.53
overseas 58,062,954.87
43. Operating taxes and surcharges
Items 2021.01-06 2020.01-06
City construction tax 1,446,546.32 822,185.02
Education surcharge 962,826.14 589,369.05
Property tax 4,035,908.73 3,835,774.27
Land use tax 2,450,307.46 2,189,549.16
Vehicle and vessel tax 8,942.04 11,571.44
Stamp duty 657,768.65 563,772.21
Others 119,222.81 8,270.68
Total 9,681,522.15 8,020,491.83
44. Selling expenses
Items 2021.01-06 2020.01-06
Official business expense 4,348,750.49 2,994,176.07
Travel expense 4,114,863.50 3,742,450.00
Business entertaining expense 2,525,127.61 2,356,885.18
Maintenance and repair expense 2,873,319.38 1,890,493.88
Advertisement and bids expense 1,044,426.89 806,949.46
Depreciation expense 98,213.00 110,392.35
Transportation expense 6,509,108.10 5,215,850.58
Other expense 1,370,485.55 -569,730.79
Total 56,710,524.65 35,446,794.72
45. Administrative expenses
Items 2021.01-06 2020.01-06
Employee benefit 44,697,319.27 44,701,524.40
Official expense 6,540,910.41 5,862,390.02
Depreciation expense 5,684,128.55 5,681,960.08
Long-term assets amortization 3,926,562.28 3,319,148.39
Maintenance and repair expense 2,769,914.26 3,332,999.96
Design consultant and test service expense 3,154,130.36 3,623,329.62
Safety production cost 1,201,021.67 1,127,227.68
Travel expense 1,783,780.25 1,161,310.14
Business entertaining expense 814,439.73 793,831.00
82
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
Items 2021.01-06 2020.01-06
Insurance expense 364,092.63 407,320.27
Advertisement expense 66,647.41 100,998.04
Other tax 18,601.23
Other expense 704,949.73 658,087.26
Total 71,726,497.78 70,770,126.86
46. R&D expenses
Items 2021.01-06 2020.01-06
Employee benefit 28,422,612.24 21,428,261.05
Depreciation and amortization expense 441,407.58 2,110,399.66
Raw material 1,367,252.76 478,225.01
Entrust external R&D investment 227,644.82 6,283.00
Other expense 279,234.20 691,852.56
Total 30,738,151.60 24,715,021.28
47. Financial expenses
Items 2021.01-06 2020.01-06
Interest expenses 8,711,437.07 9,632,767.81
Less: Interest income 3,200,439.42 882,852.63
Add: Exchange loss -471,153.98 -552,914.09
Others expenditure 1,200,825.06 1,864,326.98
Total 6,240,668.73 10,061,328.07
48. Other income
Items 2021.01-06 2020.01-06
Government subsidy 907,398.00 6,507,868.29
Personal income tax handling fee refund 7,056.99
Total 914,454.99 6,507,868.29
49. Investment income
Items 2021.01-06 2020.01-06
Long-term equity investment gain under equity method 21,085,751.39 16,816,173.99
Gain from disposing of long-term equity investment
Gain from from debt restructuring -6,860.60
Gain from disposal of other noncurrent financial assets -96,737.66
Gain from holding of other non-current financial assets 7,229,604.48 6,126,903.12
83
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
Total 28,211,757.61 22,943,077.11
50. Fair value change income (loss listed as“-“)
Items 2021.01-06 2020.01-06
Other non-current financial assets -5,034,903.12 -19,323,309.84
Total -5,034,903.12 -19,323,309.84
51. Credit impairment losses (loss listed as“-“)
Items 2021.01-06 2020.01-06
Bad debt loss on notes receivable 1,108,930.41 3,479,059.83
Bad debt loss on receivable -11,460,308.47 -16,928,378.83
Bad debt loss on other receivable 2,435,152.34 -592,587.01
Credit impairment loss on long term receivable 280,800.00
Total -7,635,425.72 -14,041,906.01
52. Assets impairment losses (loss listed as“-“)
Items 2021.01-06 2020.01-06
Loss of contract asset impairment -1,016,603.72
Total -1,016,603.72
53. Gain on assets disposal
Item 2021.01-06 2020.01-06
Gains on disposal of non-current assets 8,393.93 10,788.53
Including: Gain on non-current assets disposal
8,393.93 10,788.53
income not classified as held for sale
Including: gain on fixed assets disposal 8,393.93 10,788.53
Total 8,393.93 10,788.53
54. Non-operating income
Amounts recognized into
Item 2021.01-06 2020.01-06 non-recurring profit or loss
for the year
Debt restructuring gains 531,903.00 162,560.00 531,903.00
Penalty and fine income 216,492.50
Others 1,407,195.38 987,052.84 1,407,195.38
Total 1,939,098.38 1,280,059.12 1,939,098.38
55. Non-operating expenses
Item 2021.01-06 2020.01-06 Amounts recognized into
84
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
non-recurring profit or loss for the
year
Non-current assets scrap loss 395,122.52 44,972.15 395,122.52
Others 166,566.53 48,522.19 166,566.53
Total 561,689.05 93,891.78 561,689.05
56. Income tax expenses
(1) Income tax expenses
Items 2021.01-06 2020.01-06
Current income tax expenses 2,143,118.35 1,427,499.91
Deferred income tax expenses 371,879.14 -2,919,759.08
Total 2,514,997.49 -1,492,259.17
(2) Adjustment process of accounting profit and income tax expense
Items 2021.01-06
Total profits -14,391,429.90
Current income tax expense accounted by tax and relevant
-2,158,714.49
regulations
Influence of different tax rate suitable to subsidiary -499,161.50
Influence of income tax before adjustment -460,093.06
Influence of non taxable income -4,648,381.01
Influence of not deductable costs, expenses and losses 3,319,163.62
Effect on use of deductible loss from unrecognized deferred tax
4,222,207.39
assets in the prior period
Influence of deductible temporary difference or deductible losses of
2,889,339.52
deferred income tax assets derecognized in reporting period.
Income tax expenses 2,514,997.49
57. Other comprehensive income
Refer to the note VII.38 other comprehensive income for details.
