Dalian Refrigeration Co., Ltd. 2013 Annual...

Dalian Refrigeration Co., Ltd. 2013 Annual Report

1

Dalian Refrigeration Co., Ltd.

2013 Annual Report

April, 2014


2

Section 1 Important Notice, Table of Contents, and Definitions

The directors and the Board of Directors, the supervisors and the Supervisory Board, and Senior staff members of Dalian Refrigeration Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are not any important omissions, fictitious statements or serious misleading carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completeness of the whole contents. Chairman of the Board of Directors of the Company Mr. Ji Zhijian, Financial Majordomo Mrs. Rong Yan and the head of Accounting Department Mrs. Mao Chunhua hereby confirm that the financial report of the annual report is true and complete. All the directors have attended this Board meeting of the Company. The profit distribution proposal reviewed and adopted at this Board meeting of the Company is: to take the total share capital of the Company as of Dec. 31, 2013 as the base number and pay to all shareholders the cash dividend of 1.5 yuan (inclusive the tax) and 0 bonus shares per 10 shares, without capital reserve to be converted into share capital. This report is written respectively in Chinese and in English. In the event of any discrepancy between the two above-mentioned versions, the Chinese version shall prevail.


3

CONTENTS

Section 1 Important Notice, Table of Contents, and Definitions........................................... 2 Section 2 About the Company ............................................................................................. 6 Section 3 Summary of Main Accounting Data and Financial Indicators............................... 8 Section 4 Board of Directors' Report ................................................................................. 10 Section 5 Important Issues ................................................................................................. 23 Section 6 Change in Share Capital and Shareholders' Information ..................................... 27 Section 7 Information on the Company’s Directors, Supervisors, Senior Management and Staff................................................................................................................................... 30 Section 8 Corporate Governance ....................................................................................... 37 Section 9 Internal Control.................................................................................................. 40 Section 10 Financial Report............................................................................................... 41 Section 11 Contents of Reference Documents...................................................................103


4

Definitions

Defined item Stands for Meaning Reporting period Stands for From Jan. 1, 2013 to Dec. 31, 2013 The Company, this Company Stands for Dalian Refrigeration Co., Ltd.

Wuxin Refrigeration Stands for Wuhan New World Refrigeration Industries Co., Ltd., one of the controlled subsidiaries of this Company, where the Company holds 51% of its shares.

Dalian Sanyo Compressor Stands for Dalian Sanyo Compressor Co., Ltd., one of the mutual shareholding companies of the Company, where the Company holds 40% of its shares.

Dalian Sanyo Cold Chain Stands for Dalian Sanyo Cold Chain Co., Ltd., one of the mutual shareholding companies of the Company, where the Company holds 40% of its shares.

Dalian Sanyo Refrigeration Stands for Dalian Sanyo Refrigeration Co., Ltd., one of the mutual shareholding companies of the Company, where the Company holds 40% of its shares.

Dalian Fuji-Bingshan Stands for Dalian Fuji-Bingshan Vending Machine Co., Ltd., one of the mutual shareholding companies of this Company, where the Company holds 49% of its shares.

Keihin Grand-Ocean Stands for Keihin Grand-Ocean Cooling & Heating Industry (Dalian) Co., Ltd., one of the mutual shareholding companies with this Company, where the Company holds 20% of its shares.

Screw compressor in new series Stands for A compressor with adjustable volumetric ratio to ensure the compressor set in energy saving condition throughout the year.

Scroll compressor Stands for A high-efficiency and energy-saving full-hermetic compressor using advanced technology

OA Stands for Office Automation 5S Stands for Seiri, Seiton, Seiso, Seiketsu, and Shitsuke


5

Notice about Significant Risks

There is no significant risk having adverse influence on attainment of the Company's future development strategy and business targets. The paragraph "Development Prospect of the Company" in Section 4 of this Annual Report describes major risks the Company may be confronted with, including the risk of fiercer industrial competition, and the risk of backward production equipment and process flow. See the related sections for the countermeasures to be taken by the Company.


6

Section 2 About the Company

I. Company information

Short form of the stock DALENG GUFEN; DALENG-B

Stock code 000530; 200530

Listed stock exchange Shenzhen Stock Exchange

Legal name in Chinese 大连冷冻机股份有限公司

Legal English name and abbreviation Dalian Refrigeration Co., Ltd. DRC

Legal representative Ji Zhijian

Registered address and office address 888 Xinan Road, Shahekou District, Dalian

Post code 116033

Internet web site of the Company www.daleng.cn

E-mail of the Company [email protected] II. Contact persons and information

Secretary of the Board of Directors Authorized representative for securities affairs Name Song Wenbao Song Wenbao (proxy)

Address DALENG GUFEN Securities Department, No. 888, Xinan Road, Shahekou District, Dalian

DALENG GUFEN Securities Department, No. 888, Xinan Road, Shahekou District, Dalian

Tel. 0411-86538130 0411-86538130 Fax 0411-86654530 0411-86654530 E-mail [email protected] [email protected] III. Information disclosure and place of preparation for inquiry

Name of the newspaper designated by the Company for information disclosure

China Securities Daily and Hong Kong Commercial Daily

Address of the website designated by China Securities Regulatory Commission for publishing this Annual Report http://www.cninfo.com.cn

Place where this Annual Report was prepared for inquiry Securities Department of the Company IV. Alteration to the registration

Registration date Registration place

Registered number of Business License

of the Corporate Legal Entity

Registered number for taxation

Organization code

Initial registration Dec. 18, 1993 No. 888, Xinan Road, Shahekou District, Dalian

2102001100326 DA GUO, DI SHA (ZHI) 210204242361300 24236130-0

Registration at the end of the reporting period

Mar. 31, 2014 No. 888, Xinan Road, Shahekou District, Dalian

210200000266757 DA GUO, DI SHA (ZHI) 210204242361300 24236130-0

Change in main business since the Company was listed No change

Changes in the holding shareholder No change

http://www.daleng.cn

mailto:[email protected]



http://www.cninfo.com.cn


7

V. Other related information Accounting firm engaged by the Company

Name of accounting firm Da Hua Certified Public Accountants (Special General Partnership)

Office location of accounting firm 12/F,7th Building No.,16 Xi Si Huan Zhong Road, HaiDian District Beijing, China

Name of signing certified public accountant Yang Yingjin ,Wang Shuhuan Sponsor the Company appointed for performance of the consistent supervision duty in the reporting period □ Applicable √ Not applicable Financial consultant the Company appointed for performance of the consistent supervision duty in the reporting period □ Applicable √ Not applicable


8

Section 3 Summary of Main Accounting Data and Financial Indicators

I. Main accounting data and financial indicators

Did the Company retroactively adjust or restate the accounting data of previous years due to change in the accounting policy and correction of accounting mistakes? □ Yes √ No

2013 2012

Increase/decrease

compared with

previous year (%)

2011

Operating revenue 1,535,706,911.25 1,521,979,266.15 0.9% 1,863,253,549.47

Net profit attributable to shareholders of listed companies 153,006,057.13 117,142,066.15 30.62% 81,621,060.33

Net profit belonging to the shareholders of listed companies after

the deduction of non-recurring profit and loss 121,207,821.52 123,788,117.10 -2.08% 15,699,415.00

Net cash flow from operating activities 7,630,456.44 -66,860,885.98 111.42% 168,363,149.93

Basic earning per share 0.44 0.33 33.33% 0.23

Diluted earnings per share 0.44 0.33 33.33% 0.23

Weighted average return on net asset yield 8.27% 6.63% Increase 1.64

percentage points 4.71%

At the end of 2013 At the end of 2012

Increase/decrease

compared with

previous year（％）

At the end of 2011

Total assets 2,967,390,234.89 2,937,190,656.69 1.03% 3,053,660,921.27

Owner's equity attributable to shareholders of listed companies 1,907,018,190.46 1,808,800,737.71 5.43% 1,748,822,103.82

II. Difference of accounting data between as per Chinese accounting standards and as per International Accounting Standards The difference of accounting data between as per Chinese Accounting Standards and as per International Accounting Standards was 0.

III. Non-recurring profits and losses and their amounts

2013 2012 2011

Disposal gains and losses of non-current asset 33,844,950.09 -22,341,252.74 52,845,646.18

Tax returned/reduced by chance 905,596.59

Government subsidies included in current profit or loss 7,290,805.05 13,090,280.89 12,677,393.52

Disposal gains from investments on financial assets available for sale 20,903,931.90

Other non-operating revenue or expense 1,121,112.19 1,097,771.60 2,325,576.15


9

Influence on income tax 10,592,590.74 -2,218,545.09 21,998,451.02

Influence on minority shareholders 771,637.57 711,395.79 832,451.40

Influence on net profit 31,798,235.61 -6,646,050.95 65,921,645.33


10

Section 4 Board of Directors' Report I. Summary The company, as the largest industrial refrigeration equipment production enterprise in China, is committed to developing the business of industrial refrigeration, food freezing and cold storage, central and commercial air-conditioning and refrigeration components, having covered the key areas of the refrigeration industrial chain and forged the most complete cold and hot industrial chain in China. In face of a lot of unfavorable factors in 2013, the company took the initiative actively, competed to seize opportunities, strived to open up market externally, laid a high emphasis on basic management internally, promoted comprehensive reform in an orderly way and tried the best to fulfill the operating plan target. In 2013, the Company made the sales income of 1,535.71 million yuan, accounting for 95.39% of 1,610 million yuan of the Company’s annual business indicator for 2013, with a year-on-year increase of 0.9%; the total amount of profit of 184.75 million yuan, and the total amount of profit of 142.99 million yuan after deducting the profit from the warehousing land use right of the company was collected and stored, accounting for 105.92% of 135 million yuan of the Company’s annual business indicator for 2013, with a year-on-year increase of 7.29%. Within the reporting period, the company made positive and effective changes and practices in such aspects as perfecting the marketing management mode, broadening the sales channels, adjusting the marketing strategies, etc. It responded to market changes actively and strived to expand the market share by taking such changing initiatives as participating in China Refrigeration Exhibition in a unified group image, holding national distributor meetings, establishing sales directors in national ten major sales regions, reforming the salesperson distribution system, perfecting after-sale maintenance and warranty, etc. and by carrying out such characteristic activities as return visit to key customers, training to employees of key customers, etc. Within the reporting period, the company perfected the basic management, enhanced the manufacturing ability and increased both efficiency and economic benefits by taking such changing initiatives as adjusting the organizational structure and mid-level cadres, erecting the OA basic platform, promoting 5S activities, carrying out new work modes, perfecting the distribution system, etc. Within the reporting period, the company centered particularly around the direction of new type environmentally friendly and efficient refrigeration compressors, intelligent, energy-saving type products to do new product R & D and make optimum design of existing products, having fulfilled 16 items of new product R & D and technical innovation such as CO2 screw refrigeration compressor unit, new type small cold storage, etc. Within the reporting period, Dalian Sanyo Compressor, in which the company participates and being a domestically leading vortex compressor producer, highly emphasized the commercial air-conditioning market and continued to show its scale effect by realizing a sales income of RMB 2.4 billion yuan, up by 11% from that in the same period last year; a net profit of RMB 167 million yuan, up by 36% from that in the same period last year. The accumulated production volume of scroll compressor has exceeded 10 million sets. Within the reporting period, Dalian Sanyo Cold Chain in which the company participates centered around retailing industry transformation to develop new products and provide more excellent comprehensive cold chain transportation solutions for chain enterprises. By carrying out in-depth innovation activities, it has improved the production efficiency, saved labor costs. Under the influence of insufficient oversea ordering and Japanese Yen depreciation, the sales income and the net profit reduced as compared with the same period last year. Within the reporting period, Dalian Sanyo Refrigeration in which the company participates realized an optimum configuration of large air-conditioner business resources with the sales income increasing by 50% as compared to the same period last year by integrated operation with Dalian Sanyo Air-conditioner. Under the influence of Japanese Yen depreciation, there was an exchange loss which influenced the realization of net profit. Within the reporting period, Keihin-Dayang in which the company participates made a new progress in opening up market. The branch company in Foshan was put into production formally, realizing product supply localization for local customers, upgrading the market service efficiency and quality and expanding the enterprise scale. Within the reporting period, Dalian Fuji-Bingshan Automatic Vending Machine in which the company participates developed a large automatic vending machine and declared 20 items of utility model patents. The second factory was put into production formally, as a result, the enterprise product capacity was increased. During the reporting period, the Company further to perfected foreign equity investment. To highlight the main business, whole equity of Dalian Jiale Vending Machine Marketing Co., Ltd. owned by the Company were transferred; follow-on invested in Wuhan-New World Refrigeration Industrial Co., Ltd. and Dalian Bingshan Group Import & Export Co., Ltd.; and established a joint venture MHI Bingshan Refrigeration (Dalian) Co., Ltd.


11

II. Analysis of main business 1. Summary In 2013, the Company made the sales income of 1,535.71 million yuan, accounting for 95.39% of 1,610 million yuan of the Company’s annual business indicator for 2013; and the total amount of profit of 142.99 million yuan after deducting the profit from the warehousing land use right of the company was collected and stored, accounting for 105.92% of 135 million yuan of the Company’s annual business indicator for 2013. Reason for the Company's actual business performance decrease or increase by 20% or higher compared with the earnings projection for this reporting period that has been disclosed in public □ Applicable √ Not applicable 2. Sales income In the reporting period, the Company's sales income increased by 0.9% on a year-on-year basis. Was the Company's sales income on material objects more than that on labor service? √ Yes □ No

Industry category Item 2013 2012 Year-on-year increase/decrease (%)

Sales volume 3,299 3,358 -1.75% Production output 3,229 3,415 -5.44% Main refrigeration unit for

industrial or commercial use Inventory level 455 525 -13.33% Reason for change in the related data by 30% or higher on a year-on-year basis □ Applicable √ Not applicable Major orders in the hand of the Company □ Applicable √ Not applicable Major change or adjustment in the Company's products or service in the reporting period □ Applicable √ Not applicable Information on the Company's major customers Total sales volume from top five customers (yuan) 188,926,543.22

Proportion of the total sales volume from top five customers to the annual sales volume (%) 12.31%

Information on the Company's top five customers

No. Name of customer Sales volume (yuan) Proportion to the annual sales volume (%)

1 Dalian Bingshan Engineering & Trading Co., Ltd. 91,804,457.91 5.98%

2 Chengdu New World Refrigeration Equipment

Engineering Co., Ltd. 26,247,162.22 1.71%

3 Huanghai Shipbuilding Co., Ltd. 26,106,390.19 1.7%

4 China PLA No. 63820 Troop 23,931,623.95 1.56%

5 Dalian Sanyo Cold Chain Co., Ltd. 20,836,908.95 1.36%

Total —— 188,926,543.22 12.31%


12

3. Costs Industry category

Monetary unit: RMB yuan 2013 2012

Industry category Item Amount Proportion to the operating costs

(%) Amount

Proportion to the operating costs

(%)

Year-on-year increase/decrease

(%)

Direct materials 989,011,168.11 84.7% 1,002,595,114.78 87.3% Decrease 2.6

percentage points

Labor wages 89,131,562.04 7.7% 72,766,815.75 6.3% Increase 1.4

percentage points

Depreciation 26,853,056.06 2.3% 24,134,308.66 2.1% Increase 0.2

percentage points

Utilities 20,239,508.58 1.7% 13,345,821.59 1.2% Increase 0.5

percentage points

Others 41,765,707.96 3.6% 35,303,682.61 3.1% Increase 0.5

percentage points

Refrigeration and air-conditioning

Total operating costs 1,167,001,002.75 100% 1,148,145,743.39 100% —

Note There was no remarkable change in composition of the Company's costs in this reporting period. Information on the Company's major suppliers Total purchase volume from top five suppliers (yuan) 192,906,199.35 Proportion of the total purchase volume from top five suppliers to the annual purchases volume (%) 18.59%

Information on the Company's top five suppliers

No. Name of supplier Purchase volume (yuan)

Proportion to the annual purchase volume (%)

1 BAC Dalian Co., Ltd. 68,381,433.34 6.59%

2 Dalian Shentong Electric Co., Ltd. 38,156,532.43 3.68%

3 Wuhuan Zhongwei Anti-explosion Control System Co.,

Ltd. 34,399,828.16 3.32%

4 Dalian Bingshan Group Refrigeration Equipment Co., Ltd. 33,672,400.06 3.25%

5 Lida Heating, Ventilating and Air-conditioning Installation

Engineering Co., Ltd. Jilin Province 18,296,005.36 1.76%

Total —— 192,906,199.35 18.59%

4. Expenses In the reporting period, the Company had the selling expenses decreased by 0.16% on a year-on-year basis; the administrative expenses decreased by 3.19% on a year-on-year basis; the financial expenses decreased by 37.53% on a year-on-year basis, mainly due to increase of the term deposit with more interest revenue in the reporting period; the expense of income tax increased by 256.11% year on year, the main reason is that within the reporting period, the warehousing land use right of the company was collected and stored.


13

5. R&D expenditure In the reporting period, the Company had the total R&D expenditure of 78.53 million yuan, accounting for 4.12% of the Company's net assets as of the end of 2013 or 5.12% of the Company's annual operating revenues. There was no remarkable year-on-year change in related data. 6. Cash flows

Monetary unit: RMB yuan

Item 2013 2012 Year-on-year increase/decrease (%)

Sub-total of cash inflows from operating activities 1,210,898,029.90 1,268,721,521.10 -4.56%

Sub-total of cash outflows from operating activities 1,203,267,573.46 1,335,582,407.08 -9.91%

Net amount of cash flow generated in operating activities 7,630,456.44 -66,860,885.98 111.42%

Sub-total of cash inflows from investing activities 91,997,685.81 45,500,206.41 102.19%

Sub-total of cash outflows from investing activities 73,148,044.45 86,098,678.72 -15.04%

Net amount of cash flow generated in investing activities 18,849,641.36 -40,598,472.31 146.43%

Sub-total of cash inflows from financing activities 53,900,000.00 35,300,000.00 52.69%

Sub-total of cash outflows from financing activities 103,818,561.63 83,115,675.04 24.91%

Net amount of cash flow generated in financing activities -49,918,561.63 -47,815,675.04 -4.4%

Net increase in cash and cash equivalents -23,479,575.11 -155,258,753.84 84.88%

Reason for change in the related data by 30% or higher on a year-on-year basis √ Applicable □ Not applicable （1）The net amount of cash flow resulting from operating activities increased obviously as compared to the same period last. The main reason is that within the reporting period, the company strengthened loan recovery with the cash paid for purchasing commodities, receiving labor services reducing obviously as compared to the last year. （2）The subtotal of cash inflow from investment activities increased obviously. The main reason is that within the reporting period, the warehousing land use right of the company was collected and stored with a large amount of cash being recovered. （3）The net amount of cash flow resulting from investment activities increased obviously as compared to the same period last year. The main reason is that within the reporting period, the warehousing land use right of the company was collected and stored with a large amount of cash being recovered and that within the reporting period, the investment in the associated company reduced as compared to the same period last year. （4）The subtotal of cash inflow from fund-raising activities increased obviously as compared to the same period last year. The main reason is that within the reporting period, the amalgamated sub-companies increased short-term loans. （5）The net amount of cash and cash equivalents increased obviously as compared to the same period last year. The main reason is that the net amount of cash flow resulting from operation activities and investment activities increased obviously as compared to the same period last year. Reason for remarkable difference between the cash flows from the Company's operating activities in the reporting period and the net annual profit √ Applicable □ Not applicable There was a remarkable difference between the net amount of cash flow generated in operating activities of the Company and the net annual profit in the reporting period, mainly due to that the proportion of returns on investment to the total profit of the Company was higher.


14

III. Main business structure

Monetary unit: RMB yuan

Operating revenue Operating costs Gross profit (%)

Increase/decrease of operating

revenues on a year-on-year

basis (%)

Increase/decrease of operating costs on a year-on-year

basis (%)

Increase/decrease of gross profit on a

year-on-year basis (%)

By industry Refrigeration and air-conditioning 1,517,271,251.60 1,149,272,794.08 24.25% 1.13% 2.11% Decrease 0.73 per

centage points By product Refrigeration and air-conditioning equipment

1,517,271,251.60 1,149,272,794.08 24.25% 1.13% 2.11% Decrease 0.73 percentage points

By region

Northeast China 1,115,911,862.44 850,325,789.22 23.8% 3.09% 4.87% Decrease 1.29 per

centage points

East China 31,406,876.77 25,784,728.39 17.9% -4.28% -16.37% Increase 11.87

percentage points

Central China 369,952,512.39 273,162,276.47 26.16% -3.93% -3.77% Decrease 0.13

percentage points

IV. Analysis of assets & liabilities 1. Remarkable change in assets

Monetary unit: RMB yuan End of 2013 End of 2012

Amount Proportion to the total assets (%) Amount Proportion to the

total assets (%)

Proportion increase/decrease (%)

Monetary funds 512,903,713.13 17.28% 531,896,655.08 18.11% Decrease 0.83

percentage points

Accounts receivable 369,712,746.70 12.46% 352,261,726.74 11.99%

Increase 0.47

percentage points

Inventories 325,531,007.41 10.97% 398,895,095.83 13.58% Decrease 2.61

percentage points

Long-term equity investment 1,021,946,998.64 34.44% 962,636,635.50 32.77%

Increase 1.67

percentage points

Fixed assets 395,266,143.70 13.32% 404,973,883.42 13.79% Decrease 0.47

percentage points

Construction in progress 68,462,823.08 2.31% 1,304,951.56 0.04%

Increase 2.27

percentage points 2. Remarkable change in liabilities

Monetary unit: RMB yuan 2013 2012

Amount Proportion to the total assets (%) Amount Proportion to the

total assets (%)

Proportion increase/decrease (%)

Short-term loans 37,500,000.00 1.26% 29,500,000.00 1% Increase 0.26 percentage points

Long-term loans 0% 0% ——


15

V. Analysis of core competence Boasting the most complete cooling and heating product chain in the industry, the Company can offer to customers the service of package projects from design, manufacture, installation to maintenance to well meet the customized demand of customers. Having the mature and perfect marketing network and after-sale service network, the Company can offer to customers in more regions the more rapid and considerate high-quality service. Taking refrigeration and air-conditioning as its main business, the Company effectively combines the independent R&D and the joint ventures and cooperation and has formed a unique development pattern appropriate to itself and the industry. In the reporting period, the Company's core competence above-mentioned was improved further. VI. Analysis of investments 1. External equity investments (1) External investments

External investments Investment in 2013 (yuan) Investment in 2012 (yuan) Amount of variation

1,021,946,998.64 962,636,635.50 6.17%

Invested companies

Name of company Main business Equity proportion of listed companies to invested companies (%)

For details of the invested companies, see V-10, 11 in the Explanatory Notes to Accounting Statements. (2) Held financial companies' equity

Name of object held Amount of primary

investment

Quantity (Shares)

held

Proportion of

share equity

in that

company

Book value at the

end of period

Profit and loss

within period

Change of

owner’s equity

within period

Guotai Junan

Secunities Co., Ltd 30,098,895.00 30,098,895 0.49% 30,098,895.00 0.00 0.00

Total 30,098,895.00 30,098,895 - 30,098,895.00 0.00 0.00

2. Analysis of major subsidiary companies and mutual shareholding companies

a. Main holding subsidiary companies

① Dalian Bingshan Group Refrigerator & Air-conditioner Installation Co.

With a registered capital of 20.04 million yuan and 100% of its shares held by the Company, Dalian Bingshan Group

Refrigerator & Air-conditioner Installation Co. is engaged mainly in installation and test of complete sets of refrigeration

equipment. The company realized the sales of 123.84 million yuan and net profit of 2,340 thousand yuan in 2013, with total

assets of 65.58 million yuan and net assets of 26.37 million yuan.

② Dalian Bingshan Group Sales Co., Ltd.

With a registered capital of 18 million yuan and 90% of its shares held by the Company, Dalian Bingshan Group Sales Co., Ltd.


16

is engaged mainly in selling the products of the member enterprises of Dalian Bingshan Group. The company realized the sales

of 31.41 million yuan and net profit of 530 thousand yuan in 2013, with total assets of 44.89 million yuan and net assets of

24.98 million yuan.

③ Dalian Bingshan Air-conditioning Equipment Co., Ltd.

With a registered capital of 700 million Japanese yen and 70% of its shares held by the Company, Dalian Bingshan

Air-conditioning Equipment Co., Ltd. is engaged mainly in production and sale of the terminal products for air conditioners

such as fan coils and air processors. The company realized the sales of 125.68 million yuan and net profit of 3,840 thousand

yuan in 2013, with total assets of 144.56 million yuan and net assets of 72.23 million yuan.

④ Dalian Bingshan Ryosetsu Fast Frozen Equipment Co., Ltd.

With a registered capital of US$ 1 million and 70% of its shares held by the Company, Dalian Bingshan Ryosetsu Fast Frozen

Equipment Co., Ltd. produces and selling fast frozen equipment. The company realized the sales of 30.28 million yuan and net

profit of -3,140 thousand yuan in 2013, with total assets of 27.75 million yuan and net assets of 6.9 million yuan.

⑤ Dalian Bingshan Metal Processing Co., Ltd.

With a registered capital of US$ 2.35 million and 64.25% of its shares held by the Company, Dalian Bingshan Metal Processing

Co., Ltd. produces and supplies metal plate works and stampings for the established joint venture companies and the Company.

The company realized the sales of 40.82 million yuan and net profit of 1,300 thousand yuan in 2013, with total assets of 31.37

million yuan and net assets of 25.08 million yuan.

⑥ Dalian Bingshan Guardian Automation Co., Ltd.

With a registered capital of GBP 210 thousand and 60% of its shares held by the Company, Dalian Bingshan Guardian

Automation Co., Ltd. engaged mainly in supplying automated control technology for refrigeration & other fields. The company

realized the sales of 35.09 million yuan and net profit of 5,150 thousand yuan in 2013, with total assets of 19.76 million yuan

and net assets of 12.55 million yuan.

⑦ Wuhan New World Refrigeration Industry Co., Ltd.

With a registered capital of 30 million yuan and 51% of its shares held by the Company, Wuhan New World Refrigeration

Industry Co., Ltd. engaged mainly in producing and selling screw type refrigeration compressor. The company realized the sales

of 373.65 million yuan and net profit of 10,680 thousand yuan in 2013, with total assets of 449.72 million and net assets of

140.11 million.

b. Main participating companies

Name Sales（thousand yuan） Net profit（thousand yuan）

Dalian Sanyo Compressor 2,422,380 166,670

Keihin Grand-Ocean 557,870 49,190

Subsidiary companies obtained or disposed in the reporting period √Applicable □ Not applicable


17

VII. Estimation of the business performance for Jan.-Mar., 2014 Estimation notice that the accumulated net profit from the beginning of year to the end of the next reporting period may be turned

into loss or significantly change compared with the same period of the last year, and explanation of the cause

□ Applicable √ Inapplicable VIII. Development prospect of the Company 1. Industrial development trend The industry that the company belongs to is refrigeration and air-conditioning industry. The refrigeration and air-conditioning equipment has a wide scope of application and the service area is expanding constantly. The continuous development of national economy and the comprehensive promotion of well-off society construction provide a vast development space for the refrigeration and air-conditioning industry as a manufacturing industry supporting multiple sectors of the national economy. Currently, the influential power of the refrigeration and air-conditioning industry in the national economy of our country is becoming greater and greater, and its position in improving the people’s livelihood is becoming more and more prominent, the social concern degree is becoming higher and higher, the industrial centralization degree is becoming higher and higher and market competition is becoming more and more fierce. Industrial complete set forming, modularization, informatization develops fast, new enterprises intervene constantly, new hot points emerges constantly, the areas, opponents, products, connotations of competition are changing constantly. 2. Opportunities and challenges the company confronts （1）Opportunities the company confronts With the State strengthening investment in such people’s livelihood sectors as urbanization, food, health, etc., the freezing and cold storage sector maintains a high market growth speed and the market demand space in the main business sector of the company expands. The 12th five-year plan for cold chain logistics has provided market demand for the cold storage package project of the company. In the peak period of technical upgrading, energy conservation innovation to the existing package projects, freezing stations, etc., there is a big market expansion space for modern service industry. （2）Challenges the company confronts Foreign-funded brands promote localization to reduce costs, domestic-funded enterprises intervene at a low cost, as a result, the industrial profit space is compressed. Traditional cooperative partners adopt low-cost purchase and the customer group stability reduces. By oversea acquisition, being listed for financing, asset reorganization, etc., the main competitors expand the industrial chain, consolidate existing advantages and develop new competitive advantages. 3. Company development plan With the proprietary cold and hot technologies, the company will innovate constantly, increase the competitive power of the core products, expand the industrial chain longitudinally, develop products in associated sectors transversely, embody the enterprise value with energy conservation and environmental protection, colorful solutions, strive to build itself into a strongest and largest manufacturer for industrial refrigeration products; a strongest and largest food cold chain manufacturer; an integrated cold, hot, ecological and environmental protection business supplier and create an international enterprise. 4. Funding demand and funding source plan In 2014, the company predicts that the need of funds will be solved through its own funds and debt financing. 5. Main risks the company confronts and countermeasures （1）The risk of fiercer industrial competition. The huge demands in the refrigeration and air-conditioning market in China are highly emphasized by domestic and foreign industrial enterprises. At the same time of developing respective industries having advantages, enterprises extend industrial chains constantly, consolidate the existing market sectors, compete to take up emerging market sectors and the industrial competition pattern is becoming fierce increasingly. Countermeasures: Focus on intensifying independent innovations and promoting transformation and upgrading, strengthen the forging of the core competitive power. Take satisfaction of customer demands as our own mission, take expansion of market share as the key point, take relocation for innovation as the driving force, take cold and hot, ecological, environmental protection business as the main part, make a great effort to develop industrial refrigeration, food freezing and cold storage, central air-conditioning, refrigeration components and engineering service business sector, transform the product structure toward a structure of new type, high end, transform the operation management toward informatization, digitalization, transform the development way toward low energy consumption, low emission. （2）The risk of backward production equipment and process flow. The company is an old enterprise and also an old factory, where the process flow and facility layout already can not follow the requirements of the situation and market development completely.


