Bingshan Refrigeration & Heat Transfer
Technologies Co., Ltd.
2021 Annual Report
April, 2022
1 / 188
Section 1 Important Notice, Table of Contents, and Definitions
The directors and the Board of Directors, the supervisors and the
Supervisory Board, and Senior staff members of Bingshan Refrigeration &
Heat Transfer Technologies Co., Ltd. (hereinafter referred to as the
Company) hereby confirm that there are not any important omissions,
fictitious statements or serious misleading carried in this report, and shall
take all responsibilities, individual and/or joint, for the reality, accuracy and
completeness of the whole contents.
Chairman of the Board of Directors of the Company Mr. Ji Zhijian,
Financial Majordomo Mrs. Wang Jinxiu and the head of Accounting
Department Mr. Li Sheng hereby confirm that the financial report of the
annual report is true and complete.
All the directors have attended this Board meeting of the Company.
There is no significant risk having adverse influence on attainment of the
Company's future development strategy and business targets. The
paragraph " The prospect of the Company's future development " in Section
3 of this Annual Report describes major risks the Company may be
confronted with, including the risk of Increasing market competition risk,
the market promotion for new product and new technology slow, the
Accounts receivable is on the high side and rising prices of raw materials.
See the related sections for the countermeasures to be taken by the Company.
The profit distribution proposal reviewed and adopted at this Board meeting
of the Company is: Based on the total capital stock of 843,212,507 shares, the
dividend of RMB 0.1 in cash (including tax) will be distributed for every 10
shares; The Company will not transfer the capital reserve to increase capital
stock.
This report is written respectively in Chinese and in English. In the event of
any discrepancy between the two above-mentioned versions, the Chinese
version shall prevail.
2 / 188
CONTENTS
Section 1 Important Notice, Table of Contents, and Definitions………………………………………………………………………...2
Section 2 About the Company and Main Financial Indicators .................................................................................................................6
Section 3 Management discussion and analysis ....................................................................................................................................10
Section 4 Corporate governance ............................................................................................................................................................23
Section 5 Environmental and social responsibility ................................................................................................................................33
Section 7 Change in Share Capital and Shareholders' Information ........................................................................................................38
Section 8 Information on Preferred Stock..............................................................................................................................................42
Section 9 Information on Corporate bonds ............................................................................................................................................43
Section 10 Financial Report...................................................................................................................................................................44
Section 11 Reference Documents ........................................................................................................................................................188
3 / 188
Reference Documents
1. The accounting statements bearing the signatures and seals of the legal representative, the financial
majordomo and the accountants in charge.
2. The original copies of all the Company's documents and the original copies of the bulletins published on the
newspapers designated by the China Securities Regulatory Commission in the report period.
3. Time for reference: from Monday to Friday 8:00 - 11:30 (am) 1:00 - 4:30 (pm)
Liaison persons: Mr. Song Wenbao, Ms Du Yu
Tel: 0086-411-87968130
Fax: 0086-411-87968125
4 / 188
Definitions
Defined item Stands for Meaning
Reporting period Stands for From Jan. 1, 2021 to Dec. 31 2021
The Company, this Company Stands for Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Wuhan New World Refrigeration Industry Co., Ltd., one of the subsidiaries of the Company
Wuxin Refrigeration Stands for
where the Company holds 100% of its shares.
Dalian Bingshan Group Engineering Co., Ltd., one of the subsidiaries of the Company where
Bingshan Engineering Company Stands for
the Company holds 100% of its shares.
Dalian Bingshan Guardian Automation Co., Ltd. one of the subsidiaries of the Company
Bingshan Guardian Stands for
where the Company holds 100% of its shares.
Panasonic Appliances Compressor (Dalian) Co., Ltd. one of the associated companies of the
Panasonic Compressor Stands for
Company, where the Company holds 40% of its shares.
Panasonic Appliances Cold-Chain (Dalian) Co., Ltd. one of the associated companies of the
Panasonic Cold-Chain Stands for
Company, where the Company holds 40% of its shares.
Panasonic Appliances Refrigerating System (Dalian) Co., Ltd., one of the
Panasonic Refrigerating System Stands for
associated company of the Company, where the Company holds 20% of its shares
Dalian Fuji-Bingshan Vending Machine Co., Ltd., one of the associated companies of the
Fuji-Bingshan Stands for
Company, where the Company holds 49% of its shares.
Jiangsu Jingxue Insulation Technology Co., Ltd., one of the associated companies of the
Jingxue Insulation Stands for
Company, where the Company holds 21.91% of its shares.
5 / 188
Section 2 About the Company and Main Financial Indicators
I. Company information
Short form of the stock Bingshan; Bingshan B
Stock code 000530; 200530
Listed stock exchange Shenzhen Stock Exchange
Legal name in Chinese 冰山冷热科技股份有限公司
Legal name abbreviation in Chinese 冰山冷热
Legal English name Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Legal English name abbreviation Bingshan
Legal representative Ji Zhijian
Registered address No.106, Liaohe East Road, Dalian Economic and Technological Development Zone
Post code of Registered address 116630
Due to the overall relocation, the registered address of the Company was changed
Historical changes of the Company's
from 888 Southwest Road, Shahekou District, Dalian to 106 Liaohe East Road,
registered address
Dalian Economic and Technological Development Zone in March 2017.
Office address No.106, Liaohe East Road, Dalian Economic and Technological Development Zone
Post code of Office address 116630
Internet web site of the Company www.bingshan.cn
E-mail of the Company 000530@bingshan.com
II. Contact persons and information
Secretary of the Board of Directors Authorized representative for securities affairs
Name Song Wenbao Du Yu
Bingshan Securities﹠Legal Affairs No.106, Liaohe Bingshan Securities﹠Legal AffairsNo.106, Liaohe
Address East Road, Dalian Economic and Technological East Road, Dalian Economic and Technological
Development Zone Development Zone
Tel. 0411-87968130 0411-87968822
Fax 0411-87968125 0411-87968125
E-mail 000530@bingshan.com 000530@bingshan.com
III. Information disclosure and place of preparation for inquiry
Name of the newspaper designated by the Company for China Securities Daily, Securities Times and Hong
information disclosure Kong Commercial Daily
Address of the website designated by China Securities
http://www.cninfo.com.cn
Regulatory Commission for publishing this Annual Report
Place where this Annual Report was prepared for inquiry Securities﹠Legal Affairs Department of the Company
IV. Alteration to the registration
Organization code 912102002423613009
Change in main business since the Company was listed No change
Changes in the holding shareholder No change
6 / 188
V. Other related information
Accounting firm engaged by the Company
Name of accounting firm ShineWing CPAs (Special General Partnership)
Office location of accounting firm 9/F,A Building No.,8 north street of Chao Yang Men, Dong Cheng District Beijing, China
Name of signing certified public accountant Lin Li, Zhang Shizhuo
Sponsor the Company appointed for performance of the consistent supervision duty in the reporting period
□ Applicable √ Not applicable
Financial consultant the Company appointed for performance of the consistent supervision duty in the reporting
period
□ Applicable √ Not applicable
VI. Main accounting data and financial indicators
Did the Company retroactively adjust or restate the accounting data of previous years due to change in the
accounting policy and correction of accounting mistakes?
□ Applicable √ Not applicable
Increase/decrease compared
2021 2020 2019
with previous year
Operating revenue 2,089,208,256.22 1,727,267,935.15 20.95% 1,831,851,280.70
Net profit attributable to shareholders of listed companies -269,059,849.96 21,341,133.39 -1,360.76% 89,112,113.43
Net profit belonging to the shareholders of listed
companies after the deduction of non-recurring profit and -355,049,953.56 6,128,351.99 -5,893.56% 21,406,535.65
loss
Net cash flow from operating activities 1,518,218.37 -13,142,427.45 111.55% 12,695,071.81
Basic earnings per share -0.319 0.025 -1,376.00% 0.106
Diluted earnings per share -0.319 0.025 -1,376.00% 0.106
Weighted average return on net asset yield -8.31% 0.64% Decrease 8.95 percentage points 2.63%
Increase/decrease compared
2021.12.31 2020.12.31 2019.12.31
with previous year
Total assets 5,735,570,604.67 5,681,568,328.36 0.95% 5,525,503,256.26
Owner's equity attributable to shareholders of listed
3,002,842,837.47 3,375,609,788.07 -11.04% 3,379,565,029.89
companies
The net profit attributable to the shareholders of the listed company suffered a significant loss, mainly due to the
following reasons: 1. Affected by the sharp rise in the price of raw materials and the intensification of market
competition, the gross profit margin decreased by 5.59 percentage points year-on-year; 2. Due to the increase of
long-term accounts receivable, the Company's provision for credit impairment loss increased according to the
Company's asset impairment provision policy; 3, in antithetical couplet enterprises, the joint venture has
implemented new financial instruments standards since January 1, 2021, and the credit loss has been increased
considerably. Meanwhile, the price of the raw materials has been greatly increased and the impact of COVID-19
on the new retail equipment leasing business has been greatly affected. The investment income of the joint venture
has dropped by 149.93 million yuan.
The lower of the Company’s net profit before and after deduction of non-recurring gains and losses in the most
7 / 188
recent three fiscal years are all negative, and the audit report in the last year shows that the Company's ability to
continue operations is uncertain
□ Applicable √ Not applicable
The lower of the net profit before and after non-recurring gains and losses is negative
√ Applicable □ Not applicable
Item 2021 2020 notes
Operating income (yuan) 2,089,208,256.22 1,727,267,935.15
Amount deducted from Income from sales of materials, rental of fixed assets
62,109,983.70 59,331,578.30
operating income (yuan) and labor services other than normal operation.
Amount after deduction of
2,027,098,272.52 1,667,936,356.85
operating income (yuan)
VII.1.Difference of accounting data between as per Chinese accounting standards and as per
International Accounting Standards
□ Applicable √ Not applicable
2. Difference of accounting data between as per Chinese accounting standards and as per
Foreign Accounting Standards
The difference of accounting data between as per Chinese Accounting Standards and as per International
Accounting Standards was 0.
3.Explanation of reasons for differences in accounting data under domestic and foreign
accounting standards
√Applicable □Not applicable
The difference of accounting data between as per Chinese Accounting Standards and as per International
Accounting Standards was 0.
VIII. The quarter main financial indicators
the first quarter the second quarter the third quarter the fourth quarter
Operating revenue 491,609,773.09 602,675,847.88 657,628,182.17 337,294,453.08
Net profit attributable to shareholders of listed companies -28,904,736.89 14,320,526.88 -26,965,424.33 -227,510,215.62
Net profit belonging to the shareholders of listed companies
-16,049,142.03 4,166,467.42 -39,026,942.89 -304,140,336.06
after the deduction of non-recurring profit and loss
Net cash flow from operating activities 17,535,066.89 -46,422,903.17 33,753,508.29 -3,347,453.64
IX. Non-recurring profits and losses and their amounts
item 2021 2020 2019
Disposal gains and losses of non-current asset 27,724,344.91 -169,550.05 1,132,131.30
Government subsidies included in current profit or loss 15,993,001.31 17,952,461.57 3,707,100.00
Debt restructuring gains and losses 819,297.68 1,999,241.94
Disposal gains from investments on financial assets
available for sale, and gains from fair value change of 55,245,024.14 4,362,148.57 72,282,942.52
financial assets available for sale
Other non-operating revenue or expense -5,129,941.48 -4,643,229.90 481,549.43
Others 554,176.99
Influence on income tax 8,490,868.44 1,995,261.63 12,122,009.11
Influence on minority shareholders 170,754.52 293,787.16 329,555.29
Total 85,990,103.60 15,212,781.40 67,705,577.78
Based on the changes in the controlling shareholders of Thermoking Container Temperature Control (Suzhou) Co.,
8 / 188
Ltd. ("Suzhou Thermoking "), as well as the trend of business growth and profit improvement, the Company
adopted the price to book ratio method of comparable companies and considered the liquidity discount to measure
the fair value of Suzhou Thermoking in 2021. The income from changes in fair value was 47,971,962.90 yuan.
9 / 188
Section 3 Management discussion and analysis
I. The industry situation of the Company during the reporting period
1. Industry development trend
In recent years, the influence of refrigeration and air conditioning industry in China's national economy is growing,
conferring increasing influence upon consumption upgrade, food safety and livelihood improvement. Besides,
development model under high-end, intelligent, green and service is experiencing rapid growth. The field of
competition, competitors, products, connotation is constantly changing.
In 2021, the refrigeration and air-conditioning industry was facing a complex and severe market situation at home
and abroad. The problems of intensified market competition, increased cost pressure, and difficulty in improving
efficiency continued to plague the operation and development of the industry.
In 2022, the industry will continue to differentiate, competition will continue to intensify, difficulties and
opportunities coexist. Actively respond to the national "double carbon" strategy, the transformation and upgrading
of major enterprises in the industry will be further accelerated. Intelligent manufacturing, green manufacturing
and service-oriented manufacturing will become increasingly prominent, and the pace of high-quality
development will be more robust.
2. Challenges and opportunities faced by the Company
(1)Opportunities faced by the Company
Energy conservation, carbon reduction and improving energy efficiency have become the consensus of the whole
society; Overall promotion of the national "double carbon" strategy; The carbon trading market was officially
launched and gradually expanded; Regional energy system and comprehensive energy utilization are encouraged
and supported by the state; The 14th five year plan for the development of cold chain logistics has been issued,
and the market demand for cold chain equipment is expected to grow rapidly; With the promulgation of the new
cold storage design standard, the use opportunities of ammonia refrigerant have increased.
With the strong technology bases, innovative business model, and system advantages, the Company is capable of
capturing the above opportunities in a good position.
(2)Challenges faced by the Company
The production license system is cancelled, and the traditional market competition is intensified; the cultivation of
energy conservation and emission reduction market still needs time; the transformation and upgrading process is
complex, and there may be significant risk factors that have not been identified.
3. Development planning of the Company
The Company will focus on the refrigeration and heating industries under the operation policy of innovation and
value creation, promote business integration with the parent company and subsidiaries as the core business,
integrate internal and external resources, upgrade the industrial chain, innovate business model, strengthen
technological innovation, improve and expand the business scale and development space, improve employees’
benefits and realize sustained, healthy and harmonious development, thus to become an enterprise trusted and
respected by customers, partners and the society.
4. Capital requirement and fund sourcing plan
In 2022, the capital expected to be required for the Company's production operation and capital operation will be
financed by its own funds and appropriate financing.
II. The Company’s Main business during the reporting period
Focusing on the hot and cold industry, the Company is committed to the development of industrial refrigeration
and heating business, commercial refrigeration business, air conditioning and environment business, engineering
and service business and new business fields, covering the key areas of the hot and cold industry chain and
creating a complete hot and cold industry chain.
10 / 188
The Company's main products include piston and screw refrigeration compressors, pressure vessels, combined
warehouses, controlled atmosphere storage, quick freezer, ice maker, flake ice maker, granulator, etc., which are
used in national defense, scientific research, petroleum, chemical, textile, medicine, power generation, agriculture,
animal husbandry, fishery and catering service industries. The Company's product sales and comprehensive
solutions provide both domestic and international markets, with self-supporting sales as the main and channel
sales as the auxiliary.
During the reporting period, rigid demands such as food safety, consumption upgrading, energy conservation and
carbon reduction will benefit the refrigeration and air conditioning industry. At the same time, the refrigeration
and air conditioning industry is also facing the problems of intensified market competition, increased cost pressure,
and difficulty in improving efficiency. Facing the opportunities and challenges, focusing on the hot and cold
industry, the Company strengthened and optimized the professional work department, continued to deeply
cultivate the advantageous market segments such as cold chain logistics, petrochemical industry, beer and dairy
products, meat slaughtering, ship refrigeration, ice and snow venues and polysilicon, vigorously expanded CCUS,
ORC, photovoltaic and other new undertakings, and actively expanded and occupied the domestic market.
1. Industrial refrigeration and heating business
Industrial refrigeration is an important field reflecting the core technology of the Company. After years of
development, the Company has been close to the technical level of the main international competitors in the field
of industrial refrigeration, and has achieved catching up in some fields. Based on the traditional refrigeration, the
Company realizes the balance of cold and heat through the utilization of heat, which greatly improves the energy
utilization rate.
During the reporting period, the Company's "industrial and commercial open screw refrigeration unit and
refrigeration system" was selected as the Sixth Batch of manufacturing single champion products of the Ministry
of industry and information technology.
2. Commercial refrigeration business
Commercial refrigeration is the Company's core business. In China, the Company takes the lead in opening up the
green intelligent cold chain from the first kilometer of the field to the last 100 meters of the residential community,
which is the competitive advantage of the Company.
Focusing on food refrigeration, the Company has patented products pre-cooling from the field, all kinds of quick
freezing equipment and refrigeration facilities of various specifications, and China's leading experience in the
design and installation of large-scale ammonia and carbon dioxide refrigerators. On the basis of absorbing the
relevant experience of Japan, Europe and the United States, combined with China's new needs, to provide newer
products, better solutions and fresher experience for the field of food freezing and refrigeration.
3. Air conditioning and environment business
In recent years, relying on the complete industrial chain, the Company has continuously carried out transformation
and upgrading in the field of air conditioning and environment, developed more energy-saving and environmental
protection products around the blue sky project, and accelerated the transformation and upgrading from air
treatment to environmental governance.
At present, the Company has developed a series of innovative products around the market segments of
commercial air conditioning, central air conditioning and special air conditioning, and provides corresponding
solutions in different segments around these innovative products. For hospitals, electronic factories, high-end real
estate, rail transit and other fields, provide targeted solutions.
During the reporting period, in order to strengthen the special air conditioning business, the Company transferred
30% equity of Dalian Bingshan air conditioning equipment Co., Ltd. held by Showa Iron Industry Co., Ltd. After
this equity transfer, the Company held 100% equity of Dalian Bingshan air conditioning equipment Co., Ltd.
4. Engineering and service business
Cold and hot engineering and service are the Company's advantageous business fields. In recent years, the
Company has realized transformation and upgrading from the manufacturer of cold and hot equipment to the
service provider of comprehensive solution of cold and hot through the development of engineering and service
industry, and realized the dual wheel drive of the enterprise, and provided more professional and accurate services
to each segment market, and constantly created new value for customers and realized common growth.
At present, the Company focuses on petrochemical technology, refrigeration, central air conditioning, ice and
snow engineering, artificial environment and other market segments. Relying on the enterprise's industrial chain,
value chain and ecosystem, the Company provides services from consulting, planning, design to manufacturing,
installation, commissioning and service in the whole process and life cycle. At the same time, according to the
needs of customers, promote the combination of industry and finance, and provide services for customers through
the form of project general contracting and financial leasing.
5. New business
11 / 188
With the deepening of China's economic transformation and upgrading, as well as the continuous introduction of
environmental governance policies, the domestic industrial energy conservation and environmental protection
industry is growing rapidly, the level of energy conservation and consumption reduction of enterprises and the
comprehensive utilization of resources is constantly improving, and the energy industrial structure has changed.
Strengthening the optimal utilization of energy has become a development trend. For low-grade energy recycling,
the Company provides customers with a series of energy-saving, environmental protection, efficient new products,
in line with the national strategic requirements of energy conservation, carbon reduction and sustainable
development, and contributes professional wisdom to the national carbon peak and carbon neutral strategy.
During the reporting period, the Company made good progress in CCUS, ORC, photovoltaic and other new
undertakings.
III. Analysis of core competence
The Company focuses on main business of refrigeration and heating; independent R&D and joint
venture partnerships are cooperate with each other effectively; capital resources integration and
business model innovation are in a positive interaction; the community of business and interest are
being multi-storey created; the develop mode with Bingshan characteristic are formed.
The Company has the integrated refrigeration and heating industrial chain for offering kinds of
comprehensive solution services, including design, manufacture, installation and maintenance etc.,
and can satisfy individual requirements preferably.
The Company possesses a mature and solid marketing networks and after-sale service network
on/off-line, and can offer high quality and high value-added services more initiative and faster for
clients from around the city.
After overall relocation reform, the new factory of intelligence, environment protection, high
efficiency and safety are put into used, which produces a strong advantage for creating higher value
to the customers.
While move forward with transformation and upgrading for former business, the Company will
implement the cultivation for new kinetic energy, thus the sustainable healthy development will
come more and more feasible.
During the reporting period, the Company adhered to innovation, took the initiative to change,
solidly improved its technical power, marketing power, product power, engineering power and
service power, and further improved its core competitiveness.
IV. Analysis of main business
1. summarize
In 2021, the Company further focused on refrigeration and heating industries, deeply cultivated market
segments, focused on the improvement of main business and the cultivation of new drivers, continued to
improve innovation, improved quality and efficiency, and solidly enhanced its core competitiveness.
In 2021, the Company achieved an operating revenue of 2,089.21 million yuan, a year-on-year increase of
20.95%; The net profit attributable to the shareholders of the listed company was -269.06 million yuan,
resulting in a significant loss. The main reasons are as follows: first, affected by the sharp rise in the price of
raw materials and the intensification of market competition, the Company's gross profit margin decreased by
5.59 percentage points year-on-year; Second, due to the increase of long-term accounts receivable, the
Company's provision for credit impairment loss increased according to the Company's asset impairment
provision policy; Three, in antithetical couplet enterprises, the joint venture's implementation of the new
financial instruments standard since January 1, 2021, the increase in the credit loss increase and the
unfavorable impact of COVID-19's impact on the new retail equipment leasing business, the investment
income of the joint venture enterprises has dropped by about 149.93 million yuan.
During the reporting period, the Company adhered to integrity, innovation and initiative. The construction of
12 / 188
corporate culture has been carried out in a pragmatic manner, unified ideas, woven dreams, and many core
technicians have returned. Strengthen the organization and vigorously promote the implementation of
market-centered integrated operation through organizational restructuring and business process reengineering.
The improvement of engineering power and manufacturing power were implemented in an orderly manner,
the orders increased significantly year-on-year, and the operating cash flow improved significantly. The
Company's "industrial and commercial open screw refrigeration unit and refrigeration system" was selected
as the Sixth Batch of manufacturing single champion products of the Ministry of industry and information
technology. The red water pre-cooling device of the Company was selected as the "innovative product of
2021 China Refrigeration Exhibition" and the "specialized and special new" product of Liaoning Province in
2021.
During the reporting period, Bingshan Engineering company, a subsidiary of the Company, optimized and
strengthened the professional work department and specialized deep cultivation of advantageous market
segments. Won the bid for the central kitchen project of Xinjiang production and Construction Corps (the
contract amount is about 340 million yuan), which is the largest single project contract in the Company's
history; Won the bid for the Shanghai Star indoor comprehensive ice and snow venue project (the contract
amount is about 130 million yuan), which is the largest ice and snow integration contract in China at present;
The market share of polysilicon jumped sharply, with a total contract amount of about 210 million yuan; CO2
projects erupted intensively and their influence increased rapidly; The CCUS project was implemented for
the second time, and the carbon neutralization solution was successfully expanded.
During the reporting period, Wuhan New World Refrigeration, a subsidiary of the Company, further
implemented product and solution optimization in combination with the national strategy of "carbon peak
and carbon neutralization". The commissioning and operation of the demonstration project of pressure
energy recovery and comprehensive utilization of cold energy in Wuhan Sanjintan natural gas pipeline
network was successful. The project with the largest installed power of single machine of ORC screw
expansion generator set - silbon petrochemical waste heat power generation project was successfully
undertaken. Marine screw expansion generator set was selected as "innovative products of 2021 China
Refrigeration Exhibition".
During the reporting period, Bingshan Guardian, a subsidiary of the Company, focused on energy-saving
control of cooling and heating system and strengthened technological innovation. Selected as the
"specialized and new" small giant enterprise in Liaoning Province in 2021. Scc60 console was selected as the
"specialized and special new" product of Liaoning Province in 2021. The research and application project of
edge intelligent equipment for real-time monitoring of distributed large-scale refrigeration equipment based
on 5G was selected as the first batch of science and technology research projects in Dalian in 2021.
2. Sales income and costs
(1) Sales income structure
2021 2020
Year-on-year
Proportion to the Proportion to the
Amount Amount increase/decrease
Sales costs Sales costs
Total sales income 2,089,208,256.22 1,727,267,935.15 100% 20.95%
By industry
Refrigeration and
air-conditioning 2,031,958,305.49 97.26% 1,680,314,480.42 97.28% 20.93%
equipment
Others 57,249,950.73 2.74% 46,953,454.73 2.72% 21.93%
By product
13 / 188
Industrial product 1,328,371,290.81 63.58% 1,347,335,824.84 78.00% -1.41%
Installation works 652,866,257.62 31.25% 321,545,409.42 18.62% 103.04%
Others 107,970,707.79 5.17% 58,386,700.89 3.38% 343.63%
By region
Domestic sales 1,994,087,984.59 95.45% 1,635,465,100.98 95.45% 21.93%
Foreign sales 95,120,271.63 4.55% 91,802,834.17 4.55% 3.61%
By sales model
Total 2,089,208,256.22 100.00% 1,727,267,935.15 100.00% 20.95%
(2) Main business structure
Increase/decrease of Increase/decrease
operating revenues of operating costs Increase/decrease of gross profit
Operating revenue Operating costs Gross profit
on a year-on-year on a year-on-year on a year-on-year basis
basis basis
By industry
Refrigeration and
2,031,958,305.49 1,808,263,206.67 11.01% 20.93% 29.03% Decrease 5.59 percentage points
air-conditioning
By product
Industrial product 1,328,371,290.81 1,137,346,738.60 14.38% -1.41% 3.37% Decrease 3.96 percentage points
Installation works 652,866,257.62 632,692,690.26 3.09% 103.04% 116.08% Decrease 5.85 percentage points
Others 50,720,757.06 38,223,777.81 24.64% 343.63% 358.60% Decrease 2.46 percentage points
By region
Domestic sales 1,936,838,033.86 1,729,446,885.07 10.71% 21.93% 0.30 Decrease 5.61 percentage
Foreign sales 95,120,271.63 78,816,321.60 17.14% 3.61% 0.10 Decrease 4.86 percentage
By sales model
Total 2,031,958,305.49 1,808,263,206.67 11.01% 20.93% 29.03% Decrease 5.59 percentage points
（3）Was the Company's sales income on material objects more than that on labor service?
√ Yes □ No
Year-on-year
Industry category Item 2021 2020
increase/decrease
Sales volume 1,921 1,911 0.52%
Main refrigeration unit for
Production output 1,918 1,916 0.10%
industrial or commercial use
Inventory level 383 386 -0.78%
Reason for change in the related data by 30% or higher on a year-on-year basis
□ Applicable √ Not applicable
（4）Performance of major sales contracts and major procurement contracts signed by the company up to
the reporting period
□ Applicable √ Not applicable
（5）Sales cost structure
2021 2020
Proportion to the Year-on-year
Industry category Item Proportion to the
Amount Amount increase/decrease
operating costs operating costs
Direct materials 1,549,104,567.26 83.76% 1,190,876,714.73 83.13% 30.08%
Labor wages 182,511,399.62 9.87% 136,954,335.52 9.56% 33.26%
Refrigeration and Depreciation 35,318,984.53 1.91% 41,327,601.39 2.88% -14.54%
air-conditioning Utilities 18,771,030.25 1.01% 16,693,515.58 1.17% 12.45%
Others 63,825,290.62 3.45% 46,671,942.69 3.26% 36.75%
Total operating costs 1,849,531,272.29 100.00% 1,432,524,109.91 100.00% 29.11%
14 / 188
(6) Was the Company's consolidated range change during the reporting period?
□ Applicable √Not applicable
(7) Major change or adjustment in the Company's products or service in the reporting period
□ Applicable √ Not applicable
(8) Information on the Company's major customers and major suppliers
Information on the Company's major customers
Total sales volume from top five customers (yuan) 432,519,530.82
Proportion of the total sales volume from top five customers to the annual sales volume 20.70%
Proportion of the related party total sales volume from top five customers to the annual sales volume 8.72%
Information on the Company's top five customers
Proportion to the annual
No. Name of customer Sales volume (yuan)
sales volume
1 Panasonic Cold-chain (Dalian) Co., Ltd. 127,490,433.60 6.10%
2 State Grid Integrated Energy Service Group Co., Ltd. 108,357,798.18 5.19%
Xinjiang Silk Road Tianshan International Food City
3 88,318,144.83 4.23%
Investment Co., Ltd.
4 BAC Dalian Co., Ltd. 54,676,218.06 2.62%
5 Qingdao Fuji Farm Food Co., Ltd. 53,676,936.15 2.57%
Total —— 432,519,530.82 20.70%
Among the top five customers mentioned above, Panasonic cold chain (Dalian) Co., Ltd. and BAC Dalian Co.,
Ltd. are related to the Company.
Information on the Company's major suppliers
Total purchase volume from top five suppliers (yuan) 350,270,525.77
Proportion of the total purchase volume from top five suppliers to the annual purchases volume 17.36%
Proportion of the related party total purchase volume from top five suppliers to the annual purchases volume 2.19%
Information on the Company's top five suppliers
Purchase Proportion to the annual
No. Name of supplier
volume (yuan) purchase volume
1 Shenyang Bao Gang Northeast Trade Co., Ltd. 159,141,244.93 7.89%
2 Longkou Longpeng Precision Copper Pipe Co. Ltd. 62,806,544.12 3.11%
Dalian Weijie Refrigeration and Air Conditioning Installation Co.,
3 49,618,076.99 2.46%
Ltd.
4 Dalian Big ICER Refrigeration Equipment Co., Ltd. 44,236,639.71 2.19%
5 Weilian Heat Transfer Technology (Shanghai) Co., Ltd. 34,468,020.02 1.71%
Total —— 350,270,525.77 17.36%
Among the top five suppliers mentioned above, Dalian Big ICER Refrigeration Equipment Co., Ltd. had an
associated relationship with the Company during the reporting period.
3. Expenses
Increase/decrease of gross
2021 2020 Explain for major changes
profit on a year-on-year basis
Adjustment of personnel organizational
Selling expenses 130,633,909.30 83,740,476.90 56.00% structure and increase of performance
appraisal salary of business personnel
Administrative 170,613,436.15 160,295,370.53 6.44%
15 / 188
expenses
The decrease of bank borrowings leads
Financial expenses 13,941,926.23 26,479,309.37 -47.35% to a corresponding decrease in interest
costs; Decrease in exchange losses
With the increase of operating revenue,
R&D expenses 65,269,765.23 49,158,256.78 32.77%
R & D expenses increase accordingly
4. R&D expenditure
During the reporting period, the Company focused on the deep enthalpy energy system solutions, focused on the
key market segments in the wide temperature zone, and actively promoted the research and development, trial
production and optimization of new products.
Information on R&D expenditure
2021 2020 Increase/decrease on a year-on-year basis
The quantity of the person engaged in R&D 304 268 13.43%
The quantity proportion of the person engaged in R&D 17.53% 10.77% 6.76%
The spending amount on R&D（yuan） 65,269,765.23 57,382,896.29 13.74%
R&D spending accounts for the proportion of revenue 3.12% 3.32% Decrease 0.20 percentage points
The amount of R&D investment capitalization（yuan） 0.00 0.00 0.00%
Capitalize R&D investment for the proportion of R&D
0.00% 0.00% 0.00%
spending
Reasons for the remarkable change in R&D spending accounts for the proportion of revenue compared with the
previous year
□ Applicable √ Not applicable
Reasons for the substantial changes in the capitalization rate of R&D investment and its rationality
□ Applicable √ Not applicable
5. Cash flows
Year-on-year
Item 2021 2020
increase/decrease
Sub-total of cash inflows from operating activities 2,084,554,545.45 1,639,373,926.67 27.16%
Sub-total of cash outflows from operating activities 2,083,036,327.08 1,652,516,354.12 26.05%
Net amount of cash flow generated in operating activities 1,518,218.37 -13,142,427.45 111.55%
Sub-total of cash inflows from investing activities 324,356,502.38 184,194,481.36 76.09%
Sub-total of cash outflows from investing activities 76,095,331.84 14,869,095.73 411.77%
Net amount of cash flow generated in investing activities 248,261,170.54 169,325,385.63 46.62%
Sub-total of cash inflows from financing activities 347,516,847.94 390,021,419.37 -10.90%
Sub-total of cash outflows from financing activities 473,406,304.78 531,151,803.02 -10.87%
Net amount of cash flow generated in financing activities -125,889,456.84 -141,130,383.65 10.80%
Net increase in cash and cash equivalents 123,990,877.38 13,451,105.93 821.79%
Reason for change in the related data by 30% or higher on a year-on-year basis
√ Applicable □ Not applicable
1. Net cash flow arising from operation activities have a significant increase on a y-o-y basis, mainly due to the
increase in cash received from the sale of goods and the provision of labor services.
2. Net cash flow arising from investing activities have a significant increase on a y-o-y basis, mainly because the
Company received the price of equity transfer of Panasonic Refrigeration (Dalian) Co., Ltd. during the reporting
period.
Reason for remarkable difference between the cash flows from the Company's operating activities in the reporting
period and the net annual profit.
16 / 188
√ Applicable □ Not applicable
There was a remarkable difference between the net amount of cash flow generated in operating activities of the
Company and the net annual profit in the reporting period, mainly due to that the proportion of returns on
investment to the total profit of the Company was higher.
V. Analysis of the non-main business
During the reporting period, Panasonic compressor, an associate of the Company, grew steadily with variable
strain. Market development has been steadily promoted, and the market share of leading products has increased
for two consecutive years. The research and development of 25HP high horsepower scroll compressor has been
completed and mass production has been realized; CO2 rotor compressor has been successfully applied to the new
generation of hydrogen fuel hybrid locomotive of CRRC; CO2 compressor officially landed in the European
vending machine market.
During the reporting period, Panasonic cold chain, an associate of the Company, continued to cultivate
advantageous markets. The cooperation between Master Kang, Yuanqi forest and other beverage manufacturers
was further expanded, and the beverage freezer market received large orders again. Actively respond to the
personalized needs of key customers such as meituan optimization and miyue ice city, and the commercial cabinet
business has achieved good growth. 45 mainstream best-selling products won the "leader" certificate of enterprise
standard in 2021.
During the reporting period, the Company's associated company, Panasonic Refrigerator System further improved
its engineering and manufacturing capabilities. It won the bid for four large-scale vaccine cold storage projects,
including Beijing Yizhuang pharmaceutical cold storage project and Sinopharm China biological Wuhan Xinguan
vaccine storage project. Luoyang Dazhang Food Industrial Park, the largest EPC project till now, lasted nearly two
years, has been successfully accepted. The newly developed 40HP high horsepower semi closed piston
compressor was officially launched.
During the reporting period, Fuji Bingshan, an associate of the Company, continued to promote the strengthening
of leading products and the optimization of marketing mode. Focus on beverage machines, coffee machines,
integrated machines and other leading products, expand the development of brand marketing, and promote special
marketing.
During the reporting period, Jingxue Energy Saving, an associated company of the Company, successfully
obtained the approval of China Securities Regulatory Commission for registration and was listed on the growth
enterprise market of Shenzhen Stock Exchange on June 18, 2021. The future development will be assisted by the
capital market.
VI. Analysis of assets & liabilities
1. Remarkable change in assets
Monetary unit: RMB yuan
2021.12.31 2020.12.31
Proportion Explain for major
Proportion to Proportion to the
Amount Amount increase/decrease changes
the total assets total assets
Mainly because the
Company received
Monetary funds 522,658,505.79 9.11% 373,445,731.67 6.57% 2.54% the equity transfer
price of Panasonic
Refrigeration
Accounts receivable 821,548,678.85 14.32% 817,011,955.75 14.38% -0.06%
Contract assets 109,859,658.79 1.92% 91,430,011.60 1.61% 0.31%
mainly because the
Inventories 1,014,527,127.82 17.69% 731,658,797.98 12.88% 4.81% company's
unfinished
17 / 188
construction
projects increased in
the current period,
according to the
requirements of the
new income
standards, income
cannot be
recognized income.
Investment property 120,752,809.61 2.11% 126,288,477.92 2.22% -0.11%
mainly due to the
transfer of 40%
equity of Panasonic
refrigeration held by
Long-term equity the company and the
1,231,504,533.45 21.47% 1,597,241,363.62 28.11% -6.64%
investment decline of the
company's
investment income
in associated
enterprises
Fixed assets 855,395,405.85 14.91% 866,198,856.04 15.25% -0.34%
Construction in
38,974,478.45 0.68% 34,254,599.42 0.60% 0.08%
progress
Short-term loans 23,934,703.37 0.42% 27,449,505.03 0.48% -0.06%
Orders increased,
Contract liabilities 245,937,091.72 4.29% 282,971,600.00 4.98% -0.69% and advances from
customers increased
Long-term loans 499,719,963.40 8.71% 295,100,657.10 5.19% 3.52%
Lease liabilities 150,000,000.00 2.62% 160,000,000.00 2.82% -0.20%
5,394,021.14 0.09% 13,818,476.46 0.24% -0.15%
2. Assets & liabilities which are measured by fair value
√ Applicable □ Not applicable
Other non-current financial asset measured in fair value is 239,304,098.83 yuan at the year beginning，and
261,410,664.61 yuan at the year end, with a selling amount of 30,292,000.00yuan.