58. Notes to cash flow statement
(1) Cash receipt/payment of other operating/investing/financing activities
1) Other cash received relating to operating activities
Items 2021.01-06 2020.01-06
Government grants 1,367,721.83 12,168,371.56
Received travel expense refund 449,912.15 1,063,272.24
Deposit given back 27,180,320.58 14,765,375.21
Interest income 1,910,435.81 314,336.56
Others 3,356,161.51 4,566,093.18
Receivable from the related party 9,545,982.11
Total 43,810,533.99 32,877,448.75
85
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
2) Other cash paid relating to operating activities
Items 2021.01-06 2020.01-06
Business travel borrowing 5,217,215.20 8,230,047.29
Deposit paid 18,941,721.30 17,663,991.76
Expenditure 40,969,033.35 34,127,531.31
Unsettled AR/AP among related party 3,074,818.29
Bank handling charges 1,155,480.12 1,769,898.93
Others 16,259,439.25 583,138.56
Total 85,617,707.51 62,374,607.85
3) Others cash received relating to financing activities
Items 2021.01-06 2020.01-06
Collection of guarantee money 58,467,271.18 32,960,611.49
Sale leaseback and financial lease 1,876,663.49 3,886,589.07
Total 60,343,934.67 36,847,200.56
4) Others cash played relating to financing activities
Items 2021.01-06 2020.01-06
Payment of guarantee money 58,467,271.18 32,960,611.49
Sale& lease back and financial lease 1,876,663.49 3,886,589.07
Total 60,343,934.67 36,847,200.56
59. Supplementary information of consolidated cash flow statement
Items 2021.01-06 2020.01-06
1. Adjusting net profit into cash flows of operating —— ——
activities:
Net profit -16,906,427.39 -24,910,499.83
Add: Provision for impairment of assets 8,652,029.44 15,147,375.91
Depreciation of fixed assets, Amortization of mineral
34,378,919.44 34,750,769.26
resources, and biological assets
Depreciation of right of use assets 1,473,155.41 0.00
Amortization of intangible assets 3,356,402.92 2,373,689.18
Amortization of long-term deferred expenses 786,205.59 2,175,118.39
Losses on disposal of fixed assets, intangible assets, and
-8,393.93 -55,668.73
long-term assets (income listed with”-”)
Losses on write-off of fixed assets (income listed with”-”) 395,122.52 45,369.59
Change of fair value profit or loss 5,034,903.12 19,323,309.84
Financial expense (income listed with”-”) 8,711,437.07 9,635,047.81
Investment loss (income listed with”-”) -28,211,757.61 -22,943,077.11
86
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
Decrease of deferred tax assets(increase listed
-854,627.34 2,334,787.70
with”-”)
Increase of deferred tax liabilities(decrease
-755,235.46 -2,898,496.47
listed with”-”)
Decrease of inventories (increase listed with”-”) -125,888,007.53 -69,323,956.85
Decrease of operating receivables (increase listed
-152,568,485.04 -147,581,069.09
with”-”)
Increase of operating payables (decrease listed
103,576,611.65
233,516,922.51
with”-”)
Others
Net cash flows arising from operating activities -28,887,836.28 -78,350,688.75
2. Significant investment and financing activities
unrelated to cash income and expenses
Liabilities transferred to capital
Convertible bonds within 1 year 25,000,034.00
Financing leased fixed assets
3. Net increase (decrease) of cash and cash equivalent
Closing balance of cash 254,388,688.02 268,889,987.62
Less: Opening balance of cash 314,978,460.49 301,527,354.56
Net increase of cash and cash equivalent -60,589,772.47 -32,637,366.94
(1) Cash and cash equivalents
Items 2021.6.30 2021.1.1
Cash 254,388,688.02 314,978,460.49
Including: Cash on hand 46,859.50 154,668.54
Bank deposit used for paying at any moment 254,341,828.52 314,852,391.95
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 254,388,688.02 314,978,460.49
60 The assets with the ownership or use right restricted
Items 2021.6.30 Reasons
Monetary fund 58,425,355.47 Guarantee money
Notes Receivable 21,890,716.83 Pledge
Total 80,316,072.30
Note: The bank account of Wuhan New World Refrigeration Industrial Co., Ltd is frozen due to litigations,
the amount is 3.945 million Yuan. Wuhan Lanning Energy Technology Co., Ltd’s bank account is frozen due
87
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
to litigations, the amount is 97,600 Yuan.
Dalian Niweisi LengNuan Techonoligy Co., Ltd. pledged the bank acceptance note to China Merchants bank
Dalian Branch as guarantee for issuing the commercial acceptance note.
Dalian Xinminghua Electrical Technology Co., Ltd. pledged the bank acceptance note to China Merchants
bank Dalian Jinpu Branch as guarantee for issuing the commercial acceptance note.
Dalian Bingshan Air-conditioning Equipment Co., Ltd. pledged the bank acceptance note to ICBC bank
Dalian DDZ Branch as guarantee for issuing the commercial acceptance note.
61. Monetary category of foreign currency
(1) Monetary category of foreign currency
Item Closing Balance Exchange Closing Balance
(foreign currency) Rate (RMB)
Cash — —
Including：USD 1,233,178.15 6.4601 7,966,454.17
Euro 786.88 7.6862 6,048.12
JPY 2,603,881.00 0.0584 152,139.56
GBP 7,002.56 8.9410 62,609.89
Accounts receivable — — 45,614,023.00
Including: USD 5,549,031.84 6.4601 35,847,300.59
GBP 149,031.86 8.9410 1,332,493.86
JPY
Accounts payable — —
Including: USD 947,459.24 6.4601 6,120,681.44
Euro 18,447.50 7.6862 141,791.17
JPY 12,075,675.00 0.0584 705,557.54
GBP 37,374.28 8.9410 334,163.44
62. Government Grants
Amount
recognized in
Category Amount Disclosure
current profit and
loss
Efficiency pump and its supporting
7,800,000.00 Deferred Income 48,412.65
systems
Relocation compensation 42,332,000.00 Deferred Income 556,998.00
Application of combined compression
21,273,678.04 Deferred Income 1,014,161.94
NH3&Co2 replace R22
Refrigeration Compressor Intelligent
5,000,000.00 Deferred Income 184,384.86
Manufacturing System Fund
Ultrasonic defrosting technology 9,841,800.00 Deferred Income 147,416.76
Environmental protection and energy Deferred Income
31,000,000.00 1,276,925.28
saving refrigeration and air
88
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
Amount
recognized in
Category Amount Disclosure
current profit and
loss
Efficiency pump and its supporting
7,800,000.00 Deferred Income 48,412.65
systems
Relocation compensation 42,332,000.00 Deferred Income 556,998.00
Application of combined compression
21,273,678.04 Deferred Income 1,014,161.94
NH3&Co2 replace R22
conditioning compressor technology
industrialization project
R290 replace R22 13,006,663.20 Deferred Income
R290 replace R22 twin stage screw sets 4,747,680.00 Deferred Income
High-tech enterprise recognition Deferred Income
300,000.00 200,000.00
subsidy
Subsidies after r&d investment 1,000,000.00 Deferred Income
Others 42,456.99 42,456.99
Total 136,344,278.23 - 3,470,756.48
VI. Change of Consolidation Scope
There are no changes in scope of consolidation
VII. Interest in other entity
1. Equity of subsidiaries
(1) Organization structure of group company
Main Shareholding (%)
Registered Obtaining
Name of subsidiaries business Business nature
address Direct Indirect method
address
Dalian Bingshan Group
Dalian Dalian Installation 100 Establish
Engineering Co., Ltd.