18

Countermeasures: By relocation for innovation, perfect the process flow, update the processing equipment, increase the efficiency of employees, perfect the quality control and reach or be better than the level of our main competitors. 6. Operation plan for 2014 The Company’s business targets for 2014: Sales income: 1,690 million yuan Total amount of profit: 140 million yuan In 2014, the Company will thoroughly enforce value management principle, continues to improve core competence, vigorously develop new markets and guarantee a completion of revenue and profit index. The Company focus on the follow works in 2014 with purpose of complete the index of revenue and profit: (1) improve comprehensive ability of proposal and system supporting, offering one-stop service to the clients and creating value for customers. (2) around planning of core products, strengthen technology innovation, refining intellectual property management, optimized product mix and well-defined the industrial chain. (3) improve internal control (IC) system, strengthen cash flow management and enhanced capability of risk prevention. (4) accelerating information construction, making effective use of internet technology and remote monitoring technology. (5) based on the planning direction of industrial chain, actively promote the strategic joint cooperation. (6) reinforce construction of enterprise culture, improve staff’s happiness. IX. Explain to the “non standard audit report” from the board of directors, board of supervisors of the Company Not applicable. X. Change in accounting policies, accounting estimates and accounting methods compared with the financial statements of the previous year No change. XI. Correction of major accounting mistakes in the reporting period, which should be retroactively restated Not applicable. XII. Change in the range of consolidated statements compared with the financial statements of the previous year No change. XIII. Profit distribution and dividend payment By giving consideration to both the return to shareholders and the Company's long-term development, and in combination of the Company's profit made in the this year, the Company formulated the 2012 annual dividend distribution plan of paying the cash of 1.5 yuan for every 10 shares. Reviewed and adopted at the Company's general meeting, the Company's Board of Directors has implemented the plan in June 2013. Formulation and implementation of the Company's cash dividend distribution policy in the reporting period complied with the Company's Articles of Association and the general meeting's resolution, and the dividend distribution standard and proportion were defined and clear and the applicable decision-making procedure and system were complete. The independent directors agreed on it and the legal rights and interests of minority shareholders were well protected.


19

Special notes to cash dividend payout policy

If the regulations of the Articles of Association or the requirements of the shareholders of

the company meeting are met: Yes

If the dividend payout standard and proportion is definite and clear-cut: Yes

If relevant decision-making procedure and mechanism is complete: Yes

If the independent directors have performed their duties and played their due role: Yes

If small and medium shareholders have the opportunity to sufficiently express their

opinions and appeals and if their legal rights and interests are sufficiently protected: Yes

If the condition and procedure for adjusting or changing the cash dividend payout policy is

compliant and transparent: Yes

Table of profit distribution plan, plan of share-granting with capital accumulation fund of the Company in recent three years

Dividend year Profit distribution plan Plan of share-granting with

capital accumulation fund

2013 RMB 1.5 yuan (cash) for every 10 shares (including tax) None



The Company’s cash profit distribution in the previous 3 years: Unit ：（RMB）yuan

Cash profit distribution

(incl. tax )

Net profit belonging to parent company owners in

the consolidated statistical tables and reports

Net profit ratio belonging to

parent company’s owners

2013 52,502,246.25 153,006,057.13 34.31%

2012 52,502,246.25 117,142,066.15 44.82%

2011 52,502,246.25 81,621,060.33 64.32%

The Company made profit in the reporting period and the undistributed profit of the parent company was positive but no cash dividend distribution plan was proposed. □ Applicable √ Not applicable XIV. Profit distribution preplan, and preplan of share-granting with capital accumulation fund of the Company

Bonus shares to be presented for every 10 shares (shares) 0

Dividend to be distributed for every 10 shares (RMB yuan) (including tax) 1.50

Equity base for distribution preplan (shares) 350,014,975

Total amount of cash dividend distribution (RMB yuan) (including tax) 52,502,246.25

Profit that can be used for distribution (RMB yuan) 130,795,000.00

Proportion of cash dividend distribution accounting for total profit distribution (%) 100%

Cash dividend distribution policy:

When the development stage of the company belongs to a growth period with important fund disbursement arrangement(s), the


20

proportion of cash dividend distribution accounting for this profit distribution should reach 20% at minimum when conducting profit

distribution.

Notes to details about preplan for profit distribution or capital stock increase with capital reserve

According to the audit by Da Hua CPAs (Special General Partnership), the net profit made by the parent company of the company in

2013 was RMB 145.328 million and 10% of the net profit (RMB 14.533 million) was drawn as the legal surplus reserve. Therefore,

the profit distributable to the shareholders in the current year was RMB 130.795 million. Plus the initial undistributed profit of RMB

315.632 million and minus the dividend of RMB 52.502 million of common shares paid in 2012 and the drawn free surplus reserve of

RMB 21.334 million (20%), the accumulated profit distributable to the shareholders is RMB 372.591 million, in which, RMB 29.066

million (20%) was drawn as the free surplus reserve, and RMB 52.502 million is distributed as the dividend, and the balance of RMB

291.023 million is transferred to the future for distribution.

The company’s dividend distribution preplan for 2013:

Based on the total capital stock of 350,014,975 shares at the end of 2013, the dividend of RMB 1.5 in cash (including tax) is

distributed for every 10 shares, and the cash dividend for B share is converted and paid in Hong Kong dollars.

The company will not transfer the capital reserve to increase capital stock.

The above preplan shall be submitted to the shareholders general meeting 2013 for review and approval. XV. Social responsibilities In the course of development, the company has always observed national laws and regulations, operate faithfully, treat objectively such stakeholders as creditors, employees, consumers, suppliers, communities, etc., assume social responsibilities actively and perform the obligations as a citizen. For the specific performance of social responsibilities by the company, refer to the social responsibility report for 2013. XVI. Record of investigation, communication, interview and other activities in the reporting period

Receiving time Receiving

location

Way of

receiving

Received

object type Received object

Main contents talked

about and information

provided

Jan. 8, 2013 Company

office

Telephone

communication Institution Researcher from Galaxy Securities

Company fundamental

condition


office

Telephone

communication Institution Researcher from Huatai Securities

Company fundamental

condition


office

Telephone

communication Institution Researcher from Taikang Life Insurance Assets

Company fundamental

condition

Feb. 6, 2013 Company

office

Telephone

communication Institution

Researchers from CITIC Securities, Galaxy

Securities, Huatai Securities, Haitong Securities,

Guotai Junan Securities, Guoxin Securities

Company fundamental

condition


office

Physical

investigation

and survey

Institution Researchers from CITIC Securities, Fortune

SGAM Fund, Guangda Securities

Company fundamental

condition


office Physical

investigation Institution

Researchers from China Galaxy Securities,

Haitong Securities, China International Fund,

Company fundamental

condition


21

and survey Huaxia Fund, Penghua Fund, ABC-CA Fund, ABC

Life Insurance, China Life Insurance Assets

Mar. 11, 2013 Company

office

Physical

investigation

and survey

Institution

Researchers from Haitong Securities, Changjjiang

Securities, Guotai Junan Securities, Wanjia Fund,

Fullgoal Fund, Franklin Templeton Sealand Fund

Company fundamental

condition

Mar. 19, 2013 Company

office

Physical

investigation

and survey

Institution Researcher from Sealand Securities Company fundamental

condition

Apr. 22, 2013 Company

office

Telephone

communication Institution Researcher from Haitong Securities

Company fundamental

condition

May 2, 2013 Company

office

Physical

investigation

and survey

Institution Researcher from CITIC Securities Company fundamental

condition

Jun. 27, 2013 Company

office

Physical

investigation

and survey

Institution Researchers from BOC International, Tianfeng

Securities, Guotai Fund

Company fundamental

condition

Jun. 28, 2013 Company

office

Physical

investigation

and survey

Institution Researchers from Haitong Securities, BOC Fund。 Company fundamental

condition

Jul. 24, 2013 Company

office

Physical

investigation

and survey

Institution Researcher from Shenyin Wanguo Securities Company fundamental

condition

Aug. 22, 2013 Company

office

Telephone


Researchers from Galaxy Securities, Societe

Generale Securities

Company fundamental

condition

Aug. 26, 2013 Company

office

Telephone

communication Institution Researcher from CITIC Securities

Company fundamental

condition

Sep. 4, 2013 Company

office

Physical

investigation

and survey

Institution Researcher from Huatai Securities Company fundamental

condition

Oct. 25, 2013 Company

office

Telephone


Researchers from China Life Insurance Assets,

UBS Securities, Galaxy Securities, Huatai

Securities, Societe Generale Securities

Company fundamental

condition

Nov. 6, 2013 Company

office

Physical

investigation

and survey

Institution Researchers from Guoyuan Securities, Zhongtian

Securities

Company fundamental

condition


office

Physical

investigation

and survey

Institution Researcher from Japan Securities Company fundamental

condition


office Physical

investigation Institution

Researchers from Huatai Securities, Orient

Securities, Great Wall Securities, Harvest Fund,

Company fundamental

condition


22

and survey Guangdong Development Fund, Huaan Fund, CCB

Principal Asset Management Co., Ltd., Shanghai

Chaos Dowland Assets, Greenwoods Asset, Haihua

Group, Shanghai International Trust

Dec. 19, 2013 Company

office

Physical

investigation

and survey

Institution Researchers from Guojin Securities, Guangdong

Development Fund, Great Wall Jingshun Fund

Company fundamental

condition

Dec. 25, 2013 Company

office

Physical

investigation

and survey

Institution Researchers from SMC Chinese Fund, Guodu

Securities

Company fundamental

condition


23

Section 5 Important Issues

I. Major lawsuit and arbitration issues □ Applicable √ Not applicable The Company had no major lawsuit and arbitration issues in this reporting period. II. Media's queries □ Applicable √ Not applicable There were no media's queries to the Company in this reporting period. III. Non-operation capital occupation by holding shareholders and their related parties in the listed company The company had no capital occupation by the holding shareholders and their related parties in the listed company within this reporting period. IV. Asset transactions 1. Purchases of important assets □ Applicable √ Not applicable 2. Sales of important assets √ Applicable □ Not applicable Within the reporting period, the company had the land use rights of two land plots for warehousing that it owned and are located in Houge Village, Gezhenpu Sub-district, Ganjingzi District, Dalian collected and stored by Dalian Land Reserve Center with the amount of compensation for collection and storage being RMB 50 million yuan. The first announcement about the land collection and storage this time (announcement number: 2013-020) was published on B007 of China Securities, A17 of HK Commercial Daily and Cninfo website on Jul. 19, 2013. The announcement about the progress of the land collection and storage this time (announcement number: 2013-021) was published on B019 of China Securities, A9 of HK Commercial Daily and Cninfo website on Aug. 2, 2013. The announcement about the progress of the land collection and storage this time (announcement number: 2013-032) was published on B048 of China Securities, A24 of HK Commercial Daily and Cninfo website on Dec. 31, 2013. Within the reporting period, the company transferred 50% of Dalian Jiale Automatic Vending Machine Operation Co., Ltd.’s shares it held to an independent third party - Shanghai Miyuan Beverage Co., Ltd. at a price of RMB 15,000,000 yuan. The first announcement about this share transfer (announcement number: 2013-026) was published on B018 of China Securities, A22 of HK Commercial Daily and Cninfo website on Oct. 24, 2013. The announcement about the progress of this share transfer (announcement number: 2013-027) was published on B007 of China Securities, A17 of HK Commercial Daily and Cninfo website on Nov. 12, 2013. 3. Important external investments √ Applicable □ Not applicable Within the reporting period, the company invested to establish a joint venture with Japan Mitsubishi Heavy Industry Co., Ltd. jointly, engaging in R & D, purchasing, manufacturing, sales and after-sale service of centrifugal refrigeration units. The company contributed RMB 36 million yuan in cash, holding 45% of the joint venture’s shares. The announcement about the external investment of the centrifuge project (announcement number: 2013-008) was published on B050 of China Securities, A9 of HK Commercial Daily and Cninfo website on Apr. 13, 2013. V. Important associated transactions 1. Associated transactions related to normal business In the report period, the total amount of normal associated transactions between the Company and associated parties was 322,270 thousand yuan, accounting for 68.57% of the budgeted amount for the year 2013. This included 161,030 thousand yuan, accounting for 64.42% of the budgeted amount for the year 2013, for purchasing supporting products for package projects from associated parties, and 161,240 thousand yuan, accounting for 73.29% of the budgeted amount for the year 2013, from selling supporting parts and components to associated parties.


24

2. Important associated transactions with joint external investments Within the reporting period, the company and the related party of Dalian Bingshan Group Co., Ltd. increased jointly the capital in Dalian Bingshan Group Import & Export Co., Ltd. in which they participate. The temporary announcement about this connected transaction (announcement number: 2013-014) was published on B178 of China Securities, A11 of HK Commercial Daily and Cninfo website on Apr. 20, 2013. Within the reporting period, the company and the related parties of Dalian Bingshan Group Co., Ltd., Sanyo Electric Co., Ltd. increased jointly the capital in the holding subsidiary of Wuhan New World Refrigeration Industry Co., Ltd. The temporary announcement about this connected transaction (announcement number: 2013-019) was published on B007 of China Securities, A17 of HK Commercial Daily and Cninfo website on Jul. 19, 2013. 3. Current associated rights of credit and liabilities Were there current non-operating associated rights of credit and liabilities? □ Yes √ No For credits and debts with associated parties, see the Special Description on Use of Funds by Dalian Refrigeration Co., Ltd.'s Holding Shareholder and Other Associated Parties issued by Da Hua Certified Public Accountants. Websites for reference to the temporary announcement on important associated transactions

Title of temporary announcement Date when the temporary announcement was disclosed

Name of the website for disclosure of the temporary

announcement Announcement on the associated transaction to increase capital

in Dalian Bingshan Group Import & Export Co., Ltd. Apr. 20, 2013 www.cninfo.com.cn

Announcement on the associated transaction to increase capital

in Wuhan New World Refrigeration Industry Co., Ltd. Jul. 19, 2013 www.cninfo.com.cn

VI. Implementation of commitments 1. Commitments of the Company or its shareholders holding 5% or higher of the shares in the reporting period or carried to the reporting period Undertaking matters for trial sales of state shares and implementation Except the immature condition of being implementation for management share incentive scheme, Dalian Bingshan Group perform the commitment in share reform. VII. Engagement and dismissal of the accounting firm Currently engaged accounting firm

Name of domestic accounting firm Da Hua Certified Public Accountants (Special General Partnership)

Remuneration paid to the domestic accounting firm (in 10 thousand yuan) 77

Continuous audit service years of the domestic accounting firm 1

Name of certified public accountants with the domestic accounting firm Yang Yingjin , Wang Shuhuan

If the CPA firm retaining was changed in this period

√ Yes □ No

If the CPA firm retaining was changed during auditing

□ Yes √ No

If the CPA firm changing went through an examination and approval procedure

√ Yes □ No




25

Detailed notes to change in CPA firm retaining According to the need of business development of the company, the company held on Dec. 30, 2013 the 2nd Extraordinary Shareholders’ General Meeting of 2013 to change to retain Da Hua Certified Public Accountants (Special General Partnership) as the auditing agency of the company for 2013. The agency made integrated auditing to the financial statements and internal control of the company. The expenses to audit the annual financial statements were RMB 770 thousand yuan. The expenses for internal control auditing were RMB 300 thousand yuan. The announcement on the resolution of the 2nd Extraordinary Shareholders’ General Meeting of 2013 (announcement number: 2013-031) was published on B048 of China Securities, A24 of HK Commercial Daily and Cninfo website on Dec. 31, 2013. In this year, the company retained Da Hua Certified Public Accountants (Special General Partnership) to audit the internal control and paid RMB 300 thousand yuan for the internal control auditing. VIII. Index of information announcements for important matters within the reporting period

Announce-

ment

number

Matter Newspaper name and page

where it was published Publishing date

Name of internet website

where it was published and

searching route

2013-001 Announcement on resolution of the 21st Session of the

5th Board of Directors

A13 of China Securities, A7 of

HK Commercial Daily Jan. 19, 2013 http://www.cninfo.com.cn

2013-002 Announcement on resolution of the 14th Session of the

5th Board of Supervisors



2013-003 Notice on holding the 1st Extraordinary Shareholders’

General Meeting of 2013



2013-004 Announcement on the resolution of the 1st Extraordinary

Shareholders’ General Meeting of 2013

B014 of China Securities, A9

of HK Commercial Daily Feb. 6, 2013 http://www.cninfo.com.cn

2013-005 Announcement on the resolution of the 1st Session of

the 6th Board of Directors



2013-006 Announcement on the resolution of the 1st Session of

the 6th Board of Supervisors



2013-007 Announcement on the resolution of the 2nd Session of



of HK Commercial Daily Apr. 13, 2013 http://www.cninfo.com.cn

2013-008 Announcement on external investment of centrifuge

project



2013-009 Annual Report Abstract for 2012 B178 of China Securities, B11


2013-010 Announcement on the resolution of the 3rd Session of


B178 of China Securities, B11


2013-011 Announcement on the resolution of the 2nd Session of

the 6th Board of Supervisors



2013-012 Notice on holding the general shareholders meeting for

2012



2013-013 Announcement on prediction of daily connected

transactions for 2013



2013-014 Associated transaction announcement (increasing

capital in Bingshan Import & Export)


















26

2013-015 Report for the First Quarter of 2013 B178 of China Securities, B11


2013-016 Announcement on the resolution of the general

shareholders meeting for 2012


of HK Commercial Daily May 22, 2013 http://www.cninfo.com.cn

2013-017 Announcement on dividend distribution for 2012 B016 of China Securities, A14

of HK Commercial Daily Jun. 18, 2013 http://www.cninfo.com.cn

2013-018 Announcement on the resolution of the 4th Session of



of HK Commercial Daily Jul. 19, 2013 http://www.cninfo.com.cn

2013-019 Associated transaction announcement (increasing

capital in Wuhan New World)



2013-020 Announcement on collection and storage of part of land

use rights



2013-021 Announcement on progress of the matter on collection

and storage of part of land use rights


of HK Commercial Daily Aug. 2, 2013 http://www.cninfo.com.cn





2013-023 Semi-annual Report Abstract for 2013 B019 of China Securities, A24


2013-024 Report for the 3rd Quarter of 2013 B018 of China Securities, A22

of HK Commercial Daily Oct. 24, 2013 http://www.cninfo.com.cn




of HK Commercial Daily Oct. 24, 2013 http://www.cninfo.com.cn

2013-026

Announcement on transferring 50% of Dalian Jiale

Automatic Vending Machine Operation Co., Ltd.’s

shares held

China SecuritiesB018, A22 of

HK Commercial Daily Oct. 24, 2013 http://www.cninfo.com.cn

2013-027

Announcement on progress of the matter on transferring

50% of Dalian Jiale Automatic Vending Machine

Operation Co., Ltd.’s shares held


of HK Commercial Daily Nov. 12, 2013 http://www.cninfo.com.cn




of HK Commercial Daily Dec. 13, 2013 http://www.cninfo.com.cn

2013-029

Announcement on external investment (refrigeration

equipment management consultation and energy

conservation service joint venture project)



2013-030 Notice on holding the 2nd Extraordinary Shareholders’

General Meeting of 2013



2013-031 Announcement on the resolution of the 2nd

Extraordinary Shareholders’ General Meeting of 2013



2013-032 Announcement on progress of the matter on collection

and storage of part of land use rights






















27

Section 6 Change in Share Capital and Shareholders' Information I. Change in share capital No change. II. Securities issuance and listing 1. Change in total shares of the Company and structure of shareholders Within the reporting period, the company carried out management changing work and the directors, supervisors and senior managers of the company had great changes and the shareholder structure of the company also changed accordingly. III. Shareholders and actual controller

1. Number of shareholders and their shareholding

Total number of shareholders in the reporting period 33,548 Total number of shareholders as of the 5th trading

day before disclosure of the annual report 37,468

Shareholding of top ten shareholders

Name Nature Proportion Total number

Number of

shares with sale

restriction

Number of

pledged shares

or shares frozen

Dalian Bingshan Group Co., Ltd. Domestic non-state-owned legal person 21.96% 76,855,683 19,213,921 0

Sanyo Electric Co., Ltd. Overseas legal person 10.00% 35,001,500 0 0

Penghua Chinese 50 Open-end Securities

Investment Fund Others 1.95% 6,799,927 0 0

GF Stable Growth Securities Investment Fund Others 1.72% 6,021,197 0 0

National Social Security Fund Combination 404 Others 1.32% 4,599,985 0 0

Penghua Dynamic Growth Hybrid Securities


Tianzhi Core Growth Stock Type Securities


BOCI SECURITIES LIMITED Overseas legal person 0.86% 2,985,254 0 0

Guoyuan Securities Brokerage (Hong Kong)

Limited Overseas legal person 0.78% 2,708,978 0 0

Northeast Securities Co., Ltd. Domestic non-state-owned legal person 0.67% 2,326,947 0 0

Shareholding of top ten shareholders without sale restriction

Name Number of shares without sale restriction Type of shares

Dalian Bingshan Group Co., Ltd. 57,641,762 RMB denominated ordinary shares

Sanyo Electric Co., Ltd. 35,001,500 Domestically listed foreign shares

Penghua Chinese 50 Open-end Securities Investment Fund 6,799,927 RMB denominated ordinary shares

GF Stable Growth Securities Investment Fund 6,021,197 RMB denominated ordinary shares


28

National Social Security Fund Combination 404 4,599,985 RMB denominated ordinary shares

Penghua Dynamic Growth Hybrid Securities Investment Fund 4,143,401 RMB denominated ordinary shares

Tianzhi Core Growth Stock Type Securities Investment Fund 3,362,600 RMB denominated ordinary shares

BOCI SECURITIES LIMITED 2,985,254 Domestically listed foreign shares

Guoyuan Securities Brokerage (Hong Kong) Limited 2,708,978 Domestically listed foreign shares

Northeast Securities Co., Ltd. 2,326,947 RMB denominated ordinary shares

Notes to the associated relationship and uniform actions of the above

shareholders

Dalian Bingshan Group Co., Ltd. had the association relationship with Sanyo Electric

Co., Ltd. among the above shareholders. Sanyo Electric Co., Ltd. holds 30% of Dalian

Bingshan Group Co., Ltd.'s equity.

2. Holding shareholder of the Company

Name of holding shareholder Legal representative

Founding date

Organization code

Registered capital Main business

Dalian Bingshan Group Co., Ltd. Motoma Zhero Jul. 3,

1985 24129179-3 140600000

Research, development, manufacture, sales, service and installation of industrial refrigeration products, freezing and cold storage products, large-, medium- and small-size air-conditioning products, petrochemical equipment products, electronic and electric control products, home appliance products and environment protection products.

Business performance, financial position, cash flows and future development strategy

In 2013, the annual operating revenue was 10,967.86 million yuan, the net profit was 516.1 million yuan, and the net assets was 776.24 million yuan (unaudited).

Shares held by the holding shareholder in other overseas and domestic listed companies as the holding shareholder or ordinary shareholder in the reporting period

None

Change in the holding shareholder in the reporting period □ Applicable √ Not applicable 3. Actual controller of the Company The actual controller of the Company is the State-Owned Assets Supervision and Administration Commission of Dalian Municipal Government. Change in the actual controller in the reporting period □ Applicable √ Not applicable


29

4. Other legal-person shareholders holding of 10% or more shares Sanyo Electric Co., Ltd., which holds 10% of the shares of the Company, is one of the major electromechanical product manufacturers in Japan and also the key joint venture partner of this Company. That company was listed in Tokyo Stock Exchange. On April 2011, it became the wholly-owned subsidiary of Panasonic Corporation and stopped being listed.


30

Section 7 Information on the Company’s Directors, Supervisors, Senior Management and Staff

I. Changes in shareholding by directors, supervisors and senior managers

Name Position Office-hol

ding state Sex Age

Starting

date of

office term

Ending

date of

office term

Shares

held at

beginning

of period

(shares)

Increase

on holding

of shares

in this

period

(shares)

Decrease

in holding

of shares

in this

period

(share)

Shares

held at the

end of

period

(shares)

Zhang He Chairman,

GM

Leaving

office M 76

May 20,

2009

Feb. 5,

2013 33,345 0 0 33,345

Mu

Chuanjiang

Vice

Chairman

Leaving

office M 64

May 20,

2009

Feb. 5,

2013 29,445 0 0 29,445

Yang Bin

Director,

Standing

DGM

Leaving

office M 57

May 20,

2009

Feb. 5,

2013

Xu Junrao

Director,

Financial

Majordomo,

Board

Secretary

Leaving

office F 50

May 20,

2009

Feb. 5,

2013 3,900 0 0 3,900

Hidetoshi

Arima Director

Leaving

office M 61

May 20,

2009

Feb. 5,

2013

Wang Weijie Director Leaving

office M 50

May 20,

2009

Feb. 5,

2013

Men

Yuesheng Supervisor

Leaving

office M 60

May 20,

2009

Feb. 5,

2013 975 0 0 975

Zhang

Hongzhi DGM

Leaving

office M 54

May 20,

2009

Feb. 5,

2013 27,462 0 0 27,462

Wang Dekun DGM Leaving

office M 61

May 20,

2009

Feb. 5,

2013 18,525 0 0 18,525

Hu Xitang DGM Leaving

office M 45

May 20,

2009

Feb. 5,

2013

Xiao

Yongqin Chairman

Serves in

report period

and resigned

presently

M 59 Feb. 5,

2013

Mar. 27,

2014


31

Wang Jian Vice

Chairman

Serves in

report period

and resigned

presently

M 56 Feb. 5,

2013

Mar. 4,

2014

Liu Kai Director, GM Incumbent M 39 Feb. 5,

2013

Feb. 4,

2016

Wang

Zhiqiang

Director,

DGM Incumbent M 51

Feb. 5,

2013

Feb. 4,

2016

Rong Yan

Director,

Financial

Majordomo

Serves in

report period

and resigned

Director

presently

F 44 Feb. 5,

2013

Feb. 4,

2016

Nagasawa

Hideharu Director

Serves in

report period

and resigned

presently

M 53 Feb. 5,

2013

Mar. 4,

2014

Wang

Huiquan

Independent

director Incumbent M 69

Feb. 5,

2013

Feb. 4,

2016

Xing Tiancai Independent

director Incumbent M 52

Feb. 5,

2013

Feb. 4,

2016

Liu Caiping Independent

director Incumbent F 58

Feb. 5,

2013

Feb. 4,

2016

Yu Fuchun

Chairman of

Board of

Supervisors

Incumbent M 54 Feb. 5,

2013

Feb. 4,

2016 10,140 0 0 10,140

Mao

Chunhua Supervisor Incumbent F 48

Feb. 5,

2013

Feb. 4,

2016

Ma Yun Supervisor Incumbent M 42 Feb. 5,

2013

Feb. 4,

2016

Li Wenjiang DGM Incumbent M 47 Dec. 12,

2013

Feb. 4,

2016

Song

Wenbao

Board

secretary Incumbent M 40

Feb. 5,

2013

Feb. 4,

2016

Total -- -- -- -- -- -- 123,792 0 0 123,792

II. Office holding

Main work experiences of incumbent directors, supervisors, senior managers of the company during the reporting period in recent

five years till the end of 2013


32

Name Main work experience Office holding or working concurrently in other units in

addition to shareholder units

Xiao

Yongqin

Successively acting as GM of Dalian Sanyo Refrigeration

Co., Ltd., Chairman of Dalian Bingshan Group Co., Ltd.

