Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD.
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2023
(NOT AUDITED)
1
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
BALANCE SHEET
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. June 30, 2023 Unit: RMB Yuan
30-June-2023 1-Jan-2023
Items
Consolidation Parent Company Consolidation Parent Company
Current assets:
Monetary funds 935,314,724.32 121,338,274.25 1,006,165,899.18 361,446,559.26
Financial assets which are measured by fair value and
which changes are recorded in current profit and loss
Derivative financial assets
Transaction financial assets
Notes receivable 436,138,232.96 73,504,466.57 505,945,261.18 100,218,283.64
Accounts receivable 1,556,250,566.33 748,681,197.81 1,409,978,442.95 629,954,649.50
Receivables financing 289,036,299.90 46,450,544.61 58,792,792.70 12,451,483.74
Accounts paid in advance 181,132,850.78 86,549,600.31 171,991,468.12 61,446,678.23
Other receivables 56,174,612.60 41,937,269.90 51,394,474.24 36,021,805.53
Interest receivables
Dividend receivable 4,361,299.55 10,184,798.49 14,495.00
Inventories 1,564,068,652.36 366,751,018.14 1,395,344,780.24 342,276,945.65
Contract assets 295,009,088.87 108,391,267.34 225,790,875.78 83,739,043.68
Assets held for sale
Non-current asset due within one year 12,571,309.30 12,571,309.30 15,715,631.52 15,715,631.52
Other current assets 72,026,226.30 234,800.41 33,499,577.60 565,836.48
Total current assets 5,397,722,563.72 1,606,409,748.64 4,874,619,203.51 1,643,836,917.23
Non-current assets:
Finance asset held available for sales
Held-to-maturity investment
Long-term account receivable 5,162,458.90 5,162,458.90 5,162,458.90 5,162,458.90
Long-term equity investment 560,434,511.74 2,861,738,379.20 562,987,771.94 2,720,998,153.80
Other Non-current financial assets 154,314,864.51 152,999,722.01 149,950,861.31 148,635,718.81
Investment property 113,680,574.74 88,683,297.10 115,332,918.20 90,986,890.03
Fixed assets 1,311,960,863.65 624,832,328.27 1,229,029,368.93 646,432,825.98
Construction in progress 120,460,980.49 58,072,120.16 115,577,902.54 48,905,875.93
Right of use assets 17,252,776.14 13,737,818.45 30,941,662.26 14,975,625.90
Engineering material
Disposal of fixed asset
Productive biological asset
Oil and gas asset
Intangible assets 200,766,768.53 70,101,114.73 168,076,720.07 72,158,994.17
Expense on Research and Development
Goodwill 270,800,976.03 - 248,345,508.41 -
Long-term expenses to be apportioned 6,061,988.51 4,994,056.53 6,486,566.92 5,553,733.11
Deferred income tax asset 100,110,654.25 23,177,703.42 95,424,386.61 21,597,992.46
Other non-current asset
Total non-current asset 2,861,007,417.49 3,903,498,998.77 2,727,316,126.09 3,775,408,269.09
Total assets 8,258,729,981.21 5,509,908,747.41 7,601,935,329.60 5,419,245,186.32
Current liabilities:
Short-term loans 285,525,821.90 229,000,000.00 274,052,990.15 234,980,000.00
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Financial liabilities which are measured by fair value
and which changes are recorded in current profit and
loss
Derivative financial liabilities
Transaction financial liabilities
Notes payable 702,812,950.62 299,694,457.74 618,944,384.85 259,002,815.07
Accounts payable 1,772,786,424.04 417,924,008.98 1,586,098,060.59 406,794,291.57
Accounts received in advance
Contract liabilities 778,394,477.23 148,129,305.72 647,645,820.57 139,622,706.08
Wage payable 99,905,376.28 97,305.73 118,216,683.23 14,557,783.63
Taxes payable 27,175,496.50 6,213,244.20 33,691,523.62 9,430,543.11
Other accounts payable 81,615,830.24 24,066,504.88 67,054,250.25 21,061,597.80
Interest payable
Dividend payable 8,965,281.07 8,965,281.07 533,156.00 533,156.00
Liabilities held for sale
Non-current liabilities due within one year 103,835,713.78 85,205,472.33 63,105,954.56 42,972,752.44
Other current liabilities 321,182,483.03 76,380,653.81 204,650,003.24 106,146,986.20
Total current liabilities 4,173,234,573.62 1,286,710,953.39 3,613,459,671.06 1,234,569,475.90
Non-current liabilities:
Long-term loans 739,400,000.00 739,400,000.00 715,100,000.00 715,100,000.00
Bonds payable
Preferred stock
Perpetual bond
Lease liability 18,816,652.85 11,714,291.84 11,230,532.05 12,613,986.87
Long-term account payable 27,261,665.26 8,079,947.11 31,009,644.16 12,908,810.87
Long-term wage payable
Special Payable
Anticipation liabilities 15,266,933.73 18,805,967.43
Deferred income 98,148,550.01 59,553,048.01 99,754,346.39 61,685,846.39
Deferred income tax liabilities 66,823,727.27 22,705,866.88 52,306,365.68 20,603,550.11
Other non-current liabilities
Total non-current liabilities 965,717,529.12 841,453,153.84 928,206,855.71 822,912,194.24
Total liabilities 5,138,952,102.74 2,128,164,107.23 4,541,666,526.77 2,057,481,670.14
Shareholders’ equity
Share capital 843,212,507.00 843,212,507.00 843,212,507.00 843,212,507.00
Other equity instruments
Preferred stock
Perpetual bond
Capital public reserve 717,097,098.38 755,146,592.54 717,097,098.38 755,146,592.54
Less: Treasury stock
Other comprehensive income 2,208,669.73 1,246,569.06 2,208,669.73 1,246,569.06
Special preparation
Surplus public reserve 825,226,634.15 825,226,634.15 825,226,634.15 825,226,634.15
Generic risk reserve
Retained profit 675,860,321.80 956,912,337.43 618,445,922.58 936,931,213.43
Total owner’s equity attributable to parent company 3,063,605,231.06 3,381,744,640.18 3,006,190,831.84 3,361,763,516.18
Minority interests 56,172,647.41 - 54,077,970.99 -
Total owner’s equity 3,119,777,878.47 3,381,744,640.18 3,060,268,802.83 3,361,763,516.18
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Total liabilities and shareholder’s equity 8,258,729,981.21 5,509,908,747.41 7,601,935,329.60 5,419,245,186.32
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
4
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
INCOME STATEMENT
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. January-June, 2023 Unit: RMB Yuan
January-June, 2023 January-June, 2022
Items
Consolidation Parent Company Consolidation Parent Company
I. Total sales 2,327,536,713.05 561,507,191.57 1,291,858,908.71 468,001,628.25
II. Total operating cost 2,244,978,370.92 561,507,191.57 1,304,025,021.32 486,496,189.37
Including: Operating cost 1,941,335,530.42 462,573,454.21 1,131,915,209.09 407,577,362.51
Taxes and associate charges 17,209,585.63 6,734,597.24 9,791,372.03 5,558,409.19
Selling and distribution expenses 98,211,645.02 24,951,968.65 55,209,408.15 20,533,128.73
Administrative expenses 103,515,309.49 31,968,790.92 70,074,155.71 34,892,044.21
R&D expenses 68,628,817.97 15,845,215.75 31,564,520.91 14,040,048.85
Financial expense 16,077,482.38 14,942,066.91 5,470,355.43 3,863,954.55
Including: interest expense 19,165,466.43 14,246,006.33 7,533,477.17 4,561,734.35
interest income 5,451,984.39 735,367.41 2,004,850.77 1,542,821.77
Add: Other income 1,814,789.04 100,000.00 1,984,170.62 31,241.33
Gain/(loss) from investment 6,848,068.69 29,661,828.13 83,743,763.15 88,227,124.82
Including: income from investment on
affiliated enterprise and jointly enterprise 90,409.95 -183,975.05 16,955,402.09 16,926,568.63
Gain/(loss) from change in fair value (loss as “-“) 4,364,003.20 4,364,003.20 -29,425,921.52 -29,425,921.52
Credit impairment loss (loss as “-“) -19,302,777.86 -5,984,187.92 -12,091,879.71 -1,460,424.20
Assets impairment loss (loss as “-“) -4,905,134.78 -1,472,892.79 -775,665.61 -632,818.79
Gain/(loss) from asset disposal (loss as “-“) 51,209.01 0.00 67,260.20 1,451.76
III. Operating profit 71,428,499.43 31,159,848.51 31,335,614.52 38,277,333.61
Add: non-business income 4,268,645.77 9,639.35 1,610,684.35 20,000.08
Less: non-business expense 2,257,797.99 70,000.00 332,644.57
IV. Total profit 73,439,347.21 31,099,487.86 32,613,654.30 38,297,333.69
Less: Income tax 13,930,271.56 2,686,238.79 2,774,153.99 1,234,987.29
V. Net profit 59,509,075.65 28,413,249.07 29,839,500.31 37,062,346.40
(I) Net profit from continuous operation 59,509,075.65 28,413,249.07 29,839,500.31 37,062,346.40
(II)Net profit from discontinuing operation
Net profit attributable to parent company 57,414,399.22 28,413,249.07 29,568,351.52 37,062,346.40
Minority shareholders’ gains and losses 2,094,676.43 271,148.79
VI. After-tax net amount of other comprehensive
incomes
After-tax net amount of other comprehensive incomes
attributable to owners of the Company
(I) Other comprehensive incomes that will not be
reclassified into gains and losses
1. Changes in net liabilities or assets with a defined
benefit plan upon re-measurement
2. Enjoyable shares in other comprehensive incomes in
invests that cannot be reclassified into gains and losses
under the equity method
(II) Other comprehensive incomes that will be
reclassified into gains and losses
1. Enjoyable shares in other comprehensive incomes in
invests that will be reclassified into gains and losses
under the equity method
2. Gains and losses on fair value changes of available-
for-sale financial assets
3. Gains and losses on reclassifying held-to-maturity
investments into available-for-sale financial assets
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
4. Effective hedging gains and losses on cash flows
5. Foreign-currency financial statement translation
difference
6、Others
……
After-tax net amount of other comprehensive incomes
attributable to minority shareholders
VII Total comprehensive income 59,509,075.65 28,413,249.07 29,839,500.31 37,062,346.40
Total comprehensive income attributable to parent
company 57,414,399.22 29,568,351.52 37,062,346.40
Total comprehensive income attributable to minority
shareholders 2,094,676.43 271,148.79
VIII. Earnings per share
(I) basic earnings per share 0.07 0.04
(II) diluted earnings per share 0.07 0.04
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sh eng
6
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
CASH FLOW STATEMENT
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. January -June, 2023 Unit: RMB Yuan
January -June, 2023 January -June, 2022
Items
Consolidation Parent Company Consolidation Parent Company
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing
labor services 1,897,060,493.23 416,876,256.09 1,261,666,720.62 352,345,258.81
Write-back of tax received 9,988,890.50 11,560,593.20 4,006,659.69
Other cash received concerning operating activities 52,698,239.72 7,689,232.01 27,127,455.59 5,384,314.18
Subtotal of cash inflow arising from operating activities 1,959,747,623.45 424,565,488.10 1,300,354,769.41 361,736,232.68
Cash paid for purchasing commodities and receiving
1,457,105,820.91 474,452,446.24 1,193,219,986.59 496,371,451.85
labor service
Cash paid to/for staff and workers 369,826,569.78 62,530,285.96 188,402,543.12 62,633,591.91
Taxes paid 107,685,392.77 28,543,318.27 31,106,515.38 11,139,042.04
Other cash paid concerning operating activities 151,924,036.97 26,003,055.24 77,032,061.17 32,464,131.37
Subtotal of cash outflow arising from operating activities 2,086,541,820.43 591,529,105.71 1,489,761,106.26 602,608,217.17
Net cash flows arising from operating activities -126,794,196.98 -166,963,617.61 -189,406,336.85 -240,871,984.49
II. Cash flows arising from investing activities:
Cash received from recovering investment 300,000.00 300,000.00
Cash received from investment income 5,796,799.24 24,022,304.24 76,499,887.00 76,474,242.00
Net cash received from disposal of fixed, intangible and
434,242.64 30,000.00 361,191.28 5,000.00
other long-term assets
Net cash received from disposal of subsidiaries and other
0.00 5,605,792.62 25,888,200.00
units
Other cash received concerning investing activities 0.00
Subtotal of cash inflow from investing activities 6,231,041.88 24,052,304.24 82,766,870.90 102,667,442.00
Cash paid for purchasing fixed, intangible and other
long-term assets 22,081,215.68 6,203,763.76 12,416,614.10 9,320,136.74
Cash paid for investment 145,285,500.00
Net cash paid for achievement of subsidiaries and other
business units 12,056,951.02
Other cash paid concerning investing activities
Subtotal of cash outflow from investing activities 34,138,166.70 151,489,263.76 12,416,614.10 9,320,136.74
Net cash flows arising from investing activities -27,907,124.82 -127,436,959.52 70,350,256.80 93,347,305.26
III. Cash flows arising from financing activities
Cash received from absorbing investment
Including: Cash received from absorbing minority
shareholders' equity investment by subsidiaries
Cash received from loans 345,525,821.90 316,000,000.00 240,850,000.00 229,000,000.00
Cash received from issuing bonds
Other cash received concerning financing activities 6,600,000.00 95,778,131.09 21,144,709.02
Subtotal of cash inflow from financing activities 352,125,821.90 316,000,000.00 336,628,131.09 250,144,709.02
Cash paid for settling debts 252,466,250.00 246,450,000.00 237,845,000.00 237,845,000.00
Cash paid for dividend and profit distributing or interest
15,175,950.51 13,745,417.12 12,340,724.16 8,186,734.35
paying
Including: dividends or profit paid by subsidiaries to
minority shareholders
Other cash paid concerning financing activities 22,250,574.21 1,267,500.00 56,257,183.04 612,000.00
Subtotal of cash outflow from financing activities 289,892,774.72 261,462,917.12 306,442,907.20 246,643,734.35
Net cash flows arising from financing activities 62,233,047.18 54,537,082.88 30,185,223.89 3,500,974.67
IV. Influence on cash due to fluctuation in exchange rate -526,981.97 1,614,217.38 -15.49
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
V. Net increase of cash and cash equivalents -92,995,256.59 -239,863,494.25 -87,256,638.78 -144,023,720.05
Add: Balance of cash and cash equivalents at the period -
921,663,803.17 361,032,768.50 438,969,337.87 369,932,989.19
begin
VI. Balance of cash and cash equivalents at the period–
end 828,668,546.58 121,169,274.25 351,712,699.09 225,909,269.14
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
8
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’ EQUITY
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd 2023.01-06 Unit: RMB Yuan
2023.01-06
Owners’ equity attributable to parent company
Items Lessen: Other Special Retained Minority Total of
Capital Surplus equity owners’ equity
share capital treasury comprehens preparatio profits
suplus reserve
stock ive income n
I. balance at the end of last
843,212,507.00 717,097,098.38 2,208,669.73 825,226,634.15 618,445,922.58 54,077,970.99 3,060,268,802.83
year
1. Change of accounting
policy
2. Correction of errors in
previous period
II. Balance at the beginning of 843,212,507.00 717,097,098.38 2,208,669.73 825,226,634.15 618,445,922.58 54,077,970.99 3,060,268,802.83
this year
III. Increase/ decrease of
amount in this year (“-” means 57,414,399.22 2,094,676.42 59,509,075.64
decrease)
(I) Total comprehensive 57,414,399.22 2,094,676.42 59,509,075.64
incomes
(II) Capital increased and
reduced by owners
1. Common shares increased
by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in
owners’ equity
4. Other
(III) Profit distribution
1. Withdrawing surplus
public reserve
2. Distribution to all owners
(shareholders)
3. Others
(IV) Internal carrying
forward of owners’ equity
1. New increase of share
capital from capital reserves
2. Convert surplus reserves to
share capital
3. Surplus reserves make up
losses
4. Others
(V) Specific reserve
1. Withdrawn for the period
2. Used in the period
(VI) Other
IV Balance at the end of this 843,212,507.00 717,097,098.38 2,208,669.73 825,226,634.15 675,860,321.80 56,172,647.41 3,119,777,878.47
period
9
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
2022.01-06
Owners’ equity attributable to parent company
Items Lessen: Other Special Retained Minority Total of
Capital Surplus equity owners’ equity
share capital treasury comprehens preparatio profits
suplus reserve
stock ive income n
I. balance at the end of last 843,212,507.00 720,215,866.78 2,178,681.73 809,471,199.64 627,764,582.32 46,654,771.50 3,049,497,608.97
year
1. Change of accounting
policy
2. Correction of errors in
previous period
II. Balance at the beginning of 843,212,507.00 720,215,866.78 2,178,681.73 809,471,199.64 627,764,582.32 46,654,771.50 3,049,497,608.97
this year
III. Increase/ decrease of
amount in this year (“-” means 336,172.00 21,136,226.45 -880,172.94 19,919,881.51
decrease)
(I) Total comprehensive 29,568,351.52 271,148.79 29,839,500.31
incomes
(II) Capital increased and
648,678.27 648,678.27
reduced by owners
1. Common shares increased
by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in
owners’ equity
4. Other 648,678.27 648,678.27
(III) Profit distribution -8,432,125.07 -1,800,000.00 -10,232,125.07
1. Withdrawing surplus
public reserve
2. Distribution to all owners -8,432,125.07 -1,800,000.00 -10,232,125.07
(shareholders)
3. Others
(IV) Internal carrying
forward of owners’ equity
1. New increase of share
capital from capital reserves
2. Convert surplus reserves to
share capital
3. Surplus reserves make up
losses
4. Others
(V) Specific reserve
1. Withdrawn for the period
2. Used in the period
(VI) Other -336,172.00 -336,172.00
IV Balance at the end of this 843,212,507.00 719,879,694.78 2,178,681.73 809,471,199.64 648,900,808.77 45,774,598.56 3,069,417,490.48
period
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sh eng
10
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
STATEMENT OF CHANGES IN OWNERS’ EQUITY
2023.01-06
Owners’ equity attributable to parent company
Items Other Lessen: Other Total of owners’
Capital Special Surplus equity
share capital equity treasury comprehensive Retained profits
suplus preparation reserve
instrument stock income
I. balance at the end of last
843,212,507.00 755,146,592.54 1,246,569.06 825,226,634.15 936,931,213.43 3,361,763,516.18
year
1. Change of accounting
policy
2. Correction of errors in
previous period
II. Balance at the beginning of 843,212,507.00 1,246,569.06 825,226,634.15 936,931,213.43 3,361,763,516.18
this year 755,146,592.54
III. Increase/ decrease of
amount in this year (“-” means 19,981,124.00 19,981,124.00
decrease)
(I) Total comprehensive 28,413,249.07 28,413,249.07
incomes
(II) Capital increased and
reduced by owners
1. Common shares increased
by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in
owners’ equity
4. Other
(III) Profit distribution -8,432,125.07 -8,432,125.07
1. Withdrawing surplus
public reserve
2. Distribution to all owners -8,432,125.07 -8,432,125.07
(shareholders)
3. Others
(IV) Internal carrying
forward of owners’ equity
1. New increase of share
capital from capital reserves
2. Convert surplus reserves to
share capital
3. Surplus reserves make up
losses
4. Others
(V) Specific reserve
1. Withdrawn for the period 1,403,878.98 1,403,878.98
2. Used in the period -1,403,878.98 -1,403,878.98
(VI) Other
IV Balance at the end of this 843,212,507.00 755,146,592.54 1,246,569.06 825,226,634.15 956,912,337.43 3,381,744,640.18
period
11
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd 2022.01-06 Unit: RMB Yuan
2022.01-06
Owners’ equity attributable to parent company
Items Other Lessen: Other Total of owners’
Capital Special Surplus equity
share capital equity treasury comprehensive Retained profits
suplus preparation reserve
instrument stock income
I. balance at the end of last 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
year
1. Change of accounting
policy
2. Correction of errors in
previous period
II. Balance at the beginning of 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
this year
III. Increase/ decrease of
amount in this year (“-” means 28,630,221.33 28,630,221.33
decrease)
(I) Total comprehensive 37,062,346.40
37,062,346.40
incomes
(II) Capital increased and
reduced by owners
1. Common shares increased
by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in
owners’ equity
4. Other
(III) Profit distribution -8,432,125.07 -8,432,125.07
1. Withdrawing surplus
public reserve
2. Distribution to all owners -8,432,125.07 -8,432,125.07
(shareholders)
3. Others
(IV) Internal carrying
forward of owners’ equity
1. New increase of share
capital from capital reserves
2. Convert surplus reserves to
share capital
3. Surplus reserves make up
losses
4. Others
(V) Specific reserve
1. Withdrawn for the period 641,750.97 641,750.97
2. Used in the period -641,750.97 -641,750.97
(VI) Other
IV Balance at the end of this 843,212,507.00 755,146,592.54 1,216,581.060 809,471,199.64 832,194,649.28 3,241,241,529.52
period
Legal Representative: Ji Zhijian Chief Financial Official: Wang Jinxiu Person in Charge of Accounting Organization: Li Sheng
12
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
III. General Information
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd (the “Company”) was reorganized
and reformed from main part of former Dalian Refrigeration Factory. On December 8, 1993, the
Company went to the public as a listed Company at Shenzhen Stock Exchange Market. On March
20, 1998, the company successfully went to the public at B share market and listed at Shenzhen
Stock Exchange Market with total share capital of RMB350,014,975Yuan.
According to the 13th meeting of the 6th generation of board, extraordinary general meeting for 2015
fiscal year and ' Restricted share incentive plan (draft)' , the Company planned to introduce A
ordinary shares to incentive objectives, which was 10,150,000 number of shares would be granted
to 41 share incentive objectives at granted price of RMB5.56Yuan per share. Up to March 12 th ,2015,
the Company received new added share capital of RMB10,150,000Yuan and the share capital had
been verified by DaHua Certified Public Accountants, and had been issued the capital verification
report Dahuayanzi [2015]000086 on March12th , 2015.
The general meeting for 2015 fiscal year held on 21st April 2016 approved the profit distribution
policy for the year of 2015, which agrees the profit distribution based on the total 360,164,975
number of shares as share capital, paid share dividend of 5 common shares for every 10 shares
through capital reserve. The policy stated above was fully implemented on 5th May 2016, and the
registered capital was altered to 540,247,462.00Yuan.
The 17thmeeting of the 6th generation of board was held on 4th June 2015 and the 2nd interim
shareholders’ meeting was held on 24th June 2015, meeting deliberated and passed the proposal of
non-public offering of ‘A shares’. China’s Securities Regulatory Commission issued SFC license
[2015]3137 on 30th December, 2015, approving that new non-public offering cannot exceeded
38,821,954 number of shares. The company implemented the post meeting procedures for China’s
Securities Regulatory Commission, which is regarding adjustment of bottom price and the number
of the shares issued after the implementation of profit distribution policy of 2015 in May, 2016, and
accordingly revised the upper limit of non-public offering of share to58,645,096 number of new ‘A
shares’. The company issued the non-public offering of 58,645,096 number of ‘A shares’ to 7
investors, and as a result, the total number of shares of the company is changed to 598,892,558
shares, and the par value is 1yuan per share and the total share capital is 598,892,558.00Yuan. The
share capital stated above has been verified by DaHua Certified Public Accountants, and has been
issued the capital verification report Dahuayanzi [2016]000457 on 31st May 2016.
According to the ‘Restricted Share Incentive Plan(draft) of Dalian Refrigeration Company Limited
for the year of 2016’ and the ‘Proposal regarding the shareholders’ meeting authorized the board of
directors to implement the Restricted Share Incentive Plan’ approved on the 3rdprovisional general
meeting held on 13th September 2016, the 9th meeting of the 7th generation of board deliberated and
passed the ‘Proposal about granting the restricted shares to incentive targets’ on September 20 th,
2016 and set 20th September 2016 as share granted date, and granted 12,884,000 number of
restricted shares to 188 incentive targets at granted price of 5.62Yuan per share. By 22 ndNovember,
2016, the company has actually received the newly subscribed registered share capital of
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
12,884,000Yuan subscribed by incentive targets. The share capital stated above has been verified
by DaHua Certified Public Accountants, and has been issued the capital verification report
Dahuayanzi [2016]001138 on 23rdNovember, 2016.
On May 20th, 2017, the general meeting for 2016 fiscal year was held and profit appropriation
scheme for 2016 FY was approved, which was every 10 shares will be increased by 4 shares through
capital reserve based on the total 611,776,558 number of shares. After the profit appropriation
scheme, the registered capital was changed to RMB856,478,181.00Yuan.
On December 18, 2017, the Company held the third extraordinary shareholders’ meeting of 2017
which reviewed and approved the Proposal on Repurchasing and Cancelling Part Restricted Stocks
of the 2016 Restricted Stock Incentive Plan”. On March 8, 2018, after the completion of repurchase
and cancellation, the Company implemented the corresponding capital reduction procedures
according to law, and the registered capital of the Company was changed from 856,487,181 Yuan
to 855,908,981 Yuan.
On May 4, 2018, the Company held the 21st meeting of the seventh board of directors which
reviewed and approved the Proposal on Repurchasing and Cancelling Party Restricted Stocks of
the 2015 Restricted Stock Incentive Plan. On June 29, 2018, after the completion of repurchase and
cancellation, the Company implemented the corresponding capital reduction procedures according
to law, and the registered capital of the Company was changed from 855,908,981 Yuan to
855,434,087 Yuan.
On January 17,2019, the Company held the first extraordinary shareholders’ meeting of 2019 which
reviewed and approved the Proposal on terminating the implementation of 2016 Restricted Stock
Incentive Plan of the Company and logouting the restricted stock. On March 4,2019, the Company
has completed the capital reduction process, and the registered capital of the Company was changed
from 855,434,087 Yuan to 843,212,507 Yuan.