Dalian Bingshan Group Sales
Dalian Dalian Trading 100 Establish
Co., Ltd.
Dalian Bingshan Air-conditioning
Dalian Dalian Manufacturing 70 Establish
Equipment Co., Ltd.
Dalian Bingshan Guardian
Dalian Dalian Manufacturing 100 Establish
Automation Co., Ltd.
Dalian Bingshan Ryosetsu Quick
Dalian Dalian Manufacturing 100 Establish
Freezing Equipment Co., Ltd.
Wuhan New World Refrigeration
Wuhan Wuhan Manufacturing 100 Acquisition
Industrial Co., Ltd.
Bingshan Technical Service
Dalian Dalian Services 100 Establish
（Dalian） Co.,Ltd.
89
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
Name of subsidiaries Main Registered Business nature Shareholding (%) Obtaining
business address method
Dalian New Meica Electronics address
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
Shareholding (%)
Main
Name of joint ventures or Registered Business Accounting
business
affiliated companies address nature methods
address
Direct Indirect
Equity
Panasonic Compressor Dalian Dalian Manufacturing 40
method
Equity
Jing Xue Insulation Changzhou Changzhou Manufacturing 21.91
method
90
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
Shareholding (%)
Main
Name of joint ventures or Registered Business Accounting
business
affiliated companies address nature methods
address
Direct Indirect
Equity
Bingshan Metal Technology Dalian Dalian Manufacturing 49
method
Songzhi Dayang Refrigeration Equity
& Heat Transfer Technology
Dalian Dalian Manufacturing 25
method
(Dalian) Co., LTD
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
91
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
30-06-2021/2021.01-06
Songzhi Dayang
Items
Panasonic Compressor Jing Xue Insulation Bingshan Metal Technology Refrigeration & Heat
Transfer Technology
Current assets 1,250,747,128.82 1,179,793,108.93 370,543,496.54 317,505,812.09
Non-current assets 298,021,485.62 222,503,367.11 41,903,501.37 78,312,618.73
Total assets 1,548,768,614.44 1,402,296,476.04 412,446,997.91 395,818,430.82
Current liabilities 383,010,177.63 652,284,352.73 74,729,737.51 86,720,800.09
Non-current liabilities 26,094,286.57 16,207,048.62 14,217,165.53
Total liabilities 409,104,464.20 668,491,401.35 74,729,737.51 100,937,965.62
Minority interests 399,413.03
Equity to the parent
1,139,664,150.24 733,405,661.66 337,717,260.40 294,880,465.20
company
Proportions of net assets
according to the
455,865,660.10 160,681,846.42 165,481,457.60 58,976,093.04
shareholding
percentage
Adjusting events
—Goodwill 29,961,491.06 19,269,770.94
—Unrealized profits of
insider trading
--Others -775,149.95 -57,236.29
Book value of equity
investment of affiliated 455,090,510.15 190,643,337.48 184,693,992.25 58,976,093.04
companies
Fair value of equity
investment of affiliated
companies
Operating income 579,289,602.09 277,028,549.54 231,889,705.55 278,843,178.61
92
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
30-06-2021/2021.01-06
Songzhi Dayang
Items
Panasonic Compressor Jing Xue Insulation Bingshan Metal Technology Refrigeration & Heat
Transfer Technology
Net profit 66,514,772.97 16,637,748.36 23,361,750.71 15,205,688.28
Net profit from closing
Other comprehensive
income
Total comprehensive
66,514,772.97 16,637,748.36 23,361,750.71 15,205,688.28
income
The current dividends
received from joint 32,773,200.00
ventures
Continued：
31-12-2020/2020.01-06
Songzhi Dayang
Items
Panasonic Compressor Jing Xue Insulation Bingshan Metal Technology Refrigeration & Heat
Transfer Technology
Current assets 1,245,700,871.26 858,059,356.79 332,989,325.80 333,123,113.44
Non-current assets 309,811,760.93 192,469,083.17 44,431,510.18 84,661,159.92
Total assets 1,555,512,632.19 1,050,528,439.96 377,420,835.98 417,784,273.36
Current liabilities 366,066,971.54 478,133,992.64 63,065,326.29 123,961,987.60
Non-current liabilities 18,343,806.70 13,138,693.27 14,147,508.84
Total liabilities 384,410,778.25 491,272,685.91 63,065,326.29 138,109,496.44
Minority interests 375,245.30
Equity to the parent
1,171,101,853.94 558,880,508.75 314,355,509.69 279,674,776.92
company
Net assets calculated
468,440,741.58 163,260,174.22 154,034,199.75 55,934,955.38
according to the
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
31-12-2020/2020.01-06
Songzhi Dayang
Items
Panasonic Compressor Jing Xue Insulation Bingshan Metal Technology Refrigeration & Heat
Transfer Technology
shareholding proportions
Adjusting events
—Goodwill 39,948,654.75 19,269,770.94
—Unrealized profits of
insider trading
--Others -2,621,843.60 -145,424.54
Book value of equity
investment of affiliated 465,818,897.98 203,208,828.97 173,158,546.15 55,934,955.38
companies
Fair value of equity
investment of affiliated
companies
Operating income 498,727,220.29 239,740,068.05 204,625,692.76 278,877,218.96
Net profit 30,316,392.38 7,932,858.81 25,242,882.57 702,135.41
Net profit from closing
Other comprehensive
income
Total comprehensive
30,316,392.38 7,932,858.81 25,242,882.57 702,135.41
income
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
(3) Summary financial information of insignificant affiliated companies
Items 30-06-2021/2021.01-06 31-12-2020/2020.01-06
Total book value of investment of affiliated
713,602,837.05 733,355,484.16
companies
The total of following items according to the
shareholding proportions
Net profit -25,310,849.92 3,936,888.40
Other comprehensive income
Total comprehensive income -25,310,849.92 3,936,888.40
VII. 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 2021 the company’s assets and liabilities
dominated in foreign currency are listed in RMB as following：
Items Closing Balance Opening balance
Monetary fund-USD 7,966,454.17 15,790,643.22
Monetary fund-JPY 152,139.56 2,714,504.45
Monetary fund-EURO 6,048.12
Monetary fund- GBP 62,609.89 66.32
Receivable - GBP 1,332,493.86 1,331,614.56
Receivable- USD 35,847,300.59 34,739,431.77
Receivable - EURO
Receivable - JPY 2,162,789.04
Payables -USD 6,120,681.44 6,553,114.36
Payables -EURO 141,791.17
Payables - JPY 705,557.54
Payables -GBP 334,163.44
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
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 150,000,000.00 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 2021, base on the assumption of interest rate change of 50 BP, the Company’s net profit will increase or
decrease RMB 434.30 thousand Yuan.