3. Restrictions on asset rights as of the end of the reporting period
By the end of reporting period, the Company’s asset rights was limited, including monetary funds 83,689,167.92
yuan, the reason for the limitation is the deposit and the bank account were frozen; notes receivable 6,420,000.00
yuan, the reason for the limitation is bank pledge.
VII. Analysis of investments
1.The overall situation
√ Applicable □ Not applicable
Investment in 2021(yuan) Investment in 2020(yuan) Amount of variation
1,231,504,533.45 1,597,241,363.62 -18.38%
2.The significant equity investment during the reporting period
□Applicable √Not applicable
18 / 188
3 The significant non-equity investment during the reporting period
□Applicable √Not applicable
4.The financial asset investment
(1) The securities investment
√ Applicable □ Not applicable
Account Changes in the Accumulativ
Initial ing profit and loss e change of
Stock Stock Book value at the Current sale Report period Book value in the Accounting Source
investment measure of the fair fair value
code abbreviation beginning amount profit and loss ending subjects of funds
cost ment value in this credited to
model period equity
fair Other
value Non-current Own
601211 Guotai Jun’an 11,210,008.00 196,511,440.24 4,426,602.88 4,426,602.88 32,812,417.98 11,656,207.36 200,547,043.12
measure financial funds
ment assets
total 11,210,008.00 -- 196,511,440.24 4,426,602.88 4,426,602.88 32,812,417.98 11,656,207.36 200,547,043.12 --
Until 31 December, 2021, the Company held 11,210,008 numbers of shares of Guotai Jun’an Securities Co., Ltd. ,
including 1,710,000 shares under refinancing and lending. The Company sold 1,700,000 numbers of shares of
Guotai Jun’an, and received cash dividend RMB 7,229,604.48 Yuan during the reporting period.
(2) Derivative investment
□Applicable √ Not applicable
During the reporting period, the Company does not exist derivative investment.
5. The use of funds raised
□Applicable √ Not applicable
VIII. The material assets and equity sale
1. The material assets sale
□Applicable √Not applicable
2. The material equity sale
√Applicable □Not applicable
19 / 188
The
The net percent
profit age of
contributed the net
The
by the profit
equity
equity to contrib Impl
Transa invol
the listed The uted by Relati eme
ction Principl ved
company impact of the Related onship nted Discl
price es of has Discl
Counte Sold Sale from the the sale equity transact with as osur
(ten Equity all osure
rparty equity date beginning on the sale to ion or the plan e
thousa Sale been Index
of the Compan the not counte ned date
nd Pricing transf
current y total rparty or
yuan) erred
period to net not
or
the date of profit
not
sale(ten of the
thousand listed
yuan) compan
y
Amon
This g the
equity directo
transfer rs and
will help superv
the isors
Compan of
y to Bingsh
properly an
revitalize Group,
long-ter the
m equity control
investme ling
nt, Accord shareh
The
optimize ing to older
Compan
the asset the of the
y holds Nov
structure asset - compa
40 emb
and help based ny,
percent er http:/
Panaso improve method panaso
equity Dece 27, /ww
nic the main to nic
of mber 17,493. 2021 w.cni
Corpor -1,499 business. 10.28% determi Yes China Yes Yes
Panason 13, 52 nfo.c
ation of The ne the directo
ic 2021 Dece om.c
China equity transfer rs
Refriger mber n/
transfer price of serve
ation 13,
received the as part
(Dalian) 2021
funds, underly of the
Co.,
the ing directo
Ltd.
Compan equity.. rs and
y will be superv
used to isors.
suppleme Panaso
nt nic
working China
capital or is the
repay affiliat
bank ed
loans, legal
reduce person
financial of the
costs. compa
ny.
IX. Analysis of major subsidiary companies and mutual shareholding companies
√ Applicable □ Not applicable
Unit: ten thousand yuan (except for registered capital)
20 / 188
Operating
registered Net profit
Company name Type The main business total assets net assets income
capital
Vending machine
development,
manufacturing,
mutual
sales, installation, JPY 4,000
Fuji Bingshan shareholding 75,381 37,567 23,978 28
maintenance and million
company
related consulting
and after-sales
service
Commercial
Refrigeration
Equipment,
mutual Refrigeration
Panasonic JPY 4,650
shareholding Storage, Stainless 187,260 21,472 151,325 -28,215
Cold-Chain million
company Steel Kitchen
Equipment and
Electrical
Appliances
mutual
Panasonic JPY 6,200
shareholding Scroll Compressor 158,506 115,685 111,704 8,370
Compressor million
company
New building
mutual
Jingxue energy-saving RMB 101,000
shareholding 152,402 78,402 91,402 6,710
Insulation board, refrigerated thousand
company
storage door
High-grade
mutual
building hardware, USD 18,064.5
Bingshan Metal shareholding 36,998 30,413 46,791 4,849
plumbing thousand
company
equipment
Subsidiary companies obtained or disposed in the reporting period
□Applicable √Not applicable
X. The structured corporate bodies which the Company controlled
□Applicable √Not applicable
XI. Development prospect of the Company
Major risks faced and countermeasures adopted by the Company
(1)Increasing market competition risk
Countermeasures: focus on the hot and cold industry, deeply cultivate the advantage market segmentation; rapidly
improve the engineering and manufacturing power; orderly improve the level of intelligent manufacturing and
service-oriented manufacturing; speed up the transformation and upgrading of inherent undertakings; accelerate
the implementation of new kinetic energy cultivation; continue to build Bingshan enterprise and interest
community.
(2)Risk of slow marketing of new products and technologies
21 / 188
Countermeasures: create differentiated competitiveness of new products and technologies; strengthen the
technology marketing and service marketing, and cultivate the market segmentation professionally; appropriate
use of financial leasing, contract energy management and other innovative models.
(3)Risk of high level of trade receivables
Countermeasures: strictly implement the project management system and further strengthen the management of
accounts receivable; enhance quality of contract through intensified customer credit assessment and contract
appraisal; effective control of increase in trade receivables by reduction of guarantee deposits, and taking bank
credit instruments as guarantee deposits; improve contract execution through stricter review on goods delivery,
intensified control on project construction and acceptance, and post-sale service; prepare special composition
solutions and incentive policy to accelerate settlement of trade receivables with relatively long aging.
(4)Risk of rising raw material prices
Countermeasures: the Company will actively respond to cost pressure by reducing material rates, centralized
procurement, expanding sales, adjusting selling prices, reducing expenses and other measures.
In 2022, the Company will focus on the refrigeration and heating industry, continue to cultivate the advantageous
market segments such as cold chain logistics, petrochemical industry, beer and dairy products, meat slaughtering,
ship refrigeration, ice and snow venues and polysilicon, vigorously expand new businesses such as CCUS, ORC
and photovoltaic, solidly improve the five core competitiveness of marketing, technology, products, engineering
and services, and accelerate the improvement of its main business.
In 2022, the main business strategies are as follows:
(1) Marketing strengthening. Aiming at the product business, stabilize the traditional field, improve the market
share, and continue to lead the polysilicon segment market. For the engineering business, improve the order
quality of complete sets of projects and improve the self product ratio of engineering projects. For the energy
industry, take the carbon neutralization solution as the main development path to expand the markets of CCUS,
natural gas liquefaction, new energy and so on.
(2) Technology enhancement. With green refrigerant and zero carbon as the center and market segmentation
application as the goal, improve technology, implement application and help sales. Promote the standardization of
standard spectrum and sub modularization, and realize the standardization, serialization and modularization of
products.
(3) Improvement of engineering power. Strengthen project management, fully implement the project budget,
control the whole process of operation, ensure profits and prevent risks. Optimize the work flow and promote the
standardization of safe and civilized construction and construction management. Refine the performance appraisal
to ensure the project duration and acceptance.
(4) Improvement of manufacturing power. By integrating engineering procurement and product procurement
business, optimize supply chain management and improve production assurance rate and sales satisfaction rate.
By improving the refining process, adding intelligent equipment and tools, and adding batch production lines,
ensure product quality and improve production capacity and production efficiency. Reduce the market defect rate
through measures such as quality team optimization, supplier management and control strengthening and process
management and control refinement.
The above-mentioned business plan does not represent the earnings forecast of listed companies for the year of
2022. Whether it can be achieved depends on the changes of market conditions and the efforts of management
teams and other factors. There are great uncertainties. Investors should pay special attention to it.
XII. Record of investigation, communication, and other activities in the reporting period
□Applicable √Not applicable
22 / 188
Section 4 Corporate governance
I. Basic situation of corporate governance
Within the reporting period, the Company centered around the operation subject as “Leading innovation, Creating
value” with the theme " integrity, innovation and return of the king"”, relying on the opportunity of overall
relocation and transformation of the Company, to further deepen and perfect the normative internal control system
and upgrade the governing level of the Company continuously.
There were no problems with the Company concerning horizontal competition caused by restructures and other
reasons. The main normal associated transactions between the Company and the associated companies included
purchasing the supporting products for package projects from the associated companies, and selling the supporting
parts and components to the associated companies and providing them with the labor service. Associated
transactions between the Company and the associated companies are necessary for normal production and
operation and helpful for the Company’s healthy development, and therefore will continue. The Company will
strictly follow the related decision-making procedures and fulfill the obligation in information disclosure in order
to further regulate associated transactions.
Was there any deviation of the Company's corporate governance from the requirements in the Company Law and
China Securities Regulatory Commission's regulations?
□ Yes √ No
There was no deviation of the Company's corporate governance from the requirements in the Company Law and
China Securities Regulatory Commission's regulations.
II. Status of the Company's business, staff, asset, organization and finance separations from
the holding shareholder
The Company was separated from the holding shareholder in business, staff, asset, organization and finance, and
has the independent and complete business and operation capability.
III. Horizontal competitions
□ Applicable √ Not applicable
IV Shareholders’ general meeting convened in the reporting period
1. Annual Shareholders’ general meeting within this reporting period
The proportion of
Session number of meeting The type of the meeting participate date Disclosing date Disclosing index
investors
2020 Annual Shareholders’ general http://www.cnin
29.38% May 14, 2021 May 15, 2021
Annual Shareholders’ General Meeting meeting fo.com.cn
The 1st Extraordinary Shareholders’ Extraordinary Shareholders’ http://www.cnin
21.13% Dec.13, 2021 Dec.14, 2021
General Meeting of 2021 General Meeting fo.com.cn
V. Information on the Company’s Directors, Supervisors, Senior Management and Staff
1. basic information
Shares Increase on Decrease in
Shares held
Starting Ending held at holding of holding of
Office-hol at the end of
Name Position Sex Age date of date of beginning shares in this shares in this
ding state period
office term office term of period period period
(shares)
(shares) (shares) (share)
Mar. 27, Jan.11,
Ji Zhijian Chairman Incumbent M 54 1,528,830 0 0 1,528,830
2014 2025
Fan Wen Director Incumbent M 57 Jan.12, Jan.11, 7,770 0 0 0
23 / 188
2022 2025
Vice Chairman/ Jan.12, Jan.11,
Yin Xide Incumbent M 50 90,080 0 0 0
General manager 2022 2025
Director/ Board Jan.12, Jan.11,
Song Wenbao Incumbent M 48 593,880 0 0 593,880
secretary 2022 2025
Jan.12, Jan.11,
Dono Shigeru Director Incumbent M 60 0 0 0 0
2022 2025
Nishimoto Director Incumbent M Jan.11,
55 Jun.5,2019 0 0 0 0
Shigeyuki 2025
M May.14,20 Jan.11,
Zhai Yunling Independent director Incumbent 58 0 0 0 0
21 2025
F May.14,20 Jan.11,
Liu Yuanyuan Independent director Incumbent 47 0 0 0 0
21 2025
Incumbent F May.14,20 Jan.11,
Yao Hong Independent director 48 0 0 0 0
21 2025
Chairman of the board Jan. 17, Jan.11,
Hu Xitang Incumbent M 54 0 0 0 0
of Supervisors 2019 2025
Jan. 21, Jan.11,
Dai Yuling Supervisor Incumbent F 44 0 0 0 0
2016 2025
May.15, Jan.11,
Li Sheng Supervisor Incumbent M 42 0 0 0 0
2020 2025
Chief Financial May.14, Jan.11,
Wang Jinxiu Incumbent F 51 5,000 0 0 5,000
Officer 2021 2025
Deputy general Jan.12,202 Jan.11,
Yang Fuhua Incumbent M 50 0 0 0 0
manager 2 2025
Deputy general Jan.12,202 Jan.11,
Lu Jun Incumbent M 56 2,500 0 0 2,500
manager 2 2025
Mar. 27, Jan.12,
Xu Junrao Director Leaving F 59 995,349 0 0 995,349
2014 2022
Otc.20, Mar.26,
Fan Yuekun Director DGM Leaving M 58 210,000 0 0 210,000
2015 2021
Feb.12, May.14,
Dai Dashuang Independent director Incumbent F 71 0 0 0 0
2015 2021
Feb.12, May.14,
Liu Jiwei Independent director Incumbent M 61 0 0 0 0
2015 2021
May.20 May.14,
Wang Yan Independent director Incumbent F 58 0 0 0 0
2015 2021
Chief Financial Jan. 21, May.6
Ma Yun Incumbent M 50 35,000 0 0 35,000
Officer 2016 2022
Total 3,993,409 0 0 3,993,409
During the reporting period, whether any directors or supervisors leave office or senior
managers are dismissed
√Applicable □Not applicable
During the reporting period, Fan Yuekun, director and deputy general manager of the Company, resigned due to
24 / 188
job changes and no longer held any positions in the Company after his resignation.
During the reporting period, Ma Yun, chief financial officer of the Company, resigned due to job changes and no
longer held any positions in the Company after his resignation.
Changes of directors, supervisors, senior managers of the Company
Name Position held Type Date Reason
Leave office after After the general election, Mr. Ding Jie no longer served
Ding Jie Vice Chairman Jan 12,2022
the end of term as vice chairman of the Company
Leave office after After the general election, Mrs. Xu Junrao no longer
Xu Junrao Director Jan 12,2022
the end of term served as director of the Company
Fan Yuekun Director; DGM Leaving office March 26, 2021 Resign from the Company due to job changes
Leave office after
Dai Dashuang Independent director May 14, 2021 Leave office after the end of term
the end of term
Leave office after
Liu Jiwei Independent director May 14, 2021 Leave office after the end of term
the end of term
Leave office after
Wang Yan Independent director May 14, 2021 Leave office after the end of term
the end of term
Termination of
Ding Jie GM Jan 1,2021 Termination of employment due to job changes
employment
Chief Financial
Ma Yun Leaving office May 6, 2021 Resign from the Company due to job changes
Officer
Yin Xide Director be elected May 14, 2021 By-election of director at general meeting of shareholders
Zhai Yunling Independent director be elected May 14, 2021 By-election of director at general meeting of shareholders
Liu Yuanyuan Independent director be elected May 14, 2021 By-election of director at general meeting of shareholders
Yao Hong Independent director be elected May 14, 2021 By-election of director at general meeting of shareholders
Yin Xide GM Appointed Jan 1,2021 Appointed by the Board of Directors
Chief Financial
Wang Jinxiu Appointed May 14, 2021 Appointed by the Board of Directors
Officer
2. Office holding
Professional background, main work experiences and the main duties and responsibilities of incumbent directors,
supervisors, senior managers of the Company
main duties and
Name Position held Professional background Main work experience
responsibilities
doctorate degree in
Successively acting as GM, Chairman of Panasonic Cold-Chain.; Related
management of the
Ji Zhijian Chairman Chairman and President of Dalian Bingshan Group Co., Ltd.; responsibilities of
Dalian University of
Chairman of the Company. the Chairman
Technology
Vice Chairman Graduated from Dalian served as sales director, copy director and General manager of Related
Yin Xide
and GM University of low-temperature logistics Equipment Division of Panasonic Cold responsibilities of
25 / 188
Technology, majoring in Chain (Dalian) Co., LTD.; the General Manager of Panasonic the Director
thermal engineering Appliances Refrigerating System (Dalian) Co., Ltd .
served as vice Minister of Import and Export Department and
Related
Minister of Import and Export Department of the Company; Assistant
Fan Wen Director Graduate degree responsibilities of
general Manager and Vice President of DalianBingshan Group Co.,
the Director
LTD.; Director of Jiangsu JingXue Insulation Technology Co.,Ltd.
Director and Related
graduate from Zhejiang Successively acting as representative for securities affairs, board
Song Wenbao Board responsibilities of
University，CFA secretary of the Company.
Secretary Board Secretary
served as technical director of beauty & Life Department, business
director and planning director of Kitchen Appliances Division, food
distribution business director, Kitchen space business director, HA
Related
Graduated from Kyoto business director and vice president of Panasonic Corporation;
Dono Shigeru Director responsibilities of
University in Japan. Executive attendant of Panasonic Corporation. Currently, he is the
the Director
head of household appliances division, head of household appliances,
and president of China & Northeast Asia Co., LTD;; the supervisor of
Dalian Bingshan Group Co., LTD.
served as the director of Financial Planning Room and Finance
Department System Overall Room of Panasonic Corporation Related
Nishimoto graduated from Meiji
Director Headquarter; the director of Regional Financial Integration Room, responsibilities of
Shigeyuki university
CFO of Panasonic Corporation China & Northeast Asia Company; the the Director
supervisor of Dalian Bingshan Group Co., LTD.
Professor of Law School of Dalian Maritime University, lawyer of Related
Independent Doctor of Law, Beijing Jincheng Tongda (Dalian) Law Firm, legal adviser of Dalian responsibilities of
Zhai Yunling
director professor, lawyer Municipal People's Government, member/arbitrator of Dalian the Independent
Arbitration Commission director
Professor of Accounting School of Dongbei University of Finance
and Economics, Director of Sino-German Management Control Related
Independent Research Center, independent director of China Railway Tielong responsibilities of
Liu Yuanyuan Doctor of Accounting
director Container Logistics Co., LTD.,; independent director of Bank of the Independent
Dalian Co., LTD.; independent director of Kincai (Liaoning) Life director
Science and Technology Co., LTD.
Doctor of Management, School of Economics and Management,
graduate from China Related
Dalian University of Technology, Independent director of Shanghai
Independent University of Political responsibilities of
Yao Hong Binku Network Technology Co., LTD., Independent director of Hualu
director Science and Law， the Independent
Zhida Technology Co., LTD., independent director of Harbin Hattou
professor of law director
Investment Co., LTD.
Chairman of graduated from Nanjing Related
Hu Xitang Board of University of Science served as the chairman of the labor union of the Company. responsibilities of
Supervisors and Technology the Supervisor
Related
acting as the chief of the Financial Dept. of Dalian Bingshan Group
Dai Yuling Supervisor Senior Accountant responsibilities of
Company Ltd.
the Supervisor
26 / 188
graduated from Dalian acting as the Director of Operation Management Department of Related
Li Sheng Supervisor University of Dalian Bingshan Group Company Ltd；chief of the Financial Dept. of responsibilities of
Technology the Company. the Supervisor
served as engineer, deputy director and director of complete set
graduated from Xi 'an design Department of the Company; served as deputy General Related
Yang Fuhua DGM Jiaotong University, Manager of Dalian Bingshan Group Engineering Co., LTD; served as responsibilities of
Senior Engineer chief engineer of the Company's business Headquarters and deputy DGM
Head of the Research and development Headquarters.
served as designer and vice minister of the Company; general Manager
graduated from Jilin
of Dalian Bingshan Air-conditioning Equipment Co., Ltd; the Deputy Related
University of
Lu Jun DGM General Manager of Dalian Bingshan Group Engineering Co., LTD. ; responsibilities of
Technology, Graduate
the assistant to the general Manager and head of the Operation and DGM
degree, Senior Engineer.
Management Department of the Company.
served as cost accountant in finance Department of the Company and
Minister of Finance Department of DalianBingshan Air Conditioning Related
Wang Jinxiu CFO Senior accountant Equipment Co., LTD.; served as the Director of the Financial responsibilities of
Management Department of the Company. served as Chief Financial CFO
Officer since May 2021.
Office holding in shareholder unit
√ Applicable □ Not applicable
If receiving remuneration or allowance from
Name of office holder Shareholder unit name Position held in shareholder unit
shareholder unit
Ji Zhijian Dalian Bingshan Group Co., Ltd. Chairman of the Board, President Yes
Fan Wen Dalian Bingshan Group Co., Ltd. Vice President Yes
Office holding in other units
√ Applicable □ Not applicable
If receiving
remuneration or
name unit name Position held in other unit
allowance from other
unit
Ji Zhijian Dalian Zhong Huida Refrigeration Technology Co., Ltd. Chairman No
Wuhan New World Refrigeration Industrial Co., Ltd. Chairman No
MHI Bingshan Refrigeration (Dalian) Co., Ltd. Chairman No
Fan Wen Dalian Niweisi LengNuan Technology Co., Ltd Chairman No
Dalian Bingshan Lingshe Quick Freezing Equipment Co., Ltd Chairman No
Dalian Bingshan Air-Conditioning Equipment Co., Ltd Chairman No
Yin Xide Dalian Bingshan Group Construction Co., Ltd Chairman No
China Railway Tielong Container Logistics Co., LTD. Independent director Yes
Liu Yuanyuan Bank of Dalian Co., LTD. Independent director Yes
Kincai (Liaoning) Life Science and Technology Co., LTD. Independent director Yes
Yao Hong Shanghai Binku Network Technology Co., LTD. Independent director Yes
27 / 188
Hualu Zhida Technology Co., LTD. Independent director Yes
Harbin Hattou Investment Co., LTD. Independent director Yes
3. Remuneration paid to directors, supervisors, and senior management
Decision-making procedure, decision-making basis and actual payment of remuneration for directors, supervisors
and senior management
Decision-making procedure: the Company's remuneration plan for directors and supervisors was proposed by the
Company's Remuneration and Evaluation Committee of the Board of Directors, and after approval by the Board
of Directors, submitted to the general meeting for adoption and put into effect. The Company’s remuneration plan
for senior management was put into effect after approval by the Company’s Board of Directors.
Decision-making basis: it was decided on the basis of main responsibilities and importance of the concerned
position and the remuneration level of similar positions in other similar enterprises and evaluated and rewarded
through the Company’s examination procedure for assets operation performance.
The total amount of remunerations actually ( pre-tax ) paid by the Company to directors, supervisors, and senior
management was 371.15 thousand yuan.
Particulars about the annual remuneration of directors, supervisors and senior staff members
Annual remuneration and allowance( pre-tax )paid by the Company
Name
(ten thousand yuan)
Ji Zhijian 0
Xu Junrao 0
Ding Jie 0
Yin Xide 96.27
Yokoo Sadaaki 0
Nishimoto Shigeyuki 0
Zhai Yunling 8
Liu Yuanyuan 8
Yao Hong 8
Hu Xitang 77.49
Dai Yuling 0
Li Sheng 28.95
Wang Jinxiu 42.44
Song Wenbao 57.76
Fan Yuekun 18.41
Ma Yun 25.83
Total 371.15
VI. Performance of directors' duties during the reporting period
1.The situation of the board of Directors during this reporting period
The meeting time Date of meeting Date of disclosure The meeting resolution
15th Meeting of 8th Session of
March 19, 2021 March 20, 2021 http://www.cninfo.com.cn
the Board
16th Meeting of 8th Session of
April 22,2021 April 24,2021 http://www.cninfo.com.cn
the Board
17th Meeting of 8th Session of
May 14,2021 May 15,2021 http://www.cninfo.com.cn
the Board
28 / 188
18th Meeting of 8th Session of
August 24,2021 August 25,2021 http://www.cninfo.com.cn
the Board
19th Meeting of 8th Session of
September 29,2021 September 30,2021 http://www.cninfo.com.cn
the Board
20th Meeting of 8th Session of
October 27,2021 October 28,2021 http://www.cninfo.com.cn
the Board
21th Meeting of 8th Session of
November 26,2021 November 27,2021 http://www.cninfo.com.cn
the Board
22th Meeting of 8th Session of
December 23,2021 December 24,2021 http://www.cninfo.com.cn
the Board
2. Attendance of directors at the board of directors and general meetings of shareholders
During the reporting period, all directors were present in person at all board meetings where they were required to
be present.
3.Objections raised by directors to matters related to the company
□ Applicable √ Not applicable
4. Other instructions for the performance of directors' duties
□ Applicable √ Not applicable
VII. Execution of duties of the special committees under the Board of Directors in the
reporting period
The audit committee under the Board of Directors of the Company performs its duties in accordance with the
detailed rules for the implementation of the audit committee under the Board of Directors and the working
procedures for the annual report of the audit committee, supervises the Company's internal audit system and its
implementation, reviews the Company's financial information and its disclosure, and evaluates the work of
external audit institutions.
In the evaluation of the Company's internal control, the audit committee actively plays its responsibilities of
organization, leadership and supervision. According to the identification standard of internal control defects of the
Company, the annual internal control evaluation report of the Company was reviewed, and ShineWing Certified
Public Accountants was entrusted to conduct internal control audit. It is considered that the current situation of the
Company's internal control system meets the relevant requirements and has been well implemented. The annual
internal control evaluation report of the Company truthfully reflects the above facts.
During the annual audit of the company, the audit committee actively communicated and effectively coordinated
with the audit institution ShineWing certified public accountants. Before and after the audit, we have repeatedly
urged the audit institutions to promote the audit work with quality and quantity on the audit work plan and work
progress. After the completion of the audit, the annual financial report and annual report of the company were
carefully reviewed, and it was considered that the financial report of the company was comprehensive and true,
and the financial report and other information disclosed by the company were objective and true, which truly
reflected the annual financial situation of the company.
The Audit Committee believes that ShineWing Certified Public Accountants can abide by the independent,
objective and fair practice standards in providing annual audit services for the Company, audit the Company in
strict accordance with the new accounting standards, actively communicate with the audit committee and
independent directors, be diligent and responsible, and better complete the annual audit of the Company. It is
proposed that the Company renew the appointment of ShineWing Certified Public Accountants as the audit
institution of the Company in 2022.
29 / 188
The remuneration and assessment committee under the Board of Directors of the Company performed its duties in
accordance with the implementation rules of the remuneration and assessment committee of the Board of
Directors of the Company, and reviewed the annual remuneration of the directors, supervisors and senior
managers of the Company.
VIII. Work of the Board of Supervisors
Was there any risk with the Company found by the Board of Supervisors in their supervision activities in the
reporting period?
□ Applicable √ Not applicable
The Board of Supervisors had no objections to the matters under supervision in the reporting period.
IX Status of the Company's staff
1. As of Dec. 31, 2021 the Company and its subsidiary had 2,485 enrolled employees, including 1,299 persons
engaged in production; 338 persons engaged in marketing; 304 persons engaged in engineering and technology;
55 persons engaged in financing; and 489 persons engaged in management.
2. As of Dec. 31, 2021, among enrolled employees of the Company and its subsidiary, 76 persons have the
educational background of Master or higher; 718 persons have the educational background of university; 736
persons have the educational background of junior college; and 955 persons have the educational background of
secondary technical school or lower.
3. The Company applied the employee job performance wage system with distribution according to positions and
performance of an employee.
4. The Company formulated the annual training plan and gave purposeful training to an employee in consideration
of his/her post requirement.
5. Labor outsourcing
□ Applicable √ Not applicable
X. Profit distribution and dividend payment
By giving consideration to both the return to shareholders and the Company's long-term development, and in
combination of the Company's profit made in this year, the Company formulated the 2020 annual dividend
distribution plan of paying the cash of 0.1 yuan for every 10 shares. Reviewed and adopted at the Company's
general meeting, the Company's Board of Directors has implemented the plan in July 2021.
Formulation and implementation of the Company's cash dividend distribution policy in the reporting period
complied with the Company's Articles of Association and the general meeting's resolution, and the dividend
distribution standard and proportion were defined and clear and the applicable decision-making procedure and
system were complete. The independent directors agreed on it and the legal rights and interests of minority
shareholders were well protected.
Special notes to cash dividend payout policy
If the regulations of the Articles of Association or the requirements of the shareholders of
Yes
the company meeting are met:
If the dividend payout standard and proportion is definite and clear-cut: Yes
If relevant decision-making procedure and mechanism is complete: Yes
If the independent directors have performed their duties and played their due role: Yes
If small and medium shareholders have the opportunity to sufficiently express their
Yes
opinions and appeals and if their legal rights and interests are sufficiently protected:
If the condition and procedure for adjusting or changing the cash dividend payout policy
Yes
is compliant and transparent:
The Company made profit in the reporting period and the undistributed profit of the parent company was positive
but no cash dividend distribution plan was proposed.
□ Applicable √ Not applicable
Profit distribution preplan, and preplan of share-granting with capital accumulation fund of the Company
Bonus shares to be presented for every 10 shares (shares) 0
Dividend to be distributed for every 10 shares (RMB yuan) (including tax) 0.1
30 / 188
Equity base for distribution preplan (shares) 843,212,507
Total amount of cash dividend distribution (RMB yuan) (including tax) 8,432,125.07
Profit distributable to the shareholders in the current year 803,564,427.95
Proportion of cash dividend distribution accounting for total profit distribution 100%
Cash dividend distribution policy:
When the development stage of the company belongs to a growth period with important fund disbursement arrangement(s), the
proportion of cash dividend distribution accounting for this profit distribution should reach 20% at minimum when conducting profit
distribution.
Notes to details about preplan for profit distribution or capital stock increase with capital reserve
According to the audit by ShineWing CPAs (Special General Partnership), the net profit made by the parent company of the Company
in 2021 was RMB -86.252 million. Plus the initial undistributed profit of RMB 911.033 million and minus the dividend of RMB
8.432 million of common shares paid in 2020 and the drawn free surplus reserve of RMB 12.785 million (20%), the accumulated
profit distributable to the shareholders was RMB 803.564 million.
The Company’s profit distribution preplan for 2021:
Based on the total capital stock of 843,212,507 shares, the dividend of RMB 0.1 in cash (including tax) will be distributed for every
10 shares, the total cash dividend is RMB 8.432 million, and the cash dividend for B share is converted and paid in Hong Kong
dollars.
If the share capital changes from the disclosure of this plan to the equity registration date of implementing the profit distribution plan,
the distribution proportion will be adjusted accordingly according to the principle that the total distribution amount remains
unchanged.
The above preplan shall be submitted to the 2021 shareholders’ general meeting for review and approval.
XI．The implementation and effect of equity incentive
□ Applicable √ Not applicable
XII．Internal control system construction and implementation during the reporting period
1. Internal control construction and implementation
During the reporting period, the Company made positive innovation, took the initiative to change, and vigorously
promoted organizational strengthening. Implement market-centered integrated operation through organizational
restructuring, business process reengineering and management system revision. Through the project management
system, fully implement the project budget, control the whole process of operation, ensure profits and prevent
risks.
2. Details of material weakness in the internal control found in the reporting period described in the report
on self-evaluation of internal control.
□ Applicable √ Not applicable
There was no material weakness in the internal control found in the reporting period.
XIII．Management and control of subsidiaries during the reporting period
During the reporting period, the Company focused on strengthening the management control of subsidiaries from
the following aspects:
(1) The Company carefully identified, strictly managed and dynamically adjusted the directors, supervisors and
senior managers assigned to subsidiaries;
(2) The Company participated in the whole process of the preparation of the annual business plan of its
subsidiaries, made reasonable suggestions and gave appropriate guidance;
(3) The Company conducted monthly/quarterly tracking and annual assessment on the implementation of business
plans and compliance operations of subsidiaries.
31 / 188
XIV．Report on self-evaluation of internal control or internal control audit report
1. Report on self-evaluation of internal control
Details of material weakness in the internal control found in the reporting period described in the report on
self-evaluation of internal control
There was no material weakness in the internal control found in the reporting period.
Date of disclosing the full text of the report on
Apr.23, 2022
self-evaluation of internal control
Disclosure reference to the full text of the For the 2021 annual report on self-evaluation of internal control
report on self-evaluation of internal control of the Company, visit the website www.cninfo.com.cn.
2. Internal control audit report
Description of the deliberation opinions in the internal control audit report
We think that as of Dec. 31, 2021, Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. had
maintained an effective internal control over the financial reports in all material aspects according to Basic
Enterprise Internal Control Specification and relevant regulations.
Date of disclosing the full text of
Apr. 23, 2022
the internal control audit report
Disclosure reference to the full text For the 2021 annual internal control audit report of the Company, visit the
of the internal control audit report website www.cninfo.com.cn.
Did the accounting firm issue the internal control audit report with nonstandard opinions?
□ Applicable √ Not applicable
Was the internal control audit report issued by the accounting firm consistent with the opinion in the
self-evaluation report of the Board of Directors?
√Yes □ No
XV. Rectification of problems in self inspection of special actions for governance of listed
companies
Rectification problem 1 found by the Company: The minutes of the meeting of the Board of Supervisors did not
fully record all the key points of the supervisors' speeches
(1) Problem Description: during 2018, the minutes of the meeting of the Board of Supervisors were incomplete.
(2) Rectification Description: it is confirmed that there was no objection or abstention of supervisors in the voting
at the meeting of the Board of Supervisors in 2018, and the Board of Supervisors played a good role in
supervising the performance of the Board of Directors. The Board of Supervisors was changed in January 2019.
After self inspection in 2020, the Company standardized the content and form of minutes of meetings of the Board
of Supervisors as required, improved the key points of records, and ensured that the records were true, accurate
and complete.
Rectification problem 2 found by the Company: The current independent director has served for more than 6
consecutive years
(1) Problem Description: as of February 2021, Dai Dashuang and Liu Jiwei, independent directors of the
Company, have been reappointed in the Company for six years.
(2) Rectification instructions: the Company immediately communicated with independent directors Dai Dashuang
and Liu Jiwei, and made arrangements for the election of new independent directors. Later, Dai Dashuang and Liu
Jiwei submitted their resignation reports to the Company on March 19, 2021. On May 14, 2021, the new
independent directors of the Company were elected and approved by the general meeting of shareholders, and the
independent directors of the Company were successfully replaced, which had no material adverse impact on
corporate governance.
32 / 188
Section 5 Environmental and social responsibility
I．Major environmental issues
The listed company and its subsidiaries whether belong to heavy pollution industry formulated by the state
environmental protection department
□Yes √ No
Administrative penalties imposed for environmental problems during the reporting period
□Yes √ No
Main Distribution Pollutant
Number of Total Excessiv
pollutant Way of of the Emission discharge Total
Enterprise or subsidiary discharge approved e
and discharge discharge concentration standard discharge
outlet emissions emission
features outlet implemented
138 ㎎/L
Bingshan Refrigeration & Heat Unified DB21 Not over
COD sequence 1 9.816tons None
Transfer Technologies Co., Ltd. discharged standard
1627-2008
6.66 ㎎/L
Bingshan Refrigeration & Heat Ammonia Unified DB21 Not over
sequence 1 0.489tons None
Transfer Technologies Co., Ltd. nitrogen discharged standard
1627-2008
Bingshan Refrigeration & Heat Unified Not over
Dust sequence 1 10.6mg/m3 GB9078-1996 2.132 tons None
Transfer Technologies Co., Ltd. discharged standard
The Company received the new version of the "Sewage Discharge Permit" issued by the Dalian Ecological
Environment Bureau in July 2020. The Company discharges within the limit according to the required emission
concentration of the new version of "Sewage Discharge Permit".
Measures and effects taken by the Company to reduce carbon emissions
During the reporting period, the Company implemented the green, energy-saving and efficient lean production
mode in the production process, continuously improved the operation mode, improved the operation efficiency,
reduced the operation cost, and continued to move forward towards intelligent manufacturing and green
manufacturing.
During the reporting period, the Company used the roofs of some plants in the new plant area to build phase I
photovoltaic power generation project by using the mode of self use and surplus power on the Internet, and
connected to the grid in early November 2021. The installed power of the project is 3.4 MW, the annual power
generation is about 4.08 million kwh, and the annual carbon dioxide emission is reduced by about 4,067 tons.
During the reporting period, focusing on energy conservation and carbon reduction, the Company developed and
applied high-efficiency compressor energy conservation, green refrigerant, CCUS (carbon capture, utilization and
storage) and other technologies, and completed a number of energy conservation and carbon reduction projects
with customers in the fields of coal mine waste heat recovery, liquefied natural gas cold energy utilization,
petroleum refining and other fields, creating good economic and social benefits.
33 / 188
II．Social responsibilities
The specific content of the Company's performance of social responsibility can be found in the Social
Responsibility Report disclosed on Juchao information website on April 23, 2022.
III. We consolidated and expanded our achievements in poverty alleviation and rural revitalization
In 2021, combined with its main business, the Company continued to consolidate the achievements of poverty
alleviation, invested 60,000 yuan in Songlin village, Guangmingshan Town, Zhuanghe City to aid the construction
of village level wireless broadcasting system project, and maintained the air conditioning equipment of villagers'
cultural activity center. Meanwhile, during the epidemic period in Zhuanghe City, the Company actively raised
about 20,000 yuan of epidemic prevention goods to provide support for the epidemic prevention work in Songlin
village.
34 / 188
Section 6 Important items
I Implementation of commitments
1. Commitments of the Company or its shareholders holding 5% or higher of the shares in the reporting
period or carried to the reporting period
□Applicable √Not applicable
2. The company's assets or projects have earnings forecasts, and the reporting period is still in the period of
earnings forecasts. The company explains the reasons why the assets or projects have reached the original
earnings forecasts.
