Huangshi Dongbei Electrical Appliance Co., Ltd.
900956
The Semi-Annual Report 2014
Important Notes
1.The Board of Directors，SupervisoryCommittee，directors , supervisors and Senior Executives of the Company hereby guarantees that there are no misstatement, misleading representation or important omissions in this report and shall assume joint and several liability for the authenticity, accuracy and completeness of the contents hereof.
2．The situation of the director who failed to attend
|||||
|-|-|-|-|
|Position of the directorwho failed to attend|Name of the directorwho failed to attend|Reason for failure toattend|Name of proxy|
|Director|Ruan Zhengya|Business trip|Zhao Dayou|

3. The financial report of the semi-annual report has not been audited.
4. Mr.Yang Baichang, The Company leader, Ms. Lu Lihua, Chief financial officer, Ms. Ma Li, the person in charge of the accounting department (the person in charge of the accounting )hereby confirm the authenticity and completeness of the financial report enclosed in this semi-annual report.
5. Whether the controlling shareholder and its related parties did not occupy the funds of the
Company for operation.
No.
6. Whether the Company did not provide guarantee in violation of specified decision-making procedure.
No.
Table of Contents
I..Definition
II.Company profile
III. Summary of Accounting Data and Financial indexes
IV. Report of the Board of Directors
V. Important Events
VI. Particulars about Changes in Share Capital and Shareholders
VII. Situation of the Preferred Shares
VIII.Particulars about Directors, Supervisors and Senior Executives
IX. Financial Report (Unaudited)
X.. List of Documents Available for Inspection
I.Definition
1. Definition
In this report, medium, the following words and expressions shall have the following meaning unless otherwise defined:
||||
|-|-|-|
|Definition of frequently mentioned words and expressions|||
|Company, The Company, We, DongbeiElectrical Appliance|Refers to|Huangshi Dongbei Electrical ApplianceCo., Ltd.|
|Dongbei Group, Controlling shareholder|Refers to|Huangshi Dongbei ElectromechanicalGroup Co., Ltd|
|Report period|Refers to|January 1, 2014 to June 30, 2014|
|CSRC|Refers to|China Securities Regulatory Commission|
|The Securities Law|Refers to|The Securities Law of the People’sRepublic of China|
|The Company Law|Refers to|The Company Law of the People’sRepublic of China|
|Articles, The Articles of association|Refers to|The Articles of association of HuangshiDongbei Electrical Appliance Co., Ltd.|
|Yuan, Million Yuan, Billion Yuan|Refers to|RMB Yuan , RMB million Yuan,RMBBillion Yuan|

II.Company profile
1. Basic Information of the Company
|||
|-|-|
|Chinese name of the Company|黄石东贝电器股份有限公司|
|Abbr. of the Chinese name of the Company|东贝B股|
|English name of the Company|HUANGSHI DONGBEI ELECTRICALAPPLIANCE CO., LTD.|
|Legal representative of the Company|Yang Baichang|

2. Contact person and contact manner
||||
|-|-|-|
||Board secretary|Securities affairs Representative|
|Name|Lu Lihua|Huang Jie|
|Contact address|No.6, Jinshan East Road,Economic & TechnologyDevelopment Zone, HuangshiCity, Hubei Province.|No.6, Jinshan East Road,Economic & TechnologyDevelopment Zone, HuangshiCity, Hubei Province.|
|Tel|0714-5415858|0714-5415858|
|Fax|0714-5415858|0714-5415858|
|E-mail|stock@donper.com|stock@donper.com|

3. Registration changes of the Company
|||
|-|-|
|Registered Address:|No.6, Jinshan East Road, Economic & TechnologyDevelopment Zone, Huangshi City, Hubei Province.|
|Postal code of Registered address|435000|
|Business Address|No.6, Jinshan East Road, Economic & TechnologyDevelopment Zone, Huangshi City, Hubei Province.|
|Postal code of Business address|435000|
|Website：|http://www.donper.com|
|E-mail|stock@donper.com|

4.The Place for Placing the Annual Report and the Information Disclosure
|||
|-|-|
|Newspapers for Information Disclosure|Shanghai Securities Daily and Hong KongCommercial Daily|
|Internet Website for Publishing the Semi-AnnualReport|www.sse.com.cn|
|The Place for Placing the Annual Report|Securities Dept. of the Company|

5.Stock Profile
|||||
|-|-|-|-|
|Stock Condition of the Company||||
|Type|Stock exchange forlisting|Stock Abbreviation|Stock Code|
|B share|Shanghai StockExchange|Dongbei B|900956|

6. The change of the registration in the report period
The registration remained in the report period
III. Summary of Accounting Data and Financial index
I. Main accounting data and financial index
（1） Main accounting data
In RMB
|||||
|-|-|-|-|
|Main accounting data|Current period(January-June_|Same period of last year|Increase/decrease in this report Y-O-Y(%)|
|Operating Gross income|2,269,550,201.85|2,390,456,912.38|-5.06|
|Net profit attributable to theshareholders of the listed company|24,962,203.45|24,062,624.84|3.74|
|Net profit after deducting ofnon-recurring gain/loss attributable tothe shareholders of listed company|18,769,506.01|20,180,843.08|-6.99|
|Cash flow generated by businessoperation, net|172,652,495.68|-86,111,550.61|Not Applicable|
||End of current period|End of last period|Increase/decrease in this report –endover that of lastperiod-end (%)|
|Net Assets attributable to theshareholders of the listed companyGross assets|922,236,179.79|897,432,610.64|2.76|
|Gross assets|4,069,783,788.04|3,851,675,304.29|5.66|

（2） Main Financial Index
|||||
|-|-|-|-|
|Main Financial index|Current period(January-June_|Same period of last year|Increase/decrease in this report Y-O-Y(%)|
|Basic earnings per share(RMB/Share)|0.106|0.102|3.74|
|Diluted gains per share(RMB/Share)|0.106|0.102|3.74|
|Basic earning per share afterdeducting of non-recurringgains/losses(RMB/Share)|0.080|0.086|-6.99|
|Weighted average net asset earningsratio（%）|2.74|2.95|Decreased by 0.21%|
|Net income on asset, weighted anddeducted non-recurring gain/loss (%)|2.06|2.47|Decreased by 0.41%|

II.Items and amount of non-operating gains and losses:
In RMB
|||
|-|-|
|Items of non-operating gains and losses|Amount|
|Gain/loss from disposal of non-current assets.|-116,656.42|
|Governmental Subsidy accounted as current gain/loss, except forthose subsidies at with amount or quantity fixed by the nationalgovernment and closely related to the Company‘s businessoperation.|10,791,270.00|
|Other non-business income and expenditures other than theabove|797,610.14|
|Influenced amount of minor shareholders‘ equity|-3,558,692.73|

|||
|-|-|
|Influenced amount of income tax|-1,720,833.55|
|Total|6,192,697.44|

IV. Report of the Board of Directors
1. Discussion and analysis of the Company's operation in the report period by the board of directors
The first half of 2014, the domestic economic slowdown, along with appliances to the countryside, en ergy subsidies and other incentives consumer policy ended, the company failed to extend downstream refrigerator industry rapid growth in 2013, and fell into a downturn. During the reporting period, the c ompressor industry has week demand and fierce market competition, the compressor industry market s ituation is grim.
Faced with pressures and difficulties of economic downturn, the company's business objectives around the Board of Trustees, firmly grasp the leading marketing, pay closely attention to domestic and inter national market trends, according to changes in market demand, timely adjustment of marketing strate gy, and actively participate in market competition ; seize the momentum of technological innovation, and continuously improve core competitiveness, completed a small, efficient, large-sized product deve lopment, as well as the matching inverter compressor and volume production; seize this focus to impr ove the quality, speed promoting strong corporate boutique building; seize the main efficiency savings , companies continue to activate intrinsic motivation, and enhance overall competitiveness.
During the reporting period, the company produced 11.60 million compressor station; sold compressor s 12.07 million units; achieved operating income of 2.269 billion yuan, completed54% of the annual t arget; achieve net profit attributable to equity holders of 24.96 million yuan, compared with last year g rowth of3.74% over the same period.
(1) Analysis on principal Business
1. Sheet of change analysis of relevant items of Financial statement
In RMB
|||||
|-|-|-|-|
|Subject|Amount in thisperiod|Amount in lastperiod|Proportion（%）|
|Operating income|2,269,550,201.85|2,390,456,912.38|-5.06|
|Operating cost|2,026,592,510.22|2,143,762,531.87|-5.47|
|Sales expenses|56,321,177.74|56,012,811.31|0.55|
|Administrative expenses|109,089,449.94|98,710,434.27|10.51|
|Financial expenses|28,477,173.91|38,280,044.61|-25.61|
|Cash flow generated by operationactivities, net|172,652,495.68|-86,111,550.61||
|Net cash flow generated by investmentactivities|-68,782,370.21|-53,421,126.56||
|Net cash flow generated by financingactivities|46,371,945.58|223,552,055.59|-79.26|

Operating income decreased5.06% over the previous year, mainlydue to changes in product miniaturization and aluminum leads to lower prices per unit of product
Operating costs were reduced5.47% over the previous year, mainly due to lower material costs.
Administrative expenses increased by10.51% over the previous year, mainly due to changes in labor costs due to increased R& D expenses.
Financial expenses decreased by25.51% over the previous year, mainly due to accelerate cash flow to improve capital efficiency, as well as foreign currency exchange gains and losses due to decline year over year.
The increase in net cash flow from operating activities was mainly due to the purchase of goods,
services paid for accepting cash reduction.
Net changes in cash flow from investing activities was mainly due to the payment of investment funds
increased during the reporting period
Net changes in cash flow from financing activities were mainly due to lower material costs and changes in payment policies, resulting in reduced liquidity requirements.
(2)The Status of key business in terms of industry of business, production and Area
1.The Status of key business in terms of industry of business and production
In RMB
||||||||
|-|-|-|-|-|-|-|
|The Status of key business in terms of industry of business|||||||
|Onindustry|Income from keybusiness|Cost of keybusiness|Grossprofit（％）|Increase/decrease ofkeybusinessturnover（％）|Increase/decrease ofkeybusinesscost（％）|Change ofGrossprofit（%）|
|Manufacturing|2,103,244,040.13|1,869,005,723.14|11.14|-10.15|-11.01|Increased0.86%|
|The Status of key business in terms of production of business|||||||
|Onproduction|Income from keybusiness|Cost of keybusiness|Grossprofit（％）|Increase/decrease ofkeybusinessturnover（％）|Increase/decrease ofkeybusinesscost（％）|Change ofGrossprofit（%）|
|Compressors|1,869,221,845.53|1,666,757,247.17|10.83|-13.21|-13.48|Increasedby0.27%|
|Autocasting andCompressors casting|217,986,808.27|191, 071,508.18|12.35|26.39|17.18|Increasedby 6.89%|
|Solar waterheater|16,035,386.33|11,176,967.79|30.30|8.68|2.88|Increasedby 3.93%|

 2.Table of the status of main operation in terms of Area
In RMB
||||
|-|-|-|
|Area|Income from operation|Increase or decrease of rate of profit fromoperation over the previous year（％）|
|Domestic sales|1,626,870,026.71|-10.45|
|Foreign sales|476,374,013.42|-9.11|

(3)Core competitive-ness analsis
The Company has core competitiveness in respect of ability of continuous innovation and productR&D, diversified production capacity, cohesive force of team, ability of quick response and custom services and ability of comprehensive market development, which helps the Company achieve the
enterprise mission of providing first-rate compressors to refrigerator and ice box manufacturers in the
world.
I.R&D ability and technology
The Company owns strongR&D ability and advancedR&D platform in China. Compressor technology center is a technical center of enterprise certified by the state. The Company established aR&D center in Europe and a postdoctoral workstation. The Company boasts technologies of high/medium/low- backpressure efficient compressors that can meet requirements of different working mediums.
II. Advanced production line
The Company owns internationally advanced compressor production lines and can produce 12 series and over 200 kinds of products with working mediums including R600a, R134a, R22, R404a and R290, being an enterprise with the most varieties, most complete specifications and the biggest power spans of products in compressor industry at present. The Company is a leading compressor supplier for many famous refrigerator manufacturing enterprises at home and abroad, whose products are exported to over 20 countries and regions.
III.Corporate Culture
Adhering to the "create wealth for the community, so that employees live and work," the core values, combined with company policy, using a variety of publicity through the workers' congress, seminars a nd other special communication platform to communicate with employees, through the implementatio n of the "six systems" , "three major projects," "two funds" and other staff care programs, create an ent erprise culture with the East Beit color, enhance cohesion.
IV. Efficient management
The company continued to carry out excellent performance management, implementation of lean pro duction, around the "Focus Action" continues to improve staff's enthusiasm and creativity, strengthen coordination and communication speed of the various departments, improve the company's ability to r espond to internal and external environments.
V.Market expansion
The refrigerant compressor of changes in market demand, production and sales, to carry out pre-sale, s ale and full service on a global scale.
(4)The investment of the Company
1.Entrusted money management by non-finance companies and derivatives investment
(1).Entrusted asset management
The Company did not entrust others with asset management in this report period.
(2)Entrusted Loans
The company did not entrust loans in the report period;
(3) Use of raised funds
The company did not raise funds or pre-use raised funds in the reporting period
2.Analysis on principal subsidiaries and Mutual shareholding companies
||||||||||
|-|-|-|-|-|-|-|-|-|
|SubsidiariesName|Subsidiaries Type|RegistrationPlace|Legalrepresentative|Business Scope|Registeredcapital|Shareholding ratio(%)|Voteratio(%)|Organizationcode|
|HuangshiDongbeiElectromechanicalGroup SolarEnergy Co., Ltd.|ControllingSubsidiaries|Huangshi|YangBaichang|Production andsales of solarwater heaters|24,861,162.85|83.03|83.03|70681674-9|

Production and 50,000,00
0.00
sales of
Wuhu Abaur Me Controlli refrigeration
Yang
chanical& Elect ng 78653614- Wuhu Baichan compressor , 75 75
rical Subsidia 7 g
Co.,Ltd ries Compressor
and
Electrical
Organ casting
||||||||||
|-|-|-|-|-|-|-|-|-|
|HuangshiDongbeiFoundry Co.,Ltd.|ControllingSubsidiaries|Huangshi|ChenBaoping|Casting ofsmall andmedium-sizedcast products,house rentingand parkingservice.|32,814,078.23|51.28|51.28|17841625-7|
|HuangshiDongbeiInternationalTrade Co., Ltd.|Whollyownedsubsidiary|BVI|WangGuhua|Sales ofRefrigerationCompressor,RefrigerationEquipment andParts ,Photoelectricproducts andsolar waterheater ,etc.|USD1,000,000.00|100|100||
|Dongbei(Wuhan )Technology InnovationCo., Ltd.|Whollyownedsubsidiary|Wuhan|YangBaichang|Mechanical engineering, energy technology research and consulting services;refrigeration equipment, electric mechanical, solar energy manufacturing|8,000,000.00|100|100|09084685-0|
|DongbeiMechanical &Electrical(Jiangsu) Co.,Ltd.|Whollyownedsubsidiary|Suqian|YangBaichang|Production andsales ofrefrigerationcompressor ,CompressorandElectricalOrgan casting|200,000,000.00|100|100|09409289-x|

3. Projects invested with the non-raised capital
In the report period, the Company has no investment projects using non-raised proceeds.
II.The profit distribution or proposal of conversion of the capital reserve into share capital
(1) Formulation, implementation or adjustment of cash dividend policy
Huangshi Dongbei Electrical Appliance Co., Ltd. 2013 annual profit distribution scheme has been exa mined the adoption by the company 2013 annual shareholders meeting held on May 19,2014，
the resolution of the shareholders' meeting was published on "Shanghai Securities News", "Hongkong commercial daily" and the Shanghai Stock Exchange Web site (www.sse.com.cn) on May 20, 2014. H uangshi Dongbei Electrical Appliance Co., Ltd. 2013 annual dividend announcement of the implement ation was published on "Shanghai Securities News", "Hongkong commerical daily" and the website of Shanghai Stock Exchange (www.sse.com.cn) on June 30, 2014, Confirmed the last trading day of B S hare: July 7, 2014 : Ex- dividend date: July 8, 2014, Equity registration date: July 10, 2014, The divi dend payment date: July 18, 2014. The distribution of profits was based on the total share capital of 23 5 million shares expired on the equity registration date July 4 , 2041, distribute cash dividend of RMB 1.00 (tax included) for every 10 shares to all shareholders, total cash dividend of 23.5 million yuan (R MB), the remaining undistributed profit will be finished next year. (B shares converted into dollars).
III.. Other matters to be disclosed
(1) Explanation of the Board of Directions and Supervisory Committee Concerning the― non-standard auditreport‖ issued by the CPAs firm for the reporting period.
√Not applicable
V. Important Events
I Major lawsuits, Arbitration affairs and Query form media
In the reporting year, the Company had never been involved in any material lawsuit ,arbitration and
Query form media.
II. Matters concerning bankruptcy and reorganization
In the report year, the Company was not involved in matters concerning bankruptcy or reorganization. III..Asset transactions or enterprise merger
√ Not applicable
IV. Implementation and influence of any equity incentive plan of the Company
√ Not applicable
V.Material related transactions
(I) Related transactions in connection with daily operation
1.
Matters that have been disclosed in provisional announcements and there has been no change or devel op of subsequent implementation.
|||
|-|-|
|Summary of matters|Inquiry indexing|
|Announcement of External Investment and Related Transaction ofHuangshi Dongbei Electrical Appliance Co., Ltd.|Refer to the website of Shanghai Stock Exchange：1. March 21, 2014，Announcement of Resolutions ofthe first Provisional of the Meeting of the board ofdirectors of Huangshi Dongbei Electrical ApplianceCo., Ltd. No.:2014-002.2． March 21,2014，Announcement of External Investmentand Related Transaction of Huangshi Dongbei ElectricalApplicance Co., Ltd., No.:2014-004..3. April 8, 2014，Announcement of Resolutions ofthe First provisional shareholders' general meeting ofHuangshi Dongbei Electrical Appliance Co., Ltd. No.:2014-006.|