On December 20th, 2019, the Company held the 7th meeting of the 8th Board of Directors and
approved to change the Company’s name from Dalian Refrigeration Company Limited to Bingshan
Refrigeration & Heat Transfer Technologies Co., Ltd.
The old address of the Company’s registered office as same as head office is No.888 Xinan Road,
Shahekou District, Dalian, China. In 2017, the Company relocated to new factory and changed its
address to No.16 Liaohe East RD, Dalian Economic&Technology Development Zone(‘DDZ’),
Dalian China as same as HQ’s address. The parent company of the Company is Dalian Bingshan
Group Co., Ltd., and there is no ultimate controller regulated by the relevant law, regulations and
rules.
The Company is in industrial manufacturing sector, mainly engaged in industrial refrigeration,
refrigerated and frozen food storage, and manufacture and installation of central air-conditionin g
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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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).
During this reporting period, entities within the consolidation scope has change comparing to last
year, decreasing 1 entities (Sonyo Refrigeration (Dalian) Co., Ltd.).
IV. Financial Statements Preparation Basis
（1） Preparing basis
The Company’s financial statements are prepared on the basis of going concern assumption,
according to the actual occurred transactions and events and in accordance with ‘Accounting
Standards for Business Enterprises’ and relevant regulations, and also based on the note V
“Significant Accounting Policies, Accounting Estimates”.
（2） Going concern
The Company has the capacity to continually operate within 12 months at least since the end of
report period, and hasn‘t the major issues impacting on the sustainable operation ability.
V. Significant Accounting Policies and Accounting Estimates
1. Declaration for compliance with accounting standards for business enterprises
The financial statements are prepared by the Group according to the requirements of Accounting
Standard for Business Enterprise, and reflect the relative information for the financial position,
operating performance, cash flow of the Group truly and fully.
2. Accounting period
The Group adopts the Gregorian calendar year as accounting period from Jan 1 to Dec 31.
3. Operating cycle
Normal operating cycle refers to the duration starting from purchasing the assets for manufacturing
up to cash or cash equivalent realization. The group sets twelve months for one operating cycle and
as the liquidity criterion for assets and liability.
4. Functional currency
The Group adopts RMB as functional currency.
5. Accounting for business combination under same control and not under same control
As an acquirer, the assets and liabilities that The Group obtained in a business combination under
the same control should be measured on the basis of their carrying amount in the consolidated
financial statements on the combining date. As for the balance between the carrying amount of the
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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 liabilit ies
incurred or assumed and equity securities issued by the acquirer in exchange for the control of the
acquire, and sum of all direct expenses(if the combination is achieved in stages, the combination
cost shall be the sum of individual transaction). The difference when combination cost exceeds
proportionate share of the fair value of identifiable net assets of acquire should be recognized as
goodwill. If the combination cost is less than proportionate share of the fair value of identifiable net
assets of acquiree, firstly, fair value of identifiable asset, liability or contingent liability shall be
reviewed, and so the fair value of non-monetary assets or equity instruments issued in the
combination consideration , after review, still the combination cost is less than proportionate share
of the fair value of identifiable net assets of acquire, the difference should be recognized as non-
operating income.
6. Method of preparation of consolidated financial statements
All subsidiaries controlled by the Group and structured entities are within the consolidation scope.
If subsidiaries adopt different accounting policy or have different accounting period from the parent
company, appropriated adjustments shall be made in accordance with the Group policy in
preparation of the consolidated financial statements.
All significant intergroup transactions, outstanding balances and unrealized profit shall be
eliminated in full when preparing the consolidated financial statements. Portion of the subsidiary’s
equity not belonging to the parent, profit, loss for the current period, portion of other comprehensive
income and total comprehensive belonging to minority interest, shall be presented separately in
the consolidated financial statements under “minority interest of equity”, ”minority interest of profit
and loss”, “other comprehensive income attributed to minority interest” and “total comprehensive
income attributed to minority interest” title.
If a subsidiary is acquired under common control, its operation results and cash flow shall be
consolidated since the beginning of the consolidation period. When preparing the comparative
consolidated financial statements, adjustments shall be made to relevant items of comparative
figures as regarded that reporting entity established through consolidation has been always there
since the point when the ultimate controlling party starts to have the control.
If a business consolidation under common control is finally achieved in stages, consolidation
accounting method shall be disclosed additionally for the period in which the control is obtained.
For example, if a business consolidation under common control is finally achieved in stages, when
preparing the consolidated financial statements, adjustments shall be made for the current
consolidation status as if consolidation has always been there since the point when the ultimate
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
controlling party starts to control. In preparation of comparative figures, asset and liability of the
acquiree shall be consolidated into the Group’s comparative financial statements, but to the extent
no earlier than the point when the Group and acquiree are both under ultimate control and relevant
items under equity in comparative financial statements shall be adjusted for net asset increased in
combination. To avoid the duplicated computation of net asset of acquiree, for long-term equity
investment held by the Group before the consolidation, relevant profit and loss, other
comprehensive income and movement in other net asset, recognized for the period between the
combination date and later date when original shareholding is obtained and when the Group and the
acquiree are under common control of same ultimate controlling party, shall be respectively used
for writing down the opening balance of retained earnings of comparative financial statements and
profit and loss for the current period.
If a subsidiary is acquired not under common control, its operation results and cash flow shall be
consolidated since the beginning of the consolidation period. In preparation of the consolidated
financial statements, adjustments shall be made to subsidiary’s financial statements based on the
fair value of its all identifiable assets, liability or contingent liability on the acquisition date.
If a business consolidation under non-common control is finally achieved in stages, consolidation
accounting method shall be disclosed additionally for the period in which the control is obtained.
For example, if a business consolidation not under common control is finally achieved in stages,
when preparing the consolidated financial statements, the acquirer shall remeasure its previously
held equity interest in the acquiree at its acquisition-date fair value and recognize the resulting gain
or loss as investment income for the current period. Other comprehensive income, under equity
method accounting rising from the interest held in acquiree in relation to the period before the
acquisition, and changes in the value of its other equity other than net profit or loss, other
comprehensive income and profit appropriation shall be transferred to investment gain or loss for
the period in which the acquisition incurs, excluding the other comprehensive income from the
movement on the remeasurement of ne asset or liability of defined benefit plan.
When the Group partially disposes of the long –term equity investment in subsidiary without losing
the control over it, in the consolidated financial statements, the difference, between disposals price
and respective disposed value of share of net assets in the subsidiary since the acquisition date or
combination date, shall be adjusted for capital surplus or share premium, no enough capital surplus,
then adjusted for retained earnings.
When the Group partially disposes of the long –term equity investment in subsidiary and lose the
control over it, in preparation of consolidated financial statements, remaining share of interest in
the subsidiary shall be remeasured on the date of losing control. Sum of the share disposal
consideration and fair value of remaining portion of shareholding minus the share of the net assets
in the subsidiary held based on the previous shareholding percentage since the acquisition date or
combination date, the balance of above is recognized as investment gain/loss for the period and
goodwill shall be written off accordingly. Other comprehensive income relevant to share investment
in subsidiary shall be transferred to investment gain /loss for the period on the date of losing control.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
When the Group partially disposes of the long –term equity investment in subsidiary and lose the
control over it by stages, if all disposing transactions are bundled, each individual transaction shall
be seen as a transaction of disposal of a subsidiary by losing control. The difference between the
disposal price and the share of the net assets in the subsidiary held before the date of losing
control, shall be recognize as other comprehensive income until the date of losing control where it
is transferred into investment gain/ loss for the current period.
7. Joint arrangement classification and joint operation accounting
The Group’s joint arrangement includes joint operation and joint venture. For joint operation, the
Group as a joint operator shall recognize its own assets and its share of any assets held jointly, its
liabilities and its share of any liabilities incurred jointly, its revenue from the sale of its share of the
output arising from the joint operation, its share of the revenue from the sale of the output by the
joint operation; and its expenses, including its share of any expenses incurred jointly. When an entity
enters into a transaction with a joint operation in which it is a joint operator, such as a sale or
contribution of assets, it is conducting the transaction with the other parties to the joint operation
and, as such, the joint operator shall recognize gains and losses resulting from such a transaction
only to the extent of the other parties’ interests in the joint operation.
8. Cash and cash equivalent
The cash listed on the cash flow statements of the Group refers to cash on hand and bank deposit.
The cash equivalents refer to short-term (normally with original maturities of three months or less)
and liquid investments which are readily convertible to known amounts of cash and subject to an
insignificant risk of changes in value.
9. Translation of foreign currency
(1) Foreign currency transaction
Foreign currency transactions are translated at the spot exchange rate issued by People’s Bank of
China (“PBOC”) on the 1st day of the month when the transactions incurred. Monetary assets and
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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
the day when the cash flows incur. The amounts resulted from change of exchange rate are presented
separately in the cash flow statement.
10. Financial assets and financial liabilities
The company shall recognize a financial asset or a financial liability when the company becomes
party to the contractual provisions of the instrument.
(1) Financial assets
1) Classification, recognition and measurement
The company shall classify financial assets as measured at amortized cost, fair value through other
comprehensive income or fair value through profit or loss on the basis of both the company’s
business model for managing the financial assets and the contractual cash flow characteristics of
the financial asset.
A financial asset shall be measured at amortized cost if both of the following conditions are met:
①the financial asset is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows;①the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding. At initial recognition, the company shall measure the financial asset at its fair
value and take any transaction costs that are directly attributable to the financial asset into account.
After initial recognition, the company shall measure the financial asset at amortized cost. A gain or
loss on a financial asset that is measured at amortized cost and is not a hedged item shall be
recognized in profit or loss when the financial asset is derecognized, impaired, involved in foreign
exchange or amortized for any difference arising between the initial recognized amount and due
amount by applying effective interest method.
A financial asset shall be measured at fair value through other comprehensive income if both of the
following conditions are met: ①the financial asset is held within a business model whose objective
is achieved by both collecting contractual cash flows and selling financial assets and ①the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding. At initial recognition, the
company shall measure this financial asset at its fair value and take any transaction costs that are
directly attributable to the financial asset into account. A gain or loss on a financial asset that is
measured at fair value through other comprehensive income and is not a hedged item shall be
recognized in other comprehensive income apart from a gain or loss on credit loss, foreign exchange
and interest of the financial asset calculated by effective interest method. Accumulated gain or loss
previously in the other comprehensive income shall be out of it and accounted in the profit or loss
account when the financial asset is derecognized.
The company recognized interest revenue based on effective interest method. Interest revenue shall
be calculated by applying the effective interest rate to the gross carrying amount of a financial asset,
except for: ①purchased or originated credit-impaired financial assets. For those financial assets, the
company shall apply the credit-adjusted effective interest rate to the amortized cost of the financial
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
asset from initial recognition. ①financial assets that are not purchased or originated credit-impaired
financial assets but subsequently have become credit-impaired financial assets. For those financial
assets, the company shall apply the effective interest rate to the amortized cost of the financial asset
in subsequent reporting periods.
The company designates an investment as fair value measured through other comprehensive income
if an equity instrument held is not for trading. Once the decision is made, it is an irrevocable election.
At initial recognition, the company shall measure the equity instrument investment not for trading
at its fair value and take any transaction costs that are directly attributable to the financial asset into
account. Any other gain or loss (including foreign exchange gain or loss) shall be accounted in other
comprehensive income and shall not be subsequently transferred to profit or loss, unless the
dividend received is accounted in profit or loss( excluding the recovered investment cost).
Accumulated gain or loss previously in the other comprehensive income shall be out of it and into
retained earnings when the financial asset is derecognized.
Apart from classified as the amortized cost financial assets and as fair value through other
comprehensive income financial assets, a financial asset is classified as fair value through profit or
loss. At initial recognition, the company shall measure this financial asset at its fair value and take
any transaction costs that are directly attributable to the financial asset into account.
A financial asset shall be classified as fair value through profit or loss if it is recognized contingent
consideration through business combination, which is not under same control situation.
2) Recognition and measurement of transfer of financial assets
A financial asset is derecognized when any one of the following conditions is satisfied: ①the rights
to receive cash flows from the asset is terminated, ①the financial asset has been transferred and the
company transfers substantially all risks and rewards relating to the financial assets to the
transferee, ①the financial asset has been transferred to the transferee, the company has given up its
control of the financial asset although the company neither transfers nor retains all risks and rewards
of the financial asset.
In the case where the financial asset as a whole qualifies for the derecognition conditions, the
difference between the carrying value of transferred financial asset and the sum of the consideration
received for transfer and the accumulated amount of changes in fair value in respect of the amount
of partial derecognition (the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal amount outstanding) ,
that was previously recorded under other comprehensive income is transferred into profit or loss for
the period.
In the case where only part of the financial asset qualifies for derecognition, the carrying amount of
financial asset being transferred is allocated between the portions that to be derecognised and the
portion that continued to be recognised according to their relative fair value. The difference between
the amount of consideration received for the transfer and the accumulated amount of changes in fair
value that was previously recorded in other comprehensive income for the asset partially qualified
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
for derecognition (the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding) and
the above-mentioned allocated carrying amount is charged to profit or loss for the period.
(2) Financial liabilities
1) Classification, basis for recognition and measurement
Financial liabilities of the company are classified at initial recognition as “financial liabilities at fair
value through profit or loss” and “other financial liabilities” on initial recognition.
Financial liabilities at fair value through profit or loss include financial liabilities held for trading
and those designated as fair value through profit or loss on initial recognition. They are subsequently
measured at fair value. The net gain or loss arising from changes in fair value, dividends and interest
paid related to such financial liabilities are recorded in profit or loss for the period in which they are
incurred.
Other financial liabilities shall be subsequently measured at amortized cost by applying effective
interest method. The company shall classify a financial liability as a liability measured at amortized
cost except the followings: ①financial liability measured at fair value through profit or loss
including tradable financial liability (derivative instrument of financial liability included) and
designated as financial liability measured at fair value through profit or loss ① financial assets
transfers that do not qualify for derecognition or financial liability is formed from continuing
involvement in transferred assets ① financial guarantee contract not in the above category of ①or
① and loan commitment which is not in the category ① at the below the market loan rate.
The company shall account the financial liability as it measured at fair value through profit or loss
if the financial liability is formed by contingent consideration recognized by the buyer through
business combination that is not under common control.
2) Financial liability derecognition
A financial liability is derecognized when the underlying present obligations or part of it are
discharged. Existing financial liability shall be derecognized and new financial liability shall be
recognized when the company signs the agreement with creditor to undertake the new financial
liability in replacement of existing financial liability, and the terms of agreement are different in
substance. Any significant amendment to the agreement as a whole or part o it is made, then the
existing liabilities or part of it shall be derecognized and financial liability after terms amendment
shall be recognized as a new financial liability. The difference between the carrying amount of the
financial liability derecognized and the consideration paid is recognized in profit or loss for the
period.
(3) Fair value measurement of financial asset and financial liability
The company uses the price in the primary market for financial assets and liability fair value
measurement, if no primary market exists, the price in the most advantageous market shall be used
for fair value measurement and applicable valuation techniques which enough data is available for
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
and supported by other information shall be adopted. Input for fair value measurement has 3 levels:
level 1 input is the unadjusted quoted price for identical asset or liability available at the active
market on the measurement date; level 2 input is the directly or indirectly observable input for
relevant asset or liability apart from level 1 input; level 3 input is the unobservable input for relevant
asset or liability.
(4) Financial asset and financial liability offset
Financial asset and financial liability shall be presented in the balance sheet separately and cannot
be offset, unless the following conditions are all met: ①the company has the legal right to
recognized offset amount and the right is enforceable. ②the company plans to receive or a legal
obligation to pay cash at net amount.
(5) Distinguishment between financial liability and equity instrument and accounting
financial liability and equity instrument shall be distinguished in accordance with the following
standards: ① if the company cannot unconditionally avoid paying cash or financial asset to fulfil a
contractual obligation, the contractual obligation is qualified or financial liability. For certain
financial instrument, although there are no clear terms and conditions to include obligation of paying
cash or other financial liability, contractual obligation may indirectly be formed through other terms
and conditions. ② the company’s own equity instrument shall also be considered whether it is the
substitute of cash, financial asset or it is the remaining equity, after the issuer deducts liability,
enjoyed by the equity holder , if it must or can be used to settle a financial asset. If the former, the
instrument is a financial liability of the issuer, otherwise it is an equity instrument of the issuer. In
certain circumstances, financial instrument contract is classified as financial liability, if financial
instrument contract specifies the company must or can use its own equity to settle the financial
instrument, the contractual amount of right or obligation equals to that of the numbers of own equity
instrument available or to be paid multiplied by fair value when settling, nevertheless the amount
is fixed, or varied partially or fully based on the its own equity’s market price(such as interest rate,
certain commodity’s or financial instrument’s price variance).
When classifying a financial instrument (or its component) in the consolidated statements, the
company takes all terms and conditions agreed by the group member and instrument holder into
consideration. If the group due to the instrument, as a whole, bears settlement obligation by paying
cash, other financial asset or other means resulted in financial liability, the instrument shall be
classified as financial liability.
If a financial instrument or its component is financial liability, any gain or loss, interest, dividend,
and any gain or loss from buy back or refinancing shall be accounted in profit or loss.
If a financial instrument or its component is an equity instrument, when it was issued(includ in g
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
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Based on expected credit loss, a financial asset measured at amortized cost, a debt instrument
investment measured at FVTOCI and a contractual asset shall all be subject to impairment
accounting and be recognized for impairment loss allowance if any impairment.
Expected credit loss is the weighted average of credit losses with the respective risks of a default
occurring as the weights. A credit loss herein is referred to as the present value, at original effective
rate, of the difference between the contractual cash flows that are due to the company under the
contract; and the cash flows that the company expects to receive, that's the present value of the total
cash shortage. A financial asset shall be the present value, at credit adjusted effective rate, if it is a
purchased or originated credit -impaired asset.
The company adopts simplified approach for trade receivables, contract assets that do not contain a
significant financing component, and shall always measure the loss allowance at an amount equal
to lifetime expected credit losses.
Impairment requirements is to assess whether credit risk has been significantly increased since
initial recognition at each reporting date, if there have been significant increases in credit risk, the
company shall measure the loss allowance for a financial instrument at an amount equal to the
lifetime expected credit losses, at the reporting date, if the credit risk on a financial instrument has
not increased significantly since initial recognition, the company shall measure the loss allowance
for that financial instrument at an amount equal to 12month expected credit losses.
When assessing expected credit losses, the company considers all reasonable and supportable
information, including that which is forward-looking.
The company shall measure expected credit losses of a financial instrument in a way that reflects:
an unbiased and probabilityweighted amount that is determined by evaluating a range of possible
outcomes; The time value of money; and reasonable and supportable information that is available
without undue cost or effort at the reporting date about past events, current conditions and forecasts
of future economic conditions.
The company directly lowers the book value of the financial asset when contractual cash flow
cannot be fully or partially recollected within rational expectation any longer.
The company also assesses the expected credit loss of financial asset measured at amortized cost
based on aging portfolio, other than pastdue credit loss assessment based on individual item.
11. Notes receivable
（1） Recognition of provision for impairment
On the basis of expected credit loss, the company always measures the loss allowance at an amount
equal to lifetime expected credit losses for notes receivables which do not contain a significant
financing component and are generated in accordance with Revenue Standard- No 14 of Accounting
Standard for Business Enterprise.
(2) Expected credit loss risk portfolio assessment method based on portfolio
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
The company separately assesses the credit risk of financial assets which have significantly different
the credit risk, such as receivable with dispute or involved in litigation and arbitration; There are
clear signs indicating the debtor is unlikely to fulfill the repayment obligations of the receivables,
etc.
Apart from the financial asset to be assessed for credit risk separately, the company divides the
financial assets into different group based on common characteristics of risk and assesses the risk
based on the portfolio.
Based on the acceptor credit risk of notes receivable as the common risk characteristics, it is divided
into different categories and determined for expected credit loss accounting estimate policy.
Portfolio category Expected credit loss accounting estimate policy
Bank acceptance note portfolio Lower credit risk assessed by the management
Commercial acceptance note Same as receivables and provided for excepted credit loss
portfolio allowance
Referring to the experience of historical credit losses, the company prepares a table comparing the
aging of notes receivable with the fixed reserve rate to calculate the expected credit losses on this
basis.
The Company prepares the comparison table between receivables aging and expected credit loss
rate within lifetime and work out the expected credit loss by reference to historical credit loss
experience in combination with current situation and future forecast of economy condition.
The company shall measure expected credit losses of a financial instrument in a way that reflects:
an unbiased and probabilityweighted amount that is determined by evaluating a range of possible
outcomes; The time value of money; and reasonable and supportable information that is available
without undue cost or effort at the reporting date about past events, current conditions and forecasts
of future economic conditions.
The company prepares the comparison table between receivables aging and fixed provision rate and
work out the expected credit loss by reference to historical credit loss experience.
On the balance sheet date, expected credit loss of receivable shall be calculated. If the expected
credit loss is larger than the book value of the provision of receivable impairment, the difference
shall be recognized as receivable impairment loss, debit to “credit impairment loss”, credit to
“provision for bad debt”. Alternatively, the difference is recognized as impairment gain and
reversed journal entry shall be made.
Actually incurred credit loss shall be debit to “provision for bad debt”, credit to “notes receivable”,
based on the approved amount to be written off as it is assured as uncollectible receivable. If the
amount to be written off is bigger than the provision for impairment loss, the difference is debit to
“credit impairment loss”.
12. Accounts receivable
(1) Recognition of provision for impairment
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
On the basis of expected credit loss, the company always measures the loss allowance at an amount
equal to lifetime expected credit losses for trade receivables which do not contain a significant
financing component and are generated in accordance with Revenue Standard- No 14 of Accounting
Standard for Business Enterprise. For trade receivables which do contain a significant financing
component, the company chooses as its accounting policy to measure the loss allowance at an
amount equal to lifetime expected credit losses.
(2) Expected credit loss risk portfolio assessment method based on portfolio
The company separately assesses the credit risk of financial assets which have significantly different
the credit risk, such as receivable with dispute or involved in litigation and arbitration; There are
clear signs indicating the debtor is unlikely to fulfill the repayment obligations of the receivables,
etc.
Apart from the financial asset to be assessed for credit risk separately, the company divides the
financial assets into different group based on common characteristics of risk and assesses the risk
based on the portfolio.
Apart from the trade receivables and other receivables to be assessed for credit risk separately, based
on the counterparty as the common risk characteristics, it is divided into different categories and
determined for expected credit loss accounting estimate policy.
Portfolio category Expected credit loss accounting estimate policy
Related parties portfolio within the
Lower credit risk assessed by the management
consolidation
Other related parties and non-related
Provided for excepted credit loss allowance
parties portfolio
Referring to the experience of historical credit losses, the company prepares a table comparing the
aging of accounts receivable with the fixed reserve rate to calculate the expected credit losses on
this basis.
On the balance sheet date, expected credit loss of receivable shall be calculated. If the expected
credit loss is larger than the book value of the provision of receivable impairment, the difference
shall be recognized as receivable impairment loss, debit to “credit impairment loss”, credit to
“provision for bad debt”. Alternatively, the difference is recognized as impairment gain and
reversed journal entry shall be made.
Actually incurred credit loss shall be debit to “provision for bad debt”, credit to “receivable”, based
on the approved amount to be written off as it is assured as uncollectible receivable. If the amount
to be written off is bigger than the provision for impairment loss, the difference is debit to “credit
impairment loss”
13. Receivables financing
In the process of managing enterprise liquidity, the Company carries out endorsement transfer or
discount of most of the notes receivable before maturity, and terminates the confirmation of the
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
discounted or endorsed notes receivable based on the fact that the Company has transferred almost
all the risks and rewards of the relevant notes receivable to the relevant counterparty. The company's
business model of managing notes receivable is aimed at both collecting the contract cash flow and
selling the financial asset, so it is classified as the financial asset measured at fair value and its
changes are included in other comprehensive income, and listed in the receivables financing.
14.Other receivable
(1) Recognition of provision for impairment
On the basis of expected credit loss, the company always measures the loss allowance at an amount
equal to lifetime expected credit losses for trade receivables which do not contain a significant
financing component and are generated in accordance with Revenue Standard- No 14 of Accounting
Standard for Business Enterprise. For trade receivables which do contain a significant financing
component, the company chooses as its accounting policy to measure the loss allowance at an
amount equal to lifetime expected credit losses.
(2) Expected credit loss risk portfolio assessment method based on portfolio
The company separately assesses the credit risk of financial assets which have significantly different
the credit risk, such as receivable with dispute or involved in litigation and arbitration; There are
clear signs indicating the debtor is unlikely to fulfill the repayment obligations of the receivables,
etc.
Apart from the financial asset to be assessed for credit risk separately, the company divides the
financial assets into different group based on common characteristics of risk and assesses the risk
based on the portfolio.
Apart from the trade receivables and other receivables to be assessed for credit risk separately, based
on the counterparty as the common risk characteristics, it is divided into different categories and
determined for expected credit loss accounting estimate policy.
Portfolio category Expected credit loss accounting estimate policy
Related parties portfolio within the
Lower credit risk assessed by the management
consolidation
Other related parties and non-related Same as receivables and provided for excepted credit loss
parties portfolio allowance
Referring to the experience of historical credit losses, the company prepares a table comparing the
aging of other receivable with the fixed reserve rate to calculate the expected credit losses on this
basis.
The company prepares the comparison table between receivables aging and expected credit loss rate
within lifetime and work out the expected credit loss by reference to historical credit loss experience
in combination with current situation and future forecast of economy condition.