□Applicable √Not applicable
II. Non-operation capital occupation by holding shareholders and their related parties in the
listed company
□Applicable √Not applicable
The Company had no capital occupation by the holding shareholders and their related parties in the listed
company within this reporting period.
III. Foreign guarantee in violation of regulations
□ Applicable √ Not applicable
IV. Explain to the “non standard audit report” last year from the board of directors of the
Company
□Applicable √Not applicable
V. Explain to the “non standard audit report” from the board of directors, board of
supervisors of the Company
□Applicable √Not applicable
VI. Change in accounting policies, accounting estimates and accounting methods or correction
of major accounting mistakes in the reporting period, which should be retroactively restated
compared with the financial statements of the previous year
√Applicable □Not applicable
On December 7, 2018, the Ministry of Finance issued the "notice on revising and Issuing the accounting standards
for Business Enterprises No. 21 - leasing" (CK [2018] No. 35), and revised the accounting standards for Business
Enterprises No. 21 - leasing (hereinafter referred to as the "new leasing standards"). Enterprises listed both at
home and abroad and enterprises listed abroad and preparing financial statements using international financial
reporting standards or accounting standards for business enterprises shall be implemented as of January 1, 2019;
Other enterprises that implement the accounting standards for business enterprises shall implement them as of
January 1, 2021. When preparing the financial statements of 2021, the Company implemented the relevant
accounting standards and handled them in accordance with the relevant connection provisions.
VII. Change in the range of consolidated statements compared with the financial statements
of the previous year
□Applicable √Not applicable
VIII. Engagement and dismissal of the accounting firm
Currently engaged accounting firm
Name of domestic accounting firm ShineWing CPAs (Special General Partnership)
Remuneration paid to the domestic accounting firm (in 10 thousand yuan) 107
Continuous audit service years of the domestic accounting firm 6
Name of certified public accountants with the domestic accounting firm Lin Li, Zhang Shizhuo
Continuous audit service years of the certified public accountants Lin Li 1 year, Zhang Shizhuo 3 years
If the CPA firm retaining was changed in this period
□Applicable √Not applicable
Employment of internal control audit accounting firm, financial advisor or sponsor
√ Applicable □ Not applicable
During the reporting period, the Company hired ShineWing CPAs (Special General Partnership) as the Company's
2021 audit institution to conduct an integrated audit of the Company's financial reports and internal control.
35 / 188
IX. Facing suspend and terminate listing after the annual report disclosure
□ Applicable √ Not applicable
X. Bankruptcy restructuring related matters
□ Applicable √ Not applicable
XI. Major lawsuit and arbitration issues
□ Applicable √ Not applicable
XII. Punishment and rectification
□ Applicable √ Not applicable
XIII．The credibility of companies and its controlling shareholder, actual controller
√ Applicable □ Not applicable
The controlling shareholder of the Company and the Company don’t exist situation such as unfulfilled the court’s
effective judgments or failed to pay duly a large amount of debt during the reporting period.
XIV．Important associated transactions
1. Related party transactions related to daily operations
During the reporting period, the total amount of normal associated transactions between the Company and
associated parties was 514,680 thousand yuan, accounting for 74.59% of the budgeted amount for the year 2021.
This included 139,890 thousand yuan, accounting for 53.19% of the budgeted amount for the year 2021, for
purchasing supporting products for package projects from associated parties, and 374,790 thousand yuan,
accounting for 87.77% of the budgeted amount for the year 2021, from selling supporting parts and components to
associated parties.
2. Associated transactions related to purchases or sales of assets
□Applicable √ Not applicable
3. Important associated transactions with joint external investments
□ Applicable √ Not applicable
4. Associated transactions related to rights and debts
□ Applicable √ Not applicable
5. Associated transactions with related financial companies
□ Applicable √ Not applicable
6. The transactions between the financial company controlled by the company and its related parties
□ Applicable √ Not applicable
7. Other associated transactions
√ Applicable □ Not applicable
1. In order to strengthen the financing of cold and hot industrial chain, boost sales and recycling, the Company
signed the equity transfer contract with Dalian Zhonghuida Refrigeration Technology Co., Ltd. and transferred
20% equity of Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd. held by Dalian Zhonghuida
Refrigeration Technology Co., Ltd. The above matters were deliberated and adopted at the 15th meeting of the 8th
Board of Directors of the Company on March 19, 2021. The Company's announcement on related party
transactions of transferring the equity of Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd. was
disclosed in China Securities Journal and cninfo.com (2021-004) on March 20, 2021.
2. In order to optimize the asset structure and help improve the main business, the Company signed an equity
transfer agreement with Panasonic electric (China) Co., Ltd. ("Panasonic China") and transferred all the 40%
equity of Panasonic refrigeration (Dalian) Co., Ltd. to Panasonic China. The Company's announcement on related
party transactions on the transfer of equity of Panasonic refrigeration (Dalian) Co., Ltd. was disclosed in China
Securities Journal and cninfo (2021-043) on November 27, 2021.
XVII. Major contract and its performance
1. Hosting, contracting and leasing status
(1) the hosting status
□ Applicable √ Not applicable
(2)the contracting status
□ Applicable √ Not applicable
(3) the leasing status
√ Applicable □ Not applicable
36 / 188
The 13th meeting of the 7th board of directors of the Company was held on April 22, 2017, and approved to rent
out the old plant and land located in No 888, South West RD, Shahekou Districit, Dalian to Bingshan Wisdom.
The lease contract is from April 1, 2017 to December 31, 2036. The Company has signed the “estate leasing
contract” with Dalian Bingshan Wisdom based on the requirement of utilization of old land and plant and new
business foster plan. Current year’s lease premium is RMB 8.19 million.
On July 31, 2014, the Company and Lingzhong Bingshan Refrigeration (Dalian) Co., Ltd. signed a supplementary
agreement to modify the house lease contract, and rent out the Building No. 6 of Workshop No. 106, Liaohe East
Road, Dalian Development Zone, to Lingzhong Bingshan Refrigeration (Dalian) Co., Ltd.. The rental area is
15,259.04 square meters, and lease period will end on July 16, 2029, the annual rent is RMB 3.81 million.
The Company's subsidiary Bingshan Lingxie signed a house lease contract with Dalian Jingxue Energy Saving
Technology Co., Ltd. on June 1, 2017., and rent out the factory building located at No. 92 Tieshan West Road,
Dalian Development Zone, to Dalian Jingxue Energy Saving Technology Co., Ltd.. The rental area is 3,653.76
square meters, and lease period from June 1, 2017 to May 31, 2022, the annual rent is RMB 1 million.
2. Guaranteeing status
□ Applicable √ Not applicable
3. Entrust others to cash assets management
(1)Trust management
□Applicable √Not applicable
(2)Entrusted loans
□Applicable √Not applicable
(3)Other important contracts
□ Applicable √ Not applicable
XIX. Other important matters
□ Applicable √ Not applicable
XX. Other important matters of subsidiary company
□ Applicable √ Not applicable
37 / 188
Section 7 Change in Share Capital and Shareholders' Information
I. Change in share capital
1. Change in share capital
Shares Shares
（before change） （after change）
items
number proportion number proportion
I. Non-circulating share capital with restricted trade
3,058,879 0.36% 3,130,189 0.37%
conditions
II. Circulating share capital 840,153,628 99.64% 840,082,318 99.63%
1. Domestically listed ordinary shares 598,653,628 71.00% 598,582,318 70.99%
2. Domestically listed foreign shares 241,500,000 28.64% 241,500,000 28.64%
III. Total shares 843,212,507 100.00% 843,212,507 100.00%
The reason for the Change in share capital
During the reporting period, the Company employed Yin Xide, the general manager, and Wang Jinxiu, the chief
financial officer. Fan Yuekun, the director and deputy general manager of the Company, resigned, and Ma Yun,
the chief financial officer, resigned. The lock-in shares of senior executives changed, resulting in changes in the
composition of shares.
Approval of changes in shares
□ Applicable √Not applicable
The restricted shares changes
□ Applicable √Not applicable
II. Securities issuance and listing
1. Securities issuance in the report period
□ Applicable √ Not applicable
2. Change in total shares of the Company and structure of shareholders
□ Applicable √ Not applicable
3. Internal staff shares
□ Applicable √ Not applicable
III. Shareholders and actual controller
1. Number of shareholders and their shareholding
38 / 188
Total number of shareholders in the Total number of shareholders as of the last month before
54,572 82,592
reporting period disclosure of the annual report
Shareholding of top ten shareholders
Number of Number of
Proporti shares with pledged
Name Nature Total number
on sale shares or
restriction shares frozen
Domestic non-state-owned
Dalian Bingshan Group Co., Ltd. 20.27% 170,916,934 0 0
legal person
Sanyo Electric Co., Ltd. Overseas legal person 8.72% 73,503,150 0 0
Lin Zhenming Foreign natural person 0.80% 6,770,000
Wu An Domestic natural person 0.53% 4,500,000
Xue Hong Domestic natural person 0.43% 3,600,000
Dalian industrial development investment Co., Domestic non-state-owned
0.40% 3,406,725
Ltd. legal person
Chen Yong Domestic natural person 0.40% 3,339,378
Li Xiaohua Domestic natural person 0.37% 3,145,608
Zhan Changcheng Domestic natural person 0.35% 2,971,647
Chen Cirou Domestic natural person 0.31% 2,635,550
Shareholding of top ten shareholders without sale restriction
Number of shares
Name Type of shares
without sale restriction
Dalian Bingshan Group Co., Ltd. 170,916,934 RMB denominated ordinary shares
Sanyo Electric Co., Ltd. 73,503,150 Domestically listed foreign shares
Lin Zhenming 6,770,000 Domestically listed foreign shares
Wu An 4,500,000 Domestically listed foreign shares
Xue Hong 3,600,000 Domestically listed foreign shares
Dalian industrial development investment Co., Ltd. 3,406,725 RMB denominated ordinary shares
Chen Yong 3,339,378 RMB denominated ordinary shares
Li Xiaohua 3,145,608 RMB denominated ordinary shares
Zhan Changcheng 2,971,647 Domestically listed foreign shares
Chen Cirou 2,635,550 Domestically listed foreign shares
Dalian Bingshan Group Co., Ltd. had the association
Notes to the associated relationship and uniform actions of the above relationship with Sanyo Electric Co., Ltd. among the above
shareholders shareholders. Sanyo Electric Co., Ltd. holds 26.6% of Dalian
Bingshan Group Co., Ltd.'s equity.
39 / 188
2. Controlling shareholder of the Company
Legal Founding Unified social
Name of holding shareholder Main business
representative date credit code
Research, development, manufacture, sales,
service and installation of industrial refrigeration
products, freezing and cold storage products,
91210200241 large-, medium- and small-size air-conditioning
Dalian Bingshan Group Co., Ltd. Ji Zhijian Jul. 3, 1985
2917931 products, petrochemical equipment products,
electronic and electric control products, home
appliance products and environment protection
products.
Shares held by the holding
shareholder in other overseas and
domestic listed companies as the None
holding shareholder or ordinary
shareholder in the reporting period
Change in the holding shareholder in the reporting period
□ Applicable √ Not applicable
3. Actual controller of the Company
The company has no actual controller.
According to the actual situation of the Company and its controlling shareholder, and compared with the related
laws and regulations including Company Law of People’s Republic of China, Management Regulation on Listing
Company Acquisition and Stock Listing Rules of Shenzhen Stock Exchange, with the confirmation of Liaoning
Huaxia law firm, the Company released the Public Notice on Not Having Actual Controller.(No: 2015-025),)
which was published on B04 of China Securities, A19 of HK Commercial Daily and Cninfo website on April 24
2015.
40 / 188
Commission ofDalian Municipality Government
State-owned Assets Supervision and Administration
Dalian State-owned Assets Management Co., Ltd.
Dalian Equipment Manufacture Investment
Panasonic Corporation of China
Dalan Zhonghuida Refrigeration
Sanyo Electric Co., Ltd.
Dayang Co., Ltd.
Technology Co., Ltd.
Co., Ltd.
100% 100%
24.97% 8.28% 13.3% 20.2% 26.6% 6.65%
Dalian Bingshan Group Co., Ltd.
20.27%
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
The actual controller controlled the Company through a trust or other asset management
□ Applicable √ Not applicable
4. Other legal-person shareholders holding of 10% or more shares
□ Applicable √ Not applicable
5.、controlling shareholders, actual controllers, restructuring the constraint to the stake and other
commitments underweight
□ Applicable √ Not applicable
41 / 188
Section 8 Information on Preferred Stock
□ Applicable √ Not applicable
In the reporting period, the Company didn’t own preferred stock.
42 / 188
Section 9 Information on Corporate bonds
The Company’s non-public issuance of exchangeable corporate bonds was listed at the Shanghai Stock Exchange
on August 6, 2018. As of August 1, 2018, according to the using plan disclosed in the prospectus, the raised funds
of the Company’s non-public issuance of exchangeable corporate bonds have been used to repay bank loans. The
special account for the Company's 2018 exchangeable corporate bonds fund raising was cancelled in March 2019.
Till the reporting period, the Company's exchangeable corporate bondholders exchanged a total of 8.3889 million
shares. The current balance is zero at the end of the reporting period.
43 / 188
Section 10 Financial Report
1. Opinion
We have audited the accompanying financial statements of Bingshan Refrigeration &
Heat Transfer Technologies Co., Ltd (“Bingshan Refrigeration & Heat Company”),
which comprise the consolidated and company balance sheets as at 31 December 2021,
and the consolidated and company income statements, the consolidated and company
cash flow statements, the consolidated and company statements of changes in equity for
the year then ended, and notes to these financial statements.
In our opinion, the accompanying financial statements have been prepared in
accordance with the requirements of Accounting Standards for Business Enterprises, in
all material respects and present fairly the consolidated and the financial position of
Bingshan Refrigeration & Heat Company as at 31 December 2021, and of their
consolidated and the company’s financial performance and cash flows for the year then
ended.
2. Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing for Chinese
Certified Public Accountants. Our responsibilities under those standards are further
described in the “Auditor’s Responsibilities for the Audit of the Financial Statements”
section of our report. We are independent of Bingshan Refrigeration & Heat Company
in accordance with the Code of Ethics for Chinese Certified Public Accountants, and we
have fulfilled our other ethical responsibilities of the code. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our audit.
3. Key Audit Matters
Key audit matters are those matters that we consider, in our professional judgment, were
of most significance in our audit of the financial statements of the current period. These
matters were addressed in the context of our audit of the financial statements as a whole
and, in forming our audit opinion thereon, and we do not express a separate opinion on
these matters.
Revenue Recognition
Key Audit Matter How the matter was addressed in the audit
44 / 188
Revenue of Bingshan Refrigeration The main audit procedures carried out for
& Heat Company and its addressing the key audit matters are as follows:
subsidiaries mainly come from sales 1. Understand and evaluate effectiveness of
design and operation of the management ‘s
of products and installation. The key
internal control over revenue
concern about the sales revenue is
2. Carried out analytical review and evaluate
due to the large sales quantities and the reasonableness of sales income and gross
any potential misstatements existing profit margin by segmenting the business and
in the revenue recognition within sales in conjunction with industry development
the appropriate accounting period. and actual situation of Bingshan Refrigeration &
Key concern about installation Heat Company.
income is because the accounting 3. Sampling test the sales contracts, identify the
clause and condition in respect to the contract
involved by significant accounting
performance obligation, consideration and risk
estimate and judgment. Having
and reward transfer of the ownership. Evaluate
considered these matters, we the revenue recognition of Bingshan
recognized revenue recognition as Refrigeration & Heat Company whether it is in
key audit matters. line with the accounting standards.
4. Sampling select product sales revenue
record, reconcile to sales invoice, contracts,
dispatch note, acceptance note; Sampling select
installation sales revenue record, reconcile to
invoice, installation contracts and completion
report and Evaluate the recognition of revenue
whether is in line with the accounting standards
5. Checking actual installation cost by
reviewing the contract, invoice and supportive
document with signature for the equipment
received to evaluate the cost whether it really
incurred.
6. Sampling select the transactions before and
after the balance sheet date, carry out
confirmation procedure, test the dispatch note
and other supporting documents so to ensure
whether the transaction is recorded into the
appropriate accounting period.
4. Other Information
The management of Bingshan Refrigeration & Heat Company (hereinafter referred to as
the “Management”) is responsible for the other information. The other information
comprises the information included in the Bingshan Refrigeration & Heat Company
2021 annual report, but does not include the financial statements and our auditor’s
report thereon.
45 / 188
Our opinion on the financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of the other information, we are required to report that fact. We have
nothing to report in this regard.
5. Responsibilities of the Management and Those Charged with Governance for
the Financial Statements
The Management is responsible for the preparation of the financial statements in
accordance with Accounting Standards for Business Enterprises to achieve fair
presentation; and designing, implementing and maintaining internal control which is
necessary to enable that the financial statements are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Management is responsible for assessing
Bingshan Refrigeration & Heat Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Management either intends to liquidate Bingshan
Refrigeration & Heat Company or to cease operations, or have no realistic alternative
but to do so.
Those charged with governance are responsible to overseeing Bingshan Refrigeration &
Heat Company’s financial reporting process.
6. Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with
auditing standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are generally considered material if,
individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
During the course of audit in accordance with auditing standards, we exercise
professional judgment and maintain professional skepticism. We also carry out the
46 / 188
following works:
(1) Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our audit. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of its internal control
(this sentence would be deleted in circumstance when we are also responsible to
issue an opinion on the effectiveness of internal control in conjunction with the
audit of the financial statements).
(3) Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by the Management.
(4) Conclude on the appropriateness of the Management’s use of the going concern
basis of accounting and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that may cast
significant doubt on Bingshan Refrigeration & Heat Company’s ability to
continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor’s report to the related
disclosures in the financial statements in accordance with the auditing standards
or, if such disclosures are inadequate, we shall modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause Bingshan
Refrigeration & Heat Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial
statements, and also whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient and appropriate audit evidence with respect to the financial
information of Bingshan Refrigeration & Heat entities or business activities,
and issue an audit opinion. We are responsible for guiding, supervising and
performing group audits and take full responsibility for audit opinions.
We communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and significant audit findings etc., including
47 / 188
any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with those relevant ethical requirements regarding independence, and to communicate
with them all relationships and other matters that may reasonably be thought to bear on
our independence and related safeguards, where applicable.
From the matters communicated with those charged with governance, we determine
those matters that were of most significance in the audit of the financial statements of
the current period and are therefore the key audit matters. We describe these matters in
our auditor’s report unless law or regulation prohibited public disclosure about the
matter or when, in rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
ShineWing Certified Public Accountants LLP CPA： Lin Li (Engagement Partner)
CPA：Zhang Shizhuo
China, Beijing April 22, 2022
48 / 188
II. Accounting statement
Consolidated Balance Sheet
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 31 December, 2021 Unit: RMB Yuan
ITEMS 31 December 2021 31 December 2020
Current Assets:
Monetary funds 522,658,505.79 373,445,731.67
Settlement provision
Loans to banks and other financial institutions
Financial asset held for trading
Derivative financial assets
Notes receivable 166,430,365.74 139,121,037.78
Accounts receivable 821,548,678.85 817,011,955.75
Receivable financing 43,704,310.38 61,737,282.56
Prepayments 182,701,403.55 154,481,509.35
Insurance receivables
Reinsurance Receivable
Provision of reinsurance contract reserve receivable
Other receivables 60,340,096.45 67,527,176.86
including: interest receivable - 46,879.68
dividend receivable 1,003,568.75 25,923.75
Financial assets purchased under agreement to resell
Inventories 1,014,527,127.82 731,658,797.98
Contractual asset 109,859,658.79 91,430,011.60
Held for sale assets
Non-current assets due within 1-year 14,990,989.30 42,003,576.60
Other current assets 24,525,076.71 23,214,091.44
Total Current Assets 2,961,286,213.38 2,501,631,171.59
Non-Current Assets：
Loan and payment on other's behalf disbursed
Debt investment
Other debt investment
Long-term receivables 65,867,973.25
Long-term equity investment 1,231,504,533.45 1,597,241,363.62
Other equity instrument investment
Other non-current financial assets 261,410,664.61 239,304,098.83
Investments properties 120,752,809.61 126,288,477.92
Fixed assets 855,395,405.85 891,147,058.82
Construction in process 38,974,478.45 34,254,599.42
Production biological assets
Oil-gas assets
Right-of-use assets 23,934,703.37
Intangible assets 142,592,738.10 145,442,721.24
Development cost
Goodwill 1,750,799.49 1,750,799.49
Long-term prepaid expense 8,088,684.23 9,660,538.07
Deferred tax asset 89,879,574.13 68,979,526.11
Other non-current assets
Total Non-current Assets 2,774,284,391.29 3,179,937,156.77
Total Assets 5,735,570,604.67 5,681,568,328.36
49 / 188
Consolidated Balance Sheet (continued)
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 31 December, 2021 Unit: RMB Yuan
ITEMS 31 December 2021 31 December 2020
Current Liabilities:
Short-term borrowings 245,937,091.72 282,971,600.00
Financial liability held for trading
Derivative financial liabilities
Notes payable 380,033,039.56 295,151,372.38
Accounts payable 919,871,927.53 767,267,232.43
Advance received -
Contractual liability 499,719,963.40 295,100,657.10
Financial assets sold under agreements to repurchase
Deposits received and hold for others
Entrusted trading of securities
Entrusted underwriting of securities
Employee pay payables 35,148,782.48 31,125,808.94
Taxes and duties payable 13,514,847.82 9,714,194.25
Other payables 55,284,140.21 43,017,466.38
including: interest payable - 1,839,166.81
dividend payable 3,008,156.00 533,156.00
Fees and commissions payable
Amount due to reinsurance
Held for sale liabilities
Non-current liabilities due within 1-year 24,175,388.12 37,157,126.41
Other current liabilities 195,213,206.91 152,173,946.30
Total Current Liabilities 2,368,898,387.75 1,913,679,404.19
Non-current Liabilities:
Insurance contract provision
Long-term borrowings 150,000,000.00 160,000,000.00
Bonds Payable -
including: preference share
perpetual debt
Lease liability 5,394,021.14
Long-term payables 19,998,913.29 14,622,463.75
Long-term employee payables
Provision 7,592,239.01
Deferred income 106,185,323.82 104,457,568.86
Deferred Tax liabilities 35,596,349.70 32,010,364.83
Other non-current liabilities -
Total Non-current Liabilities 317,174,607.95 318,682,636.45
Total Liabilities 2,686,072,995.70 2,232,362,040.64
Owners Equity(or Shareholders Equity):
Paid-in capital（Share capital) 843,212,507.00 843,212,507.00
Other equity instrument
Including:preference share
perpetual capital securities
Capital reserve 720,215,866.78 726,768,468.00
Less: Treasury stock
Other comprehensive income 2,178,681.73 2,501,459.77
Chartered reserve
Surplus reserves 809,471,199.64 805,525,775.33
△Provision for general risk
Undistributed profit 627,764,582.32 997,601,577.97
Equity attributable to equity holders of the Company 3,002,842,837.47 3,375,609,788.07
Minority interest 46,654,771.50 73,596,499.65
Total Equity 3,049,497,608.97 3,449,206,287.72
Total Liabilities and Equity 5,735,570,604.67 5,681,568,328.36
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
50 / 188
Balance Sheet of Parent Company
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 31 December, 2021 Unit: RMB Yuan
ITEMS 31 December 2021 31 December 2020
Current Assets:
Monetary funds 391,077,589.19 208,325,740.71
Tradable financial asset
Derivative financial assets
Notes receivable 61,036,803.62 42,858,563.72
Accounts receivable 408,719,275.78 408,625,925.91
Receivable financing 5,427,828.26 5,752,810.30
Prepayments 57,409,521.75 62,620,914.33
Other receivables 54,222,825.18 41,183,397.14
including: interest receivable - 46,879.68
dividend receivable 25,100,920.84
Inventories 339,977,048.51 255,635,206.96
Contractual assets 50,916,025.04 38,366,253.50
Held for sale assets
Non-current assets due within 1-year 13,281,553.63 19,488,435.75
Other current assets 8,871,387.69 27,637.13
Total Current Assets 1,390,939,858.65 1,082,884,885.45
Non-Current Assets：
Debt investment
Other debt investment
Long-term receivables 45,964,783.15
Long-term equity investment 1,923,394,225.05 2,280,377,981.04
Other equity instrument investment
Other non-current financial assets 260,095,522.11 237,888,956.33
Investments properties 95,850,052.41 100,762,366.02
Fixed assets 680,392,162.13 721,701,015.39
Construction in process 28,279,901.38 9,160,965.22
Production biological assets
Oil-gas assets
Right-of-use assets 15,636,361.47
Intangible assets 73,679,019.01 76,619,078.55
Development cost
Goodwill
Long-term unamortized expense 6,766,442.52 8,259,220.68
Deferred tax asset 16,806,287.61 13,940,130.98
Other non-current assets
Total Non-current Assets 3,100,899,973.69 3,494,674,497.36
Total Assets 4,491,839,832.34 4,577,559,382.81
51 / 188
Balance Sheet of Parent Company (continued)
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 31 December, 2021 Unit: RMB Yuan
ITEMS 31 December 2021 31 December 2020
Current Liabilities:
Short-term borrowings 230,373,666.72 276,011,600.00
Financial liability held for trading
Derivative financial liabilities
Notes payable 238,051,362.81 202,747,834.50
Accounts payable 318,798,749.33 254,630,956.73
Advance received -
Contractual liability 115,654,933.60 67,468,174.27
Employee pay payables 13,551,313.90 11,187,502.65
Taxes and duties payable 2,667,309.95 4,244,948.37
Other payables 23,508,139.39 17,179,194.67
including: interest payable - 1,839,166.81
dividend payable 533,156.00 533,156.00
Held for sale liabilities
Non-current liabilities due within 1-year 1,918,874.53 25,000,034.00
Other current liabilities 68,871,944.99 50,815,558.18
Total Current Liabilities 1,013,396,295.22 909,285,803.37
Non-current Liabilities:
Long-term borrowings 150,000,000.00 160,000,000.00
Bonds Payable -
including: preference share
perpetual debt
Lease liability 13,243,055.41
Long-term payables
Long-term employee payables
Provision for liabilities
Deferred income 66,992,823.82 64,121,068.86
Deferred Tax liabilities 35,596,349.70 32,010,364.83
Other non-current liabilities
Total Non-current Liabilities 265,832,228.93 256,131,433.69
Total 1,279,228,524.15 1,165,417,237.06
Liabilities
Owners Equity(or Shareholders Equity):
Paid-in capital（Share capital) 843,212,507.00 843,212,507.00
Other equity instrument
Including:preference share
perpetual capital securities
Capital reserve 755,146,592.54 771,270,562.83
Less: Treasury stock
Other comprehensive income 1,216,581.06 1,539,359.10
Chartered reserve
Surplus reserves 809,471,199.64 805,525,775.33
Undistributed profit 803,564,427.95 990,593,941.49
Total Equity 3,212,611,308.19 3,412,142,145.75
Total Liabilities and Equity 4,491,839,832.34 4,577,559,382.81
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
52 / 188
Consolidated Income Statement
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. January- December, 2021 Unit: RMB Yuan
Item This year Last year
Ⅰ、Total operating revenue 2,089,208,256.22 1,727,267,935.15
Including: Operating revenue 2,089,208,256.22 1,727,267,935.15
Interest income
Earned premiums
Fees and commission income
Ⅱ、Total cost of operation 2,248,942,160.16 1,767,653,636.63
Including: Cost of operation 1,849,531,272.29 1,432,524,109.91
Interest expenses
Fees and commission expenses
Payments to surrenders of insurance contracts
Net amount of insurance claims expenses
Net charges of provision for insurance contracts
Dividends policy expenses
Reinsurance expenses
Taxes and surcharges 18,951,850.96 15,456,113.14
Selling and distribution expenses 130,633,909.30 83,740,476.90
Administrative expenses 170,613,436.15 160,295,370.53
R&D 65,269,765.23 49,158,256.78
Financial expenses 13,941,926.23 26,479,309.37
Including: Interest expenses 16,718,288.26 22,795,380.51
Interest income 5,193,155.75 2,435,386.06
add: other income 10,799,794.83 20,104,570.39
investment income (Loss listed with "-") -47,447,292.15 104,437,155.73
Including: income from investments in associates and joint ventures -58,045,519.63 91,883,843.64
Gain arising from derecognition of financial asset measured at
amortized cost
Exchange gain (Loss listed with "-")
Gain on hedging of net exposure (Loss listed with "-")
Gain on FV change (Loss listed with "-") 52,398,565.78 -14,797,607.68
Loss on impairment of credit(Loss listed with "-") -90,798,013.99 -34,717,562.20
Loss on impairment of assets(Loss listed with "-") -49,626,686.83 -13,476,398.01
Gain on asset disposal(Loss listed with "-") 59,272.29 -169,550.05
Ⅲ、Operating profit (Loss listed with "-") -284,348,264.01 20,994,906.70
Add: Non-operating income 4,474,706.92 1,411,389.75
Less: Non-operating expenses 9,619,390.42 8,141,253.63
Ⅳ、 Total profit (Loss listed with "-") -289,492,947.51 14,265,042.82
Less: Income tax expenses -14,303,353.47 -8,584,766.51
Ⅴ、Net profit (Net loss listed with "-") -275,189,594.04 22,849,809.33
(I) Classification by continuity -275,189,594.04 22,849,809.33
1、Net profit from continuing operation -275,189,594.04 22,849,809.33
2、Net profit from discontinuing operation
(II) Classification by ownership -275,189,594.04 22,849,809.33
1、Net profit attributable to equity holders(shareholders) of the Company -269,059,849.96 21,341,133.39
2、Minority interest -6,129,744.08 1,508,675.94
Ⅵ、 Other comprehensive income net off tax - -
Net other comprehensive income net off tax attributable to equity
holders(shareholders) of the parent company - -
53 / 188
(Ⅰ)Items that may not be reclassified subsequently to the income statement - -
1.Change in net asset/liability from remeasurment on defined benefit plan
2.Under equity method, proportionate share of other comprehensive income
in invested company that may not be reclassified subsequently to the income
statement
3.FV change of other equity instrument investment
4.FV change of own credit risk
5.Others
(Ⅱ)Items that may be reclassified subsequently to the income statement - -
1.Under equity method, proportionate share of other comprehensive income
invested company that may be reclassified subsequently to the income
statement
2.FV change of other debt instrument investment
3.Financial assets reclassfied into other comprehensive income
4.Credit impairment provision of other debt investment
5.Cash flow hedges effective portion
6.Foreign currency translation difference
7.Others
Net other comprehensive income net off tax attributable to Minority interest
Ⅶ、Total comprehensive income -275,189,594.04 22,849,809.33
Total comprehensive income attributable to parent Company -269,059,849.96 21,341,133.39
Total comprehensive income attributable to minority interest -6,129,744.08 1,508,675.94
Ⅷ、 Earnings per share
(Ⅰ)Basic earnings per share -0.319 0.025
(Ⅱ)Diluted earnings per share -0.319 0.025
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
54 / 188
Income Statement of Parent Company
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. January- December, 2021 Unit: RMB Yuan
Item This year Last year
Ⅰ、Operating revenue 833,501,935.55 751,021,670.44
Less: Cost of operation 737,122,594.46 616,299,098.91
Taxes and surcharges 11,713,347.51 8,800,692.80
Selling and distribution expenses 62,191,872.24 41,031,582.10
Administrative expenses 84,579,442.49 77,436,050.28
R&D 23,153,016.46 20,145,122.54
Financial expenses 11,949,817.04 15,362,883.21
Including: Interest expenses 14,788,914.23 15,405,378.98
Interest income 4,726,261.06 1,973,796.92
Add: Other income 1,854,962.57 5,367,222.70
Investment income (Loss listed with "-") -16,105,494.35 115,121,934.09
Including: income from investments in associates and joint ventures -58,058,060.45 92,790,086.32
Gain arising from derecognition of financial asset measured at amortized cost
Gain on hedging of net exposure (Loss listed with "-")
Gain on FV change (Loss listed with "-") 52,398,565.78 -14,797,607.68
Loss on impairment of credit(Loss listed with "-") -13,408,727.47 -5,231,482.28
Loss on impairment of assets(Loss listed with "-") -12,126,565.07 -12,846,106.32
Gain on asset disposal(Loss listed with "-") -399.28 -706,217.34
Ⅱ、Operating profit (Loss listed with "-") -84,595,812.47 58,853,983.77
Add: Non-operating income 1,548.54 3,900.06
Less: Non-operating expenses 885,498.38 108,725.25
Ⅲ、 Total profit (Loss listed with "-") -85,479,762.31 58,749,158.58
Less: Income tax expenses 772,605.54 -5,177,760.99
Ⅳ、Net profit (Net loss listed with "-") -86,252,367.85 63,926,919.57
1、Net profit from continuing operation -86,252,367.85 63,926,919.57
2、Net profit from discontinuing operation
Ⅴ、 Other comprehensive income net off tax - -
(Ⅰ)Items that may not be reclassified subsequently to the income statement - -
1.Change in net asset/liability from remeasurment on defined benefit plan
2.Under equity method, proportionate share of other comprehensive income in invested
company that may not be reclassified subsequently to the income
3.FV change of other equity instrument investment
4.FV change of own credit risk
5.Others
(Ⅱ)Items that may be reclassified subsequently to the income statement - -
1.Under equity method, proportionate share of other comprehensive income invested
company that may be reclassified subsequently to the income statement
2.FV change of other debt instrument investment
3.Financial assets reclassfied into other comprehensive income
4.Credit impairment provision of other debt investment
5.Cash flow hedges effective portion
6.Foreign currency translation difference
7.Others
Ⅵ、Total comprehensive income -86,252,367.85 63,926,919.57
Ⅷ、 Earnings per share
(Ⅰ)Basic earnings per share
(Ⅱ)Diluted earnings per share
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
55 / 188
Consolidated Cash Flow Statement
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. January- December, 2021 Unit: RMB Yuan
Item This year Last year
1. Cash flows from operating activities:
Cash received from sales of goods and rendering of services 1,998,747,405.23 1,538,738,032.26
Net increase in deposits from customers and inter-banks deposits
Net increase in loans from central bank
Net increase in loans from other financial institutions
Cash receipts of premium of direct insurance contracts
Net cash received from reinsurance contracts
Net increase in deposits from insurance policy holders and investment
Cash receipts of interest, fees and commission
Net increase in placement from banks and other financial institution
Net increase in sales and repurchase operations
Entrusted trading of securities
Cash received from taxes refund 21,514,050.68 18,519,826.50
Cash received relating to other operating activities 64,293,089.54 82,116,067.91
Sub-total of cash inflows from operating activities 2,084,554,545.45 1,639,373,926.67
Cash paid for goods and services 1,501,614,080.55 1,121,134,021.73
Net increase in loans and disbursement to customers
Net increase in deposit with central bank and inter-banks
Cash paid for claims of direct insurance contracts
Net increase of loans to other banks
Cash paid for interest, fee and commission
Cash paid for dividends of insurance policies
Cash paid to and on behalf of employees 350,456,810.15 314,253,416.05
Payments of taxes and surcharges 68,388,963.77 70,148,337.99
Cash paid relating to other operating activities 162,576,472.61 146,980,578.35
Sub-total of cash outflows from operating activities 2,083,036,327.08 1,652,516,354.12
Net cash flows from operating activities 1,518,218.37 -13,142,427.45
2. Cash flows from investment activities:
Cash received from return of investments 1,703,262.34 3,196,000.00
Cash received from investments income 110,699,788.36 141,629,646.76
Net cash received from disposal of fixed assets, intangible assets and other
754,551.68 1,624,834.60
long-term assets
Net cash received from disposal of subsidiaries and other business units 211,198,900.00 37,744,000.00
Cash received relating to other investing activities
Sub-total of cash inflows from investing activities 324,356,502.38 184,194,481.36
Cash paid to acquire fixed assets, intangible assets and other long-term assets 30,695,331.84 14,869,095.73
Cash paid for investments 45,400,000.00
Net increase in pledged deposits
Net cash paid to acquire subsidiaries and other business units
Cash paid relating to other investing activities
Sub-total of cash outflow from investing activities 76,095,331.84 14,869,095.73
Net cash flows from investing activities 248,261,170.54 169,325,385.63
3. Cash flows from financing activities
Cash received from investment absorption
Including: Cash received by subsidiaries from investment absorpotion of
non-controlling interest
Cash received from loans granted 263,670,518.89 333,531,600.00
Cash received relating to other financing activities 83,846,329.05 56,489,819.37
Sub-total of cash inflows from financing activities 347,516,847.94 390,021,419.37
Cash paid for settlement of borrowings 336,679,560.00 405,812,000.00
Cash paid for dividends, profits appropriation or payments of interest 24,739,356.41 47,142,841.87
Including: Dividens and profits paid to non-controlling interest
Cash paid relating to other financing activities 111,987,388.37 78,196,961.15
Sub-total of cash outflows from financing activities 473,406,304.78 531,151,803.02
Net cash flows from financing activities -125,889,456.84 -141,130,383.65
56 / 188
4. Effect of changes in foreign exchange rate on cash and cash equivalents 100,945.31 -1,601,468.60
5. Net increase in cash and cash equivalents 123,990,877.38 13,451,105.93
Add: Cash and cash equivalents at beginning of year 314,978,460.49 301,527,354.56
6. Cash and cash equivalents at end of year 438,969,337.87 314,978,460.49
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
Cash Flow Statement of Parent Company
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. January- December, 2021 Unit: RMB Yuan
Item This year Last year
1.Cash flow from operating activities
Cash receipts from sale of goods or rendering of services 765,232,022.05 697,805,239.15
Refunds of taxes - 8,601,797.19
Other cash receipts in operating activities 25,372,394.89 30,807,494.95
Sub-total of cash inflows from operating activities 790,604,416.94 737,214,531.29
Cash payments for goods and services acquired 570,924,816.02 522,795,640.64
Cash payments to and on behalf of employees 106,175,901.94 94,837,857.19
Tax and duties payments 32,561,028.64 38,287,456.09
Other cash payments for operating activities 53,337,644.37 47,268,602.90
Sub-total of cash outflows from operating activities 762,999,390.97 703,189,556.82
Net cash flows from operating activities 27,605,025.97 34,024,974.47
2.Cash flows from investing activities
Cash receipts from return of investments 1,700,000.00 2,800,000.00
Cash receipts from investments income 113,318,424.61 144,821,456.80
Net cash receipts from disposal of fixed assets, intangible assets and other - 972,185.00
long-term assets
Net cash receipts from disposal of subsidiaries and other businesses 211,198,900.00 37,744,000.00
Other cash receipts in investing activities
Sub-total of cash inflows from investing activities 326,217,324.61 186,337,641.80
Cash payments for acquired fixed assets, intangible assets and other long-term 10,487,613.09 10,438,744.28
assets
Cash payments for investment 54,165,615.00 100,000,000.00
Net cash payments for acquisition of subsidiaries and other businesses
Other cash payments in investing activities
Sub-total of cash outflows from investing activities 64,653,228.09 110,438,744.28
Net cash flows from investment activities 261,564,096.52 75,898,897.52
3.Cash flows from financing activities
Cash received from capital injection
Cash receipts from borrowings 227,000,000.00 315,011,600.00
Other cash receipts in financing activities 23,123,472.43 743,155.00
Sub-total of cash inflows from financing activities 250,123,472.43 315,754,755.00
Cash paid for settlement of borrowings 311,478,560.00 347,082,000.00
Cash paid for dividends, profits appropriation or payments of interest 21,455,435.22 45,119,746.25
Other cash payments in financing activities 21,611,560.00 23,123,472.43
Sub-total of cash outflows from financing activities 354,545,555.22 415,325,218.68
Net cash flows from financing activities -104,422,082.79 -99,570,463.68
4.Effect of changes in foreign exchange rate on cash and cash equivalents -16,318.79 5,763.51
57 / 188
5.Net increases in cash and cash equivalents 184,730,720.91 10,359,171.82
Add: the beginning balance of cash and cash equivalent 185,202,268.28 174,843,096.46
6.The ending balance of cash and cash equivalent 369,932,989.19 185,202,268.28
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
58 / 188
Consolidated Statement of Changes in Shareholder’s Equity
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2020.01-12 Unit: RMB Yuan
Current year
Equity attributable to the equity holders of the Company
Item Paid-up capital Other equity instrument Other △Ge