VI. Significant contracts and the status of their performance
(1)The trust, contracting and renting matters
√Not applicable
(2). Particulars of guarantee
In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Particulars about the external guarantee of the Company(Barring the guarantee for the controlling subsidiaries)||||||||||||||
|Name ofguaranteetarget|Relation|warrantee|Amountofguarantee|Occurrencedate (date ofagreementsigning)|Guarantee thestarting date|Guarantee theexpiration date|Type ofguarantee|Whetherterminated|Whetherguaranteeexceedthedelinquencydate|Guaranteedemurrage|whetheranti-guaranteeexistor not|Whetherprovided torelatedparties|Relationship|
|HuangshiDongbeiElectricalAppliance Co.,Ltd.|TheCompany|HuangshiDongbeiElectromechanicalGroup Co.,Ltd.|2,000.00|January 16,2014|January 16,2014|January 16,2015|Guaranteewith jointresponsibility|No|No||No|Yes|Controllingshareholders|
|HuangshiDongbeiElectricalAppliance Co.,Ltd.|TheCompany|HuangshiDongbeiElectromechanicalGroup Co.,Ltd.|1,000.00|April26,2014|April 26,2013|April 26,2014|Guaranteewith jointresponsibility|No|No||No|Yes|Controllingshareholders|
|HuangshiDongbeiElectricalAppliance Co.,Ltd.|TheCompany|HuangshiDongbeiRefrigerating Co.,Ltd.|1,000.00|September 4,2013|September 4,2013|September 4,2014|Guaranteewith jointresponsibility|No|No||No|Yes|Controlsubsidiaryof thepartentcompany|
|HuangshiDongbeiElectricalAppliance Co.,Ltd.|TheCompany|HuangshiDongbeiRefrigerating Co.,Ltd.|1,000.00|December3,2013|December 3,2013|December 2,2014|Guaranteewith jointresponsibility|No|No||No|Yes|Controlsubsidiaryof thepartentcompany|

||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||Guaranteewith jointresponsibility||||||
|HuangshiDongbeiElectricalAppliance Co.,Ltd.|TheCompany|HuangshiDongbeiRefrigerating Co.,Ltd.|980.00|April 24,2014|April 24,2014|September19, 2014|Guaranteewith jointresponsibility|No|No|No|Yes|Controlsubsidiaryof thepartentcompany|
|HuangshiDongbeiElectricalAppliance Co.,Ltd.|TheCompany|HuangshiDongbeiRefrigerating Co.,Ltd.|1,220.00|May 8, 2014|May 8, 2014|October 17,2014|Guaranteewith jointresponsibility|No|No|No|Yes|Contralsubsidiaryof thepartentcompany|
|Total amount of guarantee in the report (Barring the guarantee for the controlling subsidiaries)||||||||7,700.00|||||
|Total balance of guarantee in the report(A)(Barring the guarantee for the controlling subsidiaries)||||||||7,700.00|||||
|Guarantees provided by the Company to its controlled subsidiaries|||||||||||||
|Total amount of guarantees provided to subsidiaries in the report period||||||||80,559.00|||||
|Total balance of guarantees provided to subsidiaries at the end of the report period(B)||||||||51,939.82|||||
|Total amount of guarantees provided by the company (including the guarantees provided to controlled subsidiaries)|||||||||||||
|Total amount of guarantee（A+B）||||||||59,639.82|||||
|Proportion of the total guarantee in the net assets of the Company(%)||||||||64.67|||||
|Of which:|||||||||||||
|Guarantees provided to the shareholders, substantial controllers and the related parties（C）||||||||7,700.00|||||
|Guarantees provided to objects with over70%in liability/capital rate, directly or indirectly（D）||||||||53,924.82|||||
|Amount of guarantee over 50％ of the net asset（E）||||||||13,528.01|||||
|Total of the above 3*（C+D+E）||||||||53,924.82|||||

(3)Other Significant of contracting
The Company was not involved in contracted business in this report period.
VII. Performance of commitments
√Not applicable
VIII . Penalty to the Company and its directors, supervisors and senior executives, shareholders
holding over5% of total shares, actual controller or buyer and particulars about rectification
In the report period, the Company and its directors, supervisors and senior executives, shareholders holding over5% of total shares, actual controller or buyer were not subject to investigation, administrative penalty and public reprimand by CSRC or public condemnation by stock exchange.
IX. Status of corporate governance
The company is strictly according to the principle of "the company law", "The Securities Law", "man agement of listing Corporation standards", other relevant laws, regulations, and normative documents and "the provisions of the articles of association of the company", constantly improve the corporate g overnance structure, regulate the operations of the company, establish and improve the corporate gove rnance structure and the rules of procedure, formed a system of a general meeting of shareholders, bo ard of directors, board of supervisors and the management of the company as the decision-making bod y structure and management, perform the duties of the "company law" and "articles of association" in accordance with the law, to ensure that the company's effective operation, and earnestly safeguard the interests of the majority of investors. Corporate governance situation and the SFC issued relevant listi ng Corporation management normative documents requested does not exist differences.
VI. Particulars about Changes in Share Capital and Shareholders
I. The changes in share capital
(1) The changes in share capital
1.The changes in share capital
In the report period, the total shares and share capital structure of the Company has remained unchanged.
（2）Change in conditional shares
The Company has not changed in conditional shares of the Report period .
II.Particulars shareholders
1. Shareholding of shareholders holding more than5% shares
In Shares
|||||||||
|-|-|-|-|-|-|-|-|
|Total number of shareholders as at the end of the report period|||||19,493|||
|Particulars about the shareholding of the top ten shareholders||||||||
|Shareholdername|Properties ofshareholder|Shareproportion %|Total quantityof shares held|Increase ordecrease in theyear||Quantity ofConditionalshares held|Quantity ofPledged orfrozen shares|
|HuangshiDongbeiElectromechanical Group Co.,Ltd.|State-ownedlegal person|50.04|117,600,000|0||117,600,000|N/A|
|Sun Menglin|Domesticnatural person|1.19|2,805,757|-3,526||0|Unknown|
|Hu Jiaying|Domesticnatural person|0.69|1,627,537|602,401||0|Unknown|
|ChangzhouZhongkeElectricmanufactureCo., Ltd.|DomesticNon-State-owned legalperson|0.34|800,000|0||800,000|N/A|
|Wang Yujie|Domesticnatural person|0.22|510,600|26,600||0|Unknown|
|Fan Jongyang|Domesticnatural person|0.19|449,301|221,300||0|Unknown|
|Zhang Zhiping|Domesticnatural person|0.18|429,300|6,800||0|Unknown|
|Jiang Zhongfa|Domesticnatural person|0.17|400,000|0||0|Unknown|
|ChangshuTianyinElectromechanical Co., Ltd.|DomesticNon-State-owned legalperson|0.17|400,000|0||400,000|N/A|
|ShaoxingXingbeiPressing Co.,|DomesticNon-State-owned legal|0.17|400,000|0||400,000|N/A|

Ltd. person
||||
|-|-|-|
|Shareholding of top 10 shareholders of unrestricted shares|||
|Name of the shareholder|Quantity of unrestricted shares held|Type and Quantity of shares|
|Sun Menglin|2,805,757|Foreign shares placed indomestic exchange|
|Hu Jiaying|1,627,537|Foreign shares placed indomestic exchange|
|Wang Yujie|510,600|Foreign shares placed indomestic exchange|
|Fan Jiongyang|449,301|Foreign shares placed indomestic exchange|
|Zhang Zhiping|429,300|Foreign shares placed indomestic exchange|
|Jiang Zhongfa|400,000|Foreign shares placed indomestic exchange|
|Qin Weiqi|311,100|Foreign shares placed indomestic exchange|
|SHENYIN WANGUO NOMINEES (H.K.)LTD.|303,100|Foreign shares placed indomestic exchange|
|Zhang Yanfang|300,420|Foreign shares placed indomestic exchange|
|Sun Xinliang|300,000|Foreign shares placed indomestic exchange|
|Explanation on associated relationship amongthe aforesaid shareholders|Of the top 10 shareholders, Huangshi Dongbei Electromechanical GroupCo., Ltd., the largest single shareholder, has no relationship with othershareholders of the Company. They are not the persons taking concertedaction defined in the Regulations on the Information Disclosure of theChange of Shareholding of Shareholders of Listed Companies. TheCompany does not know whether there is relation between othershareholders or whether they are persons taking concerted action defined inthe Regulations on the Information Disclosure of the Change ofShareholding of Shareholders of Listed Companies.||

III. Change of the controlling shareholder or the actual controller
The controlling shareholder or actual controller of the Company has not changed.
Section VII. Situation of the Preferred Shares
No issue regarding preference shares in the report period.
VIII.Particulars about Directors, Supervisors and Senior Executives
1.Change of shares hold
(1) The change of shareholding of directors, supervisors and senior executives who currently hold
their posts or left their posts in the report period and particulars
Shares held by directors , supervisors and senior executives have no changes in reporting period.
2.Change in directors, supervisors and senior executives
|||||
|-|-|-|-|
|Name|Titles|Change situation|Reason|
|Lin Yinkun|General Manager|Appointment|New hires of the board of directors|
|Jiang Shouming|Deputy GeneralManager|Appointment|New hires of the board of directors|
|Lin Yinkun|Director|Elected|At expiration of office term of theBoard of Directors|
|Lu Lihua|Director|Elected|At expiration of office term of theBoard of Directors|
|Xie Jincheng|Indepenment director|Elected|At expiration of office term of theBoard of Directors|
|Ma Yanping|Supervisor|Elected|At expiration of office term of theSupervisory committee|
|Hu Rongzhi|Supervisor|Elected|At expiration of office term of theSupervisory committee|
|Fang Zeyun|General Manager|Leave his post|Work changes|
|Fang Zeyun|Director|Leave his post|Qualitative and quantitative of theBoard of Directors|
|Cao Lijian|Director|Leave his post|Qualitative and quantitative of theBoard of Directors|
|Yu Yumiao|Independent director|Leave his post|Qualitative and quantitative of theBoard of Directors|
|Huang Bo|Deputy General director|Leave his post|Work changes|
|Wang Huasheng|Supervisor|Leave his post|Qualitative and quantitative of theSupervisory committee|
|Jiang Zhian|Supervisor|Leave his post|Qualitative and quantitative of theSupervisory committee|
|Guo Shuiquan|Deputy General director|Leave his post|At expiration of office term of theBoard of Directors|

IX.Financial report (Unaudited)
1. Financial statements
Consolidated Balance Sheet
Prepared by: Huangshi Dongbei Electrical Appliance Co., Ltd.
June 30, 2014 In RMB
|||||
|-|-|-|-|
|Items|Notes|Year-end balance|Year-beginning balance|
|Current asset：||||
|Monetary fund||591,751,600.35|528,112,035.59|
|Settlement provision||||
|Outgoing call loan||||
|Trading financial assets||||
|Bill receivable||779,205,686.19|733,301,431.98|
|Account receivable||1,213,258,282.42|999,871,333.83|
|Prepayments||136,367,418.15|127,409,973.54|
|Insurance receivable||||
|Reinsurance receivable||||
|Provisions of Reinsurance contractsreceivable||||
|Interest receivable||||
|Dividend receivable||||
|Other account receivable||15,983,894.44|10,294,402.66|
|Repurchasing of financial assets||||
|Inventories||392,005,528.83|528,984,793.37|
|Non-current asset due in 1 year||||
|Other current asset||||
|Total of current assets||3,128,572,410.38|2,927,973,970.97|
|Non-current assets：||||
|Loans and payment on other‘s behalfdisbursed||||
|Disposable financial asset||||
|Expired investment in possess||||
|Long-term receivable||||
|Long term share equity investment||5,340,169.88|5,579,199.37|
|Property investment||3,449,811.04|3,876,879.92|
|Fixed assets||803,499,754.65|816,542,012.66|
|Construction in progress||44,840,541.79|14,031,259.01|
|Engineering material||||
|Fixed asset disposal||||
|Production physical assets||||
|Gas & petrol||||
|Intangible assets||74,967,274.90|75,740,680.14|

R& D petrol
||||
|-|-|-|
|Goodwill|||
|Long-germ expenses to be amortized|1,304,472.89|1,031,854.03|
|Differed income tax asset|7,809,352.51|6,899,448.19|
|Other non-current asset|||
|Total of non-current assets|941,211,377.66|923,701,333.32|
|Total of assets|4,069,783,788.04|3,851,675,304.29|

Consolidated BalanceSheet(Cont‘d)
||||
|-|-|-|
|Current liabilities|||
|Short-term loans|729,051,374.00|682,506,600.00|
|Loan from Central Bank|||
|Deposit received and hold for others|||
|Call loan received|||
|Trade off financial liabilities|||
|Bill payable|870,709,166.62|736,273,961.21|
|Account payable|885,692,098.07|940,272,373.02|
|Prepayment|14,979,523.29|14,762,754.06|
|Selling of repurchased financial assets|||
|Fees and commissions receivable|||
|Employees‘ wage payable|23,325,036.66|42,108,898.55|
|Tax payable|36,218,098.38|29,510,041.41|
|Interest Payable||960,328.49|
|Dividend Payable|10,009,121.12|10,009,121.12|
|Other account payable|208,946,851.69|190,061,481.50|
|Reinsurance fee payable|||
|Insurance contract provision|||
|Entrusted trading of securities|||
|Entrusted selling of securities|||
|Non-current liability due in 1 year|120,000,000.00||
|Other current liability|||
|Total of current liability|2,898,931,269.83|2,646,465,559.36|
|Non-current liabilities：|||
|Long-term loan|1,440,000.00|121,440,000.00|
|Bond payable|||
|Long-term payable|73,593,343.26|20,784,033.34|
|Special payable|5,000,000.00|5,000,000.00|
|Expected liabilities|||
|Differed income tax liability|||
|Other non-current liabilities|||
|Total of non-current liabilities|80,033,343.26|147,224,033.34|
|Total of liability|2,978,964,613.09|2,793,689,592.70|
|Owners‘ equity|||
|Share capital|235,000,000.00|235,000,000.00|
|Capital reserves|190,111,836.26|190,111,836.26|

Less：Shares in stock
||||
|-|-|-|
|Special reserves|||
|Surplus reserves|37,944,193.35|37,944,193.35|
|Common risk provision|||
|Undistributed profit|459,531,850.18|434,569,646.73|
|Different of foreign currency translation|-351,700.00|-193,065.70|
|Total of owner‘s equity belong to the parentcompany|922,236,179.79|897,432,610.64|
|Minor shareholders‘ equity|168,582,995.16|160,553,100.95|
|Total of owners‘ equity|1,090,819,174.95|1,057,985,711.59|
|Total of liabilities and owners‘ equity|4,069,783,788.04|3,851,675,304.29|

Legal representative：Yang Baichang
Person-in-charge of the accountingwork：Lu Lihua
Person-in -charge of the accountingorgan：Ma Li
Parent Company Balance Sheet
June 30, 2014
Prepared by: Huangshi Dongbei Electrical Appliance Co., Ltd.
In RMB
|||||
|-|-|-|-|
|Items|Notes|Year-end balance|Year-beginning balance|
|Current Assets||||
|Monetary fund||329,811,216.22|279,658,871.30|
|Trading financial assets||||
|Bills receivable||290,158,214.31|258,130,401.42|
|Accounts receivable||865,454,838.26|706,933,185.41|
|Prepayment||195,055,751.52|187,524,627.07|
|Interest receivable||||
|Dividend receivable||||
|Other receivables||5,457,458.98|8,403,825.26|
|Inventory||337,263,143.17|412,601,513.10|
|Non-current assets duewithin 1 year||||
|Other current assets||||
|Total of current assets||2,023,200,622.46|1,853,252,423.56|
|Non-current assets||||

Sellable financial assets
||||
|-|-|-|
|Expired investment inpossess|||
|Long-term receivables|||
|Long –term equityinvestment|210,646,277.60|62,646,277.60|
|Investment real estate|||
|Fixed assets|454,501,056.27|459,862,876.50|
|Construction in progress|25,322,292.35|7,866,927.30|
|Construction materials|||
|Disposal of fixed assets|||
|Capitalized biologicalassets|||
|Oil-gas assets|||
|Intangible assets|34,888,632.90|35,456,430.70|
|Development expenditure|||
|Goodwill|||
|Long-term deferredexpenses|||
|Deferred tax assets|6,388,003.36|5,958,099.04|
|Other non-current assets|||
|Total of non-current assets|731,746,262.48|571,790,611.14|
|Total assets|2,754,946,884.94|2,425,043,034.70|

 Parent Company BalanceSheet(Cont‘d)
||||
|-|-|-|
|Current Liabilities|||
|Short-term loans|461,262,990.00|429,229,890.00|
|Trading financial liabilities|||
|Bill payable|411,828,281.58|278,227,961.21|
|Account payable|496,947,736.78|470,193,678.60|
|Advances from thecustomers|598,723,381.28|464,648,456.39|
|Employees ‗ wage payable|10,458,541.56|17,205,724.65|
|Taxes payable|22,569,763.12|22,588,647.68|
|Interests payable|||
|Dividends payable|||
|Other payables|29,914,308.94|30,550,834.86|

Non-current liabilities due
120,000,000.00
within 1 year
||||
|-|-|-|
|Other current liabilities|||
|Total of current liabilities|2,151,705,003.26|1,712,645,193.39|
|Non-current liabilities|||
|Long-term loans||120,000,000.00|
|Bonds payables|||
|Long-term payable|24,191,183.34|19,737,433.34|
|Specific purpose accountpayable|||
|Contingent liabilities|||
|Deferred tax liabilities|||
|Other non-current liabilities|||
|Total of Non-currentliabilities|24,191,183.34|139,737,433.34|
|Total liabilities|2,175,896,186.60|1,852,382,626.73|
|Shareholders‘ Equity|||
|Share capital|235,000,000.00|235,000,000.00|
|Capital surplus|90,801,937.51|90,801,937.51|
|Less：Treasury stock|||
|Special reserves|||
|Surplus reserves|37,944,193.35|37,944,193.35|
|Common risk provision|||
|Undistributed profit|215,304,567.48|208,914,277.11|
|Total of owners‘ equity|579,050,698.34|572,660,407.97|
|Total of liabilities andowners‘ equity|2,754,946,884.94|2,425,043,034.70|

Legal representative：Yang Baichang
Person-in-charge of the accountingwork：Lu Lihua
Person-in -charge of the accountingorgan：Ma Li
Consolidated Profit statement
January-June 2014
In RMB
|||||
|-|-|-|-|
|Items|Notes|Amount of the Reportperiod|Amount of previous year|
|I.Total business income||2,269,550,201.85|2,390,456,912.38|
|Less：Business income||2,269,550,201.85|2,390,456,912.38|
|Interest income||||
|Insurance fee earned||||
|Fee and commission received||||
|II.Total business cost||2,234,700,689.15|2,352,773,842.02|
|Incl：Business cost||2,026,592,510.22|2,143,762,531.87|
|Interest expense||||
|Fee and commission paid||||
|Reinsurance expenses||||
|Insurance discharge payment||||
|Net claim amount paid||||
|Insurance policy dividend paid||||
|Reinsurance expenses||||
|Business tax and surcharge||8,154,348.54|8,300,539.12|
|Sales expense||56,321,177.74|56,012,811.31|
|Administrative expense||109,089,449.94|98,710,434.27|
|Financial expenses||28,477,173.91|38,280,044.61|
|Asset impairment loss||6,066,028.80|7,707,480.84|
|Add：Gains from change of fir value（―-‖for loss）||||
|Investment gain（―-‖for loss）||-239,029.49|-189,848.03|
|Incl: investment gains from affiliates||||
|Gains from currency exchange（―-‖for loss）||||
|III. Operational profit（―-‖for loss||34,610,483.21|37,493,222.33|
|Add：Non-business income||14,723,771.45|6,454,525.37|
|Less：Non business expenses||2,175,388.22|1,578,634.33|
|Incl：Loss from disposal of non-currentassets||||
|IV.Total profit(―-‖for loss)||47,158,866.44|42,369,113.37|
|Less：Income tax expenses||14,166,768.78|13,153,331.49|
|V. Net profit（―-‖for net loss||32,992,097.66|29,215,781.88|
|Net profit attributable to the owners ofparent company||24,962,203.45|24,062,624.84|
|Minority shareholders‘ equity||8,029,894.21|5,153,157.04|
|VI. Earnings per share：||||
|（I）Basic earnings per share||0.106|0.102|
|(II)Diluted earnings per share||0.106|0.102|

VII. Other comprehensive income
||||
|-|-|-|
|VIII. Total comprehensive income|32,992,097.66|29,215,781.88|
|Total comprehensive income attributable tothe owner of the parent company|24,962,203.45|24,062,624.84|
|Total comprehensive income attributableminority shareholders|8,029,894.21|5,153,157.04|

