Bingshan Refrigeration & Heat Transfer
Technologies Co., Ltd.
2022 Annual Report
April, 2023
1
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, and the Accounts receivable is on the high side.
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
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 ............................................................................................................................................................22
Section 5 Environmental and social responsibility ................................................................................................................................32
Section 7 Change in Share Capital and Shareholders' Information ......................................................................................................377
Section 8 Information on Preferred Stock............................................................................................................................................411
Section 9 Information on Corporate bonds ..........................................................................................................................................422
Section 10 Financial Report.................................................................................................................................................................433
3
Reference Documents
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
Definitions
Defined item Stands for Meaning
Reporting period Stands for From Jan. 1, 2022 to Dec. 31 2022
The Company, this Company Stands for Bingshan Refrigeration & Heat Transfer Technologies Co.,Ltd.
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.
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 Guardian Automation Co., Ltd. one of the subsidiaries of the Company
Bingshan Guardian Stands for
where the Company holds 100% of its shares.
Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd. one of the subsidiaries of the
Bingshan Ryosetsu
Company where the Company holds 100% of its shares.
Sonyo Compressor (Dalian) Co., Ltd. Formerly Panasonic Appliances Compressor (Dalian)
Sonyo Compressor Stands for Co., Ltd. one of the subsidiaries of the Company, where the Company holds100% of its
shares.
Sonyo Refrigeration System (Dalian) Co., Ltd. Formerly Panasonic Appliances
Sonyo Refrigeration System Stands for Refrigeration System (Dalian) Co., Ltd., one of the subsidiary of the Company, where the
Company holds 100% of its shares indirectly.
Jiangsu JingXue Insulation Technology Co.,Ltd., one of the associated companies of the
JingXue Insulation Stands for
Company, where the Company holds 14.91% of its shares.
5
Section 2 About the Company and Main Financial Indicators
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
Stock exchange website where companies disclose annual
Shenzhen Stock Exchange
reports
Name of the newspaper designated the address of the China Securities Daily, Securities Times and
website for publishing this Annual Report http://www.cninfo.com.cn
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
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
Office location of accounting Name of sponsor of financial Continuous supervision
Name of Financial consultant
firm advisor period
Guotai Junan Building, 768
Guotai Junan Securities Co., From November 11, 2022 to
Nanjing West Road, Jing 'an Dong Shuai、Li Xiang
LTD December 31, 2023
District, Shanghai
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 with
2022 2021 2020
previous year
Operating revenue 2,893,085,310.29 2,089,208,256.22 38.48% 1,727,267,935.15
Net profit attributable to shareholders of listed
18,255,330.45 -269,059,849.96 106.78% 21,341,133.39
companies
Net profit belonging to the shareholders of
listed companies after the deduction of -273,460,147.18 -355,049,953.56 22.98% 6,128,351.99
non-recurring profit and loss
Net cash flow from operating activities -56,247,299.36 1,518,218.37 - -13,142,427.45
Basic earnings per share 0.02 -0.32 106.25% 0.025
Diluted earnings per share 0.02 -0.32 106.25% 0.025
Weighted average return on net asset yield 0.61% -8.31% Inecrease 8.92 percentage points 0.64%
Increase/decrease compared with
2022.12.31 2021.12.31 2020.12.31
previous year
Total assets 7,601,935,329.60 5,735,570,604.67 32.54% 5,681,568,328.36
Owner's equity attributable to shareholders of
3,006,190,831.84 3,002,842,837.47 0.11% 3,375,609,788.07
listed companies
The lower of the Company’s net profit before and after deduction of non-recurring gains and losses in the most
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
7
The lower of the net profit before and after non-recurring gains and losses is negative
√ Applicable □ Not applicable
Item 2022 2021 notes
Operating income (yuan) 2,893,085,310.29 2,089,208,256.22
Income from sales of materials, rental of fixed
Amount deducted from
90,313,957.47 62,109,983.70 assets and labor services other than normal
operating income (yuan)
operation.
Amount after deduction of
2,802,771,352.82 2,027,098,272.52
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 580,124,203.74 711,734,704.97 752,258,640.60 848,967,760.98
Net profit attributable to shareholders of listed companies -12,758,270.89 42,326,622.41 -21,540,127.71 10,227,106.64
Net profit belonging to the shareholders of listed
companies after the deduction of non-recurring profit and 5,827,430.25 4,877,688.10 -23,177,485.56 -260,987,779.97
loss
Net cash flow from operating activities -106,839,308.54 -82,567,028.31 -105,495,236.74 238,654,274.23
IX. Non-recurring profits and losses and their amounts
item 2022 2021 2020
Disposal gains and losses of non-current asset 109,194,830.34 27,724,344.91 -169,550.05
Government subsidies included in current profit or loss 11,878,746.43 15,993,001.31 17,952,461.57
Debt restructuring gains and losses 230,467.42 819,297.68
Profit or loss arising from contingencies unrelated to the
-2,019,000.00
normal operation of the company
Disposal gains from investments on financial assets
available for sale, and gains from fair value change of -3,694,509.36 55,245,024.14 4,362,148.57
financial assets available for sale
Other non-operating revenue or expense 8,754,118.59 -5,129,941.48 -4,643,229.90
Other profit and loss items that meet the definition of non
170,729,805.79
recurring profit and loss
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Influence on income tax 2,961,966.70 8,490,868.44 1,995,261.63
Influence on minority shareholders 397,014.88 170,754.52 293,787.16
Total 291,715,477.63 85,990,103.60 15,212,781.40
Note: Other profit and loss items that meet the definition of non recurring profit and loss are those in which the
Company is able to control the aforementioned company due to additional investment in Sonyo Compressors and
Sonyo Refrigeration System. The difference between the fair value and book value of the aforementioned
company's equity held by the Company before the purchase date is recognized as investment income.
9
Section 3 Management discussion and analysis
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.
In 2022, 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, difficulty in improving
efficiency and high accounts receivable continued to plague the operation and development of the industry.
In 2023, the industry will continue to differentiate, competition will continue to intensify, difficulties and
opportunities coexist. 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 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 cultivation of energy conservation and emission reduction market still needs time; the transformation and
upgrading process is complex.
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.
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 continued to deeply cultivate the
advantageous market segments such as cold chain logistics, petrochemical industry, beer and dairy products,
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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 has signed many projects with multinational industry giants such
as BASF in Germany and Albemarle in the United States, which has significantly improved the influence of
Bingshan brand in the industry.
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.
During the reporting period, the Company has successfully signed key projects such as the Guangxi
Fangcheng Port Fishery Wharf Cold Storage Project, the Guangzhou Yuhu Cold Chain Market Trading
Center Refrigeration Project, and the Shanxi Yiming Phase II Meat Products (Precast Dishes) Processing
Project.
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.
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
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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
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.
Following the technical route of cold and heat balance, the Company has independently developed a
series of energy-saving, environment-friendly, efficient and intelligent cold and heat technologies
and products, and actively fulfilled the dual carbon responsibility.
While promoting the transformation and upgrading of its inherent business in an orderly manner,
the Company actively cultivates new momentum for development, and the path of sustainable
growth is increasingly clear.
During the reporting period, the Company focused on the hot and cold business, deeply cultivated
the market segment, and steadily improved its sales force, product force, technical force,
engineering force and service force, so as to further enhance its core competitiveness.
IV. Analysis of main business
1. summarize
In 2022, the Company focused on hot and cold business, deeply cultivated market segments, solidly enhanced
core competitiveness, and accelerated the improvement of main business. In 2022, the Company achieved
operating revenue of 2,893.09 million yuan, up 38.48% year on year; The net profit attributable to shareholders of
the listed company was 18.26 million yuan, turning losses into profits on a year-on-year basis.
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During the reporting period, the Company was honest, innovative and pragmatic. Enrich and strengthen the
management team, adjust and optimize the organizational structure and business processes. Multiple strategies
were taken simultaneously to effectively improve production capacity and productivity, and the monthly output
value reached a new record high. Close to the market and leading the market, we independently developed
petrochemical standard LNG BOG compressor units, ammonia heat pump units, high standard project units and
other highlight products. The "National High-end Equipment Manufacturing Industry Standardization Pilot" was
successfully accepted. The Company was selected into the list of Liaoning Intelligent Factory in 2022. The
Company's cascade ammonia screw heat pump unit was selected as the "Innovative Product of 2022 China
Refrigeration Exhibition". The screw refrigeration unit for large ocean going fishing vessels of the Company was
selected as the "specialized, refined and new" product of Liaoning Province in 2022.
During the reporting period, Bingshan Engineering Company, a subsidiary of the Company, continued to deepen
its competitive market segments. In the field of product business, it actively serves high-end customers, and has
signed many projects with multinational industry giants such as BASF in Germany and Albemarle in the United
States, which has significantly improved the influence of Bingshan brand in the industry; Join hands with leading
enterprises to lead the polysilicon market and win large orders. In the field of engineering, the Xinjiang Central
Kitchen Project, the Shanghai Star Indoor Comprehensive Ice and Snow Venue Project and other landmark
projects were orderly constructed, and key projects such as the Guangxi Fangcheng Port Fishery Wharf Cold
Storage Project, the Guangzhou Yuhu Cold Chain Market Trading Center Refrigeration Project, and the Shanxi
Yiming Phase II Meat Products (Precast Dishes) Processing Project were successfully signed. In the field of
energy industry, CCUS projects have been rapidly promoted, and many demonstration projects of central
enterprises have been successfully signed, with a substantial year-on-year increase in orders.
During the reporting period, the Company's subsidiary Wuhan New World Refrigeration further optimized its
products and solutions. Based on the existing traditional products, it focused on expanding the market segments of
energy, coal mines and LNG. The main model of energy products has achieved good results in marketing, and the
steam screw compressor unit has achieved a breakthrough in sales of new products. The largest single unit
installed power project of ORC screw expansion generator set - Jiangsu Silbang Petrochemical Waste Heat Power
Generation Project has successfully generated electricity, realizing full automatic unattended operation.
During the reporting period, the subsidiary of the Company, Bingshan Guardian, focused on energy saving control
of cooling and heating systems, and achieved rapid and qualitative growth. New Meica was absorbed and merged
to achieve resource integration, complementary advantages and efficient operation. Continuously improve and
optimize edge computing intelligent devices and energy-saving control algorithms, and effectively improve the
level of refined and intelligent control. It won the bid for the distribution box project of the Dalian Bay undersea
tunnel project, helping Dalian's key projects.
During the reporting period, the Company's subsidiary, Bingshan Ryosetsu, vigorously expanded the cause of
quick freezing. It is specialized in assisting major corn producing areas in Heilongjiang, Xinjiang, Hebei and other
major corn producing areas in China to achieve a total capacity distribution of 150 tons/hour for quick freezing of
fresh corn. The down spin flow rate freezer for corn cob was selected as the "Innovative Product of 2022 China
Refrigeration Exhibition". The fresh corn quick freezing machine was selected into the Guiding Catalogue for the
Promotion and Application of the First (Set) Major Scientific and Technological Equipment in Liaoning Province.
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During the reporting period, in order to further strengthen the hot and cold main business, the Company planned
and implemented a major asset restructuring. After the reorganization is completed in November 2022, the
Company directly or indirectly holds 100% of the shares of Sonyo Compressor and Sonyo Refrigeration System.
2. Sales income and costs
(1) Sales income structure
2022 2021
Year-on-year
Proportion to the Proportion to the
Amount Amount increase/decrease
Sales costs Sales costs
Total sales income 2,893,085,310.29 100% 2,089,208,256.22 100% 38.48%
By industry
Refrigeration and
air-conditioning 2,803,347,359.37 96.90% 2,031,958,305.49 97.26% 37.96%
equipment
Others 89,737,950.92 3.10% 57,249,950.73 2.74% 56.75%
By product
Industrial product 1,920,458,161.82 66.38% 1,328,371,290.81 63.58% 44.57%
Installation works 857,764,430.03 29.65% 652,866,257.62 31.25% 31.38%
Others 114,862,718.44 3.97% 107,970,707.79 5.17% 6.38%
Domestic sales 2,713,167,600.04 93.78% 1,994,087,984.59 95.45% 36.06%
Foreign sales 179,917,710.25 6.22% 95,120,271.63 4.55% 89.15%
Total 2,893,085,310.29 100.00% 2,089,208,256.22 100.00% 38.48%
(2) Main business structure
Increase/decrease of Increase/decrease
operating revenues of operating costs Increase/decrease of gross profit on
Operating revenue Operating costs Gross profit
on a year-on-year on a year-on-year a year-on-year basis
basis basis
By industry
Refrigeration and
2,803,347,359.37 2,459,913,203.46 12.25% 37.96% 36.04% Increase 1.24 percentage points
air-conditioning
By product
Industrial product 1,920,458,161.82 1,602,696,861.90 16.55% 44.57% 40.92% Increase 2.17 percentage points
Installation works 857,764,430.03 833,747,200.54 2.80% 31.38% 31.78% Decrease 0.29 percentage points
Others 25,124,767.52 23,469,141.02 6.59% -50.46% -38.60% Decrease 18.05 percentage points
By region
Domestic sales 2,630,083,287.55 2,305,266,150.99 12.35% 35.79% 33.29% Increase 1.64 percentage points
Foreign sales 173,264,071.82 154,647,052.47 10.74% 82.15% 96.21% Decrease 6.40 percentage points
By sales model
Total 2,803,347,359.37 2,459,913,203.46 12.25% 37.96% 36.04% Increase 1.24 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 2022 2021
increase/decrease
Sales volume 2,086 1,921 8.59%
Main refrigeration unit for
Production output 2,112 1,918 10.11%
industrial or commercial use
Inventory level 409 383 6.79%
Reason for change in the related data by 30% or higher on a year-on-year basis
□ Applicable √ Not applicable
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（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
2022 2021
Proportion to the Year-on-year
Industry category Item Proportion to the
Amount Amount increase/decrease
operating costs operating costs
Direct materials 2,205,570,125.13 86.92% 1,549,104,567.26 83.76% 42.38%
Labor wages 208,996,790.95 8.24% 182,511,399.62 9.87% 14.51%
Refrigeration and Depreciation 33,450,400.07 1.32% 35,318,984.53 1.91% -5.29%
air-conditioning Utilities 19,274,676.78 0.76% 18,771,030.25 1.01% 2.68%
Others 70,236,848.47 2.77% 63,825,290.63 3.45% 10.05%
Total operating costs 2,537,528,841.40 100.00% 1,849,531,272.29 100.00% 37.20%
(6) Was the Company's consolidated range change during the reporting period?
Applicable Not applicable
Compared with last year, there are two more entities included in the consolidated financial statements this year:
Sonyo Compressor (Dalian) Co., Ltd. and Sonyo Refrigeration System (Dalian) Co., Ltd. due to major asset
reorganization. Due to the sale, absorption and merger of Ningbo Bingshan Refrigeration and Air Conditioning
Engineering Co., LTD., Bingshan Technology Service (Dalian) Co., LTD., Dalian New Meica Electronics
Technology Co., LTD.
(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) 480,662,540.28
Proportion of the total sales volume from top five customers to the annual sales volume 16.61%
Proportion of the related party total sales volume from top five customers to the annual sales volume 5.91%
Proportion to the annual
No. Name of customer Sales volume (yuan)
sales volume
1 Panasonic Cold-chain (Dalian) Co., Ltd. 171,040,261.51 5.91%
2 Customer 2 87,495,412.86 3.02%
3 Hualu Engineering Technology Co., Ltd. 83,741,150.43 2.89%
Xinjiang Silk Road Tianshan International Food City
4 77,847,114.52 2.69%
Investment Co., Ltd.
5 Shanghai Construction Engineering Group Co., Ltd. 60,538,600.96 2.09%
Total —— 480,662,540.28 16.61%
Information on the Company's top five customers
Among the top five customers mentioned above, Panasonic cold chain (Dalian) Co., Ltd. is related to the
Company.
Information on the Company's major suppliers
Total purchase volume from top five suppliers (yuan) 328,474,626.75
Proportion of the total purchase volume from top five suppliers to the annual purchases volume 12.94%
Proportion of the related party total purchase volume from top five suppliers to the annual purchases volume 1.29%
Information on the Company's top five suppliers
15
Purchase Proportion to the annual
No. Name of supplier
volume (yuan) purchase volume
1 Shenyang Bao Gang Northeast Trade Co., Ltd. 162,603,719.85 6.41%
2 Longkou Longpeng Precision Copper Pipe Co. Ltd. 67,635,219.89 2.67%
3 Angang Steel Co. Ltd. 35,490,399.39 1.40%
4 BAC Dalian Co., Ltd. 32,827,251.97 1.29%
5 Shanghai Dingfeng Gongtong Technology Co., Ltd. 29,918,035.65 1.18%
Total —— 328,474,626.75 12.94%
Among the top five suppliers mentioned above, BAC Dalian Co., Ltd. had an associated relationship with the
Company.
3. Expenses
Increase/decrease of gross
2022 2021 Explain for major changes
profit on a year-on-year basis
Selling expenses 153,735,714.96 130,633,909.30 17.68%
Administrative
186,378,204.50 170,613,436.15 9.24%
expenses
Financial expenses 11,825,523.03 13,941,926.23 -15.18%
R&D expenses 76,792,805.69 65,269,765.23 17.65%
4. R&D expenditure
Information on R&D expenditure
Increase/decrease on a year-on-year
2022 2021
basis
The quantity of the person engaged in R&D 306 304 0.66%
The quantity proportion of the person engaged in R&D 14.18% 17.53% -3.35%
The spending amount on R&D（yuan） 76,792,805.69 65,269,765.23 17.65%
R&D spending accounts for the proportion of revenue 2.65% 3.12% Decrease 0.47 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 2022 2021
increase/decrease
Sub-total of cash inflows from operating activities 2,419,852,020.16 2,084,554,545.45 16.08%
Sub-total of cash outflows from operating activities 2,476,099,319.52 2,083,036,327.08 18.87%
Net amount of cash flow generated in operating
-56,247,299.36 1,518,218.37 -3,804.82%
activities
Sub-total of cash inflows from investing activities 419,938,843.20 324,356,502.38 29.47%
Sub-total of cash outflows from investing activities 452,538,330.23 76,095,331.84 494.70%
Net amount of cash flow generated in investing
-32,599,487.03 248,261,170.54 -113.13%
activities
Sub-total of cash inflows from financing activities 871,841,047.27 347,516,847.94 150.88%
16
Sub-total of cash outflows from financing activities 301,774,629.30 473,406,304.78 -36.25%
Net amount of cash flow generated in financing
570,066,417.97 -125,889,456.84 552.83%
activities
Net increase in cash and cash equivalents 482,692,465.30 123,990,877.38 289.30%
Reason for change in the related data by 30% or higher on a year-on-year basis
√ Applicable □ Not applicable
1. Net cash flow generated from operating activities decreased significantly year-on-year, mainly due to an
increase in cash paid for purchasing goods and receiving services.
2. Net cash flow generated from investment activities decreased significantly year-on-year, mainly due to the
Company's payment for the acquisition of equity in Sonyo Compressors and Sonyo Refrigeration System.
3. Net cash flow generated from financing activities has significantly increased year-on-year, mainly due to the
acquisition of bank mergers and acquisitions loans through major asset restructuring projects.
Reason for remarkable difference between the cash flows from the Company's operating activities in the reporting
period and the net annual profit.
□Applicable √ Not applicable
V. Analysis of the non-main business
□ Applicable √ Not applicable
VI. Analysis of assets & liabilities
1. Remarkable change in assets
Monetary unit: RMB yuan
2022.12.31 2021.12.31
Proportion Explain for major
Proportion to Proportion to the
Amount Amount increase/decrease changes
the total assets total assets
Mainly due to changes in
Increase 4.13
Monetary funds 1,006,165,899.18 13.24% 522,658,505.79 9.11% merger criteria after
percentage points
major asset restructuring
Increase 4.23 Mainly due to changes in
Accounts receivable 1,409,978,442.95 18.55% 821,548,678.85 14.32% percentage points merger criteria after
major asset restructuring
Increase 1.05
Contract assets 225,790,875.78 2.97% 109,859,658.79 1.92%
percentage points
Increase 0.67
Inventories 1,395,344,780.24 18.36% 1,014,527,127.82 17.69%
percentage points
Decrease 0.59
Investment property 115,332,918.20 1.52% 120,752,809.61 2.11%
percentage points
Decrease14.06 Mainly due to Sonyo
percentage points Compressor and Sonyo
Refrigeration System to
Long-term equity
562,987,771.94 7.41% 1,231,504,533.45 21.47% become a subsidiary
investment
company, and Panasonic
cold chain equity
transfer
Increase 1.26
Fixed assets 1,229,029,368.93 16.17% 855,395,405.85 14.91%
percentage points
Construction in Increase 0.84
115,577,902.54 1.52% 38,974,478.45 0.68%
progress percentage points
17
Decrease 0.01
Use right assets 30,941,662.26 0.41% 23,934,703.37 0.42%
percentage points
Decrease 0.68
Short-term loans 274,052,990.15 3.61% 245,937,091.72 4.29%
percentage points
Decrease 0.19
Contract liabilities 647,645,820.57 8.52% 499,719,963.40 8.71%
percentage points
Increase 6.79 Mainly due to the
percentage points Company obtained bank
Long-term loans 715,100,000.00 9.41% 150,000,000.00 2.62% acquisition loan for
major asset
reorganization
Increase 0.06
Lease liabilities 11,230,532.05 0.15% 5,394,021.14 0.09%
percentage points
2. Assets & liabilities which are measured by fair value
√ Applicable □ Not applicable
Other non-current financial asset measured in fair value is 261,410,664.61 yuan at the year beginning，and
149,950,861.31 yuan at the year end, with a selling amount of 107,495,400.00yuan.
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, mainly including monetary funds
84,504,096.01 yuan, the reason for the limitation is the deposit and the bank account were frozen; notes receivable
98,917,384.72 yuan, the reason for the limitation is bank pledge; fixed assets 62,207,555.51 yuan, the reason for
the limitation is mortgage.
VII. Analysis of investments
1.The overall situation
√ Applicable □ Not applicable
Investment in 2022(yuan) Investment in 2021(yuan) Amount of variation
562,987,771.94 1,231,504,533.45 -54.28%
The long-term equity investment decreased by 54.28% compared to the end of 2021, mainly due to the subsidiary
companies of Sonyo Compressor and Sonyo Refrigeration System, as well as the equity transfer of Panasonic
Cold Chain.
2.The significant equity investment during the reporting period
□Applicable √Not applicable
3 The significant non-equity investment during the reporting period
□Applicable √Not applicable
4.The financial asset investment
(1) The securities investment
√ Applicable □ Not applicable
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
Own
601211 Guotai Jun’an 10,910,008.00 value 195,180,043.12 -46,991,034.40 0.00 5,289,000.00 -39,572,228.96 148,267,008.72 Non-current
funds
measure financial
18
ment assets
total 10,910,008.00 -- 195,180,043.12 -46,991,034.40 0.00 5,289,000.00 -39,572,228.96 148,267,008.72 --
Until 31 December, 2022, the Company held 10,910,008 numbers of shares of Guotai Jun’an Securities Co., Ltd..
The Company sold 300,000 numbers of shares of Guotai Jun’an, and received cash dividend RMB 7,418,805.44
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
During the reporting period, the Company transferred 17.8% of its equity in Thermoking Container Temperature
Control (Suzhou) Co., Ltd. This equity transfer is beneficial for the Company to appropriately activate non current
financial assets, optimize asset structure, and assist in improving its main business.
During the reporting period, the Company transferred 40% of its equity in Panasonic Appliances Cold Chain
(Dalian) Co., Ltd. This equity transfer is beneficial for the Company to optimize its asset structure, highlight its
main business, and assist in improving its main business.
19
IX. Analysis of major subsidiary companies and mutual shareholding companies
√ Applicable □ Not applicable
Unit: ten thousand yuan (except for registered capital)
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 66,749 22,627 17,546 243
maintenance and million
company
related consulting
and after-sales
service
New building
mutual
Jingxue energy-saving RMB 108
shareholding 166,041 80,305 90,252 3,972
Insulation board, refrigerated million
company
storage door
High-grade
mutual
building hardware, USD 18,064.5
Bingshan Metal shareholding 36,826 31,846 43,312 6,240
plumbing thousand
company
equipment
Subsidiary companies obtained or disposed in the reporting period
√Applicable □Not applicable
Compared with the previous year, the entities included in the consolidated financial statements this year increased
by two companies, including Bingshan Sonyo Compressor (Dalian) Co., Ltd. and Bingshan Sonyo Refrigeration
System (Dalian) Co., Ltd., due to significant asset restructuring. Additionally, three companies, including Ningbo
Bingshan Refrigeration Air Conditioning Engineering Co., Ltd., Bingshan Technical Services (Dalian) Co., Ltd.,
and Dalian New Meica Electronic Technology Co., Ltd., were reduced due to sales or mergers.
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 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
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.
20
(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.
In 2023, the Company will focus on the hot and cold business, deeply cultivate the market segment, solidly
improve the core competitiveness of sales, product, technology, engineering, service and continue to promote the
improvement of main business.
In 2023, the main business strategies are as follows:
(1) Sales force. Strengthen sales system and market segmentation. For the product sector, consolidate the
traditional market, strengthen the development of new areas, and improve the complete set capacity of the
refrigeration station. For the engineering sector, integrate and improve the comprehensive solution capability of
complete sets, and improve the quality of complete sets of orders with the proportion of engineering quality and
self products. For the energy sector, expand core technologies, embrace the dual carbon policy, and achieve
sustainable development.
(2) Product force. Accelerate the development of new products based on the market. Continue to promote product
standardization, serialization and modularization. Strictly implement the AQ development system and optimize
the product development process. Integrate the internal technical resources of Bingshan to realize collaborative
design and development.
(3) Technical force. Focusing on CO2 system solutions, intelligent zero carbon park comprehensive solutions,
ultra-low charging system technology, high temperature heat pump heat recovery and other engineering
technologies, continue to optimize and improve.
(4) Engineering force. Establish and improve the whole project progress management system. Standardize and
strengthen budget process management. Promote the standardization of staffing and process control. Seriously
take responsibility for acceptance and accelerate project acceptance.
(5) Service force. Strengthen the service and marketing support within the warranty period to improve customer
satisfaction. Continuously optimize business processes, deepen post training, and improve service quality and
efficiency.