(share capital) Capital reserves Less: comprehensiv Special Surplus reserves neral Undistribute Other Sub-total Minority interests Total equity
preferenc perpetua Treasur e income reserves risk d profits s
others y provi
e share l bond
shares sion
1. Balance at end of last year 843,212,507.00 - - - 726,768,468.00 - 2,501,459.77 - 805,525,775.33 - 997,601,577.97 - 3,375,609,788.07 73,596,499.65 3,449,206,287.72
Add: Changes in accounting policies -
Correction of prior periods errors -
Business combination within the same control -
Others -8,839,959.60 -79,559,636.71 -88,399,596.31 -88,399,596.31
2. Balance at beginning of current year 843,212,507.00 - - 726,768,468.00 - 2,501,459.77 - 796,685,815.73 - 918,041,941.26 - 3,287,210,191.76 73,596,499.65 3,360,806,691.41
3. Increase/ Decrease for current year (Decrease
listed with "-") - - - -6,552,601.22 - -322,778.04 - 12,785,383.91 - -290,277,358.94 - -284,367,354.29 -26,941,728.15 -311,309,082.44
（Ⅰ）Total of comprehensive income -269,059,849.96 -269,059,849.96 -6,129,744.08 -275,189,594.04
（Ⅱ）Capital contribution and reduction - - - 9,571,369.07 - - - - - - - 9,571,369.07 -18,336,984.07 -8,765,615.00
1.Ordinary share - -
2.Capital contributed by other equity instrument
- -
holders
3.Share-based payments charged to equity - -
4.Others 9,571,369.07 9,571,369.07 -18,336,984.07 -8,765,615.00
（III）Profit appropriations - - - - - - - - 12,785,383.91 - -21,217,508.98 - -8,432,125.07 -2,475,000.00 -10,907,125.07
1.Appropriation to surplus reserves 12,785,383.91 -12,785,383.91 - -
2.Appropriation to general risks provision - -
3.Appropriation to equity holders (or shareholders) -8,432,125.07 -8,432,125.07 -2,475,000.00 -10,907,125.07
4.Others - -
（IV）Transfer within equity - - - - - - - - - - - - - - -
1.Transfer of capital reserve to capital (share capital) - -
2.Transfer of surplus reserves to capital (share
- -
capital)
3.Surplus reserves making up of losses - -
4.Carried over the change in net asset/liability from
remeasurment on defined benefit plan - -
5.Transfer of other comprehensive to retained
- -
earnings
6.Others - -
（V）Special reserves - - - - - - - - - - - - -
1.Provision for special reserve 3,799,007.87 3,799,007.87 3,799,007.87
2.Utilisation of special reserve 3,799,007.87 3,799,007.87 3,799,007.87
（VI）Others -16,123,970.29 -322,778.04 -16,446,748.33 -16,446,748.33
4、Balance at end of current year 843,212,507.00 - - 720,215,866.78 - 2,178,681.73 - 809,471,199.64 - 627,764,582.32 - 3,002,842,837.47 46,654,771.50 3,049,497,608.97
59 / 188
Last year
Equity attributable to the equity holders of the
Company
Item Minorit
Paid-up capital Other equity instrument Other △General Total equity
y
(share capital) Capital reserves Less: Treasury comprehensiv Special Surplus reserves risk Undistribute Others Sub-total
interests
preferenc perpetua shares e income reserves provision d profits
others
e share l bond
1. Balance at end of last year 843,212,507.00 - - 726,768,468.00 - 2,501,459.77 - 768,723,812.53 - 1,038,358,782.59 3,379,565,029.89 74,562,823.71 3,454,127,853.60
Add: Changes in accounting policies - -
Correction of prior periods errors - -
Business combination within the same control - -
Others - -
2. Balance at beginning of current year 843,212,507.00 - - 726,768,468.00 - 2,501,459.77 - 768,723,812.53 - 1,038,358,782.59 - 3,379,565,029.89 74,562,823.71 3,454,127,853.60
3. Increase/ Decrease for current year (Decrease
- - - - - - - 36,801,962.80 - -40,757,204.62 - -3,955,241.82 -966,324.06 -4,921,565.88
listed with "-")
（Ⅰ）Total of comprehensive income 21,341,133.39 21,341,133.39 1,508,675.94 22,849,809.33
（Ⅱ）Capital contribution and reduction - - - - - - - - - - - - - -
1.Ordinary share - -
2.Capital contributed by other equity instrument - -
holders
3.Share-based payments charged to equity - -
4.Others - -
（III）Profit appropriations - - - - - - - - 36,801,962.80 - -62,098,338.01 - -25,296,375.21 -2,475,000.00 -27,771,375.21
1.Appropriation to surplus reserves 36,801,962.80 -36,801,962.80 - -
2.Appropriation to general risks provision - -
3.Appropriation to equity holders (or shareholders) -25,296,375.21 -25,296,375.21 -2,475,000.00 -27,771,375.21
4.Others - -
（IV）Transfer within equity - - - - - - - - - - - - - - -
1.Transfer of capital reserve to capital (share capital) - -
2.Transfer of surplus reserves to capital (share capital) - -
3.Surplus reserves making up of losses - -
4.Carried over the change in net asset/liability from
- -
remeasurment on defined benefit plan
5.Transfer of other comprehensive to retained - -
earnings
6.Others - -
（V）Special reserves - - - - - - - - - - - - - - -
1.Provision for special reserve 3,239,077.20 3,239,077.20 3,239,077.20
2.Utilisation of special reserve 3,239,077.20 3,239,077.20 3,239,077.20
（VI）Others - -
4、Balance at end of current year 843,212,507.00 - - 726,768,468.00 - 2,501,459.77 - 805,525,775.33 - 997,601,577.97 - 3,375,609,788.07 73,596,499.65 3,449,206,287.72
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
60 / 188
Statement of Changes in Shareholder’s Equity of Parent Company
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2020.01-12 Unit: RMB Yuan
Current year
Paid-up Other equity instrument Other
Item Capital reserves Less: Special Surplus reserves Undistributed Others Total equity
capital (share comprehensiv
capital) preferenc perpetua Treasury e income reserves profits
others shares
e share l bond
1. Balance at end of last year 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
Add: Changes in accounting policies -
Correction of prior periods errors -
Others -8,839,959.60 -79,559,636.71 -88,399,596.31
2. Balance at beginning of current year 843,212,507.00 - - 771,270,562.83 - 1,539,359.10 - 796,685,815.73 911,034,304.78 - 3,323,742,549.44
3. Increase/ Decrease for current year (Decrease listed with
- - - -16,123,970.29 - -322,778.04 - 12,785,383.91 -107,469,876.83 - -111,131,241.25
"-")
（Ⅰ）Total of comprehensive income -86,252,367.85 -86,252,367.85
（Ⅱ）Capital contribution and reduction - - - - - - - - - - -
1.Ordinary share -
2.Capital contributed by other equity instrument holders -
3.Share-based payments charged to equity -
4.Others -
（III）Profit appropriations - - - - - - - 12,785,383.91 -21,217,508.98 - -8,432,125.07
1.Appropriation to surplus reserves 12,785,383.91 -12,785,383.91 -
2.Appropriation to equity holders (or shareholders) -8,432,125.07 -8,432,125.07
3.Others -
（IV）Transfer within equity - - - - - - - - - - -
1.Transfer of capital reserve to capital (share capital) -
2.Transfer of surplus reserves to capital (share capital) -
3.Surplus reserves making up of losses -
4.Carried over the change in net asset/liability from
-
remeasurment on defined benefit plan
5.Transfer of other comprehensive to retained earnings -
6.Others -
（V）Special reserves - - - - - - - - - - - -
1.Provision for special reserve 3,799,007.87 3,799,007.87
2.Utilisation of special reserve 3,799,007.87 3,799,007.87
（VI）Others -16,123,970.29 -322,778.04 -16,446,748.33
4、Balance at end of current year 843,212,507.00 - - - 755,146,592.54 - 1,216,581.06 - 809,471,199.64 803,564,427.95 - 3,212,611,308.19
61 / 188
Last year
Paid-up Other equity instrument Other
Item Capital reserves Less: Special Surplus reserves Undistributed Others Total equity
capital (share comprehensiv
capital) preferenc perpetua Treasury e income reserves profits
e share l bond others shares
1. Balance at end of last year 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
Add: Changes in accounting policies -
Correction of prior periods errors -
Others -
2. Balance at beginning of current year 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
3. Increase/ Decrease for current year (Decrease
- - - - - - - 36,801,962.80 1,828,581.56 - 38,630,544.36
listed with "-")
（Ⅰ）Total of comprehensive income 63,926,919.57 63,926,919.57
（Ⅱ）Capital contribution and reduction - - - - - - - - - - -
1.Ordinary share -
2.Capital contributed by other equity instrument holders -
3.Share-based payments charged to equity -
4.Others -
（III）Profit appropriations - - - - - - - 36,801,962.80 -62,098,338.01 - -25,296,375.2
1
1.Appropriation to surplus reserves 36,801,962.80 -36,801,962.80 -
2.Appropriation to equity holders (or shareholders) -25,296,375.21 -25,296,375.2
1
3.Others -
（IV）Transfer within equity - - - - - - - - - - -
1.Transfer of capital reserve to capital (share capital) -
2.Transfer of surplus reserves to capital (share capital) -
3.Surplus reserves making up of losses -
4.Carried over the change in net asset/liability from
-
remeasurment on defined benefit plan
5.Transfer of other comprehensive to retained earnings -
6.Others -
（V）Special reserves - - - - - - - - - - - -
1.Provision for special reserve 3,239,077.20 3,239,077.20
2.Utilisation of special reserve 3,239,077.20 3,239,077.20
（VI）Others -
4、Balance at end of current year 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
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
62 / 188
III. Notes to the accounting statement
(All amounts in RMB Yuan unless otherwise stated)
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd (the “Company”) previously
named as Dalian Refrigeration Company Limited, 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 RMB350,014,975.00Yuan.
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 12, 2015, the Company received new added share capital of
RMB10,150,000.00Yuan.
The general meeting for 2015 fiscal year held on April 21, 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 May 5, 2016, and
the registered capital was altered to 540,247,462.00Yuan.
The 17thmeeting of the 6th generation of board was held on June 4, 2015 and the 2nd interim
shareholders’ meeting was held on June 24, 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 December 30, 2015, approving that new non-public offering cannot
exceeded 38,821,954 numbers 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.
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 3rd
provisional general meeting held on September 13, 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 20, 2016 and set September 20 , 2016 as share granted date, and granted
63 / 188
12,884,000 number of restricted shares to 118 incentive targets at granted price of 5.62Yuan per
share. By November 22, 2016, The Company has actually received the newly subscribed
registered share capital of 12,884,000.00Yuan subscribed by incentive targets.
On May 19, 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 RMB856,487,181.00Yuan.
On December 28, 2017, The Company held the 3rd extraordinary shareholders meeting in 2017,
and reviewed and approved the “Proposal on Repurchasing and Retiring Partially Restricted
Stocks of the 2016 Restricted Stock Incentive Plan”. On March 8, 2018, after The Company's
repurchase and cancellation, The Company implemented the corresponding capital reduction
procedures according to law. The registered capital of The Company was changed from
856,487,181.00Yuan to 855,908,981.00 Yuan.
On May 4, 2018, The Company held the 21st meeting of the 7th Board of Directors, and
reviewed and approved the “Proposal on Repurchasing and Retiring Partially Restricted Stocks
of the 2015 Restricted Stock Incentive Plan". On June 29, 2018, after The Company's
repurchase and cancellation, The Company implemented the corresponding capital reduction
procedures according to law. The registered capital of The Company was changed from
855,908,981.00 Yuan to 855,434,087 .00Yuan.
On January 17th, 2019, the 1st interim shareholders’ meeting was held and approved for
“Proposal on Termination of the 2016 Restricted Stock Incentive Plan and Repurchasing and
Retiring Restricted Stocks Plan”. Up to February 25th, 2019, The Company has completed the
repurchasing and retiring stocks plan, respectively The Company shall perform the
corresponding capital reduction procedures in accordance with the law and the registered capital
decreased from 855,434,087.00Yuan to 843,212,507.00Yuan.
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
64 / 188
air-conditioning and refrigeration equipment. The scope of business includes research and
development, design, manufacture, sale, lease, installation and repair of refrigeration and heat
equipment, accessories, spare parts, and energy-saving and environmental protection products;
Technical services, technical consultation, technical promotion; Design, construction,
installation repair and maintenance of complete sets of refrigeration and air conditioning
projects, mechanical and electrical installation projects, steel structure projects, anti-corrosion
and heat preservation works; Rental of premises; Transport of ordinary goods; Property
management; Low temperature storage; Import and export of goods and technologies. (With the
exception of projects subject to approval according to law, independently carry out business
activities according to law with the business license).
II. The scope of consolidation
There are 14 entities included in the current consolidated financial statements. This year, entities
within the consolidation scope aren’t changed comparing to last year. For the specific
information of the consolidation scope, see the notes of “VII. The Change of Scope of
Consolidation” and “VIII. The Equity in Other Entities”.
III. Financial Statements Preparation Basis
（1） Preparing basis
The Company’s financial statements are prepared on the basis of going concern assumption,
according to the actual occurred transactions and events and in accordance with ‘Accounting
Standards for Business Enterprises’ and relevant regulations, and also based on the note IV
“Significant Accounting Policies and 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.
IV. Significant Accounting Policies and Accounting Estimates
1. Declaration for compliance with accounting standards for business enterprises
The financial statements are prepared by the Company 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 Company truly and fully.
2. Accounting period
The Company adopts the Gregorian calendar year as accounting period from Jan 1 to Dec 31.
3. Operating cycle
65 / 188
The Company sets twelve months for one operating cycle and as the liquidity criterion for assets
and liability.
4. Functional currency
The Company 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 Company 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 Company 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 Company
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
66 / 188
minority interest” and “total comprehensive income attributed to minority interest” title.
If a subsidiary is acquired under common control, its operation results and cash flow shall be
consolidated since the beginning of the consolidation period. When preparing the comparative
consolidated financial statements, adjustments shall be made to relevant items of comparative
figures as regarded that reporting entity established through consolidation has been always there
since the point when the ultimate controlling party starts to have the control.
If a business consolidation under common control is finally achieved in stages, consolidation
accounting method shall be disclosed additionally for the period in which the control is obtained.
For example, if a business consolidation under common control is finally achieved in stages,
when preparing the consolidated financial statements, adjustments shall be made for the current
consolidation status as if consolidation has always been there since the point when the ultimate
controlling party starts to control. In preparation of comparative figures, asset and liability of the
acquiree shall be consolidated into the Company’s comparative financial statements, but to the
extent no earlier than the point when the Company 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 Company 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 Company 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,
67 / 188
excluding the other comprehensive income from the movement on the remeasurement of ne
asset or liability of defined benefit plan.
When the Company partially disposes of the long –term equity investment in subsidiary without
losing the control over it, in the consolidated financial statements, the difference, between
disposals price and respective disposed value of share of net assets in the subsidiary since the
acquisition date or combination date, shall be adjusted for capital surplus or share premium, no
enough capital surplus, then adjusted for retained earnings.
When the Company 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 Company 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 Company’s joint arrangement includes joint operation and joint venture. For joint operation,
The Company 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 Company refers to cash on hand and bank
deposit. The cash equivalents refer to short-term (normally with original maturities of three
68 / 188
months or less) and liquid investments which are readily convertible to known amounts of cash
and subject to an insignificant risk of changes in value.
9. Translation of foreign currency
(1) Foreign currency transaction
Foreign currency transactions are translated at the spot exchange rate issued by People’s Bank
of China (“PBOC”) on the 1st day of the month when the transactions incurred. Monetary assets
and liabilities in foreign currencies are translated into RMB at the exchange rate prevailing at
the balance sheet day. Exchange differences arising from the settlement of monetary items are
charged as in profit or loss for the period. Exchange differences of specific borrowings related
to the acquisition or construction of a fixed asset should be capitalized as occurred, before the
relevant fixed asset being acquired or constructed is ready for its intended uses.
(2) Translation of foreign currency financial statements
The asset and liability items in the foreign currency balance sheet should be translated at a spot
exchange rate at the balance sheet date. Among the owner’s equity items except “undistributed
profit”, others should be translated at the spot exchange rate when they are incurred. The
income and expense should be translated at spot exchange rate when the transaction incurs.
Translation difference of foreign currency financial statements should be presented separately
under the other comprehensive income title. Foreign currency cash flows are translated at the
spot exchange rate on the day when the cash flows incur. The amounts resulted from change of
exchange rate are presented separately in the cash flow statement.
10. Financial assets and financial liabilities
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
69 / 188
asset into account. Subsequently the Company shall measure the financial asset at amortized
cost. A gain or loss on a financial asset measured at amortized cost, which isn’t any part of
hedging relationship 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.
The financial assets of this category include: receivable, notes receivable and other receivables.
A financial asset shall be measured at fair value through other comprehensive income if both of
the following conditions are met: ①the financial asset is held within a business model whose
objective is achieved by both collecting contractual cash flows and selling financial assets and
②the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding. At initial
recognition, the Company shall measure this financial asset at its fair value and take any
transaction costs that are directly attributable to the financial asset into account. A gain or loss
on a financial asset measured at fair value through other comprehensive income, which is not
part of hedging relationship 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 accounted in the profit or loss account when the financial asset is derecognized.
The financial assets of this category include: receivable financing.
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.
70 / 188
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. Any
gain or loss on FVTPL shall be accounted into profit and loss. The financial assets of this
category include: tradable financial asset other non-current financial asset.
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 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 at the derecognition date 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 ( financial assets involved in transfer
must qualify the following conditions: the financial asset is held within a business model whose
objective is to hold financial assets in order to collect contractual cash flows; 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 financial asset is
held within a business model whose objective is to hold financial assets in order to collect
contractual cash flows; 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
71 / 188
1) Classification, basis for recognition and measurement
The company shall classify all financial liabilities as subsequently measured at amortized cost
by applying effective interest method, 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. 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.
② financial assets transfers that do not qualify for derecognition or financial liability is formed
from continuing involvement in transferred assets. This type of liability shall be measured in
accordance with the financial assets transfer standard.
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.
After initial recognition, the Company as an issuer of such a contract shall subsequently
measure it at the higher of: the amount initially recognized less the cumulative amount of
income recognized in accordance with the revenue standards and the amount of the loss
allowance determined in accordance with the financial instrument impairment standard.
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.
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
72 / 188
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 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 Company member and instrument holder
into consideration. If the Company 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
73 / 188
and no fair value change shall be recognized.
(6) Financial asset impairment
Based on expected credit loss, the Company shall apply the impairment requirements for the
recognition and measurement of a loss allowance for the followings: ① a financial asset
measured at amortized cost; ② a financial asset measured at FVTOCI(the financial asset is
held within a business model whose objective is achieved by both collecting contractual cash
flows and selling financial assets and 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.); ③ lease receivable; ④ a contractual asset.
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.
The Company shall always measure the loss allowance at an amount equal to lifetime expected
credit losses for the following items: ①receivables or contract assets originated from trade
within regulation of Accounting Standard for Business Enterprises No. 14 – Revenue, regardless
any significant financing component is contained. ②Receivable of finance lease payment ③
receivable of operating lease payment.
Apart from the above items, other financial assets shall be assessed for impairment loss
allowance ①if 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. ②if 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. ③ if purchased
or originated financial asset is impaired, 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.
For a financial asset measured at FVTOCI(the financial asset is held within a business model
whose objective is achieved by both collecting contractual cash flows and selling financial
assets and 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.) , the
Company shall apply the impairment requirements for the recognition and measurement of a
loss allowance for financial assets that are measured at fair value through other comprehensive
income. However, the loss allowance shall be recognized in other comprehensive income,
impairment loss or gain shall be accounted into profit and loss and shall not reduce the carrying
amount of the financial asset in the statement of financial position. Credit loss allowance
74 / 188
increase or reverse for financial instrument other than a financial asset measured at FVTOCI
shall be accounted into profit and loss as impairment loss or gain.
1) Assessment of significant increase in credit risk
At each reporting date, the Company shall assess whether the credit risk on a financial
instrument has increased significantly since initial recognition. To make that assessment, the
Company shall compare the risk of a default occurring on the financial instrument as at the
reporting date with the risk of a default occurring on the financial instrument as at the date of
initial recognition. However, the Company may assume that the credit risk on a financial
instrument has not increased significantly since initial recognition if the financial instrument is
determined to have low credit risk at the reporting date. In general, if the contractual payments
are more than 30 days past due, it indicates the increase in the credit risk unless reasonable and
supportable information , which is available without undue cost or effort to indicate no
significant increases in credit risk since initial recognition, even though the contractual
payments are more than 30 days past due. The Company considers reasonable and supportable
information, that is available without undue cost or effort including forward looking.
If in the aspect of individual instrument, the Company can't obtain sufficient evidence about
credit risk increased significantly at a reasonable cost, but portfolio evaluation is feasible, the
Company will group the instruments and assess whether the credit risk increased significantly
based on the portfolio in accordance with the common characteristics of credit risk of financial
instrument.
2) Measurement of expected credit losses
The Company shall measure expected credit losses of a financial instrument in a way that
reflects: ①an unbiased and probabilityweighted amount that is determined by evaluating a
range of possible outcomes; ② the time value of money; and ③reasonable 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 determines the credit loss of lease receivable and financial guarantee contracts
based on the individual asset or contract.
The Company determines the expected credit loss of trade receivable and contract asset on the
basis of portfolios, which are considered by expected credit loss measurement reflection, by
reference to historical experience of credit loss and by comparison of receivable past due days/
receivable age with default risk rate, unless the single credit loss is separately recognized for
contractual payments that is significant in amount and credit impaired.
The Company determines the expected credit loss of a financial asset measured at FVTOCI(the
financial asset is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets and the contractual terms of the financial
75 / 188
asset give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.) and a financial asset measured at amortized cost on the
basis of portfolio unless the single credit loss is separately recognized for contractual payments
that is significant in amount and credit impaired.
The Company groups the financial instruments based on the portfolio in accordance with the
common characteristics of credit risk which involves type of financial instrument, credit risk
grade, geographic location and industry of debtors.
The Company measures the expected credit loss on financial instrument based on the
followings:
①financial asset, credit loss is the present value of difference between the receivable of
contracted cashflow and expected cashflow.
②lease receivable, credit loss is the present value of difference between the receivable of
contracted cashflow and expected cashflow. Cash flow used for measurement of credit loss is
consistent with the cash flow used for lease receivable in accordance with leasing standard.
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 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 age portfolio, other than past due credit loss assessment based on individual item.
76 / 188
11. Provision for Impairment of Trade receivables
The Company’s receivables include notes receivable, receivable, receivable expected credit loss
recognition and accounting.
（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 No 14-Revenue Standard
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.
If the receivable is generated from transactions in accordance with No14-Revenue Standard and
despite any significant financing component is contained or not, it shall be measured for 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 or the receivables with significantly different credit risk due to contacted repayment
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.
①Notes receivable
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
Lower credit risk assessed by the management, no
Bank acceptance note portfolio
expected credit loss recognition
Commercial acceptance note Same as receivables portfolio and provided for excepted
portfolio credit loss allowance based on expected credit loss rate
②Trade receivables and other receivables
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.
77 / 188
Portfolio category Expected credit loss accounting estimate policy
Related parties portfolio within the Lower credit risk assessed by the management, no
consolidation expected credit loss recognition
Other related parties and non-related
Excepted credit loss rate for allowance
parties portfolio
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”
12. Receivable financing
During the liquidity management of the Company, majority of the bill receivables is endorsed or
discounted prior to the bill due date and endorsed or discounted bill receivables are
derecognized after the all risks and rewards have been transferred to the counter party. The
business model for managing bill receivables is not only for collecting contractual cash flows
but also for selling the financial assets as its objective, therefore it is classified as financial
assets that are measured at fair value through other comprehensive income
13. Other receivable
Other receivable shall be measured based on the followings:① the credit risk on a financial
asset has not increased significantly since initial recognition, the Company shall measure the
loss allowance at an amount equal to 12month expected credit losses.② there have been
significant increases in credit risk, the Company shall measure the loss allowance for a financial
78 / 188
instrument at an amount equal to the lifetime expected credit losses. ③purchased or originated
credit-impaired financial assets, the Company shall measure the loss allowance for a financial
instrument at an amount equal to the lifetime expected credit losses.
Assessment is based on the portfolio. The Company is unable to obtain the sufficient evidence
on the credit risk significant increase at the rational cost at individual instrument level, but it is
feasible to assess whether the credit risk increased significantly based on the portfolio.
Therefore, the Company groups the other receivable for credit risk increase assessment based on
the common risk characteristic such as age, nature and the industry in which debtors are.
14. Inventories
Inventories are materials purchasing, raw material, low-valuable consumable, materials
processed on commission, working-in-progress, semi-finished goods, variance of semi-finished
goods, and finished goods, etc.
The inventories are processed on perpetual inventory system, and are measured at their actual
cost on acquisition. Weighted average cost method is taken for measuring the inventory
dispatched or used. Low value consumables and packaging materials is recognized in the
income statement by one-off method.
After year-end 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 and work-in-progress 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.
15. Contract asset
(1) Recognition and criterion
Contract asset is an entity’s right to consideration in exchange for goods or services that the
entity has transferred to a customer when that right is conditioned on something other than the
passage of time. For example, the Company sold two goods that can be clearly distinguished to
the client, then the Company has the right to consideration in exchange of the goods because
one of the goods are delivered, but the consideration’s collection is conditioned on the other
goods delivery, in this case, the right to consideration shall be recognized as contract asset.
(2) Expected credit loss recognition and accounting of contract asset
Expected credit loss recognition of contract asset is referred to the Note XI. Provision for
Impairment of Trade receivables.
79 / 188
On the balance sheet date, expected credit loss of contract asset shall be calculated and the
difference shall be recognized as the impairment loss if the loss figure worked out is bigger than
the carrying amount of the provision for impairment of contract asset, and debit “asset
impairment loss”, credit “provision for impairment of contract asset”. On the contrary, the
Company shall recognize the difference as impairment profit and keep the opposite accounting
record.
If the actual credit loss incurred and the contract asset is unable to be collected with
confirmation, after the approval is given, the loss shall be written off based on the approved
amount and debit “provision for impairment of contract asset”, credit “contract asset”. If the
amount to be written is greater than the provision, the difference shall be debited to “asset
impairment loss”.
16. Contract cost
(1) Assets recognition methods in relation to contract cost
Assets relevant to contract cost in the Company include cost to fulfill the contract and cost to
obtain a contract.
If the costs incurred in fulfilling a contract with a customer are not within the scope of another
Standard, an entity shall recognize an asset from the costs incurred to fulfill a contract only if
those costs meet all of the following criteria: the costs relate directly to a contract or to an
anticipated contract, including direct labor, direct materials and overheads which is clearly
stated to be borne by the client and any other cost in line with the contract; the costs enhance
resources of the entity that will be used in performance obligations in the future; and the costs
are expected to be recovered.
An entity shall recognize an asset as the incremental costs of obtaining a contract with a
customer if the entity expects to recover those costs. an entity may recognize the incremental
costs of obtaining a contract as an expense when incurred if the amortization period of the asset
t is one year or less. The incremental costs of obtaining a contract are those costs that an entity
incurs to obtain a contract with a customer that it would not have incurred if the contract had not
been obtained (for example, a sales commission). Costs to obtain a contract that would have
been incurred rather than the incremental cost expected to be recovered shall be recognized as
an expense when incurred, unless those costs are explicitly chargeable to the customer
regardless of whether the contract is obtained
(2) Amortization of asset relevant to contract cost
An asset recognized in accordance with contract cost shall be amortized on a systematic basis
that is consistent with the transfer to the customer of the goods or services to which the asset
relates.
(3) Impairment of asset relevant to contract cost
80 / 188
When determining the impairment loss of the assets related to the contract cost, the Company
shall firstly determine the impairment loss of the assets related to the contract that are
recognized in accordance with the other accounting standards. If the book value of the asset is
higher than the remaining consideration expected to be obtained by the Company for the
transfer of the goods related to the asset and the estimated cost to be incurred for the transfer of
the goods related to the asset, the excess part shall be withdrawn as an impairment provision and
recognized as an impairment loss of the asset.
An entity shall recognize in profit or loss a reversal of some or all of an impairment loss
previously recognized when the impairment conditions no longer exist or have improved. The
increased carrying amount of the asset shall not exceed the amount that would have been
determined (net of amortization) if no impairment loss had been recognized previously.
17.Long-term receivable
Refer to 10. (6) Impairment of financial assets.
18. Long-term equity investment
Long term equity investments are the investment in subsidiary, in associated company and in
joint venture.
Joint control is the contractual agreement sharing of control over an economic activity by all
participants or participants’ combination and decisions or policies relating to the operating
activity of the entity require the unanimous consent of the parties sharing the control.
Significant influence exists when the entity directly or indirectly owned 20% or more but less
than 50% shares with voting rights in the investee company. If holding less than 20% voting
rights, the entity shall also take other facts or circumstances into accounts when judging any
significant influences. Factors and circumstances include: representation on the board of
directors or equivalent governing body of the investee, participation in financial or operating
activities policy-making processes, material transactions between the investor and the investee,
interchange of managerial personnel or provision of essential technical information.
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
81 / 188
bundled transaction, the entity shall regard all transactions as a one for accounting. If it’s not a
bundled transaction, the carrying amount presented in the consolidated financial statements of
the share of net assets at the combination date in the acquired company since acquisition is
determined as for the initial cost of long-term equity investment. The difference between the
cost initially recognized and carrying amount of long-term equity investment prior to the
business combination plus the newly paid consideration for further share acquired, and capital
reserve shall be adjusted accordingly. If no enough capital reserve is available for adjustment,
retain earnings shall be adjusted.
If long-term equity investment is acquired through business combination not under common
control, initial investment cost shall be the combination cost.
If the equity of investee not under common control is acquired by stages and business
combination incursion the end, an entity shall disclose the accounting method for long-term
equity investment in the parent financial statement as a supplemental. If the equity investment
of investee not under common control is acquired by stages and business combination incursion
the end, and it’s a bundled transaction, the entity shall regard all transactions as a one for
accounting. If it’s not a bundled transaction, the carrying amount of the equity investment held
previously plus newly increased investment cost are taken as the initial investment cost under
cost model. If equity investment is held under equity method before the acquisition date, other
comprehensive income under equity method previously shall not be adjusted accordingly. When
disposing of the investment, the entity shall adopt the same basis as the investee directly
disposing of related assets or liability for accounting treatment. Prior to acquisition date, if the
share is designated as non-tradable equity instrument measured at FV through other
comprehensive income, the accumulated change on fair value previously recorded in other
comprehensive can not be transferred into current profit and loss.
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 Company 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.
82 / 188
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 under equity method, other comprehensive income recorded
shall be accounted on the same basis as the investee directly disposing of related assets or
liability when equity method is not used any longer. The movements of shareholder’s equity,
other than the net profit or loss, other comprehensive income and profit distribution 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 accounted for
in line with the Recognition and Measurement of Financial Instruments Standard -No 22 of
Accounting Standards for Business Enterprises(No7 Caikuai [2017]), 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 and carried over on the same basis as the investee directly disposing of related
assets or liability when stopping using under equity model. The movements of shareholder’s
equity, other than the net profit or loss, other comprehensive income and profit distribution
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 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 in
accordance with the Recognition and Measurement of Financial Instruments Standard -No 22 of
83 / 188
Accounting Standards for Business Enterprises(No7 Caikuai [2017]), 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.
19. Investment property
The investment property includes property and building and measured at cost model
Estimated net
Useful life
Category residual value rate Annual depreciation rate
(years)
(%)
Housing and Buildings 40 3% 2.43%
20. Fixed assets
Recognition criteria of fixed assets: defined as the tangible assets which are held for the
purpose of producing goods, rendering services, leasing or for operation & management, and
have more than one year of useful life.
Fixed assets shall be recognized when the economic benefit probably flows into the Company
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 Company. Estimated net residual value rate, useful life, depreciation rate as follows:
Useful life Estimated net residual Annual
No Category
(years) 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%
84 / 188
The Company 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.
21. Construction in progress
Constructions in progress are carried down to fixed assets based on the construction budget
and actual costs on the date when completing and achieving estimated usable status, and the
fixed assets should be withdrawn deprecation in the next month. Adjustment will be
conducted upon confirmation of their actual values after implementing the completion and
settlement procedures.
22. Borrowing costs
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 excesses the special
borrowing, multiplied by the capital rate. The capital rate is the weighted average rate of the
common borrowings.
23. Right-of-use assets
An asset that represents a lessee’s right to use an underlying asset for the lease term.
（1） Initial recognition
At the commencement date, a lessee shall measure the right-of-use asset at cost.
The cost of the right-of-use asset shall comprise:
① the amount of the initial measurement of the lease liability,
② any lease payments made at or before the commencement date, less any lease incentives
received, which is the incremental cost for the lease
85 / 188
③ any initial direct costs incurred by the lessee which is the incremental cost
④ an estimate of costs to be incurred by the lessee in dismantling and removing the
underlying asset, restoring the site on which it is located or restoring the underlying asset to
the condition required by the terms and conditions of the lease, unless those costs are incurred
to produce inventories.
（2） Subsequent measurement
After the commencement date, a lessee shall measure the right-of-use asset applying a cost
model. To apply a cost model, a lessee shall measure the rightofuse asset at cost less any
accumulated depreciation and any accumulated impairment losses; and adjusted for any
remeasurement of the lease liability specified in the lease standard
Depreciation of right-of -use asset
Since the commencement date, the Company shall depreciate the right-of-use asset.
Depreciation shall be made in the month of lease commencement and shall be accounted in
the cost of related asset or profit and loss.
When determining the depreciation method, straight line method is used for depreciation
based on the expected way of consuming of economic benefit related to the right-of-use asset.