The company shall measure expected credit losses of a financial instrument in a way that reflects:
an unbiased and probabilityweighted amount that is determined by evaluating a range of possible
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
outcomes; The time value of money; and reasonable and supportable information that is available
without undue cost or effort at the reporting date about past events, current conditions and forecasts
of future economic conditions.
The company prepares the comparison table between receivables aging and fixed provision rate and
work out the expected credit loss by reference to historical credit loss experience.
On the balance sheet date, expected credit loss of receivable shall be calculated. If the expected
credit loss is larger than the book value of the provision of receivable impairment, the difference
shall be recognized as receivable impairment loss, debit to “credit impairment loss”, credit to
“provision for bad debt”. Alternatively, the difference is recognized as impairment gain and
reversed journal entry shall be made.
Actually incurred credit loss shall be debit to “provision for bad debt”, credit to “notes receivable”,
“receivable”, “other receivable” based on the approved amount to be written off as it is assured as
uncollectible receivable. If the amount to be written off is bigger than the provision for impairment
loss, the difference is debit to “credit impairment loss”
15. Inventories
Inventories are materials purchasing, raw material, variance of cost materials, low-valuable
consumable, materials processed on commission, working-in-progress, semi-finished goods,
variance of semi-finished goods, and finished goods, engineering construction etc.
The inventories are processed on perpetual inventory system, and are measured at their actual cost
on acquisition. Weighted average cost method is taken for measuring the inventory dispatched or
used. Low value consumables and packaging materials is recognized in the income statement by
one-off method.
After yearend thorough inventory check, at the balance sheet date inventory impairment should be
provided or adjusted according to inventory category. For the finished goods, raw material held for
sale etc which shall be sold directly, the net realizable value should be confirmed at the estimated
selling price less estimated selling expenses and related tax and expenses. The raw material held for
production, its realizable value should be confirmed at the estimated selling price of finished goods
less estimated cost of completion, estimated selling expenses and related tax. The net realiza ble
value of inventories held for execution of sale contracts or labor contracts shall be calculated based
on the contract price. If the quantities of inventories in the Group are more than quantities if
inventories subscribed in the sales contracts, the net realizable value of the excessive part of the
inventories should be calculated based on the general selling price. When the impairment indicators
disappear, impairment provision shall be reversed and
16. Contract assets
Contract assets are the rights of the Company to receive consideration for the goods it has
transferred to the customer, and such rights are subject to factors other than the passage of time. If
the Company sells two clearly distinguishable goods to a customer and is entitled to receive
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
payment for the delivery of one of the goods, but the payment is contingent on the delivery of the
other goods, the Company regards the right to receive payment as a contract asset.
The method for determining the expected credit loss of the contract assets shall refer to the
description of notes receivable and accounts receivable in notes 11 and 12 above.
Accounting method: the Company calculates the expected credit loss of the contract assets on the
balance sheet date. If the expected credit loss is greater than the carrying amount of the current
contract assets impairment provision, the Company will recognize the difference as an impairment
loss and debit "credit impairment loss" and credit "Contract assets impairment provision". On the
contrary, the Company recognizes the difference as impairment gain and makes opposite accounting
records.
If the Company actually suffers a credit loss and determines that the relevant contract assets cannot
be recalled, and the write-off is approved, the Company shall debit "impairment provisions of
contract assets" and credit "contract assets" according to the approved amount of write-off. If the
amount of write-off is greater than the allowance for loss accrued, the difference shall be debited as
"credit impairment loss".
17. Contract Cost
(1) The method for determining the amount of assets related to the contract cost
The Company's assets related to contract cost include contract performance cost and contract
acquisition cost.
Contract performance cost, that is, the cost of the Company to the contract, do not belong to other
accounting standards for enterprises the scope of the specification, and satisfy the following
conditions at the same time, as the performance contract cost recognized as an asset: the cost and a
current or expected is directly related to the contract, including direct materials, direct labor,
manufacturing cost (or similar fee), specific cost borne by the customer and only other cost arising
from this contract; this cost increases the Company's future resources for performance obligations;
the cost is expected to be recovered.
Contract acquisition cost, that is, the incremental cost incurred by the Company to acquire the
contract is expected to be recovered, shall be recognized as an asset as the contract acquisition cost;
if the amortization period of the asset does not exceed one year, it shall be recorded into the current
profit and loss at the time of occurrence. Incremental cost is cost (such as sales commissions, etc.)
that the Company would not incur without obtaining a contract. Expenses incurred by the Company
for the acquisition of the contract, in addition to the incremental cost expected to be recovered (such
as travel expenses incurred whether the contract is acquired or not, etc.), shall be recorded into the
current profit and loss when incurred, except those clearly borne by the customer.
(2) Amortization of assets related to contract cost
The assets related to the contract cost of the Company shall be amortized on the same basis as the
commodity income recognition related to the assets and shall be recorded into the current profit and
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
loss.
(3) Impairment of assets related to the contract cost
When determining the impairment loss of assets related to the contract cost, the Company shall first
determine the impairment loss of other assets related to the contract recognized in accordance with
accounting standards for other relevant enterprises. If the carrying value is higher than the residual
consideration expected to be obtained by the Company due to the transfer of the commodity related
to the asset and the estimated cost to be incurred for the transfer of the commodity, the excess part
shall be set aside for impairment loss and recognized as an asset impairment loss.
If the foregoing difference is higher than the carrying amount of the asset, the carrying amount of
the asset shall be converted back to the original provision for impairment of the asset and recorded
into the current profit and loss. However, the carrying amount of the asset after conversion shall not
exceed the carrying amount of the asset under the circumstance of no provision for impairment of
the asset.
18. Long-term receivables
(1) Confirmation method of impairment provisio
On the basis of expected credit losses, the Company will always measure its loss provision in
accordance with the amount equivalent to the expected credit losses in the entire duration for long-
term receivables formed by transactions regulated by the Accounting Standards for Enterprises No.
14 - Income Standards that do not contain significant financing components.
Measurement of expected credit losses. Expected credit loss refers to the weighted average of the
credit loss of a financial instrument weighted by the risk of default. The credit loss herein refers to
the difference between all contractual cash flows receivable under the contract and all cash flows
expected to be received by the Company discounted at the original effective interest rate, i.e. the
present value of all cash shortfalls.
(2) A portfolio method to evaluate expected credit risk on the basis of portfolio
The Company evaluates the credit risk of financial assets with significantly different credit risks,
such as: long-term receivables that have disputes with the other party or involve litigation or
arbitration; Other receivables where there is a clear indication that the debtor is likely to be unable
to meet its obligations, etc.
Except for financial assets for which credit risk is assessed individually, the Company divides
financial assets into different groups based on common risk characteristics and evaluates credit risk
on a portfolio basis.
In addition to long-term receivables with single credit risk assessment, it is divided into different
combinations based on the relationship between long-term receivables transaction objects as the
common risk characteristics, and the expected credit loss accounting estimation policy is
determined:
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Accounting policy for expected credit loss of portfolio classification
The related party portfolio management within the scope of the merger evaluates that such projects
have low credit risk
Other related parties and combinations of non-related parties shall draw impairment provisions in
accordance with the expected loss rate
With reference to historical credit loss experience and combined with the current situation and
forecast of future economic conditions, the company prepares a comparison table between the age
of long-term receivables and the expected credit loss rate of the entire duration to calculate the
expected credit loss.
The Company's method of measuring expected credit losses on financial instruments reflects factors
such as: an unbiased probability weighted average amount determined by evaluating a range of
possible outcomes; Time value of money; Reasonable and evidence-based information about past
events, current conditions, and projections of future economic conditions that are available at no
unnecessary additional cost or effort at the balance sheet date.
The Company calculates the expected credit loss of long-term receivables on the balance sheet date.
If the expected credit loss is greater than the carrying amount of the current impairment provision
for long-term receivables, the Company recognizes the difference as the impairment loss for long-
term receivables, debits the "credit impairment loss" and credits the "bad debt provision". Instead,
the company recognizes the difference as an impairment gain and makes the opposite accounting
record.
If the company decides that the related long-term receivables cannot be collected due to the actual
credit loss and is approved to cancel, the "bad debt reserve" and the "long-term receivables" shall
be debited and credited according to the approved amount of write-off. If the write-off amount is
greater than the loss provision already drawn, the difference will be debited to "credit impairment
loss" on a regular basis.
19. Long-term equity investment
Long term equity investments are the investment in subsidiary, in associated company and in joint
venture.
Joint control is the contractual agreement sharing of control over an economic activity by all
participants or participants’ combination and decisions or policies relating to the operating activity
of the entity require the unanimous consent of the parties sharing the control.
Significant influence exists when the entity directly or indirectly owned 20% or more but less than
50% shares with voting rights in the investee company. If holding less than 20% voting rights, the
entity shall also take other facts or circumstances into accounts when judging any significant
influences. Factors and circumstances include: representation on the board of directors or equivalent
governing body of the investee, participation in financial or operating activities policy-makin g
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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 as the investee directly disposing of related assets or liability
for accounting treatment. Equity held prior to acquisition date as available for sale financial assets
under fair value model, accumulated change on fair value previously recorded in other
comprehensive shall be transferred into investment gain/loss for the period.
Apart from the long-term equity investments acquired through business combination mentioned
above, the cost of investment for the long-term equity investments acquired by cash payment is the
amount of cash paid. For long-term equity investment acquired by issuing equity instruments, the
cost of investment is the fair value of the equity instrument issued. For long-term equity investment
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
injected to the entity by the investor, the investment cost is the consideration as specified in the
relevant contract or agreement.
The Group adopts cost method to account for investment in subsidiary and equity method for
investment in joint venture and affiliate.
Long-term equity investment subsequently measured under cost model shall increase the carrying
amount of investment by adjusting the fair value of additional investment and relevant transaction
expenses. Cash dividend or profit declared by investee shall be recognized as investment gain/loss
for the period based on the proportion share in the investee.
Long-term equity investment subsequently measured under equity method shall be adjusted for its
carrying amount according to the share of equity increase or decrease in the investee. The entity
shall recognize its share of the investee’s net profits or losses based on the fair value of the investee’s
individual identifiable assets at the acquisition date, after making appropriate adjustments thereto
in conformity with the accounting policies and accounting period, and offsetting the unrealized
profit or loss from internal transactions entered into between the entity and its associates and joint
ventures according to the shareholding attributable to the entity and accounted for as investment
income and loss based on such basis.
On disposal of a long-term equity investment, the difference between the carrying value and the
consideration actually received is recognized as investment income for the period. For long-term
investments accounted for under equity method, the movements of shareholder’s equity, other than
the net profit or loss, of the investee company, previously recorded in the shareholder’s equity of
the Company are recycled to investment income for the period on disposal.
Where the entity has no longer joint control or significant influence in the investee company as a
result of partially disposal of the investment, the remaining investment will be changed to be
accounted for as available for sale financial assets, and the difference between the fair value of
remaining investment at the date of losing joint control or significant influence and its carrying
amount shall be recognized in the profit or loss for the year. Other comprehensive income
recognized from previous equity investment under equity model shall be accounted for on the same
basis as the investee directly disposing of related assets or liability when stopping using under equity
model.
Where the entity has no longer control over the investee company as a result of partially disposal of
the investment, the remaining investment will be changed to be accounted for using equity method
providing remaining joint control or significant influence over the investee company. The difference
between carrying amount of disposed investment and consideration received actually shall be
recognized in the profit and loss for the period as investment gain or loss, and investment shall be
adjusted accordingly as if it was accounted for under equity model since acquisition. Where the
entity has on longer joint control or significant influence in the investee as a result of disposal, the
investment shall be changed to be accounted for as available for sale financial assets, and difference
between the carrying amount and disposal consideration shall be recognized in profit and loss for
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
the period, and the difference between the fair value of remaining investment at the date of losing
control and its carrying amount shall be recognized in the profit or loss for the year as investment
gain or loss.
If the entity loses its control through partially disposal of investment by stages and it’s not a bundled
transaction, the entity shall account for all transactions separately. If it’s a bundled transaction, the
entity shall regard all transactions as one disposal of subsidiary by losing control, but the difference
between disposal consideration and carrying amount of the equity investment disposed prior to
losing control, which arises from each individual transaction shall be recognized as other
comprehensive income until being transferred into profit and loss for the period by the time of losing
control.
20. Investment property
The investment property includes property and building and measured at cost model
Useful life Estimated net
Category Annual depreciation rate
(years) residual value rate
Housing and Buildings 40 3% 2.43%
21. Fixed assets
Recognition criteria of fixed assets: defined as the tangible assets which are held for the purpose of
producing goods, rendering services, leasing or for operation & management, and have more than
one year of useful life.
Fixed assets shall be recognized when the economic benefit probably flows into the Group and its
cost can be measured reliably. Fixed assets include: building, machinery, transportation equipment,
electronic equipment and others.
All fixed assets shall be depreciated unless the fixed assets had been fully depreciated and are still
being used and land is separately measured. Straight-line depreciation method is adopted by the
Group. Estimated net residual value rate, useful life, depreciation rate as follows:
Useful life Estimated net Annual
No Category
(years) residual value rate depreciation rate
1 Housing and Buildings 20-40 3%,5%,10% 2.25-4.85%
2 Machinery equipment 10-22 3%,5%,10% 4.09-9.7%
3 Transportation equipment 4-15 3%,5%,10% 6-24.25%
4 Electronic equipment 5 3%,5%,10% 18-19.4%
5 Others equipment 10-15 3%,5%,10% 6-9.7%
The Group should review the estimated useful life, estimated net residual value and depreciation
method at the end of each year. If any change has occurred, it shall be regarded as a change in the
accounting estimates.
Finance lease shall be recognized when one of the conditions are met, (1) the ownership of the asset
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
belongs to the company when the lease term is due , (2) the company has the option to buy the asset
and buy price is far lower than the fair value when exercising the option. (3) lease term is most of
the asset life (4) no significant difference between the present value of minimum lease premium and
fair value on the lease commencement date.
On commencement date, leased asset shall be recognized at the lower of fair value and the PV of
minimum lease payment, long term payable shall be recognized at the minimum lease payment and
the difference is unrecognized financing expense.
The depreciation policy of the leased fixed assets shall be consistent with that of the self-owned
fixed assets. If the ownership of asset can be reliably acquired by the lease term due date, leased
asset shall be depreciated through the expected service life, otherwise, it shall be depreciated within
the lower of the lease term and expected service life of the asset.
22. Construction in progress
The criteria and time spot of constructions in progress’s being transferred to fixed assets:
Constructions in progress are carried down to fixed assets on their actual costs when completing
and achieving estimated usable status. The fixed assets that have been completed and reached
estimated usable status but have not yet been through completion and settlement procedures are
charged to an account according to their estimate values; adjustment will be conducted upon
confirmation of their actual values. The Group should withdraw depreciation in the next month after
completion.
23. Borrowing costs
The borrowing cost includes the interest expenses of the borrowing, amortization of underflow or
overflow from borrowings, additional expenses and the foreign exchange profit and loss because of
foreign currency borrowings. The borrowing costs incurred which can be directly attribute to the
fixed assets, investments properties, inventories requesting over 1 year purchasing or manufacturing
so to come into the expected condition of use or available for sale shall start to be capitalized when
expenditure for the assets is being occurred, borrowing cost has occurred, necessary construction
for bringing the assets into expected condition for use is in progress. The borrowing costs shall stop
to be capitalized when the assets come into the expected condition of use or available for sale. The
borrowing costs subsequently incurred should be recorded into profit and loss when occurred. The
borrowing costs should temporarily stop being capitalized when there is an unusual stoppage of
over consecutive 3 months during the purchase or produce of the capitalized assets, until the
purchase or produce of the asset restart.
The borrowing costs of special borrowings, deducting the interest revenue of unused borrowings
kept in the bank or the investment income from transient investment should be capitalized. The
capitalized amount of common borrowings should be calculated as follows: average assets
expenditure of the accumulated assets expenditure excess the special borrowing, multiplied by the
capital rate. The capital rate is the weighted average rate of the common borrowings.
24. Right of use assets
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
The right to use assets refers to the right of the Company as the lessee to use the leased assets during
the lease term.
(1) Initial measurement
On the commencement date of the lease term, the Company shall make an initial measurement of
the right to use assets at the cost. The cost includes the following four items: (1) The initial
measurement amount of lease liabilities; (2) The amount of the lease payment paid on or before the
commencement date of the lease term, if there is a lease incentive, will be deducted from the amount
of the lease incentive already enjoyed; (3) The initial direct costs incurred, namely the incremental
costs incurred to achieve the lease; (4) The cost expected to be incurred for the demolition and
removal of the leased asset, the restoration of the leased asset site or the restoration of the leased
asset to the state agreed in the lease terms, except those incurred for the production of inventory.
(2) Follow-up measurement
After the commencement of the lease term, the Company shall adopt the cost model to carry out
subsequent measurement of the right to use assets, that is, to measure the right to use assets at the
cost minus accumulated depreciation and accumulated impairment losses. If the Company re-
measures the lease liabilities in accordance with the relevant provisions of the lease standards, the
book value of the right to use assets shall be adjusted accordingly.
Depreciation of usufruct assets
From the commencement date of the lease term, the Company shall make depreciation of the
usufruct. The usuary-use asset is usually depreciated in the month in which the lease begins (if the
enterprise chooses to depreciate in the month in which the lease begins, it needs to be depreciated
according to the specific situation described). The amount of depreciation deducted shall, according
to the use of the usufruct, be included in the cost of the relevant asset or the current profit and loss.
When determining the depreciation method of the right to use assets, the Company shall make a
decision based on the expected consumption mode of the economic benefits related to the right to
use assets, and shall calculate and deduct the depreciation of the right to use assets by the straight
line method.
In determining the depreciable life of the use-right assets, the Company shall follow the following
principles: Where the ownership of the leased assets is reasonably determined at the end of the lease
term, depreciation shall be accrued during the remaining service life of the leased assets; Where it
is not reasonably certain that ownership of the leased asset will be acquired at the end of the lease
term, depreciation shall be accrued within the shorter period of the lease term or the remaining
useful life of the leased asset.
Impairment of the right to use assets
In case of impairment of the right to use assets, the Company shall carry out subsequent depreciation
according to the book value of the right to use assets after deducting the impairment loss.
25. Intangible assets
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
The intangible assets of the Group refer to land use right and software. For acquired intangible
assets, the actual cost are measured at actual price paid and relevant other expenses. The cost
invested into intangible assets by investors shall be determined according to the stated value in the
investment contract or agreement, except for those of unfair value in the contract or agreement.
Land use right shall be amortized evenly within the amortization period since the remised date.ERP
system software and other intangible assets are amortized over the shortest of their estimated useful
life, contractual beneficial period and useful life specified in the law. Amortization charge is
included in the cost of assets or expenses, as appropriate, for the period according to the usage of
the assets. At the end of the year, for definite life of intangible assets, their estimated useful life and
amortization method shall be assessed. Any change shall be treated as change on accounting
estimate.
26. Impairment of long-term assets
The Group assesses at each balance sheet date whether there is any indication that long-term equity
investments, investment property, fixed assets, construction in progress and intangible assets with
definite useful life may be impaired. If there is any indication that an asset may be impaired, the
asset will be tested for impairment. Goodwill arising in a business combination and intangible
asset with infinite useful life are tested for impairment annually no matter there is any indication of
impairment or not.
Estimate of recoverable amount is the higher of its fair value less costs to sell and the present value
of the future cash flows expected to be derived from the asset.
If the recoverable amount of an asset is less than its carrying amount, the carrying amount shall be
impaired and the difference is recognised as an impairment loss and charged to profit or loss for the
period. Once an impairment loss on the assets is recognised, it is not reversed in a subsequent period.
After assets impairment loss is recognized, depreciation and amortisation of the impaired asset shall
be adjusted in the following period so that the adjusted carrying amount(less expected residual value)
can be depreciated and amortised systematically within the remaining life.
When assessing goodwill for impairment, the carrying amount of goodwill shall be allocated evenly
to the assets group or assets portfolio. When testing the assets group or assets portfolio including
goodwill, if there is any indication of impairment , ignoring the goodwill and testing the assets
group or assets portfolio alone so to work out the recoverable amount and comparing to its carrying
amount and recognize the impairment loss. After that, testing the assets group or assets portfolio
with goodwill together, comparing the carrying amount of the assets group or assets
portfolio(including goodwill allocation) with recoverable amount , goodwill impairment shall be
recognized when the recoverable amount is lower than its carrying amount.
27. Long-term deferred expenses
Long-term deferred expenses of the Group refer to leasing expenses, redecoration expense and
others. The expenses should be amortized evenly over the beneficial period. If the deferred expense
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
cannot take benefit for the future accounting period, the unamortized balance of the deferred
expenses should be transferred into the current profit or loss. Leasing expenses will be amortized
within 10 years and 30years; redecoration expense and others will be amortized within 3 years.
28. Contract liabilities
Contract liabilities reflect the Company's obligation to transfer the goods to the customer on
consideration received or receivable from the customer. Where the customer has paid the contract
consideration or the Company has obtained the right to receive the contract consideration
unconditionally before the transfer of the goods to the customer, the liability of the contract shall be
recognized in accordance with the amount received or receivable at the earlier point between the actual
payment made by the customer and the due payment.
29. Employee benefits
Employee’s benefit comprises short-term benefit, post-employment benefit, termination benefit and
other long-term employee’s benefit.
Short-term benefit includes salary, bonus, allowance, welfare, social insurance, housing funds,
labour union expense, staff training expense, during the period in which the service rendered by the
employees, the actually incurred short term employee benefits shall be recognized as liability and
shall be recognized in P&L or related cost of assets based on benefit objective allocated from the
service rendered by employees.
Post-employment benefits include the basic pension scheme and unemployment insurance etc.
Based on the risk and obligation borne by the Group, post-employment benefits are classified into
defined contribution plan and defined benefit plan. For defined contribution plan, liability shall be
recognized based on the contributed amount made by the Group to separate entity at the balance
sheet date in exchange of employee service for the period and it shall be recorded into current profit
and loss account or relevant cost of assets in accordance with beneficial objective.
Termination benefits are employee’s benefit payable as a result of either an entity’s decision to
terminate an employee’s employment before the contract due date or an employee’s decision to
accept voluntary redundancy in exchange for those benefits. An entity shall recognize the
termination benefits as a liability and an expense at the earlier date when the entity cannot unilateral
withdraw the termination benefits due to employment termination plan or due to redundancy
suggestion, or when the entity can recognize the restructuring cost or expense arising from paying
termination benefits.
Other long-term employee’s benefit refers to all other employee benefits other than short-term
benefit, post-employment benefit and termination benefit.
If other long-term employee’s benefit is qualified as defined contribution plan, contribution made
shall be recognized as liabilities accordingly for the period in which the service are rendered by the
employee and recognized in the profit or loss for the current period or relevant cost of assets. Except
other long-term employee’s benefit mentioned above, obligation arising from defined benefit plan
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
shall be recognized in the profit or loss for the current period or relevant cost of assets in accordance
with the period when the service are rendered by the employee.
30. Lease liability
(1) Initial measurement
The company shall initially measure the liabilities of the lease according to the present value of the
outstanding lease payments on the commencement date of the lease term.
1) Lease payment
The lease payment amount refers to the amount paid by the Company to the Lessor in connection
with the right to use the leased assets during the lease term, including: (1) Fixed payment amount and
substantial fixed payment amount, less the amount related to the lease incentive where there is a lease
incentive; (ii) variable lease payments dependent on indices or ratios, which are determined at the
initial measurement on the basis of the indices or ratios on the commencement date of the lease; (3)
The exercise price of the purchase option when the Company reasonably determines that the purchase
option will be exercised; (4) The term of the lease reflects the amount of money to be paid for the
termination of the lease option when the Company will exercise it; (5) The amount expected to be paid
based on the residual value of the guarantee provided by the Company.
2) Discount rate
When calculating the present value of the lease payments, the Company shall use the interest rate
embedded in the lease as the discount rate, which is the interest rate at which the sum of the present
value of the lease receipts and the present value of the unsecured residual value of the lessor is equal
to the sum of the fair value of the leased asset and the initial direct expenses of the Lessor. If the
company is unable to determine the inherent interest rate of the lease, the incremental borrowing rate
shall be used as the discount rate. Such incremental borrowing rate shall mean the interest rate payable
by the Company during a similar period under similar mortgage conditions in order to acquire assets
with a value similar to that of the usuable-use assets under similar economic circumstances. The
interest rate is related to: (1) the company's own situation, i.e., the company's solvency and credit
standing; ② The term of the "loan", i.e. the lease term; (3) The amount of "borrowed" funds, that is,
the amount of lease liabilities; (4) "collateral conditions", that is, the nature and quality of the
underlying assets; (5) Economic environment, including the jurisdiction where the lessee is located,
the valuation currency, the signing time of the contract, etc. The company's bank loan interest
rate/related lease contract interest rate/the company's latest similar asset mortgage interest rate/the
interest rate of bonds issued by the enterprise in the same period...... Based on the above adjustment
factors to obtain the incremental borrowing rate.
(2) Follow-up measurement
On the commencement date of the lease term, the Company shall carry out subsequent measurement
of the lease liabilities according to the following principles: (1) Increase the carrying amount of the
lease liabilities when recognizing the interest of the lease liabilities; (2) Reduce the carrying amount
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
of lease liabilities when paying the lease payment; (3) When the lease payment changes due to
revaluation or lease change, the book value of the lease liability shall be measured again.
The Company shall calculate the interest expense of the lease liability in each period of the lease
term at a fixed periodic interest rate and record it into the current profit and loss, except for those that
should be capitalized. The periodic interest rate refers to the discount rate used by the Company for
the initial measurement of lease liabilities, or the revised discount rate used by the Company for the
remeasurement of lease liabilities due to changes in lease payments or changes in lease.