Chairman of Linde Engineering (Dalian) Co., Ltd.;

Chairman of Dalian Bingshan International Trading Co., Ltd.;

Chairman of Dalian Sanyo Refrigeration Co., Ltd.;

Chairman of Mitsubishi-Bingshan Refrigeration (Dalian) Co.,

Ltd.

Wang Jian

Successively acting as Vice Tour Inspector of Dalian

People’s Government State-owned Assets Supervision and

Administration Commission, Party Secretary, Vice

Chairman, GM of Dalian Bingshan Group Co., Ltd.

Chairman of Dalian Sanyo Minghua Electronic Co., Ltd.;

Chairman of Dalian Bingshan Metal Working Co., Ltd.;

Chairman of Dalian Sanyo Efficient Refrigeration System

Co., Ltd.

Liu Kai

Successively acting as Head of Production Management

Dept., Assistant GM of the company, director of Dalian

Bingshan Group Co., Ltd.

None

Wang

Zhiqiang

Successively acting as DGM, Chief Engineer of the

company. None

Rong Yan

Successively acting as Head of Financial Management

Dept., Operation Planning Head of Dalian Sanyo

Refrigeration Co., Ltd.

None

Nagasawa

Hideharu

Successively acting as Operation Planning Head, Executive

Director, Standing Executive Director, Chairman of Sanyo

Electric Co., Ltd.

None

Wang

Huiquan

Once acting as Standing Committee Member of Dalian

Party Committee, Vice Party Secretary of Dalian Party

Committee, Secretary of Municipal Discipline Inspection

Commission. Have retired for many years.

Chairman of Dalian Samaritan Foundation

Xing Tiancai

Successively acting as Dean of Vocational Technical

College, Dean of Financial College in Dongbei University

of Finance & Economics.

Head of Dalian Huaxin Trust Securities Research Institute of

Dongbei University of Finance & Economics;

Independent director of Bohai Ferry Co., Ltd.;

Independent director of CITIC Bank Co., Ltd.

Liu Caiping Once acting as Chief Accountant of Dalian Construction

Holding Co., Ltd. Having retired.

Vice Chairman of Dalian Association for Chief Accountants.

Yu Fuchun Successively acting as Vice Chairm of the Trade Union of

the company.

None

Mao

Chunhua

Successively acting as Vice Head of the Financial Dept. of

the company.

None

Ma Yun

Successively acting as Vice Head of Financial Dept., Head

of Auditing Supervision Dept. in Dalian Bingshan Group

Co., Ltd.

None


33

Li Wenjiang Successively acting as Head of Package Design Dept., Vice

Chief Engineer of the company.

None

Song

Wenbao

Successively acting as representative for securities affairs,

board secretary of the company.

None

Office holding in shareholder unit

√ Applicable □ Not applicable

Name of office

holder Shareholder unit name

Position held

in shareholder

unit

Starting date of office

term

Ending date of office

term

If receiving

remuneration or

allowance from

shareholder unit

Xiao Yongqin Dalian Bingshan Group Co.,

Ltd. Chairman Jan. 11, 2013 Feb. 14, 2014 Yes

Wang Jian Dalian Bingshan Group Co.,

Ltd. GM Jan. 11, 2013 Feb. 14, 2014 Yes

Liu Kai Dalian Bingshan Group Co.,

Ltd. Director Jan. 11, 2013 Feb. 14, 2014 No

Nagasawa

Hideharu

Dalian Bingshan Group Co.,

Ltd. Director Jan. 11, 2013 Feb. 14, 2014 No

III. Remuneration paid to directors, supervisors, and senior management Decision-making procedure, decision-making basis and actual payment of remuneration for directors, supervisors and senior management Decision-making procedure: the Company's remuneration plan for directors and supervisors was proposed by the Company's Remuneration and Evaluation Committee of the Board of Directors, and after approval by the Board of Directors, submitted to the general meeting for adoption and put into effect. The Company's remuneration plan for senior management was put into effect after approval by the Company's Board of Directors. Decision-making basis: it was decided on the basis of main responsibilities and importance of the concerned position and the remuneration level of similar positions in other similar enterprises and evaluated and rewarded through the Company's examination procedure for assets operation performance. The total amount of remunerations actually paid by the Company to directors, supervisors, and senior management was 4.645 million yuan. Particulars about the annual remuneration of directors, supervisors and senior staff members

Name Annual remuneration and allowance

(ten thousand yuan)

Xiao Yongqin 68.12

Wang Jian 68.12

Liu Kai 63.54

Wang Zhiqiang 49.81

Rong Yan 49.81

Nagasawa Hideharu 0.00


34

Wang Huiquan 5.00

Xing Tiancai 5.00

Liu Caiping 5.00

Yu Fuchun 11.20

Mao Chunhua 15.70

Ma Yun 16.50

Yang Bin 49.80

Li Wenjiang 38.90

Song Wenbao 18.00

Total 464.50 Equity incentive plans granted to directors, supervisors and senior management of the Company in the reporting period □ Applicable √ Not applicable

IV. Changes of directors, supervisors, senior managers of company

Name Position held Type Date Reason

Zhang He Chairman, GM

Leaving office

for expiry of

office term

Feb. 5, 2013 No longer reappointed in company management

changing

Mu Chuanjiang Vice Chairman

Leaving office

for expiry of

office term


changing

Yang Bin Director,

Standing DGM

Appointing and

removing Feb. 5, 2013

No longer reappointed as Director, Standing DGM in

company management changing, being engaged as

DGM. On Dec. 12, 2013, resigned from DGM.

Xu Junrao

Director,

Financial

Majordomo,

Board Secretary

Leaving office

for expiry of

office term


changing

Hidetoshi Arima Director

Leaving office

for expiry of

office term


changing

Wang Weijie Director

Leaving office

for expiry of

office term


changing

Men Yuesheng Supervisor

Leaving office

for expiry of

office term


changing


35

Wang Dekun DGM

Leaving office

for expiry of

office term


changing

Zhang Hongzhi DGM

Leaving office

for expiry of

office term


changing

Hu Xitang DGM

Leaving office

for expiry of

office term


changing

Xiao Yongqin Chairman Being elected Feb. 5, 2013 Being elected in company management changing

Wang Jian Vice Chairman Being elected Feb. 5, 2013 Being elected in company management changing

Liu Kai Director, GM Being elected Feb. 5, 2013 Being elected and engaged in company management

changing

Wang Zhiqiang Director, DGM Being elected Feb. 5, 2013 Being elected and engaged in company management

changing

Rong Yan

Director,

Financial

Majordomo

Being elected Feb. 5, 2013 Being elected and engaged in company management

changing

Nagasawa

Hideharu Director Being elected Feb. 5, 2013 Being elected in company management changing

Wang Huiquan Independent

director Being elected Feb. 5, 2013

Being reelected and reappointed in company

management changing

Xing Tiancai Independent



management changing

Liu Caiping Independent



management changing

Yu Fuchun

Chairman of

Board of

Supervisors

Being elected Feb. 5, 2013 Being reelected and reappointed in company

management changing

Mao Chunhua Supervisor Being elected Feb. 5, 2013 Being reelected and reappointed in company

management changing

Ma Yun Supervisor Being elected Feb. 5, 2013 Being elected in company management changing

Li Wenjiang DGM Being engaged Dec. 12, 2013 Being engaged in changing senior managers by the

company

Song Wenbao Board Secretary Being engaged Feb. 5, 2013 Being engaged in company management changing

On Feb. 5, 2013, the company held the 1st Extraordinary Shareholders’ General Meeting of 2013 and the 1st Session of the 6th Board

of Director, the 1st Session of the 6th Board of Supervisors to carry out the management changing work. The directors, supervisors

and senior managers of the company had great changes. For specific changes, refer to the announcements on resolutions of the 1st


36

Extraordinary Shareholders’ General Meeting of 2013, the 1st Session of the 6th Board of Directors, the 1st Session of the 6th Board of

Supervisors of the company as published on China Securities, HK Commercial Daily and Cninfo website on Feb. 6, 2013.

On Dec. 12, 2013, the company held the 7th Session of the 6th Board of Directors, in which the report on changing the DGM of the

company was reviewed and passed and it was agreed that Mr. Yang Bin resigned from DGM and was appointed as the Sales

Consultant of the company; Mr. Li Wenjiang was appointed as the DGM of the company.

On 4 March 2014, Board of the Company received resignation in written from Xiao Yongqin, Wang Jian, Nagasawa Hideharu and

Rong Yan due to a career moves or job demand, they respectively asked to step down chairman, deputy chairman or director etc. of

the Company.

On 27 March 2014, the 1st extraordinary general meeting of 2014 was held by the Company for by-election for the vacancy in

directors. And Ji Zhijian, Xu Junrao, Kobayashi Noriaki and Kijima Tadatoshi were elected as director of the Company. On the

follow-up 9th meeting of 6th session of the Board held on the same day, Ji Zhijian elected as Chairman of the Company and

Kobayashi Noriaki elected as the deputy chairman for the Company.

V. Change in the core technical team or key technical personnel (who are not directors, supervisors and senior management) in the reporting period □ Applicable √ Not applicable VI. Status of the Company's staff 1. As of Dec. 31, 2013 the Company and its major subsidiary Wuxin Refrigeration had 2,126 enrolled employees, including 1,263 persons engaged in production, accounting for 59%; 234 persons engaged in engineering and technology, accounting for 11%; 314 persons engaged in marketing, accounting for 15%; and 315 persons engaged in management, accounting for 15%. 2. As of Dec. 31, 2013,, among enrolled employees of the Company and its major subsidiary Wuxin Refrigeration, 62 persons have the educational background of Master or higher, accounting for 3%; 538 persons have the educational background of university, accounting for 25%; 625 persons have the educational background of junior college, accounting for 30%; and 901 persons have the educational background of secondary technical school or lower, accounting for 42%. 3. The Company applied the post- and performance-related pay system with secondary distribution by the department according to performance of an employee. 4. The Company formulated the annual training plan and gave purposeful training to an employee in consideration of his/her post requirement. 5. The pension and medical expense for retired employees of the Company were paid by the social insurance body.


37

Section 8 Corporate Governance I. Basic situation of corporate governance Within the reporting period, the company further deepened and perfected the normative internal control system and upgraded the governing level of the company continuously. There were no problems with the Company concerning horizontal competition caused by restructures and other reasons. The main normal associated transactions between the Company and the associated companies included purchasing the supporting products for package projects from the associated companies, and selling the supporting parts and components to the associated companies and providing them with the labor service. Associated transactions between the Company and the associated companies are necessary for normal production and operation and helpful for the Company’s healthy development, and therefore will continue. The Company will strictly follow the related decision-making procedures and fulfill the obligation in information disclosure in order to further regulate associated transactions. Was there any deviation of the Company's corporate governance from the requirements in the Company Law and China Securities Regulatory Commission's regulations? □ Yes √ No There was no deviation of the Company's corporate governance from the requirements in the Company Law and China Securities Regulatory Commission's regulations. The activities for corporate governance of the Company, and establishment and implementation of the internal information insider registration and management system The Company has established the internal information insider registration and management system and strictly complied with the related regulations. In 2013, the Company launched the training with the topic of prevention from insider trading to strengthen the supervision and management of internal information insiders. Before any significant sensitive information which may have influence on the Company's share price was disclosed and after any abnormal fluctuation in the Company's share price occurred, the Company purposefully examined the Company's share buying and selling and did not find any fact that internal information insiders bought or sold the Company's shares by use of the internal information. In the reporting period, there was no director, supervisor or senior management who bought or sold the Company's shares by violation of the regulations. II. Shareholders’ general meeting convened in the reporting period

1. Annual Shareholders’ general meeting within this reporting period

Session

number of

meeting

Holding date Meeting bill name Resolution Disclosing

date Disclosing index

2012

Annual

Shareholders’

General

Meeting

May 21, 2013

1. Work report of the Board of Meeting for 2012; 2. Work report of the Board of Supervisors for 2012; 3. Financial final settlement report of the company for 2012; 4. Profit distribution plan of the company for 2012; 5. Report on prediction of daily associated transactions of the company in 2013; 6. Report on engaging annual auditing agency of the company for 2013; 7. Annual report of the company for 2012; 8. Work reports of the independent directors of the company for 2012; 9. Report on authorizing the operation level of the company to apply for bank credit line and loan line.

All above

bills were

passed

May 22, 2013

B018 of China

Securities, A21 of

HK Commercial

Daily, Cninfo website


38

2. Extraordinary Shareholders’ General Meeting in this reporting period

Session number of

meeting Holding date Meeting bill name Resolution

Disclosing

data Disclosing index

The 1st Extraordinary

Shareholders’

General Meeting of

2013

Feb. 5, 2013

1. Electing directors of the 6th Board of Directors of the company: Xiao Yongqin, Wang Jian, Liu Kai, Wang Zhiqiang, Rong Yan, Nagasawa Hideharu, Wang Huiquan, Xing Tiancai, Liu Caiping; 2. Electing the supervisors of the 6th Board of Supervisors taken by the shareholder representatives: Mao Chunhua, Ma Yun.

All above bill

were passed Feb. 6, 2013

B014 of China

Securities, A9 of HK

Commercial Daily,

Cninfo website.

The 2nd

Extraordinary

Shareholders’

General Meeting of

2013

Dec. 30, 2013 Report on changing the engagement of auditing agency of the company for 2013.

It was agreed

to change to

engage

Dahua CPAs

as the

auditing

agency of the

company for

2013.

Dec. 31, 2013

B048 of China

Securities, A24 of

HK Commercial

Daily, Cninfo website.

III. Independent directors’ execution of duties in the reporting period 1. Attendance of independent directors to the meetings of the Board of Directors and general meetings

Attendance of independent directors to the meetings of the Board of Directors

Name of independent director

Number of due board meetings in the reporting

period

Number of attendances on

the spot

Number of attendance by

communication

Number of attendance by

proxy

Number of absences

Failure to attend in person for

successive two times or not

Wang Huiquan 8 4 4 0 0 No Xing Tiancai 8 4 4 0 0 No Liu Caiping 8 4 4 0 0 No Number of attendances as a non-voting delegate 2

2. Objections to the related matters of the Company raised by independent directors The independent directors have raised no objections to the related matters of the Company in the reporting period. 3. Other description of independent directors’ execution of duties For details of the Company's independent directors' execution of duties, see the 2013 annual work report of the independent directors of the Company. IV. Execution of duties of the special committees under the Board of Directors in the reporting period 1. Execution of duties of the audit committee under the Board of Directors


39

With performance of its duty according to the Implementation Rules for the Audit Commission under the Board of Directors and the Annual Reporting Work Rules for the Audit Commission, the Audit Commission under the Board of Directors supervised the Company’s internal audit system and its implementation, audited the Company’s accounting information and its disclosure and assessed the work of the external audit institution. In the process of changing the engagement of auditing firm for 2013, the auditing commission paid attention to this actively and made an effective communication with the former CPA firm and the new CPA firm and developed special comments on basis of evlauting the practicing quality of both parties rationally and agreed to submit to the 7th Session of the 6th Board of Directors for reviewing. In the work of evaluation of a normative internal control system of the company, the Auditing Commission brought into play actively the duty of organization, leadership and supervision. According to the company internal control defect recognization standard, it examined and recognized the internal control defect recognization summary table developed by the internal control evaluation work group of the company, and had an examination reading of the internal control evaluation report of the company for 2013, believing that the status quo of the internal control system of the company complies with related requirements and with the actual situation of the company and it is being carried out satisfactorily. The internal control evaluation report of the company for 2013 reflects the above facts accurately. In the Company’s 2013 annual audit work, the Audit Commission conducted positive communication and effective coordination with the audit institution Da Hua Certified Public Accountants. The Audit Commission conducted communication with the person in charge of the project of the audit institution on the audit work plan, schedule, matters that should be noticed in audit and other matters and reached an agreement with them. In the process of audit, they kept close information on the progress of audit work and urged the audit institution many times to ensure the quality and schedule in the audit work. Through serious review of the Company’s annual finance report and annual report after completion of the audit work, the Audit Commission believed that the Company’s finance report was comprehensive and authentic, and the finance report and other information disclosed by the Company were objective and true, having reflected the true annual financial status of the Company. The Audit Commission believed that in the 2013 annual audit service for the Company, Da Hua Certified Public Accountants implemented the audit for the Company on the practicing basis of independency, objectivity and fairness and strictly abided by the new accounting standards. They worked out a well-considered plan, allocated all necessary personnel, positively contacted our Audit Commission and independent directors, and completed the 2013 annual audit service for the Company through its industrious and conscientious working. It is suggested that Da Hua Certified Public Accountants should be reengaged as the auditing agency for the company in 2014. 2. Execution of duties of the remuneration and evaluation committee under the Board of Directors With performance of its duty according to the Implementation Rules for the Remuneration and Evaluation Commission under the Board of Directors, the Remuneration and Evaluation Commission under the Board of Directors examined the annual salary and remuneration level of the Company’s directors, supervisors and senior executives, and believed that the decision-making procedure for salary and remuneration of the above persons and the paying standard complied with the laws and regulations and the Company’s regulations, and the salary and remuneration information disclosed in the Company’s Annual Report for 2013 was authentic and exact. V. Work of the Board of Supervisors Was there any risk with the Company found by the Board of Supervisors in their supervision activities in the reporting period? □ Yes √ No The Board of Supervisors had no objections to the matters under supervision in the reporting period. VI. Status of the Company's business, staff, asset, organization and finance separations from the holding shareholder The Company was separated from the holding shareholder in business, staff, asset, organization and finance, and has the independent and complete business and operation capability. VII. Horizontal competitions None VIII. Performance evaluation and incentive system for senior management The Company evaluated and rewarded senior management through the Company's examination procedure for assets operation performance in the reporting period.


40

Section 9 Internal Control

I. Construction of the internal control system As a listed company of internal control pilot in the jurisdiction of Dalian, the company carried out relevant work in 2011 pursuant to related regulations of Basic Enterprise Internal Control Specification and its supporting guide from the Ministry of Finance, according to the work scheme for implementing the company internal control specifications, combining with the actual situation of production and operation of the company and taking the parent company Dalian Refrigeration Co., Ltd. and the important subsidiary Wuhan New World Refrigeration Industry Co., Ltd. as the scope of implementation. In 2012, the company particularly centered around the subsidiaries not included in the internal control implementation scope in 2011 and its important business flow to further promote the normative internal control system construction work. In 2013, the company centered around the operation subject as “changing • upgrading” to further deepen and perfect the normative internal control system construction. II. Board of Director’s statement about the internal control responsibility According to the Basic Standard for Enterprise Internal Control and the Implementation Guideline for Enterprise Internal Control, the Company's directors should bear the full responsibility for establishment and perfection of the Company’s internal control and its effective operation. The Board of Directors of the Company and all its members take all responsibilities, individual and/or joint, for the reality, accuracy and completeness of the internal control report. III. Basis for establishing the internal control of financial statements The Basic Standard for Enterprise Internal Control and the Implementation Guideline for Enterprise Internal Control. IV. Report on self-evaluation of internal control

Details of material weakness in the internal control found in the reporting period described in the report on self-evaluation of internal control

There was no material weakness in the internal control found in the reporting period. Date of disclosing the full text of the report on self-evaluation of internal control Apr. 24, 2014

Disclosure reference to the full text of the report on self-evaluation of internal control

For the 2013 annual report on self-evaluation of internal control of the Company, visit the website www.cninfo.com.cn.

V. Internal control audit report

Description of the deliberation opinions in the internal control audit report We think that as of Dec. 31, 2013, Dalian Refrigeration Co., Ltd. had maintained an effective internal control over the financial reports in all material aspects according to Basic Enterprise Internal Control Specification and relevant regulations. Date of disclosing the full text of the internal control audit report Apr. 24, 2014

Disclosure reference to the full text of the internal control audit report

For the 2013 annual internal control audit report of the Company, visit the website www.cninfo.com.cn.

Did the accounting firm issue the internal control audit report with nonstandard opinions? □ Yes √ No Was the internal control audit report issued by the accounting firm consistent with the opinion in the self-evaluation report of the Board of Directors? √ Yes □ No VI. Establishment and implementation of the accountability system for serious mistakes in annual reports The Company established the accountability system for serious mistakes in disclosure of information, and strictly implemented it. In the reporting period, there were no matters with the Company concerning correction of serious accounting mistakes, supplementation of important omissive information and revision of performance predictions.




41

Section 10 Financial Report

I. Auditor’s Report

DHS(2014) No.003568

TO THE SHAREHOLDERS OF DALIAN REFRIGERATION COMPANY LIMITED

We have audited the financial statements of Dalian Refrigeration Company Limited, which comprise the Balance

Sheet as at 31st December 2013, and the Income Statement, Cash Flow Statement and Statement of Changes in

Owner’s Equity for the year then ended, and the notes to the financial statements.

Management’s Responsibility for the Financial Statements

It is the responsibility of Dalian Refrigeration Company Limited’s management to prepare and present the

financial statements fairly .And the responsibilities include: (1) Prepare the financial statements in conformity with

“Accounting Standard for Business Enterprises” and “Accounting System of the People’s Republic of China for

Enterprises”, and to be presented fairly. (2) Design, conduct and maintain the internal control related to the

financial statements to prevent the big material misstatement with the reason of fraud and mistakes.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our

audit in accordance with the Auditing Standards for Chinese Certified Public Accountants. Those standards require

that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free

of material misstatement.

An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial

statement. The selected audit procedure depended on the judgment of CPA includes identify the risks of the

material misstatements due to the fraud and mistakes. In evaluating the risks, we are only concerned with the

internal control systems so as to design an appropriate audit procedure, but not to express our opinion on the

effectiveness of the internal control systems. An audit also includes assessing the accounting principles used and

significant estimates made by the management, as well as evaluating the overall financial statement presentation.

We believe that our audit provides a reasonable basis for our opinion.

Opinion

In our opinion, the financial statements are prepared in conformity with Accounting Standards for Business

Enterprises and, in all material respects, present fairly the consolidated and company’s financial position of Dalian

Refrigeration Company Limited as at 31 December 2013, and their results of its operations and cash flow for the

year then ended.

Da Hua Certified Public Accountants China CPA: Yang Yingjin

（Special General Partnership）

Beijing, China China CPA: Wang Shuhuan

April 22, 2014


42

II. Accounting statement (attached hereunder) III. Notes to the accounting statement (All amounts in RMB Yuan unless otherwise stated)

Ⅰ.General information

Dalian Refrigeration Company Limited (the “Company”) was incorporated in the People’s Republic of China (the “PRC”) on

December 18, 1993 as a joint stock limited company. The principal activities of the Company are manufacture, sale and installation

of refrigeration equipments. The Company together with its subsidiaries is hereinafter collectively referred to as the “Group”. The

address of the Company’s registered office is No.888 Xinan Road, Shahekou District, Dalian, China.

The Company’s domestically listed RMB denominated ordinary shares (“A shares”) and domestically listed foreign investment ordinary shares (“B shares”) were listed on the Shenzhen Stock Exchange in the PRC in December 1993 and March 1998 respectively.

As the China's Refrigeration & Air Conditioning Association published, the Company was put the first place for its sales income and economy utility general index in the line; and its products were also been the first level for variety, specification, market occupation rate and export sales in China's refrigeration industry.

Ⅱ. The main accounting policies, accounting estimates and corrections of accounting errors

1. Basic of preparation of financial statements

The financial statements have been prepared on the basic assumption of going concern and on the accrual basis of accounting. The

effects of evens and other transactions actually occurred and they have been recorded and measured in accordance with the Chinese

Accounting Standards (2006): Framework and other accounting standards.

2. Declaration on following Accounting Standard for Business Enterprises

Declaration from the Company: The financial report made by the Company was in accordance with Accounting Standard for

Business Enterprises, which reflected the financial position, financial performance and cash flow of the Company truly, objectively

and completely.

3. Fiscal year

The Company adopts the calendar year as its fiscal year, i.e. from January 1 to December 31.

4. Functional currency

RMB was the functional currency of the Company.

5. Accounting measurement attribute

A. Accounting measurement attribute

The Company adopts the accrual basis for accounting treatments. All assets are stated at their historical costs on acquisition. The

financial assets or financial liabilities which are measured at their fair value and the variation of which is recorded into the profits and

losses are stated at their fair value. Stocks or fixed assets and other assets on acquisition, which its payment delayed longer than

normal payment condition, should be measured at the present value of the payment. Other assets with impairment are measured at the

recoverable amount. The amount of overage on assets is determined at replacement cost.


43

B. The reporting items which the accounting measurement attributes changed during the current period

No.

6. Accounting method of business combination under the same control and not under the same control

A. The Company adopts equity method for business combination under same control. The assets and liabilities that the combining

party obtained in a business combination shall be measured on their carrying amount in the combined party on the combining date.

The difference between the carrying amount of net assets acquired by the combining party and the carrying amount of the

consideration paid by it (or the total par value of the shares issued) shall be adjusted to capital surplus. If the capital surplus is not

sufficient for adjustment, retained earning is adjusted respectively. The business combination costs that are directly attributable to the

combination, such as audit fees, valuation fees, and legal service fees and so on are recognized in profit or loss during the current

period when they occurred. The bonds issued for a business combination or the handling fees, commissions and other expenses for

bearing other liabilities shall be recorded in the amount of initial measurement of the bonds or other debts. The handling fees,

commissions and other expenses for the issuance of equity securities for the business combination shall be credited against the

surplus of equity securities; if the surplus is not sufficient, the retained earnings shall be offset. Where a relationship between a parent

company and a subsidiary company is formed due to a business combination, the parent company shall, on the combining date,

prepare consolidated financial statements according to the accounting policy of the Company.

B. The Company adopts acquisition method for business combination not under same control. The acquirer shall recognize the initial cost of combination under the following principles: a) When business combination is achieved through a single exchange transaction, the cost of a business combination is the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for control of the acquiree; b) For the business combination involved more than one exchange transaction, the cost of the combination is the aggregate cost of the individual transactions; c) The costs directly attributed to business combination are included in the cost of combination; d) Where a business combination contract or agreement provides for a future event which may adjust the cost of combination, the Company shall include the amount of the adjustment in the cost of the combination at the acquisition date if the future event leading to the adjustment is probable and the amount of the adjustment can be measured reliably.

The acquirer shall, on the acquisition date, measure the assets given and liabilities incurred or assumed by an enterprise for a business

combination in light of their fair value, and shall record the balances between them and their carrying amounts into the profits and

losses at the current period. The acquirer shall distribute the combination costs on the acquisition date, and shall recognize all

identifiable assets, liabilities and contingent liabilities it obtains from the acquiree. a. the acquirer shall recognize the difference that

the combination costs are over the fair value of the identifiable net assets obtained from acquiree as goodwill; b. if the combination

costs are less than the fair value of the identifiable net assets obtained from acquiree, the acquirer shall reexamine the measurement

of the fair values of the identifiable assets, liabilities and contingent liabilities obtained from the acquiree as well as the combination

costs; and then after the reexamination, the result is still the same, the difference shall be recorded in the profit and loss of the current

period.