The above-mentioned business plan does not represent the earnings forecast of listed companies for the year of
2023. 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
21
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
The 1st Extraordinary Shareholders’ Extraordinary Shareholders’ http://www.cnin
29.37% Jan.12, 2022 Jan.13, 2022
General Meeting of 2022 General Meeting fo.com.cn
2021 Annual Shareholders’ general http://www.cnin
29.74% May 18, 2022 May 19, 2022
Annual Shareholders’ General Meeting meeting fo.com.cn
The 2nd Extraordinary Shareholders’ Extraordinary Shareholders’ http://www.cnin
20.67% Nov 1,2022 Nov 2,2022
General Meeting of 2022 General Meeting fo.com.cn
V. Information on the Company’s Directors, Supervisors, Senior Management and Staff
1. basic information
22
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)
Jan.12, Jan.11,
Ji Zhijian Chairman Incumbent M 55 1,528,830 0 0 1,528,830
2022 2025
Jan.12, Jan.11,
Fan Wen Director Incumbent M 58 7,770 0 0 0
2022 2025
Vice Chairman/ Jan.12, Jan.11,
Yin Xide Incumbent M 51 90,080 0 0 90,080
General manager 2022 2025
Director/ Board Jan.12, Jan.11,
Song Wenbao Incumbent M 49 593,880 0 0 593,880
secretary 2022 2025
Jan.12, Jan.11,
Dono Shigeru Director Incumbent M 61 0 0 0 0
2022 2025
Nishimoto Director Incumbent M Jan.12, Jan.11,
56 0 0 0 0
Shigeyuki 2022 2025
M Jan.12, Jan.11,
Zhai Yunling Independent director Incumbent 59 0 0 0 0
2022 2025
F Jan.12, Jan.11,
Liu Yuanyuan Independent director Incumbent 48 0 0 0 0
2022 2025
Incumbent F Jan.12, Jan.11,
Yao Hong Independent director 49 0 0 0 0
2022 2025
Chairman of the board Jan.12, Jan.11,
Hu Xitang Incumbent M 55 0 0 0 0
of Supervisors 2022 2025
Jan.12, Jan.11,
Dai Yuling Supervisor Incumbent F 45 0 0 0 0
2022 2025
Jan.12, Jan.11,
Li Sheng Supervisor Incumbent M 43 0 0 0 0
2022 2025
Chief Financial Jan.12, Jan.11,
Wang Jinxiu Incumbent F 52 5,000 0 0 5,000
Officer 2022 2025
Deputy general Jan.12, Jan.11,
Yang Fuhua Incumbent M 51 0 0 0 0
manager 2022 2025
Deputy general Jan.12, Jan.11,
Lu Jun Incumbent M 57 2,500 0 0 2,500
manager 2022 2025
Total 2,228,060 0 0 2,228,060
During the reporting period, whether any directors or supervisors leave office or senior
managers are dismissed
√Applicable □Not applicable
23
On January 12, 2022, the Company's board of directors change the term of office, The former director of the
Company Ding Jie ,Xun Junrao and Yokoo Sadaaki no longer served as director of the Company.
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
Leave office after After the general election, Mr. Yokoo Sadaaki no longer
Yokoo Sadaaki Director Jan 12,2022
the end of term served as vice chairman of the Company
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
Graduated from Dalian served as sales director, copy director and General manager of
Related
Vice Chairman University of low-temperature logistics Equipment Division of Panasonic Cold
Yin Xide responsibilities of
and GM 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.
Nishimoto Director graduated from Meiji served as the director of Financial Planning Room and Finance Related
24
Shigeyuki university Department System Overall Room of Panasonic Corporation responsibilities of
Headquarter; the director of Regional Financial Integration Room, the Director
CFO of Panasonic Corporation China & Northeast Asia Company; the
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
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.
25
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
Dalian Zhong Huida Refrigeration Technology Co., Ltd. Chairman No
Ji Zhijian Songzhi-Grand Ocean Cold and Hot Technology (Dalian) Co., Ltd Chairman No
Linde Engineering (Dalian) Co., Ltd. Chairman No
Wuhan New World Refrigeration Industrial Co., Ltd. Chairman No
MHI Bingshan Refrigeration (Dalian) Co., Ltd. Chairman No
Dalian Niweisi LengNuan Technology Co., Ltd Chairman No
Fan Wen
Dalian Bingshan Lingshe Quick Freezing Equipment Co., Ltd Chairman No
Dalian Bingshan Air-Conditioning Equipment Co., Ltd Chairman No
Sonyo Compressor (Dalian) Co., Ltd. Chairman No
Dalian Bingshan Group Construction Co., Ltd Chairman No
Yin Xide
Sonyo Refrigeration System (Dalian) 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
Shanghai Binku Network Technology Co., LTD. Independent director Yes
Hualu Zhida Technology Co., LTD. Independent director Yes
Yao Hong
Harbin Hattou Investment Co., LTD. Independent director Yes
Fushun Special Steel 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 4,895,800 yuan.
Particulars about the annual remuneration of directors, supervisors and senior staff members
26
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 106.81
Yokoo Sadaaki 0
Nishimoto Shigeyuki 0
Song Wenbao 64.09
Zhai Yunling 8
Liu Yuanyuan 8
Yao Hong 8
Hu Xitang 79.54
Dai Yuling 0
Li Sheng 33.42
Lu Jun 61.21
Yang Fuhua 60.50
Wang Jinxiu 60.01
Total 489.58
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
1st Meeting of 9th Session of the
Jan 12, 2022 Jan 13, 2022 http://www.cninfo.com.cn
Board
2ndMeeting of 9th Session of the
Jan 21, 2022 Jan 22, 2022 http://www.cninfo.com.cn
Board
3rd Meeting of 9th Session of the
April 11,2022 April 12,2022 http://www.cninfo.com.cn
Board
4th Meeting of 9th Session of the
April 22,2022 April 23,2022 http://www.cninfo.com.cn
Board
5th Meeting of 9h Session of the
May 27,2022 May 28,2022 http://www.cninfo.com.cn
Board
6th Meeting of 9th Session of the
August 24,2022 August 25,2022 http://www.cninfo.com.cn
Board
7th Meeting of 9th Session of the
September 8,2022 September 9,2022 http://www.cninfo.com.cn
Board
8th Meeting of 9th Session of the
September 26,2022 September 27,2022 http://www.cninfo.com.cn
Board
9th Meeting of 9th Session of the
October 27,2022 October 28,2022 http://www.cninfo.com.cn
Board
27
10th Meeting of 9th Session of
November 7,2022 November 8,2022 http://www.cninfo.com.cn
the Board
11th Meeting of 9th Session of
November 18,2022 November 19,2022 http://www.cninfo.com.cn
the Board
12th Meeting of 9th Session of
November 28,2022 November 28,2022 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 2023.
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.
28
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, 2022 the Company and its subsidiary had 2,158 enrolled employees, including 1,268 persons
engaged in production; 241 persons engaged in marketing; 306 persons engaged in engineering and technology;
47 persons engaged in financing; and 296 persons engaged in management.
2. As of Dec. 31, 2022, among enrolled employees of the Company and its subsidiary, 72 persons have the
educational background of Master or higher; 673 persons have the educational background of university; 649
persons have the educational background of junior college; and 764 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 2021 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 2022.
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
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 141,798,910.55
Proportion of cash dividend distribution accounting for total profit distribution 100%
Cash dividend distribution policy:
29
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 parent company of the Company achieved a net profit
of 157.554 million yuan in 2022, with a 10% statutory surplus reserve fund of 15.755 million yuan. The profit available for
distribution to shareholders for the year was 141.799 million yuan.
Add in the undistributed profit of 803.564 million yuan at the beginning of the year, deduct the paid ordinary stock dividend of 8.432
million yuan for the year 2021, and the cumulative profit available for shareholder distribution is 936.931 million yuan.
The Company’s profit distribution preplan for 2022:
The Company will allocate 20% of the parent company's net profit of 157.554 million yuan in 2022 to the discretionary surplus
reserve fund of 31.511 million yuan;
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 2022 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.
During the reporting period, in order to further strengthen the hot and cold main businesses, the Company planned
to implement a major asset restructuring. After the completion of this restructuring in November 2022, the
Company directly or indirectly holds 100% equity in Sonyo Compressor and 100% equity in Sonyo Refrigeration
System. The integration plan for business, assets, finance, personnel, institutions, and other aspects of this
30
restructuring is detailed in the "Draft Report on Major Asset Purchase and Related Party Transactions (Revised
Draft)" disclosed by the Company on October 26, 2022 on CNINFO. The relevant integration plan is being
implemented in an orderly manner.
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.26, 2023
self-evaluation of internal control
Disclosure reference to the full text of the For the 2022 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, 2022, 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. 26, 2023
the internal control audit report
Disclosure reference to the full text For the 2022 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
None
31
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
Bingshan Sonyo Compressor (Dalian) Co., Ltd., a subsidiary of the Company, is a key pollutant discharge unit
announced by the environmental protection department.
Administrative penalties imposed for environmental problems during the reporting period
□Yes √ No
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 26, 2023.
III. We consolidated and expanded our achievements in poverty alleviation and rural revitalization
In 2022, the Company continued to consolidate and expand its achievements in poverty alleviation, actively
communicating with Songlin Village, Guangming Mountain Town, Zhuanghe City, and fulfilling its
responsibilities. Invested 50,000 yuan to assist in the construction of the rural street lighting project, and carried
out daily maintenance of the air conditioning equipment in the village cultural activity center. Provide education
and assistance to children from impoverished families.
32
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
According to the relevant provisions of the "Self regulatory Guidelines for Listed Companies on the Shenzhen
Stock Exchange No. 8- Major Asset Restructuring", the important commitments and performance made by
relevant parties during the 2022 major asset restructuring process of the Company are detailed in the Company's
announcement on the performance of commitments made by relevant parties during the major asset restructuring
disclosed on CNINFO on April 26, 2023.
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
In December 2021, the Ministry of Finance issued Interpretation No. 15 of the Accounting Standards for Business
Enterprises (Cai Kuai [2021] No. 35) (hereinafter referred to as "Interpretation No. 15"), which states that
"accounting treatment for the sale of products or by-products produced by enterprises before their fixed assets
reach their intended usable state or during the research and development process" and "judgment on loss
contracts" shall be implemented from January 1, 2022. The Company shall commence implementation from the
specified date.
The adoption of Interpretation No. 15 by the Company did not have a significant impact on our financial condition
and operating results.
VII. Change in the range of consolidated statements compared with the financial statements
of the previous year
√Applicable □Not applicable
Compared with the previous year, the entities included in the consolidated financial statements this year increased
by two companies, including Bingshan Sonyo Compressor (Dalian) Co., Ltd. and Bingshan Sonyo Refrigeration
System (Dalian) Co., Ltd., due to significant asset restructuring. Additionally, three companies, including Ningbo
Bingshan Refrigeration Air Conditioning Engineering Co., Ltd., Bingshan Technical Services (Dalian) Co., Ltd.,
and Dalian New Meica Electronic Technology Co., Ltd., were reduced due to sales or mergers.
VIII. Engagement and dismissal of the accounting firm
Currently engaged accounting firm
33
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 7
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 2 year, Zhang Shizhuo 4 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
2022 audit institution to conduct an integrated audit of the Company's financial reports and internal control.
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 608.8 million yuan, accounting for 79.43% of the budgeted amount for the year 2022. This
included 105.2 million yuan, accounting for 60.63% of the budgeted amount for the year 2022, for purchasing
supporting products for package projects from associated parties, and 503.6 million yuan, accounting for 84.92%
of the budgeted amount for the year 2022, from selling supporting parts and components to associated parties.
Associated transactions related to purchases or sales of assets
□Applicable √ Not applicable
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. To eliminate management barriers for subsidiaries, strengthen service and market sales support during the
warranty period, and improve customer satisfaction, the Company transferred 100% equity of Bingshan
Technology Services (Dalian) Co., Ltd. to Dalian Bingshan Group Co., Ltd., Dalian Zhonghuida Refrigeration
Technology Co., Ltd., and Dalian Zhixintong Enterprise Management Partnership (limited partnership). The above
matters were reviewed and approved by the second meeting of the ninth Board of Directors of the Company on
January 21, 2022. The Company's "Announcement on Related Party Transactions Regarding the Transfer of
Equity of Bingshan Technology Services (Dalian) Co., Ltd." (2022-008) was disclosed on January 22, 2022 in
China Securities Journal and CNINFO.
2. After deliberation and approval at the eighth meeting of the ninth Board of Directors and the second
extraordinary shareholders' meeting in 2022, the Company has implemented a major asset restructuring. The
Company purchased 60% equity of Panasonic Compressor (Dalian) Co., Ltd. held by Sanyo Electric Co., Ltd. and
34
30% equity of Panasonic Refrigeration System (Dalian) Co., Ltd. held by Panasonic Electric Appliances (China)
Co., Ltd. and 25% equity of Panasonic Refrigerator Systems (Dalian) Co., Ltd.held by Panasonic Cold Chain
(Dalian) Co., Ltd. through cash payment. The Company's "Major Asset Restructuring and Related Party
Transactions Report" (draft) was disclosed on September 27, 2022 in China Securities Journal and CNINFO. The
above matters were implemented and completed on November 11, 2022.
3. In order to optimize the asset structure, highlight its main business, and assist in the improvement of its main
business, the Company has signed an equity transfer agreement with Panasonic Electric Appliances (China) Co.,
Ltd., transferring all 40% of its equity in Panasonic Cold Chain (Dalian) Co., Ltd. to Panasonic Electric
Appliances (China) Co., Ltd. The above matters were reviewed and approved at the 11th meeting of the 9th Board
of Directors of the Company on November 18, 2022. The Company's announcement on related party transactions
related to the transfer of equity of Panasonic Cold Chain (Dalian) Co., Ltd. (2022-055) was disclosed on
November 19, 2022 in China Securities Journal and CNINFO.
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
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 8.51 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.
2. Guaranteeing status
√Applicable □ Not applicable
China Development Fund provides support for the Company's cold chain green intelligent equipment and service
industrialization base project, and provides special funds to the controlling shareholder of the Company, Bingshan
Group. The above-mentioned special fund amount is 160 million yuan, with a term of 10 years and a rate of 1.2%.
After the above special funds are in place, Bingshan Group has fully allocated them to the Company in a one-time
manner without increasing the rate. The implementation of the above-mentioned special funds requires the
Company to provide guarantees and continue until the reporting period. This guarantee is in the form of a
guarantee for the controlling shareholder, but in fact, it is a guarantee for the Company to obtain financial support
for itself.
The Company provided guarantees for its client Guizhou Waterfall Cold Chain Food Investment Co., Ltd. based
on financing leasing business, which lasted until the reporting period, with a guarantee amount of 25.705 million
yuan. The project is currently being fulfilled normally, and the guaranteed shareholders and relevant natural
persons have provided the Company with a full amount of joint and several liability guarantee and counter
guarantee. The overall risk of the Company's guarantee is controllable.
The Company provides guarantees for clients Liuyang Zhongjie Technology Investment Co., Ltd., Shandong
35
Jiechuang Energy Technology Co., Ltd., and Shaanxi Yiming Food Co., Ltd. based on financing leasing business.
The guaranteed party has good qualifications, and the guaranteed party's shareholders and relevant natural or legal
persons have provided full joint and several liability guarantee and counter guarantee to the Company. The
Company's guarantee risk is generally controllable and does not harm the legitimate rights and interests of the
Company and small and medium-sized shareholders.
The above guarantee matters have been reviewed by the board of directors and are being fulfilled normally.
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
36
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
3,130,039 0.37% 1,670,894 0.20%
conditions
II. Circulating share capital 840,082,468 99.63% 841,541,613 99.80%
1. Domestically listed ordinary shares 598,582,468 70.99% 600,041,613 71.16%
2. Domestically listed foreign shares 241,500,000 28.64% 241,500,000 29.64%
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, newly appointed directors Fan Wen and Deputy General Manager Lu Jun of the
Company, as well as directors Ding Jie and Xu Junrao, resigned upon the expiration of their terms of office. The
above-mentioned personnel changes have led to changes in the lock-in of shares by executives, 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
37
Total number of shareholders in the Total number of shareholders as of the last month before
67,475 61,099
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% 6,730,000
Chen Xianlai Domestic natural person 0.59% 4,934,500
Chen Yong Domestic natural person 0.52% 4,387,500
Xue Hong Domestic natural person 0.42% 3,580,000
Dalian industrial development investment Co., Domestic non-state-owned
0.40% 3,406,725
Ltd. legal person
Chen Cirou Domestic natural person 0.40% 3,374,280
Li Xiaohua Domestic natural person 0.37% 3,149,608
Wu An Domestic natural person 0.36% 3,055,200
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 6,730,000 Domestically listed foreign shares
Chen Xianlai 4,934,500 RMB denominated ordinary shares
Chen Yong 4,387,500 RMB denominated ordinary shares
Xue Hong 3,580,000 Domestically listed foreign shares
Dalian industrial development investment Co., Ltd. 3,406,725 RMB denominated ordinary shares
Chen Cirou 3,374,280 Domestically listed foreign shares
Li Xiaohua 3,149,608 RMB denominated ordinary shares
Wu An 3,055,200 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.
Li Xiaohua holds 1,093,700 shares of the Company through an
Explanation on the participation of the top 10 ordinary shareholders
ordinary securities account and 2,055,908 shares of the
in margin trading and securities lending business
Company through an investor credit securities account.
38
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.
39
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
40
Section 8 Information on Preferred Stock
□ Applicable √ Not applicable
In the reporting period, the Company didn’t own preferred stock.
41
Section 9 Information on Corporate bonds
□ Applicable √ Not applicable
In the reporting period, the Company didn’t own corporate bonds.
42
Section 10 Financial Report
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 2022, 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 2022, and of their consolidated and the company’s financial performance and cash flows for
the year then ended.
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.
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
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 Understand and evaluate effectiveness of design
and operation of the management ‘s internal
of products and installation. The key
control over revenue
concern about the sales revenue is
43
due to the large sales quantities and Carried out analytical review and evaluate the
any potential misstatements existing reasonableness of sales income and gross profit
in the revenue recognition within margin by segmenting the business and sales in
conjunction with industry development and
the appropriate accounting period.
actual situation of Bingshan Refrigeration &
Key concern about installation
Heat Company.
income is because the accounting Sampling test the sales contracts, identify the
involved by significant accounting clause and condition in respect to the contract
estimate and judgment. Having performance obligation, consideration and risk
considered these matters, we and reward transfer of the ownership. Evaluate
recognized revenue recognition as the revenue recognition of Bingshan
key audit matters. Refrigeration & Heat Company whether it is in
line with the accounting standards.
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
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.
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.
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 2022 annual report, but does not
include the financial statements and our auditor’s report thereon.
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.
44
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.
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.
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 following works:
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.
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).
45
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the Management.
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.
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.
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 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 25, 2023
46
Consolidated Balance Sheet
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
ITEMS 31 December 2022 01 January 2022
Current Assets:
Monetary funds 1,006,165,899.18 522,658,505.79
Settlement provision
Loans to banks and other financial institutions
Financial asset held for trading
Derivative financial assets
Notes receivable 505,945,261.18 166,430,365.74
Accounts receivable 1,409,978,442.95 821,548,678.85
Receivable financing 58,792,792.70 43,704,310.38
Prepayments 171,991,468.12 182,701,403.55
Insurance receivables
Reinsurance Receivable
Provision of reinsurance contract reserve receivable
Other receivables 51,394,474.24 60,340,096.45
including: interest receivable 0.00 0.00
dividend receivable 14,495.00 1,003,568.75
Financial assets purchased under agreement to resell
Inventories 1,395,344,780.24 1,014,527,127.82
Contractual asset 225,790,875.78 109,859,658.79
Held for sale assets
Non-current assets due within 1-year 15,715,631.52 14,990,989.30
Other current assets 33,499,577.60 24,525,076.71
Total Current Assets 4,874,619,203.51 2,961,286,213.38
Non-Current Assets：
Loan and payment on other's behalf disbursed
Debt investment
Other debt investment
Long-term receivables 5,162,458.90
Long-term equity investment 562,987,771.94 1,231,504,533.45
Other equity instrument investment
Other non-current financial assets 149,950,861.31 261,410,664.61
Investments properties 115,332,918.20 120,752,809.61
Fixed assets 1,229,029,368.93 855,395,405.85
Construction in process 115,577,902.54 38,974,478.45
Production biological assets
Oil-gas assets
Right-of-use assets 30,941,662.26 23,934,703.37
Intangible assets 168,076,720.07 142,592,738.10
Development cost
Goodwill 248,345,508.41 1,750,799.49
Long-term prepaid expense 6,486,566.92 8,088,684.23
Deferred tax asset 95,424,386.61 89,879,574.13
Other non-current assets
Total Non-current Assets 2,727,316,126.09 2,774,284,391.29
Total Assets 7,601,935,329.60 5,735,570,604.67
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
47
Consolidated Balance Sheet (continued)
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
ITEMS 31 December 2022 01 January 2022
Current Liabilities:
Short-term borrowings 274,052,990.15 245,937,091.72
Loans from central bank
Loans from other banks
Financial liability held for trading
Derivative financial liabilities
Notes payable 618,944,384.85 380,033,039.56
Accounts payable 1,586,098,060.59 919,871,927.53
Advance received -
Contractual liability 647,645,820.57 499,719,963.40
Financial assets sold under agreements to repurchase
Deposits received and hold for others
Entrusted trading of securities
Entrusted underwriting of securities
Employee pay payables 118,216,683.23 35,148,782.48
Taxes and duties payable 33,691,523.62 13,514,847.82
Other payables 67,054,250.25 55,284,140.21
including: interest payable 0.00 0.00
dividend payable 533,156.00 3,008,156.00
Fees and commissions payable
Amount due to reinsurance
Held for sale liabilities
Non-current liabilities due within 1-year 63,105,954.56 24,175,388.12
Other current liabilities 204,650,003.24 195,213,206.91
Total Current Liabilities 3,613,459,671.06 2,368,898,387.75
Non-current Liabilities:
Insurance contract provision
Long-term borrowings 715,100,000.00 150,000,000.00
Bonds Payable -
including: preference share
perpetual debt
Lease liability 11,230,532.05 5,394,021.14
Long-term payables 31,009,644.16 19,998,913.29
Long-term employee payables
Provision 18,805,967.43
Deferred income 99,754,346.39 106,185,323.82
Deferred Tax liabilities 52,306,365.68 35,596,349.70
Other non-current liabilities -
Total Non-current Liabilities 928,206,855.71 317,174,607.95
Total Liabilities 4,541,666,526.77 2,686,072,995.70
Owners Equity(or Shareholders Equity):
Paid-in capital（Share capital) 843,212,507.00 843,212,507.00
Other equity instrument
Capital reserve 717,097,098.38 720,215,866.78
Other comprehensive income 2,208,669.73 2,178,681.73
Chartered reserve
Surplus reserves 825,226,634.15 809,471,199.64
△Provision for general risk
Undistributed profit 618,445,922.58 627,764,582.32
Equity attributable to equity holders of the Company 3,006,190,831.84 3,002,842,837.47
*Minority interest 54,077,970.99 46,654,771.50
Total Equity 3,060,268,802.83 3,049,497,608.97
Total Liabilities and Equity 7,601,935,329.60 5,735,570,604.67
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
48
Balance Sheet of Parent Company
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
ITEMS 31 December 2022 01 January 2022
Current Assets:
Monetary funds 361,446,559.26 391,077,589.19
Tradable financial asset
Derivative financial assets
Notes receivable 100,218,283.64 61,036,803.62
Accounts receivable 629,954,649.50 408,719,275.78
Receivable financing 12,451,483.74 5,427,828.26
Prepayments 61,446,678.23 57,409,521.75
Other receivables 36,021,805.53 54,222,825.18
including: interest receivable
dividend receivable 25,100,920.84
Inventories 342,276,945.65 339,977,048.51
Contractual assets 83,739,043.68 50,916,025.04
Held for sale assets
Non-current assets due within 1-year 15,715,631.52 13,281,553.63
Other current assets 565,836.48 8,871,387.69
Total Current Assets 1,643,836,917.23 1,390,939,858.65
Non-Current Assets：
Debt investment
Other debt investment
Long-term receivables 5,162,458.90
Long-term equity investment 2,720,998,153.80 1,923,394,225.05
Other equity instrument investment
Other non-current financial assets 148,635,718.81 260,095,522.11
Investments properties 90,986,890.03 95,850,052.41
Fixed assets 646,432,825.98 680,392,162.13
Construction in process 48,905,875.93 28,279,901.38
Production biological assets
Oil-gas assets
Right-of-use assets 14,975,625.90 15,636,361.47
Intangible assets 72,158,994.17 73,679,019.01
Development cost
Goodwill
Long-term unamortized expense 5,553,733.11 6,766,442.52
Deferred tax asset 21,597,992.46 16,806,287.61
Other non-current assets
Total Non-current Assets 3,775,408,269.09 3,100,899,973.69
Total Assets 5,419,245,186.32 4,491,839,832.34
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Li Sheng
49
Balance Sheet of Parent Company (continued)
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
ITEMS 31 December 2022 01 January 2022
Current Liabilities:
Short-term borrowings 234,980,000.00 230,373,666.72
Financial liability held for trading
Derivative financial liabilities
Notes payable 259,002,815.07 238,051,362.81
Accounts payable 406,794,291.57 318,798,749.33
Advance received -
Contractual liability 139,622,706.08 115,654,933.60
Employee pay payables 14,557,783.63 13,551,313.90
Taxes and duties payable 9,430,543.11 2,667,309.95
Other payables 21,061,597.80 23,508,139.39
including: interest payable
dividend payable 533,156.00 533,156.00
Held for sale liabilities
Non-current liabilities due within 1-year 42,972,752.44 1,918,874.53
Other current liabilities 106,146,986.20 68,871,944.99
Total Current Liabilities 1,234,569,475.90 1,013,396,295.22
Non-current Liabilities:
Long-term borrowings 715,100,000.00 150,000,000.00
Bonds Payable -
including: preference share
perpetual debt
Lease liability 12,613,986.87 13,243,055.41
Long-term payables 12,908,810.87
Long-term employee payables
Provision for liabilities
Deferred income 61,685,846.39 66,992,823.82
Deferred Tax liabilities 20,603,550.11 35,596,349.70
Other non-current liabilities
Total Non-current Liabilities 822,912,194.24 265,832,228.93
Total Liabilities 2,057,481,670.14 1,279,228,524.15
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 755,146,592.54 755,146,592.54
Less: Treasury stock
Other comprehensive income 1,246,569.06 1,216,581.06
Chartered reserve
Surplus reserves 825,226,634.15 809,471,199.64
Undistributed profit 936,931,213.43 803,564,427.95
Total Equity 3,361,763,516.18 3,212,611,308.19
Total Liabilities and Equity 5,419,245,186.32 4,491,839,832.34
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
50
Consolidated Income Statement
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
Item This year Last year
Ⅰ、Total operating revenue 2,893,085,310.29 2,089,208,256.22
Including: Operating revenue 2,893,085,310.29 2,089,208,256.22
Interest income
Earned premiums
Fees and commission income
Ⅱ、Total cost of operation 2,988,322,715.94 2,248,942,160.16
Including: Cost of operation 2,537,528,841.40 1,849,531,272.29
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 22,061,626.36 18,951,850.96
Selling and distribution expenses 153,735,714.96 130,633,909.30
Administrative expenses 186,378,204.50 170,613,436.15
R&D 76,792,805.69 65,269,765.23
Financial expenses 11,825,523.03 13,941,926.23
Including: Interest expenses 18,581,726.78 16,718,288.26
Interest income 5,850,062.80 5,193,155.75
add: other income 7,173,155.47 10,799,794.83
investment income (Loss listed with "-") 306,688,497.94 -47,447,292.15
Including: income from investments in associates and joint ventures -37,218,861.27 -58,045,519.63
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 "-") -46,991,034.40 52,398,565.78
Loss on impairment of credit(Loss listed with "-") -82,695,388.75 -90,798,013.99
Loss on impairment of assets(Loss listed with "-") -74,825,795.00 -49,626,686.83
Gain on asset disposal(Loss listed with "-") 194,556.13 59,272.29
Ⅲ、Operating profit (Loss listed with "-") 14,306,585.74 -284,348,264.01
Add: Non-operating income 11,841,528.55 4,474,706.92
Less: Non-operating expenses 5,204,540.35 9,619,390.42
Ⅳ、 Total profit (Loss listed with "-") 20,943,573.94 -289,492,947.51
Less: Income tax expenses 1,054,609.62 -14,303,353.47
Ⅴ、Net profit (Net loss listed with "-") 19,888,964.32 -275,189,594.04
(I) Classification by continuity
1、Net profit from continuing operation 19,888,964.32 -275,189,594.04
2、Net profit from discontinuing operation
(II) Classification by ownership
1、Net profit attributable to equity holders(shareholders) of the Company 18,255,330.45 -269,059,849.96
2、Minority interest 1,633,633.87 -6,129,744.08
Ⅵ、 Other comprehensive income net off tax 29,988.00
Net other comprehensive income net off tax attributable to equity
29,988.00
holders(shareholders) of the parent company
(Ⅰ)Items that may not be reclassified subsequently to the income statement - -
1.Change in net asset/liability from remeasurment on defined benefit plan
51
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 29,988.00
1.Under equity method, proportionate share of other comprehensive income
invested company that may be reclassified subsequently to the income 29,988.00
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 19,918,952.32 -275,189,594.04
Total comprehensive income attributable to parent Company 18,285,318.45 -269,059,849.96
Total comprehensive income attributable to minority interest 1,633,633.87 -6,129,744.08
Ⅷ、 Earnings per share
(Ⅰ)Basic earnings per share 0.02 -0.32
(Ⅱ)Diluted earnings per share 0.02 -0.32
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
52
Income Statement of Parent Company
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., LtAmount Unit:RMB
Item This year Last year
Ⅰ、Operating revenue 1,048,142,993.33 833,501,935.55
Less: Cost of operation 909,850,529.59 737,122,594.46