(3) Re-measurement
After the commencement of the lease term, in the event of any of the following circumstances, the
Company shall re-measure the lease liabilities according to the present value of the lease payments
after the change and adjust the book value of the usufruct accordingly. If the book value of the right
to use assets has been reduced to zero, but the lease liabilities still need to be further reduced, the
company shall record the remaining amount into the profits and losses of the current period. (1)
Changes in the substantial fixed payment amount (in this case, the original discount rate is used to
discount); (2) The estimated amount payable of the residual value changes (in this case, the original
discount rate is used to discount); (3) Any change in the index or rate used to determine the lease
payment (in which case the revised discount rate is used); (4) The evaluation result of the call option
changes (in this case, the revised discount rate is used to discount); (5) Changes in the assessment
result or actual exercise of the lease option to renew or terminate the lease option (in which case, the
revised discount rate is used to discount the option).
31. Contingent liabilities
When the Company has transactions such as commitment to externals, discounting the trade
acceptance, unsettled litigation or arbitration which meets the following criterion, provision should
be recognized: It is the Company's present obligation; carrying out the obligation will probably
cause the Company's economic benefit outflow; the obligation can be reliably measured.
Provision is originally measured on the best estimate of outflow for paying off the present
obligations, and to consider the risk, uncertainty, time value of monetary relevant to contingent
items. If the time value of monetary is significant, the best estimate will be determined by discounted
cash outflow in the future. At each balance sheet date, the book value of provision is reviewed and
adjustment will be made on the book value if there is any change, in order to reflect the current best
estimate.
When compensation from the 3rd party is expected for full or partial contingent liability settlement,
the compensation shall be recognized as an asset separately and measured at no more than the book
value of contingent liability.
32. Share based payment
An equity-settled share-based payment in exchange for the employee’s services is measured at the
fair value at the date when the equity instruments are granted to the employee. Such fair value during
39
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
the vesting period of service or before the prescribed exercisable conditions are achieved is
recognised as relevant cost or expense on a straight-line during the vesting period based on the best
estimated quantity of exercisable equity instruments, accordingly increase capital reserve.
A cash-settled share-based payment is measured at the fair value at the date at which the Group
incurred liabilities that are determined based on the price of the shares or other equity instruments.
If it is immediately vested, the fair value of the liabilities at the date of grant is recognised as relevant
cost or expense, and corresponding liabilities. If it is exercisable only when the vesting period of
service is expired or the prescribed conditions are achieve, the fair value of liabilities undertaken by
the Group are re-measured at each balance sheet date based on the best estimate of exercisable
situation.
The fair value of the liabilities is re-measured at each balance sheet date. Any changes are
recognised in the profit or loss for the year.
If the granted equity instruments are cancelled within the vesting period, the equity instrument shall
be treated as accelerated vesting and the balance linked to the remaining vesting period shall be
recognized in the profit or loss account, accordingly be recognized in the capital reserve. If
employees or other parties can choose but fail to satisfy non-vesting conditions during the vesting
period, the Company sees this as cancellation of granted equity instruments.
33. Revenue
The revenue of the Company is mainly from sales of complete sets of equipment, engineering
installation.
The Company has performed the performance obligations in the contract, that is, when the customer
obtains the control right of the relevant goods or services, the revenue is recognized.
If the contract contains two or more performance obligations, the Company shall, at the beginning
of the contract, allocate the transaction price to each individual performance obligation according
to the relative proportion of the individual selling price of the commodities or services committed
by each individual performance obligation, and measure the income according to the transaction
price allocated to each individual performance obligation.
The transaction price is the amount of consideration to which the Company is expected to be entitled
as a result of the transfer of goods or services to the customer, excluding payments received on
behalf of third parties. The trading price recognized by the Company shall not exceed the amount
of accumulated recognized revenue that is highly unlikely to be materially reversed when the
relevant uncertainties are eliminated. Refunds to customers are expected to be excluded from the
transaction price as liabilities. Where there is a significant financing element in the contract, the
Company shall determine the transaction price based on the amount payable by the assumed
customer in cash upon acquisition of control over the goods or services. The difference between the
transaction price and the contract consideration shall be amortized over the term of the contract
using the effective interest rate method. On the commencement date of the contract, the Company
expects that the interval between the customer's acquisition of control of the goods or services and
40
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
the customer's payment shall not exceed one year, regardless of the significant financing element
existing in the contract.
If one of the following conditions is met, the Company shall perform its performance obligations
within a certain period of time; otherwise, the performance obligation shall be performed at a certain
point:
(1) When the customer performs the performance of the Company, it will obtain and consume the
economic benefits brought by the performance of the Company.
(2) The customer can control the commodities under construction during the performance of the
Company.
(3) The commodities produced by the Company during the performance of the contract shall have
irreplaceable uses, and the Company shall have the right to receive payment for the accumulated
performance part which has been completed so far during the entire contract period.
For the performance obligations performed within a certain period of time, the Company shall
recognize the income according to the performance progress within that period. If the performance
schedule cannot be reasonably determined and the Company is expected to be compensated for the
costs incurred, the revenue shall be recognized according to the amount of the cost incurred until
the performance schedule can be reasonably determined.
For performance obligations performed at a certain point, the Company recognizes revenue at the
point when the customer acquires control over the relevant goods or services. In determining
whether the customer has acquired control over the goods or services, the Company considers the
following indications:
(1). The Company shall have the right to receive the present payment for the goods or services.
(2) The Company has transferred the legal ownership of the goods to the customer.
(3) The Company has transferred the physical goods to the customer.
(4) The Company has transferred to the customer the major risks and rewards in the ownership of
the goods.
(5) The customer has accepted the goods or services, etc.
The Company determines whether it is the principal responsible person or the agent at the time of
the transaction based on whether it has control over the commodity before transferring it to the
customer. If the Company is able to control the commodity before transferring the commodity to
the customer, the Company shall be the main person responsible and shall recognize the income
according to the total amount received or the consideration; otherwise, the Company shall recognize
the income according to the amount of the commission or handling charge to be entitled to be
collected, which shall be the net amount after the total amount of consideration received or
receivable is deducted from the price paid to other relevant parties, or determined according to the
proportion of the established commission amount. The circumstances under which the Company
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
judges that it can control the goods before transferring them to the customer include:
(1) The Company shall transfer the control right of commodities or other assets to the customer after
the third party obtains the control right.
(2) The Company can lead a third party to provide services to customers on behalf of the Company.
(3) After the Company acquires the control of the commodity by a third party, it transfers the
commodity to the customer by integrating it with other products into a group of outputs by providing
significant services.
In the specific determination of the ownership of a commodity prior to its transfer to a customer, it
is not limited to the legal form of the contract, but takes into account all relevant facts and
circumstances, including:
(1) The Company undertakes the main responsibility of transferring the goods to the customers.
(2) The Company shall bear the inventory risk of the goods before or after the transfer of the goods.
(3) The Company shall have the right to determine the prices of the commodities to be traded.
(4) Other relevant facts and circumstances.
The Company's right to receive consideration for the goods or services it has transferred to the
customer (and such right is subject to factors other than the passage of time) is shown as a contract
asset, and the impairment of the contract asset is calculated on the basis of the expected credit loss.
The Company has the right to collect the consideration unconditionally from the customer as an
account receivable. The obligation of the Company to transfer the goods or services to the customer
upon receipt of the consideration receivable by the customer is shown as a contract liability.
34. Government grants
A government grant shall be recognized when the Company complies with the conditions attaching
to the grant and when the Company is able to receive the grant.
Assets-related government grant is the government fund obtained by the Company for the purpose
of long-term assets purchase and construction or establishment in the other forms. Income-related
grants are the grant given by the government apart from the assets-related grants. If no grant
objective indicated clearly in the government documents, the Company shall judge it according to
the principle mentioned above.
Where a government grant is in the form of a transfer of monetary asset, it is measured at the
amount received. Where a government grant is made on the basis of fixed amount or conclusive
evidence indicates relevant conditions for financial support are met and expect to probably receive
the fund, it is measured at the amount receivable. Where a government grant is in the form of a
transfer of non-monetary asset, it is measured at fair value. If fair value cannot be determined
reliably, it is measured at a nominal amount of RMB1 Yuan.
Assets-related government grants are recognized as deferred income ore directly offsetting the
book value of the asset, and Assets-related government grants recognized as deferred income shall
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
be evenly amortized to profit or loss over the useful life of the related asset.
Any assets are sold, transferred, disposed off or impaired earlier than their useful life expired date,
the remaining balance of deferred income which hasn’t been allocated shall be carried forward to
the income statement when the assets are disposed off.
Income-related government grants that is a compensation for related expenses or losses to be
incurred in subsequent periods are recognized as deferred income and credited to the relevant
period when the related expense are incurred. Government grants relating to compensation for
related expenses or losses already incurred are charged directly to the profit or loss for the period.
Government grants related to daily business, shall be recognized as other income in accordance
with business nature, otherwise, shall be recognized as non-operating expenses.
If any government grant already recognized needs to be returned to the government, the accounting
shall be differed according to the following circumstances:
1) originally recognized as offsetting of related assets' book value, assets book value shall be
adjusted
2) if any deferred income, book value of deferred income shall be offset, excessive portion
shall be accounted into income statement
3) Other situation, it shall be accounted into income statement directly.
35. Deferred tax assets and deferred tax liabilities
The deferred income tax assets or the deferred income tax liabilities should be recognized according
to the differences (temporary difference) between the carrying amount of the assets or liabilities and
its tax base. Deferred tax assets shall be respectively recognized for deductible tax losses that can
be carried forward in accordance with tax law requirements for deduction of taxable income in
subsequent years. No deferred tax liabilities shall be recognized for any temporary difference arising
from goodwill initially recognition. No deferred tax assets or liabilities shall be recognized for any
difference arising from assets or liabilities initial recognition on non-business combination with no
effect on either accounting profit or taxable profit (or deductible tax loss). At the balance sheet date,
deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply
to the period when the asset is realized or liability is settled.
Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be
available to offset the deductible temporary difference, deductible loss and tax reduction.
36. Lease
(1) Accounting treatment of operating leases
(1) Identification of lease
A lease is a contract whereby the lessor assigns the right to the use of an asset to the lessee for a
certain period of time in exchange for consideration. On the commencement date of the contract,
the Company evaluates whether the contract is a lease or includes a lease. A contract is a lease or
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
includes a lease if a party assigns the right to control the use of one or more identified assets for a
certain period of time in exchange for consideration. To determine whether the contract relinquishes
the right to control the use of the identified assets for a given period, the Company assesses whether
the client under the contract is entitled to receive virtually all the economic benefits arising from
the use of the identified assets during the use period and is entitled to dominate the use of the
identified assets during the use period.
If the contract contains multiple separate leases at the same time, the company will divide the
contract and make accounting treatment for each separate lease. If the contract contains both leasing
and non-leasing parts, the company shall split the leasing and non-leasing parts for accounting
treatment.
(2) The Company acts as the lessee
On the commencement date of the lease term, the Company shall recognize the right to use assets
and liabilities of the lease. The recognition and measurement of right to use assets and lease
liabilities are shown in "27. Right to use Assets" and "33. Lease liabilities ".
2) Lease change
Lease change refers to the change of lease scope, lease consideration and lease term beyond the
terms of the original contract, including the increase or termination of the right to use one or more
leased assets, the extension or shortening of the lease term stipulated in the contract, etc. The
effective date of the lease change means the date on which the parties agree on the lease change.
If the lease changes and the following conditions are met at the same time, the Company will treat
the lease change as a separate lease for accounting: (1) The lease change expands the lease scope or
the lease term by increasing the right to use one or more leased assets; (2) The increased
consideration shall be equivalent to the amount of the individual price for the extended portion of
the lease scope or the extended lease term adjusted for the circumstances of the contract.
If the change of lease is not accounted for as a separate lease, the Company shall, on the effective
date of the change of lease, apportion the consideration of the contract after the change in accordance
with relevant provisions of the lease standards and redefine the lease period after the change; The
revised discount rate is used to discount the changed lease payment amount to re-measure the lease
liabilities. When calculating the present value of the lease payment after the change, the Company
shall use the lease embedded interest rate during the remaining lease period as the discount rate; If
it is not possible to determine the leasehold interest rate for the remaining lease term, the Company
shall use the lessee's incremental borrowing rate on the effective date of the lease change as the
discount rate. With respect to the impact of the above adjustment of lease liabilities, the Company
will make accounting treatment according to the following circumstances: (1) If the change of lease
results in the reduction of the scope of lease or the shortening of lease term, the lessee shall reduce
the book value of the right to use assets and record the profits or losses related to partial or complete
termination of lease into the current profit and loss. (2) If the lease liabilities are remeasured due to
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
other lease changes, the lessee shall adjust the book value of the right to use assets accordingly.
3) Short-term leases and leases of low-value assets
For short-term leases with a lease term of no more than 12 months and low-value asset leases with
a lower value when each leased asset is a new asset, the Company chooses not to recognize the right
to use assets and lease liabilities. The Company will include the lease payments for short-term leases
and leases of low-value assets into the cost of the relevant assets or current profits and losses during
each period of the lease term in accordance with the straight-line method or other systematically
reasonable method.
(3) Our company is the lessor
On the basis that this Contract is or includes a lease as assessed in (1), the Company, as the lessor,
on the commencement date of the lease, divides the lease into a finance lease and an operating lease.
If a lease substantially transfers almost all of the risks and rewards associated with ownership of the
leased asset, the lessor classifies the lease as a finance lease and any lease other than finance lease
as an operating lease.
The Company generally classifies a lease as a finance lease if it has one or more of the following
conditions: (1) At the end of the lease term, the ownership of the leased asset passes to the lessee;
(2) The lessee has the option to purchase the leased asset, and the purchase price entered into is
sufficiently low compared with the fair value of the leased asset at the time the option is expected
to be exercised, so that it can be reasonably determined on the commencement date that the lessee
will exercise the option; (3) Although the ownership of the asset is not transferred, the lease period
accounts for most of the service life of the leased asset (no less than 75% of the service life of the
leased asset); (4) On the lease commencement date, the present value of the lease receipts is almost
equivalent to the fair value of the leased asset (not less than 90% of the fair value of the leased
asset). ; ⑤ The leased assets are special in nature, and only the lessee can use them if there is no
major transformation. The Company may also classify a lease as a finance lease if it has one or more
of the following signs: (1) If the lessee cancels the lease, the lessee shall bear the loss caused to the
lessor by the cancellation; (2) the profit or loss generated by the fluctuation of the fair value of the
residual asset belongs to the lessee; (3) The lessee has the ability to continue the lease at a rent far
below the market level until the next period.
2) Accounting treatment of operating lease
Disposal of rent
During each period of the lease term, the Company will use the straight-line method/other
systematic and reasonable methods to recognize lease receipts from operating leases as rental
income.
Incentives offered
If the rent-free period is provided, the Company shall allocate the total rent by the straight line
method/other reasonable method throughout the lease period without deducting the rent-free period,
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
and shall recognize the rental income during the rent-free period. If the Company bears certain
expenses of the Lessee, such expenses shall be deducted from the total rental income and distributed
according to the balance of the rental income after deduction.
Initial direct cost
The initial direct expenses incurred by the Company in connection with the operating lease shall be
capitalized to the cost of the underlying assets under lease and shall be booked into the current
profits and losses in stages during the lease term on the same recognition basis as the rental income.
Depreciation
For the fixed assets in the operating leased assets, the Company shall adopt the depreciation policy
for similar assets. Other operating leased assets shall be amortized in a systematic and reasonable
manner.
Variable lease payments
The variable lease payments obtained by the Company in connection with the operating lease and
not included in the lease receipts shall be recorded into the current profit and loss when actually
incurred.
Changes in operating leases
If an operating lease changes, the Company will treat it as a new lease as of the effective date of the
change, and the amount received in advance or receivable for the lease related to the lease before
the change is regarded as the amount received for the new lease.
(2) Accounting treatment of finance lease
Initial measurement
On the commencement date of the lease term, the Company shall recognize the finance lease
receivable and terminate the recognition of the finance lease assets. In the initial measurement of
the finance lease receivables, the Group shall take the net lease investment as the recorded value of
the finance lease receivables.
The net lease investment is the sum of the present value of the unsecured residual value and the
lease receipts not yet received at the commencement of the lease period, discounted at the interest
rate contained in the lease. Lease revenue refers to the amount of money that the lessor should
collect from the lessee for the assignment of the right to use the leased assets during the lease term,
including: (1) the fixed amount and substantial fixed amount payable by the lessee; If there is a lease
incentive, the amount related to the lease incentive will be deducted; (ii) variable lease payments
dependent on indices or ratios, which are initially measured according to the indices or ratios on the
commencement date of the lease; (3) the exercise price of the option to buy, provided that it is
reasonably determined that the lessee will exercise the option; (4) the amount to be paid by the
lessee to exercise the termination option, provided that the lease term reflects that the lessee will
exercise the termination option; (5) Guarantee residual value provided to the lessor by the lessee,
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
the party related to the lessee and an independent third party who has the economic ability to perform
the guarantee obligation.
Subsequent measurement
The Company calculates and recognizes the interest income for each period of the lease term at a
fixed periodic interest rate. The periodic interest rate, it is to point to determine the net investment
in the lease use contains the discount rate (if relet, sublet's interest rate implicit in the lease cannot
be determined, using the original leasing of the discount rate (adjustments according to the initial
direct costs related to sublease)), or change in the financing lease is not as a separate lease
accounting treatment, and meet if changes to take effect on the lease beginning date, The lease will
be classified as a financial lease at the revised discount rate determined in accordance with the
relevant provisions.
Accounting treatment of lease changes
If the finance lease changes and meets the following conditions at the same time, the Company will
treat the change as a separate lease for accounting: (1) The change expands the scope of lease by
increasing the right to use one or more leased assets; (2) The increased consideration shall be
equivalent to the amount of the individual price of the expanded lease area adjusted for the
circumstances of the contract.
If the change of financing lease is not as a single lease accounting treatment, and meet if changes to
take effect on the lease beginning date, the lease will be classified as an operating lease terms, the
group since the day of the effect of the change of it as a new lease accounting treatment, and prior
to the effect of the change of the net investment in the lease as the book value of the leased asset.
37. Other significant accounting policies, accounting Estimates
When preparing the financial statements, the management needs to use accounting estimate and
assumption, which will have effect on the application of accounting policy and amount of asset,
liability, income and expense. The actual circumstance maybe differs from the estimates. The
management needs to continuously assess the key assumption involved by estimate and the
judgment on uncertainty. Effect on the accounting estimate shall be recognized during the period
when estimate is changed and in future.
The following accounting estimate and key assumption will trigger the significant risk of significant
adjustment on the book value of asset and liability during the period of future.
（1） Impairment of receivable
Receivable is measured at amortized cost at the balance sheet date and assessed for any impairment
indicator and the acutely amount of impairment. Objective evidence for impairment includes
judgmental data of indicating significant decline of future cash flow of individual or group of
receivable, indicating significant negative financial performance of debtors. Had receivable is
recovered with certain proof, and in fact, it is relevant to the the matters subsequent to the the loss
recognition, the impairment recognized before shall be reversed.
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
（2） Provision of inventory impairment
Inventory is periodically evaluated at the net realizable value and any cost higher than NRV shall
be recognized as inventory impairment loss. When evaluating the NRV, net realizable value is
determined by deducting the expected selling expense and relative tax from the estimated selling
price. When actual selling price or cost differs from the previous estimates, management will make
adjustment on NRV. Therefore, the results based on the present experience may differ from the
actual results, which caused the adjustment on the carrying amount of inventory in the book.
Provision for inventory impairment may vary with the above reasons. Any adjustment on provision
for inventory impairment will affect the income statement.
（3） Provision of goodwill impairment
Each year, goodwill shall be assessed for any impairment. Recoverable amount of assets group or
asset portfolio including goodwill shall be the present value of future cash flow, which needs
estimates for calculation.
If management adjust the gross profit margin adopted by the present value of future cash flow
calculation of assets group or asset portfolio, adjusted gross profit margin is lower than the margin
applied, the impairment is required.
If management adjust the discounting rate before tax applied by the present value of future cash
flow calculation of assets group or asset portfolio, adjusted discounting rate before tax is higher
than the rate applied, the impairment is required.
If actual profit margin or discounting rate before tax is higher or lower than management’s estimate,
any impairment recognized before can not be reversed.
（4） Provision of fixed asset impairment
At the balance sheet date, the management shall implement impairment test on buildings, plant and
machinery etc which has any impairment indicator. The recoverable amount of FA is the higher of
PV of future cash flow and net value of fair value after disposal cost, the calculation needs
accounting estimate.
If management adjust the gross profit margin adopted by the present value of future cash flow
calculation of assets group or asset portfolio, adjusted gross profit margin is lower than the margin
applied, the impairment is required.
If management adjust the discounting rate before tax applied by the present value of future cash
flow calculation of assets group or asset portfolio, adjusted discounting rate before tax is higher
than the rate applied, the impairment is required.
If actual profit margin or discounting rate before tax is higher or lower than management’s estimate,
any impairment recognized before can not be reversed.
（5） Recognition of deferred tax assets
Estimate on deferred tax assets needs making estimation of taxable income and applied tax rate in
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
the following years in future. Whether deferred tax asset can be realized depends on the enough
probable taxable profit obtained in future. Tax rate change in future and the timing of temporary
difference reverse may also affect the income tax expense(income)and the balance of deferred tax.
Any change of estimate described here will cause the deferred tax adjustment.
（6） Useful life span of fixed assets and intangible assets
At least every year end, the management shall review the useful life of FA and intangible assets.
Expected useful life is based on the management’s experience on the same class of assets, with
reference to the estimate applied in the industry in conjunction with expected technology
development. When previous estimate significantly changed, depreciation and amortization in the
future shall be adjusted accordingly.
38. Changes in Accounting Policies, Accounting Estimates
None
VI. Taxation
1. The main applicable tax and rate to the Group as follows:
Tax Tax base Tax rate
Value-added tax Sales revenue or Purchase 5%、6%、9%、13%
(VAT)
City construction Value-added tax payables 7%
tax
Education Value-added tax payables 3%
surcharge
Local education Value-added tax payables 2%
surcharge
Enterprise income Current period taxable profit 15% or 25%
tax(EIT)
70% of cost of own property or
Real estate tax 1.2% or 12%
revenue from leasing property
Land use tax Land using right area Fixed amount per square meter
Other tax According to the relevant
provisions of the state and local
Notes for tax entities with different EIT rate
Tax entities EIT rate
Bingshan Refrigeration & Heat Transfer Technologies Co. ,Ltd 15%
Dalian Bingshan Group Engineering Co., Ltd. 25%
Dalian Bingshan Group Sales Co., Ltd. 25%
Dalian Bingshan Air-conditioning Equipment Co., Ltd. 15%
49
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Tax entities EIT rate
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%
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%
Sonyo Refrigeration (Dalian) Co., Ltd. 15%
2. Tax preference
The Company obtained the qualification of high and new technology enterprises on 3rd December,
2020 approved by Dalian Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax
Bureau and Local tax Bureau. The Certificate No. is GR202021200646, and the validity duration is
three years. According to the tax law, the Company can be granted for the preferential tax policy of
enterprise income tax rate of 15% in three years.
The Company’s subsidiary, Dalian Bingshan Air-conditioning Equipment Co., Ltd. obtained the
qualification of high and new technology enterprises on 3rd December, 2020 approved by Dalian
Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax
Bureau. The Certificate No. is GR202021200672, and the validity duration is three years.
According to the tax law, Bingshan Air-conditioning can be granted for the preferential tax policy
of enterprise income tax rate of 15% in three years.
The Company’s subsidiary, Dalian Bingshan Guardian Automation Co., Ltd. obtained the
qualification of high and new technology enterprises on 16th November, 2018 approved by Dalian
Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax
Bureau. The Certificate No. is GR20181200562, and the validity duration is three years. According
to the tax law, Bingshan Guardian can be granted for the preferential tax policy of enterprise
income tax rate of 15% in three years.
The Company’s subsidiary, Wuhan New World Refrigeration Industrial Co., Ltd obtained the
qualification of high and new technology enterprises on 15th November, 2018 approved by Hubei
Science Technology Bureau, Hubei Finance Bureau, Hubei State Tax Bureau and Hubei Local tax
Bureau. The Certificate No. is GR201842000605, and the validity duration is three years.
According to the tax law, Wuhan New World Refrigeration 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
50
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax
Bureau. The Certificate No. is GR202021200570, and the validity duration is three years.
According to the tax law, Universe 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 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.
The Company’s subsidiary, Sonyo Refrigeration (Dalian) Co., Ltd.(hereinafter referred to
as“ Sonyo Refrigeration System” obtained the qualification of high and new technology enterprises
on 22th October, 2021 approved by Dalian Science Technology Bureau, Dalian Finance Bureau,
Dalian State Tax Bureau and Local tax Bureau. The Certificate No. is GR202121200368, 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 , Sonyo Refrigeration System and Sonyo Refrigeration enjoy
the tax preference.
VII. Notes to Consolidated Financial Statements
1. Cash and cash in bank
51
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Item Closing Balance Opening Balance
Cash on hand 48,506.18 80,702.47
Cash in bank 828,620,040.40 922,122,608.84
Other cash and cash equivalents 106,646,177.74 83,962,587.87
Total 935,314,724.32 1,006,165,899.18
Note: The total amount of restricted monetary funds at the end of the period was 106,646,177.74 Yuan,
including 66,218,472.37 Yuan for bank acceptance, 37,235,734.79 Yuan for letter of credit, 3,191,970.58
for migrant workers.