Legal representative：Yang Baichang
Person-in-charge of the accountingwork：Lu Lihua
Person-in -charge of the accountingorgan：Ma Li
Parent Company profit statement
January–June 2014 In RMB
|||||
|-|-|-|-|
|Items|Notes|Amount of the Reportperiod|Amount of previous year|
|I. Business income||1,638,124,367.58|1,844,438,182.12|
|Less：Business cost||1,535,263,926.01|1,733,785,968.06|
|Business tax and surcharge||4,680,493.73|1,606,641.97|
|Sales expense||22,191,197.74|22,447,716.79|
|Administrative expense||56,979,768.22|54,935,545.95|
|Financial expenses||8,678,845.38|17,802,558.77|
|Asset impairment loss||2,866,028.80|6,339,426.91|
|Add：Gains from change of fair value||||
|Investment Income||||
|Including： Investment gains from affiliatesenterprises and Joint venture enterprises||||
|II.Business profit||7,464,107.70|7,520,323.67|
|Add：Non-business income||3,652,137.04|5,306,652.07|
|Less：Non business expenses||1,857,079.60|1,445,359.94|
|Including：Loss from disposal of non-currentassets||||
|III. Total profit||9,259,165.14|11,381,615.80|
|Less：Income tax expenses||2,868,874.77|3,529,717.99|
|IV. Net profit||6,390,290.37|7,851,897.81|
|V. Earnings per share：||||

||||
|-|-|-|
|（I）Basic earnings per share|0.0272|0.0334|
|(II)Diluted earnings per share|0.0272|0.0334|
|VI. Other comprehensive income|||
|VII. Total comprehensive income|6,390,290.37|7,851,897.81|

 Legal representative：Yang Baichang
Person-in-charge of the accountingwork：Lu Lihua
Person-in -charge of the accountingorgan：Ma Li
Consolidated Cash flow statement
January–June 2014 In RMB
|||||
|-|-|-|-|
|Items|Notes|Amount of the Reportperiod|Amount of previousyear|
|I.Net cash flow from business operation||||
|Cash received from sales of products andproviding of services||2,387,154,827.55|2,555,650,453.63|
|Net increase of customer deposits andcapital kept for brother company||||
|Net increase of loans from central bank||||
|Net increase of inter bank loans from otherfinancial bodies||||
|Cash received against original insurancecontract||||
|Net cash received from reinsurance business||||
|Net increase of client deposit and investment||||
|Net increase of trade financial asset disposal||||
|Cash received as interest, processing fee, andcommission||||
|Net increase of inter bank fund received||||
|Net increase of repurchasing business||||
|Tax returned||29,828,393.37|33,745,483.94|
|Other cash received from business operation||27,144,437.08|10,941,302.88|
|Subtotal of cash inflow from businessactivities||2,444,127,658.00|2,600,337,240.45|
|Cash paid for purchasing of merchandise andservices||1,969,083,511.61|2,375,296,168.72|
|Net increase of client trade and advance||||
|Net increase of savings in central bank andbrother company||||
|Cash paid for original contract claim||||

Cash paid for interest, processing fee and
commission
||||
|-|-|-|
|Cash paid for policy dividend|||
|Cash paid to staffs or paid for staffs|171,237,628.09|167,404,419.89|
|Taxes paid|70,940,653.39|85,412,321.97|
|Other cash paid for business activities|60,213,369.23|58,335,880.48|
|Subtotal of cash outflow from businessactivities|2,271,475,162.32|2,686,448,791.06|
|Cash flow generated by business operation,net|172,652,495.68|-86,111,550.61|
|II. Cash flow generated by investing|||
|Cash received from investment retrieving|||
|Cash received as investment gains|||
|Net cash retrieved from disposal of fixedassets, intangible assets, and other long-termassets|517,601.00|145,499.95|
|Net cash received from disposal ofsubsidiaries or other operational units|||
|Other investment related cash received|||
|Subtotal of cash inflow due to investmentactivities|517,601.00|145,499.95|
|Cash paid for construction of fixed assets,intangible assets and other long-term assets|69,299,971.21|53,566,626.51|
|Cash paid at investment|||
|Net increase of loan against pledge|||
|Net cash received from subsidiaries and otheroperational units|||
|Other cash paid for investment activities|||
|Subtotal of cash outflow due to investmentactivities|69,299,971.21|53,566,626.51|
|Net cash flow generated by investment|-68,782,370.21|-53,421,126.56|
|III.Cash flow generated by financing|||
|Cash received as investment|||
|Incl: Cash received as investment from minorshareholders|||
|Cash received as loans|759,405,225.83|1,061,479,516.00|
|Cash received from bond placing|||
|Other financing –related cash received|||
|Subtotal of cash inflow from financingactivities|759,405,225.83|1,061,479,516.00|
|Cash to repay debts|688,924,502.00|814,637,118.00|
|Cash paid as dividend, profit, or interests|24,108,778.25|23,290,342.41|
|Incl: Dividend and profit paid by subsidiariesto minor shareholders|||
|Other financing –related cash received|||
|Subtotal of cash outflow due to financingactivities|713,033,280.25|837,927,460.41|
|Net cash flow generated by financing|46,371,945.58|223,552,055.59|

||||
|-|-|-|
|IV. Influence of exchange rate alternation oncash and cash equivalents|||
|V.Net increase of cash and cash equivalents|150,242,071.05|84,019,378.42|
|Add：Balance of cash and cash equivalents atthe beginning of term|441,509,529.30|507,535,311.99|
|VI. Balance of cash and cash equivalents atthe end of term|591,751,600.35|591,554,690.41|

Legal representative：Yang Baichang
Person-in-charge of the accountingwork：Lu Lihua
Person-in -charge of the accountingorgan：Ma Li
Parent Company Cash flow statement
January–June 2014 In RMB
|||||
|-|-|-|-|
|Items|Notes|Amount of the Reportperiod|Amount of previousyear|
|I.Cash flow from operating activities||||
|Cash received from sales of goods or rending ofservices||1,948,367,613.31|2,206,349,473.83|
|Refunded taxes and levies||22,715,655.70|32,804,026.48|
|Other cash receipts related to operatingactivities||8,491,874.42|4,345,723.94|
|Subtotal of cash inflow||1,979,575,143.43|2,243,499,224.25|
|Cash paid for purchasing commodities andaccepting labor||1,573,678,862.46|2,160,934,010.83|
|Cash paid to staffs or paid for staffs||83,722,501.15|84,076,127.77|
|Taxes paid||23,203,186.21|15,033,254.48|
|Other cash paid for business activities||46,580,001.23|54,887,675.73|
|Sub-total of cash outflow||1,727,184,551.05|2,314,931,068.81|
|Cash flow generated by business operation, net||252,390,592.38|-71,431,844.56|
|II.Cash flow generated by investing||||
|Cash received from investment retrieving||||
|Cash received as investment gains||||
|Net cash retrieved from disposal of fixed assets,intangible assets, and other long-term assets||517,601.00|145,499.95|
|Net cash received from disposal of subsidiariesor other operational units||||
|Other investment-related cash received||||
|Sub-total of cash inflow||517,601.00|145,499.95|
|Cash paid for construction of fixed assets,intangible assets and other long-term assets||42,409,793.24|40,592,405.58|
|Cash paid as investment||148,000,000.00||

||||
|-|-|-|
|Net cash received from subsidiaries and otheroperational units|||
|Other cash paid for investment activities|||
|Sub-total of cash outflow|190,409,793.24|40,592,405.58|
|Net cash flow generated by investment|-189,892,192.24|-40,446,905.63|
|III.Cash flow from financing activities|||
|Cash flow from absorption investing|||
|Cash received as loans|525,679,437.00|832,696,148.00|
|Cash received from bond placing|||
|Other financing –related cash received|||
|Subtotal of cash inflow from financing activities|525,679,437.00|832,696,148.00|
|Cash to repay debts|492,499,302.00|558,338,750.00|
|Cash paid as dividend, profit, or interests|13,377,440.53|11,976,209.95|
|Other financing –related cash received|||
|Subtotal of cash outflow due to financingactivities|505,876,742.53|570,314,959.95|
|Net cash flow generated by financing|19,802,694.47|262,381,188.05|
|IV. Influence of exchange rate alternation oncash and cash equivalents|||
|V.Net increase of cash and cash equivalents|82,301,094.61|150,502,437.86|
|Add：Balance of cash and cash equivalents atthe beginning of term|247,510,121.61|239,540,473.29|
|VI. Balance of cash and cash equivalents at theend of term|329,811,216.22|390,042,911.15|

Legal representative：Yang Baichang
Person-in-charge of the accountingwork：Lu Lihua
Person-in -charge of the accountingorgan：Ma Li
Consolidated Statement on Change ofOwners‘ Equity
January–June 2014
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Items|Amount of the current term||||||||||
||Owners‘ Equity attributable to Parent Company||||||||Minorshareholders‘equity|Total ofowners‘equity|
||Share Capital|Capitalreserves|Less:Shares instock|Specializedreserve|Surplusreserves|Common riskprovision|Attributableprofit|Other|||
|I.Balance at the end of last year|235,000,000.00|190,111,836.26|||37,944,193.35||434,569,646.73|-193,065.70|160,553,100.95|1,057,985,711.59|
|Add: Change of accountingpolicy|||||||||||
|Correcting of previous errors|||||||||||
|Other|||||||||||
|II.Balance at the beginning ofcurrent year|235,000,000.00|190,111,836.26|||37,944,193.35||434,569,646.73|-193,065.70|160,553,100.95|1,057,985,711.59|
|III.Changed in the current year|||||||24,962,203.45|-158,634.30|8,029,894.21|32,833,463.36|
|（I） Net profit|||||||24,962,203.45||8,029,894.21|32,992,097.66|
|（II）Other misc.income||||||||-158,634.30||-158,634.30|
|Total of (I) and (II)|||||||24,962,203.45|-158,634.30|8,029,894.21|32,833,463.36|
|(III) Investment or decreasingof capital by owners|||||||||||
|1. Capital inputted by owners|||||||||||
|2．Amount of shares paid andaccounted as owners‘ equity|||||||||||
|3．Other|||||||||||
|（IV）Profit allotment|||||||||||
|1.Providing of surplus reserves|||||||||||
|2．Common risk provision|||||||||||

|||||||||
|-|-|-|-|-|-|-|-|
|3. Allotment to the owners (orshareholders)||||||||
|4．Other||||||||
|(V) Internal transferring ofowners‘ equity||||||||
|1. Capitalizing of capitalreserves (or to capital shares)||||||||
|2. Capitalizing of surplusreserves (or to capital shares)||||||||
|3．Making up losses by surplusreserves.||||||||
|4．Other||||||||
|(VI) Special reserves||||||||
|1. Provided this year||||||||
|2．Used this term||||||||
|(VII).Other||||||||
|IV. Balance at the end of thisterm|235,000,000.00|190,111,836.26|37,944,193.35|459,531,850.18|-351,700.00|168,582,995.16|1,090,819,174.95|

 In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Items|Amount in last year||||||||||
||Owner‘s equity Attributable to the Parent Company||||||||Minorshareholders‘equity|Total ofowners‘equity|
||Share Capital|Capitalreserves|Less:Shares instock|Specializedreserve|Surplusreserves|Common riskprovision|Attributableprofit|Other|||
|I.Balance at the end of lastyear|235,000,000.00|190,111,836.26|||36,008,607.48||342,680,456.41||137,739,123.68|941,540,023.83|
|Add：Business combinationinvolving entities undercommon control|||||||||||
|Add: Change of accountingpolicy|||||||||||
|Correcting of previous errors|||||||||||
|Other|235,000,000.00|190,111,836.26|||36,008,607.48||342,680,456.41||137,739,123.68|941,540,023.83|
|II.Balance at the beginning of|||||1,935,585.87||91,889,190.32|-193,065.70|22,813,977.27|116,445,687.7|

|||||||||
|-|-|-|-|-|-|-|-|
|current year|||||||6|
|III.Changed in the currentyear||||93,824,776.19||22,813,977.27|116,638,753.46|
|（I） Net profit|||||-193,065.70||-193,065.70|
|（II）Other misc.income||||93,824,776.19|-193,065.70|22,813,977.27|116,445,687.76|
|Total of (I) and (II)||||||||
|(III) Investment or decreasingof capital by owners||||||||
|1. Capital inputted by owners||||||||
|2．Amount of shares paid andaccounted as owners‘ equity||||||||
|（IV）Profit allotment|||1,935,585.87|-1,935,585.87||||
|1.Providing of surplusreserves|||1,935,585.87|-1,935,585.87||||
|2．Common risk provision||||||||
|3. Allotment to the owners (orshareholders)||||||||
|4. Other||||||||
|(V) Internal transferring ofowners‘ equity||||||||
|1. Capitalizing of capitalreserves (or to capital shares)||||||||
|2. Capitalizing of surplusreserves (or to capital shares)||||||||
|3．Making up losses bysurplus reserves.||||||||
|4. Other||||||||
|(VI) Special reserves||||||||
|1. Provided this year||||||||
|2．Used this term||||||||
|(VII).Other||||||||
|IV. Balance at the end of thisterm|235,000,000.00|190,111,836.26|37,944,193.35|434,569,646.73|-193,065.70|160,553,100.95|1,057,985,711.59|

Legal representative：Yang Baichang
Person-in-charge of the accountingwork：Lu Lihua
Person-in -charge of the accountingorgan：Ma Li
Statement on Changes ofOwners‘ Equity of Parent Company
January-June 2014 In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Items|Amount of the current term||||||||
||Practical capitalcollected|Capitalreserves|Less：Sharesinstock|Specializedreserve|Surplusreserves|Common riskprovision|Attributableprofit|Total ofowners‘ equity|
|I.Balance at the end of last year|235,000,000.00|90,801,937.51|||37,944,193.35||208,914,277.11|572,660,407.97|
|Add: Change of accounting policy|||||||||
|Correcting of previous errors|||||||||
|Other|||||||||
|II.Balance at the beginning of current year|235,000,000.00|90,801,937.51|||37,944,193.35||208,914,277.11|572,660,407.97|
|III.Changed in the current year|||||||6,390,290.37|6,390,290.37|
|（I） Net profit|||||||6,390,290.37|6,390,290.37|
|（II）Other misc.income|||||||||
|Total of (I) and (II)|||||||6,390,290.37|6,390,290.37|
|(III) Investment or decreasing of capital by owners|||||||||
|1. Capital inputted by owners|||||||||
|2.Amount of shares paid and accounted as owners‘equity|||||||||
|3. Other|||||||||
|（IV）Profit allotment|||||||||
|1.Providing of surplus reserves|||||||||
|2．Common risk provision|||||||||
|3. Allotment to the owners (or shareholders)|||||||||

|||||||
|-|-|-|-|-|-|
|4. Other||||||
|(V) Internal transferring of owners‘ equity||||||
|1. Capitalizing of capital reserves (or to capitalshares)||||||
|2. Capitalizing of surplus reserves (or to capitalshares)||||||
|3．Making up losses by surplus reserves.||||||
|4. Other||||||
|(VI) Special reserves||||||
|1. Provided this year||||||
|2．Used this term||||||
|(VII).Other||||||
|IV. Balance at the end of this term|235,000,000.00|90,801,937.51|37,944,193.35|215,304,567.48|579,050,698.34|

||||||||||
|-|-|-|-|-|-|-|-|-|
|Items|Amount in last year||||||||
||Share Capital|Capitalreserves|Less:Sharesinstock|Specializedreserve|Surplusreserves|Common riskprovision|Attributableprofit|Total of owners‘equity|
|I.Balance at the end of last year|235,000,000.00|90,801,937.51|||36,008,607.48||191,494,004.25|553,304,549.24|
|Add: Change of accounting policy|||||||||
|Correcting of previous errors|||||||||
|Other|||||||||
|II.Balance at the beginning of current year|235,000,000.00|90,801,937.51|||36,008,607.48||191,494,004.25|553,304,549.24|
|III.Changed in the current year|||||1,935,585.87||17,420,272.86|19,355,858.73|
|（I） Net profit|||||||19,355,858.73|19,355,858.73|
|（II）Other misc.income|||||||||
|Subtotal of (I) and (II)|||||||19,355,858.73|19,355,858.73|
|(III) Investment or decreasing of capital byowners|||||||||
|1. Capital inputted by owners|||||||||
|2．Amount of shares paid and accounted asowners‘ equity|||||||||

|||||||
|-|-|-|-|-|-|
|3. Other||||||
|（IV）Profit allotment|||1,935,585.87|-1,935,585.87||
|1.Providing of surplus reserves|||1,935,585.87|-1,935,585.87||
|2.Providing of common risk provisions||||||
|3．Allotment to the owners (or shareholders)||||||
|4．Other||||||
|(V) Internal transferring of owners‘ equity||||||
|1. Capitalizing of capital reserves (or to capitalshares)||||||
|2. Capitalizing of surplus reserves (or to capitalshares)||||||
|3．Making up losses by surplus reserves.||||||
|4. Other||||||
|(VI) Special reserves||||||
|1. Provided this year||||||
|2．Used this term||||||
|（VII）Other||||||
|IV. Balance at the end of this term|235,000,000.00|90,801,937.51|37,944,193.35|208,914,277.11|572,660,407.97|