3) Price risk
As at 30 June 2021, 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
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 2021, the top five customers of receivable accounts balance is：130,481,404.00 Yuan.
(3) Liquidity risk
Liquidity risk was referred to the risk of shortage of funds incurred when the enterprise fulfill the obligation of
settlement by cash or other financial assets. The way to manage the liquidity risk is to ensure enough fund available
to fulfill the liability by due date in prevention from unacceptable loss of or reputation damage to the Company. The
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
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 2021, the credit limit still available is 473.4 million Yuan and short
term credit limit available is 473.4 million Yuan.
As at 30 June 2021 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 32,091.65 32,091.65
Notes receivable 16479.05 16479.05
Accounts receivable 87,993.08 87,993.08
Receivables financing 6,787.75 6,787.75
Other receivable 3,840.47 3,840.47
Contract asset 9,312.81 9,312.81
Non-current assets maturing within
3,895.26 3,895.26
one year
Long-term receivables 6,584.64
6,584.64
Other non-current financial assets 23,930.41
23,930.41
Financial Liabilities
Short-term loan 23,953.00 23,953.00
Notes Payable 31,346.57 31,346.57
Accounts payable 96,229.04 96,229.04
Other payable 3,844.94 3,844.94
Employee’s payable 1,043.29 1,043.29
Tax payable 840.49 840.49
Non-current liabilities due within one
4,250.95 4,250.95
year
Long-term loan 15,000.00
15,000.00
Long-term payables 868.20
868.20
IX. Disclosure of Fair Value
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
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 221,177,537.12 12,991,658.59 234,169,195.71
(1) Investment by debt instruments
(2) Investment by equity instruments 221,177,537.12 12,991,658.59 234,169,195.71
(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, 2021.
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
7. Changes of valuation technique and reasons for changes
None
8. Assets and liability are disclosed at FV rather than measured at FV
None
X. Related Parties Relationship and Transactions
(I) Related parties relationship
1. Parent company and ultimate controller
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
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
Panasonic Appliances Compressor (Dalian) Co., Ltd Affiliated company of the Company
Dalian Honjo Chemical Co., Ltd Affiliated company of the Company
Songzhi Ocean Thermal Technology (Dalian) Co.,
Affiliated company of the Company
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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
Names of the joint ventures or affiliated company Relationships with the Company
Jiangsu JingXue Insulation Technology Co., Ltd. Affiliated company of the Company
Dalian Jingxue Freezing Equipment Co., Ltd Subsidiary of affiliated company
Shanghai Jingxue Freezing Equipment Co., Ltd Subsidiary of affiliated 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
Dalian Bingshan Group Huahuida Finance Leasing
Affiliated company of the Company
Co. LTD
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
Affiliated company of Dalian
Linde Hydrogen Refill Station Equipment(Dalian) Co.,Ltd
Bingshan Group
Dalian Bingshan Part Technology Co., Ltd. Subsidiary of Dalian Bingshan Group
Alphavita Bio-scientific (Dalian) Co., Ltd. Subsidiary of Dalian Bingshan Group
Affiliated company of Subsidiary of
Dalian Fuji Bingshan Intelligent Control System Co., Ltd.
Dalian Bingshan Group
Affiliated company of Dalian
Dalian Kaierwen science Co.,Ltd
Bingshan Group
Affiliated company of Subsidiary of
Dalian Bingshan Wisdom Park Co., 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 2021.1-6 2020.1-6
Dalian Bingshan Part Technology Co., Ltd. 1,100,719.55 1,386,362.74
Panasonic Appliances Air-conditioning and Refrigeration (Dalian)
14,283,046.33 12,544,723.07
Co., Ltd.
Panasonic Appliances Cold-chain (Dalian) Co., Ltd Purchas 4,418,110.43 19,945,469.77
es of 1,913,993.12 1,079,512.31
Panasonic Appliances Compressor (Dalian) Co., Ltd goods
Panasonic Refrigerating System (Dalian) Co., Ltd. 31,810,662.45 3,328,792.07
Dalian Fuji Bingshan Vending Machine Co., Ltd 1,351,425.38 367,523.31
Dalian Fuji Bingshan Vending Machine Sales Co., Ltd 330,309.73
Dalian Spindle Cooling Towers Co., Ltd 562,428.33 1,307,075.22
Songzhi Ocean Thermal Technology (Dalian) Co., Ltd
100
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
Related party Content 2021.1-6 2020.1-6
Dalian Bingshan Part Technology Co., Ltd. 1,100,719.55 1,386,362.74
Panasonic Appliances Air-conditioning and Refrigeration (Dalian) Purchas
14,283,046.33 12,544,723.07
Co., Ltd. es of
goods
Panasonic Appliances Cold-chain (Dalian) Co., Ltd 4,418,110.43 19,945,469.77
Panasonic Appliances Compressor (Dalian) Co., Ltd 1,913,993.12 1,079,512.31
BAC Dalian Co., Ltd 14,119,984.98 16,350,334.91
Dalian Bingshan Metal Technology Co., Ltd 70,809.38
Beijing Huashang Bingshan Refrigeration and Air-conditioning
Machinery Co., Ltd
Dalian Bingshan Group Refrigeration Equipment Co., Ltd 5,841,211.35 12,654,852.80
Jiangsu JingXue Insulation Technology Co.,Ltd 15,144,300.86 7,480,038.96
Wuhan Sikafu Power Control Equipment Co., Ltd.