2. Notes receivable
(1) Category of notes receivable
Items Closing Balance Opening Balance
Bank acceptance notes 416,436,839.49 493,019,785.95
Commercial acceptance notes 19,701,393.47 12,925,475.23
Total 436,138,232.96 505,945,261.18
Closing Balance Opening Balance
Provision for Provision for
Items Booking balance Book Booking balance
bad debts bad debts Book value
value
Amount % Amount % Amount % Amount %
Including:
Notes receivable with
436,599,273 100.0 0.0 436,138,2 100.0 975,874.7
provision for bad .18 0%
461,040.22
0% 32.96
506,921,135.95
0% 7
0.19% 505,945,261.18
debts by combination
Including:
416,436,839 95.12 416,436,8 97.26
Bank acceptance bill .49 % 39.49
416,436,839.49
%
493,019,785.95
20,162,433. 2.2 19,701,39 975,874.7
trade acceptance draft 69
4.88% 461,040.22
9% 3.47
13,901,350.00 2.74%
7
7.02% 12,925,475.23
436,599,273 100.0 0.0 436,138,2 100.0 975,874.7
Total 461,040.22 506,921,135.95 0.00% 505,945,261.18
.18 0% 0% 32.96 0% 7
Provision for bad debts by combination:
Closing Balance
Items
Booking balance Bad debt provision Provision ratio
Trade acceptance
20,162,433.69 461,040.22 2.29%
draft
Instructions for determining the basis for this combination:
52
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
If the bad debt provision for bills receivable is accrued according to the general model of expected
credit loss, please refer to the disclosure method of other receivables to disclose the relevant
information of bad debt provision:
Applicable Not applicable
(2) Provision for bad debts for the current period:
Provision for bad debts in the current period:
Opening Change during the year Closing
Category
balance Accrued Collected/reversed Written-off Others Balance
Bad debt
provision for 975,874.77 512,380.99 1,027,215.54 461,040.22
notes receivable
Total 975,874.77 512,380.99 1,027,215.54 461,040.22
Among them, the amount of bad debt provision recovered or reversed in the current period is important:
Applicable Not applicable
(3)Notes receivable pledged by the company at the end of the period
Items Closing pledged amount
Bank acceptance notes 142,360,499.62
Total 142,360,499.62
(4) Notes receivable endorsed or discounted but not mature at the end of year:
Item Closing amount no more Closing amount still
recognized recognized
Bank acceptance notes 176,802,827.00
Trade acceptance draft 290,000.00
Total 177,092,827.00
3. Accounts receivable
(1) Category of accounts receivable
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
23,257,124.30 1.12% 20,424,690.50 87.82% 2,832,433.80
on individual basis
Bad debt provision
2,061,553,690.08 98.88% 508,135,557.55 23.92% 1,553,418,132.53
on group
Including: aging as
characteristics of 2,061,553,690.08 98.88% 508,135,557.55 23.92% 1,553,418,132.53
credit risk
Total 2,084,810,814.38 100.00% 528,560,248.05 24.63% 1,556,250,566.33
53
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
(Continued)
Opening 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
1) Bad debt provisions on individual basis
Closing Balance
Name Accounts Provision for Proportion Reason
receivable bad debts (%)
Wuxi Jinshang Hongyang not expected to be
10,403,258.00 10,403,258.00 100.00%
electromechanical Equipment Co., LTD recovered
YIDU(SY)Cold Chain Logistics
635,135.70 635,135.70 100.00%
Evolution Co.,Ltd.
Mudanjiang Zhongnong Batch Cold not expected to be
914,911.20 914,911.20 100.00%
Chain Logistics Co. LTD recovered
not expected to be
Qingyang Haiyue Agriculture Co Ltd 585,000.00 585,000.00 100.00%
recovered
Enforcement has
been applied for
Chishui Nong Shang LV 4,686,819.40 3,106,289.40 66.00%
and not expected to
be recovered
Enforcement has
Guizhou rural commercial tourism been applied for
6,032,000.00 4,780,096.20 79.00%
development Co., LTD and not expected to
be recovered
Total 23,257,124.30 20,424,690.50 —
Provision for bad debts by combination:
Items Closing Balance
54
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Booking balance Provision %
within 1 year 1,218,732,907.83 69,377,372.05 4.85%
1-2 years 298,717,763.13 49,331,536.60 15.60%
2-3 years 123,975,715.30 30,826,384.10 26.65%
3-4 years 71,384,457.40 44,847,889.63 56.34%
4-5 years 125,639,035.01 90,648,563.76 72.75%
more than 5 years 223,103,811.42 223,103,811.42 100.00%
Total 2,061,553,690.08 508,135,557.55
Instructions for determining the basis for this combination:
If the bad debt provision for accounts receivable is accrued according to the general model of
expected credit loss, please refer to the disclosure method of other receivables to disclose the relevant
information of bad debt provision:
Applicable Not applicable
Disclosure by age
Aging Closing Balance
Within1 year 1,220,476,722.69
1to 2 years 313,284,161.36
2 to 3 years 130,922,626.50
More than 3 years 420,127,303.83
3 to 4 years 71,384,457.40
4 to 5 years 125,639,035.01
More than 5 years 223,103,811.42
Total 2,084,810,814.38
2) Bad debt provision accrued and written-off (withdraw)
Provision for bad debts in the current period:
Opening Change during the period Closing
Category
balance Accrued Collected/reversed Written-off Others Balance
Bad debt
provision
for 491,918,796.75 24,630,411.14 4,635,130.33 3,983,646.00 20,629,816.49 528,560,248.05
accounts
receivable
3) Accounts receivable written off in current period
Item Written off amount
Receivable actually written off 3,983,646.00
Among them, the important accounts receivable write-off situation:
55
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Whether the
The nature Written off payment is
Written off Reason for
Company of accounts procedures caused by a
amount written off
receivable performed related
transaction
Chongqing
Zhongji
Trade Non-asset Board
refrigeration 1,113,700.00 No
receivable payment Resolution
equipment
Co., LTD
Wudi Keyi
Trade Non-asset Board
Chemical 786,000.00 No
receivable payment Resolution
Co., LTD
Yulin
General
Huaneng coal Trade Non-asset
585,000.00 manager No
technology receivable payment
approval
Co., LTD
Shanghai
Hantest
Non-asset Board
experimental Construction 430,470.00 No
payment Resolution
Equipment
Co., LTD
Shandong
Yucheng
Trade Non-asset Board
Dayu Fine 352,550.00 No
receivable payment Resolution
chemical Co.,
LTD
Shenyang
Chunhui Trade Non-asset Board
217,640.00 No
Engineering receivable payment Resolution
Co., LTD
Total 3,485,360.00
4. Receivables financing
Items Closing Balance Opening Balance
Notes receivable 289,036,299.90 58,792,792.70
Total 289,036,299.90 58,792,792.70
Increase and decrease of receivables in financing capital period and changes in fair value
Applicable Not applicable
If the provision for impairment of receivable financing is accrued according to the general model of
56
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
expected credit loss, please refer to the disclosure method of other receivables to disclose the relevant
information of impairment provision:
Applicable Not applicable
5. Accounts paid in advance
(1) Aging of accounts paid in advance
Closing Balance Opening Balance
Items
Amount Percentage Amount Percentage
Within 1 year 148,999,178.28 82.26% 143,894,431.33 83.66%
1 to 2 years 22,598,148.49 12.48% 18,707,868.78 10.88%
2 to 3 years 4,175,311.50 2.31% 4,457,439.74 2.59%
Over 3 years 5,360,212.51 2.96% 4,931,728.27 2.87%
Total 181,132,850.78 171,991,468.12
6. Other receivables
Items Closing Balance Opening Balance
Dividends receivable 4,361,299.55 14,495.00
Other receivable 51,813,313.05 51,379,979.24
Total 56,174,612.60 51,394,474.24
(1) Dividends receivable
1) Classification of Dividends Receivable
Items(or Investee) Closing Balance Opening Balance
Keibin Ocean Cooling
and Heating Industry 2,000,000.00 0.00
(Dalian) Co., LTD
Jiangsu Jingxue
Energy Saving 1,610,172.00 0.00
Technology Co., Ltd.
Dalian Bingshan
Group Huahuida
751,127.55 0.00
Financial Leasing Co.,
Ltd.
Wuhan Iron and Steel
14,495.00
Co., Ltd.
Total 4,361,299.55 14,495.00
2)Provision for bad debts
Applicable Not applicable
(2). Other receivables
1) Other receivables categorized by nature
57
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Nature Closing Balance Opening Balance
Receivables and Payables 37,307,092.39 38,051,147.58
Guarantee deposits 36,418,813.60 37,147,665.19
Petty cash 5,587,886.14 5,099,052.90
Others 7,562,233.95 6,088,641.82
Total 86,876,026.08 86,386,507.49
2) Provision for bad debts
The first phase The second phase The third phase
Provision for bad debts Expected Credit Loss Expected Credit Loss for Total
Expected credit losses in the
for the duration (No the duration (Credit
next 12 months
Credit Devaluation) impairment has occurred)
Balance on January 1, 2023 2,334,895.21 32,671,633.04 35,006,528.25
The balance of January 1, 2023 in
the current period
Provision for current period 553,801.19 271,665.35 825,466.54
Reversal for current period 326,938.81 465,596.13 792,534.94
Others 23,253.18 23,253.18
Balance on June 30, 2023 2,585,010.77 32,477,702.26 35,062,713.03
Changes in book balances with significant changes in loss provisions in the current period
Applicable Not applicable
Disclosure by age
Aging Closing Balance
Within 1 year 27,603,905.60
1-2 years 15,557,531.41
2-3 years 8,066,097.57
Over 3 years 35,648,491.50
3-4 years 6,588,361.07
4-5 years 22,533,240.11
Over 5 years 6,526,890.32
Total 86,876,026.08
3) Provisions for bad debts accrued, recovered or reversed in the current period
Provision for bad debts in the current period:
Change during the year
Opening Closing
Category Accrued Collected/re Written-
balance Others Balance
versed off
Provision for bad
35,062,713.0
debts of other 35,006,528.25 825,466.54 792,534.94 23,253.18
3
receivables
35,062,713.0
Total 35,006,528.25 825,466.54 792,534.94 23,253.18
3
4) Other receivables from the top 5 debtors
58
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
% of
Closing Closing Balance
Name Category Aging the total
Balance of Provision
OR
Hangzhou Zhonghong New Energy
5,145,000.00 2-3 years 5.92% 815,482.50
Technology Co., Ltd.
State Tax Bureau Dalian Shahekou District tax Within 1
1,708,353.65 1.97% 62,695.68
Bureau year
Dalian Economic and Technological Stock Within 2
1,431,475.60 1.65%
Development Zone State Taxation Bureau transfer year
Wuyuan county Furun meat processing Co., Return Within 3
1,331,766.93 1.53% 48,742.67
LTD payment year
Compensa
Over 5
Dalian Detai Ganghua Gas Co., LTD tion 1,100,000.00 1.27% 40,260.00
years
payments
Total 10,716,596.18 12.34% 967,180.85
7. Inventories
(1) Categories of inventories
Closing Balance
Item
Book value Provision for decline Net book value
Raw materials 310,344,042.33 40,065,358.65 270,278,683.68
Working in progress 233,127,786.61 7,400,079.86 225,727,706.75
Finished goods 405,631,893.62 41,675,934.58 363,955,959.04
Contract performance cost 585,394,191.95 27,781,458.66 557,612,733.29
goods shipped in transit 96,153,672.86 732,047.12 95,421,625.74
Low-value consumable 7,541,035.21 333,360.41 7,207,674.80
Self-manufactured semi- 39,116,568.17 39,116,568.17
finished products
Commissioned processing
3,728,530.43 3,728,530.43
materials
House acquired as payment
2,708,646.00 1,149,186.00 1,559,460.00
for a debt
Total 1,683,746,367.18 119,677,714.82 1,564,068,652.36
(Continue)
Opening 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
Contract performance
518,190,428.65 24,029,331.96 494,161,096.69
cost
goods shipped in transit 64,331,292.17 463,920.35 63,867,371.82
59
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Opening Balance
Item
Book value Provision for decline Net book value
Low-value consumable 161,125.34 161,125.34
Self-manufactured 30,898,915.81 30,898,915.81
semi-finished products
Commissioned
15,134,850.12 540,289.54 14,594,560.58
processing materials
House acquired as 2,708,646.00 1,149,186.00 1,559,460.00
payment for a debt
Total 1,466,946,514.70 71,601,734.46 1,395,344,780.24
(2) Provision for impairment of inventories and provision for impairment of contract performance
costs
Increase Decrease
Opening Reverse/ Others Closing
Item
Balance Accrual Other Written- transferre Balance
off d
Raw materials 17,594,044.66 31,757.02 22,790,431.86 350,874.89 40,065,358.65
Working in progress 7,091,948.88 153,551.73 154,579.25 7,400,079.86
Finished goods 20,733,013.07 1,602,365.00 20,167,060.39 826,503.88 41,675,934.58
Contract performance cost 24,029,331.96 11,574,524.36 7,822,397.66 27,781,458.66
goods shipped in transit 463,920.35 268,126.77 732,047.12
Low-value consumable 333,360.41 333,360.41
Self-manufactured semi-
finished products
Commissioned processing
materials 540,289.54 540,289.54
House acquired as payment
for a debt 1,149,186.00 1,149,186.00
Total 71,601,734.46 2,121,034.16 54,954,722.63 8,648,901.54 350,874.89 119,677,714.82
8. Contract assets
Closing Balance Opening Balance
Item Provision for Net book Provision for Net book
Book value Book value
decline value decline value
Unexpired warranty
259,311,583.05 34,795,601.71 224,515,981.34 210,149,278.14 31,927,565.84 178,221,712.30
money
The time period method
recognizes receipts 87,378,823.36 16,885,715.83 70,493,107.53 61,997,091.19 14,427,927.71 47,569,163.48
pending settlement
Total 346,690,406.41 51,681,317.54 295,009,088.87 272,146,369.33 46,355,493.55 225,790,875.78
If the provision for impairment of contract assets is accrued according to the general model of expected
credit loss, please refer to the disclosure method of other receivables to disclose the relevant
information of impairment provision:
Applicable Not applicable
Provision for bad debt
60
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Item Accrued Collected/reversed Written-off reason
Unexpired warranty money 326,312.49
The time period method recognizes receipts
2,457,788.13
pending settlement
Total 2,784,100.62 --
9. Non-current assets maturing within one year
Item Closing Balance Opening Balance
Long-term receivables due within one year 12,571,309.30 15,715,631.52
Total 12,571,309.30 15,715,631.52
10. Other current assets
Item Closing Balance Opening Balance
Contract acquisition cost 3,592,142.31
Prepaid income tax presented
13,546,207.88 9,010,312.91
at net amount after offsetting
Input VAT to be deducted 24,101,491.07 12,825,675.49
Prepaid expenses 234,800.41 16,919.61
Prepaid turnover tax 30,551,584.63 11,646,669.59
Total 72,026,226.30 33,499,577.60
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 4 28,922.00 5 ,162,458.90
(Continued)
Item Opening Balance Discounted
rate
Carrying
Provision Book value
amount
Lease premium - - -
---Unrealized financing income - - -
Goods sold by installments 5,162,458.90 5,162,458.90 5,162,458.90 4.75%
Total 5,162,458.90 5,162,458.90 5,162,458.90
(2) Provision for bad debt
61
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
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
62
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
12.Long-term equity investments
Increase/Decrease
Gains and Provision
Adjustmen
Beginning losses Cash bonus for Provision for
Investee t of other Change of Ending balance
balance recognized or profits impairment impairment
Increased Decreased comprehen other Others
under the announced of the
sive equity
equity to issue current
income
method period
Dalian Benzhuang Chemical Co., Ltd. 9,819,096.80 1,717,629.40 -1,645,994.10 9,890,732.10
Songzhi Dayang Cooling and Heating
60,089,313.51 -532,555.89 2,000,000.00 57,556,757.62
Technology (Dalian) Co., Ltd.
Dalian Fuji Bingshan Vending Machine
111,101,339.93 -15,573,573.93 95,527,766.00
Co., Ltd.
Lingzhong Bingshan Refrigeration
15,401,109.10 867,056.87 16,268,165.97
(Dalian) Co., Ltd.
Dalian Bingshan Group Huahuida
Financial Leasing Co., Ltd.
Jiangsu Jingxue Energy Saving
140,124,248.76 2,326,132.50 1,610,172.00 140,840,209.26
Technology Co., Ltd.
Dalian Bingshan Metal Technology Co.,
175,313,807.46 13,760,359.73 189,074,167.19
Ltd.
Dalian Bingshan Group Huahuida
45,603,876.95 639,868.03 751,127.55 45,492,617.43
Financial Leasing
Wuhan Scaf Power Control Equipment
5,534,979.43 249,116.74 5,784,096.17
Co., Ltd.
Total 562,987,771.94 1,717,629.40 90,409.95 4,361,299.55 560,434,511.74
63
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
13. Other non-current financial assets
Item Closing Balance Opening Balance
Financial assets classified as fair value through profit or loss 154,314,864.51 149,950,861.31
Total 154,314,864.51 149,950,861.31
14. Investment property
Property& Construction in
Item Land-use-rights Total
Building progress
I. Initial Cost
1. Opening Balance 230,594,490.07 26,094,438.38 256,688,928.45
2. Increase 2,277,713.41 2,277,713.41
(1) Outsourcing
(2)Inventory\fixed
assets\construction-in-progress 2,277,713.41 2,277,713.41
transfer
(3)Business combination
increase
3. Decrease
(1) Disposal
(2)Transferred to other
4. Closing Balance 232,872,203.48 26,094,438.38 258,966,641.86
II. Accumulated Depreciation
and Accumulated
Amortization
1. Opening Balance 128,527,417.44 12,828,592.81 141,356,010.25
2. Increase 3,669,112.49 260,944.38 3,930,056.87
(1)Provision or amortization 3,669,112.49 260,944.38 3,930,056.87
3. Decrease
(1) Disposal
(2) Transferred to other
4. Closing Balance 132,196,529.93 13,089,537.19 145,286,067.12
III. Impairment Reserve
1. Opening Balance
2. Increase
(1)Provision
3. Decrease
(1) Disposal
(2) Transferred to other
4. Closing Balance
IV. Book Value
1. Closing book value 100,675,673.55 13,004,901.19 113,680,574.74
2. Opening book value 102,067,072.63 13,265,845.57 115,332,918.20
64
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
15. Fixed assets
Items Closing Book Value Opening Book Value
Fixed asset 1,311,960,863.65 1,229,029,368.93
Total 1,311,960,863.65 1,229,029,368.93
(1) Fixed assets detail
Property& Machinery Transportatio Other
Item Equipment Total
buildings Equipment n Equipment
I. Initial Cost
1. Opening Balance 833,131,692.61 1,700,788,050.58 21,850,467.55 215,907,705.08 2,771,677,915.82
2. Increase 109,068,746.24 152,968,003.64 5,364,988.69 91,658,755.48 359,060,494.05
(1) Purchase 875,468.89 19,702,524.38 57,079.65 53,572,787.06 74,207,859.98
(2) Transferred
from construction- 1,228,239.34 18,756,742.27 413,539.84 7,657,262.63 28,055,784.08
in-progress
(3) Acquired from
business 106,965,038.01 114,508,736.99 4,894,369.20 30,428,705.79 256,796,849.99
combination
3. Decrease 3,541,375.62 11,924,145.77 651,635.20 5,414,786.57 21,531,943.16
(1) Dispose or scrap 3,541,375.62 11,924,145.77 651,635.20 5,414,786.57 21,531,943.16
4. Closing Balance 938,659,063.23 1,841,831,908.45 26,563,821.04 302,151,673.99 3,109,206,466.71
II. Accumulated
Depreciation
1. Opening Balance 244,228,011.91 1,120,019,881.71 15,419,223.76 149,998,682.42 1,529,665,799.80
2. Increase 88,750,448.09 133,322,894.49 3,933,017.59 42,519,513.37 268,525,873.54
(1)Accrued 11,713,758.60 34,260,692.30 572,045.72 16,125,980.92 62,672,477.54
Business
consolidation 77,036,689.49 99,062,202.19 3,360,971.87 26,393,532.45 205,853,396
increase
3. Decrease 1,482,386.08 11,201,214.18 607,645.00 5,284,846.90 18,576,092.16
(1) Disposal or
403,387.15 11,201,214.18 607,645.00 5,284,846.90 17,497,093.23
scrap
Business
consolidation 1,078,998.93 1,078,998.93
increase
4. Closing Balance 331,496,073.92 1,242,141,562.02 18,744,596.35 187,233,348.89 1,779,615,581.18
III. Impairment
Reserve
1. Opening Balance 201,250.96 8,839,885.62 286,519.26 3,655,091.25 12,982,747.09
2. Increase 1,960,721.36 2,231,844.13 125,347.83 1,315,706.46 5,633,619.78
65
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Property& Machinery Transportatio Other
Item Equipment Total
buildings Equipment n Equipment
(1)Accrued
Business
consolidation 1,960,721.36 2,231,844.13 125,347.83 1,315,706.46 5,633,619.78
increase
3. Decrease 816,020.05 115,136.79 125,347.83 55,188.15 986,344.99
(1) Disposal or
816,020.05 115,136.79 55,188.15 986,344.99
scrap
4. Closing Balance 1,345,952.27 10,956,592.96 411,867.09 4,915,609.56 17,630,021.88
IV. Book Value
1. Closing book
605,817,037.04 588,733,753.47 7,407,357.60 110,002,715.54 1,311,960,863.65
value
2. Opening book
588,702,429.74 571,928,283.25 6,144,724.53 62,253,931.41 1,229,029,368.93
value
16. Construction-in-progress
Item Closing book value Opening book value
Construction-in-progress 120,460,980.49 115,577,902.54
Total 120,460,980.49 115,577,902.54
(1) Construction in progress details
Closing Balance Opening Balance
Item
Book Balance Provision Book Value Book Balance Provision Book Value
Renovation of
buildings and
26,912,256.65 26,912,256.65 24,796,146.56 24,796,146.56
ancillary
facilities
Installation and
renovation of
machine tools 87,088,739.77 87,088,739.77 82,341,565.62 82,341,565.62
and mechanical
equipment
Smart
Manufacturing 6,459,984.07 6,459,984.07 3,575,525.17 3,575,525.17
Software
Dusty gas water
waste heat
power 9,164,665.19 4,300,000.00 4,864,665.19
generation
project
Total 120,460,980.49 120,460,980.49 119,877,902.54 4,300,000.00 115,577,902.54
(2) Change in the significant construction in progress
66
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Includin
Percen g: Inter
Amou Accum
t of Progre Accumu est
Openi nt Closin ulated
Other invest ss lated capit Sourc
Budge ng Incre transfe g capital
Name reduct ment of capitaliz alizat e of
t Balan ase rred to Balan ized
ions agains constr ed ion funds
ce fixed ce interes
t uction interest rate(
assets t
budget of the %)
year
Renovatio
n of
buildings 27,271,8 24,796,1 2,116,11 26,912,2 self-
99% 99%
and 36.00 46.56 0.09 56.65 raised
ancillary
facilities
Installation
and
renovation
of machine 101,691, 82,341,5 14,292,1 25,421. 9,519,511 87,088,7 self-
86% 86%
tools and 814.04 65.62 06.90 59 .16 39.77 raised
mechanica
l
equipment
Smart
Manufactu 7,535,45 3,575,52 3,925,45 1,040,9 6,459,98 self-
86% 86%
ring 6.22 5.17 6.22 97.32 4.07 raised
Software
Dusty gas
water
waste heat 9,164,66 9,164,665
power 5.19 .19
generation
project
136,499, 119,877, 20,333,6 1,066,4 18,684,17 120,460, 136,499, 119,877,
Total 106.26 902.54 73.21 18.91 6.35 980.49 106.26 902.54
17.Right of use assets
Mechanical Transportatio Electronic Land use
Item Buildings Total
equipment n Equipment equipment right
I. Initial Cost
1. Opening Balance 12,258,253.25 22,042,380.89 334,540.86 194,322.58 7,945,762.91 42,775,260.49
2. Increase 344,683.94 7,579,035.02 7,923,718.96
Rent 344,683.94 344,683.94
Business consolidation
7,579,035.02 7,579,035.02
increase
3. Decrease 2,109,328.37 19,391,531.33 21,500,859.7
Disposal or scrapping 116,777.78 116,777.78
Allocation of fixed assets 2,109,328.37 19,274,753.55 21,384,081.92
4. Closing Balance 10,493,608.82 2,650,849.56 334,540.86 194,322.58 15,524,797.93 29,198,119.75
67
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Mechanical Transportatio Electronic Land use
Item Buildings Total
equipment n Equipment equipment right
II. Accumulated
depreciation
1. Opening Balance 2,561,983.47 7,244,798.14 223,027.24 99,228.48 1,704,560.90 11,833,598.23
2. Increase 3,328,309.38 2,794,264.34 55,756.80 24,807.12 1,426,820.64 7,629,958.28
(1)Accrued 3,328,309.38 2,794,264.34 55,756.80 24,807.12 1,426,820.64 7,629,958.28
3. Decrease 7,518,212.90 7,518,212.90
(1) Disposal 38,394.98 38,394.98
Allocation of fixed assets 7,479,817.92 7,479,817.92
4. Closing Balance 5,890,292.85 2,520,849.58 278,784.04 124,035.60 3,131,381.54 11,945,343.61
III. Impairment Reserve
1. Opening Balance
2. Increase
(1)Accrued
3. Decrease
(1) Disposal
4. Closing Balance
IV. Book Value
1. Closing book value 4,603,315.97 129,999.98 55,756.82 70,286.98 12,393,416.39 17,252,776.14
2. Opening book value 9,696,269.78 14,797,582.75 111,513.62 95,094.10 6,241,202.01 30,941,662.26
18. Intangible assets
(1) Intangible assets list
Land use Patent Non Patent
Item Others Total
right technology technology
I. Initial Cost
1. Opening Balance 173,151,420.72 17,630,188.82 5,773,680.00 59,376,795.82 255,932,085.36
2. Increase 52,671,539.71 13,741,642.20 66,413,181.91
(1) Purchase 663,716.79 663,716.79
(2) Internal R&D
(3)Acquired from business
52,671,539.71 13,000,642.22 65,672,181.93
combination
(4) Transfer of construction
77,283.19 77,283.19
in progress
3. Decrease
(1) Disposal
4. Closing Balance 225,822,960.43 17,630,188.82 5,773,680.00 73,118,438.02 322,345,267.27
68
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Land use Patent Non Patent
Item Others Total
right technology technology
II.Accumulated
amortization
1. Opening Balance 47,596,987.88 9,040,676.05 4,273,700.00 26,944,001.36 87,855,365.29
2. Increase 19,014,519.47 714,758.11 250,002.00 13,692,873.52 33,672,153.10
(1)Accrued 1,159,122.03 714,758.11 250,002.00 2,995,322.57 5,119,204.71
Acquired from business
17,855,397.44 10,697,550.95 28,552,948.39
combination
3. Decrease
(1) Disposal
4. Closing Balance 66,611,507.35 9,755,434.16 4,523,702.00 40,636,874.88 121,527,518.39
III. Impairment Reserve
1. Opening Balance
2. Increase 50,980.35 50,980.35
(1)Accrued 50,980.35 50,980.35
3. Decrease
4. Closing Balance
IV. Book Value
1. Closing book value 159,211,453.08 7,874,754.66 1,249,978.00 32,430,582.79 200,766,768.53
2. Opening book value 125,554,432.84 8,589,512.77 1,499,980.00 32,432,794.46 168,076,720.07
19. Goodwill
(1) Original cost of goodwill
Increased during Decreased during current
current year year
Opening Closing
Name Enterprise
Balance Balance
s merger Other Disposal Other
increase
Dalian Nevis Cooling and
1,440,347.92 1,440,347.92
Heating Technology Co., Ltd.