Where a relationship between a parent company and a subsidiary company is formed due to a business combination, the parent

company shall prepare accounting books for future reference, which shall record the fair value of the identifiable assets, liabilities

and contingent liabilities obtained from the subsidiary company on the acquisition date. When preparing consolidated financial

statements, it shall adjust the financial statements of the subsidiary company on the basis of the fair values of the identifiable assets,

liabilities and contingent liabilities determined on the acquisition date according to the Company’s accounting policy of

“Consolidated financial statement”.

7. Basis of consolidation

(1) Scope of consolidation Consolidated financial statements are included all subsidiaries of the parent.


44

(2) Increase or decrease of the subsidiaries For any subsidiary acquired by the Company through business combination under the same control, when the consolidated balance sheet for the current period is being prepared, the beginning balances in the consolidated balance sheet are made corresponding modification. For addition business combination not under same control during the reporting period, the Company makes no adjustment for the beginning balances in the consolidated balance sheet. When disposing subsidiary during the reporting period, the Company makes no adjustment for the beginning balances in the consolidated balance sheet. For any subsidiary acquired by the Company through business combination under the same control, when the consolidated income statement for the current period is being prepared, sales, expense and profit for the period from the beginning of the consolidated period to the year end of the reporting period are included in the consolidated income statement. For addition business combination not under same control during the reporting period, revenue, expense and profit for the period from acquisition date to the year end of the reporting period is included in the consolidated income statement. When disposing subsidiary during the reporting period, sales, expense and profit for the period from the beginning to the disposal date are included in the consolidated income statement. For any subsidiary acquired by the Company through business combination under the same control, when the consolidated cash flow statement for the current period is being prepared, cash flow for the period from the beginning of the consolidated period to the year end of the reporting period is included in the consolidated cash flow statement. For addition business combination not under same control during the reporting period, cash flow for the period from acquisition date to the year end of the reporting period is included in the consolidated cash flow statement. When disposing subsidiary during the reporting period, cash flow for the period from the beginning to the disposal date is included in the consolidated cash flow statement. (3)Principle of consolidation The consolidated financial statements are based on the financial statements of individual subsidiaries which are included in the consolidation scope and prepared after adjustment of long-term equity investment under equity method and elimination effect of intra-group transaction. (4) Minority interests The portion of the equity of the subsidiaries that are not owned by the parent is presented as minority interest in the consolidated balance sheet. The portion of the profit or loss of the subsidiaries that are not owned by the parent is presented as minority interest in the consolidated income statement. (5) Excess losses The amount which losses of subsidiaries during the period exceeds the proportion of minority’s obligation is offset minority interest as agreed in the subsidiaries’ association or agreement and minorities have ability to bear the excess losses. Otherwise, the excess losses are offset equity of the parent company. Profits made afterward by subsidiaries are attributable to equity of the parent company before recovery of excess losses.

8. The standard for recognizing cash equivalent when making cash flow statement

Cash equivalent means the highly liquid, very safe investment which can be easily converted into cash, and the company can hold it

for a very short time (3 months from the date of purchase).

9. Method of foreign currency translation

When foreign currency translation occurs, the spot exchange rate on the date of translation (i.e., the middle price of the intraday

foreign exchange rate of RMB published by People’s Bank of China) shall be converted into RMB for keeping accounts while the

occurred foreign currency exchange or the foreign exchange transactions shall be translated according to exchange rate adopted in

actual transactions. On the balance sheet date, the foreign currency monetary items and foreign currency non-monetary items shall

be treated in accordance with the following provisions:

The foreign currency monetary items shall be translated at the spot exchange rate on balance sheet date, of which happen during the

normal business period shall be recorded into gains and losses at the current period; of which happen during organization period shall

be recorded into long-term deferred expense. The exchange gains or losses caused by the borrowing belonging to acquiring fixed

assets shall be treated by the capitalization of borrowing costs.

Foreign currency non-monetary items shall be translated at spot rate on the date of transaction, not changing the amount of functional

currency.

The Company translates the financial statements of its foreign operation in accordance with the following provisions: a) the asset and

liability items in the balance sheets shall be translated at a spot exchange rate ruling at the balance sheet date. Among the owner's

equity items, except the ones as "retained earnings", others shall be translated at the spot exchange rate ruling at the time when they

occurred;. b) The income and expense items in the income statements shall be translated with approximate exchange rate of the sight


45

rate on the transaction occurring date. The foreign exchange difference arisen from the translation of foreign currency financial

statements shall be presented separately under the owner's equity in the balance sheet.

10. The recognition and measurement of financial instruments and the transfer of the financial instruments

(1) Recognition of the financial assets

When an enterprise becomes a party to a financial instrument, it shall recognize a financial asset or financial liability. Where a

financial asset satisfies any of the following requirements, the recognition of it shall be terminated:

①Where the contractual rights for collecting the cash flow of the said financial assets are terminated;

②Where the said financial asset has been transferred and meets the conditions for recognizing the termination of financial assets as

provided for in Accounting Standard for Business Enterprises No. 23 – Transfer of Financial Assets. Only when the prevailing

obligations of a financial liability are relieved in all or in part may the recognition of the financial liability be terminated in all or

partly.

(2) The classification, recognition and measurement of financial assets and financial liabilities

The financial assets or financial liabilities got or born by the Company are measured according to the following classifications:

①The financial assets or financial liabilities which are measured at their fair value and the variation of which is recorded into the

profits and losses of the current period

The interest rate or cash dividend which was gained in the period when the financial assets held by the Company are measured at its

fair value and of which the variation is recorded into the profits and losses in the current period shall be recognized as investment

income. On balance sheet date, the in change in the fair value of the financial asset or financial liability which is measured at its fair

value and of which the variation is recorded into the profits and losses of the current period, shall be recorded into the profits and

losses of the current period; When the said financial assets of financial liabilities are on disposal, the difference between the fair

value and the amount in initial account shall be recognized as investment income, meanwhile, the profits and losses arising from the

change in fair value shall be adjusted.

②The investments which will be held to their maturity

The investments which will be held to their maturity will regard the sum between the gained fair value and the transaction expense

thereof as the initially recognized amount. The interest on bonds in payment, of which the mature interest is not drawn, shall be

solely recognized as the receivables. The interest revenue which is measured and recognized by the amortized cost and actual interest

rate during the period of the investments which will be held to their maturity shall be recorded into investment income. The actual

interest rate which is recognized in the period of gaining the investments which will be held to their maturity, shall maintain

unchanged within the predicted term of existence or within a shorter applicable term of the said investment which will be held to

their maturity. The little difference between actual interest rate and coupon rate of which interest revenue can be measured at the

coupon rate shall be recorded into the profits of losses in the current period. When the investments which will be held to their

maturity are on disposal, the difference between the obtained price and investment book value shall be recorded into the profits and

losses in the current period.

③The accounts receivables

The creditor’s right receivable formed during the Company selling commodity outside or offering labor shall be regarded as the

initially recognize amount in according with the receivable price stipulated in the contract or agreement signed between the Company

and the buyers. When the Company recovers or disposes the accounts receivable, the difference between the obtained price and the

book value of the accounts receivable shall be recorded into the profits and losses in the current period.

④Financial assets available for sale

The financial assets available for sale will be regarded as the initial recognized amount in according with the sum between the fair

value obtained from the said financial assets and the transaction expense thereof. The interest on bonds of which the mature interest


46

rate is not drawn in the payment or the cash dividend which is declared but not extended in the payment shall be solely recognized as

the receivables.

The interest rate or cash dividend gained during the period of holding the financial assets available for sale shall be recorded into

investment income. On balance sheet date, the financial assets shall be measured through fair value, while the change in fair value is

recorded into capital reserves (other capital reserves).

When the financial assets are on disposal, the difference between the obtained price and the book value of the financial assets shall be

recorded into investment income, meanwhile, the amount on proposal transferring out from the accumulated amount which is directly

recorded into shareholders’ equity and arises from the variation of the fair value, shall be recorded into investment income.

⑤Other financial liabilities

Other financial liabilities are regarded as the initial recognized amount in accordance with the sum between the fair value and the

transaction expense thereof. The Company shall make subsequent measurement on other financial liabilities on the basis of the

post-amortization costs.

(3) Main recognition method for the fair value of the financial assets or financial liabilities

① The quotation in the active market shall be used to recognize the fair value of the financial assets or financial liabilities existing in

active market.

② If the financial instruments do not exist in the active market, the fair value shall be recognized by value appraisal techniques.

③ As for the financial assets initially obtained of produced at source and the financial liabilities assumed, the fair value thereof shall

be determined on the basis of the transaction price of the market.

(4) Main impairment test method of the financial assets and impairment provision method

The recognition standard for impairment provision of the financial assets: the Company shall carry out an inspection, on the balance

sheet day, on the carrying amount of the financial assets other than those measured at their fair values and of which the variation is

recorded into the profits and losses of the current period. Where there is any objective evidence proving that such financial asset has

been impaired, an impairment provision shall be made.

The withdrawal method for impairment provision of the financial assets: as for the impairment provision of the financial assets is

measured on the basis of post-amortization costs, if the current value of the predicted future cash flow of the financial assets is below

the difference in the carrying amount of the said financial asset, the impairment provision of the financial assets shall be made; as for

the impairment provision of the financial assets available for sale, if the recoverable amount is below the difference in the carrying

amount, the impairment provision shall be made. Where a sellable financial asset is impaired, even if the recognition of the financial

asset has not been terminated, the accumulative losses arising from the decrease of the fair value of the owners’ equity which was

directly included shall be transferred out and recorded into the profits and losses of the current period.

11. Receivable accounts

(1) Recognition and providing of bad debt provision on individual receivable account with large amount

Basis of recognition or standard

amount of individual account

with large amount

Top 5 of account receivables at year end

Basis of bad debt provision

Impairment test performed individually, bad debt provision will be

provided at the difference of expected cash flow lower than the book

value. Without bad debt provision needed provided through individually

test, bad debt provision will be provided at age analysis method.


47

(2) Recognition and providing basis of bad debt reserves for group of receivable accounts with similar characteristics of credit risks

①Basis of recognition and providing of bad debt provision

Basis of recognition for groups

Group of inner units Accounts receivable due from subsidiaries included in consolidated scope

Group by age analysis With similar characteristics of credit risks

Basis of bad debt provision

Group of inner units Individual identified method

Group by age analysis Age analysis method

②Age analysis

Ages Provision rates for

account receivables (%)

Provision rates for

other receivables (%)

Within 1 year, (included, same for the followings) 5% 5%

1-2 years 10% 10%

2-3 years 30% 30%

3-4 years 50% 50%

4-5 years 80% 80%

Over 5 years 100% 100%

(3)Other minor amount

For the receivables which are not individually significant, and which individually significant but are not provided provision

individually, in accordance with credit risk characteristics, the method of provision for bad debts is aging analysis method. The

assessment is made collectively where receivables share similar credit risk characteristics (including those having not been

individually assessed as impaired), based on their historical loss experiences, and adjusted by the observable figures reflecting

present economic conditions.

12. The classification, pricing and accounting methods for inventories; the recognition standard and withdrawal method of

the inventories falling price reserves

(1) Classification of the inventories: purchased materials, stocking materials, material cost difference, entrusted processing materials,

unfinished products, finished products, working on project and etc.

(2) The inventory system is on the basis of perpetual inventory method.

(3) The inventories are priced by the historical cost method, so are the raw material and auxiliary material, the sold material cost is

carried over on the basis of first-in first-out method; the product cost is accounted through standard cost method, the difference

between the standard cost and historical cost is undertaken by the cost of the finished goods in process, while the cost of sales is

carried over on the basis of weighted average method; low-value consumption goods will be amortized once when drawn.

(4) As for the inventory write-down provided: each kind of inventories at the end of the report period will be measured at the lower

of cost or net realizable value, and a provision for inventory write-down will be established for any difference between the cost and

the lower net realizable value. The net realizable value refers to the value minus the predicted expense needed in the process of

completing the production and sales from the predicted price for sale and the taxes.


48

13. The method for measuring long-term equity investment

(1)Confirmation of initial investment cost of long-term equity investment

For the consolidation of enterprises that under the same control, take the book value proportion of the owner’s equity of consolidated

party on consolidation date as initial investment cost of long-term equity investment. The balance of initial investment cost of

long-term equity investment and paid cash, transferred non-cash asset, and book value of debt taken, should adjust capital public

reserve; and adjust retained earning while the capital public reserve isn’t enough to offset. For the consolidation of enterprises that

under different control, take assets paid out in order to acquire the control right of purchased party on purchase date, occurred or

undertaken debt and fair value of issued equity securities as initial investment cost of long-term equity investment. The long-term

equity investment acquired in other manners except from the enterprise consolidation, should confirm its initial investment cost

according to following regulations:

①The long-term equity investment acquired by paying cash, should take purchasing price that actually paid as initial investment cost.

Initial investment cost including expense, tax and other necessary payout that directly related with acquiring the long-term equity

investment.

②The long-term equity investment acquired by issuing equity securities, should take fair value of the issued equity securities as

initial investment cost.

③The long-term equity investment invested by investors, should take the promised value in investment contract or agreement as

initial investment cost, excluding those promised in the contract or agreement that the value is not fair.

④. The long-term equity investment acquired by non-monetary asset exchange, its initial investment cost should be confirmed

according to Accounting Standards of Business Enterprise No.7—Non-monetary Asset Exchange.

⑤. The long-term equity investment acquired by debt reorganization, its initial investment cost should be confirmed according to

Accounting Standards No.12—Debt Restructuring.

(2). Subsequent measurement of long-term equity investment

①. The following long-term equity investments adopt cost calculation method:

i. The long-term equity investment on the invested units controlled by the Company.

The investment of the Company on the subsidiaries and calculated on cost method and adjusted according to equity method while

compiling the consolidated financial statements.

ⅱ.The Company hasn’t joint control or material influence on invested party, or the long-term investment hasn’t quoted price on

active market so its fair value can’t be dependably measured.

②. The long-term equity investment that the Company has together control or material influence on the invested party, adopt equity

method to calculated.

14. The fixed assets pricing and depreciation method

(1) Definition of fixed assets

The fixed assets refer to the assets related to production and operation that has over 1 year lifetime.

(2)Classification

The fixed assets include property and plant, machinery and equipment, motor vehicles, electric equipments and other equipments etc.

(3)Pricing of fixed assets

The initial measurement of a fixed asset shall be made at its cost. The cost of a purchased fixed asset is based on the actual expense;

the cost invested to a fixed asset by the investor shall be ascertained in accordance with the value as stipulated in the investment

contract or agreement; the cost of a self-constructed fixed asset shall be formed by the necessary expenses incurred for bringing the


49

asset to the expected condition for use; the costs of fixed assets acquired through the exchange of non-monetary assets,

recombination of liabilities, merger of enterprises, and financial leasing shall be respectively ascertained in accordance with the

Accounting Standard for Business Enterprises No. 7 - Exchange of Non-monetary Assets, the Accounting Standard for Business

Enterprises No. 12 – Debt Restructuring, the Accounting Standard for Business Enterprises No. 21 – Leases.

(4)Deprecation method of fixed assets

Depreciation is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives,

as follows:

Fixed assets Estimated lifetime Annual depreciation Expected residual

rates value rates

Buildings 20-40 years 2.25-4.85% 3%、 5%、10%

Machinery and equipment 10-22 years 4.09-9.7% 3%、 5%、10%

Motor vehicles 4-15 years 6-24.25% 3%、 5%、10%

Electric equipments 5 years 18-19.4% 3%、 5%、10%

Other equipments 10-15 years 6-9.7% 3%、 5%、10%

The asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its

estimated recoverable amount.

15. Construction-in-progress

(1). Construction-in-progress represents buildings and plant under construction and machinery and equipment under installation and

testing, and is stated at cost.

(2). This includes cost of construction, plant and equipment and other direct costs plus borrowing costs which include interest charges

and exchange differences arising from foreign currency borrowings used to finance these projects during the construction period, to

the extent these are regarded as an adjustment to interest costs.

(3). When construction engineering in process has reached the scheduled state in commission, and has proceeded the final accounts

of completing, validate all the actual expenses as the fixed asset; if the fixed asset has reached the scheduled state in commission

without proceeding the final accounts of completing, validate the cost and adjust the original provisional estimated value according to

the actual costs after finishing the final accounts of completing.

16. The pricing and amortizing method of intangible assets

(1) Pricing of the intangible assets

The intangible assets shall be initially measured according to its cost.

① The cost of outsourcing intangible assets shall include the purchase price, relevant taxes and other necessary expenditure directly

attributable to intangible assets for the expected purpose.

② The cost of self-developed intangible assets shall include the total expenditures incurred during the period from the time when it

meets the following conditions to the time when the expected purposes of use are realized, except that the expenditures which have

already been treated prior to the said period shall not be adjusted.

ⅰ. It is feasible technically to finish intangible assets for use or sale;

ⅱ. It is intended to finish and use or sell the intangible assets;

ⅲ. The usefulness of methods for intangible assets to generate economic benefits shall be proved, including being able to prove that


50

there is a potential market for the products manufacturing by applying the intangible assets or there is a potential market for the

intangible assets itself or the intangible assets will be used internally.

ⅳ. It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with the support of

sufficient technologies, financial resources and other resources;

ⅴ. The development expenditures of the intangible assets can be reliably measured.

③ The cost invested into intangible assets by investors shall be determined according to the conventional value in the investment

contract or agreement.

④ The costs of intangible assets acquired from non-monetary assets transaction, debt recombination, government subsides, and

merger of enterprises shall be determined respectively according to the Accounting Standard for Business Enterprises No. 7 -

Non-monetary Assets, Accounting Standard for Business Enterprises No. 12 – Debt Restructurings, Accounting Standard for

Business Enterprises No. 16 – Government Grants and Accounting Standard for Business Enterprises No. 20 – Business

Combinations.

(2) Amortization of the intangible assets

①As for the intangible assets with limited service life, which are amortized by straight-line method when it is available for use

within the service period, shall be recorded into the current profits and losses. The Company shall, at least at the end of each year,

check the service life and the amortization method of intangible assets with limited service life. When the service life and the

amortization method of intangible assets are different from those before, the years and method of the amortization shall be changed.

② Intangible assets with uncertain service life may not be amortized. However, the Company shall check the service life of

intangible assets with uncertain service life during each accounting period. Where there are evidences to prove the intangible assets

have limited service life, it shall be estimated of its service life, and be amortized according to the above method mentioned in (1).

17. Impairment of long-term assets

(1) At the end of accounting period, the Company shall check the long-term assets. There may be an impairment of assets when the

following signs occur. The recoverable amount shall be estimated and the asset impairment loss shall be made in light of the

difference that the recoverable amount of assets is less than the book value when the impairment happens. The signs are stated as

follows:

① The current market price of assets falls, and its decrease is obviously higher than the expected drop over time or due to the normal

use;

②The economic, technological or legal environment in which the enterprise operates, or the market where the assets is situated will

have any significant change in the current period or in the near future, which will cause adverse impact on the enterprise;

③The market interest rate or any other market investment return rate has risen in the current period, and thus the discount rate of the

enterprise for calculating the expected future cash flow of the assets will be affected, which will result in great decline of the

recoverable amount of the assets;

④Any evidence shows that the assets have become obsolete or have been damaged substantially;

⑤ The assets have been or will be left unused, or terminated for use, of disposed ahead of schedule;

⑥ Any evidence in the internal report of the enterprise shows that the economic performance of the assets has been or will be lower

than the expected performance, for example, the net cash flow created by assets or the operating profit (or loss) realized is lower

(higher) than the expected amount;

⑦Other evidence indicates that the impairment of assets has probably occurred.

(2) The evidences to withdraw the impairment provision of long-term investment, fixed assets, construction in process and intangible

asset: at the end of the report period, the Company will withdraw the asset impairment provision according to the difference that the

recoverable amount of single asset is less than the book value. The recoverable value shall be recognized according to the high one


51

between the net amount of fair value deducting disposal charge and the current value of the expected future cash flow of assets. If the

recoverable amount of the single asset cannot be obtained, the recoverable amount shall be recognized on the basis of the asset group

to which the asset belongs.

(3) The business reputation formed by merger of enterprises shall be distributed into the related asset group at the end of every year,

then the asset group shall have the impairment test to measure the recoverable amount, comparing to the book value, if the

recoverable amount of the asset group is less than the book amount, the difference shall first charge against the book value of the

business reputation which is apportioned to the asset group; if the book value of the business reputation is not enough to charge

against the difference, the uncharged balance shall be distributed by the other assets of the asset group in accordance with the book

value.

(4) The recognition of the asset group under impairment test: the related minimum of asset groups that can share the synergetic

benefit brought from merger through the prediction of the Company.

(5) The above impairment losses of assets cannot be reversed as soon as they are recognized.

18. Calculation method of loan expenses

(1) The loan expenses occurred to the Company includes loan interest, amortization of reduction price and premium price, assistant

expenses and the exchange balance from foreign currency loan. The amortization of the interest, discount or premium and exchange

difference from, the specific loan for purchasing fixed assets, if meeting the following three conditions, loan expenses should be

capitalized.

①Asset disburses have been occurred.

The borrowing costs has already incurred.②

Purchase construction activity for achieving the asset utility condition has started. ③ Other loan interest, amortization of reduction

price and premium price and the exchange balance from foreign currency loan should be deemed as expenses of the period while

they occur.

(2)Where a general borrowing is used for the acquisition and construction or production of assets eligible for capitalization, the

enterprise shall calculate and determine the to-be-capitalized amount of interests on the general borrowing by multiplying the

weighted average asset disbursement of the part of the accumulative asset disbursements minus the general borrowing by the

capitalization rate of the general borrowing used. Auxiliary expense of general loan should be counted into current loss and interest.

(3)To determine capitalized amount： Capitalized interest for purchasing fixed asset at the end of the current period is the

accumulated expense and weight average asset multiplied capitalization rate. And the capitalization rate is determined by following

principles：

①Interest of the specialized loan for purchasing fixed assets is the capitalization rate；

②Above single specialized loan for purchasing fixed assets, the capitalization rate is the weighted average interest rate of these

general borrowings.

(4)Temporary stop of capitalization: If the purchase and building activities for fixed assets stop abnormally and the interruption

interval exceeds three months, the capitalization of borrowing cost should be stopped temporarily and deemed as the expenses of

current period until the re-start of purchasing and building activities for assets.

(5)Stop of capitalization: When the purchased fixed assets have reached the expected serviceable condition, stop the capitalization of

borrowing cost.

19. Calculating method on salary payable to staff

The staff’ salary means that the enterprise gives various remunerations for obtaining services providing by the employees or other


52

relevant expenses. It includes:

i. Staff’s salary, bonus, allowance and subsidy;

ii. Staff’s welfare;

iii. Hospitalization insurance, endowment insurance, unemployment insurance, occupational injury insurance and childbirth

insurance, etc. social insurances;

iv. Housing public reserve;

v. Labor union expenditure and personnel education expense;

vi. Non-monetary welfare;

vii. Compensation for rescinding the labor relationship with employee;

viii. Other expenses related with the services the employee supply.

During the accounting period of an employee' providing services to an enterprise, the Company shall recognize the compensation

payable as liabilities. Except for the compensations for the cancellation of the labor relationship with the employee, the enterprise

shall, in accordance with beneficiaries of the services offered by the employee, treat the following circumstances respectively:

(1)The compensation for the employee for producing products or providing services shall be recorded as the product costs and

service costs;

(2)The compensation for the employee for any on-going construction project or for any intangible asset shall be recorded as the costs

of fixed asset or intangible assets;

(3)The compensation for the employee other than those as mentioned in Items (1) and (2) shall be recorded as profit or loss for the

current period.

The social insurance such as hospitalization insurance, endowment insurance, unemployment insurance, occupational injury

insurance and childbirth insurance; and housing public reserve handed by the company for the staff should be calculated in

proportion of total salary according to the relevant regulations of local government during the accounting period of the services the

employee supply to the company. Before the expiration of the contract, the company rescinds the labor relationship between the

company and the staff or encourage staff accept the suggestion on compensation for accepting reduction at will, at the same time

satisfy the following conditions, projected liabilities occurs for confirming rescinding the labor relationship with employee and

giving compensation and is reckoned into current gains and losses:

i. The company officially established the plan on rescinding the labor relationship or brings forward the suggestions on reduction at

will, and will be implemented;

ii. The company could not singly withdraw rescinding the labor relationship or suggestions of reduction.

20. Measurement method of estimated debts

The obligation pertinent to Contingencies shall be recognized as estimated debts when the following conditions are satisfied

simultaneously:

(1) That obligation is a current obligation of the enterprise;

(2) It is likely to cause any economic benefit to flow out of the enterprise as a result of performance of the obligation;

(3) The amount of the obligation can be measured in a reliable way.

The Company shall check the book value of the estimated debts on the balance sheet date. If there is any exact evidence indicating

that the book value cannot really reflect the current best estimate, the Company will adjust the book value in accordance with the

current best estimate.


53

21. Revenue recognition

(1) The recognition of the revenue from selling goods: the revenue from selling shall be recognized by the following conditions: The

significant risks and rewards of ownership of the goods have been transferred to the buyer by the Company; the Company retains

neither continuous management right that usually keeps relation with the ownership nor effective control over the sold goods; the

relevant amount of revenue can be measured in a reliable way; the relevant revenue and costs of selling goods can be measured in a

reliable way.

(2) Giving of asset using rights: Income from giving of assets is recognized when satisfying requirements: related economic benefit

flows in very possibly, income can be measured reliably.

1) Amount of interest income is calculated according to the time and actual interest rate of the monetary capital is used by other party.

2) Income of using fee is calculated upon the charge period and calculation provided by the related contract or agreement.

(3)Construction contracts

When the result of the construction contract is able to be evaluated reliably at the balance sheet date, the income and cost of the

contract are recognized on completion percentage basis.

If the result of the construction contract is not able to be evaluated reliably, but the contract cost maybe recovered, the income is

recognized at the cost actually recovered, and the cost of the contract is recognized as contract expenses of the current period when it

is occurred.

1) Contract progress is recognized at the ratio of accumulative actual cost on the predicted complete cost.

2) In case the expected total cost is greater than the total income, the expected loss will be recognized as expense

of the current period. If the construction is in process, the balance is accounted as inventory impairment provision; if the contract is

not executed, the balance is accounted as expected liability.

22. Calculation method of government grants

The government grants related to the proceeds, if those used for compensating the relevant future expenses or losses of the enterprise

shall be recognized as deferred income and shall, during the period when the relevant expenses are recognized, recorded in the

current profits and losses; or if those used for compensating the relevant expenses or losses that have been incurred to the enterprise

shall be directly recorded in the current profits and losses.

The government grants related to the assets shall be recognized as deferred income and shall be distributed averagely in the related

asset using period, then counted into current loss and interest. However, government subsidiary according to nominated amount shall

be counted into current loss and interest directly.

23. Income tax

Where there is difference (temporary difference) between the carrying amounts of the assets or liabilities and its tax base, the

deferred income tax assets or the deferred income tax liabilities shall be determined. According to tax law, the deductible loss and tax

deduction which can deduct the taxable amount in the subsequent years, regarding as temporary difference, shall be recognized as the

corresponding deferred income tax assets. As for the temporary difference arising from the initial recognition of the goodwill, the

corresponding deferred income tax liabilities. When the temporary difference is arisen from the initial recognition of the assets or

liabilities incurring in the transaction which is not business combination and does not affect the accounting profits or the taxable

amount (or the deductible loss), the corresponding deferred income tax assets and deferred income tax liabilities shall not recognized.

On the balance sheet date, the deferred income tax assets and deferred income tax liabilities shall be measured at the tax rate

applicable to the period during which the assets are expected to be recovered or the liabilities are expected to be settled. The


54

Company shall recognize the deferred income tax assets to the extent of the amount of the taxable income which it is likely to obtain

and which can be deducted from the deductible temporary difference, deductible loss and tax deduction.