Taxes and surcharges 12,305,882.57 11,713,347.51
Selling and distribution expenses 54,927,585.49 62,191,872.24
Administrative expenses 92,850,447.59 84,579,442.49
R&D 28,982,093.78 23,153,016.46
Financial expenses 12,093,600.10 11,949,817.04
Including: Interest expenses 12,261,980.25 14,788,914.23
Interest income 2,557,312.33 4,726,261.06
Add: Other income 1,983,356.24 1,854,962.57
Investment income (Loss listed with "-") 289,868,640.72 -16,105,494.35
Including: income from investments in associates and joint ventures -37,651,689.22 -58,058,060.45
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 "-") -46,991,034.40 52,398,565.78
Loss on impairment of credit(Loss listed with "-") -27,779,271.62 -13,408,727.47
Loss on impairment of assets(Loss listed with "-") -13,966,272.08 -12,126,565.07
Gain on asset disposal(Loss listed with "-") 84,294.67 -399.28
Ⅱ、Operating profit (Loss listed with "-") 140,332,567.74 -84,595,812.47
Add: Non-operating income 49,394.31 1,548.54
Less: Non-operating expenses 61,252.08 885,498.38
Ⅲ、 Total profit (Loss listed with "-") 140,320,709.97 -85,479,762.31
Less: Income tax expenses -17,233,635.09 772,605.54
Ⅳ、Net profit (Net loss listed with "-") 157,554,345.06 -86,252,367.85
1、Net profit from continuing operation 157,554,345.06 -86,252,367.85
2、Net profit from discontinuing operation
Ⅴ、 Other comprehensive income net off tax 29,988.00
(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 29,988.00
1.Under equity method, proportionate share of other comprehensive income
29,988.00
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 157,584,333.06 -86,252,367.85
Ⅷ、 Earnings per share
(Ⅰ)Basic earnings per share
(Ⅱ)Diluted earnings per share
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
53
Consolidated Cash Flow Statement
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., LtAmount Unit:RMB
Item This year Last year
1. Cash flows from operating activities:
Cash received from sales of goods and rendering of services 2,299,565,737.92 1,998,747,405.23
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 27,845,766.93 21,514,050.68
Cash received relating to other operating activities 92,440,515.31 64,293,089.54
Sub-total of cash inflows from operating activities 2,419,852,020.16 2,084,554,545.45
Cash paid for goods and services 1,765,774,138.68 1,501,614,080.55
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 392,733,128.51 350,456,810.15
Payments of taxes and surcharges 85,488,578.90 68,388,963.77
Cash paid relating to other operating activities 232,103,473.43 162,576,472.61
Sub-total of cash outflows from operating activities 2,476,099,319.52 2,083,036,327.08
Net cash flows from operating activities -56,247,299.36 1,518,218.37
2. Cash flows from investment activities:
Cash received from return of investments 304,791,101.68 1,703,262.34
Cash received from investments income 109,215,313.16 110,699,788.36
Net cash received from disposal of fixed assets, intangible assets and other
668,334.46 754,551.68
long-term assets
Net cash received from disposal of subsidiaries and other business units
5,264,093.90 211,198,900.00
Cash received relating to other investing activities
Sub-total of cash inflows from investing activities 419,938,843.20 324,356,502.38
Cash paid to acquire fixed assets, intangible assets and other long-term assets 50,713,747.56 30,695,331.84
Cash paid for investments 45,400,000.00
Net increase in pledged deposits
Net cash paid to acquire subsidiaries and other business units 401,824,582.67
Cash paid relating to other investing activities
Sub-total of cash outflow from investing activities 452,538,330.23 76,095,331.84
Net cash flows from investing activities -32,599,487.03 248,261,170.54
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 847,850,000.00 263,670,518.89
Cash received relating to other financing activities 23,991,047.27 83,846,329.05
Sub-total of cash inflows from financing activities 871,841,047.27 347,516,847.94
Cash paid for settlement of borrowings 242,005,111.11 336,679,560.00
Cash paid for dividends, profits appropriation or payments of interest 30,640,401.33 24,739,356.41
Including: Dividens and profits paid to non-controlling interest
Cash paid relating to other financing activities 29,129,116.86 111,987,388.37
Sub-total of cash outflows from financing activities 301,774,629.30 473,406,304.78
Net cash flows from financing activities 570,066,417.97 -125,889,456.84
54
4. Effect of changes in foreign exchange rate on cash and cash equivalents 1,472,833.72 100,945.31
5. Net increase in cash and cash equivalents 482,692,465.30 123,990,877.38
Add: Cash and cash equivalents at beginning of year 438,969,337.87 314,978,460.49
6. Cash and cash equivalents at end of year 921,661,803.17 438,969,337.87
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
55
Cash Flow Statement of Parent Company
Name of Enterprise： Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit :RMB
Item This year Last year
1.Cash flow from operating activities
Cash receipts from sale of goods or rendering of services 769,156,429.00 765,232,022.05
Refunds of taxes 7,968,777.52
Other cash receipts in operating activities 16,186,561.44 25,372,394.89
Sub-total of cash inflows from operating activities 793,311,767.96 790,604,416.94
Cash payments for goods and services acquired 721,626,515.16 570,924,816.02
Cash payments to and on behalf of employees 116,047,528.96 106,175,901.94
Tax and duties payments 30,826,994.20 32,561,028.64
Other cash payments for operating activities 73,762,376.92 53,337,644.37
Sub-total of cash outflows from operating activities 942,263,415.24 762,999,390.97
Net cash flows from operating activities -148,951,647.28 27,605,025.97
2.Cash flows from investing activities
Cash receipts from return of investments 330,679,301.68 1,700,000.00
Cash receipts from investments income 262,646,360.17 113,318,424.61
Net cash receipts from disposal of fixed assets, intangible assets and 5,000.00
other long-term assets
Net cash receipts from disposal of subsidiaries and other businesses 211,198,900.00
Other cash receipts in investing activities
Sub-total of cash inflows from investing activities 593,330,661.85 326,217,324.61
Cash payments for acquired fixed assets, intangible assets and other 14,815,415.96 10,487,613.09
long-term assets
Cash payments for investment 1,010,883,060.00 54,165,615.00
Net cash payments for acquisition of subsidiaries and other businesses
Other cash payments in investing activities
Sub-total of cash outflows from investing activities 1,025,698,475.96 64,653,228.09
Net cash flows from investment activities -432,367,814.11 261,564,096.52
3.Cash flows from financing activities
Cash received from capital injection
Cash receipts from borrowings 829,000,000.00 227,000,000.00
Other cash receipts in financing activities 5,971,249.02 23,123,472.43
Sub-total of cash inflows from financing activities 834,971,249.02 250,123,472.43
Cash paid for settlement of borrowings 237,000,000.00 311,478,560.00
Cash paid for dividends, profits appropriation or payments of interest 23,036,986.09 21,455,435.22
Other cash payments in financing activities 2,535,000.00 21,611,560.00
Sub-total of cash outflows from financing activities 262,571,986.09 354,545,555.22
Net cash flows from financing activities 572,399,262.93 -104,422,082.79
4.Effect of changes in foreign exchange rate on cash and cash 19,977.77 -16,318.79
equivalents
5.Net increases in cash and cash equivalents -8,900,220.69 184,730,720.91
Add: the beginning balance of cash and cash equivalent 369,932,989.19 185,202,268.28
6.The ending balance of cash and cash equivalent 361,032,768.50 369,932,989.19
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
56
Consolidated Statement of Changes in Shareholer's Equity
Current year
Equity attributable to the equity holders of the Company
Paid-up Other equity instrument Other △Gener
capital Capital Less: comprehens Special Surplus al risk Undistribut Other Sub-total
preferen perpetu others Minority
Item (share reserves Treasury ive income reserves reserves provisi ed profits s Total equity
ce share al bond interests
capital) shares on
1. Balance at end of last year 843,212,507.00 0.00 0.00 0.00 720,215,866.78 0.00 2,178,681.73 0.00 809,471,199.64 0.00 627,764,582.32 0.00 3,002,842,837.47 46,654,771.50 3,049,497,608.97
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 0.00 0.00 0.00 720,215,866.78 0.00 2,178,681.73 0.00 809,471,199.64 0.00 627,764,582.32 0.00 3,002,842,837.47 46,654,771.50 3,049,497,608.97
3. Increase/ Decrease for current year
0.00 0.00 0.00 0.00 -3,118,768.40 0.00 29,988.00 0.00 15,755,434.51 0.00 -9,318,659.74 0.00 3,347,994.37 7,423,199.49 10,771,193.86
(Decrease listed with "-")
（Ⅰ）Total of comprehensive income 29,988.00 18,255,330.45 18,285,318.45 1,633,633.87 19,918,952.32
（Ⅱ）Capital contribution and reduction 0.00 0.00 0.00 0.00 -3,118,768.40 0.00 0.00 0.00 0.00 0.00 -3,386,430.61 0.00 -6,505,199.01 7,589,565.62 1,084,366.61
1.Ordinary share - -
2.Capital contributed by other equity - -
instrument holders
3.Share-based payments charged to - -
equity
4.Others -3,118,768.40 -3,386,430.61 -6,505,199.01 7,589,565.62 1,084,366.61
（III）Profit appropriations 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 15,755,434.51 0.00 -24,187,559.58 0.00 -8,432,125.07 -1,800,000.00 -10,232,125.07
1.Appropriation to surplus reserves 15,755,434.51 -15,755,434.51 0.00 0.00
2.Appropriation to general risks
0.00 0.00
provision
3.Appropriation to equity holders (or
-8,432,125.07 -8,432,125.07 -1,800,000.00 -10,232,125.07
shareholders)
4.Others 0.00 0.00
（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 - -
57
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 4,613,180.31 4,613,180.31 4,613,180.31
2.Utilisation of special reserve 4,613,180.31 4,613,180.31 4,613,180.31
（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 0.00 0.00 0.00 717,097,098.38 0.00 2,208,669.73 0.00 825,226,634.15 0.00 618,445,922.58 0.00 3,006,190,831.84 54,077,970.99 3,060,268,802.83
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Li Sheng
58
Consolidated Statement of Changes in Shareholer's Equity(continued)
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
Last year
Equity attributable to the equity holders of the Company
Paid-up Other equity instrument Other △Gener
Item Less: Minority Total equity
capital preferen perpetu others Capital comprehens Special Surplus al risk Undistribut Other Sub-total
(share reserves Treasury ive income reserves reserves provisi ed profits s interests
ce share al bond
capital) shares on
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
- - - -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
(Decrease listed with "-")
（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 -8,432,125.07 -8,432,125.07 -2,475,000.00 -10,907,125.07
shareholders)
4.Others - -
（IV）Transfer within equity - - - - - - - - - - - - - - -
1.Transfer of capital reserve to capital - -
(share capital)
2.Transfer of surplus reserves to - -
capital (share capital)
59
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
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Li Sheng
60
Statement of Changes in Shareholer's Equity of Parent Company
For the Year of 2022
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
Current year
Paid-up Other equity instrument Other
Item capital (share Capital Less: comprehensiv Special Surplus reserves Undistributed Others Total equity
capital) preferenc perpetual reserves Treasury e income reserves profits
others
e share bond shares
1. Balance at end of last year 843,212,507.00 0.00 0.00 0.00 755,146,592.54 0.00 1,216,581.06 0.00 809,471,199.64 803,564,427.95 0.00 3,212,611,308.19
Add: Changes in accounting policies -
Correction of prior periods errors -
Others
2. Balance at beginning of current year 843,212,507.00 0.00 0.00 0.00 755,146,592.54 0.00 1,216,581.06 0.00 809,471,199.64 803,564,427.95 0.00 3,212,611,308.19
3. Increase/ Decrease for current year (Decrease listed with
0.00 0.00 0.00 0.00 0.00 0.00 29,988.00 0.00 15,755,434.51 133,366,785.48 0.00 149,152,207.99
"-")
（Ⅰ）Total of comprehensive income 29,988.00 157,554,345.06 157,584,333.06
（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 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 15,755,434.51 -24,187,559.58 0.00 -8,432,125.07
1.Appropriation to surplus reserves 15,733,434.51 -15,755,434.51 0.00
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 2,791,153.21 2,791,153.21
2.Utilisation of special reserve 2,791,153.21 2,791,153.21
（VI）Others
4、Balance at end of current year 843,212,507.00 0.00 0.00 0.00 755,146,592.54 0.00 1,246,569.06 0.00 825,226,634.15 936,931,213.43 0.00 3,361,763,516.18
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Li Shen
61
Statement of Changes in Shareholer's Equity of Parent Company(continued)
For the Year of 2022
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
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 -88,399,596.3
1
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
- - - -16,123,970.29 - -322,778.04 - 12,785,383.91 -107,469,876.83 - -111,131,241.2
listed with "-")
5
（Ⅰ）Total of comprehensive income -86,252,367.85 -86,252,367.8
5
（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 -16,446,748.3
3
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
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Li Sheng
62
I. General Information
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 shAare 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 an ordinary share 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,
63
and granted 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,
64
refrigerated and frozen food storage, and manufacture and installation of central
air-conditioning and refrigeration equipment. The scope of business includes research and
development, design, manufacture, sale, lease, installation and repair of refrigeration and heat
equipment, accessories, spare parts, and energy-saving and environmental protection products;
Technical services, technical consultation, technical promotion; Design, construction,
installation repair and maintenance of complete sets of refrigeration and air conditioning
projects, mechanical and electrical installation projects, steel structure projects, anti-corrosion
and heat preservation works; Rental of premises; Transport of ordinary goods; Property
management; Low temperature storage; Import and export of goods and technologies. (With
the exception of projects subject to approval according to law, independently carry out
business activities according to law with the business license).
II. The scope of consolidation
There are 13 entities included in the current consolidated financial statements. This year, entities
within the consolidation scope changed comparing to last year. Sonyo
Compressor(Dalian)Co.,Ltd and Sonyo Refrigeration System (Dalian) Co., Ltd, two companies
are newly added to consolidation scope because of significant asset restructuring. 3 companies,
Ningbo Bingshan Air-conditioning Refrigeration Engineering Co., Ltd, Bingshan Technology
Service （Dalian） Co., Ltd and Dalian Xinminghua Electrical Technology Co., Ltd are out of
consolidation scope because of disposal and absorption merging. 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.
65
2. Accounting period
The Company adopts the Gregorian calendar year as accounting period from Jan 1 to Dec 31.
3. Operating cycle
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
66
subsidiary’s equity not belonging to the parent, profit, loss for the current period, portion of
other comprehensive income and total comprehensive belonging to minority interest, shall be
presented separately in the consolidated financial statements under “minority interest of
equity”, ”minority interest of profit and loss”, “other comprehensive income attributed to
minority interest” and “total comprehensive income attributed to minority interest” title.
If a subsidiary is acquired under common control, its operation results and cash flow shall be
consolidated since the beginning of the consolidation period. When preparing the comparative
consolidated financial statements, adjustments shall be made to relevant items of comparative
figures as regarded that reporting entity established through consolidation has been always
existing 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
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value and recognize the resulting gain or loss as investment income for the current period.
Other comprehensive income, under equity method accounting rising from the interest held in
acquiree in relation to the period before the acquisition, and changes in the value of its other
equity other than net profit or loss, other comprehensive income and profit appropriation shall
be transferred to investment gain or loss for the period in which the acquisition incurs,
excluding the other comprehensive income from the movement on the remeasurement of ne
asset or liability of defined benefit plan.
When the 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
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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
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.
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A financial asset shall be measured at amortized cost if both of the following conditions are
met: ①the financial asset is held within a business model whose objective is to hold financial
assets in order to collect contractual cash flows;②the contractual terms of the financial asset
give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding. At initial recognition, the Company shall measure the
financial asset at its fair value and take any transaction costs that are directly attributable to
the financial asset into account. 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
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investment not for trading at its fair value and take any transaction costs that are directly
attributable to the financial asset into account. Any other gain or loss (including foreign
exchange gain or loss) shall be accounted in other comprehensive income and shall not be
subsequently transferred to profit or loss, unless the dividend received is accounted in profit
or loss (excluding the recovered investment cost). Accumulated gain or loss previously in the
other comprehensive income shall be out of it and into retained earnings when the financial
asset is derecognized.
Apart from classified as the amortized cost financial assets and as fair value through other
comprehensive income financial assets, a financial asset is classified as fair value through
profit or loss. At initial recognition, the Company shall measure this financial asset at its fair
value and take any transaction costs that are directly attributable to the financial asset into
account. 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: ① the financial asset is held within a
business model whose objective is not only for collecting contractual cash flows but also for
sale; ②the contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest based 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
derecognized and the portion that continued to be recognized according to their relative fair
value. The difference between the amount of consideration received for the transfer and the
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accumulated amount of changes in fair value that was previously recorded in other
comprehensive income for the asset partially qualified for derecognition (financial assets
involved in transfer must qualify the following conditions:① the financial asset is held
within a business model whose objective is not only for collecting contractual cash flows but
also for sale; ; ②the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest based on the principal amount
outstanding ) and the above-mentioned allocated carrying amount is charged to profit or loss
for the period.
(2) Financial liabilities
1) Classification, basis for recognition and measurement
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
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different in substance. Any significant amendment to the agreement as a whole or part of it is
made, then the existing liabilities or part of it shall be derecognized and financial liability
after terms amendment shall be recognized as a new financial liability. The difference
between the carrying amount of the financial liability derecognized and the consideration paid
is recognized in profit or loss for the period.
(3) Fair value measurement of financial asset and financial liability
The Company uses the price in the primary market for financial assets and liability fair value
measurement, if no primary market exists, the price in the most advantageous market shall be
used for fair value measurement and applicable valuation techniques which enough data is
available for and supported by other information shall be adopted. Input for fair value
measurement has 3 levels: level 1 input is the unadjusted quoted price for identical asset or
liability available at the active market on the measurement date; level 2 input is the directly or
indirectly observable input for relevant asset or liability apart from level 1 input; level 3 input
is the unobservable input for relevant asset or liability.
(4) Financial asset and financial liability offset
Financial asset and financial liability shall be presented in the balance sheet separately and
cannot be offset, unless the following conditions are all met: ①the Company has the legal
right to recognized offset amount and the right is enforceable. ②the Company plans to
receive or a legal obligation to pay cash at net amount.
(5) Distinguishment between financial liability and equity instrument and accounting
Financial liability and equity instrument shall be distinguished in accordance with the
following standards: ① if the Company cannot unconditionally avoid paying cash or
financial asset to fulfil a contractual obligation, the contractual obligation is qualified or
financial liability. For certain financial instrument, although there are no clear terms and
conditions to include obligation of paying cash or other financial liability, contractual
obligation may indirectly be formed through other terms and conditions. ② the Company’s
own equity instrument shall also be considered whether it is the substitute of cash, financial
asset or it is the remaining equity, after the issuer deducts liability, enjoyed by the equity
holder , if it must or can be used to settle a financial asset. If the former, the instrument is a
financial liability of the issuer, otherwise it is an equity instrument of the issuer. In certain
circumstances, financial instrument contract is classified as financial liability, if financial
instrument contract specifies the Company must or can use its own equity to settle the
financial instrument, the contractual amount of right or obligation equals to that of the
numbers of own equity instrument available or to be paid multiplied by fair value when
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).
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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 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 12 month 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
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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 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 probability weighted amount that is determined by evaluating a
range of possible outcomes; ② the time value of money; and ③reasonable and supportable
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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 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.
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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.
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
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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.
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
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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 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
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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.
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
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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
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.
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Significant influence exists when the entity directly or indirectly owned 20% or more but less
than 50% shares with voting rights in the investee company. If holding less than 20% voting
rights, the entity shall also take other facts or circumstances into accounts when judging any
significant influences. Factors and circumstances include: representation on the board of
directors or equivalent governing body of the investee, participation in financial or operating
activities policy-making processes, material transactions between the investor and the
investee, interchange of managerial personnel or provision of essential technical information.
When control exists over an investee, the investee is a subsidiary of an entity. The initial
investment cost for long-term equity investment acquired through business combination
under common control, is the carrying amount presented in the consolidated financial
statements of the share of net assets at the combination date in the acquired company. If the
carrying amount of net assets at the combination date in the acquired company is negative,
investment shall be recognized at zero.
If the equity of investee under common control is acquired by stages and business
combination incurs in the end, an entity shall disclose the accounting method for long-term
equity investment in the parent financial statement as a supplemental. For example, if the
equity of investee under common control is acquired by stages and business combination
incurs in the end, and it’s a bundled transaction, the entity shall regard all transactions as a
one for accounting. If it’s not a bundled transaction, the carrying amount presented in the
consolidated financial statements of the share of net assets at the combination date in the
acquired company since acquisition is determined as for the initial cost of long-term equity
investment. The difference between the cost initially recognized and carrying amount of
long-term equity investment prior to the business combination plus the newly paid
consideration for further share acquired, and capital reserve shall be adjusted accordingly. If
no enough capital reserve is available for adjustment, retain earnings shall be adjusted.
If long-term equity investment is acquired through business combination not under common
control, initial investment cost shall be the combination cost.
If the equity of investee not under common control is acquired by stages and business
combination incursion the end, an entity shall disclose the accounting method for long-term
equity investment in the parent financial statement as a supplemental. If the equity investment
of investee not under common control is acquired by stages and business combination
incursion the end, and it’s a bundled transaction, the entity shall regard all transactions as a
one for accounting. If it’s not a bundled transaction, the carrying amount of the equity
investment held previously plus newly 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
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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.
Long-term equity investment subsequently measured under equity method shall be adjusted
for it 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
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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 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, building and use right of land. They are measured at
cost model.
Investment property is depreciated or amortized by straight line basis and its expected useful life,
net residual value rate and annual depreciation rate is as follows:
Category Useful life Estimated net residual value Annual
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(years) rate (%) depreciation rate
Use right of land 50 0 2
Property 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 depreciation
No Category
(years) value rate (%) rate(%)
1 Property and Buildings 20-40 3、5、10 2.25-4.85
2 Machinery equipment 5-22 0.5-1、3、5、10 4.09-19.90
3 Transportation equipment 3-15 1、3、5、10 6-33.33
4 Electronic equipment &others 3-15 0-1、3、5、10 6-33.33
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
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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
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 right of use 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
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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
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 it carrying amount, the carrying amount
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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 it 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
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.
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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.
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 is
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 is
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
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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
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
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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.
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
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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
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
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.
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(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
(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
The Company’s government grant includes assets-related government grants and
income-related government grants. 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.
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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 of 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 of.
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.
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
94
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
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
95
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
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
96
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
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.
97
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.
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
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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 lessor
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. Discontinued operation
When meeting any one of the following criteria, the component can be identified separately
and the component has already been disposed of 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
37. Other significant accounting policies, accounting estimates
When preparing the financial statements, the management needs to use accounting estimate
and assumption, which will have effect on the application of accounting policy and amount of
asset, liability, income and expense. The actual circumstance maybe differs from the estimates.
The management needs to continuously assess the key assumption involved by estimate and
the judgment on uncertainty. Effect on the accounting estimate shall be recognized during the
period when estimate is changed and in future.
The following accounting estimate and key assumption will trigger the significant risk of
significant adjustment on the book value of asset and liability during the period of future.
（1） Impairment of financial instrument
The Company uses expected credit loss model to assess any impairment of financial asset.
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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
calculation of assets group or asset portfolio, adjusted gross profit margin is lower than the
margin applied, the impairment is required.
100
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.
38. Changes in Accounting Policies, Accounting Estimates
(1) Change in significant accounting policies
Changes on accounting policy and reasons Memo
In December 2021, the Ministry of Finance released “No.15 Interpretation of
Accounting Standards for Business Enterprises"(No35 Caikuai [2021]) (hereinafter
referred to as “No.15 Interpretation”). "Accounting of products or by-products
Note
produced before fixed assets reach the expected condition for use or during research
and development stage” and "Judgment on loss-making contracts" shall come into
force as of January 1, 2022. The Company shall execute from the prescribed date.