Dalian Bingshan Group
310,451.57 310,451.57
Engineering Co., Ltd.
Sonyo
240,922,872.80 240,922,872.80
Compressor(Dalian)Co.,Ltd
Sonyo Refrigeration System
5,671,836.12 5,671,836.12
(Dalian) Co., Ltd.
Sonyo Refrigeration (Dalian)
22,455,467.62 22,455,467.62
Co., Ltd.
Total 248,345,508.41 22,455,467.62 270,800,976.03
20. Long-term unamortized expense
69
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Opening Other Closing
Item Increase Amortization
Balance Decrease Balance
Employee’s dormitory use right 1,596,735.42 69,239.16 1,527,496.26
Renovation and rebuilding 339,641.30 53,145.00 286,496.30
Membership fee 390,500.00 8,250.00 382,250.00
New plant greening fee 3,940,176.58 446,057.76 3,494,118.82
Amortization of jigs and molds 219,513.62 365,504.04 213,390.53 371,627.13
Total 6,486,566.92 365,504.04 790,082.45 6,061,988.51
21. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets without offsetting
Item Closing Balance Opening Balance
Deductible Deferred tax assets Deductible Deferred tax
temporary temporary assets
difference difference
Provision for
104,845,345.79 16,661,111.30 110,205,587.05 18,013,430.31
impairment of assets
Unrealized profit from
0.00 - 13,034,503.47 1,955,175.52
internal transaction
Deductible loss 9,991,507.80 1,498,726.17 9,991,507.80 1,498,726.17
Provision for credit
424,347,503.53 77,627,388.67 383,685,092.04 70,892,192.53
impairment
Projected liabilities 13,247,933.73 2,518,045.11 16,786,967.43 2,518,045.11
Withholding sales
13,744,913.65 2,061,737.05 13,744,913.65 2,061,737.05
rebates
Depreciation of fixed
35,600,567.62 5,340,085.14 35,600,567.62 5,340,085.14
assets
Others 41,655.78 6,248.37 845,210.65 126,781.60
Total 601,819,427.90 105,713,341.81 583,894,349.71 102,406,173.43
(2) Deferred tax liabilities without offsetting
Item Closing Balance Opening Balance
Taxable temporary Deferred tax Taxable temporary Deferred tax
difference liabilities difference liabilities
Revaluation increase in
business combination asst 294,119,069.25 44,117,860.39 211,352,103.77 31,702,815.57
not under same control
Changes in the fair value
of other non-current 151,372,445.87 22,705,866.88 137,357,000.73 20,603,550.11
financial assets
Depreciation of fixed
37,351,250.43 5,602,687.56 46,545,245.48 6,981,786.82
assets
Total 482,842,765.55 72,426,414.83 395,254,349.98 59,288,152.50
(2) Deferred income tax assets or liabilities shown net of offset
Deferred tax assets and The ending balance of a The amount of deferred The beginning balance of
Item liabilities at the end of deferred tax asset or tax assets and liabilities a deferred tax asset or
the balance liability after offset offset at the beginning of liability after offset
70
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
the period
Deferred tax assets 5,602,687.56 100,110,654.25 6,981,786.82 95,424,386.61
Deferred tax liabilities 5,602,687.56 66,823,727.27 6,981,786.82 52,306,365.68
(4) Unrecognized deferred tax assets details
Item Closing Balance Opening Balance
Deductible temporary difference 345,264,828.47 173,990,137.06
Deductible loss 366,151,435.82 310,513,803.17
Total 711,416,264.29 484,503,940.23
(5) Unrecognized deductible loss of deferred tax assets expired years
Year Closing Balance Opening Balance Notes
2024 7,735,166.14
2025 53,739,512.57 8,950,922.50
2026 42,225,527.83 54,629,003.37
2027 117,035,151.46 67,240,033.97
2028 15,202,545.05 13,111,421.07
2029 36,755,850.06 45,365,135.77
11,875,266.71
Total 10,574,799.57
22. Short-term loan
(1) Category of short term loan
Loan category Closing Balance Opening Balance
Pledge loan 12,036,276.28
Mortgage loan
Credit loan 285,525,821.90 262,016,713.87
Total 285,525,821.90 274,052,990.15
23. Notes payable
Notes category Closing Balance Opening Balance
Commercial acceptance notes 4,746,000.00 2,520,000.00
Bank acceptance notes 698,066,950.62 616,424,384.85
Total 702,812,950.62 618,944,384.85
24. Accounts payable
(1) Accounts payable
Item Closing Balance Opening Balance
Material payments 1,063,543,472.06 956,122,327.00
Project payments 614,366,140.16 567,873,401.74
Equipment payments 79,744,568.59 55,406,593.91
Others 15,132,243.23 6,695,737.94
71
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Item Closing Balance Opening Balance
Total 1,772,786,424.04 1,586,098,060.59
25. Contract Liabilities
Item Closing Balance Opening Balance
Received in advance due from
778,394,477.23 647,645,820.57
unrealized revenue
Total 778,394,477.23 647,645,820.57
26. Employee’s payable
(1) Category of employee’s payable
Item Opening Increase Decrease Closing
Balance Balance
Short-term employee’s
118,200,459.60 312,421,926.55 339,070,529.12 91,551,857.03
payable
Post-employment benefit –
16,223.63 30,781,549.79 30,784,540.48 13,232.94
defined contribution plan
Termination benefits 8,924,648.35 584,362.04 8,340,286.31
Total 118,216,683.23 352,128,124.69 370,439,431.64 99,905,376.28
(2) Short-term employee’s payables
Item Opening Balance Increase Decrease Closing Balance
Salaries, bonus,
allowance, and 103,351,245.84 251,426,101.28 276,798,503.66 77,978,843.46
subsidy
Welfare 10,816,934.54 10,816,934.54
Social insurance 9,001.71 21,778,536.32 20,318,662.08 1,468,875.95
Include: Medical
7,733.56 16,379,028.85 15,135,669.79 1,251,092.62
insurance
On-duty
injury 1,268.15 2,124,705.49 2,002,293.15 123,680.49
insurance
Maternity
1,872,000.96 1,777,898.12 94,102.84
insurance
Supplementa
ry medical 276,479.77 276,479.77
premium
Housing funds 22,251,200.65 21,434,119.69 817,080.96
Labor union and
3,426,187.27 4,625,127.60 5,710,154.03 2,341,160.84
training expenses
72
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Item Opening Balance Increase Decrease Closing Balance
Reward bonus and
11,414,024.78 111,357.50 2,579,486.46 8,945,895.82
welfare fund
Non-monetary
643,393.55 643,393.55
benefits
Others 769,275.11 769,275.11
Total 118,200,459.60 312,421,926.55 339,070,529.12 91,551,857.03
(3) List of setting withdrawal plans
Item Opening Increase Decrease Closing
Balance Balance
Basic retirement insurance 12,626.24 29,818,176.80 29,818,176.80 12,626.24
Unemployment Insurance
3,597.39 963,372.99 966,363.68 606.70
Premium
Total 16,223.63 30,781,549.79 30,784,540.48 13,232.94
27. Tax payable
Item Closing Balance Opening Balance
Value-added tax 9,102,274.89 23,058,922.64
Enterprise income tax 11,580,908.73 3,541,171.62
Individual income tax 355,195.94 818,322.16
City maintenance and construction tax 911,473.39 1,253,818.83
Real estate tax 2,548,359.19 2,212,510.37
Land use tax 1,281,345.85 1,122,457.62
Education surcharge 643,516.54 895,584.93
Stamp duty 743,420.17 787,688.77
Green tax 1,466.27 1,046.68
Others 7,535.53
Total 27,175,496.50 33,691,523.62
28. Other accounts payable
Item Closing Balance Opening Balance
Dividend payable 8,965,281.07 533,156.00
Other accounts payable 72,650,549.17 66,521,094.25
Total 81,615,830.24 67,054,250.25
(1). Dividend payable
Item Closing Balance Opening Balance
Ordinary share dividend 8,965,281.07 533,156.00
Total 8,965,281.07 533,156.00
（2）Other accounts payable
73
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Other payables categorized by payments nature
Payments nature Closing Balance Opening Balance
Deposit and security deposit 15,134,037.54 11,393,395.62
Reimbursed but not paid 20,694,347.64 21,409,586.91
Trade mark and royalty 3,505,028.04 3,505,028.04
Collection 599,732.03 700,531.82
Others 32,717,403.92 29,512,551.86
Total 72,650,549.17 66,521,094.25
29. Non-current liabilities due within one year
Item Closing balance Opening balance
Long-term payable due within one year 70,150,000.00 24,900,000.00
Lease obligation due within one year 23,641,977.37 29,809,686.93
Lease liabilities due within one year 10,043,736.41 8,396,267.63
Total 103,835,713.78 63,105,954.56
30. Other current liabilities
Item Closing balance Opening balance
Notes payable endorsed not derecognized 223,251,532.54 127,165,397.88
Output Vat to be carried forward 97,273,890.68 77,484,605.36
Others 657,059.81
Total 321,182,483.03 204,650,003.24
31. Long-term loan
(1) Category of long-term loan
Category Closing Balance Opening Balance
Pledged loan 639,400,000.00 585,100,000.00
Guarantee loan 100,000,000.00 130,000,000.00
Total 739,400,000.00 715,100,000.00
32. Lease liabilities
Item Closing Balance Opening Balance
Lease liabilities 60,542,859.17 23,357,885.20
Less: Unrecognized financing
35,847,471.46 3,731,085.52
charges
Reclassified to non-current liabilities
5,878,734.86 8,396,267.63
due within one year
Total 18,816,652.85 11,230,532.05
33. Long term accounts payable
Item Closing Balance Opening Balance
Long term accounts payable 27,261,665.26 31,009,644.16
Total 27,261,665.26 31,009,644.16
74
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
(1) Category by nature
Item Closing Balance Opening Balance
Loans from financial leasing companies 27,261,665.26 31,009,644.16
34. Provision
Nature Closing Balance Opening Balance Reason
Open litigation 12,420,424.48 15,710,985.28 litigation
Warranty 2,846,509.25 3,094,982.15 Service after sales
Total 15,266,933.73 18,805,967.43
35. Deferred income
(1) Category of deferred income
Item Opening Increase Decrease Format
Closing
Balance ion
Balance
Basis
Government
99,754,346.39 1,144,402.00 2,750,198.38 98,148,550.01
subsidy
Total 99,754,346.39 1,144,402.00 2,750,198.38 98,148,550.01 —
75
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
(2) Government subsidy project
Amount
Recorded into
Opening included Related
Non- Offset cost or Other Closing
Government subsidy item
Balance
Increase
in other with asset/
operating expense changes Balance
income equity
income
The Application of Using NH3 and CO2 to Replace the Asset
R22 Screw Refrigerator Combined Compression 20,506,438.28 966,476.04 19,539,962.24
related
Condensing Unit
Asset
Refrigeration Compressor Intelligent Manufacturing
3,169,590.55 3,169,590.55
System Fund related
Asset
Ultrasonic intelligent defrosting technology 3,006,353.02 222,412.20 2,783,940.82
related
Refrigeration Asset
20,000.00 184,384.86 164,384.86
testing APP related
Environmental protection and energy-saving Asset
refrigeration and air-conditioning compressor 17,421,621.34 1,276,925.28 16,144,696.06
related
technology industrialization project
Asset
R290 replaces R22 large industrial screw unit 13,006,663.20 13,006,663.20
related
Asset
R290 replaces R22 in industrial twin-stage screw unit 4,747,680.00 4,747,680.00
related
Asset
Relocation compensation 37,876,000.00 557,002.00 38,433,002.00
related
Asset
Meat storage technology and equipment 487,400.00 487,400.00
76
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
related
Asset
Dalian Science and Technology Progress Award 50,000.00 50,000.00
related
Asset
State subsidies for enterprises with intellectual property
50,000.00 50,000.00
advantages related
Total 99,754,346.39 1,144,402.00 100,000.00 2,650,198.38 98,148,550.01
77
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
36. Share capital
Increase/decrease（+、-）
New
Opening Transfer Closing
Item share Share Subtotal
balance from capital others balance
issued dividend
reserve
Total
843,212,507.00 843,212,507.00
shares
37. Capital reserves
Items Opening Increase Decrease Closing Balance
Balance
Capital premium
659,622,044.20 659,622,044.20
(equity premium)
Other capital reserves 57,475,054.18 57,475,054.18
Total 717,097,098.38 717,097,098.38
78
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
38. Other comprehensive income
Closing
2023.1-6
Balance
Less: included Less: included
in other in other
Amount comprehensive After-
comprehensive
Opening before
income in the Less： tax After-tax
Items income
income in the
Balance previous previous income attribute attribute to
tax for
the
period and period and tax to the minority
current
transferred to transferred to expense parent shareholder
period
profit or loss retained company
in the current earnings in the
period current period
II.Other
comprehensive
income to be 2,208,669.73 2,208,669.73
reclassified to
profit or loss
Including: other
comprehensive
income that can
be transferred 2,208,669.73 2,208,669.73
to profit or loss
under the
equity method
Other
comprehensive 2,208,669.73 2,208,669.73
income total
79
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
39. Surplus reserves
Item Opening Closing
Increase Decrease
Balance Balance
Statutory surplus reserve 362,972,224.98 362,972,224.98
Discretionary surplus reserve 462,254,409.17 462,254,409.17
Total 825,226,634.15 825,226,634.15
40. Undistributed profits
Item 2023-06-30 2022-06-30
Closing balance of last year 618,445,922.58 627,764,582.32
Add: Adjustments to the opening balance of undistributed
-
profits
Including: additional retrospective adjustments
- -
according to the new accounting standards
Change on accounting policy - -
Correction of prior period significant errors - -
Change on combination scope under same
- -
control
Other factors -
Opening balance of current year 618,445,922.58 627,764,582.32
Add: net profit attributable to shareholders of parent
57,414,399.22 18,255,330.45
company in the year
Less: Provision for statutory surplus reserves 15,755,434.51-
Provision for any surplus reserves -
Provision of general risk - -
Dividends payable for common shares 8,432,125.07
Common stock dividends converted to equity - -
Others 3,386,430.61
Closing balance of current year 675,860,321.80 618,445,922.58
41. Operating revenue and cost
Items 2023.01-06 2022.01-06
Sales revenue Cost of sales Sales revenue Cost of sales
Revenue from
2,270,473,198.19 1,911,835,081.08 1,246,624,682.46 1,101,097,130.75
principle operation
Revenue from
57,063,514.86 29,500,449.34 45,234,226.25 30,818,078.34
other operation
Total 2,327,536,713.05 1,941,335,530.42 1,291,858,908.71 1,131,915,209.09
Income related information:
80
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Items Division 1 Total
Classified at products type 2,270,473,198.19 2,270,473,198.19
Manufacture products 1,585,107,993.25 1,585,107,993.25
Installation work 671,524,488.91 671,524,488.91
Other products and service 13,840,716.03 13,840,716.03
Classified at geography location
domestic 2,032,648,206.34 2,032,648,206.34
overseas 237,824,991.85 237,824,991.85
42. Operating taxes and surcharges
Items 2023.01-06 2022.01-06
City construction tax 5,012,891.14 1,300,268.55
Education surcharge 3,301,354.09 897,379.28
Property tax 4,723,080.56 4,341,262.13
Land use tax 2,298,123.17 2,192,079.15
Vehicle and vessel tax 25,563.36 4,923.36
Stamp duty 1,468,333.41 925,221.28
Others 380,239.90 130,238.28
Total 17,209,585.63 9,791,372.03
43. Selling expenses
Items 2023.01-06 2022.01-06
Employee's salary 59,354,505.34 36,733,989.97
Official business expense 8,819,360.04 2,682,974.83
Maintenance and repair expense 7,646,873.54 6,395,816.83
Travel expense 9,530,742.36 3,786,682.25
Business entertaining expense 5,902,755.80 2,049,748.87
Advertisement and bids expense 2,876,171.77 351,149.45
Depreciation expense 459,564.35 209,483.82
Transportation expense 1,630,180.10 1,311,116.86
Other expense 1,991,491.72 1,688,445.27
Total 98,211,645.02 55,209,408.15
44. Administrative expenses
Items 2023.01-06 2022.01-06
Employee benefit 53,003,618.73 42,406,947.67
Official expense 15,910,410.28 5,163,653.61
Depreciation expense 8,217,650.71 6,926,148.25
Maintenance and repair expense 6,583,200.78 2,564,900.40
Long-term assets amortization 4,936,405.08 3,734,356.74
Travel expense 2,422,233.31 1,593,342.93
Design consultant and test service expense 2,380,415.42 4,264,322.84
81
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Items 2023.01-06 2022.01-06
Safety production cost 1,623,788.07 864,579.34
Business entertaining expense 867,329.66 599,513.97
Insurance expense 530,569.43 426,810.11
Advertisement expense 189,697.37 57,277.06
Transportation expense 6,098.57
Other tax 1,067,493.02
Technology development expense 25,630.70
Patent and trademark royalties 4,282,306.43
Other expense 1,468,461.93 1,472,302.79
Total 103,515,309.49 70,074,155.71
45. R&D expenses
Items 2023.01-06 2022.01-06
Employee benefit 47,345,348.39 25,441,289.49
Raw material 6,471,854.49 4,384,577.60
Depreciation and amortization expense 3,474,989.41 705,540.38
Expenses for intermediate tests and
4,825,843.30
product trial production
Patent application maintenance expenses 2,277,613.96
Consulting expenses 1,428,004.16
Other expense 2,805,164.26 1,033,113.44
Total 68,628,817.97 31,564,520.91
46. Financial expenses
Items 2023.01-06 2022.01-06
Interest expenses 19,165,466.43 7,533,477.17
Less: Interest income 5,451,984.39 2,004,850.77
Add: Exchange loss -1,094,669.21 -2,344,388.03
Others expenditure 3,458,669.55 2,286,117.06
Total 16,077,482.38 5,470,355.43
47. Other income
Items 2023.01-06 2022.01-06
Government subsidy 1,615,317.51 741,847.00
Personal income tax handling fee refund 180,238.52 15,928.19
Stable job subsidy 19,233.01 98,244.00
Others 1,128,151.43
Total 1,814,789.04 1,984,170.62
48. Investment income
82
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Items 2023.01-06 2022.01-06
Long-term equity investment income accounted for by the
90,409.95 16,955,402.09
equity method
Debt Restructuring Proceeds 975,354.50 2,834,620.63
Investment income of other non-current financial assets during
5,782,304.24 20,927,118.28
the holding period
Investment income from disposal of other non-current
43,026,622.15
financial assets
Total 6,848,068.69 83,743,763.15
49. Income from changes in fair value (loss listed as“-“)
Items 2023.01-06 2022.01-06
Other non-current financial assets 4,364,003.20 -29,425,921.52
Total 4,364,003.20 -29,425,921.52
50. Credit impairment losses (loss listed as“-“)
Items 2023.01-06 2022.01-06
Bad debt loss on notes receivable 514,834.55 -369,641.88
Bad debt loss of accounts receivable -19,995,280.81 -11,270,943.86
Bad debt losses of other receivables -32,931.60 -451,293.97
Long-term receivables bad debt losses 210,600.00
Total -19,302,777.86 -12,091,879.71
51 Assets impairment losses (loss listed as“-“)
Items 2023.01-06 2022.01-06
Inventory depreciation loss and contract performance
-2,121,034.16 782,759.18
cost impairment loss
Impairment loss of construction in progress -970,000.00
Impairment loss on contract assets -2,784,100.62 -588,424.79
Total -4,905,134.78 -775,665.61
52. Gain on assets disposal
Item 2023.01-06 2022.01-06
Gains on disposal of non-current assets 51,209.01 67,260.20
Including: gains on disposal of non-current assets not 51,209.01 67,260.20
83
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
classified as held for sale
Including: income from disposal of fixed assets 51,209.01 67,260.20
Total 51,209.01 67,260.20
53. Non-operating income
Amounts recognized into non-
Item 2023.01-06 2022.01-06 recurring profit or loss for the
year
Accept donations 17,838.20 17,838.20
Government subsidy 18,820.00 18,820.00
Debt restructuring gains 369,165.58
Quality compensation 31,535.00
Gain on disposal of non-current asset 48,523.49 48,523.49
Penalty 1,042,969.59 1,042,969.59
Others 3,159,314.49 1,209,983.77 3,140,494.49
Total 4,268,645.77 1,610,684.35 4,268,645.77
54. Non-operating expenses
Amounts recognized into non-
Item 2023.01-06 2022.01-06
recurring profit or loss for the year
Outward donation 250,000.00
Loss of non-current assets
1,941,578.53 23,028.50
damaged and scrapped
Estimated Loss from Pending
227,145.65
Litigation
Others 66,219.46 82,470.42
Total 2,257,797.99 332,644.57
55. Income tax expenses
(1) Income tax expenses
Items 2023.01-06 2022.01-06
Current income tax expenses 16,860,971.82 1,929,837.77
Deferred income tax expenses -2,930,700.26 844,316.22
Total 13,930,271.56 2,774,153.99
(2) Adjustment process of accounting profit and income tax expense
Items 2023.01-06
Consolidated total profit this year 73,439,347.21
Income tax expenses at applicable tax rate 11,011,590.76
84
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Items 2023.01-06
Effect on subsidiary applied to different tax rate -362,870.22
Effect on prior period income tax 653,856.36
Effect on non-deductible cost, expense and loss 812,029.61
Effect on use of deductible loss from unrecognized deferred tax
-578,552.43
assets in the prior period
Effect on temporary difference or deductible loss from unrecognized
5,360,076.27
deferred tax assets this year
R&D expenditure accelerated deduction -310,915.84
FA accelerated deduction -2,914,469.51
Income tax expenses 13,930,271.56
56. Other comprehensive income(Refer to the note VII.38 other comprehensive income for details)
57. Notes to cash flow statement
(1) Other cash received related to operating activities
Items 2023.01-06 2022.01-06
Deposit given back 24,770,821.75 12,691,025.06
Receivable from the related party 6,570,520.22
Government grants 2,325,523.26 383,420.00
Interest income 1,634,285.14 2,363,150.90
Received travel expense refund 241,258.21 128,547.91
Others 17,155,831.14 11,561,311.72
Total 52,698,239.72 27,127,455.59
(2) Other cash paid in connection with operating activities
Items 2023.01-06 2022.01-06
Expenditure 86,955,990.40 52,744,549.03
Deposit paid 50,746,582.86 17,291,456.00
Business travel borrowing 5,417,669.78 3,338,694.72
Bank handling charges 1,876,929.71 2,105,772.59
Pay related parties 1,796,642.94
Others 5,130,221.28 1,551,588.83
Total 151,924,036.97 77,032,061.17
(3) Other cash received in connection with fundraising activities
Items 2023.01-06 2022.01-06
Sale and leaseback financial lease sales 6,600,000.00 12,000,000.00
At the end of the year, the deposit not used as cash
75,003,788.58
is due and recovered
Other cash received in connection with
8,774,342.51
fundraising activities
Total 6,600,000.00 95,778,131.09
85
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
(4) Other cash paid in connection with fundraising activities
Items 2023.01-06 2022.01-06
Sale and leaseback financial lease sales 200,000.00 5,370,096.27
Rent payable 343,314.14
Finance lease deposit and handling fee 21,707,260.07
At the end of the year, the deposit not used as cash
50,887,086.77
is due and recovered
Total 22,250,574.21 56,257,183.04
58. Supplementary Information to the Statement of Cash Flows
(1)Supplementary Information to the Statement of Cash Flows
86
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Items 2023.01-06 2022.01-06
1. Adjusting net profit into cash flows of operating
activities:
Net profit 59,509,075.65 29,839,500.31
Add: Provision for impairment of assets 24,207,912.64 12,867,545.32
Depreciation of fixed assets, Amortization of mineral
66,602,534.41 36,744,922.14
resources, and biological assets
Depreciation of right of use assets 7,629,958.28 3,213,658.50
Amortization of intangible assets 5,119,204.71 4,663,658.96
Amortization of long-term deferred expenses 790,082.45 714,838.01
Losses on disposal of fixed assets, intangible assets, and long-
-51,209.01 -67,260.20
term assets (income listed with”-”)
Losses on write-off of fixed assets (income listed with”-”) 1,893,055.04 23,028.50
Change of fair value profit or loss -4,364,003.20 29,425,921.52
Financial expense (income listed with”-”) 19,165,466.43 7,533,477.17
Investment loss (income listed with”-”) -6,848,068.69 -83,743,763.15
Decrease of deferred tax assets(increase listed
12,273,911.09 -299,257.90
with”-”)
Increase of deferred tax liabilities(decrease
-1,393,689.97 -12,358,032.66
listed with”-”)
Decrease of inventories (increase listed with”-”) -169,798,737.23 -39,470,963.36
Decrease of operating receivables (increase listed
-373,658,442.52 -363,642,152.27
with”-”)
Increase in operating payable items (decreases are listed with "-
232,128,752.94 185,148,542.26
")
Others
Net cash flows arising from operating activities -126,794,196.98 -189,406,336.85
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 828,668,546.58 351,712,699.09
Less: Opening balance of cash 921,663,803.17 438,969,337.87
Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents -92,995,256.59 -87,256,638.78
(2) Net cash paid to acquisition of subsidiary
87
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Items Current year
Cash & cash equivalent paid for acquisition 145,285,500.00
-Sonyo Refrigeration (Dalian)Co.,Ltd. 145,285,500.00
Less: Cash & cash equivalent held by acquirees on acquisition date 133,228,548.98
-Sonyo Refrigeration (Dalian) Co., Ltd. 133,228,548.98
Net cash paid to acquisition of subsidiary 12,056,951.02
(3) Cash and cash equivalents
Items Current year Last year
Cash 828,668,546.58 921,663,803.17
Including: Cash on hand 48,506.18 80,702.47
Bank deposit used for paying at any moment 828,620,040.40 921,581,100.70
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 828,668,546.58 921,663,803.17
Cash and cash equivalents restricted in the parent company or
- -
subsidiary
59.The assets with the ownership or use right restricted
Items 2023.6.30 Reasons
Monetary fund 106,646,177.74 Margin, bank account frozen funds
Notes Receivable 142,360,499.62 Pledge
Fixed assets 62,207,555.51 Mortgage
Intangible assets 5,587,198.75 Mortgage
Financing of receivables 1,080,000.00 Pledge
Investment real estate 32,981,247.79 Mortgage
Total 350,862,679.41
60. Monetary category of foreign currency
(1) Monetary category of foreign currency
Item Closing Balance Exchange Closing Balance
(foreign currency) Rate (RMB)
Cash
Including：USD 915,330.70 7.2258 6,613,996.57
Euro 112,722.27 7.8771 887,924.59
HKD
JPY 97,577,865.09 0.0501 4,888,065.57
88
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Item Closing Balance Exchange Closing Balance
(foreign currency) Rate (RMB)
Accounts receivable
Including: USD 7,011,133.35 7.2258 50,661,047.36
Euro 2,024,138.60 7.8771 15,944,342.17
HKD
GBP 177,717.86 9.1432 1,624,909.94
JPY 102,853,780.00 0.0501 5,152,357.26
Accounts payable
Including: USD 414,829.23 7.2258 2,997,473.05
GBP 675,184.06 9.1432 6,173,342.91
JPY 47,038,712.02 0.0501 2,356,357.24
Euro 12,119,854.67 7.8771 95,469,307.25
Other payables
JPY 9,393,609.00 0.0501 470,563.45
61． Government Grants
(1) Basic information
Amount
recognized in
Category Amount Disclosure
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 Deferred income/cost of
air conditioning compressor 31,000,000.00 1,276,925.28
technology industrialization sales/expense
project
Application of combined Deferred income/cost of
compression NH3&Co2 replace 29,409,622.81 966,476.04
R22 sales/expense
R290 replace R22 13,006,663.20 Deferred income -
Deferred income/cost of
Ultrasonic defrosting
technology 9,841,800.00 sales/expense/other 222,412.20
income
Refrigeration Compressor Deferred income/cost of
Intelligent Manufacturing 5,000,000.00 184,384.86
System Fund sales/expense
R290 replace R22 twin stage
4,747,680.00 Deferred income -
screw sets
Meat storage technology and 487,400.00 Deferred income
89
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Amount
recognized in
Category Amount Disclosure
current profit and
loss
equipment
Dalian Science and Technology
Bureau energy conservation and
418,500.00 Other Income 418,500.00
environmental protection
subsidy
Export credit insurance premium
367,800.00 Other Income 367,800.00
support fund
Dalian enterprise transformation
of scientific and technologica l 180,000.0 Other Income 180,000.0
achievements project subsidy
Shi Yan ran the science and
100,000.00 Other Income 100,000.00
Technology Bureau for 2023
Dalian Science and Technology
50,000.00 Other Income 50,000.00
Progress Award
State subsidies for enterprises
with intellectual property 50,000.00 Other Income 50,000.00
advantages
Refrigeration machinery
development and testing 20,000.00 Other Income 15,000.00
platform
Subsidies for the identificat ion
20,000.00 Other Income 20,000.00
of new and high-tech enterprises
Job stabilization subsidy 19,233.01 Other Income 19,233.01
Shi Yan ran the science and
15,500.00 Other Income 15,500.00
Technology Bureau for 2022
Hongxin labor service stable
4,159.51 Other Income 4,159.51
post subsidy
Pay for training on behalf of
3,180.00 Other Income 3,180.00
workers
Research and development
18,802 Non-operating income 18,802
grants for key projects
Total 137,092,358.53 Other Income 4,487,370.90
VIII. Change of Consolidation Scope
1、Disposal of a subsidiary
Whether there is a situation in which the control right is lost after a single disposal of the investment in the
subsidiary
Yes No
Whether there is a situation in which the investment in the subsidiary is disposed of in stages through multiple
transactions and the control is lost in the current period
Yes No
IX. Interest in other entity
90
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
1. Equity of subsidiaries
(1) Organization structure of group company
Main Shareholding Obtaining
Name of subsidiaries Registered
business Business nature (%) method
address
address Direct Indirect
Dalian Bingshan Group Engineering Co., Ltd. Dalian Dalian Installation 100 Establish
Chengdu Bingshan Refrigeration Engineering
Chengdu Chengdu Service - 51.00 Establish
Co., Ltd.