Dalian Bingshan Group Huahuida Finance Leasing Co. LTD 476,917.71
Dalian Bingshan Wisdom Park Co., Ltd 0.00 64,991.82
Dalian Fuji Bingshan Intelligent Control System Co., Ltd.
Alphavita Bio-scientific (Dalian) Co., Ltd.
Dalian Bingshan Group Co., Ltd.
Linde Hydrogen Refill Station Equipment(Dalian) Co.,Ltd
Total 91,353,110.22 76,604,944.36
2) Sales of goods/ labour services provision
Conte 2021.1-6 2020.1-6
Related party
nt
Dalian Bingshan Part Technology Co., Ltd. 143,269.75 697,339.29
Panasonic Appliances Air-conditioning and Refrigeration
35,529,664.42 24,550,377.53
(Dalian) Co., Ltd.
Panasonic Appliances Cold-chain (Dalian) Co., Ltd 71,690,961.56 61,605,326.43
Panasonic Appliances Compressor (Dalian) Co., Ltd 7,600,809.54 3,787,087.37
Panasonic Refrigerating System (Dalian) Co., Ltd. 19,990,779.80 8,265,834.12
Dalian Fuji Bingshan Vending Machine Co., Ltd 8,397,453.07 12,025,828.33
Dalian Fuji Bingshan Vending Machine Sales Co., Ltd 31,989.61 45,419.30
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. 12,830,587.15 5,017,942.62
Sales
Dalian Spindle Cooling Towers Co., Ltd 3,073,360.72 322,836.39
of
Songzhi Grand Ocean Thermal Technology (Dalian) Co., Ltd. 614,180.71
goods
BAC Dalian Co., Ltd 17,129,169.19 16,935,526.04
Dalian Bingshan Group Refrigeration Equipment Co., Ltd 2,498,729.42 983,506.99
Jiangsu JingXue Insulation Technology Co.,Ltd
Wuhan Sikafu Power Control Equipment Co., Ltd 491,777.00
Dalian Bingshan Group Huahuida Financial Leasing Co.,LTd 145,152.00
Dalian Bingshan Wisdom Park Co., Ltd 4,281,358.92 4,750,730.48
Dalian Fuji Bingshan Intelligent Control System Co., Ltd. 285,694.57 80,619.45
Alphavita Bio-scientific (Dalian) Co., Ltd. 1,290,650.45 394,317.76
Total 186,872,325.67 140,713,801.81
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
2. Assets Lease
Assets rent out
Category of 2021.1-6 2020.1-6
Lessor Lessee
assets rent out Lease Income Lease Income
MHI Bingshan
The Company Refrigeration (Dalian) Plant 1,904,761.90 1,904,761.90
Co.,Ltd.
Dalian Bingshan
The Company Land/property 4,095,276.18 4,095,276.17
Wisdom Park Co., Ltd
Panasonic compressor Employee
The Company 22,857.14 45,714.28
(Dalian) Co., Ltd dormitory
Panasonic Refrigeration Employee
The Company 25,834.86 28,183.50
(Dalian) Co., Ltd. dormitory
Dalian JingXue
The Company Insulation Technology Plant and office 502,555.72 502,555.72
Co.,Ltd
Wuhan Sikafu Power
The Company Control Equipment Co., Plant 97,732.86 106,495.04
Ltd
Linde Hydrogen Refill
Station
The Company Land/property 1,961,055.05
Equipment(Dalian)
Co.,Ltd
Assets under lease
Category of assets rent Current year Last year Lease
Lessor
in Lease fees fees
Dalian Bingshan Group Huahuida
FA 10,971,589.76 397,771.84
Financial Leasing Co.
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 2021 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 2021 is RMB 8.646 million Yuan.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
On March 17, 2021, the company signed a lease contract with Linde Hydrogenation Station Equipment
(Dalian) Co., LTD., which will lease the 8,700 square meters of plant and office located at No. 106, East
Liaohe Road, Dalian Development Zone to Linde Hydrogenation Station Equipment (Dalian) Co., LTD. The
lease term will be up to December 31, 2030, and the current rent is RMB 2,137,500.
On June 1st, 2017, the company’s subsidiary, Bingshan Lingshe, 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, DDZ, Dalian. The rental area is 3653.76 square metres, and annual rent is RMB 1.08
million Yuan in 2021 with the contracted date between June 1st,2017 and May 31st,2022. Bingshan Lingshe
also rented out Room 201, #4 building located on No.92, Tieshan West Rd, DDZ, Dalian to Dalian Jingxue
Energy Saving Technology Co. Ltd. The rental area is 25square metres, and annual lease premium is RMB
15 thousand yuan with the contracted date between June 1st, 2017 and May 31st, 2022.
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. 150,000,000.00 2016.03.14 2026.03.13 investment
6. Balances with Related party
(1) Accounts receivable due from related parties
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
Closing Balance Opening Balance
Item Related party Book Bad debt Book Bad debt
Balance Provision Balance Provision
Accounts Panasonic
Refrigeration 13,546,229.35 950,945.30 10,217,335.97 717,256.99
receivable (Dalian) Co., Ltd
Panasonic
Accounts Appliances Cold
44,027,208.91 3,090,710.07 31,200,329.39 2,190,263.12
receivable Chain (Dalian)
Co., Ltd
Panasonic
Accounts Appliances
3,110,093.86 218,328.59 170,229.87 11,950.14
receivable Compressor
(Dalian) Co., Ltd
Panasonic
Accounts Refrigeration
10,407,969.49 730,639.46 5,009,806.43 351,688.41
receivable System (Dalian)
Co., Ltd.
Accounts MHI Bingshan
Refrigeration 9,051,763.35 635,433.79 1,381,832.96 97,004.67
receivable (Dalian) Co.,Ltd.
Accounts Dalian Spindle
Cooling Towers 1,830,162.95 128,477.44 2,099,049.80 147,353.30
receivable Co., Ltd
Accounts BAC Dalian Co.,
Ltd 8,294,833.16 582,297.29 9,504,843.22 667,239.99
receivable
Beijing Huashang
Bingshan
Accounts Refrigeration and
7,240,855.23 3,675,419.18 7,240,855.23 3,675,419.18
receivable Air-conditioning
Machinery Co.,
Ltd
Accounts Dalian Bingshan
Wisdom Park Co., 4,862,268.00 34,331.21
receivable Ltd
Dalian Fuji
Accounts Bingshan
325,500.00 22,850.10 140,000.00 9,828.00
receivable Intelligent Control
System Co., Ltd.