The Company shall follow the following principles when determining the depreciation life of
the use-right asset: if the ownership of the leased asset can be reasonably determined at the
end of the lease term, depreciation shall be calculated and deducted during the remaining
service life of the leased asset; Where it is not certain that the ownership of the leased asset
can be acquired at the end of the lease term, depreciation shall be calculated during the period
of the shorter of the lease term and the remaining service life of the leased asset.
Impairment
The Company shall depreciate the right-of-use asset subsequently based on the book value
after impairment loss deduction if impairment is applicable.
24. Intangible assets
The intangible assets of the Company refer to land use right and software, patent,
non-patented technology and other intangible asset should be measured at actual costs. For
acquired intangible assets, the actual costs 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, which the actual costs should be determined by the
fair value.
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
86 / 188
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.
25. Impairment of long-term assets
The Company assesses at each balance sheet date whether there is any indication that
long-term equity investments, investment property, fixed assets, construction in progress,
right-of-use assets 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 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 recognized as an impairment loss and charged to profit
or loss for the period. Once an impairment loss on the assets is recognized, it is not reversed
in a subsequent period.
After assets impairment loss is recognized, depreciation and amortization 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 amortized systematically within the
remaining life.
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.
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.
26. Long-term deferred expenses
Long-term deferred expenses of the Company refer to leasing expenses, redecoration expense
and others. The expenses should be amortized evenly over the beneficial period. If the
87 / 188
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. The
amortization period should be determined by the contract. If the contract without the
amortization period specification, leasing expenses will be amortized within 10 years and
30years; redecoration expense and others will be amortized within 3 years.
27. Contract liability
An entity’s obligation to transfer goods or services to a customer for which the entity has
received consideration (or the amount is due) from the customer. If a customer pays
consideration, or an entity has a right to an amount of consideration that is unconditional
before the entity transfers a good or service to the customer, the entity shall present the
contract as a contract liability when the payment is made or the payment is due (whichever is
earlier).
28. Employee benefits
Employee’s benefit comprises short-term benefit, post-employment benefit, termination
benefit and other long-term employee’s benefit.
Short-term benefit includes salary, bonus, allowance, welfare, social insurance, housing funds,
labor 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 Company, 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 Company 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.
88 / 188
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.
29. Lease obligation
(1) Initial measurement of the lease liability
At the commencement date, a lessee shall measure the lease liability at the present value of
the lease payments that are not paid at that date.
1) The lease payments
The lease payments included in the measurement of the lease liability comprise the following
payments for the right to use the underlying asset during the lease term that are not paid at the
commencement date: ① fixed payments (including in-substance fixed payments) less any
lease incentives receivable;② variable lease payments that depend on an index or a rate,
initially measured using the index or rate as at the commencement date;③ the exercise price
of a purchase option if the lessee is reasonably certain to exercise that option ④ payments of
penalties for terminating the lease, if the lessee will certainly exercise an option to terminate
the lease during the lease term.⑤ amounts expected to be payable by the lessee under
residual value guarantees;
2) Discount rate
When calculating the present value of the lease payments, interest rate implicit in the lease
shall be used. The rate of interest that causes the present value of the lease payments and the
unguaranteed residual value to equal the sum of the fair value of the underlying asset and any
initial direct costs of the lessor. If the rate cannot be readily determined, the Company shall
use the lessee’s incremental borrowing rate, which is the rate of interest that a lessee would
have to pay to borrow over a similar term, and with a similar security, the funds necessary to
obtain an asset of a similar value to the right-of-use asset in a similar economic environment.
The implicit interest rate is relevant to the followings: ①the Company’s own situation:
solvency and creditability ② “borrow term”: lease term ③ “borrowed fund” amount:
lease liability amount ④“pledge condition”: nature and quality of underlying assets ⑤
economic environment includes the jurisdiction in which the lessee is located, the currency of
denomination, and when the contract was signed. The Incremental borrowing rate is derived
by the Company based on the bank lending rate and adjusted for the above factors.
(2) Subsequent measurement
89 / 188
After the commencement date, the Company shall measure the lease liability by: ①
increasing the carrying amount to reflect interest on the lease liability; ② reducing the
carrying amount to reflect the lease payments made; ③ remeasuring the carrying amount to
reflect any reassessment or lease modifications.
Interest on the lease liability in each period during the lease term shall be the amount that
produces a constant periodic rate of interest on the remaining balance of the lease liability and
be recognized as in profit or loss unless its capitalization. A constant periodic rate of interest
is the discounting rate used for initial measurement of lease liability, or revised discounting
rate for lease liability remeasurement because of the lease payment or lease change.
(3) Remeasurement
After the lease commencement date, lease payment shall be remeasured if the following
circumstances incurred, and the lease liability shall be remeasured at the present value which
is based on the revised lease payment and revised discounting rate. A lessee shall recognize
the amount of the remeasurement of the lease liability as an adjustment to the right-of-use
asset. However, if the carrying amount of the right-of-use asset is reduced to zero and there is
a further reduction in the measurement of the lease liability, a lessee shall recognize any
remaining amount of the remeasurement in profit or loss. ①change of in-substance fixed
payments (subject to original discounting rate) ② change of amounts expected to be payable
under residual value guarantees(subject to original discounting rate) ③ change of an index
or a rate used for future lease payments(subject to revised discounting rate) ④ change in
assessment of a buy option(subject to revised discounting rate) ⑤ change in assessment of a
renew option or termination option or actual situation(subject to revised discounting rate).
30. Provision
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.
When determining the best estimate, need 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.
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.
90 / 188
31. 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 recognized 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
Company 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 recognized 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
achieved, the fair value of liabilities undertaken by the Company are re-measured at each
balance sheet date based on the best estimate of exercisable situation. According to the fair
value which the Company incurred liabilities, and recognizing acquired services as costs or
expenses, and adjust liabilities accordingly.
The fair value of the liabilities is re-measured at each balance sheet date. Any changes are
recognized in the profit or loss for the year.
If the granted equity instruments are cancelled within the vesting period (apart from the
situation where the vesting condition is not satisfied), the equity instrument shall be treated as
accelerated vesting and regarded as all share based payment plan satisfying vesting condition,
and all expense during the remaining vesting period shall be accounted at the same period
when the granted equity instruments are cancelled.
32. Principle of recognition and measurement of revenue
Accounting policy
The revenue of the Company is mainly from selling goods, providing engineering installation
services.
The Company shall recognize revenue when (or as) the Company satisfies a performance
obligation by transferring a promised good or service to a customer. An asset is transferred
when (or as) the customer obtains control of that asset.
If the contract includes two or more performance obligations, at the inception date of contract,
the Company shall allocate the transaction price to each performance obligation identified in
the contract on a relative standalone selling price ratio basis and measure the revenue at the
allocated transaction price to each performance.
The transaction price is the amount of consideration to which the Company expects to be
91 / 188
entitled in exchange for transferring promised goods or services to a customer, excluding
amounts collected on behalf of third parties. The determined transaction price shall be limited
to the extent where the maximum reversal amount of revenue recognized with the least
possibility once the uncertainty related to the variable consideration is removed. The
Company shall recognize a refund liability if the entity receives consideration from a
customer and expects to refund some or all of that consideration to the customer. Where a
significant financing component exists in the contract, the transaction price shall be measured
at the assumed price that the payment is made by cash as the client receive the control right of
goods or services. The difference between the promised consideration and the cash selling
price shall be amortized within the contract period at effective interest rate. The Company
need not take the financing component into the consideration if the entity expects, at contract
inception, that the period between when the entity transfers a promised good or service to a
customer and when the customer pays for that good or service will be one year or less.
When the Company transfers control of a good or service over time, it satisfies a performance
obligation and recognizes revenue over time only if one of the following criteria is met,
otherwise it shall be the performance obligation at a point in time.
(1) the customer simultaneously receives and consumes the benefits provided by the entity’s
performance as the entity performs
(2) the Company’s performance creates or enhances an asset (for example, work in progress)
that the customer controls as the asset is created or enhanced
(3) the entity’s performance does not create an asset with an alternative use to the entity and
the entity has an enforceable right to payment for performance completed to date
If it is performance obligation over time, the Company shall recognize the revenue in
accordance with the progress of performance obligation and measure the progress based on
input method. In the circumstances, the Company may not be able to reasonably measure the
progress of a performance obligation, but the Company expects to recover the costs incurred
in satisfying the performance obligation. In those circumstances, the entity shall recognize
revenue only to the extent of the costs incurred until such time that it can reasonably
measure the progress of the performance obligation.
It satisfies a performance obligation at a point in time when the control right of goods or
services are received by the client, and revenue shall be recognized. Judging whether the
client has received the control right, the following indicators shall be considered:
(1) The entity has a present right to payment for the asset
(2) The legal title to the asset has been transferred to the customer
(3) The Company has transferred physical possession of the asset to the client
92 / 188
(4) The Company has transferred the significant risks and rewards of ownership of an asset
to the customer
(5) The customer has accepted the goods or service
The right of receiving the consideration the Company entitled to, as the goods or service
have been transferred, shall be listed as contract asset and impairment provision shall be
based on the expected credit loss. Unconditioned right of receiving the consideration shall be
listed as receivable. The obligation shall be listed as contract liability where the Company
has received consideration, but services or goods not transferred to the customer.
.33. 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 or 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 expenses are incurred. Government grants relating to
compensation for related expenses or losses already incurred are charged directly to the
profit or loss for the period. Government grants related to daily business, shall be recognized
as other income in accordance with business nature or offsetting related expenses, otherwise,
shall be recognized as non-operating income or expenses.
93 / 188
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.
34. 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 income 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 income tax liabilities shall be
recognized for any temporary difference arising from goodwill initially recognition. No
deferred income 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
income tax assets and deferred income 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 income 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.
35. Lease
(1) Lease identification
Lease: A contract, or part of a contract, that conveys the right to use an asset (the underlying
asset) for a period of time in exchange for consideration. At inception of a contract, the entity
shall assess whether the contract is, or contains, a lease. A contract is, or contains, a lease if
the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. In order to confirm whether the right to control the use of an
identified asset for a period of time has been conveyed, the Company assess whether the
client in the contract has the right to obtain substantially all of the economic benefits from use
of the asset throughout the period of use and has the right to direct the use of the identified
asset during the period of using the identified asset.
For a contract that is, or contains several leases, the Company shall separate the contract and
account each lease separately. The Company shall account for each lease component
94 / 188
separately from non-lease components of the contract if the contract contains lease and
non-lease components.
(2) As a leasee
1) Recognition
At the commencement date, the Company as a lessee shall recognize a right-of-use asset and
a lease obligation. Recognition and measurement of right-of-use asset and a lease obligation
is referred to 23. Right-of -use asset and 29. Lease obligation
2) Lease modification
Lease modification is a change in the scope of a lease, or the consideration for a lease, that
was not part of the original terms and conditions of the lease (for example, adding or
terminating the right to use one or more underlying assets, or extending or shortening the
contractual lease term). Lease modification effective date is the date when both parties agree
to a lease modification.
The Company shall account for a lease modification as a separate lease if both condition are
satisfied: ① the modification increases the scope of the lease by adding the right to use one
or more underlying assets or extending the contractual lease term. ② the consideration for
the lease increases by an amount commensurate with the stand-alone price for the increase in
scope or the contractual lease term extension and any appropriate adjustments to that
stand-alone price to reflect the circumstances of the particular contract.
For a lease modification that is not accounted for as a separate lease, at the effective date of
the lease modification the Company shall: allocate the consideration in the modified contract;
determine the lease term of the modified lease and remeasure the lease liability by
discounting the revised lease payments using a revised discount rate. The Company used the
interest rate implicit in the lease for the remainder of the lease term as discounting rate. The
lessee’s incremental borrowing rate at the effective date of the modification will be used if the
interest rate implicit in the lease cannot be readily determined. The effect on above
adjustments of lease liability shall be accounted respectively in accordance with the
followings: ①decreasing the carrying amount of the right-of-use asset to reflect the partial or
full termination of the lease for lease modifications that decrease the scope of the lease. The
lessee shall recognize in profit or loss any gain or loss relating to the partial or full
termination of the lease. ② making a corresponding adjustment to the right-of-use asset for
all other lease modifications.
3) Short-term lease and low value asset lease
The Company has chosen not to recognize the right-of-use asset and lease liability for
short-term lease ( lease term less than 12 months) and low value asset when it is single leased
new asset. In this case, lease payment will be accounted directly in profit or loss or on the
95 / 188
straight-line basis in profit or loss.
(3) As a lessor
Based on the assessment of (1) lease contract or lease contract contained, as a lessor, at the
inception date, lease is classified as finance lease and operating lease.
A lease is classified as a finance lease if it transfers substantially all the risks and rewards
incidental to ownership of an underlying asset. Other lease is classified as an operating lease
unless a finance lease.
Examples of situations that individually or in combination would normally lead to a lease
being classified as a finance lease are: ①the lease transfers ownership of the underlying asset
to the lessee by the end of the lease term; ②the lessee has the option to purchase the
underlying asset at a price that is expected to be sufficiently lower than the fair value at the
date the option becomes exercisable for it to be reasonably certain, at the inception date, that
the option will be exercised; ③the lease term is for the major part of the economic life of the
underlying asset even if title is not transferred(not shorter than 75% of leased asset life); ④
at the inception date, the present value of the lease payments amounts to at least substantially
all of the fair value of the underlying asset( not lower than 90% of leased asset FV); ⑤ the
underlying asset is of such a specialized nature that only the lessee can use it without major
modifications. Indicators of situations that individually or in combination could also lead to a
lease being classified as a finance lease are: ①if the lessee can cancel the lease, the lessor’s
losses associated with the cancellation are borne by the lessee; ②gains or losses from the
fluctuation in the fair value of the residual accrue to the lessee; ③the lessee has the ability to
continue the lease for a secondary period at a rent that is substantially lower than market rent.
1) Financing lease
Initial measurement
At the commencement date, the Company shall recognize the lease payment receivable and
derecognize of finance lease asset. When initially measuring the lease payment receivable, net
lease investment value shall be used for the lease payment receivable.
Net lease investment value equals to the any residual value guarantees plus the PV of undue
lease receivable discounted at the interest rate implicit in the lease. Lease receivable is that
lessor conveys the right to use an asset (the underlying asset) for a period of time in exchange
for consideration including ① fixed payments (including in-substance fixed payments) less
any lease incentives receivable;② variable lease payments that depend on an index or a rate,
initially measured using the index or rate as at the commencement date;③ the exercise price
of a purchase option if the lessee is reasonably certain to exercise that option ④ payments of
penalties for terminating the lease, if the lessee will certainly exercise an option to terminate
the lease during the lease term.⑤ residual value guarantees expected by the lessee and the
96 / 188
independent 3rd party relevant to the lessee with the economic ability to guarantee.
Subsequent measurement
The Company shall recognize interest income over the lease term based on a constant
periodic rate, which is the implicit discounting rate of return on the lessor’s net investment in
the lease.( if sublease applicable, implicit rate of sublease can not be determined, original
discounting rate of lease shall be adopted after adjustment for initial direct expense relevant to
sublease) or when finance lease modification is not accounted as an separate lease, adjusted
discounting rate will be adopted for the lease since it is classified as finance lease assuming
modification took effect at the commencement date of lease.
Lease modification
The Company shall account for a finance lease modification as a separate lease if both
condition are satisfied: ① the modification increases the scope of the lease by adding the
right to use one or more underlying assets. ② the consideration for the lease increases by an
amount commensurate with the stand-alone price for the increase in scope or the contractual
lease term extension and any appropriate adjustments to that stand-alone price to reflect the
circumstances of the particular contract.
For a finance lease modification that is not accounted for as a separate lease, if the lease
would have been classified as an operating lease and the modification have been in effect at
the inception date, the lessor shall account for the lease modification as a new lease from the
effective date of the modification; and measure the carrying amount of the underlying asset as
the net investment in the lease immediately before the effective date of the lease modification.
2) Operating lease
Lease income
Lease payment received shall be recognized as lease income on a straight-line basis within the
period.
Incentive measures
If the lease-free period is provided, the Company will allocate the total lease income in the
whole lease period on the straight-line basis regardless of lease-free period, and the lease
income shall be recognized during the rent-free period. If the Company bears some expenses
of the lessee, such expenses shall be deducted from the total lease income and the remaining
balance of lease income shall be allocated within the lease period.
Initial direct expense
The Company shall add initial direct costs incurred in obtaining an operating lease to the
carrying amount of the underlying asset and recognize those costs as an expense over the
lease term on the same basis as the lease income.
97 / 188
Depreciation
The depreciation policy for depreciable underlying fixed assets subject to operating leases
shall be consistent with the lessor’s normal depreciation policy for similar assets.
Amortization for other underlying assets subject to operating lease shall be on reasonable
systematic basis.
Variable lease payment
The variable lease payments obtained by the Company related to operating leases, which are
not included in the lease payment received, shall be included in the current profit and loss
when actually incurred
Operating lease modification
A lessor shall account for a modification to an operating lease as a new lease from the
effective date of the modification, considering any prepaid or accrued lease payments relating
to the original lease as part of the lease payments for the new lease.
(4) Special lease
Sales and lease back
1) as a seller and a leasee
In accordance with Revenue Standard-No.14 of Accounting Standards for Business
Enterprises, the Company assesses whether the transfer of the asset is a sale. If the transfer of
assets is not a sale, the Company shall continue to recognize the transferred assets and at the
same time recognize a financial liability equal to the transfer income, and recognize, measure
the financial liability in accordance with the Recognition and Measurement of Financial
Instruments Standard- No. 22 - Accounting Standards for Business Enterprises. If the transfer
of assets is a sale, the Company shall measure the right-of-use asset arising from the
leaseback at the proportion of the previous carrying amount of the asset that relates to the
right of use retained by the Company. Accordingly, the Company shall recognize only the
amount of any gain or loss that relates to the rights transferred to the buyer-lessor.
2) as a buyer and a leasor
If the transfer of assets is not a sale, the Company shall not recognize the transferred asset and
shall recognize a financial asset equal to the transfer proceeds. It shall account for the
financial asset applying Recognition and Measurement of Financial Instruments Standard- No.
22 - Accounting Standards for Business Enterprises. If the transfer of assets is a sale, the
Company shall account for the purchase of the asset applying applicable Standards.
36. Held for sale
（1） Any non-current assets or disposal group shall be classified as held for sale if the
98 / 188
following criteria are met: 1) According to the similar transactions for selling such assets or
disposal group in practice, the assets must be available for immediate sale under current
condition. 2) The sale is highly probable with decision made on a probable selling proposal
and the firm purchase commitment has been obtained, the sale is expected to be completed
within one year. Certain regulations request that approvals must be given by relevant
authority or supervision regulator before the assets can be sold. Prior to the assets initially
classified as held for sale or disposal group, the carrying amounts of the asset (or all the assets
and liabilities in the disposal group) shall be measured in accordance with applicable
accounting standards. The Company shall recognize an impairment loss and account it in to
income statement for the current period, for any initial or subsequent write- down of the asset
(or disposal group) to its fair value less costs to sell if the carrying amount is higher than its
fair value less costs to sell. In the meantime, provision for assets impairment shall be made.
（2） The Company acquires a non-current asset(or disposal group) exclusively with a view
to its subsequent resale, it shall be classified as held for sale at the acquisition date only if the
condition of “expected sale can be completed within one year” can be met and also other
conditions of classified as held for sale can highly probably be met within a short period
following the acquisition(usually with three months). When measuring a newly acquired asset
(or disposal group) meeting the criteria to be classified as held for sale, it shall be measured at
the lower of its carrying amount had it not been so classified and fair value less costs to sell.
Except the non-current assets or disposal group acquired as part of a business combination,
the difference between its fair value less costs to sale and initial carrying amount is
recognized in the income statement.
（3） The Company that loss of control of a subsidiary due to a sale plan of its investment
shall classify its subsidiary planned for sale as a whole as held for sale in the single financial
statement of the parent only if the investment in subsidiary meets the criteria of held for sale,
regardless of whether the Company will retain a proportion of equity interest in its former
subsidiary after sale, and classify all assets and liabilities of the subsidiary as held for sale in
the consolidated financial statements
（4） The Company shall recognize a gain for any subsequent increase in fair value less
costs to sell of an asset and shall reverse the impairment to the extent that previously
recognized when being classified as held for sale, the revisable amount is recognized in the
income statement for the period. Any impairment from the period when the assets are not
classified as held for sale cannot be reversed.
（5） The impairment loss recognized for a disposal group shall reduce the carrying amount
of goodwill of disposal group first, and then reduce the carrying amount of the non-current
assets based on its proportion on the book.
（6）The Company shall recognize a gain for any subsequent increase in fair value less costs
99 / 188
to sell of a disposal group and shall reverse the impairment to the extent that previously
recognized when being classified as held for sale, in accordance with applicable measuring
standards, the revisable amount is recognized in the income statement for the period. Any
impairment from the period when the assets are not classified as held for sale and reduced
goodwill cannot be reversed.
（7）For any subsequently reversed amount, after the impairment loss is recognized for held
for sale disposal group, the Company shall increase the carrying amount of disposal group
based on the proportion of carrying amount of non-current assets excluding goodwill.
（8） Non-current assets classified as held for sale or disposal group shall not be depreciated
or amortized, interest and other expenses attributable to the liabilities of a disposal group
classified as held for sale shall continue to be recognized.
（9） When held for sale assets or disposal group cannot meet the criteria for held for sale
classification so that they are not recognized as held for sale or non-current asset will be
removed from disposal group, they shall be measured at the lower of the following amounts:
⑴carrying amount of assets prior to it classified as held for sale, which is the amount after
depreciation, amortization or impairment adjustment as it had not been classified as held for
sale ; ⑵recoverable amount.
（10）When the Company derecognizes the held for sale assets or disposal group, the
remaining unrecognized gain or loss shall be accounted in the income statement.
37. Discontinued operation
When meeting any one of the following criteria, the component can be identified separately
and the component has already been disposed off or classified as held for sale: (1) the
component represents one independent main business or one single main business area; (2)
the component plans to be part of the related plan which represents one independent main
business or one single main business area; (3) the component was specially acquired for
resale
38. Other significant accounting policies, accounting estimates
When preparing the financial statements, the management needs to use accounting estimate
and assumption, which will have effect on the application of accounting policy and amount of
asset, liability, income and expense. The actual circumstance maybe differs from the estimates.
The management needs to continuously assess the key assumption involved by estimate and
the judgment on uncertainty. Effect on the accounting estimate shall be recognized during the
period when estimate is changed and in future.
The following accounting estimate and key assumption will trigger the significant risk of
significant adjustment on the book value of asset and liability during the period of future.
100 / 188
（1） Impairment of financial instrument
The Company uses expected credit loss model to assess any impairment of financial asset.
When applying expected credit loss model, the Company shall take all necessary factors into
account as requested such as significant judgment, estimate and all reasonable and
supportable information including forward looking information. Repayment history in
conjunction with economic policy, macro environment ratio, industry and sector risk etc shall
also be considered when judging expected change of debtor’s credit risk.
（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 cannot be reversed.
（4） Provision of fixed asset impairment
At the balance sheet date, the management shall implement impairment test on buildings,
plant and machinery etc which has any impairment indicator. The recoverable amount of FA
is the higher of PV of future cash flow and net value of fair value after disposal cost, the
calculation needs accounting estimate.
If management adjust the gross profit margin adopted by the present value of future cash flow
101 / 188
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 cannot 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.
39. Changes in Accounting Policies, Accounting Estimates
(1) Change in significant accounting policies
Changes on accounting policy and reasons Approval progress Memo
On December 7th, 2018, the Ministry of Finance announced
amendment to “No.21-Lease of Accounting Standards for
Business Enterprises"(No35 Caikuai [2018]) (hereinafter
referred to as “new lease standard”). Since January 1, 2019,
the new lease standard took effect for either the company both The accounting policy
listed in overseas and domestic or IFRS or Accounting change has been
th
Standards for Business Enterprises adoption of the company approved by the 18 Note
th
listed overseas. The rest of domestic listed companies shall meeting of the 8
adopt the standard since January 1, 2021. When preparing the generation of board.
financial statements for 2021FY, the policy has been adopted
and the accounting has been done in accordance with this
standard.
Note. New lease standard
New standard took effect since January 1, 2021. New standard improves the lease definition,
add lease identification, split or merge; withdraw the classification for operating lease and
finance lease, requesting to recognize right-of-use asset and lease obligation for all lease apart
from short-term lease and low value asset lease, at the lease inception date. Improve the
102 / 188
subsequent measurement of lease as a lessor, add accounting and disclosure request for lease
modification and reassessment of buy option. Lease recognition and measurement as a lessor
and lessee under new lease standard is referred to No.35 of accounting policy of this Note.
Any existing contract prior to the beginning of the first adoption year, shall not be reassessed by
the Company for lease or contained lease on the first adoption date.
The Company adjusts the opening figure of retain earnings and relevant other items in the
statements for cumulative effect on new lease standard first adoption without adjustment of
comparative figures. Operating lease before first adoption date shall be measured for lease
obligation based on the PV of remaining lease payment at incremental borrowing rate on the
first adoption date and for all leases, right-of-use asset shall be adjusted for lease prepayment in
line with the lease obligation amount.
Lease modification or lease contract signed after first adoption date, at inception of a contract,
the entity shall assess whether the contract is, or contains, a lease in accordance with new lease
standard. A contract is, or contains, a lease if the contract conveys the right to control the use of
an identified asset for a period of time in exchange for consideration. New lease standard has no
significant effect on the lease contract scope within the defined lease contract.
New lease standard adoption effect on opening balance of balance sheet
Consolidated balance sheet
Effect on new
Effected Items December 31st,2020 January 1st,2021
standard adoption
Fixed asset 891,147,058.82 -24,948,202.78 866,198,856.04
Right-of-use asset - 27,449,505.03 27,449,505.03
Non- current liability due
37,157,126.41 1,340,825.77 38,497,952.18
within one year
Lease obligation - 13,818,476.46 13,818,476.46
Long-term payable 14,622,463.75 -12,657,999.98 1,964,463.77
Balance sheet of parent company
Effect on new
Effected Items December 31st,2020 January 1st,2021
standard adoption
Right-of-use asset - 1,775,041.11 1,775,041.11
Non- current liability due within
25,000,034.00 986,385.93 25,986,419.93
one year
103 / 188
Effect on new
Effected Items December 31st,2020 January 1st,2021
standard adoption
Lease obligation - 788,655.18 788,655.18
(2) Changes in significant accounting estimates
No.
V. Taxation
1. The main applicable tax and rate to the Company as follows:
Tax Tax base Tax rate
Value-added tax (VAT) Sales revenue or Purchase 6%、9%、13%、
City construction tax Value-added tax payables 7%
Education surcharge Value-added tax payables 3%
Local education surcharge Value-added tax payables 2%
Enterprise income tax(EIT) Current period taxable profit 15% or 25%
70% of cost of own property
Real estate tax or revenue from leasing 1.2% or 12%
property
Land use tax Land using right area Fixed amount per square meter
According to the relevant
Other tax
provisions of the state and local
Notes for tax entities with different EIT rate
Tax entities EIT rate
Bingshan Refrigeration & Heat Transfer Technologies Co. ,Ltd 15%
Dalian Bingshan Group Engineering Co., Ltd. 25%
Dalian Bingshan Group Sales Co., Ltd. 25%
Dalian Bingshan Air-conditioning Equipment Co., Ltd. 15%
Dalian Bingshan JiaDe Automation Co., Ltd. 15%
Dalian Bingshan Lingshe Quick Freezing Equipment Co., Ltd. 25%
Wuhan New World Refrigeration Industrial Co., Ltd. 15%
Bingshan Technical Service （Dalian） Co., Ltd. 15%
Dalian Bingshan International Trading Co. ,Ltd 25%
Dalian Niweisi LengNuan Techonoligy Co., Ltd. 15%
Dalian Xinminghua Electrical Technology Co., Ltd 15%
Ningbo Bingshan Air-conditioning Refrigeration Engineering Co., Ltd 25%
Chengdu Bingshan Refrigeration Engineering Co., Ltd. 25%
104 / 188
Tax entities EIT rate
Bingshan Refrigeration & Heat Transfer Technologies Co. ,Ltd 15%
Wuhan New World Air-conditioning Refrigeration Engineering Co., Ltd 25%
Wuhan Lanning Energy Technology Co., Ltd 25%
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 15th December, 2021 approved by
Dalian Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and
Local tax Bureau. The Certificate No. is GR202121200765, 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, 2021 approved by
Hubei Science Technology Bureau, Hubei Finance Bureau, Hubei State Tax Bureau and Hubei
Local tax Bureau. The Certificate No. is GR202142001696, 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.
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
105 / 188
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.
VI. 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 December 31, 2021; “current period” refers to the
period from January 1, 2021 to December 31, 2021; and “last period” refers to the period from
January 1, 2020 to December 31, 2020; with the currency unit RMB.
1. Cash and cash in bank
Item Closing Balance Opening Balance
Cash on hand 99,580.64 154,668.54
Cash in bank 443,177,237.30 316,921,397.57
Other cash and cash equivalents 79,381,687.85 56,369,665.56
Total 522,658,505.79 373,445,731.67
Including: sum of deposits overseas
Note: Other cash and cash equivalents is restricted, including deposit for bank acceptance notes
of 64,672,285.64 Yuan, guarantee deposit of 14,438,026.76Yuan, peasant worker deposit of
271,375.45Yuan, and frozen amount of 4,307,480.07 Yuan by the bank due to litigation total of
83,689,167.92Yuan.
2. Notes receivable
(1) Category of notes receivable
Items Closing Balance Opening Balance
Bank acceptance notes 163,956,682.86 109,424,884.35
Trade acceptance notes 2,473,682.88 29,696,153.43
Total 166,430,365.74 139,121,037.78
(2) Pledged notes receivable up to the end of year.
Items Closing pledged amount
Bank acceptance notes 6,420,000.00
106 / 188
Total 6,420,000.00
(3) Notes receivable endorsed or discounted but not mature at the end of year
Item Closing amount no more Closing amount still
recognized recognized
Bank acceptance notes 148,851,791.08
Trade acceptance notes 220,000.00
Total 149,071,791.08
(4) There is no transfer to receivable as the drawer’s default of performance of obligation
(5) Categories according to bad debts provision
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debts
provision based on 166,617,129.06 100.00 186,763.32 0.11 166,430,365.74
group
Including: bank
163,956,682.86 98.40 - - 163,956,682.86
acceptance notes
Trade acceptance
2,660,446.20 1.60 186,763.32 7.02 2,473,682.88
notes
Total 166,617,129.06 100.00 186,763.32 0.11 166,430,365.74
(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
Categories based on group
Closing Balance
Items
Booking balance Provision Provision（%）
107 / 188
Closing Balance
Items
Booking balance Provision Provision（%）
Trade acceptance notes 2,660,446.20 186,763.32 7.02
Total 2,660,446.20 186,763.32 —
(6) Bad debt provision of notes receivable accrued, collected and reversed
Opening Change during the year Closing
Category
balance Accrued Collected/reversed Written-off Balance
Bad debt
2,242,062.78 - 2,055,299.46 - 186,763.32
provision
Total 2,242,062.78 - 2,055,299.46 - 186,763.32
(7) Notes receivable written off: none
3. Accounts receivable
(1) Category of accounts receivable
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Accounts
receivable with
significant
- - - - -
individual amount
and separate bad
debt provision
Accounts
receivable with bad
debt provision
1,193,312,546.52 100.00 371,763,867.67 31.15 821,548,678.85
based on the
characters of credit
risk portfolio
Including: aging as
characteristics of 1,193,312,546.52 100.00 371,763,867.67 31.15 821,548,678.85
credit risk
Total 1,193,312,546.52 100.00 371,763,867.67 31.15 821,548,678.85
(Continued)
Opening balance
Items
Booking balance Provision Booking value
108 / 188
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
debt provision
1,089,352,275.04 99.15 281,453,097.75 25.84 807,899,177.29
based on the
characters of credit
risk portfolio
Including: aging as
characteristics of 1,089,352,275.04 99.15 281,453,097.75 25.84 807,899,177.29
credit risk
Total 1,098,727,367.38 100.00 281,715,411.63 25.64 817,011,955.75
1) Accounts receivable with the bad debt provisions under accounting aging analysis method
Closing Balance
Aging Accounts Provision for Drawing proportion
receivable bad debts (%)
Within 1 year 523,064,082.35 36,719,098.59 7.02
1 to 2 years 173,592,528.16 29,059,389.21 16.74
2 to 3 years 90,996,620.72 28,054,258.17 30.83
3 to 4 years 172,830,349.33 85,257,211.32 49.33
4 to 5years 144,183,323.44 104,028,267.86 72.15
Over 5 years 88,645,642.52 88,645,642.52 100.00
Total 1,193,312,546.52 371,763,867.67 —
(2) Receivable listed by aging
Aging Closing Balance
Within 1 year 523,064,082.35
1 to 2 years 173,592,528.16
2 to 3 years 90,996,620.72
3 to 4 years 172,830,349.33
4 to 5years 144,183,323.44
Over 5 years 88,645,642.52
109 / 188
Total 1,193,312,546.52
(3)Bad debt provision of current period
Change during the year
Opening Closing
Category Accrued Collected/
balance Written-off Balance
reversed
Bad debt
281,715,411.63 98,150,920.76 276,589.05 7,825,875.67 371,763,867.67
provision
Total 281,715,411.63 98,150,920.76 276,589.05 7,825,875.67 371,763,867.67
(4) Accounts receivable written off in current period
Item Written off amount
Receivable actually written off 7,825,875.67
Key debtors written off
Related
Procedures
Company name Nature amount reason party
implemented
transaction
Beijing Bingshan litigation
Refrigeration and Air Trade Board
805,309.06 expired No
Conditioning Equipment receivable meeting
Co., Ltd
Yingkou Shenzhen-Hong Trade litigation Board
667,528.00 No
Kong Co. LTD receivable expired meeting
Singapore JX
INSULATION Trade litigation Board
571,170.91 No
ENGINEERING PTE receivable expired meeting
LTD
Jiangxi Saiwei LDK Solar Trade litigation Board
475,621.94 No
Polysilicon Co., LTD receivable expired meeting
Zengyi E-business Trade litigation Board
288,056.88 No
(Wuhan) Co., Ltd receivable expired meeting
court judged,
Xinjiang Sanhai client has no
Trade Board
Preservation Garden Co. 285,000.00 No
receivable enforceable meeting
LTD
asset
Shandong Linjia Chemical Trade contract Internal
268,034.19 No
Technology Co., LTD receivable termination approval
Qinghai Taifeng Xianxing
Trade litigation Board
Lithium Energy 260,000.00 No
receivable expired meeting
Technology Co. LTD
Dalian Xinghai Bay project
Trade Board
Development & 248,693.00 disband, no No
receivable meeting
Construction Center
money to pay
110 / 188
Related
Procedures
Company name Nature amount reason party
implemented
transaction
court judged,
Dalian Xuelong Industry Trade client has no Board
231,600.00 No
Group Co. Ltd receivable enforceable meeting
asset
Dazhou City Fuxing
Trade litigation Board
Market Development Co. 200,000.00 No
receivable expired meeting
LTD
Total — 4,301,013.98 — — —
(5) The top five significant accounts receivable categorized by debtors
Closing
% of the
Company Closing Balance Aging Balance of
total AR
Provision
State Grid Intergrated
Energy Service Group 43,253,684.30 Within 1 year 3.62 3,036,408.64
Co.,Ltd
Panasonic Cold-chain
37,390,849.92 Within 1 year 3.13 2,624,837.66
(Dalian) Co., Ltd
Xinyi Yuanda
3-4 years
Construction and
32,748,744.00 4-5 years 2.74 25,281,907.38
Installation Engineering
over 5years
Co., Ltd.