 Legal representative：Yang Baichang
Person-in-charge of the accountingwork：Lu Lihua
Person-in -charge of the accountingorgan：Ma Li
Huangshi Dongbei Electrical Appliance Co., Ltd.
Notes to Financial Statements
（January 1, 2014-June 30,2014）
(Referring to notes to consolidated financial statements unless separately stated. Currency: RMB)
I. Company Profile
This Company is a joint stock company limited jointly promoted and established Huangshi Dongbei Refrigerating Machine Group Co., Ltd. (The Company is now renamed as Huangshi Dongbei Electromechanical Group Co., Ltd.), Changzhou Luoke Refrigerating Electrical Co., Ltd. (The Company is now renamed as Changzhou Zhongke Electrical Manufacturing Co., Ltd..), Changshu Bixi Radio Factory.( The Company is now renamed as Changshu Tianyin Electromechanical Co., Ltd.), Zhuji Electrical Machinery.( The Company is now renamed as Zhejiang Lisheng Electromechanical Manufacturing Co., Ltd.), Shaoxing Pressing Factory(The Company is now renamed as Shaoxing Xingbei Pressing Co., Ltd.),Wuhan Xinhua Hardware Factory (The Company is now renamed as Wuhan Xinhua Pressing Co., Ltd.), which was registered at Industrial and Commercial Administration of Hubei Province on March 10, 1999.
On May 28, 1999, the Company was approved by China Securities Regulatory Commission to issue 100,000,000 domestically listed foreign investment shares (B shares). B shares were listed and traded at Shanghai Stock Exchange on July 15, 1999. Over-allotment option for 15,000,000 shares was fully exercised before August 13, 1999.
After the completion of the issuance of B shares, the registered capital of the Company was RMB 235,000,000.00, which was divided into 235,000,000.00 shares with par value of RMB 1 per share. 117,600,000 shares are state-owned shares, which are held by Dongbei Refrigerating Machine Group Co. according to the entrustment by Huangshi State-owned Asset Administration. The other five promoters hold 2,400,000 shares. 115,000,000 shares are negotiable B shares.
The Company obtained WJMZSZ (1999) No. 0098 approval certificate on October 21, 1999 and obtained QGEZZ No. 002678 business license on November 2, 1999, becoming a sign-foreign joint venture company limited.
On September 10, 2002, Huangshi Dongbei Refrigerating Machine Group Co., Ltd. (now renamed as Huangshi Dongbei Refrigerating Machine Industrial Co.), the original controlling shareholder of the Company, established Huangshi Dongbei Electromechanical Group Co., Ltd. (hereinafter referred to as "Dongbei Electromechanical Group") with three asset management companies, i.e., Oriental, Huarong and Xinda with main operating assets (including50.04% equity of the Company held by it) according to the Agreement for Conversion of Creditor's Rights into Shares and the approval document issued by State Economic and Trading Commission to approve the conversion of creditor's rights into shares by Huangshi Dongbei Refrigerating Machine Group Co., Ltd. After Huangshi Dongbei Electromechanical Group Co., Ltd. was founded, the controlling shareholder of the company Refrigerating Machine Group Company was transferred to Huangshi Dongbei Electromechanical Group Co., Ltd. Because the nature of the 117.6 million shares of equity held by Refrigerating Machine Group Company was state shares, the equity transfer must be appoved by the Ministry of Finance. Huangshi Dongbei Cooler Group Company agreed to commission Huanshi Dongbei Electromechanical Group Co., Ltd. to manage the 117.6 million shares of state equity. On March 28, 2005, under GuoZiChanQuan[2005] No.197 Reply to Issues Related to Change of Stated-Owned Holder for Huangshi Dongbei Electrical Appliance Co., Ltd, State Council agreed to change the 117,600,000 state-owned shares of Huangshi Dongbei Electrical Appliance Co, Ltd held by Huangshi Dongbei Refrigerating Machinery Industry Corp. (the name of former Huangshi Dongbei Refrigerating Group Corp. was changed as Huangshi Dongbei Refrigerating Machinery Industry Corp.) to be held by Huangshi Dongbei Electromachinery(Group) Co., Ltd., with the changed nature of equity as state-owned legal-representative share.
Registered Address: No.6, Wuhuang Road, Tieshan District , Huangshi City, Hubei Province.
Business licence registration number: 420000400004635
Registered Capital : RMB 235,000,000.00
LegalRepresentative：Yang Baichang
Business scope: Production and sales of refrigerating compressors and electrical motors of compressors, development, production and consultation of high-tech products.
II.Significant accounting policies, accounting estimates and early errors
1. Basis for the preparation of financial statements
The preparation of financial statements of the company based on continuous operation.Base on actual transactions and events occurring, according to the ministry of finance issued―Accounting Standards for Enterprises - BasicStandards‖ on
15th
February 2006 and 38 items of specific accounting standards, application guidelines of accounting standards which was promulgated after, accounting standards interpretation and other requirements (hereafter named―Enterprise Accounting Standard”), based on the significant accounting policies described below, and will have the preparation to the accounting estimation. 2.Statement for complying with the accourting standard
The financial statements prepared by the Company comply with the requirements of corporate accounting standards. They truly and completely reflect the financial situations in June 30, 2014, operating results, equity changes and cash flow, and other relevant information of the company in January- June 2014.
Fiscal year: The fiscal year of the Company starts on January 1 and ends on June 30, on the Gregorian calendar.
3.Standard currency for bookkeeping:
If the account standard money is the other currency in addition to RMB
4.The accounting solution of business combinations under the same and different control
(1)Corporate merger under same control
For the corporate merger under same control, the method of equity should be adopted to do accounting treatment. Except for the adjustments due to different accounting policies, the assets and liabilities of the party being merged should be measured according to the original book value and goodwill will not form. The difference between the book value of the merging price and the book value of net assets obtained from merger should be adjusted in capital surplus. If the capital surplus is not enough to be deducted, the retained income should be adjusted.
The direct related occurring costs of the conduct of business merger reckon in profit or loss.
(2). Corporate merger under different controls
With the merger under the different control, the merger cost is the assets to pay, liabilities incurred or taken and the fair value of the issued equity securities which a buyer gains the control from the acquiree on the purchase date.
The combination cost is the sum of each single transaction cost for the enterprise combination achieved by multiple transactions step by step. All the relevant direct expense paid by the purchaser for the conduct of business combination should be accounted into current profit and loss. In case of any future events defined in merger contract whose predictable occurrence could influence the merger cost and the related amount could be reliably calculated at merger date, such amount should also be included in merger cost.
The acquiree acquired during the business merger not under same control met the conditions of confirmation can be identified as assets, loans and contingent liabilities, which are measured with the fair value at the date of purchase. The balance of the identifiable netassets‘ fair value, which is the merger cost from the buyer that is more than the acquiree confirmed, regarded as goodwill. Contrarily, less than the acquiree confirmed, after reviewing the merger cost still less than the acquiree confirmed in the balance of the identifiable netassets‘ fair value, reckoned in the profit and loss.
5. The method of drawing up the Consolidation financial statements
The company has real control to the subsidiary and special purpose entity which are included in the scope of Consolidation financial statements.
The combining financial statements are in accordance with the―No. 33 Accounting Standards for Enterprises–Consolidation FinancialStatements‖ and the related requirements for drawing up, offsetting the context of all major transactions and exchanges when is in merger. The subsidiary equity not belong the part of parent company, but is as minority interests presented separately in the Consolidation financial statements.
Subsidiaries and the company adopted accounting policies or be inconsistent in the accounting period,
in preparing Consolidation financial statements, in accordance with the company accounting policies or
has the necessary adjustments to financial statements of the subsidiary during the accounting period.
The business merger acquired subsidiaries under the different control, in preparing Consolidation financial statements, based on the fair value of identifiable net assets on the purchase date to adjust their individual financial statements; be under the same control, subsidiary acquired by the enterprise merger, will be regard as the enterprise merger at the beginning of the current period when the combination has already occurred, the current period from the beginning of the merger, its assets, liabilities, operating results and cash flows would include in the Consolidation financial statements.
6. The determination standard in cash and cash equivalents
The cash has been confirmed when the company drew up the cash flow sheet, it referred to the cash can be used to pay the deposit at any time
The cash listed in the cash flow statement refers to the cash in store and the cash can be obtained at any time. Cash equivalent means the holding period of the company is short, strong liquidity and low risk of value fluctuation.
7.The foreign currency business and the translation of foreign currency financial statement
（1）The foreign currency translation services
The company with the foreign occurring currency transactions, which used the standard money by the spot exchange rate on the transaction date to enter an item in an account.
The balance sheet date, For monetary items of foreign currency, the spot exchange rate at the date of balance sheet shall be used in conversion. The exchange balance due to the difference between the spot exchange rate at the date of balance sheet and the spot exchange rate at initial confirmation or at the date of previous balance sheet shall be attributed to the profit and loss of current period, except the exchange balance due to the special loans of foreign currency meeting the conditions of capitalization shall be attributed to the cost of related assets based on capitalization during the capitalization.
For the non-monetary items of foreign currency measured with historical cost, still the spot exchange rate at the date of transaction shall be used, and the amount of recording currency shall not be changed. For the non-monetary items of foreign currency measured with fair value, the spot exchange rate at the date of the fair value confirmation shall be used in conversion, the difference between the amount of recording currency after conversion and that of initial recording currency is made as the change of fair value, which shall be attributed to the profit and loss of current period or confirmed as other composite income and attributed to capital reserves.
（2）The foreign currency financial statements
The company with the subsidiaries, joint ventures and integrated enterprises and so on, will use the different functional currency account after the conversion by the foreign currency financial statements, and will have an accounting practice and an editing to the combined financial statements.
The assets in the balance sheet and liabilities items, by using the spot exchange rate on the balance sheet date, all equity projects except the item of―UndistributedProfits‖, other items were calculated by the spot exchange rate. With the income and expense items, it was determined by a systematic and rational approach, and calculated by the approximate exchange rate of the spot exchange rate to convert on the transaction date. The converting differences generated by the foreign currency financial statements, and all equity items in the balance sheet are listed separately.
The foreign currency cash flows are determined in accordance with systematical and reasonable way, and calculated by the spot exchange rate on the approximate exchange rate. The impact of the changing exchange rate to the cash amount, is shown separately in the cash flow statement
In disposal of overseas operation, the conversion difference of the foreign currency statements related the overseas operation shall be transferred into the profit and loss of current period in whole or as per the ratio in disposal of the overseas operation.
8.Financial instruments
（1）The classification of financial instruments, recognition and measurement
The financial instruments classified as financial assets or financial liabilities
The financial assets at the initial recognition are classified as: by measuring at the fair value and its alternation are reckoned into the financial assets of the profit or loss (included trading financial assets and the fair value and its alternation are designated into the financial assets of the profit or loss), the held-to-maturity investment, receivables, and available-for-sale financial assets. Except the receivables
beyond the financial assets classification, which depend on the company and their subsidiaries have the
intention and ability to hold on.
The financial liabilities at the initial recognition are classified as: by measuring at the fair value and its alternation are reckoned into the financial liabilities of the profit or loss (included trading financial liabilities and the fair value and its alternation are designated into the financial liabilities of the profit or loss) and other financial liabilities.
The company became a party in the financial instrument contract; it was recognized as the financial asset or the financial liability.
The financial assets or financial liabilities are initially recognized as the fair value of the company. The subsequent measurement shall be disposed by classification: the financial assets measured with fair value and having its change attributed to the profit and loss of current period, the salable financial assets and the financial liabilities measured with fair value and having its change attributed to the profit and loss of current period, shall be measured with the fair value; the financial guarantee contracts and the loan commitment with the loan below the interest rate in the market shall be measured again according to the following amounts, whichever is bigger: one is in accordance with the―Accounting Standards for Enterprises No. 13– ContingentEvents‖ after the initial confirmation, another is the balance of the initially recognized amount less the accumulative amortization amount which is recognized in accordance with the principle of the―Accounting Standards for Enterprises No. 14–Revenue‖; held-to-maturity investments, loan and receivables and other financial liabilities shall be measured as per amortized cost.
The financial assets or financial liabilities are measured in the follow-up changes in the fair value gains or losses, except the hedging, are processed in accordance with the following: 1. By measuring at fair value through alteration to calculate the profit or loss of its financial assets or the fair value gains or losses from the alteration in the financial liabilities, they will go into the profits or losses of fair value; the interest or cash dividends acquired in the holding assets period, are recognized as investment income; when it is in the disposition, the received actual amount and the balance in the amount initially recorded, are identified as the investment income, simultaneously adjusted the profit and loss from the fair value alteration. 2. The fair value alteration of available-for-sale financial assets is included in capital surplus, the interest calculated by the effective method in the holding period, and is reckoned in the investment income; when it is in the disposition, the actual amount received and the balance from the book value by deducting the fair value alternation which directly included in capital surplus, then are recognized as the investment income.
（2）The confirmation of the transferring in financial assets and measurement
The company confirmed the transferring of financial assets based on: when the ownership of financial assets is transferring almost all of the risks and rewards, neither transferring nor retaining them, but give up the control of financial assets, and should terminate and recognize it as financial capital .
The measurement in the transferring of financial assets: the financial assets satisfied the termination conditions, it should be transferred by measuring; it meant the transferring of the book value in financial assets and consideration received from the transferring, and the balance in the changing amount of fair value which directly included in capital surplus, then reckoned in the profit and loss.
The financial assets in transferring meets the termination and confirmation conditions, it will be transferred the book value of the total financial assets between the part of termination and recognition and the part not be terminated and confirmed, according to their relative fair value to apportion, and put the book value of the confirmation and termination and the received recognition and the balance in the changing amount of fair value which directly included in capital surplus, then reckoned in the profit and loss.
（3）The termination and confirmation conditions of financial liabilities
The financial liabilities termination and confirmation conditions: when the existing obligations of the financial liabilities have been fully or partly lifted, it should be terminated and confirmed the financial liabilities or a part of it.
（4）The financial assets and financial liabilities are recognized at fair value method
The fair value recognition method in the financial assets and financial liabilities: if there is an active market for financial instruments, the quote from the active market to determine the fair value; if not, adopting valuation techniques to determine the fair value.
The valuation techniques include the prices in recent market which referring to be familiar with the situation and voluntary parties to the recent transaction, also include the current fair value of other same financial assets, and the cash flow. When using a valuation technique, maximum the priority to use the market parameters, reduce the use in its related parameters of the company and certain subsidiaries.
（5）The impairment of financial assets
The company will have the assets devaluating check to the book value on the balance date, and measure at fair value through profit or loss. When the objective evidence showed the financial assets devaluating, it should have the test on it, and have a preparation to the provision for asset losses in accordance with the result.
For the financial assets with significant individual amount, a depreciation test shall be conducted separately; for the financial assets with insignificant individual amount, the company shall make separately for depreciation test, or the similar feature of credit risks included in the portfolio of financial assets for loss test. Separate tests without depreciation of financial assets (including the amount of major and non-major individual financial assets), shall be included in a similar credit risk characteristics of financial assets in the portfolio to pay test again. The depreciation loss of financial assets which has been confirmed individually shall not be included in a similar credit risk feature of a portfolio of financial assets for depreciation test. If the held-to-maturity investments, liabilities and receivables are depreciated, the company shall write down the book value to the estimated current value of future cash flow, and the reduced amount shall be made as depreciation loss, which shall be attributed to the profit and loss of current period. When the salable financial asset is depreciated, the aggregate losses due to decrease of fair value, originally attributed to the capital reserves, shall be transferred out and attributed to the profit and loss of current period; the transferred cumulative losses is the balance of the initially attained financial asset costs deducted the reclaimable principal and amortization amount, the current fair value and the loss from depreciation initially attributed to profit and loss.
The objective evidences that the Company uses to determine the impairment are asfollows:：
①Significant financial difficulty of the issuer or obligor;
②A breach of contract, such as a default or delinquency in interest or principal payments;
③The lender, for economic or legal reasons relating to the borrower's financial difficulty, grants to the borrower a concession that the lender would not otherwise consider;
④It becomes probable that the borrower will enter bankruptcy or other financial re-organization;
⑤The disappearance of an active market for that financial asset because of financial difficulties;
⑥observable data indicates that there is a measurable decrease in the estimated future cash flows from a group of financial assets
since the initial recognition of those assets, although the decrease cannot yet be identified with the
individual financial assets in the group, including: (i) Adverse changes in the payment status of borrowers in the group or (ii) an increase in the unemployment rate in the geographical area of the borrowers, a decrease in property prices for mortgages in the relevant area, or adverse changes in industry conditions that affect the borrowers.
⑦Significant changes with an adverse effect that have taken place in the technological, market, economic or legal environment in which the borrower operates, and indicates that the cost of the investment in the equity instrument may not be recovered;
⑧A significant or non-temporary decrease in fair value of equity investment instruments;
The criteria made by the company for the fair value of equity instrument investment available for sale suffering serious drop is that: if there is significant decline in the fair value of individual financial assets available for sale and beyond the holding cost of50%. Thus, the depreciation provision is required and the depreciation loss is confirmed for the serious depreciation that is recognized for the financial assets available for sale.
The criteria made by the company for the fair value of equity instrument investment available for sale suffering non-temporary drop is that: if there is significant decline in the fair value of individual financial assets available for sale, the drop is expected to belong to the non-temporary one with over one year of duration, and no fundamental change is in whole duration, the depreciation provision is required and the depreciation loss is confirmed for the non-temporary depreciation that recognized for the financial assets
available for sale.
⑨Other objective evidences for the depreciation of financial assets.
（6）The reclassification of financial assets
The held-to-maturity investment is postdated and has been reclassified as available-for-sale financial assets for the main judging:
1）There is no available financial resource which has the sustainable support to the financial assets, and let its investments hold to maturity.
2）The management has no intention to hold to maturity
3） Be restricted by laws and administrative regulations or other reasons, the financial assets difficult in hold to maturity
4）Other indicates the company does not have ability to hold to maturity
The held-to-maturity investment is important and postdated have reclassified as available-for-sale financial assets which are require approval by thedirectorate‘s decision.
9. Account receivables
The receivables of the company mainly include accounts receivable, long-term receivables and other receivables. If there is objective evidence in the date of balance sheet of assets and liabilities indicating such financial assets depreciated, the company shall confirm the depreciation losses according to the difference between the book value and the estimated current value of future cash flow.
(1)Account receivable belong t individual significance and individually assessed for impairment
The receivable with single amount exceeding RMB 5 million (including Judgment criteria or amount RMB 5 million) shall be confirmed as the receivable with significant
standard of material specific single amount. The receivable with single amount exceeding RMB 3
amount or amount criteria million (including RMB 3 million) shall be confirmed as the receivable with significant single amount.
Provision method with
The depreciation loss test is conducted separately, and if an objective evidence indicates depreciation of the receivable, the company shall material specific amount and
confirm the depreciation losses and appropriate the depreciation provisions provision of specific bad debt
according to the difference by which the current value of future cash flow is lower than its book value.
preparation
(2)Appropriation of receivables of provisions for doubtful accounts by groups
The receivables with significant single amount but not depreciated after separate Determining the basis of groups
testing, and The receivables with non-significant single amount but not depreciated after separate testing.
Appropriation method for provisions
Appropriate provisions for doubtful accounts according to aging analysis method for doubtful accounts by groups
Appropriate provisions for doubtful accounts according to aging analysis method in a group, as follows:
||
|-|
|Appropriation Ratio ofReceivables (%)|
|2|
|5|
|30|
|60|
|100|

(3)Account receivable with non-material specific amount but specific bad debt preparation
Reason for bad debt
Difficultly recoverable receivables estimated
provision
The depreciation loss test is conducted separately, and if an objective Method of
evidence indicates depreciation of the receivable, the company shall confirm the depreciation losses and appropriate the depreciation appropriation of bad
provisions according to the difference by which the current value of future cash flow is lower than its book value.
debt provision
10. Inventories
（1）Category of inventories
Inventories refer to finished goods or merchandise the company holds for sale during its daily operation, work in process, materials consumed during the process of production or services etc. It mainly include raw materials, materials for cyclic use, materials for consigned processing, packaging materials, low-value consumables, work in process, self-made unfinished goods, finished goods (merchandise inventories) etc.（2）Accounting for outgoing inventories
Raw materials are accounted for at planned cost, which can be adjusted to be actual cost by reference to the difference between the monthly actual cost carry forward of materials and the planned cost; work in process and merchandise inventory are accounted for at actual cost while outgoing merchandise inventory are accounted for by use of the weighted average method.
（3）Basis for determining net realizable value of inventory and method of appropriating provisions for inventories write-down
In the date of balance sheet of assets and liabilities, the provision for depreciation of inventories shall be evaluated and appropriated as per the lower between the cost and net realizable value of individual inventory; but for the inventories big quantity and varieties and lower unit price, appropriated as per the type of the inventory.
The basis for deciding net realizable value:① the net realizable value of the finished goods is the balance of estimated selling price reducing by the related tax;② for the material held for production, if the net realizable value of the finished goods produced by such material is higher than cost, the material shall still be measured as per cost; if the dropping of the price of material indicates the net realizable value of finished goods is below cost, the net realizable value shall be decided by the balance of estimated selling price reducing by the estimated cost, estimated selling expenses and related tax.③ there is any material to be sold, the net realizable value is the price selling in the market.
（4）Inventories system
The company implements the perpetual inventories system.
(5) Amortization of low cost and short lived articles and packing
Packaging materials, low-value consumables and other materials for cyclic use are amortized by use of the one-off amortization method.
11.Long-term equity investments
1.Determining initial investment cost
(1)The initial investment cost of a long-term equity investment acquired through business combination under common control is determined at the book value of the acquired equity while in the case of business combination not under common control the combination costs is taken as the initial investment cost;
(2)The initial investment cost of a long-term equity investment acquired by cash is the paid purchasing price;
(3)For long-term equity investments acquired by issuing equity securities, the initial investment cost is the fair value of the issued equity securities;
(4)The initial investment cost of long-term equity investments contributed by investors is the value set by the relevant contract or agreement;
(5)For investments acquired through exchange of non-monetary assets or debt restructuring, the initial
investment cost is determined in accordance with relevant rules and regulations.
2.Subsequent measurement and recognition of profit and loss
Long-term equity investments are subsequently measured by use of equity method or cost method. For long-term equity investments accounted for by equity method, the company recognizes the investment income according to its entitlement to the net realized profit or loss of the invested business and adjusts the investments. It calculates its share when it is announced to distribute profits or cash dividends, and reduces the book value of the long-term equity investments accordingly.
By cost method the book value of long-term equity investments remain unchanged except for additional commitments or withdrawal of investments. The company recognizes the investment income by calculating its share of the announced distributable profits or cash dividends.
The company uses the equity method to account for the long-term equity investments that are under common control or over which the company has significant influence while using the cost method for the others.
3.Basis for determining common control or significant influence over invested business
①The basis for determining common control over an invested business is that there must be the two or more co-operating parties jointly making decisions on the financial and operating policies of the invested business according to the contract or agreement between or among them.
②When the company owns over20% up to50% of the voting capital of an invested business, its influence over the invested business is significant. Or if the ownership is less20% but one of the following conditions is satisfied, the company still has significant influence:
①. There are representative(s) appointed in the board of directors or similar power organizations;
②. It is involved in the policy formulation of the invested business
③. There are managerial staff being sent to the invested business
④. It is dependent on the technologies or technical documents of the invested business
⑤. There are other conditions proved the company has significant influence over the invested business. 4. Impairment testing method and appropriation of impairment provisions
As of the balance sheet date, the company should review whether there are signs indicating impairment of long-term equity investments. If such impairing signs do exist, an impairment test should be conducted to recognize the recoverable amount and impairment provisions should be set aside according to the book value or the recoverable amount, whichever is lower. Subsequent reversal of an impairment loss is prohibited once it is appropriated.
The impairment testing method: a test should be conducted to measure the recoverable amount of the long-term equity investments indicated of impairment.
The recoverable amount is the higher of the net fair value for sale of a long-term equity investment and the present value of estimated prospective cash flows.
The net fair value for sale of a long-term equity investment is, if there is a price set by an agreement of fair transaction, the agreement price less relevant taxes while if there is no such an agreement of fair transaction but active markets of similar assets exist, its net fair value is the market price less relevant taxes. Or if it is impossible to reliably estimate the net fair value for sale, the recoverable amount of such a long-term equity investment is its estimated prospective cash flows during the held period and by the time of final disposal. 12.Investing real estate
（1）Types and measurement model of investing real estate
There are several types of thecompany‘s investing real estate: land use rights for lease, buildings for lease and land use rights held for transfer after value being added.
The investing real estate of the company is measured at cost initially and then by use of the cost model subsequently.
（2）Accounting by use of cost model
The lease-out buildings among the investing real estate of the company is depreciated by use of the life averaging method. The detailed accounting policy is the same as that for fixed assets.
Depreciation periodfollows：
|||
|-|-|
|Lifetime（years）|Residual value rate（%）|
|40|5|