Accounts Alphavita
Bio-scientific 849,060.12 59,604.02 796,179.45 55,891.80
receivable (Dalian) Co., Ltd.
Accounts Dalian Fuji
Bingshan Vending 3,048,771.59 214,023.77 6,782,271.29 476,115.44
receivable Machine Co., Ltd
Wuhan Sikafu
Accounts Power Control
36,484.00 2,561.18
receivable Equipment Co.,
Ltd
Panasonic
Contract Refrigeration
307,000.00 21,551.40 72,500.00 5,089.50
assets System (Dalian)
Co., Ltd.
104
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
Dalian Bingshan
Contract Group
Refrigeration 75,000.00 12,555.00 75,000.00 5,265.00
assets Equipment Co.,
Ltd.
Panasonic
Prepayment Refrigeration 540,000.00
(Dalian) Co., Ltd
Panasonic
Appliances Cold
Prepayment 3,938.00 3,938.00
Chain (Dalian)
Co., Ltd
Panasonic
Refrigeration
Prepayment 403,290.00 343,673.53
System (Dalian)
Co., Ltd.
BAC Dalian Co.,
Prepayment 205,296.00
Ltd
Dalian Bingshan
Group
Prepayment Refrigeration 421,735.10 222,875.00
Equipment Co.,
Ltd.
Jiangsu JingXue
Insulation
Prepayment 1,021,506.00 6,397,458.41
Technology
Co.,Ltd
Dalian Kaierwen
Prepayment 24,700.00 1,445,000.00
science Co., Ltd
Dalian Bingshan
Prepayment Wisdom Park Co., 114,756.00
Ltd
Dalian Spindle
Prepayment Cooling Towers 207,390.00
Co., Ltd
Receivable BAC Dalian Co.,
12,764,203.50 10,501,112.93
financing Ltd
Panasonic
Receivable Refrigeration
2,452,032.93 6,185,494.14
financing System (Dalian)
Co., Ltd.
Panasonic
Receivable Appliances Cold
15,130,000.00 16,320,000.00
financing Chain (Dalian)
Co., Ltd
Panasonic
Receivable
Refrigeration 0.00 5,049,112.09
financing
(Dalian) Co., Ltd
Panasonic
Receivable Appliances
1,025,446.21
financing Compressor
(Dalian) Co., Ltd
Dalian Fuji
Receivable
Bingshan Vending 494,341.48
financing
Machine Co., Ltd
Notes Panasonic
Refrigeration 2,348,753.70 4,125,319.49 289,597.43
receivable (Dalian) Co., Ltd
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
Panasonic
Notes Appliances Cold
6,400,000.00 449,280.00
receivable Chain (Dalian)
Co., Ltd
Panasonic
Other Refrigeration
1,121,009.34 73,314.02
receivable System (Dalian)
Co., Ltd.
(2) Accounts Payable due from Related Party
Item Related party Closing Balance Opening Balance
Dalian Bingshan Part Technology Co.,
Accounts Payable 1,450,562.24 1,988,696.08
Ltd.
Panasonic Refrigeration System
Accounts Payable 1,100,042.93 1,207,795.95
(Dalian) Co., Ltd.
Panasonic Appliances Cold Chain
Accounts Payable 12,490.04 7,109,782.64
(Dalian) Co., Ltd
Panasonic Appliances Compressor
Accounts Payable 1,832,555.98 1,805,998.72
(Dalian) Co., Ltd
Panasonic Appliances Air-conditioning
Accounts Payable and Refrigeration (Dalian) Co., 20,028,040.93 14,096,385.66
Ltd.
Dalian Fuji Bingshan Vending
Accounts Payable 1,766,726.77
Machine Co., Ltd.
Dalian Fuji Bingshan Vending
Accounts Payable 414,000.00 414,000.00
Machine Sales Co., Ltd.
Dalian Spindle Cooling Towers Co.,
Accounts Payable 1,035,984.00 695,784.00
Ltd.
Accounts Payable BAC Dalian Co., Ltd 26,981,503.45 24,377,268.45
Dalian Bingshan Group Refrigeration
Accounts Payable 4,729,555.03 5,805,008.65
Equipment Co., Ltd.
Jiangsu JingXue Insulation Technology
Accounts Payable 5,155,057.78 4,542,624.08
Co.,Ltd
Other accounts MHI Bingshan Refrigeration (Dalian)
170,000.00 170,000.00
payable Co., Ltd.
Other accounts
Dalian Bingshan Group Co., Ltd 800,000.00
payable
Other accounts Jiangsu JingXue Insulation Technology
70,000.00
payable Co.,Ltd
Panasonic Appliances Cold Chain
Contract liability 87,977.15 87,977.15
(Dalian) Co., Ltd
Dalian Fuji Bingshan Vending
Contract liability 1,877,057.65
Machine Co., Ltd.
Dalian Spindle Cooling Towers Co.,
Contract liability 1,769,911.50
Ltd.
Panasonic Appliances Air-conditioning
Contract liability and Refrigeration (Dalian) Co., 10,752,300.88
Ltd.
Wuhan Sikafu Power Control
Contract liability 76,228.67
Equipment Co., Ltd
Panasonic Appliances Compressor
Notes Payable 100,000.00
(Dalian) Co., Ltd
Panasonic Appliances Cold Chain
Notes Payable 1,657,321.00 1,657,321.00
(Dalian) Co., Ltd
Dalian Spindle Cooling Towers Co.,
Notes Payable 55,000.00 150,000.00
Ltd
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Dalian Bingshan Group Refrigeration
Notes Payable 8,404,355.33 8,124,711.01
Equipment Co., Ltd.
Jiangsu JingXue Insulation Technology
Notes Payable 924,445.75
Co.,Ltd
Notes Payable BAC Dalian Co., Ltd 869,502.00
Panasonic Appliances Air-conditioning
Notes Payable and Refrigeration (Dalian) Co., 112,010.00
Ltd.
Dalian Bingshan Pate Technology
Notes Payable 400,000.00 1,600,000.00
Co.,Ltd
Dalian Bingshan Group Huahuida
Long term payable 19,653,630.85 26,779,556.16
Financial Leasing Co., Ltd..
(II) Related Party Commitment
None
XI.
1.Contingency
As at 30 June 2021, the Company does not have any other contingencies for disclosure.
2. Commitment
As at 30 June 2021, the Company does not have any other significant commitments.