Qingchengxian Zhongyi
24,375,000.00 1-2 years 2.04 4,080,375.00
Energy Co.,Ltd
Dalian Xinghai Bay
4-5 years
Development & 24,020,836.00 2.01 18,577,302.85
over 5years
Construction Center
Total 161,789,114.22 - 13.54 53,600,831.53
4. Finance receivable
Items Closing Balance Opening Balance
Notes receivable 43,704,310.38 61,737,282.56
Total 43,704,310.38 61,737,282.56
5. Prepayments
(1) Aging of prepayments
Closing Balance Opening Balance
Items Amount Percentage Amount Percentage
(%) (%)
Within 1 year 146,457,045.63 80.16 111,133,100.83 71.93
1 to 2 years 16,304,629.82 8.92 24,880,404.77 16.11
111 / 188
2 to 3 years 12,765,104.33 6.99 9,313,439.77 6.03
Over 3 years 7,174,623.77 3.93 9,154,563.98 5.93
Total 182,701,403.55 100.00 154,481,509.35 100.00
Significant prepayments over 1 year
Company Closing Balance Aging Unsettled Reasons
Dalian Hengtong Refrigeration 2-3 years Contract is not fully
Equipment engineering Co., Ltd 5,720,000.00
3-4 years implemented
Within 1 year
Dalian Shengda Construciton Contract is not fully
3,878,617.15 1-2 years
Enginering Co., Ltd implemented
2-3 years
PT MULTI SUKSES Within 1 year Contract is not fully
2,537,821.33
ENGINEERING 1-2 years implemented
Shanghai POMA Automation Contract is not fully
2,090,625.02 Over 5 years
Equipment Co., Ltd implemented
Nanjing Bingshan Mechanical Contract is not fully
1,785,408.00 1-2 years
and Electrical Co.,Ltd implemented
Total 16,012,471.50 — —
(2) The top five significant advances to suppliers categorized by debtors
% of the total
Closing
Company Aging advances to
Balance
suppliers
Shenyang Baogang Northeast
Trading Co., Ltd 15,480,717.06 Within 1year 8.47
Dalian Shentong Electric Co., Ltd. 15,019,165.34 Within 1year 8.22
Angang Steel Company Ltd 5,858,716.72 Within 1year 3.21
Dalian Hengtong Refrigeration 2-3 years
Equipment engineering Co., Ltd 5,720,000.00 3.13
3-4 years
Shanghai Qingneng Cold Chain Equi
pment Engineering Co., LTD 4,270,859.96 Within 1year 2.34
Total 46,349,459.08 - 25.37
6. Other receivables
Items Closing Balance Opening Balance
Interest receivable 46,879.68
Dividend receivable 1,003,568.75 25,923.75
Other receivables 59,336,527.70 67,454,373.43
Total 60,340,096.45 67,527,176.86
112 / 188
6.1 Interest receivable
(1) Classification
Items Closing Balance Opening Balance
Interest on term deposits 46,879.68
Total 46,879.68
6.2. Dividends receivable
(1) Classification
Company Closing Balance Opening Balance
Guotai Junan Securities 952,000.00 -
Wuhan Steel and Electricity Co., Ltd. 51,568.75 25,923.75
Total 1,003,568.75 25,923.75
6.3. Other receivables
(1) The categories of other receivable according to nature
Items Closing Balance Opening Balance
Deposits 26,933,345.60 26,232,362.26
Petty cash 5,654,074.94 5,325,764.44
Receivables and payables 36,138,235.04 47,714,138.78
Others 1,609,350.55 1,619,770.46
Total 70,335,006.13 80,892,035.94
(2) The bad debt provision of other receivables
1st stage 2nd stage 3rd stage
Expected credit
Bad debt Expected credit Expected credit loss
loss within the Total
provision loss within 12 within the whole period
whole period (no
months (impairment incurred)
impairment)
Opening - -
13,437,662.51 13,437,662.51
balance
Opening
balance during — — — —
the year
--transfer to the
2nd stage
--transfer to the -
3,276,389.66 - 3,276,389.66
3rd stage
113 / 188
1st stage 2nd stage 3rd stage
Expected credit
Bad debt Expected credit Expected credit loss
loss within the Total
provision loss within 12 within the whole period
whole period (no
months (impairment incurred)
impairment)
--reverse to the
2nd stage
----reverse to
the 1st stage
Accrued - - 893,557.46 893,557.46
Reverse 1,001,325.54 - - 1,001,325.54
Cancelation
Written off 2,331,416.00 - - 2,331,416.00
Other
movement
Closing
6,828,531.31 - 4,169,947.12 10,998,478.43
balance
(2) Other receivable listed by account aging
Aging Closing Balance
Within 1 year 52,507,621.43
1-2 years 4,641,078.98
2-3 years 3,440,749.25
3-4 years 3,349,594.88
4-5 years 2,226,014.47
Over 5 years 4,169,947.12
Total 70,335,006.13
(4) Provision for bad debt
Change during the year
Opening
Category Accrued Collected/rev Closing Balance
balance Written-off
ersed
Bad debt
13,437,662.51 - 107,768.08 2,331,416.00 10,998,478.43
provision
Total 13,437,662.51 - 107,768.08 2,331,416.00 10,998,478.43
(5) Other receivables written off in current period: none.
114 / 188
Item Amount to be written off
Other receivables written off actually 2,331,416.00
Key other receivable written off
Related
Procedures
Company name Nature Amount Reason party
implemented
transaction
Court judged, client
Dalian Lihua Coating Receivable Internal
1,650,000.00 has no enforceable No
Equipment &payable approval
asset
Dalian Changde Court judged, client
Receivable Internal
677,416.00 has no enforceable No
Welding Co.,Ltd &payable approval
asset
Total — 2,327,416.00 — — —
(6) Other receivables from the top 5 debtors
% of Closing
Closing
Name Category Aging the total Balance of
Balance
OR Provision
Hangzhou Zhonghong Ne
Within 1
w Energy Refund 28,895,000.00 41.08 1,204,921.50
year
Co.,Ltd
Within 1
PICC Dalian Branch Compensation 5,000,000.00 7.11 208,500.00
year
Agriculture Bureau of Moyu 1-2years
Deposit 2,548,847.50 3.62 577,236.44
County 2-3 years
Cangzhou Lingang Renguo Within 1
Deposit 2,000,000.00 2.84 83,400.00
Chemical Co., LTD year
Dalian DETA Hong Kong
Deposit 1,125,000.00 3-4 years 1.60 1,125,000.00
&China Gas Co.,Ltd
Total 39,568,847.50 - 56.25 3,199,057.94
(7) Other receivables from government grant: none
7. Inventories
(1) Categories of inventories
Closing Balance
Item
Book value Provision for decline Net book value
Raw materials 166,815,875.73 4,570,316.95 162,245,558.78
Working in progress 171,554,710.97 1,929,842.21 169,624,868.76
Finished goods 300,140,274.98 29,448,083.12 270,692,191.86
115 / 188
Closing Balance
Item
Book value Provision for decline Net book value
Low-value consumable 51,817.59 - 51,817.59
Self-manufactured
semi-finished products 30,747,861.83 - 30,747,861.83
Cost to fulfill the
contract 295,750,380.56 11,185,200.11 284,565,180.45
Materials on
consignment for further 887,585.94 - 887,585.94
processing
Goods in transit 86,049,156.11 - 86,049,156.11
Properties written off
debtors 14,866,010.00 5,203,103.50 9,662,906.50
Total 1,066,863,673.71 52,336,545.89 1,014,527,127.82
(Continued)
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
Low-value consumable 171,759.42 171,759.42
Self-manufactured
semi-finished products 28,814,287.69 28,814,287.69
Cost to fulfill the
contract 193,840,972.71 193,840,972.71
Materials on
consignment for further 480,473.35 480,473.35
processing
Goods in transit 33,573,632.23 33,573,632.23
Properties written off
debtors 20,206,542.00 5,203,103.50 15,003,438.50
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 Balance
Written- off transferred
Raw
1,064,716.71 3,619,173.37 113,573.13 - 4,570,316.95
materials
Finished
2,528,193.70 31,526,166.74 4,606,277.32 - 29,448,083.12
goods
Cost to
- 11,185,200.11 - - 11,185,200.11
fulfill the
116 / 188
Increase Decrease
Opening Closing
Item Reverse/ Others
Balance Accrual Balance
Written- off transferred
contract
WIP 1,929,842.21 - - - 1,929,842.21
Properties
written off 5,203,103.50 - - - 5,203,103.50
debtors
Total 10,725,856.12 46,330,540.22 4,719,850.45 - 52,336,545.89
Accrual for provision for decline in the value of inventories
Basis for net realizable value
Item Reasons for reverse/write-off
recognition
Raw materials The amount deducting the Sold within the year
Finished goods expected cost to product Scrap within the year
completion, selling expense and
Completed constructing
relative tax from the estimated ——
projects unsettled
selling price.
8. Contract asset
(1) Details
Closing Balance Opening Balance
Item Carrying Carrying provision Book value
Provision Book value
amount amount
Undue
125,891,499.90 16,031,841.11 109,859,658.79 104,165,706.10 12,735,694.50 91,430,011.60
warranty
Total 125,891,499.90 16,031,841.11 109,859,658.79 104,165,706.10 12,735,694.50 91,430,011.60
(2) Provision for impairment
Item Accrued Reverse Collected/written off Reason
Undue warranty 3,296,146.61
Total 3,296,146.61
9. Noncurrent asset due within one year
Item Closing Balance Opening Balance
Long term receivable due within 1 year 14,990,989.30 42,003,576.60
Total 14,990,989.30 42,003,576.60
10. Other current assets
117 / 188
Item Closing Balance Opening Balance
Prepaid income tax presented at net amount
380,483.32 390,518.40
after offsetting
VAT to be deducted 23,989,939.28 22,375,761.22
Prepaid turnover tax - 1,876.94
Prepaid expenses 154,654.11 445,934.88
Total 24,525,076.71 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
Services rendered by installments
Total
(Continued)
Item Opening Balance
Carrying
Provision Book value
amount
Lease premium
---Unrealized financing income
Goods sold by installments 71,750,205.16 5,882,231.91 65,867,973.25
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
Expected credit loss Expected credit loss
Bad debt Expected credit
within the whole within the whole Total
provision loss within 12
period (no period (impairment
months
impairment) incurred)
Opening
9,218,793.44 - - 9,218,793.44
balance
Opening
118 / 188
1st stage 2nd stage 3rd stage
Expected credit loss Expected credit loss
Bad debt Expected credit
within the whole within the whole Total
provision loss within 12
period (no period (impairment
months
impairment) incurred)
balance during
the year
--transfer to
the 2nd stage
--transfer to
the 3rd stage
--reverse to the
2nd stage
----reverse to
the 1st stage
Accrued
Reverse 4,636,661.13 - - 4,636,661.13
Cancelation 3,430,522.73 - - 3,430,522.73
Written off
Other
movement
Closing
1,151,609.58 - - 1,151,609.58
balance
Note：the difference between opening balance and closing balance of bad debt provision and
long-term receivable is the part of non-current asset due within one year.
119 / 188
12.Long-term equity investments
Provision for
Increase/Decrease Ending balance
impairment
Gains and Provision
Beginning losses Adjustment Cash bonus for
Investee
balance recognized of other Change of or profits impairment
Increased Decreased Others
under the comprehensiv other equity announced to of the
equity e income issue current
method period
Associates
Panasonic
Refrigeration 163,867,472.86 147,270,127.38 -14,994,567.44 -322,778.04 1,280,000.00
(Dalian) Co., Ltd
Panasonic
Cold-Chain 205,987,069.49 -112,859,182.84 2,797,849.22 90,330,037.43
(Dalian) Co., Ltd.
Panasonic
Compressor 462,033,107.31 30,800,342.18 32,773,200.00 460,060,249.49
(Dalian) Co., Ltd.
Dalian Honjo
Chemical Co., Ltd.
8,746,197.03 741,303.19 561,233.70 8,926,266.52
Keinin-Grand
Ocean Thermal
Technology
55,934,955.38 4,864,112.90 2,000,000.00 58,799,068.28
(Dalian) Co., Ltd.
Beijing Huashang
Bingshan
Refrigeration and
Air-conditioning
2,121,951.69 17,990.49 2,139,942.18
Machinery Co.,
Ltd.
Dalian Fuji
Bingshan Vending 184,454,138.22 -35,798,123.47 148,656,014.75
Machine Co., Ltd.
MHI Bingshan
Refrigeration 14,891,119.67 32,684.20 14,923,803.87
(Dalian) Co.,Ltd.
120 / 188
Provision for
Increase/Decrease Ending balance
impairment
Gains and Provision
Beginning losses Adjustment Cash bonus for
Investee
balance recognized of other Change of or profits impairment
Increased Decreased Others
under the comprehensiv other equity announced to of the
equity e income issue current
method period
Dalian Bingshan
Group Huahuida
Financial Leasing
- 44,046,635.07 742,684.48 44,789,319.55
Co., Ltd
Dalian Fuji
Bingshan Vending
Machine Sales Co.,
43,546.35 -43,546.35 -
Ltd
Jiangsu Jingxue
Insulation
Technology
203,208,828.97 14,646,669.36 -16,123,970.29 201,731,528.04
Co.,Ltd
Panasonic cold
Machine System 30,034,799.53 2,341,469.67 3,895,484.27 28,480,784.93
(Dalian) Co., Ltd
Dalian Bingshan
Metal Technology 173,158,546.15 23,785,030.56 28,648,633.78 168,294,942.93
Co.,Ltd
Wuhan Sikafu
Power Control
Equipment Co.,
4,360,034.66 12,540.82 4,372,575.48
Ltd
Total 1,508,841,767.31 44,046,635.07 147,270,127.38 -85,710,592.25 -322,778.04 -16,123,970.29 71,956,400.97 1,231,504,533.45
121 / 188
13. Other non-current financial assets
Item Closing Balance Opening Balance
Financial assets classified as FVTPL 261,410,664.61 239,304,098.83
Including: equity instruments 261,410,664.61 239,304,098.83
Total 261,410,664.61 239,304,098.83
14. Investment property
(1) Investment property measured as cost model
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) Purchase - - -
(2) Transferred from fixed assets - - -
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 4,964,628.38 521,888.76 5,486,517.14
(1)Provision or amortization 4,964,628.38 521,888.76 5,486,517.14
(2) Acquired from business
combination - - -
3. Decrease 1,589,221.05 - 1,589,221.05
(1) Disposal 1,589,221.05 - 1,589,221.05
(2) Transferred to other - - -
4. Closing balance 123,629,414.79 12,306,704.05 135,936,118.84
III. Impairment reserve
1. Opening balance - - -
2. Increase - - -
(1)Provision or amortization - - -
3. Decrease - - -
(1) Disposal - - -
122 / 188
Property&
Item Land-use-rights Total
building
(2) Transferred to other - - -
4. Closing balance - - -
IV. Book value
1. Closing book value 106,965,075.28 13,787,734.33 120,752,809.61
2. Opening book value 111,978,854.83 14,309,623.09 126,288,477.92
15. Fixed assets
Items Closing Book Value Opening Book Value
Fixed asset 855,395,405.85 866,198,856.04
Fixed asset disposal - -
Total 855,395,405.85 866,198,856.04
(1) Fixed assets detail
Property& Machinery Transportation Other
Item equipment Total
buildings equipment equipment
I. Initial cost
1.Opening balance 681,009,688.70 598,423,183.53 13,816,050.64 67,611,429.29 1,360,860,352.16
2. Increase 14,334,194.44 37,939,787.74 731,097.72 1,432,195.72 54,437,275.62
(1) Purchase 4,923,745.23 20,134,853.79 731,097.72 1,413,883.28 27,203,580.02
(2) Transferred
from
9,410,449.21 17,804,933.95 - 18,312.44 27,233,695.60
construction-in-pr
ogress
(3) Acquired from
business - - - - -
combination
3. Decrease 19,109,659.24 1,632,948.89 7,507,883.83 28,250,491.96
(1) Disposal 19,109,659.24 1,632,948.89 7,507,883.83 28,250,491.96
(2) Transferred to
- - - - -
other
(3)Acquired from
business - - - - -
combination
4.Closing balance 695,343,883.14 617,253,312.03 12,914,199.47 61,535,741.18 1,387,047,135.82
123 / 188
Property& Machinery Transportation Other
Item equipment Total
buildings equipment equipment
II. Accumulated
depreciation
1.Opening balance 110,559,657.19 321,922,328.23 9,532,630.58 52,129,560.62 494,144,176.62
2. Increase 20,785,743.79 36,857,989.35 749,782.79 5,191,605.31 63,585,121.24
(1)Accrued 20,785,743.79 36,857,989.35 749,782.79 5,191,605.31 63,585,121.24
(2)Acquired from
business
combination - - - - -
3. Decrease 17,718,578.63 1,475,972.81 7,158,775.99 26,353,327.43
(1) Disposal 17,718,578.63 1,475,972.81 7,158,775.99 26,353,327.43
(2) Transferred to
other - - - - -
(3)Acquired from
business
combination - - - - -
4.Closing balance 131,345,400.98 341,061,738.95 8,806,440.56 50,162,389.94 531,375,970.43
III. Impairment
reserve
1.Opening balance 517,319.50 517,319.50
2. Increase - - - - -
(1)Accrued - - - - -
3. Decrease - 241,559.96 - - 241,559.96
(1) Disposal - 241,559.96 - - 241,559.96
4.Closing balance - 275,759.54 - - 275,759.54
IV.Book value
1.Closing book
563,998,482.16 275,915,813.54 4,107,758.91 11,373,351.24 855,395,405.85
value
2.Opening book
570,450,031.51 275,983,535.80 4,283,420.06 15,481,868.67 866,198,856.04
value
(2) Temporarily idle fixed assets: none.
(3) Fixed assets leased out under operating lease: none.
16. Construction-in-progress
Item Closing book value Opening book value
Construction-in-progress 38,974,478.45 34,254,599.42
124 / 188
Construction materials -
Total 38,974,478.45 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 &
2,457,434.83 - 2,457,434.83 3,628,913.65 3,628,913.65
reconstruction
Improvement of
26,282,497.83 - 26,282,497.83 3,724,069.06 3,724,069.06
machinery
Software of
intelligent 1,069,880.60 - 1,069,880.60 1,843,202.03 1,843,202.03
manufacture
Technical
renovation
project of
pressure energy - - - 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 38,974,478.45 - 38,974,478.45 34,254,599.42 34,254,599.42
(2) Change in the significant construction in progress
Decrease
Opening Transfer to Closing
Name Increase Other
balance FA/ Intangible balance
decrease
assets
Buildings &
reconstruction 3,628,913.65 10,112,439.62 9,410,449.21 - 4,330,904.06
Improvement
of machinery 3,724,069.06 22,394,788.54 1,709,829.00 - 24,409,028.60
Software of
intelligent 1,843,202.03 83,185.83 856,507.26 - 1,069,880.60
manufacture
Technical
renovation
project of
pressure
energy in 15,893,749.49 219,667.90 16,113,417.39 - -
natural gas
pipeline
network
Financing
lease item 9,164,665.19 - - - 9,164,665.19
Total 34,254,599.42 32,810,081.89 28,090,202.86 - 38,974,478.45
(Continued)
125 / 188
Progress Including:
Percent of
of Accumulated accumulated Interest
investment Source of
Name Budget construction capitalized capitalized capitalization
against funds
interest interest of the rate(%)
budget(%)
year
Buildings &
Self
reconstructi 15,241,000.00 28.42 28.42
on financing
Improveme
Self
nt of 50,358,032.00 48.47 48.47
machinery financing
Software of
Self
intelligent 3,330,750.00 32.12 32.12
manufacture financing
Technical
renovation
project of
pressure Self
energy in 19,614,500.00 100.00 100.00
financing
natural gas
pipeline
network
Self
Financing
15,020,000.00 61.02 61.02 837,440.00 financing
lease item
borrowing
Total — — — — — — —
17. Right-of-use assets
Land use Non
Item Patent Others Total
right Patent
I. Initial cost
1.Opening balance 2,501,302.25 29,049,058.84 - 526,894.11 32,077,255.20
2. Increase 2,326,296.24 - 334,540.86 - 2,660,837.10
(1) lease in 2,326,296.24 - 334,540.86 - 2,660,837.10
3. Decrease - 814,368.45 - - 814,368.45
4.Closing balance 4,827,598.49 28,234,690.39 334,540.86 526,894.11 33,923,723.85
II.Accumulated
amortization
1.Opening balance - 4,601,162.49 - 26,587.68 4,627,750.17
2. Increase 1,654,921.59 3,673,481.35 111,513.62 117,114.00 5,557,030.56
(1)Accrued 1,654,921.59 3,673,481.35 111,513.62 117,114.00 5,557,030.56
3. Decrease - 195,760.25 - - 195,760.25
4.Closing balance 1,654,921.59 8,078,883.59 111,513.62 143,701.68 9,989,020.48
III. Impairment reserve
126 / 188
Land use Non
Item Patent Others Total
right Patent
1. Opening balance - - - - -
2. Increase - - - - -
3. Decrease - - - - -
4.Closing balance - - - - -
IV. Book value
1. Closing book value 3,172,676.90 20,155,806.80 223,027.24 383,192.43 23,934,703.37
2. Opening book value 2,501,302.25 24,447,896.35 500,306.43 27,449,505.03
18. Intangible assets
Land use Non-
Item Patent Others Total
right Patent
I. Initial cost
1.Opening balance 151,187,270.24 17,630,188.82 5,000,000.00 30,994,907.82 204,812,366.88
2. Increase - - - 5,053,917.37 5,053,917.37
(1) Purchase - - - 4,197,410.11 4,197,410.11
(2) increase via merge - - - - -
(3) Transferred from
- - - 856,507.26 856,507.26
construction-in-progress
3. Decrease - - - 2,041,480.71 2,041,480.71
(1) Disposal - - - 2,041,480.71 2,041,480.71
(2)Transferred to
- - - - -
investment property
4.Closing balance 151,187,270.24 17,630,188.82 5,000,000.00 34,007,344.48 207,824,803.54
II.Accumulated
amortization
1.Opening balance 36,211,973.05 6,038,799.65 2,500,004.00 14,618,868.94 59,369,645.64
2. Increase 3,061,044.46 1,572,360.20 500,000.00 2,769,845.85 7,903,250.51
(1)Accrued 3,061,044.46 1,572,360.20 500,000.00 2,769,845.85 7,903,250.51
(2)Increase from merger - - - - -
3. Decrease - - - 2,040,830.71 2,040,830.71
(1) Disposal - - - 2,040,830.71 2,040,830.71
(2) Transferred to other - - - - -
4.Closing balance 39,273,017.51 7,611,159.85 3,000,004.00 15,347,884.08 65,232,065.44
III. Impairment reserve
127 / 188
Land use Non-
Item Patent Others Total
right Patent
1. Opening balance
2. Increase - - - - -
(1)Accrued - - - - -
(2) Others - - - - -
3. Decrease - - - - -
(1) Disposal - - - - -
(2) Transferred to other - - - - -
4.Closing balance - - - - -
IV. Book value
1. Closing book value 111,914,252.73 10,019,028.97 1,999,996.00 18,659,460.40 142,592,738.10
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
Increased during Decreased during
current year current year
Opening Closing
Name Enterprises
Balance Balance
merger Other Disposal Other
increase
Dalian Niweisi
LengNuan
1,440,347.92 1,440,347.92
Techonoligy Co.,
Ltd.
Dalian Bingshan
Group Construction 310,451.57 310,451.57
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 Company 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
128 / 188
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 Baoan Leisure Industry 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
1,873,692.06 138,478.32 1,735,213.74
right
Renovation and rebuilding 1,172,157.14 151,335.00 1,020,822.14
Membership fee for golf 423,500.00 16,500.00 407,000.00
Technology entrance fee of
466,781.25 373,425.00 93,356.25
cold and heat machinery
Greenland of new factory 5,724,407.62 892,115.52 4,832,292.10
Total 9,660,538.07 1,571,853.84 8,088,684.23
21. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets without offsetting
Item Closing balance Opening balance
Deductible Deferred tax Deductible Deferred tax
temporary difference assets temporary difference assets
Provision for
credit impairment 367,572,645.45 77,433,815.32 298,515,515.22 60,167,592.33
Provision for
impairment of 55,608,764.16 10,412,376.27 23,719,518.02 4,011,984.07
assets
Provision - - 7,171,726.51 1,792,931.63
Deductible loss - - 3,581,714.09 895,428.52
Unrealized profit
from internal 13,555,883.61 2,033,382.54 14,077,263.75 2,111,589.56
transaction
Total 436,737,293.22 89,879,574.13 347,065,737.59 68,979,526.11
129 / 188
(2) Deferred tax liabilities without offsetting
Item Closing balance Opening balance
Taxable Deferred tax Taxable Deferred tax
temporary liabilities temporary liabilities
difference difference
Change on FV of other
non-current financial 237,308,998.02 35,596,349.70 213,402,432.24 32,010,364.83
assets
Total 237,308,998.02 35,596,349.70 213,402,432.24 32,010,364.83
(3) Unrecognized deferred tax assets details
Item Closing balance Opening balance
Deductible temporary difference 30,659,975.23 3,738,153.26
Deductible loss 224,773,151.64 107,036,874.97
Total 255,433,126.87 110,775,028.23
(4) Unrecognized deductible loss of deferred tax assets expired years
Year Closing balance Opening balance Notes
2022 716,158.09 716,158.09
2023 16,458,262.38 16,458,262.38
2024 61,554,422.97 62,405,136.73
2025 21,436,832.18 27,457,317.77
2026 124,607,476.02
Total 224,773,151.64 107,036,874.97
22. Short-term borrowing
(1) Category of short term borrowing
Loan category Closing balance Opening balance
Credit loan 230,373,666.72 276,011,600.00
Mortgaged loan 9,025,000.00 6,960,000.00
Pledged loan 6,538,425.00
Total 245,937,091.72 282,971,600.00
23. Notes payable
Notes Category Closing balance Opening balance
Bank acceptance notes 372,141,300.89 293,073,330.48
Commercial acceptance notes 7,891,738.67 2,078,041.90
Total 380,033,039.56 295,151,372.38
Note: There is no due note unpaid at the year end.
130 / 188
24. Accounts payable
(1) Accounts payable
Item Closing balance Opening balance
Material payments 558,353,834.37 459,748,015.17
Project payments 328,569,617.62 227,092,621.70
Equipment payments 31,092,321.64 76,820,952.59
Others 1,856,153.90 3,605,642.97
Total 919,871,927.53 767,267,232.43
(2) Main accounts payable with age over 1 year
Reason of unpaid
Closing
Name of company or not carried
balance
forward
Haoxing Nengtou(Beijing) Assets management Co.,Ltd 7,039,659.99 Payment is undue
Lixingkai (Beijing) Energy System Technology Co.,Ltd 4,772,705.82 Payment is undue
Guangdong Shenling Environmental System Co., LTD 3,354,251.85 Payment is undue
Heilongjiang Longleng Technology Co., Ltd 3,209,930.00 Payment is undue
Hangzhou Zhonghong New Energy Co., Ltd 2,914,000.00 Payment is undue
Total 21,290,547.66 —
25. Contract liability
(1) Details
Item Closing balance Opening balance
Received in advance due from unrealized revenue 499,719,963.40 295,100,657.10
Total 499,719,963.40 295,100,657.10
(2) Significant change on the book value
Item Change amount Change reason
According to the contract,
Received in advance due from
204,619,306.30 received the payment from the
unrealized revenue
client in advance
Total 204,619,306.30
26. Employee’s payable
(1) Category of employee’s payable
Item Opening balance Increase Decrease Closing balance
Short-term employee’s 31,125,808.94 327,144,789.45 323,122,028.02 35,148,570.37
131 / 188
Item Opening balance Increase Decrease Closing balance
payable
Post-employment benefit
32,661,497.29 32,661,285.18 212.11
–defined contribution plan
Termination benefits
Other welfare due within 1
year
Total 31,125,808.94 359,806,286.74 355,783,313.20 35,148,782.48
(2) Short-term employee’s payables
Item Opening balance Increase Decrease Closing balance
Salaries, bonus,
26,526,326.00 262,869,852.53 258,139,697.01 31,256,481.52
allowance, and subsidy
Welfare 3,080,018.99 15,255,636.90 16,486,324.24 1,849,331.65
Social insurance 16,445.29 20,092,705.81 20,108,489.90 661.20
Include: Medical
14,860.20 15,790,951.51 15,805,811.71 -
insurance
Supplemental
106,401.57 106,401.57 -
insurance
On-duty injury
2,228,615.47 2,227,954.27 661.20
insurance
Maternity
1,585.09 1,966,737.26 1,968,322.35 -
insurance
Housing funds 21,190,651.04 20,885,458.23 305,192.81
Labor union and
1,503,018.66 4,922,833.61 4,688,949.08 1,736,903.19
training expenses
Short-term leave with
- - -
pay
Short term profit share
- - -
plan
Others 2,813,109.56 2,813,109.56 -
Total 31,125,808.94 327,144,789.45 323,122,028.02 35,148,570.37
(3) Defined contribution plan
Item Opening Increase Decrease Closing
balance balance
Pension 31,621,058.85 31,621,058.85 -
Unemployment insurance 1,040,438.44 1,040,226.33 212.11
132 / 188
Item Opening Increase Decrease Closing
balance balance
Company annuity plan - - -
Total 32,661,497.29 32,661,285.18 212.11
27. Tax payable
Item Closing balance Opening balance
Value-added tax 8,428,289.41 2,830,255.88
Enterprise income tax 825,185.23 3,114,706.06
Real estate tax 1,910,131.37 1,899,793.53
Land use tax 1,094,769.07 1,094,760.28
Individual income tax 471,053.12 216,213.81
Stamp duty 477,653.78 151,410.38
City maintenance and construction tax 178,955.65 238,887.83
Education surcharge 127,825.46 167,925.89
River toll fee 984.73 240.59
Total 13,514,847.82 9,714,194.25
28. Other accounts payable
Item Closing balance Opening balance
Interest payable - 1,839,166.81
Dividend payable 3,008,156.00 533,156.00
Other accounts payable 52,275,984.21 40,645,143.57
Total 55,284,140.21 43,017,466.38
28.1 Interest payable
Item Closing balance Opening balance
Interest on short term loan 1,703,750.01
Interest on corporate bond 135,416.80
Total 1,839,166.81
28.2 Dividend payable
Item Closing balance Opening balance
Ordinary share dividend 3,008,156.00 533,156.00
Total 3,008,156.00 533,156.00
28.3 Other accounts payable
(1) Other payables categorized by payments nature
133 / 188
Payments nature Closing balance Opening balance
Cash pledge and security deposit 11,879,889.59 8,518,729.05
Apply for reimbursement and unpaid 10,784,375.08 11,557,803.69
Receipts under custody 2,449,487.90 6,191,124.03
Others 27,162,231.64 14,377,486.80
Total 52,275,984.21 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
Long-term payable due within one year 13,876,415.99 2,399,351.64
Lease obligation due within one year 10,298,972.13 11,098,566.54
Total 24,175,388.12 38,497,952.18
30. Other current liabilities
Item Closing balance Opening balance
Notes payable endorsed not derecognized 143,288,366.08 121,572,682.35
Output Vat to be carried forward 51,924,840.83 30,601,263.95
Total 195,213,206.91 152,173,946.30
31. Long-term borrowing
(1) Category of long-term borrowing
Category Closing Balance Opening Balance
Guarantee loan 150,000,000.00 160,000,000.00
Total 150,000,000.00 160,000,000.00
Note: In year 2016, the Development Fund from China Development Bank gave support to the
Company’s intelligent and green equipment of cold chain and service industry base project and
provided special fund to the Company’s holding shareholder, Bingshan Group. The fund is 0.15
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.
32. Lease obligation
(1) Details of lease obligation
Category Closing balance Opening balance
Lease payment 16,861,280.02 27,625,677.55
Less: unrecognized finance expense 1,168,286.75 2,708,634.55
134 / 188
Category Closing balance Opening balance
Non-current liability due within 1 year 10,298,972.13 11,098,566.54
Net lease liability 5,394,021.14 13,818,476.46
(2) Maturity
Category Closing Balance
Minimum lease payment for an irrevocable operating lease:
1st year after balance sheet date 11,178,301.29
2nd year after balance sheet date 4,502,179.39
3rd year after balance sheet date 442,954.02
Subsequent years 737,845.32
Total 16,861,280.02
33. Long term accounts payable
Item Closing Balance Opening Balance
Long term accounts payable 19,998,913.29 1,964,463.77
Total 19,998,913.29 1,964,463.77
33.1Category by nature
Nature Closing Balance Opening Balance
Financial lease borrowings 19,998,913.29 1,964,463.77
Total 19,998,913.29 1,964,463.77
34. Provision
Nature Closing Balance Opening Balance
Open litigation 7,592,239.01
Total 7,592,239.01
35. Deferred income
(1) Category of deferred income
Item Opening Balance Increase Decrease Closing Balance
Government subsidy 104,457,568.86 8,135,944.83 6,408,189.87 106,185,323.82
Total 104,457,568.86 8,135,944.83 6,408,189.87 106,185,323.82
(2) Government subsidy
135 / 188
The value Related
Into non-
Government Opening Into other offset cost Closing with
Increase operating
subsidy item Balance income and expense Balance asset/
income
this year income
Subsidy fund for
highly effective Asset
heat pump and 48,412.65 48,412.65 related
related system
Contribution to
subsidiary Asset
company 40,104,000.00 - - 1,114,000.00 - 38,990,000.00 related
relocation
Application of
NH3 and CO2
instead of R22
screw Asset
refrigerating 16,398,350.48 8,135,944.83 - - 2,028,323.87 22,505,971.44 Related
machine
combined
condensing unit
Compressor IC Asset
system 3,907,129.99 - - - 368,769.72 3,538,360.27 related
Ultrasonic Asset
intelligent defrost 3,716,010.90 - - 30,000.00 264,833.48 3,421,177.42 related/
technology Income
Eco Compressor Asset
project 22,529,321.64 - - - 2,553,850.15 19,975,471.49 related
R290 replacement
of R22 large Asset
industrial screw 13,006,663.20 - - - - 13,006,663.20 related
unit
R290 replacement
of R22 Asset
industrial double 4,747,680.00 4,747,680.00 related
stage screw unit
Total —
104,457,568.86 8,135,944.83 - 1,144,000.00 5,264,189.87 106,185,323.82
Note: Asset related grant shall be offset the cost or expense within the asset’s useful life; income
related grant shall be booked into other income or offset cost or expense if it is relevant to daily
activity, otherwise it shall be booked into non-operating income.
36. Share capital
136 / 188
Increase/decrease（+、-）
Opening New Transfer from Closing
Item Share
balance share capital others Subtotal balance
dividend
issued reserve
Total share
843,212,507.00 843,212,507.00
capital
37. Capital reserves
Items Opening Increase Decrease Closing Balance
Balance
Share premium 659,622,044.20 9,571,369.07 - 669,193,413.27
Other capital reserves 67,146,423.80 - 16,123,970.29 51,022,453.51
Total 726,768,468.00 9,571,369.07 16,123,970.29 720,215,866.78
Note1: the increased share premium of capital reserve is the amount of that the consideration
paid for purchasing minority interest of Dalian Bingshan Air-conditioning Equipment Co., Ltd
is less than the share of the identifiable net asset in the subsidiary.
Note2: other capital reserve decreased during the year is the dilution of shareholding from
29.21% to 21.91% due to Jiangsu Jingxue Insulation Technology Co.,Ltd new shares issued in
June in Shenzhen Stock Exchange, so goodwill and share of the net assets in Jiangsu Jingxue
Insulation Technology Co.,Ltd decreased.
137 / 188
38. Other comprehensive income
Current year
Less：
Amount After-tax
Opening for the Previously After-tax Closing
Items recognized in Less： attribute
Balance period attribute to Balance
profit or loss income to the
before minority
income into other tax parent
shareholder
tax comprehensive company
income
I.Later can’t
reclassified
into profit and
loss of other
comprehensive
income
II. Later
reclassified
into profit and
loss of other 2,501,459.77 322,778.04 2,178,681.73
comprehensive
income
Other
comprehensive
income that can
be transferred to 2,501,459.77 322,778.04 2,178,681.73
profit or loss
under the equity
method
Other
comprehensive 2,501,459.77 322,778.04 2,178,681.73
income total
39. Surplus reserves
Item Opening Closing
Increase Decrease
Balance Balance
Statutory surplus reserve 347,216,790.47 - - 347,216,790.47
Discretionary surplus reserve 449,469,025.26 12,785,383.91 - 462,254,409.17
Total 796,685,815.73 12,785,383.91 - 809,471,199.64
Note: The Company made FY2020 profit appropriation plan within the reporting period.
According to the general meeting on May 15, 2021, 20% of net profit is provided for
discretionary surplus reserve.
40. Undistributed profits
Item Current year Last year
Closing balance of last year 997,601,577.97 1,038,358,782.59
Add: Adjustments to the opening balance of
-79,559,636.71
undistributed profits
138 / 188
Item Current year Last year
Including: additional retrospective adjustments -
according to the new accounting standards
Change on accounting policy -
Correction of prior period significant errors -
Change on combination scope under same -
control
Other factors -79,559,636.71
Opening balance of current year 918,041,941.26 1,038,358,782.59
Add: net profit attributable to shareholders of
-269,059,849.96 21,341,133.39
parent company in the year
Less: Provision for statutory surplus reserves - 6,392,691.96
Provision for any surplus reserves 12,785,383.91 30,409,270.84
Provision of general risk -
Dividends payable for common shares 8,432,125.07 25,296,375.21
Common stock dividends converted to equity -
Extract employee rewards and welfare funds -
Closing balance of current year 627,764,582.32 997,601,577.97
Adjustment of opening undistributed profit
The Company adopts the new financial instrument standard earlier than its affiliates.
During the period when the affiliates did not adopt the new standard, the Company did
not adjust the financial statement of affiliates under equity method due to restriction to
the objective condition. In accordance with the 5th implementation feedback of
Accounting Standards for Business Enterprises in 2021 given by Accounting Division of
Ministry of Finance, the Company made an adjustment to the opening balance of
financial statements of FY 2021 under equity method as the affiliates adjusted the
opening balance since January 1,2021 in accordance with the new standard.