The investing real estate of the company is measured at cost initially and then by use of the cost model subsequently.
As of the balance sheet date,The company checks the investment real estate if there exits the evidence of depreciation occurring possibly; if there is evidence indicating the depreciation, the company shall conduct the depreciation test to confirm the reclaimable amount, and the provision for depreciation shall be appropriated as per the lower between the book value and the recoverable amount, also the loss from depreciation, once being appropriated, not be returned in the accounting periods afterwards.
13.Fixed assets
（1）Recognition conditions of fixed assets
Fixed assets refer to as the tangible assets possessed for producing goods, providing labor, lease or management with more than one fisical year of service life. Fixed assets are recognized when satisfying the following conditions:
(1)The economic benefits related to such fixed assets can flow into the enterprise;
（2）The cost of such fixed assets can be measured reliably.
（2）Category and depreciation method of fixed assets
The fixed assets of the company are divided into property, plant and equipment, electronic devices, vehicles etc, which are depreciated by use of the life averaging method. According to the nature and use of different types of the fixed assets, the company determines their useful life and estimated residual value. It reviews the useful life, residual value and depreciation methods at the end of each year and makes adjustments accordingly if there are differences from original estimated figures. Except for the fixed assets that have been terminated for depreciation but remained in use and the lands that are separately priced and accounted for, the company appropriates depreciation for all fixed assets.
|||
|-|-|
|Lifetime（years）|Residual value rate（%）|
|10-20|5|
|5-10|5|
|4-8|5|
|3-5|5|

（3）Impairment testing method and provision appropriation method of fixed assets
As of the balance sheet date, the company reviews whether there are signs indicating impairment of fixed assets. When such signs do exist, impairment tests should be conducted to recognize the recoverable amount of fixed assets, and impairment provisions are set aside by reference to the lower of the book value and the recoverable amount. Once an impairment loss is appropriated, it is prohibited for reversal in subsequent accounting periods.
The reclaimable amount of the fixed assets shall be decided based on the higher between the net amount of
the fair value of the assets deducted by the disposal expense and the current value of the assets in future
cash flow. The net amount of the fair value of the fixed assets deducted by the disposal expense, shall be
decided based on the price in sales agreement deducted by the disposal expense directly attributed to the
assets if there is the price in sales agreement for fair transaction. If there is no sales agreement for fair
transaction but active market for the assets or transaction price of similar assets of same industry, the company shall make the market price reduced by disposal expense to decide the amount.
（4）Determining basis and valuation method for a fixed asset under a financing lease
The basis for determining a fixed asset under a financing lease is that all the risks and rewards related to the ownership of the fixed asset have been transferred substantively in the lease. Specifically, it must satisfy one or more of the following conditions:① By expiration of the lease, the ownership of the asset under the lease has been transferred to the lessee;② the lessee has the option to purchase the asset under the lease and the purchasing price set is far lower than theasset‘s fair value at the time the option being exercised, which is why it needs to be reasonably sure that the lessee would exercise such an option from the very commencement date of the lease;③ even if the ownership of the asset is not transferred, the lease term covers most of theasset‘ useful life;④ the present value of the minimum payment the lessee makes on the lease commencement date is almost equal to theasset‘s fair value of the lease commencement date;⑤ the asset under the lease is so special that only the lessee can use it without large renovation being carried out. A fixed asset under a financing lease is valued initially at theasset‘s fair value or the present value of the minimum lease payment as of the lease commencement date, whichever is lower. It is also the book entry value of the asset.
For subsequent valuation of a fixed asset under a financing lease, depreciation and impairment provisions are appropriated in accordance with the depreciation policy the same as that for self-owned fixed assets. 14. Construction in progress
（1）Category of construction in progress
There are two categories of construction in progress in the company: self-operated construction and subcontracted-out construction.
（2）Criteria and timing for conversion of construction in progress into fixed assets
The company converts its construction in progress into fixed assets when the construction is competed for the intended use. To be eligible for the intended use, the construction in progress must satisfy one of the following conditions:
①The physical construction (including installation) of the fixed asset has been completed or completed substantially;
②Trial production or operation has been run and proved that the asset can normally operate or steadily produce qualified products, or the trial operation results show that the asset can normally work or be open for business;
③Expenses on the constructed fixed asset seldom or almost no longer arise;
④The purchased or constructed fixed asset has met or substantially matched the design or contract requirements.
（3）Impairment testing method and provision appropriation for construction in progress
On the balance sheet date the company reviews whether there are signs indicating impairment of its construction in progress. If such signs do exist, it runs an impairment test to recognize the recoverable amount of fixed assets and set aside impairment provisions by reference to the book value or the recoverable amount, whichever is lower. Reversal of an impairment loss is prohibited in subsequent accounting periods once it is appropriated.
The construction in progress indicated of impairment should be tested to find out the recoverable amount. The recoverable amount of construction in progress is determined by theasset‘s fair value after deduction of its disposing expenses or its estimated prospective cash flows, whichever is lower.
15. Borrowing costs
（1）Recognition criteria for borrowing costs capitalization
The borrowing costs of the company, which can be directly attributed to acquisition, construction or production of capitalization eligible assets, are capitalized and counted in the cost of the relevant asset while other borrowing costs are recognized as expenses when incurred and counted in the profit and loss of a
current accounting period. Capitalization eligible assets refer to fixed assets, investing real estate, inventory
etc., which need to attain the intended use or sale through acquisition, construction or production activities
over a long period.
（2）Calculation of capitalized amount
A capitalization period refers to the period from the commencement to the termination of the capitalization of borrowing costs, which excludes the suspension period of the borrowing costs capitalization.
A capitalization suspension period means that the acquisition, construction or production is abnormally interrupted for consecutive three months so the capitalization of the borrowing costs should be suspended. Calculation of a capitalized amount:① for a special borrowing, it is determined at the interest expenses of the special borrowing arising in a current period less the interest income from the credit line balance being deposited in a bank or the income from temporary investment of the balance;② for the assets using general borrowings, the capitalized amount is determined by the weighted average excess of theassets‘ accumulated expenses over their special borrowings multiplying the capitalization rate of the used general borrowings while the capitalization rate is determined by calculating the weighted average interest rate of general borrowings;③ for a borrowing at a discount or premium, the actual interest rate method is used to determine amortization for each accounting period and adjust interest amount of each period.
The actual interest rate method is a method of calculating unextinguished discounts or premiums or interest expenses at the actual interest rate. The actual interest rate is the rate used to derive the present book value of the borrowing from discounting of the prospective cash flows arising throughout the expected duration of the borrowing.
16. .Intangible assets
（1）Measurement of intangible assets
The company measures its intangible assets initially at cost. A purchased intangible asset has the actual paid price and relevant expenses as its actual cost. For the intangible assets contributed by the investors, the actual cost is the value set by the investment contract or agreement but if the contract or agreement value is not fair, the actual cost is determined at fair value. The cost of the intangible assets developed in house is the total expenses incurred to attain the intended use.
Subsequent measurements are performed on intangible assets in the following ways:① for an intangible asset with a finite useful life, the company adopts the straight-line method for its amortization, and the useful life and the amortization method are reviewed at the end of each fiscal year and will be adjusted accordingly if they are different from the original estimates.② Intangible assets with an indefinite useful life are not amortized but a review will be conducted so if there are concrete evidences indicating that the useful life is finite, such assets will have an estimated useful life and be amortized by use of the straight-line method.
（2）Estimation of a finite useful life of intangible assets
For the intangible assets with limited service life, the company generally considers the following factors when estimating the service life:① the general life cycle of the products produced by use of the asset and the available information of the service life of similar assets;② the estimation of current situation of stage such as technology, craft, and future development trend;③ the market demands for the products or the services produced or offered by the asset;④ an anticipative action taken by current or potential competitors;⑤ the anticipative maintenance expenditure that is in order to maintain the capacity of economic benefits produced by the asset, and the ability to pay for the related expenses expected by the company;⑥ the relevant regulations of laws or similar constraints in the period of the asset control, such as the special privilege of use period and the lease term, etc.;⑦ the associations with the service life of other assets held by the company.
（3）Recognition of an indefinite useful life
The company is unable to foresee the period that an intangible asset can bring the company economic benefits, or the useful life of the asset is uncertain. Such an asset can be recognized as an intangible asset with an indefinite useful life.
Recognition of an indefinite useful life is based on:① contractual rights or other legal rights but there are no contractual or legal provisions limiting the service life;② the fact that it is impossible to determine the economic life of the intangible asset even when the conditions of the same industry or relevantexperts‘ opinions are taken into account.
At the end of each year, the indefinite useful life of an intangible asset is reviewed upward from the
level of the department that uses the asset, which conducts a basic review, to assess whether there are changes in the basis for recognizing an indefinite useful life.
（4）Impairment testing method and provision appropriation of intangible assets
On the balance sheet date the company reviews whether there are signs indicating impairment of an intangible asset. If such signs do exist, it will conduct an impairment test to recognize the recoverable amount of the asset and appropriate an impairment provision by reference to the book value or the recoverable amount, whichever is lower. Once appropriated, an impairment loss is prohibited from reversal in following accounting periods.
An intangible asset that there are signs indicating impairment should be tested to find out its recoverable amount.
The recoverable amount of an intangible asset is the higher of the fair value after deduction of its disposing expenses and the present value of its estimated prospective cash flows.
（5）Criteria for the research phase and the development phase of an in-house R& D project and capitalization criteria for expenses incurred during the development phase
The expenses of an in-house R& D project during the research phase are counted in the profit and loss of a current accounting period when incurred.
The expenses of such a project incurred during the development phase are recognized as an intangible asset when satisfying the following conditions:
a. There is technical feasibility in the asset in question being completed for use or sale;
b. There is intention of completing and using or selling the asset.
c. The intangible asset is deemed economically profitable when it is proven that there is a market for the products produced by such an asset or the asset itself, or that the asset is useful if it is utilized in-house; d. There are sufficient technical, financial and other support for completion of the development of the intangible asset and capability of using or selling it;
e. The expenses attributable to the development phase of the asset can be measured reliably.
The criteria for dividing the research phase and the development phase of an in-house R& D project are: the survey phase for obtaining new technology and knowledge, which is planned and exploratory, is deemed the research phase; and the phase that before commercial production or use, research results and other knowledge are applied to a specific program or design to produce new or substantially improved materials, devices, products etc. is deemed the development phase, which is purposeful and probable for achievements.
17. Long-term expenses to be amortized
The long-term expenses to be amortized of the company refer to all the expenses paid but the benefiting period of which is over one year (not including one year). They are mainly parking fee, housing decoration expenses etc. The long-term expenses to be amortized are amortized over the benefiting period of expense items. For the long-term expenses to be amortized that cannot be benefiting in future accounting periods, the amortized value of the expense items are all counted in the profit and loss of a current accounting period. 18. Estimated liabilities
（1）Recognition criteria for estimated liabilities
Estimated liabilities refer to realistic, reliably measurable obligations undertaken by the company, the fulfillment of which probably cause outflow of economic benefits.
（2）Methodology of measuring estimated liabilities
An estimated liability is measured initially at best estimate of the expenses necessary for fulfillment of a realistic obligation. If there is a continuous range of the necessary expenses, whereby the likelihood of possible outcomes is the same, the best estimate can be the median while if there are multiple items involved, the best estimate can be calculated and determined by reference to all the possible outcomes and the relevant likelihood.
As of the balance sheet date the book value of the estimated liabilities should be reviewed so that if there are concrete evidences indicating that the book value cannot genuinely reflect the present best estimate, the book value should be adjusted by reference to the best estimate.
19.Share-based payments and equity instruments
1. Share-based payments refer to transactions in which the company grants equity instruments or assume the
liabilities that are determined based on equity instruments in order to obtain services by employees or other
parties. The payments are settled in two ways: by equity and by cash
2. Equity settled payments for services by employees are measured at the fair value of the equity instruments granted to the employees. Those granted to obtain services by other parties are measured at the service fair value of the date that the services are received, and if the fair value of the services by other parties cannot be measured reliably, the payments will be measured at the equity instrument fair value of the service receiving date.
3. The fair value of equity instruments can be determined as below:
(1) If there are active markets, the fair value is determined based on the quoted price in active markets; (2) If there are no active markets, reasonable valuation techniques can be adopted to determine the fair value, e.g., by reference to the prices used by well-informed and willing parties in their recent market transactions, the present fair value of other financial instruments substantially in the same nature, the discounted cash flows technique, option pricing model etc.
4. For those settled by cash, the fair value is measured by reference to the fair value of the undertaken liabilities, which is calculated and determined based on shares and other equity instruments.
5. The best estimate of exercisable equity instruments can be determined by reference to subsequent information, e.g., the latest information on change in the number of employees who can exercise their options.
20.Earning
（1） Sales of Goods
Goods sales revenues are recognized according to the contractual or agreement price received or receivable from the purchasing party when the Goods the company sells satisfy the following conditions:① the main risks and rewards of the ownership of Goods have been transferred to the purchasing party;② the company neither reserves the continuing control right related to the ownership nor exert effective control over the sold merchandise;③ the received amount can be measured reliably;④ the relevant economic benefits are probable to flow into the company;⑤ and the relevant costs incurred or to be incurred can be measured reliably.
If a contract or agreement adopts deferred payments, it actually has a financing nature. Therefore, the sales revenue is determined according to the fair value of the receivable contractual or agreement payments.（2）Labor services
If the result of the labor service provided can be estimated reliably in the date of balance sheet of assets and liabilities, the company shall adopt the completion percentage method to confirm the income from rendering of service and determine the completion progress at the percentage of the incurred costs in the estimated total costs.
If the result of the labor service provided cannot be estimated reliably in the date of balance sheet of assets and liabilities, the company shall dispose separately according to the following situation:① the service cost which has occurred is expected to get compensation, the company shall confirm the income from rendering of service as per the service cost which has already occurred, and carry forward the service cost as per the same amount;② if the service cost which has already occurred is expected not to get compensation, the company shall attribute the service cost which has already occurred into the profit and loss of current period, and not confirm the labor service.
（3）Alienation of asset use rights
The company recognizes the revenues from alienation of asset use rights when the economic benefits related to the alienation can flow in and the received amount can be measured reliably.
21. Governmental subsidies
（1）Types of governmental subsidies
There are mainly two types of governmental subsidies: one related to assets and the other related to income The government grants of long-term assets acquired by the company and used for purchase and construction or formed by other methods are the government grants related to assets, and the government grants used to compensate for the expenses or loss already occurred or appeared in the future period are the income-related government grants. Also, the government grants that acquired by the company either used to purchase the
equipment and other long-term assets, or used to compensate for labor cost, purchasing service fee,
management charge and other expenses, are belong to the government grants related to assets and incomes,
which should be divided into two parts of the assets-related one and the income-related one, and should be accounted separately. If unable to distinguish, the whole government grants shall be classed as the grants related to assets.
（2）Accounting treatment for governmental subsidies
Assets related governmental subsidies are recognized as deferred income and counted in the profit and loss of a current period after being averagely allocated over the useful life of the related assets. Governmental subsidies measured in a nominal amount are directly counted in a current period. Income related governmental subsidies are treated as follows:① The subsidies that are used to compensate relevant expenses or losses of subsequent periods are recognized as deferred income and counted in the profit and loss of a current period when the company recognizing the relevant expenses.② Those used to compensate incurred relevant expenses or losses are counted in the profit and loss of a current period.
22.Deferred income tax assets and deferred income tax liabilities
The company recognizes its deferred income tax assets and deferred income tax liabilities as below:
（1）Based on the difference between the book value of assets and liabilities and the taxable base (for items not recognized as assets or liabilities while their taxable base can be determined in accordance with the provisions of the tax law, the taxable base is the difference), the company calculates and recognizes deferred income tax assets or liabilities at the tax rate applicable when it is time to recover the assets or liquidate the liabilities.
（2）Deferred income tax assets are recognized to the limit of taxable income, which can be achieved probably and be utilized to offset deductible temporary differences. If there are concrete evidences indicating that sufficient taxable income can be achieved probably in a future period to offset deductible temporary differences as of the balance sheet date, then the company will recognize the deferred income tax asset that were not recognized in a previous period. If not, the company will write down the book value of deferred income tax assets.
（3）For the deductible temporary differences related to the investments on the subsidiaries and associate enterprises, deferred income tax liabilities are recognized unless the company can control the reversal time of the temporary differences and such differences probably will not be reversed in the foreseeable future. Deferred income tax assets will be recognized for the deductible temporary differences related to the investments on the subsidiaries and associate enterprises when such differences can be reversed probably in the foreseeable future and it is probable to achieve taxable income in the future, which can be utilized to offset the deductible temporary differences.
23.Lease
If all the risks and rewards related to the ownership of a leased asset are transferred to the lessee according to the terms and conditions of the lease, such a lease is a finance lease while others are operating leases. 24. Held-for-sale assets
（1）Recognition criteria for held-for-sale assets
The following conditions must be satisfied simultaneously: resolution has been made by the company on disposal of the asset in question; the company has signed an irrevocable transfer agreement with the transferee; and transfer of such an asset will be completed in a year.
（2）Accounting treatment for held-for-sale assets
For a held-for-sale fixed asset, its estimated residual value should be adjusted to reflect the amount after the disposing expenses being deducted from its fair value but the adjusted residual value should not exceed the original asset book value at the time that the held-for-sale conditions are satisfied. The excess of the original book value over the estimated residual value after adjustment will be recognized as asset impairment loss and counted in the profit and loss of a current period.
Other held-for-sale noncurrent assets are treated as above, which include individual assets and disposed groups. A disposed group refers to a group of assets as a whole sold or disposed in other ways.
25.Accounting policies, accounting estimates and early errors
(1) Description for main change of accounting policies
The companydoesn‘t have any change in accounting policies in this period.
(2) Description for main change of accounting estimates
Description for no change of accounting estimates
26.The earlier correction for accounting errors
The companydoesn‘t have any earlier correction for accounting errors in this period.
III. Taxes
(1) Tax type and Tax Ratio
||
|-|
|Tax basis|
|13% of sales amounts are belong to the domestic salesrevenue and 17% is the VAT of total output, and theimplementation of ―exemption, withholding anddrawback‖ is for the export sales.|
|Should be accounted and paid according to 5% of taxableincome.|
|Should be accounted and paid according to 7% of thepayable current taxes.|
|Should be accounted and paid according to 3% of payablecurrent taxes.|
|Should be accounted and paid according of payable incometax.|