Note: In December 2021, the Ministry of Finance released “No.15 Interpretation of
Accounting Standards for Business Enterprises", the Company follows the requirement of
"Accounting of products or by-products produced before fixed assets reach the expected
condition for use or during research and development stage” and "Judgment on loss-making
contracts" since January 1, 2022.
A: accounting for sales during trial period
No.15 Interpretation gives an explicit accounting and presentation explanation about products
or by-products produced before fixed assets reach the expected condition for use or during
research and development stage, and prohibits offsetting cost of fixed assets or R&D
expenses by net amount, which sales during trial periods less cost of sales. This regulation
takes effect from January 1, 2022, any sales during trial periods between earliest reporting
period and January 1,2022, retrospective adjustment is required.
B: Judgment on loss-making contracts
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No.15 Interpretation gives an explicit explanation about loss-making contract. When judging
a contract is a loss-making contract or not, “cost to fulfil the contract” shall include
incremental cost and allocation of other direct cost in respect of fulfilling the contract. It is
applicable to the contact, in which all obligations have not been fulfilled until January 1, 2022,
and accumulated effect shall be adjusted in opening figures of retain earning and respective
account in the reporting year when it takes effect. No retrospective adjustment is needed for
prior periods comparatives.
(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 5%、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 Guardian Automation Co., Ltd. 15%
Dalian Bingshan-RYOSETSU Quick Freezing Equipment Co., Ltd. 25%
Wuhan New World Refrigeration Industrial Co., Ltd. 15%
Dalian Bingshan Engineering & Trading Co., Ltd 25%
Dalian Universe Thermal Technology Co.,Ltd. 15%
Chengdu Bingshan Refrigeration Engineering Co., Ltd. 25%
102
Tax entities EIT rate
Wuhan New World Air-conditioning Refrigeration Engineering Co., Ltd 25%
Wuhan Lanning Energy Technology Co., Ltd 25%
Sonyo Compressor(Dalian)Co.,Ltd. 15%
Sonyo Refrigeration System (Dalian) Co., Ltd. 15%
2. Tax preference
(1) The Company obtained the qualification of high and new technology enterprises on 3 rd
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 Guardian 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, Dalian Universe Thermal 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 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, Sonyo Compressor(Dalian)Co.,Ltd.(hereinafter referred to
103
as“ Sonyo Compressor” obtained the qualification of high and new technology enterprises on
22nd October, 2021 approved by Dalian Science Technology Bureau, Dalian Finance Bureau,
Dalian State Tax Bureau and Local tax Bureau. The Certificate No. is GR202121200268, 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, Sonyo Refrigeration System (Dalian) Co., Ltd.(hereinafter referred
to as“ Sonyo Refrigeration System” obtained the qualification of high and new technology
enterprises on 9th October, 2020 approved by Dalian Science Technology Bureau, Dalian
Finance Bureau, Dalian State Tax Bureau and Local tax Bureau. The Certificate No. is
GR202021200465, 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.
(2) According to the Announcement of Ministry of Science and Technology, the Ministry of
Finance and Tax Administration on supporting Scientific and Technological Innovation by the
accelerate Pre-tax Deduction (Announcement No. 28, 2022), equipment and appliances newly
purchased by high and new technology entity within the period from October 1st, 2022 to
December 31st,2022 are allowed for taxable income deduction in full amount and also can be
100% accelerated deduction before income tax. Any entity qualifying for high and new
technology during the Q4 in 2022 is subject to this tax preference. If deduction is not enough
for this year, it can be carried forward to the following year. Equipment and appliances refer to
fixed assets beyond house and buildings. High and new technology criteria is in line with
“Notice of the Ministry of Science and Technology and the Ministry of Finance and the State
Administration of Taxation on Revising and Printing the Administrative Measures for the
Identification of New and High Technology Enterprises” (Guokefahuo[2016]No.32). The
Company and its subsidiaries, Dalian Universe Thermal Technology Co.,Ltd, Sonyo
Compressor and Sonyo Refrigeration System enjoy the tax preference.
VI. Notes to Consolidated Financial Statements
The following disclosure date on this financial statement without special indication, “opening”
refers to January 1, 2022; “closing” refers to December 31, 2022; “current period” refers to the
period from January 1, 2022 to December 31, 2022; and “last period” refers to the period from
January 1, 2021 to December 31, 2021; with the currency unit RMB.
1. Monetary fund
Item Closing Balance Opening Balance
Cash on hand 80,702.47 99,580.64
Cash in bank 922,122,608.84 443,177,237.30
Other cash and cash equivalents 83,962,587.87 79,381,687.85
Total 1,006,165,899.18 522,658,505.79
104
Item Closing Balance Opening Balance
Including: sum of deposits overseas
Monetary fund restricted for use
Item Closing Balance Opening Balance
deposit for bank acceptance notes 48,567,322.04 64,672,285.64
guarantee deposit 33,697,941.99 14,438,026.76
peasant worker deposit 729,341.30 271,375.45
Frozen account 550,487.90 4,307,480.07
interest receivable from bank 959,002.78 -
Total 84,504,096.01 83,689,167.92
Note: frozen account is the amount frozen by the bank due to litigation of 94,500.00 Yuan, long
age frozen account of 209,197.14 Yuan, ETC deposit of 2,000.00Yuan, unused account for long
time of 244,790.76 Yuan.
2. Notes receivable
(1) Category of notes receivable
Items Closing Balance Opening Balance
Bank acceptance notes 493,019,785.95 163,956,682.86
Trade acceptance notes 12,925,475.23 2,473,682.88
Total 505,945,261.18 166,430,365.74
(2) Pledged notes receivable up to the end of year.
Items Closing pledged amount
Bank acceptance notes 98,917,384.72
Total 98,917,384.72
(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 137,214,397.88
Trade acceptance notes 2,505,534.77
Total 139,719,932.65
(4) There is no transfer to receivable as the drawer’s default of performance of obligation
(5) Categories according to bad debts provision
105
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debts
provision based on 506,921,135.95 100.00 975,874.77 0.19 505,945,261.18
group
Including: bank
493,019,785.95 97.26 - - 493,019,785.95
acceptance notes
Trade acceptance
13,901,350.00 2.74 975,874.77 7.02 12,925,475.23
notes
Total 506,921,135.95 100.00 975,874.77 0.19 505,945,261.18
(Continued)
Opening 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
Categories based on group
Closing Balance
Items
Booking balance Provision Provision（%）
Trade acceptance notes 13,901,350.00 975,874.77 7.02
Total 13,901,350.00 975,874.77 7.02
(6) Bad debt provision of notes receivable accrued, collected and reversed
Change during the year
Opening
Category Accrued Collected/ Closing Balance
balance Written-off
reversed
Bad debt provision 186,763.32 789,111.45 - - 975,874.77
Total 186,763.32 789,111.45 - - 975,874.77
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(7) Notes receivable written off: none
3. Accounts receivable
(1) Category of accounts receivable based on bad debt provision method
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
13,181,314.30 0.69 10,348,880.50 78.51 2,832,433.80
on individual basis
Bad debt provision
1,888,715,925.40 99.31 481,569,916.25 25.50 1,407,146,009.15
on group
Including: aging as
characteristics of 1,888,715,925.40 99.31 481,569,916.25 25.50 1,407,146,009.15
credit risk
Total 1,901,897,239.70 100.00 491,918,796.75 25.86 1,409,978,442.95
(Continued)
Opening balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
- - - - -
on individual basis
Bad debt provision
1,193,312,546.52 100.00 371,763,867.67 31.15 821,548,678.85
on group
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
1) Bad debt provisions on individual basis
Closing Balance
Name Accounts Provision for Proportion Reason
receivable bad debts (%)
Enforcement has been applied for
SNSL 6,032,000.00 4,780,096.20 79.25
and full recovery is not expected
Enforcement has been applied for
Chishui Nong Shang LV 4,686,819.40 3,106,289.40 66.28
and full recovery is not expected
Mudanjiang Zhongnong 914,911.20 914,911.20 100.00 It has been preserved by litigation
107
Closing Balance
Name Accounts Provision for Proportion Reason
receivable bad debts (%)
Batch Cold Chain and is not expected to be
Logistics Co. LTD recovered
YIDU(SY)Cold Chain
Anticipate changes in customer
Logistics Evolution 635,135.70 635,135.70 100.00
credit risk
Co.,Ltd.
Qingyang Haiyue
585,000.00 585,000.00 100.00 not expected to be recovered
Agriculture Co Ltd
Qingdao Langjin New
Anticipate changes in customer
Energy Equipment Co., 327,448.00 327,448.00 100.00
credit risk
LTD
Total 13,181,314.30 10,348,880.50 —
2) Bad debt provisions on group basis
Closing Balance
Aging Accounts Provision for Drawing proportion
receivable bad debts (%)
Within 1 year 1,048,630,821.83 63,459,092.57 6.05
1 to 2 years 266,551,896.68 44,618,132.56 16.74
2 to 3 years 186,130,798.76 57,384,125.25 30.83
3 to 4 years 64,509,549.01 31,822,560.52 49.33
4 to 5years 138,624,250.54 100,017,396.77 72.15
Over 5 years 184,268,608.58 184,268,608.58 100.00
Total 1,888,715,925.40 481,569,916.25 —
(2) Receivable listed by aging
Aging Closing Balance
Within 1 year 1,051,342,084.70
1 to 2 years 271,031,036.91
2 to 3 years 187,045,709.96
3 to 4 years 69,585,549.01
4 to 5years 138,624,250.54
Over 5 years 184,268,608.58
Total 1,901,897,239.70
(3)Bad debt provision of current period
108
Change during the year
Opening Closing
Category Accrued Collected/
balance Written-off Others Balance
reversed
Bad debt
371,763,867.67 77,384,660.21 - 18,057,656.88 60,827,925.75 491,918,796.75
provision
Total 371,763,867.67 77,384,660.21 - 18,057,656.88 60,827,925.75 491,918,796.75
Note: others are from consolidation of Sonyo Compressor & Sonyo Refrigeration System.
Bad debt provision of Sonyo Compressor comes in 140,091.75 Yuan, Sonyo Refrigeration
System comes in 65,198,433.11Yuan, Bingshan Technology Service （Dalian） Co., Ltd. Goes
out 4,145,388.71Yuan with disposal.
(4) Accounts receivable written off in current period
Item Written off amount
Receivable actually written off 18,057,656.88
Key debtors written off
Related
Company name Nature Amount Reason Procedures
party
bankruptcy
Haozhou Xinnong and Board
Market Real Estate Construction 3,360,000.00 N
unexpected to meeting
Co. Ltd
be recovered
Beijing Bingshan
Refrigeration and
Trade Board
Air Conditioning 3,121,952.83 deregistration Y
receivable meeting
Equipment Co.,
Ltd
Anyang Zhongpin
Trade bankruptcy CEO
Food Industry 1,620,000.00 and Insolvency N
receivable approval
Co.,Ltd.
Hebei Hongdao
Trade client unable Board
Technology 1,257,965.20 N
receivable to pay meeting
Co.,Ltd.
Sanhui Food going concern
Trade Board
Logistics (Tianjin) 1,189,926.00 and unable to N
receivable meeting
Co., LTD pay
Chengdu Yinli
unexpected to Board
Refrigerated Construction 1,180,000.00 N
be recovered meeting
Logistics Co., LTD
Qingdao Haihe going concern
Trade Board
Engineering 903,000.00 and unable to N
receivable meeting
Co.,Ltd.
pay
Tianjin Jitai Trade 574,259.50 unexpected to Internal N
109
Related
Company name Nature Amount Reason Procedures
party
Technology Co., receivable be recovered approval
LTD
Cofco Meat unexpected to Board
Construction 75,000.00 N
(Jiangsu) Co., LTD be recovered meeting
Sino-Aus Dubbo
Donghai
Agricultural and unexpected to Board
Construction 75,000.00 N
Livestock be recovered meeting
Development
Co.,Ltd.
Total — 13,357,103.53 — — —
(5) Based on closing balance ranking, sum of the top five significant debtors are
265,356,886.44 Yuan, representing 13.95% of total receivables at the year end.
48,505,073.26Yuan bad debt provision is provided respectively.
4. Finance receivable
Items Closing Balance Opening Balance
Notes receivable 58,792,792.70 43,704,310.38
Total 58,792,792.70 43,704,310.38
5. Prepayments
(1) Aging of prepayments
Closing Balance Opening Balance
Items Amount Percentage Amount Percentage
(%) (%)
Within 1 year 143,894,431.33 83.66 146,457,045.63 80.16
1 to 2 years 18,707,868.78 10.88 16,304,629.82 8.92
2 to 3 years 4,457,439.74 2.59 12,765,104.33 6.99
Over 3 years 4,931,728.27 2.87 7,174,623.77 3.93
Total 171,991,468.12 100.00 182,701,403.55 100.00
No significant prepayments over 1 year
(2) Sum of top 5 prepayment debtors ranking by closing balance is 68,363,483.47Yuan,
representing 39.75% of total of closing balance.
6. Other receivables
Items Closing Balance Opening Balance
Interest receivable - -
110
Items Closing Balance Opening Balance
Dividend receivable 14,495.00 1,003,568.75
Other receivables 51,379,979.24 59,336,527.70
Total 51,394,474.24 60,340,096.45
6.1. Dividends receivable
(1) Classification
Company Closing Balance Opening Balance
Guotai Junan Securities - 952,000.00
Wuhan Steel and Electricity Co., Ltd. 14,495.00 51,568.75
Total 14,495.00 1,003,568.75
6.2. Other receivables
(1) The categories of other receivable according to nature
Items Closing Balance Opening Balance
Receivables and payables 38,051,147.58 36,138,235.04
Security deposit 37,147,665.19 26,933,345.60
Petty cash 5,099,052.90 5,654,074.94
Others 6,088,641.82 1,609,350.55
Total 86,386,507.49 70,335,006.13
(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
6,828,531.31 - 4,169,947.12 10,998,478.43
balance
Opening
balance during — — — —
the year
--transfer to the
- - - -
2nd stage
--transfer to the
-3,925,916.10 - 3,925,916.10 -
3rd stage
--reverse to the
- - - -
2nd stage
111
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 1st stage
Accrued - - 4,442,806.03 4,442,806.03
Reverse 422,578.76 - - 422,578.76
Cancelation - - - -
Written off 320,775.00 - - 320,775.00
Other
175,633.76 - 20,132,963.79 20,308,597.55
movement
Closing
2,334,895.21 - 32,671,633.04 35,006,528.25
balance
(3) Other receivable listed by account aging
Aging Closing Balance
Within 1 year 27,654,438.76
1-2 years 17,231,991.92
2-3 years 26,252,562.64
3-4 years 7,027,188.39
4-5 years 2,501,537.52
Over 5 years 5,718,788.26
Total 86,386,507.49
(4) Provision for bad debt
Change during the year
Opening Closing
Category Accrued Collected/
balance Written-off Others Balance
reversed
Bad debt
10,998,478.43 4,020,227.27 - 320,775.00 20,308,597.55 35,006,528.25
provision
Total 10,998,478.43 4,020,227.27 - 320,775.00 20,308,597.55 35,006,528.25
(5) Other receivables written off in current period: none.
Item Amount to be written off
Other receivables written off actually 320,775.00
112
(6) Other receivables from the top 5 debtors based on closing balance
% of Closing
Closing
Name Category Aging the total Balance of
Balance
OR Provision
Hangzhou Zhonghong
New Energy Refund 5,295,000.00 1-2years 6.13 839,257.50
Co.,Ltd
Within 1
Dayaowan Customs Tax refund 3,277,467.08 3.79 119,955.30
year
Agriculture Bureau of
Deposit 2,548,847.50 2-4 years 2.95 1,191,973.07
Moyu County
Hubei Yurun Meat Food Within 1 1.77 56,102.95
Refund 1,532,867.61
Co. LTD year
Within 1
Dalian DETA Hong Ko
Deposit 1,208,196.13 year 1.40 44,219.98
ng &China Gas Co.,Ltd
Over 5 years
Total 13,862,378.32 - 16.04% 2,251,508.80
(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 257,330,026.33 17,594,044.66 239,735,981.67
Working in progress 219,325,436.31 7,091,948.88 212,233,487.43
Finished goods 358,865,793.97 20,733,013.07 338,132,780.90
Low-value consumable 161,125.34 - 161,125.34
Self-manufactured
semi-finished products 30,898,915.81 - 30,898,915.81
Cost to fulfill the
contract 518,190,428.65 24,029,331.96 494,161,096.69
Materials on
consignment for further 15,134,850.12 540,289.54 14,594,560.58
processing
Goods on transit 64,331,292.17 463,920.35 63,867,371.82
Properties written off
debtors 2,708,646.00 1,149,186.00 1,559,460.00
Total 1,466,946,514.70 71,601,734.46 1,395,344,780.24
(Continued)
Opening 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
113
Opening Balance
Item
Book value Provision for decline Net book value
Finished goods 300,140,274.98 29,448,083.12 270,692,191.86
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
(2) Provision for decline in the value of inventories
Increase Decrease
Opening Closing
Item Others Reverse/ Others
Balance Accrual Balance
transferred Written- off transferred
Raw
4,570,316.95 6,183,357.74 6,860,369.97 20,000.00 - 17,594,044.66
materials
WIP 1,929,842.21 4,901,951.00 260,155.67 - - 7,091,948.88
Finished
29,448,083.12 8,195,494.59 2,730,787.46 19,641,352.10 - 20,733,013.07
goods
Cost to fulfill
11,185,200.11 19,225,283.25 - 6,381,151.40 - 24,029,331.96
the contract
Materials on
consignment
- 540,289.54 - - - 540,289.54
for further
processing
Goods on
- 463,920.35 - - - 463,920.35
transit
Properties
written off 5,203,103.50 201,159.90 - 4,255,077.40 - 1,149,186.00
debtors
Total 52,336,545.89 39,711,456.37 9,851,313.10 30,297,580.90 - 71,601,734.46
Accrual for provision for decline in the value of inventories
114
Basis for net realizable value Reasons for
Item
recognition reverse/write-off
Raw materials The amount deducting the expected Sold
WIP cost to product completion, selling Sold
Finished goods expense and relative tax from the Sold
Cost to fulfill the contract estimated selling price. Sold
8. Contract asset
(1) Details
Closing Balance
Item Carrying
Provision Book value
amount
Undue warranty 210,149,278.14 31,927,565.84 178,221,712.30
Revenue recognized over time to be
61,997,091.19 14,427,927.71 47,569,163.48
settled
Total 272,146,369.33 46,355,493.55 225,790,875.78
(continued)
Opening Balance
Item Carrying Book value
provision
amount
Undue warranty 125,891,499.90 16,031,841.11 109,859,658.79
Revenue recognized over time to be
settled
Total 125,891,499.90 16,031,841.11 109,859,658.79
(2) Contract asset book value significant change
Item Change Reason
Acquisition not under same control, newly
Undue warranty 68,362,053.51
contract addition
Revenue recognized over time Acquisition not under same control, newly
47,569,163.48
to be settled revenue addition
Total 115,931,216.99
(3) Provision for impairment
Item Accrued Reverse Collected/ Reason
written off
Undue warranty 16,386,410.92 Accrued by aging
Revenue recognized over time 14,427,927.71 Accrued by aging
115
to be settled
Total 30,814,338.63
9. Non-current asset due within one year
Item Closing Balance Opening Balance
Long term receivable due within 1 year 15,715,631.52 14,990,989.30
Total 15,715,631.52 14,990,989.30
10. Other current assets
Item Closing Balance Opening Balance
Input VAT to be deducted 12,825,675.49 23,989,939.28
Prepaid VAT 11,646,669.59 -
Prepaid income tax presented at net amount
9,010,312.91 380,483.32
after offsetting
Prepaid expenses 16,919.61 154,654.11
Total 33,499,577.60 24,525,076.71
11. Long term receivable
(1) Details
Item Closing Balance Discounted
rate
Carrying
Provision Book value
amount
Lease premium - - -
---Unrealized financing income - - -
Goods sold by installments 5,591,380.90 428,922.00 5,162,458.90 4.75%
Total 5,591,380.90 428,922.00 5,162,458.90
(Continued)
Item Opening Balance Discounted
rate
Carrying Book
Provision
amount value
Lease premium - - -
---Unrealized financing income - - -
Goods sold by installments - - - 4.75%
Total - - -
116
(2) Provision for bad debt
1st stage 2nd stage 3rd stage
Expected credit Expected credit loss
Bad debt Expected credit
loss within the within the whole Total
provision loss within 12
whole period (no period (impairment
months
impairment) incurred)
Opening balance
Opening 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 501,389.82 - - 501,389.82
Reverse
Cancelation
Written off
Other -72,467.82 - - -72,467.82
Closing balance 428,922.00 - - 428,922.00
117
12.Long-term equity investments
Provision
Increase/Decrease Ending balance for
impairment
Gains and Provision
Beginning
Investee losses Adjustment of Cash bonus for
balance
recognized other Change of or profits impairment
Increased Decreased Others
under the comprehensive other equity announced to of the
equity income issue current
method period
Associates
Panasonic Appliances cold
Chain(Dalian)Co.Ltd.(N2)
90,330,037.43 20,702,064.56 -69,597,984.87 -29,988.00 -
Beijing Huashang Bingshan
Refrigeration and
Air-conditioning Machinery
2,139,942.18 2,442,782.42 302,840.24 -
Co., Ltd.(N3)
Dalian Honjo Chemical Co.,
Ltd
8,926,266.52 892,830.28 - 9,819,096.80
Keihin-Grand Ocean
Thermal 58,799,068.28 3,290,245.23 2,000,000.00 60,089,313.51
Technology(Dalian)Co.,Ltd.
Dalian Fuji Bingshan
Vending Machine Co., Ltd.
148,656,014.75 -37,554,674.82 111,101,339.93
MHI Bingshan
Refrigeration (Dalian) 14,923,803.87 477,305.23 15,401,109.10
Co.,Ltd.
Dalian Fuji Bingshan
Vending Machine Sales Co.,
Ltd
Jiangsu Jingxue Insulation
Technology Co.,Ltd (N4)
201,731,528.04 63,957,497.85 7,082,562.57 4,732,344.00 140,124,248.76
Dalian Bingshan Metal
Technology Co.,Ltd.
168,294,942.93 30,420,886.58 23,402,022.05 175,313,807.46
Dalian Bingshan Group
Huahuida Financial Leasing 44,789,319.55 1,502,255.10 687,697.70 45,603,876.95
Co., Ltd
118
Provision
Increase/Decrease Ending balance for
impairment
Gains and Provision
Beginning
Investee losses Adjustment of Cash bonus for
balance
recognized other Change of or profits impairment
Increased Decreased Others
under the comprehensive other equity announced to of the
equity income issue current
method period
Sonyo
Compressor(Dalian)Co.,Ltd. 460,060,249.49 451,307,603.23 25,369,353.74 34,122,000.00
(N1)
Sonyo Refrigeration System
(Dalian) Co., Ltd.(N1)
28,480,784.93 27,116,430.98 162,691.50 1,527,045.45
Wuhan Sikafu Power
Control Equipment Co., Ltd
4,372,575.48 432,827.95 729,576.00 - 5,534,979.43
1,231,504,533.4
Total 565,526,379.04 -37,218,861.27 -29,988.00 729,576.00 66,471,109.20 562,987,771.94
5
119
Note 1: in November this year, shareholdings of Sonyo Compressor(Dalian)Co.,Ltd. &Sonyo
Refrigeration System (Dalian) Co., Ltd were acquired, therefor they became subsidiaries from
affiliated companies, refer to VII. Change of consolidation scope.
Note 2: in November this year, full shareholdings of Panasonic Appliances cold
Chain(Dalian)Co.Ltd was disposed, Panasonic Appliances cold Chain(Dalian)Co.Ltd will not be
an affiliate any longer after disposal.
Note 3: Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd
started liquidation from December 1, 2022and will not be an affiliate any longer.
Note 4: in September 2022, 2% of shareholdings in Jiangsu Jingxue Insulation Technology
Co.,Ltd was sold and shareholding drops from 21.91% to 19.91%. in September 2022, 2% of
shareholdings in Jiangsu Jingxue Insulation Technology Co.,Ltd was sold and shareholding
drops from 19.91% to 14.91%.
13.Other non-current financial assets
Item Closing Balance Opening Balance
Financial assets classified as FVTPL 149,950,861.31 261,410,664.61
Including: equity instruments 149,950,861.31 261,410,664.61
Total 149,950,861.31 261,410,664.61
14. Investment property
(1) Investment property measured as cost model
Property&
Item Land-use-rights Total
building
I. Initial cost
1. opening balance 230,594,490.07 26,094,438.38 256,688,928.45
2. addition - - -
3. decrease - - -
4. closing balance 230,594,490.07 26,094,438.38 256,688,928.45
II. Accumulated depreciation - - -
1. opening balance 123,629,414.79 12,306,704.05 135,936,118.84
2. addition 4,898,002.65 521,888.76 5,419,891.41
(1) accrued/amortization 4,898,002.65 521,888.76 5,419,891.41
3. decrease
4. closing balance 128,527,417.44 12,828,592.81 141,356,010.25
III. Impairment reserve
1. opening balance - - -
120
Property&
Item Land-use-rights Total
building
2. addition - - -
3. decrease - - -
4. closing balance - - -
IV. Book value
1. Closing book value 102,067,072.63 13,265,845.57 115,332,918.20
2. Opening book value 106,965,075.28 13,787,734.33 120,752,809.61
15. Fixed assets
Items Closing Book Value Opening Book Value
Fixed asset 1,229,029,368.93 855,395,405.85
Fixed asset disposal - -
Total 1,229,029,368.93 855,395,405.85
(1) Fixed assets detail
Property& Machinery Transportation Other
Item equipment Total
buildings equipment equipment
I. Initial cost
1.Opening
695,343,883.14 617,253,312.03 12,914,199.47 61,535,741.18 1,387,047,135.82
balance
2. Increase 138,059,316.47 1,122,922,470.45 11,564,954.06 161,801,018.88 1,434,347,759.86
(1) Purchase 613,723.33 16,399,059.50 345,506.26 1,656,853.99 19,015,143.08
(2) Transferred
from
298,245.18 22,356,669.34 - 487,501.92 23,142,416.44
construction-in-
progress
(3) Acquired
from business 137,147,347.96 1,084,166,741.61 11,219,447.80 159,656,662.97 1,392,190,200.34
combination
3. Decrease 271,507.00 39,387,731.90 2,628,685.98 7,429,054.98 49,716,979.86
(1) Disposal - 2,330,920.47 1,728,172.54 1,190,184.35 5,249,277.36
(2)Acquired
from business 271,507.00 37,056,811.43 900,513.44 6,238,870.63 44,467,702.50
combination
4.Closing
833,131,692.61 1,700,788,050.58 21,850,467.55 215,907,705.08 2,771,677,915.82
balance
121
Property& Machinery Transportation Other
Item equipment Total
buildings equipment equipment
II. Accumulated
depreciation
1.Opening
131,345,400.98 341,061,738.95 8,806,440.56 50,162,389.94 531,375,970.43
balance
2. Increase 113,126,967.23 810,577,852.27 8,988,912.18 105,854,675.02 1,038,548,406.70
(1)Accrued 17,495,413.14 52,894,586.19 741,177.31 5,707,024.84 76,838,201.48
(2)Acquired
from business 95,631,554.09 757,683,266.08 8,247,734.87 100,147,650.18 961,710,205.22
combination
3. Decrease 244,356.30 31,619,709.51 2,376,128.98 6,018,382.54 40,258,577.33
(1) Disposal - 1,860,776.87 1,056,316.17 645,488.87 3,562,581.91
(2)Acquired
from business 244,356.30 29,758,932.64 1,319,812.81 5,372,893.67 36,695,995.42
combination
4.Closing
244,228,011.91 1,120,019,881.71 15,419,223.76 149,998,682.42 1,529,665,799.80
balance
III. Impairment
reserve
1.Opening
- 275,759.54 - - 275,759.54
balance
2. Increase 201,250.96 8,564,126.08 286,519.26 3,655,091.25 12,706,987.55
(1)Accrued
(2)Acquired
from business 201,250.96 8,564,126.08 286,519.26 3,655,091.25 12,706,987.55
combination
3. Decrease
4.Closing
201,250.96 8,839,885.62 286,519.26 3,655,091.25 12,982,747.09
balance
IV.Book value
1.Closing book
588,702,429.74 571,928,283.25 6,144,724.53 62,253,931.41 1,229,029,368.93
value
2.Opening book
563,998,482.16 275,915,813.54 4,107,758.91 11,373,351.24 855,395,405.85
value
(2) Fixed assets without ownership certificate
122
Item Book value Reason
Up to December 31,2022, sum of net book value of
the buildings without ownership certificate is
Self -constructed 27,465,128.49 Yuan, they are all self-constructed
27,465,128.49
buildings buildings. Because the land right where the buildings
stand on are not obtained, ownership certificate of
the buildings are not ready.