41. Operating revenue and cost
(1) Details
Items Current year Last year
Sales revenue Cost of sales Sales revenue Cost of sales
Revenue from
2,031,958,305.49 1,808,263,206.67 1,680,314,480.42 1,401,374,951.04
principle operation
Revenue from
57,249,950.73 41,268,065.62 46,953,454.73 31,149,158.87
other operation
Total 2,089,208,256.22 1,849,531,272.29 1,727,267,935.15 1,432,524,109.91
139 / 188
(2) Main revenue from contract details
Contract classification Total
Classified at products type 2,031,958,305.49
Manufacture products 1,328,371,290.81
Project installation 652,866,257.62
Other products and service 50,720,757.06
Classified at geography location 2,031,958,305.49
domestic 1,936,838,033.86
overseas 95,120,271.63
42. Taxes and surcharges
Items Current year Last year
City construction tax 2,697,059.55 1,611,470.71
Education surcharge 1,937,881.46 1,147,208.51
Property tax 7,889,230.05 7,337,286.22
Land use tax 4,770,267.58 4,068,191.93
Vehicle and vessel tax 1,628,433.67 1,253,726.37
Stamp duty 25,419.48 31,694.48
Others 3,559.17 6,534.92
Total 18,951,850.96 15,456,113.14
43. Selling expenses
Items Current year Last year
Employee benefit 79,027,032.72 40,196,358.86
Official business expense 17,287,793.62 14,256,723.26
Maintenance and repair expense 10,817,179.44 5,527,611.04
Travel expense 9,309,818.45 10,998,391.78
Business entertaining expense 9,790,470.43 9,966,831.47
Advertisement and bids expense 2,335,235.14 2,139,949.39
Depreciation expense 1,781,527.37 227,836.85
Other expense 284,852.13 426,774.25
Total 130,633,909.30 83,740,476.90
44. Administrative expenses
Items Current year Last year
Employee benefit 104,074,747.58 101,631,233.81
Official expense 17,723,620.65 17,274,897.46
Depreciation expense 12,382,260.68 10,423,498.19
Maintenance and repair expense 8,501,811.94 6,754,128.80
140 / 188
Items Current year Last year
Long-term assets amortization 7,564,598.02 7,508,381.76
Travel expense 5,387,065.85 2,885,657.48
Design consultant and test service expense 4,398,890.50 5,024,778.03
Safety production cost 3,799,007.87 3,239,077.20
Business entertaining expense 2,248,318.02 2,335,952.36
Insurance expense 931,137.81 764,446.72
Advertisement expense 875,051.39 364,933.57
Transportation expense 671,904.44 702,607.23
Other taxes and fee 559,693.52 83,529.05
Other expense 1,495,327.88 1,302,248.87
Total 170,613,436.15 160,295,370.53
45. Technology development expense
Items Current year Last year
Employee benefit 46,269,704.41 38,877,014.74
Raw material 11,493,089.36 4,479,120.55
Depreciation and amortization expense 4,541,949.24 4,524,355.03
Other expense 2,965,022.22 1,277,766.46
Total 65,269,765.23 49,158,256.78
46. Financial expenses
Items Current year Last year
Interest expenses 16,718,288.26 22,795,380.51
Less: interest income 5,193,155.75 2,435,386.06
Add: exchange loss -898,833.22 3,199,444.76
Add: others expenditure 3,315,626.94 2,919,870.16
Total 13,941,926.23 26,479,309.37
47. Other income
Items Current year Last year
Government subsidy 10,728,811.44 18,938,565.95
Personal income tax handling fee refund 70,983.39 688,552.44
Job stability subsidy - 477,452.00
Total 10,799,794.83 20,104,570.39
48. Investment income
Items Current year Last year
Long-term equity investment gain under equity method -85,710,592.25 79,024,253.68
141 / 188
Gain from disposal of long-term equity investment 27,665,072.62 12,859,589.96
Gain from holding of tradable financial assets
Gain from disposal of tradable financial assets
Gain from FV remeasurement of the remaining shares after
losing control
Gain from holding of other noncurrent financial assets 7,255,249.48 5,372,826.87
Gain from disposal of other no-ncurrent financial assets 2,523,680.32 7,180,485.22
Gain on Debt restructuring 819,297.68
Total -47,447,292.15 104,437,155.73
49. Gain on fair value change
Source of gain on FV change Current year Last year
Other noncurrent financial assets 52,398,565.78 -14,797,607.68
Total 52,398,565.78 -14,797,607.68
50. Credit impairment loss (loss listed as“-“)
Items Current year Last year
Credit impairment loss on notes receivable 2,055,299.46 1,310,734.78
Credit impairment loss on receivable -97,597,742.66 -20,792,681.30
Credit impairment loss on other receivable 107,768.08 -6,016,822.24
Credit impairment loss on long term receivable 4,636,661.13 -9,218,793.44
Total -90,798,013.99 -34,717,562.20
51. Assets impairment losses (loss listed as “-“)
Items Current year Last year
Loss of contract asset impairment -3,296,146.61 -5,065,258.60
Loss on impairment of inventory and cost to
-46,330,540.22 -8,411,139.41
fulfill the contract obligation
Total -49,626,686.83 -13,476,398.01
52. Gain on assets disposal (loss listed as “-“)
Amounts recognized
into current
Item Current year Last year
non-recurring profit
or loss
Gain on non-current assets
59,272.29 -169,550.05 59,272.29
disposal
Including: gain on non-current
assets disposal not classified as 59,272.29 -169,550.05 59,272.29
held for sale
Including: gain on fixed 59,272.29 -169,550.05 59,272.29
142 / 188
assets disposal
Total 59,272.29 -169,550.05 59,272.29
53. Non-operating income
（1） Non-operating income list
Amounts recognized
into non-recurring
Item Current year Last year
profit or loss for the
year
Gain on debts restructuring - 681,549.89 -
Other items 1,491,460.42 729,839.86 1,491,460.42
Contract withdrawn and received in
advance transferred to 2,983,246.50 - 2,983,246.50
non-operating income
Total 4,474,706.92 1,411,389.75 4,474,706.92
54. Non-operating expenses
Amounts recognized
into non-recurring
Item Current year Last year
profit or loss for the
year
Non-current assets scrap loss 1,474,287.01 238,773.51 1,474,287.01
Outward donation 60,000.00 60,000.00 60,000.00
Expected loss for open litigation - 7,592,239.01 -
Compensation 7,680,000.00 7,680,000.00
Inventory shortage 2,303.16 2,303.16
Others 402,800.25 250,241.11 402,800.25
Total 9,619,390.42 8,141,253.63 9,619,390.42
55. Income tax expenses
(1) Income tax expenses
Items Current year Last year
Current income tax expenses 3,010,709.68 7,201,935.68
Deferred income tax expenses -17,314,063.15 -15,786,702.19
Total -14,303,353.47 -8,584,766.51
(2) Adjustment process of accounting profit and income tax expense
Items Current year
143 / 188
Items Current year
Consolidated total profit this year -289,492,947.51
Income tax expenses at applicable tax rate -43,423,942.13
Effect on subsidiary applied to different tax rate -14,992,264.33
Effect on prior period income tax 479,768.28
Effect on non-taxable income
Effect on non-deductible cost, expense and loss 22,098,662.07
Effect on use of deductible loss from unrecognized deferred
tax assets in the prior period -1,819,963.78
Effect on temporary difference or deductible loss from
unrecognized deferred tax assets this year 31,231,561.02
Effect on deduction/ exemption of income tax
R&D expenditure accelerated deduction -7,877,174.60
Income tax expense -14,303,353.47
56. Other comprehensive income
Refer to the note “VI.38 Other comprehensive income” for details.
57. Notes to cash flow statement
(1) Cash receipt/payment of other operating/investing/financing activities
1) Other cash received relating to operating activities
Items Current year Last year
Government grants 14,489,543.00 24,996,436.54
Received travel expense refund 2,497,395.96 4,828,777.61
Deposit given back 41,513,085.25 36,950,909.92
Receivable from relate party - 11,000,000.00
Interest income 4,037,645.63 2,637,279.19
Receivable from the 3rd party - 177,570.52
Others 1,755,419.70 1,525,094.13
Total 64,293,089.54 82,116,067.91
2) Other cash paid relating to operating activities
Items Current year Last year
Business travel borrowing 9,534,563.41 7,009,973.81
Deposit paid 42,860,074.05 47,940,846.54
Expenditure 91,537,037.91 74,311,911.83
Unsettled AR/AP among related party 11,027,444.39 11,000,000.00
Bank handling charges 3,024,534.78 2,375,268.90
Others 4,592,818.07 4,342,577.27
144 / 188
Items Current year Last year
Total 162,576,472.61 146,980,578.35
3) Others cash received relating to financing activities
Items Current year Last year
Collection of guarantee money at the year end 56,369,665.56 30,591,791.66
Sale leaseback and financial lease 27,476,663.49 25,898,027.71
Total 83,846,329.05 56,489,819.37
4) Others cash paid relating to financing activities
Items Current year Last year
Payment of guarantee money 75,003,788.58 56,369,665.56
Sale& leaseback and financial lease 22,971,894.19 21,827,295.59
Purchase of minority interest 8,765,615.00
lease premium 5,246,090.60
Total 111,987,388.37 78,196,961.15
(2) Supplementary information of consolidated cash flow statement
Items Current year Last year
1. Adjusting net profit into cash flows of operating —— ——
activities:
Net profit -275,189,594.04 22,849,809.33
Add: Provision for impairment of assets 49,626,686.83 13,476,398.01
Provision for impairment of credit 90,798,013.99 34,717,562.20
Depreciation of fixed assets, Amortization of
85,379,019.94 76,389,416.86
mineral resources, and biological assets
Depreciation of right-of-use assets 5,557,030.56
Amortization of intangible assets 7,903,250.51 6,731,291.97
Amortization of long-term deferred expenses 1,571,853.84 1,986,307.40
Losses on disposal of fixed assets, intangible assets, and
-59,272.29 169,550.05
long-term assets (income listed with”-”)
Losses on write-off of fixed assets (income listed
1,536,590.17 238,773.51
with”-”)
Change of fair value profit or loss -52,398,565.78 14,797,607.68
Financial expense (income listed with”-”) 18,951,092.91 22,795,380.51
Investment loss (income listed with”-”) 47,447,292.15 -104,437,155.73
Decrease of deferred tax assets(increase listed with”-”) -20,900,048.02 -6,581,861.03
Increase of deferred tax liabilities(decrease listed with”-”) 3,585,984.87 -9,204,841.16
145 / 188
Items Current year Last year
Decrease of inventories (increase listed with”-”) -324,479,019.61 -180,341,865.83
Decrease of operating receivables (increase listed
-45,570,227.23 -61,894,148.27
with”-”)
Increase of operating payables (decrease listed with”-”) 407,758,129.57 155,165,347.05
Others -
Net cash flows arising from operating activities 1,518,218.37 -13,142,427.45
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 438,969,337.87 314,978,460.49
Less: Opening balance of cash 314,978,460.49 301,527,354.56
Add: Closing balance of cash equivalent
Less: Opening balance of cash equivalent
Net increase of cash and cash equivalent 123,990,877.38 13,451,105.93
(3) Cash and cash equivalents
Items Current year Last year
Cash 438,969,337.87 314,978,460.49
Including: Cash on hand 99,580.64 154,668.54
Bank deposit used for paying at any moment 438,869,757.23 314,823,791.95
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 438,969,337.87 314,978,460.49
Cash and cash equivalents restricted in the parent
-
company or subsidiary
58. The assets with the ownership or use right restricted
Items Current year Reasons
Monetary fund 83,689,167.92 Guarantee money frozen fund
Notes Receivable 6,420,000.00 Pledge
Fixed asset 89,417,838.05 Pledge
146 / 188
Items Current year Reasons
Investment asset 38,955,728.90 Pledge
Intangible asset 8,266,573.44 Pledge
Note: The bank account of Dalian Bingshan Group Sales Co., Ltd is frozen due to litigations,
the amount is 3,407,480.07 Yuan. Dalian Bingshan Group Engineering Co., Ltd ’s bank account
is frozen due to litigations, the amount is 900,000 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.
The Company’s subsidiary, Wuhan New World Refrigeration Industry Co., LTD., mortgaged its
fixed assets, intangible assets and the investment real estate to China EverBright Bank Co.,
LTD., Wuhan Branch, as an integrated limit of credit used for local and foreign loans, trade
financing, discount, acceptance, letter of credit, letter of guarantee, factoring, guarantee and
other specific credit business.
59. Monetary category of foreign currency
(1) Monetary category of foreign currency
Closing Balance Exchange Closing Balance
Item
(foreign currency) Rate (RMB)
Cash 2,660,385.74
Including：USD 409,800.64 6.3757 2,612,773.25
GBP 0.10 8.6064 0.86
JPY 859,183.00 0.055415 47,611.63
Accounts receivable 29,819,217.13
Including: USD 4,254,703.76 6.3757 27,126,714.76
GBP 170,311.86 8.6064 1,465,771.99
JPY 22,137,154.00 0.055415 1,226,730.38
Accounts payable 5,104,241.14
Including: USD 734,147.40 6.3757 4,680,703.58
Euro 1,330.00 7.2197 9,602.20
GBP 37,274.28 8.6064 320,797.36
JPY 1,720,000.00 0.055415 93,138.00
60. Government Grants
147 / 188
(1) Basic information
Amount recognized
Category Amount Disclosure in current profit and
loss
Efficiency pump and its Deferred income/cost
7,800,000.00 48,412.65
supporting systems of sales/expense
Deferred
Relocation compensation 42,332,000.00 1,114,000.00
income/other income
Application of combined Deferred income/cost
compression NH3&Co2 29,409,622.81 2,028,323.87
replace R22 of sales/expense
Refrigeration Compressor Deferred income/cost
Intelligent Manufacturing 5,000,000.00 368,769.72
System Fund of sales/expense
Deferred income/cost
Ultrasonic defrosting
technology 9,841,800.00 of sales/expense/other 294,833.48
income
Environmental protection
and energy saving
refrigeration and air Deferred income/cost
conditioning compressor 31,000,000.00 2,553,850.15
of sales/expense
technology
industrialization project
R290 replace R22 13,006,663.20 Deferred income -
R290 replace R22 twin
4,747,680.00 Deferred income -
stage screw sets
R22 update 4,675,798.59 Other Income 4,675,798.59
Dalian Jinpu Finance
Center-after R&D 1,544,700.00 Other Income 1,544,700.00
investment subsidy
High-tech enterprise
recognition subsidy 793,000.00 Other Income 793,000.00
Xiaojuren subsidy of
Dalian industry & 600,000.00 Other Income 600,000.00
information bureau
R&D subsidy of
Dongkejing No.2021-28 568,800.00 Other Income 568,800.00
Subsidy of FY2021 400,000.00 Other Income 400,000.00
Export credit insurance
premium support fund 263,500.00 Other Income 263,500.00
Vocational skills training
subsidies 234,810.00 Other Income 234,810.00
Technology reward of
2020-Dalian Science 200,000.00 Other Income 200,000.00
Technology Bureau
Service standardized
subsidy by Liaoning 150,000.00 Other Income 150,000.00
148 / 188
Amount recognized
Category Amount Disclosure in current profit and
loss
Market Supervision
Administration
Manufacture innovation
center special funds 80,000.00 Other Income 80,000.00
Others 74,202.85 Other Income 74,202.85
Total 152,722,577.45 - 15,993,001.31
VII. Change of Consolidation Scope
There are no changes in scope of consolidation
VIII. Interest in other entity
1. Equity of subsidiaries
(1) Organization structure of group company
Main Shareholding
Registered Business (%) Obtaining
Name of subsidiaries business
address nature method
address Direct Indirect
Dalian Bingshan Group
Dalian Dalian Installation 100 Establish
Engineering Co., Ltd.
Dalian Bingshan Group
Dalian Dalian Trading 100 Establish
Sales Co., Ltd.
Dalian Bingshan
Air-conditioning Dalian Dalian Manufacturing 100 Establish
Equipment Co., Ltd.
Dalian Bingshan JiaDe
Dalian Dalian Manufacturing 100 Establish
Automation Co., Ltd.
Dalian Bingshan Lingshe
Quick Freezing Dalian Dalian Manufacturing 100 Establish
Equipment Co., Ltd.
Wuhan New World
Refrigeration Industrial Wuhan Wuhan Manufacturing 100 Acquisition
Co., Ltd.
Bingshan Technical
Service （Dalian） Dalian Dalian Services 100 Establish
Co.,Ltd.
Dalian Xinminghua
Dalian Dalian Electronic 100 Acquisition
Electrical Technology
149 / 188
Main Registered Business Shareholding Obtaining
Name of subsidiaries
business address nature (%) method
Co., Ltd address
Dalian Niweisi LengNuan
Dalian Dalian Manufacturing 55 Acquisition
Technology Co., Ltd.
Dalian Bingshan
International Trading Dalian Dalian Service 100 Acquisition
Company
Wuhan New World
Air-conditioning
Wuhan Wuhan Installation 100 Establish
Refrigeration Engineering
Co., Ltd
Wuhan Lanning Energy
Wuhan Wuhan Trading 54.55 Acquisition
Technology Co., Ltd.
Ningbo Bingshan
Air-conditioning
Ningbo Ningbo Installation 51 Establish
Refrigeration Engineering
Co., Ltd
Chengdu Bingshan
Refrigeration Engineering Chengdu Chengdu Services 51 Establish
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.
(2) There are no significant non-subsidiaries.
2. Equity in joint venture arrangement or associated enterprise
（1） The important affiliated companies
Shareholding (%)
Main
Name of joint ventures or Registered Business Accounting
business
affiliated companies address nature methods
address
Direct Indirect
Panasonic Cold-chain Equity
(Dalian) Co., Ltd Dalian Dalian Manufacturing 40
method
150 / 188
Shareholding (%)
Main
Name of joint ventures or Registered Business Accounting
business
affiliated companies address nature methods
address
Direct Indirect
Dalian Fuji Bingshan Equity
Vending Machine Co., Ltd Dalian Dalian Manufacturing 49
method
Panasonic Compressor Equity
(Dalian) Co., Ltd Dalian Dalian Manufacturing 40
method
Jiangsu Jingxue Insulation Equity
Changzhou Changzhou Manufacturing 21.91
Technology Co.,Ltd method
Dalian Bingshan Metal Equity
Dalian Dalian Manufacturing 49.00
Technology Co., Ltd. method
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.
151 / 188
(2)The key financial information of affiliated companies
Closing balance/Current year
Dalian Fuji Bingshan Panasonic Jiangsu Jingxue
Items Panasonic Cold-chain Dalian Bingshan Metal
Vending Machine Compressor Insulation Technology
(Dalian) Co., Ltd (Dalian) Co., Ltd Co.,Ltd Technology Co., Ltd.
Co., Ltd
Current assets 519,702,256.24 1,581,760,317.20 1,277,834,286.47 1,288,722,048.45 330,379,711.49
Including: Cash and cash
41,894,346.04 22,381,748.30 112,967,780.24 197,139,783.12 133,070,727.90
equivalents
Non-current assets 234,103,971.93 290,838,647.69 307,229,051.83 235,300,482.93 39,596,544.29
Total assets 753,806,228.17 1,872,598,964.89 1,585,063,338.30 1,524,022,531.38 369,976,255.78
Current liabilities 373,521,152.88 1,051,572,145.31 396,672,114.65 709,690,258.17 65,843,251.71
Non-current liabilities 4,618,886.45 12,302,083.99 29,936,172.21 29,832,096.59 -
Total liabilities 378,140,039.33 1,063,874,229.30 426,608,286.86 739,522,354.76 65,843,251.71
Minority interests - - - 484,306.52 -
Equity to the parent
375,666,188.84 214,723,516.35 1,156,846,384.28 784,015,870.10 304,133,004.07
company
Net assets calculated
according to the 148,440,479.34 85,889,406.54 462,738,553.71 171,770,036.98 149,025,171.99
shareholding proportions
Adjusting events - - - - -
—Goodwill 226,689.29 4,440,630.89 - 29,961,491.06 19,269,770.94
—Unrealized profits of
- - - - -
insider trading
--Others -11,153.88 - -2,678,304.22 -
152 / 188
Closing balance/Current year
Dalian Fuji Bingshan Panasonic Jiangsu Jingxue
Items Panasonic Cold-chain Dalian Bingshan Metal
Vending Machine Compressor Insulation Technology
(Dalian) Co., Ltd (Dalian) Co., Ltd Co.,Ltd Technology Co., Ltd.
Co., Ltd
Book value of equity
investment of affiliated 148,656,014.75 90,330,037.43 460,060,249.49 201,731,528.04 168,294,942.93
companies
Fair value of equity
investment with public - - - - -
offer
Operating income 239,782,015.85 1,513,254,711.28 1,117,036,108.61 914,019,079.37 467,909,048.44
Financial expense 5,192,848.35 24,987,011.19 1,116,677.52 1,535,270.95 -961,474.38
Income tax expense 30,729.79 -27,060,054.40 11,921,990.57 9,147,959.86 7,639,671.65
Net profit 284,537.72 -282,147,957.09 83,697,007.01 67,100,790.28 48,486,526.57
Net profit of
- - - - -
discontinuing operation
Other comprehensive
- - - - -
income
Total comprehensive
284,537.72 -282,147,957.09 83,697,007.01 67,100,790.28 48,486,526.57
income
The current dividends
received from joint - 2,797,849.22 32,773,200.00 - 28,648,633.78
ventures
(Continued)
Items Opening balance/Last year
153 / 188
Dalian Fuji Bingshan Panasonic Jiangsu Jingxue Dalian Bingshan
Panasonic Compressor
Vending Machine Cold-chain Insulation Technology Metal Technology Co.,
(Dalian) Co., Ltd
Co.,Ltd
Co., Ltd (Dalian) Co., Ltd Ltd.
Current assets 499,408,572.43 1,315,768,176.02 1,245,467,964.26 858,059,356.79 499,408,572.43
Including: Cash and cash
64,731,708.77 55,444,887.64 146,464,797.70 163,037,732.91 191,576,206.68
equivalents
Non-current assets 252,283,994.86 238,629,720.75 309,811,760.93 192,469,083.17 44,431,510.18
Total assets 751,692,567.29 1,554,397,896.77 1,555,279,725.19 1,050,528,439.96 377,420,835.98
Current liabilities 359,742,781.58 1,048,933,029.30 366,066,971.54 478,133,992.64 63,065,326.29
Non-current liabilities 16,568,134.59 - 18,343,806.70 13,138,693.27 -
Total liabilities 376,310,916.17 1,048,933,029.30 384,410,778.25 491,272,685.91 63,065,326.29
Minority interests - - - 375,245.30
Equity to the parent company 375,381,651.12 505,464,867.47 1,161,637,377.27 558,880,508.75 314,355,509.69
Net assets calculated according
183,937,009.05 202,185,946.99 464,654,950.91 163,260,174.22 154,034,199.75
to the shareholding proportions
Adjusting events - - - - -
—Goodwill 226,689.29 4,440,630.89 - 39,948,654.75 19,269,770.94
—Unrealized profits of insider
- - - - -
trading
--Others - -639,508.39 -2,621,843.60 - -145,424.54
Book value of equity
investment of affiliated 184,454,138.22 205,987,069.49 462,033,107.31 203,208,828.97 173,158,546.15
companies
Fair value of equity investment
- - - - -
with public offer
Operating income 217,703,041.83 1,393,251,936.08 905,805,839.02 772,785,891.15 405,008,117.04
154 / 188
Opening balance/Last year
Dalian Fuji Bingshan Panasonic Jiangsu Jingxue Dalian Bingshan
Items Panasonic Compressor
Vending Machine Cold-chain Insulation Technology Metal Technology Co.,
(Dalian) Co., Ltd
Co.,Ltd
Co., Ltd (Dalian) Co., Ltd Ltd.
Financial expense 3,239,090.65 26,378,537.05 -1,428,218.52 1,660,123.13 -2,347,078.64
Income tax expense - -497,086.07 10,206,548.28 8,171,271.84 9,841,964.14
Net profit -18,525,706.44 19,984,637.30 81,932,612.51 60,206,578.50 59,356,953.86
Net profit of discontinuing
- - - - -
operation
Other comprehensive income - - - - -
Total comprehensive income -18,525,706.44 19,984,637.30 81,932,612.51 60,206,578.50 59,356,953.86
The current dividends received
- - 36,026,000.00 - 28,510,920.84
from joint ventures
155 / 188
(3)Summary financial information of insignificant affiliated companies
Items Current year Last year
Affiliated company
Total book value of investment of affiliated 158,059,185.33 364,039,638.82
companies
The total of following items according to the
shareholding proportions
Net profit 2,067,871.70 -61,011,181.99
Other comprehensive income - -
Total comprehensive income 2,067,871.70 -61,011,181.99
(4) Significant restrictions of the ability of affiliated companies transferring funds to the
Company.
No.
(5) Contingency related to joint venture or affiliated company need to be disclosed.
No.
IX. Risk Related to Financial Instruments
The main financial instruments held by the Company are borrowings, accounts receivable,
accounts payable, other non-current financial asset etc. The detailed explanation is referred to
the note No.VI. The related risks of these financial instruments and the risk management policy
conducted to reduce these risks by the Company are introduced as below. The Company
management conducts to manage and monitor these risks exposure and control these risks under
certain risk level.
1. Objectives and policies of each risk management
The objectives of risk management conducted by the Company are to reach the balance between
risk and profit return by reducing the negative influence to operating performance to the
minimum level as well as maximizing the shareholders’ and other investors’ profits. Based on
these objectives, the basic risk management policy is to recognize and analyze all sorts of risk
that the Company faced with, to set up the proper risk tolerance bottom line conducting risk
management, as well as to monitor these risks in a timely and effective manner, and to ensure
these risks under the limit level.
(1) Market risk
1) Exchange rate risk
Most of the Company’s business is located in China, and settled with RMB. But the Company
156 / 188
defined exchange rate risk of assets, liabilities dominated in foreign currency and future
transaction dominated in foreign currency (mainly including USD, JPY, EURO,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 did not agree any forward foreign exchange contract or currency
swap contract .As at 31st December 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 2,612,773.25 15,790,643.22
Monetary fund-JPY 47,611.63 2,714,504.45
Monetary fund-GBP 0.86 66.32
Receivable- GBP 1,465,771.99 1,331,614.56
Receivable -USD 27,126,714.76 34,739,431.77
Receivable -JPY 1,226,730.38 2,162,789.04
Payables -USD 4,680,703.58 6,553,114.36
Payables - EURO 9,602.20 148,041.19
Payables -JPY 93,138.00 2,526,739.93
Payables - GBP 320,797.36
The Company paid close attention to the effect on FX risk.
2) Interest rate risk
The interest risk of the Company 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 31st December 2021, based on the assumption of interest rate change of 50 BP, the Company’s net
profit of current year will increase or decrease1. 3946 million Yuan.
3) Price risk
157 / 188
The price risk of the Company is mainly commodity price risk. The Company sells products at market
prices. As the national economy enters the "new normal", the manufacturing industry is under great
economic downward pressure, and the drastic fluctuations of bulk material prices have a certain impact
on the Company's operations.
(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 monetary fund 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 31st December 2021, the top five customers of receivable accounts balance are
161,789,114.22Yuan.
(3) Liquidity risk
Liquidity risk was referred to the risk of shortage of funds incurred when the enterprise fulfill the
obligation of settlement by cash or other financial assets. The way to manage the liquidity risk is to
ensure enough fund available to fulfill the liability by due date in prevention from unacceptable loss of
or reputation damage to the Company. The Company periodically analyze the liability structure and
expiry date and the financial department of the Company continued to monitors the short term or
long-term capital needs to ensure maintain plenty of cash flow. And the same time they also monitor the
condition of bank loan agreements and obtain commitments from banks to reduce liquidity risks.
The fund mainly comes from bank loan. By December 31st, 2021, the credit limit still available is 468.95
million Yuan and short-term credit limit available is 468.95 million Yuan.
As at 31st December 2021, the Company’s financial assets and financial liabilities in line with non
discounted cash flow of the contracts as following： Currency unity:10kYuan
158 / 188
Within 1
Items 1-2 years 2-5 years Over 5 years Total
year
Financial Assets
Cash and cash in bank 52,265.85 - - - 52,265.85
Notes receivable 16,643.04 - - - 16,643.04
Accounts receivable 82,154.87 - - - 82,154.87
Financing receivable 4,370.43 - - - 4,370.43
Other Receivable 6,034.01 - - - 6,034.01
Contract asset 10,985.97 - - - 10,985.97
Non-current asset due
1,499.10 - - - 1,499.10
within 1 year
Other noncurrent
- - - 26,141.07 26,141.07
financial asset
Financial Liabilities
Short-term loan 24,593.71 - - - 24,593.71
Notes Payable 38,003.30 - - - 38,003.30
Accounts payable 91,987.19 - - - 91,987.19
Other payable 5,528.41 - - - 5,528.41
Employee’s payable 3,514.88 - - - 3,514.88
Tax payable 1,351.48 - - - 1,351.48
Non-current liability
2,417.54 - - - 2,417.54
due within 1 year
Long-term loan - - 15,000.00 - 15,000.00
Lease obligation - 333.39 169.12 36.89 539.40
Long-term payable - - 1,999.89 - 1,999.89
X. Disclosure of Fair Value
1. Amount and measurement level of the assets and liabilities measured at fair value at the year
end
Fair value at the year end
First level Second level Third level
Items
measurement of fair measurement of measurement of Total
value fair value fair value
Financial
assets — — — —
Continuously
measured at
FV available 159 / 188
for sale
Fair value at the year end
First level Second level Third level
Items
measurement of fair measurement of measurement of Total
value fair value fair value
Receivable
- 43,704,310.38 - 43,704,310.38
financing
Other
non-current 200,547,043.12 - 60,863,621.49 261,410,664.61
financial asset
Total 200,547,043.12 43,704,310.38- 60,863,621.49 305,114,974.99
2. Basis for Market price of first level measurement of fair value
Equity instrument portion of the other noncurrent financial asset is measured at the unadjusted
closing quoted price on stock market on December 31, 2021.
3. For continuous and discontinuous 2nd level of FV, valuation technique adopted and key
parameter quantitive and qualitive information.
Bank acceptance notes (receivable financing) as measured at fair value through other
comprehensive income is within this scope. Bank acceptance notes held by the Company
mainly are high credit grading from the large commercial bank. As the remaining maturity is
short and credit risk is very low, on the balance sheet date, the book value of bank acceptance
notes receivable is similar to fair value.
4. For continuous and discontinuous 3rd level of FV, valuation technique adopted and key
parameter quantitive and qualitive information.
The share investment in the non-listed company is within this scope, where neither active
market for invested company’s share nor market price is available for reference, and it is not
feasible to obtain the relevant observable input value. The Company adopts the 3rd level
unobservable input to measure FV, which is the comparable company’s share price to book
value method together with liquidity factor.
5. For continuous 3rd level of FV, adjusted information of opening and closing balance and
sensitivity analysis of unobservable parameter.
No.
6. Assets continuously measured at fair value have switched among different level during the
year.
No.
160 / 188
7. Changes of valuation technique and reasons for changes
No.
8. Assets and liability are disclosed at FV rather than measured at FV
No.
XI. Related Parties Relationship and Transactions
(I) Related parties’ relationship
1. Parent company and ultimate controller
(1) Parent company and ultimate controller
Parent Registered Business Registered Shareholding Voting
company address nature capital percentage power
(%) percentage
(%)
Dalian
Bingshan
Dalian Manufacture 158,580,000.00 20.27 20.27
Group Co.,
Ltd.
Note: Dalian Bingshan Group Co., Ltd. is a Sino –foreign joint venture located No.106 Liaohe
East Road, DDZ, 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) Change of registered capital of controlling shareholder
Controlling shareholder Opening balance Increase Decrease Closing balance
Dalian Bingshan Group 158,580,000.00 158,580,000.00
Co., Ltd.
(3) Change of proportion of controlling shareholder’s shareholding and equity
Controlling Shareholding amount Ratio of shareholding（%）
161 / 188
shareholder Closing balance Opening balance Ratio Ratio at
at year end beginning of
year
Dalian Bingshan
Group Co., Ltd. 170,916,934.00 170,916,934.00 20.27 20.27
2. Subsidiaries
Referrer to the content in the Note “VIII. 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 “VIII. 2.(1)
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
Relationships with the Company
company
Panasonic Refrigeration (Dalian) Co., Ltd Affiliated company of the Company
Panasonic Cold-chain (Dalian) Co., Ltd Affiliated company of the Company
Panasonic Compressor (Dalian) Co., Ltd Affiliated company of the Company
Dalian Honjo Chemical Co., Ltd Affiliated company of the Company
Keinin-Grand Ocean Thermal Technology
Affiliated company of the Company
(Dalian) Co., Ltd
Beijing Huashang Bingshan Refrigeration and
Affiliated company of the Company
Air-conditioning Machinery Co., Ltd
Dalian Fuji Bingshan Vending Machine Co.,
Affiliated company of the Company
Ltd
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. Affiliated company of the Company
Dalian Fuji Bingshan Vending Machine Sales
Affiliated company of the Company
Co., Ltd
Jiangsu Jingxue Insulation Technology
Affiliated company of the Company
Co.,Ltd
Dalian Jingxue Freezing Equipment Co., Ltd Subsidiary of affiliated company
Shanghai Jingxue Freezing Equipment Co.,
Subsidiary of affiliated company
Ltd
Panasonic Cold Machine System (Dalian) co.,
Affiliated company of the Company
Ltd
Dalian Bingshan Metal Technology Co.,Ltd Affiliated company of the Company
Dalian Bingshan Group Huahuida Financial
Affiliated company of the Company
Leasing Co., Ltd
Wuhan Sikafu Power Control Equipment Co., Affiliated wholly owned subsidiary of the
Ltd Company
4. Other related parties
162 / 188
Name of related party Related party relationship
Dalian Bingshan Group Refrigeration Affiliated company of Dalian Bingshan
Equipment Co., Ltd Group
Affiliated company of Dalian Bingshan
Dalian Spindle Cooling Towers Co., Ltd
Group
Affiliated company of Dalian Bingshan
BAC (Dalian) Co., Ltd
Group
Linde Hydrogen Refill Station Affiliated company of Dalian Bingshan
Equipment(Dalian) Co.,Ltd Group
Dalian Pate Technology Co.,Ltd Subsidiary of Dalian Bingshan Group
Dalian Bingshan Group Management
Subsidiary of Dalian Bingshan Group
Consulting Co., Ltd
Alphavita Bio-scientific (Dalian) Co., Ltd. Subsidiary of Dalian Bingshan Group
Dalian Fuji Bingshan Intelligent Control System Affiliated company of Subsidiary of Dalian
Co., Ltd. Bingshan Group
Affiliated company of Subsidiary of Dalian
Dalian Kaierwen Science Co.,Ltd
Bingshan Group
Affiliated company of Subsidiary of Dalian
Dalian Bingshan Huigu Development Co., Ltd.
Bingshan Group
(II) 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 Current year Last year
Panasonic Cold Machine System Purchases of
(Dalian) co., Ltd goods 8,212,752.63 6,204,102.31
Panasonic Refrigeration (Dalian) Co., Purchases of
Ltd. goods 5,942,676.17 5,734,790.46
Purchases of
BAC (Dalian) Co., Ltd 26,483,606.45 38,558,623.38
goods
Panasonic Cold-chain (Dalian) Co., Purchases of
Ltd goods 8,274,236.08 6,771,058.02
Jiangsu Jingxue Insulation Purchases of
Technology Co.,Ltd goods 34,088,451.31 12,637,825.68
Dalian Jingxue Freezing Equipment Purchases of
Co., Ltd goods - 31,132.74
Dalian Bingshan Group Refrigeration Purchases of
Equipment Co., Ltd goods 44,236,639.71 25,610,580.45
Dalian Bingshan Huigu Development Purchases of
Co., Ltd. goods 1,154,661.47
Purchases of
Dalian Pate Technology Co.,Ltd 4,288,651.47 4,424,140.00
goods
Dalian Spindle Cooling Towers Co., Purchases of
Ltd goods 1,895,034.78 3,165,693.81
Panasonic Compressor (Dalian) Co., Purchases of
Ltd goods 236,234.00 239,127.13
Dalian Bingshan Metal Technology Purchases of
Co., Ltd goods 61,988.75 185,173.85
Dalian Fuji Bingshan Vending Purchases of
Machine Co., Ltd goods 2,018,187.51 367,523.32
163 / 188
Related party Content Current year Last year
Dalian Fuji Bingshan Vending Purchases of
Machine Sales Co., Ltd goods 330,309.73
Purchases of
Dalian Honjo Chemical Co., Ltd 152,920.35
goods
Purchases of
Dalian Kaierwen Science Co.,Ltd 2,488,250.00
goods
Dalian Bingshan Group Hua Hui Da Purchases of
Financial Leasing Co, .Ltd goods 25,898,027.71
Purchases of
Dalian Bingshan Group 27,471.70 9,759.29
goods
Total 167,605,586.21 129,837,558.15
(2) Sales of goods/ labour services provision
Related party Content Current year Last year
Panasonic Cold-chain (Dalian) Co., Ltd Sales of goods 127,490,433.60 93,027,572.31
Panasonic Refrigeration (Dalian) Co.,
Sales of goods 43,839,502.05 45,338,115.66
Ltd.
Dalian Fuji Bingshan Vending Machine
Sales of goods 19,081,218.00 18,376,724.10
Co., Ltd
Panasonic Cold Machine System
Sales of goods 35,590,082.15 30,951,802.17
(Dalian) co., Ltd
MHI Bingshan Refrigeration (Dalian)
Sales of goods 16,781,616.57 8,338,788.98
Co., Ltd.