(2) Tax incentives
1. In 2011, the company has been examined and recognized as the hi-tech enterprise by Hubei Provincial Hi-tech Enterprise Recognition and Management Committee, with the validity of three years, and15% of income tax accounted for the enterprise in this period.
||
|-|
|2. Huangshi Dongbei Electromechanical Group Solar Energy Co., Ltd. is subsidiary of the Company, is|
|enterprise engaged in civil welfare. According to the Circular of Tax Preference Policy for Promoting|
|Employment of the Disabled issued by Ministry of Finance and State Taxation Administration (Cai|
|Shui (2007) No.92), the company enjoyed the preferential policy of refund of value added tax within|
|limit when levied and deduction of additional corporate income tax. In 2011, the company has been|
|examined and recognized as the hi-tech enterprise by Hubei Provincial Hi-tech Enterprise Recognition|
|and Management Committee, with the validity of three years, and 15% of income tax accounted for the|
|enterprise in this period.|

|||
|-|-|
||3. In 2011, the Controlling Subsidiary Wuhu Abaur Mechanical & Electrical Co.,Ltd has been|
|examined and recognized as the hi-tech enterprise by Hubei Provincial Hi-tech Enterprise Recognition||
|and Management Committee, with the validity of three years, and 15% of income tax accounted for the||
|enterprise in this period.||
|4. In 2013, the Controlling Subsidiary Huangshi Dongbei Founding Co., Ltd. has been examined and||
|recognized as the hi-tech enterprise by Hubei Provincial Hi-tech Enterprise Recognition and||
|Management Committee, with the validity of three years, and 15% of income tax accounted for the||
|enterprise in this period.||

IV. Enterprises Consolidated and Consolidated Financial statement
The company includes the subsidiaries that it has actual control over and the entities of special purposes in
its consolidated financial statements.
The consolidated financial statements of the company are complied in accordance with the requirements of
The Enterprise Accounting Principle No. 33– Consolidated Financial Statements and the relevant provisions, and significant internal transactions within the consolidation scope have been eliminated in consolidation. Theshareholders‘ equity of the subsidiaries, which are not attributable to the parent company, is listed separately as minorityshareholders‘ equity under theshareholders‘ equity in the consolidated financial statement.
If a subsidiary adopts different accounting policies or periods, necessary adjustment should be made on the financial statements of the subsidiary according to thecompany‘s accounting policies or periods when consolidated financial statements are compiled.
For a subsidiary acquired through business combination not under common control, when consolidated financial statements are compiled, adjustment should be made on one individual financial statement based on the fair value of its net identifiable assets at the purchase date . As to a subsidiary acquired through business combination under common control, it is deemed that the combination has occurred at the beginning of the combination year so that its assets, liabilities, operating results and cash flows should be included in consolidated financial statements from the beginning of the combination year.
1.Subsidiaries
(1)Subsidiaries acquired through establishment or investment
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Type ofsubsidiary|Registeredplace|Nature ofbusiness|Registeredcapital|Scope of business|Closing actualinvestment|Balance of otherprojects for netinvestment ofsubsidiaryessentially|Shareholdingratio (%)|Voting power ratio(%)|Whethermerge thestatements ornot|
|LimitedCompany|Wuhu|Manufacturing|50,000,000.00|Production andsales ofCompressor andCompressorMachine|33,339,800.00||75.00|75.00|Yes|
|LimitedCompany|Wuhan|Services|8,000,000.00|Mechanical engineering, energytechnology research and consulting services; refrigeration equipment, electric mechanical, solarenergy manufacturing|8,000,000.00||100.00|100.00|Yes|
|LimitedCompany|Shujiang|Manufacturing|200,000,000.00|Production andsales ofCompressor andCompressorMachine|140,000,000.00||100|100.00|Yes|

(2)Subsidiaries acquired through business combination under common control
||||||||||
|-|-|-|-|-|-|-|-|-|
|Type of|Registe|Registered|Scope of business|Closing actual|Balance of|Shareholding|Voting|Whether|

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|subsidiary|redplace|Nature ofbusiness|capital||investment|other projectsfor netinvestment ofsubsidiaryessentially|ratio (%)|power ratio(%)|merge thestatements ornot|
|LimitedCompany|Huangshi|Manufacturing|24,861,162.85|Production and salesof solar water heaters|22,485,202.90||83.03|83.03|Yes|
|LimitedCompany|Huangshi|Manufacturing|32,814,078.23|Casting of small andmedium casts|20,000,000.00||51.28|51.28|Yes|
|LimitedCompany|BVI|Commerce|USD1,000,000.00|Sales of RefrigerationCompressor,RefrigerationEquipment and Parts ,Photoelectric productsand solar waterheater ,etc.|6,632,400.00||100.00|100.00|Yes|

2.Newly included in consolidation scope during the period.
||
|-|
|Net assets as at period-end|
|8,001,190.35|
|140,001,339.46|

V．Notes to items of consolidated financial statements
1. Monetary capital
(1)Classification of Monetary capital
||||||||
|-|-|-|-|-|-|-|
|Items|Balance at period end|||Balance at period beginning|||
||Foreignamount|Exchangerates|Amount equivalent toRMB|Foreign amount|Exchangerates|Amountequivalent toRMB|
|Cash：|——|——|4,775.87|——|——|2,194.95|
|Including：RMB|——|——|4,775.87|——|——|2,168.09|
|Euro|——|8.3946|——|3.19|8.4189|26.86|
|Bank deposit|——|——|331,738,058.18|——|——|257,966,904.97|
|Including：RMB|——|——|301,187,383.74|——|——|225,715,533.03|
|USD|3,465,255.61|6.1528|21,321,024.71|3,747,815.81|6.0969|22,850,058.21|
|Euro|1,099,474.63|8.3946|9,229,649.73|1,116,691.46|8.4189|9,401,313.73|
|Other monetarycapital|——|——|260,008,766.30|——|——|270,142,935.67|
|Including：RMB||——||——|——|270,142,834.03|
|USD|——|——|——|16.67|6.0969|101.64|
|Total||——|591,751,600.35|——|——|528,112,035.59|

(2)Other Monetary capital
||
|-|
|Balance at period end|
|198,485,766.30|
|0.00|
|61,523,000.00|
|260,008,766.30|

 Note 1: the company provides RMB 61,523,000.00 pledge to the Xingye bank Wuhan Branch and made USD10 million dollar in short-term borrowing
2. Bills receivables
(1) Classification of Bills receivables
||
|-|
|Balance at period end|
|693,431,747.60|
|82,703,938.59|
|3,070,000.00|
|779,205,686.19|

 Notes： The third subsidiary of Huangshi Dongbei Founding Co., Ltd. has acquired RMB 9.305 million of domestic L/C by pledging the book value of RMB 9.305 million of commercial acceptance bills to China Everbright Bank Co., Ltd.
(2) As of June 30, 2014,Top 5 notes receivable of largest pledged amounts as follows
||||
|-|-|-|
|No|IssuingDate|Maturity Date|
|2013-12-31|2014-7-2|9,235,340.09|
|2014-2-28|2014-9-3|8,767,265.30|
|2014-2-28|2014-9-3|7,285,350.01|
|2014-2-28|2014-9-3|6,970,385.70|
|2014-2-28|2014-9-3|6,915,600.63|

(3) As of June 30, 2014,Top 5 of largest amounts of notes receivable with endorsement but not matured as follows
||||
|-|-|-|
|No|Issuing Date|MaturityDate|
|2014-3-20|2014-9-20|13,123,920.00|
|2014-6-19|2014-12-19|12,772,488.00|
|2014-4-22|2014-10-22|10,970,520.00|
|2014-4-24|2014-10-24|10,000,000.00|
|2014-6-18|2014-12-18|10,000,000.00|

3.Account receivables
(1) Classification of account receivables
Balance at period end
||||
|-|-|-|
|Book balance|||
|Amount|Proportion(%)|Amount|
|1,252,449,599.30|100.00|39,191,316.88|
|1,252,449,599.30|100.00|39,191,316.8|

Balance at period end
||||
|-|-|-|
|Book balance|||
|Amount|Proportion(%)|Amount|
|||8|
|1,252,449,599.30|100.00|39,191,316.88|
|1,252,449,599.30|100.00|39,191,316.88|

Balance at period beginning
||||
|-|-|-|
|Book balance|||
|Amount|Proportion(%)|Amount|
|1,032,996,621.91|100.00|33,125,288.08|
|1,032,996,621.91|100.00|33,125,288.08|
|1,032,996,621.91|100.00|33,125,288.08|
|1,032,996,621.91|100.00|33,125,288.08|

Notes：The accounts receivable with significant individual amount and appropriation of provisions for doubtful accounts individually, refers to the receivables of single amount beyond RMB 5 million (including RMB 5 million), if there is no depreciation after depreciation test made, the company shall appropriate provisions for doubtful accounts according to account age.
In groups, the receivables status of provisions for doubtful accounts shall be appropriated according to aging analysis method.
||||||
|-|-|-|-|-|
|Amount at period end|||||
|Book balance|Proportion(%)|Bad debt reserve|Book balance|Proportion(%)|
|1,234,052,409.66|98.53|25,528,743.23|1,012,887,093.47|98.05|
|2,185,879.32|0.17|269,496.83|5,389,936.74|0.53|
|3,630,897.76|0.29|1,089,269.33|2,577,709.32|0.25|
|691,512.68|0.06|414,907.61|252,982.50|0.02|
|||-|||
|11,888,899.88|0.95|11,888,899.88|11,888,899.88|1.15|
|1,252,449,599.30|100.00|39,191,316.88|1,032,996,621.91|100.00|

Notes1：For the accounts of shareholder unit holding the company of5% (including5%) or more of voting power shares in the accounts receivable, the details please see the notes―6. The affiliated party and the related transaction, 6. The accounts receivable and payable of the affiliatedparty‖;
Notes2：The details of receivables from affiliated party please see the notes―6. The affiliated party and the related transaction, 6. The accounts receivable and payable of the affiliatedparty‖.
Notes3：The details of receivables from Pledge at the end of the period please see the Note 5 of the notes of the important items in consolidated Financial Statements, note 16 Short-term loan.
(2)The top 5 debtors of accounts receivable
||||
|-|-|-|
|Relationship with theCompany|Amount|Aging|
|Non-related parties|266,060,973.63|Within 1 year|
|Non-related parties|97,748,384.00|Within 1 year|
|Non-related parties|64,110,448.60|Within 1 year|
|Non-related parties|45,844,660.52|Within 1 year|
|Non-related parties|42,510,193.99|Within 1 year|
|——|516,274,660.74|——|

 (3)Account receivable include the following foreign currency balances
||||||
|-|-|-|-|-|
|Year-end balance|||||
|Original currency|Exchangerate|RMB equivalent|Original currency|Exchange rate|
|27,319,838.85|6.1528|168,093,504.48|19,844,176.28|6.0969|
|2,016,013.06|8.3946|16,923,623.23|3,185,679.81|8.4189|
|——|——|185,017,127.71|——|——|

 4. Prepayments
(1) Analysis of Aging
||||
|-|-|-|
|Amount at period end|||
|Amount|Proportion (%)|Amount|
|118,694,475.20|87.04|110,027,505.50|
|6,891,939.69|5.05|8,257,489.69|
|3,377,021.35|2.48|3,496,665.00|
|7,403,981.91|5.43|5,628,313.35|
|136,367,418.15|100.00|127,409,973.54|

(2) As of June 30, 2014,The top 5 companies according to the Prepayment
|||||
|-|-|-|-|
|Relationship with theCompany|Amount|Proportion%|Time|

|||||
|-|-|-|-|
|Relationship with theCompany|Amount|Proportion%|Time|
|Non-related parties|28,963,828.02|21.24|Within 1 year|
|Relatedparties|18,275,409.14|13.40|Within 1 year|
|Non-related parties|15,883,849.11|11.65|Within 1 year|
|Non-related parties|11,531,346.33|8.46|Within 1 year|
|Non-related parties|7,461,716.45|5.47|Within 1 year|
|——|82,116,149.05|60.22||

Notes1：For the accounts of shareholder unit holding the company of5% (including5%) or more of voting power shares in the Prepayment, the details please see the notes―6. The affiliated party and the related transaction, 6. The accounts receivable and payable of the affiliatedparty‖;
Notes2：The details of receivables from affiliated party please see the notes―6. The affiliated party and the related transaction, 6. The accounts receivable and payable of the affiliatedparty‖.
5.Other receivables
(1) Classification of other receivables
Amount at period end
||||
|-|-|-|
|Book balance|||
|Amount|Proportion(%)|Amount|
|17,177,587.08|100.00%|1,193,692.64|
|17,177,587.08|100.00%|1,193,692.64|
|17,177,587.08|100.00%|1,193,692.64|
|-||-|
|17,177,587.08|100.00%|1,193,692.64|

Balance at period beginning
||||
|-|-|-|
|Book balance|||
|Amount|Proportion(%)|Amount|
|11,488,095.30|100|1,193,692.64|
|11,488,095.30|100|1,193,692.64|
|11,488,095.30|100|1,193,692.64|
|11,488,095.30|100|1,193,692.64|

Notes1：The Other receivable with significant individual amount and appropriation of provisions for
doubtful accounts individually, refers to the receivables of single amount beyond RMB 3 million (including RMB 3 million), if there is no depreciation after depreciation test made, the company shall appropriate provisions for doubtful accounts according to account age.
Notes 2: There is no amount due from shareholders with more than5%(including5%) of the voting shares of the Company in prepayment.
In groups, other receivables status of provisions for doubtful accounts shall be appropriated according to aging analysis method.
||||||
|-|-|-|-|-|
|Amount at period end|||||
|Book balance|Proportion(%)|Bad debt reserve|Book balance|Proportion(%)|
|16,224,439.57|94.45|1,033,546.72|9,173,615.52|79.85|
|767,593.78|4.47|38,379.69|728,286.55|6.34|
|81,925.56|0.48|24,577.67|777,455.57|6.77|
|16,099.02|0.09|9,659.41|168,000.00|1.46|
|58,993.00|0.34|58,993.00|614,737.66|5.35|
|28,536.15|0.17|28,536.15|26,000.00|0.23|
|17,177,587.08|100|1,193,692.64|11,488,095.30|100|

 (2) The nature or contents for bigger amounts of other receivables
||
|-|
|Amount|
|6,428,570.00|
|6,428,570.00|

(3) The top five companies according to the other receivable
||||
|-|-|-|
|Relationship with theCompany|Amount|Time|
|Non-related parties|6,428,570.00|Within 1 year|
|Non-related parties|4,044,601.01|Within 1 year|
|Non-related parties|581,483.60|Within 1 year|
|Non-related parties|488,650.00|Over 1 year|
|Non-related parties|271,245.91|Over 1 year|
|——|11,814,550.52|——|

6. Inventories
||||||
|-|-|-|-|-|
|Balance in year-end|||||
|Book balance|Bad debtprovision|Book Value|Book balance|Bad debtprovision|
|68,916,958.53||68,916,958.53|111,035,587.47||
|129,638,056.22||129,638,056.22|150,807,221.14||
|193,450,514.08||193,450,514.08|267,141,984.76||
|392,005,528.83||392,005,528.83|528,984,793.37||

7. Investment to the affiliated enterprise
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Type|Registrationplace|Legalrepresentative|Nature ofbusiness|Registeredcapital|Proportion ofshareheld(%)|Proportion ofvoting power(%)|Amount atyear-end|Total closingliabilitiesamounts|Total closingnet assetsamounts|Total businessincome amountsof the currentperiod|
|LimitedCompany|Huangshi|ZhuJinming|Real estate|RMB 10million|30.00|30.00|248,502,723.10|242,911,672.31|5,591,050.79||
|LimitedCompany|Huangshi|LiuChuansong|Agriculture|RMB 20million|30.00|30.00|62,680,065.88|45,005,366.22|17,589,896.77|3,071,787.59|

8.Long-term Equity investment
|||||||||
|-|-|-|-|-|-|-|-|
|Accountingmethod|Investment cost|Beginningbalance ofthe year|Changes|Endingbalance of theperiod|Percentage of the ownedshares of the investedbusiness (%)|Percentage of thevoting shares ofghe investedbusiness(%)|Impairmentprovision|
|Equity method|3,000,000.00|1,562,888.00|-212,847.67|1,350,040.33|30|30||
|Equity method|6,000,000.00|4,006,311.37|-26,181.82|3,980,129.55|30|30||
|Cost method|10,000.00|10,000.00||10,000.00|0.48|0.48||
|——|——|5,579,199.37|-239,029.49 Error!Notassigned|5,340,169.88|——|——||

9. Investment real estate
||||
|-|-|-|
|Balance inyear-begin|Increase at thisperiod|Decrease at thisperiod|
|6,934,630.00|||
|6,934,630.00|||
|3,057,750.08|427,068.88||
|3,057,750.08|427,068.88||
|3,876,879.92|||
|3,876,879.92|||

Notes：The depreciation of this period was RMB427,068.88 .
10. Fixed assets
||||
|-|-|-|
|Balance inyear-begin|Increase at thisperiod|Decrease at thisperiod|
|1,346,373,334.02|39,640,547.87|13,483,258.64|
|422,619,627.83|16,135,471.60|36,800.00|
|875,180,560.30|22,002,933.33|12,801,415.68|
|24,174,000.22|670,392.56|236,891.31|
|24,399,145.67|831,750.38|408,151.65|
|529,831,321.36|49,677,050.37|10,477,503.13|
|102,784,009.85|9,881,149.84|-|
|390,598,593.80|36,583,427.49|9,867,097.13|
|18,308,967.33|1,271,266.42|228,862.90|
|18,139,750.38|1,941,206.62|381,543.10|
|816,542,012.66|-|-|
|319,835,617.98|-|-|
|484,581,966.50|-|-|
|5,865,032.89|-|-|
|6,259,395.29|-|-|
|-|-|-|
|-|-|-|

||||
|-|-|-|
|Balance inyear-begin|Increase at thisperiod|Decrease at thisperiod|
|-|-|-|
|-|-|-|
|-|-|-|
|816,542,012.66|-|-|
|319,835,617.98|-|-|
|484,581,966.50|-|-|
|5,865,032.89|-|-|
|6,259,395.29|-|-|