16. Construction-in-progress
Item Closing book value Opening book value
Construction-in-progress 115,577,902.54 38,974,478.45
Construction materials - -
Total 115,577,902.54 38,974,478.45
(1) Construction-in-progress details
Closing balance Opening balance
Item
Book balance Provision Book Value Book balance Provision Book value
Buildings &
24,796,146.56 - 24,796,146.56 4,330,904.06 - 4,330,904.06
reconstruction
Improvement of
82,341,565.62 - 82,341,565.62 24,409,028.60 - 24,409,028.60
machinery
Software of
intelligent 3,575,525.17 - 3,575,525.17 1,069,880.60 - 1,069,880.60
manufacture
Power generation
9,164,665.19 4,300,000.00 4,864,665.19 9,164,665.19 - 9,164,665.19
project
Total 119,877,902.54 4,300,000.00 115,577,902.54 38,974,478.45 - 38,974,478.45
(2) Change in the significant construction in progress
Decrease
Opening Transfer to Closing
Name Increase Other
balance FA/ Intangible balance
decrease
assets
Buildings &
reconstruction 4,330,904.06 34,933,807.31 14,316,352.42 152,212.39 24,796,146.56
Improvement of
machinery 24,409,028.60 69,792,719.83 11,860,182.81 - 82,341,565.62
Software of
intelligent 1,069,880.60 5,635,971.44 2,997,599.76 132,727.11 3,575,525.17
manufacture
123
Decrease
Opening Transfer to Closing
Name Increase Other
balance FA/ Intangible balance
decrease
assets
Power generation
project 9,164,665.19 9,164,665.19
Total 38,974,478.45 110,362,498.58 29,174,134.99 284,939.50 119,877,902.54
(Continued)
Including:
Percent of
Progress Accumulated accumulated Interest
investment Source of
Name Budget of capitalized capitalized capitalization
against funds
construction interest interest of the rate(%)
budget(%)
year
Buildings & Self-financi
reconstruction 27,271,836.00 90.92 90.92 -
ng
Improvement of Self-financi
machinery 101,691,814.04 80.97 80.97 -
ng
Software of
Self-financi
intelligent 3,610,000.00 99.05 99.05 -
manufacture ng
Self-financi
Power generation
project 15,020,000.00 32.39 32.39 837,440.00 ng
borrowing
Total 147,593,650.04 — — 837,440.00 — — —
(3) Impairment provision
Item Provision Reason
Power generation project 4,300,000.00 Project standstill
Total 4,300,000.00 —
124
17. Right-of-use assets
Property/ Transportation
Item Machinery Others Land use right Total
buildings equipment
I. Initial cost
1.Opening balance 4,827,598.49 28,234,690.39 334,540.86 526,894.11 - 33,923,723.85
2. Increase 9,574,424.24 2,031,380.53 - 194,322.58 7,945,762.91 19,745,890.26
(1) lease in 5,205,530.42 2,031,380.53 - - - 7,236,910.95
(2) business combination 4,368,893.82 - - 194,322.58 7,945,762.91 12,508,979.31
3. Decrease 2,143,769.48 8,223,690.03 - 526,894.11 - 10,894,353.62
4.Closing balance 12,258,253.25 22,042,380.89 334,540.86 194,322.58 7,945,762.91 42,775,260.49
II. Accumulated
— — — — — —
amortization
1.Opening balance 1,654,921.59 8,078,883.59 111,513.62 143,701.68 9,989,020.48
2. Increase 3,050,831.36 2,713,098.38 111,513.62 128,507.63 1,704,560.90 7,708,511.89
(1)Accrued 661,704.22 2,713,098.38 111,513.62 37,548.19 185,222.38 3,709,086.79
(2) business combination 2,389,127.14 - - 90,959.44 1,519,338.52 3,999,425.10
3. Decrease 2,143,769.48 3,547,183.83 - 172,980.83 - 5,863,934.14
4.Closing balance 2,561,983.47 7,244,798.14 223,027.24 99,228.48 1,704,560.90 11,833,598.23
III. Impairment reserve — — — — — —
1. Opening balance - - - - - -
2. Increase - - - - - -
125
Property/ Transportation
Item Machinery Others Land use right Total
buildings equipment
3. Decrease - - - - - -
4.Closing balance - - - - - -
IV. Book value — — — — — —
1. Closing book value 9,696,269.78 14,797,582.75 111,513.62 95,094.10 6,241,202.01 30,941,662.26
2. Opening book value 3,172,676.90 20,155,806.80 223,027.24 383,192.43 - 23,934,703.37
126
18. Intangible assets
Non-
Item Land use right Patent Others Total
Patent
I. Initial cost
1.Opening balance 151,187,270.24 17,630,188.82 5,000,000.00 34,007,344.48 207,824,803.54
2. Increase 21,964,150.48 - 773,680.00 26,757,007.62 49,494,838.10
(1) Purchase - - - 4,189,678.01 4,189,678.01
(2) increase via
21,964,150.48 - 773,680.00 16,535,611.06 39,273,441.54
merge
(3) Transferred
from
- - - 6,031,718.55 6,031,718.55
construction-in-pro
gress
3. Decrease - - - 1,387,556.28 1,387,556.28
(1) Business
- - - 1,387,556.28 1,387,556.28
combination
4.Closing balance 173,151,420.72 17,630,188.82 5,773,680.00 59,376,795.82 255,932,085.36
II. Accumulated
amortization
1.Opening balance 39,273,017.51 7,611,159.85 3,000,004.00 15,347,884.08 65,232,065.44
2. Increase 8,323,970.37 1,429,516.20 1,273,696.00 11,738,763.24 22,765,945.81
(1)Accrued 3,096,751.48 1,429,516.20 500,016.00 5,452,245.89 10,478,529.57
(2)Increase from
5,227,218.89 - 773,680.00 6,286,517.35 12,287,416.24
merger
3. Decrease - - - 142,645.96 142,645.96
(1) Business
- - - 142,645.96 142,645.96
combination
4.Closing balance 47,596,987.88 9,040,676.05 4,273,700.00 26,944,001.36 87,855,365.29
III. Impairment
provision
1. Opening balance - - - - -
2. Increase - - - - -
3. Decrease - - - - -
(1) Disposal - - - - -
IV. Book value
1. Closing book 125,554,432.84 8,589,512.77 1,499,980.00 32,432,794.46 168,076,720.07
127
Non-
Item Land use right Patent Others Total
Patent
value
2. Opening book
111,914,252.73 10,019,028.97 1,999,996.00 18,659,460.40 142,592,738.10
value
19. Goodwill
(1) Original cost of goodwill
Increased during Decreased during
current year current year
Opening
Name Enterprises Closing Balance
Balance
merger Other Disposal Other
increase
Dalian Universe
Thermal Technology 1,440,347.92 1,440,347.92
Co.,Ltd.
Dalian Bingshan
Group Engineering 310,451.57 310,451.57
Co., Ltd
Sonyo
Compressor(Dalian)C 240,922,872.80 240,922,872.80
o.,Ltd
Sonyo Refrigeration
System (Dalian) Co., 5,671,836.12 5,671,836.12
Ltd.
Total 1,750,799.49 246,594,708.92 248,345,508.41
(2) Goodwill impairment provision
In the year 2015, the book value of equity investment of Dalian Universe Thermal Technology
Co.,Ltd exceeds the fair value of the proportion of the acquired company’s identifiable net asset.
The difference between the book value of equity investment of 48, 287,589.78 Yuan and the
identifiable net asset’s fair value of Dalian Sanyo High-efficient Refrigeration System Co., Ltd
of 46,847,241.86 Yuan on the acquisition date of July 31st ,2015 is recognized as goodwill of
1,440,347.92 Yuan on The 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
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.
In 2022, the Company purchased 60% of the shareholdings of Sonyo
128
Compressor(Dalian)Co.,Ltd from Sanyo Electric(China)Co.,Ltd, and negotiated with Sanyo
Electric(China)Co.,Ltd to determine the share transfer consideration of 929,148,000.00 Yuan.
After the transaction, Sonyo Compressor(Dalian)Co.,Ltd became a subsidiary. This transaction
is a business combination not under same control, cost of combination is the FV of previous
shareholdings on acquisition date plus 60% shareholdings acquisition consideration, which is
1,548,580,000Yuan in total. Goodwill of 240,922,872.80 Yuan is recognized for the difference
between the share of FV of net identifiable asset of acquiree, 1,307,657,127.20Yuan and cost of
combination on acquisition date.
In 2022, the Company purchased 30% of the shareholdings of Sonyo Refrigeration System
(Dalian) Co., Ltd. from Panasonic Corporation of china Co., LTD and 25% shareholdings of
Sonyo Refrigeration System (Dalian) Co., Ltd from Panasonic Appliances cold
Chain(Dalian)Co.Ltd. The negotiated share transfer consideration of 81,735,060.00 Yuan. After
the transaction, Sonyo Compressor(Dalian)Co.,Ltd became a subsidiary. This transaction is a
business combination not under same control, cost of combination is the FV of previous
shareholdings on acquisition date plus 55% shareholdings acquisition consideration, which is
111,456,900.00Yuan in total. Goodwill of 5,671,836.12 Yuan is recognized for the difference
between the share of FV of net identifiable asset of acquire, 105,785,063.87Yuan and cost of
combination on acquisition date.
The book value of goodwill from business combination of Dalian Universe Thermal Technology
Co.,Ltd, Dalian Bingshan Baoan Leisure Industry Co., Ltd, Sonyo Compressor(Dalian)Co.,Ltd
and Sonyo Refrigeration System (Dalian) Co., Ltd which are not under same control shall be
allocated into the relevant asset group using the reasonable method since acquisition date, and
be tested for impairment on related asset groups containing goodwill by professional appraisal
companies or use evaluation models to predict the present value of future cash flows according
to the gross profit rate, sales growth rate, discount rate and other parameters in the next few
years, 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
Greenland of new factory 4,832,292.10 - 892,115.52 - 3,940,176.58
Employee’s dormitory use
1,735,213.74 - 138,478.32 - 1,596,735.42
right
Membership fee for golf 407,000.00 - 16,500.00 - 390,500.00
Renovation and rebuilding 1,020,822.14 249,056.35 228,285.05 701,952.14 339,641.30
Amortization of instruments 305,935.99 86,422.37 - 219,513.62
129
Opening Other Closing
Item Increase Amortization
Balance Decrease balance
Technology entrance fee of
93,356.25 93,356.25
cold and heat machinery
Total 8,088,684.23 554,992.34 1,455,157.51 701,952.14 6,486,566.92
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 383,685,092.04 70,892,192.53 367,572,645.45 77,433,815.32
Provision for
impairment of 110,205,587.05 18,013,430.31 55,608,764.16 10,412,376.27
assets
Provision 16,786,967.43 2,518,045.11 - -
Deductible loss 9,991,507.80 1,498,726.17 - -
Unrealized profit
from internal 13,034,503.47 1,955,175.52 13,555,883.61 2,033,382.54
transaction
Accrued sales
discount 13,744,913.65 2,061,737.05
FA depreciation 35,600,567.62 5,340,085.14
Others 845,210.65 126,781.60
Total 583,894,349.71 102,406,173.43 436,737,293.22 89,879,574.13
(2) Deferred tax liabilities without offsetting
Item Closing balance Opening balance
Taxable Deferred tax Taxable Deferred tax
temporary liabilities temporary liabilities
difference difference
Revaluation increase in
business combination
asst not under same 211,352,103.77 31,702,815.57
control
Change on FV of other
non-current financial 137,357,000.73 20,603,550.11 237,308,998.02 35,596,349.70
assets
FA depreciation 46,545,245.48 6,981,786.82
Total 395,254,349.98 59,288,152.50 237,308,998.02 35,596,349.70
(3) Net differed tax asset or liability
130
Item Offset amount Closing Offset Opening balance
at the year-end balance of net amount at the of net of
of DTA/DTL beginning of DTA/DTL
the year
Deferred tax assets 6,981,786.82 95,424,386.61 - 89,879,574.13
Deferred tax liabilities 6,981,786.82 95,424,386.61 - 89,879,574.13
(4) Unrecognized deferred tax assets details
Item Closing balance Opening balance
Deductible temporary difference 173,990,137.06 30,659,975.23
Deductible loss 304,513,803.17 224,773,151.64
Total 478,503,940.23 255,433,126.87
(5) Unrecognized deductible loss of deferred tax assets expired years
Year Closing balance Opening balance Notes
2023 16,458,262.38
2024 7,735,166.14 61,554,422.97
2025 8,950,922.50 21,436,832.18
2026 54,629,003.37 124,607,476.02
2027 61,240,033.97
2028 13,111,421.07
2029 45,365,135.77
2030 10,574,799.57
2031 50,864,213.30
2032 52,043,107.48
Total 304,513,803.17 224,773,151.64
22. Short-term borrowing
(1) Category of short-term borrowing
Loan category Closing balance Opening balance
Credit loan 262,016,713.87 230,373,666.72
Pledged loan 12,036,276.28 6,538,425.00
Mortgaged loan - 9,025,000.00
Guarantee loan
Total 274,052,990.15 245,937,091.72
(2) no overdue short term borrowing this year
23. Notes payable
131
Notes Category Closing balance Opening balance
Bank acceptance notes 616,424,384.85 372,141,300.89
Commercial acceptance notes 2,520,000.00 7,891,738.67
Total 618,944,384.85 380,033,039.56
Note: There is no due note unpaid at the year end.
24. Accounts payable
Item Closing balance Opening balance
Material payments 956,122,327.00 558,353,834.37
Project payments 567,873,401.74 328,569,617.62
Equipment payments 55,406,593.91 31,092,321.64
Others 6,695,737.94 1,856,153.90
Total 1,586,098,060.59 919,871,927.53
25. Contract liability
Item Closing balance Opening balance
Received in advance due from unrealized revenue 647,645,820.57 499,719,963.40
Total 647,645,820.57 499,719,963.40
26. Employee’s payable
(1) Category of employee’s payable
Item Opening balance Increase Decrease Closing balance
Short-term employee’s
35,148,570.37 441,095,373.81 358,043,484.58 118,200,459.60
payable
Post-employment benefit
212.11 38,198,245.70 38,182,234.18 16,223.63
–defined contribution plan
Termination benefits 534,750.80 534,750.80 -
Other welfare due within 1
year - - -
Total 35,148,782.48 479,828,370.31 396,760,469.56 118,216,683.23
(2) Short-term employee’s payables
Item Opening Increase Decrease Closing balance
balance
Salaries, bonus,
31,256,481.52 348,877,332.83 276,782,568.51 103,351,245.84
allowance, and subsidy
Welfare 1,849,331.65 18,025,607.15 19,874,938.80 -
Social insurance 661.20 22,567,810.07 22,559,469.56 9,001.71
132
Item Opening Increase Decrease Closing balance
balance
Include: Medical
- 17,485,099.19 17,477,365.63 7,733.56
insurance
Supplemental
- 359,375.57 359,375.57 -
insurance
On-duty injury
661.20 2,678,633.11 2,678,026.16 1,268.15
insurance
Maternity insurance - 2,044,702.20 2,044,702.20 -
Housing funds 305,192.81 30,648,930.70 30,954,123.51 -
Labor union and training
1,736,903.19 7,419,066.14 5,729,782.06 3,426,187.27
expenses
Short-term leave with pay - 57,121.22 57,121.22 -
Reward bonus and welfare
12,093,734.78 679,710.00 11,414,024.78
fund
Others 1,405,770.92 1,405,770.92 -
Total 35,148,570.37 441,095,373.81 358,043,484.58 118,200,459.60
(3) Defined contribution plan
Item Opening Increase Decrease Closing
balance balance
Pension - 36,949,930.41 36,937,304.17 12,626.24
Unemployment insurance 212.11 1,248,315.29 1,244,930.01 3,597.39
Company annuity plan - - - -
Total 212.11 38,198,245.70 38,182,234.18 16,223.63
27. Tax payable
Item Closing balance Opening balance
Value-added tax 23,058,922.64 8,428,289.41
Enterprise income tax 3,541,171.62 825,185.23
Real estate tax 2,212,510.37 1,910,131.37
City maintenance and construction tax 1,253,818.83 178,955.65
Land use tax 1,122,457.62 1,094,769.07
Education surcharge 895,584.93 127,825.46
Individual income tax 818,322.16 471,053.12
Stamp duty 787,688.77 477,653.78
River toll fee 1,046.68 984.73
Total 33,691,523.62 13,514,847.82
133
28. Other accounts payable
Item Closing balance Opening balance
Interest payable -
Dividend payable 533,156.00 3,008,156.00
Other accounts payable 66,521,094.25 52,275,984.21
Total 67,054,250.25 55,284,140.21
28.1 Dividend payable
Item Closing balance Opening balance
Ordinary share dividend 533,156.00 3,008,156.00
Total 533,156.00 3,008,156.00
28.2 Other accounts payable
(1) Other payables categorized by payments nature
Payments nature Closing balance Opening balance
Apply for reimbursement and unpaid 21,409,586.91 10,784,375.08
Cash pledge and security deposit 11,393,395.62 11,879,889.59
Trade mark and royalty 3,505,028.04 -
Receipts under custody 700,531.82 2,449,487.90
Others 29,512,551.86 27,162,231.64
Total 66,521,094.25 52,275,984.21
29. Non-current liabilities due within one year
Item Closing balance Opening balance
Bond payable due within one year 24,900,000.00
Long-term payable due within one year 29,809,686.93 13,876,415.99
Lease obligation due within one year 8,396,267.63 10,298,972.13
Total 63,105,954.56 24,175,388.12
30. Other current liabilities
Item Closing balance Opening balance
Notes payable endorsed not derecognized 127,165,397.88 143,288,366.08
Output Vat to be carried forward 77,484,605.36 51,924,840.83
Total 204,650,003.24 195,213,206.91
31. Long-term borrowing
(1) Category of long-term borrowing
134
Category Closing Balance Opening Balance
Pledged loan 585,100,000.00 -
Guarantee loan 130,000,000.00 150,000,000.00
Total 715,100,000.00 150,000,000.00
Note 1: pledged loan of 0.6 billion Yuan is for business combination in 2022, which comprises
0.3 billion Yuan from Dalian Zhoushuizi Branch of China Construction Bank Corporation,
5years with 2.75% borrowing rate. 50% shareholdings of Sonyo Compressor(Dalian)Co.,Ltd
and 37.5% shareholdings of Sonyo Refrigeration System (Dalian) Co., Ltd. were pledged. China
Construction Bank Corporation will complete the guarantee in February 2023. 0.3 billion Yuan
from Dalian Branch of Bank of Communications Co.,Ltd., 7 years with 2.75% borrowing rate.
50% shareholdings of Sonyo Compressor(Dalian)Co.,Ltd and 37.5% shareholdings of Sonyo
Refrigeration System (Dalian) Co., Ltd. were pledged. Dalian Branch of Bank of
Communications Co.,Ltd will complete the guarantee in February 2023.
Note 2: 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 23,357,885.20 16,861,280.02
Less: unrecognized finance expense 3,731,085.52 1,168,286.75
Non-current liability due within 1 year 8,396,267.63 10,298,972.13
Net lease liability 11,230,532.05 5,394,021.14
33. Long term accounts payable
Item Closing Balance Opening Balance
Long term accounts payable 31,009,644.16 19,998,913.29
Special fund payable - -
Total 31,009,644.16 19,998,913.29
33.1Category by nature
135
Nature Closing Balance Opening Balance
Financial lease borrowings 31,009,644.16 19,998,913.29
Total 31,009,644.16 19,998,913.29
34. Provision
Nature Closing Balance Opening Balance Reason
Open litigation 15,710,985.28 litigation
Warranty 3,094,982.15 Service after sales
Total 18,805,967.43
35. Deferred income
(1) Category of deferred income
Item Opening Balance Increase Decrease Closing Balance
Government subsidy 106,185,323.82 27,500.00 6,458,477.43 99,754,346.39
Total 106,185,323.82 27,500.00 6,458,477.43 99,754,346.39
(2) Government subsidy
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
Contribution to
subsidiary Asset
company 38,990,000.00 1,114,000.00 37,876,000.00 related
relocation
Application of
NH3 and CO2
instead of R22
screw Asset
refrigerating 22,505,971.44 1,999,533.16 20,506,438.28 Related
machine
combined
condensing unit
Compressor IC Asset
system 3,538,360.27 368,769.72 3,169,590.55 related
Ultrasonic Asset
intelligent defrost 3,421,177.42 30,000.00 384,824.40 3,006,353.02 related/
technology Income
Eco Compressor Asset
project 19,975,471.49 2,553,850.15 17,421,621.34 related
136
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
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
Refrigeration
testing APP 27,500.00 7,500.00 20,000.00
Total —
106,185,323.82 27,500.00 1,151,500.00 5,306,977.43 99,754,346.39
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
Increase/decrease（+/-）
Item Opening balance New share Share Transfer from Closing balance
others Subtotal
issued dividend capital reserve
Total share
843,212,507.00 843,212,507.00
capital
37.Capital reserves
Items Opening Increase Decrease Closing Balance
Balance
Share premium 669,193,413.27 - 669,193,413.27
Other capital reserves 51,022,453.51 729,576.00 3,848,344.40 47,903,685.11
Total 720,215,866.78 729,576.00 3,848,344.40 717,097,098.38
Note1: other capital reserve decreased by 3,512,172.40 Yuan during the year is the amount of
that the consideration paid for purchasing minority interest of Wuhan Lanning Energy
Technology Co., Ltd by Wuhan New World Refrigeration Industrial Co., Ltd, which is a
subsidiary of the Company, is more than the share of the identifiable net asset in the subsidiary.
137
Note 2: capital reserve of 336,172.00Yuan decreased during the year because of disposal of
Bingshan Technology Service （Dalian） Co., Ltd.
Note 3: capital reserve increased by 729,576.00Yuan because of equity method accounting of its
subsidiary , Wuhan New World Refrigeration Industrial Co., Ltd’s investment in Wuhan
Lanning Energy Technology Co., Ltd.