Beijing Huashang Bingshan
Refrigeration and Air-conditioning Sales of goods -41,476.27 617,094.02
Machinery Co., Ltd.
5,171,634.65
Panasonic compressor (Dalian) Co., Ltd Sales of goods 28,338,724.95
Dalian Pate Technology Co.,Ltd Sales of goods 452,182.08 1,318,667.79
Keinin-Grand Ocean Thermal
Sales of goods -309,481.22 1,048,376.71
Technology (Dalian) Co., Ltd.
Dalian Fuji Bingshan Vending Machine
Sales of goods 94,850.24
Sales Co., Ltd
Dalian Jingxue Freezing Equipment Co.,
Sales of goods 1,099,672.68 1,133,622.82
Ltd
BAC (Dalian) Co., Ltd Sales of goods 54,676,218.06 37,735,772.48
Dalian Bingshan Group Refrigeration
Sales of goods 3,876,812.87 4,876,532.38
Equipment Co., Ltd
Dalian Bingshan Huigu Development
Sales of goods 8,376,384.88 9,909,504.28
Company
164 / 188
Related party Content Current year Last year
Dalian Bingshan Group Huahuida
Sales of goods 22,747,787.61 38,052,648.77
Financial Leasing Co.,Ltd
Dalian Spindle Cooling Towers Co., Ltd Sales of goods 7,572,022.06 4,561,140.10
Wuhan Sikafu Power Control Equipment
Sales of goods 2,831.86 817,593.80
Co., Ltd
Dalian Fuji Bingshan Intelligent Control
Sales of goods 297,951.75 205,929.20
System Co., Ltd
Alphavita Bio-scientific (Dalian) Co.,
Sales of goods 2,820,207.93 1,865,032.81
Ltd.
Linde Hydrogen Refill Station
Sales of goods 2,097,847.50
Equipment(Dalian) Co.,Ltd
Dalian Bingshan Group Sales of goods 139,331.33
Total 374,790,539.11 303,580,734.60
2. Assets Lease
(1) Assets rent out
Category of Current year Last year
Lessor Lessee assets rent
out Lease Income Lease Income
Bingshan
Refrigeration&
Dalian Bingshan
Heat Transfer Office 132,110.09 132,110.09
Technologies Group Co., Ltd.
Co.,Ltd
Bingshan MHI Bingshan
Refrigeration&
Refrigeration
Heat Transfer Plant 3,809,523.80 3,809,523.80
Technologies (Dalian) Co.,
Co.,Ltd Ltd.
Bingshan Dalian Bingshan
Refrigeration&
Huigu Land/propert
Heat Transfer 8,190,302.14 8,190,552.35
Technologies Development y
Co.,Ltd Company
Bingshan Panasonic
Refrigeration&
Cold-Chain Employee
Heat Transfer 37,577.98 39,339.45
Technologies (Dalian) Co., dormitory
Co.,Ltd Ltd
Bingshan Panasonic
Refrigeration&
Compressor Employee
Heat Transfer 91,428.56 114,285.70
Technologies (Dalian) Co., dormitory
Co.,Ltd Ltd
165 / 188
Category of Current year Last year
Lessor Lessee assets rent
out Lease Income Lease Income
Bingshan Panasonic
Refrigeration& Refrigeration Employee
Heat Transfer 49,321.09 63,412.88
Technologies (Dalian) Co., dormitory
Co.,Ltd Ltd.
Dalian Bingshan
Lingshe Quick Dalian Jingxue
Freezing Energy Saving Plant and
Equipment Co., 1,005,111.44 1,005,111.44
Technology Co., office
Ltd Ltd.
Wuhan New World Wuhan Sikafu
Refrigeration Power Control
Plant 308,074.95 212,990.08
Industry Co. Ltd Equipment Co.,
Ltd
(2) Assets under lease
Category of
Current year Last year Lease
Lessor Lessee assets rent
Lease fees fees
in
Dalian Bingshan Group Bingshan Refrigeration&
Huahuida Financial Leasing Heat Transfer FA 413,238.94
Co.,Ltd Technologies Co.,Ltd
Dalian Bingshan Group Dalian Xinminghua
Huahuida Financial Leasing Electrical Technology FA 3,722,231.90 3,621,571.20
Co.,Ltd Co., Ltd
Dalian Bingshan Group Dalian Bingshan JiaDe
Huahuida Financial Leasing Automation Co., Ltd. FA 418,837.77
Co.,Ltd
Dalian Bingshan Group Wuhan New World
Huahuida Financial Leasing Refrigeration Industry Co. FA 18,339,569.52 14,690,379.43
Co.,Ltd Ltd
Dalian Bingshan Group Wuhan Lanning Energy
Huahuida Financial Leasing Technology Co., Ltd FA 24,295.00 2,814,560.00
Co.,Ltd
3. Warranty provided by Related Parties
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. Please refer to the “ Note VI. 32 long
term borrowings”.
4. Funds borrow from /lent to related party
166 / 188
Name of the Take Starting Ending
Amount Explanation
related party in/out date date
Dalian Bingshan Project fund
Group Co., Ltd. Take in 150,000,000.00 2016.03.14 2026.03.13 investment
Dalian Bingshan
Group Huahuida
Financial Leasing Take in 2,145,251.09 2021.06.15 2024.05.15
Co.,Ltd
Dalian Bingshan
Group Huahuida
Financial Leasing Take in 18,119,468.87 2021.11.15 2026.10.15
Co.,Ltd
Dalian Bingshan
Group Huahuida
Financial Leasing Take in 8,619,474.00 2021.02.15 2023.01.15
Co.,Ltd
Dalian Bingshan
Group Huahuida
Financial Leasing Take in 10,000,000.00 2021.06.01 2024.05.01
Co.,Ltd
Dalian Bingshan
Group Huahuida
Financial Leasing Take in 5,063,480.54 2021.08.15 2023.07.15
Co.,Ltd
Total 193,947,674.50
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 in 2016. After the above funds are in
place, Bingshan Group will allocate the funds to the Company in full and without any additional
charge. The above special fund is 0.15 billionYuan in total, the loan interest is fixed interest rate
at 1.2% annual rate and paid interest 1,852,000Yuan for this year.
5. Other transactions among the related parties
Item transaction Current year Last year
Dalian Bingshan Group Sold equity of affiliated
74,007,700.00
Co.,Ltd company
Dalian Zhonghuida
Purchase equity of affiliated
Refrigeration 45,400,000.00
company
Technology Co., LTD
Total 45,400,000.00 74,007,700.00
In March 2021, Bingshan Refrigeration& Heat Transfer Technologies Co., Ltd bought 20%
shareholding in Dalian Bingshan Group Huahuida Financial Leasing Co.,Ltd from Dalian
Zhonghuida Refrigeration Technology Co., LTD. This share transfer has been approved through
15th meeting of the 8th directors’ meeting and announced for related party transaction.
167 / 188
6. Management Remuneration
Item Current year Last year
Total remuneration 3,711,500.00 3,792,100.00
(III) Balances with Related party
1.Accounts receivable due from related parties
Closing Balance
Item Related party Bad debt
Book Balance
Provision
Accounts receivable BAC (Dalian) Co., Ltd 12,548,585.90 880,910.73
Beijing Huashang Bingshan
Refrigeration and
Accounts receivable Air-conditioning Machinery Co., 10,125,260.53 6,110,824.22
Ltd
Accounts receivable Alphavita Bio-scientific (Dalian) 1,164,159.66 81,724.01
Co., Ltd.
Accounts receivable Dalian Fuji Bingshan Vending 5,656,023.33 398,096.17
Machine Co., Ltd.
Accounts receivable Dalian Bingshan Huigu 439,268.00 63,813.46
Development Company
Accounts receivable Dalian Spindle Cooling Towers 1,942,559.40 136,367.67
Co., Ltd
Accounts receivable MHI Bingshan Refrigeration 1,803,184.94 126,583.58
(Dalian) Co.,Ltd.
Accounts receivable Panasonic Cold Machine System 4,963,341.40 348,426.57
(Dalian) Co., Ltd
Accounts receivable Panasonic Cold Chain (Dalian) 37,390,849.92 2,624,837.66
Co., Ltd
Accounts receivable Panasonic Compressor (Dalian) 4,021,698.75 282,323.25
Co., Ltd
Accounts receivable Panasonic Refrigeration (Dalian) 6,861,805.71 481,698.76
Co., Ltd
Accounts receivable Dalian Fuji Bingshan Intelligent 175,200.00 12,299.04
Control System Co., Ltd.
Contract asset Dalian Bingshan Group
Refrigeration Equipment Co., Ltd 75,000.00 12,555.00
Contract asset Panasonic Refrigeration (Dalian)
Co., Ltd 11,000.00 772.20
Contract asset Panasonic Cold Machine System 166,000.00 27,788.40
(Dalian) Co., Ltd
Prepayment Panasonic Cold Machine System
(Dalian) Co., Ltd 2,225,656.57
Prepayment Dalian Bingshan Group
Refrigeration Equipment Co., Ltd 157,531.70
Prepayment Dalian Spindle Cooling Towers
Co., Ltd 341,215.00 -
Prepayment Dalian Bingshan Group Huahuida
Financial Leasing Co.,Ltd 951,659.80 -
Prepayment BAC (Dalian) Co., Ltd 1,607,378.00
168 / 188
Closing Balance
Item Related party Bad debt
Book Balance
Provision
Prepayment Panasonic Refrigeration (Dalian)
Co., Ltd 3,161,000.00 -
Receivable Dalian Fuji Bingshan Vending
Machine Co., Ltd. 2,060,929.41 -
financing
Receivable Panasonic Cold Machine system
(Dalian) Co., Ltd 4,197,610.38
financing
Receivable Panasonic Cold Chain (Dalian)
Co., Ltd 18,720,000.00 -
financing
Receivable Panasonic Refrigeration (Dalian)
Co., Ltd 242,878.69 -
financing
Receivable
BAC (Dalian) Co., Ltd 7,341,688.27
financing
Wuhan Sikafu Power Control
Other receivable 148,423.28 6,189.25
Equipment Co., Ltd
Panasonic Cold Chain (Dalian)
Other receivable 18,079.63 753.92
Co., Ltd
(Continued)
Opening Balance
Item Related party Bad debt
Book Balance
Provision
Accounts
BAC (Dalian) Co., Ltd 9,504,843.22 667,239.99
receivable
Accounts Beijing Huashang Bingshan Refrigeration
and Air-conditioning Machinery Co., Ltd 7,240,855.23 3,675,419.18
receivable
Accounts
Alphavita Bio-scientific (Dalian) Co., Ltd. 796,179.45 55,891.80
receivable
Accounts Dalian Fuji Bingshan Vending Machine
Co., Ltd. 6,782,271.29 476,115.44
receivable
Accounts
Dalian Spindle Cooling Towers Co., Ltd 2,099,049.80 147,353.30
receivable
Accounts MHI Bingshan Refrigeration (Dalian)
Co.,Ltd. 1,381,832.96 97,004.67
receivable
Accounts Panasonic Cold Machine system (Dalian)
Co., Ltd 5,009,806.43 351,688.41
receivable
Accounts
Panasonic Cold Chain (Dalian) Co., Ltd 31,200,329.39 2,190,263.12
receivable
169 / 188
Opening Balance
Item Related party Bad debt
Book Balance
Provision
Accounts
Panasonic Compressor (Dalian) Co., Ltd 170,229.87 11,950.14
receivable
Accounts
Panasonic Refrigeration (Dalian) Co., Ltd 10,217,335.97 717,256.99
receivable
Accounts Wuhan Sikafu Power Control Equipment
Co., Ltd 36,484.00 2,561.18
receivable
Accounts Dalian Fuji Bingshan Intelligent Control
System Co., Ltd. 140,000.00 9,828.00
receivable
Contract asset Dalian Bingshan Group Refrigeration
Equipment Co., Ltd. 75,000.00 5,265.00
Contract asset Panasonic Cold Machine system (Dalian)
Co., Ltd 72,500.00 5,089.50
Prepayment Dalian Bingshan Group Refrigeration
Equipment Co., Ltd. 222,875.00
Prepayment Panasonic Cold Machine system (Dalian)
Co., Ltd 343,673.53
Prepayment Panasonic Cold Chain (Dalian) Co., Ltd 3,938.00
Prepayment Dalian Kaierwen science Co., Ltd 1,445,000.00
Prepayment Dalian Bingshan Huigu Development Co.,
Ltd. 114,756.00
Prepayment Dalian Spindle Cooling Towers Co., Ltd 207,390.00
Jiangsu Jingxue Insulation Technology
Prepayment 6,397,458.41
Co.,Ltd
Receivable
BAC (Dalian) Co., Ltd 10,501,112.93
financing
Receivable Dalian Fuji Bingshan Vending Machine
financing Co., Ltd. 494,341.48
Receivable Panasonic Cold Machine system (Dalian)
financing Co., Ltd 6,185,494.14
Receivable
Panasonic Cold Chain (Dalian) Co., Ltd 16,320,000.00
financing
Receivable
Panasonic Compressor (Dalian) Co., Ltd 1,025,446.21
financing
Receivable
Panasonic Refrigeration (Dalian) Co., Ltd 5,049,112.09
financing
Notes
Panasonic Cold Chain (Dalian) Co., Ltd 6,400,000.00 449,280.00
receivable
Notes
Panasonic Refrigeration (Dalian) Co., Ltd 4,125,319.49 289,597.43
receivable
Other
Dalian Bingshan Group 36,263,700.00 2,371,645.98
receivable
2.Accounts Payable due from Related Party
170 / 188
Item Related party Closing Balance Opening Balance
Accounts Payable BAC Dalian Co., Ltd 11,326,144.36 24,377,268.45
Dalian Bingshan Group
Accounts Payable 18,626,438.61 5,805,008.65
Refrigeration Equipment Co., Ltd.
Dalian Bingshan Pate Technology
Accounts Payable 3,921,294.33 1,988,696.08
Co., Ltd
Dalian Spindle Cooling Towers
Accounts Payable 1,160,849.00 695,784.00
Co., Ltd
Jiangsu Jingxue Insulation
Accounts Payable 4,512,235.92 4,542,624.08
Technology Co.,Ltd
Dalian Fuji Bingshan Vending
Accounts Payable 145,500.00 414,000.00
Machine Sales Co., Ltd.
Panasonic Cold Machine System
Accounts Payable 17,401,521.28 14,096,385.66
(Dalian) Co., Ltd
Panasonic Cold Chain (Dalian)
Accounts Payable 187,071.99 7,109,782.64
Co., Ltd
Panasonic Compressor (Dalian)
Accounts Payable 1,785,651.94 1,805,998.72
Co., Ltd
Panasonic Refrigeration (Dalian)
Accounts Payable 1,350,094.85 1,207,795.95
Co., Ltd.
Dalian Bingshan Metal
Accounts Payable 70,047.29
Technology Co., Ltd
Accounts Payable Dalian Kaierwen science Co., Ltd 128,750.00
Other payable Dalian Bingshan Group 800,000.00
Dalian Fuji Bingshan Vending
Other payable 268,500.00
Machine Co., Ltd.
MHI Bingshan Refrigeration
Other payable 170,000.00 170,000.00
(Dalian) Co., Ltd.
Panasonic Refrigeration (Dalian)
Other payable 19,500.00
Co., Ltd.
Jiangsu Jingxue Insulation
Other payable 70,000.00 70,000.00
Technology Co.,Ltd
Dalian Spindle Cooling Towers
Contract liability - 1,769,911.50
Co., Ltd
Contract liability Panasonic Cold Machine System
(Dalian) Co., Ltd 1,410,975.05 10,752,300.88
Contract liability Panasonic Refrigeration (Dalian)
Co., Ltd. 2,831.86
Contract liability Panasonic Cold Chain (Dalian)
Co., Ltd 1,819,735.06 87,977.15
Contract liability Wuhan Sikafu Power Control
Equipment Co., Ltd 76,228.67
Notes Payable BAC (Dalian) Co., Ltd 3,932,858.40 869,502.00
Dalian Bingshan Group
Notes Payable 7,377,503.92 8,124,711.01
Refrigeration Equipment Co., Ltd
Notes Payable Dalian Honjo Chemical Co., Ltd 172,800.00
Dalian Bingshan Pate Technology
Notes Payable 880,000.00 1,600,000.00
Co., Ltd
171 / 188
Item Related party Closing Balance Opening Balance
Jiangsu Jingxue Insulation
Notes Payable 492,450.00
Technology Co.,Ltd
Panasonic Cold Chain (Dalian)
Notes Payable 1,657,321.00 1,657,321.00
Co., Ltd
Dalian Spindle Cooling Towers
Notes Payable 1,517,200.00 150,000.00
Co., Ltd
Panasonic Cold Machine System
Notes Payable 112,010.00
(Dalian) Co., Ltd
Dalian Bingshan Group Huahuida
Lease payable 4,055,686.70 13,545,495.63
Financial Leasing Co., Ltd..
Non-current
Dalian Bingshan Group Huahuida
liability due 25,727,284.78 14,089,410.56
Financial Leasing Co., Ltd..
within 1 year
Long term Dalian Bingshan Group Huahuida
payable Financial Leasing Co., Ltd.. 23,543,375.62 2,022,529.96
(IV) Related Party Commitment
No.
XII. Share-Based Payment
None
XIII. Contingency
The Company sold refrigerating house equipment to Guizhou Pubu Cold Chain Food
Investment Co.,Ltd (“Pubu Cold Chain”) in the form of finance lease. The Company as a seller
singed finance lease contract with Huahuida as a buyer as well as a lessor and Pubu Cold Chain
as a lessee. The contract price is 25.705million Yuan. In case the lease premium is delayed by
the lessee, the Company needs to pay lease premium on behalf of the lessee and be obliged to
the buy back responsibility. Pubu Cold Chain issued an unconditional, irrevocable and
joint liability counter guarantee, and the Company is the beneficiary. Guarantee scope covers
the full liability because of the sales in the form of finance lease.
As at 31 December 2021, the balance of the guarantee obligation of the finance lease is RMB
24,210,316.00Yuan. There is no situation where the Company needs to bear the liability as the
Pubu Cold Chain’s default.
As at 31 December 2021, The Company does not have any other contingencies for disclosure
apart from the above matters.
XIV. Commitment
As at 31 December 2021, The Company does not have any other significant commitments.
172 / 188
XV. Events after the Balance Sheet Date
1. Significant events had not adjusted
The 2nd meeting of the 9th generation of board was held on 21st January 2022 and approved the
“ announcement of share transfer of Bingshan Technical Service （Dalian） Co.,Ltd”, and agree
to sell 100% of shareholding of Bingshan Technical Service （Dalian） Co.,Ltd to Dalian
Bingshan Group( Bingshan Group), Dalian Zhonghuida Refrigeration Technology Co., LTD
(Zhonghuida), Dalian Zhixintong Enterprise Management Partnership (Limited
partnership)( Zhixintong) at 25.8882million Yuan.
The formal ‘contract of share transfer’ was signed by Bingshan Group, Zhonghuida and
Zhixintong on March 3, 2022. Change of shareholding has been registered in Industrial and
Commercial Bureau.
2. Information about profit distribution
The 4th meeting of the 9th generation of board was held on 22nd April 2022 and approved the
profit distribution policy for the year of 2021, based on 843,212,507.00 numbers of share in
total, paying out cash dividend of 0.1Yuan for every 10 shares (before tax) and cash dividend of
B shares are paid in Hong Kong dollars.
3. Sales Return
There is no significant sales return after the balance sheet date.
4. Except the subsequent event disclosed above, the Company has no other significant
subsequent event.
XVI. Other Significant Events
1. Error correction and effect in previous period
No.
2. Debt Restructuring
No.
3. Asset exchange
(1) The exchange of non-monetary assets
No.
(2) The exchange of other assets
No.
4. Annuity Plan
173 / 188
No.
5. Operation termination
No.
6. Segment Information
The management of the Company divided the Company into 3 segments based on the
geographic area: Northeast China, Central China, and East China. The Northeast is the
Company’s general headquarters and the subsidiaries registered in Dalian. The Central is the
subsidiary of the Company, Wuhan New World Refrigeration Industrial Co., Ltd and its
subsidiary, Wuhan Cooling Engineering, Wuhan Lanning, and Chengdu Bingshan. The East is
the subsidiaries of the Company, and they are 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 thousands Yuan
Current year
Items Northeast Central
East China Offset Total
China China
1 Operating income 256,027.70 25,718.92 2,053.40 -74,879.19 208,920.83
2 Cost 233,714.74 22,681.37 2,162.77 -73,605.74 184,953.14
Impairment loss on
2,814.40 2,175.47 -11.48 -15.72 4,962.67
assets
Impairment loss on
8,774.42 401.39 -0.28 -95.73 9,079.80
credit
Depreciation and
9,528.95 865.71 0.46 10,395.12
amortization
174 / 188
Current year
Items Northeast Central
East China Offset Total
China China
3 Investment income from
-5,805.80 1.25 - - -5,804.55
associates and joint venture
4 Operating profits(loss) -20,972.88 -4,940.69 -401.00 -2,634.72 -28,949.29
5 Income tax -1,523.69 69.04 16.50 7.82 -1,430.33
6 Net profit(loss) -19,449.19 -5,009.73 -417.50 -2,642.54 -27,518.96
7 Total assets 645,264.51 46,674.73 1,205.60 -119,589.17 573,555.67
8 Total liabilities 283,157.04 33,070.52 1,241.14 -48,861.39 268,607.31
7. Other important transactions and matters affect the investor's decision
The Company hasn’t had other important transactions and matters affect the investor's decision
in this period.
XVII. Notes to the Main Items of the Financial Statements of Parent Company
1. Accounts receivable
(1) Accounts receivable category
Closing Balance
Item Booking balance Provision
Booking value
Amount % Amount %
Accounts
receivable with
significant
individual amount
and separate bad
debt provision
Accounts
receivable with bad
debt provision
490,329,366.12 100.00 81,610,090.34 16.64 408,719,275.78
based on the
characters of credit
risk portfolio
(1) Accounting
age as 279,002,384.85 56.90 81,610,090.34 29.25 197,392,294.51
characters
(2) Related party
within
211,326,981.27 43.10 - - 211,326,981.27
consolidation
scope
175 / 188
Closing Balance
Item Booking balance Provision
Booking value
Amount % Amount %
Total 490,329,366.12 100.00 81,610,090.34 16.64 408,719,275.78
(Continued)
Opening Balance
Item Booking balance Provision Booking
Amount % Amount % balance
Accounts receivable
with significant
individual amount
and separate bad
debt provision
Accounts receivable
with bad debt
provision based on 474,709,875.38 100.00 66,083,949.47 13.92 408,625,925.91
the characters of
credit risk portfolio
(1) Accounting age
250,449,415.13 52.76 66,083,949.47 26.39 184,365,465.66
as characters
(2) Related party
within
224,260,460.25 47.24 224,260,460.25
consolidation
scope
Total 474,709,875.38 100.00 66,083,949.47 13.92 408,625,925.91
1) The bad debt provisions of accounts receivable in the portfolio is accrued under
accounting aging analysis method:
Closing Balance
Aging Provision for bad Drawing Proportion
Accounts receivable
debts (%)
Within 1 year 134,087,659.57 9,412,953.70 7.02
1-2 years 56,560,751.26 9,468,269.76 16.74
2-3 years 12,732,034.09 3,925,286.11 30.83
3-4 years 24,408,237.52 12,040,583.57 49.33
4-5 years 15,980,988.18 11,530,282.97 72.15
Over 5 years 35,232,714.23 35,232,714.23 100.00
Total 279,002,384.85 81,610,090.34 —
176 / 188
(2) Bad debt provision
Aging Closing Balance
Within 1 year 289,214,483.23
1-2 years 112,760,908.87
2-3 years 12,732,034.09
3-4 years 24,408,237.52
4-5 years 15,980,988.18
Over 5 years 35,232,714.23
Total 490,329,366.12
(3) Bad debt provision
Change during the year
Opening
Category Accrued Collected/ Closing Balance
balance Written-off
reversed
Bad debt
66,083,949.47 16,379,650.72 269,500.00 584,009.85 81,610,090.34
provision
Total 66,083,949.47 16,379,650.72 269,500.00 584,009.85 81,610,090.34
(4) Accounts receivable written off in current period.
Item Written off amount
Receivable actually written off 584,009.85
(5) The top five significant accounts receivable categorized by debtors
% of Closing
Closing
Company Aging the total Balance of
Balance
AR Provision
Xinyi Yuanda Construction 3-4years
and Installation Engineering 32,748,744.00 4-5years 6.68 25,281,907.38
Co., Ltd. Over 5 years
Qingcheng Zhongyi Energy
24,375,000.00 1-2years 4.97 4,080,375.00
Co., Ltd
Xinjiang Dongfang New
10,146,500.00 Within 1 year 2.07 712,284.30
Energy Co.,Ltd
Guangzhou R&F Properties
9,879,861.21 3-4years 2.01 4,873,735.53
Co., Ltd
1-2years
Ningxia Wangwa Coal Co.,
9,131,495.12 2-3years 1.86 2,533,601.22
Ltd.
3-4years
Total 86,281,600.33 17.59 37,481,903.43
2. Other Receivables
177 / 188
Item Closing Balance Opening Balance
Interest receivable 46,879.68
Dividend receivable 25,100,920.84
Other receivable 29,121,904.34 41,136,517.46
Total 54,222,825.18 41,183,397.14
2.1 Interest receivable
(1) Interest receivable category
Item Closing Balance Opening Balance
Interest on term deposits 46,879.68
Total 46,879.68
2.2 Dividend receivable
Item Closing Balance Opening Balance
Bingshan Technical Service （Dalian） Co.,Ltd. 24,148,920.84
Guotai Junan Securities 952,000.00
Total 25,100,920.84
2.3 Other receivable
(1) The category of other receivables
Items Closing Balance Opening Balance
Share transfer 36,263,700.00
Deposits 20,112,243.72 3,640,939.00
Petty cash 344,848.03 557,035.76
Receivables and payables 10,466,237.65 5,697,595.21
Total 30,923,329.40 46,159,269.97
(2) The bad debt provision of other receivable
1st stage 2nd stage 3rd stage
Expected
Expected credit
credit loss
bad debt Expected credit loss within the
within the Total
provision loss within 12 whole
whole
months period(impair
period(no
ment incurred)
impairment)
Opening
5,022,752.51 - - 5,022,752.51
balance
Opening — — —
178 / 188
1st stage 2nd stage 3rd stage
Expected
Expected credit
credit loss
bad debt Expected credit loss within the
within the Total
provision loss within 12 whole
whole
months period(impair
period(no
ment incurred)
impairment)
balance during
the year
--transfer to
the 2nd stage
--transfer to
862,625.00 862,625.00
the 3rd stage
--reverse to
the 2nd stage
----reverse to
the 1st stage
Accrued 335,940.00 335,940.00
Reverse 1,229,851.45 1,229,851.45
Cancelation
Written off 2,327,416.00 - - 2,327,416.00
Other
movement
Closing
602,860.06 - 1,198,565.00- 1,801,425.06
balance
(3) Other receivable listed by account aging
Aging Closing Balance
Within 1 year 8,184,022.32
1-2 years 20,967,321.97
2-3 years 573,420.11
3-4 years -
4-5 years -
Over 5 years 1,198,565.00
Total 30,923,329.40
(4) Bad debt provision.
179 / 188
Change during the year
Opening Closing
Category Accrued Collected/reve
balance Written-off Balance
rsed
Bad debt
5,022,752.51 893,911.45 2,327,416.00 1,801,425.06
provision
Total 5,022,752.51 893,911.45 2,327,416.00 1,801,425.06
(5) Other receivables from the top 5 debtors
% of Closing
Closing
Name Category Aging the total Balance of
Balance
OR Provision
Cangzhou Lingang Security
Renguo Chemical 2,000,000.00 Within 1 year 6.47 83,400.00
Co., LTD deposit
Dalian Delta HK
Deposit 1,100,000.00 Over5 years, 3.56 1,100,000.00
China Gas Co., Ltd.
Xinjiang Dongfang Security
1,000,000.00 Within 1 year 3.23 41,700.00
New Energy Co.,Ltd deposit
Hebei Veyong Bio- Security
865,980.00 Within 1 year 2.80 36,111.37
Chemical Co.,Ltd deposit
Ningxia Runyang
Security
Silicon Material Tech 800,000.00 Within 1 year 2.59 33,360.00
deposit
nology Co., LTD
Total 5,765,980.00 18.65 1,294,571.37
180 / 188
3. Long-term equity investments
(1) Category of long-term equity investments
Closing Balance Opening Balance
Item
Closing Balance Provision Book Value Opening Balance Provision Book Value
Investment of subsidiaries 696,262,267.08 - 696,262,267.08 687,496,652.08 687,496,652.08
Investment of affiliates
1,227,131,957.97 - 1,227,131,957.97 1,504,481,732.65 1,504,481,732.65
and JV
Total 1,923,394,225.05 - 1,923,394,225.05 2,191,978,384.73 2,191,978,384.73
(2) Investments of subsidiaries
Provision for
impairment of Provision for
Subsidiaries names Opening Balance Increase Decrease Closing Balance impairment
the current at year end
period
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 8,765,615.00 45,272,185.00
Dalian Bingshan Jiade Automation
Co., Ltd 6,872,117.80 6,872,117.80
Dalian Bingshan Lingshe Quick
Freezing Equipment Co., Ltd 59,356,051.19 59,356,051.19
Dalian Niweisi LengNuan
Technology Co., Ltd 48,287,589.78 48,287,589.78
181 / 188
Provision for
impairment of Provision for
Subsidiaries names Opening Balance Increase Decrease Closing Balance impairment
the current at year end
period
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 Xinminghua Electronics Co.,
Ltd. 43,766,243.72 43,766,243.72
Dalian Bingshan International
Trading Co., Ltd 71,537,064.86 71,537,064.86
Total 687,496,652.08 8,765,615.00 696,262,267.08
(3) Joint ventures& affiliated companies
Increase/Decrease
Provision
Gains and Provision
Adjustment for
Beginning losses for
Investee of other Changes of Cash bonus or impairment Ending balance
balance Increased Decreased recognized Others impairment
comprehensi other equity profits announced of the
under the at year end
ve income current
equity method
period
1. Affiliated
company
Panasonic
Refrigeration 163,867,472.86 147,270,127.38 -14,994,567.44 -322,778.04 - 1,280,000.00 - - -
(Dalian) Co., Ltd.
Panasonic
Cold-chain (Dalian) 205,987,069.49 - - -112,859,182.84 - - 2,797,849.22 - - 90,330,037.43
Co., Ltd
Panasonic
Compressor 462,033,107.31 - - 30,800,342.18 - - 32,773,200.00 - - 460,060,249.49
(Dalian) Co., Ltd
182 / 188
Increase/Decrease
Provision
Gains and Provision
Adjustment for
Beginning losses for
Investee of other Changes of Cash bonus or impairment Ending balance
balance Increased Decreased recognized Others impairment
comprehensi other equity profits announced of the
under the at year end
ve income current
equity method
period
Dalian Honjo
Chemical Co., Ltd 8,746,197.03 - - 741,303.19 - - 561,233.70 - - 8,926,266.52
Keinin-Grand
Ocean Thermal
Technology 55,934,955.38 - - 4,864,112.90 - - 2,000,000.00 - - 58,799,068.28
(Dalian) Co., Ltd
Beijing Huashang
Bingshan
Refrigeration and 2,121,951.69 - - 17,990.49 - - - - - 2,139,942.18
Air-conditioning
Machinery Co., Ltd
Dalian Fuji
Bingshan Vending 184,454,138.22 - - -35,798,123.47 - - - - - 148,656,014.75
Machine Co., Ltd
MHI Bingshan
Refrigeration 14,891,119.67 - - 32,684.20 - - - - - 14,923,803.87
(Dalian) Co., Ltd.
Dalian Bingshan
Group Huahuida
Financial Leasing - 44,046,635.07 - 742,684.48 - - - - - 44,789,319.55
Co., Ltd
Dalian Fuji
Bingshan Vending
Machine Sales Co., 43,546.35 - - -43,546.35 - - - - -
Ltd
Jiangsu Jingxue
Insulation 203,208,828.97 - - 14,646,669.36 - -16,123,970.29 - - - 201,731,528.04
Technology Co.,Ltd
Panasonic Cold
Machine System 30,034,799.53 - - 2,341,469.67 - - 3,895,484.27 - - 28,480,784.93
(Dalian) Co., Ltd
183 / 188
Increase/Decrease
Provision
Gains and Provision
Adjustment for
Beginning losses for
Investee of other Changes of Cash bonus or impairment Ending balance
balance Increased Decreased recognized Others impairment
comprehensi other equity profits announced of the
under the at year end
ve income current
equity method
period
Bingshan Metal
Technical Service
（Dalian） Co., 173,158,546.15 - - 23,785,030.56 - - 28,648,633.78 - - 168,294,942.93
Ltd.
Total 1,504,481,732.65 44,046,635.07 147,270,127.38 -85,723,133.07 -322,778.04 -16,123,970.29 71,956,400.97 - - 1,227,131,957.97
184 / 188
4. Operating revenue and cost
Item Current year Last year
Revenue Cost Revenue Cost
Revenue from main
785,491,401.27 707,799,558.39 710,173,991.25 589,797,068.56
operation
Revenue from other
48,010,534.28 29,323,036.07 40,847,679.19 26,502,030.35
operation
Total 833,501,935.55 737,122,594.46 751,021,670.44 616,299,098.91
5. Investment income
Items Current year Last year
Long-term equity investment gain under equity method -85,723,133.07 79,930,496.36
Gain from disposing long-term equity investment 27,665,072.62 12,859,589.96
Gain from holding of available for sale financial assets -
Gain from disposal of financial assets available for sale -
Gain from holding of tradable financial assets -
Gain from disposing of tradable financial assets -
Long-term equity investment gain under cost method 32,102,543.64 10,200,459.43
Gain from holding of other noncurrent financial assets 7,229,604.48 5,346,903.12
Gain from disposal of other noncurrent financial assets 2,620,417.98 6,784,485.22
Total -16,105,494.35 115,121,934.09
XVIII. Approval of Financial Statements
The parent and consolidated financial statements of the Company were approved by the Board
of Directors of The Company on April 22, 2022.
185 / 188
Supplementary Information to the Financial Statements
1. Non-operating profit or loss
Items Current year Notes
Gain or loss from disposal of non-current assets 27,724,344.91
Override, no formal approval or accidental tax refund, deduction or
exemption
Government grants recorded into profit or loss during current period 15,993,001.31
Expenses for using funds from non-financial institution recognized
in current profit/loss
Gains from acquisition of subsidiary or associates when initial cost
is less than the fair value of identifiable net asset of invested
company
Profits/loss from non-monetary assets exchange
Profits/loss from investments or management of assets entrusted by
others
Assets impairment provision accrued due to force majeure, e.g.:
suffering natural disasters
Profit or loss from debts restructuring 819,297.68
Expenses of enterprise restructuring
Gain/loss on excessive part from the transaction where the trading
price is obviously unfair.
Net gain/loss of subsidiary from combination under same control
between the beginning of year and consolidation date.
Gains/ loss from contingencies arising from the normal business of
the Company
Gain/loss from change of fair value by holding the tradable financial
asset and liabilities, and or disposing of the tradable financial asset
55,245,024.14
and liabilities, available for sale financial assets, other than effective
hedging in relation to the Company’s normal business
Reversal of impairment provision of accounts receivable separately
tested for impairment
The profits/loss from external entrusted fund
The profits/gains from changes of fair value for investment property
subsequently measured at fair value model
Effects of gain/loss from one-off adjustments of gain/loss based on
laws and regulations of taxation and accounting.
186 / 188
Items Current year Notes
Custodian fees obtained from entrusted operations
Non-operating revenue and expense besides the above items -5,129,941.48
Other profit or loss
Subtotal 94,651,726.56
Effect on income tax 8,490,868.44
Attributable to minority shareholders’ equity (after tax) 170,754.52
Total 85,990,103.60
2. Return on equity and earnings per share
In accordance with the provisions of the China Securities Regulatory Commission, “Corporate
Information Disclosure and Compilation Rules for Public Offering of Securities No. 9 –
Calculation and Disclosure of Return on Net Assets and Earnings Per Share (2010 Revision)”,
the Company’s 2021 annual weighted average net Return on assets, basic earnings per share and
diluted earnings per share are as follows:
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 -8.31% -0.32 -0.32
Net profit after deducting non-recurring gains and losses
-10.97% -0.42 -0.42
attributable to shareholders of parent company
187 / 188
Section 11 Reference Documents
3. The accounting statements bearing the signatures and seals of the legal representative, the
financial majordomo and the accountants in charge.
4. The original copy of the auditor's report bearing the seal of the certified public accountants and
the signatures and seals of the certified accountants.
5. The original copies of all the Company's documents and the original copies of the bulletins
published on the newspapers designated by the China Securities Regulatory Commission in the
report period.
6. Time for reference: from Monday to Friday 8:00 - 11:30 (am) 1:00 - 4:30 (pm)
Liaison persons: Mr. Song Wenbao，Mrs Du Yu
Tel: 0086-411-87968130
Fax: 0086-411-87968125
Bingshan Refrigeration & Heat TransferTechnologies Co., Ltd.
April 23, 2022
188 / 188