 Notes1：In this period was there RMB 49,677,050.37 set aside as depreciations, and the original price of the fixed assets converted from a construction in process was RMB 4,184,600.39.
Notes 2:This period of fixed assets mortgage please see the notes 5,Consolidated financial statements of important notes 25, Long-term loan .
11. Construction in progress
||||||
|-|-|-|-|-|
|Balance in year-end|||||
|Book balance|Bad debtprovision|Book Value|Book balance|Bad debtprovision|
|1,662,405.73||1,662,405.73|1,508,012.75||
|24,487,053.02||2 4,487,053.02|6,904,171.58||
|17,504,939.18||1 7,504,939.18|5,065,000.00||
|745,143.86||745,143.86|554,074.68||
|441,000.00||441,000.00|||
|44,840,541.79||4 4,840,541.79|14,031,259.01|-|

 Notes : In this period the constructions in process worth RMB 4,184,600.39 were converted into fixed assets.
12..Intangible assets
||||
|-|-|-|
|Amount at periodbeginning|Increase in currentperiod|Decrease in currentperiod|
|86,261,386.55|||
|82,307,510.92|||
|2,153,875.63|||
|1,800,000.00|||
|10,520,706.41|773,405.24||
|9,226,582.27|668,895.22||

||||
|-|-|-|
|Amount at periodbeginning|Increase in currentperiod|Decrease in currentperiod|
|934,124.14|104,510.02||
|360,000.00|||
|75,740,680.14|||
|73,080,928.65|||
|1,219,751.49|||
|1,440,000.00|||
|75,740,680.14|||
|73,080,928.65|||
|1,219,751.49|||
|1,440,000.00|||

 Notes1：The amortization of this period was RMB 773,405.24.
Notes 2. This period of intangible assets mortgage please see the notes V,Consolidated financial statements of important notes 24, Non-current liability due in 1 year .
13.Long-term deferred expenses
||||
|-|-|-|
|Amount at periodbeginning|Increase incurrent period|Decrease incurrent period|
|1,031,854.03|250,000.00|141,316.20|
|-|169,588.00|5,652.94|
|1,031,854.03|419,588.00|146,969.14|

14. Deferred income tax assets
(1)Recognized deferred income tax assets
||
|-|
|Amount at period end|
|6,006,631.24|
|1,802,721.27|
|7,809,352.51|

(2) Temporary Differences corresponding to the Assets or Liabilities that incurred such Differences
Items Amount
Bad debt provision for accounts receivable 38,853,266.77 Bad debt provision for other receivables 1,193,692.64 Estimated losses on warranty (refund, repair and replace) 12,018,141.81 52,065,101.22 Subtotal
15. Reserve for impairment of assets
|||||
|-|-|-|-|
|Balance atperiodbeginning|Provision atthis period|Decrease for the currentperiod||
|||Switchback|Switchcancellation|
|34,318,980.72|6,066,028.80|||
|34,318,980.72|6,066,028.80|||

16. Assets under Restriction
||
|-|
|Ending balanceof the period(RMB‘0000)|
|18,043.25|
|8,213.43|
|6,152.30|
|32,408.98|

17. Short-term loan
||
|-|
|Amount at period end|
|70,885,000.00|
|618,166,374.00|
|40,000,000.00|
|729,051,374.00|

 Notes1：As Huangshi Dongbei Electromechanical Group Co., Ltd. offered guarantee, the company obtained the RMB 82 million short-term loans from Agricultural Bank of China, Shihuiyao Branch; the company obtained the USD 18 million short-term loans from China Construction Bank , Tieshan Branch ; the company obtained the USD 10 million short-term loans from China Merchants Bank, Huangshi Branch; the
company obtained the USD 11.50 million short-term loans from ICBC, Huangshi Tieshan Branch; As
Huangshi Dongbei Electromechanical Group Co., Ltd.and Wuhu Abaur Mechanical& Electrical Co.,Ltd.
offered guarantee, the company obtained the USD 6 million short-term loans from Bank of
Communications ,Huangshi Tieshan Branch; Agricultural Bank of China, Shihuiyao Branch, The company offered RMB 61.523 million deposit in current period to the Xingye Bank Co., Ltd. Wuhan Branch to get USD 10 million short-term loans;
Notes 2:：As the Company offered guarantee to the second subsidiary of Wuhu Abur Mechanical& Electrical Co.,Ltd., obtained RMB 20 million short-term loans from Huishang Bank,Wuhu Development Zone Branch; obtained RMB 50 million short-term loans from Wuhu Yangzi Nural Commercial Bank,; obtained RMB 20 million and RMB 20 million short-term loan from Xingye Bank, Wuhu Branch;CITIC Bank, obtained RMB 30 million short-term loans from CITIC Bank; obtained RMB 30 mill ion short-term loans from Bank of Communications ,Wuhu Development Zone Branch; obtained USD 5.63 million short-term loans from Bank of Communications ,Wuhu Development Zone Branch;obtained USD1.5 million short-term loan from Bank of China ,Wuhu Development Area Branch; obtained USD 1.4 million short-term loans from China Merchants Bank,Wuhu Development Zone Branch. Notes 4:As the Company offered guarantee to the Third Subsidiary of Huangshi Dongbei Founry Co., Ltd.obtained RMB 10 million shoart-term loans from SPD Bank.Wuhan Branch; obtained RMB 8 million short-term loans from Bank of China,Huangshi Tieshan Branch, obtained RMB 20 million short-term loans from Hubei Bank, Huangshi Xinxialu Branch;
Notes 5: As the Company offered guarantee to the second subsidiary of Huangshi Dongbei
Electromechanical Group Solar Energy Co., Ltd., obtained RMB 3 million short-term loans from SPD Ba nk, Wuhan Lingjiaohu Branch,obtained RMB 12 million short-term loan from China Everbright Bank, Wuhan Development Zone Branch.obtained RMB 3 million short-term loans from Xingye
Bank, Huangshi Branch;
Notes 6:: The company offered guarantee to third subsidiary of Huangshi Dongbei Founry Co., Ltd offered RMB 9.305 million commercial acceptance bills as pledge to obtain RMB 9.305 million short-term loans from China Everbright Bank, Wuhan Development Zone Branch.
18. Bill payable
||
|-|
|Amount at period end|
|870,709,166.62|
|870,709,166.62|

Notes1：The ending balance of Bill payable for this period included RMB 870,709,166.62 due next accounting period.
19. Account payable
||||
|-|-|-|
|Amount at period end|||
|Amount(RMB)|Proportion(%)|Amount(RMB)|
|847,896,591.10|95.73|864,202,989.66|
|17,794,950.76|2.01|28,509,025.77|
|16,351,764.69|1.85|43,933,561.41|
|3,648,791.52|0.41|3,626,796.18|
|885,692,098.07|100.00|940,272,373.02|

Notes1：For the accounts of shareholder unit holding the company of5% (including5%) or more of voting
power shares in the accounts receivable, the details please see the notes―6. The affiliated party and the
related transaction, 6. The accounts receivable and payable of the affiliatedparty‖;
Notes2：The closing balance of account payable is more than the beginning balance, the details please see the notes―VI. The affiliated party and the related transaction,6. The accounts receivable and payable of the affiliatedparty‖;
Note 3: the situation of significant account payable aged over one year at the end of period
20. Received in advance
||||
|-|-|-|
|Amount at period end|||
|Amount(RMB)|Proportion(%)|Amount(RMB)|
|12,913,004.93|86.20|13,814,294.02|
|1,762,709.18|11.77|372,962.09|
|151,213.29|1.01|422,902.06|
|152,595.89|1.02|152,595.89|
|14,979,523.29|100.00|14,762,754.06|

Notes1：There were no debts payable to the shareholders of the Company holding more than5% (including5%) of the total shares of the Company.
Notes 2:The situation of significant Received in advance aged over one year at the end of period
21. Employee salary payable
||||
|-|-|-|
|Amount at periodbeginning|Increase in currentperiod|Decrease in currentperiod|
|23,663,661.14|118,884,891.00|133,841,690.65|
|3251678.95|8,606,290.70|11,857,969.65|
|-|18,161,438.85|18,161,438.85|
|-|4,979,415.02|4,979,415.02|
|-|11,151,005.38|11,151,005.38|
|-|941,193.81|941,193.81|
|-|867,386.41|867,386.41|
|-|222,438.23|222,438.23|
|-|4,651,828.66|4,651,828.66|
|15,193,558.46|324,419.80|899,803.09|
|-|65,964.00|65,964.00|
|-|1,758,933.19|1,758,933.19|
|42,108,898.55|152,453,766.20|171,237,628.09|

Notes：Temporarily, the companyhasn‘t made the payment of RMB 87068.6149 million of annual
performance funds in 2014, which is expected to be paid at the end of June, 2015.
22. Taxes payable
||
|-|
|Amount at period end|
|4,007,449.51|
|88,628.33|
|1,653,186.73|
|25,579,316.65|
|1,640,739.91|
|862,019.60|
|503,454.01|
|411,225.80|
|571,561.81|
|222,205.65|
|588,275.87|
|90,034.51|
|36,218,098.38|

Notes：.The standards for main taxes and tax rates are described in "Note III of Financial Statements. Taxes"
23. Dividend payable
||
|-|
|Balance in year-end|
|10,009,121.12|
|10,009,121.12|

 24.Other payable
||||
|-|-|-|
|Balance in year-end|||
|Amount(RMB)|Proportion(%)|Amount(RMB)|
|206,003,347.10|98.59|181,466,985.11|
|545,295.32|0.26|2,885,550.67|
|506,926.16|0.24|673,629.16|
|1,891,283.11|0.91|5,035,316.56|
|208,946,851.69|100.00|190,061,481.50|

Notes1：Notes：For the accounts of shareholder unit holding the company of5% (including5%) or more of
voting power shares in the accounts receivable,
Notes2：The situation of significant other payable aged over one year at the end of period
25.Non-current liability due in 1 year
(1)Type
||
|-|
|Balance in year-end|
|120,000,000.00|
|120,000,000.00|

(2) Long-term borrowings due within one year
||
|-|
|Balance in year-end|
|120,000,000.00|
|0.00|
|120,000,000.00|

Notes . Wuhu Abaur Mechanical& Electrical Co.,Ltd., the holding subsidiary of the company, has made the mortgage of land and buildings for the company, at the price of RMB 180.4325 million to gain the long-term loans of RMB 120 million from Wuhan branch of China Import and Export Bank.
26. Long-term loan
||
|-|
|Balance in year-end|
|1,440,000.00|
|0|
|1,440,000.00|

 Notes：The commissioned loan RMB 1.44 million was the financial working fund allocated by Huangshi Financial Bureau to Huangshi Dongbei Foundry Co., Ltd.;
27..Long-term payable
|||||
|-|-|-|-|
|Cost|Balance inyear-begin|Increasefor the currentperiod|Decreasefor the currentperiod|
|5,350,000.00|4,569,791.67||133,750.00|
|4,500,000.00|3,843,750.00||112,500.00|
|12,000,000.00|10,666,666.67|5,000,000.00|300,000.00|
|690,000.00|657,225.00||16,387.50|
|1,046,600.00|1,046,600.00||26,165.00|

|||||
|-|-|-|-|
|Cost|Balance inyear-begin|Increasefor the currentperiod|Decreasefor the currentperiod|
|||60,709,734.00|12,328,009.08|
|23,586,600.00|20,784,033.34|65,709,734.00|12,900,424.08|

28. Share capital
|||||||||
|-|-|-|-|-|-|-|-|
|Before this change||Increase/decrease this time (+ , - )||||||
|Amount|Proportion|Issuingof newshare|Bonusshares|Transferred fromreserves|Other|Subtotal|Amount|
|120,000,000.00|51.06||||||120,000,000.00|
|117,600,000.00|50.04||||||117,600,000.00|
|2,400,000.00|1.02||||||2,400,000.00|
|2,400,000.00|1.02||||||2,400,000.00|
|115,000,000.00|48.94||||||115,000,000.00|
|115,000,000.00|48.94||||||115,000,000.00|
|235,000,000.00|100.00||||||235,000,000.00|

 29. Capital reserve
||||
|-|-|-|
|Amount at periodbeginning|Increase in currentperiod|Decrease incurrent period|
|180,001,555.45|||

||||
|-|-|-|
|Amount at periodbeginning|Increase in currentperiod|Decrease incurrent period|
|10,110,280.81|||
|190,111,836.26|||

30. Surplus reserve
||||
|-|-|-|
|Amount at periodbeginning|Increase in currentperiod|Decrease in currentperiod|
|37,944,193.35|||
|37,944,193.35|||

31. Retained profits
||
|-|
|Amount|
|434,569,646.73|
|434,569,646.73|
|24,962,203.45|
|459,531,850.18|

32. Operating income and operating cost
(1)Operating income
||
|-|
|Report period|
|2,103,244,040.13|
|166,306,161.72|
|2,269,550,201.85|

 (2)Operating cost
||
|-|
|Report period|
|1,869,005,723.14|
|157,586,787.08|
|2,026,592,510.22|

 (3) Main operating（Industry）
||||
|-|-|-|
|Report period|||
|Income of Mainoperation|Cost of Mainoperation|Income of Mainoperation|
|2,103,244,040.13|1,869,005,723.14|2,340,899,421.14|

||||
|-|-|-|
|2,103,244,040.13|1,869,005,723.14|2,340,899,421.14|

(4) Main operating（Product）
||||
|-|-|-|
|Report period|||
|Income of Mainoperation|Cost of Mainoperation|Income of Mainoperation|
|1,869,221,845.53|1,666,757,247.17|2,153,678,392.89|
|217,986,808.27|191, 071,508.18|172,465,976.40|
|16,035,386.33|11,176,967.79|14,755,051.85|
|2,103,244,040.13|1,869,005,723.14|2,340,899,421.14|

(5) Main operating（Area）
||||
|-|-|-|
|Report period|||
|Income of Mainoperation|Cost of Mainoperation|Income of Mainoperation|
|1,626,870,026.71|1,421,893,793.21|1,816,762,628.25|
|476,374,013.42|447,111,929.93|524,136,792.89|
|2,103,244,040.13|1,869,005,723.14|2,340,899,421.14|

(6) The top five companies in the amount
||
|-|
|Business income|
|227,402,541.56|
|83,545,627.35|
|54,795,255.21|
|39,183,470.53|
|36,333,499.14|
|441,260,393.79|

 33.Business tax and subjoin
|||
|-|-|
|Standard|Report period|
|5%|215,081.42|
|7%|2,973,976.53|
|3%|1,378,283.20|
|2%|2,132,565.03|
|2%|918,855.45|
|0.08%|535,586.91|
|——|8,154,348.54|

34.Sales expenses
||
|-|
|Accumulative total of currentperiod（RMB）|
|56,321,177.74|

||
|-|
|Accumulative total of currentperiod（RMB）|
|22,108,720.11|

 35..Administrative expenses
||
|-|
|Accumulative total of currentperiod（RMB）|
|109,089,449.94|
|33,892,135.24|
|5,169,948.34|
|6,940,233.09|
|1,346,445.04|
|5,631,444.69|
|940,802.56|
|36,364,147.57|

 36. Financial expenses
||
|-|
|Accumulative total of currentperiod（RMB）|
|30,321,245.56|
|4,784,298.45|
|984,039.94|
|1,285,821.61|
|2,638,445.13|
|28,477,173.91|

37. Investment income
(1)Investment income
||
|-|
|Accumulative total of currentperiod（RMB）|
|-239,029.49|
|-239,029.49|

(2)Long term equity investment calculated via equitymethod：
|||
|-|-|
|Accumulative total ofcurrent period（RMB）|Accumulative total of sameperiod of the previousyear(RMB）|
|-212,847.67|-227,606.31|

|||
|-|-|
|Accumulative total ofcurrent period（RMB）|Accumulative total of sameperiod of the previousyear(RMB）|
|-26,181.82|37,758.28|
|-239,029.49|-189,848.03|

38. Asset impairment losses
||
|-|
|Accumulative total of current period|
|6,066,028.80|
|6,066,028.80|

39. Non-operating income
(1)Details of Non-operating income
||||
|-|-|-|
|Amount of current period|||
|Amount|Included in thecurrent amountof non-operatinggains & losses|Amount|
|20,909.42|20,909.42|173,854.26|
|20,909.42|20,909.42|173,854.26|
|11,867,429.51|10,791,270.00|2,746,400.00|
|2,835,432.52|2,835,432.52|3,534,271.11|
|-|-|-|
|14,723,771.45|13,647,611.94|6,454,525.37|

 (2) Details of Governmental subsidies
|||
|-|-|
|Amount of currentperiod|Amount of previousperiod|
|250,000.00||
|20,000.00|6,150.00|
||1,000,000.00|
||34,000.00|
|9,825,020.00|1,160,000.00|
|150,000.00||
|546,250.00|546,250.00|
|1,076,159.51||

|||
|-|-|
|Amount of currentperiod|Amount of previousperiod|
|11,867,429.51|2,746,400.00|

40. Non-operating expenses
||||
|-|-|-|
|Amount of current period|||
|Amount|Included in thecurrent amount ofnon-operating gains& losses|Amount|
|1,510,061.93|1,510,061.93|836,657.77|
|1,510,061.93|1,510,061.93|836,657.77|
|665,326.29|665,326.29|741,976.56|
|2,175,388.22|2,175,388.22|1,578,634.33|

41. Income tax expenses
||
|-|
|Accumulated amount in currentperiod(RMB)|
|15,076,673.10|
|-909,904.32|
|14,166,768.78|

42. Calculation of Basic earnings per share and Diluted earnings per share
|||
|-|-|
|Code|Amount for this year|
|P0|24,962,203.45|
|P0|18,769,506.01|
|S0|235,000,000.00|
|S1||
|Si||

|||
|-|-|
|Code|Amount for this year|
|Sj||
|Sk||
|M0|6|
|Mi||
|Mj||
|S|235,000,000.00|
||0.106|
||0.080|
|P1|24,962,203.45|
|P1|18,769,506.01|
||235,000,000.00|
||0.106|
||0.080|

 (1)Basic earnings per share
Basic earnings pershare=P0÷ S
S=S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0 -Sk
Including：P0 Means net profit attributable to ordinary shareholders of parent company or net profit attributable to thecompany‘s ordinary shareholders after deducting non-recurring gains and losses; S means average weighted amount of common stock outstanding; S0 Means amount of common stock at the year-beginning; S1Means increase of amount of common stock owing to capital reserve transferred to thsre capital or distribution of stock dividend SiMeans increase of amount of common stock owing to issue of bonds newly or bonds issued to be transfer to commonstock； SjMeans decrease of amount of common stock due to purchase-back common stock , etc; Sk Means decrease of amount of common stock in the reportingperiod；Mi Means accumulated months since the second month when increase of amount of commonstock；Mj means accumulated months since the second month when decrease of amount of common stock.Diluted earnings per share
(2)Diluted earnings per share
Diluted earnings pershare=P1/(S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0–Sk+ Increase amount of average weighted of common stock owing to realization of warrants, stock options and convertible bonds.
Including，P1 Means net profit attributable to ordinary shareholders of the company ornetprofit attributable to thecompany‘s ordinary shareholders after deducting non-recurring gains and losses after adjustment in consideration of the effect of dilutive potential ordinary share, regulated by accounting criteria for enterprises in china or other related regulations. when calculation of diluted earnings per share , all effects of net profit attributable to thecompany‘s ordinary shareholders after deducting non-recurring gains and losses after adjustment and average weighted amount of common stock outstanding, associated with dilutive
potential ordinary share, calculating of diluted earnings per share to the degree that in minimum of EPS,
According to their degree of descending order of diluted earnings per share referred.
43. Note Cash flow statement
1. Other cash received from business operation
||
|-|
|Report period|
|7,115,221.38|
|4,237.70|
|4,779,958.00|
|0.00|
|15,245,020.00|
|27,144,437.08|