138
38.Other comprehensive income
Current year
Opening
Items Amount for the Less：Previously recognized in Less： After-tax attribute After-tax attribute Closing Balance
Balance
period before profit or loss into other income to the parent to minority
income tax comprehensive income tax company shareholder
I.Later can’t reclassified into
profit and loss of other
comprehensive income
II. Later reclassified into profit
and loss of other comprehensive 2,178,681.73 29,988.00 29,988.00 2,208,669.73
income
Other comprehensive income that
can be transferred to profit or loss 2,178,681.73 29,988.00 29,988.00 2,208,669.73
under the equity method
Other comprehensive income
total 2,178,681.73 29,988.00 29,988.00 2,208,669.73
139
39. Special reserve
Item Opening Balance Increase Decrease Closing Balance
Manufacturing safety 4,613,180.31 4,613,180.31
Total 4,613,180.31 4,613,180.31
40.Surplus reserves
Item Opening Closing
Increase Decrease
Balance Balance
Statutory surplus reserve 347,216,790.47 15,755,434.51 - 362,972,224.98
Discretionary surplus reserve 462,254,409.17 - - 462,254,409.17
Total 809,471,199.64 15,755,434.51 - 825,226,634.15
41.Undistributed profits
Item Current year Last year
Closing balance of last year 627,764,582.32 997,601,577.97
Add: Adjustments to the opening balance of
- -79,559,636.71
undistributed profits
Including: additional retrospective adjustments
- -
according to the new accounting standards
Change on accounting policy - -
Correction of prior period significant errors - -
Change on combination scope under same
- -
control
Other factors - -79,559,636.71
Opening balance of current year 627,764,582.32 918,041,941.26
Add: net profit attributable to shareholders of
18,255,330.45 -269,059,849.96
parent company in the year
Less: Provision for statutory surplus reserves 15,755,434.51 -
Provision for any surplus reserves - 12,785,383.91
Provision of general risk - -
Dividends payable for common shares 8,432,125.07 8,432,125.07
Common stock dividends converted to equity - -
Others 3,386,430.61
Closing balance of current year 618,445,922.58 627,764,582.32
42.Operating revenue and cost
(1) Details
Items Current year Last year
140
Sales revenue Cost of sales Sales revenue Cost of sales
Revenue from
2,803,347,359.37 2,459,913,203.46 2,031,958,305.49 1,808,263,206.67
principle operation
Revenue from
89,737,950.92 77,615,637.94 57,249,950.73 41,268,065.62
other operation
Total 2,893,085,310.29 2,537,528,841.40 2,089,208,256.22 1,849,531,272.29
(2) Main revenue from contract details
Contract Northeast Central
East China Total
classification China China
Classified at products
2,583,634,534.32 218,417,694.72 1,295,130.33 2,803,347,359.37
type
Manufacture products 1,713,166,227.20 205,996,804.29 1,295,130.33 1,920,458,161.82
Project installation 845,343,539.60 12,420,890.43 - 857,764,430.03
Other products and
25,124,767.52 - - 25,124,767.52
service
Classified at
2,583,634,534.32 218,417,694.72 1,295,130.33 2,803,347,359.37
geography location
domestic 2,403,716,824.07 218,417,694.72 1,295,130.33 2,623,429,649.12
overseas 179,917,710.25 - - 179,917,710.25
Total 2,583,634,534.32 218,417,694.72 1,295,130.33 2,803,347,359.37
43.Taxes and surcharges
Items Current year Last year
Property tax 8,149,841.00 7,889,230.05
Land use tax 4,339,092.94 4,770,267.58
City construction tax 3,787,453.40 2,697,059.55
Stamp duty 3,036,523.34 1,628,433.67
Education surcharge 2,716,374.19 1,937,881.46
Vehicle and vessel tax 21,640.80 25,419.48
Others 10,700.69 3,559.17
Total 22,061,626.36 18,951,850.96
44.Selling expenses
Items Current year Last year
Employee benefit 94,640,905.30 79,027,032.72
Maintenance and repair expense 17,886,776.97 10,817,179.44
Official business expense 15,487,688.84 17,287,793.62
Travel expense 12,871,992.12 9,309,818.45
Business entertaining expense 9,081,381.79 9,790,470.43
141
Advertisement and bids expense 1,817,387.69 2,335,235.14
Depreciation expense 861,025.06 1,781,527.37
Other expense 1,088,557.19 284,852.13
Total 153,735,714.96 130,633,909.30
45. Administrative expenses
Items Current year Last year
Employee benefit 104,233,517.24 104,074,747.58
Official expense 19,600,747.44 17,723,620.65
Depreciation expense 17,450,109.34 12,382,260.68
Design consultant and test service expense 14,255,471.99 4,398,890.50
Maintenance and repair expense 8,558,115.62 8,501,811.94
Long-term assets amortization 7,988,593.35 7,564,598.02
Travel expense 4,544,965.76 5,387,065.85
Safety production cost 2,791,153.21 3,799,007.87
Business entertaining expense 1,664,993.09 2,248,318.02
Patent trade mark use 1,139,572.89
Other taxes and fee 841,243.95 559,693.52
Insurance expense 830,189.74 931,137.81
Advertisement expense 424,668.21 875,051.39
Transportation expense 204,637.83 671,904.44
Other expense 1,850,224.84 1,495,327.88
Total 186,378,204.50 170,613,436.15
46.Technology development expense
Items Current year Last year
Employee benefit 52,660,638.70 46,269,704.41
Raw material 12,253,575.39 11,493,089.36
Depreciation and amortization expense 6,409,516.10 4,541,949.24
Other expense 5,469,075.50 2,965,022.22
Total 76,792,805.69 65,269,765.23
47.Financial expenses
Items Current year Last year
Interest expenses 18,581,726.78 16,718,288.26
Less: interest income 5,850,062.80 5,193,155.75
Add: exchange loss -3,698,043.31 -898,833.22
Add: others expenditure 2,791,902.36 3,315,626.94
Total 11,825,523.03 13,941,926.23
142
48.Other income
Items Current year Last year
Government subsidy 6,473,525.00 10,728,811.44
Land and property tax preference 391,094.76 -
Gain on debt restructuring 119,554.03 -
Job stability subsidy 98,244.00 -
Personal income tax handling fee refund 90,694.36 70,983.39
VAT return 43.32 -
Total 7,173,155.47 10,799,794.83
49.Investment income
Items Current year Last year
Long-term equity investment gain under equity
method -37,218,861.27 -85,710,592.25
Gain from disposal of long-term equity investment 109,098,404.60 27,665,072.62
Gain from FV remeasurement of the shares on
obtaining control 170,729,805.79
Gain from holding of other noncurrent financial assets 20,671,710.39 7,255,249.48
Gain from disposal of other no-current financial assets 43,296,525.04 2,523,680.32
Gain on debt restructuring 110,913.39 819,297.68
Total 306,688,497.94 -47,447,292.15
50. Gain on fair value change
Source of gain on FV change Current year Last year
Other noncurrent financial assets -46,991,034.40 52,398,565.78
Total -46,991,034.40 52,398,565.78
51.Credit impairment loss (loss listed as“-“)
Items Current year Last year
Bad debt loss on notes receivable -789,111.45 2,055,299.46
Bad debt loss on receivable -77,384,660.21 -97,597,742.66
Bad debt loss on other receivable -4,020,227.27 107,768.08
Bad debt loss on long term receivable -501,389.82 4,636,661.13
Total -82,695,388.75 -90,798,013.99
52.Assets impairment losses (loss listed as “-“)
Items Current year Last year
Loss on impairment of inventory and cost to
-39,711,456.37 -46,330,540.22
fulfill the contract obligation
Loss of contract asset impairment -30,814,338.63 -3,296,146.61
143
Impairment on construction in progress -4,300,000.00
Total -74,825,795.00 -49,626,686.83
53.Gain on assets disposal (loss listed as “-“)
Amounts recognized
Current into current
Item Last year
year non-recurring profit
or loss
Gain on non-current assets disposal 194,556.13 59,272.29 194,556.13
Including: gain on non-current assets
194,556.13 59,272.29 194,556.13
disposal not classified as held for sale
Including: gain on fixed assets disposal 194,556.13 59,272.29 194,556.13
Total 194,556.13 59,272.29 194,556.13
54. Non-operating income
（1） Non-operating income list
Amounts recognized
into non-recurring
Item Current year Last year
profit or loss for the
year
Penalty 6,612,182.54 6,612,182.54
Creditor giving up 4,345,157.74 4,345,157.74
Contract withdrawn and received in
advance transferred to non-operating 432,311.90 2,983,246.50 432,311.90
income
Gain on disposal of non-current asset 93,160.73 93,160.73
Other items 358,715.64 1,491,460.42 358,715.64
Total 11,841,528.55 4,474,706.92 11,841,528.55
55.Non-operating expenses
Amounts recognized
into non-recurring
Item Current year Last year
profit or loss for the
year
Compensation 2,813,844.43 7,680,000.00 2,813,844.43
Expected loss for open litigation 2,019,000.00 2,019,000.00
Non-current assets scrap loss 191,291.12 1,474,287.01 191,291.12
Outward donation 57,000.00 60,000.00 57,000.00
Inventory shortage 2,303.16
Others 123,404.80 402,800.25 123,404.80
144
Total 5,204,540.35 9,619,390.42 5,204,540.35
56. Income tax expenses
(1) Income tax expenses
Items Current year Last year
Current income tax expenses 5,482.46 3,010,709.68
Deferred income tax expenses 1,049,127.16 -17,314,063.15
Total 1,054,609.62 -14,303,353.47
(2) Adjustment process of accounting profit and income tax expense
Items Current year
Consolidated total profit this year 20,943,573.94
Income tax expenses at applicable tax rate 3,141,536.09
Effect on subsidiary applied to different tax rate -14,023,409.28
Effect on prior period income tax 912,499.72
Effect on non-taxable income -33,262,753.99
Effect on non-deductible cost, expense and loss 2,747,804.82
Effect on use of deductible loss from unrecognized deferred
tax assets in the prior period -2,372,719.16
Effect on temporary difference or deductible loss from
unrecognized deferred tax assets this year 38,379,332.62
R&D expenditure accelerated deduction -12,901,908.10
FA accelerated deduction -6,742,781.09
Others 25,177,007.99
Income tax expense 1,054,609.62
Note: others reverse the effect on recognized deferred tax asset in the prior period
57. Other comprehensive income
Refer to the note “VI.38 Other comprehensive income” for details.
58. Notes to cash flow statement
(1) Cash receipt/payment of other operating/investing/financing activities
1) Other cash received relating to operating activities
Items Current year Last year
Deposit given back 43,441,397.62 41,513,085.25
Lease premium received 14,641,754.19 -
Compensation 10,248,694.24 -
Government grants 5,669,861.48 14,489,543.00
145
Interest income 5,128,719.77 4,037,645.63
rd
Receivable from the 3 party 4,656,358.49 -
Frozen money refund 3,407,480.07 -
Received travel expense refund 3,180,530.19 2,497,395.96
Others 2,065,719.26 1,755,419.70
Total 92,440,515.31 64,293,089.54
2) Other cash paid relating to operating activities
Items Current year Last year
Expenditure 122,463,075.59 91,537,037.91
Deposit paid 89,837,201.58 42,860,074.05
Business travel borrowing 6,698,577.75 9,534,563.41
Unsettled AR/AP among non-related party 2,896,588.50 9,027,444.39
Bank handling charges 1,737,635.11 3,024,534.78
Frozen accounts 209,197.14 -
Unsettled AR/AP among related party - 2,000,000.00
Others 8,261,197.76 4,592,818.07
Total 232,103,473.43 162,576,472.61
3) Others cash received relating to financing activities
Items Current year Last year
Sale leaseback and financial lease 12,000,000.00 27,476,663.49
Notes discounted 11,991,047.27 -
Collection of guarantee money at the year end - 56,369,665.56
Total 23,991,047.27 83,846,329.05
4) Others cash paid relating to financing activities
Items Current year Last year
Sale& leaseback and financial lease 25,415,743.25 22,971,894.19
Lease premium 3,713,373.61 5,246,090.60
Payment of guarantee money 75,003,788.58
Purchase of minority interest 8,765,615.00
Total 29,129,116.86 111,987,388.37
(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 19,888,964.32 -275,189,594.04
146
Items Current year Last year
Add: Provision for impairment of assets 74,825,795.00 49,626,686.83
Provision for impairment of credit 82,695,388.75 90,798,013.99
Depreciation of fixed assets, Amortization of
82,258,092.89 85,379,019.94
mineral resources, and biological assets
Depreciation of right-of-use assets 3,709,086.79 5,557,030.56
Amortization of intangible assets 10,478,529.57 7,903,250.51
Amortization of long-term deferred expenses 1,455,157.51 1,571,853.84
Losses on disposal of fixed assets, intangible assets, and
-194,556.13 -59,272.29
long-term assets (income listed with”-”)
Losses on write-off of fixed assets (income listed
98,130.39 1,536,590.17
with”-”)
Change of fair value profit or loss 46,991,034.40 -52,398,565.78
Financial expense (income listed with”-”) 18,581,726.78 18,951,092.91
Investment loss (income listed with”-”) -306,688,497.94 47,447,292.15
Decrease of deferred tax assets(increase listed with”-”) 9,978,391.90 -20,900,048.02
Increase of deferred tax liabilities(decrease listed with”-”) -8,929,264.74 3,585,984.87
Decrease of inventories (increase listed with”-”) -412,972,663.16 -324,479,019.61
Decrease of operating receivables (increase listed
-1,052,478,135.51 -45,570,227.23
with”-”)
Increase of operating payables (decrease listed with”-”) 1,374,055,519.82 407,758,129.57
Others
Net cash flows arising from operating activities -56,247,299.36 1,518,218.37
2. Significant investment and financing activities
unrelated to cash income and expenses
Liabilities transferred to capital
Convertible bonds within 1 year
Financing leased fixed assets
3. Net increase (decrease) of cash and cash equivalent
Closing balance of cash 921,661,803.17 438,969,337.87
Less: Opening balance of cash 438,969,337.87 314,978,460.49
Add: Closing balance of cash equivalent
Less: Opening balance of cash equivalent
Net increase of cash and cash equivalent 482,692,465.30 123,990,877.38
(3) Net cash paid to acquisition of subsidiary
Items Current year
Cash & cash equivalent paid for acquisition 1,010,883,060.00
147
Items Current year
-Sonyo Compressor(Dalian)Co.,Ltd. 929,148,000.00
-Sonyo Refrigeration System (Dalian) Co., Ltd. 81,735,060.00
Less: Cash & cash equivalent held by acquirees on acquisition date 609,058,477.33
-Sonyo Compressor(Dalian)Co.,Ltd. 577,692,867.34
-Sonyo Refrigeration System (Dalian) Co., Ltd. 31,365,609.99
Net cash paid to acquisition of subsidiary 401,824,582.67
(4) Net cash received from subsidiary disposal
Items Current year
Cash & cash equivalent received for disposal of subsidiary 25,888,200.00
-Ningbo Bingshan Air-conditioning Refrigeration Engineering Co., Ltd -
-Bingshan Technology Service （Dalian） Co., Ltd. 25,888,200.00
Less: Cash & cash equivalent held by the on the date of losing control 20,624,106.10
-Ningbo Bingshan Air-conditioning Refrigeration Engineering Co., Ltd 403,914.72
-Bingshan Technology Service （Dalian） Co., Ltd. 20,220,191.38
Net cash received for disposal of subsidiary 5,264,093.90
(5) Cash and cash equivalents
Items Current year Last year
Cash 921,661,803.17 438,969,337.87
Including: Cash on hand 80,702.47 99,580.64
Bank deposit used for paying at any moment 921,581,100.70 438,869,757.23
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 921,661,803.17 438,969,337.87
Cash and cash equivalents restricted in the parent
- -
company or subsidiary
59. The assets with the ownership or use right restricted
Items Current year Reasons
Monetary fund 84,504,096.01 Guarantee money frozen fund
Notes Receivable 98,917,384.72 Pledge
Receivable financing 15,259,393.79 Pledge
Fixed asset 62,207,555.51 Pledge
Intangible asset 5,587,198.75 Pledge
148
Items Current year Reasons
Investment asset 32,981,247.79 Pledge
Total 299,456,876.57
Note: The bank account of the company in Zhongshan Branch of Bank of China Limited has
been frozen at RMB 244,790.76, mainly because this account has not been applied for online
banking, resulting in the restricted use of the frozen bank account. The bank account of Dalian
Bingshan Engineering & Trading Co., Ltd, a subsidiary of our company, has been frozen with
209,197.14 Yuan in Shahekou Branch of Bank of Dalian Co., Ltd., mainly due to the fact that
the account used to be a social security account, but it has been turned into a long-term
suspended account this year because it has been unused for a long time
Sonyo Compressor(Dalian)Co.,Ltd bank account is restricted for use of 2,000.00Yuan as ETC
deposit. Dalian Bingshan Engineering & Trading Co., Ltd
The bank account of Wuhan Lanning Energy Technology Co., Ltd in Bank of China Limited
Wuhan Branch is frozen due to litigations, the amount is 94,500.00Yuan.
Dalian Bingshan Air-conditioning Equipment Co., Ltd. pledged the bank acceptance note to
ICBC bank Dalian Chunliu Branch as guarantee for issuing the bank acceptance note.
Dalian Bingshan Guardian Automation Co., Ltd.pledged the bank acceptance notes to Dalian
Jinpu Branch of China Merchants Bank and Industrial Bank Co.,Ltd. Dalian Branch as
guarantee for issuing the bank acceptance note.
Dalian Universe Thermal Technology Co.,Ltd. pledged the bank acceptance note to China
Merchants bank Dalian Branch as guarantee for issuing the bank acceptance note.
The Company’s subsidiary, Dalian Bingshan Engineering & Trading Co., Ltd pledged the bank
acceptance note to Dalian Kaifaqu Branch of China Merchants Bank Co.,Ltd. as guarantee for
issuing the bank 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.
60. Monetary category of foreign currency
(1) Monetary category of foreign currency
Closing Balance Exchange Closing Balance
Item
(foreign currency) Rate (RMB)
Cash 7,976,721.61
Including：USD 754,513.09 6.9646 5,254,881.87
149
Closing Balance Exchange Closing Balance
Item
(foreign currency) Rate (RMB)
JPY 26,114,971.00 0.0524 1,367,327.65
Euro 182,477.48 7.4229 1,354,512.09
Accounts receivable 51,043,328.79
Including: USD 5,866,795.19 6.9646 40,859,881.78
JPY 51,868,648.00 0.0524 2,715,738.67
Euro 1,006,036.50 7.4229 7,467,708.34
Accounts payable 8,035,293.46
Including: USD 839,819.50 6.9646 5,849,006.89
GBP 37,274.28 8.3941 312,884.03
JPY 35,780,636.02 0.0524 1,873,402.54
61. Government Grants
(1) Basic information
Amount recognized
Category Amount Disclosure in current profit
and loss
Deferred income/other
Relocation compensation 42,332,000.00 1,114,000.00
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
Application of combined Deferred income/cost
compression NH3&Co2 29,409,622.81 1,999,533.16
replace R22 of sales/expense
R290 replace R22 13,006,663.20 Deferred income -
Deferred income/cost
Ultrasonic defrosting
technology 9,841,800.00 of sales/expense/other 414,824.40
income
Refrigeration Compressor Deferred income/cost
Intelligent Manufacturing 5,000,000.00 368,769.72
System Fund of sales/expense
R290 replace R22 twin
4,747,680.00 Deferred income -
stage screw sets
Champion in 2022 1,000,000.00 Other Income 1,000,000.00
Special fund for financing
612,282.00 Other Income 612,282.00
carrier
Industrial Design Center
600,000.00 Other Income 600,000.00
subsidy by Dalian Bureau
150
Amount recognized
Category Amount Disclosure in current profit
and loss
of Industry and
Information Technology
Enterprise Technology
Center subsidy by Dalian
Bureau of Industry and 500,000.00 Other Income 500,000.00
Information Technology
Subsidy for R&D in 2018 458,000.00 Other Income 458,000.00
Vocational skills training
subsidies 394,826.00 Other Income 394,826.00
Export credit insurance
premium support fund 332,100.00 Other Income 332,100.00
Digital Special fund by
province 300,000.00 Other Income 300,000.00
Special skilled new
enterprise reward 200,000.00 Other Income 200,000.00
High-tech enterprise
recognition subsidy 200,000.00 Other Income 200,000.00
1st Foster fund for technical
business development 150,000.00 Other Income 150,000.00
International market
support fund 147,752.00 Other Income 147,752.00
“size upgrade” reward 100,000.00 Other Income 100,000.00
Dalian Jinpu Finance
Center-after R&D 90,000.00 Other Income 90,000.00
investment subsidy
Subsidy of FY2022 50,000.00 Other Income 50,000.00
Job provider subsidy by
HNT district Finance 40,000.00 Other Income 40,000.00
Center
2019 fund for M&S
enterprises by Commercial 36,365.00 Other Income 36,365.00
Bureau
Graduate employment
subsidy in Jinpu district 33,000.00 Other Income 33,000.00
Special fund by innovation
center 30,000.00 Other Income 30,000.00
Deferred income/
Refrigeration tests APP 27,500.00 7,500.00
Other Income
Others 47,900.00 Other Income 47,900.00
Total 140,687,491.01 Other Income 11,780,702.43
VII. Change of Consolidation Scope
1. Business combination not under same control
(1) Business combination not under same control this year
151
Share
Acquiree acquisition Cost (%) Method
point
Purchase with
Sonyo Compressor(Dalian)Co.,Ltd. 2022-11-11 929,148,000.00 60.00
agreement
Sonyo Refrigeration System Purchase with
2022-11-11 81,735,060.00 55.00
(Dalian) Co., Ltd. agreement
(continued)
Revenue Net profit
Basis for between between
Acquisition
Acquiree acquisition acquisition acquisition
date
date date and the date and the
year end year end
Sonyo Transfer of
2022-11-11 194,961,546.08 14,798,780.53
Compressor(Dalian)Co.,Ltd. control
Sonyo Refrigeration System Transfer of
2022-11-11 64,742,634.97 3,524,253.54
(Dalian) Co., Ltd. control
(2) Combination cost and goodwill
Sonyo Refrigeration
Sonyo
Item System (Dalian) Co.,
Compressor(Dalian)Co.,Ltd.
Ltd.
Cash 929,148,000.00 81,735,060.00
FV of non-cash asset - -
FV of bond issued or
- -
undertaken
FV of equity security issued - -
FV of contingent consideration - -
FV of shareholding held prior to
619,432,000.00 29,721,840.00
acquisition on acquisition date
Total of combination cost 1,548,580,000.00 111,456,900.00
Less: proportion of FV of
1,307,657,127.20 105,785,063.88
identifiable net asset obtained
The difference between
goodwill/cost of combination
240,922,872.80 5,671,836.12
less and proportion of FV of
identifiable net asset obtained
(3) Identifiable asset, liability of acquiree on acquisition date
Sonyo Refrigeration System
Sonyo Compressor(Dalian)Co.,Ltd.
(Dalian) Co., Ltd.
Items
FV on acquisition FV on acquisition FV on FV on
date date acquisition date acquisition date
Assets: 1,708,920,739.48 1,497,875,893.46 580,996,035.18 574,567,097.60
Monetary funds 577,694,867.34 577,694,867.34 45,881,484.36 45,881,484.36
Accounts
497,460,339.10 497,460,339.10 427,343,627.20 427,343,627.20
receivable
Prepayments 8,633,385.14 8,633,385.14 20,582,759.69 20,582,759.69
Inventory 137,165,318.48 137,165,318.48 42,091,945.53 41,118,849.14
152
Sonyo Refrigeration System
Sonyo Compressor(Dalian)Co.,Ltd.
(Dalian) Co., Ltd.
Items
FV on acquisition FV on acquisition FV on FV on
date date acquisition date acquisition date
Long-term
equity 35,261,687.95 33,895,538.72 - -
investment
Fixed assets 395,362,362.65 199,138,504.47 15,910,888.11 11,266,758.04
Construction in
15,192,005.51 15,192,005.51 2,622,813.23 2,622,813.23
process
Right-of-use
8,509,554.21 8,509,554.21 9,872,833.82 9,872,833.82
assets
Intangible assets 23,663,683.43 10,208,844.82 3,403,888.97 2,592,177.85
Deferred tax
9,793,210.25 9,793,210.25 13,409,276.32 13,409,276.32
asset
Liability: 401,263,612.28 369,606,885.38 439,949,283.35 438,984,942.71
Accounts
294,750,151.17 294,750,151.17 383,039,739.74 383,039,739.74
payable
Employee
47,756,322.97 47,756,322.97 21,555,327.79 21,555,327.79
payable
Lease liability 7,835,055.16 7,835,055.16 10,508,029.25 10,508,029.25
Provision 18,216,788.28 18,216,788.28 - -
Deferred Tax
31,656,726.90 - 964,340.64 -
liability
Net asset 1,307,657,127.20 1,128,269,008.08 141,046,751.83 135,582,154.89
les ： Minority
- - - -
interest
Net asset
1,307,657,127.20 1,128,269,008.08 141,046,751.83 135,582,154.89
obtained
(4) Gain/loss on FV revaluation of shareholdings held prior to acquisition date
BV of FV of Gain/loss on
Shareholding Shareholding remeasurement of
Acquiree held before held before Shareholding held
acquisition on acquisition on before acquisition at
acquisition date acquisition date FV on acquisition date
Sonyo
451,307,603.23 619,432,000.00 168,124,396.77
Compressor(Dalian)Co.,Ltd.
Sonyo Refrigeration System
27,116,430.98 29,721,840.00 2,605,409.02
(Dalian) Co., Ltd
(continued)
FV determination method Investment income
of shareholding held before transferred from other
Acquiree acquisition & main comprehensive income
assumption on acquisition from shareholding held
date before acquisition
Adjust based on purchasing
Sonyo Compressor(Dalian)Co.,Ltd. -
price
Sonyo Refrigeration System (Dalian) Adjust based on purchasing
-
Co., Ltd price
153
2. Disposal of subsidiary
Share price
recognition less % of
Point of
Disposal basis of shareholdings
Subsidiary Share price （%） losing
method losing of net asset of
control
control respective
subsidiary
Bingshan
Technology Share
25,888,200.00 100.00 sold 2022-3-1 transfer 5,568,934.31
Service （Dalian）
completion
Co., Ltd
Ningbo Bingshan
Air-conditioning Share
Refrigeration - 51.00 sold 2022-6-9 transfer 719,165.16
Engineering Co., completion
Ltd
(continued)
Carryin FV Investment
g determinati income
FV of transferred
Remaini amount on method
remainin Gain/loss on from other
ng share of of
g share
percenta remainin remeasurem remaining comprehens
percenta
Subsidiary ge at the g share ent of shareholdin ive income
ge at the
point of percenta remaining g & key from
point of
losing ge at the shareholding assumption shareholdin
losing
control point of at the point g in
control
losing of losing previous
control control subsidiary
Bingshan
Technology
Service - - - - - -
（ Dalian ）
Co., Ltd
Ningbo
Bingshan
Air-condition
ing - - - - - -
Refrigeration
Engineering
Co., Ltd
3. Consolidation scope change from other reason
None
VIII. Interest in other entity
1.Equity of subsidiaries
(1) Organization structure of group company
154
Main Shareholding Obtaining
Registered (%) method
Name of subsidiaries business Business nature
address
address Direct Indirect
Dalian Bingshan Group Engineering
Dalian Dalian Installation 100 Establish
Co., Ltd.
Chengdu Bingshan Refrigeration
Chengdu Chengdu Service - 51.00 Establish
Engineering Co., Ltd.
Dalian Bingshan Group Sales Co.,
Dalian Dalian Trading 100 Establish
Ltd.
Dalian Bingshan Air-conditioning
Dalian Dalian Manufacturing 100 Establish
Equipment Co., Ltd.
Dalian Bingshan Guardian
Dalian Dalian Manufacturing 100 Establish
Automation Co., Ltd.
Dalian Bingshan-RYOSETSU Quick
Dalian Dalian Manufacturing 100 Establish
Freezing Equipment Co., Ltd.
Wuhan New World Refrigeration
Wuhan Wuhan Manufacturing 100 Acquisition
Industrial Co., Ltd.
Wuhan New World Air-conditioning Installation
Wuhan Wuhan 100 Establish
Refrigeration Engineering Co., Ltd
Wuhan Lanning Energy Technology Trading
Wuhan Wuhan 100 Acquisition
Co., Ltd.
Dalian Universe Thermal Technology
Dalian Dalian Manufacturing 55 Acquisition
Co.,Ltd.
Dalian Bingshan Engineering &
Dalian Dalian Service 100 Acquisition
Trading Co., Ltd
Sonyo Compressor(Dalian)Co.,Ltd. Dalian Dalian Manufacturing 100 Acquisition
Sonyo Refrigeration System (Dalian)
Dalian Dalian Manufacturing 100 Acquisition
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.Change of equity share in subsidiary which is still under control
（1） Change of equity share in subsidiary
（2） Effect on equity due to change of equity share
155
Wuhan Lanning Energy
Item
Technology Co., Ltd.