The deferred income tax liabilities arising from the temporary differences related to the investments of subsidiary companies,

associated enterprises and joint enterprises shall be recognized. However, the deferred tax income assets and deferred income tax

liabilities shall not recognized which meet the conditions that the Company can control the time of the reverse of temporary

differences which are likely to be reversed in the expected future.

24. Earnings per share (EPS)

(1) Basic earnings per share = net profit attributable to common shareholders or net profit attributable to common shareholders after

deducting extraordinary items ÷ outstanding weighted average of ordinary shares

(2) Diluted earnings per share= net profit attributable to common shareholders or net profit attributable to common shareholders after

deducting extraordinary items ÷ outstanding weighted average of ordinary shares after adjusted

(3) If the outstanding or potential common shareholders change during the report period but do not affect the total amount of

shareholders equity, the earnings per share should be recalculated.

If the above changes happened during the date of balance sheet and the date of financial statements approval, the earnings per share

of the report period should be recalculated.

25. Changes in accounting policies and estimates

(1) There is no change in accounting policies during the financial year.

(2) There is no change in accounting estimate during the financial year.

26. Correction of the accounting errors from previous term

There is no correction of the accounting error from previous term in this report period.

. TaxationⅢ

1. Value added tax (“VAT”)

The Group is subject to VAT, which is a tax charged on top of the selling price at a general rate of 17% or 13% or 6% depending on

different kinds of products. An input credit is available whereby VAT previously paid on purchases of raw materials and

semi-finished products can be used to offset the VAT on sales to determine the net VAT payable.

2. The business tax rate is 5% or 3% of revenue.

3. Urban maintenance and construction tax is 7% of turnover tax payable.

4. Education surtax is 3% of turnover tax payable.

5. Local education surtax is 2% of turnover tax payable.

6. Income tax

(1)Income tax shall be measured at 25% in total.


55

(2)Income tax of subsidiaries and associates

Taxation on profit of subsidiaries and associates is calculated at the applicable rates in accordance with the relevant tax regulations. Certain subsidiaries and associates enjoy preferential income tax policies with approvals from tax authorities. The applicable income tax rates of major subsidiaries and associates for 2012 are as follows:

Names of the entities Relationship with

the Company Applicable income tax rate in 2012

Dalian Bingshan Group Refrigeration Installation Co., Ltd. Subsidiary 25%

Dalian Bingshan Air-Conditioning Equipment Co. Ltd. Subsidiary 25%

Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd. Subsidiary 25%

Dalian Bingshan Group Sales Co., Ltd. Subsidiary 25%

Dalian Bingshan Metal Processing Co. Ltd. Subsidiary 25%

Dalian Bingshan Guardian Automation Co., Ltd. Subsidiary 15%

Wuhan New World Refrigeration Industrial Co., Ltd. (“WNWRI”) Subsidiary 15%

Ⅳ. Business combination and consolidated financial statements

1. The principal activities of its subsidiaries are shown as below.

As of 31 December 2013 the Company had direct equity interests in the following subsidiaries, all of which were incorporated in the

PRC.

In the table below column ‘A’ represents ‘Other essential investment’, column ‘B’ represents ‘Amount of minority interest in income

statement deducted from minority interest’, and column ‘C’ represents ‘Balance after deduction of losses of subsidiaries during the

period exceeding the proportion of minority shareholders from equity of parent company’.

Subsidiaries acquired by establishment or investment

No. Names

Catego

ries

Registere

d address

Business

nature

Registered capital Business scope Investment A

Shareh

olding

（%）

Voting

right（%）

Consolidated

Minority

interest

B C

1

Dalian Bingshan Group

Refrigeration Installation

Co., Ltd. (“Installation

Company”)

Ltd. Dalian Installation RMB20,040,000

Installation and

testing of

refrigeration

equipment

RMB20,040,000 100 100 Yes


56

2


Sales Co., Ltd. (“Sales

Company”)

Ltd. Dalian Trading RMB18,000,000

Sale of

refrigeration

equipment

RMB16,200,000 90 90 Yes 4,415,064.83

3

Dalian Bingshan

Air-Conditioning

Equipment Co., Ltd.

(“Bingshan

Air-Conditioning”)

Ltd. Dalian Manufacturing JPY700,000,000

Manufacture and

sale of

accessories of

refrigeration

equipment

JPY490,000,000 70 70 Yes 20,495,414.43

4

Dalian Bingshan Metal

Processing Co., Ltd.

(“Metal Processing”)

Ltd. Dalian Manufacturing USD2,350,000

Process and sale

of metal

punching parts

USD1,509,875 64.25 64.25 Yes 8,896,463.20

5

Dalian Bingshan

Guardian Automation

Co., Ltd.

Ltd. Dalian Manufacturing GBP210,000

Research, design

and develop

refrigerator

automation parts

GBP126,000 60 60 Yes 3,852,523.60

6

Dalian Bingshan

Ryosetsu Quick Freezing

Equipment Co., Ltd.

Ltd. Dalian Manufacturing USD1,000,000

Manufacture and

sale of

deep-freezing

equipment

USD700,000 70 70 Yes 2,026,405.05 941,755.95

7

Wuhan New World

Refrigeration Industrial

Co., Ltd. (“WNWRI”)

Ltd. Wuhan Manufacturing RMB100,000,000

Design,

manufacture,

sale, installation

and test of screw

type refrigeration

compressor and

refrigeration

equipment

RMB17,980,400 51 51 Yes 62,403,726.28


57

2. The principal activities of its subsidiaries’ subsidiaries are shown as below.

In the table below column ‘A’ represents ‘Other essential investment’, column ‘B’ represents ‘Amount of minority interest in income

statement deducted from minority interest’, and column ‘C’ represents ‘Balance after deduction of losses of subsidiaries’ subsidiaries

during the period exceeding the proportion of minority shareholders from equity of parent company’.

Subsidiaries’ subsidiaries acquired by establishment or investment

Ⅴ. Notes to the consolidated financial statements

1 Monetary fund

Items 31-12-2013 31-12-2012

Cash on hand 99,455.92 195,378.55

Cash in bank 493,056,269.04 523,052,983.91

Other monetary fund 19,747,988.17 8,648,292.62

Total 512,903,713.13 531,896,655.08

Particular about foreign monetary funds included in the cash in bank:

31-12-2013 31-12-2012 Foreign

currency Original currency Exchange rate RMB equivalent Original currency Exchange rate RMB equivalent

USD 13,828.25 6.0969 81,017.14 4,064.02 6.2855 25,544.40

No. Names

Catego

ries

Registere

d address

Business

nature

Registered

capital

Business scope Investment A

Shareh

olding

（%）

Voting

right（%）

Consolidated

Minority

interest

B C

1

Wuhan New World

Refrigeration Air

Conditioner Engineering

Co., Ltd.

Ltd. Wuhan Installation RMB8,000,000

Design, installation,

test and repair of

refrigeration

equipment

RMB400,000 5 100 Yes

2

Ningbo Bingshan

Refrigeration Air


Co., Ltd.

Ltd. Ningbo Installation RMB3,000,000

Installation and

repair of

refrigeration

equipment

RMB1,530,000 51 Yes 2,170,686.76


58

JPY 1,039,091.00 0.057771 60,029.33 368,460.00 0.073049 26,915.63

EUR 5.60 8.4189 47.15 5.60 8.3176 46.58

GBP 27,396.57 10.0556 275,488.95 71,217.64 10.1611 723,649.57

Total 416,582.57 776,156.18

As at 31 December, 2013, Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd. the subsidiary’s cash in bank

RMB1,000,000.00 is frozen by bank, and except that there is no pledged, frozen or withdrawn with potential risk amount.

The restrained amount of monetary fund is shown as below.

Items 31-12-2013 31-12-2012

deposit for bank acceptances and letters of guarantee 9,564,552.78 6,077,919.62

Cash in bank 1,000,000.00

Total 10,564,552.78 6,077,919.62

2 Notes receivable

Items 31-12-2013 31-12-2012

Bank acceptance 30,403,946.87 30,613,298.36

Trade acceptance 9,423,084.90 11,353,246.61

Total 39,827,031.77 41,966,544.97

(1) There is no pledged notes receivable at the end of the current year.

(2) The top five notes receivable endorsed but not matured at the end of the current year.

No. Companies Issued date Expiration date Amount Notes

1 Dalian Bingshan Engineering &Trading Co., Ltd. 2013.12.31 2014.03.20 3,913,969.50 Trade acceptance

2 Shanxi Huaxin Coal Tar Industrial Group Co., Ltd. 2013.11.04 2014.04.29 3,830,000.00 bank acceptance

3 Chengde magnetic source mining Refco Group Ltd 2013.08.06 2014.02.06 3,500,000.00 bank acceptance

4 Dalian Bingshan Engineering &Trading Co. ,Ltd. 2013.10.31 2014.01.20 3,213,099.03 Trade acceptance

5 Huarun Snow Beer (Sichuan) Co. ,Ltd. 2013.10.23 2014.01.23 2,378,061.70 bank acceptance

Total 16,835,130.23

(3) The amount of notes receivable due from related companies are RMB10,616,978.36, 26.66% of total notes receivable. Please refer

to the Ⅵ 7 of the notes.


59

3 Dividends receivable

Items 31-12-2012 Current year

addition

Current year

disposal 31-12-2013 Reasons Any impairment

Dividends receivable, aging within 1

year

Included: Wuhan Steel and Electricity

Co., Ltd. 39,025.00 33,450.00 39,025.00 33,450.00 Not due to pay No

Total 39,025.00 33,450.00 39,025.00 33,450.00

4 Interest receivable


addition

Current year

disposal 31-12-2013

Interest receivable, aging within 1 year

Included: interest on fixed-term deposits 277,444.44 8,198,470.04 4,872,319.63 3,603,594.85

Total 277,444.44 8,198,470.04 4,872,319.63 3,603,594.85

5 Accounts receivable

(1) Classified by accounts nature

31-12-2013 31-12-2012

Balance Provision for doubtful debt Balance Provision for doubtful debt Categories

Amount Proportion

(%) Amount

Proportion

(%) Amount

Proportion

(%) Amount

Proportion

(%)

Major single amount

and bad debt provision

provided individually

Bad debt provided on

group basis 468,499,323.02 100 98,786,576.32 21 446,228,134.01 100 93,966,407.27 21

Minor single amount

but bad debt provision


Total 468,499,323.02 100 98,786,576.32 21 446,228,134.01 100 93,966,407.27 21


60

Accounts receivable which bad debt provisions are provided on age basis in the group

31-12-2013 31-12-2012 Account ages

Amount Proportion (%) Provision for bad debts Amount Proportion (%) Provision for bad debts

Within 1 year 243,385,821.76 51.95 12,169,291.10 223,325,287.48 50.04 11,166,264.37

1 to 2 years 98,061,850.41 20.93 9,806,185.04 100,612,947.55 22.55 10,061,294.76

2 to 3 years 50,264,089.07 10.73 15,079,226.72 37,441,392.94 8.39 11,232,417.89

3 to 4 years 19,255,750.93 4.11 9,627,875.48 38,041,244.40 8.53 19,020,622.21

4 to 5 years 27,139,064.37 5.79 21,711,251.50 21,607,268.00 4.84 17,285,814.40

Over 5 years 30,392,746.48 6.49 30,392,746.48 25,199,993.64 5.65 25,199,993.64

Total 468,499,323.02 100 98,786,576.32 446,228,134.01 100 93,966,407.27

(2) There is no major single amount and bad debt provision provided individually.

(3) Receivable accounts written off before but received during the current year

Companies Received reason Reasons of neutralization Provision for bad debt Received amount

Tianshan Animal

Husbandry Yili Co.

Ltd.

Bankruptcy liquidation

property returned Bankruptcy 472,000.00 330,088.72

Shandong Sanyuan

Dairy Co., Ltd.

Take over control of liquidation

of Sanlu Group (Shandong)

Dairy Co., Ltd.

Bankruptcy 134,847.00 134,847.00

Lingchuan County

Nitrogenous

Fertilizer Plant

Bankruptcy liquidation

property by auction Bankruptcy 40,590.17 40,590.17

Changzhou Pangu

Chemicals Co., Ltd. Clients paid The client refused to pay for

additional expenses of install cite. 16,250.00 16,250.00

Total 663,687.17 521,775.89

(4) There is no amount of accounts receivable received by debts re-construction during the reporting period.

(5)The write-off of accounts receivable during the reporting period

Name of companies The nature of accounts receivable Written off

amount Reasons

Occurred under

related relationship?

64 Clients Sale of goods 4,427,800.84 ① No

①The reasons of accounts receivable write-off include termination of operation and disability of payment, winning lawsuits but not

finding executable assets, small balance not being collected for long time, and disagreement rework charges etc.

(6) No arrearage from the shareholders holding over 5% (including 5%) of the equity of the Company existed in the balance of

accounts receivable.

(7) Accounts receivable top 5 on amount


61

Companies The relationship with the Company Amount Ages Proportion(%)

FAW Jiefang Automotive Co., Ltd. Non-affiliated 16,482,359.00 Less than 1 year 3.52

COFCO Meat（Suqian）Co., Ltd. Non-affiliated 12,449,913.80 Less than 1

year ,1-2years,2-3years 2.66

Dalian Xinghai Bay Development and

Construction Management Centre Non-affiliated 11,242,693.00 4-5years 2.40

Yankuang Xinlu Construction Development

Co. Ltd. Non-affiliated 8,059,249.00 1-2years 1.72

The People's Liberation Army 63820

Troops Non-affiliated 6,805,353.28 Less than 1 year 1.45

(8) The amount of accounts receivable due from related companies are RMB9,680,137.52, 2.07% of total accounts receivable. Please

refer to the Ⅵ 7 of the notes.

(9) There is no accounts receivable being ended recognition or being negotiated during the reporting period.

6 Other accounts receivable

(1) Classified by account nature

31-12-2013 31-12-2012

Balance Provision for doubtful debt Balance Provision for doubtful debt Items

Amount Proportion

(%) Amount

Proportion

(%) Amount

Proportion

(%) Amount

Proportion

(%)

Major single amount and bad debt

provision provided individually

Bad debt provided on group basis 31,792,976.68 100 7,278,236.61 22.89 24,977,648.93 100 6,013,679.40 24.08

Minor single amount but bad debt

provision provided individually

Total 31,792,976.68 100 7,278,236.61 22.89 24,977,648.93 100 6,013,679.40 24.08

Other accounts receivable which bad debt provisions are provided on age basis in the group

31-12-2013 31-12-2012

Account ages Amount Proportion (%)

Provision for bad

debts Amount Proportion (%) Provision for bad debts

Within 1year 18,000,224.64 56.62 900,011.22 12,246,892.71 49.03 612,344.64

1 to 2 years 4,431,452.84 13.94 443,145.28 4,353,037.24 17.43 435,303.72

2 to 3 years 2,834,825.78 8.92 850,447.74 2,954,024.32 11.83 886,207.29

3 to 4 years 2,032,201.80 6.39 1,016,100.91 2,667,843.77 10.68 1,333,921.89


62

4 to 5 years 2,128,700.82 6.70 1,702,960.66 49,745.16 0.20 39,796.13

Over 5 years 2,365,570.80 7.43 2,365,570.80 2,706,105.73 10.83 2,706,105.73

Total 31,792,976.68 100 7,278,236.61 24,977,648.93 100 6,013,679.40

(2) There is no major single amount and bad debt provision provided individually.

(3) There is no amount of provision for bad debts written back during the reporting period.

(4) During the reporting period, there is no other account write-off.

(5) There is no balance of other accounts receivable due from the shareholders holding over 5% (including 5%) of the equity of the

Company.

(6) Other accounts receivable top 5 on amount

Companies The relationship with the

Company Amount Age Proportion

Dalian city land reserve center Non-affiliated 10,000,000.00 Less than 1 year 31.45

Baicheng Longdan Dairy Industry Co., Ltd. Non-affiliated 1,004,519.00 1-2years 3.16

Tianjin Construction Team Communication Service

Center Non-affiliated 1,000,000.00 4-5years 3.15

Wuhan Jin Qun refrigeration equipment installation

Co. Ltd. Non-affiliated 736,110.00 1-2years 2.32

Hebei Jinwei new type building materials Co., Ltd.

Hubei branch Non-affiliated 653,800.00 2-3years 2.06

Total 13,394,429.00 42.14

(7) No other important creditors of accounts receivable on amount.

(8) There is no other accounts receivable due from related companies.

(9) There is no other accounts receivable being ended recognition or being negotiated during the reporting period.

7 Accounts paid in advance

(1) The aging of prepayment

31-12-2013 31-12-2012 Account ages

Amount Proportion (%) Amount Proportion (%)

Within 1 year 24,786,019.32 95.21 28,244,256.51 90.38

1 to 2 years 64,112.00 0.25 2,736,226.73 8.76

2 to 3 years 1,178,768.00 4.53 241,520.26 0.77

3 to 4 years 2,487.00 0.01 27,973.00 0.09

Total 26,031,386.32 100 31,249,976.50 100

(2) Prepayment top 5 on amount


63

Companies The relationship with the

Company Amount Ages Reasons

Dalian Tianyi InfoTech Co., Ltd. Non-affiliated 2,499,000.00 Less than 1 year Prepayment for goods

Daikin (Chinese) Investment Co., Ltd.

Shanghai Branch Non-affiliated 1,674,146.60 Less than 1 year Prepayment for goods

Wuhan Delixin Economic and Trade

Development Co., Ltd. Non-affiliated 1,417,730.60 Less than 1 year Prepayment for goods

Dalian Mingxin Refrigeration Insulation

Materials Co., Ltd. Non-affiliated 1,084,949.15 Less than 1 year Prepayment for goods

British Holroyd Precision Components Co.

Ltd. Non-affiliated 1,064,702.11 Less than 1 year Prepayment for goods

Total 7,740,528.46


prepayment.

(4) The amount of prepayment due from related companies is RMB26,129.05, 0.10% of total prepayment. Please refer to the Ⅵ 7

of the notes.

8 Inventories

(1) Cost

31-12-2013 31-12-2012

Items Book balance

Provision for

impairment of

inventories

Book value Book balance

Provision for

impairment of

inventories

Book value

Raw materials 47,474,131.66 8,311,074.35 39,163,057.31 62,256,263.09 9,392,188.03 52,864,075.06

Materials on consignment for further processing

8,211,392.69 8,211,392.69 8,109,762.06 8,109,762.06

Low-value consumptions 128,405.67 128,405.67 142,475.24 142,475.24

Work-in-progress 91,806,242.88 2,148,729.50 89,657,513.38 93,976,830.71 93,976,830.71

Self-manufactured semi-finished products

33,279,512.91 4,024,041.73 29,255,471.18 29,285,449.92 29,285,449.92

Finished goods 135,195,482.98 3,291,858.85 131,903,624.13 156,633,159.08 2,167,851.55 154,465,307.53

Constructing projects 27,211,543.05 27,211,543.05 60,051,195.31 60,051,195.31

Total 343,306,711.84 17,775,704.43 325,531,007.41 410,455,135.41 11,560,039.58 398,895,095.83


64

(2) Provision for impairment of inventories

Current year disposal Item 31-12-2012

Current year

addition Reversal Written-off 31-12-2013

Finished goods 2,167,851.55 2,034,682.08 910,674.78 3,291,858.85

Raw materials 9,392,188.03 383,609.35 1,464,723.03 8,311,074.35

Work-in-progress 2,148,729.50 2,148,729.50


4,024,041.73 4,024,041.73

Total 11,560,039.58 8,591,062.66 2,375,397.81 17,775,704.43

(3) Details of provision for impairment of inventories

Item The bases of provision for impairment of

inventories Reasons for reversal

Proportion of reversal of provision for

impairment of its closing balance

Finished goods The book balance is higher than recoverable

amount.

Raw materials The book balance is higher than recoverable

amount.

Work-in-progress The book balance is higher than recoverable

amount.


The book balance is higher than recoverable

amount.

9 Other current assets

Item 31-12-2013 31-12-2012

Enterprise income tax prepaid 73,111.98 6,026,385.86

Deferred expenses 922,487.82

Total 995,599.80 6,026,385.86


65

10 Investment to Associates and Joint ventures

No. Name Categories

Registe

red

address

Legal represent

person Business nature

Registered

capital

Shareh

olding Voting right

31-12-2013

Total assets

31-12-2013

Total liabilities

31-12-2013

Total net

assets

Total Income of

2013

Net profit of

2013

ⅠJoint venture

1

Dalian Bingshan –

P&A Recreation

Development

Engineering Co., Ltd.

Sino-foreign joint

venture Dalian Yang Bin Installation USD250,000 50% 50% 13,684,354.52 6,681,585.76 7,002,768.76 22,867,641.63 544,620.00

Ⅱ Associates

1

Dalian Bingshan

Engineering &Trading

Co.,Ltd.

Ltd Dalian Xiao Yongqin Trading RMB

30,000,000 24% 24% 97,882,389.44 43,140,385.61 54,742,003.83 177,866,049.16 5,498,969.16

2 Dalian Sanyo


Sino-foreign joint

venture Dalian

Watanabe

Yoshio Manufacturing

JPY

3,450,000,000 40% 40% 666,091,886.83 286,873,580.97 379,218,305.86 921,803,820.66 12,503,320.35

3 Dalian Honjo Chemical

Co., Ltd.

Sino-foreign joint

venture Dalian Honjo Yukinovi Manufacturing

JPY

260,000,000 30% 30% 35,135,976.43 3,359,656.86 31,776,319.57 35,518,230.64 4,440,146.82

4 Dalian Sanyo

Cold-chain Co., Ltd

Sino-foreign joint

venture Dalian Hishitani Kiyoshi Manufacturing

JPY

4,650,000,000 40% 40% 1,230,413,387.87 700,698,827.30 529,714,560.57 1,693,773,283.13 19,201,471.20

5

Keinin-Grand Ocean

Thermal Technology

(Dalian) Co., Ltd.

Sino-foreign joint

venture Dalian

TAKASAKI

KANJI Manufacturing

USD

15,117,890 20% 20% 297,731,401.39 95,714,257.59 202,017,143.80 557,872,328.90 49,190,947.83

6 Dalian Sanyo

Compressor Co., Ltd.

Sino-foreign joint

venture Dalian

Watanabe

Yoshio Manufacturing

JPY

6,200,000,000 40% 40% 1,871,151,984.03 894,114,009.71 977,037,974.32 2,422,381,452.08 166,670,596.53

7 Dalian Sanyo Meica

Electronics Co., Ltd.

Sino-foreign joint

venture Dalian Zhang He Manufacturing

JPY

400,000,000 30% 30% 101,282,336.09 23,371,025.56 77,911,310.53 164,524,271.76 -5,911,089.18

8

Beijing Huashang

Bingshan Refrigeration

and Air-conditioning

Machinery Co., Ltd.

Sino-foreign joint

venture Beijing Yang Bin Trading

RMB

1,000,000 49% 49% 13,279,915.21 10,723,740.25 2,556,174.96 32,185,214.35 552,137.36

9

Dalian Fuji Bingshan

Vending Machine Co.,

Ltd.

Sino-foreign joint

venture Dalian Asahi Hideehiko Manufacturing

JPY

1,800,000,000 49% 49% 232,093,346.52 74,422,603.94 157,670,742.58 263,339,407.85 14,707,451.37

10

Dalian Sanyo

High-Efficient

Refrigeration System

Co., Ltd.

Sino-foreign joint

venture Dalian Wangjian Manufacturing

RMB

80,000,000 25% 25% 110,660,764.17 22,545,506.12 88,115,258.05 137,778,380.48 1,079,786.43


66

11 Long-term equity investments

No. Name Calculation

method Initial cost

Beginning

balance Changes Ending balance

Sharehold

ing Voting right

Provision for

impairment

Provision for

impairment of the

current period

Cash dividend

of the current

period

1

Dalian Bingshan – P&A

Recreation Development


Equity

method 1,034,675.00 3,229,074.38 245,079.00 3,474,153.38 50 50

2

Dalian Jiale Vending Machine

Operation Co., Ltd.

Equity

method 18,750,000.00 14,668,101.42 -334,917.83 14,333,183.59 50 50

3

Dalian Bingshan Engineering

&Trading Co.,Ltd.

Equity

method 1,200,000.00 12,435,737.30 702,343.62 13,138,080.92 24 24 6,000,000.00

4

Dalian Grand Ocean Thermo

King Transport Refrigeration

Engineering Co., Ltd

Equity

method 2,871,708.00 2,154,532.01 -2,154,532.01 40 40

5

Dalian Sanyo Refrigeration Co.,

Ltd.

Equity

method 85,416,929.20 151,488,491.18 -551,368.05 150,937,123.13 40 40 4,800,000.00

6

Dalian Honjo Chemical Co.,

Ltd.

Equity

method 3,908,911.50 9,398,455.84 54,517.38 9,452,973.22 30 30 1,197,604.02

7

Dalian Sanyo Cold-chain Co.,

Ltd

Equity

method 134,658,753.75 216,645,866.64 -933,858.60 215,712,008.04 40 40 8,000,000.00

8

Keinin-Grand Ocean Thermal

Technology (Dalian) Co., Ltd.

Equity

method 24,402,234.58 41,365,239.20 -961,810.43 40,403,428.77 20 20 10,800,000.00

9

Dalian Sanyo Compressor Co.,

Ltd.

Equity

method 176,953,841.88 348,546,951.11 36,934,779.52 385,481,730.63 40 40 24,400,000.00

10

Dalian Sanyo Meica


Equity

method 9,649,590.00 27,308,958.46 -3,935,565.30 23,373,393.16 30 30 1,500,000.00

11

MHI Bingshan

Refrigeration (Dalian)

Co.,Ltd.

Sino-foreign joint

venture Dalian Xiao Yongqin Manufacturing

RMB

80,000,000 45% 45% 50,000,000.00 50,000,000.00


67


method Initial cost

Beginning


Sharehold

ing Voting right

Provision for

impairment

Provision for

impairment of the

current period

Cash dividend

of the current

period

11

MHI Bingshan Refrigeration

(Dalian) Co.,Ltd.

Equity

method 22,500,000.00 22,500,000.00 22,500,000.00 45 45

13

Beijing Huashang Bingshan

Refrigeration and

Air-conditioning Machinery Co.,

Ltd.

Equity

method 490,000.00 905,958.67 269,098.06 1,175,056.73 49 49

14

Dalian Fuji Bingshan Vending

Machine Co., Ltd.

Equity

method 66,416,364.00 70,052,012.69 7,206,651.17 77,258,663.86 49 49

15

Daliian Sanyo High-Efficient

Refrigeration System Co., Ltd.

Equity

method 20,000,000.00 21,758,867.90 269,946.61 22,028,814.51 25 25

12

Dalian Sanyo Home

Appliance Co., Ltd.

Cost method 19,666,212.00 11,694,400.00 11,694,400.00 10.91 10.91 11,694,400.00

16

Zibo Electric Traction Machine

Group Co., Ltd.

Cost method 849,000.00 849,000.00 849,000.00 1.52 1.52 849,000.00

17 Liaoning Mec Group Co., Ltd. Cost method 1,020,000.00 1,020,000.00 1,020,000.00 3.57 3.57 500,000.00

18

Guotai Junan Securities Co.,

Ltd.

Cost method 30,098,895.00 30,098,895.00 30,098,895.00 0.49 0.49 1,582,164.89

19

Guotai Junan Investment

Management Co., Ltd.

Cost method 3,057,316.00 3,057,316.00 3,057,316.00 0.22 0.22 2,688,605.91

20

Thermo King Container

Temperature Control (Suzhou)

Co., Ltd.

Cost method 11,207,806.00 11,207,806.00 11,207,806.00 17.8 17.8

21

Liaoning Enterprises United

Industry Company

Cost method 105,000.00 105,000.00 105,000.00 4.2 4.2 105,000.00

22 Dalian Bingshan Group Cost method 250,000.00 250,000.00 250,000.00 5 5


68


method Initial cost

Beginning


Sharehold

ing Voting right

Provision for

impairment

Provision for

impairment of the

current period

Cash dividend

of the current

period

Materials Trading Co., Ltd.