Dalian Bingshan Group Sales Co., Ltd. Dalian Dalian Trading 100 Establish
Dalian Bingshan Air-conditioning Equipment
Dalian Dalian Manufacturing 100 Establish
Co., Ltd.
Dalian Bingshan Guardian Automation Co.,
Dalian Dalian Manufacturing 100 Establish
Ltd.
Dalian Bingshan-RYOSETSU Quick
Dalian Dalian Manufacturing 100 Establish
Freezing Equipment Co., Ltd.
Wuhan New World Refrigeration Industrial
Wuhan Wuhan Manufacturing 100 Acquisition
Co., Ltd.
Wuhan New World Air-conditioning Installation
Wuhan Wuhan 100 Establish
Refrigeration Engineering Co., Ltd
Wuhan Lanning Energy Technology Co., Ltd. Wuhan Wuhan Trading 100 Acquisition
Dalian Universe Thermal Technology
Dalian Dalian Manufacturing 55 Acquisition
Co.,Ltd.
Dalian Bingshan Engineering & Trading Co.,
Dalian Dalian Service 100 Acquisition
Ltd
Sonyo Compressor(Dalian)Co.,Ltd. Dalian Dalian Manufacturing 100 Acquisition
Sonyo Refrigeration System (Dalian) Co.,
Dalian Dalian Manufacturing 100 Acquisition
Ltd.
Sonyo Refrigeration (Dalian) Co., Ltd. Dalian Dalian Manufacturing 100 Acquisition
1) The company's shareholding ratio in subsidiaries is consistent with the voting rights ratio;
2）The company holds more than half of the voting rights in its subsidiaries;
3）The company holds more than half of the voting rights in its subsidiaries and can control the invested units.
2. Equity in joint venture arrangement or associated enterprise
(1) The important of joint ventures or affiliated companies
91
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Shareholding
(%)
Main
Name of joint ventures Registered Business Accounting
business
or affiliated companies address nature methods
address
Direct Indirect
Equity
Fuji Bingshan Dalian Dalian Manufacturing 49
method
Equity
Jing Xue Insulation Changzhou Changzhou Manufacturing 14.91
method
Equity
Bingshan Metal Technology Dalian Dalian Manufacturing 49
method
The investment income from the investee recognized by the company this year accounted for 10% of the net profit
attributable to the owner of the parent company or the company's share of the net assets of the investee calculated
according to the shareholding ratio accounted for attributable to the parent company at the end of the year. Associates
with more than 10% of shareholders' equity are significant associates.
1) The shareholding ratio of the company in the joint venture is the same as the voting rights ratio;
2) The company does not have an associated enterprise that holds less than 20% of the voting rights but has
significant influence;
3) The company has no associates that hold 20% or more of the voting rights but do not have significant influence.
（2） The key financial information of affiliated companies
92
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
30-06-2023/2023.01-06
Dalian Fuji
Items Jing Xue Bingshan Metal
Bingshan Vending
Insulation Technology
Machine Co., Ltd
Current assets 392,953,074.08 1,412,248,730.10 371,483,253.15
Non-current assets 197,158,934.76 302,148,077.97 41,816,984.14
Total assets 590,112,008.84 1,714,396,808.07 413,300,237.29
Current liabilities 345,312,560.80 867,213,016.64 66,769,535.67
Non-current liabilities 50,307,454.75 38,312,160.00 0.00
Total liabilities 395,620,015.55 905,525,176.64 66,769,535.67
Minority interests 251,106.06
Equity to the parent
194,491,993.29 808,620,525.37 346,530,701.62
company
Proportions of net assets
according to the 95,301,076.71 120,450,148.93 169,800,043.79
shareholding percentage
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 95,527,766.00 140,840,209.26 189,069,814.73
companies
Fair value of equity
investment of affiliated
companies
Operating income 95,101,008.52 326,567,962.40 233,048,775.05
Net profit 2,717,196.06 15,601,156.92 28,223,484.22
Net profit from closing
Other comprehensive
income
Total comprehensive income 2,717,196.06 15,601,156.92 28,223,484.22
The current dividends
received from joint ventures
Continued：
Items 31-12-2022/2022.01-06
Dalian Fuji
Jing Xue Bingshan Metal
Bingshan Vending
Insulation Technology
Machine Co., Ltd
Current assets 447,012,221.67 1,357,769,579.89 331,577,731.99
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 0.00
93
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Items 31-12-2022/2022.01-06
Dalian Fuji
Jing Xue Bingshan Metal
Bingshan Vending
Insulation Technology
Machine Co., Ltd
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
Net assets calculated
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 of affiliated
companies
Operating income 83,225,183.80 274,830,181.17 240,379,163.49
Net profit -4,861,637.51 14,233,453.36 29,807,983.52
Net profit from closing
Other comprehensive
income
Total comprehensive
-4,861,637.51 14,233,453.36 29,807,983.52
income
The current dividends
received from joint
ventures
94
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
(3) Summary financial information of insignificant affiliated companies
Items 30-06-2023/2023.01-06 31-12-2022/2022.01-06
Associates:
Total book value of investments 77,435,611.67 307,002,623.96
The total number of the following items based on
shareholding ratio
Net profit 247,249.62 11,494,152.42
Total comprehensive income 247,249.62 11,494,152.42
IX. Risk Related to Financial Instruments
一、Risks associated with financial instruments
The main financial instruments of the Company include borrowings, accounts receivable, accounts
payable, other non-current financial assets, etc. Please refer to Note VI for the detailed description of each
financial instrument. The risks associated with these financial instruments and the risk management policies
adopted by the Company to reduce these risks are described below. The management of the company manages
and monitors these risk exposures to ensure that the above risks are controlled within a limited range.
1. Various risk management objectives and policies
The company's goal in risk management is to achieve an appropriate balance between risks and benefits,
minimize the negative impact of risks on the company's operating performance, and maximize the interests of
shareholders and other equity investors. Based on this risk management objective, the basic strategy of the
company's risk management is to identify and analyze the various risks faced by the company, establish an
appropriate risk tolerance bottom line and carry out risk management, and monitor various risks in a timely
and reliable manner. controlled within a limited range.
(1) Market risk
1.The main business of the company is located in China, and the main business is settled in RMB. However,
the foreign currency assets and liabilities recognized by the company and future foreign currency transactions
(foreign currency assets and liabilities and foreign currency transactions are mainly denominated in USD, JPY,
EUR, HKD and GBP) still have foreign exchange risks. The company's financial department is responsible for
monitoring the company's foreign currency transactions and the scale of foreign currency assets and liabilit ies
to minimize foreign exchange risks. The company did not sign any forward foreign exchange contracts or
currency swap contracts during the year. As of June 30, 2023, the foreign currency financial assets and foreign
currency financial liabilities held by the company converted into RMB are listed as follows:
Items 30-06-2023 30-06-2022
Monetary fund-USD 6,613,996.57 3,524,626.68
95
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Monetary fund-JPY 4,888,065.57 1,047,501.00
Monetary fund-EURO 887,924.59 -
Monetary fund- GBP 1,624,909.94 -
Receivable - GBP 1,624,909.94 -
Receivable- USD 50,661,047.36 35,850,695.71
Receivable - JPY 5,152,357.26 920,181.22
Receivable - EURO 15,944,342.17
Payables -USD 2,997,473.05 5,414,277.32
Payables -EURO 95,469,307.25
Payables - JPY 1,873,402.54 1,938,707.73
The Company paid close attention to the effect on FX risk.
2) Interest rate risk
The company's interest rate risk mainly arises from bank borrowings. Financial liabilities with floating interest rates
expose the Company to cash flow interest rate risk, while financial liabilities with fixed interest rates expose the
Company to fair value interest rate risk. The company determines the relative proportion of fixed-rate and floating-rate
contracts based on the prevailing market conditions. As at June 30, 2023, the Company's interest-bearing debt consisted
primarily of RMB denominated fixed-rate borrowing contracts in the amount of $809.55 million ($74,000 million as
at December 31, 2022).
The company's finance department continuously monitors the company's interest rate levels. Rising interest
rates will increase the cost of new interest-bearing debt and the company's unpaid interest on floating-rate
interest-bearing debt, and adversely affect the company's financial performance. The management will make
timely adjustments based on the latest market conditions. Adjustments to reduce interest rate risk.
The sensitive analysis：
As of June 30, 2023, if the borrowing rate were to rise or fall by 50 basis points, while other factors remained constant,
the company's net profit would decrease or increase by approximately RMB5.909 million.
3) Price risk
The price risk faced by 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 greater
economic downward pressure, and the sharp fluctuations in the prices of bulk materials have a certain impact
on the company's operations.
(2)Credit risk
The company's credit risk mainly comes from monetary funds, notes receivable, accounts receivable, and other
receivables. Management has established appropriate credit policies and continuously monitors exposure to
these credit risks.
96
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
The monetary funds held by the company are mainly deposited in financial institutions such as commercial
banks. The management believes that these commercial banks have high reputation and asset status and have
low credit risk. The company adopts a limit policy to avoid credit risk to any financial institution.
For accounts receivable, other receivables and notes receivable, the company sets relevant policies to control
credit risk exposure. The company evaluates the customer's credit qualification and sets the corresponding
credit period based on the customer's financial situation, the possibility of obtaining guarantees from third
parties, credit history and other factors such as current market conditions. The company will regularly monitor
the credit records of customers. For customers with bad credit records, the company will use written reminders,
shorten the credit period or cancel the credit period, etc., to ensure that the company's overall credit risk is
within a controllable range.
As of June 30, 2023, the total amount of the top five accounts receivable of the company: 219,819,023.26 yuan.
(3) Liquidity risk
Liquidity risk is the risk that the company will not be able to meet its financial obligations on the due date. The
Company's approach to managing liquidity risk is to ensure that there is sufficient liquidity to meet obligations when
they fall due without causing unacceptable losses or damage to corporate reputation. The company regularly analyzes
the liability structure and term to ensure sufficient funds. The management of the Company monitors the use of bank
borrowings and ensures compliance with loan agreements. At the same time, it conducts financing consultations with
financial institutions to maintain a certain credit line and reduce liquidity risks.
The Company uses bank borrowings as its main source of funds. As of June 30, 2023 the Company's unused bank
borrowings amounted to RMB 686.33 million, of which the Company's unused short-term bank borrowings amounted
to RMB 686.33 million.
The financial assets and financial liabilities held by the Company are analyzed according to the maturity period of the
undiscounted remaining contractual obligations as follows:
Unit: ten thousand yuan
Closing balance
Within 1 1-2 2-5 Over 5
Items Total
year years years years
Financial Assets
Cash and cash in bank 93,531.47 - - -
93,531.47
Notes receivable 43,613.82 - - -
43,613.82
Accounts receivable 155,625.06 - - -
155,625.06
Receivables financing 28,903.63 - - -
28,903.63
Other receivable 5,181.33 - - -
5,181.33
97
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Closing balance
Within 1 1-2 2-5 Over 5
Items Total
year years years years
Contract asset 29,500.91 - - -
29,500.91
Non-current assets maturing within one
1,257.13 - - -
1,257.13
year
Long-term receivable - - -
516.25 516.25
Other non-current financial assets 15,431.49 - - -
15,431.49
Financial Liabilities 0 -
Short-term loan 28,552.58 - - -
27,405.30
Notes Payable 70,281.30 - - -
61,894.44
Accounts payable 177,278.64 - - -
158,609.81
Other payable 7,265.05 - - -
6,705.43
Employee’s payable 9,990.54 - - -
11,821.67
Tax payable 2,717.55 - - -
3,369.15
Non-current liabilities due within one
10,383.57 - - - 6,310.60
year
Long-term loan
14,420.00 47,150.00 12,370.00 73,940.00
Lease liability 758.62
321.88 391.62 409.55 1,881.67
Long-term payables -
1,786.87 939.30 2,726.17
XI. Disclosure of Fair Value
1. Closing fair value of assets and liabilities measured at fair value
Fair value at the year end
Items First level Second level Third level
measurement of fair measurement of measurement Total
value fair value of fair value
Financial assets Continuously
-- -- -- --
measured at FV available for sale
Receivables Financing 289,036,299.90 289,036,299.90
Other non-current financial assets 152,631,011.92 1,683,852.59 154,314,864.51
Non-continuous fair value
-- -- -- --
measurement
2. Determination basis for the market price of continuous and non-continuous first-level fair value
98
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
measurement items
The company's investment in some equity instruments in other non-current financial assets is the unadjusted
closing price on the stock public trading market on June 30, 2023.
3. Continuing and non-continuing Level 2 fair value measurement items, valuation techniques used and
qualitative and quantitative information on important parameters
The financial instruments included in the second level of fair value measurement by the company are the
bank acceptance bills (accounts receivable financing) held at fair value and whose changes are included in
other comprehensive income. They are mainly large commercial banks with high credit ratings. Due to the
short remaining maturity period and extremely low credit risk, the book value of bank acceptance bills
receivable is close to the fair value on the balance sheet date.
4. Continuing and non-continuing Level 3 fair value measurement items, the valuation techniques used
and qualitative and quantitative information on important parameters
Continuous and non-continuous third-level fair value measurement items are mainly equity investments in
unlisted companies held by the company. There is no active market for the equity of the investee involved,
and there is no market transaction price for reference. The relevant observable input If it is not practical to
obtain the value, the company uses the third-level input value, that is, the unobservable input value. The
fair value measurement mainly adopts the price-to-book ratio method of comparable companies, and
considers the liquidity discount.
5. Continuous third-level fair value measurement items, adjustment information between the opening
and closing book values and sensitivity analysis of unobservable parameters
Continued third-level fair value measurement items, reconciliation information between the book value at
the beginning of the year and the end of the year, and sensitivity analysis of unobservable parameters
6. Continued fair value measurement items, if there is a transfer between different levels in the current
period, the reason for the transfer and the policy for determining the time point of the transfer
None
7. Changes in valuation techniques during the period and reasons for the changes
None
8. Fair value of financial assets and financial liabilities not measured at fair value
None
XII. Related Parties Relationship and Transactions
1. The parent company of the company
Parent company Registered Business Registered Shareholding Voting power
address nature capital percentage percentage
99
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
(%) (%)
Dalian Bingshan
Dalian Manufacture 158,580,000.00 20.27 20.27
Group Co., Ltd.
The registered address of Dalian Bingshan Group Co., Ltd. is located at No. 106, Liaohe East Road, Dalian
Economic and Technological Development Zone. It is a Sino-foreign joint venture limited liability company.
Its legal representative is Ji Zhijian. July 2nd. The company's business scope: research, development,
manufacturing, sales, service and installation of products in the fields of industrial refrigeration products,
refrigeration and refrigeration products, large, medium and small air-conditioning products, petrochemical
equipment products, electronic and electronic control products, household appliances products, environmental
protection equipment products (involving Administrative licenses must be operated with a license).
Registered capital of controlling shareholder and its changes
Controlling Initial balance Increase decrease end of year
shareholder balance
Dalian Bingshan
158,580,000.00 - - 158,580,000.00
Group Co., Ltd.
Controlling shareholders' holdings or interests and their changes
Controlling Shareholding amount Shareholding ratio (%)
shareholder End of year Initial balance Year-end ratio Ratio at the
balance beginning of the
year
Dalian Bingshan
Group Co., Ltd. 170,916,934.00 170,916,934.00 20.27 20.27
2. Subsidiaries
Please refer to Note IX, 1. (1) Composition of the enterprise group for the details of the subsidiaries of the
Company.
3. Affiliated company and joint venture
For the important joint ventures or associates of the company, please refer to Note IX. 3. (1) Important
associates.
100
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Other joint ventures or associates that have related party transactions with the company in the current period,
or have related party transactions with the company in the previous period and formed a balance are as follows:
Names of the joint ventures or affiliated company Relationships with the Company
Songzhi Dayang Cooling and Heating Technology
Affiliated company of the Company
(Dalian) 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.
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
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
101
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Name of related party Related party relationship
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.,
Subsidiary of Dalian Bingshan Group
Ltd.
Subsidiary of Dalian Bingshan Group’s
SonyoCold Chain (Dalian) 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
5. Related Party transactions
1. Purchase of goods, offer and receive labour services etc inter-group transactions
1) Purchase of goods/receive labour services
102
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Content 2023.1-6 Approved Whether 2022.1-6
Transaction the
Limit transact
Related party ion limit
is
exceede
d
Company under direct/indirect Control of
16,061,957.06 25,000,000.00 No
Panasonic Co.,Ltd
Panasonic Cold Chain (Dalian) Co., Ltd. 5,702,273.24 15,000,000.00 No 2,058,376.71
Dalian Bingshan Group Co., Ltd. 500,000.00 No 4,528.30
Dalian Bingshan Pat Technology Co., Ltd 17,854,202.15 30,000,000.00 No 2,981,051.00
Dalian BingshanGroup Huahuida Financial leasing
1,000,000.00 No 330.19
Co., LTD
Bingshan Technology Service （Dalian） Co., Ltd. 1,028,124.44 3,000,000.00 No 1,253,534.59
Dalian Fuji Bingshan Vending Machine Co., Ltd. Purchase 206,432.86 3,000,000.00 No 1,003,270.93
Dalian Fuji Bingshan Vending Machine Sales Co., No
s of 500,000.00 16,814.16
Ltd.
Dalian Fuji Bingshan Control System Co., Ltd. goods 8,276.00 3,000,000.00 No 0.00
Dalian Bingshan Metal Technology Co., Ltd. 30,587,674.23 65,000,000.00 No 28,460.16
Jiangsu Jingxue Energy Saving Technology Co., No
20,046,515.95 65,000,000.00 364,716.81
Ltd.
Dalian Spinde Environmental Equipment Co., Ltd. 816,701.77 2,000,000.00 No 815,097.34
BAC Dalian Co., Ltd. 9,666,650.44 35,000,000.00 No 21,233,858.40
Dalian Shentong Electric Co., Ltd. 3,224,632.53 8,000,000.00 No
Dalian Bingshan Huigu Development Co., Ltd. 5,896.23 1,500,000.00 No 147,219.63
Dalian Honjo Chemical Co., Ltd 3,063,274.33 No
Alphavita Bio-scientific (Dalian) Co., Ltd. 1,254,598.22 No 933,799.10
Sonyo Refrigeration System (Dalian) Co., Ltd. 32,295,394.82
Sonyo Compressor(Dalian)Co.,Ltd. 2,352,071.11
2) Sales of goods/ labour services provision
Con 2023.1-6 2022.1-6
Related party
tent
Company under direct/indirect Control of Panasonic Co.,Ltd 131,295,821.04
Sonyo Cold Chain (Dalian) Co., Ltd. 39,240,301.87 66,262,077.88
Dalian Bingshan Pat Technology Co., Ltd. 750,927.00 624,768.48
Alphavita Bio-scientific (Dalian) Co., Ltd. Sale 2,791,630.38 7,771,926.75
Dalian Bingshan Group Huahuida Financial Leasing Co., Ltd. s of 26,645,039.63 8,700,007.96
Bingshan Technical Service (Dalian) Co., Ltd. goo 18,019,442.13 19,222,103.24
Dalian Fuji Bingshan Vending Machine Co., Ltd. ds 10,541,125.91 14,518,618.12
Dalian Fuji Bingshan Vending Machine Sales Co., Ltd.