Cash -
FV of non-cash asset -
Sum of combination cost/ disposal consideration -
Less: share of net asset obtained based on shareholding ratio -6,898,603.01
The difference -6,898,603.01
Including adjustments
capital reserve -3,512,172.40
Surplus reserve -
Undistributed profit -3,386,430.61
3.Equity in joint venture arrangement or associated enterprise
（1） The important affiliated companies
Shareholding
Main (%)
Name of joint
busines Registere Business Accounting
ventures or affiliated In
s d address nature methods
companies di
address Direct
re
ct
Dalian Fuji Bingshan Manufactur
Vending Machine Co., Dalian Dalian 49.00 Equity method
Ltd ing
Jiangsu Jingxue Changz Changzho Manufactur
Insulation Technology 14.91 Equity method
Co.,Ltd hou u ing
Dalian Bingshan Metal Manufactur
Dalian Dalian 49.00 Equity method
Technology Co., Ltd. ing
1) The Company has the same percentage of shareholding and voting right in joint-venture or
affiliated company.
2) The Company has an affiliated company, Jiangsu Jingxue Insulation Technology Co.,Ltd, which
has significant influence although being held less than 20% voting rights. The Company is the
shareholder of Jiangsu Jingxue Insulation Technology Co.,Ltd with over 5% shareholding.
3) The Company doesn’t have joint venture or affiliated companies which have no significant
influence although being held 20% or more voting rights.
（2） The key financial information of affiliated companies
156
Closing balance/Current year
Dalian Fuji Jiangsu Jingxue Dalian Bingshan
Items
Bingshan Vending Insulation Metal Technology
Technology Co.,Ltd
Machine Co., Ltd Co., Ltd.
Current assets 447,012,221.67 1,357,769,579.89 331,577,731.99
Including: Cash and
8,768,885.75 210,766,589.69 171,454,780.42
cash equivalents
Non-current assets 220,481,862.47 302,638,265.60 36,680,264.69
Total assets 667,494,084.14 1,660,407,845.49 368,257,996.68
Current liabilities 391,692,836.48 827,081,128.54 49,800,779.28
Non-current liabilities 49,526,450.43 29,830,925.61 -
Total liabilities 441,219,286.91 856,912,054.15 49,800,779.28
Minority interests - 449,591.20 -
Equity to the parent
226,274,797.23 803,046,200.14 318,457,217.40
company
Share of net assets
according to the
110,874,650.64 119,734,188.43 156,044,036.52
shareholding
proportions
Adjusting events - - -
—Goodwill 226,689.29 20,390,060.33 19,269,770.94
—Unrealized profits of
- - -
insider trading
--Others - -
Book value of equity
investment of affiliated 111,101,339.93 140,124,248.76 175,313,807.46
companies
Fair value of equity
investment with public - - -
offer
Operating income 175,460,421.16 902,517,681.24 433,120,778.54
Financial expense 10,357,794.72 854,477.47 -7,161,210.92
Income tax expense -10,755.71 2,621,080.54 9,728,042.54
Net profit 2,430,819.76 39,722,362.41 62,395,419.10
Net profit of
discontinuing
operation
Other comprehensive
income
Total comprehensive
2,430,819.76 39,722,362.41 62,395,419.10
income
The current dividends
received from joint - 4,732,344.00 23,402,022.05
ventures
(Continued)
157
Opening balance/Last year
Dalian Fuji Bingshan Panasonic Appliances Sonyo Jiangsu Jingxue Dalian Bingshan
Items
Vending Machine cold Chain(Dalian) Compressor(Dalian) Insulation Technology Metal Technology
Co.,Ltd Co.,Ltd
Co., Ltd 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 company 375,666,188.84 214,723,516.35 1,156,846,384.28 784,015,870.10 304,133,004.07
Share of net assets according to
148,440,479.34 85,889,406.54 462,738,553.71 171,770,036.98 149,025,171.99
the 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 - -
Book value of equity 148,656,014.75 90,330,037.43 460,060,249.49 201,731,528.04 168,294,942.93
158
Opening balance/Last year
Dalian Fuji Bingshan Panasonic Appliances Sonyo Jiangsu Jingxue Dalian Bingshan
Items
Vending Machine cold Chain(Dalian) Compressor(Dalian) Insulation Technology Metal Technology
Co.,Ltd Co.,Ltd
Co., Ltd Co.,Ltd Co., Ltd.
investment of affiliated
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 income 284,537.72 -282,147,957.09 83,697,007.01 67,100,790.28 48,486,526.57
The current dividends received
- 2,797,849.22 32,773,200.00 - 28,648,633.78
from joint ventures
159
(3)Summary financial information of insignificant affiliated companies
Items Current year Last year
Affiliated company
Total book value of investment of affiliated
companies 123,418,337.24 158,059,185.33
The total of following items according to the
shareholding proportions —
Net profit 28,021,453.13 2,067,871.70
Other comprehensive income - -
Total comprehensive income 28,021,453.13 2,067,871.70
(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
160
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 2022, the Company’s assets and liabilities dominated in
foreign currency are listed in RMB as following：
Items Closing Balance Opening balance
Monetary fund-USD 5,254,881.87 2,612,773.25
Monetary fund-JPY 1,367,327.65 47,611.63
Monetary fund- EURO 1,354,512.09 -
Monetary fund-GBP - 0.86
Receivable- GBP - 1,465,771.99
Receivable -USD 40,859,881.78 27,126,714.76
Receivable -JPY 2,715,738.67 1,226,730.38
Receivable - EURO 7,467,708.34 -
Payables -USD 5,849,006.89 4,680,703.58
Payables - EURO - 9,602.20
Payables -JPY 1,873,402.54 93,138.00
Payables - GBP 312,884.03 320,797.36
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’s interest-bearing debt is borrowings of RMB 740,000,000.00 at fixed interest rate as of
December 31,2022(borrowings of RMB 150,000,000.00 in2021).
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 2022, based on the assumption of interest rate change of 50 BP, the Company’s net
161
profit of current year will increase or decrease3.7 million Yuan.
3) Price risk
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 2022, the top five customers of receivable accounts balance are
230,971,161.93Yuan.
(3) Liquidity risk
Liquidity risk was referred to the risk of shortage of funds incurred when the enterprise fulfills 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, 2022, the credit limit still available is 499.50
million Yuan and short-term credit limit available is 499.50 million Yuan.
As at 31st December 2022, the Company’s financial assets and financial liabilities in line with
non-discounted cash flow of the contracts as following： Currency unity:10kYuan
162
Within 1
Items 1-2 years 2-5 years Over 5 years Total
year
Financial Assets
Cash and cash in bank 100,616.59 - - - 100,616.59
Notes receivable 50,594.53 - - - 50,594.53
Accounts receivable 140,997.84 - - - 140,997.84
Financing receivable 5,879.28 - - - 5,879.28
Other Receivable 5,139.45 - - - 5,139.45
Contract asset 22,579.09 - - - 22,579.09
Non-current asset due
1,571.56 - - - 1,571.56
within 1 year
Long-term receivable - 516.25 - - 516.25
Other noncurrent
- - - 14,995.09 14,995.09
financial asset
Financial Liabilities — — — — —
Short-term loan 27,405.30 - - - 27,405.30
Notes Payable 61,894.44 - - - 61,894.44
Accounts payable 158,609.81 - - - 158,609.81
Other payable 6,705.43 - - - 6,705.43
Employee’s payable 11,821.67 - - - 11,821.67
Tax payable 3,369.15 - - - 3,369.15
Non-current liability
6,310.60 - - - 6,310.60
due within 1 year
Long-term loan - 5,040.00 54,300.00 12,170.00 71,510.00
Lease obligation - 321.88 391.62 409.55 1,123.05
Long-term payable - 1,825.66 1,275.30 - 3,100.96
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 163
FV available
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
- 58,792,792.70 - 58,792,792.70
financing
Other
non-current 148,267,008.72 - 1,683,852.59 149,950,861.31
financial asset
Total 148,267,008.72 58,792,792.70 1,683,852.59 208,743,654.01
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, 2022.
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.
As of December 31, 2022, the book value of the share investment in Guotai Junan Investment
Management Co.,Ltd and Wuhan Steel and Power Co.,Ltd is 1,683,852.59 Yuan. It is
presented as other non-current financial asset in accordance with No.22- financial instrument
recognition and measurement of Accounting Standards for Business Enterprises. Having
considered there is 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. FV
of the investment is measured at cost by taking influence factor of FV into consideration.
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
164
year.
No.
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. Controlling shareholder and ultimate controller
(1) Controlling shareholder 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 includes 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
165
Shareholding amount Ratio of shareholding（%）
Controlling Closing balance Opening Ratio Ratio at
shareholder balance 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. 3.(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 company Relationships with the Company
Keinin-Grand Ocean Thermal Technology (Dalian)
Affiliated company of the Company
Co., Ltd.
Dalian Fuji Bingshan Vending Machine Co., Ltd. Affiliated company of the Company
Dalian Fuji Bingshan Vending Machine Sales Co.,
Affiliated company of the Company
Ltd.
Jiangsu Jingxue Insulation Technology Co.,Ltd. Affiliated company of the Company
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. Affiliated company of the Company
Dalian Honjo Chemical Co., Ltd. Affiliated company of the Company
Dalian Bingshan Metal Technology Co.,Ltd. Affiliated company of the Company
Dalian Bingshan Group Huahuida Financial Leasing
Affiliated company of the Company
Co., Ltd.
Beijing Huashang Bingshan Refrigeration and Affiliated company between
Air-conditioning Machinery Co., Ltd. Jan.2022 and Nov.2022
Affiliated company between
Panasonic Appliances cold Chain(Dalian)Co.Ltd.
Jan.2022 and Nov.2022
Affiliated company between
Sonyo Compressor(Dalian)Co.,Ltd.
Jan.2022 and Oct.2022
Affiliated company between
Sonyo Refrigeration System (Dalian) Co., Ltd.
Jan.2022 and Oct.2022
Dalian Jingxue Freezing Equipment Co., Ltd. Subsidiary of its affiliated company
Shanghai Jingxue Freezing Equipment Co., Ltd. Subsidiary of its affiliated company
Jiangsu Jingxue Insulation Environmental
Subsidiary of its affiliated company
Engineering Co.,Ltd.
Wuhan Sikafu Power Control Equipment Co., Ltd. Affiliated company of its subsidiary
166
4. Other related parties
Name of related party Related party relationship
Company under direct/indirect Control of Both parties are under the control of or
Panasonic Co.,Ltd significant influence by the same party
Both parties are under the control of or
Sanyo Corporation
significant influence by the same party
Directors of the Company also serve as
Panasonic Corporation of China Co., Ltd
directors
Dalian Spindle Environmental Facilities Co., Ltd. Affiliated company of Dalian Bingshan Group
LINDE HYDROGEN FUELTECH (DALIAN)
Affiliated company of Dalian Bingshan Group
CO., LTD.
Dalian Shentong Electric Co., Ltd. Affiliated company of Dalian Bingshan Group
Dalian Fuji Bingshan Control System Co., Ltd. Affiliated company of Dalian Bingshan Group
BAC Dalian Co., Ltd. Affiliated company of Dalian Bingshan Group
Dalian Bingshan Huigu Development Co., Ltd. Joint Venture of Dalian Bingshan Group
Dalian Bingshan Part Technology Co.,LTD. Subsidiary of Dalian Bingshan Group
Alphavita Bio-scientific (Dalian) Co., Ltd. Subsidiary of Dalian Bingshan Group
Bingshan Technology Service （Dalian） Co., Ltd. Subsidiary of Dalian Bingshan Group
Subsidiary of Dalian Bingshan Group’s
Dalian Kaierwen Science Co.,Ltd.
Subsidiary(deregistered)
Directors and senior officers of the Company
Dalian Zhonghuida Refrigeration Technology Co., serve as directors and senior officers in Dalian
Ltd Zhonghuida Refrigeration Technology Co., Ltd
Company
Note: Companies under direct/indirect Control of Panasonic Co.,Ltd are Panasonic
Procurement(CHINA)Co.,Ltd, Panasonic Home Appliances
Air-Conditioning(Guangzhou)Co.,Ltd, Panasonic Appliances Air-Conditioning and
Refrigeration(Dalian)Co.,Ltd, Panasonic Appliances cold Chain(Dalian)Co.Ltd(December
2022), Panasonic Wanbao(Guangzhou) Compressor Co.,Ltd, Panasonic Industry (China) Co.,
Ltd, Panasonic Electronic Devices(Jiangmen)Co.,Ltd，Panasonic R&D Center Suzhou Co.,Ltd
Dalian Branch, Beijing 2nd Branch of Panasonic Electric Equipment (China）Co.,Ltd, Panasonic
Electric Taiwan Co.,Ltd, Panasonic Corporation, Panasonic Industry Sales Asia, Panasonic Do
Brasil Limitada-Miam, Panasonic Automotive & Industrial, Panasonic Appliances
Air-Conditioning, Panasonic Industrial Devices Sales, Panasonic Industry Europe GmbH,
Panasonic Life Solutions India, Panasonic Taiwan Co.,Ltd., Panasonic Commercial Equipment
Systems Asia Pacific, Panasonic Sales Taiwan Co.,Ltd, Panasonic Appliances Air-Conditioning
Malaysia Sdn.BHD, Panasonic Commercial Equipment Systems Taiwan Co.Ltd, Panasonic
India Pvt Ltd (APIN)
ii. Related Party transactions
1. Purchase of goods, offer and receive labour services etc inter-group transactions
(1) Purchase of goods/receive labour services
167
Related party Content Current year Last year
BAC Dalian Co., Ltd. Purchases of goods 32,827,251.97 26,483,606.45
Company under direct/indirect Control of
Purchases of goods 24,447,037.82 -
Panasonic Co.,Ltd
Dalian Bingshan Part Technology Co.,LTD. Purchases of goods 10,938,171.74 4,288,651.47
Dalian Bingshan Metal Technology Co.,Ltd. Purchases of goods 10,017,493.41 61,988.75
Dalian Shentong Electric Co., Ltd. Purchases of goods 9,480,036.79 -
Jiangsu Jingxue Insulation Technology
Purchases of goods 5,390,801.78 34,088,451.31
Co.,Ltd.
Sonyo Refrigeration System (Dalian) Co.,
Purchases of goods 4,947,268.89 8,212,752.63
Ltd.
Bingshan Technology Service （Dalian） Co.,
Purchases of goods 2,047,836.64 -
Ltd.
Dalian Fuji Bingshan Control System Co.,
Purchases of goods 1,718,811.27 -
Ltd.
Dalian Spindle Environmental Facilities Co.,
Purchases of goods 1,407,486.73 1,895,034.78
Ltd
Dalian Fuji Bingshan Vending Machine Co.,
Purchases of goods 753,944.37 2,018,187.51
Ltd
Sonyo Compressor(Dalian)Co.,Ltd. Purchases of goods 429,782.52 236,234.00
Bingshan Technology Service （Dalian） Co.,
Receive labour services 303,037.68 -
Ltd.
Dalian Honjo Chemical Co., Ltd Purchases of goods 140,522.12 152,920.35
Panasonic Appliances cold
Purchases of goods 135,529.36 8,274,236.08
Chain(Dalian)Co.Ltd
Dalian Bingshan Huigu Development Co.,
Purchases of goods 100,943.39 1,154,661.47
Ltd.
Dalian Fuji Bingshan Vending Machine Sales
Purchases of goods 78,761.06 330,309.73
Co., Ltd
Shanghai Jingxue Freezing Equipment Co.,
Purchases of goods 19,584.07 -
Ltd
Dalian Bingshan Group Co., Ltd. Receive labour services 18,792.45 27,471.70
Dalian Bingshan Group Refrigeration
Purchases of goods - 44,236,639.71
Equipment Co., Ltd
Panasonic Refrigeration (Dalian) Co., Ltd Purchases of goods - 5,942,676.17
Dalian Kaierwen Science Co.,Ltd Purchases of goods - 2,488,250.00
Total 105,203,094.06 139,892,072.11
(2) Sales of goods/ labour services provision
Related party Content Current year Last year
Company under direct/indirect Control of
Sales of goods 147,935,120.42 -
Panasonic Co.,Ltd
Panasonic Appliances cold Chain(Dalian)Co.Ltd Sales of goods 122,871,855.60 127,490,433.60
BAC Dalian Co., Ltd Sales of goods 65,002,512.47 54,676,218.06
Sonyo Compressor(Dalian)Co.,Ltd. Sales of goods 41,055,441.71 28,338,724.95
168
Related party Content Current year Last year
Bingshan Technology Service （Dalian） Co.,
Sales of goods 40,641,988.78 -
Ltd.
Sonyo Refrigeration System (Dalian) Co., Ltd. Sales of goods 23,645,169.22 35,590,082.15
Dalian Bingshan Group Huahuida Financial
Sales of goods 18,888,460.18 22,747,787.61
Leasing Co., Ltd
Dalian Fuji Bingshan Vending Machine Co., Ltd Sales of goods 18,327,608.54 19,081,218.00
Alphavita Bio-scientific (Dalian) Co., Ltd. Sales of goods 9,532,891.46 2,820,207.93
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. Sales of goods 5,537,667.76 16,781,616.57
Dalian Spindle Environmental Facilities Co., Ltd Sales of goods 3,240,535.34 7,572,022.06
Jiangsu Jingxue Insulation Technology Co.,Ltd Sales of goods 2,524,416.77 -
Dalian Bingshan Part Technology Co.,LTD Sales of goods 1,395,237.01 452,182.08
Linde Hydrogen Fueltech (Dalian) Co., Ltd Sales of goods 1,309,485.55 2,097,847.50
Dalian Fuji Bingshan Control System Co., Ltd. Sales of goods 654,160.22 297,951.75
Dalian Shentong Electric Co., Ltd Sales of goods 522,107.10 -
Dalian Bingshan Huigu Development Co., Ltd. Sales of goods 323,553.82 8,376,384.88
Dalian Jingxue Freezing Equipment Co., Ltd Sales of goods 102,957.82 1,099,672.68
Dalian Honjo Chemical Co., Ltd Sales of goods 91,981.13 -
Panasonic Refrigeration (Dalian) Co., Ltd. Sales of goods - 43,839,502.05
Keinin-Grand Ocean Thermal Technology
Sales of goods - -309,481.22
(Dalian) Co., Ltd
Dalian Bingshan Group Refrigeration
Sales of goods - 3,876,812.87
Equipment Co., Ltd
Beijing Huashang Bingshan Refrigeration and
Sales of goods - -41,476.27
Air-conditioning Machinery Co., Ltd
Wuhan Sikafu Power Control Equipment Co.,
Sales of goods - 2,831.86
Ltd
Total 503,603,150.90 374,790,539.11
2. Assets Lease
(1) Assets rent out
Last year
Category of Current year
Lessee Lease
assets rent out Lease Income
Income
Dalian Bingshan Huigu Development Co.,
Ltd. Land/property 8,189,918.99 8,190,302.14
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. Plant 3,809,523.80 3,809,523.80
Linde Hydrogen Fueltech (Dalian) Co., Ltd Plant 2,759,026.37 -
169
Last year
Category of Current year
Lessee Lease
assets rent out Lease Income
Income
Plant and
Dalian Jingxue Freezing Equipment Co., Ltd. 858,322.40 1,005,111.44
office
Wuhan Sikafu Power Control Equipment Co., Ltd Plant 730,954.13 308,074.95
Bingshan Technology Service （Dalian） Co., Ltd. Plant 443,699.06 -
Company under direct/indirect Control of Panasonic
Co.,Ltd Plant 336,180.42
Dalian Bingshan Group Co., Ltd. Office 132,110.09 132,110.09
Employee
Panasonic Appliances cold Chain(Dalian)Co.Ltd 3,465,470.95 37,577.98
dormitory
Employee
Sonyo Compressor(Dalian)Co.,Ltd - 91,428.56
dormitory
Employee
Panasonic Refrigeration (Dalian) Co., Ltd 49,321.09
dormitory
(2) Assets under lease
Category of Lease premium paid
Lessor assets rent in
Current year Last year
Dalian Bingshan Group Huahuida Financial
Fixed asset 28,659,750.85 22,918,173.13
Leasing Co., Ltd
(Continued)
Interests on lease liabilities Increased right-of-use assets
Lessor
Current year Last year Current year Last year
Dalian Bingshan Group
Huahuida Financial 698,321.11 1,217,094.64 -26,150,305.01 -77,007.29
Leasing 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. 31 long
term borrowings”.
4. Funds borrow from /lent to related party
Name of the Take Starting Ending
Amount Explanation
related party in/out date date
Dalian Bingshan Project fund
Group Co., Ltd. Take in 160,000,000.00 2016.03.14 2026.03.13 investment
Dalian Bingshan
Take in 32,833,000.00 2022.10.15 2024.09.15 Factoring
Group Huahuida
170
Financial Leasing
Co.,Ltd
Dalian Bingshan
Group Huahuida Sale and
Financial Leasing Take in 12,000,000.00 2022.01.07 2025.01.06 leaseback
Co.,Ltd
Dalian Bingshan
Group Huahuida Sale and
Financial Leasing Take in 13,805,309.73 2021.11.15 2026.11.15 leaseback
Co.,Ltd
Dalian Bingshan
Group Huahuida
Take in 10,000,000.00 2021.06.01 2024.05.01 Factoring
Financial Leasing
Co.,Ltd
Dalian Bingshan
Group Huahuida
Take in 8,619,474.00 2021.02.15 2023.01.15 Factoring
Financial Leasing
Co.,Ltd
Dalian Bingshan
Group Huahuida
Take in 5,481,000.00 2022.06.20 2024.06.10 Factoring
Financial Leasing
Co.,Ltd
Dalian Bingshan
Group Huahuida
Take in 5,063,480.54 2021.08.15 2023.07.15 Factoring
Financial Leasing
Co.,Ltd
Dalian Bingshan
Group Huahuida Sale and
Financial Leasing Take in 2,145,251.09 2021.06.15 2024.05.15 leaseback
Co.,Ltd
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 160 million Yuan in total, the loan interest is fixed interest rate
at 1.2% annual rate and paid interest 1,852,000Yuan for this year.
5. Asset transfer and debt restructuring among the related parties
Item Transaction Current year Last year
Sold shareholdings of
Dalian Bingshan Group Co.,Ltd 14,756,300.00
subsidiary
Dalian Zhonghuida Refrigeration Sold shareholdings of
6,472,000.00
Technology Co., LTD subsidiary
Panasonic Corporation of China Sold shareholdings of
70,990,000.00
Co., Ltd affiliated company
Panasonic Corporation of China Purchase shareholdings of
44,582,760.00
Co., Ltd affiliated company
Panasonic Appliances cold Purchase shareholdings of 37,152,300.00
171
Item Transaction Current year Last year
Chain(Dalian)Co.Ltd affiliated company
Purchase shareholdings of
Sanyo Corporation 929,148,000.00
affiliated company
Dalian Zhonghuida Refrigeration Purchase shareholdings of
- 45,400,000.00
Technology Co., LTD affiliated company
Total 1,103,101,360.00 45,400,000.00
The 2nd meeting of the 9th generation of board was held on 21st January 2022 and approved to
sell 100% of shareholding of Bingshan Technical Service （Dalian）Co.,Ltd to Dalian Bingshan
Group, Dalian Zhonghuida Refrigeration Technology Co., Ltd, Dalian Zhixintong Enterprise
Management Partnership (Limited partnership) at 25.8882 million Yuan, which is based on the
evaluated net asset as of October 31, 2021. 57% of shareholdings of Bingshan Technical Service
（Dalian） Co.,Ltd was transferred to Dalian Bingshan Group at price of 14.7563 million Yuan,
25% of shareholdings of Bingshan Technical Service （Dalian） Co.,Ltd was transferred to
Dalian Zhonghuida Refrigeration Technology Co., Ltd at price of at a price of 6.472million
Yuan and 18% of of shareholdings of Bingshan Technical Service （Dalian） Co.,Ltd was
transferred to Dalian Zhixintong Enterprise Management Partnership (Limited partnership) at
price of at a price of 4.6599million Yuan.
On November 19, 2022, the 11th meeting of the 9th directors’ meeting approved the transfer of
40% of the shareholdings of Panasonic Appliances cold Chain(Dalian)Co.Ltd to Panasonic
Corporation of china Co., Ltd. The share transfer price is based on the assessed value of
Panasonic Appliances cold Chain(Dalian)Co.Ltd’s net assets as of September 30, 2022, and the
transfer price is 70,990,000.00 Yuan. After the transaction, the company no longer holds the
shareholdings of Panasonic Appliances cold Chain(Dalian)Co.Ltd.
On September 27, 2022, the 8th meeting of the 9th directors’ meeting approved the purchase of
60% of the shareholdings of Sonyo Compressor(Dalian)Co.,Ltd from Sanyo
Electric(China)Co.,Ltd, and negotiated with Sanyo Electric(China)Co.,Ltd to determine the
share transfer consideration of 929,148,000.00 Yuan based on the assessed value of acquiree’s
net assets on May 31, 2022. After the transaction, Sonyo Compressor(Dalian)Co.,Ltd was
changed to a subsidiary of the Company. The directors’ meeting also approved the purchase of
30% of shareholdings of Sonyo Refrigeration System (Dalian) Co., Ltd. from Panasonic
Corporation of china Co., LTD and 25% shareholdings of Sonyo Refrigeration System (Dalian)
Co., Ltd from Panasonic Appliances cold Chain(Dalian)Co.Ltd, and negotiated with Panasonic
Corporation of china Co., LTD and Panasonic Appliances cold Chain(Dalian)Co.Ltd to
determine the share transfer consideration of 81,735,060.00 Yuan based on the assessed value of
respective acquiree’s net assets on May 31, 2022. After the transaction, Sonyo Refrigeration
System (Dalian) Co., Ltd was changed to a subsidiary of the Company.
172
6. Management Remuneration
Item Current year Last year
Total remuneration 4,895,800.00 3,711,500.00
7. Other transactions among the related parties
On September 27, 2022, the 8th meeting of the 9th directors’ meeting approved the purchase of
60% of the shareholdings of Sonyo Compressor(Dalian)Co.,Ltd from Sanyo
Electric(China)Co.,Ltd, and negotiated with Sanyo Electric(China)Co.,Ltd to determine the
share transfer consideration of 929,148,000.00 Yuan based on the assessed value of acquiree’s
net assets on May 31, 2022. After the transaction, Sonyo Compressor(Dalian)Co.,Ltd was
changed to a subsidiary of the Company. The directors’ meeting also approved the purchase of
30% of shareholdings of Sonyo Refrigeration System (Dalian) Co., Ltd. from Panasonic
Corporation of china Co., LTD and 25% shareholdings of Sonyo Refrigeration System (Dalian)
Co., Ltd from Panasonic Appliances cold Chain(Dalian)Co.Ltd, and negotiated with Panasonic
Corporation of china Co., LTD and Panasonic Appliances cold Chain(Dalian)Co.Ltd to
determine the share transfer consideration of 81,735,060.00 Yuan based on the assessed value of
respective acquiree’s net assets on May 31, 2022. After the transaction, Sonyo Refrigeration
System (Dalian) Co., Ltd was changed to a subsidiary of the Company.