24

Wuhan Steel and Electricity

Co., Ltd.

Cost method 1,315,142.50 1,315,142.50 1,315,142.50 0.056 0.056 33,450.00

Total 635,822,379.41 979,555,806.30 59,310,363.14 1,038,866,169.44 16,919,170.80 57,231,054.02

(1) On 11th April, 2013, the 2nd meeting of the 6th Board of the Company decided to establish the join-venture MHI Bingshan

Refrigeration (Dalian) Co., Ltd. with Japan Mitsubishi Heavy Industry Co., Ltd. The Company invested RMB 36,000,000.00

and held 45% equity. The join-venture received the investment of both investors on 22nd November, 2013, and got the Capital

Certification Report of Dalian Changde Gongzheng CPAs on 25th November, 2013.

(2) On 18th April, 2013, the 3rd meeting of the 6th Board of the Company agreed Dalian Bingshan Group Import & Export Co., Ltd.

to increase capital with its retained earnings, and the registered capital increased from RMB 5,000,000.00 to RMB

30,000,000.00. After that, the shareholding ratio was constant. On the same time, Dalian Bingshan Group Import & Export Co.,

Ltd. changed the name to Dalian Bingshan International Trading Co. , Ltd.

(3) On 29th August, 2013, Dalian Grand Ocean Thermo King Transport Refrigeration Engineering Co., Ltd which the Company

held 40% equity terminated after having been approved to cancel the registration by Dalian Administration of Industry and

Commerce.

(4) On 22nd October, 2013, the 6th meeting of the 6th Board of the Company permitted the Company and Fuji Electricity Co., Ltd.

transferring all the equity of Dalian Jiale Vending Machine Operation Co., Ltd. to the independent third party Shanghai Miyuan

Beverage Co., Ltd. respectively. At the end of current year, the transaction didn’t complete, and the Company received the

transfer price RMB15,000,000.00 in January of 2014.

12 Fixed assets

(1)Fixed assets details


addition

Current year

disposal 31-12-2013

1. Original value 929,871,205.65 30,193,356.73 46,103,473.54 913,961,088.84

Including: Buildings 320,730,626.52 7,131,233.20 2,940,817.52 324,921,042.20

Machinery 565,190,187.64 18,822,879.51 37,725,134.74 546,287,932.41

Vehicles 26,651,528.44 3,405,854.19 3,717,742.81 26,339,639.82

Other equipments 17,298,863.05 833,389.83 1,719,778.47 16,412,474.41

2. Accumulated depreciation 517,972,335.98 35,771,708.12 37,862,065.21 515,881,978.89

Including: Buildings 108,798,387.26 7,818,234.23 2,506,004.55 114,110,616.94

Machinery 380,337,233.39 25,085,223.17 30,512,027.90 374,910,428.66


69

Vehicles 15,471,089.70 1,959,638.35 3,254,497.25 14,176,230.80

Other Equipments 13,365,625.63 908,612.37 1,589,535.51 12,684,702.49

3.Net book value 411,898,869.67 398,079,109.95

Including: Buildings 211,932,239.26 210,810,425.26

Machinery 184,852,954.25 171,377,503.75

Vehicles 11,180,438.74 12,163,409.02

Other Equipments 3,933,237.42 3,727,771.92

4.Provision for impairment 6,924,986.25 2,812,966.25

Including: Buildings

Machinery 6,924,986.25 2,812,966.25

Vehicles

Other Equipments

5.Fixed assets net 404,973,883.42 395,266,143.70

Including: Buildings 211,932,239.26 210,810,425.26

Machinery 177,927,968.00 168,564,537.50

Vehicles 11,180,438.74 12,163,409.02

Other Equipments 3,933,237.42 3,727,771.92

(2)All the accumulated depreciation increased during the current period was depreciation of the current period.

(3) The original value of fixed assets RMB19,054,863.28 transferred from construction in progress during 2013.

(4)There were no idle fixed assets during the current period.

(5) There were no leased fixed assets during the current period.

(6) Wuhan New World Refrigeration Industrial Co., Ltd. borrowed RMB37,500,000 from bank and mortgaged with its buildings and

land-use-rights with total book value RMB136,039,261.45 which included book value of buildings RMB79,563,491.45.

(7) Fixed assets without owner’s certificates

Items Reasons Expected finished time

New foundry workshop and office building Handling

Workshop of Dalian Bingshan Air-Conditioning

Equipment Co., Ltd. Less some documents

Departments from debts reconstruction Less some documents


70

13 Project in construction

Names of

projects Budget 31-12-2012

Increased during

current year

Decreased during

current year 31-12-2013 Sources of funds

Percentage of

completion

Buildings 72,420,254.37 5,442,698.22 66,977,556.15 Internally

generated funds

Machinery 1,304,951.56 13,792,480.43 13,612,165.06 1,485,266.93 Internally

generated funds

Total 1,304,951.56 86,212,734.80 19,054,863.28 68,462,823.08

(1) No interests capitalized during the current period.

(2) The amount of construction in progress RMB19,054,863.28 was transferred to fixed assets during the current period.

14 Intangible assets

(1) Intangible assets details

Items 31-12-2012 Increased during

current year

Decreased during

current year 31-12-2013

1.Original cost

Land-use-rights 186,624,687.38 10,120,288.85 176,504,398.53

Non-patented technology 515,224.41 515,224.41

Others 6,473,020.63 499,080.88 6,972,101.51

Total 193,612,932.42 499,080.88 10,120,288.85 183,991,724.45

2.Amortization

Land use rights 24,893,168.33 3,681,891.88 3,238,492.02 25,336,568.19

Non-patented technology 515,224.41 515,224.41

Others 2,410,498.53 539,202.81 2,949,701.34

Total 27,818,891.27 4,221,094.69 3,238,492.02 28,801,493.94

3. .Net book value

Land-use-rights 161,731,519.05 151,167,830.34

Non-patented technology

Others 4,062,522.10 4,022,400.17

Total 165,794,041.15 155,190,230.51

4.Provision for the

impairment

Land-use-rights


Others


71


current year

Decreased during


Total

5. .Net value

Land-use-rights 161,731,519.05 151,167,830.34


Others 4,062,522.10 4,022,400.17

Total 165,794,041.15 155,190,230.51

(2) The intangible assets amortized RMB4,221,094.69 during the current year.

(3) Please refer to the Ⅴ18 of the notes for land-use-rights mortgaged.

15 Long-term deferred expenses


current year Amortize during

current year Others 31-12-2013

Employee’s dormitory use right 2,981,518.62 138,478.32 2,843,040.30

Renovation and rebuilding 1,105,696.84 178,689.38 927,007.46

Inspection services 145,521.99 13,820.04 131,701.95

Total 2,981,518.62 1,251,218.83 330,987.74 3,901,749.71

16 Deferred tax assets/Deferred tax liabilities

(1) Confirmed Deferred tax assets

Items 31-12-2013 31-12-2012

Deferred tax assets

Provision for bad debts 14,350,578.95 13,301,546.04

Provision for obsolete inventory 4,415,198.69 2,890,009.89

Impairment provision of fixed assets 703,241.56 1,731,246.56

Total 19,469,019.20 17,922,802.49

(2) Unconfirmed Deferred tax assets

Items 31-12-2013 31-12-2012

Provision for impairment 16,919,170.80 16,919,170.80

Provision for bad debts 39,739,180.37 39,710,078.58

Total 56,658,351.17 56,629,249.38


72

(3)Temporary differences

Items 31-12-2013

Provision for impairment 86,914,303.24

Total 86,914,303.24

17 Provision for impairment

Decreased during current year


current year Reversal Written off

31-12-2013

Bad debts provision 99,980,086.67 10,512,527.10 4,427,800.84 106,064,812.93

Provision for obsolete inventories 11,560,039.58 8,591,062.66 2,375,397.81 17,775,704.43

Provision for the impairment of long-term equity

investments 16,919,170.80 16,919,170.80

Provision for the impairment of fixed assets 6,924,986.25 4,112,020.00 2,812,966.25

Total 135,384,283.30 19,103,589.76 10,915,218.65 143,572,654.41

18 Short-term loans

Terms of loans 31-12-2013 31-12-2012

Credit loan

Mortgage loan 37,500,000.00 29,500,000.00

Total 37,500,000.00 29,500,000.00

(1) Wuhan New World Refrigeration Industrial Co., Ltd. borrowed short-term loan RMB37,500,000 from bank and mortgaged with

its buildings and land-use-rights.

(2)There was no short-term loan due to pay at the end of year 2013.

19 Notes payable

Items 31-12-2013 31-12-2012

Bank acceptance notes 47,070,444.13 75,452,028.38

Trade acceptance notes 33,223,071.04 3,675,095.82

Total 80,293,515.17 79,127,124.20

(1)The amount of notes payable RMB80,293,515.17 will due to pay during year 2013.

(2)The amount of notes payable due to related companies is RMB13,071,412.17, 16.28% of total accounts payable. Please refer to

the Ⅵ 7 of the notes.


73

20Accounts payable

Ages 31-12-2013 31-12-2012

Within 1 year 413,250,580.87 397,641,695.13

1 to 2 years 25,101,084.59 20,899,378.69

2 to 3 years 10,862,165.41 11,693,523.33

3 to 4 years 10,007,609.12 1,415,896.19

4 to 5 years 1,145,059.67 690,783.07

Over 5 years 4,496,765.35 4,379,062.79

Total 464,863,265.01 436,720,339.20

(1) No amount due to the shareholders holding over 5% (including 5%) of the equity of the Company existed in the balance of

accounts payable at the end of the current year.

(2) The amount of accounts payable due to related companies is RMB22,466,425.76, 4.83 % of total accounts payable. Please refer to

the Ⅵ 7 of the notes.

(3) There was no big amount among the accounts payable aged more than 1 year.

21 Accounts received in advance

Ages 31-12-2013 31-12-2012

Within1 year 147,136,295.71 207,173,680.69

1 to 2 years 16,796,570.29 48,059,518.74

2 to 3 years 5,369,183.13 8,520,448.19

3 to 4 years 4,955,873.83 23,137,733.83

4 to 5 years 1,815,734.25 1,038,356.88

Over 5 years 1,164,731.78 111,374.90

Total 177,238,388.99 288,041,113.23

(1)There were no accounts due to the shareholders holding over 5% (including 5%) of the equity of the Company existed in the

balance of accounts received in advance at the end of the current year.

(2) The amount of accounts received in advance due to related companies is RMB4,215,236.76, 2.38% of total accounts received in

advance. Please refer to the Ⅵ 7 of the notes.

(3)Most of the amount of accounts received in advance aged more than one year was unsettled contract payments on serial

refrigeration equipments.


74

22 Employees’ compensation payable


current year

Decreased during


1.Wages and salaries, bonuses, allowances and

subsidies 36,136,166.83 175,928,791.65 187,792,546.91 24,272,411.57

2.Staff welfare 22,485,421.91 10,543,993.84 8,316,553.38 24,712,862.37

3.Social insurance 2,026,248.32 45,556,058.10 45,942,439.67 1,639,866.75

Including： ①Medical insurance 83,383.81 10,306,235.64 10,389,619.45

②Retirement pension 208,241.44 25,413,647.13 25,621,888.57

③Unemployment insurance 138,073.65 2,538,014.52 2,676,088.17

④injury insurance premium 13,533.71 1,095,672.73 1,109,206.44

⑤Pregnancy insurance 8,328.46 769,097.78 777,426.24

⑥Housing subsidies 1,574,687.25 1,639,866.75 1,574,687.25 1,639,866.75

⑦Heating fees 3,793,523.55 3,793,523.55

4. Housing funds 1,968,300.54 16,049,555.24 15,973,002.36 2,044,853.42

5.Labor union fee and employee education fee 1,768,613.37 3,387,226.00 4,245,802.46

6.Non-currency welfare 778,631.44 778,631.44

7. Redemption for terminations of labor contract 191,844.72 191,844.72

8.Others

Total 64,384,750.97 252,436,100.99 263,240,820.94 53,580,031.02

(1) There was no amount delay paid at the end of the current year.

(2) The labor union fee and employee education fee occurred RMB3,387,226.00, and the non-currency welfare occurred

RMB778,631.44, and the redemption for terminations of labor contract occurred RMB191,844.72 during the current year.

(3) The ending balance amount of staff welfare was that the subsidiaries took out according to their board meeting resolutions,

which including Dalian Bingshan Air-Conditioning Equipment Co. Ltd., and Dalian Bingshan Metal Processing Co., Ltd., and

Dalian Bingshan Guardian Automation Co., Ltd. and Wuhan New World Refrigeration Industrial Co., Ltd.

23 Taxes payable

Items 31-12-2013 31-12-2012

Value-added tax 2,725,964.48 -5,138,920.13

Business tax 1,890,363.25 1,335,280.85

City maintenance and construction tax 531,714.02 198,984.65

Enterprise income tax 14,915,676.15 3,269,786.14


75

Individual income tax 717,852.43 382,023.46

Stamp duty 44,629.25 33,096.69

Extra-charges for education 285,986.48 110,893.05

Water project fund/River route maintenance fee 547,873.15 427,516.11

Safeguard fund for disables 420.00 420.00

Prices regulated fund 28,920.27 1,098.84

Land use tax 434,549.74

Building taxes 373,581.64

Total 22,497,530.86 620,179.66

24 Dividend payable

Name of investors 31-12-2013 31-12-2012

Legal person shareholders 2,053,911.36 533,156.00

Total 2,053,911.36 533,156.00

The amount due to the shareholders holding over 5% (including 5%) of the equity of the Company in the balance of dividend

payable at the end of the current year was RMB950,000.00 and RMB570,755.36 which payable to Dalian Bingshan Group Co., Ltd.

and Sanyo Electric Co., Ltd. respectively.

25 Other accounts payable

Ages 31-12-2013 31-12-2012

Within 1 year 29,586,977.60 28,634,478.69

1 to 2 years 3,640,918.43 5,340,619.53

2 to 3 years 2,003,306.90 3,322,905.85

3 to 4 years 2,981,861.66 2,563,202.17

4 to 5 years 2,416,554.17 1,845,733.04

Over 5 years 11,299,745.27 11,729,024.79

Total 51,929,364.03 53,435,964.07

(1)There were RMB10,332,829.67 due to the shareholders holding over 5% (including 5%) of the equity of the Company ---Dalian

Bingshan Group Co., Ltd., and mainly because subsidiary company borrowed for moving to new location.

(2) The amount of other accounts payable due to related companies is RMB10,565,329.49, 20.35% of total other accounts payable.

Please refer to the VI7 of the notes.

(3) Most of the amount of other accounts payable aged more than one year was owed to Dalian Bingshan Group Co., Ltd.

(4) Top 5 on amount of other accounts payable

Name of investors 31-12-2013 Reasons Notes

Dalian Bingshan Group Co., Ltd. 10,332,829.67 Borrowed for moving to new location


76

26 Other current liabilities

Items 31-12-2013 31-12-2012 Note

Contribution to subsidiary company relocation 1,114,000.00 1,114,000.00

Subsidy fund for highly effective heat pump and related system 585,101.00 585,101.00

The deferred income

average amortized during

the use life of related

assets.

Total 1,699,101.00 1,699,101.00

The ending balance of deferred income of the current year will be converted to income during year 2014.

27 Other non-current liabilities —Deferred income

Items 31-12-2013 31-12-2012

Subsidy fund for big screw refrigeration research project 6,688,918.19

Subsidy fund for highly effective heat pump and related system 4,289,394.00 4,874,495.00

Contribution to subsidiary company relocation 46,788,000.00 47,902,000.00

Big capacity of sea water pre-freeze project of Project 863 15,549,945.60 13,809,945.60

Total 66,627,339.60 73,275,358.79

The balance of above items didn’t meet the conditions being converted to income at the end of year 2013.

28 Share capitals

Items 31-12-2012 Issuance of

new shares

Shares converted

from reserve Others 31-12-2013

I. Non-circulating share capital with restricted

trade conditions

1. State-owned shares

2. Shares held by domestic legal persons

3. Other domestic shares 19,306,034.00 -84,508.00 19,221,526.00

Including: Shares held by domestic natural

person 92,113.00 -84,508.00 7,605.00

II. Circulating share capital

1. Domestically listed ordinary shares

(A-share) 215,708,941.00 84,508.00 215,793,449.00

2. Domestically listed ordinary shares

(B-share) 115,000,000.00 115,000,000.00

III. Total 350,014,975.00 350,014,975.00

The non-circulating share capital of Dalian Bingshan Group Co., Ltd. circulated on January 21, 2011, but Dalian Bingshan Group Co.,

Ltd. declared that these shares would not be listed to sell in the Shenzhen Stock Exchange within 60 months after the circulating date.


77

Base on the promise, the Company will apply to unlock these shares until the Company practices management equity incentive.

29 Capital surpluses

Items 31-12-2012 Increased during current

year

Decreased during


Capital premium

(1)Capital premium 513,645,432.79 513,645,432.79

(2)Others 1,534,544.19 9,000.00 1,543,544.19

Other capital surplus

(1) portion of associated

companies’ capital surplus reserves 2,783,286.72 2,783,286.72

(2) Others 66,889,019.51 66,889,019.51

Total 584,852,283.21 9,000.00 584,861,283.21

30 Surplus reserves

Item 31-12-2012 Increased during current year Decreased during current year 31-12-2013

Statutory surplus reserves 246,953,104.61 14,532,842.39 261,485,947.00

Other reserved capital 222,712,778.72 21,334,339.53 244,047,118.25

Total 469,665,883.33 35,867,181.92 505,533,065.25

The increase of the surplus reserves were because the statutory reserved capital RMB14,532,842.39 was withdrawn respectively on

the basis of 10% of the Company’s net profit of year 2013 and the other reserved capital RMB21,334,339.53was withdrawn on the

basis of 20% of the Company’s net profit of 2012 according to the resolution of the General Meeting of Shareholders of year 2013.

31 Retained earnings

Items 2013 Extraction or allocation proportion

Retained earnings at the end of prior year 404,267,596.17

Add: Changes in accounting policies

At beginning of the year after retrospective adjustment 404,267,596.17

Add: Net profit of the current period 153,006,057.13

Less: Appropriation of statutory surplus reserves 14,532,842.39 10% of net profit of parent company

Appropriation of other reserved capital 21,334,339.53 20% of net profit of year 2012

Cash dividends 52,502,246.25 RMB 0.15 per share of year 2012

Dividends transferred to share capital

Appropriation of employee’s welfare and bonus fund in foreign

invested company 2,295,358.13

Retained earnings at the end of the current year 466,608,867.00


78

32 Total operating income and operating cost

(1) Total operating income and cost

Items 2013 2012

Key business income 1,517,271,251.60 1,500,369,887.23

Other business income 18,435,659.65 21,609,378.92

Key business cost 1,149,272,794.08 1,125,582,427.92

Other business cost 17,728,208.67 22,563,315.47

(2) Key business (Type)

2013 2012 Name of type

Revenue Cost Revenue Cost

Manufacturing 1,517,271,251.60 1,149,272,794.08 1,500,369,887.23 1,125,582,427.92

(3) Key business (Product)

2013 2012 Name of product


Refrigeration equipments 1,517,271,251.60 1,149,272,794.08 1,500,369,887.23 1,125,582,427.92

(4) Key business (Region)

2013 2012 Regions


North-east of China 1,115,911,862.44 850,325,789.22 1,082,470,156.02 810,884,866.15

East of China 31,406,876.77 25,784,728.39 32,811,751.62 30,833,469.32

Central of China 369,952,512.39 273,162,276.47 385,087,979.59 283,864,092.45

Total 1,517,271,251.60 1,149,272,794.08 1,500,369,887.23 1,125,582,427.92

(5) Top five customers

Names Revenue Percentage of total business income

Dalian Bingshan Engineering &Trading Co., Ltd. 91,804,457.91 5.98

Chengdu New World Refrigeration Equipment Engineering Co., Ltd. 26,247,162.22 1.71

The Yellow Sea Ship Building Co., Ltd. 26,106,390.19 1.70

The People's Liberation Army 63820 Troops 23,931,623.95 1.56

Dalian Sanyo Cold-chain Co., Ltd. 20,836,908.95 1.36

Total 188,926,543.22 12.31


79

33 Taxes and surcharges

Items 2013 2012 Basis of taxes calculated

Business tax 1,620,199.26 1,618,429.52 3% or 5% of Revenue

City maintenance and construction tax 6,943,068.86 4,925,750.13 7% of Business tax and Value-added tax

Additional education fees 2,809,809.19 2,254,048.27 3% of Business tax and Value-added tax

Local educational fees 1,769,485.46 1,472,859.06 2% of Business tax and Value-added tax

Fees for dikes protection 253,132.56 205,022.98

Others 1,658.60

Total 13,395,695.33 10,477,768.56

34 Selling and distribution expenses

Items 2013 2012

Handle official business expenses 10,995,574.34 10,429,190.04

Salaries and subsidies 43,671,276.16 48,656,810.22

Depreciation expenses 534,867.59 571,857.80

Transportations expenses 18,329,442.69 15,946,248.74

Entertainment expenses 15,232,708.03 12,922,965.34

Traveling expenses 22,658,477.21 21,682,038.78

Maintenance and repair expenses 7,012,387.41 8,968,857.75

Advertise and bids expenses 1,157,448.96 712,713.99

Others 628,458.37 529,656.52

Total 120,220,640.76 120,420,339.18

35 Administrative expenses

Items 2013 2012

Handle official business expenses 17,930,227.98 15,556,062.72

Salaries and subsidies 98,199,562.43 105,318,386.75

Depreciation expenses 6,941,443.83 6,886,241.87

Transportations expenses 449,579.80 956,992.18

Entertainment expenses 5,063,935.14 4,512,282.74

Traveling expenses 5,720,931.13 5,030,251.20

Maintenance and repair expenses 5,488,204.42 5,257,370.54

Advertise expenses 590,472.83 683,411.08

Other taxes 10,784,752.67 8,981,685.29

Insurance expenses 3,404,042.46 2,911,875.37

Research and development expenses 16,543,061.97 16,580,048.22


80

Amortization of long term assets 4,358,271.30 4,279,400.88

Design consultant and test service expenses 692,855.48 3,909,650.12

Others 2,247,458.06 3,430,865.74

Total 178,414,799.50 184,294,524.70

36 Financial expenses

Items 2013 2012

Interest expenses 3,486,491.68 2,020,041.16

Less: interest income 9,713,153.86 6,754,743.27

Losses on exchange(Less: gain on exchange) -43,918.61 69,190.54

Other expenses 437,974.58 424,492.55

Total -5,832,606.21 -4,241,019.02

37 Gain/ (loss) from investment

(1) Details

Items 2013 2012

Calculated by cost method 533,450.00 39,025.00

Calculated by equity method 90,138,921.23 90,901,193.46

Gain from disposal financial assets available for sale

Gain from disposal associated company -2,130,588.28 -22,452,531.35

Total 88,541,782.95 68,487,687.11

(2) Calculated by cost method（more than 5% of profit）

Names 2013 2012 Reason of changes

Wuhan Steel and Electricity Co., Ltd. 33,450.00 39,025.00 Profit distribution

Liaoning Mec Group Co., Ltd. 500,000.00 Profit distribution

Total 533,450.00 39,025.00

(3) Calculated by equity method（more than 5% of profit）

Names 2013 2012 Reason of changes

Dalian Sanyo Cold-chain Co., Ltd 14,500,067.70

Grand Ocean-Showa Auto Air Conditioning (Dalian) Co., Ltd. 9,838,189.57 12,119,696.25 Decrease of business profit

Dalian Sanyo Compressor Co., Ltd. 61,334,779.52 45,399,199.71 Increase of business profit

Dalian Fuji Bingshan Vending Machine Co., Ltd. 10,997,312.10

Total 71,172,969.09 83,016,275.76

(4)There was no severe constrict on the collection of the investment earnings.


81

38 Impairment losses

Items 2013 2012

Bad debt provision 9,990,751.21 15,453,003.02

Provision for obsolete inventories 8,591,062.66 -1,106.22

Provision for the impairment of available-for-sale financial assets

Provision for the impairment of held to maturity investments

Provision for the impairment of long-term equity investments

Provision for the impairment of investing property

Provision for the impairment of fixed assets

Provision for the impairment of construction materials

Provision for the impairment of construction in progress

Provision for the impairment of bearer biological assets

Provision for the impairment of oil assets

Provision for the impairment of intangible assets

Provision for the impairment of goodwill

Provision for the impairment of other assets

Total 18,581,813.87 15,451,896.80

39 Non-business incomes

(1)Details

Items 2013 2012 Non-recurring losses of current period

Gain on the disposal of non-current assets 42,478,670.13 287,957.48 42,478,670.13

Penalty and fine income 224,978.40 169,348.00 224,978.40

Subsidy fund from government 2,681,117.07 3,201,518.64 1,507,483.45

Deferred income 8,388,019.19 13,177,896.96 6,688,918.19

Debts need not paid 1,212,570.63 1,019,739.52 1,212,570.63

Others 80,007.30 9,533.75 80,007.30

Total 55,065,362.72 17,865,994.35 52,192,628.10

(2) Subsidy fund from government

Items 2013 2012 Explanations

Subsidy for information construction from Dalian Municipal

Bureau of Finance 150,000.00 Related to gain

Aid for patent from Dalian Intellectual Property Service Centre 1,500.00 Related to gain

Subsidy of economic support policy 20,300.00 Related to gain


82

Items 2013 2012 Explanations

Subsidy for social security 268,554.84 Related to gain

Subsidy for circular economy project 150,000.00 Related to gain

Award for QC team 3,000.00 Related to gain

Aid for patent from Wuhan Intellectual Property Bureau 6,700.00 Related to gain

Subsidy and award for patent 200,000.00 Related to gain

Mayor’s Quality Award 3,000.00 Related to gain

Financial incentive award for increasing production and sales 305,000.00 Related to gain

Subsidy for science and technology development 100,000.00 Related to gain

Subsidy for small and medium-sized enterprises exploiting

international market 10,500.00 Related to gain

Others 2,081,062.23 2,583,018.64 Related to gain

Total 2,681,117.07 3,201,518.64

40 Non-business expenses

Items 2013 2012 Non-recurring losses of current period

Loss on the disposal of non-current assets 2,391,111.76 397,868.21 2,391,111.76

Fines and penalties 223,561.51 37,467.63 223,561.51

Others 172,882.63 63,382.04 172,882.63

Total 2,787,555.90 498,717.88 2,787,555.90

41 Income tax expenses

Items 2013 2012

Current income tax expense 27,329,745.66 9,914,116.91

Deferred income tax expense -1,546,216.71 -2,673,681.99

Total 25,783,528.95 7,240,434.92

42 Basic earnings per share and diluted earnings per share calculation process

(1) Earnings per share

2013 2012 Items

Basic EPS Diluted EPS Basic EPS Diluted EPS

Profit or loss attributable to the Company 0.44 0.44 0.33 0.33

Profit or loss after deducting extraordinary gain or loss

attributable to the Company 0.35 0.35 0.35 0.35

(2)Calculation of basic earnings per share


83

Items No. 2013 2012

Profit or loss attributable to the Company 1 153,006,057.13 117,142,066.15

Profit or loss after deducting extraordinary gain or loss attributable to the Company 2 121,207,821.52 123,788,117.10

the weighted average number of ordinary shares outstanding during the period(So) 3=4+5+6*10/9-7*11/9-8 350,014,975 350,014,975

the number of ordinary shares at the beginning of the period(S0) 4 350,014,975 350,014,975

the number of additional ordinary shares issued on capital surplus transfer or share dividends

appropriation(S1) 5

the number of ordinary shares issued in exchange for cash or issued as a result of the conversion

of a debt instrument to ordinary shares during the period(Si) 6

reduced number of ordinary shares such as shares buy back(Sj) 7

the number of a reverse share split(Sk) 8

the months during the period(Mo) 9 12 12

the months from the following month after issuing incremental shares to the end of the

period(Mi) 10

the months from the following month after reducing shares to the end of the period(Mj) 11

Basic earnings per share 12=1/3 0.44 0.33

Basic earnings per share deducting extraordinary gain or loss 13=2/3 0.35 0.35

(3) For the diluted potential ordinary shares, the net profits attributed to ordinary shareholders during the reporting term and the

weighted average number of outstanding ordinary shares should be adjusted separately, and it shall be used to calculate the diluted

earnings per share. Under the circumstances to issue the diluted potential ordinary shares such as convertible bonds, stock options,

stock warrants, the diluted earnings per share shall be calculated in the light of the formula as follow: Diluted Earnings Per Share

=P1/(S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0–Sk+ The weighted average number of incremental ordinary shares on warrants, options,

convertible debt and so on）P1represents the amounts attributable to ordinary equity holders of the Company in respect of: (a) Profit

or loss attributable to the Company; and (b) Profit or loss after deducting extraordinary gain or loss attributable to the Company,

adjust according to the accounting standards for enterprises and other relevant provisions. The Company considered in sequence from

dilutive potential ordinary shares to get the lowest earnings per share.