Dalian Fuji Bingshan Intelligent Control System Co., Ltd. 25,708.47 305,206.80
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. 5,233,706.75 5,075,605.89
103
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Jiangsu Jingxue Energy Saving Technology Co., Ltd. 3,035,091.30
Wuhan Scaf Power Control Equipment Co., Ltd. 1,946.90 256,431.86
Dalian Spindle Environmental Facilities Co., Ltd 3,277,492.69 2,315,455.64
BAC Dalian Co., Ltd. 24,322,577.92 21,364,166.08
Dalian Shentong Electric Co., Ltd 194,881.40
Dalian Bingshan Huigu Development Co., Ltd 6,689,927.98 4,003,216.37
Linde Hydrogen Refueling Station Equipment (Dalian) Co., Ltd. 536,171.21 5,095,635.29
Dalian Honjo Chemical Co., Ltd 54,351.13 91,981.13
Sonyo Refrigeration System (Dalian) Co., Ltd. 11,925,729.23
Sonyo Compressor(Dalian)Co.,Ltd. 26,604,561.52
(2)Assets Lease
Assets rent out
Category of 2023.1-6 Lease 2022.1-6 Lease
Lessee
assets rent out Income Income
Dalian Jingxue Energy Saving
Land, Office 445,487.81 502,555.72
Technology Co., Ltd.
Dalian Bingshan Huigu Development
Land ;house 4,009,659.86 4,095,151.07
Co., Ltd.
MHI Bingshan Refrigeration (Dalian)
Land 1,904,761.90 1,904,761.90
Co.,Ltd.
Linde Hydrogen Refueling Station
Land 398,985.66 5,033,480.00
Equipment (Dalian) Co., Ltd.
Bingshan Technology Service
Land 147,436.30
（Dalian） Co., Ltd.
Wuhan Skafe Power Equipment
Land 540,784.41 330,415.59
Control Co., Ltd.
Sonyo Cold Chain (Dalian) Co., Ltd. Land 505,565.14
Description of related leases
Category of assets rent Current year Last year Lease
Lessor
in Lease fees fees
Dalian Bingshan Group Huahuida
FA 15,428,358.65 11,510,637.33
Financial Leasing Co.
(3) Related guarantees.
CDB Development Fund supports the company's cold chain green intelligent equipment and service
industrialization base project, and provides special funds to the company's controlling shareholder, Bingshan
Group. For details, see "VII. 33 Long-term Loans".
(4) Funds borrow from /lent to related party
104
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Name of the related party Amount Starting date Ending date Explanation
Project fund
Dalian Bingshan Group Co., Ltd. 160,000,000.00 2016-03-14 2026-03-13
investment
Dalian Bingshan Group Huahuida
5,060,000.00 2022-10-15 2024-09-15 Factoring
Financial Leasing Co., Ltd.
Dalian Bingshan Group Huahuida Sale and
13,805,309.73 2021-11-15 2026-11-15
Financial Leasing Co., Ltd. leaseback
Dalian Bingshan Group Huahuida
32,833,000 2022-10-15 2024-09-15 Factoring
Financial Leasing Co., Ltd.
Dalian Bingshan Group Huahuida Sale and
12,000,000.00 2022-01-07 2025-01-06
Financial Leasing Co., Ltd. leaseback
Dalian Bingshan Group Huahuida Sale and
10,000,000.00 2021-11-15 2026-11-15
Financial Leasing Co., Ltd. leaseback
Dalian Bingshan Group Huahuida
20,000,000.00 2021-06-01 2024-05-01 Factoring
Financial Leasing Co., Ltd.
Dalian Bingshan Group Huahuida
5,481,000.00 2022-06-20 2024-06-10 Factoring
Financial Leasing Co., Ltd.
Dalian Bingshan Group Huahuida
5,063,480.54 2021-08-15 2023-07-15 Factoring
Financial Leasing Co., Ltd.
Dalian Bingshan Group Huahuida Sale and
2,145,251.09 2021-06-15 2024-05-15
Financial Leasing Co., Ltd. leaseback
Dalian Bingshan Group Huahuida Sale and
6,600,000.00 2023-02-24 2025-02-23
Financial Leasing Co., Ltd. leaseback
Dalian Bingshan Group Huahuida
499,200.00 2023-05-22 2024-05-21 Factoring
Financial Leasing Co., Ltd.
6. Receivables and payables of related parties
(1) Receivables
Closing Balance Opening Balance
Item Related party Book Bad debt Book Bad debt
Balance Provision Balance Provision
Accounts Sonyo Cold Chain
93,953,936.92 5,497,926.62
receivable (Dalian) Co., Ltd.
Company under
Accounts direct/indirect
17,554,541.91 150,068.26 145,605,125.57 11,219,927.46
receivable Control of
Panasonic Co.,Ltd
Accounts BAC Dalian Co.,
18,256,893.20 1,281,633.90 17,739,655.64 1,245,323.82
receivable Ltd.
Accounts Dalian Fuji
Bingshan Vending 10,718,224.88 771,285.99 7,292,421.55 548,862.49
receivable Machine Co., Ltd.
Accounts Bingshan
Technical Service 7,659,432.52 537,692.16 5,804,599.87 426,864.25
receivable (Dalian) Co., Ltd.
Accounts Dalian Bingshan
Pat Technology 5,429,976.47 244,600.49 2,426,739.72 250,341.12
receivable Co., Ltd.
Dalian Bingshan
Accounts Huigu
3,605,323.61 291,170.65 1,139,243.27 255,895.91
receivable Development Co.,
Ltd
105
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Accounts MHI Bingshan
Refrigeration 3,699,628.26 259,713.90 3,981,739.22 279,518.10
receivable (Dalian) Co.,Ltd.
Bingshan
Accounts Songyang
3,079,666.97 216,192.62 1,224,109.36 85,932.48
receivable Biotechnology
(Dalian) Co., Ltd
Dalian Spinde
Accounts Environmental
2,253,035.56 188,463.68 750,121.11 52,658.50
receivable Equipment Co.,
Ltd.
Dalian Bingshan
Accounts Group Huahuida
1,025,000.00 71,955.00 2,411,867.26 169,313.08
receivable Financial Leasing
Co., Ltd.
Linde Hydrogen
Accounts Refueling Station
842,611.29 59,151.31 841,284.21 59,058.15
receivable Equipment
(Dalian) Co., Ltd.
Dalian Fuji
Accounts Bingshan
556,176.16 83,015.56 550,800.00 49,630.32
receivable Intelligent Control
System Co., Ltd.
Accounts Dalian Shentong
89,277.33 6,267.27 94,897.33 6,661.79
receivable Electric Co., Ltd
Dalian Bingshan
Contract Group Huahuida
138,450.00 9,719.19
assets Financial Leasing
Co., Ltd.
Contract Sonyo Cold Chain
131,130.00 22,790.42
assets (Dalian) Co., Ltd.
Dalian Bingshan
Contract Huigu
109,569.10 15,329.13 109,569.10 19,340.79
assets Development Co.,
Ltd
Dalian Shentong
Prepayment 9,722,818.40 8,402,006.53
Electric Co., Ltd
Bingshan
Prepayment Technical Service 521,589.05 825,789.25
(Dalian) Co., Ltd.
BAC Dalian Co.,
Prepayment 215,707.40 58,513.00
Ltd.
Dalian Spinde
Environmental
Prepayment 82,355.00 36,455.00
Equipment Co.,
Ltd.
Dalian Bingshan
Prepayment Pat Technology 40,160.00
Co., Ltd.
Other Dalian Fuji
Bingshan Vending 186,000.00 6,807.60 278,020.00 10,175.53
receivable Machine Co., Ltd
Bingshan
Other Technology
100,000.00 7,020.00 100,000.00 69,410.00
Service （Dalian）
receivable
Co., Ltd.
106
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Dalian Bingshan
Other Huigu
100,000.00 7,020.00
receivable Development Co.,
Ltd.
(2) Accounts Payable due from Related Party
Item Related party Closing Balance Opening Balance
Jiangsu Jingxue Energy Saving
Accounts Payable 79,672,340.17 68,660,038.43
Technology Co., Ltd.
Accounts Payable BAC Dalian Co., Ltd. 16,404,849.00 20,678,948.10
Dalian Bingshan Metal Technology
Accounts Payable 12,607,932.65 14,347,841.71
Co., Ltd.
Accounts Payable Sonyo Cold Chain (Dalian) Co., Ltd. 11,062,464.73
Dalian Bingshan Pat Technology Co.,
Accounts Payable 6,639,432.57 7,264,112.80
Ltd.
Accounts Payable Dalian Honjo Chemical Co., Ltd 5,374,200.49
Dalian Spinde Environmental
Accounts Payable 1,962,638.00 1,247,400.00
Equipment Co., Ltd.
Company under direct/indirect Control
Accounts Payable 1,746,276.66 11,517,452.19
of Panasonic Co.,Ltd
Accounts Payable Dalian Shentong Electric Co., Ltd 1,651,102.97 1,396,176.88
Dalian Fuji Bingshan Intelligent
Accounts Payable 868,928.95 1,942,256.73
Control System Co., Ltd.
Bingshan Technical Service (Dalian)
Accounts Payable 356,861.39 282,405.30
Co., Ltd.
Dalian Fuji Bingshan Vending Machine
Accounts Payable 337,766.32
Sales Co., Ltd
Other accounts Company under direct/indirect Control
2,991,025.17 4,502,046.38
payable of Panasonic Co.,Ltd
Other accounts
Sonyo Cold Chain (Dalian) Co., Ltd. 74,770.64
payable
Other accounts Dalian Jingxue Energy Saving
70,000.00 666,864.48
payable Technology Co., Ltd.
Other accounts Jiangsu Jingxue Energy Saving
666,864.50
payable Technology Co., Ltd.
Dalian Bingshan Group Huahuida
Contract liability 12,334,181.42 4,206,191.86
Financial Leasing Co., Ltd.
Linde Hydrogen Fueltech (Dalian) Co.,
Contract liability 2,303,585.62 2,274,454.09
Ltd
Company under direct/indirect Control
Contract liability 309,517.97 1,299,686.95
of Panasonic Co.,Ltd
Dalian Fuji Bingshan Vending Machine
Contract liability 77,383.17
Sales Co., Ltd.
Dalian Spinde Environmental
Contract liability 3,097.35
Equipment Co., Ltd.
Non-current Dalian Bingshan Group Huahuida
liabilities due Financial Leasing Co., Ltd. 30,824,259.03 34,388,781.83
within one year
Long-term Dalian Bingshan Group Huahuida
22,022,390.82 31,009,644.16
payables Financial Leasing Co., Ltd.
(I) Related Party Commitment
None
107
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
XIII. Commitments and Contingencies
1. Important Commitments
As of June 30, 2023, the company has no commitments that need to be disclosed.
2. Contingencies
(1) As of June 30, 2023, the Company's guarantee obligations under financing leases
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 30 June 2023, the balance
of the guarantee obligation of the financial lease is RMB 10.993 million yuan.
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 30 June 2023,
the balance of the guarantee obligation of the financial lease is RMB5.6334 million Yuan.
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 30 June, 2023, the
balance of the guarantee obligation of the financial lease is RMB6.3871 million Yuan.
The Company sold refrigerating house equipment to Shaanxi Yiming Food Co., LTD (“ Shaanxi Yiming”) 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 Shaanxi Yiming as a lessee. The contract price is 12.70million 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. Shaanxi Yiming issued an unconditional, irrevocable and
joint liability counter guarantee, and the Company is the beneficiary. Guarantee scope covers the full liability
108
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
because of the sales in the form of financial lease. As at 30 June, 2023, the balance of the guarantee obligation
of the financial lease is RMB 11.8364 million Yuan.
The Company sold refrigerating house equipment to Jilin Fuyu Agricultural Technology Co., LTD (“ Jilin
Fuyu ”) 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 andJilin Fuyu as a lessee. The contract price is 20.50 million 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. Jilin Fuyu 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 30 June, 2023, The Company has not assumed any guarantee
obligation for this financial lease for this project
Until 30 June, 2023, the balance of all guarantee obligation of the financial lease is RMB 34.8499million Yuan.
There is no situation where the Company needs to undertake the liability as 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 Until 30 June, 2023, no final judgment has been issued, and Sonyo Compressor made a provision
of 10,401,424.48 yuan
Until 30 June, 2023, the Company does not have any other contingencies for disclosure apart from the
above matters.
XIV.Events after the Balance Sheet Date
(1)Sales return
The company did not have any significant sales returns after the balance sheet date.
(2)Other event
Except for the above-mentioned post-balance sheet events disclosed, the Company has no other significant
post-balance sheet events.
XV. Other Significant Events
Segment Information
The management of the Company divided the Company into 3 segments based on the geographic area:
Northeast China, Central China, and East China. The Northeast is the Company’s general headquarters and the
registered address. The Central is the subsidiary of the Company, Wuhan New World Refrigeration Industrial
Co., Ltd, Wuhan Lanning Energy Technology Co., Ltd, and Chengdu Bingshan Refrigeration Engineering
Co., Ltd. The East is the subsidiary of the Company, Ningbo Bingshan Air-conditioning Refrigeration
109
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Engineering Co., Ltd.
(1) The basis and accounting policies of reporting segments
The internal organization structure, management requirements and internal report scheme are the
determination basis for the Company to set the operating segments. The segments are those satisfied
the following requirements.
1).The segment can generates revenue and incur expenses.
2).The management personnel can regularly evaluate the operation results of segments and allocate
resource ,assess its performance .
3).The financial situation, operation results, cash flow and other accounting information of segments can
be acquired.
The Company confirms the report segments based on the operating segments. The transfer price among
segments is set base on the market price. The assets and related expenses in common use are allocated to
different segments based on their proportion of revenue.
(2)The financial information of reporting segments
Amount unit ： yuan
30-06-2023/2023.01-06
Items
Northeast China Central China Offset Total
1 Operating income 2,492,707,283.43 175,644,850.57 -340,815,420.95 2,327,536,713.05
2 Cost 2,117,690,269.02 148,126,513.90 -324,481,252.50 1,941,335,530.42
Impairment loss on
-3,843,013.26 -723,096.58 -339,024.94 -4,905,134.78
assets
Impairment loss on
-19,451,906.83 -1,292,044.43 1,441,173.40 -19,302,777.86
credit
Depreciation and
50,657,005.42 3,916,133.49 54,573,138.91
amortization
3 Investment income from
3,387.24 249,116.74 2,814.27 255,318.25
associates and joint venture
4 Operating profits(loss) 114,118,423.43 1,716,059.57 -42,395,135.79 73,439,347.21
5 Income tax 17,006,179.87 -282,285.57 -2,793,622.74 13,930,271.56
6 Net profit(loss) 97,112,243.56 1,998,345.14 -39,601,513.05 59,509,075.65
-
7 Total assets 10,389,500,497.05 520,010,772.47 8,258,729,981.21
2,650,781,288.31
8 Total liabilities 5,521,189,617.76 422,235,213.73 -804,472,728.75 5,138,952,102.74
XVI. Notes to the Main Items of the Financial Statements of Parent Company
1. Accounts receivable
(1) Accounts receivable category
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Closing Balance
Item Booking balance Provision Booking
Amount % Amount % balance
Accounts receivable with
significant individual
861,673,723.29 1.00% 112,992,525.48 0.13% 748,681,197.81
amount and separate bad
debt provision
Accounts receivable with
bad debt provision based
on the characters of credit
risk portfolio
Accounting age as
465,931,163.61 0.54% 112,992,525.48 0.24% 352,938,638.13
characters
Related party within
395,742,559.68 0.46% 395,742,559.68
consolidation scope
Accounts receivable with
insignificant individual
amount and separate bad
debt provision
Total 861,673,723.29 1.00% 112,992,525.48 0.13% 748,681,197.81
(Continued)
Opening Balance
Item Booking balance Provision Booking
Amount % Amount % balance
Accounts receivable with
significant individual
737,611,736.89 100.00% 107,657,087.39 0.15% 629,954,649.50
amount and separate bad
debt provision
Accounts receivable with
bad debt provision based on
the characters of credit risk
portfolio
Accounting age as
388,615,076.25 52.69% 107,657,087.39 0.28% 280,957,988.86
characters
Related party within
348,996,660.64 47.31% 348,996,660.64
consolidation scope
Accounts receivable with
insignificant individual
amount and separate bad
debt provision
Total 737,611,736.89 100.00% 107,657,087.39 0.15% 629,954,649.50
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
(1)The bad debt provisions of accounts receivable in the portfolio is accrued under accounting aging analysis
method:
Aging Closing Balance
Within1 year 677,048,404.74
1 to 2 years 56,613,460.14
2 to 3 years 58,375,681.75
More than 3 years 69,636,176.66
3 to 4 years 1,733,408.83
4 to 5 years 21,498,453.03
More than 5 years 46,404,314.80
Total 861,673,723.28
(2) Bad debt provision accrued and reversed (withdraw)
Change during the year
Category Opening balance Closing Balance
Accrued Collected/ reversed Written-off
Bad debt
107,657,087.39 6,094,358.09 758,920.00 112,992,525.48
provision
Total 107,657,087.39 6,094,358.09 758,920.00 112,992,525.48
(3) No accounts receivable written off in current period.
Item Written off amount
Receivable actually written off 758,920.00
(4) The top five significant accounts receivable categorized by debtors
Key debtors written off
Related
Company name Nature Amount Reason Procedures
party
Oben Food
Trade CEO
(Shanghai) Co., 5,600.00 Field expense N
receivable approval
LTD
Fujian Binhai Trade Customer CEO
94,540.00 N
Chemical Co., LTD receivable money problem approval
Yulin Huaneng coal
Trade CEO
technology Co., 585,000.00 Court decision N
LTD receivable approval
Yichang Three
Trade CEO
Gorges Logistics 73,780.00 Court decision N
receivable approval
Park Co. LTD
Total — 758,920.00 — — —
2. Other Receivables
Item Closing Balance Opening Balance
Interest receivable 0.00 0.00
112
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Dividend receivable 10,184,798.49
Other receivable 31,752,471.41 36,021,805.53
Total 41,937,269.90 36,021,805.53
2.1 Dividend receivable
Item Closing Balance Opening Balance
Songzhi Dayang Cold and Heat Technology (Dalian)
2,000,000.00
Co., LTD
Dalian Bingshan Engineering & Trading Co., Ltd. 2,986,802.05
Jiangsu Jingxue Insulation Technology Co., Ltd. 1,610,172.00
Sonyo Refrigeration System (Dalian) Co., Ltd. 2,836,696.89
Dalian Bingshan Group Huahuida Financial Leasing
751,127.55
Co., Ltd.
Total 10,184,798.49
2.2 Other receivable
(1) Other receivables categorized by nature
Nature Closing Balance Opening Balance
Receivables and payables 22,163,566.42 22,444,622.16
Deposits 9,776,414.85 13,733,003.58
Petty cash 658,142.66 589,402.48
Total 32,598,123.93 36,767,028.22
(2) Provision for bad debts
The first phase The second phase The third phase
Provision for bad debts Expected Credit Loss Expected Credit Loss for Total
Expected credit losses in the
for the duration (No the duration (Credit
next 12 months
Credit Devaluation) impairment has occurred)
Balance on January 1, 2023 596,484.59 148,738.10 745,222.69
The balance of January 1, 2023 in
—— —— —— ——
the current period
Provision for bad debts 100,429.83 100,429.83
Balance on June 30, 2023 696,914.42 148,738.10 845,652.52
The bad debt provisions of other receivables in the portfolio is accrued under accounting aging analysis
method
Aging Closing Balance
Within 1 year 1,498,945.92
1 to 2 years 5,561,329.35
2 to 3 years 23,447,703.00
More than 3 years 2,090,145.66
3 to 4 years 310,000.00
4 to 5 years 279,835.11
More than 5 years 1,500,310.55
Total 32,598,123.93
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
(3) Bad debt provision accrued and reversed (withdraw) in the period.
Change during the year
Opening Closing
.Category
balance Accrued Collected/reversed Written-off Balance
Bad debt
745,222.69 100,429.83 845,652.52
provision
Total 745,222.69 100,429.83 845,652.52
(4) Other receivables from the top 5 debtors
Closing
Closing % of the
Name Category Aging Balance of
Balance total OR
Provision
Wuyuan county Furun meat
Receivable 1,331,766.93 1 to 2 years 4.09% 48,742.67
processing Co., LTD
Dalian Delta HK China gas Co.,
Deposit 1,100,000.00 Over 5 years 3.37% 40,260.00
Ltd.
Xinjiang Oriental Hope New Energy Bid bond 1,000,000.00 2 to 3 years 3.07% 36,600.00
Co., LTD
Ningxia Crystal New Energy Bid bond 1,000,000.00 1 to 2 years 3.07% 36,600.00
Materials Co., Ltd.
Hebei Veyong Bio- Security deposit for 2 to 3 years
865,980.00 2.66% 31,694.87
Chemical Co.,Ltd fulfil the contract
Total 5,297,746.93 16.26% 193,897.54
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
3. Long-term equity investments
Category of long-term equity investments
Closing Balance Opening Balance
Item
Closing Balance Provision Book Value Opening Balance Provision Book Value
Investment of subsidiaries 2,308,830,861.29 2,308,830,861.29 2,163,545,361.29 2,163,545,361.29
Investment of affiliates and JV 552,907,517.91 552,907,517.91 557,452,792.51 557,452,792.51
Total 2,861,738,379.20 2,861,738,379.20 2,720,998,153.80 2,720,998,153.80
(1) Investments of subsidiaries
Subsidiaries names Opening Balance Increase Decrease Closing Balance
Dalian Bingshan Group Construction Co., Ltd 193,749,675.77 193,749,675.77
Dalian Bingshan Group Sales Co., Ltd 20,722,428.15 20,722,428.15
Dalian Bingshan Air-Conditioning Equipment Co., Ltd 45,272,185.00 45,272,185.00
Dalian Bingshan Guardian Automation Co., Ltd. 50,638,361.52 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
Wuhan New World Refrigeration Industrial Co., Ltd 184,674,910.81 184,674,910.81
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
Sonyo Refrigeration (Dalian) Co., Ltd 145,285,500.00 145,285,500.00
Total 2,163,545,361.29 145,285,500.00 2,308,830,861.29
(2) Joint ventures& affiliated companies
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Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Increase/Decrease
Adjustment of Provision for
Investee Beginning balance Gains and losses Cha ng e s Cash bonus or Provision for Ending balance impairment
other
Increased Decreased recognized under of other profits impairment of the Others at year end
comprehensive
the equity method equity announced current period
income
1. Affiliated companies
Dalian Honjo Chemical Co.,
Ltd 9,819,096.80 -1,671,262.36 0.00 8,147,834.44
Songzhi Ocean Thermal
Technology (Dalian) Co., Ltd 60,089,313.51 -532,555.89 2,000,000.00 57,556,757.62
Dalian Fuji Bingshan Vending
Machine Co., Ltd 111,101,339.93 -15,573,573.93 0.00 95,527,766.00
MHI Bingshan Refrigeration
(Dalian) Co.,Ltd. 15,401,109.10 867,056.87 0.00 16,268,165.97
Dalian Fuji Bingshan Vending
Machine Sales Co., Ltd 0.00 0.00 0.00
Jiangsu JingXue Insulation
Technology Co.,Ltd 140,124,248.76 2,326,132.50 1,610,172.00 140,840,209.26
Bingshan Metal Technical
175,313,807.46 13,760,359.73 189,074,167.19
Service （Dalian） Co.,Ltd.
Dalian Bingshan Group
Huahuida Finance Leasing Co. 45,603,876.95 639,868.03 751,127.55 45,492,617.43
LTD
Total 557,452,792.51 0.00 0.00 -183,975.05 0.00 0.00 4,361,299.55 0.00 552,907,517.91
116
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
4. Operating revenue and cost
Item 2023.01-06 2022.01-06
Revenue Cost Revenue Cost
Revenue from main operation 533,710,281.94 442,877,817.72 385,929,620.18 336,469,117.09
Revenue from other operation 27,796,909.63 19,695,636.49 20,551,816.12 13,934,076.36
Total 561,507,191.57 462,573,454.21 406,481,436.30 350,403,193.45
5. Investment income
Items 2023.01-06 2022.01-06
Income from long-term equity investments under cost method 24,063,498.94 3,482,615.76
Income from long-term equity investments under equity method -183,975.05 16,926,568.63
Investment income from disposal of long-term equity investment 3,864,200.00
Income from holding and disposing of other non-current financial
5,782,304.24 63,953,740.43
assets
Total 29,661,828.13 88,227,124.82
XVII. Supplementary Information to the Financial Statements
1. Non-operating profit or loss
item Amount
Disposal gains and losses of non-current asset -493,693.67
Government subsidies included in current profit or loss 4,263,277.78
Gains and losses on debt restructuring 975,354.50
Profit or loss arising from contingencies unrelated to the normal operation of the
3,290,560.80
company
When the investment cost of a subsidiary, associate or joint venture is less than that
of the investment, an enterprise shall enjoy the income generated by the fair value of 4,364,003.20
the identifiable net assets of the invested entity
Allowance for impairment reversal of receivables tested separately for impairment 1,037,705.78
Other non-operating revenue or expense 646,683.82
Influence on income tax 2,020,903.93
Influence on minority shareholders 106,759.58
Total 11,956,228.70
2. Return on equity and earnings per share
Weighted Earnings per share
average (EPS)
Profit of report period return on Basic Diluted
net assets EPS EPS
(%)
Net profit attributable to shareholders of parent company 1.93% 0.07 0.07
Net profit after deducting non-recurring gains and losses
1.54% 0.05 0.05
attributable to shareholders of parent company
117