2.Other cash payable related to operating activities
||
|-|
|Report period|
|33,575,105.00|
|872,073.36|
|22,044,789.82|
|3,631,816.86|
|89,584.19|
|60,213,369.23|

44. Supplement Information of Cash flow statement
(1)Supplement Information of Cash flow statement
||
|-|
|Report period|
|32,992,097.66|
|6,066,028.80|
|50,104,119.25|
|773,405.24|
|471,128.57|
|30,321,245.56|
|239,029.49|
|-909,904.32|
|136,979,264.54|

||
|-|
|Report period|
|-362,148,306.17|
|277,764,387.06|
|172,652,495.68|
|591,751,600.35|
|441,509,529.30|
|150,242,071.05|

 (2)Cash and cash equivalents
||
|-|
|Report period|
|591,751,600.35|
|4,775.87|
|331,738,058.18|
|260,008,766.30|
|591,751,600.35|

VI.Related parties and Related transactions
1.Parent Company of the Company
||||||||||
|-|-|-|-|-|-|-|-|-|
|Relatedparties|Type|Registeredaddress|Legalrepresentative|Nature|Registrated capital（RMB‘0000）|The Parentcompany of thecompany‘sshareholdingratio(%)|The Parentcompany of thecompany‘s voteratio(%)|The ultimatecontrolling party ofthe company|
|ParentCompany|LimitedCompany|Huangshi|YangBaichang|Production andsale of refrigeration compressor,refrigeration equipment and spare parts, refrigeration equipmentrepair, development and consulting of high-technology|24,184.00|50.04|50.04|Huangshi DongbeiElectromechanicalGroup Co., Ltd.|

2.Subsidiary of the Company
|||||||||
|-|-|-|-|-|-|-|-|
|Type ofsubsidiary|TypeofEnterprise|Registeredaddress|Legalrepresentative|Nature|Registratedcapital（RMB‘0000）|The Parent company ofthe company‘sshareholding ratio(%)|The Parentcompany of thecompany‘s voteratio(%)|
|Controllingsubsidiary|LimitedCompany|Huangshi|YangBaichang|Production and salesof solar energy waterheater|2,486.12|83.03|83.03|
|Controllingsubsidiary|LimitedCompany|Wuhu|YangBaichang|Production and salesof refrigerationcompressor ,Compressor and|5,000.00|75.00|75.00|

|||||||||
|-|-|-|-|-|-|-|-|
|Type ofsubsidiary|TypeofEnterprise|Registeredaddress|Legalrepresentative|Nature|Registratedcapital（RMB‘0000）|The Parent company ofthe company‘sshareholding ratio(%)|The Parentcompany of thecompany‘s voteratio(%)|
|||||Electrical Organcasting||||
|Controllingsubsidiary|LimitedCompany|Huangshi|Chen Baoping|Casting of small andmedium-sized castproducts, houserenting and parkingservice.|3,281.41|51.28|51.28|
|Controllingsubsidiary|LimitedCompany|BVI|Wang Guhua|Sales of RefrigerationCompressor,RefrigerationEquipment and Parts ,Photoelectric productsand solar waterheater ,etc.|USD100.00|100.00|100.00|
|Controllingsubsidiary|LimitedCompany|Wuhan|YangBaichang|Mechanical engineering, energy technologyresearch and consulting services; refrigeration equipment, electricmechanical, solar energy manufacturing|800.00|100|100|
|Controllingsubsidiary|LimitedCompany|Shuqian|YangBaichang|Production and salesof refrigerationcompressor ,Compressor andElectrical Organcasting|20,000.00|100|100|

3. Affiliated enterprise
||
|-|
|Relationship with the Company|
|Affiliated enterprise|
|Affiliated enterprise|

Notes：The details of affiliated enterprise please see the Note 5 of the notes of the important items in Consolidated Financial Statements, Note 7 Investment in Affiliated enterprise.
4. Other related parties of the Company
||
|-|
|Relationship with the Company|
|Also controlled by HuangshiDongbei ElectromechanicalGroup Co., Ltd.|
|One of the shareholders of theparent Company HuangshiDongbei ElectromechanicalGroup Co., Ltd.|
|Other related party|
|Other related party|
|One of the shareholders of theparent Company HuangshiDongbei ElectromechanicalGroup Co., Ltd.|
|Related party controlledsubsidiary Company|
|Related party controlledsubsidiary Company|
|Related party controlledsubsidiary Company|
|Related party controlledsubsidiary Company|
|Related party controlledsubsidiary Company|
|Related party controlledsubsidiary Company|

5.Related transactions
(1) Purchase goods and receiving services
|||||
|-|-|-|-|
|Methed|Type of relatedtransactions|||
|||Amount|Proportion%|
|Purchase|Compressor parts|62,714,481.99|2.76|
|Sales|Compressor|6,177,475.15|0.27|

|||||
|-|-|-|-|
|Purchase|Compressor parts|15,103,611.48|0.68|
|Purchase|Compressor parts|242,642,699.43|10.86|
|Sales|Material|122,426,510.03|5.39|
|Purchase|Compressor parts|170,140,314.02|7.61|
|Sales|Compressor parts|48,260.30|0.00|
|Purchase|Agriculturalproducts|545,130.20|10.68|
|Purchase|Agriculturalproducts|82,062.00|1.61|
|Purchase|Photovotaic|4,957,265.03|0.00|

 (2) Related Leasing
|||||||
|-|-|-|-|-|-|
|Lessee|Type of assetlease|Leasecommencementdate|Leasetermination date|Lease income|Basis fordetermininglease income|
|HuangshiDongbeiElectricalAppliance Co.,Ltd.|Land lease|October2002|October2052|18,000.00|Market pricewhencontractbeing signed|
|HuangshiDongbeiRefrigeratingCo., Ltd.|House lease|July 2011|Non-fixed term|1,193,537.08|Market pricewhencontractbeing signed|
|Huangshi JinbeiDairy Co., Ltd.|House lease|June2012|June2015|34,884.00|Market pricewhencontractbeing signed|
|HuangshiDongbei NewEnergy Co., Ltd|House lease|January2013|Non-fixed term|51,300.00|Market pricewhencontractbeing signed|
|HuangshiDongbeiR efrigeratingCo., Ltd.|House lease|January2009|Non-fixed term|972,000.00|Market pricewhencontractbeing signed|
|Jiangsu LuokeElectric Co., Ltd.|House lease|February2011|February2017|153,270.00|Market pricewhencontractbeing signed|
|Wuhu Abaur PropertyCo., Ltd.|House lease|July 2013|June2015|1,500.00|Market pricewhencontractbeing signed|
|Wuhu FariciInvestment Co.,Ltd.|House lease|July 2013|June2015|3,600.00|Market pricewhencontractbeing signed|

Notes 1: In October 2002, the Company signed Land Use Right Lease Agreement with Dongbei Electromechanical Group. Dongbei Electromechanical Group agreed to lease the land covering area of
15,963.04 square metres located at 5 Wuhuang Road, Tieshan District, Huangshi City to the Company for
its use. The term of lease is 50 years.
Notes 2: In July 2011, the Company leased the factory buildings in Huangshi Huangjinshan Industrial Park
with floorage of 11976.48 square meters to Huangshi Dongbei Refrigeration Co., Ltd. for use. The lease term specified in the contract is one year. As agreed, this contract will be automatically extended upon its expiration in case both parties have no objection.
Notes 3: In January 2009, Huangshi Dongbei Electromechanical Group Solar Energy Co., Ltd. leased the factory buildings in Dongbei Industrial Park (located at 5 Wuhuang Road, Tieshan District, Huangshi City, Hubei Province) with floorage of 18000 square meters to Huangshi Dongbei Refrigeration Co., Ltd. for use. The lease term specified in the contract is one year. As agreed, this contract will be automatically extended upon its expiration in case both parties have no objection.
(4)Related Guarantee
The details of affiliates guarantees please see Note 5 of the notes of the important items in consolidated financial statements, Note16, short-term loans and Note 25, long-term loans.
6. Between funds of related parties
Ⅰ.Between funds of related parties
|||
|-|-|
|Related parties|Balance at period end|
|Huangshi Dongbei Refrigerating Co., Ltd.|22,498,841.38|
|Huangshi Dongbei Electromechanical GroupCo., Ltd.|18,275,409.14|
|Huangshi Dongbei Refrigerating Co., Ltd.||
|Huangshi Dongbei New Energy Co., Ltd.|290,000.00|

Ⅱ. Spreadsheet of Accounts Payable from related parties
|||
|-|-|
|Related parties|Balance at period end|
|Huangshi Dongbei Refrigerating Co., Ltd.|12,874,165.69|
|Huangshi Aibo Technology DevelopmentCo., Ltd.|13,509,872.49|
|Jiangsu Luoke Electric Co., Ltd.|62,619,786.86|

 VII. Contingent events
As of June 30, 2014, the Company did not have material contingent events to be disclosed.
VIII.Commitments event
As of June 30, 2014, no any significant commitment was made.
IX. Events Occurring After the Balance Sheet Date.
As of the report date, the Company did not have Future items balance sheet items to be disclosed.
X. Other significant events
XI. Notes to Main items of financial statements of parent company
1.Account receivables
(1)Classification of Accounts receivables
Amount in year-end
||||
|-|-|-|
|Book Balance|||
|Amount|Proportion(%)|Amount|
|894,920,712.65|100|29,465,874.39|
|894,920,712.65|100|29,465,874.39|
|894,920,712.65|100|29,465,874.39|
|894,920,712.65|100|29,465,874.39|

 Balance at period beginning
||||
|-|-|-|
|Book balance|||
|Amount|Proportion(%)|Amount|
|733,533,031.00|100.00|26,599,845.59|
|733,533,031.00|100.00|26,599,845.59|
|733,533,031.00|100.00|26,599,845.59|
|733,533,031.00|100.00|26,599,845.59|

 Notes 1: The accounts receivable with significant individual amount and appropriation of provisions for
doubtful accounts individually, refers to the receivables of single amount beyond RMB 5 million (including RMB5 million), if there is no depreciation after depreciation test made, the company shall appropriate
provisions for doubtful accounts according to account age.
Notes 2: The top five account receivables of the end of period added up to RMB438,326,690.17,59.76% of the total account
In groups, the receivables status of provisions for doubtful accounts shall be appropriated according to aging analysis method.
||||||
|-|-|-|-|-|
|Amount at period end|||||
|Book balance|Proportion(%)|Bad debt reserve|Book balance|Proportion(%)|
|880,633,070.85|98.40|16,824,603.98|719,245,389.20|98.05|

||||||
|-|-|-|-|-|
|Amount at period end|||||
|Book balance|Proportion(%)|Bad debt reserve|Book balance|Proportion(%)|
|68,824.89|0.01|3,441.24|68,824.89|0.01|
|2,113,992.49|0.24|634,197.75|2,113,992.49|0.29|
|252,982.50|0.02|151,789.50|252,982.50|0.03|
|||-|||
|11,851,841.92|1.33|11,851,841.92|11,851,841.92|1.62|
|894,920,712.65|100.00|29,465,874.39|733,533,031.00|100.00|

（2）There are no receivables from any shareholders held over5%(inclusive5%) voting shares of the Company.
(3) Account receivable include the following foreign currency balances
||||||
|-|-|-|-|-|
|Year-end balance|||||
|Original currency|Exchangerate|RMB equivalent|Originalcurrency|Exchange rate|
|18,386,803.42|6.1528|113.130,324.08|11,884,756.66|6.0969|
|2,016,013.06|8.3946|16,923,623.23|3,185,679.81|8.4189|
|——|——|130,053,947.31|——|——|

 2. Other receivables
（1）Other Other receivables presented by types
Amount at period end
||||
|-|-|-|
|Book balance|||
|Amount|Proportion(%)|Amount|
|6,560,131.87|100|1,102,672.89|
|6,560,131.87|100|1,102,672.89|
|6,560,131.87|100|1,102,672.89|
|6,560,131.87|100|1,102,672.89|

Balance at period beginning
||||
|-|-|-|
|Book balance|||
|Amount|Proportion(%)|Amount|

Balance at period beginning
||||
|-|-|-|
|Book balance|||
|Amount|Proportion(%)|Amount|
|9,506,498.15|100.00|1,102,672.89|
|9,506,498.15|100.00|1,102,672.89|
|9,506,498.15|100.00|1,102,672.89|
|9,506,498.15|100.00|1,102,672.89|

Notes：The Other receivable with significant individual amount and appropriation of provisions for doubtful accounts individually, refers to the receivables of single amount beyond RMB3 million (including RMB3 million), if there is no depreciation after depreciation test made, the company shall appropriate provisions for doubtful accounts according to account age.
In groups, other receivables status of provisions for doubtful accounts shall be appropriated according to aging analysis method.
||||||
|-|-|-|-|-|
|Amount at period end|||||
|Book balance|Proportion(%)|Bad debt reserve|Book balance|Proportion(%)|
|5,012,358.28|76.41|159,174.49|7,958,724.56|83.71|
|6,200.15|0.09|310.01|6,200.15|0.07|
|758,835.78|11.57|227650.73|758,835.78|7.98|
|168,000.00|2.56|100800|168,000.00|1.77|
|614,737.66|9.37|614737.66|614,737.66|6.47|
|6,560,131.87|100.00|1,102,672.89|9,506,498.15|100.00|

（2）There are no other receivables from any shareholders held over5%(includive5%) voting shares of the company.
3. Long-term Equity investment
|||||||||
|-|-|-|-|-|-|-|-|
|Accountingmethod|Investment cost|Beginningbalance ofthe year|Changes|Endingbalance ofthe period|Percentage of the ownedshares of the investedbusiness (%)|Percentage of thevoting shares ofghe investedbusiness(%)|Impairmentprovision|
|Costmethod|22,485,202.90|22,485,202.90||22,485,202.90|83.03|83.03||
|Costmethod|33,339,800.00|33,339,800.00||33,339,800.00|75.00|75.00||
|Costmethod|6,821,274.70|6,821,274.70||6,821,274.70|100.00|100.00||
|Costmethod|8,000,000.00|0.00|8,000,000.00|8,000,000.00|100.00|100.00||
|Costmethod|140,000,000.00|0|140,000,000.00|140,000,000.00|100.00|100.00||
|——|210,646,277.60|62,646,277.60|148,000,000.00|210,646,277.60|——|——||

4.Operating income and operating cost
(1)Operating income
||
|-|
|Report period|
|1,474,778,500.67|
|163,345,866.91|
|1,638,124,367.58|

 (2)Operating cost
||
|-|
|Report period|
|1,392,131,995.86|
|143,131,930.15|
|1,535,263,926.01|

 (3) Main operating（Industry）
||||
|-|-|-|
|Report period|||
|Income of Mainoperation|Cost of Mainoperation|Income of Mainoperation|
|1,474,778,500.67|1,392,131,995.86|1,709,491,126.14|
|1,474,778,500.67|1,392,131,995.86|1,709,491,126.14|

(4) Main operating（Product）
||||
|-|-|-|
|Report period|||
|Income of Mainoperation|Cost of Mainoperation|Income of Mainoperation|
|1,474,778,500.67|1,392,131,995.86|1,709,491,126.14|
|1,474,778,500.67|1,392,131,995.86|1,709,491,126.14|

(5) Main operating（Area）
||||
|-|-|-|
|Report period|||
|Income of Mainoperation|Cost of Mainoperation|Income of Mainoperation|
|1,076,903,567.55|1,018,125,496.14|1,369,364,507.08|
|397,874,933.12|374,006,499.72|340,126,619.06|
|1,474,778,500.67|1,392,131,995.86|1,709,491,126.14|

5. Supplement Information of Cash flow statement
||
|-|
|Report period|
|6,390,290.37|
|2,866,028.80|
|27,447,050.28|
|382,274.09|
|13,377,440.53|
|-429,904.32|
|54,742,385.66|
|-204,521,080.99|
|352,136,107.96|
|252,390,592.38|
|329,811,216.22|
|247,510,121.61|
|82,301,094.61|

 XII. Supplement Information
1.Non-recurring gains and losses of current year
（1）Calculation of non-recurring gains and losses below, in accordance with No.1, Information
Disclosure interpretative Bulletin for public offering of securities of enterprises , namely non-recurring
gains and losses (Version of 2008), China securities Regulatory Commission Announcement{2008} No.43}
Issued by China securities regulatory commission.
||
|-|
|Amount|
|-116,656.42|
|-|
|10,791,270.00|
|-|
|-|
|-|
|-|
|-|
|-|
|-|
|-|
|-|
|-|
|-|
|-|
|-|
|-|
|-|
|-|
|797,610.33|
|-|
|-3,558,692.76|
|-1,720,833.58|
|6,192,697.57|

(2) The item and reason of recurrent profit and loss in the government grants accounted in current profit and
loss:
||
|-|
|Amount|
|1,076,159.51|

 2.Return on equity and earnings per share
(1)For this year
|||
|-|-|
|Weighted averagereturn on equity（%）||
||Basic earningsper share|
|2.74|0.106|
|2.06|0.080|

(2)For last year
|||
|-|-|
|Weighted averagereturn on equity（%）||
||Basic earningsper share|
|2.95|0.102|
|2.47|0.086|

 3. Abnormal items of main financial statements and reasons for abnormality
(1)Balance sheet
|||||
|-|-|-|-|
|Amount at periodend|Amount at periodbeginning|Amount of change|Magnitudeof change%|
|15,983,894.44|10,294,402.66|8,695,508.22|55.27|
|44,840,541.79|14,031,259.01|30,809,282.78|219.58|
|23,325,036.66|42,108,898.55|18,783,861.89|-44.61|

Note 1: the main reason of increased of other receivables over the begining of the period is the three subsidi ary Huangshi Dongbei Foundry Co., Ltd. leasing deposit of 6.42 million yuan
Note 2: the main reason of increased of construction in progress over the begining of the period is the added construction project of luoqiao, Huang Jinshan phase 3
Note 3: the main reason of greatly reduced of the employee benefits payable over the begining of the period is issuing 2013 annual year-end bonus.
(2)Profit Statement
|||||
|-|-|-|-|
|Amount at periodend|Amount at periodbeginning|Amount of change|Magnitudeof change%|
|28,477,173.91|38,280,044.61|9,802,870.7|34.42|

Note 1: the main reason of reduction the amount of financial cost reduction over the last period is the depre
ciation of RMB, foreign exchange gains and losses caused by saving compared with the same period last ye
ar.
XIII. Approval of the financial statement
The financial statement has been approved by the board of directors of the Company in August 22, 2014.
Huangshi Dongbei Electrical Appliance Co., Ltd. August 22, 2014 Notes in Financial Statements on page 37 to page 92 were signed by the responsible person.
Legal representative： Person-in-charge of the Person-in -charge of the Yang Baichang accountingwork：Lu Lihua accountingorgan：Ma Li signed: signed: signed:
Date： Date： Date：
X. List of Documents Available for Inspection
(I) The semi-annual Report with the signature of the Legal representative of the Company;
(II) Text of the Financial Repost with the signatures and seals of the Legal representative and the person of the accounting organs;
(III) Texts of all theCompany‘s documents ever disclosed in the newspapers designated by the CSRC in the report period as well as the originals of the public notices.
Chairman of the board of directors: Yang Baichang Huangshi Dongbei Electrical Appliance Co., Ltd. August 22, 2014