43 Other comprehensive income

Items 2013 2012

1、Gain/(loss)on financial assets available for sale

Less: Income tax infection on financial assets available for sale

Net amount transferred into profit and loss at current period that reckon into other

comprehensive income at former period

Subtotal

2、Net amount of comprehensive income of invested company belonging to the company 33,750.41

Less: Income tax infection

Net amount transferred into profit and loss at current period that reckon into other 1,514,016.77


84

Items 2013 2012


Subtotal -1,480,266.36

3.Others 12,000.00

Less: Income tax infection 3,000.00

Net amount transferred into profit and loss at current period that reckon into other


Subtotal 9,000.00

Total 9,000.00 -1,480,266.36

Other comprehensive income of the current period was a van contributed by Dalian Bingshan Group Co., Ltd.

44 Relevant information about cash flow statement

(1) Other cash received relating to operating activities

Items 2013

Government grants 601,886.86

Received travel expense receivable 144,151.92

Deposit received 12,487,300.47

Received amount paid on behalf of related companies 491,705.07

interest income 6,387,003.45

Others 652,608.03

Total 20,764,655.80

(2) Other cash paid relating to operating activities

Items 2013

Borrowing of travel expense 1,910,956.05

Deposit paid 18,589,434.86

Expenditure 105,925,234.58

Bank handling charges 435,970.84

Others 2,568,790.16

Total 129,430,386.49

(3) Other cash paid relating to financing activities

Items 2013

Interests on discount of bill acceptance 28,496.45

Total 28,496.45


85

45 Complementary information for consolidated cash flow statement

(1) The relationship between the net profit and the net cash flows from operating activities

Item 2013 2012

1. Reconciliation from the net profit to the cash flows from operating activities

Net profit 158,961,626.07 126,044,541.20

Add: Provisions for assets impairment 18,581,813.87 15,451,896.80

Depreciation of fixed assets 35,771,708.12 32,392,644.09

Amortization of intangible assets 4,221,094.69 4,153,582.56

Amortization of long-term deferred expenses 330,987.74 138,478.32

Losses on disposal of fixed assets, intangible assets and other long-term assets -39,296,435.28 22,627,350.39

Losses on scrapping of fixed assets 1,339,465.19 -64,908.31

Losses on variation of fair value

Finance expenses 3,442,573.07 1,920,314.53

Investment losses -90,672,371.23 -90,940,218.46

Decrease in deferred tax assets -1,546,216.71 -2,673,681.99

Increase in deferred tax liabilities

Decrease in inventory 67,628,044.19 27,869,321.85

Decrease in operating receivables -64,778,163.84 34,539,921.59

Increase in operating payables -86,353,669.44 -238,320,128.55

Others

Net cash flows from operating activities 7,630,456.44 -66,860,885.98

2. Investing and financing activities that do not involve cash receipts and payments

Conversion of debt into capital

Convertible bonds to be expired within one year

Fixed assets under finance lease

3. Net increase in cash and cash equivalents

Cash at the end of the period 502,339,160.35 525,818,735.46

Less: Cash at the beginning of the period 525,818,735.46 681,077,489.30

Plus: Cash equivalents at the end of the period

Less: Cash equivalents at the beginning of the period

Net increase in cash and cash equivalents -23,479,575.11 -155,258,753.84

(2) Cash and cash equivalents

Item 2013 2012

1.Cash 502,339,160.35 525,818,735.46

Including: cash on hand 99,455.92 195,378.55

Bank deposits that can be used for payment whenever necessary 492,056,269.04 523,052,983.91

Other monetary capital that can be used for payment whenever necessary 10,183,435.39 2,570,373.00

2.Cash equivalents

Including: Bonds mature within 3 months

3.Balance of cash and cash equivalents at the end of the year 502,339,160.35 525,818,735.46


86

Including: Cash or cash equivalents which was restricted in use of the Company and subsidiaries in the group

Ⅵ.Related Parties Relationships and Transactions

1 Information of the Company’s parent company

Name of

enterprise

Principal

activities

Nature of

enterprise

Registered

address

Legal

representative

person

Nature of

business Registered capital

The parent

company's

shareholding

The parent

company's

voting right

The ultimate

controlling

party of the

Company

Organization

Code

Dalian

Bingshan

Group Co.,

Ltd.

Installation

and

manufactory

of

refrigeration

equipment

Limited

liabilities

company

Dalian Homma

Tetsuro Manufacture 140,600,000.00 21.96% 21.96%

SASAC of

Dalian 24129179-3

2The information of the subsidiaries please refers to Ⅳ.1 of this note.

3 The information of the affiliated company and joint venture please refers toⅤ.10 of this note.

4 Other type of the related parties

Names of the related parties Relationships with the Company Organization Code

Dalian Bingshan Group Refrigeration Equipment Co., Ltd. Subsidiary of Dalian Bingshan Group 11857056-X

Dalian Third Refrigeration Equipment Factory Subsidiary of Dalian Bingshan Group 11853975-7

Beijing Bingshan Serial Refrigeration Equipment Co., Ltd. Subsidiary of Dalian Bingshan Group 80139721-2

Dalian Bingshan Group Materials Trading Co. , Ltd Subsidiary of Dalian Bingshan Group 74437418-7

Dalian Spindle Cooling Towers Co., Ltd. Affiliated company of Dalian Bingshan Group 60487379-3

Dalian Bingshan Metal Technology Co., Ltd. Affiliated company of Dalian Bingshan Group 76077536-X

Dalian Mahe Level Control Electrical Appliances Co., Ltd. Affiliated company of Dalian Bingshan Group 60486775-6

Linde Engineering (Dalian) Co., Ltd. Affiliated company of Dalian Bingshan Group 77301721-8

BAC Dalian Co., Ltd. Joint venture of Dalian Bingshan Group 60492102-X

Linde Engineering (Hangzhou) Co., Ltd. Affiliated company of Dalian Bingshan Group 77356588-X

5 The transactions between the Company and the related parties

(1) The consolidated financial statements are based on the financial statements of individual subsidiaries which are included in the consolidation scope and prepared after elimination effect of intra-group transaction.


87

(2) Purchases of goods from related parties

2013 2012

Names of the related parties Items Details of

transaction

Rule of

price setting Amount

Proportion of the

same type

transaction amount

(%)

Amount

Proportion of the

same type

transaction amount

(%)

Dalian Sanyo Refrigeration Co., Ltd. Purchases Purchases of

goods Market price 2,569,876.37 0.25 980,638.27 0.11

Dalian Sanyo Cold-chain Co., Ltd Purchases Purchases of

goods Market price 16,055,020.56 1.55 14,283,670.08 1.55

Dalian Sanyo Compressor Co., Ltd. Purchases Purchases of


Dalian Sanyo Meica Electronics

Co., Ltd. Purchases

Purchases of

goods Market price 213,529.88 0.02 630,695.93 0.07

Dalian Bingshan Group Refrigeration

Equipment Co., Ltd. Purchases

Purchases of


Dalian Third Refrigeration Equipment

Factory Purchases

Purchases of


Dalian Spindle Cooling Towers Co.,

Ltd. Purchases

Purchases of

goods Market price 505,726.50 0.05 1,142,564.14 0.12

BAC Dalian Co., Ltd. Purchases Purchases of


Dalian Bingshan Engineering &

Trading Co. , Ltd Purchases

Purchases of


Dalian Bingshan Group Materials

Trading Co. , Ltd Purchases

Purchases of


Dalian Bingshan Metal Technology

Co., Ltd. Purchases

Purchases of


Daliian Sanyo High-Efficient Refrigeration

System Co., Ltd. Purchases

Purchases of

goods Market price 1,685,099.52 0.16

(3) Sales of goods to related parties

2013 2012

Names of the related parties Item Details of

transaction

Rule of


Proportion of the

same type

transaction amount

(%)

Amount

Proportion of the

same type

transaction amount

(%)

Dalian Sanyo Refrigeration Co., Ltd. Sales Sales of


Dalian Sanyo Cold-chain Co., Ltd Sales Sales of



88

2013 2012

Names of the related parties Item Details of

transaction

Rule of


Proportion of the

same type

transaction amount

(%)

Amount

Proportion of the

same type

transaction amount

(%)

Dalian Sanyo Compressor Co., Ltd. Sales Sales of


Dalian Bingshan Group Refrigeration

Equipment Co., Ltd. Sales

Sales of


Dalian Third Refrigeration Equipment

Factory Sales

Sales of


BAC Dalian Co., Ltd. Sales Sales of

goods Market price 414,564.10 0.03 3,789,911.11 0.25

Dalian Bingshan Engineering & Trading

Co. , Ltd Sales

Sales of


Dalian Bingshan – P&A Recreation

Development Engineering Co., Ltd. Sales

Sales of


Beijing Bingshan Serial Refrigeration

Equipment Co., Ltd. Sales

Sales of

goods Market price 6,319,382.90 0.41 889,382.05 0.06

Beijing Huashang Bingshan Serial

Refrigeration Equipment Co., Ltd. Sales

Sales of


Dalian Fuji Bingshan Vending Machine

Co., Ltd. Sales

Sales of


Dalian Mahe Level Control Electrical

Appliances Co., Ltd. Sales

Sales of

goods Market price 97,701.45 0.01 15,651.60

Dalian Bingshan Metal Technology Co.,

Ltd. Sales

Sales of


Daliian Sanyo High-Efficient Refrigeration

System Co., Ltd. Sales

Sales of


(4) Leasing fee from related party

Leaser Lessee Leasing

assets

Starting date of

lease Ending date of lease Rental amount per year

The Company Dalian Bingshan Group Co., Ltd. Offices 2011.01.01 2013.12.31 95,400.00

Leasing fee to related party

Leaser Lessee Leasing

assets

Starting date of

lease Ending date of lease Rental amount per year

Dalian Bingshan Group Co., Ltd. The Company Offices 2013.01.01 2015.12.31 142,572.00

The Company signed a leasing agreement with Dalian Bingshan Group Co., Ltd., and leased 530 ㎡ of offices to Dalian Bingshan

Group Co., Ltd. The rental of offices is RMB 95,400.00 per year, and the effective period of the contract is 3 years, and the leasing


89

income is 0.52% of total other income of the current period.

The Company rent office and garage of Dalian Bingshan Group Co., Ltd., and the rental is RMB142,572.00 per year for 3 years.

(5) No guarantee with related companies.

(6) The borrowing of funds from related party

Name of the related party Amount Starting date Ending date Explanation

Dalian Bingshan Group Co., Ltd. 10,000,000.00 2006.09 Borrowed for moving to new location

The Company’s subsidiary Dalian Bingshan Ryosetsu Quick Freezing Equipment Co., Ltd. borrowed RMB 10,000,000.00 from

Dalian Bingshan Group Co., Ltd. for moving to new location, and the interests are counted same as bank loan and RMB608,333.36

paid during the current period.

7 Amounts due from/to related parties

(1) Notes receivable

Names of the related parties 31-12-2013 31-12-2012

Dalian Sanyo Compressor Co., Ltd. 426,959.02 1,210,373.56

Dalian Bingshan Group Import & Export Co. , Ltd. 8,529,233.58 11,283,246.61

BAC Dalian Co., Ltd. 300,000.00

Dalian Sanyo Cold-chain Co., Ltd. 839,091.27

Dalian Sanyo Refrigeration Co., Ltd. 521,694.49

(2) Accounts paid in advance


Dalian Sanyo Compressor Co., Ltd. 2,487.00 117,097.50

Dalian Sanyo Cold-chain Co., Ltd. 13,642.05 555.05

BAC Dalian Co., Ltd. 10,000.00 19,768.00

(3) Accounts receivable

31-12-2013 31-12-2012

Names of the related parties Amount Provision for bad debts Amount

Provision for

bad debts

Dalian Sanyo Compressor Co., Ltd. 89,378.90 4,468.94 310,500.00 15,525.00

Dalian Sanyo Refrigeration Co., Ltd. 2,419,164.85 120,958.24 2,377,058.87 118,852.94

Dalian Sanyo Cold-chain Co., Ltd. 2,365,278.44 118,263.92 2,862,481.41 143,124.07

Dalian Bingshan Engineering & Trading Co., Ltd. 2,617,143.93 130,857.20

BAC Dalian Co., Ltd. 94,500.00 4,725.00

Beijing Bingshan Serial Refrigeration Equipment Co., Ltd. 1,737,774.37 86,888.72 20,976.00 1,048.80


90

Dalian Bingshan – P&A Recreation Development Engineering Ltd. 79,457.00 3,972.85 207,707.00 10,385.35

Beijing Huashang Bingshan Refrigeration and Air-conditioning

Machinery Co., Ltd. 223,000.00 19,750.00 172,000.00 8,600.00

Dalian Fuji Bingshan Vending Machine Co., Ltd. 148,940.03 7,447.00 453,578.72 22,678.94

Dalian Sanyo High-Efficient Refrigeration System Co., Ltd. 174,023.55 8,701.18

(4) Other accounts receivable

31-12-2013 31-12-2012

Name of the related party Amount Provision for bad debts Amount

Provision for bad

debts

BAC Dalian Co., Ltd. 30,000.00 3,000.00

(5) Notes payable


Dalian Bingshan Group Refrigeration Equipment Co., Ltd. 5,072,848.40 6,500,000.00

BAC Dalian Co., Ltd. 1,000,000.00 300,000.00

Dalian Bingshan Group Materials Trading Co. , Ltd. 5,208,750.00 2,159,000.00

Dalian Third Refrigeration Equipment Factory 1,500,000.00

Dalian Bingshan Engineering & Trading Co.,Ltd 6,447.00

Dalian Bingshan Metal Technology Co., Ltd. 600,000.00

Dalian Sanyo High-Efficient Refrigeration System Co., Ltd. 289,813.77

(6) Accounts payable


Dalian Third Refrigeration Equipment Factory 1,355,621.34 436,239.54

BAC Dalian Co., Ltd. 16,862,867.00 13,504,237.95

Dalian Bingshan Group Refrigeration Equipment Co., Ltd. 98,364.00 4,534,454.95

Dalian Sanyo Refrigeration Co., Ltd. 13,000.00

Dalian Sanyo Cold-chain Co., Ltd. 9,526.00 9,516.00

Dalian Sanyo Meica Electronics Co., Ltd. 172,568.79 152,738.82

Dalian Spindle Cooling Towers Co., Ltd. 269,499.00 453,403.00

Dalian Bingshan Engineering & Trading Co., Ltd. 688,542.77 844,109.45

Dalian Sanyo Compressor Co., Ltd. 909,828.95 106,102.09

Dalian Bingshan Group Materials Trading Co. , Ltd 341,965.80 175,641.03

Dalian Bingshan Metal Technology Co., Ltd. 383,288.96 108,154.23

Dalian Sanyo High-Efficient Refrigeration System Co., Ltd. 1,374,353.15


91

(7) Accounts received in advance


Dalian Bingshan Group Refrigeration Equipment Co., Ltd. 8,415.30

Dalian Sanyo Refrigeration Co., Ltd. 2,978.85 2,007,000.00

Dalian Bingshan Engineering & Trading Co., Ltd. 2,272,607.85 755,530.40

Beijing Bingshan Serial Refrigeration Equipment Co., Ltd. 1,332,928.48

Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd. 1,936,650.06 2,710,239.92

Dalian Bingshan – P&A Recreation Development Engineering Ltd. 3,000.00

(8) Other accounts payable


Dalian Bingshan Group Co., Ltd. 10,332,829.67 10,518,303.62

Dalian Third Refrigeration Equipment Factory 1,000.00 1,000.00

Dalian Bingshan Engineering & Trading Co., Ltd. 231,499.82

Ⅶ.Contingency

1. Effect of unsettled lawsuit to the financial statements

Accuser Defendant Reason Court Target

amount Development

Tonghua Yijia

Biotechnology Food Co.,

Ltd.

Dalian Bingshan

Ryosetsu Quick Freezing

Equipment Co., Ltd.

Contract

dispute

Jilin Province

Tonghua County

people’s Court

RMB1.94mi

llion

RMB1 million of the defendant’s bank

deposit were frozen.

The lawsuit happened during the current period and was still in the process of trying when the financial statements disclosed.

2. No guarantee to other company as at the end of year 2013

3. No other contingency needed disclosed.

.Ⅷ Commitments

No major commitments to be disclosed.

.Ⅸ Post-balance sheet issues

1. Information about profit distribution after balance sheet date

Items Amount

Dividend proposed to be distributed after

balance sheet date 52,502,246.25

Dividend approved to be distributed by the board of directors after balance

sheet date 52,502,246.25


92

Board of directors proposed to withdraw the other reserved capital on the basis of 20% of the Company’s net profit and distribute

cash dividend of RMB 0.15 per share to ordinary shareholders of the Company on April 22, 2014, and the cash dividend of B

shareholders will be converted to Hong Kong dollar and paid.

Ⅹ. No other important things needed disclosed.

Ⅺ.Notes to the financial statements of the parent company

1 Accounts receivable


31-12-2013 31-12-2012


Amount Proportion

(%) Amount

Proportion

(%) Amount

Proportion

(%) Amount

Proportion

(%)

Major single

amount and bad

debt provision

provided

individually

Bad debt provided

on group basis 231,390,326.16 100 60,808,169.35 26.28 233,497,736.50 100 59,972,692.36 25.68

Minor single

amount but bad debt

provision provided

individually

Total 231,390,326.16 100 60,808,169.35 26.28 233,497,736.50 100 59,972,692.36 25.68

Accounts receivable which bad debt provisions are provided on age basis in the group

31-12-2012 31-12-2011

Ages Amount Proportion

(%) Provision for bad debts Amount

Proportion

(%) Provision for bad debts

Within1 year 98,401,447.62 42.53 4,920,072.38 93,951,629.41 40.23 4,697,581.47

1 to 2 years 54,129,047.71 23.39 5,412,904.77 59,935,567.98 25.67 5,993,556.80

2 to 3 years 27,897,517.68 12.06 8,369,255.30 22,646,684.27 9.70 6,794,005.28

3 to 4 years 10,718,514.51 4.63 5,359,257.26 23,644,344.77 10.13 11,822,172.39

4 to 5 years 17,485,595.02 7.56 13,988,476.02 13,270,668.25 5.68 10,616,534.60

Over 5 years 22,758,203.62 9.83 22,758,203.62 20,048,841.82 8.59 20,048,841.82

Total 231,390,326.16 100 60,808,169.35 233,497,736.50 100 59,972,692.36


93

(2) There is no major single amount or minor single amount but bad debt provision provided individually during the reporting period.

(3) The write-off of accounts receivable

Name of company The nature of accounts receivable Written off

amount Reasons

Occurred under

related relationship?

43Clients Sale of goods 3,723,228.30 ① No

①The reasons of accounts receivable write-off include termination of operation and disability of payment, winning lawsuits but not

finding executable assets, small balance not being collected for long time, and disagreement rework charges etc.


accounts receivable.

(5) The first five arrearage entities listed in the balance of accounts receivable at the end of 2013

Companies The relationships with

the Company Amount Ages Proportion (%)

COFCO Meat（Suqian）Co., Ltd. Non-affiliated 12,449,913.80 Less than 1 year，1-2years，

2-3years 5.38

Dalian Xinghai Bay Development and Construction

Management Centre Non-affiliated 11,242,693.00 4-5years 4.86

The People's Liberation Army 63820 Troops Non-affiliated 6,805,353.28 Less than 1 year 2.94

Inner Mongolia Hengyecheng Silicones Co., Ltd. Non-affiliated 6,400,786.65 Less than 1 year 2.77

Dalian Jinyu New Energy Technology Development Co.,

Ltd. Non-affiliated 5,500,000.00 Over 5 years 2.38

(6) Amounts due from related parties

Companies Relationships with the Company Amount Proportion (%)

Beijing Bingshan Serial Refrigeration Equipment Co., Ltd. Subsidiary of Dalian Bingshan Group 1,346,671.52 0.58

Total 1,346,671.52 0.58

2 Other accounts receivable


31-12-2013 31-12-2012


Amount Proportion

(%) Amount

Proportion

(%) Amount

Proportion

(%) Amount

Proportion

(%)

Major single amount and

bad debt provision


Bad debt provided on

group basis 14,155,569.38 100 1,332,793.72 9.42 7,139,241.12 100 1,046,519.70 14.66


94

Minor single amount but

bad debt provision


Total 14,155,569.38 100 1,332,793.72 9.42 7,139,241.12 100 1,046,519.70 14.66

The ageing of other accounts receivable and related provisions for bad debts

31-12-2013 31-12-2012 Ages

Amount Proportion (%) Provision for bad debts Amount Proportion (%) Provision for bad debts

Within1 year 12,408,490.33 87.66 620,424.51 3,581,828.76 50.17 179,091.44

1 to 2 years 418,763.14 2.96 41,876.31 1,512,886.77 21.19 151,288.68

2 to 3 years 285,114.62 2.01 85,534.39 1,535,506.07 21.51 460651.82

3 to 4 years 834,181.77 5.89 417,090.89 505,759.52 7.08 252,879.76

4 to 5 years 205,759.52 1.46 164,607.62 3,260.00 0.05 2,608.00

Over 5 years 3,260.00 0.02 3,260.00

Total 14,155,569.38 100 1,332,793.72 7,139,241.12 100 1,046,519.70

(3) There is no major single amount or minor single amount but bad debt provision provided individually during the reporting period.

(4) During the reporting period, there is no other accounts receivable written-off.

(5) There is no balance of other accounts receivable due from the shareholders holding over 5% (including 5%) of the equity of the

Company.

(6) The top five arrearage entities of other accounts receivable at the end of 2013

Companies The relationships with

the Company Reasons Amount Ages Proportion (%)

Dalian Urban Land Reserve Center Non-affiliated Land reserve 10,000,000.00 Less than 1 year 70.64

Dalian Construction Project Labor Insurance Management Office

Non-affiliated Deposit for migrant workers

500,000.00 Less than 1 year s 3.53

Xining Agriculture and Trade Investment Construction and

Development Management Centre Non-affiliated Deposit 432,000.00 3-4years 3.05

Jiangxi Alkali Industry Co., Ltd. Non-affiliated Deposit 300,000.00 3-4years 2.12

Dalian Economic &Technology Development Zone

Government Organs and Institution Administrative

Expenditure Accounting Center

Non-affiliated Special fund for

cement and wall innovation

265,950.62 2-3years 1.88

Total 11,497,950.62 81.22

(7) There is no amount of other accounts receivable due from related companies at the end of the current year.

3 Long-term equity investments

(1) Details of long-term equity investments


95

No Names Calculation

method Initial cost Beginning balance Changes Ending balance

Shareholdi

ng

Voting right

（%）

Provision for

impairment

Provision

for

impairmen

t of the

current

period

Cash dividend of

the current period

1

Dalian Bingshan – P&A

Recreation

Development


Equity

method

1,034,675.00 3,229,074.38 245,079.00 3,474,153.38 50 50

2

Dalian Jiale Vending

Machine Operation Co.,

Ltd.

Equity

method

18,750,000.00 14,668,101.42 -334,917.83 14,333,183.59 50 50

3

Dalian Bingshan

Engineering & Trading

Co. , Ltd.

Equity

method

1,200,000.00 12,435,737.30 702,343.62 13,138,080.92 24 24 6,000,000.00

4

Dalian Grand Ocean

Thermo King Transport

Refrigeration

Engineering Co., Ltd

Equity

method

2,871,708.00 2,154,532.01 -2,154,532.01 40 40

5 Dalian Sanyo


Equity

method

85,416,929.20 151,488,491.18 -551,368.05 150,937,123.13 40 40 4,800,000.00

6 Dalian Honjo Chemical

Co., Ltd.

Equity

method

3,908,911.50 9,398,455.84 54,517.38 9,452,973.22 30 30 1,197,604.02

7 Dalian Sanyo

Cold-chain Co., Ltd

Equity

method

134,658,753.75 216,645,866.64 -933,858.60 215,712,008.04 40 40 8,000,000.00

8

Keinin-Grand Ocean

Thermal Technology

(Dalian) Co., Ltd.

Equity

method

24,402,234.58 41,365,239.20 -961,810.43 40,403,428.77 20 20 10,800,000.00

9 Dalian Sanyo

Compressor Co., Ltd.

Equity

method

176,953,841.88 348,546,951.11 36,934,779.52 385,481,730.63 40 40 24,400,000.00

10 Dalian Sanyo Meica


Equity

method

9,649,590.00 27,308,958.46 -3,935,565.30 23,373,393.16 30 30 1,500,000.00

11

MHI Bingshan

Refrigeration (Dalian)

Co.,Ltd

Equity

method

22,500,000.00 22,500,000.00 22,500,000.00 45 45

12

Beijing Huashang

Bingshan Refrigeration

and Air-conditioning

Equity

method

490,000.00 905,958.67 269,098.06 1,175,056.73 49 49


96



Shareholdi

ng

Voting right

（%）

Provision for

impairment

Provision

for

impairmen

t of the

current

period

Cash dividend of

the current period

Machinery Co., Ltd.

14

Dalian Fuji Bingshan

Vending Machine Co.,

Ltd.

Equity

method

66,416,364.00 70,052,012.69 7,206,651.17 77,258,663.86 49 49

15

Daliian Sanyo

High-Efficient

Refrigeration System

Co., Ltd.

Equity

method

20,000,000.00 21,758,867.90 269,946.61 22,028,814.51 25 25

11 Dalian Sanyo Home

Appliance Co., Ltd.

Cost

method

19,666,212.00 11,694,400.00 11,694,400.00 10.91 10.91 11,694,400.00

16

Zibo Electric Traction

Machine Group Co.,

Ltd.

Cost

method

420,000.00 420,000.00 420,000.00 0.76 0.76 420,000.00

17 Liaoning Mec Group

Co., Ltd.

Cost

method

1,020,000.00 1,020,000.00 1,020,000.00 3.57 3.57 500,000.00

18 Guotai Junan Securities

Co., Ltd.

Cost

method

30,098,895.00 30,098,895.00 30,098,895.00 0.49 0.49 1,582,164.89

19

Guotai Junan

Investment Management

Co., Ltd.

Cost

method

3,057,316.00 3,057,316.00 3,057,316.00 0.22 0.22 2,688,605.91

20

Thermo King Container

Temperature Control

(Suzhou) Co., Ltd.

Cost

method

11,207,806.00 11,207,806.00 11,207,806.00 17.8 17.8

21

Liaoning Enterprises

United Industry Co.,

Ltd.

Cost

method

105,000.00 105,000.00 105,000.00 4.2 4.2 105,000.00

22


Materials Trading Co.,

Ltd.

Cost

method

250,000.00 250,000.00 250,000.00 5 5

24


Refrigeration

Installation Co., Ltd.

Cost

method

20,036,841.62 20,036,841.62 20,036,841.62 100 100

25 Dalian Bingshan Group Cost 16,200,000.00 16,200,000.00 16,200,000.00 90 90


97



Shareholdi

ng

Voting right

（%）

Provision for

impairment

Provision

for

impairmen

t of the

current

period

Cash dividend of

the current period

Sales Company method

26 Dalian Bingshan Metal

Processing Co., Ltd.