XIV.. Events after the Balance Sheet Date
(1)Contingency
As at 30 June 2021, the Company does not have any other contingencies for disclosure.
(2)Commitment
As at 30 June 2021, 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. Debt Restructuring
Book Value of debt Gain on debt Capital
Restructuring
restructuring increase
Debts settled by asset
Debt transfer into equity
instrument
Amendment to other debt
24,563,327.30 531,903.00
condition
Hybrid restructuring
Note: Through friendly negotiation, the Company's subsidiary Wuhan New World Refrigeration Industry
Co., LTD and wuhan Kaiping Industrial Equipment Co., LTD and other suppliers have reached an agreement
that the supplier will voluntarily reduce part of the total debts of Wuhan New World Refrigeration Industry
Co., LTD by RMB 531,903.00.
2. 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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
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.
(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 ：Ten thousand yuan
30-06-2021/2021.01-06
Items Northeast Central East
Offset Total
China China China
1 Operating income 122,879.28 12,410.86 641.77 -26,503.35 109,428.56
2 Cost 109,698.99 10,824.29 541.72 -26,024.53 95,040.48
Impairment loss on
18.50 -120.21 0.06 -101.66
assets
Impairment loss on
-779.83 -10.03 26.31 -763.54
credit
Depreciation and
3,638.93 417.77 4,056.69
amortization
3 Investment income from
2,215.72 -107.14 2,108.58
associates and joint venture
4 Operating profits(loss) -114.17 -1,303.85 -21.12 -1,439.14
5 Income tax 306.12 -61.22 6.59 251.50
6 Net profit(loss) -420.29 -1,242.64 -27.71 -1,690.64
7 Total assets 643,064.85 53,425.05 1,773.74 -106,197.19 592,066.45
8 Total liabilities 241,649.44 35,776.18 912.58 -31,323.00 247,015.21
XIII. Notes to the Main Items of the Financial Statements of Parent Company
1. Accounts receivable
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(1) Accounts receivable category
Closing Balance
Item Booking balance Provision Booking
Amount % Amount % balance
Accounts
receivable with
significant
466,351,893.54 100.00 69,268,038.34 14.85 397,083,855.20
individual amount
and separate bad
debt provision
Accounts
receivable with bad
debt provision
based on the
characters of credit
risk portfolio
Accounting age as
301,803,732.77 35.28 69,268,038.34 22.95 232,535,694.43
characters
Related party
within
164,548,160.77 64.72 164,548,160.77
consolidation
scope
Accounts
receivable with
insignificant
individual amount
and separate bad
debt provision
Total 466,351,893.54 100.00 69,268,038.34 14.85 397,083,855.20
(Continued)
Opening Balance
Item Booking balance Provision Booking
Amount % Amount % balance
Accounts receivable
with significant
individual amount 474,709,875.38 100.00 66,083,949.47 13.92 408,625,925.91
and separate bad
debt provision
Accounts receivable
with bad debt
provision based on
the characters of
credit risk portfolio
Accounting age as 250,449,415.13 52.76 66,083,949.47 26.39 184,365,465.66
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Opening Balance
Item Booking balance Provision Booking
Amount % Amount % balance
characters
Related party within
224,260,460.25 47.24 224,260,460.25
consolidation scope
Accounts receivable
with insignificant
individual amount
and separate bad
debt provision
Total 474,709,875.38 100.00 66,083,949.47 13.92 408,625,925.91
Closing Balance
Items
Booking balance Provision %
Expected credit losses within 1 year 173,207,981.34 12,159,200.29 7.02
Expect credit losses of 1-2 years 51,811,899.56 8,673,311.99 16.74
Expect credit losses of 2-3 years 24,026,524.46 7,407,377.49 30.83
Expect credit losses of 3-4 years 12,780,988.18 6,304,861.47 49.33
Expect credit losses of 4-5 years 18,861,946.60 13,608,894.47 72.15
Expect credit losses more than 5 years 21,114,392.63 21,114,392.63 100.00
Total 301,803,732.77 69,268,038.34 --
(1)The bad debt provisions of accounts receivable in the portfolio is accrued under accounting aging analysis
method:
Aging Closing Balance
Within1 year 337,756,142.11
1 to 2 years 51,811,899.56
2 to 3 years 24,026,524.46
More than 3 years 52,757,327.41
3 to 4 years 12,780,988.18
4 to 5 years 18,861,946.60
More than 5 years 21,114,392.63
Total 466,351,893.54
(2) Bad debt provision accrued and reversed (withdraw)
Change during the year
Category Opening balance Closing Balance
Accrued Collected/ reversed Written-off
Bad debt provision 66,083,949.47 3,728,098.72 40,000.00 584,009.85 69,268,038.34
Total 66,083,949.47 3,728,098.72 40,000.00 584,009.85 69,268,038.34
(3) No accounts receivable written off in current period.
Item Written off amount
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2021Semiannual Report
Item Written off amount
Receivable actually written off 584,009.85
(4) The top five significant accounts receivable categorized by debtors
Closing
Closing % of the
Company Balance of
Balance total AR
Provision
Xinyi Yuanda Construction and
32,748,744.00 7.02 25,281,907.38
Installation Engineering Co., Ltd.
Qingcheng Zhongyi Energy Co., Ltd 26,600,000.00 5.70 4,452,840.00
Ningxia Wangwa Coal Co., Ltd. 13,631,495.12 2.92 4,753,451.22
Beidahuang Taihua Organic Food Co.