On November 19, 2022, the 11th meeting of the 9th directors’ meeting approved the transfer of
40% of the shareholdings of Panasonic Appliances cold Chain(Dalian)Co.Ltd to Panasonic
Corporation of china Co., Ltd. The share transfer price is based on the assessed value of
Panasonic Appliances cold Chain(Dalian)Co.Ltd’s net assets as of September 30, 2022, and the
transfer price is 70,990,000.00 Yuan. After the transaction, the company no longer holds the
shareholdings of Panasonic Appliances cold Chain(Dalian)Co.Ltd.
iii. Balances with Related party
1.Accounts receivable due from related parties
Closing Balance
Item Related party Bad debt
Book Balance
Provision
Accounts receivable Company under direct/indirect 145,605,125.57 11,219,927.46
Control of Panasonic Co.,Ltd
Accounts receivable BAC Dalian Co., Ltd 17,739,655.64 1,245,323.82
Accounts receivable Dalian Fuji Bingshan Vending 7,292,421.55 548,862.49
Machine Co., Ltd
173
Closing Balance
Item Related party Bad debt
Book Balance
Provision
Accounts receivable Bingshan Technology Service 5,804,599.87 426,864.25
（Dalian） Co., Ltd.
Accounts receivable MHI Bingshan Refrigeration 3,981,739.22 279,518.10
(Dalian) Co.,Ltd.
Accounts receivable Dalian Bingshan Part Technology 2,426,739.72 250,341.12
Co.,LTD
Accounts receivable Dalian Bingshan Group Huahuida 2,411,867.26 169,313.08
Financial Leasing Co., Ltd
Accounts receivable Alphavita Bio-scientific (Dalian) 1,224,109.36 85,932.48
Co., Ltd.
Accounts receivable Dalian Bingshan Huigu 1,139,243.27 255,895.91
Development Co., Ltd.
Accounts receivable Linde Hydrogen Fueltech 841,284.21 59,058.15
(Dalian) Co., Ltd
Accounts receivable Dalian Spindle Environmental 750,121.11 52,658.50
Facilities Co., Ltd
Accounts receivable Dalian Fuji Bingshan Control 550,800.00 49,630.32
System Co., Ltd.
Accounts receivable Dalian Shentong Electric Co., Ltd 94,897.33 6,661.79
Contract asset Company under direct/indirect
Control of Panasonic Co.,Ltd 1,982,037.10 612,603.41
Contract asset Dalian Bingshan Huigu
Development Co., Ltd. 109,569.10 19,340.79
Prepayment Dalian Shentong Electric Co., Ltd 8,402,006.53 -
Prepayment Company under direct/indirect
Control of Panasonic Co.,Ltd 3,825,488.41
Prepayment Bingshan Technology Service
（Dalian） Co., Ltd. 825,789.25 -
Prepayment Dalian Bingshan Group Huahuida
Financial Leasing Co., Ltd 308,310.02 -
Prepayment BAC Dalian Co., Ltd 58,513.00 -
Prepayment Dalian Spindle Environmental
Facilities Co., Ltd 36,455.00 -
Dalian Fuji Bingshan Vending
Other receivable Machine Co., Ltd 278,020.00 10,175.53
Bingshan Technology Service
Other receivable 100,000.00 69,410.00
（Dalian） Co., Ltd.
(Continued)
Opening Balance
Item Related party Bad debt
Book Balance
Provision
Accounts receivable Panasonic Appliances cold
Chain(Dalian)Co.Ltd 37,390,849.92 2,624,837.66
Accounts receivable BAC Dalian Co., Ltd 12,548,585.90 880,910.73
174
Opening Balance
Item Related party Bad debt
Book Balance
Provision
Accounts receivable Beijing Huashang Bingshan
Refrigeration and Air-conditioning 10,125,260.53 6,110,824.22
Machinery Co., Ltd
Accounts receivable Panasonic Refrigeration (Dalian)
Co., Ltd 6,861,805.71 481,698.76
Accounts receivable Dalian Fuji Bingshan Vending
Machine Co., Ltd 5,656,023.33 398,096.17
Accounts receivable Sonyo Refrigeration System (Dalian)
Co., Ltd. 4,963,341.40 348,426.57
Accounts receivable Sonyo Compressor(Dalian)Co.,Ltd. 4,021,698.75 282,323.25
Accounts receivable Dalian Spindle Environmental
Facilities Co., Ltd 1,942,559.40 136,367.67
Accounts receivable MHI Bingshan Refrigeration
(Dalian) Co.,Ltd. 1,803,184.94 126,583.58
Accounts receivable Alphavita Bio-scientific (Dalian)
Co., Ltd. 1,164,159.66 81,724.01
Accounts receivable Dalian Bingshan Huigu Development
Co., Ltd. 439,268.00 63,813.46
Accounts receivable Dalian Fuji Bingshan Control
System Co., Ltd. 175,200.00 12,299.04
Contract asset Sonyo Refrigeration System (Dalian)
Co., Ltd. 166,000.00 27,788.40
Contract asset Panasonic Refrigeration (Dalian)
Co., Ltd 11,000.00 772.2
Contract asset Dalian Bingshan Group Refrigeration
Equipment Co., Ltd - 12,555.00
Prepayment Panasonic Refrigeration (Dalian)
Co., Ltd 3,161,000.00 -
Prepayment Sonyo Refrigeration System (Dalian)
Co., Ltd. 2,225,656.57 -
Prepayment BAC Dalian Co., Ltd 1,607,378.00 -
Prepayment Dalian Bingshan Group Huahuida
951,659.80 -
Financial Leasing Co., Ltd
Prepayment Dalian Spindle Environmental
341,215.00 -
Facilities Co., Ltd
Panasonic Appliances cold
Receivable financing 18,720,000.00 -
Chain(Dalian)Co.Ltd
Receivable financing BAC Dalian Co., Ltd 7,341,688.27 -
Sonyo Refrigeration System (Dalian)
Receivable financing 4,197,610.38 -
Co., Ltd.
Dalian Fuji Bingshan Vending
Receivable financing 2,060,929.41 -
Machine Co., Ltd
Panasonic Refrigeration (Dalian)
Receivable financing 242,878.69 -
Co., Ltd
Wuhan Sikafu Power Control
Other receivable 148,423.28 6,189.25
Equipment Co., Ltd
Panasonic Appliances cold
Other receivable 18,079.63 753.92
Chain(Dalian)Co.Ltd
175
2. Accounts Payable due from Related Party
Closing Opening
Item Related party
Balance Balance
Accounts Jiangsu Jingxue Insulation
Payable Technology Co.,Ltd 68,660,038.43 4,512,235.92
Accounts
BAC Dalian Co., Ltd 20,678,948.10 11,326,144.36
Payable
Accounts Dalian Bingshan Metal Technology
Payable Co.,Ltd 14,347,841.71 70,047.29
Accounts Company under direct/indirect
Payable Control of Panasonic Co.,Ltd 10,591,357.69 -
Accounts Dalian Bingshan Part Technology
Payable Co.,LTD 7,264,112.80 3,921,294.33
Accounts Jiangsu Jingxue Insulation
Payable Environmental Engineering Co.,Ltd 2,896,300.00 -
Accounts Dalian Fuji Bingshan Control
Payable System Co., Ltd. 1,942,256.73 -
Accounts
Dalian Shentong Electric Co., Ltd 1,396,176.88
Payable
Accounts Dalian Spindle Environmental
Payable Facilities Co., Ltd 1,247,400.00 1,160,849.00
Accounts Bingshan Technology Service
Payable （Dalian） Co., Ltd. 282,405.30 -
Accounts Panasonic Appliances cold
Payable Chain(Dalian)Co.Ltd - 187,071.99
Accounts Panasonic Refrigeration (Dalian)
Payable Co., Ltd - 1,350,094.85
Accounts
Dalian Kaierwen Science Co.,Ltd - 128,750.00
Payable
Accounts Dalian Bingshan Group
18,626,438.61
Payable Refrigeration Equipment Co., Ltd
Accounts Dalian Fuji Bingshan Vending
- 145,500.00
Payable Machine Sales Co., Ltd
Accounts Sonyo Refrigeration System
- 17,401,521.28
Payable (Dalian) Co., Ltd.
Accounts
Sonyo Compressor(Dalian)Co.,Ltd. - 1,785,651.94
Payable
Company under direct/indirect
Other payable 4,502,046.38 -
Control of Panasonic Co.,Ltd
Jiangsu Jingxue Insulation
Other payable 666,864.48 70,000.00
Technology Co.,Ltd
MHI Bingshan Refrigeration
Other payable 170,000.00 170,000.00
(Dalian) Co.,Ltd.
Dalian Jingxue Freezing Equipment
Other payable 70,000.00 -
Co., Ltd
Dalian Bingshan Group Huahuida
Other payable 1,172.61 -
Financial Leasing Co., Ltd
Dalian Fuji Bingshan Vending
Other payable - 268,500.00
Machine Sales Co., Ltd
Panasonic Refrigeration (Dalian)
Other payable - 19,500.00
Co., Ltd
Dalian Bingshan Group Huahuida
Contract liability 4,206,191.86 -
Financial Leasing Co., Ltd
176
Closing Opening
Item Related party
Balance Balance
Linde Hydrogen Fueltech (Dalian)
Contract liability 2,274,454.09
Co., Ltd
Company under direct/indirect
Contract liability 1,299,686.95 -
Control of Panasonic Co.,Ltd
Dalian Spindle Environmental
Contract liability 736,424.50 -
Facilities Co., Ltd
Panasonic Appliances cold
Contract liability - 1,819,735.06
Chain(Dalian)Co.Ltd
Sonyo Refrigeration System
Contract liability - 1,410,975.05
(Dalian) Co., Ltd.
Panasonic Refrigeration (Dalian)
Contract liability - 2,831.86
Co., Ltd
Wuhan Sikafu Power Control
Contract liability - 76,228.67
Equipment Co., Ltd
Notes Payable BAC Dalian Co., Ltd - 3,932,858.40
Dalian Bingshan Group
Notes Payable - 7,377,503.92
Refrigeration Equipment Co., Ltd
Notes Payable Dalian Honjo Chemical Co., Ltd - 172,800.00
Dalian Bingshan Part Technology
Notes Payable - 880,000.00
Co.,Ltd
Jiangsu Jingxue Insulation
Notes Payable - 492,450.00
Technology Co.,Ltd
Panasonic Appliances cold
Notes Payable - 1,657,321.00
Chain(Dalian)Co.Ltd
Dalian Spindle Environmental
Notes Payable - 1,517,200.00
Facilities Co., Ltd
Other current Dalian Bingshan Group Huahuida
liability Financial Leasing Co., Ltd 546,804.94 -
Other current Company under direct/indirect
liability Control of Panasonic Co.,Ltd 130,044.39 -
Other current Dalian Spindle Environmental
liability Facilities Co., Ltd 81,006.69
Dalian Bingshan Group Huahuida
Lease payable 983,501.51 4,055,686.70
Financial Leasing Co., Ltd
Non-current
Dalian Bingshan Group Huahuida
liability due 34,388,781.83 25,727,284.78
Financial Leasing Co., Ltd
within 1 year
Long term Dalian Bingshan Group Huahuida
payable Financial Leasing Co., Ltd.. 31,009,644.16 23,543,375.62
iv. Related Party Commitment
None
v. Others
None
XII. Share-Based Payment
None
177
XIII. Contingency
1. Up to December 31, 2022, guarantee obligations undertaken by the Company due to
financial leasing.
The Company sold refrigerating house equipment to Guizhou Pubu Cold Chain Food
Investment Co.,Ltd (“Pubu Cold Chain”) in the form of financial leasing. 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
2022, the balance of the guarantee obligation of the financial lease is RMB 15,390,200Yuan.
The Company sold water chiller and heat pump to Shangdong Jiechuang Energy Technology
Co.,Ltd (“Shandong Jiechuang”) in the form of financial lease. The Company as a seller singed
finance lease contract with Huahuida as a buyer as well as a lessor and Shandong Jiechuang as a
lessee. The contract price is 6.998million Yuan. Shandong Jiechuang had made 10% down
payment, and remaining 6.2982million Yuan is underlined the leasing contract amount. 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. Shandong Jiechuang 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 financial
lease. As at 31 December 2022, the balance of the guarantee obligation of the financial lease is
RMB 6,840,500Yuan.
The Company sold refrigerating house equipment to Liuyang Zhongjie Technology Investment
Co.,Ltd (“Liuyang Zhongjie”) in the form of financial lease. The Company as a seller singed
finance lease contract with Huahuida as a buyer as well as a lessor and Liuyang Zhongjie as a
lessee. The contract price is 9.831million 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. Liuyang Zhongjie 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 financial lease. As at 31 December, 2022, the
balance of the guarantee obligation of the financial lease is RMB 7.9839million Yuan.
Until 31 December, 2022, the balance of all guarantee obligation of the financial lease is RMB
30,214,600 Yuan. There is no situation where the Company needs to undertake the liability as
178
the lessees’ default.
2. In April, 2020, Dalian Ruixing Iron Core Manufacturing Co.,Ltd( “Dalian Ruixing”) sued
the Company’s subsidiary, Sonyo Compressor(Dalian)Co.,Ltd for not fulfilling the purchase
contract signed. Sonyo Compressor(Dalian)Co.,Ltd made a provision of 18,263,806.71Yuan
based on the legal advice. In March 2021, Dalian Ruixing formally filed a lawsuit, the amount
of litigation is 13,691,985.28 yuan. As of December 31, 2022, no final judgment has been
issued, and Songyang Compressor made a provision of 13,691,985.28 yuan
As at 31 December 2022, The Company does not have any other contingencies for disclosure
apart from the above matters.
XIV. Commitment
As at 31 December 2022, The Company does not have any other significant commitments.
XV. Events after the Balance Sheet Date
1. Unadjusted significant events
None
2. Information about profit distribution
Item Content
Planned profit/ dividend distribution 8,432,125.07
The 13th meeting of the 9th generation of board was
held on 25th April 2023 and approved the profit
distribution policy for the year of 2022, based on
Profit/dividend approved for
843,212,507.00 numbers of share in total, paying
distribution declaration
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.
179
2. Debt Restructuring
There is no significant debt restructuring during the year.
3. Asset exchange
(1) The exchange of non-monetary assets
No.
(2) The exchange of other assets
No.
4. Annuity Plan
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 generate 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
180
Amount unit ：Ten thousand Yuan
Northeast Central
Items East China Offset Total
China China
1 Operating income 329,753.07 28,130.51 129.51 -68,704.56 289,308.53
2 Cost 296,064.78 26,170.39 133.34 -68,615.63 253,752.88
Impairment loss on
-6,131.98 -981.34 - -369.26 -7,482.58
assets
Impairment loss on
-5,810.30 -963.12 - -1,496.12 -8,269.54
credit
Depreciation and
8,967.14 828.02 - 93.90 9,889.06
amortization
3 Investment income from
-3,690.95 43.28 - -74.22 -3,721.89
associates and joint venture
4 Operating profits(loss) 6,520.71 -4,104.45 -105.48 -216.42 2,094.36
5 Income tax 382.15 -4.71 - -271.99 105.45
6 Net profit(loss) 6,138.56 -4,099.74 -105.48 55.57 1,988.91
7 Total assets 984,351.64 50,918.56 - -275,076.66 760,193.54
8 Total liabilities 491,012.20 40,409.64 - -77,255.19 454,166.65
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 %
Bad debt provision
on individual basis
Bad debt provision
737,611,736.89 100.00 107,657,087.39 14.60 629,954,649.50
on group
(1) Accounting
age as 388,615,076.25 52.69 107,657,087.39 27.70 280,957,988.86
characters
(2) Related party
within
348,996,660.64 47.31 - - 348,996,660.64
consolidation
scope
Total 737,611,736.89 100.00 107,657,087.39 14.60 629,954,649.50
(Continued)
181
Opening Balance
Item Booking balance Provision Booking
Amount % Amount % balance
Bad debt provision
on individual basis
Bad debt provision
490,329,366.12 100.00 81,610,090.34 16.64 408,719,275.78
on group
(1) Accounting age
279,002,384.85 56.90 81,610,090.34 29.25 197,392,294.51
as characters
(2) Related party
within
211,326,981.27 43.10 - - 211,326,981.27
consolidation
scope
Total 490,329,366.12 100.00 81,610,090.34 16.64 408,719,275.78
1) No individual bad debt provisions this year.
2) Bad debt provisions on group basis is accrued under accounting aging analysis method:
Closing Balance
Aging Provision for bad Drawing Proportion
Accounts receivable
debts (%)
Within 1 year 187,416,105.23 13,156,610.59 7.02
1-2 years 71,782,073.34 12,016,319.08 16.74
2-3 years 56,755,645.42 17,497,765.48 30.83
3-4 years 3,330,453.62 1,642,912.77 49.33
4-5 years 21,498,453.03 15,511,133.86 72.15
Over 5 years 47,832,345.61 47,832,345.61 100.00
Total 388,615,076.25 107,657,087.39 -
(2) Bad debt provision
Aging Closing Balance
Within 1 year 536,467,765.87
1-2 years 71,727,073.34
2-3 years 56,755,645.42
3-4 years 3,330,453.62
4-5 years 21,498,453.03
Over 5 years 47,832,345.61
Total 737,611,736.89
(3) Bad debt provision
182
Change during the year Closing
Balance
Category Opening balance
Accrued Collected/
Written-off Other
reversed
Bad debt
81,610,090.34 27,759,518.59 1,714,782.00 2,260.46 107,657,087.39
provision
Total 81,610,090.34 27,759,518.59 1,714,782.00 2,260.46 107,657,087.39
(4) Accounts receivable written off in current period.
Item Written off amount
Receivable actually written off 1,714,782.00
Key debtors written off
Related
Company name Nature Amount Reason Procedures
party
Anyang ZHongpin
Trade bankruptcy and CEO
Food Industry 1,620,000.00 N
receivable Insolvency approval
Co.,Ltd.
Petro China Receivable
Trade CEO
Company Limited 43,800.00 deduction due to N
receivable approval
Urumqi Branch
site matter
Henan Energy and
going concern
Chemical Industry Trade CEO
35,000.00 and unable to N
Group Guolong receivable approval
pay
Logistics Co.,ltd
Zhejiang Jiahua
Trade CEO
Energy Chemical 11,180.00 Site repair N
receivable approval
Industry Co.,Ltd.
Shandong Silver
Embellish Trade CEO
4,802.00 Site repair N
Biological receivable approval
Chemical Co.,Ltd.
Total — 1,714,782.00 — — —
(5) Based on closing balance ranking, sum of the top five significant debtors are
114,653,244.00 Yuan, representing 15.54% of total receivables at the year end.
41,874,847.01Yuan bad debt provision is provided respectively.
2. Other Receivables
Item Closing Balance Opening Balance
Interest receivable
Dividend receivable - 25,100,920.84
Other receivable 36,021,805.53 29,121,904.34
183
Total 36,021,805.53 54,222,825.18
2.1 Dividend receivable
Item Closing Balance Opening Balance
Bingshan Technology Service （Dalian） Co., Ltd 24,148,920.84
Guotai Junan Securities 952,000.00
Total 25,100,920.84
2.2 Other receivable
(1) The category of other receivables
Items Closing Balance Opening Balance
Receivables and payables 22,444,622.16 20,112,243.72
Deposits 13,733,003.58 10,466,237.65
Petty cash 589,402.48 344,848.03
Total 36,767,028.22 30,923,329.40
(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
602,860.06 - 1,198,565.00 1,801,425.06
balance
Opening
balance during — — —
the year
--transfer to
the 2nd stage
--transfer to
-98,565.00 - 98,565.00 -
the 3rd stage
--reverse to
the 2nd stage
----reverse to
1,198,565.00 - -1,198,565.00 -
the 1st stage
Accrued - - 50,173.10 50,173.10
184
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)
Reverse 1,106,375.47 - - 1,106,375.47
Cancelation
Written off
Other
movement
Closing
596,484.59 - 148,738.10 745,222.69
balance
(3) Other receivable listed by account aging
Aging Closing Balance
Within 1 year 10,080,508.11
1-2 years 4,307,883.00
2-3 years 20,750,000.00
3-4 years 430,072.11
4-5 years -
Over 5 years 1,198,565.00
Total 36,767,028.22
(4) Bad debt provision.
Change during the year
Opening Closing
Category Accrued Collected/reve
balance Written-off Balance
rsed
Bad debt
1,801,425.06 1,056,202.37 745,222.69
provision
Total 1,801,425.06 1,056,202.37 745,222.69
185
(5) Other receivables from the top 5 debtors
% of Closing
Closing
Name Category Aging the total Balance of
Balance
OR Provision
Xiangfan Zhende Meat
Foodstuff Co.,Ltd. Receivable 1,532,867.61 Within 1 year 4.17 56,102.95
Dalian Delta HK
Deposit 1,100,000.00 Over5 years, 2.99 40,260.00
China Gas Co., Ltd.
Xinjiang Dongfang
Bid deposit 1,000,000.00 1-2 years 2.72 36,600.00
New Energy Co.,Ltd
Ningxia Crystal New
Bid deposit 1,000,000.00 Within 1 year 2.72 36,600.00
Energy Materials
Security
Hebei Veyong Bio- deposit for
865,980.00 1-2 years 2.36 31,694.87
Chemical Co.,Ltd fulfil the
contract
Total 5,498,847.61 14.96 201,257.82
186
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 2,163,545,361.29 - 2,163,545,361.29 696,262,267.08 - 696,262,267.08
Investment of affiliates
557,452,792.51 - 557,452,792.51 1,227,131,957.97 - 1,227,131,957.97
and JV
Total 2,720,998,153.80 - 2,720,998,153.80 1,923,394,225.05 - 1,923,394,225.05
(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 45,272,185.00 45,272,185.00
Dalian Bingshan Guardian
Automation Co., Ltd 6,872,117.80 43,766,243.72 50,638,361.52
Dalian Bingshan-RYOSETSU Quick
Freezing Equipment Co., Ltd 59,356,051.19 - 59,356,051.19
Dalian Universe Thermal
Technology Co.,Ltd 48,287,589.78 - 48,287,589.78
187
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 Technology 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 Engineering &
Trading Co., Ltd 71,537,064.86 - - 71,537,064.86
Sonyo Compressor(Dalian)Co.,Ltd 1,380,455,603.23 - 1,380,455,603.23
Sonyo Refrigeration System (Dalian)
Co., Ltd 108,851,490.98 - 108,851,490.98
Total 696,262,267.08 1,533,073,337.93 65,790,243.72 2,163,545,361.29
(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
Appliances cold 90,330,037.43 - 20,702,064.56 -69,597,984.87 -29,988.00 - -
Chain(Dalian)Co.Lt
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
d
Beijing Huashang
Bingshan
Refrigeration and 2,139,942.18 - 2,442,782.42 302,840.24 - -
Air-conditioning
Machinery Co., Ltd
Dalian Honjo
Chemical Co., Ltd 8,926,266.52 892,830.28 - - - - - 9,819,096.80
Keinin-Grand
Ocean Thermal
Technology 58,799,068.28 - - 3,290,245.23 - - 2,000,000.00 - - 60,089,313.51
(Dalian) Co., Ltd
Dalian Fuji
Bingshan Vending 148,656,014.75 - - -37,554,674.82 - - - - - 111,101,339.93
Machine Co., Ltd
MHI Bingshan
Refrigeration 14,923,803.87 - - 477,305.23 - - - - - 15,401,109.10
(Dalian) Co., Ltd.
Dalian Fuji
Bingshan Vending
Machine Sales Co., - - - -
Ltd
Jiangsu Jingxue
Insulation 201,731,528.04 - 63,957,497.85 7,082,562.57 - - 4,732,344.00 - - 140,124,248.76
Technology Co.,Ltd
Bingshan Metal
Technical Service
（Dalian） Co., 168,294,942.93 - - 30,420,886.58 - - 23,402,022.05 - - 175,313,807.46
Ltd.
Dalian Bingshan
Group Huahuida 44,789,319.55 - 1,502,255.10 - - 687,697.70 - - 45,603,876.95
189
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
Financial Leasing
Co., Ltd
Sonyo
Compressor(Dalian) 460,060,249.49 451,307,603.23 25,369,353.74 - - 34,122,000.00 - - -
Co.,Ltd
Sonyo
Refrigeration
System (Dalian) 28,480,784.93 27,116,430.98 162,691.50 - - 1,527,045.45 - -
Co., Ltd
Total 1,227,131,957.97 565,526,379.04 -37,651,689.22 -29,988.00 - 66,471,109.20 - - 557,452,792.51
190
4. Operating revenue and cost
Item Current year Last year
Revenue Cost Revenue Cost
Revenue from main
976,567,011.13 853,599,677.62 785,491,401.27 707,799,558.39
operation
Revenue from other
71,575,982.20 56,250,851.97 48,010,534.28 29,323,036.07
operation
Total 1,048,142,993.33 909,850,529.59 833,501,935.55 737,122,594.46
5. Investment income
Items Current year Last year
Long-term equity investment gain under cost method 153,482,615.76 32,102,543.64
Long-term equity investment gain under equity method -37,651,689.22 -85,723,133.07
Gain from disposing long-term equity investment 110,083,973.75 27,665,072.62
Gain from holding of other non-current financial assets 20,657,215.39 7,229,604.48
Gain from disposal of other non-current financial assets 43,296,525.04 2,620,417.98
Total 289,868,640.72 -16,105,494.35
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 25, 2023.XIV. 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 109,194,830.34
Override, no formal approval or accidental tax refund, deduction or
-
exemption
Government grants recorded into profit or loss 11,878,746.43
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
191
Items Current year Notes
Profit or loss from debts restructuring 230,467.42
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
-2,019,000.00
the Company
Gain/loss from change of fair value by holding the tradable financial
asset and liabilities, derivatives and or disposing of the tradable
-3,694,509.36
financial asset and liabilities, derivatives 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.
Custodian fees obtained from entrusted operations -
Non-operating revenue and expense besides the above items 8,754,118.59
Other profit or loss 170,729,805.79
Subtotal 295,074,459.21
Effect on income tax 2,961,966.70
Attributable to minority shareholders’ equity (after tax) 397,014.88
Total 291,715,477.63
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 2022 annual weighted average net Return on assets, basic earnings per share and
diluted earnings per share are as follows:
192
Weighted Earnings per share
average (EPS)
Profit of report period return on Basic Diluted
net assets EPS EPS
(%)
Net profit attributable to shareholders of parent company 0.61 0.02 0.02
Net profit after deducting non-recurring gains and losses
-9.10 -0.32 -0.32
attributable to shareholders of parent company
Bingshan Refrigeration & Heat TransferTechnologies Co., Ltd.
April 26, 2023
193