Cost

method

12,501,344.60 12,501,344.60 12,501,344.60 64.25 64.25

27

Dalian Bingshan

Air-Conditioning

Equipment Co., Ltd.

Cost

method

36,506,570.00 36,506,570.00 36,506,570.00 70 70 2,240,000.00

28

Dalian Bingshan

Guardian Automation

Co., Ltd.

Cost

method

1,522,117.80 1,522,117.80 1,522,117.80 60 60 2,263,205.11

29

Dalian Bingshan

Ryosetsu Quick

Freezing Equipment

Co., Ltd.

Cost

method

5,745,097.40 5,745,097.40 5,745,097.40 70 70

30

Wuhan New World

Refrigeration Industrial

Co., Ltd.

Cost

method

17,980,400.00 17,980,400.00 17,980,400.00 51 51 2,550,000.00

31

Wuhan New World

Refrigeration Air


Co., Ltd.

Cost

method

400,000.00 400,000.00 400,000.00 5 100

Total 744,970,608.33 1,088,704,035.22 59,310,363.14 1,148,014,398.36 16,490,170.80 64,250,809.133

(2) On 11th April, 2013, the 2nd meeting of the 6th Board of the Company decided to establish the join-venture MHI Bingshan

Refrigeration (Dalian) Co., Ltd. with Japan Mitsubishi Heavy Industry Co., Ltd. The Company invested RMB 36,000,000.00 and

held 45% equity. The join-venture received the investment of both investors on 22nd November, 2013, and got the Capital

Certification Report of Dalian Changde Gongzheng CPAs on 25th November, 2013.

(3) On 18th April, 2013, the 3rd meeting of the 6th Board of the Company agreed Dalian Bingshan Group Import & Export Co., Ltd.

to increase capital with its retained earnings, and the registered capital increased from RMB 5,000,000.00 to RMB 30,000,000.00.

After that, the shareholding ratio was constant. On the same time, Dalian Bingshan Group Import & Export Co., Ltd. changed the

name to Dalian Bingshan International Trading Co., Ltd.

(4) On 18th July, 2013, the 4th meeting of the 6th Board of the Company agreed Wuhan New World Refrigeration Industrial Co., Ltd.

to increase capital with its capital surpluses and surplus reserved and retained earnings, and the registered capital increased from

RMB 30,000,000.00 to RMB 100,000,000.00, and got the No.213 Capital Certification Report of Hubei Gongxin CPAs. After that,

the shareholding ratio was constant.

(5) On 29th August, 2013, Dalian Grand Ocean Thermo King Transport Refrigeration Engineering Co., Ltd which the Company held


98

40% equity terminated after having been approved to cancel the registration by Dalian Administration of Industry and Commerce.

(6) On 22nd October, 2013, the 6th meeting of the 6th Board of the Company permitted the Company and Fuji Electricity Co., Ltd.

transferring all the equity of Dalian Jiale Vending Machine Operation Co., Ltd. to the independent third party Shanghai Miyuan

Beverage Co., Ltd. respectively. At the end of current year, the transaction didn’t complete, and the Company received the transfer

price RMB15,000,000.00 in January of 2014.

4 Total operating income and operating cost

(1)Business income and cost

Items 2013 2012

Key business income 884,273,729.21 857,046,806.65

Other business income 16,295,615.17 20,114,449.47

Key business cost 680,508,985.30 651,587,064.34

Other business cost 15,288,568.30 20,521,426.14

(2) Key business (Type）

2013 2012 Name of type


Manufacturing 884,273,729.21 680,508,985.30 857,046,806.65 651,587,064.34

(3) Key business (Product）

2013 2012 Name of product


Refrigeration equipments 884,273,729.21 680,508,985.30 857,046,806.65 651,587,064.34

(4) Key business (Region）

2012 2011 Name of region


North-east of China 884,273,729.21 680,508,985.30 857,046,806.65 651,587,064.34

(5) Top five customers

Names Revenue Percentage of total business income

Dalian Bingshan Engineering & Trading Co. , Ltd. 77,834,617.71 8.64

The Yellow Sea Ship Building Co., Ltd. 26,106,390.19 2.90

The People's Liberation Army 63820 Troops 23,931,623.95 2.66

Rizhao Tyson Foods Co., Ltd. 13,652,286.82 1.52

Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd. 13,075,560.94 1.45

Total 154,600,479.61 17.17


99

5 Gain/ (loss) from investments

(1) Category

Items 2013 2012

Gain arising from dividends of subsidiaries 7,553,205.11 6,537,220.05

Long-term equity investment income accounted for by using the equity method 90,138,921.23 90,901,193.46

Gain on selling equity of associate company -2,130,588.28 2,247,250.99

Gain from other company -24,478,593.00

Total 95,561,538.06 75,207,071.50

(2) Gain arising from dividends of subsidiaries (cost method)

Names of invested companies 2013 2012 Reason of changes

Liaoning Mec Group Co., Ltd. 500,000.00 distributed dividend

Dalian Bingshan Air-Conditioning Equipment Co., Ltd. 2,240,000.00 2,450,000.00 Less distributed dividend

Dalian Bingshan Guardian Automation Co., Ltd. 2,263,205.11 1,537,220.05 More distributed dividend

Wuhan New World Refrigeration Industrial Co., Ltd. 2,550,000.00 2,550,000.00

Total 7,553,205.11 6,537,220.05

(3) Long-term equity investment income accounted for by using the equity method

Names of invested companies 2013 2012 Reason of changes

Dalian Sanyo Refrigeration Co., Ltd. 4,248,631.95 5,767,953.89 Decrease of business profit

Dalian Sanyo Cold-chain Co., Ltd 7,066,141.40 14,500,067.70 Decrease of business profit

Grand Ocean-showa Auto Air Conditioning (Dalian) Co., Ltd. 9,838,189.57 12,119,696.25 Decrease of business profit

Dalian Sanyo Compressor Co., Ltd. 61,334,779.52 45,399,199.71 Increase of business profit

Dalian Bingshan Group Import & Export Co. , Ltd. 702,343.62 1,906,943.93 Decrease of business profit

Dalian Grand Ocean Thermo King Transport Refrigeration Engineering Co., Ltd 476,422.06 -1,303,186.83 Liquidation

Dalian Honjo Chemical Co., Ltd. 1,252,121.40 1,213,141.64 Increase of business profit

Dalian Sanyo Meica Electronics Co., Ltd. -2,435,565.30 827,388.15 Decrease of business profit

Beijing Huashang Bingshan Refrigeration and Air-conditioning Machinery Co., Ltd. 269,098.06 111,742.54 Increase of business profit

Dalian Fuji Bingshan Vending Machine Co., Ltd. 7,206,651.17 10,997,312.10 Decrease of business profit

Daliian Sanyo High-Efficient Refrigeration System Co., Ltd. 269,946.61 -1,094,615.22 Increase of business profit

Dalian Bingshan – P&A Recreation Development Engineering Co., Ltd. 245,079.00 348,604.56 Decrease of business profit

Dalian Jiale Vending Machine Operation Co., Ltd. -334,917.83 106,945.04 Decrease of business profit

Total 90,138,921.23 90,901,193.46

(4)There was no severe constrict on the collection of the investment earnings.


100

6 Supplementary information of cash flow statement

Supplementary information 2013 2012

1. Reconciliation from the net profit to the cash flows from operating activities

Net profit 145,328,423.94 106,671,697.64

Add: Provisions for assets impairment 11,252,241.88 7,419,892.35

Depreciation of fixed assets 23,007,116.88 20,387,841.95

Amortization of intangible assets 2,623,483.37 2,551,355.91

Amortization of long-term deferred expenses 313,457.06 120,947.64

Losses on disposal of fixed assets, intangible assets and other long-term assets -39,177,559.49 22,231,342.01

Losses on scrapping of fixed assets 1,058,384.84 -125,806.40

Losses on variation of fair value

Finance expenses -114,079.83 -27.22

Investment losses -97,692,126.34 -97,438,413.51

Decrease in deferred tax assets -386,780.42 -1,245,914.08

Increase in deferred tax liabilities

Decrease in inventory 23,686,826.75 4,067,223.46

Decrease in operating receivables 5,437,999.56 18,019,108.19

Increase in operating payables -61,276,693.23 -158,481,164.58

Others

Net cash flows from operating activities 14,060,694.97 -75,821,916.64

2. Investing and financing activities that do not involve cash receipts and payments

Conversion of debt into capital

Convertible bonds to be expired within one year

Fixed assets under finance lease

3. Net increase in cash and cash equivalents

Cash at the end of the period 431,494,649.19 437,725,268.74

Less: Cash at the beginning of the period 437,725,268.74 585,557,597.61

Plus: Cash equivalents at the end of the period

Less: Cash equivalents at the beginning of the period

Net increase in cash and cash equivalents -6,230,619.55 -147,832,328.87


101

Ⅻ. Other supplementary Information

1 Non-recurring profits and losses

Non-recurring gains and losses items 2013 2012

1. Gain/loss from disposal of non-current assets 33,844,950.09 -22,341,252.74

2.Tax return or exemption exceeding authority or without formal authorization documents 905,596.59

3.Governmental subsidy written into current gains and losses 7,290,805.05 13,090,280.89

4. Interest from non-financial enterprises written into current gains and losses

5.Gains/Losses on debt restructuring

6.Reversal of provision for impairment of long-term assets

7.Gain/loss from change of fair value of transactional asset and liabilities, and investment gains from disposal

of transactional financial assets and liabilities and sellable financial assets, other than valid period value

instruments related to the Company’s common businesses.

8.Other net income and expense from non-operation 1,121,112.19 1,097,771.60

Total 43,162,463.92 -8,153,200.25

Less：Affected amount of income tax from non-recurring gains and losses -10,592,590.74 -2,218,545.09

Net amount of non-recurring gains and losses 32,569,873.17 -5,934,655.16

Included: Attributable to minority shareholders’ equity -771,l637.57 711,395.79

Attributable to the owners of parent company 31,798,235.61 -6,646,050.95

2 Earnings per share

EPS Items

The weighted average

ROE Basic EPS Diluted EPS

Net profit attributable to the Company’s ordinary shareholders 8.27% 0.44 0.44

Net profit attributable to the Company’s ordinary shareholders after

deducting non-recurring gains and losses 6.55% 0.35 0.35


102

Ⅻ. Details and reasons for the special change of the financial statements items

Items of balance sheet 2013 2012 Rate of change（%） Reasons

Interest receivable 3,603,594.85 277,444.44 1,198.85% Fixed bank deposit increased

Other current assets 995,599.80 6,026,385.86 -83.48% Prepaid income tax decreased

Project in construction 68,462,823.08 1,304,951.56 5,146.39% Building transformation unfinished

Long-term deferred expenses 3,901,749.71 2,981,518.62 30.86% Renovation and amortization expenses increased

Account received in advance 177,238,388.99 288,041,113.23 -38.47% Fulfill to realize sales

Dividend payable 2,053,911.36 533,156.00 285.24% Not due to pay

Taxes payable 22,497,530.86 620,179.66 3,527.58% Income tax payable increased

Financial expenses -5,832,606.21 -4,241,019.02 37.53% Interest income increased

Non-business incomes 55,065,362.72 17,865,994.35 208.21% Gain of land reserved

Non-business expenses 2,787,555.90 498,717.88 458.94% Disposal of assets of old mould workshop

Income tax expenses 25,783,528.95 7,240,434.92 256.10% Profit before tax increased

ⅩⅢ. Approval of the financial statements

The financial statements were approved by the board of directors of the Company on April 22, 2014.


103

Section 11 Reference Documents

1. The accounting statements bearing the signatures and seals of the legal representative, the financial

majordomo and the accountants in charge.

2. The original copy of the auditor's report bearing the seal of the certified public accountants and the signatures

and seals of the certified accountants.

3. The original copies of all the Company's documents and the original copies of the bulletins published on the

newspapers designated by the China Securities Regulatory Commission in the report period.

4. Time for reference: from Monday to Friday 8:00 - 12:00 (a. m.) 1:00 - 5:00 (p. m.) Liaison persons: Song Wenbao

Tel: 0086-411-86538130

Fax: 0086-411-86654530

Board of Directors of Dalian Refrigeration Co., Ltd.

April 24, 2014


104

CONSOLIDATED BALANCE SHEET

AS OF 31 DECEMBER 2013

Prepared by Dalian Refrigeration Company Limited 31 December 2013 Unit: RMB Yuan

Ending balance Beginning Balance Items

Consolidation Parent company Consolidation Parent company

Current Assets:

Monetary funds 512,903,713.13 434,747,569.29 531,896,655.08 443,299,858.36

Transaction financial asset

Notes receivable 39,827,031.77 20,694,679.80 41,966,544.97 27,500,254.79

Account receivable 369,712,746.70 170,582,156.81 352,261,726.74 173,525,044.14

Account paid in advance 26,031,386.32 6,125,477.96 31,249,976.50 12,919,740.55

Interest receivable 3,603,594.85 3,603,594.85 277,444.44 277,444.44

Dividend receivable 33,450.00 2,550,000.00 39,025.00

Other account receivable 24,514,740.07 12,822,775.66 18,963,969.53 6,092,721.42

Inventories 325,531,007.41 173,198,452.67 398,895,095.83 201,422,670.07

Non-current assets due within 1 year

Other current assets 995,599.80 922,487.82 6,026,385.86 5,956,559.82

Total current assets 1,303,153,270.05 825,247,194.86 1,381,576,823.95 870,994,293.59

Non-current assets:

Available for sale financial assets

Long-term equity investment 1,021,946,998.64 1,131,524,227.56 962,636,635.50 1,072,213,864.42

Investing property

Fixed asset 395,266,143.70 218,716,664.94 404,973,883.42 224,624,146.17

Project in construction 68,462,823.08 65,051,019.19 1,304,951.56 554,009.14

Engineering material

Fixed asset disposal

Intangible assets 155,190,230.51 89,590,975.25 165,794,041.15 98,611,277.13

Development expense

Goodwill

Long-term expense to be apportioned 3,901,749.71 3,548,214.70 2,981,518.62 2,610,452.93

Deferred tax assets 19,469,019.20 11,512,233.28 17,922,802.49 11,125,452.86

Other non-current assets

Total non-current assets 1,664,236,964.84 1,519,943,334.92 1,555,613,832.74 1,409,739,202.65

Total assets 2,967,390,234.89 2,345,190,529.78 2,937,190,656.69 2,280,733,496.24


105

CONSOLIDATED BALANCE SHEET (CONTINUED)

AS OF 31 DECEMBER 2013

Prepared by Dalian Refrigeration Company Limited 31 December 2013 Unit: RMB Yuan

Ending balance Beginning Balance Items


Current liabilities:

Short-term borrowings 37,500,000.00 29,500,000.00

Notes payable 80,293,515.17 55,821,881.28 79,127,124.20 58,628,509.20

Account payable 464,863,265.01 265,908,099.58 436,720,339.20 267,244,798.64

Account received in advance 177,238,388.99 107,267,861.73 288,041,113.23 142,944,087.68

Employee’s compensation payable 53,580,031.02 19,207,236.71 64,384,750.97 29,385,027.38

Tax payable 22,497,530.86 13,071,583.87 620,179.66 -4,577,147.78

Dividend payable 2,053,911.36 533,156.00 533,156.00 533,156.00

Other account payable 51,929,364.03 51,184,849.13 53,435,964.07 41,680,362.14

Non-current liabilities due within 1 year

Other current liabilities 1,699,101.00 585,101.00 1,699,101.00 585,101.00

Total current liabilities 891,655,107.44 513,579,769.30 954,061,728.33 536,423,894.26

Non-current liabilities:

Long-term borrowings

Deferred tax liabilities

Other non-current liabilities 66,627,339.60 19,839,339.60 73,275,358.79 25,373,358.79

Total non-current liabilities 66,627,339.60 19,839,339.60 73,275,358.79 25,373,358.79

Total liabilities 958,282,447.04 533,419,108.90 1,027,337,087.12 561,797,253.05

Owner’s equity

Share capital 350,014,975.00 350,014,975.00 350,014,975.00 350,014,975.00

Capital surplus 584,861,283.21 583,632,355.59 584,852,283.21 583,623,355.59

Less: Treasury Stock

Reserved fund 505,533,065.25 505,533,065.25 469,665,883.33 469,665,883.33

General risk provision

Retained earnings 466,608,867.00 372,591,025.04 404,267,596.17 315,632,029.27

Foreign exchange difference

Total owners' equity attributable to holding company 1,907,018,190.46 1,811,771,420.88 1,808,800,737.71 1,718,936,243.19

Minority interest 102,089,597.39 101,052,831.86

Total owner’s equity 2,009,107,787.85 1,811,771,420.88 1,909,853,569.57 1,718,936,243.19

Total liabilities and owner’s equity 2,967,390,234.89 2,345,190,529.78 2,937,190,656.69 2,280,733,496.24


106

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2013

Prepared by Dalian Refrigeration Company Limited Year of 2013 Unit: RMB Yuan

2013 2012 Items


I. Total sales 1,535,706,911.25 900,569,344.38 1,521,979,266.15 877,161,256.12

Including: Operating income 1,535,706,911.25 900,569,344.38 1,521,979,266.15 877,161,256.12

II. Total operating cost 1,491,781,346.00 879,734,879.70 1,474,549,253.61 858,246,387.63

Including: Operating cost 1,167,001,002.75 695,797,553.60 1,148,145,743.39 672,108,490.48

Taxes and associate charges 13,395,695.33 5,551,893.13 10,477,768.56 4,979,011.93

Selling and distribution expenses 120,220,640.76 73,064,406.17 120,420,339.18 68,640,197.02

Administrative expenses 178,414,799.50 103,225,883.77 184,294,524.70 111,129,878.72

Financial expense -5,832,606.21 -9,157,098.85 -4,241,019.02 -6,031,082.87

Impairment loss 18,581,813.87 11,252,241.88 15,451,896.80 7,419,892.35

Add: gain from change in fair value

Gain/(loss) from investment 88,541,782.95 95,561,538.06 68,487,687.11 75,207,071.50

Including: income form investment on affiliated enterprise and jointly enterprise 90,138,921.23 90,138,921.23 90,901,193.46 90,901,193.46

Foreign exchange difference

III. Operating profit 132,467,348.20 116,396,002.74 115,917,699.65 94,121,939.99

Add: non-business income 55,065,362.72 51,089,399.87 17,865,994.35 14,405,321.40

Less: non-business expense 2,787,555.90 1,988,131.34 498,717.88 104,193.60

Including: loss from non-current asset disposal 2,391,111.76 1,988,131.34 397,868.21 104,193.60

IV. Total profit 184,745,155.02 165,497,271.27 133,284,976.12 108,423,067.79

Less: Income tax 25,783,528.95 20,168,847.33 7,240,434.92 1,751,370.15

V. Net profit 158,961,626.07 145,328,423.94 126,044,541.20 106,671,697.64

Net profit attributable to parent company 153,006,057.13 145,328,423.94 117,142,066.15 106,671,697.64

Minority shareholders’ gains and losses 5,955,568.94 8,902,475.05

VI. Earnings per share

(I) basic earnings per share 0.44 0.33

(II) diluted earnings per share 0.44 0.33

Ⅶ. Other comprehensive income 9,000.00 9,000.00 -1,480,266.36 -1,480,266.36

Ⅷ. Total comprehensive income 158,970,626.07 145,337,423.94 124,564,274.84 105,191,431.28

Total comprehensive income attributable to parent company 153,015,057.13 145,337,423.94 115,661,799.79 105,191,431.28

Total comprehensive income attributable to minority shareholders 5,955,568.94 8,902,475.05


107

CONSOLIDATED CASH FLOW STATEMENT



2013 2012 Items


1. Cash flows arising from operating activities:

Cash received from sales of goods or rending of services 1,189,227,777.51 755,661,177.35 1,244,649,016.91 779,971,073.04

Refund of tax and fare received 905,596.59 1,074,217.39

Other cash received relating to operating activities 20,764,655.80 15,052,479.83 22,998,286.80 15,901,394.97

Sub-total of cash inflows 1,210,898,029.90 770,713,657.18 1,268,721,521.10 795,872,468.01

Cash paid for goods and services 693,055,366.39 467,021,690.12 839,140,888.03 582,646,681.25

Cash paid to and on behalf of employees 262,511,390.02 149,282,944.19 243,198,883.59 130,615,196.60

Tax and fare paid 118,270,430.56 62,835,570.59 126,629,196.07 75,514,844.89

Other cash paid relating to operating activities 129,430,386.49 77,512,757.31 126,613,439.39 82,917,661.91

Sub-total of cash outflows 1,203,267,573.46 756,652,962.21 1,335,582,407.08 871,694,384.65

Net cash flow from operating activities 7,630,456.44 14,060,694.97 -66,860,885.98 -75,821,916.64

2. Cash Flows arising from Investment Activities:

Cash received from return of investments 500,365.79 500,365.79 23,305.03 23,305.03

Cash received from investment income 51,236,629.02 55,700,809.13 45,351,793.58 51,331,138.63

Net cash received from disposal of fixed assets, intangible assets and other long-term assets 40,260,691.00 40,128,000.00 125,107.80

Net cash received from disposal of subsidiaries 21,189.34

Other cash received relating to investment activities

Sub-total of cash inflows 91,997,685.81 96,329,174.92 45,500,206.41 51,375,633.00

Cash paid for acquiring fixed assets, intangible assets and other long-term assets 50,648,044.45 41,617,909.94 41,288,458.72 26,073,551.76

Cash paid for acquiring investments 22,500,000.00 22,500,000.00 44,810,220.00 44,810,220.00

Other cash paid relating to investment activities

Sub-total of cash outflows 73,148,044.45 64,117,909.94 86,098,678.72 70,883,771.76

Net cash flow from investing activities 18,849,641.36 32,211,264.98 -40,598,472.31 -19,508,138.76

3. Cash Flows arising from Financing Activities:

Cash received from absorbing investment

Cash received from borrowings 53,900,000.00 35,300,000.00

Other proceeds relating to financing activities

Sub-total of cash inflows 53,900,000.00 35,300,000.00

Cash paid for settling debt 45,000,000.00 18,300,000.00


108

Cash paid for distribution of dividends or profit or reimbursing interest 58,790,065.18 52,502,246.25 64,811,376.57 52,502,246.25

Including: dividends or profit paid to minority interest 2,468,803.41 8,509,813.37

Other cash payments relating to financing activities 28,496.45 4,298.47

Sub-total of cash outflows 103,818,561.63 52,502,246.25 83,115,675.04 52,502,246.25

Net cash flow from financing activities -49,918,561.63 -52,502,246.25 -47,815,675.04 -52,502,246.25

4. Influence on cash due to fluctuation in exchange rate -41,111.28 -333.25 16,279.49 -27.22

5. Increase in cash and cash equivalents -23,479,575.11 -6,230,619.55 -155,258,753.84 -147,832,328.87

Add : Cash and cash equivalents at year-begin 525,818,735.46 437,725,268.74 681,077,489.30 585,557,597.61

6.Cash and cash equivalents at the end of the year 502,339,160.35 431,494,649.19 525,818,735.46 437,725,268.74


109

CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’ EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2013 Prepared by Dalian Refrigeration Company Limited Year of 2013 Unit: RMB Yuan

2013

Owners’ equity attributable to parent company Items

share capital Capital suplus Lessen: treasury

stock Surplus reserve

General risk

reserve Retained profits Others

Minority equity

Total of owners’ equity

I. balance at the end of last year 350,014,975.00 584,852,283.21 469,665,883.33 404,267,596.17 101,052,831.86 1,909,853,569.57

1. Change of accounting policy

2. Correction of errors in previous period

II. Balance at the beginning of this year

350,014,975.00 584,852,283.21 469,665,883.33 404,267,596.17 101,052,831.86 1,909,853,569.57

III. Increase/ decrease of amount in this year (“-” means decrease)

9,000.00

35,867,181.92 62,341,270.83 1,036,765.53 99,254,218.28

(I) Net profit 153,006,057.13 5,955,568.94 158,961,626.07

(II) Other comprehensive income

9,000.00 9,000.00

Subtotal of (I)and (II) 9,000.00 153,006,057.13 5,955,568.94 158,970,626.07

(III) Input an reduced capital of owners

1. Input capital of owners

2.Amount of Shares included in the owners’ equity

3. Others

(IV) Profit distribution 35,867,181.92 -90,664,786.30 -4,918,803.41 -59,716,407.79

1. Withdrawing surplus public reserve 35,867,181.92 -35,867,181.92

2. Withdrawing general risk reserve

3. Distribution to all owners (shareholders) -52,502,246.25 -4,918,803.41 -57,421,049.66

4. Others -2,295,358.13 -2,295,358.13

(V)Internal carrying forward of owners’ equity

1. New increase of capital (share capital) from capital reserves

2. Convert surplus reserves to capital(share capital)

3. Surplus reserves make up losses

(VI) Special reserve

1. Withdrawing in the year

2. Using in the year

IV. Balance at the end of this period

350,014,975.00 584,861,283.21 505,533,065.25 466,608,867.00 102,089,597.39 2,009,107,787.85


110

2012


share capital Capital surplus Lessen: treasury


General risk


Minority equity


I. balance at the end of last year 350,014,975.00 586,837,221.82 445,492,052.28 366,477,854.72 97,410,170.18 1,846,232,274.00




350,014,975.00 586,837,221.82 445,492,052.28 366,477,854.72 97,410,170.18 1,846,232,274.00


-1,984,938.61 24,173,831.05 37,789,741.45 3,642,661.68 63,621,295.57

(I) Net profit 117,142,066.15 8,902,475.05 126,044,541.20


-1,984,938.61 -1,984,938.61

Subtotal of (I)and (II) -1,984,938.61 117,142,066.15 8,902,475.05 124,059,602.59




3. Others

(IV) Profit distribution 24,173,831.05 -79,352,324.70 -5,259,813.37 -60,438,307.02



3. Distribution to all owners (shareholders)

-52,502,246.25 -5,259,813.37 -57,762,059.62

4. Others -2,676,247.40 -2,676,247.40





4. Others





350,014,975.00 584,852,283.21 469,665,883.33 404,267,596.17 101,052,831.86 1,909,853,569.57


111

STATEMENT OF CHANGES IN OWNERS’ EQUITY



2013




General risk



I. balance at the end of last year 350,014,975.00 583,623,355.59 469,665,883.33 315,632,029.27 1,718,936,243.19




350,014,975.00 583,623,355.59 469,665,883.33 315,632,029.27 1,718,936,243.19


9,000.00

35,867,181.92 56,958,995.77

92,835,177.69

(I) Net profit 145,328,423.94 145,328,423.94


9,000.00 9,000.00

Subtotal of (I)and (II) 9,000.00 145,328,423.94 145,337,423.94




3. Others

(IV) Profit distribution 35,867,181.92 -88,369,428.17 -52,502,246.25



3. Distribution to all owners (shareholders) -52,502,246.25 -52,502,246.25

4. Others









350,014,975.00 583,632,355.59 505,533,065.25 372,591,025.04 1,811,771,420.88


112

2012




General risk



I. balance at the end of last year

350,014,975.00 585,608,294.20 445,492,052.28 285,636,408.93 1,666,751,730.41



II. Balance at the beginning of this year 350,014,975.00 585,608,294.20 445,492,052.28 285,636,408.93 1,666,751,730.41


-1,984,938.61 24,173,831.05 29,995,620.34 52,184,512.78

(I) Net profit 106,671,697.64 106,671,697.64

(II) Other comprehensive income -1,984,938.61 -1,984,938.61

Subtotal of (I)and (II) -1,984,938.61 106,671,697.64 104,686,759.03




3. Others

(IV) Profit distribution 24,173,831.05 -76,676,077.30 -52,502,246.25

1. Withdrawing surplus public reserve

24,173,831.05 -24,173,831.05


3. Distribution to all owners (shareholders)

-52,502,246.25 -52,502,246.25

4. Others





4. Others




IV. Balance at the end of this period 350,014,975.00 583,623,355.59 469,665,883.33 315,632,029.27 1,718,936,243.19

Dalian Refrigeration Co., Ltd. 2013 Annual...

Documents

Transcript of Dalian Refrigeration Co., Ltd. 2013 Annual...