9,615,000.00 2.06 2,964,304.50
Ltd
Guangzhou R&F Real Estate Co., LTD 5,598,148.15 1.20 2,761,566.48
Total 88,193,387.27 18.90
2. Other Receivables
Item Closing Balance Opening Balance
Interest receivable 681,304.44 46,879.68
Dividend receivable 8,430,838.28
Other receivable 5,913,239.35 41,136,517.46
Total 15,025,382.07 41,183,397.14
2.1 Interest receivable
(1) Interest receivable category
Item Closing Balance Opening Balance
Interest on term deposits 681,304.44 46,879.68
Interest on bank financial product
Total 681,304.44 46,879.68
1.2 Dividend receivable
Item Closing Balance Opening Balance
Panasonic Refrigeration (Dalian) Co., Ltd 640,000.00
Dalian Honjo Chemical Co., Ltd 561,233.80
Guotai Junan Securities Co., Ltd. 7,229,604.48
Total 8,430,838.28
2.3 Other receivable
(1) Other receivables categorized by nature
Nature Closing Balance Opening Balance
Equity transfer fund 0.00 36,263,700.00
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Deposits 2,438,302.00 3,640,939.00
Petty cash 733,627.61 557,035.76
Guarantee deposits 6,362,534.71 5,697,595.21
Total 9,534,464.32 46,159,269.97
(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, 2021 5,022,752.51 5,022,752.51
The balance of January 1, 2021 in
—— —— —— ——
the current period
Provision for bad debts -1,401,527.54 -1,401,527.54
Balance on June 30, 2021 3,621,224.97 3,621,224.97
The bad debt provisions of other receivables in the portfolio is accrued under accounting aging analysis
method
Aging Closing Balance
Within 1 year 3,623,574.61
1,328,441.00
1 to 2 years
968,247.71
2 to 3 years
More than 3 years 3,614,201.00
4 to 5 years 2,415,636.00
More than 5 years 1,198,565.00
Total 9,534,464.32
(3) Bad debt provision accrued and reversed (withdraw) in the period.
Change during the year
Opening Closing
.Category
balance Accrued Collected/reversed Written-off Balance
Bad debt
5,022,752.51 1,401,527.54 3,621,224.97
provision
Total 5,022,752.51 1,401,527.54 3,621,224.97
(4) Other receivables from the top 5 debtors
Closing
Closing % of the
Name Category Aging Balance of
Balance total OR
Provision
Dalian Huali Coating Equipment Co.,
Outstanding debtor 1,650,000.00 4-5 years 17.31 1,170,015.00
Ltd.
Over 5
Dalian Delta HK China gas Co., Ltd. Security deposit 1,100,000.00
years
11.54 1,100,000.00
Xinjiang Oriental Hope New Energy Within 1
Security deposit 1,000,000.00 10.49 65,400.00
Co., LTD year
Dalian Changde Welding Co.,Ltd Outstanding debtor 765,636.00 4-5 years 8.03 542,912.49
Xinjiang Tbea Electrical Engineering Within 1
Security deposit 400,000.00 4.20 26,160.00
Project Management Co., LTD year
Total 4,915,636.00 51.57 2,904,487.49
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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 687,496,652.08 687,496,652.08 687,496,652.08 687,496,652.08
Investment of affiliates and JV 1,603,006,769.97 1,603,006,769.97 1,592,881,328.96 1,592,881,328.96
Total 2,290,503,422.05 2,290,503,422.05 2,280,377,981.04 2,280,377,981.04
(1) Investments of subsidiaries
Subsidiaries names Opening Balance Increase Decrease Closing Balance
Dalian Bingshan Group Construction Co., Ltd 193,749,675.77 193,749,675.77
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 687,496,652.08 687,496,652.08
(2) Joint ventures& affiliated companies
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Increase/Decrease
Gains and losses Adjustment of Provision for
Investee Beginning balance C ha ng e s Cash bonus or Provision for Ending balance impairment
recognized other
Increased Decreased of other profits impairment of the Others at year end
under the equity comprehensive
equity announced current period
method income
1. Affiliated companies
Panasonic Appliances
-14,304,960.2
Air-conditioning and 172,549,678.96 1,280,000.00 156,964,718.71
5
Refrigeration (Dalian) Co., Ltd.
Panasonic Appliances
274,533,413.30 661,139.89 2,797,849.22 272,396,703.97
Cold-chain (Dalian) Co., Ltd
Panasonic Appliances
465,818,897.98 22,044,812.17 32,773,200.00 455,090,510.15
Compressor (Dalian) Co., Ltd
Dalian Honjo Chemical Co.,
8,746,197.03 355,303.63 561,233.80 8,540,266.86
Ltd
Songzhi Ocean Thermal
55,934,955.38 3,041,137.66 58,976,093.04
Technology (Dalian) Co., Ltd
Beijing Huashang Bingshan
Refrigeration and
2,121,951.69 -37,039.35 2,084,912.34
Air-conditioning Machinery
Co., Ltd
Dalian Fuji Bingshan Vending
184,454,138.22 -9,141,058.73 175,313,079.49
Machine Co., Ltd
MHI Bingshan Refrigeration
14,891,119.67 1,697,477.05 16,588,596.72
(Dalian) Co.,Ltd.
Dalian Fuji Bingshan Vending
43,546.35 -43,520.00 26.35
Machine Sales Co., Ltd
-16,12
Jiangsu JingXue Insulation
203,208,828.97 3,558,478.80 3,970. 190,643,337.48
Technology Co.,Ltd
29
Panasonic Refrigeration
37,420,055.26 1,840,988.29 3,895,484.27 35,365,559.28
System (Dalian) Co., Ltd.
Bingshan Metal Technical
173,158,546.15 11,535,446.10 184,693,992.25
Service （Dalian） Co.,Ltd.
Dalian Bingshan Group
45,400,0
Huahuida Finance Leasing Co. 948,973.33 46,348,973.33
00.00
LTD
-16,12
45,400,0
Total 1,592,881,328.96 38,845,178.59 3,970. 41,307,767.29 1,603,006,769.97
00.00
29
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4. Operating revenue and cost
Item 2021.01-06 2020.01-06
Revenue Cost Revenue Cost
Revenue from main operation 385,929,620.18 336,469,117.09 401,973,100.61 346,387,083.54
Revenue from other operation 20,551,816.12 13,934,076.36 19,564,567.55 13,444,729.68
Total 406,481,436.30 350,403,193.45 421,537,668.16 359,831,813.22
5. Investment income
Items 2021.01-06 2020.01-06
8,185,883.28
Income from long-term equity investments under cost method
Income from long-term equity investments under equity method 22,157,178.59 17,295,970.66
Income from holding of other non-current financial assets 7,229,604.48 6,126,903.12
29,386,783.07 31,608,757.06
Total
XVII. Supplementary Information to the Financial Statements
1. Non-operating profit or loss
item Amount
Disposal gains and losses of non-current asset 8,393.93
Government subsidies included in current profit or loss 914,454.99
Income from changes in fair value during the period of holding financial assets
-5,034,903.12
available for sale and income from disposal of financial assets available for sale
Other non-operating revenue or expense 1,377,409.33
Influence on income tax -370,653.73
Influence on minority shareholders 337,544.26
Total -2,701,535.40
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 -0.43% -0.017 -0.017
Net profit after deducting non-recurring gains and losses
-0.36% -0.014 -0.014
attributable to shareholders of parent company
115
